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tevatron_fiqa_qrel_test

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[ { "docid": "566392", "title": "", "text": "Have the check reissued to the proper payee." } ]

[ { "docid": "345389", "title": "", "text": "If I apply for a job at my hedge fund's PB, how likely is it that will come back to my firm through sales contacts and such? It's not a job within the PB business if it makes a difference. Do banks have policies against hiring from their PB clients? What about from S&T customers? This would be at the associate level if it matters." }, { "docid": "305907", "title": "", "text": "To transfer US$30,000 from the USA to Europe, ask your European banker for the SWIFT transfer instructions. Typically in the USA the sending bank needs a SWIFT code and an account number, the name and address of the recipient, and the amount to transfer. A change of currency can be made as part of the transfer. The typical fee to do this is under US$100 and the time, under 2 days. But you should ask (or have the sender ask) the bank in the USA about the fees. In addition to the fee the bank may try to make a profit on the change of currency. This might be 1-2%. If you were going to do this many times, one way to go about it is to open an account at Interactive Brokers, which does business in various countries. They have a foreign exchange facility whereby you can deposit various currencies into your account, and they stay in that currency. You can then trade the currencies at market rates when you wish. They are also a stock broker and you can also trade on the various exchanges in different countries. I would say, though, they they mostly want customers already experienced with trading. I do not know if they will allow someone other than you to pay money into your account. Trading companies based in the USA do not like to be in the position of collecting on cheques owed to you, that is more the business of banks. Large banks in the USA with physical locations charge monthly fees of $10/mo or more that might be waived if you leave money on deposit. Online banks have significantly lower fees. All US banks are required to follow US anti-terrorist and anti-crime regulations and will tend to expect a USA address and identity documents to open an account with normal customers. A good international bank in Europe can also do many of these same sorts of things for you. I've had an account with Fortis. They were ok, there were no monthly fees but there were fees for transactions. In some countries I understand the post even runs a bank. Paypal can be a possibility, but fees can be high ~3% for transfers, and even higher commissions for currency change. On the other hand, it is probably one of the easiest and fastest ways to move amounts of $1000 or less, provided both people have paypal accounts." }, { "docid": "272279", "title": "", "text": "What options do I have? Realistically? Get a regular full time job. Work at it for a year or so and then see about buying a house. That said, I recently purchased a decent home. I am self-employed and my income is highly erratic. Due to how my clients pay me, my business might go a couple months with absolutely no deposits. However, I've been at this for quite a few years. So, even though my business income is erratic, I pay myself regularly once a month. In order to close the deal with the mortgage company I had to provide 5 years worth of statements on my business AND my personal bank accounts. Also I had about a 30% down payment. This gave the bank enough info to realize that I could absolutely make the payments and we closed the deal. I'd say that if you have little to no actual financial history, don't have a solid personal income and don't have much of a down payment then you probably have no business buying a house at this point. The first time something goes wrong (water heater, ac, etc) you'll be in a world of trouble." }, { "docid": "417133", "title": "", "text": "I am using my debit card regularly: in ATM's with a pin, in stores with my signature, and online. But later you say But from what I recall from starting my own business (a LONG time ago), for debit cards there's only a per-transaction fee of like $0.25, not a percentage cut. Only pin transactions have just a per-transaction fee paid by you to the merchant (and you are reimbursed by Schwab). If you use your card with just a signature or online without a pin, then it is a credit transaction from the merchant's perspective. The merchant pays a fee and Schwab gets its cut of that. So for two of the transaction types that you describe, the merchant pays Schwab (indirectly) out of your payment. Only when you enter your pin does it process as a debit transaction where Schwab pays the merchant. Because check cards withdraw the money from your account immediately, you don't even get the twenty to fifty day grace period. So those merchant fees are pure profit for Schwab, offsetting the loss from the ATM fees. You claim $4-5k in fees at $.25 each. That's sixteen to twenty thousand transactions. Assuming that several is four to five years, that's more than ten transactions a day. That seems like a lot. I can see three for meals, one for miscellaneous, and maybe some shopping. But if I go shopping one day, I don't normally go again for a while. I have trouble seeing a consistent average of five or more transactions a day. Even if we use just the higher ATM fees (e.g. $2), that's still more than a transaction a day. That's an extreme level of usage, particularly for someone who also makes frequent purchases via card. I haven't done any other business with them. I find this confusing. How does money get into your account? At some point, you must have deposited money into the account. You can't debit from an account without a positive balance. So you must have done or be doing some kind of business with them. If nothing else, they can invest the balance that you deposit. Note that they make a profit off such investments. They share some of that profit with you in the form of interest, but not that much really. Of course, Schwab may still be losing money on your transactions. We can't really tell without more information on how much of each transaction type you do and how much of a balance you maintain. Perhaps they are hoping that you will do other, more profitable, activities in the future. I doubt there are that many Schwab customers like you describe yourself. As best I've been able to see, they advertise their banking services just to investment customers. So it's unlikely that many customers who don't use their investment services use their banking services just for ATM reimbursements." }, { "docid": "73427", "title": "", "text": "Funds earned and spent before opening a dedicated business account should be classified according to their origination. For example, if your business received income, where did that money go? If you took the money personally, it would be considered either a 'distribution' or a 'loan' to you. It is up to you which of the two options you choose. On the flip side, if your business had an expense that you paid personally, that would be considered either a 'contribution of capital' or a 'loan' from you. If you choose to record these transactions as loans, you can offset them together, so you don't need two separate accounts, loan to you and loan from you. When the bank account was opened, the initial deposit came from where? If it came from your personal funds, then it is either a 'contribution of capital' or a 'loan' from you. From the sound of your question, you deposited what remained after the preceding income/expenses. This would, in effect, return the 'loan' account back to zero, if choosing that route. The above would also be how to record any expenses you may pay personally for the business (if any) in the future. Because these transactions were not through a dedicated business bank account, you can't record them in Quickbooks as checks and deposits. Instead, you can use Journal Entries. For any income received, you would debit your capital/loan account and credit your income account. For any expenses, you would debit the appropriate expense account and credit your distribution/loan account. Also, if setting up a loan account, you should choose either Current Asset or Current Liability type. The capital contribution and distribution account should be Equity type. Hope this helps!" }, { "docid": "271102", "title": "", "text": "I have no idea about India, but in many countries there are companies that specialize in property management. This means they will take on the business of maintaining the properties, finding tenants, doing paperwork and background checks, collecting rents and evicting tenants if necessary. Obviously for this they require a fee, but essentially the owner gets to sit back and do nothing except collect a cheque every month. In my country some real estate agents are in this business as well, though for 20 apartments I would be looking for a specialized firm." }, { "docid": "340857", "title": "", "text": "Well first off, I would advice you to do this research yourself. You should not base your selection off someone's opinion such as mines. With that being said, these are some factors I suggest you consider and research before talking to an offshore bank account: Now, when opening an offshore account most offshore banks do not require you to be present at all. You can open an account simply by calling them or filling out their application online. However, be prepared to provide them with some information to verify who you are and the nature of your business such as a notarized passport along with other various forms of information that they may require. Just think of what your local bank requires is generally what they will ask as well. Here is a compiled list of offshore bank accounts to consider: These banks overall have a range between $0 - $1 million (domestic currency) minimum deposits. Most of them ranging from $1000-$5000. It all depends on the type of account, the nature of the account, and the business associated with the account." }, { "docid": "130350", "title": "", "text": "I think it depends a lot on your idea of how you should relate to your neighbors. Personally, I think that I should be allowed to do just about whatever I want with my property, and I grant my neighbor the same right. If my neighbor wants to paint his house purple with orange stripes and fill his front lawn with pink flamingos, I think that's his right. If I don't like it, I don't have to look at his house. (I would draw the line at things that I cannot avoid by simply looking the other way, like running jet engines in his back yard at 2 in the morning, as I could not avoid the noise. Or dumping toxic waste on the street, as it will cause health problems. Etc.) Others think it IS their business what their neighbor does with his property and want to be able to control it. They want someone who has the authority to force everyone in the neighborhood to paint their house in colors deemed acceptable, to meet certain requirements for yard work. And that's what Home Owners Associations are for: to require that everyone in the neighborhood maintain their property according to a standard set by the HOA, which should theoretically represent the wishes of the majority. Of course the price you pay for giving you the right to tell your neighbor what kind of fence he is allowed to have is that now your neighbors can tell you what kind of fence you can have. Advocates of HOAs often say that they are necessary to protect property values. Personally I think this is something of a circular argument: I must have the right to prevent my neighbor from doing something that, in my opinion, makes his house ugly, not because I necessarily have no choice but to stare out my window at his house all day and be repulsed by it, but because someday I may want to sell my house to someone who will have no choice but to stare out the window at his house all day and be repulsed by it and so will not want to buy my house. Of course if we all just minded our own business, this wouldn't be an issue. Okay, this was pretty much an anti-HOA post, but I did TRY to state the other side of it." }, { "docid": "89211", "title": "", "text": "There is one edge case that may be of value to you. If you declare a bonus (probably to yourself given a very small company) you can deduct it from your year and then have up to 6 months to actually write the cheque and give it to the person. Say your year end for the corporation is July 31st. You could declare the bonus July 30th and deduct it from that year, lowering your corporate tax. You could then wait until January 30th to actually write the bonus cheque. The person would then have that taxable income in a later calendar year, deferring paying the tax. Depending on the size of the bonus, this would possibly matter, although if you did large bonuses every year it would only matter the first time. The other issue is the availability of your bookkeeper or accountant. They are sometimes very busy during personal income tax season. They often like a vacation immediately after that. They may go away in the summer when their kids are out of school. The nice thing about a July 31st year end is that you can probably count on a quick turnaround from your accountant in September. The possible downside is that you won't enjoy reconciling your credit card statements and the like in August as part of getting your year end stuff together. You can avoid that by keeping your books in a decent shape all the time." }, { "docid": "408124", "title": "", "text": "When you start at a new job here in the U.S., the default means of payment is usually a paper check. Most folks will quickly set up direct deposit so that their employer deposits their paycheck directly into their personal bank account - the incentive to do so is that you receive your funds faster than if you deposit a paper check. Even if you set up direct deposit on your first day on the job, you may still receive your first paycheck as a paper check simply because the wheels of payroll processing turn slowly at some (large) companies. A counter example is a self-employed contractor - perhaps a carpenter or house painter. These folks are paid by their customers, homeowners and such. Many larger, well established contracters now accept credit card payments from customers, but smaller independents may be reluctant to set up a credit card merchant account to accept payment by card because of all the fees that are associated with accepting credit card payments. 3% transaction fees and monthly service fees can be scary to any businessman who already has very thin profit margins. In such cases, these contractors prefer to be paid by check or in cash for the simple reason that there are no fees deducted from cash payments. There are a few folks here who don't trust direct deposit, or more specifically, don't trust their employer to perform the deposit correctly and on time. Some feel uncomfortable giving their bank info to their employer, fearing someone at the company could steal money from their account. In my experience, the folks who prefer a paper paycheck are often the same folks who rush to the bank on payday to redeem their paychecks for cash. They may have a bank account (helps with check cashing) but they prefer to carry cash. I operate in a manner similar to you - I use a debit card or credit card (I only have one of each) for nearly all transactions in daily life, I use electronic payments through my bank to pay my regular bills and mortgage, and I receive my paycheck by direct deposit. There have been periods where I haven't written or received paper checks for so long that I have to hunt for where I put my checkbook! Even though I use a debit card for most store purchases, the bank account behind that debit card is actually a checking account according to the bank. Again, the system defaults to paper checks and you have the option of going electronic as well. Before we judge anyone who doesn't use direct deposit or who prefers to be paid in cold hard cash, consider that direct deposit is a luxury of stability. Steady job, home, etc. Direct deposit doesn't make sense for a contractor or day laborer who expect to work for a different person each day or week. I don't think this is all that unique to the US. There are people in every city and country who don't have long-term employment with a single employer and therefore prefer cash or paper check over electronic payments. I'd be willing to bet that this applies to the majority of people on the planet, actually." }, { "docid": "309171", "title": "", "text": "I can't speak for the US, but I've completed direct tax payments via my online bank account (for business and personal) in two countries (South Africa and the UK). I find it easier and with a better record that the transaction took place than any of the other methods available (including going directly into a tax office to pay by cheque). Mail can go missing. Queueing in their offices takes hours and the result can still be misfiled (by them). Ditto allowing them to do a pay run on your account - they can make a mistake and you'll have difficulty proving it. A payment via my bank account gives me an electronic record and I can ensure all the details are correct myself. In addition, in the UK, paying online gives you a good few months extra grace to pay. Even in South Africa, online payments are given a few weeks grace over physical payments. Their recognising that you paying electronically saves them processing time." }, { "docid": "278678", "title": "", "text": "\"I opened several free checking accounts at a local credit union. One is a \"\"Deposit\"\" account where all of my new money goes. I get paid every two weeks. Every other Sunday we have our \"\"Money Day\"\" where we allocate the money from our Deposit account into our other checking accounts. I have one designated as a Bills account where all of my bills get paid automatically via bill pay or auto-pay. I created a spreadsheet that calculates how much to save each Money Day for all of my upcoming bills. This makes it so the amount I save for my bills is essentially equal. Then I allocate the rest of my deposit money into my other checking accounts. I have a Grocery, Household, and Main checking accounts but you could use any combination that you want. When we're at the store we check our balances (how much we have left to spend) on our mobile app. We can't overspend this way. The key is to make sure you're using your PIN when you use your debit card. This way it shows up in real-time with your credit union and you've got an accurate balance. This has worked really well to coordinate spending between me and my wife. It sounds like it's a lot of work but it's actually really automated. The best part is that I don't have to do any accounting which means my budget doesn't fail if I'm not entering my transactions or categorizing them. I'm happy to share my spreadsheet if you'd like.\"" }, { "docid": "318108", "title": "", "text": "In general, deposits into an NRE account must be the proceeds of remittances from outside India. If you send your friend a cheque, denominated in Indian Rupees, drawn on your NRE account (which is an account held in a bank in India), that cheque will most likely be refused by your friend's bank for deposit into your friend's NRE account. Your friend could deposit it into an NRO account, though, but that deposit would likely draw the attention of the income tax people." }, { "docid": "469194", "title": "", "text": "To be absolutely sure you should call the agent and check That said I have been renting accommodation through both agencies and directly through landlords for seven years (I live in London) and this is quite a common situation. It normally means that the deposit is being securely held by a third party so that it cannot be taken or depleted without the agreement of both parties. The deposit protection scheme ( https://www.depositprotection.com/ ) is one way that deposits are securely held in this manner. As a third party they will have different account details. It may be the case that the agency is protecting the deposit and you are paying rent to the landlord directly. This means that your deposit goes to the agency's account and the rent goes to the landlord's account. Obviously your landlord and agency have different accounts. A little colour to brighten your day: I am currently paying my rent to the agency who also took the deposit but, because of the way they handle deposits versus rent, the deposit was sent to a different account held by the same agent. In my previous flat I paid the deposit to an agency and the rent directly to the landlord. This resulted in an issue one time where I got the two accounts confused and paid rent to the agency who, after giving me a small slap on the wrist, transferred it to my landlord. In the flat before that I paid rent and the deposit to my landlords' holding company. That is one of the few times that I paid rent and the deposit into the same account. Again check with the agent that one of these situations is the case but this is absolutely normal when renting through an agency." }, { "docid": "239632", "title": "", "text": "The hard hold is the bank holding your money for no reason but to make money of your. Like the hotel took deposit for my over night and they released the time checked out in there system but it never showed on my account . I had to call the bank why the numbers are not adding up to my current balance. It's illegal practice by banks to hold your money until your realize you didn't spent that much and that musing amount is not even showing on your account. When it happen they will release after 30 days or you can call the bank right away soon as you done your business so you can use the money right away not the bank" }, { "docid": "279480", "title": "", "text": "\"This answer is based on my understanding of the US banking system. We have check cashing businesses here too, which are just like what you describe, except for the spelling :-) Let's consider what \"\"cash it for free at the bank\"\" really means, and why it might not be an option for everyone. One key issue is \"\"which bank?\"\" As an example, suppose that I have an account at ABC Bank. I take out my checkbook for that account and write you a check for $500. (Terminology: In this case, I am the drawer or maker of the check, ABC Bank is the drawee bank, and you, user54609, are the payee. Disclaimer: \"\"You\"\" here is meant as a generic pronoun and I do not mean to insinuate that anything here actually applies to you personally.) There are two common things you might do with the check: If you have an account at some bank, say XYZ Bank, you might take the check to XYZ Bank and deposit it in your account. (You might be able to do this through an ATM, mobile app, or by mail, instead of in person.) XYZ Bank does not have a way to verify with certainty that the check is valid (e.g. they don't know what my signature looks like, nor whether I actually have $500 in my account at ABC), so they send it to ABC Bank, which verifies the check and transfers $500 to XYZ. (This is usually done through a central clearinghouse, such as the Federal Reserve in the US, and in some cases an image of the check may be sent electronically, instead of the physical check.) This process takes some time, so XYZ may not make the $500 available to you right away - there may be a hold period before you can withdraw that $500 from your account. You could take the check to ABC Bank, in person. They will verify on the spot that the check is valid and that you are in fact user54609. If everything looks good, they will hand you $500 in cash (perhaps subtracting a fee of a few dollars). Now we can see some possible problems with each of these approaches. For 1: Maybe you don't have a bank account at all. There are many possible reasons: You don't have enough money to meet the minimum balance that a bank account would require. You used to have an account, but you overdrew or otherwise misused an account, so the bank closed it. They then entered you in a registry such as ChexSystems which ensures that other banks know about this, and so no other bank will open a new account for you. You immigrated to the country illegally and cannot get the documents (driver's license, social security number, etc) that a bank normally requires to open an account. You simply don't like the idea of keeping your money in a bank. Maybe you do have an account at XYZ Bank, but it's in another town. You need the cash today, so you can't use mail or a mobile app, and third-party ATMs usually don't accept deposits. Maybe you need to spend the money today, and XYZ Bank would place a hold. For 2: ABC Bank may not have a branch you can conveniently visit. Maybe the nearest one is a long way away, in another city or across the country. Or maybe ABC is an online bank with no physical branches at all. Maybe it's in the same city, but you don't have transportation to get you there. Or maybe it's simply less convenient than the check-cashing business on the corner. Maybe it is after usual banking hours, or a weekend, and ABC Bank is closed, but you need cash now. In any of these situations, \"\"cash it at the bank\"\" might not be a viable option, and so you might reasonably turn to a check cashing business instead. As you say, you will pay a much higher fee there, but maybe it is worth it to you, or you just don't have any choice. Another possibility, of course, is that you are poorly educated about the banking system, and you don't really understand that 1 and 2 are options, or how to go about them. But there's this storefront on the corner that says \"\"Check Cashing\"\", so this seems like a low-stress, uncomplicated way to exchange this piece of paper for money. As such, there certainly are people who legitimately might want to cash a valid check at a check-cashing business. Check cashing business do of course take some risk of fraud, since they can't necessarily verify the check. There are sometimes steps they can take to minimize this risk. Sometimes they can call ABC Bank and check that I have sufficient money in my account. Maybe they'll only accept certain kinds of checks, such as payroll checks from well-known companies for which you can produce a matching pay stub. And they can demand identification from you (perhaps allowing more flexible options than a bank), which helps ensure that you are the payee, and would make you easier to track down if you did commit fraud. But they will probably lose some money this way, so they will have to make their fees high enough to cover those losses.\"" }, { "docid": "271974", "title": "", "text": "Thank you so much for this! Like you said, I think I have a unique story and went to CC for both financial reasons and I had some personal issues that got in the way that I had to take care of. I guess my biggest fear is the whole resume issue, I put down my CC and my major (I have a 4.0 in all my econ/accounting/business classes that transferred) and cumulative GPA, but people have told me to not list my CC GPA, although then I have nowhere to list a GPA and it omits a lot of important information and part of my story. I listed my intended coursework at UCLA and my major/minor. I have made a list of some alumni that are MDs and VPs in the LA area, and I've been looking on LinkedIn for some recently graduated students, but I don't know how much of a help the recent grads will be." }, { "docid": "596549", "title": "", "text": "You actually don't have to open a business account with your bank, you can have a personal account with the bank and have your business funds go into it, whether it be from cheques or from Eftpos\\Credit Card Facilities. You just have to get your customers to make the cheque out under your name (the same name used for your bank account). If you are trading as a sole trader and you trade under a name other than your own name, then officially you are supposed to register that name with Fair Trading in your state. However, if you are trading using another name and it is not registered, Fair Trading will only become aware of it if someone (usually one of your customers) makes a compliant about you, and they will then ask you to either stop using that name as your trading name or have it registered (if not already registered by someone else)." }, { "docid": "176017", "title": "", "text": "\"Checks (in the US, anyway) are only good for six months after they have been written. After that. under the US Uniform Commerical Code they are considered \"\"stale checks\"\" and banks need not accept them. My experience is that they generally won't -- but you probably shouldn't count on that, either when figuring out whether to try depositing an old check or figuring out how much cash you need to keep in your checking account to cover recent stale checks. The check you now hold is certainly a statement of intent to pay you and thus is a useful document to supplement other evidence that they still owe you the money -- but since checks can be cancelled and/or a replacement check may have been issued, its value for that purpose may be limited. You can try depositing it and see what happens. If that doesn't work (or you don't want to bother trying it) you can contact the retirement plan, point out that this check went uncashed, and ask them to send you a replacement. If they haven't already done so (you might want to check your own records for that), there shouldn't be any problem with this. (Note: Many business checks have a statement printed on them that they're only good for 90 days or so. If yours does, you can skip trying to cash it; just contact the retirement plan offices.)\"" } ]

[ { "docid": "65404", "title": "", "text": "Just have the associate sign the back and then deposit it. It's called a third party cheque and is perfectly legal. I wouldn't be surprised if it has a longer hold period and, as always, you don't get the money if the cheque doesn't clear. Now, you may have problems if it's a large amount or you're not very well known at the bank. In that case you can have the associate go to the bank and endorse it in front of the teller with some ID. You don't even technically have to be there. Anybody can deposit money to your account if they have the account number. He could also just deposit it in his account and write a cheque to the business." } ]

[ { "docid": "243732", "title": "", "text": "No. This amount of money is not appropriate for friends to go in on. Although you could consider buying a house with a business partner, have the contracts drawn up, see an attorney, read up on the penalties if one of the partners doesn't hold up their end from the law's point of view. Also, since this is a business arrangement, write and sign all sorts of details regarding the penalties amongst the partners (not just the law) when one person doesn't hold up. It isn't that you don't have good intentions, or that you couldn't do it just fine if no problems ever happen. The issue is that over the course of a mortgage, which is at least several years, something is very likely to come up. If you and your friend aren't prepared to think about all those issues and how to handle them, you will lose a friend, probably a house and your good credit. I wouldn't go into business with my best friend because I want him to stay my best friend." }, { "docid": "261856", "title": "", "text": "Banks has to complete KYC. In case you want to open a bank account, most will ask for proof of address. I also feel it is difficult for bank to encash a cheque payable to a business in your account. Opening a bank account in the name of your business or alternatively obtaining a cheque payable to your personal name seems the only alternatives to me." }, { "docid": "228396", "title": "", "text": "from my experience working in the family business, the first step is to make sure you HAVE the authority, one of the problems I encountered was that we were given managerial positions were we not empowered to do anything, which created many problems which comes to my second point, make sure you have clear roles and responsibilities, you have to know what you should be doing, if you don't, find out asap what you and your other managers are supposed to do, and lastly, make sure there is accountability and every family member and employees must be treated equally so that if your employees or you yourself don't do something you are supposed to do, you can be held accountable for your actions, you won't believe how easy family members get special treatment, how family members miss deadlines and nobody cares, and how family members are managers when really they are just daddy's spoiled puppets being there to be peons (not to think), and Facebook more than usual. I recommend you read all literature you can get your hands on on dealing with family Enterprises and how to deal with common issues, good luck, I for one am desperately searching for jobs outside the family business because I can't take it anymore." }, { "docid": "279480", "title": "", "text": "\"This answer is based on my understanding of the US banking system. We have check cashing businesses here too, which are just like what you describe, except for the spelling :-) Let's consider what \"\"cash it for free at the bank\"\" really means, and why it might not be an option for everyone. One key issue is \"\"which bank?\"\" As an example, suppose that I have an account at ABC Bank. I take out my checkbook for that account and write you a check for $500. (Terminology: In this case, I am the drawer or maker of the check, ABC Bank is the drawee bank, and you, user54609, are the payee. Disclaimer: \"\"You\"\" here is meant as a generic pronoun and I do not mean to insinuate that anything here actually applies to you personally.) There are two common things you might do with the check: If you have an account at some bank, say XYZ Bank, you might take the check to XYZ Bank and deposit it in your account. (You might be able to do this through an ATM, mobile app, or by mail, instead of in person.) XYZ Bank does not have a way to verify with certainty that the check is valid (e.g. they don't know what my signature looks like, nor whether I actually have $500 in my account at ABC), so they send it to ABC Bank, which verifies the check and transfers $500 to XYZ. (This is usually done through a central clearinghouse, such as the Federal Reserve in the US, and in some cases an image of the check may be sent electronically, instead of the physical check.) This process takes some time, so XYZ may not make the $500 available to you right away - there may be a hold period before you can withdraw that $500 from your account. You could take the check to ABC Bank, in person. They will verify on the spot that the check is valid and that you are in fact user54609. If everything looks good, they will hand you $500 in cash (perhaps subtracting a fee of a few dollars). Now we can see some possible problems with each of these approaches. For 1: Maybe you don't have a bank account at all. There are many possible reasons: You don't have enough money to meet the minimum balance that a bank account would require. You used to have an account, but you overdrew or otherwise misused an account, so the bank closed it. They then entered you in a registry such as ChexSystems which ensures that other banks know about this, and so no other bank will open a new account for you. You immigrated to the country illegally and cannot get the documents (driver's license, social security number, etc) that a bank normally requires to open an account. You simply don't like the idea of keeping your money in a bank. Maybe you do have an account at XYZ Bank, but it's in another town. You need the cash today, so you can't use mail or a mobile app, and third-party ATMs usually don't accept deposits. Maybe you need to spend the money today, and XYZ Bank would place a hold. For 2: ABC Bank may not have a branch you can conveniently visit. Maybe the nearest one is a long way away, in another city or across the country. Or maybe ABC is an online bank with no physical branches at all. Maybe it's in the same city, but you don't have transportation to get you there. Or maybe it's simply less convenient than the check-cashing business on the corner. Maybe it is after usual banking hours, or a weekend, and ABC Bank is closed, but you need cash now. In any of these situations, \"\"cash it at the bank\"\" might not be a viable option, and so you might reasonably turn to a check cashing business instead. As you say, you will pay a much higher fee there, but maybe it is worth it to you, or you just don't have any choice. Another possibility, of course, is that you are poorly educated about the banking system, and you don't really understand that 1 and 2 are options, or how to go about them. But there's this storefront on the corner that says \"\"Check Cashing\"\", so this seems like a low-stress, uncomplicated way to exchange this piece of paper for money. As such, there certainly are people who legitimately might want to cash a valid check at a check-cashing business. Check cashing business do of course take some risk of fraud, since they can't necessarily verify the check. There are sometimes steps they can take to minimize this risk. Sometimes they can call ABC Bank and check that I have sufficient money in my account. Maybe they'll only accept certain kinds of checks, such as payroll checks from well-known companies for which you can produce a matching pay stub. And they can demand identification from you (perhaps allowing more flexible options than a bank), which helps ensure that you are the payee, and would make you easier to track down if you did commit fraud. But they will probably lose some money this way, so they will have to make their fees high enough to cover those losses.\"" }, { "docid": "223645", "title": "", "text": "\"I know this an old thread, but one that caught my interest as I just moved to the USA from Australia. As per the OP I had never written a check in my whole life, and upon arriving in the US I was surprised as to their proliference. In Australia pretty much all bills you receive can be paid in a number of ways: For small amounts between friends cash is probably used most, but for larger amounts direct transfer is popular. Your friend/landlord will give you their bank account number and BSB number, which identifies their bank, and then you transfer the money in. We don't have a SSN like some other countries. Cheques are still used by some however, esp by the older generations. Now that I'm in the US initially I had tried to set up direct transfer to pay my rent however the bank has a $1000 daily transfer limit. I contacted the bank to get this increased however I was informed that this limit applies to ALL accounts at the bank. I asked how do people pay their rents with this low limit and was told that most people used cheques. (This explains the strange look I got from my landlord when I asked for their bank account details so I could pay the rent!) I now have some bills to pay here and I use online banking. You enter the biller's name and address and then the bank actually prints off a cheque and posts it to the biller on your behalf! My first couple of pays here were also cheques, which were the first actual \"\"paychecks\"\" I had ever received.\"" }, { "docid": "124191", "title": "", "text": "Couple of my friends went through a fraud agent who ran off with their money and the landlords were none the wiser. So it always pays to be a bit diligent. Are they a well known letting agents nationally ? Many agents do have different accounts to manage their properties. Yours seems a case as such probably i.e. they manage the property on behalf of the landlord so keeping their monies differentiated. Did you sign an agreement ? If yes go through what is written in the agreement, most of it is same in all agreements but have a look anyway. Check if there is mention of deposit protection scheme. One thing you could do is go to a bank to do the transfer, the same bank where the letting agent holds their account and confirm from them if it is really a personal account or a business account. I am not sure how possible it is, but doesn't hurt to ask. If it is a personal account, then fraud is the most possible cause. The sort code should tell you which branch and which bank. Or the best option is to ask the estate agents to show a recent statement of the bank account, where the money is to be deposited into. Some tips" }, { "docid": "104492", "title": "", "text": "\"First thing is that your English is pretty damn good. You should be proud. There are certainly adult native speakers, here in the US, that cannot write as well. I like your ambition, that you are looking to save money and improve yourself. I like that you want to move your funds into a more stable currency. What is really tough with your plan and situation is your salary. Here in the US banks will typically have minimum deposits that are high for you. I imagine the same is true in the EU. You may have to save up before you can deposit into an EU bank. To answer your question: Yes it is very wise to save money in different containers. My wife and I have one household savings account. Yet that is broken down by different categories (using a spreadsheet). A certain amount might be dedicated to vacation, emergency fund, or the purchase of a luxury item. We also have business and accounts and personal accounts. It goes even further. For spending we use the \"\"envelope system\"\". After our pay check is deposited, one of us goes to the bank and withdraws cash. Some goes into the grocery envelope, some in the entertainment envelope, and so on. So yes I think you have a good plan and I would really like to see a plan on how you can increase your income.\"" }, { "docid": "400230", "title": "", "text": "\"IANAL, but. As you note, when you open a new account, they give you temporary checks that are usually blank in the upper left. I've used such checks and the bank has honored them. Therefore, I conclude that there must not be any legal requirement for anything to appear there, nor does the bank require it. Businesses are often reluctant to accept such temporary checks, for the obvious reason that anyone could go to the bank, open an account with $10, write checks for thousands of dollars, and disappear. At least if they've waited long enough to get the permanent checks in, there's some reason to believe that they plan to stick around. In any case, it's not clear what you are trying to accomplish. You want to hand-write either your business name or your personal name depending on whether the check is for personal or business purposes? I don't see what that gains. You could always use a personal check for business purposes. If you're afraid someone will say, \"\"Hey, that doesn't look very professional, what kind of fly-by-night company is this that uses personal checks?\"\", surely a hand-written company name would look even less professional. Why not just open a business account and have your personal checks printed with your personal name and your business checks with your business name? I don't know where you live, but I have a business account on which I pay zero fees. The only cost is getting checks printed. There's the small hassle of having to make one trip to the bank to open the account. Well, the biggest hassle I have is that the bank won't let me transfer money between my personal and business accounts over the Internet, so I have to either go to the bank to move money back and forth, or I have to write a check from one account to the other and deposit through an ATM.\"" }, { "docid": "57373", "title": "", "text": "\"Uber would have been a better company if they just started up the world's largest payday loans business. It would actually be cheaper to operate, by a substantial margin, and they could run their business legitimately, instead of immorally and illegally on most locations. When I looked at Uber, I laughed so hard it actually made my stomach hurt. A guy I knew reckoned he was creaming it. I used simply maths to show he was making 4 cents a kilometre by the time running costs were accounted for, and many Uber drivers will be operating at an actual loss. At least a payday loan has no hidden costs associated with it, and you don't have to spend days raising the small amount of cash you need to get through the month. Uber must be the most dishonest business of the planet right now, and its \"\"employees\"\" (LOL) are the dumbest fucks on the planet.\"" }, { "docid": "408124", "title": "", "text": "When you start at a new job here in the U.S., the default means of payment is usually a paper check. Most folks will quickly set up direct deposit so that their employer deposits their paycheck directly into their personal bank account - the incentive to do so is that you receive your funds faster than if you deposit a paper check. Even if you set up direct deposit on your first day on the job, you may still receive your first paycheck as a paper check simply because the wheels of payroll processing turn slowly at some (large) companies. A counter example is a self-employed contractor - perhaps a carpenter or house painter. These folks are paid by their customers, homeowners and such. Many larger, well established contracters now accept credit card payments from customers, but smaller independents may be reluctant to set up a credit card merchant account to accept payment by card because of all the fees that are associated with accepting credit card payments. 3% transaction fees and monthly service fees can be scary to any businessman who already has very thin profit margins. In such cases, these contractors prefer to be paid by check or in cash for the simple reason that there are no fees deducted from cash payments. There are a few folks here who don't trust direct deposit, or more specifically, don't trust their employer to perform the deposit correctly and on time. Some feel uncomfortable giving their bank info to their employer, fearing someone at the company could steal money from their account. In my experience, the folks who prefer a paper paycheck are often the same folks who rush to the bank on payday to redeem their paychecks for cash. They may have a bank account (helps with check cashing) but they prefer to carry cash. I operate in a manner similar to you - I use a debit card or credit card (I only have one of each) for nearly all transactions in daily life, I use electronic payments through my bank to pay my regular bills and mortgage, and I receive my paycheck by direct deposit. There have been periods where I haven't written or received paper checks for so long that I have to hunt for where I put my checkbook! Even though I use a debit card for most store purchases, the bank account behind that debit card is actually a checking account according to the bank. Again, the system defaults to paper checks and you have the option of going electronic as well. Before we judge anyone who doesn't use direct deposit or who prefers to be paid in cold hard cash, consider that direct deposit is a luxury of stability. Steady job, home, etc. Direct deposit doesn't make sense for a contractor or day laborer who expect to work for a different person each day or week. I don't think this is all that unique to the US. There are people in every city and country who don't have long-term employment with a single employer and therefore prefer cash or paper check over electronic payments. I'd be willing to bet that this applies to the majority of people on the planet, actually." }, { "docid": "135196", "title": "", "text": "\"Checks sold as \"\"business checks\"\" are larger than checks sold as \"\"personal checks\"\". Personal checks are usually 6\"\" x 2 1/2\"\" while business checks are 8 1/2 \"\" x 3 to 4 \"\". Also, business checks typically have a tear-off stub where you can write who the check was made out to and what it was for. In this computer age that seems pretty obsolete to me, I enter the check into the computer, not write it on a stub, but I suppose there are still very small businesses out there that doesn't use a computerized record-keeping system. These days business checks are often printed on 8 1/2 by 11\"\" paper -- either one per sheet with a big tear-off or 3 per sheet with no tear off -- so you can feed them through a computer printer easily. Nothing requires you to use \"\"business checks\"\" for a business account. At least, I've always used personal checks for my business account with no problem. These days I make almost all payments electronically, I think I write like one paper check a year, so it's become a trivial issue. Oh, and I've never had any problem getting a check printer to put my business name on the checks or anything like that.\"" }, { "docid": "22268", "title": "", "text": "\"They don't actually need to. They accept deposits for historical reasons and because they make money doing so, but there's nothing key to their business that requires them to do so. Here's a decent summary, but I'll explain in great detail below. By making loans, banks create money. This is what we mean when we say the monetary supply is endogenous. (At least if you believe Sir Mervyn King, who used to run England's central bank...) The only real checks on this are regulatory--capitalization requirements and reserve requirements, which impose a sort of tax on a bank's circulating loans. I'll get into that later. Let's start with Why should you believe that story--that loans create deposits? It seems like a bizarre assertion. But it actually matches how banks behave in practice. If you go borrow money from a bank, the loan officer will do many things. She'll want to look at your credit history. She'll want to look at your income and assets. She'll want to look at what kind of collateral or guarantees you're providing that the loan will be repaid. What she will not do is call down to the vaults and make sure that there's enough bills stacked up for them to lend out. Loans are judged based on a profitability function determined by the interest rate and the loan risk. If those add up to \"\"profitable\"\", the bank makes the loan. So the limiting factor on the loans a bank makes are the available creditworthy borrowers--not the bank's stock of cash. Further, the story makes sense because loans are how banks make money. If a bank that was short of money suddenly stopped making loans, it'd be screwed: no new loans = no way to make money to pay back depositors and also keep the lights on = no more bank. And the story is believable because of the way banks make so little effort to solicit commercial deposit business. Oh sure, they used to give you a free toaster if you opened an account; but now it's really quite challenging to find a no-fee checking account that doesn't impose a super-high deposit limit. And the interest paid on savings deposits is asymptotically approaching zero. If banks actually needed your deposits, they'd be making a lot more of effort to get them. I mean, they won't turn up their noses; your deposited allowance is a couple basis points cheaper to the bank than borrowing from the Fed; but banks seem to value small-potatoes depositors more as a source of fees and sales opportunities for services and consumer credit than as a source of cash. (It's a bit different if you get north of seven figures, but smaller depositors aren't really worth the hassle just for their cash.) This is where someone will mention the regulatory requirements of fractional reserve banking: banks are obliged by regulators to keep enough cash on hand to pay out a certain percentage of deposits. Note nothing about loans was said in that statement: this requirement does not serve as a check on the bank making bad loans, because the bank is ultimately liable to all its depositors for the full value of their deposits; it's more making sure they have enough liquidity to prevent bank runs, the self-fulfilling prophecy in which an undercapitalized bank could be forced into bankruptcy. As you noted in your question, banks can always borrow from the Fed at the Fed Discount Rate (or from other banks at the interbank overnight rate, which is a little lower) to meet this requirement. They do have to pledge collateral, but loans themselves are collateral, so this doesn't present much of a problem. In terms of paying off depositors if the bank should collapse (and minimizing the amount of FDIC insurance payout from the government), it's really capital requirements that are actually important. I.E. the bank has to have investors who don't have a right to be paid back and whose investment is on the hook if the bank goes belly-up. But that's just a safeguard for the depositors; it doesn't really have anything to do with loans other than that bad loans are the main reason a bank might go under. Banks, like any other private business, have assets (things of value) and liabilities (obligations to other people). But banking assets and liabilities are counterintuitive. The bank's assets are loans, because they are theoretically recoverable (the principal) and also generate a revenue stream (the interest payments). The money the bank holds in deposits is actually a liability, because it has to pay that money out to depositors on demand, and the deposited money will never (by itself) bring the bank any revenue at all. In fact, it's a drain, because the bank needs to pay interest to its depositors. (Well, they used to anyway.) So what happens when a bank makes a loan? From a balance sheet perspective, strangely enough, the answer is nothing at all. If I grant you a loan, the minute we shake hands and you sign the paperwork, a teller types on a keyboard and money appears in your account. Your account with my bank. My bank has simultaneously created an asset (the loan you now have to repay me) and an equal-sized liability (the funds I loaned you, which are now deposited in your account). I'll make money on the deal, because the interest you owe me is a much higher rate than the interest I pay on your deposits, or the rate I'd have to pay if I need to borrow cash to cover your withdrawal. (I might just have the cash on hand anyway from interest and origination fees and whatnot from previous loans.) From an accounting perspective, nothing has happened to my balance sheet, but suddenly you owe me closing costs and a stream of extraneous interest payments. (Nice work if you can get it...) Okay, so I've exhaustively demonstrated that I don't need to take deposits to make loans. But we live in a world where banks do! Here's a few reasons: You can probably think of more, but at the end of the day, a bank should be designed so that if every single (non-borrowing) depositor withdrew their deposits, the bank wouldn't collapse or cease to exist.\"" }, { "docid": "164801", "title": "", "text": "\"I live in the UK so it's a little different but generally you'd have one account (a current account) which would have a Visa/MasterCard debit card associated before working and any high street bank (don't know what the US equivalent would be, but big banks such as HSBC/Santander) will offer you a savings account which pays a v small amount of interest as well as bonds as all sorts. From what I know most people have their salary paid into their current account (which would be the spending account with a card associated) and would transfer a set amount to a savings account. Personally, I have a current account and a few different saving accounts (which do not have cards associated). One savings account has incoming transfers/money received and I can use online banking to transfer that to my current account \"\"instantly\"\" (at least I've done it standing at ATM's and the money is there seconds later - but again this is the UK, not US). This way, my primary current account never has more than £10-15 in it, whenever I know I need money I'll transfer it from the instant access account. This has saved me before when I've been called by my bank for transactions a few £100 each which would have been authorised I kept all my money in my current account. If you don't have money (and dont have an overdraft!) what are they meant to do with it? The other savings account I had setup so that I could not transfer money out without going into a branch with ID/etc, less to stop someone stealing my money and more to be physically unable to waste money on a Friday if I don't arrive at the bank before 4/5PM, so saves a lot of time. US banking is a nightmare, I don't imagine any of this will translate well and I think if you had your salary paid into your savings on a Friday and missed the bank with no online banking facilities/transfers that aren't instant you'd be in a lot of trouble. If the whole \"\"current + instant access savings account\"\" thing doesn't work to well, I'm sure a credit/charge (!!!) card will work instead of a separate current account. Spend everything on that (within reason and what you can pay back/afford to pay stupid interest on) on a card with a 0% purchase rate and pay it back using an account you're paid into but is never used for expenses, some credit cards might even reward you for this type of thing but again, credit can be dangerous. A older retired relative of mine has all of his money in one account, refuses a debit card from the bank every time he is offered (he has a card, but it isn't a visa/mastercard, it's purely used for authentication in branch) and keeps that in a safe indoors! Spends everything he needs on his credit card and writes them a sort of cheque (goes into the bank with ID and signs it) for the full balance when his statement arrives. No online banking! No chance of him getting key logged any time soon. tldr; the idea of separating the accounts your money goes in (salary wise) and goes out (spending) isn't a bad idea. that is if wire transfers don't take 3-5 days where you are aha.\"" }, { "docid": "89211", "title": "", "text": "There is one edge case that may be of value to you. If you declare a bonus (probably to yourself given a very small company) you can deduct it from your year and then have up to 6 months to actually write the cheque and give it to the person. Say your year end for the corporation is July 31st. You could declare the bonus July 30th and deduct it from that year, lowering your corporate tax. You could then wait until January 30th to actually write the bonus cheque. The person would then have that taxable income in a later calendar year, deferring paying the tax. Depending on the size of the bonus, this would possibly matter, although if you did large bonuses every year it would only matter the first time. The other issue is the availability of your bookkeeper or accountant. They are sometimes very busy during personal income tax season. They often like a vacation immediately after that. They may go away in the summer when their kids are out of school. The nice thing about a July 31st year end is that you can probably count on a quick turnaround from your accountant in September. The possible downside is that you won't enjoy reconciling your credit card statements and the like in August as part of getting your year end stuff together. You can avoid that by keeping your books in a decent shape all the time." }, { "docid": "542213", "title": "", "text": "\"From the IRS perspective, there's no difference between \"\"your taxes\"\" and \"\"your sole proprietorship's taxes\"\", they're all just \"\"your taxes\"\". While I could see it being very useful and wise to track your business's activities separately, and use separate bank accounts and the like, this is just a convenience to help you in your personal accounting, and not something that needs to relate directly to how tax forms are completed or taxes are paid. When calculating your taxes, if you want to figure out how much \"\"you\"\" owe vs. how much \"\"your business\"\" owes, you'll have to do so yourself. One approach might be just to take the amount that your Schedule C puts as income on your return and multiply by your marginal tax rate. Another approach might be to have your tax software run the calculations as though you had no business income, and see what just \"\"your personal\"\" taxes would have been without the business. If you think of the business income as being \"\"first\"\" and should use up the lower brackets rather than your personal income, maybe do it the other way around and have your software run the calculations as though you had only the business income and no other personal/investment income, and see what the amount of taxes would be then. Once you've figured out a good allocation, the actual mechanics of paying some \"\"personal tax amount\"\" from your personal bank account and some \"\"business tax amount\"\" from your business bank account are up to you. I'd probably just transfer the money from my business account to my personal account and pay all the taxes from the personal account. Writing two separate checks, one from each account, that total to the correct amount, I'm sure would work just fine as well. You can probably make separate payments from each account electronically through Direct Pay or EFTPS as well. As long as all taxes are paid by the deadline, I don't think the IRS is too picky about the details of how many payments are made.\"" }, { "docid": "417133", "title": "", "text": "I am using my debit card regularly: in ATM's with a pin, in stores with my signature, and online. But later you say But from what I recall from starting my own business (a LONG time ago), for debit cards there's only a per-transaction fee of like $0.25, not a percentage cut. Only pin transactions have just a per-transaction fee paid by you to the merchant (and you are reimbursed by Schwab). If you use your card with just a signature or online without a pin, then it is a credit transaction from the merchant's perspective. The merchant pays a fee and Schwab gets its cut of that. So for two of the transaction types that you describe, the merchant pays Schwab (indirectly) out of your payment. Only when you enter your pin does it process as a debit transaction where Schwab pays the merchant. Because check cards withdraw the money from your account immediately, you don't even get the twenty to fifty day grace period. So those merchant fees are pure profit for Schwab, offsetting the loss from the ATM fees. You claim $4-5k in fees at $.25 each. That's sixteen to twenty thousand transactions. Assuming that several is four to five years, that's more than ten transactions a day. That seems like a lot. I can see three for meals, one for miscellaneous, and maybe some shopping. But if I go shopping one day, I don't normally go again for a while. I have trouble seeing a consistent average of five or more transactions a day. Even if we use just the higher ATM fees (e.g. $2), that's still more than a transaction a day. That's an extreme level of usage, particularly for someone who also makes frequent purchases via card. I haven't done any other business with them. I find this confusing. How does money get into your account? At some point, you must have deposited money into the account. You can't debit from an account without a positive balance. So you must have done or be doing some kind of business with them. If nothing else, they can invest the balance that you deposit. Note that they make a profit off such investments. They share some of that profit with you in the form of interest, but not that much really. Of course, Schwab may still be losing money on your transactions. We can't really tell without more information on how much of each transaction type you do and how much of a balance you maintain. Perhaps they are hoping that you will do other, more profitable, activities in the future. I doubt there are that many Schwab customers like you describe yourself. As best I've been able to see, they advertise their banking services just to investment customers. So it's unlikely that many customers who don't use their investment services use their banking services just for ATM reimbursements." }, { "docid": "29372", "title": "", "text": "\"Lets say you owed me $123.00 an wanted to mail me a check. I would then take the check from my mailbox an either take it to my bank, or scan it and deposit it via their electronic interface. Prior to you mailing it you would have no idea which bank I would use, or what my account number is. In fact I could have multiple bank accounts, so I could decide which one to deposit it into depending on what I wanted to do with the money, or which bank paid the most interest, or by coin flip. Now once the check is deposited my bank would then \"\"stamp\"\" the check with their name, their routing number, the date, an my account number. Eventually an image of the canceled check would then end up back at your bank. Which they would either send to you, or make available to you via their banking website. You don't mail it to my bank. You mail it to my home, or my business, or wherever I tell you to mail it. Some business give you the address of another location, where either a 3rd party processes all their checks, or a central location where all the money for multiple branches are processed. If you do owe a company they will generally ask that in the memo section in the lower left corner that you include your customer number. This is to make sure that if they have multiple Juans the money is accounted correctly. In all my dealings will paying bills and mailing checks I have never been asked to send a check directly to the bank. If they want you to do exactly as you describe, they should provide you with a form or other instructions.\"" }, { "docid": "340857", "title": "", "text": "Well first off, I would advice you to do this research yourself. You should not base your selection off someone's opinion such as mines. With that being said, these are some factors I suggest you consider and research before talking to an offshore bank account: Now, when opening an offshore account most offshore banks do not require you to be present at all. You can open an account simply by calling them or filling out their application online. However, be prepared to provide them with some information to verify who you are and the nature of your business such as a notarized passport along with other various forms of information that they may require. Just think of what your local bank requires is generally what they will ask as well. Here is a compiled list of offshore bank accounts to consider: These banks overall have a range between $0 - $1 million (domestic currency) minimum deposits. Most of them ranging from $1000-$5000. It all depends on the type of account, the nature of the account, and the business associated with the account." }, { "docid": "596549", "title": "", "text": "You actually don't have to open a business account with your bank, you can have a personal account with the bank and have your business funds go into it, whether it be from cheques or from Eftpos\\Credit Card Facilities. You just have to get your customers to make the cheque out under your name (the same name used for your bank account). If you are trading as a sole trader and you trade under a name other than your own name, then officially you are supposed to register that name with Fair Trading in your state. However, if you are trading using another name and it is not registered, Fair Trading will only become aware of it if someone (usually one of your customers) makes a compliant about you, and they will then ask you to either stop using that name as your trading name or have it registered (if not already registered by someone else)." } ]

[ { "docid": "325273", "title": "", "text": "Sure you can. You can fill in whatever you want in the From section of a money order, so your business name and address would be fine. The price only includes the money order itself. You can hand deliver it yourself if you want, but if you want to mail it, you'll have to provide an envelope and a stamp. Note that, since you won't have a bank record of this payment, you'll want to make sure you keep other records, such as the stub of the money order. You should probably also ask the contractor to give you a receipt." } ]

[ { "docid": "76120", "title": "", "text": "Well first problem is usually that you are trying to do too much, you end up micro managing, once a company becomes large enough this is impossible to keep doing at the same level. If you find that you don't have enough time maybe it's time to either hire someone new, or promote/transfer someone. You need to trust and give freedom to your employees to do their job in their own way which may or may not be better than yours. (Communicate with each at intervals.) A lot of business owners struggle with this because it costs them money, and that is wrong it's cost your company money which is a separate entity than you. A piece of property that makes you less money than the week before is still making you money you are not losing money. So get that out of your head, it's not your money until you take it out of the business until then that money including profits are the property of the business (this is how the law see it by the way.) Marginally an understaffed store will make a larger percentage of profits from revenue, a well staffed store will make more actual profits from more actual revenue because it can handle the business coming into the store better, which in turns should lead to more business. On a particular day you may see more money in profit from an understaffed store, someone calls out let's say, but trust me when I say that will not continue for very long. On of the biggest challenges new business owners face is they are fugal, as in they don't spend the money they need to. This means buying new equipment, and hiring and giving raises and promotions, so you can handle new business as well. Let say you are making T-Shirts, or really adding new designs to pre-made plain shirts, you can only press one at a time which for a while is enough, but eventually you are going to need another press so you can do 2 at a time, but a lot business owners will somehow expect an employee to produce more with what he has, now orders aren't being filed and you are in a panic and possibly angry but guess what you are angry at the employee not the fact you were to stupid to realize that he needs 2 presses to do the job correctly that's your own fault and you're blind to it, because you feel as if you are working twice as hard than them because of the problem you created! And let's say the problem is different now the press isn't getting hot enough and it take 20% per shirt to get it to stay on correctly and you decide to never fix it, then a light goes out then blank then blank and suddenly you realize finally all of this needs to be replaced at the same time. I've seen things like this happen, in new and old businesses things work fine for the first 5 years then normal maintenance is forgotten, have a depreciation fund ready so it doesn't feel like you are spending any money, that's what that fund is for and you put into it from the beginning, need a $2k equipment, ohh I have $4k saved for this already, it was money intended to be spent on this. But of course some of this is going to depend on the type of business you are running! And since you have provided us no details I can't give an answer for you because all businesses are different, but I feel that these things, refusing to give freedom and authority to other employees, and refusing to spend money when needed are the biggest pitfalls most business owners fall into." }, { "docid": "582933", "title": "", "text": "\"Curiosity: Are \"\"heavy packages\"\" things I order from Amazon, or the sort of things like shrinkwrapped pallets that get delivered to Best Buy? 'Cause if it's the Amazon thing, USPS is almost always faster than the other guys (esp. Ontrac, who can't be bothered to deliver packages at all, let alone on time).\"" }, { "docid": "2025", "title": "", "text": "\"It's not usually apparent to the average consumer, but there's actually two stages to collecting a payment, and two ways to undo it. The particular combination that occurs may lead to long refund times, on top of any human delays (like Ben Miller's answer addresses). When you pay with a credit card, it is typically only authorized - the issuing bank says \"\"I'm setting this money aside for this transaction\"\", but no money actually changes hands. You'll typically see this on your statement as a \"\"pending\"\" charge. Only later, in a process called \"\"settlement\"\", does your bank actually send money to the merchant's bank. Typically, this process starts the same day that the authorization happens (at close of business), but it may take a few days to complete. In the case of an ecommerce transaction, the merchant may not be allowed to start it until they ship whatever you ordered. On the flip side, a given transaction can be voided off or money can be sent back to your card. In the first case, the transaction will just disappear altogether; in the second, it may disappear or you may see both the payment and the refund on your statement. Voids can be as fast as an authorization, but once a transaction has started settlement, it can't be voided any more. Sending money back (a \"\"refund\"\") goes through the same settlement process as above, and can take just as long. So, to specifically apply that to your question: You get the SMS when the transaction is authorized, even though no money has yet moved. The refund money won't show up until several days after someone indicates that it should happen, and there's no \"\"reverse authorize\"\" operation to let you or your bank know that it's coming.\"" }, { "docid": "152044", "title": "", "text": "\"You are looking to be made whole, so the requests need to be reasonable. You need to be clear that you want: You aren't going to 'punish' the dry cleaner or anything else. You don't want coupons or free service for future work, you want your pants or cash. If you send a letter, send it certified with a return receipt. You want to be able to show a judge you made efforts outside of the court that you attempted to reconcile the issue. Sending it certified is also a good way to indicate to the dry cleaner that you aren't going to just go away. Be clear, firm and very polite. You cannot blame or criticize the cleaner, simply state \"\"On YY/YY/YYYY date I didn't get my pants back; I want my pants or I want money by XX/XX/XXXX date.\"\" If you want to picket, contact local law enforcement and find out the rules before picketing. You can probably picket from a sidewalk, but that doesn't mean the dry cleaner won't approach you and get in your personal space. If you hand out flyers, stick strictly to provable facts lest you be sued for defamation. It is smarter to hand out a fact sheet or speak from a rehearsed script so that you don't say something that would be actionable. Make sure you pick the busiest day of the week for a dry cleaner. (Weekends?) I don't think this is criminal, but you can sue. Like others said, if you have the cleaning ticket (and the ticket doesn't absolve the dry cleaner of responsibility) you will probably get a judgement. Be careful what you ask for, make sure you cover all of your costs (the pants, filing fees, time off of work, and collection efforts.) Itemize all your requested costs and make sure they are reasonable. You only want to be made whole, and that only means $160 or pants (plus fees) Just because you won in small claims doesn't mean you can collect easily. Figure in your cost for collecting when you sue. You might have to hire somebody to collect on your judgement. If you hire somebody they will want a cut, so you might want to figure that out for your small claims. I am guessing this is a local business, so it should be pretty easy to collect. (Unless they go out of business, in which case you will get nothing.)\"" }, { "docid": "144879", "title": "", "text": "First, you can never trust what USPS says about the status of your package. I have had tracking numbers that said they were pending receipt of the package up to and including the day I received the package myself. It's a nice feature, but nothing to rely on. Second, she cancelled the order after not receiving it in 6 days?? I've shipped things New York to California (or vice versa) that took 10 business days to arrive before. A few times because of bad weather in between, and several times because they attempted delivery and I was not available, or because the shipper wasn't able to get it to the post office 3 or 4 days later than they said they would when they filled out the label. Cancelling your order after 6 days is jumping the gun a bit. I don't blame the company for initially saying they couldn't refund her purchase since their records showed it was fulfilled. I WANT to jump on the bandwagon disliking the company for their response, but let's be honest here - ars technica did not reproduce her communications to the company verbatim like they did the company's messages to her. She could have written much more crazy that would make the company's response seem tame and level headed in comparison. Trying to collect the $250 is ridiculous, you're allowed to have an opinion about a company and espouse that to others. But let's not grab our pitchforks over how horrible this company was to treat this lady this way for not getting her iPhone case to her in 6 days." }, { "docid": "220853", "title": "", "text": "Reading stuff like this makes me want to go into the debt collection business. Just send letters to random people demanding money. Sounds like an easy way to make a living. What's your name and address? Just kidding. If they are sending stuff to a Virginia PO Box, close the box with no forwarding address and consider it case closed. If they are targetting you personally in New Hampshire, the best thing to do is to sue proactively before it goes to collection. New Hampshire has strict anti-debt-collection laws. Basically, what you do is go to small claims court and fill out a one-page form. Sue them for $2000, $3000 or whatever is convenient. Do not hire a lawyer. You can do this in 2 hours of your own time. Your grounds are: (1) Violation of the creditor of NH FDCA laws. According to the laws the creditor has to put all kinds of specific stuff in their threat letters. Since they are not doing this, they have violated NH FDCA. Read the FDCA so you know which specific items they are violating. (2) Extortion. Since you do not owe them any money, demanding money from you is extortion which is both criminally and civilly actionable. You sue them for mental anguish due to extortion. The validity of your claims is irrelevant. You just need to get them in court. There are two possibilities: (A) They fail to show up. In this case you win and they owe you $3000 or whatever. Not only that if they later try to collect from you send a copy of the judgement to the credit bureau or collector or whatever and that is proof you owe them no money. (B) They hire some stooge local lawyer who appears. Accept the court's offer for arbitration. When you go into arbitration with the lawyer tell him you will drop the lawsuit if they send you a check for $500 and a hand-written guarantee from him that you will never hear from his client again. Either way, you come out ahead. By the way, it is absolutely guaranteed that the enemy lawyer will accept your offer in (B) above because the SEO company is already paying him $5000 to show up to answer your lawsuit, and the lawyer does not want to hang around all morning in court waiting for the case to be heard. If he can get out of there in half an hour for only $500 he will do it. -------------------------------UPDATE If all you are getting is calls and the caller refuses to identify themself, then it is definitely an illegal scam. It is illegal in New Hampshire to make collection calls and refuse to full identify who is calling. The phone company has methods for dealing with illegal calls. First you have to file a police report. Then you call Verizon Security at 1-800-518-5507 (or whatever your phone company is). They will trace the call and identify the caller. They you can make a criminal complaint in their jurisdiction unless the call is from Pakistan or something." }, { "docid": "595759", "title": "", "text": "See this spread sheet I worked up for fun. https://docs.google.com/spreadsheets/d/1ZhI-Rls4FpwpdpEYgdn20lWmcqkIEhB-2AH0fQ7G2wY/edit?usp=sharing If you are really crazy you can do what I did and model the rates (modified normal) and expenses (large items like the roofing being replaced on exponential) distribution and run a monte carlo simulation to get maximum likely losses by years and ranges of final values. P.S. As a side note, this spreadsheet makes a lot of assumptions and I would consider it absolutely necessary to be able to build a sheet like this and understand all the assumptions and play with it to see how quickly this can turn into a losing investment before making any business investments." }, { "docid": "233145", "title": "", "text": "I assume you kept the receipt for your money order, in which case there's no reason you can't call the issuer and find out if the money order has been posted for payment. It does beg the question as to why you didn't send it registered mail or by some other means which would allow you to at least verify it was received by the IRS. As someone else mentioned, why can't you simply call the IRS and ask them if the money order was received and applied?" }, { "docid": "579875", "title": "", "text": "USPS is in debt because they have a wonky pension system where they have to guarantee (And pre-pay) pensions for the next X years (Where X is large). Also, shipping is part letters and part packages. Letters are hard to make profitable. Fedex, UPS and DHL get the sweet deal of shipping (mostly) packages. They pretty much get to only play the profitable part of the game while USPS has to play both. They can be competitive since they don't have the low-margin job of shipping letters, and in turn they can eat into the profitable part of USPS while leaving the unprofitable part untouched." }, { "docid": "470403", "title": "", "text": "That has nothing to do with what I said. Undoubtedly the USPS does many things that make them money. They also seem to do things that don't make them money, as evidenced by them cutting those non-money-making things to balance their budget. And due to congressional interference, the USPS often does irrational things, unfortunately." }, { "docid": "385074", "title": "", "text": "\"It's definitely annoying, but it's not necessarily false advertising. There is no rule or law that says they have to fix a pricing error at all, let alone within a certain period of time. Unfortunately they have no obligation to do business with you unless they take (and keep) your money. If they canceled the order and returned your money you have no binding agreement with them. On top of that, in the US... 'misleading advertising' usually refers to \"\"Any advertising or promotion that misrepresents the nature, characteristics, qualities or geographic origin of goods, services or commercial activities\"\" (Lanham Act, 15 U.S.C.A. § 1125(a)). The main criteria that they evaluate before taking legal action is whether or not someone has suffered harm or loss due to the reliance on the bad information. But you're in Europe. The EU ideas behind misleading advertising tend to focus a lot more on comparing one product to someone else's and making subjective claims or false promises. Pricing does come up, but still, you need to have an ability to prove that you suffered harm or a loss from the business' actions. Even if you were able to prove that, to force the business to change its price catalog, you would need to go through legal proceedings, demonstrate the harm that you've sustained, and then have a judge decide in your favor and order the supplier to comply. My guess is that it's just not worth it for you, but you haven't specified if this is just an annoying shoe-shopping experience or if you are regularly experiencing bait-and-switch tactics from a supplier that is a crucial part of a business operation. If it's the former, just like a physical shop reserves the right to kick you out if you're not behaving, (but usually doesn't because they'd like to keep you as a customer), an online shop can update its prices whenever they like. They can change their prices too, and cancel orders. If it's the latter, then start putting together some documentation on how many times this has happened and how it has damaged your business. But before you get on the warpath I would recommend you look for another place to buy whatever you have in mind, or else try a pound of sugar in your approach to this supplier... My own business experience has shown that can go a lot way in figuring out a mutually beneficial resolution. If you want to see a bit more... Here is the EU Justice Commission's website on false advertising, Here is a PDF leaflet from the UK Office of Fair Trading that spells out what is explicitly not allowed from a business by way of advertising & business practices.\"" }, { "docid": "295624", "title": "", "text": "This is an older question but I thought I'd give the correct response for anyone else that might look. Yes there definitely could be issues. You can form in friendly states such as Delaware and Nevada without having a physical location in the state but you can't run a business from another state without having to 'qualify' to do business in that State. To give a bit more clarification. Lets say you open a Delaware LLC. But you answer the phone when it rings on your New York phone and money comes into your New York bank account and your suppliers and vendors all use your New York address to send invoices and correspondence. Well you can pretty much count that you fall into the definition of doing business in New York and expected to pay New York taxes and qualify to do business in the state. The solution would be to set up your business to truly 'operate' from the state you would rather be in." }, { "docid": "583956", "title": "", "text": "\"You cannot \"\"claim back\"\" VAT. What happens is that if you sell goods with VAT and charge customers VAT, you would have to send that VAT straight to HMRC, but if your business itself paid VAT, then you already paid VAT, so you have to send less. As an example, if you send an invoice for £10,000 plus £2,000 VAT, and you paid yourself £500 VAT on business related expenses, then you need to send £2,000 - £500 = £1,500 to HMRC. But if you don't send invoices including VAT, then you owe HMRC £0. Any VAT you paid on business related expenses is lost; HMRC won't pay you money. BTW. Only VAT on business related expenses can be deducted. So if you want to be \"\"smart\"\", register for VAT and get the VAT on your weekly shopping bill refunded, forget it.\"" }, { "docid": "567201", "title": "", "text": "\"A bona-fide company never needs your credit card details, certainly not your 3-digit-on-back-of-card #, to issue a refund. On an older charge, they might have to work with their merchant provider. But they should be able to do it within the credit card handling system, and in fact are required to. Asking for details via email doesn't pass the \"\"sniff test\"\" either. To get a credit card merchant account, a company needs to go through a security assessment process called PCI-DSS. Security gets drummed into you pretty good. Of course they could be using one of the dumbed-down services like Square, but those services make refunds ridiculously easy. How did you come to be corresponding on this email address? Did they initially contact you? Did you find it on a third party website? Some of those are fraudulent and many others, like Yelp, it's very easy to insert false contact information for a business. Consumer forums, even moreso. You might take another swing at finding a proper contact for the company. Stop asking for a cheque. That also circumvents the credit card system. And obviously a scammer won't send a check... at least not one you'd want! If all else fails: call your bank and tell them you want to do a chargeback on that transaction. This is where the bank intervenes to reverse the charge. It's rather straightforward (especially if the merchant has agreed in principle to a refund) but requires some paperwork or e-paperwork. Don't chargeback lightly. Don't use it casually or out of laziness or unwillingness to speak with the merchant, e.g. to cancel an order. The bank charges the merchant a $20 or larger investigation fee, separate from the refund. Each chargeback is also a \"\"strike\"\"; too many \"\"strikes\"\" and the merchant is barred from taking credit cards. It's serious business. As a merchant, I would never send a cheque to an angry customer. Because if I did, they'd cash the cheque and still do a chargeback, so then I'd be out the money twice, plus the investigation fee to boot.\"" }, { "docid": "60562", "title": "", "text": "\"Here we go again! Why, oh why, would someone just open a bank account in your name with that much money for no good reason? Unless there's a very rich relative in your family tree, this can not come to a good ending. Besides, if this was money being left to you by someone as part of an inheritance, you'd hear from attorneys from the estate. Notwithstanding everything @NickR posted about the details of what makes it suspicious, ask yourself why a banker would contact you by email about an account with this much money in it. The bank would, at the very least, send you a registered/certified letter on official stationery. So what happens here is when you give them your banking information, whoever it is that's doing this will clean out your account, and that's for starters. They will ask for enough information to steal your identity too, and if you have good credit, that'll be gone in a heartbeat. The best scams (meaning the most successful ones) always appeal to peoples' greed, using large amounts of money that just miraculously belong to the victim, if only they'd give a little information to \"\"transfer\"\" the money. Worse yet, most of these scams will come up with some kind of \"\"fee\"\", \"\"tax\"\" or other expense that you have to pre-pay in order to make the transfer happen, so this just adds insult to injury when you find out (the hard way!) you've been scammed. DO NOT reply to the email you received or, if you already have, don't send any more responses. If they think they may have you on the hook then they won't stop trying, and it will become very messy very quickly. THIS IS NOT REAL MONEY! It isn't yours, it doesn't really exist, and all it will do is come to no good end if you go any further with it. Stay safe, my friend.\"" }, { "docid": "203175", "title": "", "text": "Gigabit internet should be available nationwide and caps should be illegal. Youtube's bandwidth costs are approximately 0% for webpages. It's all about video. P2P is *fantastic* at sharing video, and if the gateway to that stays on the server-client model, oh well. P2P can reduce the cost of running that server by orders of magnitude. > It would just offset the costs from the website-owner to the website-user Yes. Users would pay back the bandwidth they use. Costs would be offset to users - just like you're proposing. Except the technical solution is cheaper, fairer, and simpler than hassling and begging people to send money." }, { "docid": "521753", "title": "", "text": "I am on employment based visa in USA and want to send dollars from USA to India from my savings (after paying Tax). How much maximum dollars I can send in a day? month? or in a year regularly? There is no such limit. You can transfer as money you like to yourself anywhere. To pay the Bank Loan-student Loan how much maximum dollars I can send in a day, in a month or in a year? to pay that I have to pay directly to that Bank Account or in any account I can send money? You can transfer to your NRE account in India and move it further. You can also send it directly to the Loan Account [Check with the Bank, they may not be able to receive funds from outside for a Loan Account] My mother is having Green Card. She is not working. She has a NRE account in India. Can I send dollars from my USA Bank account to her NRE account in India? what are the rules for that? any Tax or limit for that? Or I have to get any permission before sending it? If you are sending money to your mother, it would come under Gift Tax act in US. There is no issue in India. Suggest you transfer to your own NRE account." }, { "docid": "433806", "title": "", "text": "\"1) Are the definitions for capital market from the two sources the same? Yes. They are from two different perspectives. Investopedia is looking at it primarily from the perspective of a trader and they lead-off with the secondary market. This refers to the secondary market: A market in which individuals and institutions trade financial securities. This refers to the primary market: Organizations/institutions in the public and private sectors also often sell securities on the capital markets in order to raise funds. Also, the Investopedia definition leaves much to be desired, but it is supposed to be pithy. So, you are comparing apples and oranges, to some extent. One is an article, as short as it may be, this other one is an entry in a dictionary. 2) What is the opposite of capital market, according to the definition in investopedia? It's not quite about opposites, this is not physics. However, that is not the issue here. The Investopedia definition simply does not mention any other possibilities. The Wikipedia article defines the term more thoroughly. It talks about primary/secondary markets in separate paragraph. 3) According to the Wikipedia's definition, why does stock market belong to capital market, given that stocks can be held less than one year too? If you follow the link in the Wikipedia article to money market: As money became a commodity, the money market is nowadays a component of the financial markets for assets involved in short-term borrowing, lending, buying and selling with original maturities of one year or less. The key here is original maturities of one year or less. Here's my attempt at explaining this: Financial markets are comprised of money markets and capital markets. Money is traded as if it were a commodity on the money markets. Hence, the short-term nature in its definition. They are more focused on the money itself. Capital markets are focused on the money as a means to an end. Companies seek money in these markets for longer terms in order to improve their business in some way. A business may go to the money markets to access money quickly in order to deal with a short-term cash crunch. Meanwhile, a business may go to the capital markets to seek money in order to expand its business. Note that capital markets came first and money markets are a relatively recent development. Also, we are typically speaking about the secondary (capital) market when we are talking about the stock or bond market. In this market, participants are merely trading among themselves. The company that sought money by issuing that stock/bond certificate is out of the picture at that point and has its money. So, Facebook got its money from participants in the primary market: the underwriters. The underwriters then turned around and sold that stock in an IPO to the secondary market. After the IPO, their stock trades on the secondary market where you or I have access to trade it. That money flows between traders. Facebook got its money at the \"\"beginning\"\" of the process.\"" }, { "docid": "359890", "title": "", "text": "This is a very misleading headline. The USPS is mired in debt because they over-extended their labor costs and obligations, despite declining revenues and a dying business model. The Internet has stolen their market, wholesale, and yet they still over near permanent employment, health insurance and defined benefit pensions. If the USPS does not make it's $5B payment into the health care fund, what happens when employees need to draw on that fund in the future? Who will pay for hip replacements and cancer treatments? This is an obligation, just like servicing trucks, paying salaries, buying gas, etc. They're dying because letters turned into free email and junk mail turned into spam and website analytics." } ]

[ { "docid": "88124", "title": "", "text": "You're confusing a lot of things here. Company B LLC will have it's sales run under Company A LLC, and cease operating as a separate entity These two are contradicting each other. If B LLC ceases to exist - it is not going to have it's sales run under A LLC, since there will be no sales to run for a non-existent company. What happens is that you merge B LLC into A LLC, and then convert A LLC into S Corp. So you're cancelling the EIN for B LLC, you're cancelling the EIN for A LLC - because both entities cease to exist. You then create a EIN for A Corp, which is the converted A LLC, and you create a DBA where A Corp DBA B Shop. You then go to the bank and open the account for A Corp DBA B Shop with the EIN you just created for A Corp. Get a better accountant. Before you convert to S-Corp." } ]

[ { "docid": "355592", "title": "", "text": "\"There absolutely is a specific model that makes this so popular with so many credit card companies, and that model is \"\"per transaction fees\"\". Card companies also receive cost-sharing incentives from certain merchants. There is also a psychological reasoning as an additional incentive. When you want to accept credit cards as a source of payment as a business, you generally have three kinds of fees to pay: monthly/yearly subscription fees, percentage of transaction fee, and per transaction fee. The subscription fees can be waived and sometimes are expressed as a \"\"minimum cost\"\", so the business pays a certain amount whether you actually have people use credit cards or not. Many of these fees don't actually make it to the credit card companies, as they just pay the service providers and middle-men processing companies. The percentage of transaction fee means that the business accepting payment via credit card must pay a percentage usually ranging from 1-3% of the total transactions they accept. So if they get paid $10,000 a month by customers in the form of credit cards, the business pays out $100-300 a month to the credit card processor - a good portion of which will make it back to the credit card issuing company, and is a major source of income for them. The per transaction fee means that every time a transaction is run involving a card, a set fee is incurred by the business (which is commonly anywhere from $0.05 to $0.30 per transaction). If that $10,000 a month business mentioned previously had 10 customers paying $1,000 each at $0.10 a transaction, that's only $1 in fees to the credit card processors/companies. But if instead that business was a grocery store with an average transaction of $40, that's $25 in fees. This system means that if you are a credit card company and want to encourage people to make a specific kind of purchase, you should encourage purchases that people make many times for relatively small amounts of money. In a perfect world you'd want them to buy $1 bottles of water 5 times a day with their credit card. If the card company had 50,000 card holders doing this, at the end of 1 year the company would have $91,250,000 spread across 91,250,000 transactions. The card company might reasonably make $0.05 per transaction and %1 of the purchase total. The Get Rewarded For Drinking More campaign might earn the card company $912,500 in percentage fees and over $4.5 million in transaction fees. Yet the company would only have to pay 3% in rewards from the percentage fees, or $2.7 million, back to customers. If the card company had encouraged using your credit card for large once-yearly purchases, they would actually pay out more money in rewards than they collect in card-use fees. Yet by encouraging people to make small transactions very often the card company earns a nice net-income even if absolutely every customer pays their balance in full, on time, and pays no annual/monthly fees for their card - which obviously does not happen in the real world. No wonder companies try so hard to encourage you to use your card all the time! For card companies to make real money they need you to use your credit card. As discussed above, the more often you use the card the better (for them), and there can be a built-in preference for small repeated transactions. But no matter what the size of transaction, they can't make the big bucks if you don't use the card at all! Selling your personal information isn't as profitable if they don't have in-depth info on you to sell, either. So how do they get you to make that plastic sing? Gas and groceries are a habit. Most people buy one or the other at least once a weak, and a very large number of us make such purchases multiple times a week. Some people even make such purchases multiple times a day! So how do people pay for such transactions? The goal of the card companies is to have you use their product to pay as much as possible. If you pay for something regularly you'll keep that card in your wallet with you, rather than it getting lost in a drawer at home. So the card companies want you to use your card as a matter of habit, too. If you use a card to buy for gas and groceries, why wouldn't you use it for other things too? Lunch, dinner, buying online? If the card company pays out more and makes less for large, less-regular purchases, then the ideal for them is to have you use the card for small regular purchase and yet still have you use the card for larger infrequent purchases even if you get reduced/no rewards. What better way to achieve all these goals than to offer special rewards on gas and groceries? And because it's not a one-time purchase, you aren't so likely to game the system; no getting that special 5% cash-back card, booking your once-per-decade dream vacation, then paying it off and cancelling it soon after - which would actually make the card company lose money on the deal. In the end, credit card companies as a whole have a business model that almost universally prefers customers who use their products regularly and preferably for small amounts a maximum number of times. They want to reduce their expenses (like rewards paid out) while maximizing their revenue. They haven't figured out a better way to do all of this so well as to encourage people to use their cards for gas and groceries - everything else seems like a losing proposition in comparison. The only time this preference differs is when they can avoid paying some or all of the cost of rewards, such as when the merchants themselves honor the rewards in exchange for reduced or zero payment from the card companies. So if you use an airline card that seems to give you 10% back in airline rewards? Well, that's probably a great deal for the card company if the airline provides that reward at their own expense to try to boost business. The card company keeps the transaction-related fees and pays out almost nothing in rewards - the perfect offer (for them)! And this assumes no shenanigans like black-out periods, \"\"not valid with any other offers\"\" rewards like on cars where only a fool pays full MSRP (and sometimes the rewards are tagged in this sort of way, like not valid on sale/clearance items, etc), expiring rewards, the fact that they know not everyone uses their rewards, annual fees that are greater than the rewards you'll actually be obtaining after accounting for all the other issues, etc. And credit card industries are known for their shenanigans!\"" }, { "docid": "117427", "title": "", "text": "What a great idea! A small business owner helping other small business owners. It's true -- to be a relevant small business in this day and age, you have to be visible on the world wide web. I use the world wide web multiple times a day to get information about businesses that I am interested in doing business with or to comparative shop. I don't think I am alone in this." }, { "docid": "24421", "title": "", "text": "The Canada Revenue Agency describes in detail here what information businesses must generally include on their invoices so that GST/HST registrants can claim Input Tax Credits (ITCs) for the expenses. Quote: Sales invoices for GST/HST registrants You have to give customers who are GST/HST registrants specific information on the invoices, receipts, contracts, or other business papers that you use when you provide taxable goods and services. This information lets them support their claims for input tax credits (ITCs) or rebates for the GST/HST you charged. [...] The page quoted continues with a table describing what, specifically, needs to be on a sales invoice based on the total amount of the invoice; the requirements differ for: total sale under $30, total sale between $30 to $149.99, and total sale $150 or more. For the total sale under $30 category, the only things a sales invoice must contain to support an ITC claim are (1) the provider's business name, (2) the invoice date, and (3) the total amount paid/payable. i.e. When the total sale is under $30, there is no requirement for any GST/HST amount to be indicated separately, nor for a business number to be present on the invoice. Hence, IMHO (and I am neither an accountant nor a lawyer), if your Uber rides are for $30 or less, then you shouldn't expect a GST/HST number anyway, and a simple invoice as described should be enough for you to claim your ITCs. Whether or not the provider is registered in fact for GST/HST is beside the point. For amounts over $30, you need a bit more. While the page above specifies that the provider's business number should be included beginning with the next level of total sales, there are exceptions to those rules described at another page mentioned, Exceptions to invoice requirements, that specifically apply to the taxi/limousine case. Quote: Exceptions to invoice requirements GST/HST registrants are required to keep the necessary documentation to support their claim for ITCs and rebates. In certain circumstances the documentation requirements have been reduced. [...] For taxi or limousine fares your books and records must show: So at a minimum, for fare in excess of $30 total, you should ask the driver to note either (a) the amount of GST/HST charged, or (b) a statement that the fare includes GST/HST. The driver's business number need not be specified. Consequently, if your receipt for a ride in excess of $30 does not contain any such additional information with respect to GST/HST, then I would expect the receipt does not satisfy the CRA's requirements for supporting your ITC claim. i.e. Keep your individual rides under $30 each, or else get a better receipt from the driver when it is above that amount. p.s. It should go without saying, but your rides, of course, must be considered reasonable business expenses in order to qualify for GST/HST ITCs for your business. Receipts for rides of a personal nature are not eligible, so be sure to maintain proper records as to the business purpose and destination for each ride receipt so claimed." }, { "docid": "83346", "title": "", "text": "\"For practical purposes, I would strongly suggest that you do create a separate account for each business you may have that is used only for business purposes, and use it for all of your business income and expenses. This will allow you to get an accurate picture of whether you are making money or not, what your full expenses really are, how much of your personal money you have put into the business, and is an easy way to keep business taxes separate. You will also be able to get a fairly quick read on what your profits are without doing much accounting by looking at the account balance less future taxes and expenses, and less any personal money you've put into the account. Check out this thread from Paypal about setting up a \"\"child\"\" account that is linked to your personal account and can be set up to autosweep payments into your main account, should you like. You will still be able to see transactions for each child account. NOTE: Do be careful to make sure you are reserving the proper amount out of any profits your startup may have for taxes - you don't want to mix this with personal money and then later find out that you owe taxes and have to scramble to come up with the money if you have already spent it This is one of the main reasons to segregate your startup's revenues and profits in the business account. For those using \"\"brick and mortar\"\" banking services rather than a service like Paypal: You likely do not need a business checking account if you are a startup. Most likely, you can simply open a second personal account with your bank in your name, and name it \"\"John Doe DBA Company Name\"\" (DBA = Doing Business As). This way, you can pay expenses and accept payments in the name of your startup. Check with your banker for additional details (localized information).\"" }, { "docid": "281572", "title": "", "text": "That is where I think Walmart comes in to buy up a business like this. With their network of stores and the insane buying power they have the can push a good solid quality that the middle class American wants and do it very cheaply. I feel this will be their main combat against Amazon buying whole foods. Currently Walmart makes more on grocery sales than anything else as a hole and will continue to do so because of what and how they are doing it. Walmart is sneaky as fuck when it comes to what they can do and how they can do it. Even Walmart buying up Advanced Auto Parts is a solid counter move to Amazon buying Whole Foods...the next step is buying a Blue Apron type business... and with how Blue Apron is doing financially and given their name they are entering buy off territory. In my humble albeit non pro status in the stock market my 3 buys are Snap Chat, GoPro, and Walmart for long term retire and never have to worry about money again companies. I am by no means an expert but I have never come close to losing money in the stock market and do a good amount of research before I invest. Snapchat is my top 1 tbh. Sorry for going on a tangent lol" }, { "docid": "406340", "title": "", "text": "\"Tough spot. I'm guessing the credit cards are a personal line of credit in their name and not the company's (the fact that the business can be liquidated separately from your parents means they did at least set up an LLC or similar business entity). Using personal debt to save a company that could have just been dissolved at little cost to their personal credit and finances was, indeed, a very bad move. The best possible end to this scenario for you and your parents would be if your parents could get the debt transferred to the LLC before dissolving it. At this point, with the company in such a long-standing negative situation, I would doubt that any creditor would give the business a loan (which was probably why your parents threw their own good money after bad with personal CCs). They might, in the right circumstances, be able to convince a judge to effectively transfer the debt to the corporate entity before liquidating it. That puts the debt where it should have been in the first place, and the CC companies will have to get in line. That means, in turn, that the card issuers will fight any such motion or decision tooth and nail, as long as there's any other option that gives them more hope of recovering their money. Your parents' only prayer for this to happen is if the CCs were used for the sole purpose of business expenses. If they were living off the CCs as well as using them to pay business debts, a judge, best-case, would only relieve the debts directly related to keeping the business afloat, and they'd be on the hook for what they had been living on. Bankruptcy is definitely an option. They will \"\"re-affirm\"\" their commitment to paying the mortgage and any other debts they can, and under a Chapter 13 the judge will then remand negotiations over what total portion of each card's balance is paid, over what time, and at what rate, to a mediator. Chapter 13 bankruptcy is the less damaging form to your parent's credit; they are at least attempting to make good on the debt. A Chapter 7 would wipe it away completely, but your parents would have to prove that they cannot pay the debt, by any means, and have no hope of ever paying the debt by any means. If they have any retirement savings, anything in their name for grandchildren's college funds, etc, the judge and CC issuers will point to it like a bird dog. Apart from that, their house is safe due to Florida's \"\"homestead\"\" laws, but furniture, appliances, clothing, jewelry, cars and other vehicles, pretty much anything of value that your parents cannot defend as being necessary for life, health, or the performance of whatever jobs they end up taking to dig themselves out of this, are all subject to seizure and auction. They may end up just selling the house anyway because it's too big for what they have left (or will ever have again). I do not, under any circumstance, recommend you putting your own finances at risk in this. You may gift money to help, or provide them a place to live while they get back on their feet, but do not \"\"give till it hurts\"\" for this. It sounds heartless, but if you remove your safety net to save your parents, then what happens if you need it? Your parents aren't going to be able to bail you out, and as a contractor, if you're effectively \"\"doing business as\"\" Reverend Gonzo Contracting, you don't have the debt shield your parents had. It looks like housing's faltering again due to the news that the Fed's going to start backing off; you could need that money to weather a \"\"double-dip\"\" in the housing sector over the next few months, and you may need it soon.\"" }, { "docid": "305907", "title": "", "text": "To transfer US$30,000 from the USA to Europe, ask your European banker for the SWIFT transfer instructions. Typically in the USA the sending bank needs a SWIFT code and an account number, the name and address of the recipient, and the amount to transfer. A change of currency can be made as part of the transfer. The typical fee to do this is under US$100 and the time, under 2 days. But you should ask (or have the sender ask) the bank in the USA about the fees. In addition to the fee the bank may try to make a profit on the change of currency. This might be 1-2%. If you were going to do this many times, one way to go about it is to open an account at Interactive Brokers, which does business in various countries. They have a foreign exchange facility whereby you can deposit various currencies into your account, and they stay in that currency. You can then trade the currencies at market rates when you wish. They are also a stock broker and you can also trade on the various exchanges in different countries. I would say, though, they they mostly want customers already experienced with trading. I do not know if they will allow someone other than you to pay money into your account. Trading companies based in the USA do not like to be in the position of collecting on cheques owed to you, that is more the business of banks. Large banks in the USA with physical locations charge monthly fees of $10/mo or more that might be waived if you leave money on deposit. Online banks have significantly lower fees. All US banks are required to follow US anti-terrorist and anti-crime regulations and will tend to expect a USA address and identity documents to open an account with normal customers. A good international bank in Europe can also do many of these same sorts of things for you. I've had an account with Fortis. They were ok, there were no monthly fees but there were fees for transactions. In some countries I understand the post even runs a bank. Paypal can be a possibility, but fees can be high ~3% for transfers, and even higher commissions for currency change. On the other hand, it is probably one of the easiest and fastest ways to move amounts of $1000 or less, provided both people have paypal accounts." }, { "docid": "444589", "title": "", "text": "\"EBITDA is in my opinion not a useful measure for an investor looking to buy shares on the stock market. It is more useful for private businesses open to changing their structuring, or looking to sell significant parts of their business. One of the main benefits of reporting Earnings Before Interest, Taxes, Depreciation & Amortization, is that it presents the company as it would look to a potential buyer. Consider that net income, as a metric, includes interest costs, taxes, and depreciation. Interest costs are (to put it simply) a result of multiplying a business's debt by its interest rate. If you own a business, and personally guarantee the loan that the company has with the bank, your interest rates might be artificially low. If you have a policy of reaching high debt levels relative to your equity, in order to achieve high 'financial leveraging', your interest cost might be artificially high. Either way, if I bought your business, my debt structure could be completely different, and therefore your interest costs are not particularly relevant to me, a potential buyer. Instead, I should attempt to anticipate what my own interest costs would be, under my plans for your business. Taxes are a result of many factors, including the corporate structure of the business. If you run your business as a sole proprietorship (ie: no corporation), but I want to buy it under my corporation, then my tax rates could look nothing like yours. Or if we operated in multiple jurisdictions. etc. etc. Instead of using your taxes as an estimate for mine, I should anticipate my taxes based on my plans for your business. Depreciation / amortization is a measure that estimates how much of a business's \"\"fixed assets\"\" were \"\"used up\"\" during the year. ie: how much wear and tear occurred on your fleet of trucks? It is generally calculated as a % of your overall asset value. It is a (very loose) proxy for the cash costs which will ultimately be incurred to make repairs/replacements. D&A is also something which could significantly change if a business changes hands. If the value of your building is much higher now than when you bought it, I will have higher D&A costs than you [because I will be recording a % of total costs higher than yours], and therefore I should forecast my own D&A. Removing these costs from Net Income is not particularly relevant for a casual stock investor, because these costs will not change when you buy shares. Whatever IBM's interest cost is, reflects the debt structuring policy that the company currently has. Therefore when you buy a share in IBM, you should consider the impact that interest has on net income. Similarly for taxes and D&A - they reflect costs to the business that impact the company's ability to pay you a dividend, and therefore you should look at net income, which includes those costs. Why would a business with 'good net income' and 'good EBITDA' report EBITDA? Because EBITDA will always be higher than net income. Why say $10M net income, when you could say $50M EBITDA? The fact is, it's easy to report, and is generally well understood - so why not report it, when it also makes you look better, from a purely \"\"big number = good\"\" perspective? I'm not sure that reporting EBITDA implies any sort of manipulative reporting, but it would seem that Warren Buffet feels this is a risk.\"" }, { "docid": "499289", "title": "", "text": "I think its crazy seeing the comments here. did nobody thoroughly read the article? business owners have to make sure that their businesses succeed. drugs, even marijuana, are not a risk that insurance want to take. when the costs of operating a business go up, the money left to hire people goes down. if im spending 5 million in insurance to cover marijuana medical bills, instead of say, 1 million to not cover marijuana, then thats 4 million i dont have to pay workers better wages. people need to get a better balanced life view. i understand that people want their liberties to do as they see fit, but in doing so they fail to see that other people are under no obligation to hire you if you are making choices that have the potential to hurt the business bottom line." }, { "docid": "385506", "title": "", "text": "A loan is most generally a liability, a part of the balance sheet. Expenses & income are part of the income statement. Income is the net of revenues after expenses. The interest is an expense on the income statement, but the loan itself does not reside there unless if it is defaulted and forgiven. Then it would become a revenue or contra-expense, depending on the methodology. The original purpose of the income statement is to show the net inflows of short term operational accruals which would exclude new borrowing and repaid loans. The cash flow statement will better show each cash event such as borrowing debt, repaying debt, or paying off a bill. To show how a loan may have funded a bill, which in theory it directly did not because an entity, be it a person or business, is like a single tank of water with multiple pipes filling and multiple pipes extracting, so it is impossible to know which exact inflow funded which exact outflow unless if there is only one inflow per period and one outflow per the same period. That being said, with a cash flow statement, the new loan will show a cash inflow when booked under the financing portion, and paying a bill will show a cash outflow when booked under the operating portion. With only those two transactions booked and an empty balance sheet beforehand, it could be determined that a new loan funded a bill payment." }, { "docid": "195207", "title": "", "text": "Do you have a separate bank account for your business? That is generally highly recommended. I have a credit card for my single-member LLC. I prefer it this way because it makes the separation of personal and business expenses very clear. Using a personal credit card, but using it for only business expenses seems to be a reasonable practice. You may be able to do one better though... For your sole proprietorship, you can file a DBA which establishes the business name. The details of this depend on your state. With a DBA, I believe you can open a bank account in the name of your business and you may also be able to open a credit card account in the name of the business. I'm not sure what practical difference it makes, but it does make the personal/business distinction clearer. Though, at that point, you might as well just do the LLC..." }, { "docid": "590775", "title": "", "text": "In Australia, any income you earn is taxable despite where it came from. Using your example your taxable income is $70,000. Keep in mind that with a business even as a sole trader any business expenses that contribute to the earning of your business income is deductible, reducing the final amount of tax you'll have to pay. The ATO website has lots of good information and examples to look at including tax rates. If your total income is pushing into a higher tax bracket over 30c tax per $1 earned, it may be worth looking at shifting your business to operate under a company structure that just has a fixed tax rate around 30c per $1. That said, for me, I don't want the paperwork overhead of a company yet so I'm running my side business as a sole trader too. I'd rather do that and keep it easy for now while my business gets profitable that waste time on admin structures for tax reasons even if in the shortterm it may mean slightly higher tax. In the end, you only pay tax on profit (income minus expenses) as opposed to raw/gross income. For more info there are good books in the bookshops or local library (to read free) on starting a business on the side while still working. They discuss these issues too." }, { "docid": "71338", "title": "", "text": "I am from India. I visited US 6-8 times on business VISA and then started 2 Member LLC. Myself and My wife as LLC Members. We provide Online Training to american students from India. Also Got EIN number. Never employed any one. Do i need to pay taxes? Students from USA pays online by Paypal and i am paying taxes in India. Do i need to pay Taxes in US? DO i need to file the Tax returns? Please guide me. I formed LLC in 2010. I opened an Office-taken Virtual office for 75 USD per month to open LLC in 2010. As there is physical virtual address, am i liable for US taxes? All my earning is Online, free lancing." }, { "docid": "438975", "title": "", "text": "Goddady.com will gladly accept payment from your personal account. They don't really care, as long as you approve the charge, whose name the account is in. I'm not sure PayPal even check the names on the invoice and the account to match, they just want you to login. However, depending on your local laws, you may be required to have a separate business account. In the US, for example, corporations must have their own accounts. For other entities with limited liability (like LLC or LLP) it is advised to have a separate account to avoid piercing corporate veil. Also, if your business name is not your personal name - clients may want to verify that the checks/transfers are deposited under your business name. In some countries checks written out to X cannot be endorsed by X to be transferred to Y. That may affect your decision as well. You'll have to get a proper legal advice valid in your jurisdiction to know the answer to your question." }, { "docid": "584232", "title": "", "text": "\"The muni bond business . Are you really too dumb to understand that's how he's referencing it in the article? He's not talking about a specific company or companies numbnuts he's talking about \"\"The business of muni bonds...i.e the total outstanding municipal bond market.\"\". Try some reading comprehension on for size. To walk you through it there are multiple uses of the word 'business'. Among them are the two you're having a real problem with in your reading comprehension. 1. Business = Company: I run a dry cleaning business. 2. Business = Industry: I am in the dry cleaning business. What he is (clearly) referring to when he says \"\"a business worth $3.7 trillion\"\" is \"\"business = industry\"\" in the second manner listed above. You're interpreting it as if he's claiming the first manner. That's incorrect. Factually and grammatically incorrect. Yours is the type of ignorance that morons on Reddit rely on to make their arguments work. I'm done here with you since you don't seem to be able to parse out rudimentary information from an article.\"" }, { "docid": "135196", "title": "", "text": "\"Checks sold as \"\"business checks\"\" are larger than checks sold as \"\"personal checks\"\". Personal checks are usually 6\"\" x 2 1/2\"\" while business checks are 8 1/2 \"\" x 3 to 4 \"\". Also, business checks typically have a tear-off stub where you can write who the check was made out to and what it was for. In this computer age that seems pretty obsolete to me, I enter the check into the computer, not write it on a stub, but I suppose there are still very small businesses out there that doesn't use a computerized record-keeping system. These days business checks are often printed on 8 1/2 by 11\"\" paper -- either one per sheet with a big tear-off or 3 per sheet with no tear off -- so you can feed them through a computer printer easily. Nothing requires you to use \"\"business checks\"\" for a business account. At least, I've always used personal checks for my business account with no problem. These days I make almost all payments electronically, I think I write like one paper check a year, so it's become a trivial issue. Oh, and I've never had any problem getting a check printer to put my business name on the checks or anything like that.\"" }, { "docid": "323389", "title": "", "text": "\"Ally Bank $0 - from their website (emphasis mine): To receive a wire transfer from a non-U.S. bank: Incoming wire transfers from a non-US bank are processed by our designated receiving bank, JP Morgan Chase Bank, N.A. You'll need to provide the following information to the person or business sending the wire transfer to you: Receiving Bank: JP Morgan Chase Bank, N.A. ABA/Routing Number: 021000021 Address: 1 Chase Manhattan PLZ, New York, NY 10005 SWIFT Code or Bank Identification Code: CHASUS33 Beneficiary Account Number: 802904391 Beneficiary Name: List 'Ally Bank' since the wire is being processed by JP Morgan Chase Bank, N.A. Further Credit: Your Ally Bank Account Number and your name as it appears on your Ally Bank account. Note: We won't charge you to receive a wire transfer into your Ally account. https://www.ally.com/help/search.html?term=SWIFT&console=false&context=Help&domain=www.ally.com&section=Help+%26+FAQs Alliant Credit Union $0 - from their website (emphasis mine): Direct international wire transfers International wire transfers are handled through our correspondent bank for processing. International wires can take up to 10 business days to be credited to the receiving institution. Funds should be wired to: Northern Trust ABA# 071000152 \"\"Note: US Banks do not use SWIFT codes. This ABA # is used in place of SWIFT codes for US Banks.\"\" 50 South La Salle Street, Chicago, IL 60603 For further credit: Alliant Credit Union Account Number 35101804 11545 W. Touhy Avenue, Chicago, IL 60666 For final credit: Member’s name and complete address (No P.O. Box) Member’s 14-digit account number Destination of funds (checking, savings or loan number) Incoming wire transfers: Wire transfers received Monday - Friday, 7:00am - 3:00pm, CT, will be credited to your account the same day. Wire transfers received after 3:00pm, CT, Monday - Friday and on the weekend will be credited the next business day. Fees: We do not charge a fee to receive incoming wire funds. However, the financial institution wiring the funds may charge for this service. http://www.alliantcreditunion.org/help/receiving-a-wire-transfer-to-your-alliant-account\"" }, { "docid": "594414", "title": "", "text": "\"Here's an excerpt from VISA's Card Acceptance Guidelines for Visa Merchants (PDF) The merchant name is the single most important factor in cardholder recognition of transactions. Therefore, it is critical that the merchant name, while reflecting the merchant’s “Doing Business As” (DBA) name, also be clearly identifiable to the cardholder. This can minimize copy requests resulting from unrecognizable merchant descriptors. Merchant applications typically list the merchant name as the merchant DBA. This may differ from the legal name (which can represent the corporate owner or parent company), and may differ from the owner’s name which, for sole proprietorships, may reflect the business owner. I think that the key statement above is \"\"Therefore, it is critical that the merchant name [...] be clearly identifiable to the cardholder.\"\" Since this merchant was not clearly identifiable to the cardholder, they are in breach of a critical point in these guidelines. This is from VISA, but I would assume that all other major credit cards would have similar guidelines for their merchants. However keep in mind that these are \"\"guidelines\"\", and not (necessarily) rules.\"" }, { "docid": "363719", "title": "", "text": "\"As ChrisInEdmonton describes, shorting has an asymmetric risk/reward ratio. And put options have a time cost, if you think the market is overvalued and buy lots of puts, but they expire before the market finally corrects, you can lose your entire investment. Betting on market timing of any kind is extremely difficult to do, some would argue it's impossible. \"\"The market can remain irrational longer than you can remain solvent\"\" is a favorite wall street trader saying. Instead of playing a game that's difficult to win, the better option is to play one you can win. That's to learn how to value individual investments well and accumulate cash until you can find investments that are under-valued to invest in. The best way to learn to value investments is to read Graham and Buffett. \"\"The Intelligent Investor\"\" is a good starting point, and you can read all of Buffett's investor letters for the last 30 years + for free on the Berkshire Hathaway web site. Finally the textbook on valuing stocks and other investments is \"\"Securities Analysis\"\" the 6th edition is only version to get, it was updated with Buffett and other leading value investors oversight. A basic overview of valuing investments is that every investment has an \"\"intrinsic value\"\" consisting of it's future cash flows, discounted for the time it takes to receive them. The skill is being able to estimate how likely those cash flows are to happen. a) Is it a good business? Does it have a moat, i.e. barriers that make it hard for competitors to duplicate it? b) Will management invest or distribute those cash flows wisely? Then your strategy is to not even worry about the market, spend your time looking at individual stocks and investments and wait until some come along that's well undervalued. That may be during a market correction, or it may be tomorrow. And it's not just good enough to intelligently value your investments, you also have to have psychological fortitude to not panic and to think for yourself. Buffett describes it best. Ben Graham, my friend and teacher, long ago described the mental attitude toward market fluctuations that I believe to be most conducive to investment success. He said that you should imagine market quotations as coming from a remarkably accommodating fellow named Mr. Market who is your partner in a private business. Without fail, Mr. Market appears daily and names a price at which he will either buy your interest or sell you his. Even though the business that the two of you own may have economic characteristics that are stable, Mr. Market’s quotations will be anything but. For, sad to say, the poor fellow has incurable emotional problems. At times he feels euphoric and can see only the favorable factors affecting the business. When in that mood, he names a very high buy-sell price because he fears that you will snap up his interest and rob him of imminent gains. At other times he is depressed and can see nothing but trouble ahead for both the business and the world. On these occasions he will name a very low price, since he is terrified that you will unload your interest on him. Mr. Market has another endearing characteristic: He doesn’t mind being ignored. If his quotation is uninteresting to you today, he will be back with a new one tomorrow. Transactions are strictly at your option. Under these conditions, the more manic-depressive his behavior, the better for you. But, like Cinderella at the ball, you must heed one warning or everything will turn into pumpkins and mice: Mr. Market is there to serve you, not to guide you. It is his pocketbook, not his wisdom, that you will find useful. If he shows up some day in a particularly foolish mood, you are free to ignore him or to take advantage of him, but it will be disastrous if you fall under his influence. Indeed, if you aren’t certain that you understand and can value your business far better than Mr. Market, you don’t belong in the game. Lastly learning to value investments isn't just useful in the stock market, they are applicable to investing in any investment such as bonds, real estate, and even buying your home or running a business.\"" } ]

[ { "docid": "285255", "title": "", "text": "\"I'm afraid the great myth of limited liability companies is that all such vehicles have instant access to credit. Limited liability on a company with few physical assets to underwrite the loan, or with insufficient revenue, will usually mean that the owners (or others) will be asked to stand surety on any credit. However, there is a particular form of \"\"credit\"\" available to businesses on terms with their clients. It is called factoring. Factoring is a financial transaction whereby a business sells its accounts receivable (i.e., invoices) to a third party (called a factor) at a discount in exchange for immediate money with which to finance continued business. Factoring differs from a bank loan in three main ways. First, the emphasis is on the value of the receivables (essentially a financial asset), not the firm’s credit worthiness. Secondly, factoring is not a loan – it is the purchase of a financial asset (the receivable). Finally, a bank loan involves two parties whereas factoring involves three. Recognise that this can be quite expensive. Most banks catering to small businesses will offer some form of factoring service, or will know of services that offer it. It isn't that different from cheque encashment services (pay-day services) where you offer a discount on future income for money now. An alternative is simply to ask his clients if they'll pay him faster if he offers a discount (since either of interest payments or factoring would reduce profitability anyway).\"" } ]

[ { "docid": "408124", "title": "", "text": "When you start at a new job here in the U.S., the default means of payment is usually a paper check. Most folks will quickly set up direct deposit so that their employer deposits their paycheck directly into their personal bank account - the incentive to do so is that you receive your funds faster than if you deposit a paper check. Even if you set up direct deposit on your first day on the job, you may still receive your first paycheck as a paper check simply because the wheels of payroll processing turn slowly at some (large) companies. A counter example is a self-employed contractor - perhaps a carpenter or house painter. These folks are paid by their customers, homeowners and such. Many larger, well established contracters now accept credit card payments from customers, but smaller independents may be reluctant to set up a credit card merchant account to accept payment by card because of all the fees that are associated with accepting credit card payments. 3% transaction fees and monthly service fees can be scary to any businessman who already has very thin profit margins. In such cases, these contractors prefer to be paid by check or in cash for the simple reason that there are no fees deducted from cash payments. There are a few folks here who don't trust direct deposit, or more specifically, don't trust their employer to perform the deposit correctly and on time. Some feel uncomfortable giving their bank info to their employer, fearing someone at the company could steal money from their account. In my experience, the folks who prefer a paper paycheck are often the same folks who rush to the bank on payday to redeem their paychecks for cash. They may have a bank account (helps with check cashing) but they prefer to carry cash. I operate in a manner similar to you - I use a debit card or credit card (I only have one of each) for nearly all transactions in daily life, I use electronic payments through my bank to pay my regular bills and mortgage, and I receive my paycheck by direct deposit. There have been periods where I haven't written or received paper checks for so long that I have to hunt for where I put my checkbook! Even though I use a debit card for most store purchases, the bank account behind that debit card is actually a checking account according to the bank. Again, the system defaults to paper checks and you have the option of going electronic as well. Before we judge anyone who doesn't use direct deposit or who prefers to be paid in cold hard cash, consider that direct deposit is a luxury of stability. Steady job, home, etc. Direct deposit doesn't make sense for a contractor or day laborer who expect to work for a different person each day or week. I don't think this is all that unique to the US. There are people in every city and country who don't have long-term employment with a single employer and therefore prefer cash or paper check over electronic payments. I'd be willing to bet that this applies to the majority of people on the planet, actually." }, { "docid": "73427", "title": "", "text": "Funds earned and spent before opening a dedicated business account should be classified according to their origination. For example, if your business received income, where did that money go? If you took the money personally, it would be considered either a 'distribution' or a 'loan' to you. It is up to you which of the two options you choose. On the flip side, if your business had an expense that you paid personally, that would be considered either a 'contribution of capital' or a 'loan' from you. If you choose to record these transactions as loans, you can offset them together, so you don't need two separate accounts, loan to you and loan from you. When the bank account was opened, the initial deposit came from where? If it came from your personal funds, then it is either a 'contribution of capital' or a 'loan' from you. From the sound of your question, you deposited what remained after the preceding income/expenses. This would, in effect, return the 'loan' account back to zero, if choosing that route. The above would also be how to record any expenses you may pay personally for the business (if any) in the future. Because these transactions were not through a dedicated business bank account, you can't record them in Quickbooks as checks and deposits. Instead, you can use Journal Entries. For any income received, you would debit your capital/loan account and credit your income account. For any expenses, you would debit the appropriate expense account and credit your distribution/loan account. Also, if setting up a loan account, you should choose either Current Asset or Current Liability type. The capital contribution and distribution account should be Equity type. Hope this helps!" }, { "docid": "494783", "title": "", "text": "Typically your paychecks are direct deposited into your bank account and you receive a paycheck stub telling you how much of your money went where (taxes, insurance, 401k, etc.). Most people use debit or credit cards for purchases. I personally only use checks to transfer money to another person (family, friend, etc.) than a business. And even then, there's PayPal." }, { "docid": "424679", "title": "", "text": "\"I cannot tell you what is or is not allowed under Islamic law. What I can tell you is that when most investors talk about the \"\"power of compound interest,\"\" they are not actually necessarily talking about interest! The idea of the magic of compound interest is that when you receive an interest payment on your investment, you now have a larger investment, earning more interest. Your investment grows exponentially. This doesn't just apply to interest payments, however, but can apply to any type of investment where the profits of the investment cause the investment to get larger. For example, if you invest in a company's stock, and the value of the stock goes up 10% in a year, after that year your investment is worth more than it was at the beginning. If it goes up another 10% the following year, you have gained more money in the second year than you did in the first. Your gains are compounding, even though interest payments are not involved at all. The same is true if you reinvest dividends or if you use business profit to expand your business, for example. The term \"\"power of compound interest\"\" is so named for historical reasons, but really applies to any type of investment where the investment itself is growing.\"" }, { "docid": "401677", "title": "", "text": "\"Summary: the fees used to differ but no longer do. Fees are the same. If you have a personal account, feel free to upgrade it to premier to get access to more features. Longer answer: the two account types USED to differ but that changed a few years ago (maybe circa 2011?). PayPal wants person-to-person payments to be free (except where they must pass along credit card charges or else they would loose their shirt) but wants to charge merchants for receiving payments. Originally PayPal required merchants to have premier (or business) accounts, and charged fees for payments made to those account types. Personal accounts had significant limitations on receiving payments, but did not pay fees upon receiving payments. Eventually PayPal decoupled the question of \"\"is this a person-to-person payment or a payment to a merchant for goods and services?\"\" from the paypal account type. So now the same account can receive both a p2p payment (e.g. splitting lunch costs), on which it will NOT pay fees, and can receive a payment for goods or services e.g. from a web checkout, on which it WILL pay fees. Regardless of the account type.\"" }, { "docid": "8126", "title": "", "text": "Navy Federal Credit Union recently added this feature. It is free for members making a deposit to their personal checking account, though you have to be a member for at least 90 days to be eligible. I have an all-in-one printer with flatbed scanner and availed myself of the service a couple of days ago. There wasn't any additional software involved as everything was done through the web browser, as shown the scan deposit demo. The only problem I had was figuring out how to align the check for it to be scanned completely (had to place the check in the middle of the scanner, aligned lengthwise; that was more of a hassle to figure out that one would suppose). That was it. I immediately received an e-mail confirmation that my deposit had been approved and processed. While Navy Federal's scan deposit FAQ is specific to them, of course, it is pretty comprehensive and gives one an idea of the general restrictions applied to the service." }, { "docid": "252273", "title": "", "text": "Assuming that you don't own the business, it would seem to apply. The CRA says: If you were a resident of Quebec on December 31, 2016, and you did not have a business with a permanent establishment outside Quebec, your refundable Quebec abatement is 16.5% of the basic federal tax on line 55 of Schedule 1. If you had income from a business (including income you received as a limited or non-active partner) and the business has a permanent establishment outside Quebec, or you were not a resident of Quebec on December 31, 2016, and the business has a permanent establishment in Quebec, use Form T2203, Provincial and Territorial Taxes for 2016 - Multiple Jurisdictions, to calculate your abatement. For people whose income isn't coming from businesses they own, this seems quite clear." }, { "docid": "560251", "title": "", "text": "I don't believe Saturday is a business day either. When I deposit a check at a bank's drive-in after 4pm Friday, the receipt tells me it will credit as if I deposited on Monday. If a business' computer doesn't adjust their billing to have a weekday due date, they are supposed to accept the payment on the next business day, else, as you discovered, a Sunday due date is really the prior Friday. In which case they may be running afoul of the rules that require X number of days from the time they mail a bill to the time it's due. The flip side to all of this, is to pick and choose your battles in life. Just pay the bill 2 days early. The interest on a few hundred dollars is a few cents per week. You save that by not using a stamp, just charge it on their site on the Friday. Keep in mind, you can be right, but their computer still dings you. So you call and spend your valuable time when ever the due date is over a weekend, getting an agent to reverse the late fee. The cost of 'right' is wasting ten minutes, which is worth far more than just avoiding the issue altogether. But - if you are in the US (you didn't give your country), we have regulations for everything. HR 627, aka The CARD act of 2009, offers - ‘‘(2) WEEKEND OR HOLIDAY DUE DATES.—If the payment due date for a credit card account under an open end consumer credit plan is a day on which the creditor does not receive or accept payments by mail (including weekends and holidays), the creditor may not treat a payment received on the next business day as late for any purpose.’’. So, if you really want to pursue this, you have the power of our illustrious congress on your side." }, { "docid": "42340", "title": "", "text": "Yes, overall, it is a big inconvenience to you. This same issue applies for those that for example, receive Social Security benefits (and perhaps other government cash benefits) on a pre-paid card (rather than direct deposit to a bank account). They allow a few ways to get cash from the card: You can get cash back (no fee) when you make a retail purchase. You could use the card for relatively small items you would purchase anyway, and get $100 or more back in cash each time. Every store/chain will have it's own limits on how much cash back they will allow per transaction. And, be careful, some stores charge a fee for cash back, but it's not at all common. If even these small purchases are an issue, you can then (presumably later) return the item you purchased without returning the cash-back you received (if the store allows returns/refunds). And, since a transaction with cash back is processed as a debit (rather than a credit), usually if you later return the purchased item, you will be refunded in cash (rather than a credit back to your card/account). Also, for other cards, sometimes you can go to a branch of the bank that issued the card and make a no fee withdraw, sometimes in cash and sometimes by check. This depends on the policy of the issuing bank, and the card account. Finally, most of this assumes that you are given a pin (or the opportunity to create one) with the card, because cash-back and ATM access requires a pin. And there are some banks/cards that don't allow any of this." }, { "docid": "425185", "title": "", "text": "It looks like the resource to deciding these is here Concerning the meals, the law seems a bit vague to me. You can exclude the value of meals you furnish to an employee from the employee's wages if they meet the following tests. This exclusion does not apply if you allow your employee to choose to receive additional pay instead of meals. If the whole point of google providing meals is to benefit Google as such people will not leave the googleplex when to obtain meals elsewhere causing increased productivity for Google, then this is covered as a business expense. (Even if it wasn't, Google would have to notify you that it was providing you a non-expensable benefit, i.e. compensation, by giving you a 1099 at the end of the year). Concerning the other benefits, the only way I could see those items not being taxable benefits is if one of the two applies." }, { "docid": "112793", "title": "", "text": "In many cases yes. In the case of an employer handing employees a credit card to use, that is clearly income if the card is used for something other than a business expense. Generally speaking, if you're receiving something with a significant value without strings attached, it is likely taxable. Google no doubt has an army of tax attorneys, so perhaps they are able to exploit loopholes of some sort." }, { "docid": "259708", "title": "", "text": "> Not when 100 people apply for a receptionist job with 20 graduates in the mix. How is a tax credit that encourages business owners to hire the long term unemployeed going to do anything to fix this problem? Such a tax credit isn't going to create opportunity for businesses to hire more people. It's just going to shift employment opportunities from the employed and short-term unemployed to the long-term unemployed. Where is the value in this proposition?" }, { "docid": "378611", "title": "", "text": "Corey Rockafeler is president of Vaalk Consulting Group. He is also small business financing expert and part of leadership team at Bell Funding Solutions in New York City. Some of the city’s top businesses regard him as their first choice when it comes to securing growth and expansion capital. He offers complete financing solutions for growing business. His custom solutions include everything from multi-year terms, lines of credit, asset and collateral based loans, factoring and receivable financing to SBA and SBA bridge loans. When asked about his key to success, Corey stated, “It’s all about passion" }, { "docid": "91994", "title": "", "text": "While you are required to do so as others have said, it's actually in your interest to do so. In a recent article at GlobeInvestor, Tim Cestnick discusses the benefits of filing tax returns for teens. This situation may or may not apply to you but the message is the same. The main benefits are (1) create RRSP contribution room and (2) be eligible for GST/HST credits and other possible one-shot credits (think oil royalty surplus cheques in Alberta). Excerpt: You see, when Lincoln was 14, he filed a tax return and reported $2,000 of income that year. He paid no tax thanks to the basic personal tax credit, but he created $360 of RRSP contribution room that year. Beginning in 2003, Lincoln started working part-time in his father's business. His father agreed to pay him $6,000 each summer to work in the business, to help save money for university. Lincoln didn't pay any tax on the money he earned in those summers because his basic personal tax credit was always higher than his earnings. In addition, Lincoln added to his RRSP contribution room simply by filing a tax return each year." }, { "docid": "439779", "title": "", "text": "I want to shop in the currency that will be cheapest in CAD at any given time. How do you plan to do this? If you are using a debit or credit card on a CAD account, then you will pay that bank's exchange rate to pay for goods and services that are billed in foreign currency. If you plan on buying goods and services from merchants that offer to bill you in CAD for items that are priced in foreign currency (E.g. buying from Amazon.co.uk GBP priced goods, but having Amazon bill your card with equivalent CAD) then you will be paying that merchant's exchange rate. It is very unlikely that either of these scenarios would result in you paying mid-market rates (what you see on xe.com), which is the average between the current ask and bid prices for any currency pair. Instead, the business handling your transaction will set their own exchange rate, which will usually be less favorable than the mid-market rate and may have additional fees/commission bolted on as a separate charge. For example, if I buy 100 USD worth of goods from a US vendor, but use a CAD credit card to pay, the mid-market rate on xe.com right now indicates an equivalent value of 126.97 CAD. However the credit card company is more likely to charge closer to 130.00 CAD and add a foreign transaction fee of maybe $2-3, or a percentage of the transaction value. Alternatively, if using something like Amazon, they may offer to bill the CAD credit card in CAD for those 100 USD goods. No separate foreign transaction fee in this case, but they are still likely to exchange at the less favorable 130.00 rate instead of the mid-market rates. The only way you can choose to pay in the cheapest equivalent currency is if you already have holdings of all the different currencies. Then just pay using whichever currency gets you the most bang for your buck. Unless you are receiving payments/wages in multiple currencies though, you're still going to have to refill these accounts periodically, thus incurring some foreign transaction fees and being subject to the banker's exchange rates. Where can I lookup accurate current exchange rates for consumers? It depends on who will be handling your transaction. Amazon will tell you at the checkout what exchange rate they will apply if you are having them convert a bill into your local currency for you. For credit/debit card transactions processed in a different currency than the attached account, you need to look at your specific agreement or contact the bank to see which rate they use for daily transactions (and where you can obtain these rates), whether they convert on the day of the transaction vs. the day it posts to your account, and how much they add on ($ and/or %) in fees and commission." }, { "docid": "111466", "title": "", "text": "When you start living in US, it doesn't actually matter what was your Credit history in another country. Your Credit History in US is tied to your SSN (Social Security Number), which will be awarded once you are in the country legally and apply for it. Getting an SSN also doesn't guarantee you nothing and you have to build your credit history slowly. Opening a Checking or Savings account will not help you in building a credit history. You need to have some type of Credit Account (credit card, car loan, mortgage etc.) linked to your SSN to start building your credit history. When you are new to US, you probably won't find any bank that will give you a Credit Card as you have no Credit history. One alternative is to apply for a secured credit card. A secured credit card is one you get by putting money or paying money to a bank and open a Credit Card against that money, thereby the bank can be secure that they won't lose any money. Once you have that, you can use that to build up your credit history slowly and once you have a good credit history and score, apply for regular Credit Card or apply for a car loan, mortgage etc. When I came to US 8 years ago, my Credit History was nothing, even though I had pretty good balance and credit history back in my country. I applied for secured credit card by paying $500 to a bank ( which got acquired by CapitalOne ), got it approved and used it for everything, for three years. I applied for other cards in the mean time but got rejected every time. Finally got approved for a regular credit card after three years and in one year added a mortgage and car loan, which helped me to get a decent score now. And Yes, a good Credit Score is important and essential for renting an apartment, leasing a car, getting a Credit Card etc. but normally your employer can always arrange for an apartment given your situation or you need to share apartment with someone else. You can rent a car without and credit score, but need a valid US / International Drivers license and a Credit Card :-) Best option will be to open a secured credit card and start building your credit. When your wife and family arrives, they also will be assigned individual SSN and can start building their credit history themselves. Please keep in mind that Credit Score and Credit History is always individual here..." }, { "docid": "46902", "title": "", "text": ">OK, great, where do I apply for my refund? An odd question, but I'll answer it if you really don't know. Tax credits will only likely be a refund if you pay too much tax during the year, otherwise they will be reductions in your yearly tax bill. In most countries, tax credits are awarded when paying taxes. Assuming you are from the United States, that would likely be in April on your individual income tax form. Tax credits can be earned for doing anything the government deems desirable or worthy of exception. Examples include buying a first house, having children, starting or running a business, paying tuition, adopting a child, caring for an elderly or disabled person, earning money overseas, paying certain types of medical insurance, and being married in addition to purchasing a zero emission or low emission vehicle." }, { "docid": "401819", "title": "", "text": "\"I'm going to post this as an answer because it's from the GoFundMe website, but ultimately even they say to speak with a tax professional about it. Am I responsible for taxes? (US Only) While this is by no means a guarantee, donations on GoFundMe are simply considered to be \"\"personal gifts\"\" which are not, for the most part, taxed as income in the US. However, there may be particular, case-specific instances where the income is taxable (dependent on amounts received and use of the monies, etc.). We're unable to provide specific tax advice since everyone's situation is different and tax rules can change on a yearly basis. We advise that you maintain adequate records of donations received, and consult with your personal tax adviser. Additionally, WePay will not report the funds you collect as earned income. It is up to you (and a tax professional) to determine whether your proceeds represent taxable income. The person who's listed on the WePay account and ultimately receives the funds may be responsible for taxes. Again, every situation is different, so please consult with a tax professional in your area. https://support.gofundme.com/hc/en-us/articles/204295498-Am-I-responsible-for-taxes-US-Only- And here's a blurb from LibertyTax.com which adds to the confusion, but enforces the \"\"speak with a professional\"\" idea: Crowdfunding services have to report to the IRS campaigns that total at least $20,000 and 200 transactions. Money collected from crowdfunding is considered either income or a gift. This is where things get a little tricky. If money donated is not a gift or investment, it is considered taxable income. Even a gift could be subject to the gift tax, but that tax applies only to the gift giver. Non-Taxable Gifts These are donations made without the expectation of getting something in return. Think of all those Patriots’ fans who gave money to GoFundMe to help defray the cost of quarterback Tom Brady’s NFL fine for Deflategate. Those fans aren’t expecting anything in return – except maybe some satisfaction -- so their donations are considered gifts. Under IRS rules, an individual can give another individual a gift of up to $14,000 without tax implications. So, unless a Brady fan is particularly generous, his or her GoFundMe gift won’t be taxed. Taxable Income Now consider that same Brady fan donating $300 to a Patriots’ business venture. If the fan receives stock or equity in the company in return for the donation, this is considered an investment and is not taxable . However, if the business owner does not offer stock or equity in the company, the money donated could be considered business income and the recipient would need to report it on a tax return. https://www.libertytax.com/tax-lounge/two-tax-rules-to-know-before-you-try-kickstarter-or-gofundme/\"" }, { "docid": "358837", "title": "", "text": "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." } ]

[ { "docid": "350819", "title": "", "text": "Banks will usually look at 2 years worth of tax returns for issuing business credit. If those aren't available (for instance, for recently formed businesses), they will look at the personal returns of the owners. Unfortunately, it sounds like your friend is in the latter category. Bringing in another partner isn't necessarily going to help, either; with only two partners / owners, the bank would probably look at both owners' personal tax returns and credit histories. It may be necessary to offer collateral. I'm sorry I can't offer any better solutions, but alternative funding such as personal loans from family & friends could be necessary. Perhaps making them partners in exchange for capital." } ]

[ { "docid": "352927", "title": "", "text": "Generally, unless you're doing a wire transfer, bank transactions are processed in batches overnight. So the credit card company won't be able to confirm your transfer until the next business day (it may take even longer for them to actually receive the money)." }, { "docid": "240350", "title": "", "text": "\"I don't know of a situation where rejecting a raise would make sense. Often, one can be in a phaseout of some benefit, so that even though you're in a certain tax bracket, the impact of the next $100 is greater than the bracket rate alone. Taxation of social security benefits is one such anomaly. It can be high, but never over 100%. Update - The Affordable Care Act contains such an anomaly - go to the Kaiser Foundation site, and see the benefit a family of three might receive. A credit for up to $4631 toward their health care insurance cost. But, increase the income to above $78120 Modified Adjusted Gross Income (MAGI) and the benefit drops to zero. The fact that the next dollar of income will cost you $4631 in the lost credit is an example of a step-function in the tax code. I'd still not turn down the raise, but I'd ask that it be deposited to my 401(k). And when reconciling my taxes each April, I'd use an IRA in case I still went over a bit. Consider, it's April, and your MAGI is $80,120. Even if you don't have to cash to deposit to the IRA, you borrow it, from a 24% credit card if need be. Because the $2000 IRA will trigger not just $300 less Federal tax, but a $4631 health care credit. Note - the above example will apply to a limited, specific group who are funding their own health care expense and paying above a certain percent of income. It's not a criticism of ACA, just a mathematical observation appropriate to this question. For those in this situation, a close look at their projected MAGI is in order. Another example - the deduction for college tuition and fees. This is another \"\"step function.\"\" Go a dollar over the threshold, $130K joint, and the deduction drops from $4000 to $2000. You can claim that a $2000 deduction is a difference of 'only' $500 in tax due, but the result is a quick spike in the marginal rate. For those right at this number, it would be worth it to increase their 401(k) deduction to get back under this limit.\"" }, { "docid": "254151", "title": "", "text": "\"If you receive a 1099-MISC from YouTube, that tells you what they stated to the IRS and leads into most tax preparation software guided interviews or wizards as a topic for you to enter. Whether or not you have a 1099-MISC, this discussion from the IRS is pertinent to your question. You could probably elect to report the income as a royalty on your copyrighted work of art on Schedule E, but see this note: \"\"In most cases you report royalties in Part I of Schedule E (Form 1040). However, if you ... are in business as a self-employed writer, inventor, artist, etc., report your income and expenses on Schedule C or Schedule C-EZ (Form 1040).\"\" Whether reporting on Schedule E or C is more correct or better for your specific circumstances is beyond the advice you should take from strangers on the internet based on a general question - however, know that there are potentially several paths for you. Note that this is revenue from a business, so if you paid for equipment or services that are 100% dedicated to your YouTubing (PC, webcam, upgraded broadband, video editing software, vehicle miles to a shoot, props, etc.) then these are a combination of depreciable capital investments and expenses you can report against the income, reducing the taxes you may owe. If the equipment/services are used for business and personal use, there are further guidelines from the IRS as to estimating the split. These apply whether you report on Sch. E, Sch. C, or Sch C-EZ. Quote: \"\"Self-Employment Income It is a common misconception that if a taxpayer does not receive a Form 1099-MISC or if the income is under $600 per payer, the income is not taxable. There is no minimum amount that a taxpayer may exclude from gross income. All income earned through the taxpayer’s business, as an independent contractor or from informal side jobs is self-employment income, which is fully taxable and must be reported on Form 1040. Use Form 1040, Schedule C, Profit or Loss from Business, or Form 1040, Schedule C-EZ, Net Profit from Business (Sole Proprietorship) to report income and expenses. Taxpayers will also need to prepare Form 1040 Schedule SE for self-employment taxes if the net profit exceeds $400 for a year. Do not report this income on Form 1040 Line 21 as Other Income. Independent contractors must report all income as taxable, even if it is less than $600. Even if the client does not issue a Form 1099-MISC, the income, whatever the amount, is still reportable by the taxpayer. Fees received for babysitting, housecleaning and lawn cutting are all examples of taxable income, even if each client paid less than $600 for the year. Someone who repairs computers in his or her spare time needs to report all monies earned as self-employment income even if no one person paid more than $600 for repairs.\"\"\"" }, { "docid": "259708", "title": "", "text": "> Not when 100 people apply for a receptionist job with 20 graduates in the mix. How is a tax credit that encourages business owners to hire the long term unemployeed going to do anything to fix this problem? Such a tax credit isn't going to create opportunity for businesses to hire more people. It's just going to shift employment opportunities from the employed and short-term unemployed to the long-term unemployed. Where is the value in this proposition?" }, { "docid": "453025", "title": "", "text": "If it's just an ordinary credit card I'd think he could merely dispute the charges, since he's saying they 'created' (which I presume means applied for and received) a card, it should not affect his accounts directly. And especially since application details may be bogus, he should be able to prove it was not him. Even if they got HIS credit card number, he should be able to dispute those charges that are not his, especially if they went to a different address, or were charged someplace (like another city) where he was not present at that time. OTOH, if they created a DEBIT card that was linked to his bank account somehow, well then, that could be a lot more difficult to recover from, but even then, if it's not his signature that was used to apply for the card, or on any charges that had to be signed for etc, he should be able to dispute it and get the bank to put the money back in his account since it will be a case of forgery etc. The big problem with ID theft is people tend to ruin your credit rating, and you end up having to fend off bill collectors etc. The primary thing it costs you (speaking from experience of having checks stolen and forged using a fake drivers license) is the TIME and hassle of getting everything straightened out and put right. In my case it took a few hours at the credit union, and all the money was back, in a new account (the old one having been closed) when I left. Dealing with all the poor merchants that were taken, and with bill collectors on the other hand took months. but I never once in the process needed 'quick money' from anyone. So the need for 'quick money' seems a bit doubtful. I'd want a lot more details of exactly why he needs money from you. Refer your friend to this Federal Trade Commission site and make sure he takes the steps listed, and especially pays attention to the parts about keeping notes of every single person he talks with, including name, date, time, and pertinent details of the conversation. If he has some idea HOW this happened (as in a robbery) then report it to the proper authorities, and insist on getting a case number. talking with bill collectors is the worst, just trying to get ahold of them when they send you letters (and talk to a person, not a recorded number with instructions on how to pay them) is sometimes nearly impossible (google was my friend) and a lot of times they didn't want to back off till I gave them the case number with the police, that somehow magically made it 'real' to them and not just my telling them a story." }, { "docid": "307120", "title": "", "text": "\"Unemployment insurance provides a temporary safety net to workers who lose their jobs by replacing a portion of their salary for certain periods. Each state administers its own unemployment insurance program so some rules may vary from state to state. To receive unemployment insurance payments, you must have lost your job through no fault of your own. If you quit your job or lost it because of poor performance or another justifiable reason, you are not eligible for unemployment insurance benefits. State unemployment insurance programs require claimants to have worked sufficiently before they can claim benefits. As soon as you apply for unemployment insurance, an agency with the state in which you live will verify that you were a victim of a layoff by contacting your previous employer and making sure you lost your job due to lack of work and not an action within your control. After the state verifies you were indeed the victim of a layoff, your weekly payment is calculated. Your payment will be a percentage of what you made in your previous job, generally between 20 percent and 50 percent, depending on your state. Unemployment insurance replaces only a portion of your previous pay because it is intended to pay only for the essentials of living such as food and utilities until you find new employment. Before you begin receiving benefits, you must complete a waiting period of typically one or two weeks. If you find a new job during this period, you will not be eligible for unemployment benefits, even if the job does not pay you as much as your previous job. After the waiting period, you will begin to receive your weekly payments. Employers pay for unemployment insurance through payroll taxes. So, while employees' work and earnings history are important to funding their unemployment benefits, the money does not come from their pay. Employer unemployment insurance contributions depend on several factors, including how many former employees have received benefits. Employers pay taxes on an employee's base wages, which vary by state. California, for example taxes employers on the first $7,000 of an employee's annual earnings, while neighboring Oregon taxes up to $32,000 of wages. Employers must set aside funds each payroll period and then report taxes and pay their states quarterly. States have several categories of tax rates they charge employers. New businesses and those first adding employees pay the \"\"new rate,\"\" which is typically lower and geared toward small businesses. Established businesses who haven't paid their taxes recently or properly are usually assessed the \"\"standard rate\"\" --- the highest possible tax rate, which in 2010 ranged from 5.4 percent in several states including Georgia, Hawaii and Alaska to 13.56 percent in Pennsylvania. Businesses in good standing may receive discounts under the \"\"experienced rate.\"\" Depending on the number of employees a business has and how many former employees have claimed unemployment, states can give sizable rate reductions. The fewer claims, the lower the rate a business pays in unemployment insurance taxes. As a result of the economic crisis legislation has been passed to extend Unemployment benefits. Regular unemployment benefits are paid for a maximum of 26 weeks in most states. However, additional weeks of extended unemployment benefits are available during times of high unemployment. The unemployment extension legislation passed by Congress in February 2012 changed the way the tiers of Emergency Unemployment Compensation (EUC) are structured. A tier of unemployment is an extension of a certain amount of weeks of unemployment benefits. There are currently four tiers of unemployment benefits. Each tier provides extra weeks of unemployment in addition to basic state unemployment benefits. Emergency Unemployment Compensation (EUC) Tiers June - August 2012: Source and further information can be found here - Unemployment Tiers - About.com Sources: Unemployment Insurance(UI) - US Dept. of Labor How Does Unemployment Insurance Work? - eHow Percentage of Pay That Goes to Unemployment Insurance - eHow Additional Info: You can file for UI over the internet here are some useful resources. OWS Links State Unemployment Offices - About.com How to Apply for Unemployment Over the Internet - eHow\"" }, { "docid": "538199", "title": "", "text": "If it was me, I would outsource as much as possible with the desire to receive up front payment from financing companies for originating a loan. Why? The biggest risk to newer businesses is cash flow. The amount of work a new business owner has to do is daunting. If you can outsource some of that work it will increase your chance of success and make your life easier. Focus on selling cars. The upfront origination will help with your cash flow. If you can outsource the credit decision making and paper work you have leveraged your time and can focus on more important things." }, { "docid": "593554", "title": "", "text": "The slips from your bank for your HSA account are for an account already established and thus the bank is willing to accept your deposits even if they arrive at the bank after the April 15 deadline, as long as the postmark is April 15 or earlier. The account exists in the bank, they know who you are, and that the payment is received after April 15 is just due to the normal (or even abnormal) delays in postal delivery. For the new account that you tried to establish (with appropriate notarization and timely postmark etc), the credit union could not have received the paperwork as of the close of business on April 15 (except in the very unlikely circumstance that a local letter deposited in the mailbox in the morning gets delivered the same day by USPS: don't extrapolate from stories of how mail was delivered in London in Victorian times). Ergo, you did not have an HSA account in the credit union as of April 15, and they are perfectly correct in refusing to open an account with a April 15 date and put money into it for the previous tax year. To answer the question asked: Are they allowed to ignore the postmark date? Yes, not only are they allowed to ignore the postmark date, the IRS insists that they ignore the postmark date. The credit union prefers to report only the truth: as of April 15, you had not established an HSA account as of April 15; to say otherwise would be making a false statement to the IRS." }, { "docid": "73427", "title": "", "text": "Funds earned and spent before opening a dedicated business account should be classified according to their origination. For example, if your business received income, where did that money go? If you took the money personally, it would be considered either a 'distribution' or a 'loan' to you. It is up to you which of the two options you choose. On the flip side, if your business had an expense that you paid personally, that would be considered either a 'contribution of capital' or a 'loan' from you. If you choose to record these transactions as loans, you can offset them together, so you don't need two separate accounts, loan to you and loan from you. When the bank account was opened, the initial deposit came from where? If it came from your personal funds, then it is either a 'contribution of capital' or a 'loan' from you. From the sound of your question, you deposited what remained after the preceding income/expenses. This would, in effect, return the 'loan' account back to zero, if choosing that route. The above would also be how to record any expenses you may pay personally for the business (if any) in the future. Because these transactions were not through a dedicated business bank account, you can't record them in Quickbooks as checks and deposits. Instead, you can use Journal Entries. For any income received, you would debit your capital/loan account and credit your income account. For any expenses, you would debit the appropriate expense account and credit your distribution/loan account. Also, if setting up a loan account, you should choose either Current Asset or Current Liability type. The capital contribution and distribution account should be Equity type. Hope this helps!" }, { "docid": "418708", "title": "", "text": "\"Well, primarily because that's fraud and fraud prevents a debtor from receiving a discharge in bankruptcy court. Fraud would be pretty easy to prove if you didn't have an income change and you have several lines of credit opened on and around the same day with almost no payments made toward them. Additionally, thanks to the reforms of the bankruptcy code, if your income exceeds the median income of your state you'll be forced in to a Chapter 13 and committed to a repayment plan that allocates all of your \"\"disposable income\"\" to your creditors. Now if whoever posted that will attempt to simply not pay then negotiate repayment plans with their creditors the process will last far longer than 7 years. It takes a long time to be in default for enough time that a consumer creditor will negotiate the debt and this is assuming the creditor doesn't sue you and get a judgement which could apply liens to any property you may own. The judgment(s) will likely cause you to pursue bankruptcy anyway; only now you're at least a few years beyond the point at which you ruined your credit.\"" }, { "docid": "284162", "title": "", "text": "\"I've just received my first Credit Card statement from HSBC. All I can say is all the information you need is there. It's really easy to pay off your credit card bill just have to read the instructions! Here are the bank account numbers and steps how to set up a standing order (as it was written in my statement): \"\"Standing Order/ bill payment Pay a fixed amount to your HSBC Bank Credit Card using the following information: Type of Card Card ------------------------ Number Begins ----Account Number MasterCard: HSBC Bank and Welsh --- 543460 ----------------29004734 Visa: HSBC and Welsh ---------------------454638 ----------------09003649 Gold Visa ---------------------------------------494120 ----------------69005161 Remember, if payments are made using the wrong card details, sort code or account number, they may be delayed or not applied.\"\" hope it was helpful\"" }, { "docid": "163896", "title": "", "text": "Generally it goes by when they receive the check, not when they cash the check. Though if the check was received prior to midnight on December 31st, but after the bank closes, they would probably let the tax payer decide to count it for the next year. Of course if the check is from person A to person B then the only issue is gift tax, or annual limit calculations. If it is company to person then income tax could be involved. The IRS calls this Constructive receipt Income Under the cash method, include in your gross income all items of income you actually or constructively receive during your tax year. If you receive property or services, you must include their fair market value in income. Example. On December 30, 2011, Mrs. Sycamore sent you a check for interior decorating services you provided to her. You received the check on January 2, 2012. You must include the amount of the check in income for 2012. Constructive receipt. You have constructive receipt of income when an amount is credited to your account or made available to you without restriction. You do not need to have possession of it. If you authorize someone to be your agent and receive income for you, you are treated as having received it when your agent received it. Example. Interest is credited to your bank account in December 2012. You do not withdraw it or enter it into your passbook until 2013. You must include it in your gross income for 2012. Delaying receipt of income. You cannot hold checks or postpone taking possession of similar property from one tax year to another to avoid paying tax on the income. You must report the income in the year the property is received or made available to you without restriction. Example. Frances Jones, a service contractor, was entitled to receive a $10,000 payment on a contract in December 2012. She was told in December that her payment was available. At her request, she was not paid until January 2013. She must include this payment in her 2012 income because it was constructively received in 2012. Checks. Receipt of a valid check by the end of the tax year is constructive receipt of income in that year, even if you cannot cash or deposit the check until the following year. Example. Dr. Redd received a check for $500 on December 31, 2012, from a patient. She could not deposit the check in her business account until January 2, 2013. She must include this fee in her income for 2012. In general it is best not to cut it close. If the check is to be counted as an January event it is best to send it in January. If it is to be December event it is best to send it early enough to be able to say with confidence that the check arrived at the destination before the end of the year." }, { "docid": "23016", "title": "", "text": "While one credit provider (or credit reference agency) might score you in one way, others may score you differently including treating different things that contribute to your score differently. Different credit providers may also not see all of your credit score as potentially some data may not be available to all credit suppliers. Further too many searches may trigger systems that recognise behavior that is a sign of possible fraudulent activity (such as applying for many items of credit in a short space of time). Whether this would directly affect a score or trigger manual checks is also likely to vary. In situations like this a person could have applied for (say) a dozen credit cards, with all the credit checks being performed before there is any credit history for any of those dozen cards." }, { "docid": "77248", "title": "", "text": "\"You are right on track with your idea of setting up a separate account for invoiced income. Create a new account with the type other asset and call it \"\"Receivables\"\" (or something similar). Every time you invoice a client, enter a credit to this account with the amount of the invoice. Once the client pays and you deposit a check, enter a transfer from the \"\"Receivables\"\" account to the bank account. EDIT I overlooked that you wish to account for not-yet-invoiced income. I think that's a bad idea. It will become confusing and will give you the false sense that your financial condition is better than it really is. There are plenty of stories about businesses that have stellar sales, but fail because of lack of cash flow (the business' bills become due before it gets paid by its own customers).\"" }, { "docid": "254431", "title": "", "text": "You can do this through a journal entry in Quickbooks. It can all be entered as one entry, there's no need to do separate ones for each bill. The journal entry should debit Accounts Payable and credit your equity account. In the line for Accounts Payable, make sure to choose your name in the 'Name' column. This, in effect, enters a credit to your account, which will offset the bills that were shown there previously. The last step is to apply those credits to the bills. Even though they offset each other, your name would still show up in any Payables reports and in the Pay Bills window. To do this, open the Pay Bills window and select one of the bills owed to you. There should be an option to choose 'Apply Credits' or something similar (depends on which version of Quickbooks you are running). Choose that option, and apply credits in the amount of the bill, so that it zeroes out. Do the same for all of the other bills. Once they are all checked off, click the button to Pay Bills. This won't actually 'pay' anything, but will instead just apply the credits to the bills as indicated." }, { "docid": "475054", "title": "", "text": "It is recommended that you get this using Wire Transfer. The fees is slightly high, it should be in the range of USD 20 - 30. You would get the funds faster, about 3-5 days after the payment is initiated. The Fx conversion would be applied without your knowledge so you would have very little control over it. If you are getting by paper cheque, it would take around 7 - 10 days for the mail to arrive. You would have to deposit this in local Bank, complete a form giving out the details as to why you received the cheque, along with a letter to request the cheque to be cashed ... Generally it takes around 25 days for the funds to get credited. As you would be speaking to someone in Bank, you can try and negotiate a better Fx rate, however for such amounts Bank will not go out of the way, so you may not know what rate gets applied, it would be the standard rate some 20 days later when the actual cheque gets processed. The fees are relatively less in the range of Rs 500 to Rs 1000." }, { "docid": "571801", "title": "", "text": "In most cases, a debit card can be charged like a credit card so there is typically no strict need for a credit card. However, a debit card provides weaker guarantees to the merchant that an arbitrary amount of money will be available. This is for several reasons: As such, there are a few situations where a credit card is required. For example, Amazon requires a credit card for Prime membership, and car rental companies usually require a credit card. The following does not apply to the OP and is provided for reference. Debit cards don't build credit, so if you've never had a credit card or loan before, you'll likely have no credit history at all if you've never had a credit card. This will make it very difficult to get any nontrivially-sized loan. Also, some employers (typically if the job you're applying for involves financial or other highly sensitive information) check credit when hiring, and not having credit puts you at a disadvantage." }, { "docid": "111466", "title": "", "text": "When you start living in US, it doesn't actually matter what was your Credit history in another country. Your Credit History in US is tied to your SSN (Social Security Number), which will be awarded once you are in the country legally and apply for it. Getting an SSN also doesn't guarantee you nothing and you have to build your credit history slowly. Opening a Checking or Savings account will not help you in building a credit history. You need to have some type of Credit Account (credit card, car loan, mortgage etc.) linked to your SSN to start building your credit history. When you are new to US, you probably won't find any bank that will give you a Credit Card as you have no Credit history. One alternative is to apply for a secured credit card. A secured credit card is one you get by putting money or paying money to a bank and open a Credit Card against that money, thereby the bank can be secure that they won't lose any money. Once you have that, you can use that to build up your credit history slowly and once you have a good credit history and score, apply for regular Credit Card or apply for a car loan, mortgage etc. When I came to US 8 years ago, my Credit History was nothing, even though I had pretty good balance and credit history back in my country. I applied for secured credit card by paying $500 to a bank ( which got acquired by CapitalOne ), got it approved and used it for everything, for three years. I applied for other cards in the mean time but got rejected every time. Finally got approved for a regular credit card after three years and in one year added a mortgage and car loan, which helped me to get a decent score now. And Yes, a good Credit Score is important and essential for renting an apartment, leasing a car, getting a Credit Card etc. but normally your employer can always arrange for an apartment given your situation or you need to share apartment with someone else. You can rent a car without and credit score, but need a valid US / International Drivers license and a Credit Card :-) Best option will be to open a secured credit card and start building your credit. When your wife and family arrives, they also will be assigned individual SSN and can start building their credit history themselves. Please keep in mind that Credit Score and Credit History is always individual here..." }, { "docid": "180155", "title": "", "text": "You can get an SBA disaster loan to help cover costs. There are a few different kinds of loans. You have to live in a qualifying area to get one, which you likely do. There are physical disaster loans, which cover inventory, and that may help replace the flowers/plants. They also have EIDLs which you can use to help cover ongoing costs like fixed bills while you get back into business. Important to note these are loans, intended to be low-interest (or at least lower than a merchant cash advance or putting charges on credit cards), and do have to get paid back. There are hoops to jump through too, but they may be your best option, depending on your current financial situation. (You could also go to your local Small Business Development Center for help -- they have free resources and experts who can help you understand your options.) And when you get back up on your feet, get a business line of credit and business insurance so you have a backup plan and immediate access to capital for next time. This article is about Harvey, but same ideas apply for Irma: https://www.nav.com/blog/how-to-get-an-sba-disaster-loan-after-hurricane-harvey-22706/" } ]

[ { "docid": "599545", "title": "", "text": "You should probably consult an attorney. However, if the owner was a corporation/LLC and it has been officially dissolved, you can provide an evidence of that from your State's department of State/Corporations to show that their request is unfeasible. If the owner was a sole-proprietor, then that may be harder as you'll need to track the person down and have him close the plan." } ]

[ { "docid": "122114", "title": "", "text": "\"Good question. And it depends a bit on your current plan, your future income, and the plan you are moving too. Mostly you want to roll out of your existing 401K. There will likely be a fee, and your investment choices are limited. You will want to do a direct transfer, and going with a quality company such as Fidelity or Vanguard. Both of those have zero fees for accounts and pretty good customer service. However, if your future income is likely to be high there is something else to consider. If you are over the limits do a ROTH, and are considering doing a \"\"Backdoor ROTH\"\" a key success for this strategy is keeping your roll over IRA balance low (or zero). So you may want to either leave the 401K where it is, or roll it to your new 401K plan. In that case you will have to call the two 401K custodians, and select the best choice as far as fees and fund choice.\"" }, { "docid": "259227", "title": "", "text": "\"To summarize your starting situation: You want to: Possible paths: No small business Get a job. Invest the 300K in safe liquid investments then move the maximum amount each year into your retirement accounts. Depending on which company you work for that could include 401K (Regular or Roth), deductible IRA, Roth IRA. The amount of money you can transfer is a function of the options they give you, how much they match, and the amount of income you earn. For the 401K you will invest from your paycheck, but pull an equal amount from the remainder of the 300K. If you are married you can use the same procedure for your spouse's account. You current income funds any vacations or splurges, because you will not need to put additional funds into your retirement plan. By your late 30's the 300K will now be fully invested in retirement account. Unfortunately you can't touch much of it without paying penalties until you are closer to age 60. Each year before semi-retirement, you will have to invest some of your salary into non-retirement accounts to cushion you between age 40 and age 60. Invest/start a business: Take a chunk of the 300K, and decide that in X years you will use it to start a small business. This chunk of money must be liquid and invested safely so that you can use it when you want to. You also don't want to invest it in investments that have a risk of loss. Take the remaining funds and invest it as described in the no small business section. You will completely convert funds to retirement funds earlier because of a smaller starting amount. Hopefully the small business creates enough income to allow you to continue to fund retirement or semi-retirement. But it might not. Comment regarding 5 year \"\"rules\"\": Roth IRA: you have to remain invested in the Roth IRA for 5 years otherwise your withdrawal is penalized. Investing in stocks: If your time horizon is short, then stocks are too volatile. If it drops just before you need the money, it might not recover in time. Final Advice: Get a financial adviser that will lay out a complete plan for a fixed fee. They will discuss investment options, types not particular funds. They will also explain the tax implications of investing in various retirement accounts, and how that will impact your semi-retirement plans. Review the plan every few years as tax laws change.\"" }, { "docid": "338519", "title": "", "text": "Nobody here really answered your question. The custodian of the 401k determines what funds and investment options are available within that 401k. So if they're eliminating company stock as an option then they can absolutely make you sell out of it. You may be able to do an in service rollover and transfer your funds to an individual ira but that's not particularly common among 401k administrators. Aside from that I'd ask why do you want to hold company stock anyway? Generally I'd advise against this as its imposing a ton of risk on your financial future. If your company tanks you're out of a job, which sucks. But it sucks even more if your company tanks and your 401k loses a ton of value at the same time. Edit: I see you asked who benefits as well. It may just be a situation of no benefit at all. Perhaps the plan didn't have enough people investing in company stock to make the option cost effective. Maybe the administrator decided that allowing people to take on that amount of risk was not in their best interest(it's not). Could be a ton of reasons but it's unlikely the company did so out of greed. There isn't a lot of financial benefit for them there." }, { "docid": "471687", "title": "", "text": "\"This is the best tl;dr I could make, [original](https://www.usatoday.com/story/money/2017/07/07/sears-holdings-kmart-store-closures/459277001/) reduced by 78%. (I'm a bot) ***** > Sears Holdings continued its steady drip of store closures Friday with the announcement that it would close 35 more Kmart locations and eight Sears stores. > Although the iconic American department store chain still has more than 1,000 locations, Sears has buckled under pressure from online competitors, having failed to reinvent its traditional store experience. > "It is obvious that we don't make decisions to close stores lightly. Our efforts have been, and will continue to be, fact-based, thoughtful and disciplined, with the goal of making Sears Holdings more relevant and more competitive for our members and other constituents.\"\" ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/6lws7p/sears_kmart_to_close_43_more_stores_as_retail/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ \"\"Version 1.65, ~161827 tl;drs so far.\"\") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr \"\"PM's and comments are monitored, constructive feedback is welcome.\"\") | *Top* *keywords*: **Sears**^#1 **store**^#2 **locations**^#3 **close**^#4 **more**^#5\"" }, { "docid": "309684", "title": "", "text": "See if there are any favorable tax treaties between your two countries. (check US state department - or find the nearest PWC, Deloitte, KPMG, these are global auditing firms that deal with international tax and compliance) A tax treaty could have possible goodies such as a lower more favorable tax or even a tax credit from. For instance, if you paid 28% tax in the US then your new country will give you a credit on the taxes owed to them. The point of tax treaties are to prevent double taxation, but in the effort to do so they often create their own new tax rates for transfers between countries. You'll be better off just paying the 28% US income tax on your 401k distribution. And using the post-tax money as you please. US citizens are on the hook for income tax several years after they leave the US." }, { "docid": "588029", "title": "", "text": "\"Let's pretend that the author of that article is not selling anything and is trying to help you succeed in life. I have nothing against sales, but that author is throwing out a lot of nonsense to sell his stuff and is creating a state of urgency so that people adopt this mindset. It's clever and it obviously works. From a pure time perspective, most people won't make enough money to run their own business and be as profitable as if they worked for a company. This is a reality that few want to acknowledge. If you invested in yourself and your career with the same discipline and urgency as an entrepreneur, most people would be better off at a company when you consider the benefits and the fact that employees have a full 7.5% of social security paid by their employer (entrepreneurs see the full 15% while employees don't). Why do I start here, because this author isn't telling you that the more people take his advice, the more their earnings will regress to the mean or below. In fact, most of my entrepreneur friends have to go back to work when their reality fails after they burn through their savings. 401ks are not a perfect system, but there are more 401k millionaires now than ever before this, and people who give the author's advice are always looking to avoid doing what they need to do - save for retirement. Most people I know sadly realize this in their 50s, when it's too late, and start trying to \"\"catch up.\"\" I don't blame the author for this, as he knows his article will appeal to younger people who don't have the wisdom to see that his advice hasn't been great for most. The reality is that for most people 401ks will provide tax advantaged savings that you can use when you're older; taxes will eat at your earnings, so these accounts really help. Finally, look at the article again especially the part you quote. He says inflation will carve out what you save, yet inflation is less than 2%. Where is he getting this from? In the past decade, we've seen numerous deflationary spirals and the market overall has come back from the fall in 2009. Again, this isn't \"\"good enough\"\" for this author, so buy his stuff to learn how to succeed! There have been numerous decades (50s,70s) that were much worse for investors than this past one.\"" }, { "docid": "260075", "title": "", "text": "Take some of the commentary on home buying forums with a grain of salt. I too have read some of the commentary on these forums such as myFICO, Trulia, or Zillow and rarely is the right advice given or proper followup done. Typical 401k withdrawals for home purchase would not be considered a hardship. However, most employer 401k plans will allow you to take a loan for 401k as long as you provide suitable documentation: HUD-1 statement, Real Estate Contract, Good Faith Estimate, or some other form of suitable documentation as described by the plan administrator. For instance, I just took a 401k loan to pay for closing costs and I had to provide only the real estate contract. Could I not follow through with the contract? Sure, but what if I am found out for fraud? Then the plan administrator would probably end up turning the distribution into a taxable distribution. I wouldn't go to jail in this hypothetical situation - I am only stealing from myself. But the law states that certain loan situations are not liable for tax as long as that situation still exists. In the home loan situation, my employer allows for a low interest, 10 year loan. My employer also allows for a pre-approved loan for any purpose. This would be a low interest, 5 year loan. There is also the option to not do a loan at all. But normally that is only allowed after you have exhausted all your loan options and the government makes it intentionally harsh (30% penalty at least) to discourage people from dumping their tax free haven 401k accounts. That all being said, many plans offer no prepayment penalty. So like my employer has for us, I can pay it all back in full whenever I want or make micropayments every month. Otherwise, it comes out of my pay stub biweekly. So if it were to fall through, I could just put it all back like it never happened. Though with my plan, there is a cooling off period of 7 days before I can take another loan. Keep in mind that if you leave your employer then the full amount becomes a taxable distribution unless you pay it back within a certain period of time after leaving the employer. Whether this fits your financial situation is up to you, but a loan is definitely preferred over a partial or full withdrawal since you are paying yourself back for your rightly earned retirement which is just as important." }, { "docid": "536703", "title": "", "text": "Transfers can be made from U.S. pension plans to Canadian RRSPs, if the following conditions are met: Way more details here: http://www.howlandtax.com/answers/05Sept21.htm And googling 'transfer 401k to rrsp' yields much fruit." }, { "docid": "226547", "title": "", "text": "\"The biggest reason why one might want to leave 401k money invested in an ex-employer's plan is that the plan offers some superior investment opportunities that are not available elsewhere, e.g. some mutual funds that are not open to individual investors such as S&P index funds for institutional investors (these have expense ratios even smaller than the already low expense ratios of good S&P index funds) or \"\"hot\"\" funds that are (usually temporarily) closed to new investors, etc. The biggest reason to roll over 401k money from an ex-employer's plan to the 401k plan of a new employer is essentially the same: the new employer's plan offers superior investment opportunities that are not available elsewhere. Of course, the new employer's 401k plan must accept such roll overs. I do not believe that it is a requirement that a 401k plan must accept rollovers, but rather an option that a plan can be set up to allow for or not. Another reason to roll over 401k money from one plan to another (rather than into an IRA) is to keep it safe from creditors. If you are sued and found liable for damages in a court proceeding, the plaintiff can come after IRA assets but not after 401k money. Also, you can take a loan from the 401k money (subject to various rules about how much can be borrowed, payment requirements etc) which you cannot from an IRA. That being said, the benefits of keeping 401k money as 401k money must be weighed against the usually higher administrative costs and usually poorer and more limited choices of investment opportunities available in most 401k plans as Muro has said already.\"" }, { "docid": "105011", "title": "", "text": "What is my best bet with the 401K? I know very little about retirement plans and don't plan to ever touch this money until I retire but could this money be of better use somewhere else? You can roll over a 401k into an IRA. This lets you invest in other funds and stocks that were not available with your 401k plan. Fidelity and Vanguard are 2 huge companies that offer a number of investment opportunities. When I left an employer that had the 401k plan with Fidelity, I was able to rollover the investments and leave them in the existing mutual funds (several of the funds have been closed to new investors for years). Usually, when leaving an employer, I have the funds transferred directly to the place my IRA is at - this avoids tax penalties and potential pitfalls. The student loans.... pay them off in one shot? If the interest is higher than you could earn in a savings account, then it is smarter to pay them off at once. My student loans are 1.8%, so I can earn more money in my mutual funds. I'm suspicious and think something hinky is going to happen with the fiscal cliff negotiations, so I'm going to be paying off my student loans in early 2013. Disclaimer: I have IRA accounts with both Fidelity and Vanguard. My current 401k plan is with Vanguard." }, { "docid": "128451", "title": "", "text": "\"Yes you can do the withdraw if you turned 55 during the year you separated from service. http://www.401khelpcenter.com/401k_education/Early_Dist_Options.html#.VdMrqPlVhBc Leaving Your Job On or After Age 55 The age 59½ distribution rule says any 401k participant may begin to withdraw money from his or her plan after reaching the age of 59½ without having to pay a 10 percent early withdrawal penalty. There is an exception to that rule, however, which allows an employee who retires, quits or is fired at age 55 to withdraw without penalty from their 401k (the \"\"rule of 55\"\"). There are three key points early retirees need to know. First, this exception applies if you leave your job at any time during the calendar year in which you turn 55, or later, according to IRS Publication 575. Second, if you still have money in the plan of a former employer and assuming you weren't at least age 55 when you left that employer, you'll have to wait until age 59½ to start taking withdrawals without penalty. Better yet, get any old 401k's rolled into your current 401k before you retire from your current job so that you will have access to these funds penalty free. Third, this exception only applies to funds withdrawn from a 401k. IRAs operate until different rules, so if you retire and roll money into an IRA from your 401k before age 59½, you will lose this exception on those dollars.\"" }, { "docid": "53028", "title": "", "text": "\"With these income levels you cannot deduct any IRA contribution. I.e.: you cannot save pre-tax, as you want. But you still can contribute to IRA (as a non-deductible contribution), and using the \"\"loophole\"\" transfer the contribution to Roth (you are probably over the limit to be able to contribute to Roth directly). For pre-tax contributions - max out your 401k.\"" }, { "docid": "515440", "title": "", "text": "\"My father imparted this advice to me when I was a teenager, and it hasn't failed me yet. > Pay yourself first What this means is that the first \"\"bill\"\" you pay should always be your savings. Preferably in a way that automatically comes out of your paycheck or account without requiring you to take an active step to make it happen. I save a ton of money, but I am no more disciplined than anyone else. I just realized that over the years of progressing in my career that I gradually got higher and higher salaries, yet never had a substantial increase in the money I had leftover in my bank at the end of the month despite the fact that I make about 8x the money I used to live reasonably comfortably on. Therein is the point, we spend whatever money we see, so you almost have to hide it from yourself. First, participate to the fullest in your company's 401k if they offer it. After a while you will adjust naturally to the net take home pay and won't miss the savings you are accumulating. Absent that, or in addition to that, set up a separate bank or investment account and arrange an automatic transfer from your checking account every month. Then set up automatic investing in CD's or some other less-liquid-than-cash investment so you it is just enough hassle to get at the money that you won't do it on a whim. It sounds too simple, but it works.\"" }, { "docid": "9640", "title": "", "text": "I haven't heard of a company allowing you to convert an after-tax 401k to a Roth 401k, though an after-tax 401k to a Roth IRA conversion is common and has basically the same upside. You'll have a taxable event on your gains until the point of the conversion, but that's a small price to pay to make sure all future gains are tax free. I agree, there really is no downside." }, { "docid": "346387", "title": "", "text": "There are several things being mixed up in the questions being asked. The expense ratio charged by the mutual fund is built into the NAV per share of the fund, and you do not see the charge explicitly mentioned as a deduction on your 401k statement (or in the statement received from the mutual fund in a non-401k situation). The expense ratio is listed in the fund's prospectus, and should also have been made available to you in the literature about the new 401k plan that your employer is setting up. Mutual fund fees (for things like having a small balance, or for that matter, sales charges if any of the funds in the 401k are load funds, God forbid) are different. Some load mutual funds waive the sales charge load for 401k participants, while some may not. Actually, it all depends on how hard the employer negotiates with the 401k administration company who handles all the paperwork and the mutual fund company with which the 401k administration company negotiates. (In the 1980s, Fidelity Magellan (3% sales load) was a hot fund, but my employer managed to get it as an option in our plan with no sales load: it helped that my employer was large and could twist arms more easily than a mom-and-pop outfit or Solo 401k plan could). A long long time ago in a galaxy far far away, my first ever IRA contribution of $2000 into a no-load mutual fund resulted in a $25 annual maintenance fee, but the law allowed the payment of this fee separately from the $2000 if the IRA owner wished to do so. (If not, the $25 would reduce the IRA balance (and no, this did not count as a premature distribution from the IRA). Plan expenses are what the 401k administration company charges the employer for running the plan (and these expenses are not necessarily peanuts; a 401k plan is not something that needs just a spreadsheet -- there is lots of other paperwork that the employee never gets to see). In some cases, the employer pays the entire expense as a cost of doing business; in other cases, part is paid by the employer and the rest is passed on to the employees. As far as I know, there is no mechanism for the employee to pay these expenses outside the 401k plan (that is, these expenses are (visibly) deducted from the 401k plan balance). Finally, with regard to the question asked: how are plan fees divided among the investment options? I don't believe that anyone other than the 401k plan administrator or the employer can answer this. Even if the employer simply adopts one of the pre-packaged plans offered by a big 401k administrator (many brokerages and mutual fund companies offer these), the exact numbers depend on which pre-packaged plan has been chosen. (I do think the answers the OP has received are rubbish)." }, { "docid": "235935", "title": "", "text": "For various reasons, if you can defer tax payment, it's good for you [when you can give uncle sam $x tomorrow, why give it today?]. Some reasons are, you may plan to return back to your country after x years and then you can pay tax at a lower bracket [e.g. convert 401k to Rollover-IRA then do Roth-conversion and pay lower tax bracket]. Paying now versus later is purely based on your anticipated future tax bracket. [if future bracket is same.. say 25% today and after say 20 years, 25%.. there is absolutely no difference between today payment or future payment of tax -- you can mathematically prove the returns are the same for Roth-IRA (or Roth-401k) versus IRA (or 401k)]. Having a bigger balance (in case of 401k compared to roth-401k) can also give you a sense of more security -- since there are provisions for hardship withdrawal (tax may be due)" }, { "docid": "388021", "title": "", "text": "Post-86 After tax contributions to a 401k are after tax. The earnings on that money is taxable, but not the contributions. This means: You'll have $15,000 in the 401k and $10,000 is considered after-tax and $5,000 is considered pre-tax. The after-tax portion can be converted to a Roth IRA without paying taxes or penalties. New in September 2014 The IRS has made substantial changes that now enable this to happen. You can request a distribution from your 401k provider where they divide the money into pre-tax and after-tax funds. In my example, you'd get a check for $10,000 that you could send to a Roth IRA and a check for $5,000 you could add to a traditional Roll-over IRA. Neither of those would be taxable events and you'd end with a Roth IRA with $10K and a Traditional, Rollover IRA with $5K in it. Notes:" }, { "docid": "303525", "title": "", "text": "Have you shopped around? I would agree that the fees seem high. The first question I would ask if if the .75% management fee is per year or per month? If it is per month, you will almost certainly lose money each year. A quick search shows that Fidelity will allow one to transfer their pensions into a self directed account. Here in the US, where we have 401Ks, it is almost always better to transfer them into something self directed once you leave an employer. Fidelity makes it really easy, and I always recommend them. (No affiliation.) Here in the US they actually pay you for you transferring money into your account. This can come in the form of free stock trades or money added to your account. I would encourage you to give them or their competitors a look in order to make an informed decision. Often times, a person with lowish balances, can't really afford to pay those high management fees. You might need in the 10s of millions before something like that makes sense." }, { "docid": "354868", "title": "", "text": "This article is correct, but it's focused on just one issue with IBM which is the tip of an iceberg. IBM has taken its office work policy too far, especially in light of all of its recent office closures. The company has driven out its most senior skilled labor while limiting its recruiting to a very narrow set of remaining offices, located exclusively in the most competitive hiring environments. And no, IBM does not have cash on hand to BOTH pay new recruits premium salaries AND continue supporting their massive product portfolio - in fact, all hiring is presently frozen for lack of stable finances. Don't be surprised as it continues to tank after it fails to meet contract obligations due to a lack of skilled resources." } ]

[ { "docid": "272709", "title": "", "text": "Most items used in business have to be depreciated; you get to deduct a small fraction of the cost each year depending on the lifetime of the item as per IRS rules. That is, you cannot assume a one-year life for an electronic item even if it will be obsolete in three months. Some items can be expensed; you get to deduct the entire cost in the first year but then if you don't stay in business, e.g. you get a job paying wages and are no longer self-employed, you have to recapture this and pay taxes on the amount recaptured in the later year. With respect to consumer-type electronics such as an iPad or laptop, it helps to have a separate item for personal use that you can show in case of an audit." } ]

[ { "docid": "299211", "title": "", "text": "\"-Alain Wertheimer I'm a hobbyist... Most (probably all) of those older items were sold both prior to my establishing the LLC This is a hobby of yours, this is not your business. You purchased all of these goods for your pleasure, not for their future profit. The later items that you bought after your LLC was establish served both purposes (perks of doing what you love). How should I go about reporting this income for the items I don't have records for how much I purchased them for? There's nothing you can do. As noted above, these items (if you were to testify in court against the IRS). \"\"Losses from the sale of personal-use property, such as your home or car, aren't tax deductible.\"\" Source Do I need to indicate 100% of the income because I can't prove that I sold it at a loss? Yes, if you do not have previous records you must claim a 100% capital gain. Source Addition: As JoeTaxpayer has mentioned in the comments, the second source I posted is for stocks and bonds. So at year begin of 2016, I started selling what I didn't need on eBay and on various forums [January - September]. Because you are not in the business of doing this, you do not need to explain the cost; but you do need to report the income as Gross Income on your 1040. Yes, if you bought a TV three years ago for a $100 and sold it for $50, the IRS would recognize you earning $50. As these are all personal items, they can not be deducted; regardless of gain or loss. Source Later in the year 2016 (October), I started an LLC (October - December) If these are items that you did not record early in the process of your LLC, then it is reported as a 100% gain as you can not prove any business expenses or costs to acquire associated with it. Source Refer to above answer. Refer to above answer. Conclusion Again, this is a income tax question that is split between business and personal use items. This is not a question of other's assessment of the value of the asset. It is solely based on the instruments of the IRS and their assessment of gains and losses from businesses. As OP does not have the necessary documents to prove otherwise, a cost basis of $0 must be assumed; thus you have a 100% gain on sale.\"" }, { "docid": "68486", "title": "", "text": "Congratulations on starting your own business. Invest in a tax software package right away; I can't recommend a specific one but there is enough information out there to point you in the right direction: share with us which one you ended up using and why (maybe a separate question?) You do need to make your FICA taxes but you can write off the SE part of it. Keep all your filings as a PDF, a printout and a softcopy in the native format of the tax software package: it really helps the next tax season. When you begin your business, most of the expenses are going to be straightforward (it was for me) and while I had the option of doing it by hand, I used software to do it myself. At the beginning, it might actually seem harder to use the tax software package, but it will pay off in the end. Build relationships with a few tax advisors and attorneys: you will need to buy liability insurance soon if you are in any kind of serious (non hobby) business and accounting for these are no trivial tasks. If you have not filed yet, I recommend you do this: File an extension, overpay your estimated taxes (you can always collect a refund later) and file your return once you have had a CPA look over it. Do not skimp on a CPA: it's just the cost of running your business and you don't want to waste your time reading the IRS manuals when you could be growing your own business. Best of luck and come back to tell us what you did!" }, { "docid": "28764", "title": "", "text": "You would report it as business income on Schedule C. You may be able to take deductions against that income as well (home office, your computer, an android device, any advertising or promotional expenses, etc.) but you'll want to consult an accountant about that. Generally you can only take those kinds of deductions if you use the space or equipment exclusively for business use (not likely if it's just a hobby). The IRS is pretty picky about that stuff." }, { "docid": "365648", "title": "", "text": "\"In addition to Alex B's excellent overview, I'd like to add a few more bits of advice. First of all, one term you should know is \"\"commercial real estate\"\" - which is precisely what this is. There is a business element, but it is strictly (and almost entirely) intertwined to the underlying real estate, which makes this a special category of business which is generally considered simply \"\"commercial real estate\"\" (just like office buildings, shopping malls, etc). All real estate and businesses value are based on alternatives - what other options are there? In appraisal, these are generally called \"\"comparables\"\". A professional appraiser is generally available for commercial real estate of this type. While a full, official commercial appraisal can run into the thousands, many/most (all?) appraisers are willing to sell you a simplified version of their service, which can be called a \"\"letter of opinion\"\" and can help you get an idea for the market price (what other similar commercial properties are running for). A loan company would strictly require this, but if you are thinking of an all cash or form of seller-financing this would technically be optional. Your best bet is to read about some of what is involved in commercial real estate appraisal and evaluation, and you may even want to speak with commercial loan officers - even if you don't know that you want to get a loan to acquire the property! It's their job to help inform you about what is required and what they look for, so they can be a potential resource beyond your own research as well. With this said, the only way to estimate value (and, conveniently, the best way) is to look at other properties! And by \"\"others\"\", I mean that you should really not consider buying absolutely anything until you've viewed at least 6-10 other options in some depth - and you probably want to double or triple that number if you are looking to make this the last big business transaction of your life. If you don't you'll be relying on little more than dumb luck to carry you through - which in this area of business, you don't want to do because the dollar amounts and liabilities involved can bankrupt you in no time flat. With that general advice out of the way, here's a tiny nutshell version of valuation of commercial real estate. There are a few key parts involved in commercial real estate: land, improvements (buildings, docks, stuff like that), income, and wages. Land: the value of the land is based upon what you could sell it for, as-is. That is to say - who else might want it? This alone has many important factors, such as zoning laws, the neighborhood (including your neighbors), water/utilities, pacts on the land (someone may have insisted the land not be paved into a parking lot, or really anything like that), alternative uses (could you put a golf course on it, or is the land suitable for a big building or farming?), etc. And is this in a growing area, where you might hope the value will increase over the next decade, or decrease, or basically stay flat (and possibly cause losses compared to inflation)? Improvements: anything on the land is both an asset and a liability. It's an asset because it could add to the value of the land, but it might also reduce the land value if it interferes with alternate land uses. It's a liability, both in the legal sense and in that it requires maintenance. If you want to rent them out, especially, that means concern about any foundations involved, termites, roofs, sewage/septic tanks, utilities that are your responsibility (pipes, poles, wires), as well as any sort of ac/heating you may have, docks, and so on. These things are rarely free and absolutely can eat you alive. Income: Ah, the best part, the constant influx of cash! But wait, is it a constant influx? Some businesses are purely seasonal (summer only, winter only), some are year-round but have peak times, and others don't really have a \"\"peak\"\" to speak of. If you are renting, are there issues collecting, or with people over-staying? How about damage, making a mess, getting rowdy and disturbing others? Regardless, there is obviously some income, and this is usually the most dangerous part of the equation. I say \"\"dangerous\"\", because people absolutely lie like dogs on this part, all the time. It's easy to cook the books, assuming they even attempt to keep proper books in the first place! Businesses of this form often have a lot of cash business that's easy to hide (from Uncle Sam, or sometimes even the owners themselves if there are employees involved) - and fake! And some people are just shoddy bookkeepers and the info is just wrong. But, there will clearly be some kind of yearly income involved. What does this matter? Well...how much is there? How much is tied to the owners (personal friends do business and they will leave if the ownership/management changes)? In commercial real estate the income will be calculated for a fiscal year, and then there is something called a \"\"multiple\"\", which is market dependent. Let's say the whole place takes in $100k in rent a year. As part of buying this business, you are buying not just assets, but expected future income. In some commercial areas the multiple is as little as .5 to 2 - which means that the going rate is about 6-24 months worth of income, as part of the purchase price. So with 100k rent a year, that means 50k-200k of the purchase price is attributable to the income of the business. And if business is half of what you thought it would be? That means the net value of the whole enterprise decreases by 25k-100k - on top of the reduced income every year you own it! Income provides cash flow, which should pay all the expenses (cleaning up from wind storms, replacing windows that are broken, hauling off trash, replacing a well that ran dry), and then the extra that remains is positive cash flow. If you take out a loan, then ideally the cash flow would also pay that completely so long as you don't have any big unexpected expenses in the year - and still have some left over for yourself. Wages: Well, that money doesn't collect itself! There's sales, keeping the books, collecting the rent, performing maintenance, customer service, cleaning, paying the bills, keeping the insurance people happy, handling emergencies, and everything else involved with running the business. Someone is going to do it, and the biggest error people make here is not to put any value on their time - and to make it so they can never afford to take a vacation again! Pay yourself, and give yourself the flexibility to pay others when you can't (or don't want) to do it all yourselves. So, what's the point of all this? How do you actually make any money? In two ways: 1) selling the whole thing later, and 2) cash flow. For 1, it's important that you not be in a situation where you are betting that in the future there will be a \"\"person richer, and dumber, than I am now\"\". If the current owner wanted 2 million, then 1 mil, then less, over multiple years...this suggests either he is delusional about the value of his place (and most property owners are), or that its actually hard to find a buyer for such a business. You are going to want to make sure you understand why that is, because most of the value of real estate is...well, in the real estate itself! For 2, you need cash coming in that's considerably more than the cost of running the place. Also, cash flow can strongly change the value of the business for resale (depending on the multiple, this can make a huge difference or prevent you from selling the thing at all). You mentioned you want to put in more cabins, more marketing/sales efforts, etc. That's great, but first, that would mean added investment beyond the purchase price. Is it legally and physically practical to add more cabins, and what is their current utilization rate? If they are only renting 10% of their current capacity, increasing capacity may be premature. This will also vary through the year, so you may find there is a problem with being sold out sometimes...but only for a small percentage of the time. Which means you'll be adding buildings only to have them used for a fraction of the year, which will be very hard to make a profit from. If cash flow is good, ideally even being enough to cover a loan payment to help cover the purchase price (and remember that commercial real estate loans are much smaller loan-to-value ratios than in residential real estate), there is one final barrier to making money: the damn non-regular maintenance! Roofs, wells, and wooden walls all have a sad tendency to cost you nothing right up until the point they cost you $30k+ on a single day. Is there enough cash flow to make these sort of certainties (and if you plan to be there for years, they are a certainty) not put you in the poor house? This was rather long, but I hope this overview helps you appreciate all that you'll need to look into and be cautious of during your future en-devour! Commercial real estate is generally costly and high-risk, but also can be high reward. You'll need to compare many opportunities before you can get a \"\"feel\"\" for what is a good deal and what is a terrible one. You'll need to consider many factors, such as resale value and cash flow/income (which they will have to tell you and you can assume is not true, due to ignorance or malice), as well as maintenance and liabilities, before you can begin to really estimate the value of an enterprise of this sort. There are people who can help you, like appraisers and commercial brokers, but ultimately you'll need to do a lot of research and comparisons yourself to help you make a good decision. Finally, there is no very simple method for evaluating commercial real estate value. You need a variety of information, and you must be skeptical of what you are told because of the very large sums of money involved. It is doable (lots of people do it), but you must take care and do your due diligence so you don't get bankrupted by a single bad purchase.\"" }, { "docid": "289620", "title": "", "text": "(1). Is this right? Pretty much, though this is a really rudimentary way to think about it. (2). If it is, why is it that extensive services are provided by high margin companies competing for talent, rather then lower margin businesses looking to boost their profits by reducing their expenditures on employees (by cutting out the government)? It's the polar opposite of that. Google (and companies like that) do things like have a day care center on premises. The company staffs a day care center which has costs, then lets employees use it for free. This is a business expense for Google, and in relative terms, a considerably large business expense that a lower margin business could no afford. Employer healthcare is a tax protected expense for employees via section 125 of the tax code. The company portion of the healthcare costs are a deductible business expense to the company, as expected. Healthcare is different than most other expenses because the employee can forego income before it's effectively received which negates it from taxable income. This doesn't work for something like food purchased at a cafe on a Google complex. If employee money is being spent at a corporate cafe, it's taxable income being spent (though the cost of running the cafe is a tax deductible business expense to the company). There have been discussions in congress to assess a value as income to employees for services like on site child care and no cost employee cafeterias. To address your new example: For example, suppose John Doe makes $100,000 a year taxed at a rate of 20%, for a take home pay of $80,000. He spends $10,000 on food. His employer Corporation decides to give him all of his food and deduct it as a business expense - costing them $10,000. But now they can pay John Doe an amount so his take home pay will be reduced by $10,000 - $87,500 The company is now spending $97500 employing John Doe, for a savings of $2500$. This would be an audit prone administrative nightmare. Either You need John to submit receipts for reimbursement up to the $10,000 agreed upon amount which would require some kind of administrative staff, or After a very short period of time John forgets the abstract value of the food cost arrangement, that is only really benefiting the employer in the form of lower payroll expense, and is enticed away for more pay somewhere else anyway. The company may be saving $2,500, though again there will be an additional administrative expense of some sort, but John is only saving $500 ($97,500 * 0.20 - $100,000 * 0.20)." }, { "docid": "219274", "title": "", "text": "Definitely get a lawyer to write up all the details of the partnership in a formal agreement. If your ex does not want to do this, that is a bad sign. You both need to be clear about expectations and responsibilities in this partnership, and define an exit strategy in the case one of you wants out. This is the most fair to both parties. Generally, what is common is that property is split cleanly when the relationship ends. I would strongly recommend you both work towards a clean split with no joint property ownership. How this looks depends on your unique situation. To address your questions 2 and 3: You have two roles here - tenant and owner. As a 50% owner, you are running a business with a partner. That business will have assets (home), income, expenses, and profit. You basically need to run this partnership as a simple business. All the rent income (your rent and the other tenant's) should go into a separate account. The mortgage and all other housing expenses are then paid from only this account. Any excess is then profit that may be split 50/50. All expenses should be agreed upon by both of you, either by contract or by direct communication. You should see a financial professional to make sure accounting and taxes are set up properly. Under this system, your ex could do work on the house and be paid from the business income. However, they are responsible to you to provide an estimate and scope of work, just like any other contractor. If you as a joint owner agree to his price, he then could be paid out of the business income. This reduces the business cash flow for the year accordingly. You can probably see how this can get very complicated very fast. There is really no right or wrong answer on what both of you decide is fair and best. For the sake of simplicity and the least chance of a disaster, the usual and recommended action is to cleanly split all property. Good Luck!" }, { "docid": "490888", "title": "", "text": "\"You need to do a bit more research and as @littleadv often wisely advises, consult a professional, in this case a tax layer or CPA. You are not allowed to just pull money out of a property and write off the interest. From Deducting Mortgage Interest FAQs If you own rental property and borrow against it to buy a home, the interest does not qualify as mortgage interest because the loan is not secured by the home itself. Interest paid on that loan can't be deducted as a rental expense either, because the funds were not used for the rental property. The interest expense is actually considered personal interest, which is no longer deductible. This is not exactly your situation of course, but it illustrates the restriction that will apply to you. Elsewhere in the article, it references how, if used for a business, the interest deduction still will not apply to the rental, but to the business via schedule C. In your case, it's worse, you can never deduct interest used to fund a tax free bond, or to invest in such a tax favored product. Putting the facts aside, I often use the line \"\"don't let the tax tail wag the investing dog.\"\" Borrowing in order to reduce taxes is rarely a wise move. If you look at the interest on the 90K vs 290K, you'll see you are paying, in effect, 5.12% on the extra 200K, due the higher rate on the entire sum. Elsewhere on this board, there are members who would say that given the choice to invest or pay off a 4% mortgage, paying it off is guaranteed, and the wiser thing to do. I think there's a fine line and might not be so quick to pay that loan off, an after-tax 3% cost of borrowing is barely higher than inflation. But to borrow at over 5% to invest in an annuity product whose terms you didn't disclose, does seem right to me. Borrow to invest in the next property? That's another story.\"" }, { "docid": "173212", "title": "", "text": "\"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).\"" }, { "docid": "554171", "title": "", "text": "For insight on what will happen, I suggest looking at the situation from the lender's perspective: If your setbacks are temporary, and you are likely to get back on your feet again, they will protect their investment by making accommodations, and probably charging you extra fees along the way. If your financial hardship seems irredeemable, they probably try to squeeze you for as much as possible, and then eventually take your house, protecting their investment as best they can. If they are going to foreclose, they may be reluctant to do it quickly, as foreclosure is expensive, takes man power, and looks bad on their books. So it may get pushed off for a Quarter, or a fiscal year. But if you are asking if they'll help you out from the goodness of their heart, well, a bank has no heart, and creditors are interested in ROI. They'll take the easiest path to profit, or failing that, the path to minimum financial losses. The personal consequences to you are not their concern. Once you realize this, it may change your thinking about your own situation. If you think you have a path to financial recovery, then you need to make that clear to them, in writing, with details. Make a business case that working with you is in their own best interests. If you cannot make such a case, recognize that they'll likely squeeze you for as much as possible in penalties, fees, interest payments, etc, before eventually foreclosing on you anyway. Don't play that game. If your home is a lost cause financially, plan how to get out from it with the smallest losses possible. Don't pay more than you need to, and don't throw good money after bad." }, { "docid": "18647", "title": "", "text": "One possibility that I use: I set up an LLC and get paid through that entity. Then I set up a payroll service through Bank of America and set up direct deposit so that it is free. I pay myself at 70% of my hourly rate based on the number of hours I work, and the payroll service does all the calculations for me and sets up the payments to the IRS. Typically money is left over in my business account. When tax time rolls around, I have a W2 from my LLC and a 1099 from the company I work for. I put the W2 into my personal income, and for the business I enter the revenue on the 1099 and the payroll expenses from paying myself; the left over in the business account is taxed as ordinary income. Maybe it's overkill, but setting up the LLC makes it possible to (a) set up a solo 401(k) and put up to $51k away tax-free, and (b) I can write off business expenses more easily." }, { "docid": "130631", "title": "", "text": "\"In the US you are not required to have a corporation to use business expenses to offset your income. The technical term you need is \"\"deducting business expenses\"\", and in matters of taxes it's usually best to go straight to the horse's mouth: the IRS's explanations Deducting Business Expenses Business expenses are the cost of carrying on a trade or business. These expenses are usually deductible if the business operates to make a profit. What Can I Deduct? Cost of Goods Sold, Capital Expenses, Personal versus Business Expenses, Business Use of Your Home, Business Use of Your Car, Other Types of Business Expenses None of this requires any special incorporation or tax arrangements, and are a normal part of operating a business. However, there is a bit of a problem with your scenario. You said you \"\"invested\"\" into a business, but you mentioned buying specific things for the business which is not generally how one accounts for investment. If you are not an owner/operator of the business, then the scenario is not so straight-forward, as you can't simply claim someone else's business expenses as your own because you invested in it. Investments are taxed differently than expenses, and based upon your word choices I'm concerned that you could be getting yourself into a bit of a pickle. I would strongly advise you to speak with a professional, such as a Certified Public Accountant (CPA), to go over your current arrangement and advise you on how you should be structuring your ongoing investment into this shared business. If you are investing you should be receiving equity to reflect your ownership (or stock in the company, etc), and investments of this sort generally cannot be deducted as an expense on your taxes - it's just an investment, the same as buying stock or CDs. If you are just buying things for someone else's benefit, it's possible that this could be looked upon as a personal gift, and you may be in a precarious legal position as well (where the money is, indeed, just a gift). And gifts of this sort aren't deductible, either. Depending on how this is all structured, it's possible that you should both consider a different form of legal organization, such as a formal corporation or at least an official business partnership. A CPA and an appropriate business attorney should be able to advise you for a nominal (few hundred dollars, at most) fee. If a new legal structure is advisable, you can potentially do the work yourself for a few hundred dollars, or pay to have it done (especially if the situation is more complex) for a few hundred to a few thousand. That's a lot less than you'd be on the hook for if this business is being accounted for improperly, or if either of your tax returns are being reported improperly!\"" }, { "docid": "135196", "title": "", "text": "\"Checks sold as \"\"business checks\"\" are larger than checks sold as \"\"personal checks\"\". Personal checks are usually 6\"\" x 2 1/2\"\" while business checks are 8 1/2 \"\" x 3 to 4 \"\". Also, business checks typically have a tear-off stub where you can write who the check was made out to and what it was for. In this computer age that seems pretty obsolete to me, I enter the check into the computer, not write it on a stub, but I suppose there are still very small businesses out there that doesn't use a computerized record-keeping system. These days business checks are often printed on 8 1/2 by 11\"\" paper -- either one per sheet with a big tear-off or 3 per sheet with no tear off -- so you can feed them through a computer printer easily. Nothing requires you to use \"\"business checks\"\" for a business account. At least, I've always used personal checks for my business account with no problem. These days I make almost all payments electronically, I think I write like one paper check a year, so it's become a trivial issue. Oh, and I've never had any problem getting a check printer to put my business name on the checks or anything like that.\"" }, { "docid": "42831", "title": "", "text": "Many people dream of having a home based business. A home based business gives you the freedom to be your own boss and set your own hours. However, most people have no idea what kind of business to start to make real money from home. Here are some home business ideas." }, { "docid": "248761", "title": "", "text": "You can claim a deduction only if all of your business is conducted from the home, i.e. your home is your principal place of business - not just if you work from home sometimes. The CRA (Canada Revenue Agency) has pretty strict guidelines listed here, but once you're sure you qualify for a deduction, the next step would be to determine what portion of your home qualifies. You cannot attempt to deduct your entire mortgage simply because you run your business out of your home. The portion of your mortgage and other related & allowable home expense deductions has to be pro-rated to be equal to or less than the portion of your home you use for business. Simply put, if your business is operated out of a 120 sq-ft self-contained space, and your home's total square-footage is 2400 sq-ft, you can deduct 5% of your expenses (120/2,400 = 0.05). Hope this helps!" }, { "docid": "518949", "title": "", "text": "\"What you need will depend on a number of factors that aren't clear from the question. This coverage is simply called \"\"Vacant home insurance\"\", but not all companies are willing to offer this coverage. Unfortunately, in New York, insurers can also legally drop your standard homeowners' coverage if they become aware that your property has become vacant for 30 days or more. The Insurer's Concerns Typically, a \"\"standard\"\" homeowners policy will have an exclusion clause for vacant homes. The insurance company's concern is that without someone in the home, they will be at risk for break-ins, squatters and vandalism. If you've ever seen \"\"Flip Men\"\" on Spike, you'll know this is a serious concern (great show, by the way). They will use a risk model to calculate an estimated risk for the property (this is why a seasonal vacation home in a sparsely-populated area is often less of a concern than a family home in an urban area). If they estimate the risk to be low, some insurance companies will allow to you buy back that exclusion so that vacant properties are covered. In your case, they have probably decided that either: Your Options First, you need to find a company that is comfortable with taking on the extra risk of a vacant home. This will vary quite a bit by location, but the main ones are Farmer's (they use the Foremost brand name in New York) and Castle Rock. There are lots of insurance agencies that also advertise these products, but most of them are middlemen and use one of these two companies to actually write the coverage. Additionally, since this is a specialty policy, make sure you understand all of the details of the policy, and how they vary from a regular policy including: How to Reduce your Premium costs These are general tips from the Murray Group's website (an independent broker in NY) on how to lower the additional cost of vacant coverage: This may sound expensive, but these steps will all reduce the risk of something really bad happening when you're not there. Additionally, do you know anyone you completely trust (relative, unemployed friend) that might want to live in your old house rent-free for a while? This could work out for you if they are willing to keep the place 100% clean around the clock so that you can show the house at any time. If you have additional/specific questions, you should be able to find an independent insurance broker in your area that would be willing to advise you on your specific situation for a flat fee. Best of luck with getting the home covered and sold quickly!\"" }, { "docid": "163765", "title": "", "text": "Vista Sand When Marty Robertson and Gary Humphreys, Managing Partners, bought Vista Sand in 2011 they knew there were a couple of things they needed to take care of in order to grow their business, replace the worn out mixed fleet they inherited in the purchase and have someone manage it for them. The solution was hiring Ron Lee, Director of Mining and Fleet Assets, in 2013 and creating a partnership with an equipment dealer who could maintain the equipment at minimal downtime." }, { "docid": "447231", "title": "", "text": "You don't say what country you live in. If it's the U.S., the IRS has very specific rules for business use of a car. See, for starters at least, http://www.irs.gov/publications/p463/ch04.html. The gist of it is: If you use the car 100% for business purposes, you NEVER use it to drive to the grocery store or to your friend's house, etc, then it is a deductible business expense. If you use a car party for business use and partly for personal use, than you can deduct the portion of the expense of the car that is for business use, but not the portion that is for personal use. So basically, if you use the car 75% for business purposes and 25% for personal use, you can deduct 75% of the cost and expenses. You can calculate the business use by, (a) Keeping careful records of how much you spent on gas, oil, repairs, etc, tracking the percentage of business use versus percentage of personal use, and then multiplying the cost by the percentage business use and that is the amount you can deduct; or (b) Use the standard mileage allowance, so many cents per mile, which changes every year. Note that the fact that you paid for the car from a business account has absolutely nothing to do with it. (If it did, then everyone could create a small business, open a business account, pay all their bills from there, and all their personal expenses would magically become business expenses.) Just by the way: If you are going to try to stretch the rules on your taxes, business use of a car or personal computer or expenses for a home office are the worst place to do it. The IRS knows that cars and computers are things that can easily be used for either personal or business purposes and so they keep a special eye out on these." }, { "docid": "352552", "title": "", "text": "\"As @BrenBarn points out, when people say \"\"they like having a mortgage because they get the benefit of writing off the interest\"\" they typically mean as opposed to renting. You can deduct interest and real estate (property) tax payments, as well as some closing costs in the year you purchase the home. You are also building equity (instead of helping your landlord build his or her equity). Take for example a single person paying $1,000/month to rent an apartment. This is not deductible. He has $1,800 a year in other expenditures that would otherwise be deductible (charitable contributions, etc.), but he doesn't itemize because it isn't more than the $6,100 standard deduction, so it doesn't matter. He takes out a mortgage for $150,000 at 6% over a 30-year term to buy a similarly-appointed home. His new mortgage payment is about $900/month, plus he puts $100/month into an escrow account for property taxes, roughly totaling his former rent payment. Over the first full year, he pays about $9,000 in deductible mortgage interest and $1,200 in deductible real estate taxes. And because he is now itemizing, he can also write off the aforementioned $1,800. At a top marginal tax rate of 25%, he shaved nearly $1,500 (.25 * (9000 + 1200 + 1800 - 6100)) off his federal income tax bill -- with the same living expenses! This is a simple example with some arbitrary numbers to prove the point, and there are a lot of other pros and cons to buying vs. renting. But again, this is probably what they mean when you hear this. Others have covered the overpaying angle, and there are a bunch of other Money.SE posts on the same or similar subjects.\"" }, { "docid": "522723", "title": "", "text": "\"My recommendation is to pay off your student loans as quickly as possible. It sounds like you're already doing this but don't incur any other large debts until you have this taken care of. I'd also recommend not buying a car, especially an expensive one, on credit or lease either. Back during the dotcom boom I and many friends bought or leased expensive cars only to lose them or struggle paying for them when the bottom dropped out. A car instantly depreciates and it's quite rare for them to ever gain value again. Stick with reliable, older, used cars that you can purchase for cash. If you do borrow for a car, shop around for the best deal and avoid 3+ year terms if at all possible. Don't lease unless you have a business structure where this might create a clear financial advantage. Avoid credit cards as much as possible although if you do plan to buy a house with a mortgage you'll need to maintain some credit history. If you have the discipline to keep your balance small and paid down you can use a credit card to build credit history. However, these things can quickly get out of hand and you'll wonder why you suddenly owe $10K, $20K or even more on them so be very careful with them. As for the house (speaking of US markets here), save up for at least a 20% down payment if you can. Based on what you said, this would be about $20-25K. This will give you a lot more flexibility to take advantage of deals that might come your way, even if you don't put it all into the house. \"\"Stretching\"\" to buy a house that's too expensive can quickly lead to financial ruin. As for house size, I recommend purchasing a 4 bedroom house even if you aren't planning on kids right away. It will resell better and you'll appreciate having the extra space for storage, home office, hobbies, etc. Also, life has a way of changing your plans for having kids and such.\"" } ]

[ { "docid": "327263", "title": "", "text": "First of all, Dilip's answer explains well how the business deductions generally work. For most (big) expenses you depreciate it. However, in some cases you need to capitalize it, which is another accounting method. When you capitalize your expense, it becomes part of the basis of the product you're creating. Since you're an engineer, this might be relevant for you. Talk to your tax adviser. How exactly you deduct/depreciate/capitalize things, and what expense goes which way depends greatly on the laws and jurisdictions. Even in the US, different states have different laws, and the IRS and State laws don't have to conform (unfortunately). For example, the limitations on Sec. 179 deduction in 2010-2011 were 20 times higher on Federal level than in the State of California. This could have lead to cases where you fully deducted your expense on your Federal tax return, but need to continue and depreciate it on your State return (or vice versa). Good tax adviser is crucial to avoid or manage these cases." } ]

[ { "docid": "229546", "title": "", "text": "\"Legally, a check just needs to have a certain list of things (be an instruction to one's bank to pay a specific amount of money to bearer or to a specific entity, have a date, have a signature, etc.) There are anecdotes around of a guy depositing a junk mail check and it accidentally qualifying as a real check (which he turned into a live show), or of writing a check on a door, cow, or \"\"the shirt off your back\"\". What kind of checks your bank will process is technically up to them. Generally, if you get your blank checks printed up by any reputable firm, they'll have similar information in similar places, as well as the MICR line (the account and routing number in magnetic ink on the bottom) to allow for bank to process the checks with automated equipment. As long as it's a standard size, has the MICR line, and has the information that a check needs, your bank is likely to be fine with it. So, there are some standards, but details like where exactly the name of the bank is, or what font is used, or the like, are up to whoever is printing the check. For details on what standards your bank requires in order to process your checks, you'd have to check with your bank directly. Though, it wouldn't surprise me if they just directed you to their preferred check printer provider, as they know that they accept their check format fine. Though as I said, any reputable check printer makes sure that they meet the standards to get processed by banks without trouble. Unless you're a business that's going to be writing a lot of checks and pay a lot of fees for the privilege, a bank is not likely to want to make exceptions for you for your own custom-printed octagonal checks written in ancient Vulcan.\"" }, { "docid": "271459", "title": "", "text": "\"Why isn't the above the business model of a loan? It is the model of some types of loans. It's called a \"\"Line of credit\"\" (LOC). I have two them, one for my business, and one for me personally. (Why does this question exist:) Is it an 30-year loan or a 10-year loan? As you mentioned, the concept of term doesn't exist for these types of loans. As long as I pay the interest and don't go over the max of my credit limit, I could keep the money indefinitely. Due to this, lines of credit almost always have a variable interest rate. (In the US they are tied to the Prime rate.) (Why does this question exist:) If you pay extra, do you want the extra to go toward the interest or toward the principal? Again, this concept also doesn't exist with a LOC. There is a minimum payment that you must make each month, but there is nothing that prevents you from making the minimum payment and then immediately taking the exact payment you made back out again. Of course this increases the total you owe, and eventually you would hit your maximum credit limit and would no longer be able to take the full payment back out. Years ago I maxed out my business line and didn't have enough money to make the payment so my bank was nice enough to raise my limit for me (so I could take enough out to make the payment), but if I did that multiple times I'm sure they would have eventually said no. Fortunately my clients finally paid me and I paid off the line, but I still keep the LOC today even though I rarely use it. By the way, beyond traditional LOCs, they also exist in other forms, both secured and unsecured. A common secured product in the US is a 2nd lien holder to a home (the first being the mortgage), called a HELOC (Home Equity Line Of Credit). Many banks also offer unsecured LOCs on a checking account which they sometimes call \"\"overdraft protection\"\". Update: based on a comment to this answer, I now realize that the full question now becomes something similar to: Given that the Line of Credit loan model exists, why aren't all loans like this? or, refining it further: What advantages do other loan types have over the Line of Credit model, specifically finite term loans? A main advantage of a term loan over a line of credit is that the bank knows when they will get the money back. If every loan a bank made was a LOC product, and no one ever paid it back, then they'd eventually run out of money. That's obviously an oversimplification but the principle (pun intended) holds. To prevent this the bank would have to call due the loan, and doing this usually leaves customers angry. Years ago I had a business LOC with a bank that discontinued their business LOC product, and called every customer's loan due. I had a balance and they offered to convert it to a 5 year term loan, which I did, but I was so mad at them that I switched banks and paid off the term loan shortly after. Another advantage of a term loan is it forces the customer to be a little more responsible. Lines of credit can be dangerous for those that misuse it because if the amount owed is driven up due to bad behavior, there is nothing to force the bad behavior to stop. A perfect example of this can be found with governments. Some governments borrow money until their line of credit is used up, and then they just keep increasing their credit limit. There is no incentive for the officials in charge of the government to stop doing this because it isn't even their money. If those lines of credits were converted to term loans, the government would be forced to increase revenue and/or decrease expenses, which is the only way to get out of debt. Some other advantages of term loans over a LOC:\"" }, { "docid": "536849", "title": "", "text": "\"I've done various side work over the years -- computer consulting, writing, and I briefly had a video game company -- so I've gone through most of this. Disclaimer: I have never been audited, which may mean that everything I put on my tax forms looked plausible to the IRS and so is probably at least generally right, but it also means that the IRS has never put their stamp of approval on my tax forms. So that said ... 1: You do not need to form an LLC to be able to claim business expenses. Whether you have any expenses or not, you will have to complete a schedule C. On this form are places for expenses in various categories. Note that the categories are the most common type of expenses, there's an \"\"other\"\" space if you have something different. If you have any property that is used both for the business and also for personal use, you must calculate a business use percentage. For example if you bought a new printer and 60% of the time you use it for the business and 40% of the time you use it for personal stuff, then 60% of the cost is tax deductible. In general the IRS expects you to calculate the percentage based on amount of time used for business versus personal, though you are allowed to use other allocation formulas. Like for a printer I think you'd get away with number of pages printed for each. But if the business use is not 100%, you must keep records to justify the percentage. You can't just say, \"\"Oh, I think business use must have been about 3/4 of the time.\"\" You have to have a log where you write down every time you use it and whether it was business or personal. Also, the IRS is very suspicious of business use of cars and computers, because these are things that are readily used for personal purposes. If you own a copper mine and you buy a mine-boring machine, odds are you aren't going to take that home to dig shafts in your backyard. But a computer can easily be used to play video games or send emails to friends and relatives and lots of things that have nothing to do with a business. So if you're going to claim a computer or a car, be prepared to justify it. You can claim office use of your home if you have one or more rooms or designated parts of a room that are used \"\"regularly and exclusively\"\" for business purposes. That is, if you turn the family room into an office, you can claim home office expenses. But if, like me, you sit on the couch to work but at other times you sit on the couch to watch TV, then the space is not used \"\"exclusively\"\" for business purposes. Also, the IRS is very suspicious of home office deductions. I've never tried to claim it. It's legal, just make sure you have all your ducks in a row if you claim it. Skip 2 for the moment. 3: Yes, you must pay taxes on your business income. If you have not created an LLC or a corporation, then your business income is added to your wage income to calculate your taxes. That is, if you made, say, $50,000 salary working for somebody else and $10,000 on your side business, then your total income is $60,000 and that's what you pay taxes on. The total amount you pay in income taxes will be the same regardless of whether 90% came from salary and 10% from the side business or the other way around. The rates are the same, it's just one total number. If the withholding on your regular paycheck is not enough to cover the total taxes that you will have to pay, then you are required by law to pay estimated taxes quarterly to make up the difference. If you don't, you will be required to pay penalties, so you don't want to skip on this. Basically you are supposed to be withholding from yourself and sending this in to the government. It's POSSIBLE that this won't be an issue. If you're used to getting a big refund, and the refund is more than what the tax on your side business will come to, then you might end up still getting a refund, just a smaller one. But you don't want to guess about this. Get the tax forms and figure out the numbers. I think -- and please don't rely on this, check on it -- that the law says that you don't pay a penalty if the total tax that was withheld from your paycheck plus the amount you paid in estimated payments is more than the tax you owed last year. So like lets say that this year -- just to make up some numbers -- your employer withheld $4,000 from your paychecks. At the end of the year you did your taxes and they came to $3,000, so you got a $1,000 refund. This year your employer again withholds $4,000 and you paid $0 in estimated payments. Your total tax on your salary plus your side business comes to $4,500. You owe $500, but you won't have to pay a penalty, because the $4,000 withheld is more than the $3,000 that you owed last year. But if next year you again don't make estimated payment, so you again have $4,000 withheld plus $0 estimated and then you owe $5,000 in taxes, you will have to pay a penalty, because your withholding was less than what you owed last year. To you had paid $500 in estimated payments, you'd be okay. You'd still owe $500, but you wouldn't owe a penalty, because your total payments were more than the previous year's liability. Clear as mud? Don't forget that you probably will also owe state income tax. If you have a local income tax, you'll owe that too. Scott-McP mentioned self-employment tax. You'll owe that, too. Note that self-employment tax is different from income tax. Self employment tax is just social security tax on self-employed people. You're probably used to seeing the 7-whatever-percent it is these days withheld from your paycheck. That's really only half your social security tax, the other half is not shown on your pay stub because it is not subtracted from your salary. If you're self-employed, you have to pay both halves, or about 15%. You file a form SE with your income taxes to declare it. 4: If you pay your quarterly estimated taxes, well the point of \"\"estimated\"\" taxes is that it's supposed to be close to the amount that you will actually owe next April 15. So if you get it at least close, then you shouldn't owe a lot of money in April. (I usually try to arrange my taxes so that I get a modest refund -- don't loan the government a lot of money, but don't owe anything April 15 either.) Once you take care of any business expenses and taxes, what you do with the rest of the money is up to you, right? Though if you're unsure of how to spend it, let me know and I'll send you the address of my kids' colleges and you can donate it to their tuition fund. I think this would be a very worthy and productive use of your money. :-) Back to #2. I just recently acquired a financial advisor. I can't say what a good process for finding one is. This guy is someone who goes to my church and who hijacked me after Bible study one day to make his sales pitch. But I did talk to him about his fees, and what he told me was this: If I have enough money in an investment account, then he gets a commission from the investment company for bringing the business to them, and that's the total compensation he gets from me. That commission comes out of the management fees they charge, and those management fees are in the same ballpark as the fees I was paying for private investment accounts, so basically he is not costing me anything. He's getting his money from the kickbacks. He said that if I had not had enough accumulated assets, he would have had to charge me an hourly fee. I didn't ask how much that was. Whew, hadn't meant to write such a long answer!\"" }, { "docid": "371560", "title": "", "text": "and I need to upgrade my current home to a larger, longer-term property Would selling your current home give you (at least) a 20% DP on the new home? Take additional cash out of the refinance of the first home to accelerate saving Dittoing D Stanley, that makes no sense. Purchase and move to a second property of greater cost and value to first You'll need to find the new house at the same time you're selling the existing home, and write the new-home purchase contract in such a way that you can back out in case the purchaser of your home backs out." }, { "docid": "18647", "title": "", "text": "One possibility that I use: I set up an LLC and get paid through that entity. Then I set up a payroll service through Bank of America and set up direct deposit so that it is free. I pay myself at 70% of my hourly rate based on the number of hours I work, and the payroll service does all the calculations for me and sets up the payments to the IRS. Typically money is left over in my business account. When tax time rolls around, I have a W2 from my LLC and a 1099 from the company I work for. I put the W2 into my personal income, and for the business I enter the revenue on the 1099 and the payroll expenses from paying myself; the left over in the business account is taxed as ordinary income. Maybe it's overkill, but setting up the LLC makes it possible to (a) set up a solo 401(k) and put up to $51k away tax-free, and (b) I can write off business expenses more easily." }, { "docid": "149215", "title": "", "text": "Both of my primary home purchases were either at, or close to asking price. My first house was during the local seller's market in 2001-2002. There were waiting lines for open houses. In hindsight we bought more home than we needed at the time but that had nothing to do with offering asking price. It was the market for the type of property (location and features) at that time. My second house was a little after the peak in 2008. The value had come down quite a bit and the property was priced on the low side versus the comps. To this day my second house still appraises higher than what we paid for it even though it was at asking price. As a third example, my brother-in-law got into a bidding war on his first home purchase and ended up buying it for above asking price. This was normal for the houses in the area he was looking at. With real estate, like other people have said, it really is important to either know the area you are looking at or to get an agent you trust and have them explain their reasons for their offer strategy through the comps. Yes agents need to make money but the good ones have been in the business a while and also live off of repeat business when you sell your house or refer friends and family to them. Agents do a lot less work when it comes to selling by the way so they would love for you to come back to them when it's time to sell. If I'm not happy with the way things are going with my agent I would have a heart to heart with them and give them a chance to correct the relationship. I've spoken to a realtor friend in the past about getting out of buyer's contracts and he told me it's a lot easier as a buyer than a seller. The buyer has most of the power during the process. The seller just has what the buyer wants." }, { "docid": "546509", "title": "", "text": "Costs for home / small business equipment under US$10,000 don't have to be capitalized. They can be expensed (that is, claimed as an expense all in one year.) Unless this printer is one of those behemoths that collates, folds, staples, and mails medium-sized booklets, it cost less than that. Keep track of your costs. Ask the charity to pay you those costs for the product you generate, and then donate that amount of money back to them. This will be good for the charity because they'll correctly account for the cost of printing." }, { "docid": "130631", "title": "", "text": "\"In the US you are not required to have a corporation to use business expenses to offset your income. The technical term you need is \"\"deducting business expenses\"\", and in matters of taxes it's usually best to go straight to the horse's mouth: the IRS's explanations Deducting Business Expenses Business expenses are the cost of carrying on a trade or business. These expenses are usually deductible if the business operates to make a profit. What Can I Deduct? Cost of Goods Sold, Capital Expenses, Personal versus Business Expenses, Business Use of Your Home, Business Use of Your Car, Other Types of Business Expenses None of this requires any special incorporation or tax arrangements, and are a normal part of operating a business. However, there is a bit of a problem with your scenario. You said you \"\"invested\"\" into a business, but you mentioned buying specific things for the business which is not generally how one accounts for investment. If you are not an owner/operator of the business, then the scenario is not so straight-forward, as you can't simply claim someone else's business expenses as your own because you invested in it. Investments are taxed differently than expenses, and based upon your word choices I'm concerned that you could be getting yourself into a bit of a pickle. I would strongly advise you to speak with a professional, such as a Certified Public Accountant (CPA), to go over your current arrangement and advise you on how you should be structuring your ongoing investment into this shared business. If you are investing you should be receiving equity to reflect your ownership (or stock in the company, etc), and investments of this sort generally cannot be deducted as an expense on your taxes - it's just an investment, the same as buying stock or CDs. If you are just buying things for someone else's benefit, it's possible that this could be looked upon as a personal gift, and you may be in a precarious legal position as well (where the money is, indeed, just a gift). And gifts of this sort aren't deductible, either. Depending on how this is all structured, it's possible that you should both consider a different form of legal organization, such as a formal corporation or at least an official business partnership. A CPA and an appropriate business attorney should be able to advise you for a nominal (few hundred dollars, at most) fee. If a new legal structure is advisable, you can potentially do the work yourself for a few hundred dollars, or pay to have it done (especially if the situation is more complex) for a few hundred to a few thousand. That's a lot less than you'd be on the hook for if this business is being accounted for improperly, or if either of your tax returns are being reported improperly!\"" }, { "docid": "92144", "title": "", "text": "Every reward program has to have a funding source. If the card gives you x percent back on all purchases. That means that their business is structured to entice you to pump more transactions through the system. Either their other costs are lower, or the increased business allows them to make more money off of late fees, and interest. If the card has you earn extra points for buying a type of item or from a type of store (home stores improvement in the Spring), they are trying to make sure you use their card for what can be a significant amount of business during a small window of time. Sometimes they cap it by saying 5% cash back at home improvement stores during the spring but only on the first $1500 of purchases. That limits it to $75 maximum. Adding more business for them, makes more money for them. Groceries and gas are a good year round purchase categories. Yes there is some variation depending on the season, and the weather, but overall there is not an annual cliff once the season ends. Gas and groceries account for thousands of dollars a year these are not insignificant categories, for many families are recession proof. If they perceive a value from this type of offer they will change their buying behavior. My local grocery store has a deal with a specific gas station. This means that they made a monetary deal. Because you earn points at the grocery store and spend points at the gas station, the grocery store is paying some compensation to the gas station every time you use points. The gas station must be seeing an increase in business so theoretically they don't get 100% compensation from the grocery store. In cases where credit cards give airline miles, the credit card company buys the miles from the airline at a discount because they know that a significant number of miles will never be used." }, { "docid": "141738", "title": "", "text": "\"About deducting mortgage interest: No, you can not deduct it unless it is qualified mortgage interest. \"\"Qualified mortgage interest is interest and points you pay on a loan secured by your main home or a second home.\"\" (Tax Topic 505). According to the IRS, \"\"if you rent out the residence, you must use it for more than 14 days or more than 10% of the number of days you rent it out, whichever is longer.\"\" Regarding being taxed on income received from the property, if you claim the foreign tax credit you will not be double taxed. According to the IRS, \"\"The foreign tax credit intends to reduce the double tax burden that would otherwise arise when foreign source income is taxed by both the United States and the foreign country from which the income is derived.\"\" (from IRS Topic 856 - Foreign Tax Credit) About property taxes: From my understanding, these cannot be claimed for the foreign tax credit but can be deducted as business expenses. There are various exceptions and stipulations based on your circumstance, so you need to read the official publications and get professional tax advice. Here's an excerpt from Publication 856 - Foreign Tax Credit for Individuals: \"\"In most cases, only foreign income taxes qualify for the foreign tax credit. Other taxes, such as foreign real and personal property taxes, do not qualify. But you may be able to deduct these other taxes even if you claim the foreign tax credit for foreign income taxes. In most cases, you can deduct these other taxes only if they are expenses incurred in a trade or business or in the production of in­come. However, you can deduct foreign real property taxes that are not trade or business ex­penses as an itemized deduction on Sched­ule A (Form 1040).\"\" Note and disclaimer: Sources: IRS Tax Topic 505 Interest Expense, IRS Real Estate (Taxes, Mortgage Interest, Points, Other Property Expenses) , IRS Topic 514 Foreign Tax Credit , and Publication 856 Foreign Tax Credit for Individuals\"" }, { "docid": "427884", "title": "", "text": "Leasing is not exactly a scam, but it doesn't seem to be the right product for you. The point of leasing over buying is that it turns the capital purchase of a car which needs to be depreciated for tax purposes into what is effectively a rental expense. Rent is an expense that can be deducted directly without depreciation. If you are not operating a business where you can take advantage of leasing's tax advantages, leasing is probably not for you. Because of the tax advantages, a lease can be more profitable for the car dealer. They can get a commission or finder's fee on the lease as well as the commission on the car sale. That extra profit comes from somewhere, presumably from you. If a business, you can then pass part of that to the government. As an individual, you lose that advantage. At this point, the best financial decision that you could make would be to buy out the lease on your current car. Lease prices are set based on the assumption that the car will have been abused during the course of the lease. If you are driving the car less than expected, its value is probably higher than the cost of buying out the lease. If you buy that car, you can drive it for years. Save up some money and buy your next car for cash rather than using financing. Of course, if you really want a new car and can afford it, you may not want to buy out the lease. That is of course your decision. You don't have to maximize your current financial position if buying a new car would return more satisfaction for the money in the long run. I would try to avoid financing for what is essentially a pleasure purchase though." }, { "docid": "289620", "title": "", "text": "(1). Is this right? Pretty much, though this is a really rudimentary way to think about it. (2). If it is, why is it that extensive services are provided by high margin companies competing for talent, rather then lower margin businesses looking to boost their profits by reducing their expenditures on employees (by cutting out the government)? It's the polar opposite of that. Google (and companies like that) do things like have a day care center on premises. The company staffs a day care center which has costs, then lets employees use it for free. This is a business expense for Google, and in relative terms, a considerably large business expense that a lower margin business could no afford. Employer healthcare is a tax protected expense for employees via section 125 of the tax code. The company portion of the healthcare costs are a deductible business expense to the company, as expected. Healthcare is different than most other expenses because the employee can forego income before it's effectively received which negates it from taxable income. This doesn't work for something like food purchased at a cafe on a Google complex. If employee money is being spent at a corporate cafe, it's taxable income being spent (though the cost of running the cafe is a tax deductible business expense to the company). There have been discussions in congress to assess a value as income to employees for services like on site child care and no cost employee cafeterias. To address your new example: For example, suppose John Doe makes $100,000 a year taxed at a rate of 20%, for a take home pay of $80,000. He spends $10,000 on food. His employer Corporation decides to give him all of his food and deduct it as a business expense - costing them $10,000. But now they can pay John Doe an amount so his take home pay will be reduced by $10,000 - $87,500 The company is now spending $97500 employing John Doe, for a savings of $2500$. This would be an audit prone administrative nightmare. Either You need John to submit receipts for reimbursement up to the $10,000 agreed upon amount which would require some kind of administrative staff, or After a very short period of time John forgets the abstract value of the food cost arrangement, that is only really benefiting the employer in the form of lower payroll expense, and is enticed away for more pay somewhere else anyway. The company may be saving $2,500, though again there will be an additional administrative expense of some sort, but John is only saving $500 ($97,500 * 0.20 - $100,000 * 0.20)." }, { "docid": "219274", "title": "", "text": "Definitely get a lawyer to write up all the details of the partnership in a formal agreement. If your ex does not want to do this, that is a bad sign. You both need to be clear about expectations and responsibilities in this partnership, and define an exit strategy in the case one of you wants out. This is the most fair to both parties. Generally, what is common is that property is split cleanly when the relationship ends. I would strongly recommend you both work towards a clean split with no joint property ownership. How this looks depends on your unique situation. To address your questions 2 and 3: You have two roles here - tenant and owner. As a 50% owner, you are running a business with a partner. That business will have assets (home), income, expenses, and profit. You basically need to run this partnership as a simple business. All the rent income (your rent and the other tenant's) should go into a separate account. The mortgage and all other housing expenses are then paid from only this account. Any excess is then profit that may be split 50/50. All expenses should be agreed upon by both of you, either by contract or by direct communication. You should see a financial professional to make sure accounting and taxes are set up properly. Under this system, your ex could do work on the house and be paid from the business income. However, they are responsible to you to provide an estimate and scope of work, just like any other contractor. If you as a joint owner agree to his price, he then could be paid out of the business income. This reduces the business cash flow for the year accordingly. You can probably see how this can get very complicated very fast. There is really no right or wrong answer on what both of you decide is fair and best. For the sake of simplicity and the least chance of a disaster, the usual and recommended action is to cleanly split all property. Good Luck!" }, { "docid": "396056", "title": "", "text": "My company did not have income of $1000 and have a $500 expense Why not? Your company received $1000 from you, and based on its agreement with the other company - transferred out half of it. How does it not translate to having $1000 income and $500 expense? When I run a report I want to see that my business has $500 of income not $1000 with a $500 expense You can write in your reports whatever you want, but if you want to see the real picture, then that is exactly what you should be expecting. That said, transferring money from yourself to your company is generally not considered income. You can have it booked as owner's equity, or a owner's loan if the company is required to repay. Unless you're paying to your company for some services provided or assets transferred, that is." }, { "docid": "349672", "title": "", "text": "The answer is simple. You can generally claim a deduction for an expense if that expense was used to derive an income. Of course social policy sometimes gets in the way and allows for deductions where they usually wouldn't be allowed. Your rent is not tax deductible because this expense is not used to derive your income. If however you were working from your home, example - you had a home based business, and you dedicated a part of your home for your work, say an office, then part of your rent may then become tax deductible." }, { "docid": "364326", "title": "", "text": "\"We played [baseball](http://hendrengroup.me) as kids when it was the most [popular game](http://hendrengroup.me/blog/baseball-the-small-and-big-kids-dream-game) in the world, way ahead of soccer, and basketball was still a poor third-placer. We played it in the school yard using a tennis ball and became the highlight of every school boy’s day. We knew and followed the basic rules of the game although we did not use mittens or masks. We played barefoot because we went to school barefoot. We were children and we had the time of our life. The rules of baseball are not really that complicated. Almost anyone who can run, swing a bat or throw a ball can join the fun. Later on, we kids found out that there was such a thing as softball, which was for girls but using a bigger ball that was thrown from the hip level instead of overhead. Watching real baseball and softball games during athletic meets gave us a better understanding and appreciation of the game. How we would have wanted to have all the uniform, gears and field to play with; but all we could afford was an old, balding tennis ball and a homemade 2in x 3in lumber for a bat and bases made of stones or wood scraps. Baseball, as officially required, has the following rules: **1. Basic features of the baseball game and field dimensions** Baseball is played on a diamond-shaped field with the base corner designated as the home base. A player with a bat, or a batter, tries to hit the ball as far away from any of the opposing fielding team in order to reach all three bases and finally make it back to the home base. If a player makes it to a base or two after he bats, he must wait for his own team-mates to hit the ball and give him the opening to move on around the bases. Strategy and team play are important in maximizing the team’s chance to score. Sometimes, a team may sacrifice a batter just for a player to steal a base or score a run. One point can spell the difference between winning and losing; and such brilliant plays come in handy. **2. Team composition** Each team has 9 players to fill up the following positions in the field when the opposing team is on the bat: pitcher, catcher, first base, second base, third base, short stop, right fielder, left fielder and centerfielder. Substitute players may also be included. **3. Batting regulations** The team on the bat is given three attempts to hit the ball thrown by a pitcher within the boundaries of the baseball field, marked by the two lines made by the home- base/first-base and the home-base/third-base. A missed ball is called a strike and three strikes puts batter out of the field. A team that gets three outs gets to field next while the other team bats. **4. Playing the ball** A flying ball that falls outside of the field boundaries is called a foul ball and gives a batter another chance to hit. Fouls are unlimited. A ball that is hit and falls inside the two lines is either caught in the air to put the batter out or, if it rolls on the ground, must be retrieved and often thrown to the first-base player who will tag the batter with the ball to put him out. Failing to tag the batter who steps on or touches the base puts the batter \"\"safe\"\" on first base or wherever the batter may be as other hitters move on around the diamond. A player who makes it safely back to home base scores a point. If it is a homerun, meaning the ball is hit out of the filed or steals straight home if the defending team fumbles the ball, two points are gained while a single point is given to a player who eventually goes round all the bases through one or more batters. **5. Other game features** When a batting team is struck out, it take the field and lets the other team bat and attempt to score. A foul ball which is caught will also count as an out. Multiple outs can be made, such as when bases are loaded (all three bases have batters) and the batter on the plate hits a good ball and makes it to first base and the ball is retrieved and thrown back before the player running to second base reaches it, then to home base before the player on third base scores a run and, finally, to third base to tag the player running to it. Three outs in one play! It is during such fast plays when the ball changes hands so rapidly and players are scampering for bases that the excitement runs high. It is cause for celebration for the scoring team and a big letdown for the other who must probably feel like they were hit on the head with a bat several times for losing the big opportunity to score big and ending up with nothing. **6. Who wins** The team that makes the most runs after nine innings or rounds wins the game. Sometimes though, the game will stop at the \"\"top of the 9th inning\"\" or before the other team is supposed to go to final bat if that team is already ahead in points as the lagging team will not be able to catch up anyway. Some of the most memorable games end at the \"\"bottom of the ninth\"\" when a team tries to catch up. We might have heard of the familiar radio voice saying, \"\"It’s the bottom of the ninth and bases are full and the New York Yankees are behind by four and Babe Ruth has the bat. The count is two strikes and three balls . . . the pitcher winds up and throws the ball. Ruth swings hard and the ball flies . . . out of the stadium for a homerun and a win!\"\" Or something to that effect. That imagined scene a dream every child and adult lover of baseball hopes to accomplish once in a lifetime. You want to see and hear the whole stadium explode with people jumping and shouting as you take your sweet time running through the bases, smiling, waving your cap and finally kissing the home base. When a great player makes a good play, everybody wins in baseball. You have to be the eternal child to enjoy it. And there are so many people out there who still enjoy it to this day.\"" }, { "docid": "245810", "title": "", "text": "Because it appears you have in the neighborhood of 30 years remianing on your mortgage for the first house, If you can sell it you will likely be better off in the end. While renting has the potential for greater income it is a business. And like any business there are risks, expenses, and work required to make it successful. There will be times where you can not find a renter immediately and will be responsible for making both payments, maintaining both houses, the insurance(which for an owner is higher for a rental property than a domicile), and paying the applicable taxes. You need to look at your best and worst case numbers. If your best case numbers leave you in the hole 300/month then that is not the sort of business you want to run. Your investment should build your savings and retirement funds not deplete them. Further you are more likely to fall between your best and worst case scenerios. So you need to be able to thrive at that level. If something in the middle is going to take you into bankruptcy then sell the property. If you are not willing to put the time into your business that it will need (My rental home took about 10-30 hours a month despite renters being responsible for basic upkeep and maintenance. Finally your plan B: A home with 800k value will have higher costs and higer expenses and maintenance. If the 800k home is the home you and your family needs then by all means go for it. But if it can do just as well in the 450k Home then go there. Pay the home off early by making the payments you would be making for the 800k home. In this way you pay less in total cost of the home and set your self up for the greatest chance of success. Once that home is paid off the break even point for renting goes way down as well. So the rental option could be in the future. I would just aviod it now if possible." }, { "docid": "363495", "title": "", "text": "\"The point is that you need to figure out when a \"\"business expense\"\" is actually just a personal purchase. Otherwise you could very easily just start a business and mark all of your personal purchases as business expenses, so you never have to pay income taxes because you're handling all of your money through the untaxed corporation.\"" }, { "docid": "518949", "title": "", "text": "\"What you need will depend on a number of factors that aren't clear from the question. This coverage is simply called \"\"Vacant home insurance\"\", but not all companies are willing to offer this coverage. Unfortunately, in New York, insurers can also legally drop your standard homeowners' coverage if they become aware that your property has become vacant for 30 days or more. The Insurer's Concerns Typically, a \"\"standard\"\" homeowners policy will have an exclusion clause for vacant homes. The insurance company's concern is that without someone in the home, they will be at risk for break-ins, squatters and vandalism. If you've ever seen \"\"Flip Men\"\" on Spike, you'll know this is a serious concern (great show, by the way). They will use a risk model to calculate an estimated risk for the property (this is why a seasonal vacation home in a sparsely-populated area is often less of a concern than a family home in an urban area). If they estimate the risk to be low, some insurance companies will allow to you buy back that exclusion so that vacant properties are covered. In your case, they have probably decided that either: Your Options First, you need to find a company that is comfortable with taking on the extra risk of a vacant home. This will vary quite a bit by location, but the main ones are Farmer's (they use the Foremost brand name in New York) and Castle Rock. There are lots of insurance agencies that also advertise these products, but most of them are middlemen and use one of these two companies to actually write the coverage. Additionally, since this is a specialty policy, make sure you understand all of the details of the policy, and how they vary from a regular policy including: How to Reduce your Premium costs These are general tips from the Murray Group's website (an independent broker in NY) on how to lower the additional cost of vacant coverage: This may sound expensive, but these steps will all reduce the risk of something really bad happening when you're not there. Additionally, do you know anyone you completely trust (relative, unemployed friend) that might want to live in your old house rent-free for a while? This could work out for you if they are willing to keep the place 100% clean around the clock so that you can show the house at any time. If you have additional/specific questions, you should be able to find an independent insurance broker in your area that would be willing to advise you on your specific situation for a flat fee. Best of luck with getting the home covered and sold quickly!\"" } ]

[ { "docid": "331981", "title": "", "text": "Keep this rather corny acronym in mind. Business expenses must be CORN: As other posters have already pointed out, certain expenses that are capital items (computers, furniture, etc.) must be depreciated over several years, but you have a certain amount of capital items that you can write off in the current tax year." } ]

[ { "docid": "112801", "title": "", "text": "\"Wait, are you sure you've got that right? What you're describing is a tax credit that counts against your total owed. In normal operations, companies get to \"\"write off\"\" all of their expenses and they only pay taxes on the net profit of the operation. So I guess you could say that if it cost me $100M to move a factory off shore, and my marginal tax rate was 35%, then I would \"\"save\"\" $35M in taxes ( it still cost me the $100M, but it only felt like it cost $65M). This is true of any business expense. I (not Romney, apparently) don't know of any special treatment that offshoring activities get one way or the other.\"" }, { "docid": "308938", "title": "", "text": "\"You should have separate files for each of the two businesses. The business that transfers money out should \"\"write check\"\" in its QB file. The business that receives money should \"\"make deposit\"\" in its QB file. (In QB you \"\"write check\"\" even when you make the payment by some other means like ACH.) Neither business should have the bank accounts of the other explicitly represented. On each side, you will also need to classify the payment as having originated from / gone to some other account - To know what's correct there, we'd need to know why your transferring the money in the first place and how you otherwise have your books established. I think that's probably beyond the scope of what's on-topic / feasible here. Money into your business from your personal account is probably owner's equity, unless you have something else going on. For example, on the S Corp you should be paying yourself a salary. If you overpay by accident, then you might write a check back to the company from your personal account to correct the mistake. That's not equity - It's probably a \"\"negative expense\"\" in some other account that tracks the salary payments.\"" }, { "docid": "175649", "title": "", "text": "\"You are assuming 100% occupancy and 100% rent collection. This is unrealistic. You could get lucky and find that long term tenant with great credit that always pays their bills... but in reality that person usually buys a home they do not rent long term. So you will need to be prepared for periods of no renters and periods of non payment. The expenses here I would expect could wipe out more than you can make in \"\"profit\"\" based on your numbers. Have you checked to find out what the insurance on a rental property is? I am guessing it will go up probably 200-500 a year possibly more depending on coverage. You will need a different type of insurance for rental property. Have you checked with your mortgage provider to make sure that you can convert to a rental property? Some mortgages (mine is one) restrict the use of the home from being a rental property. You may be required to refinance your home which could cost you more, in addition if you are under water it will be hard to find a new financier willing to write that mortgage with anything like reasonable terms. You are correct you would be taking on a new expense in rental. It is non deductible, and the IRS knows this well. As Littleadv's answer stated you can deduct some expenses from your rental property. I am not sure that you will have a net wash or loss when you add those expenses. If you do then you have a problem since you have a business losing money. This does not even address the headaches that come with being a landlord. By my quick calculations if you want to break even your rental property should be about 2175/Month. This accounts for 80% occupancy and 80% rental payment. If you get better than that you should make a bit of a profit... dont worry im sure the house will find a way to reclaim it.\"" }, { "docid": "365648", "title": "", "text": "\"In addition to Alex B's excellent overview, I'd like to add a few more bits of advice. First of all, one term you should know is \"\"commercial real estate\"\" - which is precisely what this is. There is a business element, but it is strictly (and almost entirely) intertwined to the underlying real estate, which makes this a special category of business which is generally considered simply \"\"commercial real estate\"\" (just like office buildings, shopping malls, etc). All real estate and businesses value are based on alternatives - what other options are there? In appraisal, these are generally called \"\"comparables\"\". A professional appraiser is generally available for commercial real estate of this type. While a full, official commercial appraisal can run into the thousands, many/most (all?) appraisers are willing to sell you a simplified version of their service, which can be called a \"\"letter of opinion\"\" and can help you get an idea for the market price (what other similar commercial properties are running for). A loan company would strictly require this, but if you are thinking of an all cash or form of seller-financing this would technically be optional. Your best bet is to read about some of what is involved in commercial real estate appraisal and evaluation, and you may even want to speak with commercial loan officers - even if you don't know that you want to get a loan to acquire the property! It's their job to help inform you about what is required and what they look for, so they can be a potential resource beyond your own research as well. With this said, the only way to estimate value (and, conveniently, the best way) is to look at other properties! And by \"\"others\"\", I mean that you should really not consider buying absolutely anything until you've viewed at least 6-10 other options in some depth - and you probably want to double or triple that number if you are looking to make this the last big business transaction of your life. If you don't you'll be relying on little more than dumb luck to carry you through - which in this area of business, you don't want to do because the dollar amounts and liabilities involved can bankrupt you in no time flat. With that general advice out of the way, here's a tiny nutshell version of valuation of commercial real estate. There are a few key parts involved in commercial real estate: land, improvements (buildings, docks, stuff like that), income, and wages. Land: the value of the land is based upon what you could sell it for, as-is. That is to say - who else might want it? This alone has many important factors, such as zoning laws, the neighborhood (including your neighbors), water/utilities, pacts on the land (someone may have insisted the land not be paved into a parking lot, or really anything like that), alternative uses (could you put a golf course on it, or is the land suitable for a big building or farming?), etc. And is this in a growing area, where you might hope the value will increase over the next decade, or decrease, or basically stay flat (and possibly cause losses compared to inflation)? Improvements: anything on the land is both an asset and a liability. It's an asset because it could add to the value of the land, but it might also reduce the land value if it interferes with alternate land uses. It's a liability, both in the legal sense and in that it requires maintenance. If you want to rent them out, especially, that means concern about any foundations involved, termites, roofs, sewage/septic tanks, utilities that are your responsibility (pipes, poles, wires), as well as any sort of ac/heating you may have, docks, and so on. These things are rarely free and absolutely can eat you alive. Income: Ah, the best part, the constant influx of cash! But wait, is it a constant influx? Some businesses are purely seasonal (summer only, winter only), some are year-round but have peak times, and others don't really have a \"\"peak\"\" to speak of. If you are renting, are there issues collecting, or with people over-staying? How about damage, making a mess, getting rowdy and disturbing others? Regardless, there is obviously some income, and this is usually the most dangerous part of the equation. I say \"\"dangerous\"\", because people absolutely lie like dogs on this part, all the time. It's easy to cook the books, assuming they even attempt to keep proper books in the first place! Businesses of this form often have a lot of cash business that's easy to hide (from Uncle Sam, or sometimes even the owners themselves if there are employees involved) - and fake! And some people are just shoddy bookkeepers and the info is just wrong. But, there will clearly be some kind of yearly income involved. What does this matter? Well...how much is there? How much is tied to the owners (personal friends do business and they will leave if the ownership/management changes)? In commercial real estate the income will be calculated for a fiscal year, and then there is something called a \"\"multiple\"\", which is market dependent. Let's say the whole place takes in $100k in rent a year. As part of buying this business, you are buying not just assets, but expected future income. In some commercial areas the multiple is as little as .5 to 2 - which means that the going rate is about 6-24 months worth of income, as part of the purchase price. So with 100k rent a year, that means 50k-200k of the purchase price is attributable to the income of the business. And if business is half of what you thought it would be? That means the net value of the whole enterprise decreases by 25k-100k - on top of the reduced income every year you own it! Income provides cash flow, which should pay all the expenses (cleaning up from wind storms, replacing windows that are broken, hauling off trash, replacing a well that ran dry), and then the extra that remains is positive cash flow. If you take out a loan, then ideally the cash flow would also pay that completely so long as you don't have any big unexpected expenses in the year - and still have some left over for yourself. Wages: Well, that money doesn't collect itself! There's sales, keeping the books, collecting the rent, performing maintenance, customer service, cleaning, paying the bills, keeping the insurance people happy, handling emergencies, and everything else involved with running the business. Someone is going to do it, and the biggest error people make here is not to put any value on their time - and to make it so they can never afford to take a vacation again! Pay yourself, and give yourself the flexibility to pay others when you can't (or don't want) to do it all yourselves. So, what's the point of all this? How do you actually make any money? In two ways: 1) selling the whole thing later, and 2) cash flow. For 1, it's important that you not be in a situation where you are betting that in the future there will be a \"\"person richer, and dumber, than I am now\"\". If the current owner wanted 2 million, then 1 mil, then less, over multiple years...this suggests either he is delusional about the value of his place (and most property owners are), or that its actually hard to find a buyer for such a business. You are going to want to make sure you understand why that is, because most of the value of real estate is...well, in the real estate itself! For 2, you need cash coming in that's considerably more than the cost of running the place. Also, cash flow can strongly change the value of the business for resale (depending on the multiple, this can make a huge difference or prevent you from selling the thing at all). You mentioned you want to put in more cabins, more marketing/sales efforts, etc. That's great, but first, that would mean added investment beyond the purchase price. Is it legally and physically practical to add more cabins, and what is their current utilization rate? If they are only renting 10% of their current capacity, increasing capacity may be premature. This will also vary through the year, so you may find there is a problem with being sold out sometimes...but only for a small percentage of the time. Which means you'll be adding buildings only to have them used for a fraction of the year, which will be very hard to make a profit from. If cash flow is good, ideally even being enough to cover a loan payment to help cover the purchase price (and remember that commercial real estate loans are much smaller loan-to-value ratios than in residential real estate), there is one final barrier to making money: the damn non-regular maintenance! Roofs, wells, and wooden walls all have a sad tendency to cost you nothing right up until the point they cost you $30k+ on a single day. Is there enough cash flow to make these sort of certainties (and if you plan to be there for years, they are a certainty) not put you in the poor house? This was rather long, but I hope this overview helps you appreciate all that you'll need to look into and be cautious of during your future en-devour! Commercial real estate is generally costly and high-risk, but also can be high reward. You'll need to compare many opportunities before you can get a \"\"feel\"\" for what is a good deal and what is a terrible one. You'll need to consider many factors, such as resale value and cash flow/income (which they will have to tell you and you can assume is not true, due to ignorance or malice), as well as maintenance and liabilities, before you can begin to really estimate the value of an enterprise of this sort. There are people who can help you, like appraisers and commercial brokers, but ultimately you'll need to do a lot of research and comparisons yourself to help you make a good decision. Finally, there is no very simple method for evaluating commercial real estate value. You need a variety of information, and you must be skeptical of what you are told because of the very large sums of money involved. It is doable (lots of people do it), but you must take care and do your due diligence so you don't get bankrupted by a single bad purchase.\"" }, { "docid": "443859", "title": "", "text": "On form 8829, line 20 you can list utilities paid for the home office. You have two choices: 1) You can list the entire amount under column (b) as an indirect expense. You will then get a deduction for the fraction of the amount based on what fraction of your home is an office. This makes sense if the service equally benefits your entire home. 2) You can compute the portion of the expense reasonably attributable to the business/office and list that amount under column (a). This entire amount will be deducted. Which option you choose depends on how well you think you can allocate the expense between your office and the rest of your home. For example, I have had to do this with electricity, but I specifically measured the electricity used by my office. If you think you can defend allocating a larger portion to the office, use option 2. If you would have paid the same amount even if you didn't have an office, it's hard to justify allocating more of the expense to the office than its portion of the home. If you opted for a more expensive service or otherwise incurred additional costs, it makes sense to allocate a higher fraction to the office and to calculate that yourself." }, { "docid": "178501", "title": "", "text": "I would not claim to be a personal expert in rental property. I do have friends and family and acquaintances who run rental units for additional income and/or make a full time living at the rental business. As JoeTaxpayer points out, rentals are a cash-eating business. You need to have enough liquid funds to endure uncertainty with maintenance and vacancy costs. Often a leveraged rental will show high ROI or CAGR, but that must be balanced by your overall risk and liquidity position. I have been told that a good rule-of-thumb is to buy in cash with a target ROI of 10%. Of course, YMMV and might not be realistic for your market. It may require you to do some serious bargain hunting, which seems reasonable based on the stagnant market you described. Some examples: The main point here is assessing the risk associated with financing real estate. The ROI (or CAGR) of a financed property looks great, but consider the Net Income. A few expensive maintenance events or vacancies will quickly get you to a negative cash flow. Multiply this by a few rentals and your risk exposure is multiplied too! Note that i did not factor in appreciation based on OP information. Cash Purchase with some very rough estimates based on OP example Net Income = (RENT - TAX - MAINT) = $17200 per year Finance Purchase rough estimate with 20% down Net Income = (RENT - MORT - TAX - MAINT) = $7500 per year" }, { "docid": "349672", "title": "", "text": "The answer is simple. You can generally claim a deduction for an expense if that expense was used to derive an income. Of course social policy sometimes gets in the way and allows for deductions where they usually wouldn't be allowed. Your rent is not tax deductible because this expense is not used to derive your income. If however you were working from your home, example - you had a home based business, and you dedicated a part of your home for your work, say an office, then part of your rent may then become tax deductible." }, { "docid": "38712", "title": "", "text": "\"The first red-flag here is that an appraisal was not performed on an as-is basis - and if it could not be done, you should be told why. Getting an appraisal on an after-improvement basis only makes sense if you are proposing to perform such improvements and want that factored in as a basis of the loan. It seems very bizarre to me that a mortgage lender would do this without any explanation at all. The only way this makes sense is if the lender is only offering you a loan with specific underwriting guidelines on house quality (common with for instance VA-loans and how they require the roof be of a certain maximum age - among dozens of other requirements, and many loan products have their own standards). This should have been disclosed to you during the process, but one can certainly never assume anyone will do their job properly - or it may have only mentioned in some small print as part of pounds of paper products you may have been offered or made to sign already. The bank criteria is \"\"reasonable\"\" to the extent that generally mortgage companies are allowed to set underwriting criteria about the current condition of the house. It doesn't need to be reasonable to you personally, or any of us - it's to protect lender profits by aiding their risk models. Your plans and preferences don't even factor in to their guidelines. Not all criteria are on a a sliding scale, so it doesn't necessarily matter how well you meet their other standards. You are of course correct that paying for thousands of dollars in improvements on a house you don't own is lunacy, and the fact that this was suggested may on it's own suggest you should cut your losses now and seek out a different lender. Given the lender being uncooperative, the only reason to stick with it seems to be the sunk cost of the appraisal you've already paid for. I'd suggest you specifically ask them why they did not perform an as-is appraisal, and listen to the answer (if you can get one). You can try to contact the appraiser directly as well with this question, and ask if you can have the appraisal strictly as-is without having a new appraisal. They might be helpful, they might not. As for taking the appraisal with you to a new bank, you might be able to do this - or you might not. It is strictly up to each lender to set criteria for appraisals they accept, but I've certainly known of people re-using an appraisal done sufficiently recently in this way. It's a possibility that you will need to write off the $800 as an \"\"education expense\"\", but it's certainly worth trying to see if you can salvage it and take it with you - you'll just have to ask each potential lender, as I've heard it go both ways. It's not a crazy or super-rare request - lenders backing out based on appraisal results should be absolutely normal to anyone in the finance business. To do this, you can just state plainly the situation. You paid for an appraisal and the previous lender fell through, and so you would like to know if they would be able to accept that and provide you with a loan without having to buy a whole new appraisal. This would also be a good time to talk about condition requirements, in that you want a loan on an as-is basic for a house that is inhabitable but needs cosmetic repair, and you plan to do this in cash on your own time after the purchase closes. Some lenders will be happy to do this at below 75%-80% LTV, and some absolutely do not want to make this type of loan because the house isn't in perfect condition and that's just what their lending criteria is right now. Based on description alone, I don't think you really should need to go into alternate plans like buy cash and then get a home equity loan to get cash out, special rehab packages, etc. So I'd encourage you to try a more straight-forward option of a different lender, as well as trying to get a straight answer on their odd choice of appraisal order that you paid for, before trying anything more exotic or totally changing your purchase/finance plans.\"" }, { "docid": "75005", "title": "", "text": "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." }, { "docid": "149215", "title": "", "text": "Both of my primary home purchases were either at, or close to asking price. My first house was during the local seller's market in 2001-2002. There were waiting lines for open houses. In hindsight we bought more home than we needed at the time but that had nothing to do with offering asking price. It was the market for the type of property (location and features) at that time. My second house was a little after the peak in 2008. The value had come down quite a bit and the property was priced on the low side versus the comps. To this day my second house still appraises higher than what we paid for it even though it was at asking price. As a third example, my brother-in-law got into a bidding war on his first home purchase and ended up buying it for above asking price. This was normal for the houses in the area he was looking at. With real estate, like other people have said, it really is important to either know the area you are looking at or to get an agent you trust and have them explain their reasons for their offer strategy through the comps. Yes agents need to make money but the good ones have been in the business a while and also live off of repeat business when you sell your house or refer friends and family to them. Agents do a lot less work when it comes to selling by the way so they would love for you to come back to them when it's time to sell. If I'm not happy with the way things are going with my agent I would have a heart to heart with them and give them a chance to correct the relationship. I've spoken to a realtor friend in the past about getting out of buyer's contracts and he told me it's a lot easier as a buyer than a seller. The buyer has most of the power during the process. The seller just has what the buyer wants." }, { "docid": "130631", "title": "", "text": "\"In the US you are not required to have a corporation to use business expenses to offset your income. The technical term you need is \"\"deducting business expenses\"\", and in matters of taxes it's usually best to go straight to the horse's mouth: the IRS's explanations Deducting Business Expenses Business expenses are the cost of carrying on a trade or business. These expenses are usually deductible if the business operates to make a profit. What Can I Deduct? Cost of Goods Sold, Capital Expenses, Personal versus Business Expenses, Business Use of Your Home, Business Use of Your Car, Other Types of Business Expenses None of this requires any special incorporation or tax arrangements, and are a normal part of operating a business. However, there is a bit of a problem with your scenario. You said you \"\"invested\"\" into a business, but you mentioned buying specific things for the business which is not generally how one accounts for investment. If you are not an owner/operator of the business, then the scenario is not so straight-forward, as you can't simply claim someone else's business expenses as your own because you invested in it. Investments are taxed differently than expenses, and based upon your word choices I'm concerned that you could be getting yourself into a bit of a pickle. I would strongly advise you to speak with a professional, such as a Certified Public Accountant (CPA), to go over your current arrangement and advise you on how you should be structuring your ongoing investment into this shared business. If you are investing you should be receiving equity to reflect your ownership (or stock in the company, etc), and investments of this sort generally cannot be deducted as an expense on your taxes - it's just an investment, the same as buying stock or CDs. If you are just buying things for someone else's benefit, it's possible that this could be looked upon as a personal gift, and you may be in a precarious legal position as well (where the money is, indeed, just a gift). And gifts of this sort aren't deductible, either. Depending on how this is all structured, it's possible that you should both consider a different form of legal organization, such as a formal corporation or at least an official business partnership. A CPA and an appropriate business attorney should be able to advise you for a nominal (few hundred dollars, at most) fee. If a new legal structure is advisable, you can potentially do the work yourself for a few hundred dollars, or pay to have it done (especially if the situation is more complex) for a few hundred to a few thousand. That's a lot less than you'd be on the hook for if this business is being accounted for improperly, or if either of your tax returns are being reported improperly!\"" }, { "docid": "254151", "title": "", "text": "\"If you receive a 1099-MISC from YouTube, that tells you what they stated to the IRS and leads into most tax preparation software guided interviews or wizards as a topic for you to enter. Whether or not you have a 1099-MISC, this discussion from the IRS is pertinent to your question. You could probably elect to report the income as a royalty on your copyrighted work of art on Schedule E, but see this note: \"\"In most cases you report royalties in Part I of Schedule E (Form 1040). However, if you ... are in business as a self-employed writer, inventor, artist, etc., report your income and expenses on Schedule C or Schedule C-EZ (Form 1040).\"\" Whether reporting on Schedule E or C is more correct or better for your specific circumstances is beyond the advice you should take from strangers on the internet based on a general question - however, know that there are potentially several paths for you. Note that this is revenue from a business, so if you paid for equipment or services that are 100% dedicated to your YouTubing (PC, webcam, upgraded broadband, video editing software, vehicle miles to a shoot, props, etc.) then these are a combination of depreciable capital investments and expenses you can report against the income, reducing the taxes you may owe. If the equipment/services are used for business and personal use, there are further guidelines from the IRS as to estimating the split. These apply whether you report on Sch. E, Sch. C, or Sch C-EZ. Quote: \"\"Self-Employment Income It is a common misconception that if a taxpayer does not receive a Form 1099-MISC or if the income is under $600 per payer, the income is not taxable. There is no minimum amount that a taxpayer may exclude from gross income. All income earned through the taxpayer’s business, as an independent contractor or from informal side jobs is self-employment income, which is fully taxable and must be reported on Form 1040. Use Form 1040, Schedule C, Profit or Loss from Business, or Form 1040, Schedule C-EZ, Net Profit from Business (Sole Proprietorship) to report income and expenses. Taxpayers will also need to prepare Form 1040 Schedule SE for self-employment taxes if the net profit exceeds $400 for a year. Do not report this income on Form 1040 Line 21 as Other Income. Independent contractors must report all income as taxable, even if it is less than $600. Even if the client does not issue a Form 1099-MISC, the income, whatever the amount, is still reportable by the taxpayer. Fees received for babysitting, housecleaning and lawn cutting are all examples of taxable income, even if each client paid less than $600 for the year. Someone who repairs computers in his or her spare time needs to report all monies earned as self-employment income even if no one person paid more than $600 for repairs.\"\"\"" }, { "docid": "599684", "title": "", "text": "\"What they are doing is wrong. The IRS and the state might not be happy with what they are doing. One thing you can ask for them to do is to give you a credit card for business and travel expenses. You will still have to submit receipts for expenses, but it will also make it clear to the IRS that these checks are not income. Keep the pay stubs for the year, or the pdf files if they don't give you a physical stub. Pay attention to the YTD numbers on each stub to make sure they aren't sneaking in the expenses as income. If they continue to do this, ask about ownership of the items purchased, since you will be paying the tax shouldn't you own it? You can in the future tell them \"\"I was going to buy X like the customer wanted, but I just bought a new washer at home and their wasn't enough room on the credit card. Maybe next month\"\"\"" }, { "docid": "271459", "title": "", "text": "\"Why isn't the above the business model of a loan? It is the model of some types of loans. It's called a \"\"Line of credit\"\" (LOC). I have two them, one for my business, and one for me personally. (Why does this question exist:) Is it an 30-year loan or a 10-year loan? As you mentioned, the concept of term doesn't exist for these types of loans. As long as I pay the interest and don't go over the max of my credit limit, I could keep the money indefinitely. Due to this, lines of credit almost always have a variable interest rate. (In the US they are tied to the Prime rate.) (Why does this question exist:) If you pay extra, do you want the extra to go toward the interest or toward the principal? Again, this concept also doesn't exist with a LOC. There is a minimum payment that you must make each month, but there is nothing that prevents you from making the minimum payment and then immediately taking the exact payment you made back out again. Of course this increases the total you owe, and eventually you would hit your maximum credit limit and would no longer be able to take the full payment back out. Years ago I maxed out my business line and didn't have enough money to make the payment so my bank was nice enough to raise my limit for me (so I could take enough out to make the payment), but if I did that multiple times I'm sure they would have eventually said no. Fortunately my clients finally paid me and I paid off the line, but I still keep the LOC today even though I rarely use it. By the way, beyond traditional LOCs, they also exist in other forms, both secured and unsecured. A common secured product in the US is a 2nd lien holder to a home (the first being the mortgage), called a HELOC (Home Equity Line Of Credit). Many banks also offer unsecured LOCs on a checking account which they sometimes call \"\"overdraft protection\"\". Update: based on a comment to this answer, I now realize that the full question now becomes something similar to: Given that the Line of Credit loan model exists, why aren't all loans like this? or, refining it further: What advantages do other loan types have over the Line of Credit model, specifically finite term loans? A main advantage of a term loan over a line of credit is that the bank knows when they will get the money back. If every loan a bank made was a LOC product, and no one ever paid it back, then they'd eventually run out of money. That's obviously an oversimplification but the principle (pun intended) holds. To prevent this the bank would have to call due the loan, and doing this usually leaves customers angry. Years ago I had a business LOC with a bank that discontinued their business LOC product, and called every customer's loan due. I had a balance and they offered to convert it to a 5 year term loan, which I did, but I was so mad at them that I switched banks and paid off the term loan shortly after. Another advantage of a term loan is it forces the customer to be a little more responsible. Lines of credit can be dangerous for those that misuse it because if the amount owed is driven up due to bad behavior, there is nothing to force the bad behavior to stop. A perfect example of this can be found with governments. Some governments borrow money until their line of credit is used up, and then they just keep increasing their credit limit. There is no incentive for the officials in charge of the government to stop doing this because it isn't even their money. If those lines of credits were converted to term loans, the government would be forced to increase revenue and/or decrease expenses, which is the only way to get out of debt. Some other advantages of term loans over a LOC:\"" }, { "docid": "408308", "title": "", "text": "I have a job and would like to buy equipment for producing music at home and it would be easier for me to pay for the equipment monthly I just want to address your contention that it would be easier to pay monthly, with an interest calculation. Lets say you get a credit card with a very reasonable rate of 12% and you buy $2,500 of equipment. A typical credit card minimum payment is interest charges + 1% of the principle. You can see how this is going. You've paid nearly $200 to clear about $100 off your principle. Obviously paying the minimum payment will take forever to wipe out this debt. So you pay more, or maybe you get 0% interest for a while and take advantage of that. Paying $100 per month against $2,500 at 12% per year will take 29 months and cost about $390 in interest. At $200 per month it'll take 14 months and cost $184 in interest. Also note, you'll probably get an interest rate closer to 16 or 17%. It's always easier to pay small amounts frequently than it is to pay a lot of money all at once, that ease has a cost. If you're buying the gear to start a little business, or you already have a little business going and want to upgrade some gear, great; disciplined debt handling is a wonderful skill to have in business. If you want to start yourself in to a new hobby, you should not do that with debt. If interest rates are low enough financing something can make sense. 0.9% apr on a car, sure; 15% apr on a mixing board, no. Credit card interest rates are significant and really should not be trifled with." }, { "docid": "364326", "title": "", "text": "\"We played [baseball](http://hendrengroup.me) as kids when it was the most [popular game](http://hendrengroup.me/blog/baseball-the-small-and-big-kids-dream-game) in the world, way ahead of soccer, and basketball was still a poor third-placer. We played it in the school yard using a tennis ball and became the highlight of every school boy’s day. We knew and followed the basic rules of the game although we did not use mittens or masks. We played barefoot because we went to school barefoot. We were children and we had the time of our life. The rules of baseball are not really that complicated. Almost anyone who can run, swing a bat or throw a ball can join the fun. Later on, we kids found out that there was such a thing as softball, which was for girls but using a bigger ball that was thrown from the hip level instead of overhead. Watching real baseball and softball games during athletic meets gave us a better understanding and appreciation of the game. How we would have wanted to have all the uniform, gears and field to play with; but all we could afford was an old, balding tennis ball and a homemade 2in x 3in lumber for a bat and bases made of stones or wood scraps. Baseball, as officially required, has the following rules: **1. Basic features of the baseball game and field dimensions** Baseball is played on a diamond-shaped field with the base corner designated as the home base. A player with a bat, or a batter, tries to hit the ball as far away from any of the opposing fielding team in order to reach all three bases and finally make it back to the home base. If a player makes it to a base or two after he bats, he must wait for his own team-mates to hit the ball and give him the opening to move on around the bases. Strategy and team play are important in maximizing the team’s chance to score. Sometimes, a team may sacrifice a batter just for a player to steal a base or score a run. One point can spell the difference between winning and losing; and such brilliant plays come in handy. **2. Team composition** Each team has 9 players to fill up the following positions in the field when the opposing team is on the bat: pitcher, catcher, first base, second base, third base, short stop, right fielder, left fielder and centerfielder. Substitute players may also be included. **3. Batting regulations** The team on the bat is given three attempts to hit the ball thrown by a pitcher within the boundaries of the baseball field, marked by the two lines made by the home- base/first-base and the home-base/third-base. A missed ball is called a strike and three strikes puts batter out of the field. A team that gets three outs gets to field next while the other team bats. **4. Playing the ball** A flying ball that falls outside of the field boundaries is called a foul ball and gives a batter another chance to hit. Fouls are unlimited. A ball that is hit and falls inside the two lines is either caught in the air to put the batter out or, if it rolls on the ground, must be retrieved and often thrown to the first-base player who will tag the batter with the ball to put him out. Failing to tag the batter who steps on or touches the base puts the batter \"\"safe\"\" on first base or wherever the batter may be as other hitters move on around the diamond. A player who makes it safely back to home base scores a point. If it is a homerun, meaning the ball is hit out of the filed or steals straight home if the defending team fumbles the ball, two points are gained while a single point is given to a player who eventually goes round all the bases through one or more batters. **5. Other game features** When a batting team is struck out, it take the field and lets the other team bat and attempt to score. A foul ball which is caught will also count as an out. Multiple outs can be made, such as when bases are loaded (all three bases have batters) and the batter on the plate hits a good ball and makes it to first base and the ball is retrieved and thrown back before the player running to second base reaches it, then to home base before the player on third base scores a run and, finally, to third base to tag the player running to it. Three outs in one play! It is during such fast plays when the ball changes hands so rapidly and players are scampering for bases that the excitement runs high. It is cause for celebration for the scoring team and a big letdown for the other who must probably feel like they were hit on the head with a bat several times for losing the big opportunity to score big and ending up with nothing. **6. Who wins** The team that makes the most runs after nine innings or rounds wins the game. Sometimes though, the game will stop at the \"\"top of the 9th inning\"\" or before the other team is supposed to go to final bat if that team is already ahead in points as the lagging team will not be able to catch up anyway. Some of the most memorable games end at the \"\"bottom of the ninth\"\" when a team tries to catch up. We might have heard of the familiar radio voice saying, \"\"It’s the bottom of the ninth and bases are full and the New York Yankees are behind by four and Babe Ruth has the bat. The count is two strikes and three balls . . . the pitcher winds up and throws the ball. Ruth swings hard and the ball flies . . . out of the stadium for a homerun and a win!\"\" Or something to that effect. That imagined scene a dream every child and adult lover of baseball hopes to accomplish once in a lifetime. You want to see and hear the whole stadium explode with people jumping and shouting as you take your sweet time running through the bases, smiling, waving your cap and finally kissing the home base. When a great player makes a good play, everybody wins in baseball. You have to be the eternal child to enjoy it. And there are so many people out there who still enjoy it to this day.\"" }, { "docid": "195372", "title": "", "text": "\"Someone asked this over in /r/darknetmarkets , they were asking how to profit off NV specifically, but here's what I wrote there, I'd be curious what you guys think: > Go back in time about 6 mo, case the medical scene for movers and shakers, write some proposals to help them expand. Traditional banks won't touch financing these guys with a 10ft stick right now, the Fed has told them straight up they will lose FDIC membership if they touch \"\"drug money\"\" (cough cough tobacco and alcohol don't count? cough cough). If you don't have a time machine, either come up with a way to be a bank to these guys without going to a Fed lockup, or go finance expansion in the next state which legalizes. It's gonna be a while until these guys get integrated with the regular money system to the point they have stocks and such. Or maybe the Fed freezing them out as they make a fortune will just push forward crypto currency and hasten the collapse of the current money oligarchy, who knows. There was also some comments about shipping from NV to home states, which is probably a bad idea for many reasons. I did however feel I can offer some insight on a legal president for this kind of behavior, but exactly how legal reshipping to avoid direct shipping of a purchase to a state is (I mean, once it's your proper legal property and you're just shipping it to yourself that does seem legal, right?) or if it would get the same blind eye when done with pot are huge unknowns: >I'm sure the Feds will not see a problem with sending drugs to yourself across state lines! Actually funny enough I live in the wine region of CA and there is a whole business here of wine \"\"storage and shipping\"\" places. It's up to the states to decide how or if they allow alcohol to be shipped into their state from others, and a bunch of state have very complex rules or just don't allow it. So if you come out here for tourism, drink some wine at a winery, like it, and ask if you can have some shipped home, the answer is about 50/50 to be 'no'. And if you're a average income pleb, that's your answer. If you're some rich dude however, you can say \"\"ah gotcha, pesky laws... well here's the address of my storage and shipping place, send the 2 cases there then\"\", nobody bats an eye, and off the cases go. Guy goes home, calls up the shipping place, and says \"\"hey pull those cases, my personal property, and ship them to me\"\" and, somehow, magically, this is now legal. I have no idea who's taking on the liability here, if the shipping place has them sign off \"\"we will ship wherever you ask, it's not our job to verify the legality of your request\"\" then I guess it's on the consumer, but if you have an entire business built around circumventing state law it would seem to me that this should be a legal problem. But, wine is a high-end commodity, rich people make their own rules, and if CA turns a blind eye to this practice they get to collect the sales tax as it's sold in CA and shipped to a location in CA, whereas fighting it would hurt their tourism and also send the tax income to the states being shipped to. C.R.E.A.M. baby! Re-reading this now I'm not even sure if there IS a liability here. They bought the property in CA, paid tax in CA, and had it sent to a mailing address in CA. What they do after that with their personal property is not the states business, right? I'd imagine this would be drastically different if shipping for resale. Similarly, I think this all only works if you complete the transaction while physically in the state. So at most this might turn on some weed tourism. The big difference in all of this is that the Fed is fine with alcohol, but not weed, so, while I suspect someone will form such a weed storage and shipping place at some point, I don't really want to be first in line to see how this flys and if it lands you in trouble with the Fed.\"" }, { "docid": "490888", "title": "", "text": "\"You need to do a bit more research and as @littleadv often wisely advises, consult a professional, in this case a tax layer or CPA. You are not allowed to just pull money out of a property and write off the interest. From Deducting Mortgage Interest FAQs If you own rental property and borrow against it to buy a home, the interest does not qualify as mortgage interest because the loan is not secured by the home itself. Interest paid on that loan can't be deducted as a rental expense either, because the funds were not used for the rental property. The interest expense is actually considered personal interest, which is no longer deductible. This is not exactly your situation of course, but it illustrates the restriction that will apply to you. Elsewhere in the article, it references how, if used for a business, the interest deduction still will not apply to the rental, but to the business via schedule C. In your case, it's worse, you can never deduct interest used to fund a tax free bond, or to invest in such a tax favored product. Putting the facts aside, I often use the line \"\"don't let the tax tail wag the investing dog.\"\" Borrowing in order to reduce taxes is rarely a wise move. If you look at the interest on the 90K vs 290K, you'll see you are paying, in effect, 5.12% on the extra 200K, due the higher rate on the entire sum. Elsewhere on this board, there are members who would say that given the choice to invest or pay off a 4% mortgage, paying it off is guaranteed, and the wiser thing to do. I think there's a fine line and might not be so quick to pay that loan off, an after-tax 3% cost of borrowing is barely higher than inflation. But to borrow at over 5% to invest in an annuity product whose terms you didn't disclose, does seem right to me. Borrow to invest in the next property? That's another story.\"" }, { "docid": "156554", "title": "", "text": "\"This is a great question! I've been an entrepreneur and small business owner for 20+ years and have started small businesses in 3 states that grew into nice income streams for me. I've lived off these businesses for 20+ years, so I know it can be done! First let me start by saying that the rules, regulations, requirements and laws for operating a business (small or large) legally, for the most part, are local laws and regulations. Depending on what your business does, you may have some federal rules to follow, but for the most part, it will be your locality (state, county, city) that determines what you'll have to do to comply and be \"\"legal\"\". Also, though it might be better in some cases to incorporate (and even required in some circumstances), you don't always have to. There are many small businesses (think landscapers, housekeepers, babysitters, etc.) that get income from their \"\"business operations\"\" and do so as \"\"individuals\"\". Of course, everyone has to pay taxes - so as long as you property record your income (and expenses) and properly file your tax returns every year, you are \"\"income tax legal\"\". I won't try to answer the income tax question here, though, as that can be a big question. Also, though you certainly can start a business on your own without hiring lawyers or other professionals (more on that below), when it comes to taxes, I definitely recommend you indeed plan to hire a tax professional (even if it's something like H&R Block or Jackson Hewitt, etc). In some cities, there might even be \"\"free\"\" tax preparation services by certain organizations that want to help the community and these are often available even to small businesses. In general, income taxes can be complicated and the rules are always changing. I've found that most small business owners that try to file their own taxes generally end up paying a lot more taxes than they're required to, in essence, they are overpaying! Running a business (and making a profit) can be hard enough, so on to of that, you don't need to be paying more than you are required to! Also, I am going to assume that since it sounds like it would be a business of one (you), that you won't have a Payroll. That is another area that can be complicated for sure. Ok, with those generics out of the way, let me tackle your questions related to starting and operating a business, since you have the \"\"idea for your business\"\" pretty figured out. Will you have to pay any substantial amount of money to attorneys or advisors or accountants or to register with the government? Not necessarily. Since the rules for operating a business legally vary by your operating location (where you will be providing the service or performing your work), you can certainly research this on your own. It might take a little time, but it's doable if you stick with it. Some resources: The state of Florida (where I live) has an excellent page at: http://www.myflorida.com/taxonomy/business/starting%20a%20business%20in%20florida/ You might not be in Florida, but almost every state will have something similar. What all do I need to do to remain on the right side of the law and the smart side of business? All of the answers above still apply to this question, but here are a few more items to consider: You will want to keep good records of all expenses directly related to the business. If you license some content (stock images) for example, you'll want to document receipts. These are easy usually as you know \"\"directly\"\". If you subscribe to the Apple Developer program (which you'll need to if you intend to sell Apps in the Apple App Stores), the subscription is an expense against your business income, etc. You will want to keep good records of indirect costs. These are not so easy to \"\"figure out\"\" (and where a good accountant will help you when this becomes significant) but these are important and a lot of business owners hurt themselves by not considering these. What do I mean? Well, you need an \"\"office\"\" in order to produce your work, right? You might need a computer, a phone, internet, electricity, heat, etc. all of which allow you to create a \"\"working environment\"\" that allows you to \"\"produce your product\"\". The IRS (and state tax authorities) all provide ways for you to quantify these and \"\"count them\"\" as legitimate business expenses. No, you can't use 100% of your electric bill (since your office might be inside your home, and the entire bill is not \"\"just\"\" for your business) but you are certainly entitled to some part of that bill to count as a business expense. Again, I don't want to get too far down the INCOME TAX rabbit hole, but you still need to keep track of what you spend! You must keep good record of ALL your income. This is especially important when you have money coming in from various sources (a payroll, gifts from friends, business income from clients and/or the App Stores, etc.) Do not just assume that copies of your bank deposits tell the whole story. Bank statements might tell you the amount and date of a deposit, but you don't really know \"\"where\"\" that money came from unless you are tracking it! The good news is that the above record keeping can be quite easy with something like Quicken or QuickBooks (or many many other such popular programs.) You will want to ensure you have the needed licenses (not necessarily required at all for a lot of small businesses, especially home based businesses.) Depending on your business activity, you might want to consider business liability insurance. Again, this will depend on your clients and/or other business entities you'll be dealing with. Some might require you to have some insurance. Will be efforts even be considered a business initially until some amount of money actually starts coming in? This might be a legal / accountant question as to the very specific answer from the POV of the law and taxing authorities. However, consider that not all businesses make any money at all, for a long time, and they definitely \"\"are a business\"\". For instance, Twitter was losing money for a long time (years) and no one would argue they were not a business. Again, deferring to the attorneys/cpas here for the legal answer, the practical answer is that you're performing \"\"some\"\" business activity when you start creating a product and working hard to make it happen! I would consider \"\"acting as\"\" a business regardless! What things do I need to do up-front and what things can I defer to later, especially in light of the fact that it might be several months to a couple years before any substantial income starts coming in? This question's answer could be quite long. There are potentially many items you can defer. However, one I can say is that you might consider deferring incorporation. An individual can perform a business activity and draw income from it legally in a lot of situations. (For tax purposes, this is sometimes referred to as \"\"Schedule-C\"\" income.) I'm not saying incorporation is a bad thing (it can shield you from a lot of issues), but I am saying that it's not necessary on day 1 for a lot of small businesses. Having said that, this too can be easy to do on your own. Many companies offer services so you can incorporate for a few hundred dollars. If you do incorporate, as a small business of one person, I would definitely consider a tax concept called an \"\"S-Corp\"\" to avoid paying double taxes.) But here too, we've gone down the tax rabbit hole again. :-)\"" } ]

[ { "docid": "572690", "title": "", "text": "Yes. I can by all means start my own company and name myself CEO. If Bill Gates wanted to hire me, I'll take the offer and still be CEO of my own company. Now, whether or not my company makes money and survives is another question. This is the basis of self-employed individuals who contract out their services." } ]

[ { "docid": "519321", "title": "", "text": "Are you being paid through a limited company or an umbrella company ? Are you self employed If not what they are doing is illegal. If you are being paid a salary, then the employer has to contribute their part of National Insurance. I believe they are treating you as self employed, hence asking you to generate invoices. Check your contract wordings properly. Or get help from Citizens Advice. Call them or visit their local office. Or else do call up HMRC. But if you are invoicing them, I would assume you are self employed and you have to do your self assessment. Get in contact with HMRC and ask them to generate your Unique Taxpayer Reference (UTR). THey will send you the UTR and using this you can fill your tax returns. It looks like cumbersome now, but it isn't so. You can do it yourself, I do mine. Or at the end of the financial year, get an accountant to do the returns for you, probably should charge you £100-£150. Keep all your invoices, bills, bank statements safely. This is some help from HMRC website" }, { "docid": "193200", "title": "", "text": "> Sometimes Walmart is the only place a person can be hired. they don't have to live there. there are NO business on say the badlands of south dakota. i can't want to live there and then complain about the lack of business. move. get more education. start your own business and maybe employ others. dont get mad at someone else for not hiring you or offering you less than you want. how many jobs have YOU created?" }, { "docid": "406789", "title": "", "text": "\"Littleadv is incorrect because receiving a 1099 means she will be taxed self-employment tax on top of federal income taxes. Your employer will automatically withhold 7.65% of payroll taxes as they pay you each paycheck and then they'll automatically pay the other half of your payroll tax (an additional 7.65%) to bring it to a total of 15.3%. In other words, because your wife is technically self employed, she will owe both sides of payroll tax which is 15.3% of $38k = $5,800 on TOP of your federal income tax (which is the only thing the W-4 is instructing them about what amount to withhold). The huge advantage to a 1099, however, is that she's essentially self-employed which means ALL of the things she needs to run her business are deductible expenses. This includes her car, computer, home office, supplies, sometimes phone, gas, maintenance, travel expenses, sometimes entertainment, etc - which can easily bring her \"\"income\"\" down from $38k to lets say $23k, reducing both her federal income tax AND self-employment tax to apply to $15k less (saving lets say 50% of $15k = $7.5k with federal and self employment because your income is so high). She is actually supposed to pay quarterly taxes to make up for all of this. The easy way to do this is each quarter plug YOUR total salary + bonus and the tax YOU have paid so far (check your paystubs) into TurboTax along with her income so far and all of her expenses. This will give you how much tax you can expect to have left to owe so far--this would be your first quarter. When you calculate your other quarters, do it the exact same way and just subtract what you've already paid so far that year from your total tax liability.\"" }, { "docid": "15270", "title": "", "text": "Your freelance income will not qualify you for the work-from-home deductions, for that you would need a T2200 form signed by your employer. But, you are allowed to be self employed as a sole-proprietorship while still being an employee of another company. If you take that route, you'll be able to write-off even more expenses than those you linked to. Things like a portion of your internet bill can be claimed, for example. But note that these deductions would only apply to offset the self-employment income, so if you're not earning very much from the freelance work, it might not be worth all the hassle. Filing taxes when self-employed is definitely more complicated, and many people will get professional tax preparation help - at least for the first time." }, { "docid": "257168", "title": "", "text": "\"A tax return is a document you sign and file with the government to self-report your tax obligations. A tax refund is the payment you receive from the government if your payments into the tax system exceeded your obligations. As others have mentioned, if an extra $2K in income generated $5K in taxes, chances are your return was prepared incorrectly. The selection of an appropriate entity type for your business depends a lot on what you expect to see over the next several years in terms of income and expenses, and the extent to which you want or need to pay for fringe benefits or make pretax retirement contributions from your business income. There are four basic flavors of entity which are available to you: Sole proprietorship. This is the simplest option in terms of tax reporting and paperwork required for ongoing operations. Your net (gross minus expenses) income is added to your wage income and you'll pay tax on the total. If your wage income is less than approximately $100K, you'll also owe self-employment tax of approximately 15% in addition to income tax on your business income. If your business runs at a loss, you can deduct the loss from your other income in calculating your taxable income, though you won't be able to run at a loss indefinitely. You are liable for all of the debts and obligations of the business to the extent of all of your personal assets. Partnership. You will need at least two participants (humans or entities) to form a partnership. Individual items of income and expense are identified on a partnership tax return, and each partner's proportionate share is then reported on the individual partners' tax returns. General partners (who actively participate in the business) also must pay self-employment tax on their earnings below approximately $100K. Each general partner is responsible for all of the debts and obligations of the business to the extent of their personal assets. A general partnership can be created informally or with an oral agreement although that's not a good idea. Corporation. Business entities can be taxed as \"\"S\"\" or \"\"C\"\" corporations. Either way, the corporation is created by filing articles of incorporation with a state government (doesn't have to be the state where you live) and corporations are typically required to file yearly entity statements with the state where they were formed as well as all states where they do business. Shareholders are only liable for the debts and obligations of the corporation to the extent of their investment in the corporation. An \"\"S\"\" corporation files an information-only return similar to a partnership which reports items of income and expense, but those items are actually taken into account on the individual tax returns of the shareholders. If an \"\"S\"\" corporation runs at a loss, the losses are deductible against the shareholders' other income. A \"\"C\"\" corporation files a tax return more similar to an individual's. A C corporation calculates and pays its own tax at the corporate level. Payments from the C corporation to individuals are typically taxable as wages (from a tax point of view, it's the same as having a second job) or as dividends, depending on how and why the payments are made. (If they're in exchange for effort and work, they're probably wages - if they're payments of business profits to the business owners, they're probably dividends.) If a C corporation runs at a loss, the loss is not deductible against the shareholders' other income. Fringe benefits such as health insurance for business owners are not deductible as business expenses on the business returns for S corps, partnerships, or sole proprietorships. C corporations can deduct expenses for providing fringe benefits. LLCs don't have a predefined tax treatment - the members or managers of the LLC choose, when the LLC is formed, if they would like to be taxed as a partnership, an S corporation, or as a C corporation. If an LLC is owned by a single person, it can be considered a \"\"disregarded entity\"\" and treated for tax purposes as a sole proprietorship. This option is not available if the LLC has multiple owners. The asset protection provided by the use of an entity depends quite a bit on the source of the claim. If a creditor/plaintiff has a claim based on a contract signed on behalf of the entity, then they likely will not be able to \"\"pierce the veil\"\" and collect the entity's debts from the individual owners. On the other hand, if a creditor/plaintiff has a claim based on negligence or another tort-like action (such as sexual harassment), then it's very likely that the individual(s) involved will also be sued as individuals, which takes away a lot of the effectiveness of the purported asset protection. The entity-based asset protection is also often unavailable even for contract claims because sophisticated creditors (like banks and landlords) will often insist the the business owners sign a personal guarantee putting their own assets at risk in the event that the business fails to honor its obligations. There's no particular type of entity which will allow you to entirely avoid tax. Most tax planning revolves around characterizing income and expense items in the most favorable ways possible, or around controlling the timing of the appearance of those items on the tax return.\"" }, { "docid": "351169", "title": "", "text": "I think you can. I went to Mexico for business and the company paid for it, so if you are self employed you should be able to expense it." }, { "docid": "184559", "title": "", "text": "I've done my taxes using turbotax for years and they were not simple, Schedule C (self-employed), rental properties, ESPP, stock options, you name it. It's a lot of work and occasionally i did find bugs in TurboTax. ESPP were the biggest pain surprisingly. The hardest part is to get all the paperwork together and you'd have to do it when you hire an accountant anyway. That said this year i am using an accountant as i incorporated and it's a whole new area for me that i don't have time to research. Also in case of an audit i'd rather be represented by a pro. I think the chance of getting audited is smaller when a CPA prepares your return." }, { "docid": "229110", "title": "", "text": "CEOs are compensated with stocks and options on top of their salary. Most is in the form of stocks and options. You may see them with a fancy car, but they don't necessarily possess the car, house, etc. They merely control it, which is nearly as good. You may lease it, or time share it. It might be owned by the company and provided as a perk. To earn a million, there are 4 ways: a job, self-employed, own a business, and invest. The fastest way is to own a business. The slowest way is a job or self-employed. Investing is medium. To learn more, read Rich Dad's Cashflow Quadrants." }, { "docid": "194090", "title": "", "text": "You can find a lot of information at the HRMC website at http://hmrc.gov.uk. If you don't want to work as an employee, you can register as self-employed (basically a one-man band), which is quite simple, you can start your own company, which is more work but can have tax advantages, or you can find umbrella companies which will officially employ you while in reality you are a freelancer and only do your billing through them. Umbrella companies can be anywhere from totally legal to extremely dodgy. If they promise you that you pay only five percent tax on your income through ingenious tricks, that's only until the tax office finds out and they will make you pay. Between self-employed and your own company, the big difference is whether you are actually working independently or not. If you work like an employee (take someone else's orders) and claim you are a company, the tax office doesn't like that. And if you pay very little taxes, they don't like that either. So self-employed is the safer choice but you will pay more taxes, close to what a normal employee would pay. Obviously you will have to pay tax on your income and NHS insurance. Obviously you are required to tell the government (actually HMRC) about your income. Not doing so would be tax evasion and get you into deep trouble when you are caught. I don't think you have to tell them the source of your income, but not telling them might look very suspicious and might get your accounts checked carefully. And unless you design a website for the mafia, why wouldn't you tell them? The bill payer will try to deduct your bill from their profits anyway, so it's no secret. Most important to remember: When you send out a bill and receive payment, you'll have to pay tax on it. When self employed, as a rule of thumb put one third away into a savings account for your tax bill. Don't spend it all or you will find yourself in deep trouble when your taxes need paying. Plus put some more away for times when you can't find work." }, { "docid": "242654", "title": "", "text": "Note: I am in the UK. I don't know specifically about australia but I expect the general principles will be much the same everywhere. What banks want is to be reasonablly confident that you have a steady income stream that will continue to pay the mortgate until it completes. In general employed are fairly easy to assess. Most employed people will have a steady basic pay that increases through their career. Payslips will usually seperate-out basic pay, overtime and bonuses. There is little opertunity to cook the books. The self-employed are harder to assess. Income can be bursty and there are far more opertunities for cooking the books to make it look like you are earning more than you really are. So banks are likely to be far more careful about lending to the self-employed, they will likely want to see multiple years of buisness records so that any bursts, whether natural due to the ebbs and flows of buisness or deliberatly created to cook the books average out and they can see the overall pattern. A large deposit will help because it reduces the risk to the bank in the event of a default. Similarly not being anywhere near your limit of affordability will help." }, { "docid": "334107", "title": "", "text": "\"This kind of investment is called \"\"sweat equity\"\". It is sometimes taken into account by lenders and other investors. Such investors look at the alleged value of the input labor with a very skeptical eye, but they often appreciate that the entrepreneur has \"\"skin in the game\"\". The sort of analysis described by the original poster is useful for estimating \"\"economic profit\"\" -- how much better off was the entrepreneur than if he had done something else with his time. But this sort of analysis is not applicable for tax purposes for most small businesses in the United States. It is usually not in the entrepreneur's interest to use this method of accounting for tax purposes, for three reasons: It requires setting up the business in such a way that it can pay him wages or salaries for his time. The business might not have enough cash resources to do so. Furthermore, setting up the business in this way requires legal and accounting expertise, which is expensive. If the entrepreneur does set up the business like this, the wages and salaries will be subject to tax. Wage and salary tax rates are often much higher than capital gains tax rates, especially when one considers taxes like Social Security taxes, Medicare taxes, and Business & Occupation taxes. If the entrepreneur does set up the business like this, the taxes on the wages and salaries would be due long before the hoped-for sale of the company. The sale of the company might never happen. This results in a time-value-of-money penalty, an optionality penalty, and a risk penalty.\"" }, { "docid": "223170", "title": "", "text": "Since your YouTube income is considered self-employment income and because you probably already made more than $400 in net income (after deducting expenses from the $4000 you've received so far), you will have to pay self-employment tax and file a return. This is according to the IRS's Publication 17 (2016), Your Federal Income Tax, so assumes the same rules for 2016 will remain in effect for 2017: You are self-employed if you: Carry on a trade or business as a sole proprietor, Are an independent contractor, Are a member of a partnership, or Are in business for yourself in any other way. Self-employment can include work in addition to your regular full-time business activities, such as certain part-time work you do at home or in addition to your regular job. You must file a return if your gross income is at least as much as the filing requirement amount for your filing status and age (shown in Table 1-1). Also, you must file Form 1040 and Schedule SE (Form 1040), Self-Employment Tax, if: Your net earnings from self-employment (excluding church employee income) were $400 or more, or You had church employee income of $108.28 or more. (See Table 1-3.) Use Schedule SE (Form 1040) to figure your self-employment tax. Self-employment tax is comparable to the social security and Medicare tax withheld from an employee's wages. For more information about this tax, see Pub. 334, Tax Guide for Small Business. I'd also note that your predicted income is getting close to the level where you would need to pay Estimated Taxes, which for self-employed people work like the withholding taxes employers remove their employees paychecks and pay to the government. If you end up owing more than $1000 when you file your return you could be assessed penalties for not paying the Estimated Taxes. There is a grace period if you had to pay no taxes in the previous year (2016 in this case), that could let you escape those penalties." }, { "docid": "593197", "title": "", "text": "\"Can the companies from USA give job to me (I am from New Zealand)? Job as being employee - may be tricky. This depends on the labor laws in New Zealand, but most likely will trigger \"\"nexus\"\" clause and will force the employer to register in the country, which most won't want to do. Instead you can be hired as a contractor (i.e.: being self-employed, from NZ legal perspective). If so, what are the legal documents i have to provide to the USA for any taxes? If you're employed as a contractor, you'll need to provide form W8-BEN to your US employer on which you'll have to certify your tax status. Unless you're a US citizen/green card holder, you're probably a non-US person for tax purposes, and as such will not be paying any tax in the US as long as you work in New Zealand. If you travel to the US for work, things may become tricky, and tax treaties may be needed. Will I have to pay tax to New Zealand Government? Most likely, as a self-employed. Check how this works locally. As for recommendations, since these are highly subjective opinions that may change over time, they're considered off-topic here. Check on Yelp, Google, or any local NZ professional review site.\"" }, { "docid": "490223", "title": "", "text": "While the OP disses the health insurance coverage offered through his wife's employer as a complete rip-off, one advantage of such coverage is that, if set up right (by the employer), the premiums can be paid for through pre-tax dollars instead of post-tax dollars. On the other hand, Health insurance premiums cannot be deducted on Schedule C by self-employed persons. So the self-employed person has to pay both the employer's share as well as the employee's share of Social Security and Medicare taxes on that money. Health insurance premiums can be deducted on Line 29 of Form 1040 but only for those months during which the Schedule C filer is neither covered nor eligible to be covered by a subsidized health insurance plan maintained by an employer of the self-employed person (whose self-employment might be a sideline) or the self-employed person's spouse. In other words, just having the plan coverage available through the wife's employment, even though one disdains taking it, is sufficient to make a Line 29 deduction impermissible. So, AGI is increased. Health insurance premiums can be deducted on Schedule A but only to the extent that they (together with other medical costs) exceed 10% of AGI. For many people in good health, this means no deduction there either. Thus, when comparing the premiums of health insurance policies, one should pay some attention to the tax issues too. Health insurance through a spouse's employment might not be that bad a deal after all." }, { "docid": "147080", "title": "", "text": "The amount of the income taxes you will owe depends upon how much income you have, after valid business expenses, also it will depend upon your filing status as well as the ownership form of your business and what state you live in. That said, you will need to be sure to make the Federal 1040ES quarterly prepayments of your tax on time or there will be penalties. You also must remember that you will be needing to file a schedule SE with your 1040. That is for the social security taxes you owe, which is in addition to your income taxes. With an employer/employee situation, the FICA withhoding you have seen on your paycheck are matched by the same payment by your employer. Now that you are self-employed you are responcible for your share and the employer share as well; in this situation it is known as self-employment tax. the amount of it will be the same as your share of FICA and half of the employer's share of FICA taxes. If you are married and your wife also is working self-employed, then she will have to files herown schedule SE along with yours. meaning that you will pay based on your business income and she will pay baed on hers. your 1040Es quarterly prepayment must cover your income tax and your combined (yours and hers) Self Employment taxes. Many people will debate on the final results of the results of schedule SE vrs an employee's and an employer's payments combined. If one were to provides a ball park percentage that would likely apply to you final total addition to your tax libility as a result of needing schedule SE would tend to fluctuate depending upon your total tax situation; many would debate it. It has been this way since, I first studied and use this schedule decades ago. For this reason it is best for you to review these PDF documents, Form 1040 Schedule SE Instructions and Form 1040 Schedule SE. As for your state income taxes, it will depend on the laws of the state you are based in." }, { "docid": "162630", "title": "", "text": "Firstly if you've formed a limited company you don't need to register as self-employed. You're an employee and shareholder of the company and your taxes will be handled that way. Registering as self-employed is only necessary if you're operating as a sole trader (i.e. without a company). Secondly you absolutely do want to get set-up correctly with HMRC as soon as possible, whether you're a company or a sole trader. Ignoring the legal question your worry about paying taxes when you have no income is groundless - if you're not making any money there won't be any tax to pay. Furthermore it seems likely that the business is currently losing money. Those losses, if correctly recorded, can be carried forward and offset against future profits so not only do you not have to pay tax now, but you can reduce the tax you pay later when the money does start rolling in." }, { "docid": "260603", "title": "", "text": "\"The \"\"independent contractor\"\" vs. \"\"employee\"\" distinction is a red herring to this discussion and not at all important just because someone suggested you use your LLC to do the job. Corp-2-Corp is a very common way to do contracting and having an LLC with business bank accounts provides you with more tax deductions (such as deducting interest on credit lines). Some accounting practices prefer to pay entities by their Tax ID numbers, instead of an individual's social security number. The actual reasoning behind this would be dubious, but the LLC only benefits you and gives you more advantages by having one than not. For example, it is easier for you to hire subcontractors through your LLC to assist with your job, due to the opaqueness of the private entity. Similarly, your LLC can sign Non Disclosure and Intellectual Property agreements, automatically extending the trade secrets to all of its members, as opposed to just you as an individual. By signing whatever agreement with the company that is paying you through your LLC, your LLC will be privy to all of this. Next, assuming you did have subcontractors or other liability inducing assets, the LLC limits the liability you personally have to deal with in a court system, to an extent. But even if you didn't, the facelessness of an LLC can deter potential creditors, for example, your client may just assume you are a cog in a wheel - a random employee of the LLC - as opposed to the sole owner. Having a business account for the LLC keeps all of your expenses in one account statement, making your tax deductions easier. If you had a business credit line, the interest is tax deductible (compared to just having a personal credit card for business purposes). Regarding the time/costs of setting up and managing an LLC, this does vary by jurisdiction. It can negligible, or it can be complex. You also only have to do it once. Hire an attorney to give you a head start on that, if you feel that is necessary. Now back to the \"\"independent contractor\"\" vs. \"\"employee\"\" distinction: It is true that the client will not be paying your social security, but they expect you to charge more hourly than an equivalent actual employee would, solely because you don't get health insurance from them or paid leave or retirement plans or any other perk, and you will receive the entire paycheck without any withheld by the employer. You also get more tax deductions to utilize, although you will now have self employment tax (assuming you are a US citizen), this becomes less and less important the higher over $105,000 you make, as it stops being counted (slightly more complicated than that, but self employment tax is it's own discussion).\"" }, { "docid": "510373", "title": "", "text": "When getting a mortgage it always depends on the bank and each bank may be more or less strict. With that being said there are rules and general guidelines which can help you understand how you fit in the world of mortgage approvals. If you can provide the same paper work as an employee of your company that you would normally provide from any other company then a bank may just accept that alone. However to me it seems like you will be looking at a new variation of what was known as a Self-certification mortgage A self-certification mortgage is basically a mortgage for those who cannot prove their income. As a result of the housing collapse, the rules on a traditional self-cert mortgages have changed. As someone who is self employed, it is more difficult today to get a mortgage but is still possible. This article provides some good information: Can the self employed still get a mortgage? I advise doing some research on this topic and speaking with a professional mortgage broker. Some Resources: Compare Self Cert Mortgages How to beat the mortgage famine in 2012 Can the self employed still get a mortgage?" }, { "docid": "562780", "title": "", "text": "Yes, absolutely she can. I come across small businesses from sole props to corps and llc who have their spouses employed. One thing to note is that the business won't need Workers Comp insurance if you're the only employee, if you hire anyone else you will need it." } ]

[ { "docid": "19183", "title": "", "text": "\"If your sole proprietorship losses exceed all other sources of taxable income, then you have what's called a Net Operating Loss (NOL). You will have the option to \"\"carry back\"\" and amend a return you filed in the last 2 years where you owed tax, or you can \"\"carry forward\"\" the losses and decrease your taxes in a future year, up to 20 years in the future. For more information see the IRS links for NOL. Note: it's important to make sure you file the NOL correctly so I'd advise speaking with an accountant. (Especially if the loss is greater than the cost of the accountant...)\"" } ]

[ { "docid": "411606", "title": "", "text": "\"A loan is not a taxable income. Neither is a gift. Loans are repaid with interest. The interest is taxable income to the lender, and may or may not be deductible to the borrower, depending on how the loan proceeds were used. Gifts are taxable to the donor (the person giving the gift) under the gift tax, they're not a taxable income to the recipient. Some gifts are exempt or excluded from gift tax (there's the annual exemption limit, lifetime exclusion which is correlated to the estate tax, various specific purpose gifts or transfers between spouses are exempt in general). If you trade for something of equal value, is that considered income? Yes. Sale proceeds are taxable income, however your basis in the item sold is deductible from it. If you borrow a small amount of money for a short time, is that considered income? See above. Loan proceeds are not income. does the friend have to pay taxes when they get back their $10? No, repayment of the loan is not taxable income. Interest on it is. Do you have to pay taxes if you are paid back in a different format than originally paid? Form of payment doesn't matter. Barter trade doesn't affect the tax liability. The friend sold you lunches and you paid for them. The friend can deduct the cost of the lunches from the proceeds. What's left - is taxable income. Everything is translated to the functional currency at the fair market value at the time of the trade. you are required to pay taxes on the gross amount Very rarely taxes apply to gross income. Definitely not the US Federal Income taxes for individuals. An example of an exception would be the California LLC taxes. The State of California taxes LLCs under its jurisdiction on gross proceeds, regardless of the actual net income. This is very uncommon. However, the IRC (the US Federal Tax Code) is basically \"\"everything is taxable except what's not\"\", and the cost of generating income is one of the \"\"what's not\"\". That is why you can deduct the basis of the asset from your gross proceeds when you sell stuff and only pay taxes on the net difference.\"" }, { "docid": "94600", "title": "", "text": "\"Summarized article: In Canada, Jennifer Desloges, owner of an electrolysis business, is accusing Yelp, a user review website, of hurting businesses by burying positive reviews and lowering ratings. Desloges encouraged her customers to post real comments about her business on the Yelp site. 17 customers posted positive reviews which boosted her rating to 5 stars but her rating later dropped to 2 1/2 stars when some positive reviews were filtered out. Yelp uses an algorithm to filter out reviews by users who don't write reviews as often and are not \"\"trusted\"\" users. The intent is to filter out fake reviews by those trying to manipulate the system. Yelp explained that although Desloges received genuine reviews, they were likely filtered out because they were from infrequent Yelp users. Desloges says the low Yelp rating is causing her to lose potential customers. Other small business owners have also complained about Yelp's filtering system. Some tried suing Yelp because they claimed Yelp was manipulating user reviews to force them to advertise. The judge said there was no proof of the claims and dismissed the case. *For more summarized news, subscribe to the [/r/SkimThat](http://www.reddit.com/r/SkimThat) subreddit*\"" }, { "docid": "396968", "title": "", "text": "Basically, no. You have retirement plan options and can either go with a Roth option, which won't change your current tax burden, or go with a traditional plan, which is tax deductible but won't change your business deductions or self-employment taxes. This article has an explanation of options for setting up SEP or Solo 401k plans. Key quote for all the pre-tax retirement plans: Because pre-tax employer and employee contributions are deducted in the same way, neither one is more tax-efficient than the other. The article goes on to say that if you were an S Corp or LLC that elected to be taxed as an S Corp, a Solo 401(k) plan would allow the business to make an employer contribution to your 401(k) and even then there's no tax advantage to the employer contribution. Conclusion for S-corps: [Employer contributions] would reduce the amount of income from the S-corporation that would be passed through to you as the owner, thereby reducing your income tax. But, because this income is not subject to payroll taxes in the first place, these contributions will not reduce your payroll taxes." }, { "docid": "248651", "title": "", "text": "Many states have a simple method for assessing income tax on nonresidents. If you have $X income in State A where you claim nonresident status and $Y income overall, then you owe State A a fraction (X/Y) of the income tax that would have been due on $Y income had you been a resident of State A. In other words, compute the state income tax on $Y as per State A rules, and send us (X/Y) of that amount. If you are a resident of State B, then State B will tax you on $Y but give you some credit for taxes paid to State A. Thus, you might be required to file a State A income tax return regardless of how small $X is. As a practical matter, many commercial real-estate investments are set up as limited partnerships in which most of the annual taxable income is a small amount of portfolio income (usually interest income that you report on Schedule B of Form 1040), and the annual bottom line is lots of passive losses which the limited partners report (but do not get to deduct) on the Federal return. As a result, State A is unlikely to come after you for the tax on, say, $100 of interest income each year because it will cost them more to go after you than they will recover from you. But, when the real estate is sold, there will (hopefully) be a big capital gain, most of which will be sheltered from Federal tax since the passive losses finally get to be deducted. At this point, State A is not only owed a lot of money (it knows nothing of your passive losses etc) but, after it processes the income tax return that you filed for that year, it will likely demand that you file income tax returns for previous years as well." }, { "docid": "160612", "title": "", "text": "\"The store owners don't know what your intentions are. All they know is they gave you good cash for a bad check. Part of this is that you're paying for the bad acts of others in the past, and these people aren't in the business of trying to understand your intentions. If you show good faith by going in and paying whatever you can, it will go a long way toward getting them to work with you on the balance. I don't know if they'd have much of a criminal case if the check you gave them was clearly marked as \"\"void\"\" and you've shown a willingness to resolve the situation. Of course you can't blame them for not wanting to accept another check from you. Good old hard cash, even if it isn't the full amount, will be a better sign of your intent to repay the debt.\"" }, { "docid": "560776", "title": "", "text": "\"Earned income is what your software is doing, so it is taxable. So you can't really make it tax exempt. You can form a business and claim the revenues from that business as income and deduct expenses it costs you to earn that revenue. If you buy a server to run your software, then that is an acceptable expense to deduct from your revenues. Others can be more questionable and the best thing to do is to consult a CPA. If you are still in the testing stage and the revenues will be small then it should not matter. Worry about the important things, not if you paid the IRS a few hundred to much. Are you in a state/country that allows online gambling? In most states here in the US you are operating on shaky legal ground. Before \"\"Black Friday\"\" I used to earn a nice part-time income playing online poker.\"" }, { "docid": "196961", "title": "", "text": "Very grey area. You can't pay them to run errands, mow the lawn, etc. I'd suggest that you would have to have self employment income (i.e. your own business) for you to justify the deduction. And then the work itself needs to be applicable to the business. I've commented here and elsewhere that I jumped on this when my daughter at age 12 started to have income from babysitting. I told her that in exchange for her taking the time to keep a notebook, listing the family paying her, the date, and amount paid, I'd make a deposit to a Roth IRA for her. I've approaches taxes each year in a way that would be audit-compliant, i.e. a paper trail that covers any and all deductions, donations, etc. In the real world, the IRS isn't likely to audit someone for that Roth deposit, as there's little for them to recover." }, { "docid": "330622", "title": "", "text": "Delaware LLC requires that each business entity have and hold an enterprise Registered in the State of Delaware who can be both a character resident or enterprise entity this is legal to do business in the Wilmington, Delaware. the Delaware LLC has offered the same asset protections and tax advantages that a corporation offers. Often the LLC is the simpler, more flexible choice for small businesses. This small amount of required information not only makes it easy to start an LLC in Delaware, but it also helps to keep your identity and personal information secure." }, { "docid": "381151", "title": "", "text": "Chris, since you own your own company, nobody can stop you from charging your personal expenses to your business account. IRS is not a huge fan of mixing business and personal expenses and this practice might indicate to them that you are not treating your business seriously, and it should classify your business as a hobby. IRS defines deductible business expense as being both: ordinary AND necessary. Meditation is not an ordinary expense (other S-corps do not incur such expense.) It is not a necessary expense either. Therefore, you cannot deduct this expense. http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Deducting-Business-Expenses" }, { "docid": "445298", "title": "", "text": "\"AFAIK, there are two kinds of taxes your web freelancing income may be subject to in Quebec: On the income taxes: The net income you realize from your web freelancing activities would be considered taxable income. Assuming you are not operating as an incorporated business, you would need to declare the freelancing income on both your federal and provincial tax returns. You should be able to deduct certain costs related to your business – for instance, if you paid for software, hosting, domain name registration, etc. That is, only the profit from your business would be subject to income tax. With income and expenses arising from self-employment, you may want to use a professional to file your taxes. On the sales taxes: You may also need to charge federal GST and provincial QST (Quebec Sales Tax) on your services: You must enroll and charge GST and QST once you exceed the \"\"small supplier\"\" revenue threshold of $30,000 measured over four consecutive quarters. (You can still choose to enroll for GST/QST before you reach that amount, but over that amount enrollment becomes mandatory. Some businesses enroll before the threshold is reached so they can claim input tax credits for tax paid on expenses, but then there's more paperwork – one reason to perhaps avoid enrolling until necessary.) In Quebec, the Ministère du Revenu du Québec administers both GST (on behalf of the federal government) as well as provincial QST. Be sure to also check out their informative booklet, Should I Register with Revenu Quebec? (PDF). See also General Information Concerning the QST and the GST/HST (PDF).\"" }, { "docid": "314984", "title": "", "text": "There should be no problem getting a mortgage from a bank with 3 years in business. They are going to use the average of the last 2 years of taxable profits to determine your income though. I think the key words here are taxable profits and this is where the problem typically comes in for most self employed folks. Many times self employed people will have soft losses and deductions that make their income seem lower than it really is (or unreported income). It has nothing to do with your business plan, or your relationship with the bank unless it is a small community bank or credit union." }, { "docid": "310612", "title": "", "text": "\"You should probably have a tax professional help you with that (generally advisable when doing corporation returns, even if its a small S corp with a single shareholder). Some of it may be deductible, depending on the tax-exemption status of the recipients. Some may be deductible as business expenses. To address Chris's comment: Generally you can deduct as a business on your 1120S anything that is necessary and ordinary for your business. Charitable deductions flow through to your personal 1040, so Colin's reference to pub 526 is the right place to look at (if it was a C-corp, it might be different). Advertisement costs is a necessary and ordinary expense for any business, but you need to look at the essence of the transaction. Did you expect the sponsorship to provide you any new clients? Did you anticipate additional exposure to the potential customers? Was the investment (80 hours of your work) similar to the costs of paid advertisement for the same audience? If so - it is probably a business expense. While you can't deduct the time on its own, you can deduct the salary you paid yourself for working on this, materials, attributed depreciation, etc. If you can't justify it as advertisement, then its a donation, and then you cannot deduct it (because you did receive something in return). It might not be allowed as a business expense, and you might be required to consider it as \"\"personal use\"\", i.e.: salary.\"" }, { "docid": "580612", "title": "", "text": "\"1) Indeed, if referring to a Roth as the question is, you are right on. But - You can deposit to an Traditional IRA (TIRA). You just can't deduct it. You are then permitted to convert that to a Roth any time. Now, this would appear to negate income issues, right? Not so fast. When you convert, all TIRA accounts must be considered. In other words, when it comes to the TIRA, you only have One TIRA, the \"\"A\"\" actually standing for Arrangement, not account. That TIRA may then be spread over as many accounts as you have time to set up. So, if there is any pretax money and/or untaxed gain, it will be prorated and taxed based on your conversion amount. If any of this is not 110% clear, please comment and I will update the answer. No 401(k) at work? Note: I edited as my original wording misunderstood the response, and in turn, appeared a bit unkind. Not my intention.\"" }, { "docid": "266229", "title": "", "text": "\"The HMRC has a dedicated self-help/learning site that is helpful here: It's important to tell HMRC that you are self-employed as soon as possible. If you don't, you may have to pay a penalty. You don't want to pay more to HMRC than you have to as it is a waste of your money. Your business has started when you start to advertise or you have a customer to buy your goods or services. It is at this point that your business is 'trading'. You cannot register before you start trading. For example, if you advertise your business in the local newspaper on 15 January but do not get your first customer until 29 March; in this case, you have been trading since 15 January. You must tell HMRC within six months of the end of the tax year in which you start self-employment. You must therefore register by 5 October. But it's best to register well before this so that you do not forget to do so. The HMRC also has a YouTube channel with help videos, and \"\"Am I Trading or Not?\"\" might be of particular interest to you. Most of the registration is based around the concept of starting to work with the intent to make a profit. By the letter of law and regulations, you should register within six months of the end of the tax year you started to avoid any potential penalty. However note that the situation is different based upon your intent. If you begin making/putting up videos online as a hobby with the hope that you can make something to help you defray the basic costs involved, and the total amount you make is relatively small (say, less than 500 pounds), you will not be classified as \"\"trading\"\" and likely have no need to register with HMRC. As soon as you begin to get in regular payments, maybe a single payment of a significant size, or multiple payments for a similar service/item, you are vastly more likely to need to register. From my reading you would likely be safe to begin putting up videos without registration, but if you begin spending a large portion of your time over an extended period (multiple months) and/or begin getting payments of any notable size then you should likely register with the appropriate services (HMRC, etc). As is the case in both the USA and UK, simple registration is pretty cheap and the costs of little/no income are usually pretty minor. Also note that the HMRC trading and self-employment regulations are unusual compared to many US laws/institutions, in that you are explicitly permitted to begin doing something and only register later. So if you start doing videos for an entire tax year + 5 months and make nothing significant, you'd seemingly be fine to never register at all.\"" }, { "docid": "298336", "title": "", "text": "\"One topic that I've been trying to learn more about is the affects of the low interest rates on businesses and the economy from quantitative easing. Due to the amount of \"\"free money\"\" corporations have received over the last 5 years there has been a few interesting consequences. There are several corporations that have borrowed money at little to no interest with the feds intentions of seeing it go back into the economy however instead corporations have used it to buy back stock which was not necessarily the plan in the first place. You could definitely have a unique thesis written about something within that flow of funds. If that makes no sense apologies stupid undergrad here.\"" }, { "docid": "197839", "title": "", "text": "As far as i understand the big companies on the stock markets have automated processes that sit VERY close to the stock feeds and continually processes these with the intention of identifying an opportunity to take multiple small lots and buy/sell them as a big lot or vice/versa and do this before a buy or sell completes, thus enabling them to intercept the trade and make a small profit on the delta. With enough of these small gains on enough shares they make big profits and with near zero chance of losing." }, { "docid": "245447", "title": "", "text": "\"For simplicity, let's start by just considering cash back. In general, cash back from credit cards for personal use is not taxable, but for business use it is taxable (sort of, I'll explain later). The reason is most personal purchases are made with after tax dollars; you typically aren't deducting the cost of what you purchased from your personal income, so if you purchase something that costs $100 and you receive $2 back from the CC company, effectively you have paid $98 for that item but that wouldn't affect your tax bill. However, since businesses typically deduct most expenses, that same $100 deduction would have only been a $98 deduction for business tax purposes, so in this case the $2 should be accounted for. Note, you should not consider that $2 as income though; that would artificially inflate your revenue. It should be treated as a negative expense, similar to how you would handle returning an item you purchased and receiving a CC refund. Now for your specific questions: Part 1: As a small business owner, I wish to attend an annual seminar to improve my business. I have enough credit card reward points to cover the airfare, hotel, and rental car. Will those expenses still be deductible at the value displayed on the receipt? Effectively no, these expenses are not deductible. If you deduct them they will be completely counter-acted by the \"\"refund\"\" you receive for the payments. Part 2: Does it matter if those points are accrued on my personal credit card, rather than a business credit card? This is where it gets hairy. Suppose your company policy is that employees make purchases with their own personal credit cards and submit receipts for reimbursement. In this case the employer can simply reimburse and would not know or care if the employee is racking up rewards/points/cashback. The trick is, as the employee, you must always purchase business related items normally so you have receipts to show, and if you receive cashback on the side there seems to be a \"\"don't ask, don't tell\"\" rule that the IRS is OK with. It works the same way with heavy business travelers and airline miles- the free vacations those users get as perks are not treated as taxable income. However, I would not go out of my way to abuse this \"\"loophole\"\". Typically, things like travel (airfare, hotel, car rental, meals) are expected. But I wouldn't go purchase 100 company laptops on your personal card and ask the company to reimburse you. The company should purchase those 100 laptops on a company card and effectively reduce the sale price by the cashback received. (Or more realistically, negotiate a better discount with your account rep and just cut them a check.) Part 3: Would there be any difference between credit card points and brand-loyalty points? If the rental car were paid for with points earned directly on the rental car company's loyalty system (not a CC), would that yield a different result? There is no difference. Perhaps the simplest way to think about this is you can only deduct an expense that you actually incur. In other words, the expense should show up on a bank or CC statement. This is why when you volunteer and work 10 hours for a charity, you can't call that a \"\"donation\"\" of any amount of money because there is no actual payment made that would show up on a bank statement. Instead you could have billed the charity for your 10 hours of work, and then turned around and donated that same amount back to them, but it ends up being a wash.\"" }, { "docid": "483489", "title": "", "text": "I think you're a little confused about taxes. First, I'm guessing that you feel your lack of home ownership makes your taxes higher. That might be true, or it might not. The main tax break you would get from home ownership is the mortgage interest deduction, and that is a fraction of what you're paying in interest. So, yeah, your tax bill is lower, but 3-4 times that amount is going out the door in interest. Plus, when you buy a property, you may have substantial taxes on that property that your landlord is paying now. Secondly, yes, you can deduct expenses on a business, but that only can be done without income for so long before the IRS begins disallowing your deductions. But if you're making money, the expenses come right off of your income. Third, owning a business means that you get the privilege of paying a self-employment tax, which is the same thing that your employer now pays into Social Security on your behalf. More taxes! So in short, owning and operating a business has the potential to be more rewarding than holding down a job -- and I recommend starting up a side business just to get another income stream going -- but the tax savings really aren't that appealing to do it just for those." }, { "docid": "462831", "title": "", "text": "In the US there's no significant difference between what a business can deduct and what an individual can deduct. However, you can only deduct what is an expense to produce income. Businesses are allowed to write off salaries, but individuals can't write off what they pay their gardener or maid (at least in the US) If you're a sole proprietor in the business of managing properties - you can definitely deduct payments to gardeners or maids. Business paying for a gardener on a private property not related to producing the income (like CEO's daughter's house) cannot deduct that expense for tax purposes (although it is still recorded in the business accounting books as an expense - with no tax benefit). Businesses are allowed to deduct utility expenses as overhead, individuals cannot Same thing exactly. I can deduct utility expenses for my rental property, but not for my primary residence. Food, shelter, clothing and medical care are fundamental human needs, but we still pay for them with after-tax money, and pay additional sales tax. Only interest (and not principal) on a mortgage is deductible in the US, which is great for people who take out mortgages (and helps banks get more business, I'm sure), but you're out of luck if you pay cash for your house, or are renting. Sales taxes are deductible. You can deduct sales taxes you paid during the year if you itemize your deduction. You can chose - you either deduct the sales taxes or the State income taxes, whatever is more beneficial for you. BTW in many states food and medicine are exempt from sales tax. Medical expenses are deductible if they're significant compared to your total income. You can deduct medical expenses in excess of 10% of your AGI. With the ACA kicking in - I don't see how would people even get to that. If your AGI is low you get subsidies for insurance, and the insurance keeps your expenses capped. For self-employed and employed, insurance premiums are pre-tax (i.e.: not even added to your AGI). Principle for mortgage is not deductible because it is not an expense - it is equity. You own an asset, don't you? You do get the standard deduction, even if your itemized (real) deductions are less - business don't get that. You also get an exemption amount (for your basic living needs), which businesses don't get. You can argue about the amounts - but it is there. In some States (like California) renters get tax breaks for renting, depending on the AGI. CA renters credit is phasing out at AGI of about $60K, which is pretty high." } ]

[ { "docid": "413229", "title": "", "text": "You should have a separate business account. Mixing business and personal funds is a bad practice. Shop around, you should be able to find a bank that will let you open a free checking account, especially if you are going to have minimal activity (e.g. less than 20 of checks per month) and perhaps maintain a small balance (e.g. $100 or $500)." } ]

[ { "docid": "526817", "title": "", "text": "You mentioned depositing the check and then sending a personal check. Be sure to account for time, since any deposit over $10,000 the money will be made available in increments, so it may take 10-14 days to get the full amount in your account before you could send a personal check. I would not recommend this option regardless, but if you do, just a heads up." }, { "docid": "245447", "title": "", "text": "\"For simplicity, let's start by just considering cash back. In general, cash back from credit cards for personal use is not taxable, but for business use it is taxable (sort of, I'll explain later). The reason is most personal purchases are made with after tax dollars; you typically aren't deducting the cost of what you purchased from your personal income, so if you purchase something that costs $100 and you receive $2 back from the CC company, effectively you have paid $98 for that item but that wouldn't affect your tax bill. However, since businesses typically deduct most expenses, that same $100 deduction would have only been a $98 deduction for business tax purposes, so in this case the $2 should be accounted for. Note, you should not consider that $2 as income though; that would artificially inflate your revenue. It should be treated as a negative expense, similar to how you would handle returning an item you purchased and receiving a CC refund. Now for your specific questions: Part 1: As a small business owner, I wish to attend an annual seminar to improve my business. I have enough credit card reward points to cover the airfare, hotel, and rental car. Will those expenses still be deductible at the value displayed on the receipt? Effectively no, these expenses are not deductible. If you deduct them they will be completely counter-acted by the \"\"refund\"\" you receive for the payments. Part 2: Does it matter if those points are accrued on my personal credit card, rather than a business credit card? This is where it gets hairy. Suppose your company policy is that employees make purchases with their own personal credit cards and submit receipts for reimbursement. In this case the employer can simply reimburse and would not know or care if the employee is racking up rewards/points/cashback. The trick is, as the employee, you must always purchase business related items normally so you have receipts to show, and if you receive cashback on the side there seems to be a \"\"don't ask, don't tell\"\" rule that the IRS is OK with. It works the same way with heavy business travelers and airline miles- the free vacations those users get as perks are not treated as taxable income. However, I would not go out of my way to abuse this \"\"loophole\"\". Typically, things like travel (airfare, hotel, car rental, meals) are expected. But I wouldn't go purchase 100 company laptops on your personal card and ask the company to reimburse you. The company should purchase those 100 laptops on a company card and effectively reduce the sale price by the cashback received. (Or more realistically, negotiate a better discount with your account rep and just cut them a check.) Part 3: Would there be any difference between credit card points and brand-loyalty points? If the rental car were paid for with points earned directly on the rental car company's loyalty system (not a CC), would that yield a different result? There is no difference. Perhaps the simplest way to think about this is you can only deduct an expense that you actually incur. In other words, the expense should show up on a bank or CC statement. This is why when you volunteer and work 10 hours for a charity, you can't call that a \"\"donation\"\" of any amount of money because there is no actual payment made that would show up on a bank statement. Instead you could have billed the charity for your 10 hours of work, and then turned around and donated that same amount back to them, but it ends up being a wash.\"" }, { "docid": "308938", "title": "", "text": "\"You should have separate files for each of the two businesses. The business that transfers money out should \"\"write check\"\" in its QB file. The business that receives money should \"\"make deposit\"\" in its QB file. (In QB you \"\"write check\"\" even when you make the payment by some other means like ACH.) Neither business should have the bank accounts of the other explicitly represented. On each side, you will also need to classify the payment as having originated from / gone to some other account - To know what's correct there, we'd need to know why your transferring the money in the first place and how you otherwise have your books established. I think that's probably beyond the scope of what's on-topic / feasible here. Money into your business from your personal account is probably owner's equity, unless you have something else going on. For example, on the S Corp you should be paying yourself a salary. If you overpay by accident, then you might write a check back to the company from your personal account to correct the mistake. That's not equity - It's probably a \"\"negative expense\"\" in some other account that tracks the salary payments.\"" }, { "docid": "481383", "title": "", "text": "\"The earnest money deposit generally is not delivered with the offer. This generally isn't done because you may find out that your offer is going to be rejected immediately. You may have decided to make an offer under their stated selling price, you may have added a condition they are unwilling to meet. There is also the situation where other parties have already made an offer and their offering price has exceed yours; so your offer is rejected or at least slowed down while the continue negotiations with the other potential buyer. In these cases getting a cashiers check before making the offer delays the offer, complicates the movement of money within your accounts, and delays your ability to make an offer on a another house. If the offer on the first house is rejected on Friday, and the bank is closed on Saturday, and you have to wait until Monday to redeposit the check; then you have to delay an offer on the perfect house you see on Sunday. Of the three options you present the second one, \"\"I can put a rider on the P&S which warrants that the check will be delivered in a set amount of time like three days.\"\" You may also find similar language in the local version of the standard real estate contract. This delay in writing the check makes sense for another reason, the manner of the deposit and how it is to be made, how it is to be held, and under what terms it can be released should also be a part of the negotiation. You want to make sure it is being kept by a third party, you both have to trust that 3rd party, you need to know what are the exact conditions regarding that money. The purpose of the deposit is to convince the seller that you are serious, and that the knowledge that you will lose the deposit makes you likely to go through your required parts of the transaction. Also more and more of these deposits are being done electronically, there is no check involved.\"" }, { "docid": "29372", "title": "", "text": "\"Lets say you owed me $123.00 an wanted to mail me a check. I would then take the check from my mailbox an either take it to my bank, or scan it and deposit it via their electronic interface. Prior to you mailing it you would have no idea which bank I would use, or what my account number is. In fact I could have multiple bank accounts, so I could decide which one to deposit it into depending on what I wanted to do with the money, or which bank paid the most interest, or by coin flip. Now once the check is deposited my bank would then \"\"stamp\"\" the check with their name, their routing number, the date, an my account number. Eventually an image of the canceled check would then end up back at your bank. Which they would either send to you, or make available to you via their banking website. You don't mail it to my bank. You mail it to my home, or my business, or wherever I tell you to mail it. Some business give you the address of another location, where either a 3rd party processes all their checks, or a central location where all the money for multiple branches are processed. If you do owe a company they will generally ask that in the memo section in the lower left corner that you include your customer number. This is to make sure that if they have multiple Juans the money is accounted correctly. In all my dealings will paying bills and mailing checks I have never been asked to send a check directly to the bank. If they want you to do exactly as you describe, they should provide you with a form or other instructions.\"" }, { "docid": "323573", "title": "", "text": "\"The biggest disadvantage to you is that your tenant now knows your bank information, which means he can easily identify your source of money in the event he wins a lawsuit and wins a judgement. He will be able to have a court marshall freeze your account. However, if you deposit your tenant's check into your account as opposed to an EFT, then your tenant can basically still obtain your bank account information and freeze your account, it would just take him a bit longer to get that information. I am definitely anti-landlord in these situations because I've had to deal with so many bad ones here in NYC, but as a landlord, the best thing you can do is to create a \"\"buffer\"\" account for you to deposit tenant rent money into, then transfer the money from the buffer account to your regular account. This would prevent the tenant from knowing your personal bank information and greatly delay the tenant receiving his judgement from an assumed court win against you. My source: I had to take my landlord to court, and after obtaining a judgement, I got a court marshall to begin the process of closing access to her account (she couldn't access the money in that account). The process resulted in her sending me a check (assuming from her other account) for the judgement since her account was frozen and she couldn't access any of her money.\"" }, { "docid": "476363", "title": "", "text": "\"Many of my friends turn to me for financial advice, and here's what I always tell them because it's super effective for me... 1) I opened an online bank account with Scottrade for which I did not request a card or checks. I set up direct deposit straight to that account. It would be a complicated pain to take money out of that savings. The only time I did so was to buy my house (which was the purpose of the savings) and it involved a wire-transfer and printing of the form to fill out and faxing it in, etc. I have continued to use the account to save for my second house. I basically completely forget that the account is even there or that I am \"\"missing\"\" a large chunk of my money. 2) It is VERY important to actually budget for spending money to continue to spend on impulse items. Basically allow yourself to spend money on yourself but in a controlled way. Decide a specific amount that you want to put in a separate account that is just for you to spend to your hearts content and have it direct deposit. I find, (and Dave Ramsey also encourages this) that when I know how much money I am going to blow, I feel much more in control and it causes me to not get carried away and blow more than I realized. Take this a step further... Decide specifically what you want to buy for yourself, and label the account accordingly. For example, I decided back in March that I wanted to buy an Xbox One for when Star Wars Battlefront comes out this November. I calculated exactly how much money I would need at that time, figured how many paychecks I would receive until then, and did the math to determine exactly how much I need to direct deposit into an account JUST for saving to buy the Xbox and game. I use CapFed, and I can actually rename the account as it is displayed, so I called it \"\"Xbox fund\"\". Seeing that title, a reminder of what I really want\"\" encourages me to not touch it. What is your goal behind wanting to save money better? What are you saving for? Label your account accordingly so you don't just see it as money, but as progress.\"" }, { "docid": "83346", "title": "", "text": "\"For practical purposes, I would strongly suggest that you do create a separate account for each business you may have that is used only for business purposes, and use it for all of your business income and expenses. This will allow you to get an accurate picture of whether you are making money or not, what your full expenses really are, how much of your personal money you have put into the business, and is an easy way to keep business taxes separate. You will also be able to get a fairly quick read on what your profits are without doing much accounting by looking at the account balance less future taxes and expenses, and less any personal money you've put into the account. Check out this thread from Paypal about setting up a \"\"child\"\" account that is linked to your personal account and can be set up to autosweep payments into your main account, should you like. You will still be able to see transactions for each child account. NOTE: Do be careful to make sure you are reserving the proper amount out of any profits your startup may have for taxes - you don't want to mix this with personal money and then later find out that you owe taxes and have to scramble to come up with the money if you have already spent it This is one of the main reasons to segregate your startup's revenues and profits in the business account. For those using \"\"brick and mortar\"\" banking services rather than a service like Paypal: You likely do not need a business checking account if you are a startup. Most likely, you can simply open a second personal account with your bank in your name, and name it \"\"John Doe DBA Company Name\"\" (DBA = Doing Business As). This way, you can pay expenses and accept payments in the name of your startup. Check with your banker for additional details (localized information).\"" }, { "docid": "278678", "title": "", "text": "\"I opened several free checking accounts at a local credit union. One is a \"\"Deposit\"\" account where all of my new money goes. I get paid every two weeks. Every other Sunday we have our \"\"Money Day\"\" where we allocate the money from our Deposit account into our other checking accounts. I have one designated as a Bills account where all of my bills get paid automatically via bill pay or auto-pay. I created a spreadsheet that calculates how much to save each Money Day for all of my upcoming bills. This makes it so the amount I save for my bills is essentially equal. Then I allocate the rest of my deposit money into my other checking accounts. I have a Grocery, Household, and Main checking accounts but you could use any combination that you want. When we're at the store we check our balances (how much we have left to spend) on our mobile app. We can't overspend this way. The key is to make sure you're using your PIN when you use your debit card. This way it shows up in real-time with your credit union and you've got an accurate balance. This has worked really well to coordinate spending between me and my wife. It sounds like it's a lot of work but it's actually really automated. The best part is that I don't have to do any accounting which means my budget doesn't fail if I'm not entering my transactions or categorizing them. I'm happy to share my spreadsheet if you'd like.\"" }, { "docid": "297465", "title": "", "text": "\"Is there any way for me to get my money bank? It would be a long drawn process. You would have to file a fraud complaint, they should be able to catch the imposter and / or get a freeze on the account you did wire transfer on [even courts would be involved in process] ... could take lot of time and money. Depending on the amount it may or may not be worth it. If so, should I talk to my bank Your Bank will not take any liability. From their point of view, you deposited a check, they sent it get cleared and reversed the transaction moment they realized it was fraud. the \"\"vendor's\"\" bank You could talk to Vendor Bank. However as you have no relationship with them, they may or may not co-operate. If its a large institution they may do their own internal investigations. If you act sooner, they maybe able to place a hold on the account. Often this is a parking account and the funds are moved elsewhere. They will not be able to refund the funds unless the legal system / process is involved. bank that the fraudulent check came from Depending on how the check was made ... the Bank can easily claim that someone printed something with their Bank's name on it and they are not responsible for it. If there are large cases, the Bank may to contain reputational damage may lodge a complaint with Police and put out some advertisement.\"" }, { "docid": "400230", "title": "", "text": "\"IANAL, but. As you note, when you open a new account, they give you temporary checks that are usually blank in the upper left. I've used such checks and the bank has honored them. Therefore, I conclude that there must not be any legal requirement for anything to appear there, nor does the bank require it. Businesses are often reluctant to accept such temporary checks, for the obvious reason that anyone could go to the bank, open an account with $10, write checks for thousands of dollars, and disappear. At least if they've waited long enough to get the permanent checks in, there's some reason to believe that they plan to stick around. In any case, it's not clear what you are trying to accomplish. You want to hand-write either your business name or your personal name depending on whether the check is for personal or business purposes? I don't see what that gains. You could always use a personal check for business purposes. If you're afraid someone will say, \"\"Hey, that doesn't look very professional, what kind of fly-by-night company is this that uses personal checks?\"\", surely a hand-written company name would look even less professional. Why not just open a business account and have your personal checks printed with your personal name and your business checks with your business name? I don't know where you live, but I have a business account on which I pay zero fees. The only cost is getting checks printed. There's the small hassle of having to make one trip to the bank to open the account. Well, the biggest hassle I have is that the bank won't let me transfer money between my personal and business accounts over the Internet, so I have to either go to the bank to move money back and forth, or I have to write a check from one account to the other and deposit through an ATM.\"" }, { "docid": "473957", "title": "", "text": "Savings accounts have lower fees. If you don't anticipate doing many transactions per month, e.g. three or fewer withdrawals, then I would suggest a savings account rather than a checking account. A joint account that requires both account holder signatures to make withdrawals will probably require both account holders' signature endorsements, in order to make deposits. For example, if you are issued a tax refund by the U.S. Treasury, or any check that is payable to both parties, you will only be able to deposit that check in a joint account that has both persons as signatories. There can be complications due to multi-party account ownership if cashing versus depositing a joint check and account tax ID number. When you open the account, you will need to specify what your wishes are, regarding whether both parties or either party can make deposits and withdrawals. Also, at least one party will need to be present, with appropriate identification (probably tax ID or Social Security number), when opening the account. If the account has three or more owners, you might be required to open a business or commercial account, rather than a consumer account. This would be due to the extra expense of administering an account with more than two signatories. After the questioner specified interest North Carolina in the comments, I found that the North Carolina general banking statutes have specific rules for joint accounts: Any two or more persons may establish a deposit account... The deposit account and any balance shall be as joint tenants... Unless the persons establishing the account have agreed with the bank that withdrawals require more than one signature, payment by the bank to, or on the order of (either person on) the account satisfys the bank's obligation I looked for different banks in North Carolina. I found joint account terms similar to this in PDF file format, everywhere, Joint Account: If an item is drawn so that it is unclear whether one payee’s endorsement or two is required, only one endorsement will be required and the Bank shall not be liable for any loss incurred by the maker as a result of there being only one endorsement. also Joint accounts are owned by you individually or jointly with others. All of the funds in a joint account may be used to repay the debts of any co-owner, whether they are owed individually, by a co-owner, jointly with other co-owners, or jointly with other persons or entities having no interest in your account. You will need to tell the bank specifically what permissions you want for your joint account, as it is between you and your bank, in North Carolina." }, { "docid": "387510", "title": "", "text": "\"If my wife and I tried this, we'd call it grounds for divorce. However, I think most long term couples actually do this, and it is just a budget. It is common practice for two spouses to deposit money into a single checking account. All of the household expenses are then paid from that single account. Same as you describe: if I spend money from the joint checking that is less money available to my wife. Based on your dollar amount, I'd have to say great work on thinking about saving early on in life. I think though, if you are actually starting out, getting into the habit of saving a \"\"dime of every dollar\"\" would be more beneficial. At some point your income will increase, and when it does so should your savings. By \"\"paying yourself first\"\" your savings will keep pace with your spending and you will be a happier person when you income starts to fall again.\"" }, { "docid": "313158", "title": "", "text": "\"There will be no police involved. The police do not care. Only the feds care, and they only care about large amounts (over $100,000). What will happen is that the teller will deposit the money like nothing is unusual, but the amount will trigger a \"\"Suspicious Transaction Report\"\" to be filed by the bank. This information goes to the US Treasury and is then circulated by the Treasury to basically every agency in the government: the Department of Defense, the FBI, the NSA, the CIA, the DEA, the IRS, etc. What happens next depends on your relationship with your bank and the personality of the bank. In my case I have made large cash transactions at two different banks, one that I had a long relationship with, and another that I had a long-standing but dormant account. The long-term one was a high end savings bank in a city. The dormant one was one of those bozo retail banks (think \"\"Citizens\"\" or \"\"Bank of America\"\") in a suburb. The long-term bank ignored my first deposit, but after I made some more including one over $50,000 in cash they summoned me via a letter. I went in, talked to the branch manager and explained why I was making the deposits. He said \"\"That sounds plausible.\"\" and that was the end of the interview. It is unlikely that they transferred the information. They probably just wrote it down. They did this because they have \"\"know your customer\"\" regulations and they wanted to be able to prove that they did \"\"due diligence\"\" in case anybody asked about it later. The suburban bank never asked any questions, but they did file the STRs. In general, there is no way to know if the bank will interview you or not. It depends on a lot of different factors. The basic factors are: how much money is it, are you doing a lot of business normally, and how well does the bank know you. If you refuse to answer the bank's questions to their satisfaction, it is a 100% chance that they will close your account. They can also file higher level reports that flag your activity as \"\"highly suspicious\"\" as opposed to just the normal \"\"suspicious\"\". As long as it is a bank employee, you should have no serious concerns unless the guy seems strange and asks really pointed questions. If you have any question whether the \"\"employee\"\" is legitimate, just verify that he/she is a bank employee. Obviously if the feds visit you, you should say nothing. The chance of this happening is 1 in a million.\"" }, { "docid": "408124", "title": "", "text": "When you start at a new job here in the U.S., the default means of payment is usually a paper check. Most folks will quickly set up direct deposit so that their employer deposits their paycheck directly into their personal bank account - the incentive to do so is that you receive your funds faster than if you deposit a paper check. Even if you set up direct deposit on your first day on the job, you may still receive your first paycheck as a paper check simply because the wheels of payroll processing turn slowly at some (large) companies. A counter example is a self-employed contractor - perhaps a carpenter or house painter. These folks are paid by their customers, homeowners and such. Many larger, well established contracters now accept credit card payments from customers, but smaller independents may be reluctant to set up a credit card merchant account to accept payment by card because of all the fees that are associated with accepting credit card payments. 3% transaction fees and monthly service fees can be scary to any businessman who already has very thin profit margins. In such cases, these contractors prefer to be paid by check or in cash for the simple reason that there are no fees deducted from cash payments. There are a few folks here who don't trust direct deposit, or more specifically, don't trust their employer to perform the deposit correctly and on time. Some feel uncomfortable giving their bank info to their employer, fearing someone at the company could steal money from their account. In my experience, the folks who prefer a paper paycheck are often the same folks who rush to the bank on payday to redeem their paychecks for cash. They may have a bank account (helps with check cashing) but they prefer to carry cash. I operate in a manner similar to you - I use a debit card or credit card (I only have one of each) for nearly all transactions in daily life, I use electronic payments through my bank to pay my regular bills and mortgage, and I receive my paycheck by direct deposit. There have been periods where I haven't written or received paper checks for so long that I have to hunt for where I put my checkbook! Even though I use a debit card for most store purchases, the bank account behind that debit card is actually a checking account according to the bank. Again, the system defaults to paper checks and you have the option of going electronic as well. Before we judge anyone who doesn't use direct deposit or who prefers to be paid in cold hard cash, consider that direct deposit is a luxury of stability. Steady job, home, etc. Direct deposit doesn't make sense for a contractor or day laborer who expect to work for a different person each day or week. I don't think this is all that unique to the US. There are people in every city and country who don't have long-term employment with a single employer and therefore prefer cash or paper check over electronic payments. I'd be willing to bet that this applies to the majority of people on the planet, actually." }, { "docid": "529879", "title": "", "text": "It would be better to use a bank account and have the refund deposited directly to it. But you said you never had a bank account, so that may be a problem. Another option is to have the refund check mailed to you, and you deposit it in your local bank, converting to your home currency (or not, depending on local laws). Generally, for another person to cash a check made out to you - you need to endorse it first. Physically, on the back of the check. That means you have to see the check. Specifically with tax refund checks there's much more scrutiny since there's a lot of fraud going on with regards to tax refunds. Thus, I doubt a bank would allow a third party cash a check made out to you, without you actually being present there." }, { "docid": "401454", "title": "", "text": "\"I'm pretty sure that the banks here will only allow a joint account with either all citizens or all \"\"foreign resident\"\" or tourists. You may be able to do something with Leumi since they have a US branch in NYC. What many people do (who are US citizens) is open a bank account either at a physical branch or online and then it can be managed all online. Make sure no monthly balance fees or atm fees etc. If you need to transfer money most banks will \"\"buy\"\" a US check (I have done this with Leumi) or you can go to the ATM and pull out a few thousand shekel from the USA account and deposit it right back into the Israeli account. My wife and I did this when we first arrived. Discount Bank seemed to have no fees for pulling money out and a good USD/ILS rate. Just make sure you don't have foreign transaction fees / high rates on the US account. If you need to deposit checks for him you can use the remote deposit feature and just take a picture. בהצלחה!\"" }, { "docid": "157712", "title": "", "text": "I am a US citizen and I want to transfer some amount 10 lakhs+ to my brother from my NRE account in India to his account. My brother is going to purchase something for his business. He is going to return my amount after 3-4 Months From the description it looks like you would like to loan to your brother on repatriation basis. Yes this is allowed. See the RBI Guide here and here for more details. There are some conditions; (iv) Scheme for raising loans from NRIs on repatriation basis Borrowings not exceeding US$ 2,50,000 or its equivalent in foreign exchange by an individual resident in India from his close relatives resident outside India, subject to the conditions that - a) the loan is free of interest; b) the minimum maturity period of the loan is seven years; c) The amount of loan is received by inward remittance in free foreign exchange through normal banking channels or by debit to the NRE/FCNR account of the non-resident lender; d) The loan is utilised for the borrower's personal purposes or for carrying on his normal business activity but not for carrying on agricultural/plantation activities, purchase of immovable property or shares/debentures/bonds issued by companies in India or for re-lending. Although it is mentioned as Seven years, this is revised to one year. Since he cannot deposit into my NRE account I guess he has to deposit it into my NRO account. A repatriate-able loan as above can be deposited into NRE Account. Is there any illegality here doing such transaction? No. Please ensure proper paper work to show this as loan and document the money trail. Also once I get my money in NRO account do I need to pay taxes in India on the money he deposited? This question does not arise." }, { "docid": "254730", "title": "", "text": "A CFD broker will let you open a trade on margin as long as your account balance is more than the margin required on all your open trades. If the required margin increases within a certain percentage of your account balance, you will get a margin call. If you then don't deposit more funds or close losing trades out, the broker will close all your trades. Note: Your account balance is the remaining funds you have left to open new trades with. I always use stop loss orders with all my open trades, and because of this my broker reduces the amount of margin required on each trade. This allows me to have more open trades at the one time without increasing my funds. Effects of a Losing Trade on Margin Say I have an account balance of $2,000 and open a long trade in a share CFD of 1,000 CFDs with a share price of $10 and margin of 10%. The face value of the shares would be $10,000, but my initial margin would be $1,000 (10% of $10,000). If I don't place a stop loss and the price falls to $9, I would have lost $1,000 and my remaining margin would now be $900 (10% of $9,000). So I would have $100 balance remaining in my account. I would probably receive a margin call to deposit more funds in or close out my trade. If I don't respond the broker will close out my position before my balance gets to $0. If instead I placed a stop loss at say $9.50, my initial margin might be reduced to $500. As the price drops to $9.60 I would have lost $400 and my remaining margin would now only be $100, with my account balance at $1,500. When the price drops to $9.50 I will get stopped out, my trade will be closed and I would have lost $500, with my account balance still at $1,500. Effects of a Winning Trade on Margin Say I have the same account balance as before and open the same trade but this time the price moves up. If I don't place a stop loss and the price goes up to $11, I would have made a $1,000 profit and my remaining margin will now be $1,100 (10% of $11,000). So my account balance would now be $2,000 + $1,000 - $1,100 = $1,900. If I had placed a stop loss at say $9.50 again and the price moves up to $10.50, I would have made a profit of $500 and my margin would now be $1,000. My account balance would be $2,000 + $500 - $1,000 = $1,500. However, if after the price went up to $10.50 I also moved my stop loss up to $10, then I would have $500 profit and only $500 margin. So my balance in this case would be $2,000 + $500 - $500 = $2,000. So by using stop losses as part of your risk management you can reduce the margin used from your balance which will allow you to open more trades without any extra funds deposited into your account." } ]

[ { "docid": "590102", "title": "", "text": "When a business asks me to make out a cheque to a person rather than the business name, I take that as a red flag. Frankly it usually means that the person doesn't want the money going through their business account for some reason - probably tax evasion. I'm not saying you are doing that, but it is a frequent issue. If the company makes the cheque out to a person they may run the risk of being party to fraud. Worse still they only have your word for it that you actually own the company, and aren't ripping off your employer by pocketing their payment. Even worse, when the company is audited and finds that cheque, the person who wrote it will have to justify and document why they made it out to you or risk being charged with embezzlement. It's very much in their interests to make the cheque out to the company they did business with. Given that, you should really have an account in the name of your business. It's going to make your life much simpler in the long run." } ]

[ { "docid": "408124", "title": "", "text": "When you start at a new job here in the U.S., the default means of payment is usually a paper check. Most folks will quickly set up direct deposit so that their employer deposits their paycheck directly into their personal bank account - the incentive to do so is that you receive your funds faster than if you deposit a paper check. Even if you set up direct deposit on your first day on the job, you may still receive your first paycheck as a paper check simply because the wheels of payroll processing turn slowly at some (large) companies. A counter example is a self-employed contractor - perhaps a carpenter or house painter. These folks are paid by their customers, homeowners and such. Many larger, well established contracters now accept credit card payments from customers, but smaller independents may be reluctant to set up a credit card merchant account to accept payment by card because of all the fees that are associated with accepting credit card payments. 3% transaction fees and monthly service fees can be scary to any businessman who already has very thin profit margins. In such cases, these contractors prefer to be paid by check or in cash for the simple reason that there are no fees deducted from cash payments. There are a few folks here who don't trust direct deposit, or more specifically, don't trust their employer to perform the deposit correctly and on time. Some feel uncomfortable giving their bank info to their employer, fearing someone at the company could steal money from their account. In my experience, the folks who prefer a paper paycheck are often the same folks who rush to the bank on payday to redeem their paychecks for cash. They may have a bank account (helps with check cashing) but they prefer to carry cash. I operate in a manner similar to you - I use a debit card or credit card (I only have one of each) for nearly all transactions in daily life, I use electronic payments through my bank to pay my regular bills and mortgage, and I receive my paycheck by direct deposit. There have been periods where I haven't written or received paper checks for so long that I have to hunt for where I put my checkbook! Even though I use a debit card for most store purchases, the bank account behind that debit card is actually a checking account according to the bank. Again, the system defaults to paper checks and you have the option of going electronic as well. Before we judge anyone who doesn't use direct deposit or who prefers to be paid in cold hard cash, consider that direct deposit is a luxury of stability. Steady job, home, etc. Direct deposit doesn't make sense for a contractor or day laborer who expect to work for a different person each day or week. I don't think this is all that unique to the US. There are people in every city and country who don't have long-term employment with a single employer and therefore prefer cash or paper check over electronic payments. I'd be willing to bet that this applies to the majority of people on the planet, actually." }, { "docid": "157234", "title": "", "text": "\"I wouldn't go quite that far. It's dreadfully formatted, and not brilliantly written, I'll give you that. I'd guess it's written by someone who believes they they have a flair for storytelling and the dramatic, and writes as they would talk. Assume Amy Hoy is a slightly melodramatic awkward gal soliloquizing at you, and this all seems a little more tolerable. But I find her points somewhat solid. I think she's presenting from a ideological standpoint where safety and security are paramount, and the risk associated with startups is \"\"too much risk.\"\" But I think the point thats he's making about the poisonous rhetoric associated with \"\"glorious death\"\" and \"\"working for a startup\"\" being very similar is well thought out and quite an interesting perspective. I go to a school whose idea of \"\"business\"\" is \"\"entrepreneurship.\"\" I left their business program because my career goals simply cannot be sustained by entrepreneurship until a very long while into my career, and I found the \"\"here's how to have a startup\"\" focus of the bulk of the courses essentially valueless to me where I am now. Having seen what the author refers to as the \"\"hagiography\"\" of successful startups (great word, by-the-by), I cannot help but recount those courses and the ways we were sold on this ideology. Much was made about how much money was made by successful startups. Much was made of the independence, the power, the *glory*, of winning the startup lotto and making it big. The guys that did it young were revered and lauded as the greatest of our generation. No mention was made of the failures. No mention was made of the failure rate. No mention was made of the costs associated with failure. No mention was made of the people who got fucked as these entrepreneurial saints made their fortunes. Further, the ones that got the most attention were the ones who went back and did it a few more times. Anyone clever, who won big and cashed out and quit while ahead was mentioned as a success, but their retirement or cashing out went unmentioned. Some sort of shameful detail, maybe. The guys that won big and went back and tried again were praised for their determination and vigor. If they set themselves back to square one betting on an unsuccessful attempt, that was unmentioned. VCs were praised as the greatest thing that happened to entrepreneurship. We were given no real warnings about \"\"hey, those contracts can be kinda shady sometimes\"\" or \"\"they want a *big* cut, yo.\"\" Instead, they were the grease to our machine. It was a money making machine. A machine of winners. Of the great men and women of our generation. Of everything that is good about western society. And we are letting our generation down if we don't play. Seriously. I had a prof tear a strip off a kid for asking something along the lines of \"\"but what's wrong with working for a company that already exists and can pay a steady wage?\"\" The prof got started in on how our generation is listless coasters and just fall into things and accomplish little on our own. He moved into how it's merely riding someone else's coattails and it's not really achieving anything for yourself. The tl;dr of what was a fifteen minute in-class excoriation of a student who asked what I thought was a reasonable question was \"\"If you're not signing your own paycheques, you are a huge failure and are contributing nothing of note to society or it's progress.\"\" This particular rant pretty much sealed my withdrawal from the business aspect of my school. If my very goals render me a huge failure in my profs' eyes, I'm not interested in what they have to say or in contributing to their employment at the university. But off that somewhat-personal tangent, the culture of \"\"glory of the startup\"\" that Amy Hoy somewhat ineloquently complains about in her article certainly exists. In the form she's complaining about. Your rebuttal makes sense too - it's not that VC are or aren't a risk, it's not that people don't have the right and the opportunity to take that risk if they see it as a valid opportunity to make money, it's not like it's fair to expect a VC to fund you without seeing a profit in the long run. But you're rebutting her thesis with something that doesn't actually address it. The culture that she's complaining about exists, in my experience. The culture glosses over so much of what you rebutted her article with, that risks exist and that failures exist and that there are a lot of harsh realities associated with the startup world. The culture does, indeed, glorify all the best parts of startup-dom and creates a toughness challenge that renders \"\"no, this may not be a good idea\"\" unfalsifiable because failure are personal while successes are cultural. Successful startups and people who have done very well by them are held up as everything startups are supposed to be and look at how their hard work paid off - and if yours doesn't work, it is entirely that you didn't work hard enough. Someone who has bought in wholesale holds that there are no \"\"bad\"\" startups - any startup can be successful, you just need to bust balls working harder if you fail. Startups are akin to gambling. They're not the roulette of \"\"it's all luck,\"\" but closer to five card stud - skill plays a lot of a role, but there's still luck involved. Startup culture represents all this as far closer to Texas Hold 'Em, where luck in minimized, where skill and diligence play the greatest role. It assumes that everyone going in already knows all the things you brought up in your rebuttal, without ever actually giving them that information. It keeps pimping \"\"just work harder\"\" without really saying \"\"Hey, guys - check the odds you're playing with **and know when to hold and when to fold**.\"\"\"" }, { "docid": "393553", "title": "", "text": "There is a difference between an owner and a signer. An owner is the legal owner of the funds. A signer has access to withdraw the funds. In most cases, when a new personal account is opened the name is added as an owner&signer. However, that is not always the case. A person could be an owner, but not a signer, in a custodial arrangement. For example, a minor child may be an owner only on their account with a custodial parent listed as a signer. The minor could not withdraw from the account. A person could be a signer, but not an owner, in a business or estate/trust account. The business or estate would be the owner with individuals listed as signers only. The business employees do not own the funds, they are only allowed to withdraw and disburse the funds on behalf of the company. The creditor can only garnish/withhold funds that are owned by the indebted. If the second person on the account is only a signer, those funds cannot be withheld as part of a judgment against the second person (they don't own those funds). However, simply titling the second person as a signer only is not sufficient. If you share access with the second person and allow them to spend the money for their own benefit, they are no longer just a signer. They have become an owner because you are sharing your funds with them. Think of the business relationship as an example. The employee is a signer so they can withdraw funds and pay business expenses, like the electric bill. If the employee withdrew funds and bought herself a new dress, she is stealing because she does not own those funds. If the second person on the account buys things for themselves, or transfers some of the money into their own account, they are demonstrating that more than a signer-only relationship exists. A true signer-only relationship is where the individual can only withdraw funds on the owner's behalf. For example, the owner is out of town and needs a bill paid, the signer can write a check and pay the bill for the owner. A limited power of attorney may be worth looking into. With a limited POA, the owner can define the scope and expiration of the power of attorney. With this arrangement, the second person becomes an executor of the owner under certain circumstances. For example, you could write a power of attorney that states something like: John Smith is hereby granted the limited power to withdraw funds from account 1234, on deposit at Anytown Bank, for the purpose of paying debts and obligations and otherwise maintain my estate in the event of my incapacitation or inability to attend to my own affairs. This Power of Attorney shall expire on it's fifth anniversary unless renewed. If the person you have granted the power of attorney abuses their access, you could sue them and you would only have to demonstrate that they overstepped the scope of their power." }, { "docid": "476363", "title": "", "text": "\"Many of my friends turn to me for financial advice, and here's what I always tell them because it's super effective for me... 1) I opened an online bank account with Scottrade for which I did not request a card or checks. I set up direct deposit straight to that account. It would be a complicated pain to take money out of that savings. The only time I did so was to buy my house (which was the purpose of the savings) and it involved a wire-transfer and printing of the form to fill out and faxing it in, etc. I have continued to use the account to save for my second house. I basically completely forget that the account is even there or that I am \"\"missing\"\" a large chunk of my money. 2) It is VERY important to actually budget for spending money to continue to spend on impulse items. Basically allow yourself to spend money on yourself but in a controlled way. Decide a specific amount that you want to put in a separate account that is just for you to spend to your hearts content and have it direct deposit. I find, (and Dave Ramsey also encourages this) that when I know how much money I am going to blow, I feel much more in control and it causes me to not get carried away and blow more than I realized. Take this a step further... Decide specifically what you want to buy for yourself, and label the account accordingly. For example, I decided back in March that I wanted to buy an Xbox One for when Star Wars Battlefront comes out this November. I calculated exactly how much money I would need at that time, figured how many paychecks I would receive until then, and did the math to determine exactly how much I need to direct deposit into an account JUST for saving to buy the Xbox and game. I use CapFed, and I can actually rename the account as it is displayed, so I called it \"\"Xbox fund\"\". Seeing that title, a reminder of what I really want\"\" encourages me to not touch it. What is your goal behind wanting to save money better? What are you saving for? Label your account accordingly so you don't just see it as money, but as progress.\"" }, { "docid": "193592", "title": "", "text": "This is a reasonable requirement which many banks probably have. The reason is that after you deposit a check, ACH or direct deposit - they may be reversed after a couple of days (check bounced, payment canceled, etc). If you wire the money out, and then the check by which you got the money gets bounced - the bank is left hanging because money wired out is very hard to return. Wire transfers are generally irreversible unless its a mistake in the wire. After 10 days, these transactions cannot be reversed and the money is bound to remain on the account, so you can wire it out. By the way, it also goes for cashier's checks as well, I had a similar discussion with my banker (don't remember if it was WF or Chase) when I needed one based on a ACH transfer from my savings account elsewhere. They gave me the check, but said that its because I proved that the transfer was from my own account." }, { "docid": "42942", "title": "", "text": "\"What about the escudo balance in my checking account in Cabo Verde? Are the escudos that I held for months or years, before eventually deciding to change to dollars, considered an investment? Don't know. You tell us. Investment defined as an activity taken to produce income. Did you put the money in the checking account with a full expectation of profits to be made from that? Or you only decided that it is an investment in retrospective, after the result is known, because it provides you more tax benefit? To me it sounds like you have two operating currencies and you're converting between them. Doesn't sound like an investment. Generally, from my experience, bank accounts are not considered investments (even savings accounts aren't). Once you deposit into a CD or bond or money market - you get a cash-equivalent which can be treated as an investment. But that's my personal understanding, if there are large amounts involved, I'd suggest talking to a US-licensed CPA/EA specializing on expats in your area. Pub 54 is really a reference for only the most trivial of the questions an expat may have. It doesn't even begin to describe the complexity of the monstrosity that is called \"\"The US Tax Code for Expats and Foreigners\"\".\"" }, { "docid": "358837", "title": "", "text": "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." }, { "docid": "361889", "title": "", "text": "He can send you a check. This will move the burden of GBP->USD conversion to him (unless the GBP amount is preset, then you'll be the one to pay for conversion either way). You can then deposit the USD check in any Israeli bank (they'll charge commission for the deposit and the USD->ILS conversion). Another, and from my experience significantly cheaper, option would be to wire transfer directly to your account. If you have a USD account and he'll transfer USD out - it will be almost at no cost to you, if you don't have a USD account check with your bank how to open it, or pay for USD->ILS conversion." }, { "docid": "182866", "title": "", "text": "\"When I deposit my paycheck in CapOne I have an email before I am out of the app that they received my check. I have access to some portion of the cash now and the rest the next business day, however they put things in order to NOT overdraft me. For instance, if I am overdrawn $150 but the charge is \"\"pending\"\", putting the check in they will deposit the check before posting the charge that would overdraft me. Plus I can use Apple Pay with it. My local CUs have app deposit, but it takes DAYS for a deposit to just show up. Plus, no Apple Pay.\"" }, { "docid": "175522", "title": "", "text": "I have gotten a letter of credit from my credit union stating the maximum amount I can finance. Of course I don't show the dealer the letter until after we have finalized the deal. I Then return in 3 business days with a cashiers check for the purchase price. In one case since the letter was for an amount greater then the purchase price I was able drive the car off the lot without having to make a deposit. In another case they insisted on a $100 deposit before I drove the car off the lot. I have also had them insist on me applying for their in-house loan, which was cancelled when I returned with the cashiers check. The procedure was similar regardless If I was getting a loan from the credit union, or paying for the car without the use of a loan. The letter didn't say how much was loan, and how much was my money. Unless you know the exact amount, including all taxes and fees,in advance you can't get a check in advance. If you are using a loan the bank/credit Union will want the car title in their name." }, { "docid": "151121", "title": "", "text": "Bank of America is the worst. Once I had a joint account with another individual that I had funded out of my account to make payroll. When I found out that he had screwed two other people by stealing the payroll money I decided to disburse it myself and transferred it back to my corporate account on which I was the only signer. He went back to the bank and effected a withdrawal from my account to the tune of tens of thousands of dollars, put the money in the joint account and removed me as a signer. The bank wouldn't give me my money back and I never collected from him. Another time I tried to close my sons' accounts which were in inactive status. Every day for a week they told me they could not close the account until it was active, but they were working on making it active. Chase could do this in a minute. I finally went to a branch and loudly informed the manager that maybe the bank was insolvent and that I should call the FDIC to see why they won't release my money. He wanted to take me into his office. I told him loudly, I know all about DDAs, Savings and CDs, I have run deposit operations for a major bank and wrote software to process them. Just put a hold on the account, write me two cashiers check and offset them with a suspense voucher. You do know how to write a suspense voucher don't you? It's just a general ledger entry to a suspense account. Well he was so embarassed he would do anything to get me out of the branch and gave me the cashier's checks. Fuck B of A." }, { "docid": "597571", "title": "", "text": "First, if you live in/around a reasonably populated urban area, and you're in the United States, I can't see why you would choose to bank with Chase, B of A, or another large commercial bank. I think you would be much better served by banking at a reasonably large credit union. There are many differences between banks and credit unions, but in a nutshell, credit unions are owned by the members, and operate primarily to provide benefits to their members, whereas a bank is owned by the shareholders, and operates primarily to make profits for the shareholders (not to benefit the customers). The banking industry absolutely hates the credit unions, so if you've ever been nickeled-and-dimed with this fee and that charge by your bank, I have to ask why you're still banking with a company that irritates you and/or actively tries to screw you out of your money? I live in California, and I've banked at credit unions almost exclusively since I started working nearly 30 years ago. Every time I've strayed and started banking at a for-profit bank, I've regretted it. For example, a few years ago I opened a checking account at a now-defunct bank (WaMu) just for online use: eBay and so forth. It was a free checking account. When Chase bought WaMu, the account became a Chase account, and it seemed that every other statement brought new fees, new restrictions, and so forth. I finally closed it when they imposed some stupid fee for not carrying enough of a balance. I found out by logging in to their Web site and seeing a balance of zero dollars; they had imposed the fee a few statements back, and I had missed it, so they kept debiting my account until it was empty. At this point, I do about 90% of my banking at a fairly large credit union. I have a mortgage with a big bank, but that was out of my hands, as the lender/originator sold the mortgage and I had no say in the matter. My credit union has a highly functional Web site, permits me to download my account activity to Quicken, and even has mobile apps which allow me to deposit a check by taking a picture of it, or check my account activity, etc. They (my credit union) are part of a network of other credit unions, so as long as I am using a network ATM, I never pay a fee. In sum, I can't see any reason to go with a bank. Regarding checks, I write a small number of checks per year, but I recently needed to reorder them. My credit union refers members directly to Harland-Clarke, a major-league player in the check printing business. Four boxes of security checks was around $130 plus shipping, which is not small money. However, I was able to order the very same checks via Costco for less than half that amount. Costco refers members to a check printing service, which is a front/subsidiary of Harland-Clarke, and using a promo code, plus the discount given for my Costco membership, I got four boxes of security checks shipped to me for less than $54. My advice would be to look around. If you're a Costco member, use their check printing service. Wal*mart offers a similar service to anyone, as does Sam's Club, and you can search around to find other similar services. Bottom line, if you order your checks via your bank or credit union, chances are you will pay full retail. Shop around, and save a bit. I've not opened a new account at a credit union in some time, but I would not be surprised if a credit union offered a free box of checks when you open a new account with them." }, { "docid": "278678", "title": "", "text": "\"I opened several free checking accounts at a local credit union. One is a \"\"Deposit\"\" account where all of my new money goes. I get paid every two weeks. Every other Sunday we have our \"\"Money Day\"\" where we allocate the money from our Deposit account into our other checking accounts. I have one designated as a Bills account where all of my bills get paid automatically via bill pay or auto-pay. I created a spreadsheet that calculates how much to save each Money Day for all of my upcoming bills. This makes it so the amount I save for my bills is essentially equal. Then I allocate the rest of my deposit money into my other checking accounts. I have a Grocery, Household, and Main checking accounts but you could use any combination that you want. When we're at the store we check our balances (how much we have left to spend) on our mobile app. We can't overspend this way. The key is to make sure you're using your PIN when you use your debit card. This way it shows up in real-time with your credit union and you've got an accurate balance. This has worked really well to coordinate spending between me and my wife. It sounds like it's a lot of work but it's actually really automated. The best part is that I don't have to do any accounting which means my budget doesn't fail if I'm not entering my transactions or categorizing them. I'm happy to share my spreadsheet if you'd like.\"" }, { "docid": "367754", "title": "", "text": "I feel the need to separate my freelance accounts from my personal accounts. Yes, you should. Should I start another savings account or a current account? Do you need the money for daily spending? Do you need to re-invest in your business? Use a current account. If you don't need the money for business expenses, put it away in your savings account or even consider term deposits. Don't rule out a hybrid approach either (some in savings account, some in current account). What criteria should I keep in mind while choosing a bank? (I thought of SBI since it has a lot of branches and ATMs). If you are involved in online banking and that is sufficient for most of your needs, bank and ATM locations shouldn't matter all that much. If you are saving a good chunk of money, you want to at least have that keep up with inflation. Research bank term deposit interest rates. The tend to be higher than just having your money sit in a savings account. Again, it depends on how and when you expect to need the money. What do I keep in mind while paying myself? Paying yourself could have tax implications. This depends on how are set up to freelance. Are you a business entity or are you an individual? You should look in to the following in India: The other thing to consider is rewarding yourself for the good work done. Pay yourself a reasonable amount. If you decide to expand and hire people going forward, you will have a better sense of business expenses involved when paying salaries. Tips on managing money in the business account. This is a very generic question. I can only provide a generic response. Know how much you are earning and how much your are putting back in to the business. Be reasonable in how much you pay yourself and do the proper research and paperwork from a taxation point of view." }, { "docid": "86852", "title": "", "text": "\"Unfortunately, Australian bureocrats made it impossible to register a small business without making the person's home address, full name, date of birth and other personal information available to the whole world. They tell us the same old story about preventing crime, money laundering and terrorism, but in fact it is just suffocating small business in favour of capitalistic behemoths. With so many weirdos and identity thieves out there, many people running a small business from home feel unsafe publishing all their personal details. I use a short form of my first name and real surname for my business, and reguraly have problems cashing in cheques written to this variation of my name. Even though I've had my account with this bank for decades and the name is obviously mine, just a pet or diminitive form of my first name (e.g. Becky instead of Rebecca). This creates a lot of inconvenience to ask every customer to write the cheque to my full name, or make the cheque \"\"bearer\"\" (or not to cross \"\"or bearer\"\" if it is printed on the cheque already). It is very sad that there is protection for individual privacy in Australia, unless you can afford to have a business address. But even in this case, your name, date of birth and other personal information will be pusblished in the business register and the access to this information will be sold to all sorts of dubious enterprises like credit report companies, debt collectors, market researchers, etc. It seems like Australian system is not interested in people being independent, safe, self-sufficient and working for themselves. Everyone has to be under constant surveliance.\"" }, { "docid": "417133", "title": "", "text": "I am using my debit card regularly: in ATM's with a pin, in stores with my signature, and online. But later you say But from what I recall from starting my own business (a LONG time ago), for debit cards there's only a per-transaction fee of like $0.25, not a percentage cut. Only pin transactions have just a per-transaction fee paid by you to the merchant (and you are reimbursed by Schwab). If you use your card with just a signature or online without a pin, then it is a credit transaction from the merchant's perspective. The merchant pays a fee and Schwab gets its cut of that. So for two of the transaction types that you describe, the merchant pays Schwab (indirectly) out of your payment. Only when you enter your pin does it process as a debit transaction where Schwab pays the merchant. Because check cards withdraw the money from your account immediately, you don't even get the twenty to fifty day grace period. So those merchant fees are pure profit for Schwab, offsetting the loss from the ATM fees. You claim $4-5k in fees at $.25 each. That's sixteen to twenty thousand transactions. Assuming that several is four to five years, that's more than ten transactions a day. That seems like a lot. I can see three for meals, one for miscellaneous, and maybe some shopping. But if I go shopping one day, I don't normally go again for a while. I have trouble seeing a consistent average of five or more transactions a day. Even if we use just the higher ATM fees (e.g. $2), that's still more than a transaction a day. That's an extreme level of usage, particularly for someone who also makes frequent purchases via card. I haven't done any other business with them. I find this confusing. How does money get into your account? At some point, you must have deposited money into the account. You can't debit from an account without a positive balance. So you must have done or be doing some kind of business with them. If nothing else, they can invest the balance that you deposit. Note that they make a profit off such investments. They share some of that profit with you in the form of interest, but not that much really. Of course, Schwab may still be losing money on your transactions. We can't really tell without more information on how much of each transaction type you do and how much of a balance you maintain. Perhaps they are hoping that you will do other, more profitable, activities in the future. I doubt there are that many Schwab customers like you describe yourself. As best I've been able to see, they advertise their banking services just to investment customers. So it's unlikely that many customers who don't use their investment services use their banking services just for ATM reimbursements." }, { "docid": "296717", "title": "", "text": "\"Having a separate checking account for the business makes sense. It simplifies documenting your income/expenses. You can \"\"explain\"\" every dollar entering and exiting the account without having to remember that some of them were for non-business items. My credit union allowed me to have a 2nd checking account and allowed me to put whatever I wanted as the name on the check. I think this looked a little better than having my name on the check. I don't see the need for a separate checking account for investing. The money can be kept in a separate savings account that has no fees, and can even earn a little interest. Unless you are doing a lot of investment transactions a month this has worked for me. I fund IRAs and 529 plans this way. We get paychecks 4-5 times a month, but send money to each of the funds once a month. You will need a business account if the number of transactions becomes large. If you deposit dozens of checks every time you go to the bank, the bank will want to move you to a business account.\"" }, { "docid": "73427", "title": "", "text": "Funds earned and spent before opening a dedicated business account should be classified according to their origination. For example, if your business received income, where did that money go? If you took the money personally, it would be considered either a 'distribution' or a 'loan' to you. It is up to you which of the two options you choose. On the flip side, if your business had an expense that you paid personally, that would be considered either a 'contribution of capital' or a 'loan' from you. If you choose to record these transactions as loans, you can offset them together, so you don't need two separate accounts, loan to you and loan from you. When the bank account was opened, the initial deposit came from where? If it came from your personal funds, then it is either a 'contribution of capital' or a 'loan' from you. From the sound of your question, you deposited what remained after the preceding income/expenses. This would, in effect, return the 'loan' account back to zero, if choosing that route. The above would also be how to record any expenses you may pay personally for the business (if any) in the future. Because these transactions were not through a dedicated business bank account, you can't record them in Quickbooks as checks and deposits. Instead, you can use Journal Entries. For any income received, you would debit your capital/loan account and credit your income account. For any expenses, you would debit the appropriate expense account and credit your distribution/loan account. Also, if setting up a loan account, you should choose either Current Asset or Current Liability type. The capital contribution and distribution account should be Equity type. Hope this helps!" }, { "docid": "297465", "title": "", "text": "\"Is there any way for me to get my money bank? It would be a long drawn process. You would have to file a fraud complaint, they should be able to catch the imposter and / or get a freeze on the account you did wire transfer on [even courts would be involved in process] ... could take lot of time and money. Depending on the amount it may or may not be worth it. If so, should I talk to my bank Your Bank will not take any liability. From their point of view, you deposited a check, they sent it get cleared and reversed the transaction moment they realized it was fraud. the \"\"vendor's\"\" bank You could talk to Vendor Bank. However as you have no relationship with them, they may or may not co-operate. If its a large institution they may do their own internal investigations. If you act sooner, they maybe able to place a hold on the account. Often this is a parking account and the funds are moved elsewhere. They will not be able to refund the funds unless the legal system / process is involved. bank that the fraudulent check came from Depending on how the check was made ... the Bank can easily claim that someone printed something with their Bank's name on it and they are not responsible for it. If there are large cases, the Bank may to contain reputational damage may lodge a complaint with Police and put out some advertisement.\"" } ]

[ { "docid": "268026", "title": "", "text": "\"If you sign the check \"\"For Deposit Only\"\", the bank will put it in your account. You may need to set up a \"\"payable name\"\" on the account matching your DBA alias. However, having counted offerings for a church on several occasions, I know that banks simply have no choice but to be lax about the \"\"Pay to the Order Of\"\" line on checks. Say the church's \"\"legal name\"\" for which the operating funds account was opened is \"\"Saint Barnabas Episcopal Church of Red Bluff\"\". You'll get offering checks made out to \"\"Saint Barnabas\"\", \"\"Saint B's\"\", \"\"Episcopal Church of Red Bluff\"\", \"\"Red Bluff Episcopal\"\", \"\"Youth Group Fund\"\", \"\"Pastor Frank\"\", etc. The bank will take em all; just gotta stamp em with the endorsement for the church. Sometimes the money will be \"\"earmarked\"\" based on the payable line; any attempt to pay the pastor directly will go into his \"\"discretionary fund\"\", and anything payable to a specific subgroup of the church will go into their asset account line, but really all the cash goes directly to the same bank account anyway. For-profit operations are similar; an apartment complex may get checks payable to the apartment name, the management company name, even the landlord. I expect that your freelance work will be no different.\"" } ]

[ { "docid": "555486", "title": "", "text": "\"1.Why is there no \"\"United States Treasury\"\" endorsement? Why should there be, and what do you think it would look like? Some person at Treasury sitting at a desk all day signing \"\"Uncle Sam\"\"? At most you would expect to see some stamp, because it's clear that no person is going to sign all of these checks. 2.Can I have the check returned for proper endorsement? No, this is none of your business unless you have some serious reason to believe that someone other than the treasury cashed your check. (If that were really your concern, then you'd have a bigger issue than the endorsement.) 3.If I am required to endorse checks made out to me, why isn't the US Treasury? As others have noted, an endorsement is often not required as long as the name on the check matches a name on the account to which it is deposited. Individual banks may have stricter rules, but that's between you and your bank.\"" }, { "docid": "398856", "title": "", "text": "\"Well, it's directly depositing money in your account, but Direct Deposit is something completely different: https://en.wikipedia.org/wiki/Direct_deposit Direct deposits are most commonly made by businesses in the payment of salaries and wages and for the payment of suppliers' accounts, but the facility can be used for payments for any purpose, such as payment of bills, taxes, and other government charges. Direct deposits are most commonly made by means of electronic funds transfers effected using online, mobile, and telephone banking systems but can also be effected by the physical deposit of money into the payee's bank account. Thus, since the purpose of DD is to eliminate checks, I'd say, \"\"no\"\", depositing cash directly into your account does not count as the requirement for one Direct Deposit within 90 days.\"" }, { "docid": "12655", "title": "", "text": "\"A very interesting topic, as I am moving to the US in a month. I realise this thread is old but its been helpful to me. My observations from my home country \"\"Before we judge anyone who doesn't use direct deposit or who prefers to be paid in cold hard cash, consider that direct deposit is a luxury of stability. Steady job, home, etc. Direct deposit doesn't make sense for a contractor or day labourer who expect to work for a different person each day or week\"\" --- well here a contractor would still be paid by a direct deposit, even if he was working for many different people. On the invoice the contractor provides Bank account details, and customer logs onto their internet banking and pays electronically. It is a a very simple process and is the preferred method of payment by most businesses even small contractors. Many accounting software programs are linked to bank accounts and can quickly reconcile accounts for small business. Many businesses will not accept a cheque in Australia anymore as they are considered to be a higher risk. I started work in 1994 and have never received any payment except via direct deposit.\"" }, { "docid": "296717", "title": "", "text": "\"Having a separate checking account for the business makes sense. It simplifies documenting your income/expenses. You can \"\"explain\"\" every dollar entering and exiting the account without having to remember that some of them were for non-business items. My credit union allowed me to have a 2nd checking account and allowed me to put whatever I wanted as the name on the check. I think this looked a little better than having my name on the check. I don't see the need for a separate checking account for investing. The money can be kept in a separate savings account that has no fees, and can even earn a little interest. Unless you are doing a lot of investment transactions a month this has worked for me. I fund IRAs and 529 plans this way. We get paychecks 4-5 times a month, but send money to each of the funds once a month. You will need a business account if the number of transactions becomes large. If you deposit dozens of checks every time you go to the bank, the bank will want to move you to a business account.\"" }, { "docid": "492174", "title": "", "text": "Does your employer offer direct deposit? Can you deposit to more than one account? Personally, I have my pay split up like this via direct deposit: From an early age I found that separating my expenses from my spending money kept me inside my spending limits and kept my savings on track. In fact, checking account 1 and 2 are at two different banks. Get yourself a credit card to start establishing some credit. Make a payment plan for the student loan, but before focusing completely on repaying it start to establish an emergency fund." }, { "docid": "361889", "title": "", "text": "He can send you a check. This will move the burden of GBP->USD conversion to him (unless the GBP amount is preset, then you'll be the one to pay for conversion either way). You can then deposit the USD check in any Israeli bank (they'll charge commission for the deposit and the USD->ILS conversion). Another, and from my experience significantly cheaper, option would be to wire transfer directly to your account. If you have a USD account and he'll transfer USD out - it will be almost at no cost to you, if you don't have a USD account check with your bank how to open it, or pay for USD->ILS conversion." }, { "docid": "367754", "title": "", "text": "I feel the need to separate my freelance accounts from my personal accounts. Yes, you should. Should I start another savings account or a current account? Do you need the money for daily spending? Do you need to re-invest in your business? Use a current account. If you don't need the money for business expenses, put it away in your savings account or even consider term deposits. Don't rule out a hybrid approach either (some in savings account, some in current account). What criteria should I keep in mind while choosing a bank? (I thought of SBI since it has a lot of branches and ATMs). If you are involved in online banking and that is sufficient for most of your needs, bank and ATM locations shouldn't matter all that much. If you are saving a good chunk of money, you want to at least have that keep up with inflation. Research bank term deposit interest rates. The tend to be higher than just having your money sit in a savings account. Again, it depends on how and when you expect to need the money. What do I keep in mind while paying myself? Paying yourself could have tax implications. This depends on how are set up to freelance. Are you a business entity or are you an individual? You should look in to the following in India: The other thing to consider is rewarding yourself for the good work done. Pay yourself a reasonable amount. If you decide to expand and hire people going forward, you will have a better sense of business expenses involved when paying salaries. Tips on managing money in the business account. This is a very generic question. I can only provide a generic response. Know how much you are earning and how much your are putting back in to the business. Be reasonable in how much you pay yourself and do the proper research and paperwork from a taxation point of view." }, { "docid": "8126", "title": "", "text": "Navy Federal Credit Union recently added this feature. It is free for members making a deposit to their personal checking account, though you have to be a member for at least 90 days to be eligible. I have an all-in-one printer with flatbed scanner and availed myself of the service a couple of days ago. There wasn't any additional software involved as everything was done through the web browser, as shown the scan deposit demo. The only problem I had was figuring out how to align the check for it to be scanned completely (had to place the check in the middle of the scanner, aligned lengthwise; that was more of a hassle to figure out that one would suppose). That was it. I immediately received an e-mail confirmation that my deposit had been approved and processed. While Navy Federal's scan deposit FAQ is specific to them, of course, it is pretty comprehensive and gives one an idea of the general restrictions applied to the service." }, { "docid": "86852", "title": "", "text": "\"Unfortunately, Australian bureocrats made it impossible to register a small business without making the person's home address, full name, date of birth and other personal information available to the whole world. They tell us the same old story about preventing crime, money laundering and terrorism, but in fact it is just suffocating small business in favour of capitalistic behemoths. With so many weirdos and identity thieves out there, many people running a small business from home feel unsafe publishing all their personal details. I use a short form of my first name and real surname for my business, and reguraly have problems cashing in cheques written to this variation of my name. Even though I've had my account with this bank for decades and the name is obviously mine, just a pet or diminitive form of my first name (e.g. Becky instead of Rebecca). This creates a lot of inconvenience to ask every customer to write the cheque to my full name, or make the cheque \"\"bearer\"\" (or not to cross \"\"or bearer\"\" if it is printed on the cheque already). It is very sad that there is protection for individual privacy in Australia, unless you can afford to have a business address. But even in this case, your name, date of birth and other personal information will be pusblished in the business register and the access to this information will be sold to all sorts of dubious enterprises like credit report companies, debt collectors, market researchers, etc. It seems like Australian system is not interested in people being independent, safe, self-sufficient and working for themselves. Everyone has to be under constant surveliance.\"" }, { "docid": "146317", "title": "", "text": "\"When I was younger I had a problem with Washington Mutual. Someone had deposited a check in to my account then ran my account negative with a \"\"dupe\"\" of my debit card. WaMu tied up my account for three months while they investigated because it wasn't simply a debit card fraud issue, this was check fraud (so they claimed). At the time all the money I had in the world was in that account and the ordeal was extremely disruptive to my life. Since the, I never spend on my debit card(s) and I keep more than one checking account to disperse the risk and avoid disruption in the event anything ever happens again. Now one of the accounts contains just enough money (plus a small buffer) to pay my general monthly expenses and the other is my actual checking account. There's no harm in having more than one checking account and if you think it will enhance your finances, do it. Though, there's no reason to get a business account unless you've actually formed a business.\"" }, { "docid": "389953", "title": "", "text": "I have seen this happen with IRS checks, the bank told me that the IRS imposes the requirement. Otherwise, though, I have frequently deposited checks made out to my wife into a joint checking account without her signature, they have never cared one bit." }, { "docid": "313158", "title": "", "text": "\"There will be no police involved. The police do not care. Only the feds care, and they only care about large amounts (over $100,000). What will happen is that the teller will deposit the money like nothing is unusual, but the amount will trigger a \"\"Suspicious Transaction Report\"\" to be filed by the bank. This information goes to the US Treasury and is then circulated by the Treasury to basically every agency in the government: the Department of Defense, the FBI, the NSA, the CIA, the DEA, the IRS, etc. What happens next depends on your relationship with your bank and the personality of the bank. In my case I have made large cash transactions at two different banks, one that I had a long relationship with, and another that I had a long-standing but dormant account. The long-term one was a high end savings bank in a city. The dormant one was one of those bozo retail banks (think \"\"Citizens\"\" or \"\"Bank of America\"\") in a suburb. The long-term bank ignored my first deposit, but after I made some more including one over $50,000 in cash they summoned me via a letter. I went in, talked to the branch manager and explained why I was making the deposits. He said \"\"That sounds plausible.\"\" and that was the end of the interview. It is unlikely that they transferred the information. They probably just wrote it down. They did this because they have \"\"know your customer\"\" regulations and they wanted to be able to prove that they did \"\"due diligence\"\" in case anybody asked about it later. The suburban bank never asked any questions, but they did file the STRs. In general, there is no way to know if the bank will interview you or not. It depends on a lot of different factors. The basic factors are: how much money is it, are you doing a lot of business normally, and how well does the bank know you. If you refuse to answer the bank's questions to their satisfaction, it is a 100% chance that they will close your account. They can also file higher level reports that flag your activity as \"\"highly suspicious\"\" as opposed to just the normal \"\"suspicious\"\". As long as it is a bank employee, you should have no serious concerns unless the guy seems strange and asks really pointed questions. If you have any question whether the \"\"employee\"\" is legitimate, just verify that he/she is a bank employee. Obviously if the feds visit you, you should say nothing. The chance of this happening is 1 in a million.\"" }, { "docid": "188167", "title": "", "text": "\"Do not use a shared bank account. One of you can cash/deposit the check in your personal account and then either pay the others in the group cash or write them a check. You open yourself up to many, many problems sharing a bank account and/or money. Treat it like a business as far as income goes, but I would not recommend any type of formal business, LLC, partnership, sole proprietorship, etc. For federal taxes, you just keep track of how much \"\"you\"\" personally are paid and report that at the end of the year as income, most likely on a 1040EZ 1040SE, along with any other income you have.\"" }, { "docid": "295522", "title": "", "text": "I don't really see the big deal in taking the check. Fidelity will issue you a check, made payable to VANGUARD FBO [Your Name]. All you have to do is simply hand the check over to Vanguard to deposit into your new IRA. Simple and done. To answer your question: Whether or not a custodian, tpa, or recordkeeper will do a direct-deposit or transfer of your funds is completely at their discretion. My company rarely does direct transfers. We issue a check to you. It's just the way we do it. You can talk to Vanguard and see if they can initiate the direct transfer with Fidelity - but honestly, this may just delay getting your funds moved and you're going to end up with a check anyways. And if Vanguard does somehow convince Fidelity to do the wire transfer - there is still going to be a fee. Wires are expensive. Unless Vanguard is willing to pick up the wire fee for you (doubtful). Other's have also mentioned that TPA's will withhold a mandatory 20% federal tax withholding if they send you a check. This is only true if the check gets made payable in your name. But the taxes should not be withheld as long as the check is made payable to your new Vanguard IRA. So my final opinion: Just take the check and give it to your Vanguard rep. It's literally that simple." }, { "docid": "526817", "title": "", "text": "You mentioned depositing the check and then sending a personal check. Be sure to account for time, since any deposit over $10,000 the money will be made available in increments, so it may take 10-14 days to get the full amount in your account before you could send a personal check. I would not recommend this option regardless, but if you do, just a heads up." }, { "docid": "152827", "title": "", "text": "\"Generally when you open a new account, you'd be given a checkbook (usually \"\"starter\"\" checks with no personal information, but some banks will later mail you a proper checkbook with your personal details) and a debit card (again, some banks will give you a \"\"starter\"\" one on the spot with a personalized following up in the mail, others will mail you). With the debit card you can use your bank's ATM to withdraw cash from your account, or use it for purchases (will debit, as the name says, directly from your account). You can also use it in other ATMs, but that will usually be with significant fees ($2-$5 per withdrawal to both the ATM owner and your bank). Checks - you can write a check to someone or use the check to go to the cashier in the bank and withdraw money (although usually they have special withdrawal slips for that in the branches, so you don't really need to waste your own checks). As to how to deposit money in your home country - you'll have to check with the bank you have an account at back at home. Usually, you can \"\"wire\"\" transfer money from your BoA account to the account back home, but that is usually comes at a fee of about $30-$50 per transfer (in the US, additional fees may be charged at the receiving end + currency conversion costs). You can also write yourself a check and deposit that check at the home country bank, but that depends on the specific bank whether it is possible, how much it would cost, and how long it would take for them to credit the money to your account after they take your check - may take weeks with personal checks.\"" }, { "docid": "73427", "title": "", "text": "Funds earned and spent before opening a dedicated business account should be classified according to their origination. For example, if your business received income, where did that money go? If you took the money personally, it would be considered either a 'distribution' or a 'loan' to you. It is up to you which of the two options you choose. On the flip side, if your business had an expense that you paid personally, that would be considered either a 'contribution of capital' or a 'loan' from you. If you choose to record these transactions as loans, you can offset them together, so you don't need two separate accounts, loan to you and loan from you. When the bank account was opened, the initial deposit came from where? If it came from your personal funds, then it is either a 'contribution of capital' or a 'loan' from you. From the sound of your question, you deposited what remained after the preceding income/expenses. This would, in effect, return the 'loan' account back to zero, if choosing that route. The above would also be how to record any expenses you may pay personally for the business (if any) in the future. Because these transactions were not through a dedicated business bank account, you can't record them in Quickbooks as checks and deposits. Instead, you can use Journal Entries. For any income received, you would debit your capital/loan account and credit your income account. For any expenses, you would debit the appropriate expense account and credit your distribution/loan account. Also, if setting up a loan account, you should choose either Current Asset or Current Liability type. The capital contribution and distribution account should be Equity type. Hope this helps!" }, { "docid": "182866", "title": "", "text": "\"When I deposit my paycheck in CapOne I have an email before I am out of the app that they received my check. I have access to some portion of the cash now and the rest the next business day, however they put things in order to NOT overdraft me. For instance, if I am overdrawn $150 but the charge is \"\"pending\"\", putting the check in they will deposit the check before posting the charge that would overdraft me. Plus I can use Apple Pay with it. My local CUs have app deposit, but it takes DAYS for a deposit to just show up. Plus, no Apple Pay.\"" }, { "docid": "344780", "title": "", "text": "\"Should is a very \"\"strong\"\" word. You do what makes most sense to you. Should I be making a single account for Person and crediting / debiting that account? You can do that. Should I be creating a loan for Person? And if so, would I make a new loan each month or would I keep all of the loans in one account? You can create a loan account (your asset), you don't need to create a new account every time - just change the balance of the existing one. That's essentially the implementation of the first way (\"\"making a single account for a Person\"\"). How do I show the money moving from my checking account to Company and then to Person's loan? You make the payment to Company from your Checking, and you adjust the loan amount to Person from Equity for the same amount. When the Person pays - you clear the loan balance and adjust the Checking balance accordingly. This keeps your balance intact for the whole time (i.e.: your total balance sheet doesn't change, money moves from line to line internally but the totals remain the same). This is the proper trail you're looking for. How do I (or should I even) show the money being reimbursed from the expense? You shouldn't. Company is your expense. Payment by the Person is your income. They net out to zero (unless you charge interest). Do I debit the expense at any point? Of course. Company is your expense account. Should I not concern myself with the source of a loan / repayment and instead just increase the size of the loan? Yes. See above.\"" } ]

[ { "docid": "248624", "title": "", "text": "\"Depending on where you are, you may be able to get away with filing a \"\"Doing Business As\"\" document with your local government, and then having the bank call the county seat to verify this. There is generally a fee for processing/recording/filing the DBA form, of course. But it's useful for more purposes than just this one. (I still need to file a DBA for my hobby work-for-pay, for exactly this reason.)\"" } ]

[ { "docid": "547301", "title": "", "text": "\"Like you said, it's important to keep your personal assets and company assets completely separate to maintain the liability protection of the LLC. I'd recommend getting the business bank account right from the beginning. My wife formed an LLC last year (also as a pass-through sole proprietorship for tax purposes), and we were able to get a small business checking account from Savings Institute and Trust that has no fees (at least for the relatively low quantity of transactions we'll be doing). We wrote it a personal check for startup capital, and since then, the LLC has paid all of its own bills out of its checking account (with associated debit card). Getting the account opened took less than an hour of sitting at the bank. Without knowing exactly where you are in Kentucky, I note that Googling \"\"kentucky small business checking\"\" and visiting a few banks' web sites provided several promising options for no-fee business checking.\"" }, { "docid": "176017", "title": "", "text": "\"Checks (in the US, anyway) are only good for six months after they have been written. After that. under the US Uniform Commerical Code they are considered \"\"stale checks\"\" and banks need not accept them. My experience is that they generally won't -- but you probably shouldn't count on that, either when figuring out whether to try depositing an old check or figuring out how much cash you need to keep in your checking account to cover recent stale checks. The check you now hold is certainly a statement of intent to pay you and thus is a useful document to supplement other evidence that they still owe you the money -- but since checks can be cancelled and/or a replacement check may have been issued, its value for that purpose may be limited. You can try depositing it and see what happens. If that doesn't work (or you don't want to bother trying it) you can contact the retirement plan, point out that this check went uncashed, and ask them to send you a replacement. If they haven't already done so (you might want to check your own records for that), there shouldn't be any problem with this. (Note: Many business checks have a statement printed on them that they're only good for 90 days or so. If yours does, you can skip trying to cash it; just contact the retirement plan offices.)\"" }, { "docid": "146317", "title": "", "text": "\"When I was younger I had a problem with Washington Mutual. Someone had deposited a check in to my account then ran my account negative with a \"\"dupe\"\" of my debit card. WaMu tied up my account for three months while they investigated because it wasn't simply a debit card fraud issue, this was check fraud (so they claimed). At the time all the money I had in the world was in that account and the ordeal was extremely disruptive to my life. Since the, I never spend on my debit card(s) and I keep more than one checking account to disperse the risk and avoid disruption in the event anything ever happens again. Now one of the accounts contains just enough money (plus a small buffer) to pay my general monthly expenses and the other is my actual checking account. There's no harm in having more than one checking account and if you think it will enhance your finances, do it. Though, there's no reason to get a business account unless you've actually formed a business.\"" }, { "docid": "254730", "title": "", "text": "A CFD broker will let you open a trade on margin as long as your account balance is more than the margin required on all your open trades. If the required margin increases within a certain percentage of your account balance, you will get a margin call. If you then don't deposit more funds or close losing trades out, the broker will close all your trades. Note: Your account balance is the remaining funds you have left to open new trades with. I always use stop loss orders with all my open trades, and because of this my broker reduces the amount of margin required on each trade. This allows me to have more open trades at the one time without increasing my funds. Effects of a Losing Trade on Margin Say I have an account balance of $2,000 and open a long trade in a share CFD of 1,000 CFDs with a share price of $10 and margin of 10%. The face value of the shares would be $10,000, but my initial margin would be $1,000 (10% of $10,000). If I don't place a stop loss and the price falls to $9, I would have lost $1,000 and my remaining margin would now be $900 (10% of $9,000). So I would have $100 balance remaining in my account. I would probably receive a margin call to deposit more funds in or close out my trade. If I don't respond the broker will close out my position before my balance gets to $0. If instead I placed a stop loss at say $9.50, my initial margin might be reduced to $500. As the price drops to $9.60 I would have lost $400 and my remaining margin would now only be $100, with my account balance at $1,500. When the price drops to $9.50 I will get stopped out, my trade will be closed and I would have lost $500, with my account balance still at $1,500. Effects of a Winning Trade on Margin Say I have the same account balance as before and open the same trade but this time the price moves up. If I don't place a stop loss and the price goes up to $11, I would have made a $1,000 profit and my remaining margin will now be $1,100 (10% of $11,000). So my account balance would now be $2,000 + $1,000 - $1,100 = $1,900. If I had placed a stop loss at say $9.50 again and the price moves up to $10.50, I would have made a profit of $500 and my margin would now be $1,000. My account balance would be $2,000 + $500 - $1,000 = $1,500. However, if after the price went up to $10.50 I also moved my stop loss up to $10, then I would have $500 profit and only $500 margin. So my balance in this case would be $2,000 + $500 - $500 = $2,000. So by using stop losses as part of your risk management you can reduce the margin used from your balance which will allow you to open more trades without any extra funds deposited into your account." }, { "docid": "464619", "title": "", "text": "\"I started a business a few years ago. At one point it wasn't going so well and my father \"\"loaned\"\" me an amount not too dissimilar to what you've done. From a personal perspective, the moment I took that loan there was a strain the relationship. Especially when I was sometimes late on the interest payments... Unfortunately thoughts like \"\"he doesn't need this right now, but if I don't pay the car loan then that is taken away\"\" came up a few times and paying the interest fell to the bottom of the monthly bill payment stack. At some point my wife and I finally took a hard look at my finances and goals. We got rid of things that simply weren't necessary (car payment, cable tv, etc) and focused on the things we needed to. Doing the same with the business helped out as well, as it helped focus me to to turn things around. Things are now going great. That said, two of my siblings ran into their own financial trouble that our parents helped them on. When this happened my father called us together and basically forgave everyone's debt by an equal amount which covered everything plus wrote a check to the one that was doing fine. This \"\"cleared the air\"\" with regards to future inheritance, questions about how much one sibling was being helped vs another, etc. Honestly, it made family gatherings more enjoyable as all that underlying tension was now gone. I've since helped one of my children. Although I went about it an entirely different way. Rather than loan them money, I gave it to them. We also had a few discussions on how I think they ought to manage their finances and a set of goals to work towards which we co-developed. Bearing in mind that they are an individual and sometimes you can lead a horse... Given the current state of things I consider it money well \"\"spent\"\".\"" }, { "docid": "560622", "title": "", "text": "\"In the case of bank failures You are protected by FDIC insurance. At the time I wrote this, you are insured up to $250,000. In my lifetime, it has been as high as $1,000,000 and as low as $100,000. I attached a link, which is updated by FDIC. In the case of fraud It depends. If you read this story and are horrified (I was too), you know that the banking system is not as safe as the other answers imply: In February 2005, Joe Lopez, a businessman from Florida, filed a suit against Bank of America after unknown hackers stole $90,000 from his Bank of America account. The money had been transferred to Latvia. An investigation showed that Mr. Lopez’s computer was infected with a malicious program, Backdoor.Coreflood, which records every keystroke and sends this information to malicious users via the Internet. This is how the hackers got hold of Joe Lopez’s user name and password, since Mr. Lopez often used the Internet to manage his Bank of America account. However the court did not rule in favor of the plaintiff, saying that Mr. Lopez had neglected to take basic precautions when managing his bank account on the Internet: a signature for the malicious code that was found on his system had been added to nearly all antivirus product databases back in 2003. Ouch. But let's think about the story for a second - he had his money stolen because of online banking and he didn't have the latest antivirus/antimalware software. How safe is banking if you don't do online banking? In the case of this story, it would have prevented keyloggers, but you're still susceptible to someone stealing your card or account information. So: In the bank's defense, how does a bank not know that someone didn't wire money to a friend (which is a loss for good), then get some of that money back from his friend while also getting money back from the bank, which had to face the loss. Yes, it sucks, but it's not total madness. As for disputing charges, from personal experience it also depends. I don't use cards whatsoever, so I've never had to worry, but both of my parents have experienced banking fraud where a fake charge on their card was not reversed. Neither of my parents are rich and can't afford lawyers, so crying \"\"lawsuit\"\" is not an option for everyone. How often does this occur? I suspect it's rare that banks don't reverse the charges in fraudulent cases, though you will still lose time for filing and possibly filling out paperwork. The way to prevent this: As much as I hate to be the bearer of bad news, there is no absolutely safe place to keep your money. Even if you bought metals and buried them in the ground, a drifter with a metal detector might run across it one day. You can take steps to protect yourself, but there is no absolute guarantee that these will work out. Account Closures I added this today because I saw this question and have only seen/heard about this three times. Provided that you get the cashier's check back safely, you should be okay - but why was this person's account closed and look at how much funds he had! From his question: In the two years I banked with BoA I never had an overdraft or any negative marks on my account so the only thing that would stick out was a check that I deposited for $26k that my mom left me after she passed. Naturally, people aren't going to like some of my answers, especially this, but imagine you're in an immediate need for cash, and you experience this issue. What can you do? Let's say that rent is on the line and it's $25 for every day that you're late. Other steps to protect yourself Some banks allow you to use a keyword or phrase. If you're careful with how you do this and are clever, it will reduce the risk that someone steals your money.\"" }, { "docid": "400230", "title": "", "text": "\"IANAL, but. As you note, when you open a new account, they give you temporary checks that are usually blank in the upper left. I've used such checks and the bank has honored them. Therefore, I conclude that there must not be any legal requirement for anything to appear there, nor does the bank require it. Businesses are often reluctant to accept such temporary checks, for the obvious reason that anyone could go to the bank, open an account with $10, write checks for thousands of dollars, and disappear. At least if they've waited long enough to get the permanent checks in, there's some reason to believe that they plan to stick around. In any case, it's not clear what you are trying to accomplish. You want to hand-write either your business name or your personal name depending on whether the check is for personal or business purposes? I don't see what that gains. You could always use a personal check for business purposes. If you're afraid someone will say, \"\"Hey, that doesn't look very professional, what kind of fly-by-night company is this that uses personal checks?\"\", surely a hand-written company name would look even less professional. Why not just open a business account and have your personal checks printed with your personal name and your business checks with your business name? I don't know where you live, but I have a business account on which I pay zero fees. The only cost is getting checks printed. There's the small hassle of having to make one trip to the bank to open the account. Well, the biggest hassle I have is that the bank won't let me transfer money between my personal and business accounts over the Internet, so I have to either go to the bank to move money back and forth, or I have to write a check from one account to the other and deposit through an ATM.\"" }, { "docid": "555486", "title": "", "text": "\"1.Why is there no \"\"United States Treasury\"\" endorsement? Why should there be, and what do you think it would look like? Some person at Treasury sitting at a desk all day signing \"\"Uncle Sam\"\"? At most you would expect to see some stamp, because it's clear that no person is going to sign all of these checks. 2.Can I have the check returned for proper endorsement? No, this is none of your business unless you have some serious reason to believe that someone other than the treasury cashed your check. (If that were really your concern, then you'd have a bigger issue than the endorsement.) 3.If I am required to endorse checks made out to me, why isn't the US Treasury? As others have noted, an endorsement is often not required as long as the name on the check matches a name on the account to which it is deposited. Individual banks may have stricter rules, but that's between you and your bank.\"" }, { "docid": "492174", "title": "", "text": "Does your employer offer direct deposit? Can you deposit to more than one account? Personally, I have my pay split up like this via direct deposit: From an early age I found that separating my expenses from my spending money kept me inside my spending limits and kept my savings on track. In fact, checking account 1 and 2 are at two different banks. Get yourself a credit card to start establishing some credit. Make a payment plan for the student loan, but before focusing completely on repaying it start to establish an emergency fund." }, { "docid": "22268", "title": "", "text": "\"They don't actually need to. They accept deposits for historical reasons and because they make money doing so, but there's nothing key to their business that requires them to do so. Here's a decent summary, but I'll explain in great detail below. By making loans, banks create money. This is what we mean when we say the monetary supply is endogenous. (At least if you believe Sir Mervyn King, who used to run England's central bank...) The only real checks on this are regulatory--capitalization requirements and reserve requirements, which impose a sort of tax on a bank's circulating loans. I'll get into that later. Let's start with Why should you believe that story--that loans create deposits? It seems like a bizarre assertion. But it actually matches how banks behave in practice. If you go borrow money from a bank, the loan officer will do many things. She'll want to look at your credit history. She'll want to look at your income and assets. She'll want to look at what kind of collateral or guarantees you're providing that the loan will be repaid. What she will not do is call down to the vaults and make sure that there's enough bills stacked up for them to lend out. Loans are judged based on a profitability function determined by the interest rate and the loan risk. If those add up to \"\"profitable\"\", the bank makes the loan. So the limiting factor on the loans a bank makes are the available creditworthy borrowers--not the bank's stock of cash. Further, the story makes sense because loans are how banks make money. If a bank that was short of money suddenly stopped making loans, it'd be screwed: no new loans = no way to make money to pay back depositors and also keep the lights on = no more bank. And the story is believable because of the way banks make so little effort to solicit commercial deposit business. Oh sure, they used to give you a free toaster if you opened an account; but now it's really quite challenging to find a no-fee checking account that doesn't impose a super-high deposit limit. And the interest paid on savings deposits is asymptotically approaching zero. If banks actually needed your deposits, they'd be making a lot more of effort to get them. I mean, they won't turn up their noses; your deposited allowance is a couple basis points cheaper to the bank than borrowing from the Fed; but banks seem to value small-potatoes depositors more as a source of fees and sales opportunities for services and consumer credit than as a source of cash. (It's a bit different if you get north of seven figures, but smaller depositors aren't really worth the hassle just for their cash.) This is where someone will mention the regulatory requirements of fractional reserve banking: banks are obliged by regulators to keep enough cash on hand to pay out a certain percentage of deposits. Note nothing about loans was said in that statement: this requirement does not serve as a check on the bank making bad loans, because the bank is ultimately liable to all its depositors for the full value of their deposits; it's more making sure they have enough liquidity to prevent bank runs, the self-fulfilling prophecy in which an undercapitalized bank could be forced into bankruptcy. As you noted in your question, banks can always borrow from the Fed at the Fed Discount Rate (or from other banks at the interbank overnight rate, which is a little lower) to meet this requirement. They do have to pledge collateral, but loans themselves are collateral, so this doesn't present much of a problem. In terms of paying off depositors if the bank should collapse (and minimizing the amount of FDIC insurance payout from the government), it's really capital requirements that are actually important. I.E. the bank has to have investors who don't have a right to be paid back and whose investment is on the hook if the bank goes belly-up. But that's just a safeguard for the depositors; it doesn't really have anything to do with loans other than that bad loans are the main reason a bank might go under. Banks, like any other private business, have assets (things of value) and liabilities (obligations to other people). But banking assets and liabilities are counterintuitive. The bank's assets are loans, because they are theoretically recoverable (the principal) and also generate a revenue stream (the interest payments). The money the bank holds in deposits is actually a liability, because it has to pay that money out to depositors on demand, and the deposited money will never (by itself) bring the bank any revenue at all. In fact, it's a drain, because the bank needs to pay interest to its depositors. (Well, they used to anyway.) So what happens when a bank makes a loan? From a balance sheet perspective, strangely enough, the answer is nothing at all. If I grant you a loan, the minute we shake hands and you sign the paperwork, a teller types on a keyboard and money appears in your account. Your account with my bank. My bank has simultaneously created an asset (the loan you now have to repay me) and an equal-sized liability (the funds I loaned you, which are now deposited in your account). I'll make money on the deal, because the interest you owe me is a much higher rate than the interest I pay on your deposits, or the rate I'd have to pay if I need to borrow cash to cover your withdrawal. (I might just have the cash on hand anyway from interest and origination fees and whatnot from previous loans.) From an accounting perspective, nothing has happened to my balance sheet, but suddenly you owe me closing costs and a stream of extraneous interest payments. (Nice work if you can get it...) Okay, so I've exhaustively demonstrated that I don't need to take deposits to make loans. But we live in a world where banks do! Here's a few reasons: You can probably think of more, but at the end of the day, a bank should be designed so that if every single (non-borrowing) depositor withdrew their deposits, the bank wouldn't collapse or cease to exist.\"" }, { "docid": "239632", "title": "", "text": "The hard hold is the bank holding your money for no reason but to make money of your. Like the hotel took deposit for my over night and they released the time checked out in there system but it never showed on my account . I had to call the bank why the numbers are not adding up to my current balance. It's illegal practice by banks to hold your money until your realize you didn't spent that much and that musing amount is not even showing on your account. When it happen they will release after 30 days or you can call the bank right away soon as you done your business so you can use the money right away not the bank" }, { "docid": "173807", "title": "", "text": "Personally, I keep two regular checking accounts at different banks. One gets a direct deposit totaling the sum of my regular monthly bills and a prorated provision for longer term regular bills like semi-annual car insurance premiums. I leave a buffer in the account to account for the odd expensive electrical bill or rate increase or whatever. One gets a direct deposit of the rest which I then allocate to savings and spending. It makes sense to me to separate off regular planned expenses (rent/mortgage, utility bills, insurance premiums) from spending money because it lets me put the basics of my life on autopilot. An added benefit is I have a failover checking account in the event something happens to one of them. I don't keep significant amounts of money in either account and don't give transfer access to the savings accounts that store the bulk of my money. I wear a tinfoil hat when it comes to automatic bank transfers and account access... It doesn't make sense to me to keep deposits separate from spending, it makes less sense to me to spend off of a savings account." }, { "docid": "38628", "title": "", "text": "I don't think this is a French thing. It's like this everywhere. Banks always want people to open accounts of every type. A person with a checking account should be easy to sell on a savings account at the same institution. Given that it does not appear that they will have any chance to recover the money they spend to get customers to open these accounts (there are no fees and they have to pay out the interests, even if very small) Oh, they recover it. Banks make money by having deposits that they can use to lend out. They do pay interest on deposits, but not as much as they earn on your money. If they persuade you to have a savings account in addition to your checking account, then you might find it convenient and then move your money out of a different institution into their savings account. Or you might stop hoarding it under your mattress. Or whatever. More money in their accounts means more profit for them. I don't know whether banks make more profit per dollar in savings or checking accounts. I see banks pushing for both. I think they simply view more accounts as a good thing because it can lead to more total savings in their institution. That's how they make money." }, { "docid": "97719", "title": "", "text": "\"Disclaimer: This should go without saying, but this answer is definitely an opinion. (I'm pretty sure my current accountant would agree with this answer, and I'm also pretty sure that one of my past accountants would disagree.) When I started my own small business over 10 years ago I asked this very same question for pretty much every purchase I made that would be used by both the business and me personally. I was young(er) and naive then and I just assumed everything was deductible until my accountant could prove otherwise. At some point you need to come up with some rules of thumb to help make sense of it, or else you'll drive yourself and your accountant bonkers. Here is one of the rules I like to use in this scenario: If you never would have made the purchase for personal use, and if you must purchase it for business use, and if using it for personal use does not increase the expense to the business, it can be fully deducted by the business even if you sometimes use it personally too. Here are some example implementations of this rule: Note about partial expenses: I didn't mention partial deductions above because I don't feel it applies when the criteria of my \"\"rule of thumb\"\" is met. Note that the IRS states: Personal versus Business Expenses Generally, you cannot deduct personal, living, or family expenses. However, if you have an expense for something that is used partly for business and partly for personal purposes, divide the total cost between the business and personal parts. You can deduct the business part. At first read that makes it sound like some of my examples above would need to be split into partial calulations, however, I think the key distinction is that you would never have made the purchase for personal use, and that the cost to the business does not increase because of allowing personal use. Partial deductions come into play when you have a shared car, or office, or something where the business cost is increased due to shared use. In general, I try to avoid anything that would be a partial expense, though I do allow my business to reimburse me for mileage when I lend it my personal car for business use.\"" }, { "docid": "84770", "title": "", "text": "\"My dad keeps complaining that I treat him like a kid but hey, when the shoe fits, right? That right there is some wisdom. I would question why you need a student account. If I found myself in this situation; and, decided to participate. I would open a savings account (no debit card) in both of your names. This account would have little or no fees, have a branch convenient for both of you, and no ability for him to overdraft. When I wanted to, I could deposit money into his account, and he could withdraw. You might even open your own account at the same bank that he does not have access to. Then it is a matter of transferring the money into his account which can be done by mobile phone. The thing that I would say to you, beyond your question, is that you are choosing to participate and enabling this insanity. By \"\"quickly\"\" sending him money you are not allowing him to find alternatives for his poor behavior. If it was me, I would require that he have some sort of financial literacy education. He needs help budgeting, planning, and managing a bank account. I am a Dave Ramsey guy, so I would require him to attend FPU, that I would happily pay for ~$100. Alternatives are more than fine, mostly there has to be progress in his financial literacy and behavior. If he asked for money in the future, I would ask to see his budget and explain what went wrong. If there was no budget, there would be no money. If there was some legitimacy to his need, I would help meet it. One example would be the company he worked for did not meet payroll. That is something mostly beyond his control and can really hurt when a person is just starting to take control of their life. So yes, I would send a check in that case. However, that choice is yours. For perspective, when my son was 18 he came to me for help with habitual bounced checks. He wanted me to pay the fee and probably pay it every month that he went crazy. I paid the fee once, and I provided the education he needed. After that he learned and was quickly a self-sufficient adult. I also made it very clear that I would only pay it once. My situation was normal, parents should teach their children. Your situation is insanity. There is no way you should be put in the situation you are in with your father. He needs to grow up, and you will have to help him somewhat. If nothing more you should cut him off financially.\"" }, { "docid": "258423", "title": "", "text": "\"What I've found works best when working on my personal budget is to track my income and spending two different ways: bank accounts and budget categories. Here is what I mean: When I deposit my paycheck, I do two things with it: It goes into my checking account, so the balance of my checking account goes up by the amount of my paycheck. I also \"\"deposit\"\" the money from my checking account into my various budget category balances. This is separate from my bank account balances. Some of my paycheck money goes into my groceries category, some goes into clothing, some into car fuel, entertainment, mortgage, phone, etc. Some goes into longer range bills that only happen once or twice a year, such as car insurance, life insurance, property tax, etc. Some goes into savings goals of ours, such as car replacement, vacation, furniture, etc. Every dollar that we have in a bank account or in cash in our wallets is also accounted for in a budget category. If you add up the balances of our bank accounts and cash, and you add up the balances of our budget categories, they add up to the same number. When we make a purchase, this also gets accounted for twice: The appropriate bank account (or cash wallet) balance gets reduced by the purchase amount. The appropriate budget category gets reduced by the purchase amount. In this way, we don't really need to worry about having separate bank accounts for different purposes. We don't need to put our savings goal money in a separate bank account from our grocery money, if we don't want to. The budget category accounting keeps track of how much money is allocated to each purpose. Now, the budget category amounts are not spent yet; the money in them is still in our bank account, and we can move money around in the categories, if we change our mind on how to allocate them. For example, if we don't spend all of our gas money for the month, we can either keep that money in the gas category, or we can move it to a different category, such as the car replacement category or the vacation category. If the phone bill is more than we expect, we can move money around from a different category to cover it. Now, back to your question: We allocate some money from each paycheck into our furniture category. But the money is not really spent until we actually buy some furniture. When we do, the furniture category balance and bank account balance both go down by the amount of the purchase. All of this can be kept track of on the computer in a spreadsheet. However, it's not easy to keep track of so many categories and bank balances. An easier solution is custom budgeting software designed for this purpose. I use and recommend YNAB.\"" }, { "docid": "8126", "title": "", "text": "Navy Federal Credit Union recently added this feature. It is free for members making a deposit to their personal checking account, though you have to be a member for at least 90 days to be eligible. I have an all-in-one printer with flatbed scanner and availed myself of the service a couple of days ago. There wasn't any additional software involved as everything was done through the web browser, as shown the scan deposit demo. The only problem I had was figuring out how to align the check for it to be scanned completely (had to place the check in the middle of the scanner, aligned lengthwise; that was more of a hassle to figure out that one would suppose). That was it. I immediately received an e-mail confirmation that my deposit had been approved and processed. While Navy Federal's scan deposit FAQ is specific to them, of course, it is pretty comprehensive and gives one an idea of the general restrictions applied to the service." }, { "docid": "86852", "title": "", "text": "\"Unfortunately, Australian bureocrats made it impossible to register a small business without making the person's home address, full name, date of birth and other personal information available to the whole world. They tell us the same old story about preventing crime, money laundering and terrorism, but in fact it is just suffocating small business in favour of capitalistic behemoths. With so many weirdos and identity thieves out there, many people running a small business from home feel unsafe publishing all their personal details. I use a short form of my first name and real surname for my business, and reguraly have problems cashing in cheques written to this variation of my name. Even though I've had my account with this bank for decades and the name is obviously mine, just a pet or diminitive form of my first name (e.g. Becky instead of Rebecca). This creates a lot of inconvenience to ask every customer to write the cheque to my full name, or make the cheque \"\"bearer\"\" (or not to cross \"\"or bearer\"\" if it is printed on the cheque already). It is very sad that there is protection for individual privacy in Australia, unless you can afford to have a business address. But even in this case, your name, date of birth and other personal information will be pusblished in the business register and the access to this information will be sold to all sorts of dubious enterprises like credit report companies, debt collectors, market researchers, etc. It seems like Australian system is not interested in people being independent, safe, self-sufficient and working for themselves. Everyone has to be under constant surveliance.\"" }, { "docid": "278678", "title": "", "text": "\"I opened several free checking accounts at a local credit union. One is a \"\"Deposit\"\" account where all of my new money goes. I get paid every two weeks. Every other Sunday we have our \"\"Money Day\"\" where we allocate the money from our Deposit account into our other checking accounts. I have one designated as a Bills account where all of my bills get paid automatically via bill pay or auto-pay. I created a spreadsheet that calculates how much to save each Money Day for all of my upcoming bills. This makes it so the amount I save for my bills is essentially equal. Then I allocate the rest of my deposit money into my other checking accounts. I have a Grocery, Household, and Main checking accounts but you could use any combination that you want. When we're at the store we check our balances (how much we have left to spend) on our mobile app. We can't overspend this way. The key is to make sure you're using your PIN when you use your debit card. This way it shows up in real-time with your credit union and you've got an accurate balance. This has worked really well to coordinate spending between me and my wife. It sounds like it's a lot of work but it's actually really automated. The best part is that I don't have to do any accounting which means my budget doesn't fail if I'm not entering my transactions or categorizing them. I'm happy to share my spreadsheet if you'd like.\"" } ]

[ { "docid": "508754", "title": "", "text": "\"I have checked with Bank of America, and they say the ONLY way to cash (or deposit, or otherwise get access to the funds represented by a check made out to my business) is to open a business account. They tell me this is a Federal regulation, and every bank will say the same thing. To do this, I need a state-issued \"\"dba\"\" certificate (from the county clerk's office) as well as an Employer ID Number (EIN) issued by the IRS. AND their CHEAPEST business banking account costs $15 / month. I think I can go to the bank that the check is drawn upon, and they will cash it, assuming I have documentation showing that I am the sole proprietor. But I'm not sure.... What a racket!!\"" } ]

[ { "docid": "492174", "title": "", "text": "Does your employer offer direct deposit? Can you deposit to more than one account? Personally, I have my pay split up like this via direct deposit: From an early age I found that separating my expenses from my spending money kept me inside my spending limits and kept my savings on track. In fact, checking account 1 and 2 are at two different banks. Get yourself a credit card to start establishing some credit. Make a payment plan for the student loan, but before focusing completely on repaying it start to establish an emergency fund." }, { "docid": "387510", "title": "", "text": "\"If my wife and I tried this, we'd call it grounds for divorce. However, I think most long term couples actually do this, and it is just a budget. It is common practice for two spouses to deposit money into a single checking account. All of the household expenses are then paid from that single account. Same as you describe: if I spend money from the joint checking that is less money available to my wife. Based on your dollar amount, I'd have to say great work on thinking about saving early on in life. I think though, if you are actually starting out, getting into the habit of saving a \"\"dime of every dollar\"\" would be more beneficial. At some point your income will increase, and when it does so should your savings. By \"\"paying yourself first\"\" your savings will keep pace with your spending and you will be a happier person when you income starts to fall again.\"" }, { "docid": "560622", "title": "", "text": "\"In the case of bank failures You are protected by FDIC insurance. At the time I wrote this, you are insured up to $250,000. In my lifetime, it has been as high as $1,000,000 and as low as $100,000. I attached a link, which is updated by FDIC. In the case of fraud It depends. If you read this story and are horrified (I was too), you know that the banking system is not as safe as the other answers imply: In February 2005, Joe Lopez, a businessman from Florida, filed a suit against Bank of America after unknown hackers stole $90,000 from his Bank of America account. The money had been transferred to Latvia. An investigation showed that Mr. Lopez’s computer was infected with a malicious program, Backdoor.Coreflood, which records every keystroke and sends this information to malicious users via the Internet. This is how the hackers got hold of Joe Lopez’s user name and password, since Mr. Lopez often used the Internet to manage his Bank of America account. However the court did not rule in favor of the plaintiff, saying that Mr. Lopez had neglected to take basic precautions when managing his bank account on the Internet: a signature for the malicious code that was found on his system had been added to nearly all antivirus product databases back in 2003. Ouch. But let's think about the story for a second - he had his money stolen because of online banking and he didn't have the latest antivirus/antimalware software. How safe is banking if you don't do online banking? In the case of this story, it would have prevented keyloggers, but you're still susceptible to someone stealing your card or account information. So: In the bank's defense, how does a bank not know that someone didn't wire money to a friend (which is a loss for good), then get some of that money back from his friend while also getting money back from the bank, which had to face the loss. Yes, it sucks, but it's not total madness. As for disputing charges, from personal experience it also depends. I don't use cards whatsoever, so I've never had to worry, but both of my parents have experienced banking fraud where a fake charge on their card was not reversed. Neither of my parents are rich and can't afford lawyers, so crying \"\"lawsuit\"\" is not an option for everyone. How often does this occur? I suspect it's rare that banks don't reverse the charges in fraudulent cases, though you will still lose time for filing and possibly filling out paperwork. The way to prevent this: As much as I hate to be the bearer of bad news, there is no absolutely safe place to keep your money. Even if you bought metals and buried them in the ground, a drifter with a metal detector might run across it one day. You can take steps to protect yourself, but there is no absolute guarantee that these will work out. Account Closures I added this today because I saw this question and have only seen/heard about this three times. Provided that you get the cashier's check back safely, you should be okay - but why was this person's account closed and look at how much funds he had! From his question: In the two years I banked with BoA I never had an overdraft or any negative marks on my account so the only thing that would stick out was a check that I deposited for $26k that my mom left me after she passed. Naturally, people aren't going to like some of my answers, especially this, but imagine you're in an immediate need for cash, and you experience this issue. What can you do? Let's say that rent is on the line and it's $25 for every day that you're late. Other steps to protect yourself Some banks allow you to use a keyword or phrase. If you're careful with how you do this and are clever, it will reduce the risk that someone steals your money.\"" }, { "docid": "188167", "title": "", "text": "\"Do not use a shared bank account. One of you can cash/deposit the check in your personal account and then either pay the others in the group cash or write them a check. You open yourself up to many, many problems sharing a bank account and/or money. Treat it like a business as far as income goes, but I would not recommend any type of formal business, LLC, partnership, sole proprietorship, etc. For federal taxes, you just keep track of how much \"\"you\"\" personally are paid and report that at the end of the year as income, most likely on a 1040EZ 1040SE, along with any other income you have.\"" }, { "docid": "597571", "title": "", "text": "First, if you live in/around a reasonably populated urban area, and you're in the United States, I can't see why you would choose to bank with Chase, B of A, or another large commercial bank. I think you would be much better served by banking at a reasonably large credit union. There are many differences between banks and credit unions, but in a nutshell, credit unions are owned by the members, and operate primarily to provide benefits to their members, whereas a bank is owned by the shareholders, and operates primarily to make profits for the shareholders (not to benefit the customers). The banking industry absolutely hates the credit unions, so if you've ever been nickeled-and-dimed with this fee and that charge by your bank, I have to ask why you're still banking with a company that irritates you and/or actively tries to screw you out of your money? I live in California, and I've banked at credit unions almost exclusively since I started working nearly 30 years ago. Every time I've strayed and started banking at a for-profit bank, I've regretted it. For example, a few years ago I opened a checking account at a now-defunct bank (WaMu) just for online use: eBay and so forth. It was a free checking account. When Chase bought WaMu, the account became a Chase account, and it seemed that every other statement brought new fees, new restrictions, and so forth. I finally closed it when they imposed some stupid fee for not carrying enough of a balance. I found out by logging in to their Web site and seeing a balance of zero dollars; they had imposed the fee a few statements back, and I had missed it, so they kept debiting my account until it was empty. At this point, I do about 90% of my banking at a fairly large credit union. I have a mortgage with a big bank, but that was out of my hands, as the lender/originator sold the mortgage and I had no say in the matter. My credit union has a highly functional Web site, permits me to download my account activity to Quicken, and even has mobile apps which allow me to deposit a check by taking a picture of it, or check my account activity, etc. They (my credit union) are part of a network of other credit unions, so as long as I am using a network ATM, I never pay a fee. In sum, I can't see any reason to go with a bank. Regarding checks, I write a small number of checks per year, but I recently needed to reorder them. My credit union refers members directly to Harland-Clarke, a major-league player in the check printing business. Four boxes of security checks was around $130 plus shipping, which is not small money. However, I was able to order the very same checks via Costco for less than half that amount. Costco refers members to a check printing service, which is a front/subsidiary of Harland-Clarke, and using a promo code, plus the discount given for my Costco membership, I got four boxes of security checks shipped to me for less than $54. My advice would be to look around. If you're a Costco member, use their check printing service. Wal*mart offers a similar service to anyone, as does Sam's Club, and you can search around to find other similar services. Bottom line, if you order your checks via your bank or credit union, chances are you will pay full retail. Shop around, and save a bit. I've not opened a new account at a credit union in some time, but I would not be surprised if a credit union offered a free box of checks when you open a new account with them." }, { "docid": "83346", "title": "", "text": "\"For practical purposes, I would strongly suggest that you do create a separate account for each business you may have that is used only for business purposes, and use it for all of your business income and expenses. This will allow you to get an accurate picture of whether you are making money or not, what your full expenses really are, how much of your personal money you have put into the business, and is an easy way to keep business taxes separate. You will also be able to get a fairly quick read on what your profits are without doing much accounting by looking at the account balance less future taxes and expenses, and less any personal money you've put into the account. Check out this thread from Paypal about setting up a \"\"child\"\" account that is linked to your personal account and can be set up to autosweep payments into your main account, should you like. You will still be able to see transactions for each child account. NOTE: Do be careful to make sure you are reserving the proper amount out of any profits your startup may have for taxes - you don't want to mix this with personal money and then later find out that you owe taxes and have to scramble to come up with the money if you have already spent it This is one of the main reasons to segregate your startup's revenues and profits in the business account. For those using \"\"brick and mortar\"\" banking services rather than a service like Paypal: You likely do not need a business checking account if you are a startup. Most likely, you can simply open a second personal account with your bank in your name, and name it \"\"John Doe DBA Company Name\"\" (DBA = Doing Business As). This way, you can pay expenses and accept payments in the name of your startup. Check with your banker for additional details (localized information).\"" }, { "docid": "297465", "title": "", "text": "\"Is there any way for me to get my money bank? It would be a long drawn process. You would have to file a fraud complaint, they should be able to catch the imposter and / or get a freeze on the account you did wire transfer on [even courts would be involved in process] ... could take lot of time and money. Depending on the amount it may or may not be worth it. If so, should I talk to my bank Your Bank will not take any liability. From their point of view, you deposited a check, they sent it get cleared and reversed the transaction moment they realized it was fraud. the \"\"vendor's\"\" bank You could talk to Vendor Bank. However as you have no relationship with them, they may or may not co-operate. If its a large institution they may do their own internal investigations. If you act sooner, they maybe able to place a hold on the account. Often this is a parking account and the funds are moved elsewhere. They will not be able to refund the funds unless the legal system / process is involved. bank that the fraudulent check came from Depending on how the check was made ... the Bank can easily claim that someone printed something with their Bank's name on it and they are not responsible for it. If there are large cases, the Bank may to contain reputational damage may lodge a complaint with Police and put out some advertisement.\"" }, { "docid": "175522", "title": "", "text": "I have gotten a letter of credit from my credit union stating the maximum amount I can finance. Of course I don't show the dealer the letter until after we have finalized the deal. I Then return in 3 business days with a cashiers check for the purchase price. In one case since the letter was for an amount greater then the purchase price I was able drive the car off the lot without having to make a deposit. In another case they insisted on a $100 deposit before I drove the car off the lot. I have also had them insist on me applying for their in-house loan, which was cancelled when I returned with the cashiers check. The procedure was similar regardless If I was getting a loan from the credit union, or paying for the car without the use of a loan. The letter didn't say how much was loan, and how much was my money. Unless you know the exact amount, including all taxes and fees,in advance you can't get a check in advance. If you are using a loan the bank/credit Union will want the car title in their name." }, { "docid": "296717", "title": "", "text": "\"Having a separate checking account for the business makes sense. It simplifies documenting your income/expenses. You can \"\"explain\"\" every dollar entering and exiting the account without having to remember that some of them were for non-business items. My credit union allowed me to have a 2nd checking account and allowed me to put whatever I wanted as the name on the check. I think this looked a little better than having my name on the check. I don't see the need for a separate checking account for investing. The money can be kept in a separate savings account that has no fees, and can even earn a little interest. Unless you are doing a lot of investment transactions a month this has worked for me. I fund IRAs and 529 plans this way. We get paychecks 4-5 times a month, but send money to each of the funds once a month. You will need a business account if the number of transactions becomes large. If you deposit dozens of checks every time you go to the bank, the bank will want to move you to a business account.\"" }, { "docid": "152049", "title": "", "text": "\"I have some money invested on Merrill Edge. 2 days ago I purchased some mutual funds with most of the rest of my money in my account. I logged in today to see how it did, and noticed that there are 3 sections: Priced Investments, Cash & Money Accounts, and Pending Activity. In the Cash & Money section, there shows a negative balance of Cash (let's say -$1,000) and a positive \"\"Money Account Value\"\" (let's say +$1,100). The \"\"Money Account\"\" appears to be made up of $1 shares of something called \"\"ML Direct Deposit Program\"\". However, even though the mutual fund purchase was made 2 days ago, and the shares of the mutual funds are officially in my account, I'm still showing all of my \"\"Money Account\"\" shares ($1000). The balance sheet effectively makes it look like I somehow needed to have \"\"sold\"\" back my money account shares, converted them to cash, and then bought the funds. I'm hoping that isn't the case, and for some reason, there is a multiday lag between me buying stock and money getting deducted from my \"\"Money Account\"\". Hope that all makes sense. TLDR: what's the diff between a Cash account and Money Account that's filled with shares of \"\" ML Direct Deposit Program\"\"? Edit: Today the cash and money account offset by equal values equal to one of my mutual fund purchases.\"" }, { "docid": "476233", "title": "", "text": "\"This is based on my experience with Chase and may not be applicable to other banks. As you mentioned Chase as one of the banks you do business with hopefully this will be helpful to you. The money does come out of your account immediately. If the check isn't cashed in a certain amount of time, the check expires and you get the money credited back to your account. Once you have made a bill payment online you can check on the status of your check by looking at your payment activity, finding the payment in question, and following the \"\"proof of payment\"\" link. There is will provide you with information on your payment which you can submit to your payee to prove when you submitted the payment, and which they can use to verify with the bank that you really did send the payment as you claimed. Once the check is cashed, this page will also contain images of the front and back of the cashed check, so you can prove that the recipient really did cash it. You can see from this info that the check is being funded from a different account number than your own, which is good for security purposes since (per Knuth, 2008) giving someone else your bank routing number and account number as found on your personal checks basically provides them with all they need to (fraudulently, of course) clean out your account.\"" }, { "docid": "29372", "title": "", "text": "\"Lets say you owed me $123.00 an wanted to mail me a check. I would then take the check from my mailbox an either take it to my bank, or scan it and deposit it via their electronic interface. Prior to you mailing it you would have no idea which bank I would use, or what my account number is. In fact I could have multiple bank accounts, so I could decide which one to deposit it into depending on what I wanted to do with the money, or which bank paid the most interest, or by coin flip. Now once the check is deposited my bank would then \"\"stamp\"\" the check with their name, their routing number, the date, an my account number. Eventually an image of the canceled check would then end up back at your bank. Which they would either send to you, or make available to you via their banking website. You don't mail it to my bank. You mail it to my home, or my business, or wherever I tell you to mail it. Some business give you the address of another location, where either a 3rd party processes all their checks, or a central location where all the money for multiple branches are processed. If you do owe a company they will generally ask that in the memo section in the lower left corner that you include your customer number. This is to make sure that if they have multiple Juans the money is accounted correctly. In all my dealings will paying bills and mailing checks I have never been asked to send a check directly to the bank. If they want you to do exactly as you describe, they should provide you with a form or other instructions.\"" }, { "docid": "308938", "title": "", "text": "\"You should have separate files for each of the two businesses. The business that transfers money out should \"\"write check\"\" in its QB file. The business that receives money should \"\"make deposit\"\" in its QB file. (In QB you \"\"write check\"\" even when you make the payment by some other means like ACH.) Neither business should have the bank accounts of the other explicitly represented. On each side, you will also need to classify the payment as having originated from / gone to some other account - To know what's correct there, we'd need to know why your transferring the money in the first place and how you otherwise have your books established. I think that's probably beyond the scope of what's on-topic / feasible here. Money into your business from your personal account is probably owner's equity, unless you have something else going on. For example, on the S Corp you should be paying yourself a salary. If you overpay by accident, then you might write a check back to the company from your personal account to correct the mistake. That's not equity - It's probably a \"\"negative expense\"\" in some other account that tracks the salary payments.\"" }, { "docid": "176017", "title": "", "text": "\"Checks (in the US, anyway) are only good for six months after they have been written. After that. under the US Uniform Commerical Code they are considered \"\"stale checks\"\" and banks need not accept them. My experience is that they generally won't -- but you probably shouldn't count on that, either when figuring out whether to try depositing an old check or figuring out how much cash you need to keep in your checking account to cover recent stale checks. The check you now hold is certainly a statement of intent to pay you and thus is a useful document to supplement other evidence that they still owe you the money -- but since checks can be cancelled and/or a replacement check may have been issued, its value for that purpose may be limited. You can try depositing it and see what happens. If that doesn't work (or you don't want to bother trying it) you can contact the retirement plan, point out that this check went uncashed, and ask them to send you a replacement. If they haven't already done so (you might want to check your own records for that), there shouldn't be any problem with this. (Note: Many business checks have a statement printed on them that they're only good for 90 days or so. If yours does, you can skip trying to cash it; just contact the retirement plan offices.)\"" }, { "docid": "475497", "title": "", "text": "\"This is another version of an old scam -- \"\"let me have a check deposited in your account because I can't open one for some reason, and I'll share some of the money with you.\"\" Here the scammer is promising to \"\"start a business\"\" with you as a way to gain your confidence and trust. The first danger sign is that you only know this person from online. They are not someone you are friends with in the \"\"real\"\" world. They could be anybody. They used the name of a big company as a way to make what they're doing sound legitimate, but it's all a fraud. They could be depositing a faked Exxon check into your account, which could land YOU in huge trouble. Here's the thing -- The only way Exxon (or any other company) can deposit money in a bank under someone's name is if that person provides the account and routing numbers to an account that already exists. No company can just create an account in another person's name. That's Hollywood movie stuff, but it's not how banking works. To open an account, the bank would need identification on the account holder, so your \"\"friend\"\" already has an account if Exxon has allegedly deposited money. Further, Exxon isn't going to take back money that has already been deposited. In fact, they can't take it back. If the account is in his name, they can't do anything to the account or with the account. This is a situation you should run away from and never look back. Nothing about this story sounds right or legitimate, but this is one of the oldest scams out there since the beginning of the Internet. You would be well advised to stay VERY far away from your supposed friend, because they're anything but your friend. You are being SCAMMED. Don't be a victim. Stop communicating with this person immediately, and DON'T give them any personal information of any kind. They're crooks! I hope this helps. Good luck!\"" }, { "docid": "358837", "title": "", "text": "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." }, { "docid": "473957", "title": "", "text": "Savings accounts have lower fees. If you don't anticipate doing many transactions per month, e.g. three or fewer withdrawals, then I would suggest a savings account rather than a checking account. A joint account that requires both account holder signatures to make withdrawals will probably require both account holders' signature endorsements, in order to make deposits. For example, if you are issued a tax refund by the U.S. Treasury, or any check that is payable to both parties, you will only be able to deposit that check in a joint account that has both persons as signatories. There can be complications due to multi-party account ownership if cashing versus depositing a joint check and account tax ID number. When you open the account, you will need to specify what your wishes are, regarding whether both parties or either party can make deposits and withdrawals. Also, at least one party will need to be present, with appropriate identification (probably tax ID or Social Security number), when opening the account. If the account has three or more owners, you might be required to open a business or commercial account, rather than a consumer account. This would be due to the extra expense of administering an account with more than two signatories. After the questioner specified interest North Carolina in the comments, I found that the North Carolina general banking statutes have specific rules for joint accounts: Any two or more persons may establish a deposit account... The deposit account and any balance shall be as joint tenants... Unless the persons establishing the account have agreed with the bank that withdrawals require more than one signature, payment by the bank to, or on the order of (either person on) the account satisfys the bank's obligation I looked for different banks in North Carolina. I found joint account terms similar to this in PDF file format, everywhere, Joint Account: If an item is drawn so that it is unclear whether one payee’s endorsement or two is required, only one endorsement will be required and the Bank shall not be liable for any loss incurred by the maker as a result of there being only one endorsement. also Joint accounts are owned by you individually or jointly with others. All of the funds in a joint account may be used to repay the debts of any co-owner, whether they are owed individually, by a co-owner, jointly with other co-owners, or jointly with other persons or entities having no interest in your account. You will need to tell the bank specifically what permissions you want for your joint account, as it is between you and your bank, in North Carolina." }, { "docid": "323573", "title": "", "text": "\"The biggest disadvantage to you is that your tenant now knows your bank information, which means he can easily identify your source of money in the event he wins a lawsuit and wins a judgement. He will be able to have a court marshall freeze your account. However, if you deposit your tenant's check into your account as opposed to an EFT, then your tenant can basically still obtain your bank account information and freeze your account, it would just take him a bit longer to get that information. I am definitely anti-landlord in these situations because I've had to deal with so many bad ones here in NYC, but as a landlord, the best thing you can do is to create a \"\"buffer\"\" account for you to deposit tenant rent money into, then transfer the money from the buffer account to your regular account. This would prevent the tenant from knowing your personal bank information and greatly delay the tenant receiving his judgement from an assumed court win against you. My source: I had to take my landlord to court, and after obtaining a judgement, I got a court marshall to begin the process of closing access to her account (she couldn't access the money in that account). The process resulted in her sending me a check (assuming from her other account) for the judgement since her account was frozen and she couldn't access any of her money.\"" }, { "docid": "355686", "title": "", "text": "\"This is not a mistake. This is done for \"\"Out of Network\"\" providers, and mainly when the patient is an Anthem member, be it Blue Shield or Blue Cross. Even though an \"\"Assignment of Benefits\"\" is completed by the patient, and all fields on the claim from (CMS1500 or UB04) are completed assigning the benefits to the provider, Anthem has placed in their policy that the Assignment of Benefits the patient signs is null and void. No other carrier that I have come across conducts business in this manner. Is it smart? Absolutely not! They have now consumed their member's time in trying to figure out which provider the check is actually for, the member now is responsible for forwarding the payment, or the patient spends the check thinking Anthem made a mistake on their monthly premium at some point (odds are slim) and is now in debt thousands of dollars because they don't check with Anthem. It creates a huge mess for providers, not only have we chased Anthem for payment, but now we have to chase the patient and 50% of the time, never see the payment in our office. It creates more phone calls to Anthem, but what do they care, they are paying pennies on the dollar for their representatives in the Philippines to read from a script. Anthem is the second largest insurance carrier in the US. Their profit was over 800 million dollars within 3 months. The way they see it, we issued payment, so stop calling us. It's amazing how they can accept a CMS1500, but not follow the guidelines associated with it. Your best bet, and what we suggest to patients, either deposit the check and write your a personal check or endorse and forward. I personally would deposit the check and write a personal check for tracking purposes; however, keep in mind that in the future, you may depend on your bank statements for proof of income (e.g. Social Security) and imagine the work having to explain, and prove, a $20,000 deposit and withdraw within the same month.\"" } ]

[ { "docid": "64556", "title": "", "text": "If you're a sole proprietor there's no reason to have a separate business account, as long as you keep adequate records, as you are one and the same for tax purposes. My husband and I already have 5 accounts and a mortgage with one bank. I don't see the need to open up yet another account. As a contracted accountant, I don't need to write business checks, and my expenses are minimal. As long as I have an present my assumed business name certificate and ID, there's no reason for a bank not to deposit into my personal account." } ]

[ { "docid": "358837", "title": "", "text": "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." }, { "docid": "323573", "title": "", "text": "\"The biggest disadvantage to you is that your tenant now knows your bank information, which means he can easily identify your source of money in the event he wins a lawsuit and wins a judgement. He will be able to have a court marshall freeze your account. However, if you deposit your tenant's check into your account as opposed to an EFT, then your tenant can basically still obtain your bank account information and freeze your account, it would just take him a bit longer to get that information. I am definitely anti-landlord in these situations because I've had to deal with so many bad ones here in NYC, but as a landlord, the best thing you can do is to create a \"\"buffer\"\" account for you to deposit tenant rent money into, then transfer the money from the buffer account to your regular account. This would prevent the tenant from knowing your personal bank information and greatly delay the tenant receiving his judgement from an assumed court win against you. My source: I had to take my landlord to court, and after obtaining a judgement, I got a court marshall to begin the process of closing access to her account (she couldn't access the money in that account). The process resulted in her sending me a check (assuming from her other account) for the judgement since her account was frozen and she couldn't access any of her money.\"" }, { "docid": "310112", "title": "", "text": "\"The first consideration for the banking part of your portfolio is safety. In the United States that is FDIC protection, or the equivalent for a Credit Union. The second consideration is does it have the level of service you need. For this I mean the location of branches, ATMs, or its online services meet your needs for speed, accuracy, and ability to access or move the money as you need. The rest are then balanced on the extras. For your situation those extras include the ability to make free trades. For other it might be a discount on their mortgage. For others it is free checking. In your current situation if the first two things are met, and you are using those extra benefits then don't change. For me the free trades wouldn't be a benefit, so any major degradation in the safety and service would cause me to leave. Keep in mind that free services exist to entice you to make a deposit: which they can then make money by lending it out; or they offer a free service to entice you to use a service they can charge you to use. All Free services come with a cost. I earned a completely paltry $3.33 YTD over the last 9 months on my savings at my bank presumably in exchange for these \"\"free\"\" trades. Without knowing how much you had deposited in your savings account there is no way to know how much you could have made at the bank across the street. But with the low rates of the last decade there is not big money to be made off the emergency savings of a typical american family.\"" }, { "docid": "393553", "title": "", "text": "There is a difference between an owner and a signer. An owner is the legal owner of the funds. A signer has access to withdraw the funds. In most cases, when a new personal account is opened the name is added as an owner&signer. However, that is not always the case. A person could be an owner, but not a signer, in a custodial arrangement. For example, a minor child may be an owner only on their account with a custodial parent listed as a signer. The minor could not withdraw from the account. A person could be a signer, but not an owner, in a business or estate/trust account. The business or estate would be the owner with individuals listed as signers only. The business employees do not own the funds, they are only allowed to withdraw and disburse the funds on behalf of the company. The creditor can only garnish/withhold funds that are owned by the indebted. If the second person on the account is only a signer, those funds cannot be withheld as part of a judgment against the second person (they don't own those funds). However, simply titling the second person as a signer only is not sufficient. If you share access with the second person and allow them to spend the money for their own benefit, they are no longer just a signer. They have become an owner because you are sharing your funds with them. Think of the business relationship as an example. The employee is a signer so they can withdraw funds and pay business expenses, like the electric bill. If the employee withdrew funds and bought herself a new dress, she is stealing because she does not own those funds. If the second person on the account buys things for themselves, or transfers some of the money into their own account, they are demonstrating that more than a signer-only relationship exists. A true signer-only relationship is where the individual can only withdraw funds on the owner's behalf. For example, the owner is out of town and needs a bill paid, the signer can write a check and pay the bill for the owner. A limited power of attorney may be worth looking into. With a limited POA, the owner can define the scope and expiration of the power of attorney. With this arrangement, the second person becomes an executor of the owner under certain circumstances. For example, you could write a power of attorney that states something like: John Smith is hereby granted the limited power to withdraw funds from account 1234, on deposit at Anytown Bank, for the purpose of paying debts and obligations and otherwise maintain my estate in the event of my incapacitation or inability to attend to my own affairs. This Power of Attorney shall expire on it's fifth anniversary unless renewed. If the person you have granted the power of attorney abuses their access, you could sue them and you would only have to demonstrate that they overstepped the scope of their power." }, { "docid": "295522", "title": "", "text": "I don't really see the big deal in taking the check. Fidelity will issue you a check, made payable to VANGUARD FBO [Your Name]. All you have to do is simply hand the check over to Vanguard to deposit into your new IRA. Simple and done. To answer your question: Whether or not a custodian, tpa, or recordkeeper will do a direct-deposit or transfer of your funds is completely at their discretion. My company rarely does direct transfers. We issue a check to you. It's just the way we do it. You can talk to Vanguard and see if they can initiate the direct transfer with Fidelity - but honestly, this may just delay getting your funds moved and you're going to end up with a check anyways. And if Vanguard does somehow convince Fidelity to do the wire transfer - there is still going to be a fee. Wires are expensive. Unless Vanguard is willing to pick up the wire fee for you (doubtful). Other's have also mentioned that TPA's will withhold a mandatory 20% federal tax withholding if they send you a check. This is only true if the check gets made payable in your name. But the taxes should not be withheld as long as the check is made payable to your new Vanguard IRA. So my final opinion: Just take the check and give it to your Vanguard rep. It's literally that simple." }, { "docid": "152049", "title": "", "text": "\"I have some money invested on Merrill Edge. 2 days ago I purchased some mutual funds with most of the rest of my money in my account. I logged in today to see how it did, and noticed that there are 3 sections: Priced Investments, Cash & Money Accounts, and Pending Activity. In the Cash & Money section, there shows a negative balance of Cash (let's say -$1,000) and a positive \"\"Money Account Value\"\" (let's say +$1,100). The \"\"Money Account\"\" appears to be made up of $1 shares of something called \"\"ML Direct Deposit Program\"\". However, even though the mutual fund purchase was made 2 days ago, and the shares of the mutual funds are officially in my account, I'm still showing all of my \"\"Money Account\"\" shares ($1000). The balance sheet effectively makes it look like I somehow needed to have \"\"sold\"\" back my money account shares, converted them to cash, and then bought the funds. I'm hoping that isn't the case, and for some reason, there is a multiday lag between me buying stock and money getting deducted from my \"\"Money Account\"\". Hope that all makes sense. TLDR: what's the diff between a Cash account and Money Account that's filled with shares of \"\" ML Direct Deposit Program\"\"? Edit: Today the cash and money account offset by equal values equal to one of my mutual fund purchases.\"" }, { "docid": "151121", "title": "", "text": "Bank of America is the worst. Once I had a joint account with another individual that I had funded out of my account to make payroll. When I found out that he had screwed two other people by stealing the payroll money I decided to disburse it myself and transferred it back to my corporate account on which I was the only signer. He went back to the bank and effected a withdrawal from my account to the tune of tens of thousands of dollars, put the money in the joint account and removed me as a signer. The bank wouldn't give me my money back and I never collected from him. Another time I tried to close my sons' accounts which were in inactive status. Every day for a week they told me they could not close the account until it was active, but they were working on making it active. Chase could do this in a minute. I finally went to a branch and loudly informed the manager that maybe the bank was insolvent and that I should call the FDIC to see why they won't release my money. He wanted to take me into his office. I told him loudly, I know all about DDAs, Savings and CDs, I have run deposit operations for a major bank and wrote software to process them. Just put a hold on the account, write me two cashiers check and offset them with a suspense voucher. You do know how to write a suspense voucher don't you? It's just a general ledger entry to a suspense account. Well he was so embarassed he would do anything to get me out of the branch and gave me the cashier's checks. Fuck B of A." }, { "docid": "173807", "title": "", "text": "Personally, I keep two regular checking accounts at different banks. One gets a direct deposit totaling the sum of my regular monthly bills and a prorated provision for longer term regular bills like semi-annual car insurance premiums. I leave a buffer in the account to account for the odd expensive electrical bill or rate increase or whatever. One gets a direct deposit of the rest which I then allocate to savings and spending. It makes sense to me to separate off regular planned expenses (rent/mortgage, utility bills, insurance premiums) from spending money because it lets me put the basics of my life on autopilot. An added benefit is I have a failover checking account in the event something happens to one of them. I don't keep significant amounts of money in either account and don't give transfer access to the savings accounts that store the bulk of my money. I wear a tinfoil hat when it comes to automatic bank transfers and account access... It doesn't make sense to me to keep deposits separate from spending, it makes less sense to me to spend off of a savings account." }, { "docid": "86852", "title": "", "text": "\"Unfortunately, Australian bureocrats made it impossible to register a small business without making the person's home address, full name, date of birth and other personal information available to the whole world. They tell us the same old story about preventing crime, money laundering and terrorism, but in fact it is just suffocating small business in favour of capitalistic behemoths. With so many weirdos and identity thieves out there, many people running a small business from home feel unsafe publishing all their personal details. I use a short form of my first name and real surname for my business, and reguraly have problems cashing in cheques written to this variation of my name. Even though I've had my account with this bank for decades and the name is obviously mine, just a pet or diminitive form of my first name (e.g. Becky instead of Rebecca). This creates a lot of inconvenience to ask every customer to write the cheque to my full name, or make the cheque \"\"bearer\"\" (or not to cross \"\"or bearer\"\" if it is printed on the cheque already). It is very sad that there is protection for individual privacy in Australia, unless you can afford to have a business address. But even in this case, your name, date of birth and other personal information will be pusblished in the business register and the access to this information will be sold to all sorts of dubious enterprises like credit report companies, debt collectors, market researchers, etc. It seems like Australian system is not interested in people being independent, safe, self-sufficient and working for themselves. Everyone has to be under constant surveliance.\"" }, { "docid": "193592", "title": "", "text": "This is a reasonable requirement which many banks probably have. The reason is that after you deposit a check, ACH or direct deposit - they may be reversed after a couple of days (check bounced, payment canceled, etc). If you wire the money out, and then the check by which you got the money gets bounced - the bank is left hanging because money wired out is very hard to return. Wire transfers are generally irreversible unless its a mistake in the wire. After 10 days, these transactions cannot be reversed and the money is bound to remain on the account, so you can wire it out. By the way, it also goes for cashier's checks as well, I had a similar discussion with my banker (don't remember if it was WF or Chase) when I needed one based on a ACH transfer from my savings account elsewhere. They gave me the check, but said that its because I proved that the transfer was from my own account." }, { "docid": "387510", "title": "", "text": "\"If my wife and I tried this, we'd call it grounds for divorce. However, I think most long term couples actually do this, and it is just a budget. It is common practice for two spouses to deposit money into a single checking account. All of the household expenses are then paid from that single account. Same as you describe: if I spend money from the joint checking that is less money available to my wife. Based on your dollar amount, I'd have to say great work on thinking about saving early on in life. I think though, if you are actually starting out, getting into the habit of saving a \"\"dime of every dollar\"\" would be more beneficial. At some point your income will increase, and when it does so should your savings. By \"\"paying yourself first\"\" your savings will keep pace with your spending and you will be a happier person when you income starts to fall again.\"" }, { "docid": "296717", "title": "", "text": "\"Having a separate checking account for the business makes sense. It simplifies documenting your income/expenses. You can \"\"explain\"\" every dollar entering and exiting the account without having to remember that some of them were for non-business items. My credit union allowed me to have a 2nd checking account and allowed me to put whatever I wanted as the name on the check. I think this looked a little better than having my name on the check. I don't see the need for a separate checking account for investing. The money can be kept in a separate savings account that has no fees, and can even earn a little interest. Unless you are doing a lot of investment transactions a month this has worked for me. I fund IRAs and 529 plans this way. We get paychecks 4-5 times a month, but send money to each of the funds once a month. You will need a business account if the number of transactions becomes large. If you deposit dozens of checks every time you go to the bank, the bank will want to move you to a business account.\"" }, { "docid": "526817", "title": "", "text": "You mentioned depositing the check and then sending a personal check. Be sure to account for time, since any deposit over $10,000 the money will be made available in increments, so it may take 10-14 days to get the full amount in your account before you could send a personal check. I would not recommend this option regardless, but if you do, just a heads up." }, { "docid": "484535", "title": "", "text": "Opening account in foreign bank is possible, but you must have strong proofs you use it for legitimate purposes. More chances to get an account if you visit Europe and able to stay, for example, for a week, to visit bank in person and wait for all the checks and approvals. Also keep in mind that there will be deposit/withdraw limits and fees applicable, that are significantly stricter and larger for non-EU citizen. In my opinion, if your amounts are not large, it might not worth it. If amounts are large, you might consider business account rather than personal, as is the example of strong proof I meant." }, { "docid": "258423", "title": "", "text": "\"What I've found works best when working on my personal budget is to track my income and spending two different ways: bank accounts and budget categories. Here is what I mean: When I deposit my paycheck, I do two things with it: It goes into my checking account, so the balance of my checking account goes up by the amount of my paycheck. I also \"\"deposit\"\" the money from my checking account into my various budget category balances. This is separate from my bank account balances. Some of my paycheck money goes into my groceries category, some goes into clothing, some into car fuel, entertainment, mortgage, phone, etc. Some goes into longer range bills that only happen once or twice a year, such as car insurance, life insurance, property tax, etc. Some goes into savings goals of ours, such as car replacement, vacation, furniture, etc. Every dollar that we have in a bank account or in cash in our wallets is also accounted for in a budget category. If you add up the balances of our bank accounts and cash, and you add up the balances of our budget categories, they add up to the same number. When we make a purchase, this also gets accounted for twice: The appropriate bank account (or cash wallet) balance gets reduced by the purchase amount. The appropriate budget category gets reduced by the purchase amount. In this way, we don't really need to worry about having separate bank accounts for different purposes. We don't need to put our savings goal money in a separate bank account from our grocery money, if we don't want to. The budget category accounting keeps track of how much money is allocated to each purpose. Now, the budget category amounts are not spent yet; the money in them is still in our bank account, and we can move money around in the categories, if we change our mind on how to allocate them. For example, if we don't spend all of our gas money for the month, we can either keep that money in the gas category, or we can move it to a different category, such as the car replacement category or the vacation category. If the phone bill is more than we expect, we can move money around from a different category to cover it. Now, back to your question: We allocate some money from each paycheck into our furniture category. But the money is not really spent until we actually buy some furniture. When we do, the furniture category balance and bank account balance both go down by the amount of the purchase. All of this can be kept track of on the computer in a spreadsheet. However, it's not easy to keep track of so many categories and bank balances. An easier solution is custom budgeting software designed for this purpose. I use and recommend YNAB.\"" }, { "docid": "84770", "title": "", "text": "\"My dad keeps complaining that I treat him like a kid but hey, when the shoe fits, right? That right there is some wisdom. I would question why you need a student account. If I found myself in this situation; and, decided to participate. I would open a savings account (no debit card) in both of your names. This account would have little or no fees, have a branch convenient for both of you, and no ability for him to overdraft. When I wanted to, I could deposit money into his account, and he could withdraw. You might even open your own account at the same bank that he does not have access to. Then it is a matter of transferring the money into his account which can be done by mobile phone. The thing that I would say to you, beyond your question, is that you are choosing to participate and enabling this insanity. By \"\"quickly\"\" sending him money you are not allowing him to find alternatives for his poor behavior. If it was me, I would require that he have some sort of financial literacy education. He needs help budgeting, planning, and managing a bank account. I am a Dave Ramsey guy, so I would require him to attend FPU, that I would happily pay for ~$100. Alternatives are more than fine, mostly there has to be progress in his financial literacy and behavior. If he asked for money in the future, I would ask to see his budget and explain what went wrong. If there was no budget, there would be no money. If there was some legitimacy to his need, I would help meet it. One example would be the company he worked for did not meet payroll. That is something mostly beyond his control and can really hurt when a person is just starting to take control of their life. So yes, I would send a check in that case. However, that choice is yours. For perspective, when my son was 18 he came to me for help with habitual bounced checks. He wanted me to pay the fee and probably pay it every month that he went crazy. I paid the fee once, and I provided the education he needed. After that he learned and was quickly a self-sufficient adult. I also made it very clear that I would only pay it once. My situation was normal, parents should teach their children. Your situation is insanity. There is no way you should be put in the situation you are in with your father. He needs to grow up, and you will have to help him somewhat. If nothing more you should cut him off financially.\"" }, { "docid": "239632", "title": "", "text": "The hard hold is the bank holding your money for no reason but to make money of your. Like the hotel took deposit for my over night and they released the time checked out in there system but it never showed on my account . I had to call the bank why the numbers are not adding up to my current balance. It's illegal practice by banks to hold your money until your realize you didn't spent that much and that musing amount is not even showing on your account. When it happen they will release after 30 days or you can call the bank right away soon as you done your business so you can use the money right away not the bank" }, { "docid": "38628", "title": "", "text": "I don't think this is a French thing. It's like this everywhere. Banks always want people to open accounts of every type. A person with a checking account should be easy to sell on a savings account at the same institution. Given that it does not appear that they will have any chance to recover the money they spend to get customers to open these accounts (there are no fees and they have to pay out the interests, even if very small) Oh, they recover it. Banks make money by having deposits that they can use to lend out. They do pay interest on deposits, but not as much as they earn on your money. If they persuade you to have a savings account in addition to your checking account, then you might find it convenient and then move your money out of a different institution into their savings account. Or you might stop hoarding it under your mattress. Or whatever. More money in their accounts means more profit for them. I don't know whether banks make more profit per dollar in savings or checking accounts. I see banks pushing for both. I think they simply view more accounts as a good thing because it can lead to more total savings in their institution. That's how they make money." }, { "docid": "464619", "title": "", "text": "\"I started a business a few years ago. At one point it wasn't going so well and my father \"\"loaned\"\" me an amount not too dissimilar to what you've done. From a personal perspective, the moment I took that loan there was a strain the relationship. Especially when I was sometimes late on the interest payments... Unfortunately thoughts like \"\"he doesn't need this right now, but if I don't pay the car loan then that is taken away\"\" came up a few times and paying the interest fell to the bottom of the monthly bill payment stack. At some point my wife and I finally took a hard look at my finances and goals. We got rid of things that simply weren't necessary (car payment, cable tv, etc) and focused on the things we needed to. Doing the same with the business helped out as well, as it helped focus me to to turn things around. Things are now going great. That said, two of my siblings ran into their own financial trouble that our parents helped them on. When this happened my father called us together and basically forgave everyone's debt by an equal amount which covered everything plus wrote a check to the one that was doing fine. This \"\"cleared the air\"\" with regards to future inheritance, questions about how much one sibling was being helped vs another, etc. Honestly, it made family gatherings more enjoyable as all that underlying tension was now gone. I've since helped one of my children. Although I went about it an entirely different way. Rather than loan them money, I gave it to them. We also had a few discussions on how I think they ought to manage their finances and a set of goals to work towards which we co-developed. Bearing in mind that they are an individual and sometimes you can lead a horse... Given the current state of things I consider it money well \"\"spent\"\".\"" } ]

[ { "docid": "31793", "title": "", "text": "Depends whom the 1099 was issued to. If it was issued to your corporation - then its your corporation's income, not yours. Why would it go to your tax return? Your corporation and you are two separate legal entities. You will have to file the 1120S, whether you have corporate income or not, it has to be filed each year. So why make a mess of your reporting and not just report the corporation income on its return and your personal income on your own return? If you no longer use the corporation and all the 1099's are issued to you personally, then just dissolve it so that you won't have to file an empty 1120S every year and pay additional fees for maintaining it." } ]

[ { "docid": "381151", "title": "", "text": "Chris, since you own your own company, nobody can stop you from charging your personal expenses to your business account. IRS is not a huge fan of mixing business and personal expenses and this practice might indicate to them that you are not treating your business seriously, and it should classify your business as a hobby. IRS defines deductible business expense as being both: ordinary AND necessary. Meditation is not an ordinary expense (other S-corps do not incur such expense.) It is not a necessary expense either. Therefore, you cannot deduct this expense. http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Deducting-Business-Expenses" }, { "docid": "175072", "title": "", "text": "\"If you are in the US, you legally must file taxes on any income whatsoever. How much you will pay in taxes, if any, will depend on your total taxable income. Now, for small transactions, the payments are often not reported to the IRS so some people do not file or pay. The threshold at which they payer is required to send a 1099 to the IRS is $600. Patreon considers each donation a separate transaction and therefore does not send a 1099 to the IRS unless you make more than $20,000 in a calendar year. If they do not report it, the IRS will not know about it unless they audit you or something. However, you are technically and legally responsible to report income whether the IRS knows about it or not. -------- EDIT ------- Note that the payer files a 1099, not the recipient. In order to report your patreon income you will either use schedule C or add it to the amount on 1040 line 21 (\"\"other income\"\") depending on whether you consider this a business or a hobby. If it's a business and it's a lot of money you should consider sending in quarterly payments using a 1040-ES in order to avoid a penalty for too little withholding.\"" }, { "docid": "79411", "title": "", "text": "\"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).\"" }, { "docid": "7925", "title": "", "text": "\"That is a great distinction you bring up: Has the Don filed for personal BK or Corp bk? In April of 2011, The Wall Street journal [asked him](http://blogs.wsj.cccom/washwire/2011/04/11/trump-will-probably-run-as-independent-if-he-doesnt-win-gop-nomination/): Should someone who filed for bankruptcy multiple times be running national finances at a time when we have a big debt problem? His Answer? \"\"I've never filed for bankruptcy.\"\" ...um... to say the LEAST this is semantics, I would classify it as an outright lie. I say that because he slaps the name on EVERYTHING, he is the President, CEO, Chairman of the Board - he is responsible (until things go south) then the investors and debtors are left with an empty shell. Here are some examples: * Trump Plaza Hotel bankruptcy – On Nov 2, 1992, Trump's Plaza Hotel was forced to file Chapter 11 bankruptcy protection after being unable to make its debt payments. Under the plan, Trump agreed to give up a 49% stake in this luxury hotel to Citibank and five other lenders. * Trump Shuttle closure – The Trump Shuttle became no more when it merged with Shuttle Inc, operating as USAir Shuttle in 1992. * Donald Trump personal bankruptcy – By 1994, Trump slashed a large portion of his $900 million personal debt and washed away $3.5 billion in his portfolio's business debt. * Trump Hotels & Casino Resorts' bankruptcy – On November 21, 2004 Trump's company filed for bankruptcy. Trump said the filing was \"\"really just a technical thing\"\" as the best way to implement a restructuring plan. * Donald Trump personal bankruptcy (again) – Once again, Trump filed for personal bankruptcy protection and restructured his debt in 2004. * Taj Mahal bankruptcy – On November 22, 2006 Donald J. Trump’s casino empire filed for bankruptcy protection after months of negotiations with bondholders over restructuring a crushing debt. * GoTrump.com – Donald Trump's online travel search engine was launched in 2006. Just a year later it folded. * Trump 29 Casino – Now known as Spotlight 29 Casino because Donald Trump's ownership/management involvement ended in 2006). * Donald Trump Ocean Resort Baja – This Mexican resort was never built and investor's deposits (up to $500,000.00) have not been returned. Trump claims these buyers are “lucky” because they would have lost more money in a tanking market had the projects been actually built. * Trump Towers Tampa – Trump is being sued right now in Tampa, Florida for taking deposits on a 52-story condo tower that he never built. None of the buyers got their $45,000 deposits back. And in an ironic twist, initial sales of this condo were so successful that all deposits were returned to charge a higher price. * Trump International Hotel and Tower Chicago – Trump built the second tallest building in Chicago… he also defaulted on a $40 million loan. Rather than having to pay the bank loan, Trump demanded the same bank should pay him $3 billion for \"\"undermining the project and damaging his reputation.\"\" * Trump Magazine – Trump's private-labeled publication (which was aimed at affluent readers in major US markets) suffered from sagging ad sales. It folded on May 19, 2009. This was Trump's third failed attempt at offering a magazine bearing his name. * Trump International Hotel & Tower New Orleans – If constructed, this Trump Tower would become the tallest building in the city of New Orleans and the state of Louisiana at 70 stories high. But the project was put on hold in February of 2009. * Trump Entertainment Resort Holdings bankruptcy – On February 17, 2009 casino operator Trump Entertainment Resorts Inc filed for Chapter 11 bankruptcy protection (with a debt ratio of $50 million in assets to his $500 million in debt). * Donald Trump SoHo Hotel Condominium – Donald Trump was sued for fraud over his New York SoHo condo offering in 2010. The lawsuit by 15 plaintiffs alleged that during the first 18 months of marketing, Trump advertised that the building was \"\"30, 40, 50, 60 percent or more sold\"\" when in fact just 16% of the units were sold. * Trump Ocean Resort Baja Mexico – Instead of a 525-unit luxury vacation home complex with pools and tennis courts, this project is shaping up to be a legal battle with a big hole in the ground. Dozens of angry buyers sued Trump for failing to complete the project. Trump claims he only lent his name to the project (and it was the developers who allowed the project to fail). * Trump International Hotel & Tower Fort Lauderdale – Construction was to be completed by the end of 2009 featuring 298 hotel condominium units. Having defaulted on a $139 million loan, Donald Trump announced in November of 2010 he was no longer affiliated with the project. * Trump International Hotel & Tower Las Vegas – Through the end of February 2010, the 1,282-unit condominium hotel had only closed on 302 units. That equates to a 23.6% vacancy rate. It was forced into renting out the building as apartments. * Trump International Hotel & Tower in Dubai – This 62-story mixed-used building on the Palm Jumeirah’s Golden Mile was first announced in 2005. Construction was never started and the $2.9 billion project had been canceled and replaced with a shopping mall. So, back to your distinction - has he filed for personal BK? No. Has he filed for personal BK protection while he reorganized debt - YES. Does he manipulate the Corporate BK laws by playing a Corp shell game and filing for BK protection - Yes. Is it smart business? Or a scam? TL:DR - Magnets Bitch! *Edit for formatting\"" }, { "docid": "196920", "title": "", "text": "From the 1099 instructions: File Form 1099-MISC, Miscellaneous Income, for each person to whom you have paid during the year Your accounting method doesn't matter. You file 1099 for the year you paid the money." }, { "docid": "325677", "title": "", "text": "Mods decided to leave it here, so I'll summarize some of my answers on this question given @OnStartups. You can find them here, here and here. Your options are : You and your business are one and the same. You report your income and expenses for taxes on a Schedule C (for each sole proprietorship a separate schedule), and taxed at your personal rates. There's no liability protection or legal separation between you and your business, and you don't need to have any bureaucratic overhead of managing an entity. You can use your own bank account and have checks written to you directly. You can register for DBA if you want a store-front name to be different from your own name. Depending on State, can cost a lot or close to nothing. Provides certain liability protection (depending on State, single-member and multi-member LLC's may have different liability protections). You can chose to be taxed as either a sole-proprietor (partnership, for multi-member) or as a corporation. You have to separate your activities, have a separate bank account, and some minimal bureaucracy is required to maintain the entity. Benefits include the limited liability, relatively easy to add partners to the business or sell it as a whole, and provides for separation of your personal and business finances. Drawbacks - bureaucracy, additional fees and taxes (especially in CA), and separation of assets. Corporation is an entirely separate entity from yourself, files its own tax returns, has separate bank accounts and is run by the board of directors (which in some cases may require more than 1 person to be on the board, check your state laws on that). As an officer of the corporation you'll have to pay salary to yourself. S-Corp has the benefit of pass-through taxation, C-Corp doesn't and has double taxation. Benefits - liability protection, can sell shares to investors, legally distinct entity. Disadvantages - have to deal with payroll, additional accounting, significant bureaucracy and additional layer of taxes for C-Corp (double taxation). Selling corporate assets is always a taxable event (although in your case it is probably not of an importance). You have to talk to a lawyer in your state about the options re the liability protection and how to form the entities. The formation process is usually simple and straight forward, but the LLC/Partnership operating agreements and Corporation charters/bylaws must be drafted by a lawyer if you're not going to be the sole owner (even if you are - better get a lawyer draft something for you, its just easier to fix and change things when you're the sole owner). You have to talk to a CPA/EA in your state about the taxes and how the choice of entity affects them." }, { "docid": "107536", "title": "", "text": "Supposedly this also means that I am free from having to pay California corporate taxes? Not in the slightest. Since you (the corporate employee) reside in CA - the corporation is doing business in CA and is liable for CA taxes. Or, does this mean I am required to pay both CA taxes and Delaware fees? (In this case, minimal, just a paid agent from incorporate.com) I believe DE actually does have corporate taxes, check it out. But the bottom line is yes, you're liable for both CA and DE costs of doing corporate business (income taxes, registered agents, CA corp fee, etc). Is there any benefit at all for me to be a Delaware C-Corp or should I dissolve and start over. Or just re-incorporate as California LLC Unless you intend to go public anytime soon or raise money from VCs/investors - there's no benefit whatsoever in incorporating in DE. You should seek a legal advice with an attorney, of course, since benefits are legal issues (usually related to choosing jurisdiction for litigation etc). If you're a one-person freelancer, doing C-Corp was not the best decision as well. Tax-wise you'd be much better off with a S-Corp, or a LLC - both pass-through and have no (Federal) entity-level taxes. Corporate rates are generally higher than individual rates, and less deductions can be taken. In California, check with a CPA/EA licensed in the State, since both S-Corp and LLC would be taxed, and taxed differently." }, { "docid": "20888", "title": "", "text": "If you're waiting for Apple to send you a 1099 for the 2008 tax season, well, you shouldn't be. App Store payments are not reported to the IRS and you will not be receiving a 1099 in the mail from anyone. App Store payments are treated as sales commissions rather than royalties, according to the iTunes Royalty department of Apple. You are responsible for reporting your earnings and filing your own payments for any sums you have earned from App Store. – https://arstechnica.com/apple/2009/01/app-store-lessons-taxes-and-app-store-earnings The closest thing to sales commissions in WA state seems to be Service and Other Activities described at http://dor.wa.gov/content/FileAndPayTaxes/BeforeIFile/Def_TxClassBandO.aspx#0004. When you dig a little deeper into the tax code, WAC 458-20-224 (Service and other business activities) includes: (4) Persons engaged in any business activity, other than or in addition to those for which a specific rate is provided in chapter 82.04 RCW, are taxable under the service and other business activities classification upon gross income from such business. - http://apps.leg.wa.gov/wac/default.aspx?cite=458-20-224 I am not a lawyer or accountant, so caveat emptor." }, { "docid": "59853", "title": "", "text": "This doesnt happen in Germany, why? Labor gets half the board seats. When corps cut, everyone gets cuts. Everyone shares the pain. When corps do well, EVERYONE does better. They dont chop up a corp and sell it off for parts. They dont send all the jobs to china. This is also how you get things like this [How Germany Builds Twice as Many Cars as the U.S. While Paying Its Workers Twice as Much](http://www.forbes.com/sites/frederickallen/2011/12/21/germany-builds-twice-as-many-cars-as-the-u-s-while-paying-its-auto-workers-twice-as-much/) just remember it is the unions keeping american autoworkers from competeting and yet they get paid less than their german counterparts that live in an economy the fraction of our size. [If you look at gdp per person, WE are 6th on the planet, and germany 17th](http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita) what does all this mean? Everyone is getting part of the economic growth and the meme that the right go off on that unions are destroying business in the US is BS. WE have a much richer country than germany. WE should be paying our workers even more than them. WE CAN AFFORD TO. They sure as shit can afford to with less money per person to go arround." }, { "docid": "509111", "title": "", "text": "No there is no way to have untaxed earnings. Single Member LLC are taxed on your personal taxes. Partnership LLC is taxed on your and your partners personal taxes. An C-Corp LLC has its own tax bracket. An S-Corp is taxed on your personal taxes (but does not get taxed as self-employment taxes). At $500,000, YOU SHOULD BE AN S-CORP or C-CORP to save on self-employment taxes." }, { "docid": "291749", "title": "", "text": "No, thanks to the principle of corporate personhood. The legal entity (company C) is the owner and parent of the private company (sub S). You and C are separate legal entities, as are C and S. This principle helps to legally insulate the parties for purposes such as liability, torts, taxes, and so forth. If company C is sued, you may be financially at stake (i.e. your investment in C is devalued or made worthless) but you are not personally being sued. However, the litigant may attach you as an additional litigant if the facts of the suit merit it. But without legal separateness of corporations, then potentially all owners and maybe a number of the employees would be sued any time somebody sued the business - which is messy for companies and messy for litigants. It's also far cleaner for lenders to lend to unified business entities rather than a variety of thousands of ever-shifting shareholders. Note that this is a separate analysis that assumes the companies are not treated as partnerships or disregarded entities (tax nothings) for tax purposes, in which case an owner may for some purposes be imputed to own the assets of C. I've also ignored the consolidated tax return, which would allow C and S to file a type of corporate joint return that for some purposes treats them similarly to common entity. For the simplest variation of your question, the answer is no. You do not own the assets of a corporation by virtue of owning a few of its shares. Edit: In light of your edit to include FB and Whatsapp, and the wrinkle about corporate books. If sub S is 100% owned by company C, then you do not have any inspection rights to S because you are not a shareholder. You also do not have virtual corporation inspection rights through company C. However, if a person has inspection rights to company C, and sub S appears on the books and financial records of C, then your C rights will do the job of seeing S information. However, Facebook is a public company, so they will make regular public filings and disclosures that should at least partly cover Whatsapp. So I hedge and clear my throat by averring that my securities training is limited, but I believe that the SEC filings of a public company will as a practical matter (maybe a matter of law?) moot the inspection rights. At the very least, I suspect you'd need a proper purpose (under DGCL, for example), to demand the inspection, and they will have already made extensive disclosures that I believe will be presumptively sufficient. I defer to more experienced securities experts on that question, but I don't believe inspection rights are designed for public companies." }, { "docid": "482165", "title": "", "text": "It depends on the structure of your business. Are you a sole proprietor filing Schedule C on your 1040, or an S-corp, or part of a partnership? The treatment of a home office will differ depending on business entity." }, { "docid": "276411", "title": "", "text": "This is a complicated question that relies on the US-India Tax Treaty to determine whether the income is taxable to the US or to India. The relevant provision is likely Article 15 on Personal Services. http://www.irs.gov/pub/irs-trty/india.pdf It seems plausible that your business is personal services, but that's a fact-driven question based on your business model. If the online training is 'personal services' provided by you from India, then it is likely foreign source income under the treaty. The 'fixed base' and '90 days' provisions in Article 15 would not apply to an India resident working solely outside the US. The question is whether your US LLC was a US taxpayer. If the LLC was a taxpayer, then it has an obligation to pay US tax on any worldwide income and it also arguably disqualifies you from Article 15 (which applies to individuals and firms of individuals, but not companies). If you were the sole owner of the US LLC, and you did not make a Form 8832 election to be treated as subject to entity taxation, then the LLC was a disregarded entity. If you had other owners, and did not make an election, then you are a partnership and I suspect but cannot conclude that the treaty analysis is still valid. So this is fact-dependent, but you may be exempt from US tax under the tax treaty. However, you may have still had an obligation to file Forms 1099 for your worker. You can also late-file Forms 1099 reporting the nonemployee compensation paid to your worker. Note that this may have tax consequences on the worker if the worker failed to report the income in those years." }, { "docid": "530596", "title": "", "text": "Many of the custodians (ie. Schwab) file for an extension on 1099s. They file for an extension as many of their accounts have positions with foreign income which creates tax reporting issues. If they did not file for extension they would have to send out 1099s at the end of January and then send out corrected forms. Obviously sending out one 1099 is cheaper and less confusing to all. Hope that helps," }, { "docid": "352640", "title": "", "text": "I am surprised no one has mentioned the two biggest things (in my opinion). Or I should say, the two biggest things to me. First, 1099 have to file quarterly self employment taxes. I do not know for certain but I have heard that often times you will end up paying more this way then even a W-2 employees. Second, an LLC allows you to deduct business expenses off the top prior to determining what you pay in taxes as pass-through income. With 1099 you pay the same taxes regardless of your business expenses unless they are specifically allowed as a 1099 contractor (which most are not I believe). So what you should really do is figure out the expense you incur as a result of doing your business and check with an accountant to see if those expenses would be deductible in an LLC and if it offsets a decent amount of your income to see if it would be worth it. But I have read a lot of books and listened to a lot of interviews about wealthy people and most deal in companies not contracts. Most would open a new business and add clients rather than dealing in 1099 contracts. Just my two cents... Good luck and much prosperity." }, { "docid": "452259", "title": "", "text": "As littleadv says, if you're a sole proprietorship, you don't need to file a 1099 for money you pay yourself. You certainly will need to file a schedule C or schedule E to report the income. And don't forget SE to pay social security taxes on the income if you made a profit. If your company is a corporation, then -- I'm not a tax lawyer here, but I think the corporation would need to file a 1099 for the money that the corporation pays to you. Assuming that the amount is above the threshold that requires a 1099. That's normally $600, but it's only $10 for royalties." }, { "docid": "174025", "title": "", "text": "You are right that even if you do not receive a 1099-MISC, you still need to report all income to the IRS. Report the $40 on Schedule C or Schedule C-EZ. Since your net profit was less than $400, you do not need to file Schedule SE. From the IRS web site: Self-Employment Income It is a common misconception that if a taxpayer does not receive a Form 1099-MISC or if the income is under $600 per payer, the income is not taxable. There is no minimum amount that a taxpayer may exclude from gross income. All income earned through the taxpayer’s business, as an independent contractor or from informal side jobs is self-employment income, which is fully taxable and must be reported on Form 1040. Use Form 1040, Schedule C, Profit or Loss from Business, or Form 1040, Schedule C-EZ, Net Profit from Business (Sole Proprietorship) to report income and expenses. Taxpayers will also need to prepare Form 1040 Schedule SE for self-employment taxes if the net profit exceeds $400 for a year. Do not report this income on Form 1040 Line 21 as Other Income. Independent contractors must report all income as taxable, even if it is less than $600. Even if the client does not issue a Form 1099-MISC, the income, whatever the amount, is still reportable by the taxpayer." }, { "docid": "308255", "title": "", "text": "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." }, { "docid": "70109", "title": "", "text": "\"Without divulging too many specifics. Net income is 73k. Total income is 136k. Filed as an S-Corp. Using Quickbooks to classify expenses etc. I know its not much information but I don't know what to look out for, like \"\"whoa, net income is 73k, you gotta spend that!\"\" I have a CPA but isn't offering much in the terms of \"\"help\"\" and \"\"explanation\"\". Thanks for your time!\"" } ]

[ { "docid": "245447", "title": "", "text": "\"For simplicity, let's start by just considering cash back. In general, cash back from credit cards for personal use is not taxable, but for business use it is taxable (sort of, I'll explain later). The reason is most personal purchases are made with after tax dollars; you typically aren't deducting the cost of what you purchased from your personal income, so if you purchase something that costs $100 and you receive $2 back from the CC company, effectively you have paid $98 for that item but that wouldn't affect your tax bill. However, since businesses typically deduct most expenses, that same $100 deduction would have only been a $98 deduction for business tax purposes, so in this case the $2 should be accounted for. Note, you should not consider that $2 as income though; that would artificially inflate your revenue. It should be treated as a negative expense, similar to how you would handle returning an item you purchased and receiving a CC refund. Now for your specific questions: Part 1: As a small business owner, I wish to attend an annual seminar to improve my business. I have enough credit card reward points to cover the airfare, hotel, and rental car. Will those expenses still be deductible at the value displayed on the receipt? Effectively no, these expenses are not deductible. If you deduct them they will be completely counter-acted by the \"\"refund\"\" you receive for the payments. Part 2: Does it matter if those points are accrued on my personal credit card, rather than a business credit card? This is where it gets hairy. Suppose your company policy is that employees make purchases with their own personal credit cards and submit receipts for reimbursement. In this case the employer can simply reimburse and would not know or care if the employee is racking up rewards/points/cashback. The trick is, as the employee, you must always purchase business related items normally so you have receipts to show, and if you receive cashback on the side there seems to be a \"\"don't ask, don't tell\"\" rule that the IRS is OK with. It works the same way with heavy business travelers and airline miles- the free vacations those users get as perks are not treated as taxable income. However, I would not go out of my way to abuse this \"\"loophole\"\". Typically, things like travel (airfare, hotel, car rental, meals) are expected. But I wouldn't go purchase 100 company laptops on your personal card and ask the company to reimburse you. The company should purchase those 100 laptops on a company card and effectively reduce the sale price by the cashback received. (Or more realistically, negotiate a better discount with your account rep and just cut them a check.) Part 3: Would there be any difference between credit card points and brand-loyalty points? If the rental car were paid for with points earned directly on the rental car company's loyalty system (not a CC), would that yield a different result? There is no difference. Perhaps the simplest way to think about this is you can only deduct an expense that you actually incur. In other words, the expense should show up on a bank or CC statement. This is why when you volunteer and work 10 hours for a charity, you can't call that a \"\"donation\"\" of any amount of money because there is no actual payment made that would show up on a bank statement. Instead you could have billed the charity for your 10 hours of work, and then turned around and donated that same amount back to them, but it ends up being a wash.\"" } ]

[ { "docid": "547087", "title": "", "text": "You are faced with a dilemma. If you use a 529 plan to fund your education, the short timeline of a few years will limit your returns that are tax free. Most people who use a 529 plan either purchase years of tuition via lump sum, when the child is young; or they put aside money on a regular basis that will grow tax deferred/tax free. Some states do give a tax break when the contribution is made by a state taxpayer into a plan run by the state. The long term plans generally use a risk profile that starts off heavily weighted in stock when the child is young, and becomes more fixed income as the child reaches their high school years. The idea is to protect the fund from big losses when there is no time to recover. If you choose the plan with the least risk the issue is that the amount of gains that are being protected from federal tax is small. If you pick a more aggressive plan the risk is that the losses could be larger than the state tax savings. Look at some of the other tax breaks for tuition to see if you qualify Credits An education credit helps with the cost of higher education by reducing the amount of tax owed on your tax return. If the credit reduces your tax to less than zero, you may get a refund. There are two education credits available: the American Opportunity Tax Credit and the Lifetime Learning Credit. Who Can Claim an Education Credit? There are additional rules for each credit, but you must meet all three of the following for either credit: If you’re eligible to claim the lifetime learning credit and are also eligible to claim the American opportunity credit for the same student in the same year, you can choose to claim either credit, but not both. You can't claim the AOTC if you were a nonresident alien for any part of the tax year unless you elect to be treated as a resident alien for federal tax purposes. For more information about AOTC and foreign students, visit American Opportunity Tax Credit - Information for Foreign Students. Deductions Tuition and Fees Deduction You may be able to deduct qualified education expenses paid during the year for yourself, your spouse or your dependent. You cannot claim this deduction if your filing status is married filing separately or if another person can claim an exemption for you as a dependent on his or her tax return. The qualified expenses must be for higher education. The tuition and fees deduction can reduce the amount of your income subject to tax by up to $4,000. This deduction, reported on Form 8917, Tuition and Fees Deduction, is taken as an adjustment to income. This means you can claim this deduction even if you do not itemize deductions on Schedule A (Form 1040). This deduction may be beneficial to you if, for example, you cannot take the lifetime learning credit because your income is too high. You may be able to take one of the education credits for your education expenses instead of a tuition and fees deduction. You can choose the one that will give you the lower tax." }, { "docid": "152407", "title": "", "text": "Federal income taxes are indeed expenses, they're just not DEDUCTIBLE expenses on your 1120. Federal Income Tax Expense is usually a subcategory under Taxes. This is one of the items that will be a book-to-tax difference on Schedule M-1. I am presuming you are talking about a C corporation, as an S corporation is not likely to be paying federal taxes itself, but would pass the liability through to the members. If you're paying your personal 1040 taxes out of an S-corporation bank account, that's an owner's draw just like paying any of your personal non-business expenses. I would encourage you to get a tax professional to prepare your corporate tax returns. It's not quite as simple as TurboTax Business makes it out to be. ;) Mariette IRS Circular 230 Notice: Please note that any tax advice contained in this communication is not intended to be used, and cannot be used, by anyone to avoid penalties that may be imposed under federal tax law." }, { "docid": "454537", "title": "", "text": "\"It might be best to step back and look at the core information first. You're evaluating an LLC vs a Corporation (both corporate entities). Both have one or more members, and both are seen similarly (emphasis on SIMILAR here, they're not all the same) to the IRS. Specifically, LLC's can opt for a pass-through tax system, basically seen by the IRS the same way an S-Corp is. Put another way, you can be taxed as a corporate entity, or it's P/L statements can \"\"flow through\"\" to your personal taxes. When you opt for a flow-through, the business files and you get a separate schedule to tie into your taxes. You should also look at filing a business expense schedule (Schedule C) on your taxes to claim legitimate business expenses (good reference point here). While there are several differences (see this, and this, and this) between these entities, the best determination on which structure is best for you is usually if you have full time employ while you're running the business. S corps limit shares, shareholders and some deductions, but taxes are only paid by the shareholders. C corps have employees, no restrictions on types or number of stock, and no restrictions on the number of shareholders. However, this means you would become an employee of your business (you have to draw monies from somewhere) and would be subject to paying taxes on your income, both as an individual, and as a business (employment taxes such as Social Security, Medicare, etc). From the broad view of the IRS, in most cases an LLC and a Corp are the same type of entity (tax wise). In fact, most of the differences between LLCs and Corps occur in how Profits/losses are distributed between members (LLCs are arbitrary to a point, and Corps base this on shares). Back to your question IMHO, you should opt for an LLC. This allows you to work out a partnership with your co-worker, and allows you to disburse funds in a more flexible manner. From Wikipedia : A limited liability company with multiple members that elects to be taxed as partnership may specially allocate the members' distributive share of income, gain, loss, deduction, or credit via the company operating agreement on a basis other than the ownership percentage of each member so long as the rules contained in Treasury Regulation (26 CFR) 1.704-1 are met. S corporations may not specially allocate profits, losses and other tax items under US tax law. Hope this helps, please do let me know if you have further questions. As always, this is not legal or tax advice, just what I've learned in setting several LLCs and Corporate structures up over the years. EDIT: As far as your formulas go, the tax rate will be based upon your personal income, for any pass through entity. This means that the same monies earned from and LLC or an S-corp, with the same expenses and the same pass-through options will be taxed the same. More reading: LLC and the law (Google Group)\"" }, { "docid": "21576", "title": "", "text": "\"TL;DR summary: 0% balance transfer offers and \"\"free checks usable anywhere\"\" rarely are a good deal for the customer. 0% rate balance transfer offers (and the checks usable anywhere including payment of taxes) come with a transaction fee because the credit card company is paying off the balance on the other card (or the tax or the electric bill) in the full amount of $X as stated on the other card statement or on the tax/electric bill). This is in contrast to a purchase transaction where if you buy something for $X, you pay the card company $X but the card company pays the merchant something less than $X$. (Of course, the merchant has jacked up the sale price of the item to pass on the charge to you.) Can you get the credit card company to waive the transaction fee? You can try asking them but it is unlikely that you will succeed if your credit score is good! I have seen balance transfer offers with no transaction fees made to people who have don't have good credit scores and are used to carrying a balance on their credit cards. I assume that the company making the offer knows that it will make up the transaction fee from future interest payments. A few other points to keep in mind with respect to using a 0% balance transfer offer to pay off a student loan (or anything else for that matter):\"" }, { "docid": "40257", "title": "", "text": "\"The government thought of that a long time ago, and has any loophole there plugged. Like if you set up a company to buy a car and then allow you to use it ... You can use the car for company business, like driving to a customer's office to make a sales call or delivery, and the cost of the car is then tax deductible. But the company must either prohibit personal use of the car, or keep a log of personal versus business use and the personal use becomes taxable income to you. So at best you'd get to deduct an expense here and then you'd have to add it back there for a net change in taxable income of zero. In general the IRS is very careful about personal use of business property and makes it tough to get away with a free ride. I'm sure there are people who lie about it and get away with it because they're never audited, but even if that causes you no ethical qualms, it's very risky. I don't doubt that there are people with very smart lawyers who have found loopholes in the rules. But it's not as simple as, \"\"I call myself a business and now all my personal expenses become tax deductible business expenses.\"\" If you could do that, everybody would do it and no one would pay taxes. Which might be a good thing, but the IRS doesn't see it that way.\"" }, { "docid": "418999", "title": "", "text": "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." }, { "docid": "240350", "title": "", "text": "\"I don't know of a situation where rejecting a raise would make sense. Often, one can be in a phaseout of some benefit, so that even though you're in a certain tax bracket, the impact of the next $100 is greater than the bracket rate alone. Taxation of social security benefits is one such anomaly. It can be high, but never over 100%. Update - The Affordable Care Act contains such an anomaly - go to the Kaiser Foundation site, and see the benefit a family of three might receive. A credit for up to $4631 toward their health care insurance cost. But, increase the income to above $78120 Modified Adjusted Gross Income (MAGI) and the benefit drops to zero. The fact that the next dollar of income will cost you $4631 in the lost credit is an example of a step-function in the tax code. I'd still not turn down the raise, but I'd ask that it be deposited to my 401(k). And when reconciling my taxes each April, I'd use an IRA in case I still went over a bit. Consider, it's April, and your MAGI is $80,120. Even if you don't have to cash to deposit to the IRA, you borrow it, from a 24% credit card if need be. Because the $2000 IRA will trigger not just $300 less Federal tax, but a $4631 health care credit. Note - the above example will apply to a limited, specific group who are funding their own health care expense and paying above a certain percent of income. It's not a criticism of ACA, just a mathematical observation appropriate to this question. For those in this situation, a close look at their projected MAGI is in order. Another example - the deduction for college tuition and fees. This is another \"\"step function.\"\" Go a dollar over the threshold, $130K joint, and the deduction drops from $4000 to $2000. You can claim that a $2000 deduction is a difference of 'only' $500 in tax due, but the result is a quick spike in the marginal rate. For those right at this number, it would be worth it to increase their 401(k) deduction to get back under this limit.\"" }, { "docid": "525149", "title": "", "text": "I'm assuming you are in the US here. From a tax perspective you don't need to take any action to start a business and deduct expenses. If you have earned income coming from a source other than a W2 paying job, then you have a business. On your taxes, this means you file a schedule C (which is where you will deduct business expenses) and schedule SE (which computes how much FICA tax you will owe on your business income). When we talk about starting a business, we usually are talking about creating a corporation or LLC. No particular tax advantage to that in your case, but there could be liability advantages, if you are concerned about that. If you file losses consistently year after year, the IRS might try and classify your business as a hobby. That's what you should worry about. I suppose incorporating might reduce the probability of that, but it might not. Keep good records in case you need to argue with the IRS. If you do have to argue with them, they will want to ensure that you only used the laptop and internet for your business. That's a big if, but it's a potentially scary one. IRS Guidelines on hobby vs. business income Note: besides deducting expenses, another advantage of self-employment is opening a solo-401(k) or SEP or SIMPLE IRA. These potentially allow you to set aside a lot more money than the typical IRA and 401(k) arrangement. Thing is, you have to have a lot more earned income to really take advantage of them, but let's hope your app gets you there." }, { "docid": "442241", "title": "", "text": "A traditional bank is not likely to give you a loan if you have no source of income. Credit card application forms also ask for your current income level and may reject you based on not having a job. You might want to make a list of income and expenses and look closely at which expenses can be reduced or eliminated. Use 6 months of your actual bills to calculate this list. Also make a list of your assets and liabilities. A sheet that lists income/expenses and assets/liabilities is called a Financial Statement. This is the most basic tool you'll need to get your expenses under control. There are many other options for raising capital to pay for your monthly expenses: Sell off your possessions that you no longer need or can't afford Ask for short term loan help from family and friends Advertise for short term loan help on websites such as Kijiji Start a part-time business doing something that you like and people need. Tutoring, dog-walking, photography, you make the list and pick from it. Look into unemployment insurance. Apply as soon as you are out of work. The folks at the unemployment office are willing to answer all your questions and help you get what you need. Dip into your retirement fund. To reduce your expenses, here are a few things you may not have considered: If you own your home, make an appointment with your bank to discuss renegotiation of your mortgage payments. The bank will be more interested in helping you before you start missing payments than after. Depending on how much equity you have in your home, you may be able to significantly reduce payments by extending the life of the mortgage. Your banker will be impressed if you can bring them a balance sheet that shows your assets, liabilities, income and expenses. As above, for car payments as well. Call your phone, cable, credit card, and internet service providers and tell them you want to cancel your service. This will immediately connect you to Customer Retention. Let them know that you are having a hard time paying your bill and will either have to negotiate a lower payment or cancel the service. This tactic can significantly reduce your payments. When you have your new job, there are some things you can do to make sure this doesn't happen again: Set aside 10% of your income in a savings account. Have it automatically deducted from your income at source if you can. 75% of Americans are 4 weeks away from bankruptcy. You can avoid this by forcing yourself to save enough to manage your household finances for 3 - 6 months, a year is better. If you own your own home, take out a line of credit against it based on the available equity. Your bank can help you with that. It won't cost you anything as long as you don't use it. This is emergency money; do not use it for vacations or car repairs. There will always be little emergencies in life, this line of credit is not for that. Pay off your credit cards and loans, most expensive rate first. Use 10% of your income to do this. When the first one is paid off, use the 10% plus the interest you are now saving to pay off the next most expensive card/loan. Create a budget you can stick to. You can find a great budget calculator here: http://www.gailvazoxlade.com/resources/interactive_budget_worksheet.html Note I have no affiliation with the above-mentioned site, and have a great respect for this woman's ability to teach people about how to handle money." }, { "docid": "204554", "title": "", "text": "The key here is that you are defacto running your own company no matter if you acknowledge it or not. In the end these questions have the goal of deciding if you can and will repay the loan. Presumably you filed taxes on your income. These can be shown to the loan officer as proof you have the ability to repay your loan. Running your freelancing as a business has advantages of being able to deduct normal expenses for running the business from your revenue. I am not sure how business cards improves your credit worthiness as they can be had for $10 in about an hour." }, { "docid": "268747", "title": "", "text": "Use one journal entry, and split the expenses into the appropriate accounts. This can happen even if you never mix business and personal on the same receipt: say you order office supplies (which where I live are immediately deductible as an expense) and software or hardware (which must be depreciated because they are assets) on the same order. We have an account called Proprietors Loan which represents money the company is lending to the humans who own it, or that the humans are lending to the company. Were I to pay for my personal lunch on a business credit card, it would go through that account, increasing the amount the company has lent me or decreasing the amount I have lent it. Similarly if I made a business purchase with a personal card it would go through that account in the other direction. Where I live, I can lend my company all the money I want any time, but if the company lends me money there can't be an outstanding balance over the corporate year end. If you make two credit card entries of 5 and 10 when you go to reconcile your accounts it will be harder because you'll have to realize they together match the single 15 line on your statement. Making a single entry (your A option) will make reconciling your statement much easier. And that way, you'll probably reconcile your statements, which is vital to knowing you actually recorded everything." }, { "docid": "498728", "title": "", "text": "Assuming you would still have a line of credit, it makes plenty of sense to pay off the loan. You're paying 16 percent for money you don't need right now. Pay it all off and you can start rebuilding your savings account. So what do you do in a future emergency? Well first off, you can use the savings you have rebuilt up to that point to fund some portion of it. The rest you can borrow again, as long as you have a line of credit somewhere. The icing on the cake though, is that once you stop carrying a balance, your credit card purchases will have grace periods again. Once that grace period kicks in, it's an effective short term free loan, and if you really wanted to, you could move money that would otherwise immediately go to purchases into savings. The difference is that you're paying in full again, and aren't charged any interest on the float. Just remember, that if you fail to pay in full by the due date, they charge retroactive interest and fees. An alternative is to find a way to consolidate your credit card bill into a collateralized loan. HELOCs for example. The rates are much cheaper than your CC bill, but require you to have some equity in the home. One thing to consider is that HELOCs are an open line of credit that can't be easily taken away. The interest is also tax deductible, unlike your credit card interest. There's also unsecured lines of credit from banks and credit unions, and if you have the credit score the can be cheaper than credit cards. I think I've shown here that there's plenty of alternatives to carrying credit card debt for the unexpected in life. Pay it off!" }, { "docid": "470066", "title": "", "text": "You said your mother-in-law lives with you. Does she pay rent, or are you splitting the cost of housing? That would also have to figured into the equation. If you had a business you would now have to declare the expense on your business taxes. This would also then be income for her, which she would have to account for on her taxes. Remember there are both state and federal taxes involved. Regarding expenses like diapers. If the MIL had the business she could deduct them as a business expense. If you have the business it would greatly complicate the taxes. Your business would be essentially covering your personal expenses. If your MIL was not a business the cost of diapers would be paid by you regardless of the working situation of you and your spouse. To claim the tax credit: You must report the name, address, and taxpayer identification number (either the social security number, or the employer identification number) of the care provider on your return. If the care provider is a tax-exempt organization, you need only report the name and address on your return. You can use Form W-10 (PDF), Dependent Care Provider's Identification and Certification, to request this information from the care provider. If you do not provide information regarding the care provider, you may still be eligible for the credit if you can show that you exercised due diligence in attempting to provide the required information. The IRS will be looking for an income tax form from your MIL that claims the income. Getting too cute with the babysitting situation, by starting a business just for the purpose of saving money on taxes could invite an audit. Also it is not as if you just claim 3000 and you are good to go. You can only claim a percentage of the expenses based on the household AGI, the more the make the more you have to have in expenses to get the full 3000 credit, which mil cause more taxes for your MIL. Plus the whole issue with having to pay social security and other taxes on a household employee. It might be best to skip the risk of the audit. Claiming your MIL as a dependent might just be easier." }, { "docid": "88942", "title": "", "text": "\"It makes no sense to spend money unnecessarily, just for the purpose of improving your credit score. You have to stop and ask yourself the question \"\"Why do I need a good credit score?\"\" Most of the time, the answer will be \"\"so I can get a lower interest rate on (ABC loan) in the future.\"\" However, if you spend hundreds or even thousands of dollars in the present, just so that you can save a few points on a loan, you're not going to come out ahead. The car question should be considered strictly in the context of transportation expenses: \"\"It cost me $X to get around last year using Lyft. If instead I owned a car, it would have cost me $Y for gas, insurance, depreciation, parking, etc.\"\" If you come out ahead and Y < X, then buy the car. Don't jump into an expensive vehicle (which is never a good investment) or get trapped into an expensive lease which will costs you many times more than the depreciation value of a decent used car, just so that you can save a few points on a mortgage. Your best option moving forward would be to pay off your student loans first, getting rid of that interest expense. Place the remainder in savings, then start to look at a budget. Setting aside a 20% down payment on a home is considered the minimum to many people, and if that is out of reach you might need to consider other neighborhoods (less than 400K!). If you're still concerned about your credit score, a good way to build that up (once you have a budget and spending under control) is to get a credit card with no annual fees. Start putting all of your expenses on the credit card (groceries, etc), and paying off the balance IN FULL every month. By spending only what you need to within a reasonable budget, and making payments on time and in full, your credit rating will begin to gradually improve. If you have a difficult time tracking your expenses or sticking to a budget, then there is potential for danger here, as credit cards are notorious for high interest and penalties. But by keeping it under control and putting the rest toward savings, you can begin to build wealth and put yourself in a much better financial position moving into the future.\"" }, { "docid": "255101", "title": "", "text": "\"(Disclaimer: I am not an accountant nor a tax pro, etc., etc.) Yes, a Canadian corporation can function as a partial income tax shelter. This is possible since a corporation can retain earnings (profits) indefinitely, and corporate income tax rates are generally less than personal income tax rates. Details: If you own and run your business through a corporation, you can choose to take income from your corporation in one of two ways: as salary, or as dividends. Salary constitutes an expense of the corporation, i.e. it gets deducted from revenue in calculating corporate taxable income. No corporate income tax is due on money paid out as salary. However, personal income taxes and other deductions (e.g. CPP) would apply to salary at regular rates, the same as for a regular employee. Dividends are paid by the corporation to shareholders out of after-tax profits. i.e. the corporation first pays income tax on taxable income for the fiscal year, and resulting net income could be used to pay dividends (or not). At the personal level, dividends are taxed less than salary to account for tax the corporation paid. The net effect of corporate + personal tax is about the same as for salary (leaving out deductions like CPP.) The key point: Dividends don't have to be paid out in the year the money was earned. The corporation can carry profits forward (retained earnings) as long as it wants and choose to issue dividends (or not) in later years. Given that, here's how would the partial income tax shelter works: At some point, for you to personally realize income from the corporation, you can have the corporation declare a dividend. You'll then have to pay personal income taxes on the income, at the dividend rates. But for as long as the money was invested inside the corporation, it was subject only to lesser corporate tax rates, not higher personal income tax rates. Hence the \"\"partial\"\" aspect of this kind of tax shelter. Or, if you're lucky enough to find a buyer for your corporation, you could qualify for the Lifetime Capital Gains Exemption on proceeds up to $750,000 when you sell a qualified small business corporation. This is the best exit strategy; unfortunately, not an easy one where the business has no valuable assets (e.g. a client base, or intellectual property.) * The major sticking-point: You need to have real business revenue! A regular employee (of another company) can't funnel his personally-earned employment income into a corporation just to take advantage of this mechanism. Sorry. :-/\"" }, { "docid": "146657", "title": "", "text": "Yes, you should be able to deduct at least some of these expenses. For expense incurred before you started the business: What Are Deductible Startup Costs? The IRS defines “startup costs” as deductible capital expenses that are used to pay for: 1) The cost of “investigating the creation or acquisition of an active trade or business.” This includes costs incurred for surveying markets, product analysis, labor supply, visiting potential business locations and similar expenditures. 2) The cost of getting a business ready to operate (before you open your doors or start generating income). These include employee training and wages, consultant fees, advertising, and travel costs associated with finding suppliers, distributors, and customers. These expenses can only be claimed if your research and preparation ends with the formation of a successful business. The IRS has more information on how to claim the expenses if you don’t go into business. https://www.sba.gov/blogs/startup-cost-tax-deductions-how-write-expense-starting-your-business Once your business is underway, you can deduct expenses, but the exact details depend on how you organized. If you're a sole proprietor for tax purposes, then you'll deduct them on Schedule C of your Form 1040 on your personal tax. If you are a partnership, C-Corp, or S-Corp, they will be accounted at the business level and either passed on to you on a Schedule K (partnership and S-Corp) or deducted directly by the company (C-Corp). In any case, you will need good records that justify your expenses as business related. It might be well worth at least an initial meeting with a CPA to make sure that you get started on the right foot." }, { "docid": "18850", "title": "", "text": "The IRS Guidance pertaining to the subject. In general the best I can say is your business expense may be deductible. But it depends on the circumstances and what it is you want to deduct. Travel Taxpayers who travel away from home on business may deduct related expenses, including the cost of reaching their destination, the cost of lodging and meals and other ordinary and necessary expenses. Taxpayers are considered “traveling away from home” if their duties require them to be away from home substantially longer than an ordinary day’s work and they need to sleep or rest to meet the demands of their work. The actual cost of meals and incidental expenses may be deducted or the taxpayer may use a standard meal allowance and reduced record keeping requirements. Regardless of the method used, meal deductions are generally limited to 50 percent as stated earlier. Only actual costs for lodging may be claimed as an expense and receipts must be kept for documentation. Expenses must be reasonable and appropriate; deductions for extravagant expenses are not allowable. More information is available in Publication 463, Travel, Entertainment, Gift, and Car Expenses. Entertainment Expenses for entertaining clients, customers or employees may be deducted if they are both ordinary and necessary and meet one of the following tests: Directly-related test: The main purpose of the entertainment activity is the conduct of business, business was actually conducted during the activity and the taxpayer had more than a general expectation of getting income or some other specific business benefit at some future time. Associated test: The entertainment was associated with the active conduct of the taxpayer’s trade or business and occurred directly before or after a substantial business discussion. Publication 463 provides more extensive explanation of these tests as well as other limitations and requirements for deducting entertainment expenses. Gifts Taxpayers may deduct some or all of the cost of gifts given in the course of their trade or business. In general, the deduction is limited to $25 for gifts given directly or indirectly to any one person during the tax year. More discussion of the rules and limitations can be found in Publication 463. If your LLC reimburses you for expenses outside of this guidance it should be treated as Income for tax purposes. Edit for Meal Expenses: Amount of standard meal allowance. The standard meal allowance is the federal M&IE rate. For travel in 2010, the rate for most small localities in the United States is $46 a day. Source IRS P463 Alternately you could reimburse at a per diem rate" }, { "docid": "481822", "title": "", "text": "I used to do this all the time but it's more difficult now. Just a general warning that this probably isn't a good idea unless you're very responsible with your money because it's easy to get yourself in a bad position if you're not careful. You can get a new credit card that does balance transfers and request balance transfer checks from them. Then just use one of those balance transfer checks to mail a payment to the loan you want to transfer. Make sure your don't use the entire credit line as the credit card will have the balance transfer fee put on it as well. You used to be able to find credit cards with 0% balance transfer fee but I haven't seen one of those in ages. Chase Slate is the lowest I've seen recently at 2%. Alternately, if you have a lot of expenses every month then it's easy to find a credit card where all purchases are 0% interest for a year or more and use that to pay every possible expense for a few months and use the money you'd normally use to pay for those expenses to pay off the original loan. If you're regular monthly expenses are high enough you can pay off the original loan quickly and then pay on the credit card with no interest as normal. The banks are looking to hook you so make sure you pay them off before the zero percent runs out or make sure you know what happens after it does. Normally the rate sky rockets. Also, don't use that card for anything else. Credit card companies always put payments towards the lowest interest rate first so if you charge something that doesn't qualify for 0% then it will collect interest until you've paid off the entire 0% balance which will likely take a while and cost you a lot of money. If you have to pay a balance transfer fee then figure out if it's less then you would have paid if you continued paying interest on the original loan. Good luck. I hope it works out for you." }, { "docid": "427849", "title": "", "text": "There is no strict need to do that, you can consider yourself to be consulting, a 10% of your payment will be withheld and paid as tax by the company, you can deduct up to 60% of your income as expenses and pay tax on the rest (factoring the tax deducted at source). In another approach, you could register for service tax and charge service tax on your invoice and pay to the service tax department, the tax calculations are similar to above. It will be good if you speak to a chartered accountant and get more clarity. As for business card, you could print it with your name and qualification, there are no restrictions on that." } ]

[ { "docid": "575929", "title": "", "text": "Deposit $3,500 each month in a brokerage account and invest that money across a handful of diversified index funds. Rebalance those investments every quarter. The hard part is coming up with $3,500 each month; this is where your budget comes in." } ]

[ { "docid": "310629", "title": "", "text": "Different bonds (and securitized mortgages are bonds) that have similar average lives tend to have similar yields (or at least trade at predictable yield spreads from one another). So, why does a 30 year mortgage not trade in lock-step with 30-year Treasuries? First a little introduction: Mortgages are pooled together into bundles and securitized by the Federal Agencies: Fannie Mae, Freddie Mac, and Ginnie Mae. Investors make assumptions about the prepayments expected for the mortgages in those pools. As explained below: those assumptions show that mortgages tend to have an average life similar to 10-year Treasury Notes. 100% PSA, a so-called average rate of prepayment, means that the prepayment increases linearly from 0% to 6% over the first 30 months of the mortgage. After the first 30 months, mortgages are assumed to prepay at 6% per year. This assumption comes from the fact that people are relatively unlikely to prepay their mortgage in the first 2 1/2 years of the mortgage's life. See the graph below. The faster the repayments the shorter the average life of the mortgage. With 150% PSA a mortgage has an average life of nine years. On average your investment will be returned within 9 years. Some of it will be returned earlier, and some of it later. This return of interest and principal is shown in the graph below: The typical investor in a mortgage receives 100% of this investment back within approximately 10 years, therefore mortgages trade in step with 10 year Treasury Notes. Average life is defined here: The length of time the principal of a debt issue is expected to be outstanding. Average life is an average period before a debt is repaid through amortization or sinking fund payments. To calculate the average life, multiply the date of each payment (expressed as a fraction of years or months) by the percentage of total principal that has been paid by that date, summing the results and dividing by the total issue size." }, { "docid": "229978", "title": "", "text": "I admit, in the long term there are a good number of kinks to work out, but in the end I want to see some system where people in general can seize the means to their own well being without stepping on one another. The management corruptions you talked about is another reason why I prefer Worker-Co-ops to be the optimum form of issuing business, because its not just a few people in charge, it's a whole social group acting in unison. When you discuss the mom-and-pop store having no suppliers, it would be good to promote some way of each money supply to have a share of each industry within it. There are always some people in every trade looking for their next job. They just have to find a supply where there trade is in demand. The process is self feeding. Next off, or course the mechanism of the system would work in a way that firm's can't just pay themselves with their own debt, they have to issue it to their creditors first, and even then it's practically impossible to accept your own debt as payment. You would have to take some from a competitor at best. What I've been trying to do is find some system where no one institution or no one alliance holds the keys to the definition of value. If you have five to eight dictators fighting at once as opposed to one financial dictator who can oversee all, like the fed scenario you just described, It's more possible for people who are freer relatively to survive freely between the borders of these spheres of influence, as they can play each dictator off the other. at least from your dialogue I can see you're one of those who gets what I'm trying to aim for. Here's another idea I've explored with it, that's similar but may make the environment slightly different, so let me know what you think what I call the Revolving Tax Window, where the government accepts different bondnotes, both in quantity and specific assortments of notes, in intervals of every business quarter, so that the demand for specific notes changes four times a year. From January until the end of March they could accept Taxes in notes from Firms A,F,H, and T, and for April into June it could be just B and S, and so on. The options for note issuing could be set on a list of firms registered with the SEC or whoever. The combination for the quarter could be picked at random by a randomizing algorithm, so no firm could make a plan to be a market dictator, and a sense of dynamism is maintained in the economy. Obviously, the more firms are properly registered on this list, the more combinations of monetary combinations you have, and the more power is distributed from too much control by anybody. What you can do is choose whether or not you want there to be less or more notes in the next quarter, because just like fiscal policy and conventional monetary policy, the extremes have trade offs, but different ones; to few currencies, the economy may be stimulated, but you get market dictators via monetary oligopoly, even if temporary. Too many, you avoid market dictators who will be more focused on getting a real return by investing in competing ventures based on what will actually return investment, but the economy may not be as stimulated. What do you think of this structural alternative? (One of the focal sources I've been building my economic policy on has been *Debt: The First 5,000 Years* by David Graeber, if anyone's familiar.)" }, { "docid": "389028", "title": "", "text": "Even with a good investment strategy, you cannot expect more than 8-10% per year in average. Reducing this by a 3% inflation ratio leaves you with 5 - 7%, which means 15k$ - 21k$. Consider seriously if you could live from that amount as annual income, longterm. If you think so, there is a second hurdle - the words in average. A good year could increase your capital a bit, but a bad year can devastate it, and you would not have the time to wait for the good years to average it out. For example, if your second year gives you a 10% loss, and you still draw 15k$ (and inflation eats another 3%), you have only 247k$ left effectively, and future years will have to go with 12k$ - 17k$. Imagine a second bad year. As a consequence, you either need to be prepared to go back to work in that situation (tough after being without job for years), or you can live on less to begin with: if you can make it on 10k$ to begin with (and do, even in good years), you have a pretty good chance to get through your life with it. Note that 'make it with x' always includes taxes, health care, etc. - nothing is free. I think it's possible, as people live on 10k$ a year. But you need to be sure you can trust yourself to stay within the limit and not give in and spent more - not easy for many people." }, { "docid": "252653", "title": "", "text": "\"I switched to the buy side, here is some things you should do. First of all, you already had 6 interviews. I would say the HR people are going to be less helpful because its harder to differentiate yourself. If you are talking to an investment portfolio, and they ask you any of type of... What are you interested in? How did you get into this space? You better have multiple stock pitches lined up. For example, on the the first question I'm interested in IM because I was exposed at an early age by my parents. Although I didn't know what I was doing, I kept following (STOCK 1, you're first crack in the doorway). *more about your background stuff* In fact, STOCK 1 turned out to be one of my best/worst trades. I thought it was going here and it went there due to this and that and etc...*more info about stock 1* Now, I like to look at names such as STOCK 2-5 because they are show (this multiple or that yield or these moats, depending on who you are talking to). That is how you get a job through an informational interview. As for how you get an informational interview? Go run through linkedin. Sort for investment management. Any person you have a 2nd degree network or Group network is fair game. Just shoot your common friend an email (hey whats up, i saw you were friends with X, i'm really interested in his company can you put me in touch). Although the end person may never respond, the connection is like almost guaranteed to help (assuming you're a nice friendly person). Recruiting for IM is a full time job. Even other industries as well. My roommate graduated Haas Business Undergrad program (top 3 in the country) in TWO years (not 2 letters and science + 2 business, but 2 total years) at 19 years old, took him a full year of recruiting and paying his own way out to NY to meet people to land an banking job (due to similar circumstances, as he was fully out of school and wasn't in the normal rotation). What really concerns me is you keep saying \"\"analysis.\"\" It makes me think that you have no clue what you want to do. Tell me what analysis means. If you want to recruit for IM, you better be watching the markets everyday (esp if you are unemployed), have opinions on lots of companies, etc.\"" }, { "docid": "177946", "title": "", "text": "\"I think the \"\"right\"\" way to approach this is for your personal books and your business's books to be completely separate. You would need to really think of them as separate things, such that rather than being disappointed that there's no \"\"cross transactions\"\" between files, you think of it as \"\"In my personal account I invested in a new business like any other investment\"\" with a transfer from your personal account to a Stock or other investment account in your company, and \"\"This business received some additional capital\"\" which one handles with a transfer (probably from Equity) to its checking account or the like. Yes, you don't get the built-in checks that you entered the same dollar amount in each, but (1) you need to reconcile your books against reality anyway occasionally, so errors should get caught, and (2) the transactions really are separate things from each entity's perspective. The main way to \"\"hack it\"\" would be to have separate top-level placeholder accounts for the business's Equity, Income, Expenses, and Assets/Liabilities. That is, your top-level accounts would be \"\"Personal Equity\"\", \"\"Business Equity\"\", \"\"Personal Income\"\", \"\"Business Income\"\", and so on. You can combine Assets and Liabilities within a single top-level account if you want, which may help you with that \"\"outlook of my business value\"\" you're looking for. (In fact, in my personal books, I have in the \"\"Current Assets\"\" account both normal things like my Checking account, but also my credit cards, because once I spend the money on my credit card I want to think of the money as being gone, since it is. Obviously this isn't \"\"standard accounting\"\" in any way, but it works well for what I use it for.) You could also just have within each \"\"normal\"\" top-level placeholder account, a placeholder account for both \"\"Personal\"\" and \"\"My Business\"\", to at least have a consistent structure. Depending on how your business is getting taxed in your jurisdiction, this may even be closer to how your taxing authorities treat things (if, for instance, the business income all goes on your personal tax return, but on a separate form). Regardless of how you set up the accounts, you can then create reports and filter them to include just that set of business accounts. I can see how just looking at the account list and transaction registers can be useful for many things, but the reporting does let you look at everything you need and handles much better when you want to look through a filter to just part of your financial picture. Once you set up the reporting (and you can report on lists of account balances, as well as transaction lists, and lots of other things), you can save them as Custom Reports, and then open them up whenever you want. You can even just leave a report tab (or several) open, and switch to it (refreshing it if needed) just like you might switch to the main Account List tab. I suspect once you got it set up and tried it for a while you'd find it quite satisfactory.\"" }, { "docid": "506149", "title": "", "text": "I'm a successful day trader. I turned $300,000 into over $10 million over the course of a few years. I went into trading after I sold my failing company for around $1 million just to bring me out of debt and give me some cash. To give you an idea of how I did it, I just studied everything possible for a few months before I even made my first trade. Instead of having a 9-5 job, I was studying the market from 9-5. I looked at graphs, patterns, everything. I subscribed to multiple real time news feeds and have around 6 college students currently working under me just sifting through patterns and watching real time news feed. I only plan on doing this for 5 or 10 more years before I go into long term investing as it is incredibly stressful, but the returns are very good. Feel free to ask me any questions or to send me a PM if you want any specifics." }, { "docid": "29886", "title": "", "text": "\"Actually that statistic (whether it is 9/10 or 95% or 99%) is often VERY misquoted AND it is both overstated AND extremely misleading. * First of all the ratio/percentage of even the \"\"urban myth\"\" that \"\"everyone knows\"\" is purportedly **over a 5 year period of time** not a single year. * Secondly, just because a business has closed down or ceased to exist sometime prior to the 5 year mark, does NOT necessarily mean that it was a \"\"failure\"\" (and definitely not necessarily a \"\"bankruptcy\"\"). * Third, it does not mean that all of the initial investment went \"\"poof\"\" -- **that may be true for high-tech startups** (especially the dot-com/dot-bomb con operations whose business \"\"plan\"\" resembles the [South Park Underpants Gnomes \"\"plan\"\"](http://upload.wikimedia.org/wikipedia/en/d/dd/Gnomes_plan.png) more than anything else) -- but that is NOT necessarily true of the rest of the business world. Consider by contrast how many EMPLOYEES are still in the same JOB five years later (per data [the *average* job tenure in the US is now 4.6 years](http://www.marketwatch.com/story/americans-less-likely-to-change-jobs-now-than-in-1980s-2014-01-10), which is actually UP from 3.7 years in 2002, and 3.5 years in circa 1983). The vast majority of small businesses (and the sheer volume\\* skews the totals) are essentially that: they are job *replacement* (or even job *supplement*) businesses, which chiefly consist of the owner/operator being \"\"self-employed\"\" (or part-time self-employed \"\"on the side\"\") for a year, two years, and possibly longer. Occasionally they will then (often temporarily) employ others as well; but the primary goal is to provide a simple \"\"income\"\" for the owner/operator. **And there is nothing WRONG with that.** Nor is there anything wrong with the person then ENDING that \"\"business\"\" and moving on... to another (different name, different field) business... or taking a job with some company (which they may have previously worked for on a contract basis with the \"\"business\"\", etc). The idea that ALL businesses somehow *should* \"\"endure forever\"\" and continue to grow forever (as if they were all destined to be Giant Sequoia trees) is actually *rather warped and delusional...* it ignores the real world, and the fact that most flora is NOT \"\"giant trees\"\" but rather small bushes and plants -- and for small businesses, being \"\"nimble\"\" (and profitable) often means the opposite: knowing when to get OUT of a market or business is just as important (indeed can be MORE important) than knowing when to get INTO it. \\*EDIT: As a further note on the \"\"volume\"\" you have to also add in the large number of *business \"\"ideas\"\" that spawn an LLC, but then went nowhere* companies (especially these days when starting an LLC in many states is simply filling out a form online and paying a filing fee) -- IOW the \"\"business\"\" may have had a temporary \"\"legal\"\" existence (name, probably a reserved domain name, maybe even a logo, etc.), but when it comes to reality -- actual investment in assets and conducting business operations (of any type) -- well, a lot of the \"\"horses\"\" never even make it past the gate... and that too skews the numbers in many studies. --- Note that here is another take on the point: http://www.washingtonpost.com/blogs/fact-checker/wp/2014/01/27/do-9-out-of-10-new-businesses-fail-as-rand-paul-claims/ &gt;As far as we can tell, **there is no statistical basis for the assertion that nine out of 10 businesses fail.** It appears to be one of those nonsense facts that people repeat without thinking too clearly about it. Here are some basic questions to ask when assessing such a factoid: &gt;1. What’s the time frame? Two years, five years, 10 years? That can make a big difference. &gt;2. Does “fail” mean that it goes out of business because it was not financially viable? Or does that also include data about successful enterprises that merge with another company? &gt;3. Wouldn’t failure rates be different for some industries than others? Does it make sense to lump all businesses together? &gt;There have been a number of studies that have looked at this issue. This chart, from Web site designer smallbusinessplanned.com, summarizes the results of three different studies. Basically, after four years, 50 percent of the businesses are open. As time goes on, the success rate decreases, but it never gets to a failure rate of “nine out of 10.” &gt;[...] &gt;Even this does not show the whole picture. As Brian Headd, an economist at the Small Business Administration, demonstrated in a 2002 study for Small Business Economics, **about one–third of closed business were actually successful when they “failed.”** &gt;“The significant proportion of businesses that closed while successful calls into question the use of ‘business closure’ as a meaningful measure of business outcome,” the study says. “It appears that **many owners may have executed a planned exit strategy,** closed a business without excess debt, sold a viable business, or retired from the work force.” Now that doesn't necessarily mean that Rand Paul's point is WRONG (he is chiefly talking about government investing in HIGHLY LEVERAGED, HIGH-RISK, HIGH-TECH businesses, which are a different story) -- but it does mean that the statistic he is citing (general business failure rate) is an urban-myth-falsehood, however commonly-believed, or commonly-restated.\"" }, { "docid": "263746", "title": "", "text": "The details of how you can convert your 5% equity share to cash or stocks will be detailed in writing in the legal agreement you have already signed. If you do not have any signed written agreement, there is no 5%. Since 0% of anything is zero, you can expect to get $0 some time within the next few years. Lastly, if the person running the business, tells you that there is 5% equity for you, even though it is not in writing, that is extremely unlikely to be the case. This is because the Seller of the equity has no obligation whatsoever to pay you. In fact, they are obligated by their other agreements with actual shareholders not to dilute their equity without good cause. So, odds are, if your agreement is not in writing, not only will it not be honored, but it probably can't be honored." }, { "docid": "271118", "title": "", "text": "\"Robert Lutz recently came and gave a great talk to the Rotary club I belong to. His views aligned very closely with my own. He likened cars today to the horse at the end of the 19th century. It was unheard of that horses may be replaced by cars (the automated horse). Today, horses are a niche business; you can buy/sell/breed horses but they come from specialized dealers and are used in private areas. Commercial fleets will be the first to be fully automated. We're already very close there, and I see real mass adoption of commercial fleet automation within 5 years. Individual adoption will follow after, starting on public limited-access highways. Once the critical mass of 25% automation is reached, the federal government will step in and say \"\"Look, 75% of you are causing 99.9% of all accidents out there.\"\" They will set the timer on individually operated vehicles - probably something like a 10 year window. All in all I'm with those who see complete automation within 20 years.\"" }, { "docid": "594226", "title": "", "text": "Edit: This is paywalled so I pasted it here. LONDON—The synthetic CDO, a villain of the global financial crisis, is back. A decade ago, investors’ bad bets on collateralized debt obligations helped fuel the crisis. Billed as safe, they turned out to be anything but. Now, more investors are returning to CDOs—and so are concerns that excess is seeping into the aging bull market. In the U.S., the CDO market sunk steadily in the years after the financial crisis but has been fairly flat since 2014. In Europe, the total size of market is now rising again—up 5.6% annually in the first quarter of the year and 14.4% in the last quarter of 2016, according to the Securities Industry and Financial Markets Association. Collateralized debt obligations package a bunch of assets, such as mortgage or corporate loans, into a security that is chopped up into pieces and sold to investors. The assets inside a synthetic CDO aren’t physical debt securities but rather derivatives, which in turn reference other investments such as loans or corporate debt. During the financial crisis, synthetic CDOs became a symbol of the financial excesses of the era. Labelled an “atomic bomb” in the movie “The Big Short,” they ultimately were the vehicle that spread the risks from the mortgage market throughout the financial system. Synthetic CDOs crammed with exposure to subprime mortgages—or even other CDOs—are long gone. The ones that remain contain credit-default swaps referencing a range of European and U.S. companies, effectively allowing investors to bet whether corporate defaults will pick up. Desperate for something that pays better than basic government bonds, insurance companies, asset managers and high-net worth investors are scooping up investments like synthetic CDOs, bankers say, which had largely become the preserve of hedge funds after 2008. Investment banks, which create and sell CDOs, are happy to oblige. Placid markets have made trading revenue weak this year, and such structured products are an increasingly important business line. Synthetic CDOs got “bad press,” says Renaud Champion, head of credit strategies at Paris-based hedge fund La Française Investment Solutions. But “that market has never ceased to fully function,” he added. These days, Mr. Champion still trades synthetic CDOs, receiving a stream of income for effectively insuring against a sharp rise in European corporate defaults. Many investors, though, still view the products as unnecessarily complex and are concerned they may be hard to offload when markets get choppy—as they did in the last crisis. From the DepthsThe amount outstanding of European collateralized debt obligations has been growing again after years of shrinking. “We don’t see that demand from our clients and we wouldn’t recommend it,” said Markus Stadlmann, chief investment officer at Lloyds Private Banking, citing concerns over the products’ lack of transparency and lack of liquidity, meaning it could be hard to offload a position when needed. The return of synthetic CDOs could present other risks. Even if banks are currently less willing to loan money to help clients juice returns, credit default swaps can be very leveraged, potentially allowing investors to make outsize bets. Structured products accounted for nearly all the $2.6 billion year-on-year growth in trading-division revenue at the top 12 global investment banks in the first quarter, according to Amrit Shahani, research director at financial consultancy Coalition. “There has been an uptick in interest in any kind of yield-enhancement structure,” said Kokou Agbo-Bloua, a managing director in Société Générale SA’s investment bank. The fastest growth this year has come in credit—the epicenter of the 2007-08 crisis. The top global 12 investment banks had around $1.5 billion in revenue in structured credit in the first quarter, according to Coalition, more than doubling since the first quarter of 2016. Structured equities are largest overall, a business dominated by sales of derivatives linked to moves in stock prices, with revenue of $5 billion in the first quarter. “The low-yield environment hurts,” said Lionel Pernias, a credit-fund manager at AXA Investment Managers. “So there are a lot of asset owners looking at structured credit.” These days, the typical synthetic CDO involves a portfolio of credit-default swaps on a range of companies. The portfolio is sliced into tranches, and investors receive payouts based on the performance of the swaps. Those investors owning lower tranches tend to get paid more but are subject to higher losses if the swaps sour. Structured GrowthBank revenues from structured products such as collateralized debt obligations are rising faster than conventionaltrading of stocks, bonds and currencies. For instance, an investor can sell insurance against a pick-up in defaults in the lowest—or “equity”—tranche of the iTraxx Europe index, a widely traded CDS benchmark that tracks European investment-grade companies. In return, the investor will receive regular payments, but those will shrink with every company default and stop altogether once 3% of the portfolio has been wiped out through defaults. During the financial crisis, synthetic CDOs based on standardized indexes like iTraxx Europe suffered losses as traders expected defaults to pick up. Investors who held on, though, have since done “great,” says Mr. Champion. Investors who agreed to insure against a rise in defaults for 10 years on the equity tranche of the iTraxx Europe index in March 2008 have made roughly 10% a year, according to an analysis of data from IHS Markit . That’s despite defaults from two companies in the index: Italian lender Monte dei Paschi di Siena and Portugal Telecom International Finance BV. In contrast, investors who sold insurance on tailored CDOs packed with riskier credits—such as Icelandic banks or monoline insurers—would have been on the hook for losses. Synthetic CDOs have evolved since the crisis, bankers say. For instance, most are shorter-dated, running up to around two to three years rather than seven to 10 years. Some banks will only slice and dice standardized CDS indexes that trade frequently in the market rather than craft tailored baskets of credits. There are also fewer banks involved in arranging these trades. Those active include BNP Paribas SA, Citigroup Inc., Goldman Sachs Group Inc., J.P. Morgan Chase &amp; Co. and Société Générale. Postcrisis regulations have forced banks to set aside more capital against these transactions and use less leverage. That has encouraged banks to parcel out the risk to clients rather than keeping it on their own books. “There is a lot more regulation and scrutiny and a lot less leverage,” said Mr. Agbo-Bloua. Mr. Champion says he only trades tranches based on standardized CDS indexes, which he says are easier to buy and sell than more tailored products. Currently, he sees value in selling default protection on super-senior tranches. Mr. Champion said he has to lay down only around $1 million in upfront margin costs on a $100 million trade of this kind. “The cost of leverage in the derivatives space is very low,” he said. Any expectations of default rates picking up could inflict losses on synthetic CDOs, though at the moment analysts forecast they should decline. Still, the memory of how the market behaved in the immediate aftermath of the financial crisis is likely to keep many investors on the sidelines. “If you’re the person responsible for buying the synthetic CDO that suddenly goes wrong, your career risk is bigger than if you’d bought a plain vanilla bond that goes wrong. It has a bad name,” said Ulf Erlandsson, a portfolio manager at start-up hedge fund Glacier Impact, who until recently oversaw credit for one of Sweden’s public pension funds." }, { "docid": "554654", "title": "", "text": "\"For a job doing that kind of stuff, what is PREFERRED is 4 year undergrad at ivy league school + 2 year MBA at ivy league school, and then several more years of experience, which you can sort of get by interning while in school this will of course saddle you with debt, which is counterintuitive to your plans basically, the easy way up is percentage based compensation. without knowing the right people, you will get a piss poor salary regardless of what you do, in the beginning. so portfolio managers earn money by percentage based fees, and can manage millions and billions. real estate agents can earn money by percentage based commissions if they close a property and other business venture/owners can do the same thing. the problem with \"\"how to trade\"\" books is that they are outdated by the time they are published. so you should just stick with literature that teaches a fundamental knowledge of the products you want to trade/make money from. ultimately regardless of how you get/earn your initial capital, you will still need to be an individual investor to grow your own capital. this has nothing to do with being a portfolio manager, even highly paid individuals on wall street are in debt to lavish expenditures and have zero capital for their own investments. hope this helps, you really need to be thinking in a certain way to just quickly deduce good ideas from bad ideas\"" }, { "docid": "80913", "title": "", "text": "\"It should be pretty obvious that without knowing what sort of assets the company owns, and what sort of net earnings are being generated it's impossible to say what a $20k equity investment should get you in terms of ownership percentage. With that said, you want to look at a few to several years of books, look for trends. Some things to understand that might be subtle red flags: It's extremely common for early stage investors to essentially make loans rather than strictly buying shares. In the worst case scenario creditors get to participate in liquidation proceedings before shareholders do. You may be better off investing in this business via a loan that's convertible to equity at your discretion. Single owner service companies are difficult because all of the net earnings go to the proprietor and that person maintains all of the relationships. So taking something like 5 years of net earnings as the value of the company doesn't make much sense because you (or someone else) couldn't just step in and replace the owner. Granted, you aren't contemplating taking over the business, but it negates using an X years of net earnings valuation method. When you read about valuation there is a sort of overriding assumption that no single person could topple the operation which couldn't be farther from the truth in single employee service companies. Additionally, understand that your investment in a single owner company hinges completely on one person's ability and willingness to work. It's really vital to understand the purpose of the funds. Someone will be hired? $20,000 couldn't be even six months of wages... Put things in to perspective with a pad, pen and calculator. Don't invest in the pipe dream of a friend of yours, and DEFINITELY don't hand this person the downpayment for their new house. The first rule of investing is \"\"don't lose money,\"\" this isn't emotional, this is a dollars and cents pragmatic process. Why does the business need this money? How will you be paid back? Personally, I think it would be more gratifying to put $20k in a blender and watch it blend, this is probably a horrible investment. The risk should just be left to credit card companies.\"" }, { "docid": "135765", "title": "", "text": "How much should a rational investor have in individual stocks? Probably none. An additional dollar invested in a ETF or low cost index fund comprised of many stocks will be far less risky than a specific stock. And you'd need a lot more capital to make buying, voting, and selling in individual stocks as if you were running your own personal index fund worthwhile. I think in index funds use weightings to make it easier to track the index without constantly trading. So my advice here is to allocate based not on some financial principal but just loss aversion. Don't gamble with more than you can afford to lose. Figure out how much of that 320k you need. It doesn't sound like you can actually afford to lose it all. So I'd say 5 percent and make sure that's funded from other equity holdings or you'll end up overweight in stocks." }, { "docid": "270992", "title": "", "text": "The main difference between an ETF and a Mutual Fund is Management. An ETF will track a specific index with NO manager input. A Mutual Fund has a manager that is trying to choose securities for its fund based on the mandate of the fund. Liquidity ETFs trade like a stock, so you can buy at 10am and sell at 11 if you wish. Mutual Funds (most) are valued at the end of each business day, so no intraday trading. Also ETFs are similar to stocks in that you need a buyer/seller for the ETF that you want/have. Whereas a mutual fund's units are sold back to itself. I do not know of many if any liquity issues with an ETF, but you could be stuck holding it if you can not find a buyer (usually the market maker). Mutual Funds can be closed to trading, however it is rare. Tax treatment Both come down to the underlying holdings in the fund or ETF. However, more often in Mutual Funds you could be stuck paying someone else's taxes, not true with an ETF. For example, you buy an Equity Mutual Fund 5 years ago, you sell the fund yourself today for little to no gain. I buy the fund a month ago and the fund manager sells a bunch of the stocks they bought for it 10 years ago for a hefty gain. I have a tax liability, you do not even though it is possible that neither of us have any gains in our pocket. It can even go one step further and 6 months from now I could be down money on paper and still have a tax liability. Expenses A Mutual Fund has an MER or Management Expense Ratio, you pay it no matter what. If the fund has a positive return of 12.5% in any given year and it has an MER of 2.5%, then you are up 10%. However if the fund loses 7.5% with the same MER, you are down 10%. An ETF has a much smaller management fee (typically 0.10-0.95%) but you will have trading costs associated with any trades. Risks involved in these as well as any investment are many and likely too long to go into here. However in general, if you have a Canadian Stock ETF it will have similar risks to a Canadian Equity Mutual Fund. I hope this helps." }, { "docid": "502567", "title": "", "text": "Unfortunately it is not possible for an ordinary person to become an accredited investor without a career change. Gaining any legal certification in investments typically require sponsorship from an investment company (which you would be working for). There are reasons why these kinds of investments are not available to ordinary people directly, and you should definitely consult an RIA (registered investment adviser) before investing in something that isn't extremely standardized (traded on an major exchange). The issue with these kinds of investments is that they are not particularly standardized (in terms of legal structure/settlement terms). Registered investment advisers and other people who manage investments professionally are (theoretically) given specific training to understand these kinds of non-standard investments and are (theoretically) qualified to analyze the legal documentation of these, make well informed investment decisions, and make sure that their investors are not falling into any kind of pyramid scheme. There are many many kinds of issues that can arise when investing in startups. What % of the company/ the company's profits are you entitled to? How long can the company go without paying you a dividend? Do they have to pay you a dividend at all? How liquid will your investment in the company be? Unfortunately it is common for startups to accept investment but have legal restrictions on their investors ability to sell their stake in the business, and other non-standard contract clauses. For example, some investment agreements have a clause which states that you can only sell your stake in the business to a person who already owns a stake in the business. This makes your investment essentially worthless - the company could run for an exponential amount of time without paying you a dividend. If you are not able to sell your stake in the company you will not be able to earn any capital gains either. The probability of a startup eventually going public is extremely small.. so in this scenario it is likely you will end up gaining no return investment (though you can be happy to know you helped a company grow!) Overall, the restrictions for these kinds of investments exist to protect ordinary folks from making investing their savings into things that could get them burned. If you want to invest in companies on FundersClub build a relationship with an RIA and work with that person to invest your money. It is easier, less risky, and not all that more expensive :)" }, { "docid": "495165", "title": "", "text": "\"What you're thinking of is more market making kind of activity, HFT algo's thrive on this; having information faster than anyone else. This type of activity could also likely be lumped into what is considered top-down analysis as opposed to bottom-up (which is what most mutual fund equity research involves). Again, the more important aspect is, what does the company you are applying to use! Top-down analysis means that you are forecasting the revenue drivers for a company using macro-economic analysis. For example, let's say I'm investing in Chinese cement manufacturer's, what implications does Chinese interest rate policy have on infra-structure expansion and how does that drive revenue for this specific company. I might then look at margins, etc. to get an EPS estimate. Part of this could fall into secular investing, too. Let's say I like LCD panel glass because of this consortium, I might take a look at 5 companies and then find the ones I think would benefit most from this. The problem with top-down is it tends not to be as much of a deep-dive, and its hard to pick individual companies because of it. Bottom-up tends to be more analytical and is what most pitches would be based around. The most important thing I'm not saying one is right or wrong, they are just different, and every investor has their own style. Bottom-up analysis, which would be closer to what an equity research analyst would be doing on the sell-side, is analyzing what bottom-line indicators drive revenue and how are those expanding. For example, lets say I'm looking at search providers (i.e. Baidu, Google, Yahoo, etc.) I'd be looking at Cost-Per-Thousand-Clicks (CPTC) and number of clicks on the website. Multiply the two and I get revenue (very simplified version) for clicks business. I might then also forecast other revenue driving segments and try to understand how they are growing/pricing at an individual segment level (i.e. business services or mobile advertising). I'd then break down costs/margins for each segment and forecast those out. I could then get a forward EPS, get a range of multiples I believe it could trade in (i.e. I think the multiple will trade up/down), to get a target price. Also, I would likely do a DCF analysis on forward earnings to get a \"\"fair market value,\"\" and then try to triangulate a price. I would also be looking at stuff like management teams and industry trends, too, but bottom line, I'm pitching a company because I think it is undervalued and will outperform competitors **in the long run**. This type of work tends to be more research oriented and is what most (not all) mutual funds use when analyzing companies. Since mutual funds tend to have longer holding periods (2-10 years), as opposed to short-term, it's harder to justify investing in a company only because it has a short-term catalyst. Anecdotally, it's also easier to present in a written thesis because the numbers tend to be more concrete and easier to forecast than top-down (which have wider target ranges). Your thought process that catalyst + industry context = market beating returns isn't wrong, it's just that every company thinks about investing differently, and it's important to tailor the report to that group's style.\"" }, { "docid": "577832", "title": "", "text": "Your question seems to be making assumptions around “investing”, that investing is only about stock market and bonds or similar things. I would suggest that you should look much broader than that in terms of your investments. Investment Types Your should consider (and include) some or all of the following for your investments, depending on your age, your attitude towards risk, the number of dependents you have, your lifestyle, etc. I love @Blackjack’s explanation of diversification into other asset classes producing a lower risk portfolio. Excellent! All the above need to be considered in this spread of risk, depending as I said earlier on your age, your attitude towards risk, the number of dependents you have, your lifestyle, etc. Stock Market Investment I’ll focus most of the rest of my post on the stock markets, as that is where my main experience lies. But the comments are applicable to a greater or lesser extent to other types of investing. We then come to how engaged you want to be with your investments. Two general management styles are passive investment management versus active investment management. @Blackjack says That pretty much sums up passive management. The idea is to buy ETFs across asset classes and just leave them. The difficulty with this idea is that profitability is very dependent upon when the stocks are purchased and when they are sold. This is why active investing should be considered as a viable alternative to passive investment. I don’t have access to a very long time frame of stock market data, but I do have 30 or so years of FTSE data, so let’s say that we invest £100,000 for 10 years by buying an ETF in the FTSE100 index. I know this isn't de-risking across a number of asset classes by purchasing a number of different EFTs, but the logic still applies, if you will bear with me. Passive Investing I have chosen my example dates of best 10 years and worst 10 years as specific dates that demonstrate my point that active investing will (usually) out-perform passive investing. From a passive investing point of view, here is a graph of the FTSE with two purchase dates chosen (for maximum effect), to show the best and worst return you could receive. Note this ignores brokerage and other fees. In these time frames of data I have … These are contrived dates to illustrate the point, on how ineffective passive investing can be, depending if there is a bear/bull market and where you buy in the cycle. One obviously wouldn’t buy all their stocks in one tranche, but I’m just trying to illustrate the point. Active Investing Let’s consider now active investing. I use the following rules for selling and buying:- This is obviously a very simple technical trading system and I would not recommend using it to trade with, as it is overly simplistic and there are some flaws and inefficiencies in it. So, in my simulation, These beat the passive stock market profit for their respective dates. Summary Passive stock market investing is dependent upon the entry and exit prices on the dates the transactions are made and will trade regardless of market cycles. Active stock market trading or investing engages with the market using a set of criteria, which can change over time, but allows one’s investments to be in or out of the market at any point in time. My time frames were arbitrary, but with the logic applied (which is a very simple technical trading methodology), I would suggest that any 10 year time frame active investing would beat passive investing." }, { "docid": "96121", "title": "", "text": "\"If you mean, If I invest, say, $1000 in a stock that is growing at 5% per year, versus investing $1000 in an account that pays compound interest of 5% per year, how does the amount I have after 5 years compare? Then the answer is, They would be exactly the same. As Kent Anderson says, \"\"compound interest\"\" simply means that as you accumulate interest, that for the next interest cycle, the amount that they pay interest on is based on the previous cycle balance PLUS the interest. For example, suppose you invest $1000 at 5% interest compounded annually. After one year you get 5% of $1000, or $50. You now have $1050. At the end of the second year, you get 5% of $1050 -- not 5% of the original $1000 -- or $52.50, so you now have $1102.50. Etc. Stocks tend to grow in the same way. But here's the big difference: If you get an interest-bearing account, the bank or investment company guarantees the interest rate. Unless they go bankrupt, you WILL get that percentage interest. But there is absolutely no guarantee when you buy stock. It may go up 5% this year, up 4% next year, and down 3% the year after. The company makes no promises about how much growth the stock will show. It may show a loss. It all depends on how well the company does.\"" }, { "docid": "7046", "title": "", "text": "\"diamonds are intrinsically worthless this is simply wrong. (1) Diamonds that are sold for anything less than, oh, let's say $5000 at original retail - are indeed utterly, totally, completely worthless. It is simply \"\"one of the great scams\"\". Their real \"\"price\"\" is maybe \"\"five bucks\"\". End of story. There is no secondary market. Literally - \"\"end of story\"\". If you buy a \"\"diamond\"\" lol for \"\"$2000\"\" to impress your loved one, you can not then \"\"sell it\"\" for any amount of money. It is: worthless. Once again: simple, undeniable fact. the diamond you bought for 2 grand cannot be resold. Ir's worthless. (OK, maybe you can get 100 bucks for it, something like that. Or, you can scam someone clueless, and get 200 bucks.) (2) However actual \"\"investment\"\" stones do in fact have a value - if somewhat fragile. Example, a few years ago I sold a stone for 30 thousand. That was a \"\"real\"\" price and it was quite liquid - I was within days able to find a buyer. (A dealer - he would have then sold it on for 35 or whatever.) I have never dealt in stones over six figures, but I'm fairly certain those are \"\"real\"\" valuable objects: just like paintings by name artists. (However: yes, the line between \"\"laughable diamonds\"\" and actual investment stones, is indeed moving ever upwards.) (Note - the \"\"elephant in the room\"\" with diamonds is that GE's industrial process for simply making utterly flawless diamonds, starting with carbon, is getting better every decade.) (A second overwheleming point that nobody has mentioned: diamonds get beat-up. Regarding \"\"engagement ring diamonds\"\", a used one is exactly as useless as a used car. It's crap. Just as with $200,000 picassos, this concept does not apply to \"\"actual investment stones\"\".) Note that many of the comments/arguments on this page are very confused because: people are not distinguishing between the (ROFL) \"\"engagement ring scam market\"\" and the rarefied \"\"investment gem market\"\". The two things are utterly different. Yes, \"\"engagement ring diamonds\"\" are an utter scam, and are simply: \"\"worthless\"\". The fundamental, basic, overwhelming scam in today's business/social universe is: \"\"engagement diamonds\"\". Yes, the price is only due to marketing/monopolies etc. Elephant in the room A: GE's technology can - end of story - manufacture diamonds. (Starting with \"\"pencil leads\"\".) End of story. It's all over. Elephant in the room B: folks forget that diamonds get beat-up, they are just like used cars. Regarding \"\"engagement-ring diamonds\"\", nobody has ever, or will ever, bought a used one. Simple, utterly undeniable fact: regarding \"\"engagement ring diamonds\"\". they have: zero value. You cannot resell them. End of story. If you buy a house, you can resell it. If you buy a car, you can resell it (at a spectacular loss). If you buy a picasso, you can resell it (almost always making a huge profit). If you buy an \"\"engagement ring diamond\"\", it is worth: nothing. Zero. Nada. strictly regarding investment stones, which is a distinctly utterly different market. This market has no connection, in any way, at all, even vaguely, it is utterly unrelated, to \"\"engagement ring diamonds\"\". You can in fact buy and sell these items - very much like say \"\"art\"\" or \"\"mid century antiques\"\", and make money. This market just has utterly no connection to the whole \"\"engagement ring diamonds\"\" scam system. Say you buy wine at the supermarket, for 5 to 100 bucks a bottle. If you think that the \"\"wine\"\" thus bought, has a secondary market, or you can invest in it or something: you have lost your mind. In total contrast: Yes, although totally flakey, there is indeed an \"\"investment wine market\"\" which is real and reasonable. I for example have made some money in that. (I have a great anecdote even - I had one cellar of wine in burgundy, which could have been sold for, say, 30 grand - but we drank it :) ) Again, the (somewhat bizarre) actual market in investment wine, just has to \"\"buying wine in the supermarket\"\". To further the analogy: wine prices in the supermarket / your (ROFL) wine dealer, from 5 to 100 bucks, are just: utterly laughable. Utterly. Laughable. Much as folks sit around, and decide on \"\"label designs\"\", they sit around, and decide on \"\"price points\"\". There is, utterly, no difference between $5 and $100 grape juice rofl \"\"wine\"\". The price difference is simply a marketing decision: at best, you can think of it as a Velbin good. ... exactly the same applies to \"\"engagement ring diamonds\"\".\"" } ]

[ { "docid": "527522", "title": "", "text": "\"The answer to your question is Forex trading. You can get to 250K quicker than any other \"\"investment\"\" scheme. You'll just need to start with at least 500K.\"" } ]

[ { "docid": "180241", "title": "", "text": "There are many Shariah compliant investments, so that could direct your resulting searches. Shariah compliance is a very strict interpretation of Islam and for investing offers strict guidelines in what to invest in and excludes investments in companies that engage in certain businesses such as gambling, tobacco, pork and trading of gold and silver on a deferred basis (and more). Many multinational financial service companies such as the Standard & Poors (S&P) offer Shariah Compliant funds and indices, as such, it makes it easier to invest in a variety of different assets through them. You can also look at their fund's constituents and invest in those assets directly. Secondly, going back to your original question about a compound interest equivalent, you can look at the products offered by Shariah Compliant banks. Now, if it is really important for you to adhere to the strictest interpretations of your faith, you should know that most Islamic Banks have interest bearing assets within them and that they disguise that fact. The global financial system is based on interest bearing instruments such as bonds, and Islamic banks are large holders and issuers of those instruments, and all of their consumer products are also based on the interest rates of them. Even convoluted alternatives such as Islamic mortgages, where they are advertised as non-interest bearing equivalents, many times are also the interest bearing version. Unfortunately, these lies are enough for the banks to continue to get business from their target audiences, but outside of Islam this is a very standard and stable business practice. The point is that you should look very carefully at the alternatives you find." }, { "docid": "577832", "title": "", "text": "Your question seems to be making assumptions around “investing”, that investing is only about stock market and bonds or similar things. I would suggest that you should look much broader than that in terms of your investments. Investment Types Your should consider (and include) some or all of the following for your investments, depending on your age, your attitude towards risk, the number of dependents you have, your lifestyle, etc. I love @Blackjack’s explanation of diversification into other asset classes producing a lower risk portfolio. Excellent! All the above need to be considered in this spread of risk, depending as I said earlier on your age, your attitude towards risk, the number of dependents you have, your lifestyle, etc. Stock Market Investment I’ll focus most of the rest of my post on the stock markets, as that is where my main experience lies. But the comments are applicable to a greater or lesser extent to other types of investing. We then come to how engaged you want to be with your investments. Two general management styles are passive investment management versus active investment management. @Blackjack says That pretty much sums up passive management. The idea is to buy ETFs across asset classes and just leave them. The difficulty with this idea is that profitability is very dependent upon when the stocks are purchased and when they are sold. This is why active investing should be considered as a viable alternative to passive investment. I don’t have access to a very long time frame of stock market data, but I do have 30 or so years of FTSE data, so let’s say that we invest £100,000 for 10 years by buying an ETF in the FTSE100 index. I know this isn't de-risking across a number of asset classes by purchasing a number of different EFTs, but the logic still applies, if you will bear with me. Passive Investing I have chosen my example dates of best 10 years and worst 10 years as specific dates that demonstrate my point that active investing will (usually) out-perform passive investing. From a passive investing point of view, here is a graph of the FTSE with two purchase dates chosen (for maximum effect), to show the best and worst return you could receive. Note this ignores brokerage and other fees. In these time frames of data I have … These are contrived dates to illustrate the point, on how ineffective passive investing can be, depending if there is a bear/bull market and where you buy in the cycle. One obviously wouldn’t buy all their stocks in one tranche, but I’m just trying to illustrate the point. Active Investing Let’s consider now active investing. I use the following rules for selling and buying:- This is obviously a very simple technical trading system and I would not recommend using it to trade with, as it is overly simplistic and there are some flaws and inefficiencies in it. So, in my simulation, These beat the passive stock market profit for their respective dates. Summary Passive stock market investing is dependent upon the entry and exit prices on the dates the transactions are made and will trade regardless of market cycles. Active stock market trading or investing engages with the market using a set of criteria, which can change over time, but allows one’s investments to be in or out of the market at any point in time. My time frames were arbitrary, but with the logic applied (which is a very simple technical trading methodology), I would suggest that any 10 year time frame active investing would beat passive investing." }, { "docid": "495600", "title": "", "text": "\"Question 1: How do I start? or \"\"the broker\"\" problem Get an online broker. You can do a wire transfer to fund the account from your bank. Question 2: What criticism do you have for my plan? Dividend investing is smart. The only problem is that everyone's currently doing it. There is an insatiable demand for yield, not just individual investors but investment firms and pension funds that need to generate income to fund retirements for their clients. As more investors purchase the shares of dividend paying securities, the share price goes up. As the share price goes up, the dividend yield goes down. Same for bonds. For example, if a stock pays $1 per year in dividends, and you purchase the shares at $20/each, then your yearly return (not including share price fluctuations) would be 1/20 = 5%. But if you end up having to pay $30 per share, then your yearly return would be 1/30 or 3.3% yield. The more money you invest, the bigger this difference becomes; with $100K invested you'd make about $1.6K more at 5%. (BTW, don't put all your money in any small group of stocks, you want to diversify). ETFs work the same way, where new investors buying the shares cause the custodian to purchase more shares of the underlying securities, thus driving up the price up and yield down. Instead of ETFs, I'd have a look at something called closed end funds, or CEFs which also hold an underlying basket of securities but often trade at a discount to their net asset value, unlike ETFs. CEFs usually have higher yields than their ETF counterparts. I can't fully describe the ins and outs here in this space, but you'll definately want to do some research on them to better understand what you're buying, and HOW to successfully buy (ie make sure you're buying at a historically steep discount to NAV [https://seekingalpha.com/article/1116411-the-closed-end-fund-trifecta-how-to-analyze-a-cef] and where to screen [https://www.cefconnect.com/closed-end-funds-screener] Regardless of whether you decide to buy stocks, bonds, ETFs, CEFs, sell puts, or some mix, the best advice I can give is to a) diversify (personally, with a single RARE exception, I never let any one holding account for more than 2% of my total portfolio value), and b) space out your purchases over time. b) is important because we've been in a low interest rate environment since about 2009, and when the risk free rate of return is very low, investors purchase stocks and bonds which results in lower yields. As the risk free rate of return is expected to finally start slowly rising in 2017 and gradually over time, there should be gradual downward pressure (ie selling) on the prices of dividend stocks and especially bonds meaning you'll get better yields if you wait. Then again, we could hit a recession and the central banks actually lower rates which is why I say you want to space your purchases out.\"" }, { "docid": "506149", "title": "", "text": "I'm a successful day trader. I turned $300,000 into over $10 million over the course of a few years. I went into trading after I sold my failing company for around $1 million just to bring me out of debt and give me some cash. To give you an idea of how I did it, I just studied everything possible for a few months before I even made my first trade. Instead of having a 9-5 job, I was studying the market from 9-5. I looked at graphs, patterns, everything. I subscribed to multiple real time news feeds and have around 6 college students currently working under me just sifting through patterns and watching real time news feed. I only plan on doing this for 5 or 10 more years before I go into long term investing as it is incredibly stressful, but the returns are very good. Feel free to ask me any questions or to send me a PM if you want any specifics." }, { "docid": "594226", "title": "", "text": "Edit: This is paywalled so I pasted it here. LONDON—The synthetic CDO, a villain of the global financial crisis, is back. A decade ago, investors’ bad bets on collateralized debt obligations helped fuel the crisis. Billed as safe, they turned out to be anything but. Now, more investors are returning to CDOs—and so are concerns that excess is seeping into the aging bull market. In the U.S., the CDO market sunk steadily in the years after the financial crisis but has been fairly flat since 2014. In Europe, the total size of market is now rising again—up 5.6% annually in the first quarter of the year and 14.4% in the last quarter of 2016, according to the Securities Industry and Financial Markets Association. Collateralized debt obligations package a bunch of assets, such as mortgage or corporate loans, into a security that is chopped up into pieces and sold to investors. The assets inside a synthetic CDO aren’t physical debt securities but rather derivatives, which in turn reference other investments such as loans or corporate debt. During the financial crisis, synthetic CDOs became a symbol of the financial excesses of the era. Labelled an “atomic bomb” in the movie “The Big Short,” they ultimately were the vehicle that spread the risks from the mortgage market throughout the financial system. Synthetic CDOs crammed with exposure to subprime mortgages—or even other CDOs—are long gone. The ones that remain contain credit-default swaps referencing a range of European and U.S. companies, effectively allowing investors to bet whether corporate defaults will pick up. Desperate for something that pays better than basic government bonds, insurance companies, asset managers and high-net worth investors are scooping up investments like synthetic CDOs, bankers say, which had largely become the preserve of hedge funds after 2008. Investment banks, which create and sell CDOs, are happy to oblige. Placid markets have made trading revenue weak this year, and such structured products are an increasingly important business line. Synthetic CDOs got “bad press,” says Renaud Champion, head of credit strategies at Paris-based hedge fund La Française Investment Solutions. But “that market has never ceased to fully function,” he added. These days, Mr. Champion still trades synthetic CDOs, receiving a stream of income for effectively insuring against a sharp rise in European corporate defaults. Many investors, though, still view the products as unnecessarily complex and are concerned they may be hard to offload when markets get choppy—as they did in the last crisis. From the DepthsThe amount outstanding of European collateralized debt obligations has been growing again after years of shrinking. “We don’t see that demand from our clients and we wouldn’t recommend it,” said Markus Stadlmann, chief investment officer at Lloyds Private Banking, citing concerns over the products’ lack of transparency and lack of liquidity, meaning it could be hard to offload a position when needed. The return of synthetic CDOs could present other risks. Even if banks are currently less willing to loan money to help clients juice returns, credit default swaps can be very leveraged, potentially allowing investors to make outsize bets. Structured products accounted for nearly all the $2.6 billion year-on-year growth in trading-division revenue at the top 12 global investment banks in the first quarter, according to Amrit Shahani, research director at financial consultancy Coalition. “There has been an uptick in interest in any kind of yield-enhancement structure,” said Kokou Agbo-Bloua, a managing director in Société Générale SA’s investment bank. The fastest growth this year has come in credit—the epicenter of the 2007-08 crisis. The top global 12 investment banks had around $1.5 billion in revenue in structured credit in the first quarter, according to Coalition, more than doubling since the first quarter of 2016. Structured equities are largest overall, a business dominated by sales of derivatives linked to moves in stock prices, with revenue of $5 billion in the first quarter. “The low-yield environment hurts,” said Lionel Pernias, a credit-fund manager at AXA Investment Managers. “So there are a lot of asset owners looking at structured credit.” These days, the typical synthetic CDO involves a portfolio of credit-default swaps on a range of companies. The portfolio is sliced into tranches, and investors receive payouts based on the performance of the swaps. Those investors owning lower tranches tend to get paid more but are subject to higher losses if the swaps sour. Structured GrowthBank revenues from structured products such as collateralized debt obligations are rising faster than conventionaltrading of stocks, bonds and currencies. For instance, an investor can sell insurance against a pick-up in defaults in the lowest—or “equity”—tranche of the iTraxx Europe index, a widely traded CDS benchmark that tracks European investment-grade companies. In return, the investor will receive regular payments, but those will shrink with every company default and stop altogether once 3% of the portfolio has been wiped out through defaults. During the financial crisis, synthetic CDOs based on standardized indexes like iTraxx Europe suffered losses as traders expected defaults to pick up. Investors who held on, though, have since done “great,” says Mr. Champion. Investors who agreed to insure against a rise in defaults for 10 years on the equity tranche of the iTraxx Europe index in March 2008 have made roughly 10% a year, according to an analysis of data from IHS Markit . That’s despite defaults from two companies in the index: Italian lender Monte dei Paschi di Siena and Portugal Telecom International Finance BV. In contrast, investors who sold insurance on tailored CDOs packed with riskier credits—such as Icelandic banks or monoline insurers—would have been on the hook for losses. Synthetic CDOs have evolved since the crisis, bankers say. For instance, most are shorter-dated, running up to around two to three years rather than seven to 10 years. Some banks will only slice and dice standardized CDS indexes that trade frequently in the market rather than craft tailored baskets of credits. There are also fewer banks involved in arranging these trades. Those active include BNP Paribas SA, Citigroup Inc., Goldman Sachs Group Inc., J.P. Morgan Chase &amp; Co. and Société Générale. Postcrisis regulations have forced banks to set aside more capital against these transactions and use less leverage. That has encouraged banks to parcel out the risk to clients rather than keeping it on their own books. “There is a lot more regulation and scrutiny and a lot less leverage,” said Mr. Agbo-Bloua. Mr. Champion says he only trades tranches based on standardized CDS indexes, which he says are easier to buy and sell than more tailored products. Currently, he sees value in selling default protection on super-senior tranches. Mr. Champion said he has to lay down only around $1 million in upfront margin costs on a $100 million trade of this kind. “The cost of leverage in the derivatives space is very low,” he said. Any expectations of default rates picking up could inflict losses on synthetic CDOs, though at the moment analysts forecast they should decline. Still, the memory of how the market behaved in the immediate aftermath of the financial crisis is likely to keep many investors on the sidelines. “If you’re the person responsible for buying the synthetic CDO that suddenly goes wrong, your career risk is bigger than if you’d bought a plain vanilla bond that goes wrong. It has a bad name,” said Ulf Erlandsson, a portfolio manager at start-up hedge fund Glacier Impact, who until recently oversaw credit for one of Sweden’s public pension funds." }, { "docid": "320073", "title": "", "text": "Fisher Capital Management: Leading 10 Monetary Suggestions Posted on 17/10/2011 by fcminvestment Even though resolutions boost financial condition a great idea to accomplish in any period for year is for numerous persons discover this less difficult from the starting of the New Year. Irrespective of any time one start, the fundamentals stay identical. Fisher Capital Management shares recommendations in order to be in advance monetarily. 1. Be Compensated How Much you are worth and Save Some Part of It This appears easy; however countless individuals have difficulty having this specific initial fundamental principle. Be positive and understand exactly what your task is worth within the industry, through executing the assessment of your expertise, productiveness, career responsibilities, involvement to the firm, and the current fee, equally within and beyond the organization, regarding what you perform. Becoming under compensated actually a thousand bucks a year may possess a substantial collective result more than the actual process of one’s employment existence. Irrespective of the amount or perhaps how small you are compensated, you will in no way obtain be advance in case one devote far more compared to a person gain. Frequently it is less difficult to invest much less compared to this will be to make much more, and the small efforts within the amount of places may outcome in large savings. This will not usually have that which includes producing large sacrifices. 2. Adhere to the Price Range How many people understand when the funds will be heading when one never budget? How does a person can easily established investing and saving targets when one never understands in which the cash is actually heading? People require the budget whether or not a person creates thousands or perhaps hundreds of thousands of bucks a year. 3. Settle Credit Card Accounts Credit card financial obligation is actually the number one hindrance to becoming ahead monetarily. These small items of plastic tend to be so convenient to utilize, it is therefore very easy to overlook that it is actual cash we are coping with whenever you whip these away to pay out for any transaction, big or even little. In spite of the great resolves in order to shell out balance away swiftly, the truth is that it usually will not, and wind up having to pay much more regarding issues compared to make paid off when you made use of money. 4. Chip in towards the Pension Program When the company has a 401(k) plan and a person do not contribute to this, you are running away through one of the finest discounts right there. Request the boss if they have the 401(k) plan (or even comparable program), and sign up right now. In the event that you happen to be contributing, attempt to increase the contribution. In case the company will not provide the pension program, think about the Individual retirement account. 5. Make Financial Savings Program You might have discovered this before: Pay for yourself first! If perhaps a person delay till you have satisfied most ones monetary commitments prior to finding what is remaining around for saving, probabilities tend to be you will in no way possess a wholesome financial savings accounts or perhaps opportunities. Deal with it in order to fix apart the minimal for 5% to 10% of the income to get savings prior to shelling out the expenses. More desirable however, get cash instantly taken off through the income and deposit straight into a distinct account. 6. Make Investments! Should you are contributing the pension program and the savings account as well as one may also handle to set a number of funds in to some other ventures, all the far better. 7. Improve Ones Career Rewards Work benefits such as the 401(k) program, flexible expenditure consideration, healthcare as well as dental care coverage, and so on. are usually valued at huge money. Try to make certain you will be making the most of your own and also getting benefit of these kinds which can easily help save cash through lowering taxation or perhaps out-of-pocket expenditures. 8. Evaluate Ones Coverage Protections Overly numerous individuals tend to be though in to spending a lot regarding life and impairment coverage, no matter if it is through incorporating all these protections to automobile mortgages, purchasing whole-life insurance if term-life creates a lot more feeling, or perhaps purchasing life insurance any time one possess absolutely no dependents. In the different side, it really is essential to an individual get sufficient insurance coverage to be able to safeguard the loved ones and also the earnings in the event of fatality or possibly impairment. 9. Revise Your Current Will 70% of American citizens do not possess a will. In case a person have dependents, irrespective of just how small or what amount a person own, an individual need a will. When the predicament is not very difficult a person may actually carry out the personal plan just like WillMaker through Nolo Press. Safeguard your own cherished family members. Create your will. 10. Maintain Suitable Data When a person do not maintain useful data, you are most likely in no way proclaiming all the allowable revenue taxes deductions as well as credits. Established a method today and utilize this each of the year. It is a lot simpler compared to rushing in order to discover all the things from taxes period, just to skip things which may have rescued a person capital." }, { "docid": "593820", "title": "", "text": "Inflation is good for the economy primarily because it is an incentive to invest. If inflation is occurring, then keeping your holdings in cash is a net loser; 5% inflation means that in a year, your $100 is now worth $95.24 (1/1.05), so unless you're getting really good interest, that's a bad thing. On the other hand, if you invested that $100 in a business, you can outgain inflation more easily since inflation should drive the business's profits. Deflation (negative inflation), on the other hand, is bad for investing because it encourages holding cash. If deflation of 5% occurs, then you can get a 5% ROI by simply holding onto twenty dollar bills; why would you invest in a business that was in a deflationary economy (and thus would likely earn less money)? Mild inflation also increases flexibility in the economy, because businesses make a little more money (in terms of denominated money); that allows them more flexibility in expansion. Salaries for some also go up, meaning that spending goes up, and often with more flexibility in how those salaries are spent; inflation doesn't hit all sectors exactly the same, so often this leaves significant portions of the middle class with more money to spend (and thus driving economic growth). More than salary growth, though, inflation seems to drive job creation. From the New York Times, this article quotes a paper by George Akerloff which shows that job creation tends to be more significant than rising salaries during periods of low inflation (ie, what we're talking about here). Salary increases will come here largely from job seeking rather than raises, because businesses don't tend to cut wages and thus are reticent to significantly raise salaries; they'd rather just hire more people, and then cut jobs when the economy weakens (or inflation drops). This is even more true in low wage jobs, such as minimum wage positions, where wages cannot be cut but salary increases have little real effect on job retention; it's easier to change the number of hours for PT employees, or the number of PT/FT employees. Deflation, on the other hand, leads to decreased flexibility, layoffs, and lower consumer spending. While it sounds good to say 'hey, prices are going down!' to your average consumer, you have to keep in mind that those prices are what keep the businesses going that drive our economy and pay your salary (either directly or indirectly). If your employer started making 5% less per year, do you think they'd keep you employed? Maybe not, and at the bottom (service industries, fast food restaurants, grocers, etc.) there would be significant cutbacks if deflation hit them. I would note that 5% inflation is probably a bit high; most economists like 2% to 3%, and the Federal Reserve has said that 2% is the right target. They're mostly concerned with avoiding deflation, as that's a big risk to the economy; the advantages of mild inflation are relatively minor, compared to the damages of deflation, and tend to be more correlations (you get mild inflation in a good economy, as much or more than you need mild inflation for a good economy). Most important, probably, is consistent inflation. Consumers and businesses can act rationally if the inflation rate is relatively stable and predictable. When inflation jumps or drops, it changes the potential outcomes for choices made by investors, consumers, and businesses, meaning choices they made in the past are now suboptimal; if the inflation rate is jumping around (1% one year, 4% another, -1% the next) investors, businesses, and consumers will be relatively conservative in their choices, which leads to a bad economy." }, { "docid": "96121", "title": "", "text": "\"If you mean, If I invest, say, $1000 in a stock that is growing at 5% per year, versus investing $1000 in an account that pays compound interest of 5% per year, how does the amount I have after 5 years compare? Then the answer is, They would be exactly the same. As Kent Anderson says, \"\"compound interest\"\" simply means that as you accumulate interest, that for the next interest cycle, the amount that they pay interest on is based on the previous cycle balance PLUS the interest. For example, suppose you invest $1000 at 5% interest compounded annually. After one year you get 5% of $1000, or $50. You now have $1050. At the end of the second year, you get 5% of $1050 -- not 5% of the original $1000 -- or $52.50, so you now have $1102.50. Etc. Stocks tend to grow in the same way. But here's the big difference: If you get an interest-bearing account, the bank or investment company guarantees the interest rate. Unless they go bankrupt, you WILL get that percentage interest. But there is absolutely no guarantee when you buy stock. It may go up 5% this year, up 4% next year, and down 3% the year after. The company makes no promises about how much growth the stock will show. It may show a loss. It all depends on how well the company does.\"" }, { "docid": "552298", "title": "", "text": "\"I suggest that you're really asking questions surrounding three topics: (1) what allocation hedges your risks but also allows for upside? (2) How do you time your purchases so you're not getting hammered by exchange rates? (3) How do you know if you're doing ok? Allocations Your questions concerning allocation are really \"\"what if\"\" questions, as DoubleVu points out. Only you can really answer those. I would suggest building an excel sheet and thinking through the scenarios of at least 3 what-ifs. A) What if you keep your current allocations and anything in local currency gets cut in half in value? Could you live with that? B) What if you allocate more to \"\"stable economies\"\" and your economy recovers... so stable items grow at 5% per year, but your local investments grow 50% for the next 3 years? Could you live with that missed opportunity? C) What if you allocate more to \"\"stable economies\"\" and they grow at 5%... while SA continues a gradual slide? Remember that slow or flat growth in a stable currency is the same as higher returns in a declining currency. I would trust your own insights as a local, but I would recommend thinking more about how this plays out for your current investments. Timing You bring up concerns about \"\"timing\"\" of buying expensive foreign currencies... you can't time the market. If you knew how to do this with forex trading, you wouldn't be here :). Read up on dollar cost averaging. For most people, and most companies with international exposure, it may not beat the market in the short term, but it nets out positive in the long term. Rebalancing For you there will be two questions to ask regularly: is the allocation still correct as political and international issues play out? Have any returns or losses thrown your planned allocation out of alignment? Put your investment goals in writing, and revisit it at least once a year to evaluate whether any adjustments would be wise to make. And of course, I am not a registered financial professional, especially not in SA, so I obviously recommend taking what I say with a large dose of salt.\"" }, { "docid": "237338", "title": "", "text": "Saving money for the future is a good thing. Whether spending those savings on a business venture makes sense, will depend on a few factors, including: (1) How much money you need that business to make [ie: will you be quitting your job and relying on the business for your sole income? Or will this just be a hobby you make some pocket change from?] (2) How much the money the business needs up front [some businesses, like simple web design consulting, might have effectively $0 in cash startup costs, where starting a franchise restaurant might cost you $500k-$1M on day 1] (3) How risky it is [the general stat is that something like 50% of all new businesses fail in their first year, and I think for restaurants that number is often given as 75%+] So sometimes investing in your own business is financially risky, and other times it is not risky. Sometimes it is a good idea, sometimes it is not. Either way, saving for a future business that you may or may not ever invest in, is still saving money. If you never end up investing in a business, you can instead use that money for retirement, or whatever other financial goals you have. So it's not the saving for a new business that is risky, it's the spending. Part of good personal financial management is making financial goals, tracking your progress to those goals, and changing them as needed. In a simpler case, many people want to own their own home - this is a common financial goal, just like early retirement, or starting your own business, or paying for your kids' college education. All those goals are helped by saving money, so your job as someone mindful of personal finances, is to prioritize those goals in accordance to what is important for you. As mentioned by Stannius in the comments below, there is one catch here: if you are saving money for a short term goal (such as starting a business in a year), then you might want to keep it in low-interest savings accounts, instead of investing in the stock market. Doing this would remove the chance that your investments fail right before you need the startup money. Of course, this means that saving for a business that you never end up starting, could earn you less investment income on your savings. This would be the risk of saving for any specific short term goal that you end up changing later on." }, { "docid": "259227", "title": "", "text": "\"To summarize your starting situation: You want to: Possible paths: No small business Get a job. Invest the 300K in safe liquid investments then move the maximum amount each year into your retirement accounts. Depending on which company you work for that could include 401K (Regular or Roth), deductible IRA, Roth IRA. The amount of money you can transfer is a function of the options they give you, how much they match, and the amount of income you earn. For the 401K you will invest from your paycheck, but pull an equal amount from the remainder of the 300K. If you are married you can use the same procedure for your spouse's account. You current income funds any vacations or splurges, because you will not need to put additional funds into your retirement plan. By your late 30's the 300K will now be fully invested in retirement account. Unfortunately you can't touch much of it without paying penalties until you are closer to age 60. Each year before semi-retirement, you will have to invest some of your salary into non-retirement accounts to cushion you between age 40 and age 60. Invest/start a business: Take a chunk of the 300K, and decide that in X years you will use it to start a small business. This chunk of money must be liquid and invested safely so that you can use it when you want to. You also don't want to invest it in investments that have a risk of loss. Take the remaining funds and invest it as described in the no small business section. You will completely convert funds to retirement funds earlier because of a smaller starting amount. Hopefully the small business creates enough income to allow you to continue to fund retirement or semi-retirement. But it might not. Comment regarding 5 year \"\"rules\"\": Roth IRA: you have to remain invested in the Roth IRA for 5 years otherwise your withdrawal is penalized. Investing in stocks: If your time horizon is short, then stocks are too volatile. If it drops just before you need the money, it might not recover in time. Final Advice: Get a financial adviser that will lay out a complete plan for a fixed fee. They will discuss investment options, types not particular funds. They will also explain the tax implications of investing in various retirement accounts, and how that will impact your semi-retirement plans. Review the plan every few years as tax laws change.\"" }, { "docid": "319489", "title": "", "text": "\"This is the best tl;dr I could make, [original](https://www.theguardian.com/business/grogonomics/2017/oct/08/business-is-booming-australian-consumers-know-better) reduced by 88%. (I'm a bot) ***** &gt; The collapse in spending was also across almost all areas - food, household goods, clothing and accessories, cafes, restaurants and takeaways all saw a drop in spending. &gt; The only good news was for department stores, but that was of little consequence given in the past year spending in department stores is down 1.4%. The problem is that Australia&amp;#039;s economy is built not on the back of sheep or even from what we dig out of holes, but on household spending. &gt; Not all consumer spending is on retail trade - it makes up roughly a quarter of all spending by households - but it is a very good indicator of how households are spending. ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/753cdg/business_is_booming_australian_consumers_know/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ \"\"Version 1.65, ~224491 tl;drs so far.\"\") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr \"\"PM's and comments are monitored, constructive feedback is welcome.\"\") | *Top* *keywords*: **spend**^#1 **household**^#2 **good**^#3 **wage**^#4 **year**^#5\"" }, { "docid": "252653", "title": "", "text": "\"I switched to the buy side, here is some things you should do. First of all, you already had 6 interviews. I would say the HR people are going to be less helpful because its harder to differentiate yourself. If you are talking to an investment portfolio, and they ask you any of type of... What are you interested in? How did you get into this space? You better have multiple stock pitches lined up. For example, on the the first question I'm interested in IM because I was exposed at an early age by my parents. Although I didn't know what I was doing, I kept following (STOCK 1, you're first crack in the doorway). *more about your background stuff* In fact, STOCK 1 turned out to be one of my best/worst trades. I thought it was going here and it went there due to this and that and etc...*more info about stock 1* Now, I like to look at names such as STOCK 2-5 because they are show (this multiple or that yield or these moats, depending on who you are talking to). That is how you get a job through an informational interview. As for how you get an informational interview? Go run through linkedin. Sort for investment management. Any person you have a 2nd degree network or Group network is fair game. Just shoot your common friend an email (hey whats up, i saw you were friends with X, i'm really interested in his company can you put me in touch). Although the end person may never respond, the connection is like almost guaranteed to help (assuming you're a nice friendly person). Recruiting for IM is a full time job. Even other industries as well. My roommate graduated Haas Business Undergrad program (top 3 in the country) in TWO years (not 2 letters and science + 2 business, but 2 total years) at 19 years old, took him a full year of recruiting and paying his own way out to NY to meet people to land an banking job (due to similar circumstances, as he was fully out of school and wasn't in the normal rotation). What really concerns me is you keep saying \"\"analysis.\"\" It makes me think that you have no clue what you want to do. Tell me what analysis means. If you want to recruit for IM, you better be watching the markets everyday (esp if you are unemployed), have opinions on lots of companies, etc.\"" }, { "docid": "465819", "title": "", "text": "\"My advice would be to invest that 50k in 25% batches across 4 different money markets. Batch 1: Lend using a peer-to-peer account - 12.5k The interest rates offered by banks aren't that appealing to investors anymore, at least in the UK. Peer to peer lending brokers such as ZOPA provide 5% to 6% annual returns if you're willing to hold on to your investment for a couple of years. Despite your pre-conceptions, these investments are relatively safe (although not guaranteed - I must stress this). Zopa state on their website that they haven't lost any money provided from their investors since the company's inception 10 years ago, and have a Safeguard trust that will be used to pay out investors if a large number of borrowers defaulted. I'm not sure if this service is available in Australia but aim for an interest rate of 5-6% with a trusted peer-to-peer lender that has a strong track record. Batch 2: The stock market - 12.5k An obvious choice. This is by far the most exciting way to grow your money. The next question arising from this will likely be \"\"how do I pick stocks?\"\". This 12.5k needs to be further divided into 5 or so different stocks. My strategy for picking stock at the current time will be to have 20% of your holdings in blue-chip companies with a strong track record of performance, and ideally, a dividend that is paid bi-anually/quarterly. Another type of stock that you should invest in should be companies that are relatively newly listed on the stock market, but have monopolistic qualities - that is - that they are the biggest, best, and only provider of their new and unique service. Examples of this would be Tesla, Worldpay, and Just-eat. Moreover, I'd advise another type of stock you should purchase be a 'sin stock' to hedge against bad economic times (if they arise). A sin stock is one associated with sin, i.e. cigarette manufacturers, alcohol suppliers, providers of gambling products. These often perform good while the economy is doing well, but even better when the economy experiences a 2007-2008, and 2001-dotcom type of meltdown. Finally, another category I'd advise would be large-cap energy provider companies such as Exxon Mobil, BP, Duke Energy - primarily because these are currently cheaper than they were a few months ago - and the demand for energy is likely to grow with the population (which is definitely growing rapidly). Batch 3: Funds - 12.5k Having some of your money in Funds is really a no-brainer. A managed fund is traditionally a collection of stocks that have been selected within a particular market. At this time, I'd advise at least 20% of the 12.5k in Emerging market funds (as the prices are ridiculously low having fallen about 60% - unless China/Brazil/India just self destruct or get nuked they will slowly grow again within the next 5 years - I imagine quite high returns can be had in this type of funds). The rest of your funds should be high dividend payers - but I'll let you do your own research. Batch 4: Property - 12.5k The property market is too good to not get into, but let's be honest you're not going to be able to buy a flat/house/apartment for 12.5k. The idea therefore would be to find a crowd-funding platform that allows you to own a part of a property (alongside other owners). The UK has platforms such as Property Partner that are great for this and I'm sure Australia also has some such platforms. Invest in the capital city in areas as close to the city's center as possible, as that's unlikely to change - barring some kind of economic collapse or an asteroid strike. I think the above methods of investing provide the following: 1) Diversified portfolio of investments 2) Hedging against difficult economic times should they occur And the only way you'll lose out with diversification such as this is if the whole economic system collapses or all-out nuclear war (although I think your investments will be the least of your worries in a nuclear war). Anyway, this is the method of investing I've chosen for myself and you can see my reasoning above. Feel free to ask me if you have any questions.\"" }, { "docid": "554654", "title": "", "text": "\"For a job doing that kind of stuff, what is PREFERRED is 4 year undergrad at ivy league school + 2 year MBA at ivy league school, and then several more years of experience, which you can sort of get by interning while in school this will of course saddle you with debt, which is counterintuitive to your plans basically, the easy way up is percentage based compensation. without knowing the right people, you will get a piss poor salary regardless of what you do, in the beginning. so portfolio managers earn money by percentage based fees, and can manage millions and billions. real estate agents can earn money by percentage based commissions if they close a property and other business venture/owners can do the same thing. the problem with \"\"how to trade\"\" books is that they are outdated by the time they are published. so you should just stick with literature that teaches a fundamental knowledge of the products you want to trade/make money from. ultimately regardless of how you get/earn your initial capital, you will still need to be an individual investor to grow your own capital. this has nothing to do with being a portfolio manager, even highly paid individuals on wall street are in debt to lavish expenditures and have zero capital for their own investments. hope this helps, you really need to be thinking in a certain way to just quickly deduce good ideas from bad ideas\"" }, { "docid": "263746", "title": "", "text": "The details of how you can convert your 5% equity share to cash or stocks will be detailed in writing in the legal agreement you have already signed. If you do not have any signed written agreement, there is no 5%. Since 0% of anything is zero, you can expect to get $0 some time within the next few years. Lastly, if the person running the business, tells you that there is 5% equity for you, even though it is not in writing, that is extremely unlikely to be the case. This is because the Seller of the equity has no obligation whatsoever to pay you. In fact, they are obligated by their other agreements with actual shareholders not to dilute their equity without good cause. So, odds are, if your agreement is not in writing, not only will it not be honored, but it probably can't be honored." }, { "docid": "578677", "title": "", "text": "\"E) Spend a small amount of that money on getting advice from a paid financial planner. (Not a broker or someone offering you \"\"free\"\" advice; their recommendations may be biased toward what makes them the most money). A good financial planner will talk to you about your plans and expectations both short and long term, and about your risk tolerance (would a drop in value panic you even if you know it's likely to recover and average out in the long run, that sort of thing), and about how much time and effort you want to put into actively managing your portfolio. From those answers, they will generate an initial proposed plan, which will be tested against simulations of the stock market to make sure it holds up. Typically they'll do about 100 passes over the plan to get a sense of its probable risk versus growth-potential versus volatility, and tweak the plan until the normal volatility is within the range you've said you're comfortable with while trying to produce the best return with the least risk. This may not be a perfect plan for you -- but at the very least it will be an excellent starting point until you decide (if you ever do decide) that you've learned enough about investing that you want to do something different with the money. It's likely to be better advice than you'll get here simply because they can and will take the time to understand your specific needs rather than offering generalities because we're trying to write something that applies to many people, all of whom have different goals and time horizons and financial intestinal fortitude. As far as a house goes: Making the mistake of thinking of a house as an investment is a large part of the mindset that caused the Great Recession. Property can be an investment (or a business) or it can be something you're living in; never make the mistake of putting it in both categories at once. The time to buy a house is when you want a house, find a house you like in a neighborhood you like, expect not to move out of it for at least five years, can afford to put at least 20% down payment, and can afford the ongoing costs. Owning your home is not more grown-up, or necessarily financially advantageous even with the tax break, or in any other way required until and unless you will enjoy owning your home. (I bought at age 50ish, because I wanted a place around the corner from some of my best friends, because I wanted better noise isolation from my neighbors, because I wanted a garden, because I wanted to do some things that almost any landlord would object to, and because I'm handy enough that I can do a lot of the routine maintenance myself and enjoy doing it -- buy a house, get a free set of hobbies if you're into that. And part of the reason I could afford this house, and the changes that I've made to it, was that renting had allowed me to put more money into investments. My only regret is that I didn't realise how dumb it was not to max out my 401(k) match until I'd been with the company for a decade ... that's free money I left on the table.)\"" }, { "docid": "538462", "title": "", "text": "Assuming that the conversion was completely non-taxable (i.e. your Traditional IRA was 100% basis), then the converted money can be taken out at any time whatsoever (no 5 year or age stuff), without tax or penalty, similar to directly contributed money. For withdrawing conversions and rollovers within 5 years of the conversion or rollover, the penalty only applies to the part of the conversion or rollover that was taxable. Since in this case the conversion was completely non-taxable, there is no penalty on the withdrawal. However, note that the ordering of the conversion money is not the same as for contribution money, and this may be significant in some cases. When you take money out of Roth IRA, it goes 1) contributions, 2) rollovers and conversions, and 3) earnings. However, money within (2) is then further divided by year, with rollovers and contributions for earlier years ordered before rollovers and contributions for later years, and then within each year, the taxable rollover and conversion money are ordered first, before the non-taxable money. So what does that mean? Well, suppose you made a Roth IRA conversion that was taxable one year, and then the next year you make a contribution. If you withdraw a little bit, it comes from the contribution which is ordered first, which means no penalty. Now suppose in that second year you had a backdoor Roth IRA contribution instead of a regular contribution. If you withdraw, the first year's conversion is ordered first, and since it's within 5 years, there's a penalty. It's still true that withdrawing the backdoor Roth IRA has no penalty; but, you don't get to that money until you finish the other one. If you've never made a taxable conversion before, then this issue doesn't exist." }, { "docid": "135765", "title": "", "text": "How much should a rational investor have in individual stocks? Probably none. An additional dollar invested in a ETF or low cost index fund comprised of many stocks will be far less risky than a specific stock. And you'd need a lot more capital to make buying, voting, and selling in individual stocks as if you were running your own personal index fund worthwhile. I think in index funds use weightings to make it easier to track the index without constantly trading. So my advice here is to allocate based not on some financial principal but just loss aversion. Don't gamble with more than you can afford to lose. Figure out how much of that 320k you need. It doesn't sound like you can actually afford to lose it all. So I'd say 5 percent and make sure that's funded from other equity holdings or you'll end up overweight in stocks." } ]

[ { "docid": "575869", "title": "", "text": "\"Basically, you either borrow money, or get other people to invest in your business by buying stock or something analogous. Sometimes you can get people to \"\"park\"\" money with you. For example, many people deposit money in a bank checking account. They don't get any interest or other profit from this, they just do it because the bank is a convenient place to store their money. The bank then loans some percentage of this money out and keeps the interest. I don't doubt that people have come up with more clever ways to use other people's money. Borrowing money for an investment or business venture is risky because if you lose money, you may be unable to pay it back. On the other hand, investors expect a share of the profit, not just a fixed interest rate.\"" } ]

[ { "docid": "125057", "title": "", "text": "&gt; But their strategy is not debt spending to increase demand. They deficit spend. They increase prosperity and thus demand. They do it consistently and repeatedly. Claims that it's effects are unintentional don't hold up. Starve the beast is political cover. What they are doing is pushing profits up for the rich by cutting their taxes. Why has as many answers as there are politicians pursuing these policies, but the deficit spending is fairly obviously designed to make the economy appear to be doing better. The interesting side effect is, that they *are* making the economy do better. &gt; Deficit spending does drive demand short term. But as this debt rises so does the rent seeking cost of that debt. This is not where rent seeking occurs. The net cost of national debt is negative. &gt; Most such debt spending is a complete waste. Only if you don't understand that people having money is a prerequisite for people spending money. &gt; Your tax rate is not determined by how much money the government takes from you. The government gives you more income than it takes from you in taxes. Every bit of cut spending removes income from the population. Since we all work for each other and one person's income becomes another's relatively quickly, it's an appropriate approximation to average that income out over the population and when you do that you quickly see that government taxes and spending have a net positive effect on how much money we have. This is why we can dump so much into defense spending and still have a viable economy and why removing that spending would do more harm than good. Our economic trouble has nothing to do with efficiency and how much work needs to be done, and everything to do with how much money people have to spend. Government taking on more debt thus creating more money and handing it to it's population makes that problem better and thus the economy gains strength. Fixing the core problem that is causing the population to run out of money is a harder task, but piling on the debt in the meantime alleviates the symptoms." }, { "docid": "245614", "title": "", "text": "The thing that is working to Foxconn's advantage here is that there were several states competing for this, thats exactly it. This is actually how all business works, its no surprise. States usually compete for large businesses to move their by giving tax breaks, because it benefits their people and they will eventually still collect taxes. Now, the first part interest me, how much does the state usually spend on a project like this? I wouldnt really consider it a gamble unless you consider all investments to be gambles, but that also connotates that you think this is high risk. What makes you say that Foxconn wont live up to its promises? Wont the state just sue based on the terms of agreement?" }, { "docid": "237338", "title": "", "text": "Saving money for the future is a good thing. Whether spending those savings on a business venture makes sense, will depend on a few factors, including: (1) How much money you need that business to make [ie: will you be quitting your job and relying on the business for your sole income? Or will this just be a hobby you make some pocket change from?] (2) How much the money the business needs up front [some businesses, like simple web design consulting, might have effectively $0 in cash startup costs, where starting a franchise restaurant might cost you $500k-$1M on day 1] (3) How risky it is [the general stat is that something like 50% of all new businesses fail in their first year, and I think for restaurants that number is often given as 75%+] So sometimes investing in your own business is financially risky, and other times it is not risky. Sometimes it is a good idea, sometimes it is not. Either way, saving for a future business that you may or may not ever invest in, is still saving money. If you never end up investing in a business, you can instead use that money for retirement, or whatever other financial goals you have. So it's not the saving for a new business that is risky, it's the spending. Part of good personal financial management is making financial goals, tracking your progress to those goals, and changing them as needed. In a simpler case, many people want to own their own home - this is a common financial goal, just like early retirement, or starting your own business, or paying for your kids' college education. All those goals are helped by saving money, so your job as someone mindful of personal finances, is to prioritize those goals in accordance to what is important for you. As mentioned by Stannius in the comments below, there is one catch here: if you are saving money for a short term goal (such as starting a business in a year), then you might want to keep it in low-interest savings accounts, instead of investing in the stock market. Doing this would remove the chance that your investments fail right before you need the startup money. Of course, this means that saving for a business that you never end up starting, could earn you less investment income on your savings. This would be the risk of saving for any specific short term goal that you end up changing later on." }, { "docid": "130631", "title": "", "text": "\"In the US you are not required to have a corporation to use business expenses to offset your income. The technical term you need is \"\"deducting business expenses\"\", and in matters of taxes it's usually best to go straight to the horse's mouth: the IRS's explanations Deducting Business Expenses Business expenses are the cost of carrying on a trade or business. These expenses are usually deductible if the business operates to make a profit. What Can I Deduct? Cost of Goods Sold, Capital Expenses, Personal versus Business Expenses, Business Use of Your Home, Business Use of Your Car, Other Types of Business Expenses None of this requires any special incorporation or tax arrangements, and are a normal part of operating a business. However, there is a bit of a problem with your scenario. You said you \"\"invested\"\" into a business, but you mentioned buying specific things for the business which is not generally how one accounts for investment. If you are not an owner/operator of the business, then the scenario is not so straight-forward, as you can't simply claim someone else's business expenses as your own because you invested in it. Investments are taxed differently than expenses, and based upon your word choices I'm concerned that you could be getting yourself into a bit of a pickle. I would strongly advise you to speak with a professional, such as a Certified Public Accountant (CPA), to go over your current arrangement and advise you on how you should be structuring your ongoing investment into this shared business. If you are investing you should be receiving equity to reflect your ownership (or stock in the company, etc), and investments of this sort generally cannot be deducted as an expense on your taxes - it's just an investment, the same as buying stock or CDs. If you are just buying things for someone else's benefit, it's possible that this could be looked upon as a personal gift, and you may be in a precarious legal position as well (where the money is, indeed, just a gift). And gifts of this sort aren't deductible, either. Depending on how this is all structured, it's possible that you should both consider a different form of legal organization, such as a formal corporation or at least an official business partnership. A CPA and an appropriate business attorney should be able to advise you for a nominal (few hundred dollars, at most) fee. If a new legal structure is advisable, you can potentially do the work yourself for a few hundred dollars, or pay to have it done (especially if the situation is more complex) for a few hundred to a few thousand. That's a lot less than you'd be on the hook for if this business is being accounted for improperly, or if either of your tax returns are being reported improperly!\"" }, { "docid": "302019", "title": "", "text": "Note: My sister works for one of the largest clinical development, testing, and commercialization companies so I know some of the key issues but not all. This answer does not constitute advice on any particular stock or other instrument. This is mostly well researched opinion. The problem with biotech companies (and a few other areas of technology) is that a lot of money is spent, and debt incurred, on ensuring that products are effective and safe to go to market. At any stage these tests can fail and the product is essentially worthless. At this stage the developers will have learnt a lot about the drug and how it is as efficacious as it is and so the next iteration of the potential drug will be better and hopefully less likely to cause complications and harmful side effects. The process of gaining approval for this second iteration is just as expensive, if not more so, than the last. This means that they are spending a lot of money on the drug and, for small biotech companies concentrating on one or few drugs, will have little to no income generation to offset this. If the money runs out before they get the product out they are bankrupt even if the drug is perfect. A second issue is that they are not the only firm looking for a cure. They might have a very good drug that works very well but another company may have a better one in the pipeline that will either take their monopoly position or take all of their business based on the relative cost and efficacy. The longer it takes them to get through testing, the more likely it is that this will happen and the more likely it is that the competing drug will be first to market and receive all of the free publicity that goes with that. In this case the risk is that they have a product (eventually) but no market for it and so will again run out of money. Another consideration is what the cure is actually worth. Prevention and awareness is already reducing the number of (wealthy) western people who have HIV and so the market size is falling where the most profit can be made. In order to get any return on your investment a profit will be required. Where HIV rates are rising is in poor countries in Africa, Asia, and south America where the price at which people could afford to buy a cure is likely to be lower than even the break even price for the firm. In this case you have a monopoly and a drug that works but no one can afford to buy it for a price that you can accept and still make a profit. Biotech is a very risky, but potentially lucrative, area because there are just so many risks at every stage. Price volatility occurs on rumour and questionable statements from the company (who are always trying to be positive so that their funding doesn't dry up) and even relatively small trades can move the market a large amount as few people want to sell an investment with so much potential. There are also some charged political positions with regard to HIV and AIDS, so a shift in political power could also derail a biotech firm that is researching this kind of drug." }, { "docid": "203485", "title": "", "text": "\"Congrats you pulled some irrelevant statistics. No where in your response does it verify your claim that the majority of small businesses aren't turning a profit. And many small businesses do have a multiple stakeholders. Since we are on the subject, do you know how large a company can be and still be classified as a small business? [It is 500, 1,000, or 1,500 employees depending on the industry.] (https://www.forbes.com/sites/stevecooper/2012/09/20/the-government-definition-of-small-business-is-b-s/#58848cee360a) Five-hundred employees is not exactly small. Oh by the way, I've worked for multiple small businesses under 100 employees and they've had owners, stakeholders, investors, a board of directors, etc. on top of all of the employees. Not every small business is some mom and pop company of 5-15 employees. &gt;Then put your money where your mouth is and get out there and create some jobs. Hahaha. This has nothing to do with the discussion but whatever dude. If we were both to start our own companies, I'd actually value my workers and you would just complain about labor costs of the people that are needed to run your business. Here is the thing, I don't consider creating minimum wage jobs as true job creation, [because the tax payer is still footing the bill if the company isn't paying a live-able wage.](https://www.washingtonpost.com/news/wonk/wp/2015/04/14/when-work-isnt-enough-to-keep-you-off-welfare-and-food-stamps/) The majority of people on welfare are working families (see same link), so what good is job creation of minimum wage positions if the people that work them still have to rely on the government? Think about this, if we were to remove the minimum wage and I could pay someone $1 and hour, I could \"\"create jobs.\"\" But we all know that is asinine because no one could live on that. Yet the same thing happens at the federal minimum wage of $7.25 and people like you don't see that there is no difference between the two examples. In both scenarios, people still don't make enough to live without some assistance.\"" }, { "docid": "29886", "title": "", "text": "\"Actually that statistic (whether it is 9/10 or 95% or 99%) is often VERY misquoted AND it is both overstated AND extremely misleading. * First of all the ratio/percentage of even the \"\"urban myth\"\" that \"\"everyone knows\"\" is purportedly **over a 5 year period of time** not a single year. * Secondly, just because a business has closed down or ceased to exist sometime prior to the 5 year mark, does NOT necessarily mean that it was a \"\"failure\"\" (and definitely not necessarily a \"\"bankruptcy\"\"). * Third, it does not mean that all of the initial investment went \"\"poof\"\" -- **that may be true for high-tech startups** (especially the dot-com/dot-bomb con operations whose business \"\"plan\"\" resembles the [South Park Underpants Gnomes \"\"plan\"\"](http://upload.wikimedia.org/wikipedia/en/d/dd/Gnomes_plan.png) more than anything else) -- but that is NOT necessarily true of the rest of the business world. Consider by contrast how many EMPLOYEES are still in the same JOB five years later (per data [the *average* job tenure in the US is now 4.6 years](http://www.marketwatch.com/story/americans-less-likely-to-change-jobs-now-than-in-1980s-2014-01-10), which is actually UP from 3.7 years in 2002, and 3.5 years in circa 1983). The vast majority of small businesses (and the sheer volume\\* skews the totals) are essentially that: they are job *replacement* (or even job *supplement*) businesses, which chiefly consist of the owner/operator being \"\"self-employed\"\" (or part-time self-employed \"\"on the side\"\") for a year, two years, and possibly longer. Occasionally they will then (often temporarily) employ others as well; but the primary goal is to provide a simple \"\"income\"\" for the owner/operator. **And there is nothing WRONG with that.** Nor is there anything wrong with the person then ENDING that \"\"business\"\" and moving on... to another (different name, different field) business... or taking a job with some company (which they may have previously worked for on a contract basis with the \"\"business\"\", etc). The idea that ALL businesses somehow *should* \"\"endure forever\"\" and continue to grow forever (as if they were all destined to be Giant Sequoia trees) is actually *rather warped and delusional...* it ignores the real world, and the fact that most flora is NOT \"\"giant trees\"\" but rather small bushes and plants -- and for small businesses, being \"\"nimble\"\" (and profitable) often means the opposite: knowing when to get OUT of a market or business is just as important (indeed can be MORE important) than knowing when to get INTO it. \\*EDIT: As a further note on the \"\"volume\"\" you have to also add in the large number of *business \"\"ideas\"\" that spawn an LLC, but then went nowhere* companies (especially these days when starting an LLC in many states is simply filling out a form online and paying a filing fee) -- IOW the \"\"business\"\" may have had a temporary \"\"legal\"\" existence (name, probably a reserved domain name, maybe even a logo, etc.), but when it comes to reality -- actual investment in assets and conducting business operations (of any type) -- well, a lot of the \"\"horses\"\" never even make it past the gate... and that too skews the numbers in many studies. --- Note that here is another take on the point: http://www.washingtonpost.com/blogs/fact-checker/wp/2014/01/27/do-9-out-of-10-new-businesses-fail-as-rand-paul-claims/ &gt;As far as we can tell, **there is no statistical basis for the assertion that nine out of 10 businesses fail.** It appears to be one of those nonsense facts that people repeat without thinking too clearly about it. Here are some basic questions to ask when assessing such a factoid: &gt;1. What’s the time frame? Two years, five years, 10 years? That can make a big difference. &gt;2. Does “fail” mean that it goes out of business because it was not financially viable? Or does that also include data about successful enterprises that merge with another company? &gt;3. Wouldn’t failure rates be different for some industries than others? Does it make sense to lump all businesses together? &gt;There have been a number of studies that have looked at this issue. This chart, from Web site designer smallbusinessplanned.com, summarizes the results of three different studies. Basically, after four years, 50 percent of the businesses are open. As time goes on, the success rate decreases, but it never gets to a failure rate of “nine out of 10.” &gt;[...] &gt;Even this does not show the whole picture. As Brian Headd, an economist at the Small Business Administration, demonstrated in a 2002 study for Small Business Economics, **about one–third of closed business were actually successful when they “failed.”** &gt;“The significant proportion of businesses that closed while successful calls into question the use of ‘business closure’ as a meaningful measure of business outcome,” the study says. “It appears that **many owners may have executed a planned exit strategy,** closed a business without excess debt, sold a viable business, or retired from the work force.” Now that doesn't necessarily mean that Rand Paul's point is WRONG (he is chiefly talking about government investing in HIGHLY LEVERAGED, HIGH-RISK, HIGH-TECH businesses, which are a different story) -- but it does mean that the statistic he is citing (general business failure rate) is an urban-myth-falsehood, however commonly-believed, or commonly-restated.\"" }, { "docid": "273509", "title": "", "text": "\"From the perspective of an investor and someone in high-tech during that period, here is my take: A few high tech companies had made it big (Apple, Microsoft, Dell) and a lot of people were sitting around bemoaning the fact that we all should have realized that computers were going to be huge and invested early in those companies. We all convinced ourselves that we knew it was going to happen (whether we did or not), but for some reason we didn't put our money where our mouth was and now we were grumpy because we could be millionaires already. In the meantime the whole Internet thing transitioned from being something that only nerds and academics used to a new paradigm for computing. Many of us reasoned that we weren't going to be suckers twice and this time we were getting on that boat before it left for money-land. So it became fashionable to invest in Internet stocks. Everyone was doing it. It was guaranteed to come up in any conversation at parties or with friends at work. So with all this investment money out there for the Internet's \"\"next big thing\"\" naturally lots of companies popped up to take advantage of the easy money. It got to the point where brokers and Venture capital firms were beating the bushes LOOKING for companies to throw money at and often they didn't scrutinize these company's business plans very well and/or bought into insane growth projections. Frankly, most of the business plans amounted to \"\"We may not make any money off our users, but if we get enough people to sign up that HAS to be valuable, right?\"\" Problem #2 was that most of these companies weren't run by proven business types, but that didn't matter. It worked for those rag-tag kids at Google, Apple and Microsoft right? Well-heeled business types who know how to build a sustainable business model are so gauche in the new \"\"Internet Economy\"\". Also, the implicit agenda of most of these new entrepreneurs is (1) Get enough funding to make the company big enough go public while keeping enough equity to get rich when it does; (2) Buy a Ferrari; (3) Repeat with another company. Now these investors weren't stupid. They knew what was going on and that most of these Internet companies weren't going to be around in a decade. Everyone was just playing the momentum and planned to get out when they saw \"\"the signal\"\" that the whole house of cards was going to fall. At the time we always talked about the fact that these investments were totally playing with monopoly money, but it was addictive. During the peak, at least on paper, my brokerage account was earning more money for me than my day job. The problem was, that it was all kind of a pyramid scheme. These dot com companies needed a continual supply of new investment because most of them were operating at a loss and some didn't even have a mechanism to make a profit at all, at least not a realistic one. A buddy of mine, for example worked for an IPO bound company that made a freaking web based contact management system. They didn't charge yet, but they would one day turn on the meter and all of those thousands of customers who signed up for a free account would naturally start paying for something the company was actively devaluing by giving it away for free. This company raised more than $100M in venture capital. So eventually it started to get harder for these companies to continue to raise new money to pay operational costs without showing some kind of ROI. That is, the tried-and-true model for valuing a company started to seep back in and these companies had to admit that the CEO had no clothes. So without money to continue paying for expensive developers and marketing, these companies started to go under. When a few of the big names tumbled, everyone saw that as \"\"the signal\"\" and it was a race to the bank. The rest is history.\"" }, { "docid": "466835", "title": "", "text": "\"This is several questions wrapped together: How can I diplomatically see the company's financial information? How strong a claim does a stockholder or warrantholder have to see the company's financials? What information do I need to know about the company financials before deciding to buy in? I'll start with the easier second question (which is quasi implicit). Stockholders typically have inspection rights. For example, Delaware General Corporate Law § 220 gives stockholders the right to inspect and copy company financial information, subject to certain restrictions. Check the laws and corporate code of your company's state of incorporation to find the specific inspection right. If it is an LLC or partnership, then the operating agreement usually controls and there may be no inspection rights. If you have no corporate stock, then of course you have no statutory inspection rights. My (admittedly incomplete) understanding is that warrantholders generally have no inspection rights unless somehow contracted for. So if you vest as a corporate stockholder, it'll be your right to see the financials—which may make even a small purchase valuable to you as a continuing employee with the right to see the financials. Until then, this is probably a courtesy and not their obligation. The first question is not easy to answer, except to say that it's variable and highly personal for small companies. Some people interpret it as prying or accusatory, the implication being that the founders are either hiding something or that you need to examine really closely the mouth of their beautiful gift horse. Other people may be much cooler about the question, understanding that small companies are risky and you're being methodical. And in some smaller companies, they may believe giving you the expenses could make office life awkward. If you approach it professionally, directly, and briefly (do not over-explain yourself) with the responsible accountant or HR person (if any), then I imagine it should not be a problem for them to give some information. Conversely, you may feel comfortable enough to review a high-level summary sheet with a founder, or to find some other way of tactfully reviewing the right information. In any case, I would keep the request vague, simple, and direct, and see what information they show you. If your request is too specific, then you risk pushing them to show information A, which they refuse to do, but a vague request would've prompted them to show you information B. A too-specific request might get you information X when a vague request could have garnered XYZ. Vague requests are also less aggressive and may raise fewer objections. The third question is difficult to say. My personal understanding is some perspective of how venture capitalists look at the investment opportunity (you didn't say how new this startup is or what series/stage they are on, so I'll try to stay vague). The actual financials are less relevant for startups than they are for other investments because the situation will definitely change. Most venture capital firms like to look at the burn rate or amount of cash spent, usually at a monthly rate. A high burn rate relative to infusions of cash suggests the company is growing rapidly but may have a risk of toppling (i.e. failing before exit). Burn rate can change drastically during the early life of the startup. Of course burn rate needs the context of revenues and reserves (and latest valuation is helpful as a benchmark, but you may be able to calculate that from the restricted share offer made to you). High burn rate might not be bad, if the company is booming along towards a successful exit. You might also want to look at some sort of business plan or info sheet, rather than financials alone. You want to gauge the size of the market (most startups like to claim 9- or 10-figure markets, so even a few percentage points of market share will hit revenue into the 8-figures). You'll also have to have a sense for the business plan and model and whether it's a good investment or a ridiculous rehash (\"\"it's Twitter for dogs meets Match.com for Russian Orthodox singles!\"\"). In other words, appraise it like an investor or VC and figure out whether it's a prospect for decent return. Typical things like competition, customer acquisition costs, manufacturing costs are relevant depending on the type of business activity. Of course, I wouldn't ignore psychology (note that economists and finance people don't generally condone the following sort of emotional thinking). If you don't invest in the company and it goes big, you'll kick yourself. If it goes really big, other people will either assume you are rich or feel sad for you if you say you didn't get rich. If you invest but lose money, it may not be so painful as not investing and losing out the opportunity. So if you consider the emotional aspect of personal finance, it may be wise to invest at least a little, and hedge against \"\"woulda-shoulda\"\" syndrome. That's more like emotional advice than hard-nosed financial advice. So much of the answer really depends on your particular circumstances. Obviously you have other considerations like whether you can afford the investment, which will be on you to decide. And of course, the § 83(b) election is almost always recommended in these situations (which seems to be what you are saying) to convert ordinary income into capital gain. You may also need cash to pay any up-front taxes on the § 83(b) equity, depending on your circumstances.\"" }, { "docid": "342855", "title": "", "text": "Keep in mind this is a great primer on *macro*economics, or how the economies and money supplies of societies as a whole work. It's equally fascinating and important to learn about the basics of *micro*economics, the other side of that coin (pun intended), or how individual people and businesses make decisions about production and consumption. You've probably heard of the laws of supply and demand which are really important for understanding things like how and why prices change and why some businesses and industries are more successful than others." }, { "docid": "448521", "title": "", "text": "If the country went to a sustainable minimum wage like 15 dollars an hour we would benefit more. Anyone who thinks the walmart strikes are stupid and they should be fired clearly doesnt understand how the economy should work. You can blame walmart for trying to make as much as possible and not caring about their workforce. Look at costco and how they start all employees off at 12 dollars an hour. The company does amazing still. Also there have been countless studies that show increasing minimum wage does not hurt local businesses but actually helps out the economy. Because those lower/middle class people have a higher purchasing power, do not need government assistance as much, and can work on starting other small businesses that help out. The big nay sayers believe that it will cripple local businesses or increase the price of goods. While goods will increase in price some it is never anywhere near the amount to correlate with the wage increase. Its sad as a country people believe slavery is fine. If you are pro for under 15 dollars an hour, you are pro slavery. Im on my phone so i cant pull up all the fun statistics, but feel free to do the searches yourself. Lots of stories on how it benefits an economy overall. The only people making these facts up are the ones who own the businesses because their wealth will go down and be spread among employees more." }, { "docid": "536212", "title": "", "text": "\"Essentially, yes. Any and all decisions a business make are for one reason: $$$ Your paid vacation? That's an incentive to get better, more productive workers. Your company has done a cost/benefit analysis and they've figured out that it's worth their money to pay you to do nothing for a week because that paid vacation is a perk of the job that will get them better job applicants. OR they want you taking a vacation because you'll come back rested and refreshed. And that makes them money. (See also: every other job benefit.) \"\"Oh, well my company is a great civic member who does good work for the community.\"\" And I bet they never pass up an opportunity to tell people about it. Because they don't care about feeding the homeless kittens. They care about customers KNOWING they feed the homeless kittens. Because it makes them money. The point of a business is to make money, not employ people.\"" }, { "docid": "461526", "title": "", "text": "\"&gt;When you work, you are creating value. This is incorrect. Not all businesses add value to society - there's a reason capitalism function based on \"\"profit\"\" and \"\"loss\"\" signals. Some businesses destroy value. &gt;How do you think the concept of money came about? http://www.youtube.com/watch?v=5eP6iujgeWI &gt;Why not? This is the reason that hedge fund managers and CEOs pay so little in taxes...most of their compensation is in stocks and bonds, taxed as investment income. If you were paid in gold, i'm sure you could claim the same. Because investments are fundamentally different from money. They each serve a purpose - money is a store of value, while investments are risk-taking strategies to increase value. &gt;That's sillie: i'm emotionally invested in a gift economy. I accept a fiat paper standard. You appear to be afraid of what would happen if people were allowed to voluntarily choose what money to use, without government interference. Anyway, I've lost interest in this discussion. Have a good day.\"" }, { "docid": "170269", "title": "", "text": "Gotta love advice from a guy that bankrupted himself by spending like a moron. Also like how he didn't specify what taxes would be so crippling that he'd have to shut down the business other than the marginal tax rate which really has no impact on the business itself. I also liked how he asked his employees if they would continue to work for 50% pay, which is a failure at multiple levels. First, it fails to point out at a 50% rate isn't currently on the table. Second, if it was it would mean that worker was making a crap ton of money. Third, most of his employees probably can't stop working because they don't have a crap ton of money like he does." }, { "docid": "223841", "title": "", "text": "The first and most important thing to consider is that this is a BUSINESS TRANSACTION, and needs to be treated as such. Nail down Absolutely All The Details, specifically including what happens if either of you decides it's time to move and wants to sell off your share of the property. Get at least one lawyer involved in drawing up that contract, perhaps two so there's no risk of conflict of interest. What's your recourse, or his, if the other stops making their share of the payments? Who's responsible for repairs and upkeep? If you make renovations, how does that affect the ownership percentage, and what kind of approval do you need from him first, and how do you get it, and how quickly does he have to respond? If he wants to do something to maintain his investment, such as reroofing, how does he negotiate that with you -- especially if it's something that requires access to the inside of the house? Who is the insurance paid by, or will each of you be insuring it separately? What are the tax implications? Consider EVERY possible outcome; the fact that you're friends now doesn't matter, and in fact arguments over money are one of the classic things that kill friendships. I'd be careful making this deal with a relative (though in fact I did loan my brother a sizable chunk of change to help him bridge between his old house and new house, and that's registered as a mortgage to formalize it). I'd insist on formalizing who owns what even with a spouse, since marriages don't always last. With someone who's just a co-worker and casual friend, it's business and only business, and needs to be both evaluated and contracted as such to protect both of you. If you can't make an agreement that you'd be reasonably comfortable signing with a stranger, think long and hard about whether you want to sign it at all. I'll also point out that nobody is completely safe from long-term unemployment. The odds may be low, but people do get blindsided. The wave of foreclosures during and after the recent depression is direct evidence of that." }, { "docid": "531698", "title": "", "text": "Fantastic question to be asking at the age of 22! A very wise man suggested to me the following with regard to your net income I've purposely not included saving a sum of money for a house deposit, as this is very much cultural and lots of EU countries have a low rate of home ownership. On the education versus entrepreneur question. I don't think these are mutually exclusive. I am a big advocate of education (I have a B.Eng) but have following working in the real world for a number of years have started an IT business in data analytics. My business partner and I saw a gap in the market and have exploited it. I continue to educate myself now in short courses on running business, data analytics and investment. My business partner did things the otherway around, starting the company first, then getting an M.Sc. Other posters have suggested that investing your money personally is a bad idea. I think it is a very good idea to take control of your own destiny and choose how you will invest your money. I would say similarly that giving your money to someone else who will sometimes lose you money and will charge you for the privilege is a bad idea. Also putting your money in a box under your bed or in the bank and receive interest that is less than inflation are bad ideas. You need to choose where to invest your money otherwise you will gain no advantage from the savings and inflation will erode your buying power. I would suggest that you educate yourself in the investment options that are available to you and those that suit you personality and life circumstances. Here are some notes on learning about stock market trading/investing if you choose to take that direction along with some books for self learning." }, { "docid": "451501", "title": "", "text": "Is my financial status OK? If not, how can I improve it? I'm going to concentrate on this question, particularly the first half. Net income $4500 per month (I'm taking this to be after taxes; correct me if wrong). Rent is $1600 and other expenses are up to $800. So let's call that $2500. That leaves you $2000 a month, which is $24,000 a year. You can contribute up to $18,000 a year to a 401k and if you want to maintain your income in retirement, you probably should. The average social security payment now is under $1200. You have an above average income but not a maximum income. So let's set that at $1500. You need an additional income stream of $900 a month in retirement plus enough to cover taxes. Another $5500 for an IRA (probably a Roth). That's $23,500. That leaves you $500 a year of reliable savings for other purposes. Another $5500 for an IRA (probably a Roth). That's $23,500. That leaves you $500 a year of reliable savings for other purposes. You are basically even. Your income is just about what you need to cover expenses and retirement. You could cover a monthly mortgage payment of $1600 and have a $100,000 down payment. That probably gets you around a $350,000 house, although check property taxes. They have to come out of the $1600 a month. That doesn't seem like a lot for a Bay area house even if it would buy a mansion in rural Mississippi. Perhaps think condo instead. Try to keep at least $15,000 to $27,000 as emergency savings. If you lose your job or get stuck with a required expense (e.g. a major house repair), you'll need that money. You don't have enough income to support a car unless it saves you money somewhere. $500 a year is probably not going to cover insurance, parking, gas, and maintenance. It's possible that you could tighten up your expenses, but in my experience, people are more likely to underestimate their expenses than overestimate. That's why I'm saying $2500 (a little above the high end) rather than $2000 (your low end estimate). If things are stable, wait a year and evaluate. Track your actual spending. Ask yourself if you made any large purchases. Your budget should include an appliance (TV, refrigerator, washer/dryer, etc.) a year. If you're not paying for that now (included in rent?), then you need to allow for it in your ownership budget. I do not consider an ESPP to be a reliable investment vehicle. Consider the Enron possibility. You wake up one day and find out that there is no actual money. Your stock is now worthless. A diversified portfolio can survive this. If you lose your job and your investment, you'll be stuck with just your savings. Hopefully you didn't just tie them up in a house that you might have to sell to take your next job in a different location. An ESPP might work as savings for the house. If something goes wrong, don't buy the house. But it's not retirement or emergency savings. I would say that you are OK but could be better. Get your retirement savings started. That does two things. One, it gives you money for retirement. Two, it keeps you from having extra money now when it is easy to develop expensive habits. An abrupt drop from $4500 in spending to $1200 will hurt. A smooth transition from $2500 to $2500 is what you would like to see. You are behind now, but you have the opportunity to catch up for a few years. Work out how much you'll get from Social Security and how much you need to cover your typical expenses with the occasional emergency. Expect high health care costs in retirement. Medicare covers a lot but not everything, and health care is only getting more expensive. Don't forget to assume higher taxes in the future to help cover that expense and the existing debt. After a few years of catch up contributions, work out your long term plan assuming a reasonable real (after inflation) rate of return. If you can reduce the $23,500 in retirement contributions then, that's OK. But be pessimistic. Most people overestimate good things and underestimate bad things. It's much better to have extra than not enough. A 401k comes with an administrator and your choice of mutual funds. Try for diversification. Some money in bonds (25% to 30%). The remainder in stocks. Look for index funds. Try for a mix of value and growth, as they'll do better at different times. As you approach retirement, you can convert some of that into shorter term, lower yield investments. The rough rule of thumb is to have two to five years of withdrawals in short term investments like money market funds. But that's more than twenty years off. You have more choices with an IRA. In particular, you can choose your own administrator. But I'd keep the same stock/bond mix and stick to index funds if you're not interested in researching the more complex options. You may want to invest your IRA in a growth fund and your 401k in value funds and bonds. Then balance the stock/bond mix across both. When you invest each year, look at the underrepresented funds and add the most to them. So if bonds had a bad year and didn't keep pace, invest in bonds. They're probably cheap. You don't want to rebalance frequently, but once a year might be a good pace. That's about how often you should invest in an IRA, so that can be a good time. I'll let the others answer on the financial advisor part." }, { "docid": "10935", "title": "", "text": "Charles ponzi invented the Ponzi scheme (also known as the pyramid scheme) in the 1910 area before ww1 I believe. He got a bunch of people to invest in postage stamps and get other people to invest as they promised a huge return. Charles kept the money for himself and when people started wanting their money back it all came tumbling down. There is a movie on Netflix about how Charles got caught and the man who caught him. This is different than the Direct Selling industry (also known as multi level or network marketing) which is a legal multi billion dollar industry with brands like Mary Kay and Amway. There are three parameters that make a company an illegal pyramid: 1) only money is distributed. There are no products or services being rendered. 2) you can never make more money than the person who sponsored you into business. 3) you get money from the registration part of signing people up. Personally I am part of the fastest growing and most successful organization that utilizes this model. It is an organization called World Wide Dreambuilders, a mentorship and training organization that teaches people how to make a profitable business that distributes Amway products in a legal way with high integrity. Honestly 80% of the industry is people trying to hype up and sign up their friends and family and it's pretty lame. I can only speak for the Seattle area but my sponsor is making over $150k a year and has a strong organization with over 100 people in it. He built this business part time and is about to walk away from his day job in September and its freaking rad. Hope all this answers your question." }, { "docid": "392789", "title": "", "text": "Value investing is just an investment strategy, it's an alternative to technical investing. Buffet made money picking stocks. It's not obvious how that adds value, but it does. Everything about the stock market is ultimately about IPOs. Without active trading, of stocks after issue, no one would buy at the IPO. The purpose of an IPO is to finance the long-term growth of a business, which is the point in the process where the value to the people gets created. There is a group of elites that needs to be dealt with, you're correct, but I worry that your definition of this group is overly broad." } ]

[ { "docid": "523158", "title": "", "text": "You can either borrow money... credit card, line of credit, re-finance your home, home equity line of credit, loan, mortgage, etc. Or you have other invest in your company as equity. They will contribute $X to get Y% of your company and get Z% of the profits. Note amount of profits does not necessarily have to equate to percentage owned. This makes sense if they are a passive investor, where they just come up with the money and you do all the work. Also voting rights in a company does not have to equate to percentage owned either. You can also have a combination of equity and debt. If you have investors, you would need to figure out whether the investor will personally guarantee the debt of your company - recourse vs non-recourse. If they have more risk, they will want more of a return. One last way to do it is crowdfunding, similar to what people do on Kickstarter. Supporters/customers come up with the money, then you deliver the product. Consulting practices do something similar with the concept of retainers. Best of luck." } ]

[ { "docid": "381665", "title": "", "text": "\"It's not a ponzi scheme, and it does create value. I think you are confusing \"\"creating value\"\" and \"\"producing something\"\". The stock market does create value, but not in the same way as Toyota creates value by making a car. The stock market does not produce anything. The main way money enters the stock market is through investors investing and taking money out. The only other cash flow is in through dividends and out when businesses go public. & The stock market goes up only when more people invest in it. Although the stock market keeps tabs on Businesses, the profits of Businesses do not actually flow into the Stock Market. Earnings are the in-flow that you are missing here. Business profits DO flow back into the stock market through earnings and dividends. Think about a private company: if it has $100,000 in profits for the year then the company keeps $100,000, but if that same company is publicly traded with 100,000 shares outstanding then, all else being equal, each of those shares went up by $1. When you buy stock, it is claimed that you own a small portion of the company. This statement has no backing, as you cannot exchange your stock for the company's assets. You can't go to an Apple store and try to pay with a stock certificate, but that doesn't mean the certificate doesn't have value. Using your agriculture example, you wouldn't be able to pay with a basket of tomatoes either. You wouldn't even be able to pay with a lump of gold! We used to do that. It was called the barter system. Companies also do buy shares back from the market using company cash. Although they usually do it through clearing-houses that are capable of moving blocks of 1,000 shares at a time.\"" }, { "docid": "130631", "title": "", "text": "\"In the US you are not required to have a corporation to use business expenses to offset your income. The technical term you need is \"\"deducting business expenses\"\", and in matters of taxes it's usually best to go straight to the horse's mouth: the IRS's explanations Deducting Business Expenses Business expenses are the cost of carrying on a trade or business. These expenses are usually deductible if the business operates to make a profit. What Can I Deduct? Cost of Goods Sold, Capital Expenses, Personal versus Business Expenses, Business Use of Your Home, Business Use of Your Car, Other Types of Business Expenses None of this requires any special incorporation or tax arrangements, and are a normal part of operating a business. However, there is a bit of a problem with your scenario. You said you \"\"invested\"\" into a business, but you mentioned buying specific things for the business which is not generally how one accounts for investment. If you are not an owner/operator of the business, then the scenario is not so straight-forward, as you can't simply claim someone else's business expenses as your own because you invested in it. Investments are taxed differently than expenses, and based upon your word choices I'm concerned that you could be getting yourself into a bit of a pickle. I would strongly advise you to speak with a professional, such as a Certified Public Accountant (CPA), to go over your current arrangement and advise you on how you should be structuring your ongoing investment into this shared business. If you are investing you should be receiving equity to reflect your ownership (or stock in the company, etc), and investments of this sort generally cannot be deducted as an expense on your taxes - it's just an investment, the same as buying stock or CDs. If you are just buying things for someone else's benefit, it's possible that this could be looked upon as a personal gift, and you may be in a precarious legal position as well (where the money is, indeed, just a gift). And gifts of this sort aren't deductible, either. Depending on how this is all structured, it's possible that you should both consider a different form of legal organization, such as a formal corporation or at least an official business partnership. A CPA and an appropriate business attorney should be able to advise you for a nominal (few hundred dollars, at most) fee. If a new legal structure is advisable, you can potentially do the work yourself for a few hundred dollars, or pay to have it done (especially if the situation is more complex) for a few hundred to a few thousand. That's a lot less than you'd be on the hook for if this business is being accounted for improperly, or if either of your tax returns are being reported improperly!\"" }, { "docid": "528206", "title": "", "text": "\"Rather than thinking of becoming a landlord as a passive \"\"investment\"\" (like a bank account or mutual fund), it may be useful to think of it as \"\"starting a small part-time business\"\". While certainly many people can and do start their own businesses, and there are many success stories, there are many cases where things don't work out quite as they hoped. I wouldn't call starting any new business \"\"low risk\"\", even one that isn't expected to be one's main full-time job, though some may be \"\"acceptable risk\"\" for your particular circumstances. But if you're going to start a part-time business, is there any particular reason you'd do so in real estate as opposed to some other activity? It sounds like you'd be completely new to real estate, so perhaps for your first business you're starting you'd want it to be something you're more familiar with. Or, if you do want to enter the real estate world (or any other new business), be sure to do a lot of research, come up with a business plan, and be prepared for the possibility of losing money as with any investment or new business.\"" }, { "docid": "469874", "title": "", "text": "\"Some rich people want to make money without working. So they give their money to a company like Apollo Global Management, and then Apollo Global Management takes the money that they were given and decides how they will turn that money into more money, which they can give back to the person who gave it to them. That money they give back is called return, or \"\"return on investment.\"\" That's how the person who gave the money, makes money -- from return on investment. The company's only real purpose is to make money with the money you give them. The company takes the money and sometimes they let other companies borrow that money, either for a long period of time or short period of time. They have different things called stocks, bonds, commodities and other things that they trade back and forth, and they only hope that they will make money doing it. It is sort of like they are going to work and playing the lottery every day, except, they do a lot of math to try and figure out how they can win the money from other companies as quick as possible. Instead of buying lotto tickets, they are buying those things I mentioned, stocks, bonds, commodities, and other things. By buying or selling these things, they are betting that a company will either make or lose money. It is basically like a game, with you and other people and companies, all as players. You are betting that the other players in the game will either make or lose money, based on what you see other players doing. As a player, you can win big or small, and you can lose big or small. There's a thing called the SEC. To play the game, you have to follow the rules that the SEC makes, or you will end up in jail! They are like the police, they are looking for people who do bad things. When you are older, you can make a lot of money if you work at a company like Apollo, but you can make more money than a lottery winner if you own a company yourself like Apollo.\"" }, { "docid": "319928", "title": "", "text": "I switched from engineering into finance, into an entry level position as an analyst on the investment side. I can tell you about my experience and how I did it. Yes, it is incredibly hard to get a position on the buyside. Investment management doesn't scale well with numbers, adding more analysts typically doesn't improve results (i.e. Buffett and Munger made all the investment decisions at Berkshire Hathaway, the most successful investment team is a two man team running more than a hundred billion dollars of assets). So teams are very small. A large amount of money goes through the hands of very few people, so naturally the pay is very big. The recruiters are not lying when they say there are hundreds of applicants chasing each one of those jobs. I tried asking my friends and family, but being a first generation American, most of the people I know are blue-collar types that work with their hands. I had some success tapping into the alumni network, I got many responses with advice but no interviews. It doesn't help that the finance world is currently shrinking and there are talented people losing their jobs. I had the most success attending my schools career fair. If you graduated from one of the top schools, the firms that are recruiting will still show up. Also, check your schools career office. All the top schools I know of have on-campus interviews. They are generally open to alumni. It is summer right now, but on-campus recruiting season will start in the fall. You should be able to get some interviews through your school. Now the most important thing you need to do is to differentiate yourself. What are you doing right now? Are you working in some other area of finance or a different field altogether? I think the best way to do it (and it is how I did it) is to invest your own money. If you are in an interview and you say you invest your own money, you are pretty much guaranteed that you will be explaining one of your investment theses for the next half hour. This is effectively what you will be doing in the real job if you get it. Firms want to hire someone who can start working, they don't want to pay you that big money only to find that you can't do anything for the next year or two before they cut you. So you have to prove that you can do the job. Interns do it by working for cheap for a summer or two. Someone who graduated already can do it by claiming that they do it on the side, and then backing that up by being able to explaining positions intelligently (you will NOT get the job if it looks anything like /r/investing). There is also something hypocritical if you say that you should be paid boatloads of money because you are capable of managing money well (that is what you are claiming by applying to an investment job) and you don't manage your own money and you haven't formulated any investment theses. Students typically won't be able to do this because they don't have any money to invest, so they get their jobs through the internship route." }, { "docid": "279588", "title": "", "text": "\"When the VC is asking what your Pre-Money Valuation is, he's asking what percentage of shares his $200,000 will buy. If you say your company is worth $800K, then after he puts the money in, it will be worth $1M, and he will own 20% of all shares – you'll still own the remainder. So when the VC is asking for a valuation, what he really wants to know is how much of your company he's going to own after he funds you. Determining your pre-money valuation, then, is a question of negotiation: how much money will you need, how likely are you to require more money later (and thus dilute the VC's shares, or give up more of your own shares), how likely is your business to survive, and how much money will it make if it does survive? It isn't about the actual value of your business right now, as much as it is \"\"how much work has gone into this, and how successful can it be?\"\" The value is going to be a bit higher than you expect, because the work is already done and you can get to market faster than someone else who hasn't started yet. VCs are often looking for long shots – they'll invest in 10 companies, and expect 7 to fail, 2 to be barely-profitable, and the last one to make hilarious amounts of money. A VC doesn't necessarily want 51% of your company (you'll probably lose motivation if you're not in charge), but they'll want as much as they can get otherwise.\"" }, { "docid": "269406", "title": "", "text": "\"It includes whatever you want to do with your investment. At least initially, it's not so much a matter of calculating numbers as of introspective soul-searching. Identifying your investment objectives means asking yourself, \"\"Why do I want to invest?\"\" Then you gradually ask yourself more and more specific questions to narrow down your goals. (For instance, if your answer is something very general like \"\"To make money\"\", then you may start to ask yourself, \"\"How much money do I want?\"\", \"\"What will I want to use that money for?\"\", \"\"When will I want to use that money?\"\", etc.) Of course, not all objectives are realistic, so identifying objectives can also involve whittling down plans that are too grandiose. One thing that can be helpful is to first identify your financial objectives: that is, money you want to be able to have, and things you want to do with that money. Investment (in the sense of purchasing investment vehicles likes stocks or bonds) is only one way of achieving financial goals; other ways include working for a paycheck, starting your own business, etc. Once you identify your financial goals, you have a number of options for how to get that money, and you should consider how well suited each strategy is for each goal. For instance, for a financial goal like paying relatively small short-term expenses (e.g., your electric bill), investing would probably not be the first choice for how to do that, because: a) there may be easier ways to achieve that goal (e.g., ask for a raise, eat out less); and b) the kinds of investment that could achieve that goal may not be the best use of your money (e.g., because they have lower returns).\"" }, { "docid": "585494", "title": "", "text": "\"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.\"" }, { "docid": "547705", "title": "", "text": "Funny because I'm fully aware that I have no idea about how this works. That's exactly why I'm here. I literally was asking people to inform me, to teach me a little bit. I googled information on business plan and that's the first thing it said. Are you guys failing to see the fact that I'm clueless? Did I ever admit to being a genius with an amazing strategy of becoming the next Donald Trump? And you're just like the other guy. You can't tell me what I have planned hasn't been done if you don't know what my plan is. And it hasn't been done, I'm not brain dead.. I can figure out if my idea is already there or not. How can you tell me what my rough estimate is like if you don't know what I'm doing as well. Are all businesses supposed to start off with a 500 million dollar budget? Are they all supposed to start off with a 100 dollar budget? No, it varies for what you're doing. I'll go back and sum up what I was tying to say originally and clearly failed apparently to get into your head.. I'm 18 years old, and have a great idea for a business that would interest many many people. I have no idea how to start, or what to do to learn about how to start, call me an idiot or what not but I don't care cause most people don't know how to start a business properly especially at my age. And I wish you people could be supportive of a young guy trying to start a business instead of discouraging him and trying to turn him down. What are my peers doing? Drugs and working min wage to spend their money on bullshit. And I'm trying to find a way to be different and more successful. Obviously I guess I didn't go the right route to learn about business since I have no idea how to start but that's all I want from this thread. All I want is for someone to tell me where to start, so that way while I'm making little money working right now, I could start learning how to start and grow an idea so that maybe my stupid ass can do something big somewhere down the road whether it takes a decade I dont give a fuck. What's your people's issue? I'm sorry I'm not as smart and amazing as you all. Now if someone is kind enough to take a few minutes to help someone out then that'd be appreciated. If not then waste your time somewhere else rather than discouraging me because I don't care. I have a dream and I'm gonna do what I can to make it come true." }, { "docid": "94152", "title": "", "text": "\"Other than the inconvienent fact that Treasury cannot sell to the Fed by law your theory is nice. You forget the step where the open market buys from the Treasury since they desire bonds to invest in, and the Fed can buy only from the open market. Secondly, the Fed does not give cash to the Treasury. The mint (a branch of the Treasury, not the Fed) prints cash. So it seems your understanding of how the money system works is quite wrong, yet since this is the Economy subreddit instead of the Economics subreddit, I expect you to get upvotes for saying what is popular even though it is laughably incorrect. You seem to not like cash that was not \"\"even existing previously\"\". All cash was not existing previously. How do you expect people to make transactions? Barter? You call them interest free loans (but above claimed they will never be paid back?), but then the Fed is making a profit on them? It seems you contradict yourself with all that handwaving. It would be interesting for you to explain how (and why) money (not cash) gets added and removed to the economy. Yay for ignorance!\"" }, { "docid": "124762", "title": "", "text": "he general advice I get is that the younger you are the more higher risk investments you should include in your portfolio. I will be frank. This is a rule of thumb given out by many lay people and low-level financial advisors, but not by true experts in finance. It is little more than an old wive's tale and does not come from solid theory nor empirical work. Finance theory says the following: the riskiness of your portfolio should (inversely) correspond to your risk aversion. Period. It says nothing about your age. Some people become more risk-averse as they get older, but not everyone. In fact, for many people it probably makes sense to increase the riskiness of their portfolio as they age because the uncertainty about both wealth (social security, the value of your house, the value of your human capital) and costs (how many kids you will have, the rate of inflation, where you will live) go down as you age so your overall level of risk falls over time without a corresponding mechanical increase in risk aversion. In fact, if you start from the assumption that people's aversion is to not having enough money at retirement, you get the result that people should invest in relatively safe securities until the probability of not having enough to cover their minimum needs gets small, then they invest in highly risky securities with any money above this threshold. This latter result sounds reasonable in your case. At this point it appears unlikely that you will be unable to meet your minimum needs--I'm assuming here that you are able to appreciate the warnings about underfunded pensions in other answers and still feel comfortable. With any money above and beyond what you consider to be prudent preparation for retirement, you should hold a risky (but still fully diversified) portfolio. Don't reduce the risk of that portion of your portfolio as you age unless you find your personal risk aversion increasing." }, { "docid": "22207", "title": "", "text": "\"I agree with all the people cautioning against working for free, but I'll also have a go at answering the question: When do I see money related to that 5%? Is it only when they get bought, or is there some sort of quarterly payout of profits? It's up to the shareholders of the company whether and when it pays dividends. A new startup will typically have a small number of people, perhaps 1-3, who between them control any shareholder vote (the founder(s) and an investor). If they're offering you 5%, chances are they've made sure your vote will not matter, but some companies (an equity partnership springs to mind) might be structured such that control is genuinely distributed. You would want to check what the particular situation is in this company. Assuming the founders/main investors have control, those people (or that person) will decide whether to pay dividends, so you can ask them their plans to realise money from the company. It is very rare for startups to pay any dividends. This is firstly because they're rarely profitable, but even when they are profitable the whole point of a startup is to grow, so there are plenty of things to spend cash on other than payouts to shareholders. Paying anything out to shareholders is the opposite of receiving investment. So unless you're in the very unusual position of a startup that will quickly make so much money that it doesn't need investment, and is planning to pay out to shareholders rather than spend on growth, then no, it will not pay out. One way for a shareholder to exit is to be bought out by other shareholders. For example if they want to get rid of you then they might make you an offer for your 5%. This can be any amount they think you'll take, given the situation at the time. If you don't take it, there may be things they can do in future to reduce its value to you (see below). If you do take it then your 5% would pay you once, when you leave. If the company succeeds, commonly it will be wholly or partly sold (either privately or by IPO). At this point, if it's wholly sold then the soon-to-be-ex-shareholders at the time will receive the proceeds of the sale. If it's partly sold then as with an investment round it's up for negotiation what happens. For example I believe the cash from an IPO of X% of the company could be taken into the company, leaving the shareholders with no immediate direct payout but (100-X)% of shares in their names that they're more-or-less free to sell, or retain and receive future dividends. Alternatively, if the company settles down as a small private business that's no longer in startup mode, it might start paying out without a sale. If the company fails, as most startups do, it will never pay anything. It's very important to remember that it's the shareholders at the time who receive money in proportion to their holding (or as defined by the company articles, if there are different classes of share). Just because you have 5% now doesn't mean you'll have 5% by that time, because any new investment into the company in the mean time will \"\"dilute\"\" your shareholding. It works like this: Note that I've assumed for simplicity that the new investment comes in at equal value to the old investment. This isn't necessarily the case, it can be more or less according to the terms of the new investment voted for by the shareholders, so the first line really is \"\"nominal value\"\", not necessarily the actual cash the founders put in. Therefore, you should not think of your 5% as 5% of what you imagine a company like yours might eventually exit for. At best, think of it as 5% of what a company like yours might exit for, if it receives no further investment whatsoever. Ah, but won't the founders also have their holdings diluted and lose control of the company, so they wouldn't do that? Well, not necessarily. Look carefully at whether you're being offered the same class of shares as the founders. If not consider whether they can dilute your shares without diluting their own. Look also at whether a new investor could use the founders' executive positions to give them new equity in the same way they gave you old equity, without giving you any new equity. Look at whether the founders will themselves participate in future investment rounds using sacks of cash that they own from other ventures, when you can't afford to keep up. Look at whether new investors will receive a priority class of share that's guaranteed at exit to pay out a certain multiple of the money invested before the older, inferior classes of shares receive anything (VCs like to do this, at least in the UK). Look at any other tricks they can legally pull: even if the founders aren't inclined to be tricky, they may eventually be forced to consider pulling them by a future new investor. And when I say \"\"look\"\", I mean get your lawyer to look. If your shareholding survives until exit, then it will pay out at exit. But repeated dilutions and investors with priority classes of shares could mean that your holding doesn't survive to exit even if the company does. Your 5% could turn into a nominal holding that hasn't really \"\"survived\"\", that entitles you to 0.5% of any sale value over $100 million. Then if the company sells for $50 million you get $0, while other investors are getting a good return. All of this is why you should not work for equity unless you can afford to work for free. And even then you need to lawyer up, now and during any future investment, so your lawyer can explain to you what your investment actually is, which almost certainly is different from what it looks like at a casual uninformed glance.\"" }, { "docid": "314085", "title": "", "text": "\"The difference is in the interrelation between the varied investments you make. Hedging is about specifically offsetting a possible loss in an investment by making another related investment that will increase in value for the same reasons that the original investment would lose value. Gold, for instance, is often regarded as the ultimate hedge. Its value is typically inversely correlated to the rest of the market as a whole, because its status as a material, durable store of value makes it a preferred \"\"safe haven\"\" to move money into in times of economic downturn, when stock prices, bond yields and similar investments are losing value. That specific behavior makes investing in gold alongside stocks and bonds a \"\"hedge\"\"; the increase in value of gold as stock prices and bond yields fall limits losses in those other areas. Investment of cash in gold is also specifically a hedge against currency inflation; paper money, account balances, and even debt instruments like bonds and CDs can lose real value over time in a \"\"hot\"\" economy where there's more money than things to buy with it. By keeping a store of value in something other than currency, the price of that good will rise as the currencies used to buy it decrease in real value, maintaining your level of real wealth. Other hedges are more localized. One might, for example, trade oil futures as a hedge on a position in transportation stocks; when oil prices rise, trucking and airline companies suffer in the short term as their margins get squeezed due to fuel costs. Currency futures are another popular hedge; a company in international business will often trade options on the currencies of the companies it does business in, to limit the \"\"jitters\"\" seen in the FOREX spot market caused by speculation and other transient changes in market demand. Diversification, by contrast, is about choosing multiple unrelated investments, the idea being to limit losses due to a localized change in the market. Companies' stocks gain and lose value every day, and those companies can also go out of business without bringing the entire economy to its knees. By spreading your wealth among investments in multiple industries and companies of various sizes and global locations, you insulate yourself against the risk that any one of them will fail. If, tomorrow, Kroger grocery stores went bankrupt and shuttered all its stores, people in the regions it serves might be inconvenienced, but the market as a whole will move on. You, however, would have lost everything if you'd bet your retirement on that one stock. Nobody does that in the real world; instead, you put some of your money in Kroger, some in Microsoft, some in Home Depot, some in ALCOA, some in PG&E, etc etc. By investing in stocks that would be more or less unaffected by a downturn in another, if Kroger went bankrupt tomorrow you would still have, say, 95% of your investment next egg still alive, well and continuing to pay you dividends. The flip side is that if tomorrow, Kroger announced an exclusive deal with the Girl Scouts to sell their cookies, making them the only place in the country you can get them, you would miss out on the full possible amount of gains you'd get from the price spike if you had bet everything on Kroger. Hindsight's always 20/20; I could have spent some beer money to buy Bitcoins when they were changing hands for pennies apiece, and I'd be a multi-millionaire right now. You can't think that way when investing, because it's \"\"survivor bias\"\"; you see the successes topping the index charts, not the failures. You could just as easily have invested in any of the hundreds of Internet startups that don't last a year.\"" }, { "docid": "125057", "title": "", "text": "&gt; But their strategy is not debt spending to increase demand. They deficit spend. They increase prosperity and thus demand. They do it consistently and repeatedly. Claims that it's effects are unintentional don't hold up. Starve the beast is political cover. What they are doing is pushing profits up for the rich by cutting their taxes. Why has as many answers as there are politicians pursuing these policies, but the deficit spending is fairly obviously designed to make the economy appear to be doing better. The interesting side effect is, that they *are* making the economy do better. &gt; Deficit spending does drive demand short term. But as this debt rises so does the rent seeking cost of that debt. This is not where rent seeking occurs. The net cost of national debt is negative. &gt; Most such debt spending is a complete waste. Only if you don't understand that people having money is a prerequisite for people spending money. &gt; Your tax rate is not determined by how much money the government takes from you. The government gives you more income than it takes from you in taxes. Every bit of cut spending removes income from the population. Since we all work for each other and one person's income becomes another's relatively quickly, it's an appropriate approximation to average that income out over the population and when you do that you quickly see that government taxes and spending have a net positive effect on how much money we have. This is why we can dump so much into defense spending and still have a viable economy and why removing that spending would do more harm than good. Our economic trouble has nothing to do with efficiency and how much work needs to be done, and everything to do with how much money people have to spend. Government taking on more debt thus creating more money and handing it to it's population makes that problem better and thus the economy gains strength. Fixing the core problem that is causing the population to run out of money is a harder task, but piling on the debt in the meantime alleviates the symptoms." }, { "docid": "62552", "title": "", "text": "\"There are moral distinctions that can be drawn between gambling and investing in stocks. First and I think most important, in gambling you are trying to get money for nothing. You put $100 down on the roulette wheel and you hope to get $200 back. In investing you are not trying to get something for nothing. You are buying a piece of a hopefully profit-making company. You are giving this company the use of your money, and in exchange you get a share of the profits. That is, you are quite definitely giving something: the use of your money for a period of time. You invest $100 of your money, and you hope to see that grow by maybe $5 or $10 a year typically. You may get a sudden windfall, of course. You may buy a stock for $100 today and tomorrow it jumps to $200. But that's not the normal expectation. Second, gambling is a zero sum game. If I gamble and win $100, then someone else had to lose $100. Investing is not a zero sum game. If I buy $100 worth of stock in a company and that grows to $200, I have in a sense \"\"won\"\" $100. But no one has lost $100 to give me that money. The money is the result of the profit that the company made by selling a valuable product or service to customers. When I go to the grocery store and buy a dozen eggs for $2, some percentage of that goes to the stockholders in the grocery store, say 5 cents. So did I lose 5 cents by buying those eggs? No. To me, a dozen eggs are worth at least $2, or I wouldn't have bought them. I got exactly what I paid for. I didn't lose anything. Carrying that thought further, investing in the stock market puts money into businesses. It enables businesses to get started and to grow and expand. Assuming these are legitimate businesses, they then provide useful products and services to customers. Gambling does not provide useful products and services to anyone -- except to the extent that people enjoy the process of gambling, in which case you could say that it is equivalent to playing a video game or watching a movie. Third -- and these are all really related -- the whole goal of gambling is to take something from another person while giving him nothing in return. Again, if I buy a dozen eggs, I give the store my $2 (or whatever amount) and I get a dozen eggs in exchange. I got something of value and the store got something of value. We both walk away happy. But in gambling, my goal is that I will take your money and give you nothing in return. It is certainly true that buying stocks involves risk, and we sometimes use the word \"\"gamble\"\" to describe any risk. But if it is a sin to take a risk, then almost everything you do in life is a sin. When you cross the street, there is a risk that you will be hit by a car you didn't see. When you drink a glass of water, there is the risk that it is contaminated and will poison you. When you get married, there is a risk that your spouse will divorce you and break your heart. Etc. We are all sinners, we all sin every day, but we don't sin quite THAT much. :-) (BTW I don't think that gambling is a sin. Nothing in the Bible says that gambling is a sin. But I can comprehend the argument for it. I think gambling is foolish and I don't do it. My daughter works for a casino and she has often said how seeing people lose money in the casino regularly reminds her why it is stupid to gamble. Like she once commented on people who stand between two slot machines, feed them both coins and then pull the levers down at the same time, \"\"so that\"\", she said, \"\"they can lose their money twice as fast\"\".)\"" }, { "docid": "307008", "title": "", "text": "\"I think you've got basics, but you may have the order / emphasis a bit wrong. I've changed the order of the things you've learned in to what I think is the most important to understand: Owning a stock is like owning a tiny chunk of the business Owning stock is owning a tiny chunk of the business, it's not just \"\"like\"\" it. The \"\"tiny chunks\"\" are called shares, because that is literally what they are, a share of the business. Sometimes shares are also called stocks. The words stock and share are mostly interchangeable, but a single stock normally means your holding of many shares in a business, so if you have 100 shares in 1 company, that's a stock in that company, if you then buy 100 shares in another company, you now own 2 stocks. An investor seeks to buy stocks at a low price, and sell when the price is high. Not necessarily. An investor will buy shares in a company that they believe will make them a profit. In general, a company will make a profit and distribute some or all of it to shareholders in the form of dividends. They will also keep back a portion of the profit to invest in growing the company. If the company does grow, it will grow in value and your shares will get more valuable. Price (of a stock) is affected by supply/demand, volume, and possibly company profits The price of a share that you see on a stock ticker is the price that people on the market have exchanged the share for recently, not the price you or I can buy a share for, although usually if people on the market are buying and selling at that price, someone will buy or sell from you at a similar sort of price. In theory, the price will be the companies total value, if you were to own the whole thing (it's market capitalisation) divided by the total number of shares that exist in that company. The problem is that it's very difficult to work out the total value of a company. You can start by counting the different things that it owns (including things like intellectual property and the knowledge and experience of people who work there), subtract all the money it owes in loans etc., and then make an allowance for how much profit you expect the company to make in the future. The problem is that these numbers are all going to be estimates, and different peoples estimates will disagree. Some people don't bother to estimate at all. The market makers will just follow supply and demand. They will hold a few shares in each of many companies that they are interested in. They will advertise a lower price that they are willing to buy at and a higher price that they will sell at all the time. When they hold a lot of a share, they will price it lower so that people buy it from them. When they start to run out, they will price it higher. You will never need to spend more than the market makers price to buy a share, or get less than the market makers price when you come to sell it (unless you want to buy or sell more shares than they are willing to). This is why stock price depends on supply and demand. The other category of people who don't care about the companies they are trading are the high speed traders. They just look at information like the past price, the volume (total amount of shares being exchanged on the market) and many other statistics both from the market and elsewhere and look for patterns. You cannot compete with these people - they do things like physically locate their servers nearer to the stock exchanges buildings to get a few milliseconds time advantage over their competitors to buy shares quicker than them.\"" }, { "docid": "177946", "title": "", "text": "\"I think the \"\"right\"\" way to approach this is for your personal books and your business's books to be completely separate. You would need to really think of them as separate things, such that rather than being disappointed that there's no \"\"cross transactions\"\" between files, you think of it as \"\"In my personal account I invested in a new business like any other investment\"\" with a transfer from your personal account to a Stock or other investment account in your company, and \"\"This business received some additional capital\"\" which one handles with a transfer (probably from Equity) to its checking account or the like. Yes, you don't get the built-in checks that you entered the same dollar amount in each, but (1) you need to reconcile your books against reality anyway occasionally, so errors should get caught, and (2) the transactions really are separate things from each entity's perspective. The main way to \"\"hack it\"\" would be to have separate top-level placeholder accounts for the business's Equity, Income, Expenses, and Assets/Liabilities. That is, your top-level accounts would be \"\"Personal Equity\"\", \"\"Business Equity\"\", \"\"Personal Income\"\", \"\"Business Income\"\", and so on. You can combine Assets and Liabilities within a single top-level account if you want, which may help you with that \"\"outlook of my business value\"\" you're looking for. (In fact, in my personal books, I have in the \"\"Current Assets\"\" account both normal things like my Checking account, but also my credit cards, because once I spend the money on my credit card I want to think of the money as being gone, since it is. Obviously this isn't \"\"standard accounting\"\" in any way, but it works well for what I use it for.) You could also just have within each \"\"normal\"\" top-level placeholder account, a placeholder account for both \"\"Personal\"\" and \"\"My Business\"\", to at least have a consistent structure. Depending on how your business is getting taxed in your jurisdiction, this may even be closer to how your taxing authorities treat things (if, for instance, the business income all goes on your personal tax return, but on a separate form). Regardless of how you set up the accounts, you can then create reports and filter them to include just that set of business accounts. I can see how just looking at the account list and transaction registers can be useful for many things, but the reporting does let you look at everything you need and handles much better when you want to look through a filter to just part of your financial picture. Once you set up the reporting (and you can report on lists of account balances, as well as transaction lists, and lots of other things), you can save them as Custom Reports, and then open them up whenever you want. You can even just leave a report tab (or several) open, and switch to it (refreshing it if needed) just like you might switch to the main Account List tab. I suspect once you got it set up and tried it for a while you'd find it quite satisfactory.\"" }, { "docid": "417133", "title": "", "text": "I am using my debit card regularly: in ATM's with a pin, in stores with my signature, and online. But later you say But from what I recall from starting my own business (a LONG time ago), for debit cards there's only a per-transaction fee of like $0.25, not a percentage cut. Only pin transactions have just a per-transaction fee paid by you to the merchant (and you are reimbursed by Schwab). If you use your card with just a signature or online without a pin, then it is a credit transaction from the merchant's perspective. The merchant pays a fee and Schwab gets its cut of that. So for two of the transaction types that you describe, the merchant pays Schwab (indirectly) out of your payment. Only when you enter your pin does it process as a debit transaction where Schwab pays the merchant. Because check cards withdraw the money from your account immediately, you don't even get the twenty to fifty day grace period. So those merchant fees are pure profit for Schwab, offsetting the loss from the ATM fees. You claim $4-5k in fees at $.25 each. That's sixteen to twenty thousand transactions. Assuming that several is four to five years, that's more than ten transactions a day. That seems like a lot. I can see three for meals, one for miscellaneous, and maybe some shopping. But if I go shopping one day, I don't normally go again for a while. I have trouble seeing a consistent average of five or more transactions a day. Even if we use just the higher ATM fees (e.g. $2), that's still more than a transaction a day. That's an extreme level of usage, particularly for someone who also makes frequent purchases via card. I haven't done any other business with them. I find this confusing. How does money get into your account? At some point, you must have deposited money into the account. You can't debit from an account without a positive balance. So you must have done or be doing some kind of business with them. If nothing else, they can invest the balance that you deposit. Note that they make a profit off such investments. They share some of that profit with you in the form of interest, but not that much really. Of course, Schwab may still be losing money on your transactions. We can't really tell without more information on how much of each transaction type you do and how much of a balance you maintain. Perhaps they are hoping that you will do other, more profitable, activities in the future. I doubt there are that many Schwab customers like you describe yourself. As best I've been able to see, they advertise their banking services just to investment customers. So it's unlikely that many customers who don't use their investment services use their banking services just for ATM reimbursements." }, { "docid": "351925", "title": "", "text": "\"1 - in most cases, the difference between filing joint or married filing single is close to zero. When there is a difference you're better off filing joint. 2 - The way the W4 works is based on how many allowances you claim. Unfortunately, even in the day of computers, it does not allow for a simple \"\"well my deduction are $xxx, don't tax that money.\"\" Each allowance is equal to one exemption, same as you get for being you, same as the wife gets, same as each kid. 3 people X $3800 = $11,400 you are telling the employer to take off the top before calculating your tax. She does this by using Circular E and is able to calculate your tax as you request. If one is in the 15% bracket, one more exemption changes the tax withheld by $570. So if you were going to owe $400 in April, one few exemption will have you overpay $170. i.e. in this 15% bracket, each exemption changes annual withholding by that $570. For most people, running the W4 numbers will get them very close, and only if they are getting back or owing over $500, will they even think of adjusting. 3 - My recently published Last Minute Tax Moves offers a number of interesting ideas to address this. The concept of grouping deductions in odd years is worth noting. 4 - I'm not sure what this means, 2 accounts each worth $5000 should grow at the same rate if invested the same. The time it makes sense to load one person's account first is if they have better matching. You say you are not sure what percent your wife's company matches. You need to change this. For both of your retirement plans you need to know every detail, exact way to maximize matching, expense ratios for the investments you choose, any other fees, etc. Knowledge is power, and all that. In What is an appropriate level of 401k fees or expenses in a typical plan? I go on to preach about how fees can wipe out any tax benefit over time. For any new investor, my first warning is always to understand what you are getting into. If you can't explain it to a friend, you shouldn't be in it. Edit - you first need to understand what choices are within the accounts. The 4% and 6% are in hindsight, right? These are not fixed returns. You should look at the choices and more heavily fund the account with the better selection. Deposit to her account at least to grab the match. As far as the longer term goals, see how the house purchase goes. Life has a way of sending you two kids and forcing you to tighten the budget. You may have other ideas in three years. (I have no P2P lending experience, by the way.) Last - many advise that separate finances are a bad path for a couple. It depends. Jane and I have separate check books, and every paycheck just keep enough to write small checks without worry, most of the money goes to the house account. Whatever works for you is what you should do. We've been happily married for most of the 17 years we've been married.\"" } ]

[ { "docid": "76695", "title": "", "text": "I don't have any experience in this, but this is my academic understanding of business pricing. The LOWEST amount a seller would accept is the liquidation value. For a B&B, what would the value of the land, the house, the furnishings, accounts payable, etc. be if it had to be sold today, minus any liabilities. The amount the seller would like to pay for is going to be a multiple of its annual earnings. One example of this is the discounted cash flow analysis. You determine the EBITDA, the earnings a company generated, before interest, depreciation, taxation and amortization. Once you have this amount, you can project it out in perpetuity, or you use an industry multiplier. Perpetuity: You project this value out in perpituity, discounted by the going interest rate. In other words, if you project the business will earn $100,000/year, the business should grow at a 5% rate, and the going interest rate is 8%. Using a growing perpetuity formula, one value of a business would be: 100,000 / (.08 - .03) = $2,000,000. This is a very high number, and the seller would love to get it. It's more common to do a multiple of the EBIDTA. You can do some research into the valuation of the particular industry to figure out the EBIDTA multiplier for the industry. For example, this article suggests that the 2011 EBITDA multiplier for hospitality industries is 13.8. (It's valuing large hotel chains, but it's a start). So the value of this B&B would be around $1,380,000. Here is an online SME valuation tool to help with the EBIDTA multiple based valuation. Also, from my research, it looks like many small business use Seller Discretionary Earnings (SDE) instead of EBITDA. I don't know much about it, but it seems to serve a similar purpose as EBITDA. A potential buyer should request the financial statements of the business for the last few years to determine the value of the business, and then can negotiate with the owner a price. You would probably want to enlist a broker to help you with the transaction." } ]

[ { "docid": "279396", "title": "", "text": "Stocks, Bonds, Bills, and Lottery Tickets notes the work of Fama and French who researched the idea of a small-cap premium along with a value premium that may be useful to note in terms of what has outperformed if one looks from 1926 to present. Slice and dice would also be another article about an approach that over weights the small-cap and value sides of things if you want another resource here." }, { "docid": "300510", "title": "", "text": "\"These government mandates of minimum wage will cause more problems than they will solve. I don't know how many of you own a small business but I can give you a real world example here in the City of Chicago. On July 1st, 2017 the minimum wage will increase to $11.00 while at the same time they're introducing a .01 per oz \"\"Sugar Tax.\"\" The amount of additional work needed to keep track of sugar consumption will be burdensome for small businesses who will have to raise prices to accommodate the new labor costs and tax. Customers are price sensitive so they will usually go for the cheaper option which can be provided only by corporate/big business who have the ability to automate certain positions in the labor supply chain which is currently happening. I wouldn't be surprised if the timeline for kiosks/self-service robot implementation is on par with the $15.00 minimum wage deadline in 2019. To sum up, big business wins and labor loses but I guess results don't matter when your intentions are \"\"good.\"\"\"" }, { "docid": "214173", "title": "", "text": "\"Hello! First of all, I think it's great you're asking the community for help. Asking for help when you need it is a sign of strength and self-awareness of your own limitations (which we all have, even the smartest business people ask questions, in fact they ask the most questions). I'm wrapping up year 2 of doing what you're trying to do and am finally seeing real traction. I am a bit older than you and started out on my own 7 years after grad school, but I have learned a lot and don't mind sharing. Here's some things you might find useful. * Never work for free (working for \"\"equity\"\" or working for \"\"exposure\"\" is working for free). People who offer you this because you're just starting out are parasites looking to sell your talents but not pay for them. The only thing you can take away from attempts to do this is that your talents are in demand, which is good! * Never sell yourself short: would you rather do 10 websites for a $1000 each or do 1 website for $10000? You'll be doing a lot of projects in the middle, but one very important thing to bear in mind is that one $10000 website is a lot less work and may make you the same amount of money (or more) overall. * In the beginning, maybe you think you need to build a portfolio. But you'd be surprised how many prospects don't care what's in your portfolio and in fact never look at the portfolio, which leads me to the most important bit of advice: * Learn to sell yourself. YOU are your company's first and main product. Learn to sell yourself (as the smart kid, future Fortune 500 CEO who stays up all night getting things done, etc) * Always aim high in your proposals. You'd be surprised how many people don't negotiate at all. That being said, always put something in your proposal that is a good idea but it beyond what their asking for. If they ask you to come down in price, remove this feature and come down a little bit. * Develop an ability to read how interested a prospect is in your services before you spring the price on them. At your age, I was waiting tables. This helped me to be able to read a customer to determine which waiter they wanted me to be: the attentive one, the high class one, the friend, or the quiet servile. Consider taking on a side job to help you develop this skill. * As I said above, some prospects will sign on the line without negotiating. You might even take two proposals with you into a meeting with a prospect, one priced high and one low, and present the version that matches their interests. Go high if they need something \"\"right now\"\". * Remember you are your company's first product. This means also that your time is the company's first commodity. Be open to other things. I have a background in mathematics and am most capable as a software developer and a web developer. But I also help other companies sell and support physical products not at all related to technology. Because it's highly profitable, I do it. * When you're a one person business selling your time at the highest price is the name of the game. But growing your business will require the help of others. I found it helpful to first network with other like minded people and split project money according to skill level and time commitment on a per project basis. This will allow you to take on bigger projects. * But growing the company will eventually require you to hire (or contract) someone at a far lower pay rate than what you're bringing in. The laws of supply and demand require you to do this as a business person if you're to grow the business (so that the business has money beyond what you're being paid). This is where the extra money comes from: selling the time of others at a higher price than you're paying them. Be conscious of this. Everyone you work with is not going to be your friend. * Make your website awesome. It doesn't have to be a work of art, but let it reflect the seriousness with which you approach your customers' projects. Make sure there are no grammatical errors. Find a website of someone highly successful who's doing what you're doing and emulate it. You don't have to have a portfolio starting out. Your website is your first portfolio item, and if it's awesome, prospects will think you'll do the same for them. Good luck! I'm sure I'm not the only one here who thinks your early developed entrepreneurship is going to take you far.\"" }, { "docid": "366561", "title": "", "text": "Some businesses sell a franchise. You will be buying the name and reputation, access to the corporate infrastructure, requirements to use specific supplies and procedures. These tend to come with financing from the parent company. You will need to bring cash to the table, but they will loan you the rest. When purchasing a business, like buying a house, what is part of the deal can be negotiated. Sometimes the new owner and the seller agree to transfer everything. In other cases almost nothing except one item is included. The one item could be the location, the name, the inventory, the customer/client list. All these can be assets or liabilities depending on the specific situation, and which side of the table you are on. In the United states the US government has the Small Business Administration. They also have Small Business Development Centers SMDC to help. These are also supported by state governments and colleges and universities. They can help identify the steps needed to start a small business." }, { "docid": "519153", "title": "", "text": "Really, the only way to develop meaningful relationships of any kind (personal/business/etc) is to interact with people directly in a shared context. If you don't have any professional interaction with them through your/their business, then you're left to social/personal things -- play tennis together at a club, golf together, work out at a gym together, meet at charity events, attend social gatherings, etc. Executives are people too. Think about it -- how would you want someone to approach you? Some random guy sending mail/email to a bunch of people with your same job title hoping to make a contact for entirely selfish reasons (i.e. getting a job, selling a product/service, whatever) is not going to look attractive to you -- you're just going to ignore it because there's no personal connection, no reason to care. For all intents and purposes, you may as well be talking about an unsolicited ad from Comcast for TV service you don't need. In general, I'd go back to the drawing board. What exactly are you trying to accomplish here? Are you trying to sell a startup/project you've been working on? Are you trying to find a shortcut to a high-paid job? Revisiting your objective will give you the recipe to more effectively approach it. **TL;DR** -- Sending spam to executives is not an effective way of networking. It is a good way to identify yourself as an undesirable contact, however." }, { "docid": "131926", "title": "", "text": "\"I agree about not wanting to get into your friend's personal business, and it's a scummy bill collector that repeatedly calls friends or family to track down a debtor. On the other hand, at least he's made it obvious he's calling about a debt as opposed to pretending to be tracking down your friend with some other pretext. Nevertheless, you want the calls to stop. Here are two suggestions: Perhaps, a small fib: \"\"The creep owes me money too! Grrr! Let me know when you find him!\"\" The bill collector probably won't call you again :-) Or, if you're like me and uncomfortable fibbing – even to a scummy bill collector! – then here's a more truthful yet direct approach: \"\"I told you already it's not my debt, it's none of my business, and that I want you to stop calling me. You have no right to harass me and if you call again I will involve the police. There will be no other warning.\"\" Then have the phone company block the bill collector's phone number from calling you.\"" }, { "docid": "180390", "title": "", "text": "You're not crazy, but the banks are. Here's the problem: You're taking 100% LTV on property A - you won't be able to get a second mortgage for more than 80% total (including the current mortgage) LTV. That's actually something I just recently learned from my own experience. If the market is bad, the banks might even lower the LTV limit further. So essentially, at least 20% of your equity in A will remain on the paper. Banks don't like seeing the down-payment coming from anywhere other than your savings. Putting the downpayment from loan proceeds, even if not secured by the property which you're refinancing, will probably scare banks off. How to solve this? Suggest to deal with it as a business, putting both properties under a company/LLC, if possible. It might be hard to change the titles while you have loans on your properties, but even without it - deal with it as if it is a business. Approach your bank for a business loan - either secured by A or unsecured, and another investment loan for B. Describe your strategy to the banker (preferably a small community bank in the area where the properties are), and how you're going to fund the properties. You won't get rates as low as you have on A (3.25% on investment loan? Not a chance, that one is a keeper), but you might be able to get rid of the balloon/variable APR problem." }, { "docid": "262546", "title": "", "text": "\"Outside of broadly hedging interest rate risk as I mentioned in my other answer, there may be a way that you could do what you are asking more directly: You may be able to commit to purchasing a house/condo in a pre-construction phase, where your bank may be willing to lock in a mortgage for you at today's rates. The mortgage wouldn't actually be required until you take ownership from the builder, but the rates would be set in advance. Some caveats for this approach: (1) You would need to know the house/condo you want to move into in advance, and you would be committing to that move today. (2) The bank may not be willing to commit to rates that far in advance. (3) Construction would likely take far less than 5 years, unless you are buying a condo (which is the reason I mention condos specifically). (4) You are also committing to the price you are paying for your property. This hedges you somewhat against price fluctuation in your future area, but because you currently own property, you are already somewhat hedged against property price fluctuation, meaning this is taking on additional risk. The 'savings' associated with this plan as they relate to your original question (which are really just hedging against interest rate fluctuations) are far outweighed by the external pros and cons associated with buying property in advance like this. By that I mean - if it was something else you were already considering, this might be a (small) tick in the \"\"Pro\"\" column, but otherwise is far too committal / complex to be considered for interest rate hedging on its own.\"" }, { "docid": "141458", "title": "", "text": "\"Not really, no. The assumption you're making—withdrawals from a corporation are subject to \"\"[ordinary] income tax\"\"—is simplistic. \"\"Income tax\"\" encompasses many taxes, some more benign than others, owing to credits and exemptions based on the kind of income. Moreover, the choices you listed as benefits in the sole-proprietor case—the RRSP, the TFSA, and capital gains treatment for non-registered investments—all remain open to the owner of a small corporation ... the RRSP to the extent that the owner has received salary to create contribution room. A corporation can even, at some expense, establish a defined benefit (DB) pension plan and exceed individual RRSP contribution limits. Yes, there is a more tax-efficient way for small business owners to benefit when it comes time to retirement. Here is an outline of two things I'm aware of: If your retirement withdrawals from your Canadian small business corporation would constitute withdrawal from the corporation's retained earnings (profits), i.e. income to the corporation that had already been subject to corporate income tax in prior years, then the corporation is able to declare such distributions as dividends and issue you a T5 slip (Statement of Investment Income) instead of a T4 slip (Statement of Remuneration Paid). Dividends received by Canadian residents from Canadian corporations benefit from the Dividend Tax Credit (DTC), which substantially increases the amount of income you can receive without incurring income tax. See TaxTips.ca - Non-eligible (small business) dividend tax credit (DTC). Quote: For a single individual with no income other than taxable Canadian dividends which are eligible for the small business dividend tax credit, in 2014 approximately $35,551 [...] could be earned before any federal* taxes were payable. * Provincial DTCs vary, and so combined federal/provincial maximums vary. See here. If you're wondering about \"\"non-eligible\"\" vs. \"\"eligible\"\": private small business corporation dividends are generally considered non-eligible for the best DTC benefit—but they get some benefit—while a large public corporation's dividends would generally be considered eligible. Eligible/non-eligible has to do with the corporation's own income tax rates; since Canadian small businesses already get a big tax break that large companies don't enjoy, the DTC for small businesses isn't as good as the DTC for public company dividends. Finally, even if there is hardly any same-year income tax advantage in taking dividends over salary from an active small business corporation (when you factor in both the income tax paid by the corporation and the individual), dividends still allow a business owner to smooth his income over time, which can result in a lower lifetime average tax rate. So you can use your business as a retained earnings piggy bank to spin off dividends that attract less tax than ordinary income. But! ... if you can convince somebody to buy your business from you, then you can benefit from the lifetime capital gains exemption of up to $800,000 on qualifying small business shares. i.e. you can receive up to $800K tax-free on the sale of your small business shares. This lifetime capital gains exemption is a big carrot—designed, I believe, to incentivize Canadian entrepreneurs to develop going-concern businesses that have value beyond their own time in the business. This means building things that would make your business worth buying, e.g. a valued brand or product, a customer base, intellectual property, etc. Of course, there are details and conditions with all of what I described, and I am not an accountant, so please consult a qualified, conflict-free professional if you need advice specific to your situation.\"" }, { "docid": "216540", "title": "", "text": "You know those perks/benefits that you don't want to give up? Those are funded by the fees you are trying to eliminate by paying cash. The credit card company makes money by interest, merchant fees, and other fees such a annual fees. They give you perks to generate more transactions, thus bringing in more merchant fees. For a small business they need to balance the fee of the credit card transaction with the knowledge that it is convenient for many customers. Some small businesses will set a minimum card transaction level. They do this because the small transaction on a credit card will be more expensive because the credit card company will charge 2% or 50 cents whichever is larger. Yes a business does figure the cost of the cards into their prices, but they can get ahead a little bit if some customers voluntarily forgo using the credit card." }, { "docid": "471247", "title": "", "text": "The purpose is to go public but also to generate more wealth. The real money comes when market values you at a price more than your cash flow. If a company brings in $1000 of cash flow, then that is what the employees and owners have to distribute among themselves. But if they are likely to increase to $2000 next and $4000 next year and they go public then the stock will do well. In this case, the promoters and employees with options/RSUs will benefit as well. The increased visibility is also very useful. Look at Google or FB. They didn't need the IPO proceed when they went public. They had enough cash from their business but then they would only have $1-10 billion a year. But due to the IPO their investors and employees have a huge net worth. Basically, with just a small % of shares in the public you can value the company at a high price valuing in the future cash flows (with a discount rate etc.). So instead of realizing the profit over the next 15 years, you get to enjoy it right away." }, { "docid": "271691", "title": "", "text": "\"That characterisation of arbitrage-free pricing sounds a bit like the \"\"relative vs. fundamental\"\" approaches to asset pricing that Cochrane outlines (in his text, *Asset Pricing*). Rebonato also makes this distinction with regard to term structure models in *Volatility and Correlation*. On one extreme you have CAPM-style models in which asset prices are completely determined by investors' risk preferences; on the other extreme, you would have something like a SABR-Libor Market Model where you take everything up to and including the volatility surface as given. What's interesting to me is the way in which these different classes of models get used in various parts of the financial industry. So, buy side firms tend to rely a lot more on equilibrium-style models, since they ultimately care about things like how the equity risk premium or the bond risk premium affect asset prices. In contrast, derivatives quants working at a big sell-side bank who are pricing exotics don't care about what the \"\"fundamental\"\" value of their underlying assets is; they just take that as given and price the exotic accordingly.\"" }, { "docid": "156554", "title": "", "text": "\"This is a great question! I've been an entrepreneur and small business owner for 20+ years and have started small businesses in 3 states that grew into nice income streams for me. I've lived off these businesses for 20+ years, so I know it can be done! First let me start by saying that the rules, regulations, requirements and laws for operating a business (small or large) legally, for the most part, are local laws and regulations. Depending on what your business does, you may have some federal rules to follow, but for the most part, it will be your locality (state, county, city) that determines what you'll have to do to comply and be \"\"legal\"\". Also, though it might be better in some cases to incorporate (and even required in some circumstances), you don't always have to. There are many small businesses (think landscapers, housekeepers, babysitters, etc.) that get income from their \"\"business operations\"\" and do so as \"\"individuals\"\". Of course, everyone has to pay taxes - so as long as you property record your income (and expenses) and properly file your tax returns every year, you are \"\"income tax legal\"\". I won't try to answer the income tax question here, though, as that can be a big question. Also, though you certainly can start a business on your own without hiring lawyers or other professionals (more on that below), when it comes to taxes, I definitely recommend you indeed plan to hire a tax professional (even if it's something like H&R Block or Jackson Hewitt, etc). In some cities, there might even be \"\"free\"\" tax preparation services by certain organizations that want to help the community and these are often available even to small businesses. In general, income taxes can be complicated and the rules are always changing. I've found that most small business owners that try to file their own taxes generally end up paying a lot more taxes than they're required to, in essence, they are overpaying! Running a business (and making a profit) can be hard enough, so on to of that, you don't need to be paying more than you are required to! Also, I am going to assume that since it sounds like it would be a business of one (you), that you won't have a Payroll. That is another area that can be complicated for sure. Ok, with those generics out of the way, let me tackle your questions related to starting and operating a business, since you have the \"\"idea for your business\"\" pretty figured out. Will you have to pay any substantial amount of money to attorneys or advisors or accountants or to register with the government? Not necessarily. Since the rules for operating a business legally vary by your operating location (where you will be providing the service or performing your work), you can certainly research this on your own. It might take a little time, but it's doable if you stick with it. Some resources: The state of Florida (where I live) has an excellent page at: http://www.myflorida.com/taxonomy/business/starting%20a%20business%20in%20florida/ You might not be in Florida, but almost every state will have something similar. What all do I need to do to remain on the right side of the law and the smart side of business? All of the answers above still apply to this question, but here are a few more items to consider: You will want to keep good records of all expenses directly related to the business. If you license some content (stock images) for example, you'll want to document receipts. These are easy usually as you know \"\"directly\"\". If you subscribe to the Apple Developer program (which you'll need to if you intend to sell Apps in the Apple App Stores), the subscription is an expense against your business income, etc. You will want to keep good records of indirect costs. These are not so easy to \"\"figure out\"\" (and where a good accountant will help you when this becomes significant) but these are important and a lot of business owners hurt themselves by not considering these. What do I mean? Well, you need an \"\"office\"\" in order to produce your work, right? You might need a computer, a phone, internet, electricity, heat, etc. all of which allow you to create a \"\"working environment\"\" that allows you to \"\"produce your product\"\". The IRS (and state tax authorities) all provide ways for you to quantify these and \"\"count them\"\" as legitimate business expenses. No, you can't use 100% of your electric bill (since your office might be inside your home, and the entire bill is not \"\"just\"\" for your business) but you are certainly entitled to some part of that bill to count as a business expense. Again, I don't want to get too far down the INCOME TAX rabbit hole, but you still need to keep track of what you spend! You must keep good record of ALL your income. This is especially important when you have money coming in from various sources (a payroll, gifts from friends, business income from clients and/or the App Stores, etc.) Do not just assume that copies of your bank deposits tell the whole story. Bank statements might tell you the amount and date of a deposit, but you don't really know \"\"where\"\" that money came from unless you are tracking it! The good news is that the above record keeping can be quite easy with something like Quicken or QuickBooks (or many many other such popular programs.) You will want to ensure you have the needed licenses (not necessarily required at all for a lot of small businesses, especially home based businesses.) Depending on your business activity, you might want to consider business liability insurance. Again, this will depend on your clients and/or other business entities you'll be dealing with. Some might require you to have some insurance. Will be efforts even be considered a business initially until some amount of money actually starts coming in? This might be a legal / accountant question as to the very specific answer from the POV of the law and taxing authorities. However, consider that not all businesses make any money at all, for a long time, and they definitely \"\"are a business\"\". For instance, Twitter was losing money for a long time (years) and no one would argue they were not a business. Again, deferring to the attorneys/cpas here for the legal answer, the practical answer is that you're performing \"\"some\"\" business activity when you start creating a product and working hard to make it happen! I would consider \"\"acting as\"\" a business regardless! What things do I need to do up-front and what things can I defer to later, especially in light of the fact that it might be several months to a couple years before any substantial income starts coming in? This question's answer could be quite long. There are potentially many items you can defer. However, one I can say is that you might consider deferring incorporation. An individual can perform a business activity and draw income from it legally in a lot of situations. (For tax purposes, this is sometimes referred to as \"\"Schedule-C\"\" income.) I'm not saying incorporation is a bad thing (it can shield you from a lot of issues), but I am saying that it's not necessary on day 1 for a lot of small businesses. Having said that, this too can be easy to do on your own. Many companies offer services so you can incorporate for a few hundred dollars. If you do incorporate, as a small business of one person, I would definitely consider a tax concept called an \"\"S-Corp\"\" to avoid paying double taxes.) But here too, we've gone down the tax rabbit hole again. :-)\"" }, { "docid": "203485", "title": "", "text": "\"Congrats you pulled some irrelevant statistics. No where in your response does it verify your claim that the majority of small businesses aren't turning a profit. And many small businesses do have a multiple stakeholders. Since we are on the subject, do you know how large a company can be and still be classified as a small business? [It is 500, 1,000, or 1,500 employees depending on the industry.] (https://www.forbes.com/sites/stevecooper/2012/09/20/the-government-definition-of-small-business-is-b-s/#58848cee360a) Five-hundred employees is not exactly small. Oh by the way, I've worked for multiple small businesses under 100 employees and they've had owners, stakeholders, investors, a board of directors, etc. on top of all of the employees. Not every small business is some mom and pop company of 5-15 employees. &gt;Then put your money where your mouth is and get out there and create some jobs. Hahaha. This has nothing to do with the discussion but whatever dude. If we were both to start our own companies, I'd actually value my workers and you would just complain about labor costs of the people that are needed to run your business. Here is the thing, I don't consider creating minimum wage jobs as true job creation, [because the tax payer is still footing the bill if the company isn't paying a live-able wage.](https://www.washingtonpost.com/news/wonk/wp/2015/04/14/when-work-isnt-enough-to-keep-you-off-welfare-and-food-stamps/) The majority of people on welfare are working families (see same link), so what good is job creation of minimum wage positions if the people that work them still have to rely on the government? Think about this, if we were to remove the minimum wage and I could pay someone $1 and hour, I could \"\"create jobs.\"\" But we all know that is asinine because no one could live on that. Yet the same thing happens at the federal minimum wage of $7.25 and people like you don't see that there is no difference between the two examples. In both scenarios, people still don't make enough to live without some assistance.\"" }, { "docid": "680", "title": "", "text": "So one approach would be purely mathematical: look at whichever has the higher interest rate and pay it first. Another approach is to ignore the math (since the interest savings difference between a mortgage and student loan is likely small anyways) and think about what your goals are. Do you like having a student loan payment? Would you prefer to get rid of it as quickly as possible? How would it feel to cut the balance in HALF in one shot? If it were me, I would pay the student loan as fast as possible. Student loans are not cancellable or bankruptable, and once you get it paid off you can put that payment amount toward your house to get it paid off." }, { "docid": "192193", "title": "", "text": "\"The first thing that it is important to note here is that the examples you have given are not individual bond prices. This is what is called the \"\"generic\"\" bond price data, in effect a idealised bond with the indicated maturity period. You can see individual bond prices on the UK Debt Management Office website. The meaning of the various attributes (price, yield, coupon) remains the same, but there may be no such bond to trade in the market. So let's take the example of an actual UK Gilt, say the \"\"4.25% Treasury Gilt 2019\"\". The UK Debt Management Office currently lists this bond as having a maturity date of 07-Mar-2019 and a price of GBP 116.27. This means that you will pay 116.27 to purchase a bond with a nominal value of GBP 100.00. Here, the \"\"nominal price\"\" is the price that HM Treasury will buy the bond back on the maturity date. Note that the title of the bond indicates a \"\"nominal\"\" yield of 4.25%. This is called the coupon, so here the coupon is 4.25%. In other words, the treasury will pay GBP 4.25 annually for each bond with a nominal value of GBP 100.00. Since you will now be paying a price of GBP 116.27 to purchase this bond in the market today, this means that you will be paying 116.27 to earn the nominal annual interest of 4.25. This equates to a 3.656% yield, where 3.656% = 4.25/116.27. It is very important to understand that the yield is not the whole story. In particular, since the bond has a nominal value of GBP100, this means that as the maturity date approaches the market price of the bond will approach the nominal price of 100. In this case, this means that you will witness a loss of capital over the period that you hold the bond. If you hold the bond until maturity, then you will lose GBP 16.27 for each nominal GBP100 bond you hold. When this capital loss is netted off the interest recieved, you get what is called the gross redemption yield. In this case, the gross redemption yield is given as approximately 0.75% per annum. NB. The data table you have included clearly has errors in the pricing of the 3 month, 6 month, and 12 month generics.\"" }, { "docid": "55305", "title": "", "text": "Because large stores do not pay their cashiers enough that the companies can dock the employees' pay if they allow a bad credit card to go through. So most cashiers at large stores won't take the extra effort to check the card properly. As a result, large stores come up with other ways to handle potential credit card fraud. For example, they calculate a certain amount of fraud as expected and include it in their price calculations. Or they can use cameras to catch fraudsters. At small stores, there is a much higher chance that the cashier is either the owner or a relative of the owner. And even those who are unrelated tend to be hired by the owner directly. The owners do have their pay docked if a bad credit card is accepted, as their pay is the profit from the business. So they tend to create protocols that, at least in their mind, reduce the chance of taking a bad credit card. The cashier is often the only employee in the store to check anything. Another issue is that small stores have a harder time getting approved to accept credit cards. The companies that process the credit cards can take back their machine if there is a lot of fraud. So the companies can require more from small stores than they can from big stores. Those companies can't stop processing cards for Safeway, because they need Safeway as much if not more than Safeway needs them. So the processors have more leverage to make small stores do what they want. And small stores can feasibly fire (non-owner) cashiers who do not comply. Owners of course can't be fired. But they are far more vulnerable to business losses. So it is really important to an owner to keep the credit card machine. And it is pretty important to avoid losses, as it is their money directly. Relatives of owners may be safe from firing, but they are not safe from family retaliation like taking away television privileges. And they may also think of the effect of business losses on the family. Large stores can fire cashiers, but they are chronically understaffed and almost none of their cashiers will consistently follow a strict protocol. Since fraudsters only need to succeed once, an inconsistent application is almost as bad as no application. They might charge the cashiers for fraud, but then they would have to pay the cashiers more than minimum wage specifically for that reason (e.g. a $50 a month bonus for no fraud). For many of them, it's cheaper to risk the fraud. And large stores can't mix owners and relatives of owners into the mix. It's hard to say who owns Safeway. And even if you could, the relationship between one fraud transaction and the dividend paid on one share of stock is tiny. It would take thousands of shares to get up to a penny." }, { "docid": "365076", "title": "", "text": "&gt; I don't think you quite understand how the software services model works. Most software co utilizes the Amazon model for growth until they reached a critical point either by market size or squeezing out other players. Uber is not a software company, regardless of what they claim. They are a taxi company that uses software for dispatch. They have zero innovation that allows for improved economies of scale. Amazon's approach and a generic software startup's approach do not necessarily overlap, but they do have similarities. &gt; Your unit economic talks works only when bootstrapping and maybe debt financing. For companies that can grow using equity financing its certainly not the case. See: Tesla. That's completely false. If your product costs $10 but people will only buy it for $4, you will never make money regardless of how large you grow. In fact, the bigger you are, the more money you will ultimately lose. That's Uber's current conundrum. It doesn't resemble Tesla or Amazon's approaches whatsoever. If Uber raises prices sufficiently to achieve profitability, other entrants will continue to take market share and/or their customers will abandon them for the bus. Transportation is a commodity good, as evidenced by airlines and their utter lack of profitability over the decades." }, { "docid": "176327", "title": "", "text": "\"From my recollection of Warren Buffett's book \"\"Warren Buffett and the Art of Arbitrage\"\", the following factors determine the difference between the market price of a stock and the future expected price of an acquisition or merger: Time: Assuming the deal will close, the market price should approach the offer price as the closing date approaches. The fact that there is a 14% spread partially reflects the time value of money. Probability: Things could happen between now and closing date which could derail the deal. The higher the spread the more likely the market thinks the deal will not occur. For example, LO shareholders could reject the offer saying it is too low, or anti-trust regulators could say the deal is anti-competitive. Part of this 14% spread indicates the probability of the deal completing.\"" } ]

[ { "docid": "73427", "title": "", "text": "Funds earned and spent before opening a dedicated business account should be classified according to their origination. For example, if your business received income, where did that money go? If you took the money personally, it would be considered either a 'distribution' or a 'loan' to you. It is up to you which of the two options you choose. On the flip side, if your business had an expense that you paid personally, that would be considered either a 'contribution of capital' or a 'loan' from you. If you choose to record these transactions as loans, you can offset them together, so you don't need two separate accounts, loan to you and loan from you. When the bank account was opened, the initial deposit came from where? If it came from your personal funds, then it is either a 'contribution of capital' or a 'loan' from you. From the sound of your question, you deposited what remained after the preceding income/expenses. This would, in effect, return the 'loan' account back to zero, if choosing that route. The above would also be how to record any expenses you may pay personally for the business (if any) in the future. Because these transactions were not through a dedicated business bank account, you can't record them in Quickbooks as checks and deposits. Instead, you can use Journal Entries. For any income received, you would debit your capital/loan account and credit your income account. For any expenses, you would debit the appropriate expense account and credit your distribution/loan account. Also, if setting up a loan account, you should choose either Current Asset or Current Liability type. The capital contribution and distribution account should be Equity type. Hope this helps!" } ]

[ { "docid": "462036", "title": "", "text": "\"This may be a bit advanced now, but once you start really working and get a place, I think this will apply more... Do I set up a bank account now? Yes. There is no reason not to. As an adult you will be using this much more than you think. Assuming you have a little money, you can walk in to any bank almost any day of the week and set up an account with them in very little time. Note that they may require you to be 18 if your parents won't be with you on the account. Otherwise, just ask any bank representative to help you do this. Just to be clear, if you can get a credit union account over a typical bank account, this is a great idea. Credit unions provide exactly the same financial services as a normal bank, but typically have variety of advantages over banks. Bank Account Parts Bank accounts typically have two parts, a checking account and a savings account. Your checking account typically is what you use for most day-to-day transactions and your savings account is generally used for, well, saving money. Having a bank account often gives you the following advantages: They give you an ability to store money without having large amounts of cash on hand. Once you start working regularly, you'll find you won't want to keep ~$600+ cash every two weeks in your wallet or apartment. They help you pay bills. When you set up your bank account, you will likely be able to get a Visa debit card which will process like a regular credit card but simply deduct funds from your checking account. You can use this card online to pay utilities (i.e. electricity and water), general bills (e.g. your cell phone and cable), purchase items (ex. at Amazon) or use it in stores to pay in lieu of cash. Be aware -- some banks will give you an ATM-only card before they send you the Visa debit card in the mail. This ATM-only card can only be used at ATMs as it's name implies. Similarly, if you can invest about ~$200 to build your credit, you can often get a deposit secured credit card attached to your account (basically a credit card where the bank keeps your money in case you can't pay your bill). If you treat this card with responsibility, you can eventually transition to an unsecured credit card. They save you hassles when cashing your check. If you don't have a bank where you can cash your check (e.g. you don't have an account), you will likely be charged check cashing fees (usually by places such as grocery stores or payday loan chains, or even other banks). Furthermore, if your check is over a certain amount, some places may refuse to cash your check period and a bank may be your only option. They give you a way to receive money electronically. The most common example of this is direct deposit. Many employers will send your money directly to your bank account instead of requiring you to cash a check. If they are prompt, this money gets to you faster and saves you trouble (on payday, you'll just receive a pay stub detailing your wages and the amount deposited rather than a check). Also, since you asked about taxes, you should know that when you do eventually file with the IRS, they have an option to receive your tax refund electronically as well (e.g. direct deposit into your bank account) and that can literally save you months in some cases depending on when you file your return and how many paper checks they have to process. Does it cost money to setup? It depends. Some banks have special offers, some don't. Most places will set up an account for free, but may require a minimum deposit to open the account (typically $50-$100). The Visa debit card mentioned above generally comes free. If you want a secured credit card as above, you will want about an additional $200 (so $250 - $300 total). Note that this is absolutely NOT required. You can exclusively use the Visa debit card above if you wish. Bank Account Fees Any fees charged when you have a bank account are usually minor anymore. Regardless, the bank will hand you a whole bunch of paperwork (mostly in legalese) detailing exactly how your account works. That said, the bank person helping set things up will cover what you need to know about keeping the account in plain English. The most common types of fee associated with a bank account are monthly maintenance fees and overdraft fees, but these aren't always necessarily charged. Likewise, there may be some other fees associated with the account but these vary from bank to bank. Monthly Maintenance Fees To give some examples... Overdraft Fees Overdraft fees are typically charged when you attempt to spend more money than you have in your bank account and the bank has to cover these charges. Overdraft fees typically apply to using paper checks (which it is unlikely you will be using), but not always. That said, it is very unlikely you will be charged overdraft fees for three reasons: Many banks have done away with these fees in lieu of other ways of generating revenue. Banks that still charge these fees usually have \"\"overdraft protection\"\" options for a little more money a month, effectively negating the possibility you will be charged these fees. The ability to deduct an amount of money from your checking account is now typically checked electronically before the payment is authorized. That is, using a Visa debit card, the card balance is checked immediately, and even when using paper check, most retailers have check scanning machines that do roughly the same thing. On a personal note, the bank that I have allows my account to be deducted below my checking account balance only if the payment is requested electronically (e.g. someone who has my card information charges me for a monthly service). In this case, the funds are simply listed in the negative and deducted from any amount I deposit till the proper amount is repaid (e.g. if I'm at -$25 dollars due to a charge when my account balance was $0 and then I deposit $100, my available balance will then be $75, not $100). Finally, per the comment by @Thebluefish, while I minimize the likelihood you will be charged overdraft fees, it is good to check into the exact circumstances under which you might be charged unexpectedly by your bank. Read the documentation they give you carefully, including any mailed updates, and you'll reduce the chance of receiving a nasty surprise. For reference, here are some of the fees charged by Bank of America. What about taxes? When you begin working, an employer will usually have you fill out a tax form such as a W-4 Employee's Withholding Allowance Certificate so that your employer can withhold the correct federal income tax from your wages. If they don't, then it is your responsibility to calculate and file your own income taxes (if you are self-employed, an independent contractor or paid under the table). If your employer is reputable, they will send you additional information (generally in February) you need to properly file your taxes prior to April 15th (the IRS tax deadline for most people). This additional information will likely be some variation of a W-2 Wage and Tax Statement or possibly a Form 1099-MISC. Do I have to worry about money in my bank account? Unless you have a significant amount in your bank savings account earning interest (see \"\"Should I save for the future?\"\" below), you won't have to pay any sort of tax on money in your bank account. If you do earn enough taxable interest, the bank will send you the proper forms to file your taxes. How do I file taxes? While it won't apply till next year, you will likely be able to fill out a Form 1040EZ Income Tax Return for Single and Joint Filers With No Dependents, as long as you don't have any kids in the meantime. ;-) You will either mail in the paper form (available at your local IRS office, post office, public library, etc.) or file electronically. There will be a lot of information on how to do this when the time comes, so don't worry about details just yet. Assuming your all paid up on your taxes (very likely unless you get a good paying job and take a lot of deductions throughout the year on your W-4), you'll probably get money back from the IRS when you file your tax return. As I mentioned above, if you have a bank account, you can opt to have your refund money returned electronically and get it much sooner than if you didn't have a bank account (again, possibly saving you literal months of waiting). Should I save for my future? If so, how much? Any good articles? Yes, you should save for the future, and start as soon as possible. It's outside the scope of this answer, but listen to your Economics professor talk about compound interest. In short, the later you start saving, the less money you have when you retire. Not that it makes much difference now, but you have to think that over 45 years of working (age 20-65), you likely have to have enough money for another 20+ years of not working (65-85+). So if you want $25,000 a year for retirement, you need to make ~$50,000 - $75,000 a year between your job and any financial instruments you have (savings account, stocks, bonds, CDs, mutual funds, IRAs, job retirement benefits, etc.) Where you should stick money your money is a complicated question which you can investigate at length as you get older. Personally, though, I would recommend some combination of IRA (Individual Retirement Account), long term mutual funds, and some sort of savings bonds. There is a metric ton of information regarding financial planning, but you can always read something like Investing For Dummies or you can try the Motley Fool's How To Invest (online and highly recommended). But I'm Only 17... So what should you do now? Budget. Sounds dumb, but just look at your basic expenses and total them all up (rent, utilities, phone, cable, food, gas, other costs) and divide by two. Out of each paycheck, this is how much money you need to save not to go into debt. Try to save a little each month. $50 - $100 a month is a good starting amount if you can swing it. You can always try to save more later. Invest early. You may not get great returns, but you don't need much money to start investing. Often you can get started with as little as $20 - $100. You'll have to do research but it is possible. Put money in your savings account. Checking accounts do not typically earn interest but money in savings accounts often do (that is, the bank will actually add money to your savings assuming you leave it in there long enough). Unfortunately, this rate of interest is only about 3.5% on average, which for most people means they don't get rich off it. You have to have a significant amount of money ($5,000+) to see even modest improvements in your savings account balance each month. But still, you may eventually get there. Get into the habit of putting money places that make you money in the long run. Don't go into debt. Don't get payday loans, pawn items, or abuse credit cards. Besides wrecking your credit, even a small amount of debt ($500+) can be very hard to break out of if you don't have a great paying job and can even make you homeless (no rent means no apartment). Remember, be financially responsible -- but assuming your parents aren't totally tight with money, don't be afraid to ask for cash when you really need it. This is a much better option than borrowing from some place that charges outrageous interest or making your payments late. Have an emergency account. As already mentioned in another excellent answer, you need to have money to \"\"smooth things out\"\" when you encounter unexpected events (your employer has trouble with your check, you have to pay for some sort of repair bill, you use more gas in your car in a month than normal, etc.) Anywhere from $200 - $2000+ should do it, but ideally you should have at least enough to cover a month of basic expenses. Build good credit. Avoid the temptation to get a lot of credit cards, even if stores and banks are dying to give them to you. You really only need one to build good credit (preferably a secured one from your bank, as mentioned above). Never charge more than you can pay off in a single month. Charging, then paying that amount off before the due date on your next statement, will help your credit immensely. Likewise, pay attention to your rent, utilities and monthly services (cell phone, cable, etc.). Even though these seem like options you can put off (\"\"Oh my electric bill is only $40? I'll pay that next month...\"\") late payments on all of these can negatively affect your credit score, which you will need later to get good loans and buy a house. Get health insurance. Now that the Affordable Care Act (ACA a.k.a Obamacare) has been enacted, it is now simpler to get health insurance, and it is actually required you have some. Hopefully, your employer will offer health coverage, you can find reasonably priced coverage on your own, or you live in a state with a health exchange. Even if you can't otherwise get/afford insurance, you may qualify for some sort of state coverage depending on income. If you don't have some sort of health insurance (private or otherwise), the IRS can potentially fine you when you file your taxes. Not to be too scary, but the fine as currently proposed is jumping up to about $700 for individuals in 2016 or so. So... even if you don't grab health insurance (which you absolutely should), you need to save about $60 a month, even if just for the fine. This answer turned out a bit longer than intended, but hopefully it will help you a little bit. Welcome to the wonderful world of adult financial responsibility. :-)\"" }, { "docid": "500755", "title": "", "text": "Set up a meeting with the bank that handles your business checking account. Go there in person and bring your business statements: profit and loss, balance sheet, and a spreadsheet showing your historical cash flow. The goal is to get your banker to understand your business and your needs and also for you to be on a first-name basis with your banker for an ongoing business relationship. Tell them you want to establish credit and you want a credit card account with $x as the limit. Your banker might be able to help push your application through even with your credit history. Even if you can't get the limit you want, you'll be on your way and can meet again with your banker in 6 or 12 months. Once your credit is re-established you'll be able to shop around and apply for other rewards cards. One day you might want a line of credit or a business loan. Establishing a relationship with your banker ahead of time will make that process easier if and when the time comes. Continue to meet with him or her at least annually, and bring updated financial statements each time. If nothing else, this process will help you analyze your business, so the process itself is useful even if nothing comes of it immediately." }, { "docid": "275058", "title": "", "text": "What is the point of this? Can't I achieve the exact same effect and outcome by exchanging currency now and put that amount of USD in a bank account to gain some interest, then make the payment from one year from now? This is for companies, not individuals. Companies usually take loans, because they think they can make more money (e.g. 10%*) than the interest on the loan (e.g. 5%*). Putting money on a bank account to earn interest there would give them even less (e.g. 1%*). So with your option, instead of earning 10%* interest, they'd earn 1%* interest. If the cost of the currency forward is less than these 9%* difference, the forward saves them money. If they have excess cash and they don't know how to invest that money, your option may be preferable *Simple numbers chosen for simplicity, not accuracy." }, { "docid": "89662", "title": "", "text": "I assume that you are a citizen of India, and are what Indian law calls a NRI (NonResident Indian) and thus entitled to operate an NRE (NonResident External) account in India. You can deposit US dollars into the NRE account, but the money is converted to Indian Rupees (INR) and held as INR. You can withdraw the money and bring it back to the US as US dollars, but the INR will be converted to US$ at the exchange rate applicable on the date of the transaction. With the recent decline of the Indian Rupee against the US dollar, many NRE accounts lost a lot of their value. You can deposit any amount of money in your NRE account. Some banks may limit the amount you can send in one business day, but if 250 times that amount seriously limits the amount of money you want to send each year, you should not be asking here; there are enough expensive lawyers, bankers and tax advisors who will gladly guide you to a satisfactory solution. There is no limitation on the total amount that you can have in your NRE account. The earnings (interest paid) on the sum in your NRE account is not taxable income to you in India but you may still need to file an income tax return in India to get a refund of the tax withheld by the bank (TDS) and sent to the tax authorities. The bank should not withhold tax on the earnings in an NRE account but it did happen to me (in the past). While the interest paid on your NRE account is not taxable in India, it is taxable income to you on your US tax returns (both Federal and State) and you must declare it on your tax return(s) even though the bank will not issue a 1099-INT form to you. Be aware also about the reporting requirements for foreign accounts (FBAR, TD F90-22.1 etc). Lots of people ignored this requirement in the past, but are more diligent these days after the IRS got a truckload of information about accounts in foreign banks and went after people charging them big penalties for not filing these forms for ever so many years. There was a huge ruckus in the Indian communities in the US about how the IRS was unfairly targeting simple folks instead of auditing the rich! But, if the total value of the accounts did not exceed $10K at any time of the year, these forms do not need to be filed. It seems, though, that you will not fall under this exemption since you are planning on having considerably larger sums in your NRE account. So be sure and follow the rules." }, { "docid": "184524", "title": "", "text": "The key is that you need to use your debit card to earn the higher interest rate. The bank can offer a higher interest rate on accounts connected with a debit card because: They earn additional income through debit card fees charged towards account holders, among other things. They offer the higher interest rate specifically to encourage people to use their debit cards. By offering a joint checking/savings account that requires you to use your debit card, the bank is assuming that you'll keep more money in your account than you would in a standard checking-only account. Your higher balance translates into more money the bank can loan out or invest, which usually leads to higher profit for them. Businesses pay fees to the bank to accept debit cards. These fees represent another source of profit for the bank. The more you use your debit card, the more the bank earns in fees, so the bank encourages you to use your debit card more frequently through incentives like a higher interest rate or waiving fees on your account if you use your card enough. Plus, since it's likely that an individual who maintains a fairly high balance in an account linked to a debit card is going to spend more (simply because they can spend more), banks will sometimes waive fees on the consumer side for balances over a certain amount." }, { "docid": "249275", "title": "", "text": "The bottom line is something in your story is not adding up. You had two checks one that is voided, and one that is not. Lets say they are both written against your account for $100. Lets also assume that have exactly $100 in your account. You give the Liquor Store the voided one, they give you $100, but when they attempt to cash the check at their bank they are denied and assessed a $20 fee. You spend the $100 they gave you; however, you still should have $100 in your account as the check was not cashed. You want to make things right with the liquor store. You should be able to withdraw the $100 you still have in the bank and give them that much. While they will still be out the $20 fee, that should make them feel much better about you as a customer. Tell them when you will be paid and that you will give them the $20 on that date. Then do so. The only way this problem is not solvable is that you spent the $100 that was left in the bank. In that case, the Liquor store is correct you stole the money. More accurately you spent money that wasn't yours." }, { "docid": "185019", "title": "", "text": "First, gather the information you have on her banking history. She may have accounted for that money and moved it to a new account or otherwise spent it. I don't expect you'll have much banking documentation from the 1950s, but if you do, then start there and trace the money. To the extent you can, you may try to contact the banks in question or their successors. It may be difficult to trace them through mergers or closings. Again, it's very possible that she spent or transferred those funds and there is nothing to find anyway. There is also a risk that if the money went unclaimed for too long, then the bank was obligated to escheat any remaining balance to the state of Ohio. You can try contacting Ohio Department of Commerce about unclaimed funds and attempt to locate anything that may have rightly belonged to her. You will need to gather documentation to do so. You may be able to receive the funds from the state, if it has received them." }, { "docid": "76662", "title": "", "text": "\"As soon as I see the word \"\"friends\"\" along with money transfer I think scam. But ignoring that red flag.... You will have American companies reporting to the IRS that you are a Canadian Vendor they have hired. Then you are transferring money to people in Bangladesh. Assuming also that you fill out all the regulatory paperwork to establish this Money transfer business you may still face annual reporting requirements to 3 national taxing authorities. In the United states there are situations where the US Government hires a large company to complete a project. As part of that contract they require the large company to hire small businesses to complete some of the tasks. In a situation where the large company is imply serving as a conduit for the money between the government and the sub-contractor; and the large company has no other responsibilities; the usual fee for providing that function is 8% of the funds. This pays for their expenses for their accounting functions plus profit and the taxes that will trigger. Yet you said \"\"At the end of the day, I will not earn much, but the transactions will just burden my tax returns.\"\" The 8 percent fee doesn't include doesn't include having to file paperwork with 3 nations. Adding this to all the other risks associated with being an international bank, plus the legal costs of making sure you are following all the regulations...No thanks.\"" }, { "docid": "405484", "title": "", "text": "I get this argument for the citizenship thing too. It's being unpatriotic that I shouldn't want to file or pay taxes on money I earn oustide of the USA that stays in banks outside of the USA and won't be spent in the USA or even ever converted to dollars. Even if you don't owe anything, it's pretty much impossible to file without professional help once you get assets involved (I'm talking like a retirment account, a house, stocks, etc... Not super rich people stuff) so no matter what you have to pay an accountant that specializes in international taxes and that's not all that cheap either. If I weren't emotionally attached to my citizenship and identity, I would have renounced already and it looks like it's getting worse with all kinds of FATCA nonsense. Thanks for the public education, US but it looks like I may have to self exclude myself from ever mvoing back because of stupid bullshit." }, { "docid": "549437", "title": "", "text": "\"How can someone use the account number to withdraw money without my consent? They can use your account number to game your banks phone support and try to phish their way into your account. Banks have gotten very good at combating this, but theoretically with just the address he lives in, your name, and a bad bank phone rep, he could get into your business. The account number would just be one more piece of information to lead with. I have 1 savings and 3 checking accounts with the same bank. Would they be able to gain access to the other accounts? Dependent on how incompetent the bad bank rep I referenced above is, sure. But the odds are incredibly low, and if anything were to happen, the bank would be falling over itself to fix it and make reparations so that you don't sue for a whole crap ton more. Is there a more secure and still free option that I have overlooked? Opening up yet another checking account solely for accounts receivable and transfer to accounts payable would keep your financial records more transparent. Also, banks are doing \"\"money transfer by email\"\" now, so I don't know how great that is for business transactions, but in that instance you're just giving out an email linked to a money receiving account instead of an actual account number. Paypal is also a pretty good EFT middleman, but their business practices have become shady in the past 5 years.\"" }, { "docid": "256395", "title": "", "text": "With a question like this you should talk to a tax professional who knows about international tax and knows about both the UK and the country you will be working in. They will give you up to date advice on what can be an extremely complex question. However to get you started I'll tell you what I was told when I did this nearly twenty years ago. It's all about whether you are resident in the UK for tax purposes or not. If you are, you will pay UK tax. If not, you wont (assuming you are being paid outside the UK - check with your professional exactly what is involved). In those days you could be counted as 'non resident' if you spent a complete period of twelve months outside the UK. You can make occasional visits to the UK without invalidating that. Again, check exactly how much you are allowed to return while still being not resident. Usually you will have to pay tax in the country where you are resident, but check the rules there. With some skilful timing you may be able to be considered non-resident in bouth countries, at least for some of the time. Again, your tax professional will know. The bank account question - again get a professional. I don't think it's a problem, but you may have to establish that you are being paid in the foreign country. In general you are going to need an account in the country where you work, so if its a problem get paid there and transfer any money you need in the UK." }, { "docid": "72426", "title": "", "text": "It's hard to be disciplined when the money is right there to be spent. So what you should do is have two bank accounts. One for savings and one for spending. Figure out how much you need to spend per week and have your pay automatically deposit that much into the spending account and divert the rest into these accounts. Never touch your savings account unless it is an emergency or whatever. In fact, if you really want, you should put it as a termed deposit which you can't touch. As the only thing you see is your spending balance, you'll be forced to get used to living within your means. After a while, you're going to forget that you have that savings account at all." }, { "docid": "542213", "title": "", "text": "\"From the IRS perspective, there's no difference between \"\"your taxes\"\" and \"\"your sole proprietorship's taxes\"\", they're all just \"\"your taxes\"\". While I could see it being very useful and wise to track your business's activities separately, and use separate bank accounts and the like, this is just a convenience to help you in your personal accounting, and not something that needs to relate directly to how tax forms are completed or taxes are paid. When calculating your taxes, if you want to figure out how much \"\"you\"\" owe vs. how much \"\"your business\"\" owes, you'll have to do so yourself. One approach might be just to take the amount that your Schedule C puts as income on your return and multiply by your marginal tax rate. Another approach might be to have your tax software run the calculations as though you had no business income, and see what just \"\"your personal\"\" taxes would have been without the business. If you think of the business income as being \"\"first\"\" and should use up the lower brackets rather than your personal income, maybe do it the other way around and have your software run the calculations as though you had only the business income and no other personal/investment income, and see what the amount of taxes would be then. Once you've figured out a good allocation, the actual mechanics of paying some \"\"personal tax amount\"\" from your personal bank account and some \"\"business tax amount\"\" from your business bank account are up to you. I'd probably just transfer the money from my business account to my personal account and pay all the taxes from the personal account. Writing two separate checks, one from each account, that total to the correct amount, I'm sure would work just fine as well. You can probably make separate payments from each account electronically through Direct Pay or EFTPS as well. As long as all taxes are paid by the deadline, I don't think the IRS is too picky about the details of how many payments are made.\"" }, { "docid": "334214", "title": "", "text": "\"I had the same thing happen to me in late 2010. I contacted the big company's bored-sounding payroll department - after wading through the phone menu, and more than one \"\"all of our operators are busy, please call back later <click>\"\" - and told them I had this extra money. The guy in India told me that my petition would be investigated and that a ticket would be opened. I heard nothing for a couple of weeks. I followed up with payroll. They said that my petition investigation had determined that I did indeed get paid extra, and they'd be sending me a letter demanding the overpayment. I received no letter, and a month later (January 2011) I got a W-2 with the paycheck included on it. I decided that I'd spent enough of my own time and effort on it, and if they wanted it back, the ball was in their court. I changed my bank account numbers to prevent them from auto-debiting my account, and spent the money as if it was mine. I have not heard anything about it since then. From what I was able to determine, once I'd made a good-faith effort to return it, I was in the clear. And for what it's worth, it's not like you can just \"\"return\"\" it. Among other things: I certainly wasn't just going to mail the company a check and hope for the best.\"" }, { "docid": "11979", "title": "", "text": "Here's how I think about money. There are only 3 categories / contexts (buckets) that my earned money falls into. Savings is my emergency fund. I keep 6 months of total expenses (expenses are anything in the consumption bucket). You can be as detailed as you want with this area but I tend to leave a fudge factor. In other words, if I estimate that I spend approximately $3,000 a month in consumption dollars then I'll save $3,500 times 6 in the bank. This money needs to be liquid. Some people use a HELOC, other people use their ROTH contributions. In any case, you need to put this money some place you can get access to it in case you go from accumulation (income exceed expenses) to decumulation mode (expenses exceed income). This money is distinct from consumption which I will cover in paragraph three. Investments are stocks, bonds, income producing real estate, small businesses, etc. These dollars require a strategy. The strategy can include some form of asset allocation but more importantly a timeline. These are the dollars that are working for you. Each dollar placed here will multiply over time. Once you put a dollar here it shouldn't be taken out unless there is some sort of catastrophe that your savings can't handle or your timeline has been achieved. Notice that rental real estate is included so liquidating stocks to purchase rental real estate is NOT considered removing investment dollars. Just reallocating based on your asset allocation. This bucket includes 401k's, IRAs, all tax-sheltered accounts, non-sheltered brokerage accounts, and rental real estate. In general your primary residence is not included in this bucket. Some people include the equity of their primary residence in the investment column but it can complicate the equation and I prefer to leave it out. The consumption bucket is the most important bucket and the one you spend the most time with. It requires a budget. This includes your $5 magazine and your $200 bottle of wine. Anything in this bucket is gone. You can recover a portion of it by selling it on ebay for $3 (these are earned dollars) but the original $5 is still considered spent. The reason your thought process in this area is distinct from the other two, the decisions made in this area will have the biggest impact on your personal finances. Warren Buffett was famous for skimping on haircuts because they are worth thousands of dollars down the road if they are invested instead. Remember this is a zero-sum game so every $1 not consumed is placed in one of the other buckets. Once your savings bucket is full every dollar not consumed is sent to investments. Remember to include everything that does not fit in the other two buckets. Most people forget their car insurance, life insurance, tax bill at the end of the year, accountant bill, etc. In conclusion, there are three buckets. Savings, which serve as your emergency bucket. This money should not be touched unless you switch from accumulation to decumulation. Investments, which are your dollars that are working for you over time. They require a strategy and a timeline. Consumption, which are your monthly expenses. These dollars keep you alive and contribute to your enjoyment. This is a short explanation of my use of money. It can get as complicated and detailed as you want it to be but as long as you tag your dollars correctly you'll be okay IMHO. HTH." }, { "docid": "446647", "title": "", "text": "I want to send some money to Indian in my saving account but I haven't any NRO/NRE account. It is advisable to Open an NRE account. As an NRI you cannot hold a savings account. Please have this converted into NRO account ASAP. Process or Transaction charges or Tax (levied by Indian bank) on money what I'll send to my saving account in India. I know the process or transaction charges (applied by UK banks) from UK to India. There will be a nominal charge levied by banks in India. If you use dedicated Remittance services [Most Leading Indian Banks offer this], these are mostly free. Is there any limit to get rid off tax? Nope there isn't any limit. This depends on service provider. What types of paper work I'll need to do for showing that income is sent from UK after paying tax. If you transfer to NRE account. There is no paperwork required. It is implicit. If not you have to establish that the funds are received from outside India, keep copies of the transfer request initiated, debits to the Bank Account in UK, your salary slips, Passport stamps etc." }, { "docid": "586772", "title": "", "text": "Citizens of India who are not residents to India (have NRI status) are not entitled to have ordinary savings accounts in India. If you have such accounts (e.g. left them behind to support your family while you are abroad), they need to be converted to NRO (NonResident Ordinary) accounts as soon as possible. Your bank will have forms for completion of this process. Any interest that these accounts earn will be taxable income to you in India, and possibly in the U.K. too, though tax treaties (or Double Taxation Avoidance Agreements) generally allow you to claim credit for taxes paid to other countries. Now, with regard to your question, NRIs are entitled to make deposits into NRO accounts as well as NRE (NonResident External) accounts. The differences are that money deposited into an NRE account, though converted to Indian Rupees, can be converted back very easily to foreign currency if need be. However, the re-conversion is at the exchange rate then in effect, and you may well lose that 10% interest earned because of a change in exchange rate. Devaluation of the Indian Rupee as occurred several times in the past 70 years. Once upon a time, it was essentially impossible to take money in an NRO account and convert it to foreign currency, but under the new recently introduced schemes, money in an NRO account can also be converted to foreign currencies, but it needs certification by a CA, and various forms to be filled out, and thus is more hassle. interest earned by the money in an NRE account is not taxable income in India, but is taxable income in the U.K. There is no taxable event (neither in U.K. nor in India) when you change an ordinary savings account held in India into an NRO account, or when you deposit money from abroad into an NRE or NRO account in an Indian bank. What is taxable is the interest that you receive from the Indian bank. In the case of an NRO account, what is deposited into your NRO account is the interest earned less the (Indian) income tax (usually 20%) deducted at the source (TDS) and sent to the Income Tax Authority on your behalf. In the case of an NRE account, the full amount of interest earned is deposited into the NRE account -- no TDS whatsoever. It is your responsibility to declare these amounts to the U.K. income tax authority (HM Revenue?) and pay any taxes due. Finally, you say that you recently moved to the U.K. for a job. If this is a temporary job and you might be back in India very soon, all the above might not be applicable to you since you would not be classified as an NRI at all." }, { "docid": "266062", "title": "", "text": "\"Why would you ask \"\"is the money yours\"\", when you know it isn't? When we were young children we were told \"\"two wrongs don't make a right\"\". As an adult we know that breaking the law \"\"to get back at\"\" someone we perceive as breaking the law is illegal. In sports and in real life, the retaliator often receives a worse punishment than the initial rule violator. In the case mentioned, the second part of the \"\"scam\"\" would proceed if you participated or not. The person would go to their bank and indicate a mistaken deposit and have such refunded to their account. By the correct amount yours would be debited. Woe to the person that spent this money prior to the debit.\"" }, { "docid": "395139", "title": "", "text": "Your actual question has nothing to do with the technical issue of linking a PayPal account to a bank account. It is all about the accounting of the money. That is, what you claim as income and what you can prove to the taxman. Yes, you will need to separate the money. Linking to a business account is probably the way to go. From there, it is about how you keep track of the money and account for it. How you do the accounting is a different question. So: No, it does not automatically become business income just because it goes into a business bank account. You still have to keep track of said income and claim it somewhere on some tax form(s). The point of the separate business account is to avoid the commingling of the the money which may lead to you losing the liability protection of an incorporation. The bank doesn't file your taxes for you." } ]

[ { "docid": "366761", "title": "", "text": "I called the IRS (click here for IRS contact info) and they said I do not need to get a new EIN. I could have just filed the appropriate employer federal tax return (940/941) and then the filing requirements would have been updated. But while I was on the phone, they just updated the filing requirements for my LLC so I am all good now (I still need to file the correct form and make the correct payments, etc. but I can use this same EIN going forward). Disclaimer: Don't trust me (or this answer) for tax advice (your situation may be different). The IRS person on the phone was very helpful so I recommend calling them if you are in a similar situation. FYI, I have found calling the IRS to always be very helpful." } ]

[ { "docid": "344473", "title": "", "text": "I recently made the switch to keeping track of my finance (Because I found an app that does almost everything for me). Before, my situation was fairly simple: I was unable to come up with a clear picture of how much I was spending vs saving (altho I had a rough idea). Now I here is what it changes: What I can do now: Is it useful ? Since I don't actually need to save more than I do (I am already saving 60-75% of my income), 1) isn't important. Since I don't have any visibility on my personal situation within a few years, 2) and 3) are not important. Conclusion: Since I don't actually spend any time building theses informations I am happy to use this app. It's kind of fun. If I did'nt had that tool... It would be a waste of time for me. Depends on your situation ? Nb: the app is Moneytree. Works only in Japan." }, { "docid": "406656", "title": "", "text": "\"My late answer is: Be aware of the difference of being a contractor and being an employee. I am not sure of the laws in Canada, but in the United States lots of small companies like to hire people as \"\"contractors\"\" but make them work under rules that fall into employee. The business is trying to avoid paying payroll taxes, which is fine, but make sure you know your rights and responsibilities as a contractor vs employee. You can check with your state's Bureau of Labor and Industry in the US, but I am sure wherever you are from there is a government agency to do the same thing.\"" }, { "docid": "234510", "title": "", "text": "\"TL;DR: Get a tax adviser (EA/CPA licensed in your State) for tax issues, and a lawyer for the Operating Agreement, labor law and contract related issues. Some things are not suitable for DIY unless you know exactly what you're doing. We both do freelance work currently just through our personal names. What kind of taxes are we looking into paying into the business (besides setup of everything) compared to being a self proprietor? (I'm seeing that the general answer is no, as long as income is <200k, but not certain). Unless you decide to have your LLC taxed as a corporation, there's no change in taxes. LLC, by default, is a pass-through entity and all income will flow to your respective tax returns. From tax perspective, the LLC will be treated as a partnership. It will file form 1065 to report its income, and allocate the income to the members/partners on schedules K-1 which will be given to you. You'll use the numbers on the K-1 to transfer income allocated to you to your tax returns and pay taxes on that. Being out of state, will she incur more taxes from the money being now filtered through the business? Your employee couldn't care less about your tax problems. She will continue receiving the same salary whether you are a sole proprietor or a LLC, or Corporatoin. What kind of forms are we looking into needing/providing when switching to a LLC from freelance work? Normally we just get 1099's, what would that be now? Your contract counterparts couldn't care less about your tax problems. Unless you are a corporation, people who pay you more than $600 a year must file a 1099. Since you'll be a partnership, you'll need to provide the partnership EIN instead of your own SSN, but that's the only difference. Are LLC's required to pay taxes 4 times per year? We would definitely get an accountant for things, but being as this is side work, there will be times where we choose to not take on clients, which could cause multiple months of no income. Obviously we would save for when we need to pay taxes, but is there a magic number that says \"\"you must now pay four times per year\"\". Unless you choose to tax your LLC as a corporation, LLC will pay no taxes. You will need to make sure you have enough withholding to cover for the additional income, or pay the quarterly estimates. The magic number is $1000. If your withholding+estimates is $1000 less than what your tax liability is, you'll be penalized, unless the total withholding+estimates is more than 100% of your prior year tax liability (or 110%, depending on the amounts). The LLC would be 50% 50%, but that work would not always be that. We will be taking on smaller project through the company, so there will be times where one of us could potentially be making more money. Are we setting ourselves up for disaster if one is payed more than the other while still having equal ownership? Partnerships can be very flexible, and equity split doesn't have to be the same as income, loss or assets split. But, you'll need to have a lawyer draft your operational agreement which will define all these splits and who gets how much in what case. Make sure to cover as much as possible in that agreement in order to avoid problems later.\"" }, { "docid": "589123", "title": "", "text": "\"As you said, in the US LLC is (usually, unless you elect otherwise) not a separate tax entity. As such, the question \"\"Does a US LLC owned by a non-resident alien have to pay US taxes\"\" has no meaning. A US LLC, regardless of who owns it, doesn't pay US income taxes. States are different. Some States do tax LLCs (for example, California), so if you intend to operate in such a State - you need to verify that the extra tax the LLC would pay on top of your personal tax is worth it for you. As I mentioned in the comment, you need to check your decision making very carefully. LLC you create in the US may or may not be recognized as a separate legal/tax entity in your home country. So while you neither gain nor lose anything in the US (since the LLC is transparent tax wise), you may get hit by extra taxes at home if they see the LLC as a non-transparent corporate entity. Also, keep in mind that the liability protection by the LLC usually doesn't cover your own misdeeds. So if you sell products of your own work, the LLC may end up being completely worthless and will only add complexity to your business. I suggest you check all these with a reputable attorney. Not one whose business is to set up LLCs, these are going to tell you anything you want to hear as long as you hire them to do their thing. Talk to one who will not benefit from your decision either way and can provide an unbiased advice.\"" }, { "docid": "260603", "title": "", "text": "\"The \"\"independent contractor\"\" vs. \"\"employee\"\" distinction is a red herring to this discussion and not at all important just because someone suggested you use your LLC to do the job. Corp-2-Corp is a very common way to do contracting and having an LLC with business bank accounts provides you with more tax deductions (such as deducting interest on credit lines). Some accounting practices prefer to pay entities by their Tax ID numbers, instead of an individual's social security number. The actual reasoning behind this would be dubious, but the LLC only benefits you and gives you more advantages by having one than not. For example, it is easier for you to hire subcontractors through your LLC to assist with your job, due to the opaqueness of the private entity. Similarly, your LLC can sign Non Disclosure and Intellectual Property agreements, automatically extending the trade secrets to all of its members, as opposed to just you as an individual. By signing whatever agreement with the company that is paying you through your LLC, your LLC will be privy to all of this. Next, assuming you did have subcontractors or other liability inducing assets, the LLC limits the liability you personally have to deal with in a court system, to an extent. But even if you didn't, the facelessness of an LLC can deter potential creditors, for example, your client may just assume you are a cog in a wheel - a random employee of the LLC - as opposed to the sole owner. Having a business account for the LLC keeps all of your expenses in one account statement, making your tax deductions easier. If you had a business credit line, the interest is tax deductible (compared to just having a personal credit card for business purposes). Regarding the time/costs of setting up and managing an LLC, this does vary by jurisdiction. It can negligible, or it can be complex. You also only have to do it once. Hire an attorney to give you a head start on that, if you feel that is necessary. Now back to the \"\"independent contractor\"\" vs. \"\"employee\"\" distinction: It is true that the client will not be paying your social security, but they expect you to charge more hourly than an equivalent actual employee would, solely because you don't get health insurance from them or paid leave or retirement plans or any other perk, and you will receive the entire paycheck without any withheld by the employer. You also get more tax deductions to utilize, although you will now have self employment tax (assuming you are a US citizen), this becomes less and less important the higher over $105,000 you make, as it stops being counted (slightly more complicated than that, but self employment tax is it's own discussion).\"" }, { "docid": "513051", "title": "", "text": "\"Interesting as I am in the exact same situations as yourself. I, in fact, just incorporated. You will be able \"\"save\"\" more in taxes in the end. The reason I put \"\"save\"\" in quotes, is that you don't necessarily save on taxes, but you can defer taxes. The driving factor behind this is that you specify your own fiscal calendar/year. Incorporating allows you to defer income for up to 6 months. Meaning that if you make your fiscal year starting in August or September, for example, you can claim that income on the following year (August + 6 months = February). It allows you to keep the current year taxes down. Also, any income left over at year end, is taxed at 15% (the Corporation rate) rather than the 30-40% personal rate you get with a sole-proprietorship. In a nutshell, with sole-proprietorship, all income is taxable (after write-offs)... in a corporation, you can take some of that income and keep it in the corporation (gives your company a \"\"value\"\"), and is only taxed at 15% - big saving there. I primarily work with US businesses. I am, however, a dual-citizen, US and Canadian, which allowed me as a sole-proprietor, to easily work with US companies. However, as a sole-proprietor or a Corporation, you simply need to get an EIN from the IRS and any US company will report earnings to that number, with no deductions. At year end, it is your responsibility to file the necessary tax forms and pay the necessary taxes to both countries. Therefore you can solicit new US business if you choose, but this is not restricted to corporations. The real benefit in incorporating is what I mentioned above. My suggestion to you is to speak with you CA, who can outline all benefits. Revenue Canada's website had some good information on this topic as well. Please let me know if you need anything else explained.\"" }, { "docid": "324417", "title": "", "text": "\"**Reposted so you don't have to look at silly GIFs for 50% of the article.** Sophie is a physical penetration tester and information security consultant. She specializes in social engineering security assessments including physical, voice (vishing) and text (phishing). She consults in remediation and prevention of security incidents through creation of policy and procedures, as well as customized training for your individual office culture. Prior to working in infosec, Sophie was a journalist, photographer, and a mom. Hello! My name is Sophie and I break into buildings. I get paid to think like a criminal. Organizations hire me to evaluate their security, which I do by seeing if I can bypass it. During tests I get to do some lockpicking, climb over walls or hop barbed wire fences. I get to go dumpster diving and play with all sorts of cool gadgets that Q would be proud of. But usually, I use what is called social engineering to convince the employees to let me in. Sometimes I use email or phone calls to pretend to be someone I am not. Most often I get to approach people in-person and give them the confidence to let me in. My frequently asked questions include: What break-in are you most proud of? What have you done for a test that you were the most ashamed of? What follows is the answer to both of these questions. A few months ago, a client had hired me to test two of their facilities. A manufacturing plant, plus data center and office building nearby. First step: open source intelligence, or OSINT. I look at maps, satellite images, study what I can of their delivery and supply schedules, and so on. The manufacturing facility looked like a prison. No windows, heavy iron gates, no landscaping. Generally a monstrosity of architecture. This facility had armed guards, badge readers, biometric security controls and turnstiles at every entrance. I remember thinking, \"\"It's got to be hell to work in there. I wonder if I can use that…\"\" One thing was for sure… The chances of tailgating (following behind an employee with valid credentials) into this building were next to non-existent. I was going to have to get down and dirty with my social engineering. First stop: LinkedIn. Your LinkedIn is my best friend. The more information you have on your LinkedIn, the more options I have. I have several fake LinkedIn profiles that you are probably connected to. I scour profiles of employees who work at these facilities, and cross-reference them to other social media sites. And I find a lovely young woman who I'm going to call Mary. Mary was a brand-new hire working as an assistant at the manufacturing facility. Mary had a public Facebook account too. On Mary's public Facebook account, she documented all of her family's adventures. Side note: Now I know where Mary went to high school, her mother's maiden name, the names of her pets, etc. Answers to those \"\"security questions\"\" you use to reset your passwords are very easy to find if you aren't careful with that information. Not to mention that now I know where Mary works, where her kids go to school, where they vacation…I could go on. Scary stuff. This is not an advanced investigation. I'm not a private investigator and I don't have the resources of the NSA. But I can do a lot of damage with simple methods. Most notably to me, there were photos Mary posted of her time volunteering with a certain maternity support center. Her passion for children and caring new moms was very plain. So of course, I took advantage of it. For this assessment I played two roles. For the first, I spoofed my phone number to make it look like it was coming from the company's headquarters. I called the front desk of the manufacturing facility and was transferred to Mary. \"\"Hi Mary!\"\" I said, \"\"My name is Barbara.\"\" \"\"I am a project coordinator with facilities management. We are renovating a few of our facilities. We are sending an interior designer out to you tomorrow so she can put together proposals to update your space!\"\" Mary replied, \"\"Well that's great! But why the short notice?\"\" I could feel her getting suspicious, so I pulled out my trump card… *Sigh* \"\"Well Mary… You really should have heard from me sooner. I've just been so overloaded at work…I feel like I can't catch up, and to top it off the baby is due in 6 weeks. If my boss finds out I messed this up he's going to flip.\"\" I was really getting into this, voice shaking. (Yes, I know, I'm a terrible human being.) She cut me off, \"\"Oh hunny, hunny it's ok. We will work this out! Tell me about the baby! Is it your first? Boy or girl?!\"\" Our Mary was committed at this point. Not because she is stupid, but because she is a good person. She wanted to help me. We talked babies and birth plans for a while (never pick a pretext you can't speak about at length.) Mary took down the name of the \"\"designer\"\" who was coming by the next day and we said our goodbyes. Mary could have saved her company a lot of heartache by simply verifying that I was who I claimed to be. (Just to be clear here, I would never give out Mary's real identity. I'm not totally heartless. This could have happened to anyone. She has not been fired.) I showed up the next day as \"\"Claire\"\" with a fictional architecture firm that I had made business cards and a website for. My alter-ego Barb had done most of the leg work for me. When I arrived, Mary and her boss were waiting for me with smiles. I shook hands all around and handed them the business card I printed out the night before. I was given a visitor badge and the red carpet was rolled out. I gained rapport with the staff there by asking them to tell me what they wanted in an office space. They were so excited. I might have claimed to be on the team that put together the Google offices…(Yes, I am HORRIBLE. This is my inner demon child.) \"\"You want a standing desk? New chairs over here?! Ergonomic keyboards for everyone! Let's look at swatches!\"\" We became best buds. I was given complete and unaccompanied access to the facility where I stayed for several hours. I gained network access and stole several thousands of dollars in physical primitives by picking my way through cheap locks (credit to Deviant Ollam for the rad lockpicking animations.) This client had been pretty confident that I wouldn't get into either facility, much less be able to hit both in a short time span. So the timeline was left to my discretion, but it was assumed that I would need to fly to the area twice. I didn't see the need in burdening them with two round-trip expenses. I went back to Mary's office and said, \"\"Well I think I have what I need from here. How do I get to the office center?\"\" She looked at her watch and said, \"\"It's almost lunch time. I'll take you there!\"\" A whole group of us piled into the parking lot, and they took me to a nearby taco shop. That's right. My Marks took me to get tacos… I love my job. After lunch they drove me to the offices and a few of them came in with me to show me around. I took FOREVER looking around this office space, and eventually they said their goodbyes because they had to go back to work. They had a strict policy of escorting visitors. But I had been seen walking around with trusted insiders so no one questioned me. I was free to take my time. I made myself at home. My main objective at this site was to weasel my way into private corner offices. When I accomplished my goals, I tracked down my point of contact's office. This is the man who hired me in the first place. This is the best part of every job. Steve was there, hard at work when I disturbed his groove by knocking on the door. He glanced up, \"\"Hi there, can I help you?\"\" I smiled. \"\"Hi Steve! I'm Sophie from Sincerely Security. It's nice to meet you in-person!\"\" I will never forget the look on his face… Pure gold. \"\"Who?.... Wait, what? How? How did you get in here?!\"\" We stayed in his office and talked for a long time. I went over exactly the steps that could have prevented my success. First of all, the desire to help others is human and natural. We don't want to discourage that. Second, I'm sure they did have some sort of policy that required visitors to check in showing government issued identification, but they weren't following it. We also need to post by every computer, phone and door: \"\"TRUST, BUT VERIFY.\"\" An employee who does their homework can ruin my day. Third, if it seems too good to be true, it probably is. Is your company going to hire the team who designed Google's offices? Magic 8 ball says no. Lastly, the team who took me to the second location should have found someone else to escort me through the building. I've been doing this job for a couple years now, and almost every job is a variant of this story. Very rarely do I go through an entire assessment without some sort of social engineering. There are ways to protect yourself and your company from attacks like this. I think it starts by sharing stories like these, and educating and empowering each other to be vigilant.\"" }, { "docid": "232199", "title": "", "text": "I'm not sure about reimbursement, you'll have to talk to a tax adviser (CPA/EA licensed in your State). From what I know, if you pay your own insurance premiums - they're not deductible, and I don't think reimbursements change that. But again - not sure, verify. However, since you're a salaried employee, even if your own, you can have your employer cover you by a group plan. Even if the group consists of only you. Then, you'll pay your portion as part of the pre-tax salary deduction, and it will be deductible. The employer's portion is a legitimate business expense. Thus, since both the employee and the employer portions are pre-tax - the whole cost of the insurance will be pre-tax. The catch is this: this option has to be available to all of your employees. So if you're hiring an employee a year from now to help you - that employee will be eligible to exactly the same options you have. You cannot only cover owner-employees. If you don't plan on hiring employees any time soon, this point is moot for you, but it is something to keep in mind down the road as you're building and growing your business." }, { "docid": "388713", "title": "", "text": "As a new (very!) small business, the IRS has lots of advice and information for you. Start at https://www.irs.gov/businesses/small-businesses-self-employed and be sure you have several pots of coffee or other appropriate aid against somnolence. By default a single-member LLC is 'disregarded' for tax purposes (at least for Federal, and generally states follow Federal although I don't know Mass. specifically), although it does have other effects. If you go this route you simply include the business income and expenses on Schedule C as part of your individual return on 1040, and the net SE income is included along with your other income (if any) in computing your tax. TurboTax or similar software should handle this for you, although you may need a premium version that costs a little more. You can 'elect' to have the LLC taxed as a corporation by filing form 8832, see https://www.irs.gov/businesses/small-businesses-self-employed/limited-liability-company-llc . In principle you are supposed to do this when the entity is 'formed', but in practice AIUI if you do it by the end of the year they won't care at all, and if you do it after the end of the year but before or with your first affected return you qualify for automatic 'relief'. However, deciding how to divide the business income/profits into 'reasonable pay' to yourself versus 'dividends' is more complicated, and filling out corporation tax returns in addition to your individual return (which is still required) is more work, in addition to the work and cost of filing and reporting the LLC itself to your state of choice. Unless/until you make something like $50k-100k a year this probably isn't worth it. 1099 Reporting. Stripe qualifies as a 'payment network' and under a recent law payment networks must annually report to IRS (and copy to you) on form 1099-K if your account exceeds certain thresholds; see https://support.stripe.com/questions/will-i-receive-a-1099-k-and-what-do-i-do-with-it . Note you are still legally required to report and pay tax on your SE income even if you aren't covered by 1099-K (or other) reporting. Self-employment tax. As a self-employed person (if the LLC is disregarded) you have to pay 'SE' tax that is effectively equivalent to the 'FICA' taxes that would be paid by your employer and you as an employee combined. This is 12.4% for Social Security unless/until your total earned income exceeds a cap (for 2017 $127,200, adjusted yearly for inflation), and 2.9% for Medicare with no limit (plus 'Additional Medicare' tax if you exceed a higher threshold and it isn't 'repealed and replaced'). If the LLC elects corporation status it has to pay you reasonable wages for your services, and withhold+pay FICA on those wages like any other employer. Estimated payments. You are required to pay most of your individual income tax, and SE tax if applicable, during the year (generally 90% of your tax or your tax minus $1,000 whichever is less). Most wage-earners don't notice this because it happens automatically through payroll withholding, but as self-employed you are responsible for making sufficient and timely estimated payments, and will owe a penalty if you don't. However, since this is your first year you may have a 'safe harbor'; if you also have income from an employer (reported on W-2, with withholding) and that withholding is sufficent to pay last year's tax, then you are exempt from the 'underpayment' penalty for this year. If you elect corporation status then the corporation (which is really just you) must always make timely payments of withheld amounts, according to one of several different schedules that may apply depending on the amounts; I believe it also must make estimated payments for its own liability, if any, but I'm not familiar with that part." }, { "docid": "379963", "title": "", "text": "\"This quote kind of shocked me: \"\"A well-run organization turns over 10% of their organizations, including senior leadership.\"\" I'm not in management, but I have *never* heard anyone say before that employee churn is a good thing. And wanting fully 10 % of all employees to resign every year? That sounds completely insane to me. Is that really normal? Am I not getting something? My current employer works hard on trying to retain employees. When employees quit, we need to train the replacement, it's probably going to take 6 months until the new employees is reasonably productive. Employees are actively encouraged to find new positions within the company and we have actually rehired several employees that quit to do something else and then decided they want to come back. This all seems logical and normal to me. The mindset of wanting to push a significant portion of your workforce away each year is utterly alien to me. Would somebody elucidate me?\"" }, { "docid": "317386", "title": "", "text": "It's also bad to create skewed incentives that result in the best candidate not getting the job. Or should we have no feelings for the other candidates who apply? Edit: Hypothetical situation. My wife gets a job in another city, and I also need to relocate. I currently have a job. I am the best candidate for a new job, but don't get it because of the proposed tax credit. Not only have you created an incentive for the company to hire a second best candidate, which is bad for the company and its customers, but I am unable to relocate. Bad policy. Economic engineering that sounds good, but is not the most efficient means of allocating resources." }, { "docid": "205341", "title": "", "text": "\"Am I on crack, or do the perceived tax savings via S-Corp distributions really not matter at a certain level of business income? You're not on crack. Generally, if all the income is generated by your own personal services - this is the outcome. The benefit of S-Corp is when you have employees who generate your income, and you distribute to yourself profits that come out of other's personal services. In this case your distributions are exempt from FICA since it is not in fact a self-employment income. You'd still have to pay yourself a reasonable salary for your position (as a manager/officer), but it wouldn't have to cover all of the available profits. So if the IRS takes a position against you it would be that your salary should be to include the whole profits, since it is the compensation to you for the personal services that produced the income to the corporation (you). In many cases they might agree that a salary at the SS maximum limit would be reasonable - but that's only a speculation of mine. In that case you might gain some portion of the medicare tax (with the recent law changes at the levels you're talking about you'll pay some medicare anyway). There are a lot of accountants who take more aggressive position saying that not all of the distributions are liable for SE taxes, even if you're the sole employee of the corporation. These cases often end up in the Tax Court, and whatever the outcome, your legal fees become higher than the FICA savings. What is probably missing in your picture is the SS limit of (currently $112K) above which you don't pay social security tax, so whether you get it as a salary or as a distribution - that limit is the same. That is why you don't see a significant difference. I know there are a lot of accountants who'd disagree, but I would argue that for a sole employee of your company, S-Corp doesn't provide significant benefits over the disregarded LLC taxation, but has some additional overhead that adds to your expenses. Here's a link to a lawyer's blog where he suggests (and says many accountants follow) 60/40 division between salary and distributions. I.e.: his take, similarly to mine, is that most of the earnings have to be treated as salary. In your case, when the total is about 300K - you indeed will not get any FICA savings with such a division other than some of the medicare. Unusually low wages when compared to distributions can draw unwanted IRS scrutiny and an audit. An unfavorable audit will likely result in some portion of the distributions being reclassified as earned income for federal income tax purposes, which results in a deficiency assessment (i.e., a tax bill), interest on those unpaid taxes, and IRS penalties. The article also talks about the Watson case (one of the Tax Court cases I referred to), which can be used as the guidelines for determining the \"\"reasonable\"\" compensation. Talk to your tax adviser. I'm neither a tax adviser nor a tax professional. For a tax advice contact a CPA/EA licensed in your state. This is not a tax advice, just my personal opinion.\"" }, { "docid": "397510", "title": "", "text": "You should not form a company in the U.S. simply to get the identification number required for a W-8BEN form. By establishing a U.S.-based company, you'd be signing yourself up for a lot of additional hassle! You don't need that. You're a European business, not a U.S. business. Selling into the U.S. does not require you to have a U.S. company. (You may want to consider what form of business you ought to have in your home country, however.) Anyway, to address your immediate concern, you should just get an EIN only. See businessready.ca - what is a W8-BEN?. Quote: [...] There are other reasons to fill out the W8-BEN but for most of you it is to make sure they don’t hold back 30% of your payment which, for a small company, is a big deal. [...] How do I get one of these EIN US taxpayer identification numbers? EIN stands for Employer Identification Number and is your permanent number and can be used for most of your business needs (e.g. applying for business licenses, filing taxes when applicable, etc). You can apply by filling out the Form SS-4 but the easier, preferred way is online. However, I also found at IRS.gov - Online EIN: Frequently Asked Questions the following relevant tidbit: Q. Are any entity types excluded from applying for an EIN over the Internet? A. [...] If you were incorporated outside of the United States or the U.S. territories, you cannot apply for an EIN online. Please call us at (267) 941-1099 (this is not a toll free number) between the hours of 6:00 a.m. to 11:00 p.m. Eastern Time. So, I suggest you call the IRS and describe your situation: You are a European-based business (sole proprietor?) selling products to a U.S.-based client and would like to request an EIN so you can supply your client with a W-8BEN. The IRS should be able to advise you of the correct course of action. Disclaimer: I am not a lawyer. Consider seeking professional advice." }, { "docid": "58906", "title": "", "text": "\"I can say from personal experience that, as an employee, I would prefer a system like this for determining pay scale. I had a situation happen to me that was similar to the Yak driver analogy in the article: I had been at a software company for a little while, and they were always hiring with a chronic shortage of talent. Finally they hired some new guys, but still had open positions. One of the new guys who came on was making a full $15k more in salary than me, for doing the exact same job-- and no, he wasn't a lead, Sr., or anything like that. No matter how I tried to not let this get to me, it was hard not to let it affect my morale, and I finally ended up leaving the company. So yeah, I'm sure guys like Ntang would say it's my fault for not negotiating a better salary, but since that's impossible (due to the bureaucracy) in most jobs, the fact is that the best way to \"\"negotiate a better salary\"\" is usually to just look elsewhere.\"" }, { "docid": "317260", "title": "", "text": "10 years into my career. Here are my notes: 1. Don't work overtime as a salaried employee. If there's more work than people then management needs to hire more people. Sure, there are times when shit hits the fan and there's no other option, but that should be a 'once every two years' event, not a 'once every week' event. 2. Be a rockstar. If you're spending time 'looking busy' because you finished a 3 hour job in 1 hour ship the results to your manager and ask for more. Those results will be noticed and will move you from entry-level to mid-level to senior. 3. Skills pay the bills. Always work on learning new things to bring value to your employer. This is also required to move up the chain in your career, and leads into my #4. 4. Get paid what you're worth. Maintain an understanding of what similar skillsets are paying in your area and either maintain or exceed that. Your employer has an incentive to pay you as little as possible. Show them comparable salaries for the same position paying more and make them match it. If they won't match it find someone who will. 5. Don't correct your boss/salesperson when they are presenting to management/customers. Instead, let them know after the meeting. Your #2 points (both of them) are something that I struggled with when I was new in my career. It was incredibly frustrating to *know* something, but not have anyone listen due to the fact that I was a 'kid'. Unfortunately it's a part of life. If you can do #2 and #3 on my list for a couple of years people will start listening. It's a great feeling being a 24 year old kid in a room full of my boss's bosses, and my boss's boss's bosses and having them listen and consider my opinion, but it's not something that's given to everyone. You need to earn it." }, { "docid": "523755", "title": "", "text": "I had an amazing customer service experience with Best Buy yesterday. I walked into my local BB with a list of computer components for a PC I am building (I was purchasing from New Egg and Best Buy). Wandered around and an employee saw me (he ended up being the manager), and he helped me put together an order, not only that but he checked New Egg to make sure I was getting competitive prices, not only that but he made sure I was getting free shipping. On top of that he went through my New Egg list and price matched anything they had. Now I only need a couple more things from New Egg. Thought I'd share." }, { "docid": "19180", "title": "", "text": "nope, wouldn't. it's probably true. it would be a stereotype. like saying black people like chicken. is it racism if 98% of my black employees eat chicken every day or talk about how much they love chicken? it's like saying Italian employees are lazy, if I hire 1,000 people and 50% are italian and they're generally always slower than the other 50% how is this racism? if I don't want to hire women between 20-28 because I'd very likely end up having to pay for 12+ month for an employee that isn't at work, is it sexism not to hire? women tend to gossip, that isn't sexism that is a fact. you know it, I know it, your girlfriend knows it, but because it's a public discussion point it is now sexist. I can just say out of my experience the probability that a women brings a bad vibe into the office caused by drama or gossip is incredible higher than a man. am I sexist now? I don't think so, I'd still hire women, I just focus more on specific character features than in the past. similar as googles HR would focus on problem solving skills. I say this out loud because it might be sexist in the public eye but everybody knows it's true in the majority of cases. I have female employees and I value them as much as my male employees. doesn't mean I can randomly hire people." }, { "docid": "259313", "title": "", "text": "\"Anyone that currently owns a business of any size is a slave to pretty much anyone else. We are told who to hire, how much to pay, how much of the profits we must give to \"\"pay our fair share\"\", who we must serve and by what measure of quality, what prices we may charge (in many cases) and so on. What you and people like you do not get is that those of us that enjoy starting businesses have lost our taste for it. We're sick of working twice as hard as our employees and then being told we don't \"\"give back\"\" enough. I would NEVER not hire or serve someone on the basis of their color, religion, sexuality, and so forth. Why? Because finding great people is hard enough, why reduce the potential population further with biotry and silliness. BUT, I would also never hire a person BECAUSE of those things. I don't care if you're black and feel like you're entitled to special consideration because your great-great-great-great grandfather was enslaved. A) I don't care. B) I had nothing to do with it. C) You're not entitled to squat unless you've earned it. Ditto Native Americans, women, homosexuals, people that are overweight, or any one of a dozen other manufactured excuses for not being willing to be measured by - as per MLK - the content of your character, not the color of your skin (or whatever). In the mean time I have been on strike. I am not starting another business or hiring another person until this nonsense gets put under control. I made that committment the day the Worst President In My Lifetime - Mr Hoax And Shame - got elected. Guess what? There are lots of people like me and you're not going to see an improving unemployment picture until you quit squeezing us with this PC, feel good stupidity. And you know what? If you do end the EEOC lunacy, what will happen? People of all flavors who are persons of character and ability will flourish and the low life white trash, black ghetto scum, drug addict losers that support the ideological left will ... starve. And that's just fine with me so long as they do not block traffic.\"" }, { "docid": "524174", "title": "", "text": "That makes sense though since I live in a small town with few tech jobs available, and glassdoor is a good deciding factor when the very little that is available offer little return compared to bigger cities. I am not comfortable moving to the big city just yet since i haven't established myself in the field and competing in a big industrialized city doesn't assure that I will find a job easy peasy lemon squeezy from where I am just yet, therefore it's good to stick around and find something to build experience. I am just hoping to do it before the tech market saturates and these jobs either become scarce, or aren't very profitable anymore since public schools and community efforts offer coding classes and seminars in several cities and communities in hopes of retraining people, when this specialized skill becomes that common it might become as valuable as fast food cashiers since everyone wants to learn. I don't want to compete in a market in that state, it's all very scary (but there are several people on the internet convincing people to not go to college, I live in a town that takes this advice and I know there are several hundred more like it so I have that going for me). Anyway, Glassdoor does effect smaller businesses that have no benefits, and just a non-standardized work cultures. Basically, it's a bit of a toss up on how you will be treated in a small company since, unlike google, don't list their terms and conditions, plus their policies on their website (if they have one and if they bother). I know big corporations might not need to worry about glassdoor reviews (unless they work in chapters rather than having a huge HQ in one place that hires thousands). I would imagine a small business has more to be afraid of when it comes to glass door brand wise." } ]

[ { "docid": "367641", "title": "", "text": "See the first item in the list: For our everyday business purposes – such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus Note that there's no option for you to limit this sharing. Credit reporting is the business need of the bank, not of the bureaus. They rely on them and others reporting it in their main business: lending. While you can limit the sharing with other banks/insurance companies/service providers so that you won't get offers from them based on the data shared by the bank, you cannot limit the credit reports themselves." } ]

[ { "docid": "447917", "title": "", "text": "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." }, { "docid": "516629", "title": "", "text": "\"In truth there is no such thing as a risk-free asset. That is why your textbook feels the need to add the qualifier \"\"for practical purposes,\"\" meaning that the risk of a money market account is so much lower than virtually any other asset class that it can reasonably be approximated as risk free. The main risk of any bond, short-term or long-term, is that its price may change before the maturity date. This could happen for one of many reasons, such as interest rate changes, creditworthiness, market risk tolerance, and so on. Thus you may lose money if you need to redeem your investment ahead of the scheduled maturity.\"" }, { "docid": "508211", "title": "", "text": "\"File a John Doe lawsuit, \"\"plaintiff to be determined\"\", and then subpoena the relevant information from Mastercard. John Doe doesn't countersue, so you're pretty safe doing this. But it probably won't work. Mastercard would quash your subpoena. They will claim that you lack standing to sue anyone because you did not take a loss (which is a fair point). They are after the people doing the hacking, and the security gaps which make the hacking possible. And how those gaps arise among businesses just trying to do their best. It's a hard problem. And I've done the abuse wars professionally. OpSec is a big deal. You simply cannot reveal your methods or even much of your findings, because that will expose too much of your detection method. The ugly fact is, the bad guys are not that far from winning, and catching them depends on them unwisely using the same known techniques over and over. When you get a truly novel technique, it costs a fortune in engineering time to unravel what they did and build defenses against it. If maybe 1% of attacks are this, it is manageable, but if it were 10%, you simply cannot staff an enforcement arm big enough - the trained staff don't exist to hire (unless you steal them from Visa, Amex, etc.) So as much as you'd like to tell the public, believe me, I'd like to get some credit for what I've done -- they just can't say much or they educate the bad guys, and then have a much tougher problem later. Sorry! I know how frustrating it is! The credit card companies hammered out PCI-DSS (Payment Card Industry Data Security Standards). This is a basic set of security rules and practices which should make hacking unlikely. Compliance is achievable (not easy), and if you do it, you're off the hook. That is one way Amy can be entirely not at fault. Example deleted for length, but as a small business, you just can't be a PCI security expert. You rely on the commitments of others to do a good job, like your bank and merchant account salesman. There are so many ways this can go wrong that just aren't your fault. As to the notion of saying \"\"it affected Amy's customers but it was Doofus the contractor's fault\"\", that doesn't work, the Internet lynch mob won't hear the details and will kill Amy's business. Then she's suing Mastercard for false light, a type of defamtion there the facts are true but are framed falsely. And defamation has much more serious consequences in Europe. Anyway, even a business not at fault has to pay for a PCI-DSS audit. A business at fault has lots more problems, at the very least paying $50-90 per customer to replace their cards. The simple fact is 80% of businesses in this situation go bankrupt at this point. Usually fraudsters make automated attacks using scripts they got from others. Only a few dozen attacks (on sites) succeed, and then they use other scripts to intercept payment data, which is all they want. They are cookie cutter scripts, and aren't customized for each site, and can't go after whatever personal data is particular to that site. So in most cases all they get is payment data. It's also likely that primary data, like a cloud drive, photo collection or medical records, are kept in completely separate systems with separate security, unlikely to hack both at once even if the hacker is willing to put lots and lots of engineering effort into it. Most hackers are script kiddies, able to run scripts others provided but unable to hack on their own. So it's likely that \"\"none was leaked\"\" is the reason they didn't give notification of private information leakage. Lastly, they can't get what you didn't upload. Site hacking is a well known phenomenon. A person who is concerned with privacy is cautious to not put things online that are too risky. It's also possible that this is blind guesswork on the part of Visa/MC, and they haven't positively identified any particular merchant, but are replacing your cards out of an abundance of caution.\"" }, { "docid": "92072", "title": "", "text": "Somewhat. The balance sheet will include liabilities which as Michael Kjörling points out would tell you the totals for the debt which would often be loans or bonds depending on one's preferred terminology. However, if the company's loan was shorter than the length of the quarter, then it may not necessarily be reported is something to point out as the data is accurate for a specific point in time only. My suggestion is that if you have a particular company that you want to review that you take a look at the SEC filing in full which would have a better breakdown of everything in terms of assets, liabilities, etc. than the a summary page. http://investor.apple.com/ would be where you could find a link to the 10-Q that has a better breakdown though it does appear that Apple doesn't have any bonds outstanding. There are some companies that may have little debt due to being so profitable in their areas of business." }, { "docid": "333344", "title": "", "text": "They are creating their own chains. If you have a group of trading partners who want a common source of truth, without paying one entity to maintain the database, a private blockchain is great. But it's like having an intranet vs. being on the public internet. They think the network effects of the public chain will make it worthwhile, once the privacy and performance are good enough for them.' I don't think any particular company will be able to replace the public chain's dominance for public use." }, { "docid": "337456", "title": "", "text": "I get a subscription to WSJ through work and I use it everyday. What is the price of the subscription though? I find it useful and Barrons has a lot regarding business and the stock market. A lot of professionals have subscriptions to the WSJ. I prefer the WSJ over other services and I really like the market data they provide." }, { "docid": "405374", "title": "", "text": "&gt;They collected my license plate info via a reader at the stall and already tied it to my account. That's bit unsettling. More from a privacy standpoint. As if someone hacks into or gets Amazon's user database (as lets face it its only a matter of time that happens), they will know what car you drive among other things." }, { "docid": "297220", "title": "", "text": "&gt; What IS criminal, is faking the loan paperwork and KNOWINGLY passing along fraudulently obtained loans. Its pretty obvious that they would need to deceive the MBS buyers about the creditworthiness of the loans in order to sell them. By knowingly targeting unsophisticated poor people to take large expensive loans, they were knowingly engaging in activity that is necessarily fraudulent from the top down." }, { "docid": "118931", "title": "", "text": "China was the only place that I've traveled to where they had built in privacy screens as you're going through security. One person at a time through the metal detector and once you pass through the metal detector you're in an area that has complete privacy. Nobody before or after the line can see you. In a way it's good if implemented in the USA but sometimes it makes me wonder how that can be abused." }, { "docid": "190126", "title": "", "text": "\"&gt; don't think Hillary would've delivered the same results (or Bernie,... First, absolutely not under Bernie. Just his nomination or him being the president would kill the economy. As for Hillary, I did not vote for her, neither most American, not because she would do bad with the economy (but Trump would do better than her, for sure.) Just one example about Hillary: she cheated on debate questions that she got from fake-news CNN. If my son cheated on a test like that, he would be expelled from school. No other would-be president did such a s thing or even consider to do such a thing. Meanwhile, Trump, not even a politician, handled the debate questions very very well. So you want me to vote for Hillary who has zero morals, zero accomplishments in the past (she's just a \"\"wife of...\"\"), mishandle top secret e-mail(s), rigging DNC elections against Bernie, etc? FYI, I am a democrat and I voted for Obama twice, Al Gore (idiot!) and Kerry (bigger idiot). I prefer to vote for a democrat, but not when the DNC and the Candidate is corrupt to the core, evil, killers, cheaters, etc. And you also believe anything from CNN after they cheat with Hillary on debate questions? So you wrote, and I wrote back: &gt;&gt;&gt;How can it be fake news when we're looking at government generated economic data? &gt;&gt; Because government economic data shows the economy improved under Trump! &gt; So yes, it's doing better than a year ago. You see? First you claim, based on fake news, that economy under Trump is not doing good, and then, quickly, the story changes.\"" }, { "docid": "250657", "title": "", "text": "A good corollary. That's why HIPAA actually worked, since it imposed direct fines and jail time on personnel responsible. Ever notice how of all the privacy stuff, HIPAA is the only one that's taken seriously? We need more laws that pierce the corporate veil for intentional malfeasance or gross misconduct." }, { "docid": "90290", "title": "", "text": "I think you're making a mistake. If you still want to make this mistake (I'll explain later why I think its a mistake), the resources for you are: IRS.GOV - The IRS official web site, that has all the up-to-date forms and instructions for them, guiding publications and the relevant rules. You might get a bit overwhelmed through. Software programs - TurboTax (Home & Business for a sole propriator or single member LLC, Business for more complicated business), or H&R Block Business (only one version that should cover all) are for your guidance. They provide tips and interactive guidance in filling in all the raw data, and produce all the forms filled for you according to the raw data you entered. I personally prefer TurboTax, I think its interface is nicer and the workflow is more intuitive, but that's my personal preference. I wrote about it in my blog last year. Both also include plug-ins for the state taxes (If I remember correctly, for both the first state is included in the price, if you need more than 1 state - there's extra $30-$40 per state). Your state tax authority web site (Minnesota Department of Revenue in your case). Both Intuit and H&R Block have on-line forums where people answer each others questions while using the software to prepare the taxes, you might find useful information there. As always, Google is your friend. Now, why I think this is a mistake. Mistakes that you make - will be your responsibility. If you use the software - they'll cover the calculation mistakes. But if you write income in a wrong specification or take a wrong deduction that you shouldn't have taken - it will be on your head and you're the one to pay the fines and penalties for that. Missed deductions and credits - CPA's (should) know about all the latest deductions and credits that you or your business might be entitled to. They also (should) know which one got canceled and you shouldn't be continuing taking them if you had before. Expenses - there are plenty of rules of what can be written off as an expense and how. Some things should be written off this year, others over several years, for some depreciation formula should be used, etc etc. Tax programs might help you with that, but again - mistakes are your responsibility. Especially for the first time and for the newly formed business, I think you should use a (good!) CPA. The CPA should take responsibility over your filing. The CPA should provide guarantee that based on the documents you provided, he filled all the necessary forms correctly, and will absorb all the fees and penalties if there's an audit and mistakes were found not because you withheld information from your CPA, but because the CPA made a mistake. That costs money, and that's why the CPA's are more expensive than using a program or preparing yourself. But, the risk is much higher, especially for a new business. And after all - its a business expense." }, { "docid": "433432", "title": "", "text": "By your own logic this may not work. Tax cuts which are matched by government spending cuts will have an immediate negative effect on the economy as government spending contributes a very sizeable chunk of the GDP and employs a not at all insignificant workforce. Thus for the net total economic growth to compensate at the very least that entire tax cuts has to be spent in the economy preferably in sectors where the income velocity of money is the highest. Income velocity has often been proven to be the highest among the low income sections while the lowest among the high income sections. For example if the corporate tax cuts is just invested as share buybacks the net velocity is tiny even though share prices will increase. What proof do you really have that this will not be case? Let alone 35 years, even recent data has shown that increasing the monetary supply to corporate America does not really translate to sustained GDP growth as the money velocity remains abysmal. This has been demonstrated both on a state level in Kansas, and in a slightly different way at the federal level through our experience with quantitative easing." }, { "docid": "275706", "title": "", "text": "Overpaying a credit card to create a large positive balance may cause a bank to red flag your account. This is a technique used in fraud for check kiting (write or deposit a fraudulent check to overpay your credit card, then demand a refund on the balance overpaid before the check bounces.) Every bank is different: Talk to your bank first before you try this. For a small balance ($5-20) overpayment isn't a big deal, it happens regularly... just spend down the balance. Past that, you might be harming your credit record or risk closing the account if the bank disagrees with how you are using an overpaid balance for a larger purchase, or you risk unwanted law enforcement attention aimed at your finances. If you are trying to do this to build your creditworthiness, a secured card is better for this purpose. Disagree with your credit limit? Deposit more in the holding account." }, { "docid": "361114", "title": "", "text": "\"Not at these rates. The motto used to be 3/6/3: \"\"Borrow at 3%, Loan out at 6%, and then be at the golf course by 3pm\"\". So they get 3% on the spread, minus fixed costs. Now, they borrow at near 0% and loan out at slightly above 0%. Those fixed costs starts becoming an issue. It isn't cheap to have all these ATMs, bank branches, tellers, computer systems, etc. Also, a lot of the money cannot be loaned out at all because there are not enough creditworthy borrowers. You might have recalled a few months ago, several banks started charging for deposits. They don't want more money that will just lay there while they have to pay the costs of maintaining the accounts. Some bank CEOs have stated that they would be better off if the Fed raised rates up to 1%.\"" }, { "docid": "293933", "title": "", "text": "Zuck the cuck is the bad guy. He takes basic human instinct and exploits it. People are addicted to that shit like it's heroin. I can't say I'm not the same with Reddit but there's not an update to Reddits privacy policy taking away privacy every 2 weeks. You can talk about something and 10 minutes lateran advertisement pops up in Facebook with the subject you were talking about. He's finding out what people like and dislike so that propaganda can be more effective. If you don't think the government hasn't got a hold of mark zuckerberg and Facebook you're retarded." }, { "docid": "503603", "title": "", "text": "\"equifax is not too big to fail. equifax needs to be made an example of. congress should be trying to start to legislate some privacy for us citizens like germany/eu. this just shows that the government is very unconcerned about our privacy. they could at least fake it. EDIT: i realized i am a hypocrite. i trashed hillary for her \"\"public/private positions\"\" and here i am asking for it. i feel defeated.\"" }, { "docid": "422793", "title": "", "text": "What's also interesting is that JP Morgan is heavily involved in the Enterprise Ethereum Alliance, to the point of sponsoring conferences and developing their own client [software](https://www.jpmorgan.com/global/Quorum). Initially this is for private networks but they say they plan to connect to the public chain once it scales better and has stronger privacy features." }, { "docid": "176485", "title": "", "text": "As a solo-investor I'm not sure how I'd prove that. Showing statements? Sorry, not out of privacy but out of embarrassment. I've made quite a few mistake of investing in companies against market sentiment that proved to be god awful right, and god awful wrong for me. I'm hoping for a helluva rebound in the 10's" } ]

[ { "docid": "500755", "title": "", "text": "Set up a meeting with the bank that handles your business checking account. Go there in person and bring your business statements: profit and loss, balance sheet, and a spreadsheet showing your historical cash flow. The goal is to get your banker to understand your business and your needs and also for you to be on a first-name basis with your banker for an ongoing business relationship. Tell them you want to establish credit and you want a credit card account with $x as the limit. Your banker might be able to help push your application through even with your credit history. Even if you can't get the limit you want, you'll be on your way and can meet again with your banker in 6 or 12 months. Once your credit is re-established you'll be able to shop around and apply for other rewards cards. One day you might want a line of credit or a business loan. Establishing a relationship with your banker ahead of time will make that process easier if and when the time comes. Continue to meet with him or her at least annually, and bring updated financial statements each time. If nothing else, this process will help you analyze your business, so the process itself is useful even if nothing comes of it immediately." } ]

[ { "docid": "389750", "title": "", "text": "I'm a bond trader and we stayed away from this Tesla deal. Tesla is cash flow negative which is a terrible sign for a bond investor and is still relatively young and changing constantly. When assessing fixed income investments you want steady predictable cash flows and positive credit metrics. Tesla has none of that despite the run up in the stock. Even after taking all of these things into consideration the yields aren't even very high reflecting a compression in the amount of spread to treasuries investors are asking for taking on the risk in this kind of name. It speaks to an overvalued high yield market in general. Ford on the other hand is a mature business with much more favorable credit metrics (debt interest coverage, consistent management, a credit history of borrowing and repaying their loans, etc.). All of these things are reflected in the yield that investors require when buying bonds." }, { "docid": "2619", "title": "", "text": "Whether or not it is logical probably depends on individual circumstance. When you take on (or maintain) debt, you are choosing to do two things: The first is clear. This is what you describe very well in your answer. It is a straightforward analysis of interest rates. The fixed cost of the debt can then be directly compared to expected return on investments that are made with the newly available cash flow. If you can reasonably expect to beat your debt interest rate, this is an argument to borrow and invest. Add to this equation an overwhelming upside, such as a 401k match, and the argument becomes very compelling. The second cost listed is more speculative in nature, but just as important. When you acquire debt, you are committing your future cash flow to payments. This exposes you to the risk of too little financial margin in the future. It also exposes you to the risk of any negatives that come with non-payment of debt (repossession, foreclosure, credit hit, sleeping at night, family tension, worst-case bankruptcy) Since the future tends to be difficult to predict, this risk is not so easy to quantify. Clearly the amount and nature of the debt is a large factor here. This would seem to be highly personal, with different individuals having unique financial or personal resources or income earning power. I will never say someone is illogical for choosing to repay their debts before investing in a 401k. I can see why some would always choose to invest to the match." }, { "docid": "81941", "title": "", "text": "\"From your question, I believe that you are looking for what these mean in accounting terms and not the difference between a debit and a credit card. I'll deal with purchase and sale first as this is easier. They are the same thing seen from different points of view. If I sell something to you then I have made a sale and you have made a purchase. Every sale is a purchase and every purchase is a sale. Debits and Credits are accounting terms and refer to double column accounting (the most common accounting system used). The way a set of accounts works is, accounts are set up under the following broad headings: The first 3 appear on the Balance Sheet, so called because the accounts balance (Assets = Liabilities + Equity). This is always a \"\"point-in-time\"\" snapshot of the accounts (1 June 2015). That last 3 appear on the Profit and Loss sheet, Profit (or loss) = Income - Cost of Goods Sold - Expenses. This is always an interval measure (1 July 2014 to 30 June 2015). Changes in these accounts flow through to the Equity part of the Balance Sheet. When you enter a transaction the Debits always equal the Credits, they are simply applied to different accounts. Debits increase Assets, Cost of Goods Sold and Expenses and decrease Liabilities, Equity and Income. Credits do the reverse For your examples: 1. a customer buy something from me, what is the debit and credit? I will assume they pay $1,000 and the thing cost you $500 Your cash (asset) goes up by $1,000 (Debit), your inventory (asset) goes down by $500 (Credit), your Sales revenue (income) goes up by $500 (credit). This gives you a profit of $500. 2. a customer buy something of worth 1000 but gives me 500 what is debit and credit Your cash (asset) goes up by $500 (Debit), your debtors (asset) goes up by $500, your inventory (asset) goes down by $500 (Credit), your Sales revenue (income) goes up by $500 (credit). This also gives you a profit of $500. 3. if I buy a product from supplier worth 1000 and pay equally what is credit and debit I assume you mean pay cash: Your cash (asset) goes down by $1000 (Credit), your inventory (asset) goes up by $1000 (Debit). There is no profit or loss here - you have swapped one asset (cash) for another (inventory). 4. if I buy a product from supplier worth 1000 and don't pay what is credit and debit Your creditors (liability) goes up by $1000 (Credit), your inventory (asset) goes up by $1000 (Debit). There is no profit or loss here - you have gained an asset (inventory) but incurred a liability (creditors). The reason for confusion is that most people only see Debits and Credits in one place - their bank statement. Your bank statement is a journal of one of the banks liability accounts - its their liability because they owe the money to you (even loan accounts adopt this convention). Credits happen when you give money to the bank, they credit your account (increase a liability) and debit their cash balance (increase an asset). Debits are when they give money to you, they debit your account (decrease a liability) and credit their cash balance (decrease an asset) . If at the end of the period, you have a credit balance then they owe money to you, a debit balance means you owe money to them. If you were keeping a book of accounts then your record of the transactions would be a mirror image of the bank's because you would be looking at it from your point of view.\"" }, { "docid": "255703", "title": "", "text": "\"Which option will save you the most money in the long run? That is tough. Assuming you stay healthy, don't lose your job, don't experience a pay cut or any major emergency that drains your savings, then applying the $6000 to the higher interest loan will save you more money in the long run. However, the difference in savings is a few hundred dollars. Not much really. So, in this case, I'd put the $6k towards the smaller loan. Why? Because then you'd pay it off faster. Once that's done, you open up your cash flow by the minimum monthly payment you would have had on that loan. Assuming they both have the same or similar number of months left, by paying the smaller loan off sooner, you'd open up $X month, where $X is your minimum monthly payment. This could be useful to you if you want to take on some other debt (like buying a house) because it lowers your debt to income ratio. If you put that money towards the higher loan, your DTI won't change until the normal time you would have paid off the smaller loan. Even if you are not looking to purchase anything that requires you to have a lower DTI, paying the smaller loan off sooner increases your cash flow sooner (because your monthly payment on the higher loan doesn't change just because you lowered the balance by $6k). So you'd be more robust to emergencies if your current income doesn't allow for much savings. A major emergency could wipe out all savings from paying down the bigger balance. So, I'd suggest: Edit: TripeHound asked a question, pretty much requesting more details for why I was biased towards paying off the smaller loan first. What follows is my response, with a bit of reorganization: Typically, people asking these questions don't have so much wealth that \"\"which loan to pay first?\"\" is an academic question. They need to make smart financial decisions. While paying the highest interest loan saves the most money in interest - that only occurs under the assumption that nothing bad will ever happen to you until the loans are paid off. In reality, other things happen. Tires blow out, children get sick, you get laid off and so the \"\"best\"\" thing to do is the one that maximizes your long term financial health, even if it comes at the expense of a few $k more interest. Each loan has a minimum monthly payment. Let's assume, barring any windfalls of additional cash, you will just make the minimum payments each month towards a loan. If you pay off the smaller loan first, that increases your available monthly cash flow. At that point, you can put extra towards the other loan. However, if an emergency should come up, or you need to save for a vacation, you can do that, without negatively impacting the second loan, because you'd just drop back to its minimum payment. Putting the money towards the higher balance loan would mean it takes you longer to reach this point as the time to reach payoff on the first loan will not change ($6k only reduces the $25.6k loan to $19.6k) so you never gain the flexibility of additional cash flow until the time you would have paid off the $13.5k originally. I'd rather have a few hundred dollars each month that I can choose to use to make additional loan payments, eat out, pay for car repairs, pay for emergencies than be forced to dip into credit or worse, pay day loans, should an emergency happen.\"" }, { "docid": "314840", "title": "", "text": "Depends on how you go about it. I'm in my mid 30s with 3 houses that are about $450,000 in the black. By the time I'm 50 they will be paid off (mostly by other people's rent) and I project I'll be sitting on about $1.7mil in assets with $40,000 annually in cash flow. Not a bad position to be in really." }, { "docid": "483809", "title": "", "text": "An auto title loans are typically utilized by those that wish to obtain a funding with bad credit rating or no credit in any way. An auto-mobile title lending frequently called a vehicle title lending or merely title funding as well as pink slip funding’s. You merely should have a vehicle that is paid off or nearly paid off and also you could make use of the auto title as security to obtain the cash money you require, enabling you to continue driving your vehicle while paying your loan. Get Auto Car Title Loans North Hollywood CA and nearby cities Provide Car Title Loans, Auto Title Loans, Mobile Home Title Loans, RV/Motor Home Title Loans, Big Rigs Truck Title Loans, Motor Cycle Title Loans, Online Title Loans Near me, Bad Credit Loans, Personal Loans, Quick cash Loans Contact Us: Get Auto Car Title Loans North Hollywood CA 11604 Sylvan St # 7, North Hollywood, CA 91606 424-343-2256 nhautoloans@gmail.com http://getautotitleloans.com/car-and-auto-title-loans-north-hollywood-ca/" }, { "docid": "502628", "title": "", "text": "An auto title loans are typically utilized by those that wish to obtain a funding with bad credit rating or no credit in any way. An auto-mobile title lending frequently called a vehicle title lending or merely title funding as well as pink slip funding’s. You merely should have a vehicle that is paid off or nearly paid off and also you could make use of the auto title as security to obtain the cash money you require, enabling you to continue driving your vehicle while paying your loan. Get Auto Car Title Loans West Covina CA and nearby cities Provide Car Title Loans, Auto Title Loans, Mobile Home Title Loans, RV/Motor Home Title Loans, Big Rigs Truck Title Loans, Motor Cycle Title Loans, Online Title Loans Near me, Bad Credit Loans, Personal Loans, Quick cash Loans Contact Us: Get Auto Car Title Loans West Covina CA 1203 W Francisquito Ave # 1207, West Covina, CA 91790 626-653-4292 atlwestcovina@gmail.com http://getautotitleloans.com/car-and-auto-title-loans-covina-ca/" }, { "docid": "368247", "title": "", "text": "I would like to post a followup after almost a quarter. littleadv's advice was very good, and in retrospect exactly what I should have done to begin with. Qualifying for a secured credit card is no issue for people with blank credit history, or perhaps for anyone without any negative entries in their credit history. Perhaps, cash secured loans are only useful for those who really have so bad a credit history that they do not qualify for any other secured credit, but I am not sure. Right now, I have four cash secured credit cards and planning to maintain a 20% utilization ratio across all of them. Perhaps I should update this answer in 1.5 years!" }, { "docid": "77088", "title": "", "text": "Well, to get money, you need to leverage your assets. So your options basically are: - Asset: Cash. Well, I figure if you had, you wouldn't have asked how to get more of it, but its always worth mentioning. Don't forget about cash that can be in tricky places to tap, like 401ks, IRAs, investment accounts, etc. There is usually some way to get at the cash, but it may not be worth it and you could end up sacrificing long term financial stability if you do. - Asset: Job Skills and Initiative. Get a job and and earn the cash. $2k is not a ton, and if you live frugally you should be able to save it. There are tons of websites dedicated to living frugally and earning extra cash on the side. My personal favorite is r/beermoney. - Asset: Good Credit. Borrow the money from a traditional bank. Signature loans go up to $35k at most banks, just ask what it would take to qualify. You could also get a credit card for that amount, and use it to start up the business. - Asset. Bad Credit. If you've got bad credit, you can still take out a loan from a place like Prosper or Lending Club or Sofi (these places are handy if you have good credit, too). Your rates will be much higher, but they will still lend to you. - Asset: Property. If you own stuff, you can sell it and get cash. Clean out your attic (or ask relatives if you can have the stuff in theirs!) and sell it. If you own fancy stuff, you can borrow against it (home, car, boat, etc.). - Asset: Your Charm and Winning Smile. If you have a good, solid business plan (written down and professional looking), ask around and see if you can find an investor. It could be friends or family, but it could also be someone who is looking to invest. Be professional, and be sure to draw up the appropriate business docs if you do a partnership or take a private loan. - Asset: Your Government. If you live in the US, there are federal programs that offer Small Business Loans. Check out sba.gov for more info. You will need a business plan and will have to meet the criteria of the loan or grant. Not sure if your Ecommerce business will meet the criteria, as the intent of these types of programs are to spur the economy by allowing small business owners to hire workers. But its worth checking out." }, { "docid": "190800", "title": "", "text": "While there have been plenty of good answers I would like to suggest turning it on it's head--the problem is one of perception. Other than in terms of cash-type emergency funds (my general policy is to have enough cash to get home, however far from there I might be) I consider available credit + assets that can be liquidated reasonably quickly to count as emergency fund money." }, { "docid": "454412", "title": "", "text": "Unless a study accounts for whether the users are following a budget or not, it is irrelevant to those who are trying to take their personal finances seriously. I can certainly believe that those who have no budget will spend more on a credit card than they will on a debit card or with cash. Under the right circumstances spending with cards can actually be a tool to track and reduce spending. If you can see on a monthly and yearly basis where all of your money was spent, you have the information to make decisions about the small expenses that add up as well as the obvious large expenses. Debit cards and credit cards offer the same advantage of giving you an electronic record of all of your transactions, but debit cards do not come with the same fraud protection that credit cards have, so I (and many people like me) prefer to use credit cards for security reasons alone. Cash back and other rewards points bolster the case for credit cards over debit cards. It is very possible to track all of your spending with cash, but it is also more work. The frustration of accounting for bad transcriptions and rechecking every transaction multiple times is worth discussing too (as a reason that people get discouraged and give up on budgeting). My point is simply that credit cards and the electronic records that they generate can greatly simplify the process of tracking your spending. I doubt any study out there accounts for the people who are specifically using those benefits and what effect it has on their spending." }, { "docid": "444679", "title": "", "text": "Based on your situation, I'm not sure it should be an either/or sort of choice. The less debt you have the better, but because the HELOC is secured debt, the interest rate should be rather low. If you're trying to build a cash cushion for emergencies, it may help to figure out a few things first: Once you know how much you want to save and how long it will take, you can figure out how much longer it would take of some of the savings were diverted to debt reduction. If your credit is good enough to get a HELOC in the first place, putting some of your cash-flow toward both goals is an option worth considering." }, { "docid": "398141", "title": "", "text": "An auto title loans are typically utilized by those that wish to obtain a funding with bad credit rating or no credit in any way. An auto-mobile title lending frequently called a vehicle title lending or merely title funding as well as pink slip funding’s. You merely should have a vehicle that is paid off or nearly paid off and also you could make use of the auto title as security to obtain the cash money you require, enabling you to continue driving your vehicle while paying your loan. Get Auto Car Title Loans Pomona CA and nearby cities Provide Car Title Loans, Auto Title Loans, Mobile Home Title Loans, RV/Motor Home Title Loans, Big Rigs Truck Title Loans, Motor Cycle Title Loans, Online Title Loans Near me, Bad Credit Loans, Personal Loans, Quick cash Loans Contact Us: Get Auto Car Title Loans Pomona CA 2869 Providence Way, Pomona, CA 91767 760-523-9659 atlpomona@gmail.com http://getautotitleloans.com/car-and-auto-title-loans-pomona-ca/" }, { "docid": "495351", "title": "", "text": "DCF only works with stable cash flows, a new tech company that does not have stable cash flows or even cash flows that are easy to ACCURATELY forecast is a poor candidate for DCF. Comparables don't really work well in this space as the closest thing they would have is skype and other messager products. The honest and true value of the acquisition is the value captured/saved by facebook from the decrease in competition and as facebook is in the advertising business, this gives them a way to stay in the lives of their users. Facebook could argue, the core rationale for the acquisition was to stay current with their users keeping their core product attractive to their customers (advertisers)." }, { "docid": "421743", "title": "", "text": "\"never carry a balance on a credit card. there is almost always a cheaper way to borrow money. the exception to that rule is when you are offered a 0% promotion on a credit card, but even then watch out for cash advance fees and how payments are applied (typically to promotional balances first). paying interest on daily spending is a bad idea. generally, the only time you should pay interest is on a home loan, car loan or education loan. basically that's because those loans can either allow you to reduce an expense (e.g. apartment rent, taxi fair), or increase your income (by getting a better job). you can try to make an argument about the utility of a dollar, but all sophistry aside you are better off investing than borrowing under normal circumstances. that said, using a credit card (with no annual fee) can build credit for a future car or home loan. the biggest advantage of a credit card is cash back. if you have good credit you can get a credit card that offers at least 1% cash back on every purchase. if you don't have good credit, using a credit card with no annual fee can be a good way to build credit until you can get approved for a 2% card (e.g. citi double cash). additionally, technically, you can get close to 10% cash back by chasing sign up bonuses. however, that requires applying for new cards frequently and keeping track of minimum spend etc. credit cards also protect you from fraud. if someone uses your debit card number, you can be short on cash until your bank fixes it. but if someone uses your credit card number, you can simply dispute the charge when you get the bill. you don't have to worry about how to make rent after an unexpected 2k$ charge. side note: it is a common mis-conception that credit card issuers only make money from cardholder interest and fees. card issuers make a lot of revenue from \"\"interchange fees\"\" paid by merchants every time you use your card. some issuers (e.g. amex) make a majority of their revenue from merchants.\"" }, { "docid": "474006", "title": "", "text": "If you have a long enough time horizon, investing in the stock market while in a bad economy can turn out to be a very smart decision. If you need access to your capital in the short-term, 1-2 years, then it is probably a bad decision. If you have the ability to ride out the next few years, then you may be buying securities at an extremely low valuation. Take AAPL and MSFT for example. These are both technology stocks, which is by far the hottest sector in the economy now, and you can buy both of these companies for less than 13x earnings. Historically, you would have had to pay 20x or higher for high tech growth companies, but today you can buy these stocks at discounted valuations. Now AAPL may have a large market capitalization and a high stock price, but the simple fact is they are growing their earnings very quickly, they have best in class management, and they have $100 billion in cash and $50 billion in annual cash flow generation and you can buy the stock for a historically low multiple." }, { "docid": "68431", "title": "", "text": "Buy a car. Vehicle loans, like mortgages, are installment loans. Credit cards are revolving lines of credit. In the US, your credit score factors in the different types of credit you have. Note that there are several methods for calculating credit scores, including multiple types of FICO scores. You could buy a car and drive for Uber to help cash flow the car payments and/or save for your next purchase. As others have suggested, you should be very careful with debt and ask critical questions before taking it on. Swiping a credit card is more about your behavior and self-control than it is logic and math. And if you ever want to start a business or make multi-million dollar purchases (e.g. real estate), or do a lot of other things, you'll need good credit." }, { "docid": "591843", "title": "", "text": "An auto title loans are typically utilized by those that wish to obtain a funding with bad credit rating or no credit in any way. An auto-mobile title lending frequently called a vehicle title lending or merely title funding as well as pink slip funding’s. You merely should have a vehicle that is paid off or nearly paid off and also you could make use of the auto title as security to obtain the cash money you require, enabling you to continue driving your vehicle while paying your loan. Get Auto Car Title Loans Apple Valley CA and nearby cities Provide Car Title Loans, Auto Title Loans, Mobile Home Title Loans, RV/Motor Home Title Loans, Big Rigs Truck Title Loans, Motor Cycle Title Loans, Online Title Loans Near me, Bad Credit Loans, Personal Loans, Quick cash Loans Contact Us: Get Auto Car Title Loans Apple Valley CA 17868 US Highway 18 # 409, Apple Valley, CA 92307 760-493-2444 autoloans781@gmail.com http://getautotitleloans.com/car-and-auto-title-loans-apple-valley-ca/" }, { "docid": "490356", "title": "", "text": "An auto title loans are typically utilized by those that wish to obtain a funding with bad credit rating or no credit in any way. An auto-mobile title lending frequently called a vehicle title lending or merely title funding as well as pink slip funding’s. You merely should have a vehicle that is paid off or nearly paid off and also you could make use of the auto title as security to obtain the cash money you require, enabling you to continue driving your vehicle while paying your loan. Get Auto Title Loans in Lake Elsinore CA and nearby cities Provide Car Title Loans, Auto Title Loans, Mobile Home Title Loans, RV/Motor Home Title Loans, Big Rigs Truck Title Loans, Motor Cycle Title Loans, Online Title Loans Near me, Bad Credit Loans, Personal Loans, Quick cash Loans Contact Us: Get Auto Title Loans Lake Elsinore CA 45045 Bronze Star Rd. Lake Elsinore, CA 92532 951-816-6285 lakegatl@gmail.com http://getautotitleloans.com/car-and-auto-title-loans-lake-elsinore-ca/" } ]

[ { "docid": "344203", "title": "", "text": "A) The Credit Rating Agencies only look at the month-end totals that are on your credit card, as this is all they ever get from the issuing bank. So a higher usage frequency as described would not make any direct difference to your credit rating. B) The issuing bank will know if you use the credit with the higher frequency, but it probably has little effect on your limit. Typically, after two to three month, they reevaluate your credit limit, and it could go up considerably if you never overdrew (and at this time, it could indirectly positively affect your credit rating). You could consider calling the issuing bank after two month and try to explain the history a bit and get them to increase the limit, but that only makes sense if your credit score has recovered. Your business paperwork could go a long way to convince someone, if you do so well now. C) If your credit rating is still bad, you need to find out why. It should have normalized to a medium range with the bad historic issues dropped." } ]

[ { "docid": "483809", "title": "", "text": "An auto title loans are typically utilized by those that wish to obtain a funding with bad credit rating or no credit in any way. An auto-mobile title lending frequently called a vehicle title lending or merely title funding as well as pink slip funding’s. You merely should have a vehicle that is paid off or nearly paid off and also you could make use of the auto title as security to obtain the cash money you require, enabling you to continue driving your vehicle while paying your loan. Get Auto Car Title Loans North Hollywood CA and nearby cities Provide Car Title Loans, Auto Title Loans, Mobile Home Title Loans, RV/Motor Home Title Loans, Big Rigs Truck Title Loans, Motor Cycle Title Loans, Online Title Loans Near me, Bad Credit Loans, Personal Loans, Quick cash Loans Contact Us: Get Auto Car Title Loans North Hollywood CA 11604 Sylvan St # 7, North Hollywood, CA 91606 424-343-2256 nhautoloans@gmail.com http://getautotitleloans.com/car-and-auto-title-loans-north-hollywood-ca/" }, { "docid": "463575", "title": "", "text": "An auto title loans are typically utilized by those that wish to obtain a funding with bad credit rating or no credit in any way. An auto-mobile title lending frequently called a vehicle title lending or merely title funding as well as pink slip funding’s. You merely should have a vehicle that is paid off or nearly paid off and also you could make use of the auto title as security to obtain the cash money you require, enabling you to continue driving your vehicle while paying your loan. Get Auto Car Title Loans Torrance CA and nearby cities Provide Car Title Loans, Auto Title Loans, Mobile Home Title Loans, RV/Motor Home Title Loans, Big Rigs Truck Title Loans, Motor Cycle Title Loans, Online Title Loans Near me, Bad Credit Loans, Personal Loans, Quick cash Loans Contact Us: Get Auto Car Title Loans Torrance CA 1148 W Clarion Dr, Torrance, CA 90502 Phone : 424-306-1531 Email : atltorrance@gmail.com http://getautotitleloans.com/car-and-auto-title-loans-torrance-ca" }, { "docid": "65137", "title": "", "text": "\"Congratulations, you are in great shape financially at a very young age. Great income, nice equity in a home, and mostly debt free. It seems like you are looking at taking out a loan of 400K, and to do so you will have to put your own home at risk as you do not have the 80K cash for a down payment. Correct? It also looks like after 2.1K per year without regard to taxes, maintenance, bad tenants, or vacancies. As such this will likely be a negative cash flow situation. I would say you should plan on a 912/month cost. Are you okay with that? While your income can probably cover this, no problem, is that your objective to have this property have a negative return for the next 10-15 years or so? For me, this is a no. Way too much risk for a negative cash flow. It is hard to talk to the upside as you did not give any profit predictions and I am unsure of the market. Why would you risk jeopardizing your great financial situation with a \"\"hail mary\"\" attempt to make money? Slow down, you will get there. Save for a few years so there is no need to tap your home's equity to make a down payment. It would really bother me to owe 600K on a 121K salary (75K+20K+26K).\"" }, { "docid": "47188", "title": "", "text": "A lot of people in this thread have provided excellent information from a public company's perspective (with respect to WACC, etc.), but I'll chime in from a private company's perspective (specifically, a tech start-up). Two reasons a private company would prefer to receive financing in the form of debt as opposed to equity: 1) It can't sell equity at a good valuation (or at all). In this case, the company may have no choice but to raise debt financing, using assets as collateral and also diverting future cash flows away from growth initiatives for the sake of servicing the debt. This is obviously a bad situation for the company. Also, because debt is senior to equity, in the case of a bankruptcy, owners would only be able to recover money from the sale of the company / liquidation after debt owners have been paid. 2) The company's owners don't want to further dilute their ownership stakes and are willing to have the company pay interest to avoid it. Sometimes private company owners will take on debt with the purpose of buying out other owners. In some other cases, the company's management thinks equity in their company will increase in value disproportionately to what investors might give it credit for. In these cases, the math is simple: projected valuation growth versus the valuation financing is available at, taking into account the interest paid on the debt." }, { "docid": "398141", "title": "", "text": "An auto title loans are typically utilized by those that wish to obtain a funding with bad credit rating or no credit in any way. An auto-mobile title lending frequently called a vehicle title lending or merely title funding as well as pink slip funding’s. You merely should have a vehicle that is paid off or nearly paid off and also you could make use of the auto title as security to obtain the cash money you require, enabling you to continue driving your vehicle while paying your loan. Get Auto Car Title Loans Pomona CA and nearby cities Provide Car Title Loans, Auto Title Loans, Mobile Home Title Loans, RV/Motor Home Title Loans, Big Rigs Truck Title Loans, Motor Cycle Title Loans, Online Title Loans Near me, Bad Credit Loans, Personal Loans, Quick cash Loans Contact Us: Get Auto Car Title Loans Pomona CA 2869 Providence Way, Pomona, CA 91767 760-523-9659 atlpomona@gmail.com http://getautotitleloans.com/car-and-auto-title-loans-pomona-ca/" }, { "docid": "292051", "title": "", "text": "\"Your first and second paragraphs are two different cases. Moving money between a checking account and a savings account will credit Cash and debit Cash, making a GL transaction unnecessary, unless the amounts in the two bank accounts are tracked as two separate GL accounts. You might have account 1001 (Cash-Checking) and account 1002 (Cash-Savings). In that case, a movement of money between these two accounts should be tracked by a transaction between the GL accounts; credit checking, debit savings. It won't affect your balance sheet, but depending on your definition of liquidity of assets it might affect working capital on your statement of cash flows (if you consider the savings account \"\"illiquid\"\" then money moved to it is a decrease in working capital). Basically, what you are creating with your \"\"store credit\"\" accounts for each client is an \"\"unearned revenue\"\" account. When clients pay you cash for work you haven't done yet, or you refund money for a return as \"\"store credit\"\" instead of cash, the credit is a liability account, balancing an increase in cash, inventory, or an expense (if you're giving credit for free, perhaps due to a mistake on your part, you would debit a \"\"Store Credit Expense\"\" account). This can be split out client-by-client in the GL if you wish, avoiding the need for a holding account. The way you want to do it, you'd have a \"\"Client Holding\"\" account. It must be unique in the GL and to the client, and yes, it is a liability account. To transfer to holding, you simply debit Unearned Revenue and credit Client Holding, logging the transaction as \"\"transfer of client store credit\"\" or similar (moving liability to liability; balance sheet doesn't change). Then, as you sell goods or services to the client, you debit Accounts Receivable and credit Revenue, then to record the payment you credit AR and debit Client Holding (up to its current credit balance, after which the client pays you Cash and you debit that, or the client still owes you). To zero out a remaining balance on the Holding account, debit Client Holding and credit Unearned Revenue. I don't think the Holding account, the way you want to use it, is a good idea. If you want to track each customer's store credit balance with a GL account, then create specialized Unearned Revenue accounts for each client who gets a store credit, named for the client and containing their balance (zero or otherwise). If you don't care about it at the GL level, then pool it in one Unearned Revenue account (have one Store Credit account if you must), and track individual amounts off the books.\"" }, { "docid": "374510", "title": "", "text": "Talk to almost any large cap CFO or read any corporate finance textbook. McKinsey's Valuation is a great one to own: though yes McKinsey consultants can take a good idea and turn it bad by overdoing it to an extreme. Why would universal corporate finance principles not apply to large cap tech? Why is having $XXb of unutilized cash for a company with durable cash flow a good thing for equity investors?" }, { "docid": "129309", "title": "", "text": "\"I was wondering how \"\"future cash flows of the asset\"\" are predicted? Are they also predicted using fundamental and/or technical analysis? There are a many ways to forecast the future cash flows of assets. For example, for companies: It seems like calculating expected/required rate using CAPM does not belong to either fundamental or technical analysis, does it? I would qualify the CAPM as quantitative analysis because it's mathematics and statistics. It's not really fundamental since its does not relies on economical data (except the prices). And as for technical analysis, the term is often used as a synonym for graphical analysis or chartism, but quantitative analysis can also be referred as technical analysis. the present value of future cash flows [...] (called intrinsic price/value, if I am correct?) Yes you are correct. I wonder when deciding whether an asset is over/fair/under-valued, ususally what kind of price is compared to what other kind of price? If it's only to compare with the price, usually, the Net asset value (which is the book value), the Discount Cash flows (the intrinsic value) and the price of comparable companies and the CAPM are used in comparison to current market price of the asset that you are studying. Why is it in the quote to compare the first two kinds of prices, instead of comparing the current real price on the markets to any of the other three kinds? Actually the last line of the quote says that the comparison is done on the observed price which is the market price (the other prices can't really be observed). But, think that the part: an asset is correctly priced when its estimated price is the same as the present value of future cash flows of the asset means that, since the CAPM gives you an expected rate of return, by using this rate to compute the present value of future cash flows of the asset, you should have the same predicted price. I wrote this post explaining some valuation strategies. Maybe you can find some more information by reading it.\"" }, { "docid": "430120", "title": "", "text": "\"I don't know how much finance you know, but a fundamental idea is that something's value is the present value of all its future cash flows. Basically what those cash flows are worth today. So if we can predict the cash flows the equity holders will get in the future (not easy), and determine at what rate to discount the cash flows (not easy), we can value the equity. So a company will have cash flows coming in. But not all go to the equity holders. Some will go to debt holders, if any (interest payments). Some will go to preferred equity holders (dividends), if any. What's left over is what the equity holders will get. If there's no debt, preferred equity or other things like that, then the equity holders get all the cash flows. This doesn't mean the equity holders literally receive the cash - they'll get whatever is given out via dividends. But, they \"\"own\"\" the cash and it may be reinvested in the business to generate more cash in the future.\"" }, { "docid": "255703", "title": "", "text": "\"Which option will save you the most money in the long run? That is tough. Assuming you stay healthy, don't lose your job, don't experience a pay cut or any major emergency that drains your savings, then applying the $6000 to the higher interest loan will save you more money in the long run. However, the difference in savings is a few hundred dollars. Not much really. So, in this case, I'd put the $6k towards the smaller loan. Why? Because then you'd pay it off faster. Once that's done, you open up your cash flow by the minimum monthly payment you would have had on that loan. Assuming they both have the same or similar number of months left, by paying the smaller loan off sooner, you'd open up $X month, where $X is your minimum monthly payment. This could be useful to you if you want to take on some other debt (like buying a house) because it lowers your debt to income ratio. If you put that money towards the higher loan, your DTI won't change until the normal time you would have paid off the smaller loan. Even if you are not looking to purchase anything that requires you to have a lower DTI, paying the smaller loan off sooner increases your cash flow sooner (because your monthly payment on the higher loan doesn't change just because you lowered the balance by $6k). So you'd be more robust to emergencies if your current income doesn't allow for much savings. A major emergency could wipe out all savings from paying down the bigger balance. So, I'd suggest: Edit: TripeHound asked a question, pretty much requesting more details for why I was biased towards paying off the smaller loan first. What follows is my response, with a bit of reorganization: Typically, people asking these questions don't have so much wealth that \"\"which loan to pay first?\"\" is an academic question. They need to make smart financial decisions. While paying the highest interest loan saves the most money in interest - that only occurs under the assumption that nothing bad will ever happen to you until the loans are paid off. In reality, other things happen. Tires blow out, children get sick, you get laid off and so the \"\"best\"\" thing to do is the one that maximizes your long term financial health, even if it comes at the expense of a few $k more interest. Each loan has a minimum monthly payment. Let's assume, barring any windfalls of additional cash, you will just make the minimum payments each month towards a loan. If you pay off the smaller loan first, that increases your available monthly cash flow. At that point, you can put extra towards the other loan. However, if an emergency should come up, or you need to save for a vacation, you can do that, without negatively impacting the second loan, because you'd just drop back to its minimum payment. Putting the money towards the higher balance loan would mean it takes you longer to reach this point as the time to reach payoff on the first loan will not change ($6k only reduces the $25.6k loan to $19.6k) so you never gain the flexibility of additional cash flow until the time you would have paid off the $13.5k originally. I'd rather have a few hundred dollars each month that I can choose to use to make additional loan payments, eat out, pay for car repairs, pay for emergencies than be forced to dip into credit or worse, pay day loans, should an emergency happen.\"" }, { "docid": "490356", "title": "", "text": "An auto title loans are typically utilized by those that wish to obtain a funding with bad credit rating or no credit in any way. An auto-mobile title lending frequently called a vehicle title lending or merely title funding as well as pink slip funding’s. You merely should have a vehicle that is paid off or nearly paid off and also you could make use of the auto title as security to obtain the cash money you require, enabling you to continue driving your vehicle while paying your loan. Get Auto Title Loans in Lake Elsinore CA and nearby cities Provide Car Title Loans, Auto Title Loans, Mobile Home Title Loans, RV/Motor Home Title Loans, Big Rigs Truck Title Loans, Motor Cycle Title Loans, Online Title Loans Near me, Bad Credit Loans, Personal Loans, Quick cash Loans Contact Us: Get Auto Title Loans Lake Elsinore CA 45045 Bronze Star Rd. Lake Elsinore, CA 92532 951-816-6285 lakegatl@gmail.com http://getautotitleloans.com/car-and-auto-title-loans-lake-elsinore-ca/" }, { "docid": "466712", "title": "", "text": "An auto title loans are typically utilized by those that wish to obtain a funding with bad credit rating or no credit in any way. An auto-mobile title lending frequently called a vehicle title lending or merely title funding as well as pink slip funding’s. You merely should have a vehicle that is paid off or nearly paid off and also you could make use of the auto title as security to obtain the cash money you require, enabling you to continue driving your vehicle while paying your loan. Get Auto Title Loans in San Jacinto CA and nearby cities Provide Car Title Loans, Auto Title Loans, Mobile Home Title Loans, RV/Motor Home Title Loans, Big Rigs Truck Title Loans, Motor Cycle Title Loans, Online Title Loans Near me, Bad Credit Loans, Personal Loans, Quick cash Loans Contact Us: Get Auto Title Loans San Jacinto CA 22415 Alessandro Ave N, San Jacinto, CA 92583 (951) 474-0011 sjtitleloans3@gmail.com http://getautotitleloans.com/car-and-auto-title-loans-san-jacinto-ca/" }, { "docid": "70806", "title": "", "text": "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." }, { "docid": "134607", "title": "", "text": "Generally, the answer is as follows: If there is a legal obligation to pay cash flow (including the possibility of court determined restructuring), then it is debt. If the asset owner is not guaranteed any cash flow, but instead owns the *residual* cash flow from the operations of the business (I.e. the cash flow left-over), then it is equity." }, { "docid": "394702", "title": "", "text": "Duration is the weighted average time until all the cash flows of a fixed income security are received. There are a few different measures of duration but generally, duration measures the sensitivity of the price of a fixed income asset to a change in the yield of that asset. If you're familiar with calculus, duration is the first derivative of price with respect to yield. Convexity is the sensitivity of the duration of bond with respect to changes in yield, or the second derivative. The first chart [here](http://www.investopedia.com/terms/c/convexity.asp#axzz1x4F075zM) will help. Convexity measures the curvature of the blue or pink line, the steeper the curve the higher the convexity. The more cash flows there are in a bond (higher or more frequent coupon) the lower the duration, because you are receiving more of your investment earlier as opposed to later (think time value of money). If a bond has one cash flow, meaning you get paid back only at maturity (zero coupon) then any changes in interest rates will have a greater impact on the price of the bond since you are discounting only one cash flow in the future. Think of buying a bond with no coupons and a 5% yield that matures in 5 years, or a bond with similar yield and maturity buy pays a coupon. If interest rates rise, the zero coupon bond's price will fall more than the bond with coupons. Why? Because if you own the zero coupon bond you have to wait 5 years to get your money back and reinvest it at the higher rate, while if you have the bond that pays coupons you can reinvest those incremental cash flows at the higher rate, even though at purchase they had the same yield and maturity. These are both tough concepts that took me a fair amount of time to really understand. If you're investing in bonds or any fixed income asset, these topics are crucial to understanding interest rate risk." }, { "docid": "86716", "title": "", "text": "\"Others have commented on the various studies. If, as JoeTaxpayer says, this one particular study he mentions does not really exist, there are plenty of others. (And in that case: Did someone blatantly lie to prove a bogus point? Or did someone just get the name of the organization that did the study wrong, like it was really somebody called \"\"B&D\"\", they read it as \"\"D&B\"\" because they'd heard of Dun & Bradstreet but not of whoever B&D is. Of course if they got the organization wrong maybe they got important details of the study wrong. Whatever.) But let me add one logical point that I think is irrefutable: If you always buy with cash, there is no way that you can spend more than you have. When you run out of cash, you have no choice but to stop spending. But when you buy with a credit card, you can easily spend more than you have money in the bank to pay. Even if it is true that most credit card users are responsible, there will always be some who are not, and credit cards make it easy to get in trouble. I speak from experience. I once learned that my wife had run up $20,000 in credit card debt without my knowledge. When she divorced me, I got stuck with the credit card debt. To this day I have no idea what she spent the money on. And I've known several people over the years who have gone bankrupt with credit card debt. Even if you're responsible, it's easy to lose track with credit cards. If you use cash, when you take out your wallet to buy something you can quickly see whether there's a lot of money left or not so much. With credit, you can forget that you made the big purchase. More likely, you can fail to add up the modest purchases. It's easy to say, \"\"Oh, that's just $100, I can cover that.\"\" But then there's $100 here and $100 there and it can add up. (Or depending on your income level, maybe it's $10 here and $10 there and it's out of hand, or maybe it's $10,000.) It's easier today when you can go on-line and check the balance on your credit card. But even at that, well just this past month when I got one bill I was surprised at how big it was. I went through the items and they were all legitimate, they just ... added up. Don't cry for me, I could afford it. But I had failed to pay attention to what I was spending and I let things get a little out of hand. I'm a pretty responsible person and I don't do that often. I can easily imagine someone paying less attention and getting into serious trouble.\"" }, { "docid": "81941", "title": "", "text": "\"From your question, I believe that you are looking for what these mean in accounting terms and not the difference between a debit and a credit card. I'll deal with purchase and sale first as this is easier. They are the same thing seen from different points of view. If I sell something to you then I have made a sale and you have made a purchase. Every sale is a purchase and every purchase is a sale. Debits and Credits are accounting terms and refer to double column accounting (the most common accounting system used). The way a set of accounts works is, accounts are set up under the following broad headings: The first 3 appear on the Balance Sheet, so called because the accounts balance (Assets = Liabilities + Equity). This is always a \"\"point-in-time\"\" snapshot of the accounts (1 June 2015). That last 3 appear on the Profit and Loss sheet, Profit (or loss) = Income - Cost of Goods Sold - Expenses. This is always an interval measure (1 July 2014 to 30 June 2015). Changes in these accounts flow through to the Equity part of the Balance Sheet. When you enter a transaction the Debits always equal the Credits, they are simply applied to different accounts. Debits increase Assets, Cost of Goods Sold and Expenses and decrease Liabilities, Equity and Income. Credits do the reverse For your examples: 1. a customer buy something from me, what is the debit and credit? I will assume they pay $1,000 and the thing cost you $500 Your cash (asset) goes up by $1,000 (Debit), your inventory (asset) goes down by $500 (Credit), your Sales revenue (income) goes up by $500 (credit). This gives you a profit of $500. 2. a customer buy something of worth 1000 but gives me 500 what is debit and credit Your cash (asset) goes up by $500 (Debit), your debtors (asset) goes up by $500, your inventory (asset) goes down by $500 (Credit), your Sales revenue (income) goes up by $500 (credit). This also gives you a profit of $500. 3. if I buy a product from supplier worth 1000 and pay equally what is credit and debit I assume you mean pay cash: Your cash (asset) goes down by $1000 (Credit), your inventory (asset) goes up by $1000 (Debit). There is no profit or loss here - you have swapped one asset (cash) for another (inventory). 4. if I buy a product from supplier worth 1000 and don't pay what is credit and debit Your creditors (liability) goes up by $1000 (Credit), your inventory (asset) goes up by $1000 (Debit). There is no profit or loss here - you have gained an asset (inventory) but incurred a liability (creditors). The reason for confusion is that most people only see Debits and Credits in one place - their bank statement. Your bank statement is a journal of one of the banks liability accounts - its their liability because they owe the money to you (even loan accounts adopt this convention). Credits happen when you give money to the bank, they credit your account (increase a liability) and debit their cash balance (increase an asset). Debits are when they give money to you, they debit your account (decrease a liability) and credit their cash balance (decrease an asset) . If at the end of the period, you have a credit balance then they owe money to you, a debit balance means you owe money to them. If you were keeping a book of accounts then your record of the transactions would be a mirror image of the bank's because you would be looking at it from your point of view.\"" }, { "docid": "389750", "title": "", "text": "I'm a bond trader and we stayed away from this Tesla deal. Tesla is cash flow negative which is a terrible sign for a bond investor and is still relatively young and changing constantly. When assessing fixed income investments you want steady predictable cash flows and positive credit metrics. Tesla has none of that despite the run up in the stock. Even after taking all of these things into consideration the yields aren't even very high reflecting a compression in the amount of spread to treasuries investors are asking for taking on the risk in this kind of name. It speaks to an overvalued high yield market in general. Ford on the other hand is a mature business with much more favorable credit metrics (debt interest coverage, consistent management, a credit history of borrowing and repaying their loans, etc.). All of these things are reflected in the yield that investors require when buying bonds." }, { "docid": "71036", "title": "", "text": "\"(Ignoring any ethical considerations of defaulting on a mortgage obligation) If your credit score fell, future costs of borrowing would be greater, if you could borrow money at all. The true financial cost of these penalties would depend on your own intentions and circumstances. The value of a credit score cannot be quantified in any absolute sense because of these circumstances which will vary from person to person. Suppose a decision would result in your score falling from 700 to 600. As a result, a future car loan would cost something like 2% more in interest per year. Let's also suppose you would not be able to find a bank to give you money to buy a new home. The difficulties caused by this situation would depend on the person. Some people have no intention of taking out another mortgage or buying another car, and to them, a lowered credit score might make no difference. To others, it would be desirable to avoid these penalties. The value of credit score would be equal to how much you would be willing to pay in the present to avoid these future penalties. If you intend to borrow money in the near future, and somehow know how much more interest you will pay as a result of your lower score, then you could approximate the value of the credit drop by summing all of the additional interest costs discounted into the present. Something a little like this: Year's Additional Cost in Interest / (1 + Your Personal Opportunity Cost of Funds) ^ (Years in the future this extra interest will be paid). See time value of money explanation: Can you explain \"\"time value of money\"\" and \"\"compound interest\"\" and provide examples of each? It could also be the case that you miss out on valuable financial opportunities as a result which could be added to the present value of the credit score drop. For example, if the drop made you totally unable to purchase an investment property that would net you $10,000 in cash flows /year (which would yield cash flows immediately). The value of that investment would have been $10,000 / (1 + Your Personal Opportunity Cost of Funds). Since you would not be able to make that investment (in this example) as a result of the decreased score, the present value of the investment would be an opportunity cost of the lower score. There are other hard-to-quantify costs of low credit to consider as well, ranging from housing to employment to bragging rights. Hopefully this has helped :)\"" } ]

[ { "docid": "498751", "title": "", "text": "\"Sign up with credit karma. It will give you two scores for free and will show you credit cards you have a good chance in being approved for. Plus it will evaluate your score showing you the 6 items that effect your score and give you steps to improve them or tell you how long you have to wait until they roll off. Plus I would look at a credit union and see if they have any \"\"fresh start\"\" programs. You should be well on your way. the thing that is probably hurting your credit is your utilization. If you can just use 10% of your available credit.\"" } ]

[ { "docid": "569240", "title": "", "text": "Keep in mind that you NEED to have a cash reserve. Blindly applying all stray cash to debt reduction is a bad idea. Your lenders do not care about your balance. All they care about is your NEXT payment. It is therefore imperative that you have a cash reserve that can carry these payments for several months. Having zero cash reserves puts you at high risk for such simple things as the payroll clerk at work missing the monthly deposit (Rare, but it happens.) I've also been in situations where a major client had a cash flow issue and delayed payment, and our company had to borrow to meet payroll that month. Fortunately, we were in good standing with the bank and had low debt, but it could have been catastrophic for any employees living paycheque to paycheque." }, { "docid": "300461", "title": "", "text": "\"First, let me answer the question the best way I can: I don't know if there are any studies other than those that have already been mentioned. Now, let's talk about something more interesting: You don't need to base your behavior on any study, even if it is scientific. Let's pretend, for example, that we could find a scientifically valid study that shows that people spend 25% more when using a credit card than they do when spending cash. This does not mean that if you use a credit card, you will spend 25% more. All it means is that the average person spending with a credit card spends more than the average person paying cash. But there are outliers. There are plenty of people who are being frugal while using a credit card, and there are others who spend too much cash. Everyone's situation is different. The idea that you will automatically spend less by using cash would not be proven by such a study. When hearing any type of advice like this, you need to look at your own situation and see if it applies to your own life. And that is what people are doing with the anecdotal comments. Some say, \"\"Yep, I spend too much if I use a card.\"\" Others say, \"\"Actually, I find that when I have cash in my wallet, I spend it on junk.\"\" And both are correct. It doesn't matter what the study says the average person does, because you are not average. Now, let's say that you are a financial counselor who helps people work through disastrous financial messes. Your client has $20,000 in credit card debt and is having trouble paying all his bills. He doesn't have a budget and never uses cash. Probably the best advice for this guy is to stop using his card and start paying cash. It doesn't take a scientific study to see that this guy needs to change his behavior. For what it is worth, I keep a strict budget, keeping track of my spending on the computer. The vast majority of my spending is electronic. I find tracking my cash spending difficult, and sometimes I find that when I have cash in my wallet, it seems to disappear without a trace. :)\"" }, { "docid": "479203", "title": "", "text": "You have to check your contract to be sure what is it you're paying for. Typically, you get some of the following features which can be unavailable to you in banks which don't charge a monthly fee: Arguably, these expenses could be paid by the interest rates your money earn to the bank. Notice how banks which don't charge a fee usually require you to have a minimum amount of cash in your account or a minimum monthly cash flow. When you pay for your bank's services in cash, there's no such restrictions. I'm not sure if typical banks in the UK would take away your credit card if you lose your job and don't qualify for that kind of card any more, but I do know banks who would. The choice is yours, and while it's indeed sad that you don't have this kind of choice in Canada, it's also not like you're paying solely for the privilege of letting them invest your money behind your back." }, { "docid": "255703", "title": "", "text": "\"Which option will save you the most money in the long run? That is tough. Assuming you stay healthy, don't lose your job, don't experience a pay cut or any major emergency that drains your savings, then applying the $6000 to the higher interest loan will save you more money in the long run. However, the difference in savings is a few hundred dollars. Not much really. So, in this case, I'd put the $6k towards the smaller loan. Why? Because then you'd pay it off faster. Once that's done, you open up your cash flow by the minimum monthly payment you would have had on that loan. Assuming they both have the same or similar number of months left, by paying the smaller loan off sooner, you'd open up $X month, where $X is your minimum monthly payment. This could be useful to you if you want to take on some other debt (like buying a house) because it lowers your debt to income ratio. If you put that money towards the higher loan, your DTI won't change until the normal time you would have paid off the smaller loan. Even if you are not looking to purchase anything that requires you to have a lower DTI, paying the smaller loan off sooner increases your cash flow sooner (because your monthly payment on the higher loan doesn't change just because you lowered the balance by $6k). So you'd be more robust to emergencies if your current income doesn't allow for much savings. A major emergency could wipe out all savings from paying down the bigger balance. So, I'd suggest: Edit: TripeHound asked a question, pretty much requesting more details for why I was biased towards paying off the smaller loan first. What follows is my response, with a bit of reorganization: Typically, people asking these questions don't have so much wealth that \"\"which loan to pay first?\"\" is an academic question. They need to make smart financial decisions. While paying the highest interest loan saves the most money in interest - that only occurs under the assumption that nothing bad will ever happen to you until the loans are paid off. In reality, other things happen. Tires blow out, children get sick, you get laid off and so the \"\"best\"\" thing to do is the one that maximizes your long term financial health, even if it comes at the expense of a few $k more interest. Each loan has a minimum monthly payment. Let's assume, barring any windfalls of additional cash, you will just make the minimum payments each month towards a loan. If you pay off the smaller loan first, that increases your available monthly cash flow. At that point, you can put extra towards the other loan. However, if an emergency should come up, or you need to save for a vacation, you can do that, without negatively impacting the second loan, because you'd just drop back to its minimum payment. Putting the money towards the higher balance loan would mean it takes you longer to reach this point as the time to reach payoff on the first loan will not change ($6k only reduces the $25.6k loan to $19.6k) so you never gain the flexibility of additional cash flow until the time you would have paid off the $13.5k originally. I'd rather have a few hundred dollars each month that I can choose to use to make additional loan payments, eat out, pay for car repairs, pay for emergencies than be forced to dip into credit or worse, pay day loans, should an emergency happen.\"" }, { "docid": "453074", "title": "", "text": "\"This does not directly address the question, but how the Bank views your behaviour is not the same as a credit reporting bureau. If you do not \"\"go deep\"\" on your card at all, you may be deemed not to be exercising the facility, indeed they may ask you to reduce your credit limit. This is not the same as \"\"missing a payment\"\". At the same time, do not just make the minimum payment. Ideally you should clear it within 3 months. Think of it as a very short term line of credit. Not clearing the balance within three months (or turning it over) demonstrates a cash flow problem, as does clearing it from another card. Some banks call this \"\"kite flying\"\" after similar behaviour in older days with cheque accounts. If you use the credit and show you can pay it off, you should never need to ask for a credit increase, it will be offered. The Bureau will be informed of these offers. Also, depending upon how much the bank trusts you, the Bureau may see a \"\"monthly\"\" periodic credit review, which is good if you have no delinquencies. Amex does this as a rule.\"" }, { "docid": "129309", "title": "", "text": "\"I was wondering how \"\"future cash flows of the asset\"\" are predicted? Are they also predicted using fundamental and/or technical analysis? There are a many ways to forecast the future cash flows of assets. For example, for companies: It seems like calculating expected/required rate using CAPM does not belong to either fundamental or technical analysis, does it? I would qualify the CAPM as quantitative analysis because it's mathematics and statistics. It's not really fundamental since its does not relies on economical data (except the prices). And as for technical analysis, the term is often used as a synonym for graphical analysis or chartism, but quantitative analysis can also be referred as technical analysis. the present value of future cash flows [...] (called intrinsic price/value, if I am correct?) Yes you are correct. I wonder when deciding whether an asset is over/fair/under-valued, ususally what kind of price is compared to what other kind of price? If it's only to compare with the price, usually, the Net asset value (which is the book value), the Discount Cash flows (the intrinsic value) and the price of comparable companies and the CAPM are used in comparison to current market price of the asset that you are studying. Why is it in the quote to compare the first two kinds of prices, instead of comparing the current real price on the markets to any of the other three kinds? Actually the last line of the quote says that the comparison is done on the observed price which is the market price (the other prices can't really be observed). But, think that the part: an asset is correctly priced when its estimated price is the same as the present value of future cash flows of the asset means that, since the CAPM gives you an expected rate of return, by using this rate to compute the present value of future cash flows of the asset, you should have the same predicted price. I wrote this post explaining some valuation strategies. Maybe you can find some more information by reading it.\"" }, { "docid": "71036", "title": "", "text": "\"(Ignoring any ethical considerations of defaulting on a mortgage obligation) If your credit score fell, future costs of borrowing would be greater, if you could borrow money at all. The true financial cost of these penalties would depend on your own intentions and circumstances. The value of a credit score cannot be quantified in any absolute sense because of these circumstances which will vary from person to person. Suppose a decision would result in your score falling from 700 to 600. As a result, a future car loan would cost something like 2% more in interest per year. Let's also suppose you would not be able to find a bank to give you money to buy a new home. The difficulties caused by this situation would depend on the person. Some people have no intention of taking out another mortgage or buying another car, and to them, a lowered credit score might make no difference. To others, it would be desirable to avoid these penalties. The value of credit score would be equal to how much you would be willing to pay in the present to avoid these future penalties. If you intend to borrow money in the near future, and somehow know how much more interest you will pay as a result of your lower score, then you could approximate the value of the credit drop by summing all of the additional interest costs discounted into the present. Something a little like this: Year's Additional Cost in Interest / (1 + Your Personal Opportunity Cost of Funds) ^ (Years in the future this extra interest will be paid). See time value of money explanation: Can you explain \"\"time value of money\"\" and \"\"compound interest\"\" and provide examples of each? It could also be the case that you miss out on valuable financial opportunities as a result which could be added to the present value of the credit score drop. For example, if the drop made you totally unable to purchase an investment property that would net you $10,000 in cash flows /year (which would yield cash flows immediately). The value of that investment would have been $10,000 / (1 + Your Personal Opportunity Cost of Funds). Since you would not be able to make that investment (in this example) as a result of the decreased score, the present value of the investment would be an opportunity cost of the lower score. There are other hard-to-quantify costs of low credit to consider as well, ranging from housing to employment to bragging rights. Hopefully this has helped :)\"" }, { "docid": "95120", "title": "", "text": "\"Let's assess the situation first, then look at an option: This leaves you with about $1,017/mo in cash flow, provided you spend money on nothing else (entertainment, oil changes, general merchandise, gifts, etc.) So I'd say take $200/mo off that as \"\"backup\"\" money. Now we're at $817/mo. Question: What have you been doing with this extra $800/mo? If you put $600/mo of that extra towards the 10% loan, it would be paid off in 12 months and you would only pay $508 in interest. If you have been saving it (like all the wisest people say you should), then you should have plenty enough to either pay for a new transmission or buy a \"\"good enough\"\" car outright. 10% interest rate on a vehicle purchase is not very good. Not sure why you have a personal loan to handle this rather than an auto loan, but I'll guess you have a low credit score or not much credit history. Cost of a new transmission is usually $1,700 - $3,500. Not sure what vehicle we're talking about, so let's make it $3,000 to be conservative. At your current interest rate, you'll have paid another $1,450 in interest over the next 33 months just trying to pay off your underwater car. If you take your old car to a dealership and trade it in towards a \"\"new to you\"\" car, you might be able to roll your existing loan into a new loan. Now, I'm not sure when you say personal loan if you mean an official loan from a bank or a personal loan from a friend/family-member, so that could make a difference. I'm also not sure if a dealership will be willing to recognize a personal loan in the transaction as I'd wager there's no lien against the vehicle for them to worry about. But, if you can manage it, you may be able to get a lower overall interest rate. If you can't roll it into a new financing plan, then you need to assess if you can afford a new loan (provided you even get approved) on top of your existing finances. One big issue that will affect interest rates and approvals will be your down payment amount. The higher it is, the better interest rate you'll receive. Ultimately, you're in a not-so-great position, but if your monthly budget is as you describe, then you'll be fine after a few more years. The perils of buying a used car is that you never know what might happen. What if you don't repair your existing car, buy another car, and it breaks down in a year? It's all a bit of a gamble. Don't let your emotions get in the way of making a decision. You might be frustrated with your current vehicle, but if $3,000 of repairs makes it last 3 more years, (by which time your current loan should be paid off), then you'll be in a much better spot to finance a newer vehicle. Of course it would be much better to save up cash over that time and buy something outright, but that's not always feasible. Would you rather fix up your current car and keep working to pay down the debt, or, would you rather be rid of the car and put $3,000 down on a \"\"new to you\"\" car and take on an additional monthly debt? There's no single right answer for you. First and foremost you need to assess your monthly cash flow and properly allocate the extra funds. Get out of debt as soon as reasonably possible.\"" }, { "docid": "77088", "title": "", "text": "Well, to get money, you need to leverage your assets. So your options basically are: - Asset: Cash. Well, I figure if you had, you wouldn't have asked how to get more of it, but its always worth mentioning. Don't forget about cash that can be in tricky places to tap, like 401ks, IRAs, investment accounts, etc. There is usually some way to get at the cash, but it may not be worth it and you could end up sacrificing long term financial stability if you do. - Asset: Job Skills and Initiative. Get a job and and earn the cash. $2k is not a ton, and if you live frugally you should be able to save it. There are tons of websites dedicated to living frugally and earning extra cash on the side. My personal favorite is r/beermoney. - Asset: Good Credit. Borrow the money from a traditional bank. Signature loans go up to $35k at most banks, just ask what it would take to qualify. You could also get a credit card for that amount, and use it to start up the business. - Asset. Bad Credit. If you've got bad credit, you can still take out a loan from a place like Prosper or Lending Club or Sofi (these places are handy if you have good credit, too). Your rates will be much higher, but they will still lend to you. - Asset: Property. If you own stuff, you can sell it and get cash. Clean out your attic (or ask relatives if you can have the stuff in theirs!) and sell it. If you own fancy stuff, you can borrow against it (home, car, boat, etc.). - Asset: Your Charm and Winning Smile. If you have a good, solid business plan (written down and professional looking), ask around and see if you can find an investor. It could be friends or family, but it could also be someone who is looking to invest. Be professional, and be sure to draw up the appropriate business docs if you do a partnership or take a private loan. - Asset: Your Government. If you live in the US, there are federal programs that offer Small Business Loans. Check out sba.gov for more info. You will need a business plan and will have to meet the criteria of the loan or grant. Not sure if your Ecommerce business will meet the criteria, as the intent of these types of programs are to spur the economy by allowing small business owners to hire workers. But its worth checking out." }, { "docid": "428150", "title": "", "text": "\"Think of yourself as a business with two accounts, \"\"cash\"\" and \"\"net worth\"\". Your goal is to make money. \"\"Cash\"\" is what you need to meet your obligations. You need to pay your rent/mortgage, utilities, buy food, pay for transportation, service debt, etc. If you make $100 a month, and your obligations are $90, you're clearing $10. \"\"Net worth\"\" are assets that you own, including cash, retirement savings, investments, or even tangible goods like real property or items you collect with value. The \"\"pay off debt\"\" versus \"\"save money\"\" debate, in my opinion, is driven by two things, in this order: If you start saving too soon, you'll have a hard time getting by when your car suddenly needs a $500 repair or you need a new furnace. You need to improve your cash flow so that you actually have discretionary income. Pay off those credit cards, then start directing those old payments into savings and investments.\"" }, { "docid": "70806", "title": "", "text": "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." }, { "docid": "68431", "title": "", "text": "Buy a car. Vehicle loans, like mortgages, are installment loans. Credit cards are revolving lines of credit. In the US, your credit score factors in the different types of credit you have. Note that there are several methods for calculating credit scores, including multiple types of FICO scores. You could buy a car and drive for Uber to help cash flow the car payments and/or save for your next purchase. As others have suggested, you should be very careful with debt and ask critical questions before taking it on. Swiping a credit card is more about your behavior and self-control than it is logic and math. And if you ever want to start a business or make multi-million dollar purchases (e.g. real estate), or do a lot of other things, you'll need good credit." }, { "docid": "148270", "title": "", "text": "The Art of Short Selling by Kathryn Stanley providers for many case studies about what kind of opportunities to look for from a fundamental analysis perspective. Typically things you can look for are financing terms that are not very favorable (expensive interest payments) as well as other constrictions on cash flow, arbitrary decisions by management (poor management), and dilution that doesn't make sense (usually another product of poor management). From a quantitative analysis perspective, you can gain insight by looking at the credit default swap rate history, if the company is listed in that market. The things that affect a CDS spread are different than what immediately affects share prices. Some market participants trade DOOMs over Credit Default Swaps, when they are betting on a company's insolvency. But looking at large trades in the options market isn't indicative of anything on its own, but you can use that information to help confirm your opinion. You can certainly jump on a trend using bad headlines, but typically by the time it is headline news, the majority of the downward move in the share price has already happened, or the stock opened lower because the news came outside of market hours. You have to factor in the short interest of the company, if the short interest is high then it will be very easy to squeeze the shorts resulting in a rally of share prices, the opposite of what you want. A short squeeze doesn't change the fundamental or quantitative reasons you wanted to short. The technical analysis should only be used to help you decide your entry and exit price ranges amongst an otherwise random walk. The technical rules you created sound like something a very basic program or stock screener might be able to follow, but it doesn't tell you anything, you will have to do research in the company's public filings yourself." }, { "docid": "20830", "title": "", "text": "Moody's came out with an analysis today saying the requirement could be slightly good for for-profit hospitals (Bad-debt charges will decline. The expansion of healthcare coverage under the law will lessen for-profit hospital operators’ exposure to bad debts, which in turn will improve margins and cash flow. However, we expect that the growth rate of Medicare reimbursements will also slow down, offsetting the benefit of lower bad-debt expense and making the overall credit impact of the ruling neutral to slightly positive), negative for pharmaceutical cos. (Pharmaceutical companies will continue to pay for the full adoption of the Affordable Care Act in the form of higher rebates to the government for Medicaid drug costs, discounts to seniors covered under Medicare Part D drug plans and a new industry fee) and slightly negative for medical device firms (Beginning Jan. 1, 2013, US medical-device product sales will be subject to a 2.3% excise tax; the excise tax will be tax-deductible, resulting in an estimated effective tax rate of 1.5% on US device revenues)." }, { "docid": "444679", "title": "", "text": "Based on your situation, I'm not sure it should be an either/or sort of choice. The less debt you have the better, but because the HELOC is secured debt, the interest rate should be rather low. If you're trying to build a cash cushion for emergencies, it may help to figure out a few things first: Once you know how much you want to save and how long it will take, you can figure out how much longer it would take of some of the savings were diverted to debt reduction. If your credit is good enough to get a HELOC in the first place, putting some of your cash-flow toward both goals is an option worth considering." }, { "docid": "393838", "title": "", "text": "\"tl;dr It's a difference between cash and cash equivalents and net cash and cash equivalents. Download the 2016 annual report from http://www.diageo.com/en-us/investor/Pages/financialreports.aspx On page 99 is the Consolidated Statement of Cash Flows at the bottom is a section \"\"Net cash and cash equivalents consist of:\"\" Net cash and cash equivalents consist of: 2016-06-30 2015-06-30 Cash and cash equivalents 1,089 472 Bank overdrafts (280) (90) 809 382 The difference between net cash of 809 million and 382 million is 427 million, matching the \"\"Change in Cash and Cash Equivalents\"\" from Yahoo. I do not know that bank overdrafts mean in this situation, but appears to cause cash to show up on balance sheet without being reflected in the net cash portions of the cash flow statement. And the numbers seem like balances, not year of year changes like the rest of the statement of cash flows. 2015 net CCE 382 2016 cash flow + 427 ---- 2016 net CCE 809 Cash from overdrafts + 280 ---- 2015 balance sheet cash 1,089\"" }, { "docid": "314840", "title": "", "text": "Depends on how you go about it. I'm in my mid 30s with 3 houses that are about $450,000 in the black. By the time I'm 50 they will be paid off (mostly by other people's rent) and I project I'll be sitting on about $1.7mil in assets with $40,000 annually in cash flow. Not a bad position to be in really." }, { "docid": "264565", "title": "", "text": "\"The terms debit and credit come from double-entry book-keeping. In this system, every transaction is applied against two accounts: it debits one and credits the other by equal amounts. (Or more technically, it affects two or more accounts, and the total of the credits equals the total of the debits.) Whether a debit or a credit adds or subtracts from the balance depends on the type of account. The types of accounts were defined so that it is always possible to have these matching debits and credits. Assets, like cash or property that you own, are \"\"debit accounts\"\", that is, a debit is an increase in the balance of the account. Liabilities, like money you owe, are \"\"credit accounts\"\", that is, a credit is an increase. To get into all the details would require giving a tutorial on double-entry book-keeping, which I think is beyond the scope of a forum post. By a quick Bing search I find this one: http://simplestudies.com/double-entry-accounting-system.html. I haven't gone through it so I can't say if it's a particularly good tutorial. There are plenty of others on the Web and in bookstores. Note that the terminology can be backwards when someone you're doing business with is describing the account, because their viewpoint may be the opposite of yours. For example, to me, my credit card is a liability: I owe the bank money. So when I post a charge, that's a credit, and when I pay it off, that's a debit. But to the bank, my account is an asset: the customer (me) owes them money. So to the bank, a charge is a debit and a payment is a credit.\"" }, { "docid": "41875", "title": "", "text": "Even assuming you were reading the balance sheet correctly it means nothing. What banks mostly care about is cash flow. Do they have enough extra money to make the payments on whatever they borrow? I have never had a credit card company ask me about assets--they don't care. They care about income with which to pay the credit card bill. Have a solid record of paying your bills and enough income to pay back what you are trying to borrow and you'll have an excellent credit rating no matter what your net worth. Whether you are one person or a megacorporation makes no difference." } ]

[ { "docid": "372909", "title": "", "text": "\"What exactly would the financial institution need to see to make them comfortable with these regulations The LLC Operating Agreement. The OA should specify the member's allocation of equity, assets, income and loss, and of course - managerial powers and signature authorities. In your case - it should say that the LLC is single-member entity and the single member has all the managerial powers and authorities - what is called \"\"member-managed\"\". Every LLC is required to have an operating agreement, although you don't necessarily have to file it with the State or record it. If you don't have your own OA, default rules will apply, depending on your State law. However, the bank will probably not take you as a customer without an explicit OA.\"" } ]

[ { "docid": "325677", "title": "", "text": "Mods decided to leave it here, so I'll summarize some of my answers on this question given @OnStartups. You can find them here, here and here. Your options are : You and your business are one and the same. You report your income and expenses for taxes on a Schedule C (for each sole proprietorship a separate schedule), and taxed at your personal rates. There's no liability protection or legal separation between you and your business, and you don't need to have any bureaucratic overhead of managing an entity. You can use your own bank account and have checks written to you directly. You can register for DBA if you want a store-front name to be different from your own name. Depending on State, can cost a lot or close to nothing. Provides certain liability protection (depending on State, single-member and multi-member LLC's may have different liability protections). You can chose to be taxed as either a sole-proprietor (partnership, for multi-member) or as a corporation. You have to separate your activities, have a separate bank account, and some minimal bureaucracy is required to maintain the entity. Benefits include the limited liability, relatively easy to add partners to the business or sell it as a whole, and provides for separation of your personal and business finances. Drawbacks - bureaucracy, additional fees and taxes (especially in CA), and separation of assets. Corporation is an entirely separate entity from yourself, files its own tax returns, has separate bank accounts and is run by the board of directors (which in some cases may require more than 1 person to be on the board, check your state laws on that). As an officer of the corporation you'll have to pay salary to yourself. S-Corp has the benefit of pass-through taxation, C-Corp doesn't and has double taxation. Benefits - liability protection, can sell shares to investors, legally distinct entity. Disadvantages - have to deal with payroll, additional accounting, significant bureaucracy and additional layer of taxes for C-Corp (double taxation). Selling corporate assets is always a taxable event (although in your case it is probably not of an importance). You have to talk to a lawyer in your state about the options re the liability protection and how to form the entities. The formation process is usually simple and straight forward, but the LLC/Partnership operating agreements and Corporation charters/bylaws must be drafted by a lawyer if you're not going to be the sole owner (even if you are - better get a lawyer draft something for you, its just easier to fix and change things when you're the sole owner). You have to talk to a CPA/EA in your state about the taxes and how the choice of entity affects them." }, { "docid": "565271", "title": "", "text": "No. I believe members of congress are passing bills that enrich the rich in return for favors. The type of favors change to avoid being seen as bribery, but it is still bribery. But not every member of Congress is corrupt. Some members are just selfish and irrational, some are clean. We haven’t cracked down on this crap because they’ve done a great job dividing us against each other. They have escalated fracturing to ensure lack of cooperation for those who wish to improve the nation over self-interests." }, { "docid": "429427", "title": "", "text": "Mr. Raphael Lilla is a business enthusiast with more than 20 years of experience working in the Swiss and International financial markets. An honoured member of the International Society of Business Leaders, Raphael has a Degree in Master in Law. Currently, he is operating in the bullion market as Executive Director of SBC Group AG, Switzerland, and as Managing Director of Swiss Bullion Company International LLC, Dubai." }, { "docid": "206431", "title": "", "text": "I know an answer has been accepted, but you need an emergency fund, ideally enough to cover at least 3 months of after-tax basic living expenses. As a free-lancer, 6 months would be even better. This isn't a fun way to tie up your money, but it is a prudent way. What if you lose your job, or decide you want to change your line of work? What if you're told a close family member has only months to live and you want to take significant time off unpaid? What if your car breaks down and you need a new one? What if your freelance business hits a dry patch for a few months? What if you want to move but can't sell your next house quickly? I've known people who had these types of situations come up unexpectedly. Some were financially prepared and had the freedom to make the choices they wanted to make, others didn't and now have regrets. Once you have a basic emergency fund in place, then go for investing with the rest of the money. Best of luck!" }, { "docid": "359814", "title": "", "text": "Starting and running a business in the US is actually a lot less complicated than most people think. You mention incorporation, but a corporation (or even an S-Corp) isn't generally the best entity to start a business with . Most likely you are going to want to form an LLC instead this will provide you with liability protection while minimizing your paperwork and taxes. The cost for maintaining an LLC is relatively cheap $50-$1000 a year depending on your state and you can file the paperwork to form it yourself or pay an attorney to do it for you. Generally I would avoid the snake oil salesman that pitch specific out of state LLCs (Nevada, Delaware etc..) unless you have a specific reason or intend on doing business in the state. With the LLC or a Corporation you need to make sure you maintain separate finances. If you use the LLC funds to pay personal expenses you run the risk of loosing the liability protection afforded by the LLC (piercing the corporate veil). With a single member LLC you can file as a pass through entity and your LLC income would pass through to your federal return and taxes aren't any more complicated than putting your business income on your personal return like you do now. If you have employees things get more complex and it is really easiest to use a payroll service to process state and federal tax with holding. Once your business picks up you will want to file quarterly tax payments in order to avoid an under payment penalty. Generally, most taxpayers will avoid the under payment 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. Even if you get hit by the penalty it is only 10% of the amount of tax you didn't pay in time. If you are selling a service such writing one off projects you should be able to avoid having to collect and remit sales tax, but this is going to be very state specific. If you are selling software you will have to deal with sales tax assuming your state has a sales tax. One more thing to look at is some cities require a business license in order to operate a business within city limits so it would also be a good idea to check with your city to find out if you need a business license." }, { "docid": "546329", "title": "", "text": "The LLC (not you) is probably in debt to the California FTB. Any LLC registered in California must pay at least $800 a year, until it is officially dissolved (i.e.: notice of cancellation/dissolution properly filed with the California Secretary of State). The FTB may come after members (including you) personally, if it can prove that the failure to pay was due to your negligence. Talk to a CA-licensed EA/CPA about how to resolve this. Otherwise, at least from what you've described, there were no other taxable events. LLC is a disregarded entity, so the IRS doesn't care about it much anyway (unless someone was stupid enough to elect it to be taxed as a corporation, that is). Keep in mind that when in doubt - you are always better off with a professional (a CPA/EA licensed in your State) advice." }, { "docid": "131483", "title": "", "text": "The LLC will not be liable for anything, it is disregarded for tax purposes. If you're doing any work while in the US, or you (or your spouse) are a green card holder or a US citizen - then you (not the LLC) may be liable, may be required to file, pay, etc. Unless you're employing someone, or have more than one member in your LLC, you do not need an EIN. Re the bank - whatever you want. If you want you can open an account in an American bank. If you don't - don't. Who cares?" }, { "docid": "295750", "title": "", "text": "\"I know many people who would recommend joining a credit union. They're typically local and are not-for-profit entities (not non-profit like a charity). The \"\"customers\"\" are actually members who cooperatively provide financial services to the other members. Oftentimes if there's a surplus of profits at the end of the year, they divvy them up to the members based on how many accounts they have, what their balances are, loans, etc.\"" }, { "docid": "389098", "title": "", "text": "I realize this is a dated question, but for anyone interested in this subject please be aware of the availability of IRC § 1235 and capital gain treatment for the sale of patents. When the holder of a patent transfers all substantial rights to an unrelated person, it can qualify for long-term capital gain treatment. That can be a meaningful tax savings relative to ordinary income treatment. There are a number of specific provisions and requirements to access § 1235. The holder must be the creator or someone unrelated (and not the creator's employer) who purchased the patent from the creator. The holder must transfer all substantial rights to the patent (not a licensing), or sell an undivided portion of all substantial rights (partial sale, again not a license). The benefit of § 1235 is that long-term treatment will apply even for patents with holding periods under 1 year. Other rules and permutations of course also apply. Those who fail § 1235 may still qualify their assets as capital under § 1221 or § 1231. A patent held by its creator will often qualify as a capital asset. It may not make any sense to sell your business as a whole, particularly if all a purchaser wants is a patent or group of patents. Of course, if the patent was held by its creator in a single-member LLC or other disregarded entity sold to a buyer, then the tax treatment is still treated as the sale of a long-term capital asset." }, { "docid": "269447", "title": "", "text": "Credit unions are mutually-owned (i.e. customer owned) financial institutions that provide banking services. They take deposits from their members (customers) and loan them to other members. Members vote on a board of directors who manage operations. They are considered not-for-profit, but they pay interest on deposits. They get some preferential tax treatment and regulation and their deposits are insured by a separate organization if federally accredited. State-chartered credit unions don't have to maintain deposit insurance at all. Their charters specify who can join. They can be regionally based, employer based, or based on some other group with common interests. Regulators restrict them so that they don't interfere too much with banks. Otherwise their preferential tax and regulatory treatment would leave banks uncompetitive. Other organizations with similar limits have gone on to be competitive when the limits were released. For example, there used to be an insurance company just for government employees, the Government Employees Insurance Company. You may know it better as GEICO (yes, the one with the gecko advertisements). Now they offer life and auto insurance all over. Credit unions would like looser limitations (or no limitations at all), but not enough to give up their preferential tax treatment. Banks oppose looser limitations and have as much political clout as credit unions." }, { "docid": "449610", "title": "", "text": "Thanks for your input. &gt; Are you talking about domicile? Nope, **domestication**. See #2 [here]. I've seen that term on a few places on the web. I am a single-member LLC. I think I'll probably get a biz attorney. Do you think it matters whether the attorney is within the state I currently reside as opposed to the one I'm moving to?" }, { "docid": "394276", "title": "", "text": "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." }, { "docid": "195207", "title": "", "text": "Do you have a separate bank account for your business? That is generally highly recommended. I have a credit card for my single-member LLC. I prefer it this way because it makes the separation of personal and business expenses very clear. Using a personal credit card, but using it for only business expenses seems to be a reasonable practice. You may be able to do one better though... For your sole proprietorship, you can file a DBA which establishes the business name. The details of this depend on your state. With a DBA, I believe you can open a bank account in the name of your business and you may also be able to open a credit card account in the name of the business. I'm not sure what practical difference it makes, but it does make the personal/business distinction clearer. Though, at that point, you might as well just do the LLC..." }, { "docid": "327199", "title": "", "text": "Are you talking about domicile? An LLC is treated differently than a corporation in the terms of citizenship of the law. An LLC is a citizen of whichever state it's members (shareholders) are citizens. I would recommend you just spend the money on a business attorney to ensure that all the t's are crossed correctly so it doesn't end up costing you more later on." }, { "docid": "322645", "title": "", "text": "There is a measure of protection for investors. It is not the level of protection provided by FDIC or NCUA but it does exist: Securities Investor Protection Corporation What SIPC Protects SIPC protects against the loss of cash and securities – such as stocks and bonds – held by a customer at a financially-troubled SIPC-member brokerage firm. The limit of SIPC protection is $500,000, which includes a $250,000 limit for cash. Most customers of failed brokerage firms when assets are missing from customer accounts are protected. There is no requirement that a customer reside in or be a citizen of the United States. A non-U.S. citizen with an account at a brokerage firm that is a member of SIPC is treated the same as a resident or citizen of the United States with an account at a brokerage firm that is a member of SIPC. SIPC protection is limited. SIPC only protects the custody function of the broker dealer, which means that SIPC works to restore to customers their securities and cash that are in their accounts when the brokerage firm liquidation begins. SIPC does not protect against the decline in value of your securities. SIPC does not protect individuals who are sold worthless stocks and other securities. SIPC does not protect claims against a broker for bad investment advice, or for recommending inappropriate investments. It is important to recognize that SIPC protection is not the same as protection for your cash at a Federal Deposit Insurance Corporation (FDIC) insured banking institution because SIPC does not protect the value of any security. Investments in the stock market are subject to fluctuations in market value. SIPC was not created to protect these risks. That is why SIPC does not bail out investors when the value of their stocks, bonds and other investment falls for any reason. Instead, in a liquidation, SIPC replaces the missing stocks and other securities when it is possible to do so." }, { "docid": "389004", "title": "", "text": "Pool their money into my own brokerage account and simply split the gains/losses proportional to the amount of money that we've each contributed to the account. I'm wary of this approach due to the tax implications and perhaps other legal issues so I'd appreciate community insight here. You're right to be wary. You might run into gift tax issues, as well as income tax liability and appropriation of earnings. Not a good idea at all. Don't do this. Have them set up their own brokerage account and have them give me the login credentials and I manage the investments for them. This is obviously the best approach from a tracking and tax perspective, but harder for me to manage; to be honest I'm already spending more time than I want to managing my own investments, so option 1 really appeals to me if the drawbacks aren't prohibitive. That would also require you to be a licensed financial adviser, at least to the best of my understanding. Otherwise there's a lot of issues with potential liability (if you make investments that lose money - you might be required to repay the losses). You should do this only with a proper legal and tax advice - from an attorney and/or CPA/EA licensed in your state. There are proper ways to do this (limited partnership or LLC, for example), but you have to cover your ass-ets with proper operating agreements in place that have to be reviewed by legal counsel of each of the members/partners," }, { "docid": "42650", "title": "", "text": "\"This is the best tl;dr I could make, [original](https://newrepublic.com/article/144180/single-payer-wonks) reduced by 66%. (I'm a bot) ***** &gt; It&amp;#039;s hard to deny that single-payer is an area where progressive politics has outstripped policy. &gt; Smaller and more explicitly progressive think tanks, such as the Economic Policy Institute, Demos, and the Roosevelt Institute, are stacked with left-leaning scholars on subjects like the minimum wage, voting rights, and anti-trust policy, but are less in the business of churning out policy proposals for legislators, especially when it comes to health care. &gt; While some groups, such as the Physicians for a National Health Program, an organization that pushes for single-payer, have been at the forefront of the issue, the bulk of the think tank world has been focused on defending the ACA. As Adam Gaffney, an instructor at Harvard Medical School and board member of PNHP, told the New Republic, &amp;quot;When something seems very far away, the need for that kind of detailed policy work sometimes seems less.&amp;quot; But now that single-payer is no longer an idea on the fringe, the actual mechanics have to be in place to maintain its credibility. ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/6s14zd/apparently_its_the_fault_of_leftleaning_think/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ \"\"Version 1.65, ~184792 tl;drs so far.\"\") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr \"\"PM's and comments are monitored, constructive feedback is welcome.\"\") | *Top* *keywords*: **policy**^#1 **single-payer**^#2 **out**^#3 **detailed**^#4 **think**^#5\"" }, { "docid": "335537", "title": "", "text": "\"&gt;Clearly military screening is far from perfect. The suicide rate for all members is higher than average. You make a jump in logic here which is not falsifiable that it is screening practices which lead to higher suicide rates. &gt;Add transgender in and the likelyhood of a n incident increases disproportionately. Theres really no ecidence to support this argument as far as I am aware. Please show me how transgender military members have a higher rate of suicide than the general pop of military members. &gt;And that's an interesting spin: it's barring transgenders from the military that makes them suicidal, not the other way around. Got it. Yea, turns out discriminating against people at an institutional level increases their rates of suicide. I find it hard to believe youre surprised by this. Being socially ostracized is a huge risk factor for suicide and depression. &gt;Now factor in the costs of \"\"sensitivity training\"\", reassignment surgeries, and the inevitable lawsuits and it's a recipe for disaster. It hasnt been an issue at all so far. Why would it start now? Youre using the same arguments people have used every time civil rights are increased, every time theyre wrong. Theyre wrong now.\"" }, { "docid": "206277", "title": "", "text": "&gt;The correct solution is to... I dont think there is a correct solution. However, Id like to see major reform with financial aid recipient selection. Right now the programs pretty effectively select the **worst** students. it should be treated as an investment instead. If the goal is to produce productive members of society, they should aim to produce productive members of society. Require an essay on long term goals, career path, etc. Look at past performance strongly (some, but not too much emphasis on HS grades, more on outside interests/activities, etc) and, most importantly, how that past performance will serve them in the field they are trying to get into. Obviously put extra subsidies on things like education. Somebody who may be incapable of graduating with an accounting degree could still get an education degree with close to a 4.0. If we turn too many dummies away from education, we wont have enough teachers. Have a 30 minute interview with all of the finalists to determine their chances of having a positive return on society (through taxes paid over their lives, value added to the community, etc) and decide from there. Make sure to focus on people with a passion for their industry. Parental income should have almost no impact except for the ultra rich whose parents bring home an income of half a mil or something like that. Edit: I forgot to make this post relevant to the OP. The schools that people are applying to should be a major factor. Dont waste money sending people to schools that are a bad match (for profit schools, schools without a strong program in their intended degree). Also, put a lot of negative emphasis on things like art majors. There is no reason for the gov't to send some idiot to art school if they arent an absolute star. I go to a lib art school and I dont know a single art or theater major that has found more success through attending a 4 year program than they could have just using those 4 years to improve themselves and to hunt down their (pipe)dream job." } ]

[ { "docid": "510701", "title": "", "text": "\"The primary advantage is protection of your personal assets. If your LLC gets sued, they can't take your house/car/dog/wife. There aren't really any financial incentives to be an LLC; because of the pass-thru taxing structure, you wind up paying the same in taxes either way. \"\"The cost\"\" will depend on where you're located, and usually involves a few factors -- Expect to pay $300-500 to start it, depending on your state and who you register with (technically, you can usually register for free at the secretary of state, but wouldn't you rather pay an expert?), and \"\"State Franchise Tax\"\", which will can be a minimum of up to $1000/year depending on the state, plus even more if your LLC earns more than $xxx,000. EDIT -- As an aside, I'll mention that I'm based in California, and our state franchise tax starts at $800/yr. I'm all-web-based, so I've been investigating incorporating in Nevada or Delaware instead (no franchise tax, lower filing fees), but from what I've found, it's hardly worth the trouble. In addition to having to pay a Registered Agent (someone to act as my permanent mailing address in that state for ~$100/yr), apparently California likes to search for people just like me, and charge them $800 anyway. You can fight that, of course, and claim that your business really is done in Nevada, but do you really want to?\"" } ]

[ { "docid": "209974", "title": "", "text": "They believe that it reduces the risk that Revenue Canada will deem you to be an employee and make them pay a whole pile of tax, EI, CPP and so on that should have been paid if you had been hired as an employee. It's my recollection that the employer gets dinged for both the employee and employer share of those withholdings (and generally the employer's share is larger than yours) so they really want to prevent it. There's a Revenue Canada publication about whether you're an employee or not. There's nothing on it about being incorporated, but still employers feel more protected when their contracts are incorporated. We did work as a sole proprietorship at the very beginning, so that we could deduct our losses against employment income earned earlier in the year, before we started the business. You can find clients who will take you on. We incorporated once the losses were over with (basically we had bought the equipment and office supplies we needed to get started.) It's a simple and relatively inexpensive thing to do, and gives clients a sense of protection. It won't protect you from your own poor decisions since you'll be a director of the firm." }, { "docid": "80866", "title": "", "text": "I see a lot of people making the mistake or being given bad advise in structuring a new business. If you have more than one shareholder, then by all means an S Corporation is a better structure for lower taxes; avoid double taxation. If, however, this is a one shareholder S Corp, then you had better 1099 yourself as a consultant or look into sole proprietorship. The tax benefits are much better either way. Dr. Suraiya Shaik Ali" }, { "docid": "35810", "title": "", "text": "Making a game is hard enough, focus on that. If/when you start getting close to having something to sell, then if you're serious and want the company to grow into a full time venture, briefly consult with a lawyer and possibly accountant to set this up. It will save you a lot of time researching what you have to do and a lot of headache from potentially doing things wrong. If you want to try to do it on your own, I'd recommend getting a book on starting a business because there is more to know than a single post can cover. You'll probably have to file for a DBA (doing business as) at your city hall in order to be allowed to refer to yourself as the name of your company (otherwise you have to use your personal name). Initiating that will likely initiate annual business taxes in your town in addition to the cheap filing fee. You also want to consider how you will handle trademark (of your business and game) and copyright (of your game). If this is going to grow, you'll have to have contracts written for either employees or for freelancers who might produce assets for you. You may also need to consider writing an EULA for your game, privacy policies, etc. Additionally, you'll likely have to file with your state to collect and send sales tax. You'll also want to meticulously track costs and revenue related to your business. Formally starting a business will likely open you up to property, sales and income tax. For example, where I am, was even taxed on the equipment the business uses (e.g. computers). This is why it makes sense to wait until you're closer to having a product before you try to formally start a business and to consult with professionals on the best way. The type of business you should form will depend on the scope you plan for the company and the amount of time/money you're willing to put in. A sole proprietorship (what you are by default) means there is no difference legally/financially between you as an individual and you as a company. This may be suitable if this is just a hobby, but not if you intend it to grow because that means any lawsuit directed at your company and its money is also directed at you and your money. The differences between an LLC and corporation are more nuanced and involve differences in legal and tax treatment, however, they both shield you from the previously mentioned problem. If you want this to be more than a hobby you should form either an LLC or a corporation. Do some research on the differences and how they might apply to you and in your state." }, { "docid": "174025", "title": "", "text": "You are right that even if you do not receive a 1099-MISC, you still need to report all income to the IRS. Report the $40 on Schedule C or Schedule C-EZ. Since your net profit was less than $400, you do not need to file Schedule SE. From the IRS web site: Self-Employment Income It is a common misconception that if a taxpayer does not receive a Form 1099-MISC or if the income is under $600 per payer, the income is not taxable. There is no minimum amount that a taxpayer may exclude from gross income. All income earned through the taxpayer’s business, as an independent contractor or from informal side jobs is self-employment income, which is fully taxable and must be reported on Form 1040. Use Form 1040, Schedule C, Profit or Loss from Business, or Form 1040, Schedule C-EZ, Net Profit from Business (Sole Proprietorship) to report income and expenses. Taxpayers will also need to prepare Form 1040 Schedule SE for self-employment taxes if the net profit exceeds $400 for a year. Do not report this income on Form 1040 Line 21 as Other Income. Independent contractors must report all income as taxable, even if it is less than $600. Even if the client does not issue a Form 1099-MISC, the income, whatever the amount, is still reportable by the taxpayer." }, { "docid": "382908", "title": "", "text": "Can I work on 1099 from my own company instead of on W2? The reason is on W2 I can't deduct my commute, Health Insurance and some other expenses while on 1099 I think I can able do that. Since I am going to client place to work not at my own office, I am not sure whether I should able to do that or not. If you have LLC, unless you elected to tax it as a corporation, you need neither 1099 nor W2. For tax purposes the LLC is disregarded. So it is, from tax perspective, a sole proprietorship (or partnership, if multiple members). Being a W2 employee of your own LLC is a bad idea. For all these above expenses, which can I use company's debit/credit card or I need to use only my personal debit/credit card? It would be better to always use a business account for business purposes. Doesn't matter much for tax per se, but will make your life easier in case of an audit or a legal dispute (limited liability protection may depend on it). If I work on 1099, I guess I need to file some reasonable taxes on quarterly basis instead of filing at year end. If so, how do I pay my tax on quarterly basis to IRS? I mean which forms should I file and how to pay tax? Unless you're a W2 employee, you need to do quarterly estimate payments using form 1040-ES. If you are a W2 employee (even for a different job, and even if it is not you, but your spouse with whom you're filing jointly) - you can adjust your/spouse's withholding using form W4 to cover the additional tax liability. This is, IMHO, a better way than paying estimates. There are numerous questions on this, search the site or ask another one for details." }, { "docid": "128861", "title": "", "text": "Such activity is normally referred to as bartering income. From the IRS site - You must include in gross income in the year of receipt the fair market value of goods or services received from bartering. Generally, you report this income on Form 1040, Schedule C (PDF), Profit or Loss from Business (Sole Proprietorship), or Form 1040, Schedule C-EZ (PDF), Net Profit from Business (Sole Proprietorship). If you failed to report this income, correct your return by filing a Form 1040X (PDF), Amended U.S. Individual Income Tax Return. Refer to Topic 308 and Amended Returns for information on filing an amended return." }, { "docid": "223624", "title": "", "text": "Yes, you need to include income from your freelance work on your tax return. In the eyes of the IRS, this is self-employment income from your sole-proprietorship business. The reason you don't see it mentioned in the 1040EZ instructions is that you can't use the 1040EZ form if you have self-employment income. You'll need to use the full 1040 form. Your business income and expenses will be reported on a Schedule C or Schedule C-EZ, and the result will end up on Line 12 of the 1040. Take a look at the requirements at the top of the C-EZ form; you probably meet them and can use it instead of the more complicated C form. If you have any deductible business expenses related to your freelance business, this would be done on Schedule C or C-EZ. If your freelance income was more than $400, you'll also need to pay self-employment tax. To do this, you file Schedule SE, and the tax from that schedule lands on form 1040 Line 57." }, { "docid": "360361", "title": "", "text": "When you begin a business, you should choose which business structure (likewise legitimate structure or business frame) to Business Structure. In case you're essentially in business for yourself and don't anticipate enlisting workers, you might have the capacity to get by as a sole proprietorship. Be that as it may, huge business elements for the most part fuse, which gives certain advantages regarding obligation insurance and the multifaceted nature required for a substantial business." }, { "docid": "15729", "title": "", "text": "Those terms apply for businesses operating in the US, yes. The main takeaway should be to think of whether or not you need access to tons of capital, will have substantial risk of liability, or will operate with a partner. If the answer to all of these is no, you should use the structure which is most convenient/best for your taxes. I would look up sole proprietorships and see if that matches the definition of a sole trader." }, { "docid": "19183", "title": "", "text": "\"If your sole proprietorship losses exceed all other sources of taxable income, then you have what's called a Net Operating Loss (NOL). You will have the option to \"\"carry back\"\" and amend a return you filed in the last 2 years where you owed tax, or you can \"\"carry forward\"\" the losses and decrease your taxes in a future year, up to 20 years in the future. For more information see the IRS links for NOL. Note: it's important to make sure you file the NOL correctly so I'd advise speaking with an accountant. (Especially if the loss is greater than the cost of the accountant...)\"" }, { "docid": "520922", "title": "", "text": "You actually don't need an accountant. They'll be expensive and at this early a stage unnecessary - what you need is a good bookkeeper who can keep track of what comes in and what goes out. You'll need that to know if you're making money or not and to show the government at the end of the year. Get a copy of QuickBooks and pick up Bookkeeping for Dummies to at least get a sense for what's going on. Have you registered as a sole proprietorship? Make sure you have a vendor's permit so you can legally sell your services in Ontario. You may need to collect HST, in which case you'll need to register for an HST # and submit it on a quarterly basis. Whatever you do, don't fuck with the government - they can freeze your bank accounts to get money they're owed. You need to keep money on hand to pay for any taxes you might owe on the business, ESPECIALLY if it's a sole proprietorship where you'll be tempted to treat profit as income. You don't want to end up with nothing in the bank at the end of the year and $40k owing to the CRA. Get a separate bank account - don't mix personal and business, it's messy. Expense everything you reasonably can." }, { "docid": "513051", "title": "", "text": "\"Interesting as I am in the exact same situations as yourself. I, in fact, just incorporated. You will be able \"\"save\"\" more in taxes in the end. The reason I put \"\"save\"\" in quotes, is that you don't necessarily save on taxes, but you can defer taxes. The driving factor behind this is that you specify your own fiscal calendar/year. Incorporating allows you to defer income for up to 6 months. Meaning that if you make your fiscal year starting in August or September, for example, you can claim that income on the following year (August + 6 months = February). It allows you to keep the current year taxes down. Also, any income left over at year end, is taxed at 15% (the Corporation rate) rather than the 30-40% personal rate you get with a sole-proprietorship. In a nutshell, with sole-proprietorship, all income is taxable (after write-offs)... in a corporation, you can take some of that income and keep it in the corporation (gives your company a \"\"value\"\"), and is only taxed at 15% - big saving there. I primarily work with US businesses. I am, however, a dual-citizen, US and Canadian, which allowed me as a sole-proprietor, to easily work with US companies. However, as a sole-proprietor or a Corporation, you simply need to get an EIN from the IRS and any US company will report earnings to that number, with no deductions. At year end, it is your responsibility to file the necessary tax forms and pay the necessary taxes to both countries. Therefore you can solicit new US business if you choose, but this is not restricted to corporations. The real benefit in incorporating is what I mentioned above. My suggestion to you is to speak with you CA, who can outline all benefits. Revenue Canada's website had some good information on this topic as well. Please let me know if you need anything else explained.\"" }, { "docid": "315086", "title": "", "text": "Is the business an S-Corp, LLC or Sole Prop? I am going to guess based on the question that it is an LLC that you never closed with the state and you live in a state (NY) that charges a fee for having an LLC in the state in which case you owe those fees to the state. I am not aware of any taxes on the mere existence of a business by the IRS. I think you are going to find out that the are no taxes owed to the IRS for this nonexistent activity." }, { "docid": "383252", "title": "", "text": "No, you can not use Schedule C for a Corporation. If you treat the business as a sole proprietorship, i.e.: not a separate legal entity and not a separate financial entity - then you can. If that's how you treat your corporation, then you can continue using Schedule C, but there's no reason whatsoever to continue being a corporation either since the corporate liability protection veil is likely to be long gone. Generally, corporations file form 1120, S-Corporations file form 1120S." }, { "docid": "299211", "title": "", "text": "\"-Alain Wertheimer I'm a hobbyist... Most (probably all) of those older items were sold both prior to my establishing the LLC This is a hobby of yours, this is not your business. You purchased all of these goods for your pleasure, not for their future profit. The later items that you bought after your LLC was establish served both purposes (perks of doing what you love). How should I go about reporting this income for the items I don't have records for how much I purchased them for? There's nothing you can do. As noted above, these items (if you were to testify in court against the IRS). \"\"Losses from the sale of personal-use property, such as your home or car, aren't tax deductible.\"\" Source Do I need to indicate 100% of the income because I can't prove that I sold it at a loss? Yes, if you do not have previous records you must claim a 100% capital gain. Source Addition: As JoeTaxpayer has mentioned in the comments, the second source I posted is for stocks and bonds. So at year begin of 2016, I started selling what I didn't need on eBay and on various forums [January - September]. Because you are not in the business of doing this, you do not need to explain the cost; but you do need to report the income as Gross Income on your 1040. Yes, if you bought a TV three years ago for a $100 and sold it for $50, the IRS would recognize you earning $50. As these are all personal items, they can not be deducted; regardless of gain or loss. Source Later in the year 2016 (October), I started an LLC (October - December) If these are items that you did not record early in the process of your LLC, then it is reported as a 100% gain as you can not prove any business expenses or costs to acquire associated with it. Source Refer to above answer. Refer to above answer. Conclusion Again, this is a income tax question that is split between business and personal use items. This is not a question of other's assessment of the value of the asset. It is solely based on the instruments of the IRS and their assessment of gains and losses from businesses. As OP does not have the necessary documents to prove otherwise, a cost basis of $0 must be assumed; thus you have a 100% gain on sale.\"" }, { "docid": "200023", "title": "", "text": "If you do business under your name, you don't need to register your business. Your business will be treated as a sole proprietorship. If your revenue exceeds 30,000 (or wish to collect GST for the government) then you will have to register with the CRA for a GST account, but that is free." }, { "docid": "517836", "title": "", "text": "You can depreciate equipment as a valid expense, even for a sole proprietorship. The concept is simple, but the details are pretty complicated (and probably even more so given the added complexities of agricultural economics). Definitely speak to an accountant who specializes in the field." }, { "docid": "469043", "title": "", "text": "\"&gt; There may not be anything shameful about doing that, but that scenario is, indeed, a business **failure**. People do not shutter a profitable (successful) business and then go to work for someone else. Not necessarily. It may very well be a \"\"planned exit\"\" -- not all businesses will (nor should they be expected to or *planned* to) endure into perpetuity... just because the corporate charter sets no specific limit to the duration of the corporate entity does not mean that it is (and certainly not that it needs to be) \"\"immortal\"\". And a business that may be quite profitable to run, even if it's final pre-closing year is less so... is not necessarily a \"\"failure\"\": in fact closing an operation down *while it is (still) slightly profitable*, and BEFORE it begins losing money (and/or selling it's assets off while they still have substantial investment value), may in fact be the **wisest** move (especially financially speaking); which counts as anything BUT a \"\"failure\"\". Plus there are several industries where a \"\"temporary\"\" existence of a firm is heartily recognized as a positive thing: take films as an example, a new \"\"company\"\" (with a pre-planned, limited lifespan) will often be formed to craft and produce the film, and cease to exist once that task has been completed. And I think the hand-wringing about \"\"restaurants\"\" is especially gratuitous... if ever there was/is a business niche that was subject to fad &amp; fashion, and the ephemeral even transitory nature of people's \"\"tastes\"\", it would be the \"\"boutique\"\" segment of the restaurant industry; even the ones (or chains) that do manage to survive, often do so by dramatically changing their menus, brand &amp; character... so that a decade later they barely resemble their former selves. Sure there are also other segments of the industry that are generally \"\"stable\"\" -- but many of them tend to be slow-or-no growth as well. &gt;I believe a key contributor to the confusion is talking about the self-employed and business owners in the same breath. Someone who's self-employed basically owns a job. His income will always be directly proportional to the amount of time spent working and the company does not exist apart from himself. It covers an entire spectrum... and the lines are rather fuzzy. Yes, a lot of self-employed people (whether configured as sole proprietorships, partnerships, LLC's or full \"\"corporations\"\") are by INTENT -- and probably always will be -- simply \"\"job replacement\"\" businesses. (And again, there is NOTHING wrong with that -- whether they endure for a year, 5 years, 10 years or an entire lifetime). How or why people have come to view this as somehow of less \"\"merit\"\" than someone being gainfully employed *for someone else* -- has always puzzled me. But some of those -- just as some of the \"\"part time\"\" or \"\"on the side\"\" businesses -- can take on an (unexpected, unplanned) \"\"life of their own\"\" and grow into substantial enterprises that employ hundreds and even thousands of people over multiple decades. AFTER THE FACT, the owners will often (at least publicly) claim that it was \"\"all part of the plan\"\", but in several cases where I know the founder/owner personally... I know from private conversation that THAT simply wasn't the case. &gt;A business owner, on the other hand, has processes/equipment/staff/IP in place that generates income whether or not she gets out of bed in the morning. You are speaking of someone who has achieved a CERTAIN level of success, and a certain SIZE of operations. &gt;These are different people with different goals and cannot be lumped into the same demographic block. Any and all \"\"blocks\"\" are going to be subjective (and in a very real sense the dividing lines placed at rather arbitrary segments) -- a particular named \"\"block\"\" will be very true from ONE point of view (with lots of things that correlate and appear to be uniformly applicable)... and yet fallacious from another (where there is again a whole spectrum of distinctions).\"" }, { "docid": "40276", "title": "", "text": "Hey, sole proprietorships called (don't those comprise roughly 50% of all businesses?) they want to know what corporate tax is. Hell, most of them want to know what payroll tax is. They just know it's not fun paying both halves of it. From my perspective over on the incorporated side: Oh HEY, I'm incorporated as an S-Corp or and LLC -remember those?- and they're going to suck out five percent MORE of my GROSS. I'll fax you my cash flows statement. It's going to look like a severed artery. For those lucky enough to be joining us from the C-Corp world, enjoy trying to retain your key employees without seeing your payroll costs go through the roof. If you have all your employees by the balls because they don't have the skills to easily transfer [if you think you do, hint: you don't] then I hope you have the stomach to watch them all falling further and further behind and into debt. I don't." } ]

[ { "docid": "6349", "title": "", "text": "There is no universal answer here; it depends on how much risk each person is taking, how you want to define the value of the business now and in the future, how much each person's contribution is essential to creating and sustaining the business, how hard it would be to get those resources elsewhere and what they would cost... What is fair is whatever you folks agree is fair. Just make sure to get it nailed down in writing and signed by all the parties, so you don't risk someone changing their minds later." } ]

[ { "docid": "224695", "title": "", "text": "\"Below is just a little information on this topic from my small unique book \"\"The small stock trader\"\": The most significant non-company-specific factor affecting stock price is the market sentiment, while the most significant company-specific factor is the earning power of the company. Perhaps it would be safe to say that technical analysis is more related to psychology/emotions, while fundamental analysis is more related to reason – that is why it is said that fundamental analysis tells you what to trade and technical analysis tells you when to trade. Thus, many stock traders use technical analysis as a timing tool for their entry and exit points. Technical analysis is more suitable for short-term trading and works best with large caps, for stock prices of large caps are more correlated with the general market, while small caps are more affected by company-specific news and speculation…: Perhaps small stock traders should not waste a lot of time on fundamental analysis; avoid overanalyzing the financial position, market position, and management of the focus companies. It is difficult to make wise trading decisions based only on fundamental analysis (company-specific news accounts for only about 25 percent of stock price fluctuations). There are only a few important figures and ratios to look at, such as: perhaps also: Furthermore, single ratios and figures do not tell much, so it is wise to use a few ratios and figures in combination. You should look at their trends and also compare them with the company’s main competitors and the industry average. Preferably, you want to see trend improvements in these above-mentioned figures and ratios, or at least some stability when the times are tough. Despite all the exotic names found in technical analysis, simply put, it is the study of supply and demand for the stock, in order to predict and follow the trend. Many stock traders claim stock price just represents the current supply and demand for that stock and moves to the greater side of the forces of supply and demand. If you focus on a few simple small caps, perhaps you should just use the basic principles of technical analysis, such as: I have no doubt that there are different ways to make money in the stock market. Some may succeed purely on the basis of technical analysis, some purely due to fundamental analysis, and others from a combination of these two like most of the great stock traders have done (Jesse Livermore, Bernard Baruch, Gerald Loeb, Nicolas Darvas, William O’Neil, and Steven Cohen). It is just a matter of finding out what best fits your personality. I hope the above little information from my small unique book was a little helpful! Mika (author of \"\"The small stock trader\"\")\"" }, { "docid": "179886", "title": "", "text": "Cat has always had plants in IL. HQ is in Peoria (grew up there, several members of my family work for them), and plants all over the place. Canada probably had other things going against it at the time they pulled out. Depending on the timing, it's quite likely that the exchange rate had shifted such that, even without a raise, the workers were effectively costing the company considerably more. Articles like that seem to leave out all sorts of details. For instance, I only saw one point where salary was increased and it wasn't anywhere near a 60% increase - more like 15% which isn't entirely unheard of. There's also what looks like a one time cash payment - bonus for a good year. 3-4x salary isn't unheard of in executive bonus land. It's also highly variable and not guaranteed year to year. The rest would be in stocks and options. The trick there is that the amounts of those were probably determined when he signed his contract. The reason it makes for a big raise is because the stock price has gone up (though it's down nearly 20% over the last month - May kinda sucked for the stock market). You also need to look at whether the profits are higher because of higher volume (and possibly more workers), better margins, better deployment of capital, etc. And when there's talk about asking worker to pay more for their health care, is it more as a raw dollar amount, or more as a percentage of the health care costs. As to whacking defined benefit pensions -- personally, I'd rather have a 401k. The problem with defined benefit pensions is that you're tied to that company for life. Put in your 40 years and then retire with 80% pay or whatever it is. Leave after 4 or 5 and you've pretty much got nothing - with a 401k, leave after 4 or 5 and you have what you've put away + what the company matched." }, { "docid": "277482", "title": "", "text": "At the time of writing, the Canadian dollar is worth roughly $0.75 U.S. Now, it's not possible for you to accurately predict what it'll be worth in, say, ten years. Maybe it'll be worth $0.50 U.S. Maybe $0.67. Maybe $1.00. Additionally, you can't know in advance if the Canadian economy will grow faster than the U.S., or slower, or by how much. Let's say you don't want to make a prediction. You just want to invest 50% of your money in Canadian stocks, 50% in U.S. Great. Do that, and don't worry about the current interest rates. Let's say that you do want to make a prediction. You are firmly of the belief that the Canadian dollar will be worth $1.00 U.S. dollar in approximately ten years. And furthermore, the Canadian economy and the U.S. economy will grow at roughly equal rates, in their local currencies. Great. You should put more of your money in Canadian stocks. Let's say that you want to make a prediction. The Canadian economy is tanking. It's going to be worth $0.67 or less in ten years. And on top of that, the U.S. economy is primed for growth. It's going to grow far faster than the Canadian economy. In that case, you want to invest mostly in U.S. stocks. Let's get more complicated. You think the Canadian dollar is going to recover, but boy, maple syrup futures are in trouble. The next decade is all about Micky Mouse. Now what should you do? Well, it depends on how fast the U.S. economy expands, compared to the currency difference. What should you do? I can't tell you that because I can't predict the future. What did I do? I bought 25% Canadian stocks, 25% U.S. stocks, 25% world stocks, and 25% Canadian bonds (roughly), back when the Canadian dollar was stronger. What am I doing now? Same thing. I don't know enough about the respective economies to judge. If I had a firm opinion, though, I'd certainly be happy to change my percentages a little. Not a lot, but a little." }, { "docid": "226197", "title": "", "text": "\"The answer is partly and sometimes, but you cannot know when or how. Most clearly, you do not take somebody else's money if you buy shares in a start-up company. You are putting your money at risk in exchange for a share in the rewards. Later, if the company thrives, you can sell your shares for whatever somebody else will pay for your current share in the thriving company's earnings. Or, you lose your money, when the company fails. (Much of it has then ended up in the company's employees' pockets, much of the rest with the government as taxes that the company paid). If the stockmarket did not exist, people would be far less willing to put their money into a new company, because selling shares would be far harder. This in turn would mean that fewer new things were tried out, and less progress would be made. Communists insist that central state planning would make better decisions than random people linked by a market. I suggest that the historical record proves otherwise. Historically, limited liability companies came first, then dividing them up into larger numbers of \"\"bearer\"\" shares, and finally creating markets where such shares were traded. On the other hand if you trade in the short or medium term, you are betting that your opinion that XYZ shares are undervalued against other investors who think otherwise. But there again, you may be buying from a person who has some other reason for selling. Maybe he just needs some cash for a new car or his child's marriage, and will buy back into XYZ once he has earned some more money. You can't tell who you are buying from, and the seller can only tell if his decision to sell was good with the benefit of a good few years of hindsight. I bought shares hand over fist immediately after the Brexit vote. I was putting my money where my vote went, and I've now made a decent profit. I don't feel that I harmed the people who sold out in expectation of the UK economy cratering. They got the peace of mind of cash (which they might then reinvest in Euro stocks or gold or whatever). Time will tell whether my selling out of these purchases more recently was a good decision (short term, not my best, but a profit is a profit ...) I never trade using borrowed money and I'm not sure whether city institutions should be allowed to do so (or more reasonably, to what extent this should be allowed). In a certain size and shortness of holding time, they cease to contribute to an orderly market and become a destabilizing force. This showed up in the financial crisis when certain banks were \"\"too big to fail\"\" and had to be bailed out at the taxpayer's expense. \"\"Heads we win, tails you lose\"\", rather than trading with us small guys as equals! Likewise it's hard to see any justification for high-frequency trading, where stocks are held for mere milliseconds, and the speed of light between the trader's and the market's computers is significant.\"" }, { "docid": "131255", "title": "", "text": "I had a similar situation when I was in college. The difference was that the dealer agreed to finance and the bank they used wanted a higher interest rate from me because of my limited credit history. The dealer asked for a rate 5 percentage points higher than what they put on the paperwork. I told them that I would not pay that and I dropped the car off at the lot with a letter rescinding the sale. They weren't happy about that and eventually offered me financing at my original rate with a $1000 discount from the previously agreed-upon purchase price. What I learned through that experience is that I didn't do a good-enough job of negotiating the original price. I would suggest that your son stop answering phone calls from the dealership for at least 1 week and drive the car as much as possible in that time. If the dealer has cashed the check then that will be the end of it. He owes nothing further. If the dealer has not cashed the check, he should ask whether they prefer to keep the check or if they want the car with 1000 miles on the odometer. This only works if your son keeps his nerve and is willing to walk away from the car." }, { "docid": "16733", "title": "", "text": "\"I have always found that the \"\"free\"\" planners are just salesmen pointing you in their best interests. Not that it won't get you a good deal in the processes, but, in my experience, they usually just recommend products that give them the best commission, finders fee, kickback, whatever. Flat fee financial planners are not really to my liking either. This is a taste thing, but generally, I feel like now that they have my fee, what interest do they have in taking care of me. That doesn't mean that they don't give good advise however. They may be a good first step. Percentage based financial planners, those that charge a percentage of assets under management, are my recommendation. The more money they make me the more money they make. This seems to work out quite well. Whatever you do, you need to be aware that financial planners are not just about recommending products, or saving money. That's part of it, but a good planner will also help you look at monthly budgets, current costs, liabilities, and investments. You want to look for someone that you can basically tell your goal to - \"\"I want to have x amount of money saved for y date,\"\" for example, or \"\"I want to reduce my bills by z amount in x months\"\". Run from any planner that looks only at the large sum as the \"\"solution\"\" or only source of money. You want a planner that will look at your first house mortgage(s), care loans, income, other investments, etc. and come up with a full plan for everything. If you're only trying to invest the new house money, and that's it, you're better off just sticking with Google and some research on your own.\"" }, { "docid": "420974", "title": "", "text": "\"Though it seems unintuitive, you should rationally ignore the past performance of this stock (including the fact that it's at its 52-week high) and focus exclusively on factors that you believe should affect it moving forward. If you think it's going to go up even further, more than the return on your other options for where to put the money, keep the stock. If you think it's peaked and will be going down, now's a good time to sell. To put it another way: if you didn't already have this stock, would you buy it today? Your choice is just about the same: you can choose between a sum of cash equal to the present market value of the shares, OR the shares. Which do you think is worth more? You also mentioned that you only have 10 stocks in the portfolio. Some are probably a larger percentage than others, and this distribution may be different than what you want in your portfolio. It may be time to do some rebalancing, which could involve selling some shares where your position is too large (as a % of your portfolio) and using the proceeds toward one or more categories you're not as invested in as you would like to be. This might be a good opportunity to increase the diversity in your portfolio. If part of your reward and motivation for trading is emotional, not purely financial, you could sell now, mark it as a \"\"win,\"\" and move on to another opportunity. Trading based on emotions is not likely to optimize your future balance, but not everybody is into trading or money for money's sake. What's going to help you sleep better at night and help boost your quality of life? If holding the stock will make you stress and regret a missed opportunity if it goes down, and selling it will make you feel happy and confident even if it still goes up more (e.g. you interpret that as further confirming that you made a good pick in the first place), you might decide that the risk of suboptimal financial returns (from emotion-based trading) is acceptable. As CQM points out, you could also set a trailing sell order to activate only when the stock is a certain percentage or dollar amount below whatever it peaks at between the time you set the order and the time it fires/expires; the activation price will rise with the stock and hold as it falls.\"" }, { "docid": "550824", "title": "", "text": "It's important to realize that any portfolio, if sufficiently diversified should track overall GDP growth, and anything growing via a percentage per annum is going to double eventually. (A good corner-of-napkin estimate is 70/the percentage = years to double). Just looking at your numbers, if you initially put in the full $7000, an increase to $17000 after 10 years represents a return of ~9.3% per annum (to check my math $7000*1.09279^10 ≈ $17000). Since you've been putting in the $7000 over 10 years the return is going to be a bit more than that, but it's not possible to calculate based on the information given. A return of 9.3% is not bad (some rules of thumb: inflation is about 2-4% so if you are making less than that you're losing money, and 6-10% per annum is generally what you should expect if your portfolio is tracking the market)... I wouldn't consider that rate of return to be particularly amazing, but it's not bad either, as you've done better than you would have if you had invested in an ETF tracking the market. The stock market being what it is, you can't rule out the possibility that you got lucky with your stock picks. If your portfolio was low-risk, a return of 9%ish could be considered amazing, but given that it's about 5-6 different stocks what I'd consider amazing would be a return of 15%+ (to give you something to shoot for!) Either way, for your amount of savings you're probably better off going with a mutual fund or an ETF. The return might be slightly lower, but the risk profile is also lower than you picking your stocks, since the fund/ETF will be more diversified. (and it's less work!)" }, { "docid": "384696", "title": "", "text": "This answer should be taken as a counterpoint to Thevin S's excellent answer. I have comprehensive insurance on my vehicle. That is, if I crashed it and wrote it off, my insurance would cover the replacement costs. Now, if this happened, I would be able to deal with the replacement costs myself, even without insurance. It would not significantly impact my lifestyle and would not put my emergency funds at risk, though obviously I wouldn't be happy about this. As the insurance company is planning on making money off of me, it's clearly not in my financial best interests to carry this insurance. Statistically speaking, it's a cost to me, and a profit for the insurance company. So why do I do it? Because I find it easy to pay a small amount of money every month for the peace of mind that, if I crash my car, I will not have to cover the large expense. I am (perhaps irrationally) risk averse. I'm happier paying a small amount of money in exchange for a guarantee that I will not have to pay a large amount of money. I mitigate a potentially larger cost, albeit with low likelihood, for the certainty of a smaller cost (my monthly insurance payments). This is separate from the mandatory PL/PD (public liability, public damage) insurance that I am required to cover. That insurance fits into Thevin's definition of a devastating event." }, { "docid": "321619", "title": "", "text": "This is assuming that you are now making some amount X per month which is more than the income you used to have as a student. (Otherwise, the question seems rather moot.) All figures should be net amounts (after taxes). First, figure out what the difference in your cost of living is. That is, housing, electricity, utilities, the basics that you need to have to have a place in which to live. I'm not considering food costs here unless they were subsidized while you were studying. Basically, you want to figure out how much you now have to spend extra per month for basic sustenance. Then, figure out how much more you are now making, compared to when you were a student. Subtract the sustenance extra from this to get your net pay increase. After that is when it gets trickier. Basically, you want to set aside or invest as much of the pay increase as possible, but you probably have other expenses now that you didn't before and which you cannot really do that much about. This mights be particular types of clothes, commute fares (car keepup, gas, bus pass, ...), or something entirely different. Anyway, decide on a savings goal, as a percentage of your net pay increase compared to when you were a student. This might be 5%, 10% or (if you are really ambitious) 50% or more. Whichever number you pick, make sure it's reasonable giving your living expenses, and keep in mind that anything is better than nothing. Find a financial institution that offers a high-interest savings account, preferably one with free withdrawals, and sign up for one. Each and every time you get paid, figure out how much to save based on the percentage you determined (if your regular case is that you get the same payment each time, you can simply set up an automated bank transfer), put that in the savings account and, for the moment, forget about that money. Try your best to live only on the remainder, but if you realize that you set aside too much, don't be afraid to tap into the savings account. Adjust your future deposits accordingly and try to find a good balance. At the end of each month, deposit whatever remains in your regular account into your savings account, and if that is a sizable amount of money, consider raising your savings goal a little. The ultimate goal should be that you don't need to tap into your savings except for truly exceptional situations, but still keep enough money outside of the savings account to cater to some of your wants. Yes, bank interest rates these days are often pretty dismal, and you will probably be lucky to find a savings account that (especially after taxes) will even keep up with inflation. But to start with, what you should be focusing on is not to make money in terms of real value appreciation, but simply figuring out how much money you really need to sustain a working life for yourself and then walking that walk. Eventually (this may take anywhere from a couple of months to a year or more), you should have settled pretty well on an amount that you feel comfortable with setting aside each month and just letting be. By that time, you should have a decently sized nest egg already, which will help you get over rough spots, and can start thinking about other forms of investing some of what you are setting aside. Whenever you get a net pay raise of any kind (gross pay raise, lower taxes, bonus, whichever), increase your savings goal by a portion of that raise. Maybe give yourself 60% of the raise and bank the remaining 40%. That way, you are (hopefully!) always increasing the amount of money that you are setting aside, while also reaping some benefits right away. One major upside of this approach is that, if you lose your job, not only will you have that nest egg, you will also be used to living on less. So you will have more money in the bank and less monthly expenses, which puts you in a significantly better position than if you had only one of those, let alone neither." }, { "docid": "403776", "title": "", "text": "\"The question I think is not: \"\"What is a certain material worth in a coin\"\" but \"\"What is a certain material worth in a coin and how much does it cost to get it out of there\"\". Just because something contains a certain element doesn't mean that you can get to it cheaply. Also as George Marian said: I don't think that it is legal to melt coins. So if the time comes you would first have to find a company willing to process the coins etc. Also you should not only compare what it is worth now and at a later time but also what that money would be worth if you put it into a high yielding savings account or something like that.\"" }, { "docid": "283635", "title": "", "text": "By not saving some of your income you put yourself at risk of the following: If you are comfortable taking on those risks, then continue what you are doing (I'm not being sarcastic here...some people are perfectly comfortable taking on these risks). I plan on working until I die so I am not as concerned with saving for retirement but I do save some money for temporary job loss situations. Saving money presents its own set of issues (e.g. Where should I put the money?, Should I invest the money?, What type of investments?). If you have no interest in researching answers to these type of questions then I would suggest what others have already suggested: have part of your paycheck automatically siphoned into an account that can only be accessed by a trusted family member." }, { "docid": "72168", "title": "", "text": "The prime rate is the interest rate banks use amongst themselves to lend money to each other only. It is used as the basis (sometimes) for what interest rate banks charge you. The prime rate is based loosely on the Fed rate. There is a committee that meets regularly to set this and other industry interest rates. http://en.wikipedia.org/wiki/Prime_rate I am not 100% positive the following is totally accurate The banks keep our deposits and pay us interest for doing so. They are paying us interest because they take yours, mine and everybody elses deposits as a large lump sum and invest that money. Sometimes as business loans, sometimes as mortgages and sometimes as credit card. The banks have a book of business that will be EXACTLY how much credit they have extended to everybody. But they do not keep that amount of cash in the vaults, only some smaller percentage of that large amount. When I use my credit card and they need to transfer money to amazon.com, if they don't happen to have enough cash that day, they will just borrow from another bank that does, and the interest rate they pay to do so is the prime rate. Since they are paying interest on the money they borrow to pay the debt I charged because they told me my credit was worth so much (...???...) they charge me a little bit more than that. Hence your credit card or mortgage's APR being based on the prime rate. I THINK that is what they do If I am wrong leave a comment and I will update, or the mods can." }, { "docid": "598562", "title": "", "text": "\"Debt cripples you, it weighs you down and keeps you from living your life the way you want. Debt prevents you from accomplishing your goals, limits your ability to \"\"Do\"\" what you want, \"\"Have\"\" what you want, and \"\"Be\"\" who you want to be, it constricts your opportunities, and constrains your charity. As you said, Graduated in May from school. Student loans are coming due here in January. Bought a new car recently. The added monthly expenses have me concerned that I am budgeting my money correctly. Awesome! Congratulations. You need to develop a plan to repay the student loans. Buying a (new) car before you have planned you budget may have been premature. I currently am spending around 45-50% of my monthly (net)income to cover all my expenses and living. The left over is pretty discretionary, but things like eating dinner outside the house and expenses that are abnormal would come out of this. My question is what percentage is a safe amount to be committing to expenses on a monthly basis? Great! Plan 40-50% for essentials, and decide to spend under 20-30% for lifestyle. Be frugal here and you could allocate 30-40% for financial priorities. Budget - create a budget divided into three broad categories, control your spending and your life. Goals - a Goal is a dream with a plan. Organize your goals into specific items with timelines, and steps to progress to your goals. You should have three classes of goals, what you want to \"\"Have\"\", what you want to \"\"Do\"\", and who you want to \"\"Be\"\"; Ask yourself, what is important to you. Then establish a timeline to achieve each goal. You should place specific goals or steps into three time blocks, Near (under 3-6 months), medium (under 12 months), and Long (under 24 months). It is ok to have longer term plans, but establish steps to get to those goals, and place those steps under one of these three timeframes. Example, Good advice I have heard includes keeping housing costs under 25%, keeping vehicle costs under 10%, and paying off debt quickly. Some advise 10-20% for financial priorities, but I prefer 30-40%. If you put 10% toward retirement (for now), save 10-20%, and pay 10-20% toward debt, you should make good progress on your student loans.\"" }, { "docid": "400896", "title": "", "text": "I am currently in the process of purchasing a house. I am only putting 5% down. I see that some are saying that the traditional 20% down is the way to go. I am a first time homebuyer, and unfortunately we no longer live in the world where 20% down is mandatory, which is part of the reason why housing prices are so high. I feel it is more important that you are comfortable with what your monthly payments are as well as being informed on how interest rates can change how much you owe each month. Right now interest rates are pretty low, and it would almost be silly to put 20% down on your home. It might make more sense to put money in different vehicle right now, if you have extra, as the global economy will likely pick up and until it does, interest rates will likely stay low. Just my 2 cents worth. EDIT: I thought it would not be responsible of me not to mention that you should always have extra's saved for closing costs. They can be pricey, and if you are not informed of what they are, they can creep up on you." }, { "docid": "545759", "title": "", "text": "There are lots of sub-parts to your question. Let's takle them one at a time. Should I worry about an IRA at this age? Absolutely! Or at least some form of retirement account. When you are young is the BEST time to start putting money into a retirement account because you have so much time for it to grow. Compounding interest is a magical thing. Even if you can only afford to put a very small amount in the account, do it! You will have to put a heck of a lot less money into the account over your working career if you start now. Is there a certain amount you need for the IRA deduction? No. Essentially with a traditional IRA you can just subtract the amount you deposited (up to the contribution limit) from your income when calculating your taxes. What kind of IRA should I get? I suggest a ROTH IRA, but be warned that with that kind you get the tax breaks when you retire, not now. If you think taxes will be higher in 40 years or so, then the Roth is a clear winner. Traditional IRA: Tax deduction this year for contribution; investment plus gains are taxed as income when you take the money out at retirement. Roth IRA: Investment amount is taxed in the year you put it in; no taxes on investment amount or gains when you take it out at retirement. Given the long horizon that you will be investing, the money is likely going to at least double. So the total amount you are taxed on over your lifetime would probably be less with the ROTH even if tax rates remain the same. Is the 401K a better option? If they offer a match (most do) then it is a no-brainer, the employer 401K always comes out on top because they are basically paying you extra to put money into savings. If there is no match, I suggest a Roth because company 401K plans usually have hidden fees that are much higher than you are going to pay for setting up your own IRA or Roth IRA with a broker." }, { "docid": "134764", "title": "", "text": "\"Given the current low interest rates - let's assume 4% - this might be a viable option for a lot of people. Let's also assume that your actual interest rate after figuring in tax considerations ends up at around 3%. I think I am being pretty fair with the numbers. Now every dollar that you save each month based on the savings and invest with a higher net return of greater than 3% will in fact be \"\"free money\"\". You are basically betting on your ability to invest over the 3%. Even if using a conservative historical rate of return on the market you should net far better than 3%. This money would be significant after 10 years. Let's say you earn an average of 8% on your money over the 10 years. Well you would have an extra $77K by doing interest only if you were paying on average of $500 a month towards interest on a conventional loan. That is a pretty average house in the US. Who doesn't want $77K (more than you would have compared to just principal). So after 10 years you have the same amount in principal plus $77k given that you take all of the saved money and invest it at the constraints above. I would suggest that people take interest only if they are willing to diligently put away the money as they had a conventional loan. Another scenario would be a wealthier home owner (that may be able to pay off house at any time) to reap the tax breaks and cheap money to invest. Pros: Cons: Sidenote: If people ask how viable is this. Well I have done this for 8 years. I have earned an extra 110K. I have smaller than $500 I put away each month since my house is about 30% owned but have earned almost 14% on average over the last 8 years. My money gets put into an e-trade account automatically each month from there I funnel it into different funds (diversified by sector and region). I literally spend a few minutes a month on this and I truly act like the money isn't there. What is also nice is that the bank will account for about half of this as being a liquid asset when I have to renegotiate another loan.\"" }, { "docid": "106878", "title": "", "text": "Yeah the percentage thing I was a bit unsure of and that totally makes sense. It is a fairly popular place and I would show you more about the company, but I want to stay on the safe side and not broadcast where it is, just in case someone would want to steal this opportunity from me, but anyways... This company literally has no marketing or advertising and I feel like I could literally double their business with just a good amount of time marketing/advertising. I threw in the percentage idea because I know what I am capable of doing and how much money I could bring to the business. My strategy is to get a good, but fair cut of this deal. Also to give you a idea how bad it is: - No Facebook feed for 1 year - No website modification for 2.5 years - No other social media accounts - A 75,000 email list that has not been engaged in 13 months and so much more..." }, { "docid": "428689", "title": "", "text": "Is my understanding okay ? If so, it seems to me that this system is rather error prone. By that I mean I could easily forget to make a wire some day and be charged interests while I actually have more than enough money on the check account to pay the debt. Which is where the credit card company can add fees so you pay more and they make more money. Don't forget that in the credit case, you are borrowing money rather than using your own. Another thing that bothers me is that the credit card apparently has a rather low credit limit. If I wanted to buy something that costs $2500 but only have a credit limit of $1500, can I make a preemptive wire from my check account to the VISA account to avoid facing the limit ? If so, what is the point for the customer of having two accounts (and two cards for that matter...) ? If you were the credit card company, do you believe people should be given large limits first? There are prepaid credit cards where you could put a dollar amount on and it would reject if the balance gets low enough. Iridium Prepaid MasterCard would be an example here that I received one last year as I was involved in the floods in my area and needed access to government assistance which was given this way. Part of the point of building up a credit history is that this is part of how one can get the credit limits increased on cards so that one can have a higher limit after demonstrating that they will pay it back and otherwise the system could be abused. There may be a risk that if you prepay onto a credit card and then want to take back the money that there may be fees involved in the transaction. Generally, with credit cards the company makes money on the fees involved for transactions which may come from merchants or yourself as a cash advance on a credit card will be charged interest right away while if you buy merchandise in a store there may not be the interest charged right away." } ]

[ { "docid": "278629", "title": "", "text": "Question (which you need to ask yourself): How well are your friends paid for their work? What would happen if you just took your money and bought a garage, and hired two car mechanics? How would that be different from what you are doing? The money that you put into the company, is that paid in capital, or is it a loan to the company that will be repaid?" } ]

[ { "docid": "15487", "title": "", "text": "You should plan on your monthly payment (Principal + Interest + Escrow) being a conservative percentage of your take home pay. No matter your cash savings, if your housing is 60% of your take home pay you are going to have trouble keeping up on the house. My target for housing is that a 15 year, fixed rate mortgage should be under 25% of my take home pay. For some people, they find that too conservative. I think the exact percent is a risk/reward preference. Some people like the 25% number but look at a 30 year mortgage. Whatever you do, don't buy a house at the limit of what the bank thinks you can afford :) Historically, they have been more willing for me to spend my money than I have been." }, { "docid": "179886", "title": "", "text": "Cat has always had plants in IL. HQ is in Peoria (grew up there, several members of my family work for them), and plants all over the place. Canada probably had other things going against it at the time they pulled out. Depending on the timing, it's quite likely that the exchange rate had shifted such that, even without a raise, the workers were effectively costing the company considerably more. Articles like that seem to leave out all sorts of details. For instance, I only saw one point where salary was increased and it wasn't anywhere near a 60% increase - more like 15% which isn't entirely unheard of. There's also what looks like a one time cash payment - bonus for a good year. 3-4x salary isn't unheard of in executive bonus land. It's also highly variable and not guaranteed year to year. The rest would be in stocks and options. The trick there is that the amounts of those were probably determined when he signed his contract. The reason it makes for a big raise is because the stock price has gone up (though it's down nearly 20% over the last month - May kinda sucked for the stock market). You also need to look at whether the profits are higher because of higher volume (and possibly more workers), better margins, better deployment of capital, etc. And when there's talk about asking worker to pay more for their health care, is it more as a raw dollar amount, or more as a percentage of the health care costs. As to whacking defined benefit pensions -- personally, I'd rather have a 401k. The problem with defined benefit pensions is that you're tied to that company for life. Put in your 40 years and then retire with 80% pay or whatever it is. Leave after 4 or 5 and you've pretty much got nothing - with a 401k, leave after 4 or 5 and you have what you've put away + what the company matched." }, { "docid": "71350", "title": "", "text": "There is no ideal number of stocks you should own. There are several factors you should consider though. First, how actively do you want to manage your portfolio. If you want to be very active then the number of stocks you own should be based on the amount of time you have to research the company, by reading SEC filings and listening to conference calls, so you are not surprised when the company reports every quarter. If you don't want to be very active, then you are better off buying solid companies that have a good reputation and good history of performance. Second, you should decide how much risk you are willing to take. If you have $10,000 that you can afford to lose, then you can put your money into more risky stocks or into fewer stocks, which could potentially have a higher return. If you want your $10,000 grow (or lose) with the market, better off, again, going with the good rep and history stocks or a variety of stocks. Third, this goes along with your risk to some extent, but you should consider if you are looking for short term or long term gains? If you are looking to put your money in the market for the short term, you will probably be looking at fewer stocks with more money in each. If you are looking for long term, you will be around 5 stocks that you swap as they reach goals you set out for each stock. In my opinion, and I am not a financial expert, I like to stay at around 5 companies, mostly for the fact that it is about the ideal number of companies to keep track of." }, { "docid": "380786", "title": "", "text": "\"There's a lot of personal preference and personal circumstance that goes into these decisions. I think that for a person starting out, what's below is a good system. People with greater needs probably aren't reading this question looking for an answer. How many bank accounts should I have and what kinds, and how much (percentage-wise) of my income should I put into each one? You should probably have one checking account and one savings / money market account. If you're total savings are too low to avoid fees on two accounts, then just the checking account at the beginning. Keep the checking account balance high enough to cover your actual debits plus a little buffer. Put the rest in savings. Multiple bank accounts beyond the basics or using multiple banks can be appropriate for some people in some circumstances. Those people, for the most part, will have a specific reason for needing them and maybe enough experience at that point to know how many and where to get them. (Else they ask specific questions in the context of their situation.) I did see a comment about partners - If you're married / in long-term relationship, you might replicate the above for each side of the marriage / partnership. That's a personal decision between you and your partner that's more about your philosophy in the relationship then about finance specifically. Then from there, how do I portion them out into budgets and savings? I personally don't believe that there is any generic answer for this question. Others may post answers with their own rules of thumb. You need to budget based on a realistic assessment of your own income and necessary costs. Then if you have money some savings. Include a minimal level of entertainment in \"\"necessary costs\"\" because most people cannot work constantly. Beyond that minimal level, additional entertainment comes after necessary costs and basic savings. Savings should be tied to your long term goals in addition to you current constraints. Should I use credit cards for spending to reap benefits? No. Use credit cards for the convenience of them, if you want, but pay the full balance each month and don't overdo it. If you lack discipline on your spending, then you might consider avoiding credit cards completely.\"" }, { "docid": "34437", "title": "", "text": "\"What littleadv said is correct. His worth is based on the presumed worth of the total company value (which is much greater than all investment dollars combined because of valuation growth)*. In other words, his \"\"worth\"\" is based on the potential return for his share of ownership at a rate based on the latest valuation of the company. He is worth $17.5 billion today, but the total funding for Facebook is only $2.4 billion? I don't understand this. In private companies, valuations typically come from either speculation/analysts or from investments. Investment valuations are the better gauge, because actual money traded hands for a percentage ownership. However, just as with public companies on the stock market, there are (at least) two caveats. Just because someone else sold their shares at a given rate, doesn't mean that rate... In both cases, it's possible the value may be much lower or much higher. Some high-value purchases surprise for how high they are, such as Microsoft's acquisition of Skype for $8.5 billion. The formula for one owner's \"\"worth\"\" based on a given acquisition is: Valuation = Acquisition amount / Acquisition percent Worth = Owner's percent × Valuation According to Wikipedia Zuckerberg owns 24%. In January, Goldman Sach's invested $500 million at a $50 billion valuation. That is the latest investment and puts Zuckerberg's worth at $12 billion. However, some speculation places a Facebook IPO at a much higher valuation, such as as $100 billion. I don't know what your reference is for $17 billion, but it puts their valuation at $70.8 billion, between the January Goldman valuation and current IPO speculation. * For instance, Eduardo Saverin originally invested $10,000, which, at his estimated 5% ownership, would now be worth $3-5 billion.\"" }, { "docid": "533933", "title": "", "text": "My view is from the Netherlands, a EU country. Con: Credit cards are more risky. If someone finds your card, they can use it for online purchases without knowing any PIN, just by entering the card number, expiration date, and security code on the back. Worse, sometimes that information is stored in databases, and those get stolen by hackers! Also, you can have agreed to do periodic payments on some website and forgot about them, stopped using the service, and be surprised about the charge later. Debit cards usually need some kind of device that requires your PIN to do online payments (the ones I have in the Netherlands do, anyway), and automated periodic payments are authorized at your bank where you can get an overview of the currently active ones. Con: Banks get a percentage of each credit card payment. Unlike debit cards where companies usually pay a tiny fixed fee for each transaction (of, say, half a cent), credit card payments usually cost them a percentage and it comes to much more, a significant part of the profit margin. I feel this is just wrong. Con: automatic monthly payment can come at an unexpected moment With debit cards, the amount is withdrawn immediately and if the money isn't there, you get an error message allowing you to pay some other way (credit card after all, other bank account, cash, etc). When a recent monthly payment from my credit card was due to be charged from my bank account recently, someone else had been paid from it earlier that day and the money wasn't there. So I had to pay interest, on something I bought weeks ago... Pro: Credit cards apparently have some kind of insurance. I've never used this and don't know how it works, but apparently you can get your money back easily after fraudulent charges. Pro: Credit cards can be more easily used internationally for online purchases I don't know how it is with Visa or MC-issued debit cards, but many US sites accept only cards that have number/expiration date/security code and thus my normal bank account debit card isn't useable. Conclusion: definitely have one, but only use it when absolutely necessary." }, { "docid": "407505", "title": "", "text": "\"This answer will expand a bit on the theory. :) A company, as an entity, represents a pile of value. Some of that is business value (the revenue stream from their products) and some of that is assets (real estate, manufacturing equipment, a patent portfolio, etc). One of those assets is cash. If you own a share in the company, you own a share of all those assets, including the cash. In a theoretical sense, it doesn't really matter whether the company holds the cash instead of you. If the company adds an extra $1 billion to its assets, then people who buy and sell the company will think \"\"hey, there's an extra $1 billion of cash in that company; I should be willing to pay $1 billion / shares outstanding more per share to own it than I would otherwise.\"\" Granted, you may ultimately want to turn your ownership into cash, but you can do that by selling your shares to someone else. From a practical standpoint, though, the company doesn't benefit from holding that cash for a long time. Cash doesn't do much except sit in bank accounts and earn pathetically small amounts of interest, and if you wanted pathetic amounts of interests from your cash you wouldn't be owning shares in a company, you'd have it in a bank account yourself. Really, the company should do something with their cash. Usually that means investing it in their own business, to grow and expand that business, or to enhance profitability. Sometimes they may also purchase other companies, if they think they can turn a profit from the purchase. Sometimes there aren't a lot of good options for what to do with that money. In that case, the company should say, \"\"I can't effectively use this money in a way which will grow my business. You should go and invest it yourself, in whatever sort of business you think makes sense.\"\" That's when they pay a dividend. You'll see that a lot of the really big global companies are the ones paying dividends - places like Coca-Cola or Exxon-Mobil or what-have-you. They just can't put all their cash to good use, even after their growth plans. Many people who get dividends will invest them in the stock market again - possibly purchasing shares of the same company from someone else, or possibly purchasing shares of another company. It doesn't usually make a lot of sense for the company to invest in the stock market themselves, though. Investment expertise isn't really something most companies are known for, and because a company has multiple owners they may have differing investment needs and risk tolerance. For instance, if I had a bunch of money from the stock market I'd put it in some sort of growth stock because I'm twenty-something with a lot of savings and years to go before retirement. If I were close to retirement, though, I would want it in a more stable stock, or even in bonds. If I were retired I might even spend it directly. So the company should let all its owners choose, unless they have a good business reason not to. Sometimes companies will do share buy-backs instead of dividends, which pays money to people selling the company stock. The remaining owners benefit by reducing the number of shares outstanding, so they own more of what's left. They should only do this if they think the stock is at a fair price, or below a fair price, for the company: otherwise the remaining owners are essentially giving away cash. (This actually happens distressingly often.) On the other hand, if the company's stock is depressed but it subsequently does better than the rest of the market, then it is a very good investment. The one nice thing about share buy-backs in general is that they don't have any immediate tax implications for the company's owners: they simply own a stock which is now more valuable, and can sell it (and pay taxes on that sale) whenever they choose.\"" }, { "docid": "277482", "title": "", "text": "At the time of writing, the Canadian dollar is worth roughly $0.75 U.S. Now, it's not possible for you to accurately predict what it'll be worth in, say, ten years. Maybe it'll be worth $0.50 U.S. Maybe $0.67. Maybe $1.00. Additionally, you can't know in advance if the Canadian economy will grow faster than the U.S., or slower, or by how much. Let's say you don't want to make a prediction. You just want to invest 50% of your money in Canadian stocks, 50% in U.S. Great. Do that, and don't worry about the current interest rates. Let's say that you do want to make a prediction. You are firmly of the belief that the Canadian dollar will be worth $1.00 U.S. dollar in approximately ten years. And furthermore, the Canadian economy and the U.S. economy will grow at roughly equal rates, in their local currencies. Great. You should put more of your money in Canadian stocks. Let's say that you want to make a prediction. The Canadian economy is tanking. It's going to be worth $0.67 or less in ten years. And on top of that, the U.S. economy is primed for growth. It's going to grow far faster than the Canadian economy. In that case, you want to invest mostly in U.S. stocks. Let's get more complicated. You think the Canadian dollar is going to recover, but boy, maple syrup futures are in trouble. The next decade is all about Micky Mouse. Now what should you do? Well, it depends on how fast the U.S. economy expands, compared to the currency difference. What should you do? I can't tell you that because I can't predict the future. What did I do? I bought 25% Canadian stocks, 25% U.S. stocks, 25% world stocks, and 25% Canadian bonds (roughly), back when the Canadian dollar was stronger. What am I doing now? Same thing. I don't know enough about the respective economies to judge. If I had a firm opinion, though, I'd certainly be happy to change my percentages a little. Not a lot, but a little." }, { "docid": "550420", "title": "", "text": "\"As I understand it, if the \"\"borrower\"\" puts a down payment of 20% and the bank puts down 80%, then the bank and the \"\"borrower\"\" own the home jointly as tenants in common with a 20%-80% split of the asset amongst them. The \"\"borrower\"\" moves into the home and pays the bank 80% of the fair rental value of the home each month. {Material added/changed in edit: For the purposes of illustration, suppose that the \"\"borrower\"\" and the bank agree that the fair rental per month is 0.5% of the purchase cost. The \"\"borrower\"\" pays 80% of that amount i.e. 0.4% of the purchase cost to the bank on a monthly basis. The \"\"borrower\"\" is not required to do so but may choose to pay more money than this 0.4% of the purchase cost each month, or pay some amount in a lump sum. If he does so, he will own a larger percentage of the house, and so future monthly payments will be a smaller fraction of the agreed-upon fair rental per month. So there is an incentive to pay off the bank.} If and when the house is sold, the sale price is divided between \"\"borrower\"\" and bank according to the percentage of ownership as of the date of sale. So the bank gets to share in the profits, if any. On the other hand, if the house is sold for less than the original purchase price, then the bank also suffers in the loss. It is not a case of a mortgage being paid off from the proceeds and the home-owner gets whatever is left, or even suffering a loss when the dust has settled; the bank gets only its percentage of the sale price even if this amount is less than what it put up in the first place minus any additional payments made by the \"\"borrower\"\". I have no idea how other costs of home ownership (property taxes, insurance, repair and maintenance) or improvements, additions, etc are handled. Ditto what happens on Schedule A if such a \"\"loan\"\" is made to a US taxpayer.\"" }, { "docid": "374722", "title": "", "text": "On topic of Healthcare needs, I think it depend on individual. For example, my employer's dental plan offer PPO $34 per month and DMO $12 per month. I have my favor dentist that I have been going for years. He only accept PPO. I already had most of my dental works done so I only use him for teeth clean. He charge $100 without insurance and free with insurance. I can only use my insurance for teeth clean twice a year so $34x12 = $408 vs $200. If I go with DMO, I won't get to see my doctor and since I get my teeth once a year why not just save that money and go to my favor doctor instead the DMO doctors and if I need major dental works done which isn't immediate. I can go to Taiwan for dental works that is way cheaper than U.S. I think if you're a healthy young man/women. You should put more money toward your retirement and only keep insurance for emergency. You can do a medical tourism mentioned in 60 minutes that can be more cost effective and those doctors are U.S. trained. For older folks, a full Health care insurance is more needed than retirement. Just my two cents." }, { "docid": "581085", "title": "", "text": "\"Since the deduction balances out the future tax (presumably), I am only paying tax on the gains, however over 20 years, those gains could be greater than the original $4000 itself. (Doubling would only take 3.6% annual return over 20 years ) If I put it into a Roth IRA, I don't get a tax deduction, but I get to withdraw the original $4000 and all the gains, tax free in about 20 years. It seems the Roth IRA is a better deal tax wise, but I would like to hear if I am missing something. You are missing the time value of money. $4000 now does not have the same value to you as $4000 years in the future. In fact, the $4000 now has the same value as the money it grows into (principal + earnings) in the future. So a certain percentage of tax on the $4000 now has the same effect to you as the same percentage of tax on the $4000 + earnings in the future, no matter how much \"\"earnings\"\" is. It's simple math. If you start with the same amount of pre-tax money, and have the same flat percentage tax rate, then both Traditional and Roth will leave you with the same amount of money, regardless of how many times the gains are. Try it for yourself.\"" }, { "docid": "365333", "title": "", "text": "@ Chris: Companies like Keane, ours, and others know where to look for these funds and where to ask at the correct agencies that are holding this money that is not part of the public links that you have access to. This is how we find this information. Our types of companies spend significant time, money and resources in finding out about the money, then finding who it actually belongs to (because it does not always belong to who is mentioned on the list) and then finding the correct individual. @ jdsweet: I apologize if you think this is a marketing ploy. It is not. Our company doesn't even take phone calls from people that want us to find them money. Only if we contact someone, because at that time we're confident that the person we touch base with is due the funds. Again, I am not plugging our company, but trying to let Neil know that in some cases he is right, you don't need a third party to claim funds for you - if you can find them. In this case, he has looked and cannot find them. Keane is charging a fair amount to retrieve funds he cannot find and doesn't know about and is not charging him anything to do all the work. Again, as mentioned above, the direct answer is that we know how to access information and lists that have this money hidden from the public because the agency holding the funds doesn't want you to know about it so that they can escheat the funds. Escheating is the state's legal way to confiscate your money. See, if you don't put in a claim for the money (depending on what type it is and where it is located) the agency and state holding the funds has certain time frames for you to get the money. If you don't, again, they get to keep it and that is what they want despite what they say. That is why there is approximately $33 Billion that is known to the public and really $1 Trillion that's out there. I apologize if you think that this is a plug for my company, it's not because we're not looking for calls, we make them. I'm also not asking Neil for his business. From all accounts on my side, this seems like a fair deal." }, { "docid": "224695", "title": "", "text": "\"Below is just a little information on this topic from my small unique book \"\"The small stock trader\"\": The most significant non-company-specific factor affecting stock price is the market sentiment, while the most significant company-specific factor is the earning power of the company. Perhaps it would be safe to say that technical analysis is more related to psychology/emotions, while fundamental analysis is more related to reason – that is why it is said that fundamental analysis tells you what to trade and technical analysis tells you when to trade. Thus, many stock traders use technical analysis as a timing tool for their entry and exit points. Technical analysis is more suitable for short-term trading and works best with large caps, for stock prices of large caps are more correlated with the general market, while small caps are more affected by company-specific news and speculation…: Perhaps small stock traders should not waste a lot of time on fundamental analysis; avoid overanalyzing the financial position, market position, and management of the focus companies. It is difficult to make wise trading decisions based only on fundamental analysis (company-specific news accounts for only about 25 percent of stock price fluctuations). There are only a few important figures and ratios to look at, such as: perhaps also: Furthermore, single ratios and figures do not tell much, so it is wise to use a few ratios and figures in combination. You should look at their trends and also compare them with the company’s main competitors and the industry average. Preferably, you want to see trend improvements in these above-mentioned figures and ratios, or at least some stability when the times are tough. Despite all the exotic names found in technical analysis, simply put, it is the study of supply and demand for the stock, in order to predict and follow the trend. Many stock traders claim stock price just represents the current supply and demand for that stock and moves to the greater side of the forces of supply and demand. If you focus on a few simple small caps, perhaps you should just use the basic principles of technical analysis, such as: I have no doubt that there are different ways to make money in the stock market. Some may succeed purely on the basis of technical analysis, some purely due to fundamental analysis, and others from a combination of these two like most of the great stock traders have done (Jesse Livermore, Bernard Baruch, Gerald Loeb, Nicolas Darvas, William O’Neil, and Steven Cohen). It is just a matter of finding out what best fits your personality. I hope the above little information from my small unique book was a little helpful! Mika (author of \"\"The small stock trader\"\")\"" }, { "docid": "346537", "title": "", "text": "Deposit check and send a personal check (resulting in tax and IRS reporting issues) That's a bad idea, unless maybe the check you're receiving is a certified bank draft. Suppose the insurance company are crooks and the check is fraudulent. It could take weeks or months for some investigation to catch up to that, long after your own personal check was cashed by the pharmacy. The bank will then put you on hook for the 20 grand by reversing the check, even though the funds had been deposited into your account. Do not put yourself into the position of a money handler; you don't have the cash base, insurance, government protection and whatever else that a bank has. And, of course, you're being a free money handler if you do that. (You're not even compensated for postage, time and whatnot). If you're handling money between two parties, you should collect a percentage, or else refuse. That percentage has to be in proportion to the risk, since cashing a check for someone carries a risk similar to (and is effectively a form of) making a loan." }, { "docid": "367754", "title": "", "text": "I feel the need to separate my freelance accounts from my personal accounts. Yes, you should. Should I start another savings account or a current account? Do you need the money for daily spending? Do you need to re-invest in your business? Use a current account. If you don't need the money for business expenses, put it away in your savings account or even consider term deposits. Don't rule out a hybrid approach either (some in savings account, some in current account). What criteria should I keep in mind while choosing a bank? (I thought of SBI since it has a lot of branches and ATMs). If you are involved in online banking and that is sufficient for most of your needs, bank and ATM locations shouldn't matter all that much. If you are saving a good chunk of money, you want to at least have that keep up with inflation. Research bank term deposit interest rates. The tend to be higher than just having your money sit in a savings account. Again, it depends on how and when you expect to need the money. What do I keep in mind while paying myself? Paying yourself could have tax implications. This depends on how are set up to freelance. Are you a business entity or are you an individual? You should look in to the following in India: The other thing to consider is rewarding yourself for the good work done. Pay yourself a reasonable amount. If you decide to expand and hire people going forward, you will have a better sense of business expenses involved when paying salaries. Tips on managing money in the business account. This is a very generic question. I can only provide a generic response. Know how much you are earning and how much your are putting back in to the business. Be reasonable in how much you pay yourself and do the proper research and paperwork from a taxation point of view." }, { "docid": "312942", "title": "", "text": "Diversified is relative. Alfred has all his money in Apple. He's done very well over the last 10 years, but I think most investors would say that he's taking an incredible risk by putting everything on one stock. Betty has stock in Apple, Microsoft, and Google. Compared to Alfred, she is diversified. Charlie looks at Betty and realizes that she is only investing in one particular industry. All the companies in an individual industry can have a downturn together, so he invests everything in an S&P 500 index fund. David looks at Charlie and notes that he's got everything in large, high-capitalization companies. Small-cap stocks are often where the growth happens, so he invests in a total stock market fund. Evelyn realizes that David has all his money tied up in one country, the United States. What about the rest of the world? She invests in a global fund. Frank really likes Evelyn's broad approach to equities, but he knows that some portion of fixed-income assets (e.g. cash deposits, bonds) can reduce portfolio volatility—and may even enhance returns through periodic rebalancing. He does what Evelyn does, but also allocates some percentage of his portfolio to fixed income, and intends to maintain his target allocations. Being diversified enough depends on your individual goals and investing philosophy. There are some who would say that it is wrong to put all of your money in one fund, no matter what it is. Others would say that a sufficiently broad index fund is inherently diversified as-is." }, { "docid": "390614", "title": "", "text": "If they charge a fee to accept an item, it's reasonable to assume the item has insignificant value, so the only tax-deductible bit would be the money you donated to their charity. What you describe sounds like a fee for service, not a charitable donation. The organization should provide a fee breakdown to show what percentage (if any) of the fee is a deductible contribution. There could be some additional PA-only tax benefit, but I didn't come across anything in my brief search." }, { "docid": "80913", "title": "", "text": "\"It should be pretty obvious that without knowing what sort of assets the company owns, and what sort of net earnings are being generated it's impossible to say what a $20k equity investment should get you in terms of ownership percentage. With that said, you want to look at a few to several years of books, look for trends. Some things to understand that might be subtle red flags: It's extremely common for early stage investors to essentially make loans rather than strictly buying shares. In the worst case scenario creditors get to participate in liquidation proceedings before shareholders do. You may be better off investing in this business via a loan that's convertible to equity at your discretion. Single owner service companies are difficult because all of the net earnings go to the proprietor and that person maintains all of the relationships. So taking something like 5 years of net earnings as the value of the company doesn't make much sense because you (or someone else) couldn't just step in and replace the owner. Granted, you aren't contemplating taking over the business, but it negates using an X years of net earnings valuation method. When you read about valuation there is a sort of overriding assumption that no single person could topple the operation which couldn't be farther from the truth in single employee service companies. Additionally, understand that your investment in a single owner company hinges completely on one person's ability and willingness to work. It's really vital to understand the purpose of the funds. Someone will be hired? $20,000 couldn't be even six months of wages... Put things in to perspective with a pad, pen and calculator. Don't invest in the pipe dream of a friend of yours, and DEFINITELY don't hand this person the downpayment for their new house. The first rule of investing is \"\"don't lose money,\"\" this isn't emotional, this is a dollars and cents pragmatic process. Why does the business need this money? How will you be paid back? Personally, I think it would be more gratifying to put $20k in a blender and watch it blend, this is probably a horrible investment. The risk should just be left to credit card companies.\"" }, { "docid": "106878", "title": "", "text": "Yeah the percentage thing I was a bit unsure of and that totally makes sense. It is a fairly popular place and I would show you more about the company, but I want to stay on the safe side and not broadcast where it is, just in case someone would want to steal this opportunity from me, but anyways... This company literally has no marketing or advertising and I feel like I could literally double their business with just a good amount of time marketing/advertising. I threw in the percentage idea because I know what I am capable of doing and how much money I could bring to the business. My strategy is to get a good, but fair cut of this deal. Also to give you a idea how bad it is: - No Facebook feed for 1 year - No website modification for 2.5 years - No other social media accounts - A 75,000 email list that has not been engaged in 13 months and so much more..." } ]

[ { "docid": "214024", "title": "", "text": "Call Wells Fargo or go to a branch. Tell them what you're trying to accomplish, not the vehicle you think you should use to get there. Don't tell them you want to ACH DEBIT from YOUR ACCOUNT of YOUR MONEY. Tell them you apparently need a paperless transaction sent to this and that account at this and that bank. See if they offer a solution." } ]

[ { "docid": "510736", "title": "", "text": "If your savings account linked to the mortgage account is an 100% offset account then you don't need to put extra funds into the mortgage account apart from the minimum payments which is done automatically. Any funds you have in an 100% offset acount reduces the amount of interest you have to pay on the mortgage. So if your mortgage is $100,000 and you have $10,000 in the offset account then you only pay interest on $90,000 within the mortgage. Also the funds in the offset account are at call any time as it is simply a savings account. You can have all your pay go into it and have direct debits set up for all your bills. This way you will benefit from maximising the amounts in your offset account and reducing the amount of interest you pay on your mortgage. If your current linked savings account is not an 100% offset account ask your bank if you can change it over to one that is. If they don't have offset accounts for that particular mortgage account ask them if they have a different mortgage account with offset accounts. If they can't help you then shop arround for a bank or lender that does. I am currently with ANZ and they have a product with 100% offset account and about 0.7% below the standard variable rate, and there are plenty more similar products out there." }, { "docid": "88867", "title": "", "text": "My wife and I do this. We have one account for income and one for expenditures (and around 7 others for dedicated savings.) Doing this we are forcing ourselves to keep track of all expenditures as we have to manually transfer funds from one to the other, we try to do this periodically (every Wednesday) and then keep the expenditures within what is actually on the account. It is a really good way to keep track of everything. Bear in mind that our bank provides a fast handy smartphone app where we both can check our account as well as transfer funds in less than 10 seconds. (Fingerprint authentication, instant funds transfer as well as zero fees for transfers.) Right now we have a credit card each attached to the expenditures account, but earlier we only had a debit card each and no credit cards. Meaning that when the weekly funds ran out we where simply not able to pay. We did this to mimic living only on cash and when the cash runs out you simply have to stop buying stuff. And at the same time we could accrue quite a bit of savings. I would definitely recommend this if you have problems with over expenditures." }, { "docid": "393553", "title": "", "text": "There is a difference between an owner and a signer. An owner is the legal owner of the funds. A signer has access to withdraw the funds. In most cases, when a new personal account is opened the name is added as an owner&signer. However, that is not always the case. A person could be an owner, but not a signer, in a custodial arrangement. For example, a minor child may be an owner only on their account with a custodial parent listed as a signer. The minor could not withdraw from the account. A person could be a signer, but not an owner, in a business or estate/trust account. The business or estate would be the owner with individuals listed as signers only. The business employees do not own the funds, they are only allowed to withdraw and disburse the funds on behalf of the company. The creditor can only garnish/withhold funds that are owned by the indebted. If the second person on the account is only a signer, those funds cannot be withheld as part of a judgment against the second person (they don't own those funds). However, simply titling the second person as a signer only is not sufficient. If you share access with the second person and allow them to spend the money for their own benefit, they are no longer just a signer. They have become an owner because you are sharing your funds with them. Think of the business relationship as an example. The employee is a signer so they can withdraw funds and pay business expenses, like the electric bill. If the employee withdrew funds and bought herself a new dress, she is stealing because she does not own those funds. If the second person on the account buys things for themselves, or transfers some of the money into their own account, they are demonstrating that more than a signer-only relationship exists. A true signer-only relationship is where the individual can only withdraw funds on the owner's behalf. For example, the owner is out of town and needs a bill paid, the signer can write a check and pay the bill for the owner. A limited power of attorney may be worth looking into. With a limited POA, the owner can define the scope and expiration of the power of attorney. With this arrangement, the second person becomes an executor of the owner under certain circumstances. For example, you could write a power of attorney that states something like: John Smith is hereby granted the limited power to withdraw funds from account 1234, on deposit at Anytown Bank, for the purpose of paying debts and obligations and otherwise maintain my estate in the event of my incapacitation or inability to attend to my own affairs. This Power of Attorney shall expire on it's fifth anniversary unless renewed. If the person you have granted the power of attorney abuses their access, you could sue them and you would only have to demonstrate that they overstepped the scope of their power." }, { "docid": "89161", "title": "", "text": "\"You ask about the difference between credit and debit, but that may be because you're missing something important. Regardless of credit/debit, there is value in carrying two different cards associated with two different accounts. The reason is simply that because of loss, fraud, or your own mismanagement, or even the bank's technical error, any card can become unusable for some period of time. Exactly how long depends what happened, but just sending you a new card can easily take more than one business day, which might well be longer than you'd like to go without access to any funds. In that situation you would be glad of a credit card, and you would equally be glad of a second debit card on a separate account. So if your question is \"\"I have one bank account with one debit card, and the only options I'm willing to contemplate are (a) do nothing or (b) take a credit card as well\"\", then the answer is yes, take a credit card as well, regardless of the pros or cons of credit vs debit. Even if you only use the credit card in the event that you drop your debit card down a drain. So what you can now consider is the pros and cons of a credit card vs managing an additional bank account -- unless you seriously hate one or more of the cons of credit cards, the credit card is likely to win. My bank has given me a debit card on a cash savings account, which is a little scary, but would cover most emergencies if I didn't have a credit card too. Of course the interest rate is rubbish and I sometimes empty my savings account into a better investment, so I don't use it as backup, but I could. Your final question \"\"can a merchant know if I give him number of debit or credit card\"\" is already asked: Can merchants tell the difference between a credit card and embossed debit card? Yes they can, and yes there are a few things you can't (or might prefer not to) do with debit. The same could even be said of Visa vs. Mastercard, leading to the conclusion that if you have a Visa debit you should look for a Mastercard credit. But that seems to be less of an issue as time goes on and almost everywhere in Europe apparently takes both or neither. If you travel a lot outside the EU then you might want to be loaded down with every card under the sun, and three different kinds of cash, but you'd already know that without asking ;-)\"" }, { "docid": "343882", "title": "", "text": "\"She is laundering money for criminals, either knowingly or unknowingly. There are lots of ways to make fraudulent money transfers like credit card fraud, direct debit fraud or online banking trojans. Unfortunately (for the criminals) banks usually reverse such transfers when informed by their customers and inform the police, so criminals can not directly wire these transfers into their personal accounts. That's where so-called \"\"mules\"\" come in. Mules are people who are hired by criminals to receive such dirty money and move it to a different account controlled by the criminals. When the transfer gets reversed, two things happen: Your \"\"friend\"\" is either one of these mules or in the business of recruiting mules.\"" }, { "docid": "440824", "title": "", "text": "\"In Britain it's standard practice to use an electronic bank transfer, otherwise known as a \"\"standing order\"\" for the monthly rent payment. Many letting agents insist on it here in Britain. It's rare to hear of fraud. It is possible to setup a Direct Debit with the account numbers, as happened in a famous case where Jeremy Clarkson claimed losing account numbers wasn't a problem. If a direct debit is taken from your account, then you are protected by the the Direct Debit guarantee which means that you get a full and immediate refund if there is any fraud or unexpected payments spotted. Some landlords, particularly of bedsits accept plain old cash, however that's not recommended as there is no trace of it being paid, which could lead to legal disputes.\"" }, { "docid": "260998", "title": "", "text": "The 60 day pay back rule of a distribution your are referring to is a reportable IRS rule so you won't be able to circumvent that by opening your own company with its own 401K and borrowing the funds from there. Failure to accurately report to the IRS leads to fines and possible jail time. It's not advisable to withdraw from a retirement account but if you really need the money then you can move the funds to a Rollover IRA at the new broker/dealer, or custodian etc. Once you withdraw funds, the plan sponsor has to abide by a mandatory 20% tax withholding on the distribution, you'll be hit with a 10% tax penalty for early withdraw and you'll have to report the distribution as income when you file your personal income taxes. The move from a 401K to a Rollover however is legal and has no tax implications or penalties (besides possible closing fees at the old account) - that is until you decide to withdraw from it assuming you are under age 59 1/2. Regarding your last point, 401Ks are administered by 3rd parties. You wouldn't be opening up any accounts directly with them necessarily. Best advice? Get a Financial Advisor in your area. I recommend going with an advisor who is backed by independent broker-dealer. Independent broker dealers don't offer their own investment products therefore don't push their advisors to sell you their 'in-house' products like big banks. Here's a good article on using Rollover funds to start a venture: http://www.ehow.com/how_6789743_rollover-directed-ira-start-business.html Here is a resource guide direct from the IRS (you can CTRL+F for any specific topics) http://www.irs.gov/Retirement-Plans/Plan-Participant,-Employee/401%28k%29-Resource-Guide---Plan-Participants---General-Distribution-Rules" }, { "docid": "380786", "title": "", "text": "\"There's a lot of personal preference and personal circumstance that goes into these decisions. I think that for a person starting out, what's below is a good system. People with greater needs probably aren't reading this question looking for an answer. How many bank accounts should I have and what kinds, and how much (percentage-wise) of my income should I put into each one? You should probably have one checking account and one savings / money market account. If you're total savings are too low to avoid fees on two accounts, then just the checking account at the beginning. Keep the checking account balance high enough to cover your actual debits plus a little buffer. Put the rest in savings. Multiple bank accounts beyond the basics or using multiple banks can be appropriate for some people in some circumstances. Those people, for the most part, will have a specific reason for needing them and maybe enough experience at that point to know how many and where to get them. (Else they ask specific questions in the context of their situation.) I did see a comment about partners - If you're married / in long-term relationship, you might replicate the above for each side of the marriage / partnership. That's a personal decision between you and your partner that's more about your philosophy in the relationship then about finance specifically. Then from there, how do I portion them out into budgets and savings? I personally don't believe that there is any generic answer for this question. Others may post answers with their own rules of thumb. You need to budget based on a realistic assessment of your own income and necessary costs. Then if you have money some savings. Include a minimal level of entertainment in \"\"necessary costs\"\" because most people cannot work constantly. Beyond that minimal level, additional entertainment comes after necessary costs and basic savings. Savings should be tied to your long term goals in addition to you current constraints. Should I use credit cards for spending to reap benefits? No. Use credit cards for the convenience of them, if you want, but pay the full balance each month and don't overdo it. If you lack discipline on your spending, then you might consider avoiding credit cards completely.\"" }, { "docid": "195526", "title": "", "text": "\"The bank will make this even more confusing because they use the terms from their own perspective. From the bank's perspective (printed on your statements) credit: Money into your account (increases the bank's liabilities) debit: Money out of your account (decrease bank liabilities) From your perspective: It depends on the nature of the transfer of money, but here are the most common for a personal account. Income into your account: Credit Expenses out of your account: Debit Payment on a loan made for an asset (house/car): Credit for the loan account, debit for the equity account for the car/house/etc. Yes, it's complicated. Neither credits nor debits are always a + or -. That's why I agree with the advice of the others here that double-entry accounting is overkill for your personal finances. Note: I simplified the above examples for the purpose of clarity. Technically every transaction in double entry accounting includes both a credit and a debit (hence the \"\"double\"\" in the name). In fact, sometimes a transaction involves more than one credit or debit, but always at least one of each. Also, this is for EACH party. So any transaction between you and your bank involves at least FOUR debits and/or credits when all involved are considered.\"" }, { "docid": "543199", "title": "", "text": "I have won a large amount of money on an online casino. How reputed is the company? Have you done any research around it? It has taken 2 months for me to see any payouts. Last week I received $2300 check from them. Did you win everything in the same period? If so there is no reason why they sent you a smaller check of $2300 instead of the full amount. This should raise a red flag. Why would someone write multiple checks. The only valid reason is you won in different months. The payout for first month was $2300 and they sent a check. The payout for next month is large amount ... the request for Bank Details. that they would rather wire me the money and they are asking for my banking account number and routing number. Although giving bank account number and routing has some risks. This is the fundamental information that is need to make a credit to your account directly. You would be giving this to quite a few entities / people. In most countries, this information is printed on every check that you write from your account. Is this safe? Or am I stupid for even considering this? Online world is full of traps and this could be a scam. So proceed with extreme caution. Insist of check. In worst case open a different savings account, that does not allow direct debits, does not have over draft, etc. Use this to receive money and move it into your regular account." }, { "docid": "309909", "title": "", "text": "Are you allowed to have two personal current accounts with a debit card attached to each one? Yes, you may have as many current accounts you want, but you should ask why should I have more than one. It is cumbersome and time consuming to keep track of ongoing incoming credits and outgoing debits. Open to bank fraud too, if you aren't careful. If yes, can a sole trader in the UK use the second personal account for business transactions? Yes, but no payments to the business. At the end of the year you file you P11D, even if you have a business bank account. You would need to justify the expenses by keeping the bills and stuff. As it will be a personal account, you have to little more careful, not to mix personal and business expenses. If you are allowed to use a second personal account for business transactions, then why would someone choose to open a business bank account, where you have to pay? What are the benefits? First of all no company will pay into you personal account, for any transactions, they need to pay you. They will only pay to an account registered with the business, with whom they are dealing with. Benefits are you have your business expenses sorted out in one account and personal expenses in other. Pure business expenses comes out of the business account, rather than from your personal purse, keeps the accounts smooth. No need to sort out expenses at the end of each quarter or at the end of each month." }, { "docid": "494783", "title": "", "text": "Typically your paychecks are direct deposited into your bank account and you receive a paycheck stub telling you how much of your money went where (taxes, insurance, 401k, etc.). Most people use debit or credit cards for purchases. I personally only use checks to transfer money to another person (family, friend, etc.) than a business. And even then, there's PayPal." }, { "docid": "496272", "title": "", "text": "\"From the bank's perspective, they are offering a service and within their rights to charge appropriately for that service. Depending on the size of their operation, they may have considerable overhead costs that they need to recoup one way or another to continue operating (profitably, they hope). Traditionally, banks would encourage you to save with them by offering interest growth on your deposits. Meanwhile they would invest your (and all of their customer's) funds in securities or loans to other patrons that they anticipate will generate income for them at a faster rate than the interest they pay back to you. These days however, this overly simplified model is relatively insignificant in consumer banking. Instead, they've found they can make a lot more profit by simply charging fees for the handling of your funds, and when they want to loan money to consumers they just borrow from a central bank. What this means is that the size of your balance (unless abnormally huge) is of little interest to a branch manager - it doesn't generate revenue for them much faster than a tiny balance with the same number of transactions would. To put it simply, they can live without you, and your threatening to leave, even if you follow through, is barely going to do anything to their bottom line. They will let you. If you DO have an abnormally huge balance, and it's all in a simple checking or savings account, then it might make them pause for thought. But if that's true then frankly you're doing banking wrong and should move those funds somewhere where they can work harder for you in terms of growth. They might even suggest so themselves and direct you to one of their own \"\"personal wealth managers\"\".\"" }, { "docid": "462036", "title": "", "text": "\"This may be a bit advanced now, but once you start really working and get a place, I think this will apply more... Do I set up a bank account now? Yes. There is no reason not to. As an adult you will be using this much more than you think. Assuming you have a little money, you can walk in to any bank almost any day of the week and set up an account with them in very little time. Note that they may require you to be 18 if your parents won't be with you on the account. Otherwise, just ask any bank representative to help you do this. Just to be clear, if you can get a credit union account over a typical bank account, this is a great idea. Credit unions provide exactly the same financial services as a normal bank, but typically have variety of advantages over banks. Bank Account Parts Bank accounts typically have two parts, a checking account and a savings account. Your checking account typically is what you use for most day-to-day transactions and your savings account is generally used for, well, saving money. Having a bank account often gives you the following advantages: They give you an ability to store money without having large amounts of cash on hand. Once you start working regularly, you'll find you won't want to keep ~$600+ cash every two weeks in your wallet or apartment. They help you pay bills. When you set up your bank account, you will likely be able to get a Visa debit card which will process like a regular credit card but simply deduct funds from your checking account. You can use this card online to pay utilities (i.e. electricity and water), general bills (e.g. your cell phone and cable), purchase items (ex. at Amazon) or use it in stores to pay in lieu of cash. Be aware -- some banks will give you an ATM-only card before they send you the Visa debit card in the mail. This ATM-only card can only be used at ATMs as it's name implies. Similarly, if you can invest about ~$200 to build your credit, you can often get a deposit secured credit card attached to your account (basically a credit card where the bank keeps your money in case you can't pay your bill). If you treat this card with responsibility, you can eventually transition to an unsecured credit card. They save you hassles when cashing your check. If you don't have a bank where you can cash your check (e.g. you don't have an account), you will likely be charged check cashing fees (usually by places such as grocery stores or payday loan chains, or even other banks). Furthermore, if your check is over a certain amount, some places may refuse to cash your check period and a bank may be your only option. They give you a way to receive money electronically. The most common example of this is direct deposit. Many employers will send your money directly to your bank account instead of requiring you to cash a check. If they are prompt, this money gets to you faster and saves you trouble (on payday, you'll just receive a pay stub detailing your wages and the amount deposited rather than a check). Also, since you asked about taxes, you should know that when you do eventually file with the IRS, they have an option to receive your tax refund electronically as well (e.g. direct deposit into your bank account) and that can literally save you months in some cases depending on when you file your return and how many paper checks they have to process. Does it cost money to setup? It depends. Some banks have special offers, some don't. Most places will set up an account for free, but may require a minimum deposit to open the account (typically $50-$100). The Visa debit card mentioned above generally comes free. If you want a secured credit card as above, you will want about an additional $200 (so $250 - $300 total). Note that this is absolutely NOT required. You can exclusively use the Visa debit card above if you wish. Bank Account Fees Any fees charged when you have a bank account are usually minor anymore. Regardless, the bank will hand you a whole bunch of paperwork (mostly in legalese) detailing exactly how your account works. That said, the bank person helping set things up will cover what you need to know about keeping the account in plain English. The most common types of fee associated with a bank account are monthly maintenance fees and overdraft fees, but these aren't always necessarily charged. Likewise, there may be some other fees associated with the account but these vary from bank to bank. Monthly Maintenance Fees To give some examples... Overdraft Fees Overdraft fees are typically charged when you attempt to spend more money than you have in your bank account and the bank has to cover these charges. Overdraft fees typically apply to using paper checks (which it is unlikely you will be using), but not always. That said, it is very unlikely you will be charged overdraft fees for three reasons: Many banks have done away with these fees in lieu of other ways of generating revenue. Banks that still charge these fees usually have \"\"overdraft protection\"\" options for a little more money a month, effectively negating the possibility you will be charged these fees. The ability to deduct an amount of money from your checking account is now typically checked electronically before the payment is authorized. That is, using a Visa debit card, the card balance is checked immediately, and even when using paper check, most retailers have check scanning machines that do roughly the same thing. On a personal note, the bank that I have allows my account to be deducted below my checking account balance only if the payment is requested electronically (e.g. someone who has my card information charges me for a monthly service). In this case, the funds are simply listed in the negative and deducted from any amount I deposit till the proper amount is repaid (e.g. if I'm at -$25 dollars due to a charge when my account balance was $0 and then I deposit $100, my available balance will then be $75, not $100). Finally, per the comment by @Thebluefish, while I minimize the likelihood you will be charged overdraft fees, it is good to check into the exact circumstances under which you might be charged unexpectedly by your bank. Read the documentation they give you carefully, including any mailed updates, and you'll reduce the chance of receiving a nasty surprise. For reference, here are some of the fees charged by Bank of America. What about taxes? When you begin working, an employer will usually have you fill out a tax form such as a W-4 Employee's Withholding Allowance Certificate so that your employer can withhold the correct federal income tax from your wages. If they don't, then it is your responsibility to calculate and file your own income taxes (if you are self-employed, an independent contractor or paid under the table). If your employer is reputable, they will send you additional information (generally in February) you need to properly file your taxes prior to April 15th (the IRS tax deadline for most people). This additional information will likely be some variation of a W-2 Wage and Tax Statement or possibly a Form 1099-MISC. Do I have to worry about money in my bank account? Unless you have a significant amount in your bank savings account earning interest (see \"\"Should I save for the future?\"\" below), you won't have to pay any sort of tax on money in your bank account. If you do earn enough taxable interest, the bank will send you the proper forms to file your taxes. How do I file taxes? While it won't apply till next year, you will likely be able to fill out a Form 1040EZ Income Tax Return for Single and Joint Filers With No Dependents, as long as you don't have any kids in the meantime. ;-) You will either mail in the paper form (available at your local IRS office, post office, public library, etc.) or file electronically. There will be a lot of information on how to do this when the time comes, so don't worry about details just yet. Assuming your all paid up on your taxes (very likely unless you get a good paying job and take a lot of deductions throughout the year on your W-4), you'll probably get money back from the IRS when you file your tax return. As I mentioned above, if you have a bank account, you can opt to have your refund money returned electronically and get it much sooner than if you didn't have a bank account (again, possibly saving you literal months of waiting). Should I save for my future? If so, how much? Any good articles? Yes, you should save for the future, and start as soon as possible. It's outside the scope of this answer, but listen to your Economics professor talk about compound interest. In short, the later you start saving, the less money you have when you retire. Not that it makes much difference now, but you have to think that over 45 years of working (age 20-65), you likely have to have enough money for another 20+ years of not working (65-85+). So if you want $25,000 a year for retirement, you need to make ~$50,000 - $75,000 a year between your job and any financial instruments you have (savings account, stocks, bonds, CDs, mutual funds, IRAs, job retirement benefits, etc.) Where you should stick money your money is a complicated question which you can investigate at length as you get older. Personally, though, I would recommend some combination of IRA (Individual Retirement Account), long term mutual funds, and some sort of savings bonds. There is a metric ton of information regarding financial planning, but you can always read something like Investing For Dummies or you can try the Motley Fool's How To Invest (online and highly recommended). But I'm Only 17... So what should you do now? Budget. Sounds dumb, but just look at your basic expenses and total them all up (rent, utilities, phone, cable, food, gas, other costs) and divide by two. Out of each paycheck, this is how much money you need to save not to go into debt. Try to save a little each month. $50 - $100 a month is a good starting amount if you can swing it. You can always try to save more later. Invest early. You may not get great returns, but you don't need much money to start investing. Often you can get started with as little as $20 - $100. You'll have to do research but it is possible. Put money in your savings account. Checking accounts do not typically earn interest but money in savings accounts often do (that is, the bank will actually add money to your savings assuming you leave it in there long enough). Unfortunately, this rate of interest is only about 3.5% on average, which for most people means they don't get rich off it. You have to have a significant amount of money ($5,000+) to see even modest improvements in your savings account balance each month. But still, you may eventually get there. Get into the habit of putting money places that make you money in the long run. Don't go into debt. Don't get payday loans, pawn items, or abuse credit cards. Besides wrecking your credit, even a small amount of debt ($500+) can be very hard to break out of if you don't have a great paying job and can even make you homeless (no rent means no apartment). Remember, be financially responsible -- but assuming your parents aren't totally tight with money, don't be afraid to ask for cash when you really need it. This is a much better option than borrowing from some place that charges outrageous interest or making your payments late. Have an emergency account. As already mentioned in another excellent answer, you need to have money to \"\"smooth things out\"\" when you encounter unexpected events (your employer has trouble with your check, you have to pay for some sort of repair bill, you use more gas in your car in a month than normal, etc.) Anywhere from $200 - $2000+ should do it, but ideally you should have at least enough to cover a month of basic expenses. Build good credit. Avoid the temptation to get a lot of credit cards, even if stores and banks are dying to give them to you. You really only need one to build good credit (preferably a secured one from your bank, as mentioned above). Never charge more than you can pay off in a single month. Charging, then paying that amount off before the due date on your next statement, will help your credit immensely. Likewise, pay attention to your rent, utilities and monthly services (cell phone, cable, etc.). Even though these seem like options you can put off (\"\"Oh my electric bill is only $40? I'll pay that next month...\"\") late payments on all of these can negatively affect your credit score, which you will need later to get good loans and buy a house. Get health insurance. Now that the Affordable Care Act (ACA a.k.a Obamacare) has been enacted, it is now simpler to get health insurance, and it is actually required you have some. Hopefully, your employer will offer health coverage, you can find reasonably priced coverage on your own, or you live in a state with a health exchange. Even if you can't otherwise get/afford insurance, you may qualify for some sort of state coverage depending on income. If you don't have some sort of health insurance (private or otherwise), the IRS can potentially fine you when you file your taxes. Not to be too scary, but the fine as currently proposed is jumping up to about $700 for individuals in 2016 or so. So... even if you don't grab health insurance (which you absolutely should), you need to save about $60 a month, even if just for the fine. This answer turned out a bit longer than intended, but hopefully it will help you a little bit. Welcome to the wonderful world of adult financial responsibility. :-)\"" }, { "docid": "264565", "title": "", "text": "\"The terms debit and credit come from double-entry book-keeping. In this system, every transaction is applied against two accounts: it debits one and credits the other by equal amounts. (Or more technically, it affects two or more accounts, and the total of the credits equals the total of the debits.) Whether a debit or a credit adds or subtracts from the balance depends on the type of account. The types of accounts were defined so that it is always possible to have these matching debits and credits. Assets, like cash or property that you own, are \"\"debit accounts\"\", that is, a debit is an increase in the balance of the account. Liabilities, like money you owe, are \"\"credit accounts\"\", that is, a credit is an increase. To get into all the details would require giving a tutorial on double-entry book-keeping, which I think is beyond the scope of a forum post. By a quick Bing search I find this one: http://simplestudies.com/double-entry-accounting-system.html. I haven't gone through it so I can't say if it's a particularly good tutorial. There are plenty of others on the Web and in bookstores. Note that the terminology can be backwards when someone you're doing business with is describing the account, because their viewpoint may be the opposite of yours. For example, to me, my credit card is a liability: I owe the bank money. So when I post a charge, that's a credit, and when I pay it off, that's a debit. But to the bank, my account is an asset: the customer (me) owes them money. So to the bank, a charge is a debit and a payment is a credit.\"" }, { "docid": "277563", "title": "", "text": "\"Let's say you bank with Ally bank - one of the largest online banks in the US. First, find out what your daily purchase limit is on your debit card, for Ally bank it is $5000, but you can call them and request a one-time extension. Then: You walk into a bank, any bank or credit union; you don’t need an account there. You tell the teller: “I’d like to take a cash advance against my Visa card.” (or MasterCard, if your debit card is a MasterCard)\"\" Don’t mention it’s a debit card. You will only confuse them. As long as the card carries a Visa or MasterCard logo, they will do it the same way whether it’s credit or debit. They will ask for your ID. Then they will run your card on a terminal. It’s very similar to how you swipe your card when you buy something at a store. You sign the slip before they give you the cash. You can think of a cash advance as buying cash.\"" }, { "docid": "538384", "title": "", "text": "I work at a large bank, that isn't too unusual although a lot of banks are moving to fee-free basic accounts and upping their fees on other specific transactions. For example, my bank did away with minimum balance requirements to waive a monthly service fee, but we started charging $2/month for paper statements and upped our out-of-network ATM fee by 50 cents. Would like to point out that most financial institutions will reorder your transactions slightly for the purposes of accounting. It is much easier to run all transactions in big batches at the end of the day than individually as they come in. Required disclosures you receive upon account opening explain the exact order but most banks do all credits (money in) first and then debits (money out) like checks, debit cards, and ACH payments after. If you overdraft you can usually avoid a fee if you make a cash deposit before the end of the business day as the cash will go into your account before your purchases are debited. OCCASIONALLY this accounting-based reordering will result in additional fees but that is not the intended purpose of reordering them. And I would always refund any incurred fees that happened due to accounting-based transaction reordering. What Wells Fargo is doing has been illegal since 2008 and their continued appeals are hoping to get the ruling overturned so they won't have to pay out restitution to affected customers. It's frankly despicable." }, { "docid": "533933", "title": "", "text": "My view is from the Netherlands, a EU country. Con: Credit cards are more risky. If someone finds your card, they can use it for online purchases without knowing any PIN, just by entering the card number, expiration date, and security code on the back. Worse, sometimes that information is stored in databases, and those get stolen by hackers! Also, you can have agreed to do periodic payments on some website and forgot about them, stopped using the service, and be surprised about the charge later. Debit cards usually need some kind of device that requires your PIN to do online payments (the ones I have in the Netherlands do, anyway), and automated periodic payments are authorized at your bank where you can get an overview of the currently active ones. Con: Banks get a percentage of each credit card payment. Unlike debit cards where companies usually pay a tiny fixed fee for each transaction (of, say, half a cent), credit card payments usually cost them a percentage and it comes to much more, a significant part of the profit margin. I feel this is just wrong. Con: automatic monthly payment can come at an unexpected moment With debit cards, the amount is withdrawn immediately and if the money isn't there, you get an error message allowing you to pay some other way (credit card after all, other bank account, cash, etc). When a recent monthly payment from my credit card was due to be charged from my bank account recently, someone else had been paid from it earlier that day and the money wasn't there. So I had to pay interest, on something I bought weeks ago... Pro: Credit cards apparently have some kind of insurance. I've never used this and don't know how it works, but apparently you can get your money back easily after fraudulent charges. Pro: Credit cards can be more easily used internationally for online purchases I don't know how it is with Visa or MC-issued debit cards, but many US sites accept only cards that have number/expiration date/security code and thus my normal bank account debit card isn't useable. Conclusion: definitely have one, but only use it when absolutely necessary." }, { "docid": "124341", "title": "", "text": "You should check with the Office of Student Affairs (or equivalent) at your University to see if you can accept Credit Cards. Many will only allow you to accept student organization dues paid in cash, check, or money order. Many universities will also provide your organization with basic operating funds, if you request it. Your first point of contact should be your faculty adviser, though. Your best bet would be to just use cash. Learn where the nearest ATMs are. If you are set on using credit cards, set up a PayPal account and just use it to reimburse the person who fronts the money (cover the markup). Everyone will have to have a PayPal account set up, linked to their credit card. You can avoid fees by using a bank account. If you're so inclined, you can set up a Business account and have a PayPal Debit Card, but you'll want to check with your adviser / University by-laws to see if you're allowed. Don't expect any of these to work as website implementations. As you're a University group, you will undoubtedly be meeting in person such that an exchange of cash/check/money order would be trivial In short, you'll need to check into the rules of your University. Credit cards generally carry processing fees, charged to the merchant, which (on its own) carries some tax implications." } ]

[ { "docid": "246459", "title": "", "text": "Yes. For $15 it's not worth anyone's time to dig deep just for this specific occurrence. What you should do, however, is keep an eye on your credit card bills and accounts and watch for any other suspicious activity. It is possible that your number was stolen somehow and someone is using it fraudulently, so you want to be on the lookout in case they try to use it again. However, your credit card company is going to be much, much better than you at detecting patterns of fraud, which is why you should leave it to them unless and until you actually see more suspicious activity." } ]

[ { "docid": "429012", "title": "", "text": "\"The best answer to this is: Read the fine print on your credit card agreement. What is common, at least in the US, is that you can make any charges you want during a time window. When the date comes around that your statement balance is calculated, you will owe interest on any amount that is showing up as outstanding in your account. Example... To revise the example you gave, let's say Jan 1. your account balance was $0. Jan. 3rd you went out and spent $1,000. Your account statement will be prepared every XX days... usually 30. So if your last statement was Dec. 27th, you can expect your next statement to be prepared ~Jan.24 or Jan. 27. To be safe, (i.e. not accrue any interest charges) you will want to make sure that your balance shows $0 when your statement is next prepared. So back to the example you gave--if your balance showed $1,000... and you paid it off, but then charged $2,000 to it... so that there was now a new set of $2,000 charges in your account, then the bank would begin charging you interest when your next statement was prepared. Note that there are some cards that give you a certain number of days to pay off charges before accruing interest... it just goes back to my saying \"\"the best answer is read the fine print on your card agreement.\"\"\"" }, { "docid": "455005", "title": "", "text": "Sure of course you can do balance transfers like this but you are way late to the party and it has gotten to be pretty challenging finding new cards to transfer balances to. Before the current financial crisis in the US you could get enormous amounts of credit (2-5 times a person's annual income) and transfer balances to your bank account to collect interest . There were a bunch of ways to the transfer everything from direct deposit to your bank account to a balance transfer check payable to yourself to overpaying another credit card and requesting a refund. Over paying another account sets off a lot of red flags now days but other methods still work. The financial atmosphere has changed a lot and there are very few available cards with no balance transfer fees or capped fees and the interest rates are a lot lower now so it really isn't worth doing." }, { "docid": "451453", "title": "", "text": "\"A retail revolving account is essentially a credit card offered by a store (or chain of stores) and usable only at that store. In my area, the Sears department store's \"\"Sears card\"\" would be a good example. Stores offer these to capture a bit more profit from the transaction. They don't have to pay someone else's processing fees, and they get to keep any interest you pay. Of course they also accept the costs that go along with retail lending. It operates just like any other revolving-credit card. Read the fine print of the agreement to see what the grace period is, if any, and what APR they're charging after that. These cards also serve as a marketing tool. Some stores don't accept any other card. Some can do \"\"instant approvals\"\" to encourage you to make a large purchase now rather than continuing to shop around. Some may offer special deals only if you use their card -- I paid 0% interest for a year on my refrigerator, which was convenient for me. And so on. Gasoline stations also used to offer their own cards... though these days it's common for them to offer a branded version of one of the major credit cards instead.\"" }, { "docid": "190635", "title": "", "text": "Credit card limits are, for the most part, soft limits; sometimes, a credit card will allow you to charge a little over your limit. The large amount they allowed you to go over your limit is unusual, but not unheard of. It is your responsibility to keep track of how much you charge on your credit card, not the bank. Just like with a checking account, you are supposed to keep track of everything you charge so that you always know how much you have spent and can pay it off. Raising your limit will not help your problem; it would only make it worse. You have already charged more than you can afford, and they have already effectively raised your limit by $1200. I realize that this situation is tough, but fortunately, you have a learning opportunity here. I recommend you resolve to stop using the credit card in this way, and work toward paying off your debt to zero. At that point, treat your credit card as if it was a debit card, and only charge what you already have in the bank to pay off right away. (Or, just use a debit card and get rid of the credit card.) Learning to do this now will save you lots of money in interest. If you don't learn to do this, you will find yourself in even more debt in the future, and it will be even harder to dig yourself out. If you need some more help on getting out of debt and learning to budget your money, I recommend the book The Total Money Makeover by Dave Ramsey." }, { "docid": "402902", "title": "", "text": "\"Abine has a product for iOS and Android (and desktop), now called called Blur, that provides credit card masking (alias credit card numbers), along with other privacy services. It's subscription-based. I've used it successfully for a number of transactions over the past year or so. To the merchant, you supply any name, Abine's address, and the specific masked credit card number and code. You can create any number of masked cards with different credit amounts, and the charges show up on your real card statement as \"\"Abine, Inc.\"\".\"" }, { "docid": "551485", "title": "", "text": "This is very much possible and happens quite a lot. In the US, for example, promotional offers by credit card companies where you pay no interest on the balance for a certain period are a very common thing. The lender gains a new customer on such a loan, and usually earns money from the spending via the merchant fees (specifically for credit cards, at least). The pro is obviously free money. The con is that this is usually for a short period of time (longest I've seen was 15 months) after which if you're not careful, high interest rates will be charged. In some cases, interest will be charged retroactively for the whole period if you don't pay off the balance or miss the minimum payment due." }, { "docid": "244133", "title": "", "text": "I've used PayPal for my business for a long time. Sometimes PayPal doesn't trust credit cards. Debit or direct bank transfer are reliable. There is also a charge for using a credit card but I don't think that is the reason. You may be trying to purchase a high value item. That would be a possible reason why PayPal allowed you to use credit cards in the past, but will not allow you to do so now, for these particular transactions." }, { "docid": "19275", "title": "", "text": "\"Do not store credit cards on your servers! You will get into HUGE trouble if they get stolen. Instead, the whole credit card transaction should be done in a \"\"frame\"\" on a web that is handle by a credit card processor you chose. Once the transaction is finished, you get a code for the credit card number (masked credit card number) that no-one can convert back to a credit card number (except the processor). When you need to charge more or give refund, you use that code to tell the processor what credit card to make the charges/credits to.\"" }, { "docid": "183660", "title": "", "text": "I've had a card cloned 15 years ago and used to buy over 5k of goods in another country. So the inconvenience of having a card closed and re-issued is quite annoying even though the charges were reversed and I was made whole. But these days most CC fraud isn't from a card scanned by a waiter and cloned then used elsewhere. Mostly it is poorly secured databases or point of sale terminal malware. The latter is getting curtailed by chipped cards and the largest source of fraud is now online transactions (so called card not present) where the merchant has your CC number. If their system is breached the bad guys have a wealth of card numbers they sell in an E-bay like site on the dark web. This is where the Citi virtual CC comes in handy. Here's how it works to protect the bank and the hassles you go through when a card as to be re-issued. Citi's virtual CCs let you generate an actual credit card, complete with security code and expiration date. What is unique is that once the virtual CC is used it can only be used subsequently by that same merchant and is declined by any other. You can also set a total limit on what the merchant can charge as well as an expiration date. I use them for all my online accounts because they are, for all practical purposes, immune to the malware that steals CC info. Even if somehow the virtual CC is used before the merchant makes the initial charge that locks in the CC to their account the charge can be reversed without closing your actual card which has a different number. You can manage multiple Citi virtual CCs and view charge status, close, or adjust limits over time so managing them is quite easy with no risk to your primary account." }, { "docid": "298729", "title": "", "text": "\"I completely agree with @littleadv in favor of using the credit card and dispute resolution process, but I believe there are more important details here related to consumer protection. Since 1968, US citizens are protected from credit card fraud, limiting the out-of-pocket loss to $50 if your card is lost, stolen, or otherwise used without your permission. That means the bank can't make you pay more than $50 if you report unauthorized activity--and, nicely, many credit cards these days go ahead and waive the $50 too, so you might not have to pay anything (other than the necessary time and phone calls). Of course, many banks offer a $50 cap or no fees at all for fraudulent charges--my bank once happily resolved some bad charges for me at no loss to me--but banks are under no obligation to shield debit card customers from fraud. If you read the fine print on your debit card account agreement you may find some vague promises to resolve your dispute, but probably nothing saying you cannot be held liable (the bank is not going to lose money on you if they are unable to reverse the charges!). Now a personal story: I once had my credit card used to buy $3,000 in stereo equipment, at a store I had never heard of in a state I have never visited. The bank notified me of the surprising charges, and I was immediately able to begin the fraud report--but it took months of calls before the case was accepted and the charges reversed. So, yes, there was no money out of my pocket, but I was completely unable to use the credit card, and every month they kept on piling on more finance fees and late-payment charges and such, and I would have to call them again and explain again that the charges were disputed... Finally, after about 8 months in total, they accepted the fraud report and reversed all the charges. Lastly, I want to mention one more important tool for preventing or limiting loss from online purchases: \"\"disposable\"\", one-time-use credit card numbers. At least a few credit card providers (Citibank, Bank of America, Discover) offer you the option, on their websites, to generate a credit card number that charges your account, but under the limits you specify, including a maximum amount and expiration date. With one of these disposable numbers, you can pay for a single purchase and be confident that, even if the number were stolen in-transit or the merchant a fraud, they don't have your actual credit card number, and they can never charge you again. I have not yet seen this option for debit card customers, but there must be some banks that offer it, since it saves them a lot of time and trouble in pursuing defrauders. So, in short: If you pay with a credit card number you will not ever have to pay more than $50 for fraudulent charges. Even better, you may be able to use a disposable/one-time-use credit card number to further limit the chances that your credit is misused. Here's to happy--and safe--consumering!\"" }, { "docid": "151639", "title": "", "text": "\"AIUI this is not terribly abnormal. There are authorisations (sometimes reffered to as \"\"pending charges\"\" or \"\"holds\"\") and actual charges. An authorisation reserves money but doesn't actually take it. Normally what happens when you pay by card is that the merchant gets an authorisation immediately. Then some time later the authorisation is converted into an actual charge when the merchant takes the money. Sometimes merchants are slow in taking the actual charge, either deliberately (some merchants won't charge your card until they actually supply the goods to reduce the chance of having to process a refund) or because of administrative snarlups somewhere. When this happens the authorisation can time out before the actual charge is taken. So you get the pattern you see, first the authorisation appears then it times out and dissapears and finally the actual charge shows up.\"" }, { "docid": "562896", "title": "", "text": "You must understand that not everyone has or can get credit cards. Consider that those who are in the the lowest 20-30% of income tend to have fewer credit cards (or none), and lower credit debt, although some have quite high credit card debt relative to their income. So you really aren't comparing the same demographics (the population of all income earners, used to calculate average income, and the population of all credit card debt holders, are not the same groups of people). Once you remove those folks from consideration, then credit card usage may still average higher, but accept that it is unusual for people making less than $20K-30K/year to have much credit card debt. You must understand that wealth and income are two very different (although related) concepts. One must note that there are millions of people in the U.S. who have wealth; they have net assets of over $1M (excluding their homes). Many of those folks have assets greatly exceeding $1M. And although it might seem foolish to carry a large balance on their credit cards, they may have quite low interest rates, and simply find it simpler and more convenient to use credit cards in lieu of personal loans. Suppose you have $2M in net assets, and want to buy a classic car or a diamond necklace. Charging $30K and carrying the balance until a dividend check arrives may make sense. Understand also that not everyone makes the same choices, or good choices. Carrying a credit card balance may appear like a poor choice, especially when you are not wealthy, or have lower income. But suppose you have a high credit limit across several cards, and you need to handle a short-term financial challenge (car repair, layoff, medical bills, etc). You might use the credit card to pay for that purchase, essentially financing an extraordinary event over a longer period of time. And although having a balance of more than 5-10% of your monthly income may seem foolish to some, it may make sense to others. And some people choose to carry balances of 50% to 100% of their credit limit. Others realize that keeping their credit utilization below 30%, 20%, or 10% of the credit limit is a better plan (both interest rate and risk wise)." }, { "docid": "517440", "title": "", "text": "I would also check into whether you can keep using your credit card instead of switching to a debit card tied to your checking account. The credit card provides you protection from someone wiping your account out. Most banks will help you get the money back if this happens while using a debit card. But you are out the money while the bank figures out who is wrong. In the credit cards case none of your money is actually taken from your account while you dispute the charge. I also agree with the others that having all your money in one account is more difficult to keep real spending money separate from emergency fund money." }, { "docid": "214139", "title": "", "text": "\"American Express was originally a mail business that moved into money-orders. Traditionally their cards have been charge cards instead of a credit card (though they have credit products now as well). They've been marketed specifically as a \"\"premium\"\" product for people who have a significant amount of money (and are willing to pay a significant fee for premium services such as AmEx's good airline miles). As such, Visa and MasterCard are more widespread. Additionally, the fees that Visa and MasterCard charge merchants are typically lower (Wikipedia says 2%, as compared to AmEx's 2.5%, at least in the US). So: American Express gets less business as a company, but they charge higher fees to make up for it. Merchants will only accept the higher fees when they want to serve people who have a lot of money to spend (or if they can negotiate a discount).\"" }, { "docid": "481822", "title": "", "text": "I used to do this all the time but it's more difficult now. Just a general warning that this probably isn't a good idea unless you're very responsible with your money because it's easy to get yourself in a bad position if you're not careful. You can get a new credit card that does balance transfers and request balance transfer checks from them. Then just use one of those balance transfer checks to mail a payment to the loan you want to transfer. Make sure your don't use the entire credit line as the credit card will have the balance transfer fee put on it as well. You used to be able to find credit cards with 0% balance transfer fee but I haven't seen one of those in ages. Chase Slate is the lowest I've seen recently at 2%. Alternately, if you have a lot of expenses every month then it's easy to find a credit card where all purchases are 0% interest for a year or more and use that to pay every possible expense for a few months and use the money you'd normally use to pay for those expenses to pay off the original loan. If you're regular monthly expenses are high enough you can pay off the original loan quickly and then pay on the credit card with no interest as normal. The banks are looking to hook you so make sure you pay them off before the zero percent runs out or make sure you know what happens after it does. Normally the rate sky rockets. Also, don't use that card for anything else. Credit card companies always put payments towards the lowest interest rate first so if you charge something that doesn't qualify for 0% then it will collect interest until you've paid off the entire 0% balance which will likely take a while and cost you a lot of money. If you have to pay a balance transfer fee then figure out if it's less then you would have paid if you continued paying interest on the original loan. Good luck. I hope it works out for you." }, { "docid": "31509", "title": "", "text": "\"I think what you are looking for is a secured credit card. They are mostly used by people who have ruined their credit and want to rebuild it, but it might also serve your purpose. Essentially you deposit some money in an account and the credit card can be used up to the amount left in the account. Each month when you pay the bill, it resets the balance that you can charge. Also, many credit card providers also offer \"\"disposable\"\" or \"\"one use\"\" credit card numbers for the express purpose of using it online. It still gets charged against your regular account, but you get a separate number that can only be used for up to X dollars of transactions.\"" }, { "docid": "50000", "title": "", "text": "\"What is a good bank to use for storing my pay? Preferrably one that has free student accounts. Can I save money from my paychecks directly to a Canadian bank Otherwise, can I connect my bank account to my Canadian account online? Any (almost...) bank in the US has free college checking accounts. If the bank you entered doesn't - exit, and step into the one next door which most likely will. The big names - Wells Fargo, Bank Of America, Chase, Bank of the West, Union Bank, Citi etc - all have it. Also, check your local credit union. Do I need any ID to open a bank account? I have Canadian citizenship and a J-1 visa Bring your passport and a student card/driving license (usually 2 ID's required). What form of money should I take with me? Cash? Should I apply for a debit card? Can I use my Canadian credit card for purchasing anything in the states? (Canadian dollar is stronger than US dollar currently, so this could be to my advantage?) There's some fuss going on about debit cards right now. Some big banks (Bank of America, notably) decided to charge fees for using it. Check it, most of the banks are not charging fees, and as far as I know none of the credit unions are charging. So same thing - if they charge fees for debit card - step out and move on to the next one down the street. Using debit card is pretty convenient, cash is useful for small amount and in places that don't accept cards. If you're asking about how to move money from Canada - check with your local (Canadian) bank about the conversion rates and fees for transfers, check cashing, ATM, card swipes, etc - and see which one is best for you. When I moved large amounts of money across the border, I chose wire transfer because it was the cheapest, but for small amounts many times during the period of your stay it may be more expensive. You can definitely use your Canadian credit/debit card in the States, you'll be charged some fee by your credit card company, and of course the conversion rate. How much tax does I have to pay at the end of my internship? Let's assume one is earning $5,000 per month plus a one time $5,000 housing stipend, all before taxes. Will I be taxed again by the Canadian government? $5K for internship? Wow... You need to talk to a tax specialist, there's probably some treaty between the US and Canada on that, and keep in mind that the State of California taxes your income as well. What are some other tips I can use to save money in the California? California is a very big place. If you live in SF - you'll save a lot by using the MUNI, if your internship is in LA - consider buying an old clunker if you want to go somewhere. If you're in SD - just enjoy the weather, you won't get it in Canada. You'll probably want a \"\"pay as you go\"\" wireless phone plan. If your Canadian phone is unlocked GSM - you can go to any AT&T or T-Mobile store and get a pre-paid SIM for free. Otherwise, get a prepaid phone at any groceries store. It will definitely be cheaper than paying roaming charges to your Canadian provider. You can look at my blog (I'm writing from California), I accumulated a bunch of saving tips there over the years I'm writing it.\"" }, { "docid": "86716", "title": "", "text": "\"Others have commented on the various studies. If, as JoeTaxpayer says, this one particular study he mentions does not really exist, there are plenty of others. (And in that case: Did someone blatantly lie to prove a bogus point? Or did someone just get the name of the organization that did the study wrong, like it was really somebody called \"\"B&D\"\", they read it as \"\"D&B\"\" because they'd heard of Dun & Bradstreet but not of whoever B&D is. Of course if they got the organization wrong maybe they got important details of the study wrong. Whatever.) But let me add one logical point that I think is irrefutable: If you always buy with cash, there is no way that you can spend more than you have. When you run out of cash, you have no choice but to stop spending. But when you buy with a credit card, you can easily spend more than you have money in the bank to pay. Even if it is true that most credit card users are responsible, there will always be some who are not, and credit cards make it easy to get in trouble. I speak from experience. I once learned that my wife had run up $20,000 in credit card debt without my knowledge. When she divorced me, I got stuck with the credit card debt. To this day I have no idea what she spent the money on. And I've known several people over the years who have gone bankrupt with credit card debt. Even if you're responsible, it's easy to lose track with credit cards. If you use cash, when you take out your wallet to buy something you can quickly see whether there's a lot of money left or not so much. With credit, you can forget that you made the big purchase. More likely, you can fail to add up the modest purchases. It's easy to say, \"\"Oh, that's just $100, I can cover that.\"\" But then there's $100 here and $100 there and it can add up. (Or depending on your income level, maybe it's $10 here and $10 there and it's out of hand, or maybe it's $10,000.) It's easier today when you can go on-line and check the balance on your credit card. But even at that, well just this past month when I got one bill I was surprised at how big it was. I went through the items and they were all legitimate, they just ... added up. Don't cry for me, I could afford it. But I had failed to pay attention to what I was spending and I let things get a little out of hand. I'm a pretty responsible person and I don't do that often. I can easily imagine someone paying less attention and getting into serious trouble.\"" }, { "docid": "403663", "title": "", "text": "\"Social security number should only be needed for things that involve tax withholding or tax payment. Your bank or investment broker, and your employer, need it so they can report your earnings. You need it when filing tax forms. Other than those, nobody should really be asking you for it. The gym had absolutely no good reason to ask and won't have done anything with the number. I think we can ignore that one. The store cards are a bigger problem. Depending on exactly what was done with the data, you may have been messing up the credit record of whoever legitimately had that number... and if so you might be liable on fraud charges if they or the store figure out what happened and come after you. But that's unrelated to the fact that you have a legitimate SSN now. Basically, you really don't want to open this can of worms. And I hope you're posting from a disposable user ID and not using your real name... (As I noted in a comment, the other choice would be to contact the authorities (I'm not actually sure which bureau/department would be best), say \"\"I was young, foolish, and confused by America's process... do I need to do anything to correct this?\"\", and see what happens... but it might be wise to get a lawyer's advice on whether that's a good idea, a bad idea, or simply unnecessary.)\"" } ]

[ { "docid": "363591", "title": "", "text": "If you were looking to maximize your ability to save in a qualified plan, why not setup a 401K plan in Company A and keep the SEP in B? Setup the 401K in A such that any employee can contribute 100% of their salary. Then take a salary for around 19K/year (assuming under age 50), so you can contribute and have enough to cover SS taxes. Then continue to move dividends to Company A, and continue the SEP in B. This way if you are below age 50, you can contribute 54K (SEP limit) + 18K (IRA limit) + 5500 (ROTH income dependent) to a qualified plan." } ]

[ { "docid": "42999", "title": "", "text": "After reading OP Mark's question and the various answers carefully and also looking over some old pay stubs of mine, I am beginning to wonder if he is mis-reading his pay stub or slip of paper attached to the reimbursement check for the item(s) he purchases. Pay stubs (whether paper documents attached to checks or things received in one's company mailbox or available for downloading from a company web site while the money is deposited electronically into the employee's checking account) vary from company to company, but a reasonably well-designed stub would likely have categories such as Taxable gross income for the pay period: This is the amount from which payroll taxes (Federal and State income tax, Social Security and Medicare tax) are deducted as well as other post-tax deductions such as money going to purchase of US Savings Bonds, contributions to United Way via payroll deduction, contribution to Roth 401k etc. Employer-paid group life insurance premiums are taxable income too for any portion of the policy that exceeds $50K. In some cases, these appear as a lump sum on the last pay stub for the year. Nontaxable gross income for the pay period: This would be sum total of the amounts contributed to nonRoth 401k plans, employee's share of group health-care insurance premiums for employee and/or employee's family, money deposited into FSA accounts, etc. Net pay: This is the amount of the attached check or money sent via ACH to the employee's bank account. Year-to-date amounts: These just tell the employee what has been earned/paid/withheld to date in the various categories. Now, OP Mark said My company does not tax the reimbursement but they do add it to my running gross earnings total for the year. So, the question is whether the amount of the reimbursement is included in the Year-to-date amount of Taxable Income. If YTD Taxable Income does not include the reimbursement amount, then the the OP's question and the answers and comments are moot; unless the company has really-messed-up (Pat. Pending) payroll software that does weird things, the amount on the W2 form will be whatever is shown as YTD Taxable Income on the last pay stub of the year, and, as @DJClayworth noted cogently, it is what will appear on the W2 form that really matters. In summary, it is good that OP Mark is taking the time to investigate the matter of the reimbursements appearing in Total Gross Income, but if the amounts are not appearing in the YTD Taxable Income, his Payroll Office may just reassure him that they have good software and that what the YTD Taxable Income says on the last pay stub is what will be appearing on his W2 form. I am fairly confident that this is what will be the resolution of the matter because if the amount of the reimbursement was included in Taxable Income during that pay period and no tax was withheld, then the employer has a problem with Social Security and Medicare tax underwithholding, and nonpayment of this tax plus the employer's share to the US Treasury in timely fashion. The IRS takes an extremely dim view of such shenanigans and most employers are unlikely to take the risk." }, { "docid": "6595", "title": "", "text": "A 401k is pretty good, but it's not magic. Personally, I'd consider a 30k salary with a 401k and a 2k employer match less valuable than a 36k salary, let alone a 48k salary. If worried about retirement savings simply set up that IRA and put in the full 5.5k allowance." }, { "docid": "532839", "title": "", "text": "OK, so first of all, employers don't set up IRAs. IRA stands for Individual Retirement Account. You can set up a personal IRA for yourself, but not for employees. If that is what you're after, then just set one up for yourself - no special rules there for self employment. As far as setting up a 401(k), I'd suggest checking with benefits management companies. If you're small, you probably don't have an HR department, so managing a 401(k) yourself would likely be overly burdensome. Outsourcing this to a company which handles HR for you (maybe running payroll, etc. also), would be the best option. Barring that, I'd try calling a large financial institution (Schwab, Fidelity, etc.) for clear guidance." }, { "docid": "575576", "title": "", "text": "\"&gt;If you're in a VP+/Director position, you don't get blindsided by this shit no matter what which division you're responsible for ... \"\"Blindsided\"\" is very different from \"\"responsible for.\"\" The Director of HR might know that the CEO is tanking the company, but have no means by which to repair or stop the damage. You're just making an empty connection to justify your overly broad, \"\"tough guy\"\" fantasy. &gt;Okay, let 'em quit. Any stock options they have / other benefits get cashed out and applied to outstanding debts accrued under them before any payout reaches them. 1) Many of those benefits may have already vested, or otherwise vest when you constructively terminate them by withholding their salary. What that means is that they no longer belong to the company, and can't just be seized to play God with. The equivalent would be your employer reaching into your 401k and clawing back vested matching. 2) You're still just engaging in tough-guy fantasy, and ignoring the problem of a rudderless, headless company. Beating you chest and roaring won't stop the employees from being fucked over even harder when inventory stops showing up in the warehouse.\"" }, { "docid": "391896", "title": "", "text": "Your question is very widely scoped, making it difficult to reply to, but I can provide my thoughts on at least the following part of the question: I have a 401k plan with T. Rowe Price, should I use them for other investments too? Using your employer's decision, on which 401k provider they've chosen, as a basis for making your own decision on a broker for investing $100k when you don't even know what kind of investments you want seems relatively unwise to me, even if one of your focuses is simplicity. That is, unless your $100k is tax-advantaged (e.g. an IRA or other 401k) and your drive for simplicity means you'd be happy to add $100k to any of your existing 401k investments. In which case you should look into whether you can roll the $100k over into your employer's 401k program. For the rest of my answer, I'll assume the $100k is NOT tax-advantaged. I assume you're suggesting this idea because of some perceived bundling of the relationship and ease of dealing with one company & website? Yes, they may be able to combine both accounts into a single login, and you may be able to interact with both accounts with the same basic interface, but that's about where the sharing will end. And even those benefits aren't guaranteed. For example, I still have a separate site to manage my money in my employer's 401k @ Fidelity than I do for my brokerage/banking accounts @ Fidelity. The investment options aren't the same for the two types of accounts, so the interface for making and monitoring investments isn't either. And you won't be able to co-mingle funds between the 401k and non-tax-advantaged money anyway, so you'll have two different accounts to deal with even if you have a single provider. Given that you'll have two different accounts, you might as well pick a broker/provider for the $100k that gives you the best investment options, lowest fees, and best UI experience for your chosen type/goal of investments. I would strongly recommend figuring out how you want to invest the $100k before trying to figure out which provider to use as a broker for doing the investment." }, { "docid": "150883", "title": "", "text": "There are a couple of cases where I'd argue in favor of the 401k: Employer matching - If the employer matches your contributions, then it makes sense to get these additional investments which if you are in a low bracket may exist as highly-compensated employees may want those in the lower brackets to contribute as much as they can. Investment options - If the employer has enough assets in the plan, there could be access to institutional versions of those funds. For example, compare Vanguard Institutional Index Instl Pl (VIIIX) with Vanguard 500 Index Inv (VFINX), where the expense ratio in the former is just .02% while the latter is .17%. Granted this is a minor difference in expenses, there is something to be said for how much a .15% drag year over year could add up." }, { "docid": "119883", "title": "", "text": "\"Almost all companies in the US have changed from formal pension programs to 401k plans, and most companies that still have pension programs don't allow new employees to enroll in the new program; only the previous participants who are vested in the pension plan will get benefits while new employees get enrolled in the 401k plan. If this is the case with your prospective employer, then demanding that you be allowed to enroll in the pension plan is likely to be futile; in fact, the likely response may well be \"\"Here is our offer. Take it or leave it\"\" or \"\"We are withdrawing the offer we made\"\" especially if you are in a field where there are plenty of other people who could do the job instead of you. So be sure that you understand what your worth is to the company and how much leverage you have before starting to make counter-offers. With regard to money that you might have vested in your current employer's pension plan, your options are to leave it there until you retire and start getting a pension (generally not advisable in these parlous times when the company might not even exist by then), roll it over into an IRA or into your new employer's 401k plan. This last is the only matter that concerns your prospective employer and where you might need to ask; the new employer's 401k plan might not be structured to accept rollovers. If the money in your current employer's retirement plan is in a pension plan, what is paid out for rolling over might be different (and smaller) than what has been credited to you thus far. For example, my (State Government) pension plan credited 8% interest per annum on the amounts I contributed but this was fake money because had I resigned and withdrawn the pension contributions (for the purpose of rolling over into an IRA or even just taking it as cash), I would have received only my contributions plus only 4.5% interest per annum. The 8% interest credited is available only for the purpose of the purchase of an immediate annuity upon retirement; it is not something that is portable to a new plan, and if I want a lump-sum payout upon retirement instead of a pension in the form of an annuity, it would be the 4.5% rate again...\"" }, { "docid": "505617", "title": "", "text": "Be sure to consider the difference between Roth 401K and standard 401K. The Roth 401K is taxed as income then put into your account. So the money you put into the Roth 401K is taxed as income for the current year, however, any interest you accumulate over the years is not taxed when you withdraw the money. So to break it down: You may also want to look into Self Directed 401K, which can be either standard or Roth. Check if your employer supports this type of account. But if you're self employed or 1099 it may be a good option." }, { "docid": "353009", "title": "", "text": "Some companies allow you to make a post-tax contribution to the 401K. This is not a Roth contribution. This can be money beyond the 18,000 or 24,000 401k limit. The best news is that eventually that money can be rolled into 1 Roth-IRA. Not all companies allow this option. One company I worked for did this automatically when you hit the annual max. Of course that was made more complex if you had multiple employers that year." }, { "docid": "63532", "title": "", "text": "You cannot roll over your 401k money in an employer's 401k plan into an IRA (of any kind) while you are still employed by that employer. The only way you can start on the conversion before you retire (as Craig W suggests) is to change employers and start rolling over money in the previous employer's 401k into your Roth IRA while possibly contributing to the 401k plan of your new employer. Since the amount rolled over is extra taxable income (that is, in addition to your wages from your new job), you may end up paying more tax (or at higher rates) than you expect." }, { "docid": "579964", "title": "", "text": "Why do they hate teen workers, people with serious disabilities, and those who never had an opportunity to complete high school? Every employee must produce goods and/or services at least equal to the cost of their employment. Edit to add that people in these situations CAN and DO contribute to their employer and society. They also benefit from employment. When the bar is set artificially high, they lose the opportunity to do so." }, { "docid": "240373", "title": "", "text": "\"Just like all employee benefits there is a focus on removing or limiting owners of businesses' ability to abuse tax preferences under the guise of an employee benefit. As you point out there is an overall plan maximum 401(k) for employer contributions and match contributions. There is a nondiscrimination test for FSA programs (there is also a nondiscrimination test for medical plans under sections 125 and 105(h)). Employer contributions are counted toward the total of HSA contributions. Why an HSA has a different maximum arrangement than 401(k) is anyone's guess. But the purpose of the limit is to prevent owners of companies from setting up plans that do little more than funnel tax free funds to themselves. An owner/employee could pay themselves a wage, contribute the maximum, then have the \"\"employer\"\" also match the maximum, so there are limits in place.\"" }, { "docid": "300665", "title": "", "text": "US corporations are allowed to automatically enter employees into a 401K plan. A basic automatic enrollment 401(k) plan must state that employees will be automatically enrolled in the plan unless they elect otherwise and must specify the percentage of an employee's wages that will be automatically deducted from each paycheck for contribution to the plan. The document must also explain that employees have the right to elect not to have salary deferrals withheld or to elect a different percentage to be withheld. An eligible automatic contribution arrangement (EACA) is similar to the basic automatic enrollment plan but has specific notice requirements. An EACA can allow automatically enrolled participants to withdraw their contributions within 30 to 90 days of the first contribution. A qualified automatic contribution arrangement (QACA) is a type of automatic enrollment 401(k) plan that automatically passes certain kinds of annual required testing. The plan must include certain features, such as a fixed schedule of automatic employee contributions, employer contributions, a special vesting schedule, and specific notice requirements. You generally have a period of time to stop the first deposit. One I saw recently gave new employees to the first paycheck after the 60 day mark to refuse to join. You also may be able to get back the first deposit if you really don't want to join. If you don't want to participate look on the corporate website or the Fidelity website to set your future contributions to 0% of your paycheck. Keep in mind several things: Personally I'm against any type of government sponsored investments or savings. I can save money on my own and I don't care about their benefits. Some companies provide an annual contribution to all employees regardless of participation in the 401K. They do need to establish an account to do that. Again that is free money Does it mean if I never contribute any money so I will have 0 I might go below 0 and owe them money in case they bankrupt or do bad investments? Even in total market collapse the value of the 401K could never go below zero, unless the 401K was setup to allow very exotic investments." }, { "docid": "460905", "title": "", "text": "Defined Benefit Plans: Defined benefit plans are disappearing because of their high cost to the companies that provide them. When an employee retires, the company must pay his pension for the rest of his life, even longer if the pension includes a survivor option. Thus the company's financial burden grows as more employees retire. By law, they must provide a fund that has sufficient resources to pay all present and future pensions. Low interest rates, such as we have now, place a greater burden on the amount that must be in these funds. For these reasons, most companies, including large ones like IBM and Lockheed Martin, have discontinued their pension plans and provide only defined contribution plans. Defined Contribution Plans: These require the company to only make contributions while the employee is working. Once the employee retires, the company's responsibility ends. Usually these plans employ a 401K type savings plan for which the employee contributes and the companies matches some or all of that contribution. Comparison: Although a fully company paid pension plan is the best, it is now almost unavailable. The defined contribution plan, if it includes company matching, can be a viable alternative if the investments are chosen wisely and perform as expected. Of course, this is not guaranteed but is probably the best option that most working people have at this time." }, { "docid": "471259", "title": "", "text": "\"Hahaha, that sounds good but in real life pensions are almost never fully funded and almost never fully funded when starting off. That is why the post office is almost always losing money. They're required by law to pre-pay some crazy number like 70% of pension and retiree obligations up front which sucks up all resources. When a employee opens a pension plan their employer starts contributing a target amount dependent on the stated benefits and the actuarial projections. The market doesn't always go up and the actuaries are not always correct with lifespans either. You take the risk of losing that pension if you work for a bad company, same as if you invest in an employee stock option plan. You can usually take a lump-sum payout, but who would do that when you can get \"\"guaranteed\"\" money.\"" }, { "docid": "218696", "title": "", "text": "401(k) plans, 403(b) plans, IRAs etc all require more paperwork than a non-tax-advantaged investment. As a result, most such plans (with Vanguard as well as with other management companies) offer only a small set of investment options, and so it costs the plan sponsor (you wearing your Employer hat) money if you want to add more investment options for your Solo 401(k) plan). Note that with employer-sponsored retirement plans, investments in each mutual fund might be coming in small amounts from various employees, much less than the usual minimum investment in each fund, and possibly less than the minimum per-investment transaction requirement (often $50) of the fund group. Taking care of all that is expensive, and it is reasonable that Vanguard wants to charge you (the Employer) a fee for the extra work it is doing for you. When I was young and IRAs had just been invented (and the annual contribution limit was $2000 for IRAs), I remember being charged a $20 annual fee per Vanguard fund that I wanted to invest in within my IRA but this fee was waived once my total IRA assets with Vanguard had increased above $10K." }, { "docid": "223712", "title": "", "text": "The answer likely depends a bit on which state you are in, but this should be true for most states. I don't know anything about Pennsylvania specifically unfortunately. The Affordable Care Act created the SHOP marketplace, which allows small businesses to effectively form larger groups for group coverage purposes. SHOP stands for Small Business Health Options Program, and requires only one common-law employee on payroll. This would effectively allow you to offer group coverage without having a group. Talk to your tax accountant for more details, as this is still very new and not necessarily well understood. There are some other options, all of which I would highly suggest talking to a tax accountant about as well. HRAs (health reimbursement accounts) allow the employer to set aside pre-tax funds for the employee to use for approved medical expenses; they're often managed by a benefits company (say, Wageworks, Conexis, etc.). That would allow your employee to potentially pick a higher deductible health plan which offers poorer coverage on the individual marketplace (with after-tax dollars) and then supplement with your HRA. There are also the concept of Employer Payment Plans, where the employer reimburses the employee for their insurance premiums, but those are not compatible with the ACA for the most part - although there seems to be a lot of disagreement as to whether it's possible to have something effectively the same work, see for example this page versus this for example." }, { "docid": "290105", "title": "", "text": "I would hire an accountant to help set this up, given the sums of money involved. $53,000 would be the minimum amount of compensation needed to maximize the 401k. The total limit of contributions is the lesser of: 100% of the participant's compensation, or $53,000 ($59,000 including catch-up contributions) for 2015 and 2016. and they don't count contributions as compensation Your employer's contributions to a qualified retirement plan for you are not included in income at the time contributed. (Your employer can tell you whether your retirement plan is qualified.) On the bright side, employer contributions aren't subject to FICA withholdings." }, { "docid": "301194", "title": "", "text": "\"I assume you get your information from somewhere where they don't report the truth. I'm sorry if mentioning Fox News offended you, it was not my intention. But the way the question is phrased suggests that you know nothing about what \"\"pension\"\" means. So let me explain. 403(b) is not a pension account. Pension account is generally a \"\"defined benefit\"\" account, whereas 403(b)/401(k) and similar - are \"\"defined contribution\"\" accounts. The difference is significant: for pensions, the employer committed on certain amount to be paid out at retirement (the defined benefit) regardless of how much the employee/employer contributed or how well the account performed. This makes such an arrangement a liability. An obligation to pay. In other words - debt. Defined contribution on the other hand doesn't create such a liability, since the employer is only committed for the match, which is paid currently. What happens to your account after the employer deposited the defined contribution (the match) - is your problem. You manage it to the best of your abilities and whatever you have there when you retire - is yours, the employer doesn't owe you anything. Here's the problem with pensions: many employers promised the defined benefit, but didn't do anything about actually having money to pay. As mentioned, such a pension is essentially a debt, and the retiree is a debt holder. What happens when employer cannot pay its debts? Employer goes bankrupt. And when bankrupt - debtors are paid only part of what they were owed, and that includes the retirees. There's no-one raiding pensions. No-one goes to the bank with a gun and demands \"\"give me the pension money\"\". What happened was that the employers just didn't fund the pensions. They promised to pay - but didn't set aside any money, or set aside not enough. Instead, they spent it on something else, and when the time came that the retirees wanted their money - they didn't have any. That's what happened in Detroit, and in many other places. 403(b) is in fact the solution to this problem. Instead of defined benefit - the employers commit on defined contribution, and after that - it's your problem, not theirs, to have enough when you're retired.\"" } ]

[ { "docid": "140226", "title": "", "text": "\"The best answer here is \"\"maybe, but probably not\"\". A few quick reasons: Its not a bad idea to watch other investors especially those who can move markets but do your own research on an investment first. Your sole reason for investing should not be \"\"Warren did it\"\".\"" } ]

[ { "docid": "257417", "title": "", "text": "\"Robert Kiyosaki's is basically a get-rich quick author. But to answer your question: It is a sales pitch in disguise. See Marketplace's report on a Kiyosaki seminar, which reveals that the free work shop is a sales pitch for a 3-day work shop which costs several hundred dollars. And the 3-day workshop is a sales pitch for \"\"advanced\"\" training which can cost as much as $45,000 (presumably in Canadian dollars, as the report was done in Canada). He does touch on some basic sound principles, but it's mixed with a lot of really bad (and in some cases illegal) advice. You'll do much better to invest your time and money in reading materials that aren't advertised via infomercials. Kiyosaki may well be rich, but it's from selling his Rich Dad-branded material, not from investing in real estate, or any other investment portfolio See also John T. Reed's guru rating, and his review of Kiyosaki's book, Rich Dad, Poor Dad.\"" }, { "docid": "494655", "title": "", "text": "\"Holding pure cash is a problem for 401K companies because they would then have follow banking rules because they would be holding your cash on their balance sheets. They don't want to be in that business. Instead, they should offer at least one option as a cash equivalent - a money market fund. This way the money is held by the fund, not by 401K administrator. Money Market funds invest in ultra-short term paper, such as overnight loans between banks and other debt instruments that mature in a matter of days. So it is all extremely liquid, as close to \"\"Money\"\" as you can get without actually being money. It is extremely rare for a money market fund to lose value, or \"\"break the buck.\"\" During the crisis of 2008, only one or two funds broke the buck, and it didn't last long. They had gotten greedy and their short term investments were a little more aggressive as they were trying to get extra returns. In short, your money is safe in a money market fund, and your 401K plan should offer one as the \"\"cash\"\" option, or at least it should offer a short-term bond fund. If you feel strongly that your money should be in actual cash, you can always stop contributing to the 401K and put the money in the bank. This is not a good idea though. Unless you're close to retirement, you'll be much better off investing in a well diversified portfolio, even through the ups and downs of the market.\"" }, { "docid": "444261", "title": "", "text": "The key to good investing is you need to understand what you are investing in. That is, if you are buying a company that makes product X, you need to understand that. It is a good idea to buy stock in good companies but that is not sufficient. You need to buy stock in good companies at good prices. That means you need to understand things like price to earnings, price to revenue and price to book. Bob" }, { "docid": "229623", "title": "", "text": "As @mbhunter says, make sure you pay off any debt you have first. Then, it's a good idea to keep some or all of your savings as an emergency fund. If you use every last dime to pay for a house, you'll have no cushion available when something breaks down. The most common recommendation I've seen is to have 3-6 months worth of expenses as an emergency fund. Once you have that, then you can start saving for your down payment. As @Victor says, try to find the best interest rate you can for that money, but I wouldn't invest it in any kind of stock or bond product, because your need for it is too short term. Safety is more important than growth given your time frame. When you're ready to invest, make sure you learn all you can. You don't want to invest in something you don't understand, because that's how you get ripped off. You can be reading and talking to people while you're saving for your house so that, when the time comes, you'll have a pretty good idea of what you want to do for investments." }, { "docid": "89734", "title": "", "text": "\"Rod Kagy is a corporate Vice Chairman, and Chairman overseeing five private organizations &amp; has been recognized by a company as one of the \"\"Top 50 Business Intellectuals in the World\"\"; by Harvard Business Press as one of the \"\"Top 200 Business Gurus\"\"; by American Express as one of the \"\"Top Six Business Leaders in the World\"\" to coach its entrepreneurial clients.\"" }, { "docid": "415329", "title": "", "text": "\"One thing that's often overlooked is that cash reserves are also a long-term investment. Anything can be a long-term investment if it's expected to appreciate or pay interest/dividends. So it's not either/or. Stocks are but one way to do long-term investments. Having said that, taking on less debt for a consumer good is never a bad idea. Your primary residence is a consumer good, regardless of those who would say that \"\"your home is your biggest investment.\"\" So, there's my vote for a larger down-payment. Beyond that, a couple of outside-the-box comments:\"" }, { "docid": "9957", "title": "", "text": "\"Buy this book. It is a short, simple crash course on personal finance, geared at someone in their 20s just starting out their career. You can easily finish it in a weekend. The book is a little dated at this point (pre housing bubble), but it is still valid. I personally feel it is the best intro to personal finance out there. 99% of the financial advice you read online will be a variation of what is already in this book. If you do what the book says, you should be in a solid position financially. You won't be an investment guru or anything, but you will at least have the fundamentals. There are various \"\"protips\"\" for personal finance that go beyond the book, but I would advise against paying too much attention to them until you have the basics down.\"" }, { "docid": "517784", "title": "", "text": "I will ask again since you are an expert in economy: &gt; Explain me why Bezos, a retail and technology guru would waste his time on WaPo, and old-fashion media? Is it to make money? Yes or no? Yes, you reduce your tax bill if your profits go down due to a losing business. It's not debatable." }, { "docid": "577832", "title": "", "text": "Your question seems to be making assumptions around “investing”, that investing is only about stock market and bonds or similar things. I would suggest that you should look much broader than that in terms of your investments. Investment Types Your should consider (and include) some or all of the following for your investments, depending on your age, your attitude towards risk, the number of dependents you have, your lifestyle, etc. I love @Blackjack’s explanation of diversification into other asset classes producing a lower risk portfolio. Excellent! All the above need to be considered in this spread of risk, depending as I said earlier on your age, your attitude towards risk, the number of dependents you have, your lifestyle, etc. Stock Market Investment I’ll focus most of the rest of my post on the stock markets, as that is where my main experience lies. But the comments are applicable to a greater or lesser extent to other types of investing. We then come to how engaged you want to be with your investments. Two general management styles are passive investment management versus active investment management. @Blackjack says That pretty much sums up passive management. The idea is to buy ETFs across asset classes and just leave them. The difficulty with this idea is that profitability is very dependent upon when the stocks are purchased and when they are sold. This is why active investing should be considered as a viable alternative to passive investment. I don’t have access to a very long time frame of stock market data, but I do have 30 or so years of FTSE data, so let’s say that we invest £100,000 for 10 years by buying an ETF in the FTSE100 index. I know this isn't de-risking across a number of asset classes by purchasing a number of different EFTs, but the logic still applies, if you will bear with me. Passive Investing I have chosen my example dates of best 10 years and worst 10 years as specific dates that demonstrate my point that active investing will (usually) out-perform passive investing. From a passive investing point of view, here is a graph of the FTSE with two purchase dates chosen (for maximum effect), to show the best and worst return you could receive. Note this ignores brokerage and other fees. In these time frames of data I have … These are contrived dates to illustrate the point, on how ineffective passive investing can be, depending if there is a bear/bull market and where you buy in the cycle. One obviously wouldn’t buy all their stocks in one tranche, but I’m just trying to illustrate the point. Active Investing Let’s consider now active investing. I use the following rules for selling and buying:- This is obviously a very simple technical trading system and I would not recommend using it to trade with, as it is overly simplistic and there are some flaws and inefficiencies in it. So, in my simulation, These beat the passive stock market profit for their respective dates. Summary Passive stock market investing is dependent upon the entry and exit prices on the dates the transactions are made and will trade regardless of market cycles. Active stock market trading or investing engages with the market using a set of criteria, which can change over time, but allows one’s investments to be in or out of the market at any point in time. My time frames were arbitrary, but with the logic applied (which is a very simple technical trading methodology), I would suggest that any 10 year time frame active investing would beat passive investing." }, { "docid": "403092", "title": "", "text": "\"One way to start with stocks is by playing the fake stock market. Investigate what trading fees would be with a broker, then \"\"invest\"\" a certain amount of money - note it on paper or in a spreadsheet. Follow your stocks, make decisions on selling and buying, and see where you would be after a year or so. That way you can get an idea, even if not exactly precise, on what your returns would be if you really invested the money.\"" }, { "docid": "21225", "title": "", "text": "\"Real estate is not a good investment. In fact, it's easy to make a case for it being the worst possible investment imaginable: Imagine over a cup or coffee or a glass of wine we get to talking about investments. Then maybe one of us, let’s say you, says: “Hey I’ve got an idea. We’re always talking about good investments. What if we came up with the worst possible investment we can construct? What might that look like?” Well, let’s see now (pulling out our lined yellow pad), let’s make a list. To be really terrible: -- Why Your House Is A Terrible Investment There are plenty of good reasons to own a home, but the key word there is \"\"home\"\". Owning housing as an investment property is a horrible idea, and anyone who does it, especially right now with as bubbly as the market is looking again, (or, better put, still, since the last bubble never did fully pop and clear out the underlying systemic instability,) is an idiot. And even after the current housing market bubble pops, it's likely to remain a bad idea for decades. We're never getting the early 2000s back, for basic supply-and-demand reasons: with the Baby Boom generation retiring, aging and dying off, they're not likely to do much more home-buying, and no generation after them is as big as they are, which means a glut of oversupply and weak demand for the entirety of the foreseeable future.\"" }, { "docid": "547110", "title": "", "text": "More exactly, it would be beneficial if government spent on something that increases economic productivity. The problem is, how can the government determine what is a good investment vs a bad investment? Even restricted only to building infrastructure, how does it know which bridges are good and which are [bad](http://en.wikipedia.org/wiki/Gravina_Island_Bridge)? Government has no good method of determining this. They make political, not economic decisions and listen to whoever lobbies them the best. This idea of economic calculation is how [Mises' predicted that socialism/communism would utterly fail](http://mises.org/humanaction/chap26sec1.asp)." }, { "docid": "502686", "title": "", "text": "\"Thanks for your question. Definitely pay the car down as soon as possible (reasoning to follow). In fact, I would go even further and recommend the following: Why? 1) Make money risk free - the key here is RISK FREE. By paying down the loan now, you can avoid paying interest on the additional amount paid toward principal risk free. Imagine this scenario: if you walked into a bank and they said, \"\"If you give us $100, we'll give you $103 back today\"\", would you do it? That is exactly what you get to do by not paying interest on the remaining loan principal. 2) The spread you might make by investing is not as large as you may think. Let's assume that by investing, you can make a market return of 10%. However, these are future cash flows, so let's discount this for inflation to a \"\"real\"\" 8% return. Then let's assume that after fees and taxes this would be a 7% real after-tax return. You also have to remember that this money is at risk in the market and may not get this return in some years. Assuming that your friend's average tax rate on earned income is 25%, this means that he'd need to earn $400 pre-tax to pay the after-tax payment of $300. So this is a 4% risk-free return after tax compared to a 7% average after tax return from the market, but one where the return is at risk. The equivalent after-tax risk-free return from the market (think T-Bills) is much lower than 7%. You are also reducing risk by paying the car loan off first in a few other ways, which is a great way to increase peace of mind. First, since cars decline in value over time, you are minimizing the possibility that you will eventually end up \"\"under water\"\" on the loan, where the loan balance is greater than the value of the car. This also gives you more flexibility in terms of being able to sell the car at any point if desired. Additionally, if the car breaks down and must be replaced, you would not need to continue making payments on the old loan, of if your friend loses his job, he would own the car outright and would not need to make payments. Finally, ideally you would only be investing in the market when you intend to leave the money there for 5+ years. Otherwise, you might need to pull money out of the market at a bad time. Remember, annual market returns vary quite a bit, but over 5-10 year periods, they are much more stable. Unfortunately, most people don't keep cars 5-10+ years, so you are likely to need the money back for another car more frequently than this. If you are pulling money out of the market every 5-10 years, you are more likely to need to pull money out at a bad time. 3) Killing off the \"\"buy now, pay later\"\" mindset will result in long-term financial benefits. Stop paying interest on things that go down in value. Save up and buy them outright, and invest the extra money into things that generate income/dividends. This is a good long-term habit to have. People also tend to be more prudent when considering the total cost of a purchase rather than just the monthly payment because it \"\"feels\"\" like more money when you buy outright. As a gut check for whether this is a good idea, here is an example that Dave Ramsey likes to use: Suppose that your friend did not have the emergency fund, and also did not have the car loan and owned the car outright. In that case, would your friend take out a title loan on the car in order to have an emergency fund? I think that a lot of people would say no, which may be a good indicator that it is wise to reduce the emergency fund in order to wipe out the debt, rather than maintaining both.\"" }, { "docid": "118999", "title": "", "text": "\"To be completely honest, I think that a target of 10-15% is very high and if there were an easy way to attain it, everyone would do it. If you want to have such a high return, you'll always have the risk of losing the same amount of money. Option 1 I personally think that you can make the highest return if you invest in real estate, and actively manage your property(s). If you do this well with short term rental and/or Airbnb I think you can make healthy returns BUT it will cost a lot of time and effort which may diminish its appeal. Think about talking to your estate agent to find renters, or always ensuring your AirBnB place is in good nick so you get a high rating and keep getting good customers. If you're looking for \"\"passive\"\" income, I don't think this is a good choice. Also make sure you take note of karancan's point of costs. No matter what you plan for, your costs will always be higher than you think. Think about water damage, a tenant that breaks things/doesn't take care of stuff etc. Option 2 I think taking a loan is unnecessarily risky if you're in good financial shape (as it seems), unless you're gonna buy a house with a mortgage and live in it. Option 3 I think your best option is to buy bonds and shares. You can follow karancan's 100 minus your age rule, which seems very reasonable (personally I invest all my money in shares because that's how my father brought me up, but it's really a matter of taste. Both can be risky though bonds are usually safer). I think I should note that you cannot expect a return of 10% or more because, as everyone always says, if there were a way to guarantee it, everyone would do it. You say you don't have any idea how this works so I'd go to my bank and ask them. You probably have access to private banking so that should mean someone will be able to sit you down and talk you through. Also look at other banks that have better rates and/or pretend you're leaving your bank to negotiate a better deal. If I were you I'd invest in blue chips (big international companies listed on the main indeces (DAX, FTSE 100, Dow Jones)), or (passively managed) mutual funds/ETFs that track these indeces. Just remember to diversify by country and industry a bit. Note: i would not buy the vehicles/plans that my bank (no matter what they promise, and they promise a lot) suggest because if you do that then the bank always takes a cut off your money. TlDr, dont expect to make 10-15% on a passive investment and do what a lot of others do: shares and bonds. Also make sure you get a lot of peoples opinions :)\"" }, { "docid": "218484", "title": "", "text": "Pretty simple: When is Cash Value Life Insurance a good or bad idea? It is never a good idea. How can life insurance possibly work as investment? It can't. Just as car, home, or health insurance is not an investment. Note for counter example providers: intent to commit insurance fraud is not an investment. Why not live your life so in 15 or 20 years you are debt free, have a nice emergency fund built and have a few 100 thousand in investments? Then you can self-insure. If you die with a paid off home, no debt, 20K in a money market, and 550,000 in retirement accounts would your spouse and children be taken care of?" }, { "docid": "293464", "title": "", "text": "\"The other answers are talking about seller financing. There is another type of arrangement that might be described as \"\"writing your own mortgage,\"\" where the buyer arranges his (or her) own financing. Instead of using a bank, a buyer might find his own investor to hold the mortgage for him. An example would be if I were to buy a house that needs fixing up. I might be able to buy a house for $40,000, but after I fix it up, I believe it will sell for $100,000. Instead of going through a traditional mortgage bank, I find an investor with cash that agrees the house is a good deal, and we arrange for the investor to provide funds for the purchase of the house on a short-term basis (perhaps interest-only), during which I fix up the house and sell it. Just like a regular mortgage, the loan is backed by the house itself. I am not recommending this type of arrangement by any means, but this article does a good job of describing how this would work. It is written by a real-estate guru with lots of training courses and coaching materials that she would like to sell you. :)\"" }, { "docid": "37262", "title": "", "text": "\"Are you not allowed the y5 option? I'm no guru, but one thing that sticks out to me in that plan is the vesting period of 5yrs as opposed to 10, so the money is \"\"yours\"\" in half the time....so if after 5yrs, you find a better gig, you can roll those benefits into another account and manage them on your own (or just leave and draw on them when you are eligible) Then again, knowing that many municipalities are in shit shape due to their pension benefit liabilities, they may be pushing to the longer vesting period to a) encourage you to stay employed there and/or b) allow them to keep the money should you leave before that 10yr period Like I said, though- I'm def no guru, and that is only one aspect of these plans. I'd personally reach out to a financial planner so they can game it all out for you and equip you with the info to make the best choice\"" }, { "docid": "388826", "title": "", "text": "It's not usually a good idea to buy a house as an investment. Buy a house because you want the house, not for an investment. Your money will make more money invested somewhere other than a house. Additionally, based on talking about renting rooms to pay the mortgage and the GI bill, I assume you are planning on going to school and not working? I am not that familiar with VA loans, but I imagine they will require you show some form of income before they are willing to give you a loan. 14% returns over the long run are very good, but last year the market was up almost 30%, if you were only at 14% for last year you left quite a bit on the table. I would advise against individual stocks for investments except as a hobby. Put the majority of your investments into ETF's/low fee mutual funds and keep a smaller amount that you can afford to lose in stocks." }, { "docid": "395096", "title": "", "text": "\"There are a LOT of reasons why institutional investors would own a company's stock (especially a lot of it). Some can be: The company is in one of the indices, especially big ones. Many asset management companies have funds that are either passive (track index) or more-or-less closely adhere to a benchmark, with the benchmark frequently being (based on/exactly) an index. As such, a stock that's part of an index would be heavily owned by institutional investors. Conclusion: Nothing definitive. Being included in an equity index is usually dependent on the market cap; NOT on intrinsic quality of the company, its fundamentals or stock returns. The company is considered a good prospect (growth or value), in a sector that is popular with institutional investors. There's a certain amount of groupthink in investing. To completely butcher a known IT saying, you don't get fired for investing in AAPL :) While truly outstanding and successful investors seek NON-popular assets (which would be undervalued), the bulk is likely to go with \"\"best practices\"\"... and the general rules for valuation and analysis everyone uses are reasonably similar. As such, if one company invests in a stock, it's likely a competitor will follow similar reasoning to invest in it. Conclusion: Nothing definitive. You don't know if the price at which those institutional companies bought the stock is way lower than now. You don't know if the stock is held for its returns potential, or as part of an index, or some fancy strategy you as individual investor can't follow. The company's technicals lead the algorithms to prefer it. And they feed off of each other. Somewhat similar in spirit to #2, except this time, it's algorithmic trading making decisions based on technicals instead of portfolio managers based on funamentals. Obviously, same conclusion applies, even more so. The company sold a large part of the stock directly to institutional investor as part of an offering. Sometimes, as part of IPO (ala PNC and BLK), sometimes additional capital raising (ala Buffett and BAC) Conclusion: Nothing definitive. That investor holds on to the investment, sometimes for reason not only directly related to stock performance (e.g. control of the company, or synergies). Also, does the fact that Inst. Own % is high mean that the company is a good investment and/or less risky? Not necessarily. In 2008, Bear Stearns Inst Own. % was 77%\"" } ]

[ { "docid": "552375", "title": "", "text": "I think following the professional money managers is a strategy worth considering. The buys from your favorite investors can be taken as strong signals. But you should never buy any stock blindly just because someone else bought it. Be sure do your due diligence before the purchase. The most important question is not what they bought, but why they bought it and how much. To add/comment on Freiheit's points:" } ]

[ { "docid": "594788", "title": "", "text": "One could wish that. If you speak to Chinese in China even they don't trust Chinese businessses and don't want Chinese goods. Hiring top European and American design and engineering firms for large projects doesn't help if the guy putting the base down decides not to follow the specifications or the subcontractor doing the concrete tries to save a few bucks and does a shoddy job. As far as coming up with new ideas? Do you know why so many Chinese firms and the government hack and steal information? Group think is a way of life and no one wants to stick out." }, { "docid": "70490", "title": "", "text": "It is difficult to value a private company. Most of the valuations is based on how one feels the idea would translate into revenue in some future time. The VC firms take into account various factors to determine the price, but more often then not, its their hunch. Even VC don't make money on all picks, very few picks turn out to be stars, most picks lose money they have invested. Few picks just return their money. So if you feel that the idea/product/brand/people are great and would someday make good money, invest into it. Else stay away." }, { "docid": "424679", "title": "", "text": "\"I cannot tell you what is or is not allowed under Islamic law. What I can tell you is that when most investors talk about the \"\"power of compound interest,\"\" they are not actually necessarily talking about interest! The idea of the magic of compound interest is that when you receive an interest payment on your investment, you now have a larger investment, earning more interest. Your investment grows exponentially. This doesn't just apply to interest payments, however, but can apply to any type of investment where the profits of the investment cause the investment to get larger. For example, if you invest in a company's stock, and the value of the stock goes up 10% in a year, after that year your investment is worth more than it was at the beginning. If it goes up another 10% the following year, you have gained more money in the second year than you did in the first. Your gains are compounding, even though interest payments are not involved at all. The same is true if you reinvest dividends or if you use business profit to expand your business, for example. The term \"\"power of compound interest\"\" is so named for historical reasons, but really applies to any type of investment where the investment itself is growing.\"" }, { "docid": "502686", "title": "", "text": "\"Thanks for your question. Definitely pay the car down as soon as possible (reasoning to follow). In fact, I would go even further and recommend the following: Why? 1) Make money risk free - the key here is RISK FREE. By paying down the loan now, you can avoid paying interest on the additional amount paid toward principal risk free. Imagine this scenario: if you walked into a bank and they said, \"\"If you give us $100, we'll give you $103 back today\"\", would you do it? That is exactly what you get to do by not paying interest on the remaining loan principal. 2) The spread you might make by investing is not as large as you may think. Let's assume that by investing, you can make a market return of 10%. However, these are future cash flows, so let's discount this for inflation to a \"\"real\"\" 8% return. Then let's assume that after fees and taxes this would be a 7% real after-tax return. You also have to remember that this money is at risk in the market and may not get this return in some years. Assuming that your friend's average tax rate on earned income is 25%, this means that he'd need to earn $400 pre-tax to pay the after-tax payment of $300. So this is a 4% risk-free return after tax compared to a 7% average after tax return from the market, but one where the return is at risk. The equivalent after-tax risk-free return from the market (think T-Bills) is much lower than 7%. You are also reducing risk by paying the car loan off first in a few other ways, which is a great way to increase peace of mind. First, since cars decline in value over time, you are minimizing the possibility that you will eventually end up \"\"under water\"\" on the loan, where the loan balance is greater than the value of the car. This also gives you more flexibility in terms of being able to sell the car at any point if desired. Additionally, if the car breaks down and must be replaced, you would not need to continue making payments on the old loan, of if your friend loses his job, he would own the car outright and would not need to make payments. Finally, ideally you would only be investing in the market when you intend to leave the money there for 5+ years. Otherwise, you might need to pull money out of the market at a bad time. Remember, annual market returns vary quite a bit, but over 5-10 year periods, they are much more stable. Unfortunately, most people don't keep cars 5-10+ years, so you are likely to need the money back for another car more frequently than this. If you are pulling money out of the market every 5-10 years, you are more likely to need to pull money out at a bad time. 3) Killing off the \"\"buy now, pay later\"\" mindset will result in long-term financial benefits. Stop paying interest on things that go down in value. Save up and buy them outright, and invest the extra money into things that generate income/dividends. This is a good long-term habit to have. People also tend to be more prudent when considering the total cost of a purchase rather than just the monthly payment because it \"\"feels\"\" like more money when you buy outright. As a gut check for whether this is a good idea, here is an example that Dave Ramsey likes to use: Suppose that your friend did not have the emergency fund, and also did not have the car loan and owned the car outright. In that case, would your friend take out a title loan on the car in order to have an emergency fund? I think that a lot of people would say no, which may be a good indicator that it is wise to reduce the emergency fund in order to wipe out the debt, rather than maintaining both.\"" }, { "docid": "385932", "title": "", "text": "\"*(\"\"Fee-only\"\" meaning the only money they make is the fee your folks pay directly; no kickbacks from financial products they're selling.) The answer to this is: for God's sake, leave it alone! I commend you on wanting to help your family avoid more losses. You are right, that having most of one's retirement in one stock or sector is just silly. And again yes, if they're retired, they probably need some bonds. But here's the thing, if they follow your advise and it doesn't work out, it will be a SERIOUS strain on your relationship. Of course you'll still be a family and they'll still love you, but emotionally, you are the reason they lost the money, and that will an elephant in between you. This is especially the case since we're talking about a lot of money here (presumably), and retirement money to boot. You must understand the risk you're taking with your relationships. If you/they lose, at best it'll make things awkward, and you'll feel guilty about their impoverished retirement. At worst it can destroy your relationship with your folks. What about if you win? Won't you be feted and appreciated by your folks for saving them from themselves? Yes, for a short while. Then life moves on. Everything returns to normal. But here's the thing. You won't win. You can't. Because even if you're right here, and they win, that means both they and you will be eager for you to do it again. And at some point they'll take a hit based on your advise. Can I be blunt here? You didn't even know that you can't avoid capital gains taxes by reinvesting stock gains. You don't know enough, and worse, you're not experienced enough. I deduce you're either a college student, or a recent grad. Which means you don't have experience investing your own money. You don't know how the market moves, you just know the theory. You know who you are? You're me, 20 years ago. And thank God my grandparents ignored my advise. I was right about their utilities stocks back then, too. But I know from what I learned in the years afterwards, investing on my own account, that at some point I would have hurt them. And I would have had a very hard time living with that. So, tell your folks to go visit a fee-only financial adviser to create a retirement plan. Perhaps I'm reading into your post, but it seems like you're enthusiastic about investing; stocks, bonds, building wealth, etc. I love that. My advise -- go for it! Pull some money together, and open your own stock account. Do some trading! As much as people grouse about it, the market really is glorious. It's like playing Monopoly, but for keeps. I mean that in the best way possible. It's fun, you can build wealth doing it, and it provides a very useful social purpose. In the spirit of that, check out these ideas (just for you, not for your folks!), based on ideas in your post: Good luck.\"" }, { "docid": "513281", "title": "", "text": "\"First, let me say that $1000 is not that much of amount to invest in stocks. You need to remember that each transaction (buy/sell) has fees, which vary between $4-$40 (depending on the broker, you mentioned Scottrade - they charge $7 per transaction for stocks and about twice as much for some mutual funds). Consider this: you invest $1000, you gain $100. You'll pay $15 in fees just to buy/sell, that's 1.5% expense ratio. If you invest in more than 1 stock - multiply your fees. To avoid that you can look into mutual funds. Different brokers offer different funds for free, and almost all of them carry many of the rest for a fee. When looking into funds, you can find their expense ratio and compare. Remember that a fund with 1% expense ratio diversifies and invests in many stocks, while for you 1.5% expense ratio is for investing in a single stock. Is it a good idea to invest only in US or diversify worldwide? You can invest in the US, but in funds that diversify worldwide or across industries. Generally it is a good idea to diversify. I am 28. Should I be a conservative investor or take some risks? Depends on how bad of a shape will you be if you lose all your principle. What online brokerage service is the best? I have heard a lot about Scotttrade but want to be sure before I start. It seems to be the least expensive and most user-friendly to me. \"\"Best\"\" is a problematic term. Scottrade is OK, E*Trade is OK, you can try Sharebuilder, Ameritrade, there are several \"\"discount\"\" online brokers and plenty of on-line reviews and comparisons amongst them. What is a margin account and how would it affect my investing? From what I understand it comes into play when an investor borrows money from the broker. Do I need to use it at all as I won't be investing on a big scale yet. You understand right. There are rules to use margin accounts, and with the amount you have I'd advise against them even if you get approved. Read through the brokers' FAQ's on their requirement. Should I keep adding money on a monthly basis to my brokerage account to give me more money to invest or keep it at a certain amount for an extended period of time? Sharebuilder has a mechanism to purchase monthly at discounted prices. But be careful, they give you discounted prices to buy, but not to sell. You may end up with a lot of positions, and the discounts you've gotten to buy will cause you spend much more on selling. Generally, averaging (investing monthly) is a good way to save and mitigate some risks, but the risks are still there. This is good only for long term savings. How should my breakdown my investments in terms of bonds vs stocks? Depends on your vulnerability and risk thresholds.\"" }, { "docid": "290385", "title": "", "text": "\"Answers: 1. Is this a good idea? Is it really risky? What are the pros and cons? Yes, it is a bad idea. I think, with all the talk about employer matches and tax rates at retirement vs. now, that you miss the forest for the trees. It's the taxes on those retirement investments over the course of 40 years that really matter. Example: Imagine $833 per month ($10k per year) invested in XYZ fund, for 40 years (when you retire). The fund happens to make 10% per year over that time, and you're taxed at 28%. How much would you have at retirement? 2. Is it a bad idea to hold both long term savings and retirement in the same investment vehicle, especially one pegged to the US stock market? Yes. Keep your retirement separate, and untouchable. It's supposed to be there for when you're old and unable to work. Co-mingling it with other funds will induce you to spend it (\"\"I really need it for that house! I can always pay more into it later!\"\"). It also can create a false sense of security (\"\"look at how much I've got! I got that new car covered...\"\"). So, send 10% into whatever retirement account you've got, and forget about it. Save for other goals separately. 3. Is buying SPY a \"\"set it and forget it\"\" sort of deal, or would I need to rebalance, selling some of SPY and reinvesting in a safer vehicle like bonds over time? For a retirement account, yes, you would. That's the advantage of target date retirement funds like the one in your 401k. They handle that, and you don't have to worry about it. Think about it: do you know how to \"\"age\"\" your account, and what to age it into, and by how much every year? No offense, but your next question is what an ETF is! 4. I don't know ANYTHING about ETFs. Things to consider/know/read? Start here: http://www.investopedia.com/terms/e/etf.asp 5. My company plan is \"\"retirement goal\"\" focused, which, according to Fidelity, means that the asset allocation becomes more conservative over time and switches to an \"\"income fund\"\" after the retirement target date (2050). Would I need to rebalance over time if holding SPY? Answered in #3. 6. I'm pretty sure that contributing pretax to 401k is a good idea because I won't be in the 28% tax bracket when I retire. How are the benefits of investing in SPY outweigh paying taxes up front, or do they not? Partially answered in #1. Note that it's that 4 decades of tax-free growth that's the big dog for winning your retirement. Company matches (if you get one) are just a bonus, and the fact that contributions are tax free is a cherry on top. 7. Please comment on anything else you think I am missing I think what you're missing is that winning at personal finance is easy, and winning at personal finance is hard\"" }, { "docid": "218484", "title": "", "text": "Pretty simple: When is Cash Value Life Insurance a good or bad idea? It is never a good idea. How can life insurance possibly work as investment? It can't. Just as car, home, or health insurance is not an investment. Note for counter example providers: intent to commit insurance fraud is not an investment. Why not live your life so in 15 or 20 years you are debt free, have a nice emergency fund built and have a few 100 thousand in investments? Then you can self-insure. If you die with a paid off home, no debt, 20K in a money market, and 550,000 in retirement accounts would your spouse and children be taken care of?" }, { "docid": "403092", "title": "", "text": "\"One way to start with stocks is by playing the fake stock market. Investigate what trading fees would be with a broker, then \"\"invest\"\" a certain amount of money - note it on paper or in a spreadsheet. Follow your stocks, make decisions on selling and buying, and see where you would be after a year or so. That way you can get an idea, even if not exactly precise, on what your returns would be if you really invested the money.\"" }, { "docid": "9957", "title": "", "text": "\"Buy this book. It is a short, simple crash course on personal finance, geared at someone in their 20s just starting out their career. You can easily finish it in a weekend. The book is a little dated at this point (pre housing bubble), but it is still valid. I personally feel it is the best intro to personal finance out there. 99% of the financial advice you read online will be a variation of what is already in this book. If you do what the book says, you should be in a solid position financially. You won't be an investment guru or anything, but you will at least have the fundamentals. There are various \"\"protips\"\" for personal finance that go beyond the book, but I would advise against paying too much attention to them until you have the basics down.\"" }, { "docid": "372911", "title": "", "text": "Bond laddering is usually a good idea, but with interest rates so low, a properly laddered portfolio is going to have a higher duration that you should be willing to accept right now. CD laddering seems like a silly idea. Just keep whatever amount you're going to need in a Money Market account and invest the rest according to your risk tolerance." }, { "docid": "37276", "title": "", "text": "Please take a look a Dave Ramsey's Baby Step plan. It has all the details that you need to clean up your personal finance situation. None of your options are good. As some of the other answers mentioned, behavior modification is the key. Any idea will be worthless if you just wind up in debt again. Many, many people, including me, have made the change using Dave's plan. You can too. With regard to helping your son with tuition, are there better or cheaper options? It does not make sense to put yourself in financial peril in order to cover college expenses. I understand that is a tough decision but he is a man now and needs to be part of the real world solution. Following the Baby Steps: The biggest factor is a belief that you can fix the mess. 30k is not really that much, with a good plan and focus, you can clean it up. Good luck." }, { "docid": "461592", "title": "", "text": "(To be clear, IRA accounts are just wrappers, and can contain a large variety of investments. I'm restricting myself to the usual setup of investment in the stock market.) So, let's say you have $5000 in savings, as an emergency fund. Of the top of my head, putting some of it into a Roth IRA could backfire in the following ways: The basic principle here is that the stock market is not a good place for storing your emergency cash, which needs to be secured against loss and immediately accessible. Once you're happy with your level of emergency cash, however, tax-advantaged investment accounts are a reasonable next step." }, { "docid": "177768", "title": "", "text": "Are you considering using it? Is that the point of the post? If that's the case, I would say it's always a good idea to fully leverage your assets for investment. I recommend leveraging everything you can to maximize your profits. If you own a house, car, or anything else of value, you should use it as collateral. Then, typically any stock trading for $0.01 is a good investment - they almost never go to $0 and all it takes is a movement of $0.01 to double your money. Roulette also has similar payouts, but remember to always bet on red, never black. Good luck - send pictures of your mansion soon!" }, { "docid": "206556", "title": "", "text": "\"Every investment comes with a risk. There is also a bit of speculation involved. In there is an anticipation that one expects the value to go up in normal course of events. By your definition \"\"If I buy this equipment, I could produce more widgets, or sell more widgets,\"\" as an investment. Here again there is an anticipation that the widgets you sell will give you more return. If you are investing in stock/share, you are essentially holding a small portion of value in company and to that extent you are owining some equipment that is producing some widget .... Hence when you are purchasing Stocks, it would be looked as investment if you have done your home work and have a good plan of how you want to invest along with weiging the risk involved. However if you are investing only for the purpose of making quick bucks following so called hot tips, then you are not investing but speculating.\"" }, { "docid": "211713", "title": "", "text": "The best way to invest in college for your kid is to buy an investment property and rent it out. You might think I am really crazy to ask you to you to buy a real estate property when everyone is running from real estate. Go where others are running away from it. Look where others are not looking. Find out the need for a decent rental property in your city or county and start following the real estate market to understand the real activities including the rental market. I would say follow it for 6 months before jumping in with any investment. And manage your property with good tenants until your kid is ready to go to college. By the time your kid is ready for college, the property would have been paid off by the rents and you can sell the property to send your kid to college." }, { "docid": "360003", "title": "", "text": "My opinion is that in general, it is probably not a good idea to borrow at a cost in order to make your RRSP contribution. Banks, of course, have an interest in loaning you money. Don't expect their literature to be objective on the matter! They are selling you a product and the advice is biased. What better way to double-dip than to get guaranteed interest payments from you, as well as ongoing fees for (probably also) getting your loan money invested in their high-fee mutual funds? A year's RRSP contribution room allowance isn't use it or lose it — unlike 401k contribution allowances in the U.S.. That is, unused RRSP contribution room accumulates and you can take advantage of it in later years. If we couldn't carry our RRSP contribution room over, I might feel different about the general case for RRSP loans. Yet there are two specific cases I can think of where it may make sense to borrow and pay back: (a possible case) ... if your tax rate is currently in a high bracket (e.g. 46%), and you anticipate being in a lower income and bracket next year (e.g. 35%), then it would make sense to take advantage of the higher tax savings in the current tax year. If you waited until the following year to take the deduction, you'd lose out on 11% of the deducted amount. For a typical person whose income is level or increasing from year to year, this isn't likely to be applicable, but it could help somebody who is going on leave or otherwise has irregular income. (a foolish case) ... if you knew, somehow, that you could realize a return on your invested RRSP money exceeding the pre-tax earnings required to pay the interest on the RRSP loan. However, I would suggest this is foolish bet to make. The interest you pay is guaranteed, but the return you are expected to get is probably not (or if it is, it is probably a return lower than what your bank wants to charge on the loan.) If for some reason it does make sense for you, take the money and invest it somewhere better than the high-fee mutual funds the bank is also pushing." }, { "docid": "387717", "title": "", "text": "Real estate investment is a proven creator of wealth. Check into the history of the rich and you will find real estate investment. Starting your investment in multi-family is a great idea. It is a good way to gain experience in real estate while exponentially increasing cash flow. If you turn the properties over to a reputable property management company, your cash flow will be a little less but so will your headaches. (Expect to pay 8 - 10% of gross income.) You could start investing now by looking into discounted real estate such as foreclosures, tax sales, short sales etc while the market is still depressed. This way your return on investment should be higher. From there you could expand into land development (i.e. subdivision) or commercial investments. Commercial properties with triple net leases can be a great low-stress investment opportunity (but they take more cash upfront). Attending some local real estate investment classes would be a great idea for starters." }, { "docid": "14748", "title": "", "text": "\"That's great that you have saved up money. You are ahead of your peers. I would advise against investing in an index fund. The attraction of the idea is that you will get the same return as the base item. For example, an index fund of gold would supposedly give you the same return as if you bought gold. In reality this is not true. The return of an index fund is always significantly below the return of the underlying commodity. Your best strategy is to invest in something you know and understand. There are two books that can help you learn how to do this: \"\"One Up on Wall Street\"\" by Peter Lynch and \"\"The Intelligent Investor\"\" by Benjamin Graham. Buying, reading and following the guidance in these two books is your best investment of time and money.\"" } ]

[ { "docid": "570546", "title": "", "text": "0% bonds are desirable for some individuals. It depends on your situation. 0% bonds are usually sold well below par value (eg a 100$ face value bond for 2020 might sell for 90$ today) Hence, your gains will be CAPITAL GAINS. A similar investment paying interest would be taxed as INCOME, and smaller portion of capital gains. In many countries (US, Canada) Capital gains are taxed at a more favourable rate then income. This is especially true when holding these investments in corporations." } ]

[ { "docid": "362771", "title": "", "text": "This is a perfect example of why bonds are confusing at first glance. Think about it this way... You buy a 30-year Russian Bond at 4%. An event happens that makes Russia risky to invest in. You want to buy another bond but fuck 4%, you and the rest of the market want 6% to compensate you for the risk. Now let's say you want to sell your 4% bond... Well you're going to have to drop the price of that bond in order for it to appeal to an investor that could go out and get a 6%. On a 30-year bond of that kind, you're looking at about 75% of what you bought it for. So to wrap it up, high bond yields are great for buyers that don't already own them, but bad for sellers who want to get rid of their old ones. It is the opposite intuition as stocks and almost everything else." }, { "docid": "563009", "title": "", "text": "Ponder this. Suppose that a reputable company or government were to come out and say hey, we are going to issue some 10 year bonds at 6.4%. Anyone interested in buying some? Assume that the company or government is financially solid and there is zero chance that they will go bankrupt. Think those bonds would sell? Would you be interested in buying such a bond? Well, I would wager that these bonds would sell like hotcakes, despite the fact that the long term stock market return beats it by a half percent. Heck, vanguard's junk bond fund is hot right now. It only yields 4.9% and those are junk bonds, not rock solid companies (see vanguard high yield corporate bond fund) Every time you make an extra principal payment on your student loan, you are effectively purchasing a investment with a rock solid, guaranteed 6.4% return for 10 years (or whatever time you have left on the loan if make no extra payments). On top of that, paying off a loan early builds your credit reputation, improves your monthly cash flow once the loan is paid, may increase your purchasing power for a house or car, and if nothing else, it frees you from being a slave to that debt payment every month. Edit Improved wording based on Ross's comment" }, { "docid": "60379", "title": "", "text": "\"Looking at the list of bonds you listed, many of them are long dated. In short, in a rate rising environment (it's not like rates can go much lower in the foreseeable future), these bond prices will drop in general in addition to any company specific events occurred to these names, so be prepared for some paper losses. Just because a bond is rated highly by credit agencies like S&P or Moody's does not automatically mean their prices do not fluctuate. Yes, there is always a demand for highly rated bonds from pension funds, mutual funds, etc. because of their investment mandates. But I would suggest looking beyond credit ratings and yield, and look further into whether these bonds are secured/unsecured and if secured, by what. Keep in mind in recent financial crisis, prices of those CDOs/CLOs ended up plunging even though they were given AAA ratings by rating agencies because some were backed by housing properties that were over-valued and loans made to borrowers having difficulties to make repayments. Hence, these type of \"\"bonds\"\" have greater default risks and traded at huge discounts. Most of them are also callable, so you may not enjoy the seemingly high yield till their maturity date. Like others mentioned, buying bonds outright is usually a big ticket item. I would also suggest reviewing your cash liquidity and opportunity cost as oppose to investing in other asset classes and instruments.\"" }, { "docid": "496420", "title": "", "text": "\"The term you're looking for is yield (though it's defined the other way around from your \"\"payout efficiency\"\", as dividend / share price, which makes no substantive difference). You're simply saying that you want to buy high-yield shares, which is a common investment strategy. But you have to consider that often a high-yielding share has a reason for the high yield. You probably don't want to buy shares in a company whose current yield is 10% but will go into liquidation next year.\"" }, { "docid": "45468", "title": "", "text": "A bond fund has a 5% yield. You can take 1/.05 and think of it as a 20 P/E. I wouldn't, because no one else does, really. An individual bond has a coupon yield, and a YTM, yield to maturity. A bond fund or ETF usually won't have a maturity, only a yield." }, { "docid": "248133", "title": "", "text": "Russia has become more risky as an investment, thus investors, basically the market, wants to be paid more for investing in or owning those bonds. As yields go up, prices go down. So right now you can buy a low priced Russian bond with a high yield because the market views the risk involved as higher than risks involved in other similar securities." }, { "docid": "239271", "title": "", "text": "Big money, by vitue of its own existence, produces value. What's a person to do with it? Stuff it under a mattress and earn 0 yield? No. If you want safety, you'll put it in AAA rated US gov't bonds and help fund the government. If you want yield, you'll put it in broadly diversified equities investments, small companies, big companies, energy companies, tech companies, media companies, and so on, and soak up the net gain while injecting much needed capital investment directly into those industries, financing start up costs like construction and equipment procurement costs, as well as staffing costs. Yes, big money absolutely creates value. The trains, cars, roads, and sidewalks you travel through to get to work? All financed by filthy rich people money. The building you work in and the equipment you use? Likely financed by filthy rich people money as well. Its called financial intermediation and capital arbitrage, and you can thank your Gods you live in a country where the government allows it to operate efficiently." }, { "docid": "245117", "title": "", "text": "The dividend yield can be used to compare a stock to other forms of investments that generate income to the investor - such as bonds. I could purchase a stock that pays out a certain dividend yield or purchase a bond that pays out a certain interest. Of course, there are many other variables to consider in addition to yield when making this type of investment decision. The dividend yield can be an important consideration if you are looking to invest in stocks for an income stream in addition to investing in stocks for gain by a rising stock price. The reason to use Dividend/market price is that it changes the dividend from a flat number such as $1 to a percentage of the stock price, which thus allows it to be more directly compared with bonds and such which return a percentage yeild." }, { "docid": "141174", "title": "", "text": "Smallest risk of default would depend on where Alice and Bob live I suppose, but lets assume they are in a lower yielding nation where default is not a big concern. Remember for instance that Greece was a lower yielding nation at one point and that the US has defaulted before. Let's start with Bob because he is easier to analyze. Yield curves inversions generally pre-date recessions which is generally not so good for Bob as rates tend to drop during recessions and he will be at the short end of the curve so his bonds will be less sensitive. However, he will generally get higher yields in good times to make up for this, but these higher yields come with a price in that he is generally much more sensitive to yield changes and can get much larger swings in portfolio value. First off as JB mentioned Alice would likely own inflation-linked (IL) bonds. Which behave fairly differently from Bob's bonds. However, to keep this simple lets say they live in a place without IL bonds or IL bonds are not a consideration. Then generally Alice has lower yielding bonds in good times but may do very well when the fed steps in during a crisis. So, who wins in the long run? Likely Christi who owns a mix of a broad index of stocks and bonds in a risk mix where she wouldn't have to sell in downturns. Especially, as Christi wouldn't have to pay the trading costs of moving her whole portfolio between long and short bonds. Between Bob and Alice however Bob would likely win in the long run as the markets generally reward risk taking in the long run. Still inflation (even without the IL bonds) and general rate trends (long-term rates are historically low right now) could have Bob losing for uncomfortably long periods." }, { "docid": "466315", "title": "", "text": "Why does the rising price of a bond pushes it's yield down? The bond price and its yield are linked; if one goes up, the other must go down. This is because the cash flows from the bond are fixed, predetermined. The market price of the bond fluctuates. Now what if people are suddenly willing to pay more for the same fixed payments? It must mean that the return, i.e. the yield, will be lower. Here we see that risk associated with the bonds in question has skyrocketed, and thus bonds' returns has skyrocketed, too. Am I right? The default risk has increased, yes. Now, I assume that bonds' price is determined by the market (issued by a state, traded at the market). Is that correct? Correct, as long as you are talking about the market price. Then who determines bonds' yields? I mean, isn't it fixed? Or - in the FT quote above - they are talking about the yields for the new bonds issued that particular month? The yield is not fixed - the cash flows are. Yield is the internal rate of return. See my answer above to your first question." }, { "docid": "495600", "title": "", "text": "\"Question 1: How do I start? or \"\"the broker\"\" problem Get an online broker. You can do a wire transfer to fund the account from your bank. Question 2: What criticism do you have for my plan? Dividend investing is smart. The only problem is that everyone's currently doing it. There is an insatiable demand for yield, not just individual investors but investment firms and pension funds that need to generate income to fund retirements for their clients. As more investors purchase the shares of dividend paying securities, the share price goes up. As the share price goes up, the dividend yield goes down. Same for bonds. For example, if a stock pays $1 per year in dividends, and you purchase the shares at $20/each, then your yearly return (not including share price fluctuations) would be 1/20 = 5%. But if you end up having to pay $30 per share, then your yearly return would be 1/30 or 3.3% yield. The more money you invest, the bigger this difference becomes; with $100K invested you'd make about $1.6K more at 5%. (BTW, don't put all your money in any small group of stocks, you want to diversify). ETFs work the same way, where new investors buying the shares cause the custodian to purchase more shares of the underlying securities, thus driving up the price up and yield down. Instead of ETFs, I'd have a look at something called closed end funds, or CEFs which also hold an underlying basket of securities but often trade at a discount to their net asset value, unlike ETFs. CEFs usually have higher yields than their ETF counterparts. I can't fully describe the ins and outs here in this space, but you'll definately want to do some research on them to better understand what you're buying, and HOW to successfully buy (ie make sure you're buying at a historically steep discount to NAV [https://seekingalpha.com/article/1116411-the-closed-end-fund-trifecta-how-to-analyze-a-cef] and where to screen [https://www.cefconnect.com/closed-end-funds-screener] Regardless of whether you decide to buy stocks, bonds, ETFs, CEFs, sell puts, or some mix, the best advice I can give is to a) diversify (personally, with a single RARE exception, I never let any one holding account for more than 2% of my total portfolio value), and b) space out your purchases over time. b) is important because we've been in a low interest rate environment since about 2009, and when the risk free rate of return is very low, investors purchase stocks and bonds which results in lower yields. As the risk free rate of return is expected to finally start slowly rising in 2017 and gradually over time, there should be gradual downward pressure (ie selling) on the prices of dividend stocks and especially bonds meaning you'll get better yields if you wait. Then again, we could hit a recession and the central banks actually lower rates which is why I say you want to space your purchases out.\"" }, { "docid": "137262", "title": "", "text": "Public Securities Association Standard Prepayment Model is what the acronym psa stands for. My understanding is that it allows for adjustments in monthly pre-payment amounts, which will then affect the yield of the bond. Not really sure what the most important bond measure would be... but if I had to guess I'd say its the mechanical bond price/ bond yield relationship. Yields go down, prices go up and vice versa." }, { "docid": "296420", "title": "", "text": "It depends a lot on your investment period and the quality of the bonds that you want to invest. For example, if you want to invest until the maturity of the bonds, and the bonds are very safe (i.e. they are not expected to default), it does not matter that the interest rate rise. That is because at the maturity of the bond it will converge to its maturity value which will be independent of the change of the interest rates (although on the middle of the life the price of the bond will go down, but the coupon should remain constant -unless is a floating coupon bond-). An option could be to invest in an ETF with short term bonds (e.g. 1 year) with AAA credit rating (high quality, so very low default rate). It won't yield much, but is more than 0% if you hold it until maturity." }, { "docid": "561140", "title": "", "text": "Having a good dividend yield doesn't guarantee that a stock is safe. In the future, the company may run into financial trouble, stop paying dividends, or even go bankrupt. For this reason, you should never buy a stock just because it has a high dividend yield. You also need some criteria to determine whether that stock is safe to buy. Personally, I consider a stock is reasonably safe if it meets the following criteria:" }, { "docid": "10526", "title": "", "text": "\"[...] are all bonds priced in such a way so that they all return the same amount (on average), after accounting for risk? In other words, do risk premiums ONLY compensate for the amount investors might lose? No. GE might be able to issue a bond with lower yield than, say, a company from China with no previous records of its presence in the U.S. markets. A bond price not only contains the risk of default, but also encompasses the servicability of the bond by the issuer with a specific stream of income, location of main business, any specific terms and conditions in the prospectus, e.g.callable or not, insurances against default, etc. Else for the same payoff, why would you take a higher risk? The payoff of a higher risk (not only default, but term structure, e.g. 5 years or 10 years, coupon payments) bond is more, to compensate for the extra risk it entails for the bondholder. The yield of a high risk bond will always be higher than a bond with lower risk. If you travel back in time, to 2011-2012, you would see the yields on Greek bonds were in the range of 25-30%, to reflect the high risk of a Greek default. Some hedge funds made a killing by buying Greek bonds during the eurozone crisis. If you go through the Efficient frontier theory, your argument is a counter statement to it. Same with individual bonds, or a portfolio of bonds. You always want to be compensated for the risk you take. The higher the risk, the higher the compensation, and vice versa. When investors buy the bond at this price, they are essentially buying a \"\"risk free\"\" bond [...] Logically yes, but no it isn't, and you shouldn't make that assumption.\"" }, { "docid": "549741", "title": "", "text": "\"Wrong. Business lending has boomed under QE.. does the term \"\"cov-lite\"\" sound familiar? That's because there's so much liquidity, that they're willing to lend to companies with little to no restrictions. There is so much credit to go around, that a \"\"High Yield Bond\"\" can price at L+800 bps. When you're taking all the risk of a HY issuer, and maxing your return at 8.5%-9%, it's not too appealing. Instead, you could take a bit more risk, but also get all of the potential upside of equities. 1. Fed buys assets, injects money into banks. 2. Banks, flush with liquidity, need to put their balance sheet to use and begin lending to everyone. 2. Bond market flooded with supply, causes bond yields to drop to historic lows. 3. Investors don't enjoy limiting upside for incredibly low returns, and begin flooding equity markets to get some sort of yield. Business lending is booming, making equities the only place to get larger returns.\"" }, { "docid": "462697", "title": "", "text": "\"that would imply that a 30Y US Treasury bond only yields 2.78%, which is nonsensically low. Those are annualized yields. It would be more precise to say that \"\"a 30Y US Treasury bond yields 2.78% per year (annualized) over 30 years\"\", but that terminology is implied in bond markets. So if you invest $1,000 in a 30-year T-bond, you will earn roughly 2.78% in interest per year. Also note that yield is calculated as if it compounded, meaning that investing in a 30-year T-bind will give you a return that is equivalent to putting it in a savings account that earns 1.39% interest (half of 2.78%) every 6 months and compounds, meaning you earn interest on top of interest. The trade-off for these low yields is you have virtually no default risk. Unlike a company that could go bankrupt and not pay back the bond, the US Government is virtually certain to pay off these bonds because it can print or borrow more money to pay off the debts. In addition, bonds in general (and especially treasuries) have very low market risk, meaning that their value fluctuates much less that equities, even indicies. S&P 500 indices may move anywhere between -40% and 50% in any given year, while T-bonds' range of movement is much lower, between -10% and 30% historically).\"" }, { "docid": "313669", "title": "", "text": "You're mixing up two different concepts: low-risk and recession-proof. I'll assume I don't need to explain risk: there is always risk, regardless what form you keep your assets in. With bonds, the interest rate is supposed to reflect the risk. If a company offers bonds with too low an interest rate for the risk level, few people will buy them. While if a company offers bonds with too high an interest rate for the level of risk, they are gypping themselves. So a bond is a slightly more transparent investment from a risk assessment perspective, but that doesn't mean the risk is necessarily low: if you buy a bond with a 20% effective annual yield, that means there is quite a high risk that the underlying company will fold (unless inflation is in the double-digit range as well, in which case a 20% yield is not that much). Whereas with a stock, no parameter directly tells you anything about the risk. Recession-proof is not the same thing as low-risk. Recession-proof refers to investing in (or holding debt for) industries that perform better in a recession. http://www.investopedia.com/articles/stocks/08/industries-thrive-on-recession.asp." }, { "docid": "538898", "title": "", "text": "The Fed sets the overnight borrowing costs by setting its overnight target rate. The markets determine the rates at which the treasury can borrow through the issuance of bonds. The Fed's actions will certainly influence the price of very short term bonds, but the Fed's influence on anything other than very short term bonds in the current environment is very muted. Currently, the most influential factor keeping bond prices high and yields low is the high demand for US treasuries coming from overseas governments and institutions. This is being caused by two factors : sluggish growth in overseas economies and the ongoing strength of the US dollar. With many European government bonds offering negative redemption yields, income investors see US yields as relatively attractive. Those non-US economies which do not have negative bond yields either have near zero yields or large currency risks or both. Political issues such as the survival of the Euro also weigh heavily on market perceptions of the current attractiveness of the US dollar. Italian banks may be about to deliver a shock to the Eurozone, and the Spanish and French banks may not be far behind. Another factor is the continued threat of deflation. Growth is slowing around the world which negatively effects demand. Commodity prices remain depressed. Low growth and recession outside of the US translate into a prolonged period of near zero interest rates elsewhere together with renewed QE programmes in Europe, Japan, and possibly elsewhere. This makes the US look relatively attractive and so there is huge demand for US dollars and bonds. Any significant move in US interest rates risks driving to dollar ever higher which would be very negative for the future earning of US companies which rely on exports and foreign income. All of this makes the market believe that the Fed's hands are tied and low bond yields are here for the foreseeable future. Of course, even in the US growth is relatively slow and vulnerable to a loss of steam following a move in interest rates." } ]

[ { "docid": "203710", "title": "", "text": "No, there isn't. There are a number of reasons that institutions buy these bonds but as an individual you're likely better off in a low-yield cash account. By contrast, there would be a reason to hold a low-yield (non-zero) bond rather than an alternative low-yield product." } ]

[ { "docid": "111033", "title": "", "text": "\"Bonds are valued based on all of this, using the concept of the \"\"time value of money\"\". Simply stated, money now is worth more than money later, because of what you can do with money between now and later. Case in point: let's say the par value of a bond is $100, and will mature 10 years from this date (these are common terms for most bonds, though the U.S. Treasury has a variety of bonds with varying par values and maturation periods), with a 0% coupon rate (nothing's paid out prior to maturity). If the company or government issuing the bonds needs one million dollars, and the people buying the bonds are expecting a 5% rate of return on their investment, then each bond would only sell for about $62, and the bond issuer would have to sell a par value of $1.62 million in bonds to get its $1m now. These numbers are based on equations that calculate the \"\"future value\"\" of an investment made now, and conversely the \"\"present value\"\" of a future return. Back to that time value of money concept, money now (that you're paying to buy the bond) is worth more than money later (that you'll get back at maturity), so you will expect to be returned more than you invested to account for this time difference. The percentage of rate of return is known as the \"\"yield\"\" or the \"\"discount rate\"\" depending on what you're calculating, what else you take into consideration when defining the rate (like inflation), and whom you talk to. Now, that $1.62m in par value may be hard for the bond issuer to swallow. The issuer is effectively paying interest on interest over the lifetime of the bond. Instead, many issuers choose to issue \"\"coupon bonds\"\", which have a \"\"coupon rate\"\" determining the amount of a \"\"coupon payment\"\". This can be equated pretty closely with you making interest-only payments on a credit card balance; each period in which interest is compounded, you pay the amount of interest that has accrued, to avoid this compounding effect. From an accounting standpoint, the coupon rate lowers the amount of real monies paid; the same $1m in bonds, maturing in 10 years with a 5% expected rate of return, but with a 5% coupon rate, now only requires payments totalling $1.5m, and that half-million in interest is paid $50k at a time annually (or $25k semi-annually). But, from a finance standpoint, because the payments made in the first few years are worth more than the payments made closer to and at maturity, the present value of all these coupon payments (plus the maturity payout) is higher than if the full payout happened at maturity, and so the future value of the total investment is higher. Coupon rates on bonds thus allow a bond issuer to plan a bond package in less complicated terms. If you as a small business need $1m for a project, which you will repay in 10 years, and during that time you are willing to tolerate a 5% interest rate on the outstanding money, then that's exactly how you issue the bonds; $1 million worth, to mature in 10 years and a 5% coupon rate. Now, whether the market is willing to accept that rate is up to the market. Right now, they'd be over the moon with that rate, and would be willing to buy the bonds for more than their face value, because the present value would then match the yield they're willing to accept (as in any market system, you as the seller will sell to the highest bidder to get the best price available). If however, they think you are a bad bet, they'll want an even higher rate of return, and so the present value of all coupon and maturity payments will be less than the par value, and so will the purchase price.\"" }, { "docid": "379232", "title": "", "text": "\"$36 dividend/900 DJIA = 4% 5.5% bond yield = ($36 dividend/660 DJIA) Graham wrote this at a very different time in financial markets- interest rates were much higher, and the DJIA much lower. In addition, bonds were yielding more than stocks, unlike today when the DJIA % the 10yr Treasury yield 2.63% and 2.13% respectively. In addition, his \"\"weigher of the odds\"\" suggests waiting to invest until equity prices are lower (usually dividends aren't reduced), and therefore the DJIA dividend yield would rise relative to bond yields.\"" }, { "docid": "169309", "title": "", "text": "The price of a bond goes up when yields go down. For example, you purchase a 5% bond today for $100 and the very next day the same bond is being offered with a rate of 10%. Will you be able to sell you bond for the $100 you paid? No, you must compete with the 10% bonds being sold so you will have to sell your bond for less than the $100 you paid to compete with the new bonds being sold. Thus, bond prices are inversely related to bond yields. The 20-year index you cited tracks bond prices and bond prices have gone up over the last 10 years which means bond yields have gone down. Why have bond prices gone up? Demand. More investors are moving their savings into bonds. Why? I believe there a couple of reasons. One, US Treasuries are thought to be one of the safest investments. With the financial crisis and increased stock market volatility (see chart below) more investors are allocating more of their portfolios to safer investments. Two, a large portion of the US population is approaching retirement (see chart below). These folks are not interested in watching their retirement portfolios potentially shrink in the stock market so they move into bonds." }, { "docid": "537603", "title": "", "text": "If I invest X each month, where does X go - an existing (low yield) bond, or a new bond (at the current interest rate)? This has to be viewed in a larger context. If the fund has outflows greater than or equal to inflows then chances are there isn't any buying being done with your money as that cash is going to those selling their shares in the fund. If though inflows are greater than outflows, there may be some new purchases or not. Don't forget that the new purchase could be an existing bond as the fund has to maintain the duration of being a short-term, intermediate-term or long-term bond fund though there are some exceptions like convertibles or high yield where duration isn't likely a factor. Does that just depend on what the fund manager is doing at the time (buying/selling)? No, it depends on the shares being created or redeemed as well as the manager's discretion. If I put Y into a fund, and leave it there for 50 years, where does Y go when all of the bonds at the time I made the purchase mature? You're missing that the fund may buy and sell bonds at various times as for example a long-term bond fund may not have issues nearing maturity because of what part of the yield curve it is to mimic. Does Y just get reinvested in new bonds at the interest rate at that time? Y gets mixed with the other money in the fund that may increase or decrease in value over time. This is part of the risk in a bond fund where NAV can fluctuate versus a money market mutual fund where the NAV is somewhat fixed at $1/share." }, { "docid": "501838", "title": "", "text": "Yield can be thought of as the interest rate you would receive from that investment in the form of a dividend for stocks or interest payments on a bond. The yield takes into account the anticipated amount to be received per share/unit per year and the current price of the investment. Of course, the yield is not a guaranteed return like a savings account. If the investment yield is 4% when you buy, it can drop in value such that you actually lose money during your hold period, despite receiving income from the dividend or interest payments." }, { "docid": "582553", "title": "", "text": "Very rarely would an investor be happy with a 4% yield independent of anything else that might happen in the future. For example, if in 3 years for some reason or other inflation explodes and 30 year bond yields go up to 15% across the board, they would be kicking themselves for having locked it up for 30 years at 4%. However, if instead of doing that the investor put their money in a 3 year bond at 3% say, they would have the opportunity to reinvest in the new rate environment, which might offer higher or lower yields. This eventually leads fixed income investors to have a bond portfolio in which they manage the average maturity of their bond portfolio to be somewhere between the two extremes of investing it all in super short term/ low yield money market rates vs. super long term bonds. As they constantly monitor and manage their maturing investments, it inevitably leads them to managing interest rate risk as they decide where to reinvest their incremental coupons by looking at the shape of the yield curve at the time and determining what kind of risk/reward tradeoffs they would have to make." }, { "docid": "162892", "title": "", "text": "\"I experimented with Lending Club, lending a small amount of money in early 2008. (Nice timing right - the recession was December 2007 to June 2009.) I have a few loans still outstanding, but most have prepaid or defaulted by now. I did not reinvest as payments came in. Based on my experience, one \"\"catch\"\" is lack of liquidity. It's like buying individual bonds rather than a mutual fund. Your money is NOT just tied up for the 3-year loan term, because to get good returns you have to keep reinvesting as people pay off their loans. So you always have some just-reinvested money with the full 3 year term left, and that's how long it would take to get all your money back out. You can't just cash out when you feel like it. They have a trading platform (which I did not try out) if you want your money sooner, but I would guess the spreads are wide and you have to take a hit when you sell loans. Again though I did not try the trading platform. On the upside, the yields did seem fine. I got 19 eventual defaults from 81 loans, but many of the borrowers made a number of payments before defaulting so only part of the money was lost. The lower credit ratings default more often obviously, only one of 19 defaults had the top credit score. (I tried investing across a range of credit ratings.) The interest rates appear to cover the risk of default, at least on average. You can of course have varying luck. I made only a slight profit over the 3 years, but I did not reinvest after the first couple months, and it was during a recession. So the claimed yields look plausible to me if you reinvest. They do get people's credit scores, report nonpayment on people's credit reports, and even send people to collections. Seems like borrowers have a reason to pay the bill. In 2008 I think this was a difference compared to the other peer lending sites, but I don't know if that's still true. Anyway, for what it's worth the site seemed to work fine and \"\"as advertised\"\" for me. I probably will not invest more money there for a couple reasons: However as best I could tell from my experiment, it is a perfectly reasonable place to put a portion of your portfolio you might otherwise invest in something like high-yield bonds or some other sub-investment-grade fixed income. Update: here's a useful NY Times article: http://www.nytimes.com/2011/02/05/your-money/05money.html\"" }, { "docid": "481683", "title": "", "text": "\"Here are my reasons as to why bonds are considered to be a reasonable investment. While it is true that, on average over a sufficiently long period of time, stocks do have a high expected return, it is important to realize that bonds are a different type of financial instrument that stocks, and have features that are attractive to certain types of investors. The purpose of buying bonds is to convert a lump sum of currency into a series of future cash flows. This is in and of itself valuable to the issuer because they would prefer to have the lump sum today, rather than at some point in the future. So we generally don't say that we've \"\"lost\"\" the money, we say that we are purchasing a series of future payments, and we would only do this if it were more valuable to us than having the money in hand. Unlike stocks, where you are compensated with dividends and equity to take on the risks and rewards of ownership, and unlike a savings account (which is much different that a bond), where you are only being paid interest for the time value of your money while the bank lends it out at their risk, when you buy a bond you are putting your money at risk in order to provide financing to the issuer. It is also important to realize that there is a much higher risk that stocks will lose value, and you have to compare the risk-adjusted return, and not the nominal return, for stocks to the risk-adjusted return for bonds, since with investment-grade bonds there is generally a very low risk of default. While the returns being offered may not seem attractive to you individually, it is not reasonable to say that the returns offered by the issuer are insufficient in general, because both when the bonds are issued and then subsequently traded on a secondary market (which is done fairly easily), they function as a market. That is to say that sellers always want a higher price (resulting in a lower return), and buyers always want to receive a higher return (requiring a lower price). So while some sellers and buyers will be able to agree on a mutually acceptable price (such that a transaction occurs), there will almost always be some buyers and sellers who also do not enter into transactions because they are demanding a lower/higher price. The fact that a market exists indicates that enough investors are willing to accept the returns that are being offered by sellers. Bonds can be helpful in that as a class of assets, they are less risky than stocks. Additionally, bonds are paid back to investors ahead of equity, so in the case of a failing company or public entity, bondholders may be paid even if stockholders lose all their money. As a result, bonds can be a preferred way to make money on a company or government entity that is able to pay its bills, but has trouble generating any profits. Some investors have specific reasons why they may prefer a lower risk over time to maximizing their returns. For example, a government or pension fund or a university may be aware of financial payments that they will be required to make in a particular year in the future, and may purchase bonds that mature in that year. They may not be willing to take the risk that in that year, the stock market will fall, which could force them to reduce their principal to make the payments. Other individual investors may be close to a significant life event that can be predicted, such as college or retirement, and may not want to take on the risk of stocks. In the case of very large investors such as national governments, they are often looking for capital preservation to hedge against inflation and forex risk, rather than to \"\"make money\"\". Additionally, it is important to remember that until relatively recently in the developed world, and still to this day in many developing countries, people have been willing to pay banks and financial institutions to hold their money, and in the context of the global bond market, there are many people around the world who are willing to buy bonds and receive a very low rate of return on T-Bills, for example, because they are considered a very safe investment due to the creditworthiness of the USA, as well as the stability of the dollar, especially if inflation is very high in the investor's home country. For example, I once lived in an African country where inflation was 60-80% per year. This means if I had $100 today, I could buy $100 worth of goods, but by next year, I might need $160 to buy the same goods I could buy for $100 today. So you can see why simply being able to preserve the value of my money in a bond denominated in USA currency would be valuable in that case, because the alternative is so bad. So not all bondholders want to be owners or make as much money as possible, some just want a safe place to put their money. Also, it is true for both stocks and bonds that you are trading a lump sum of money today for payments over time, although for stocks this is a different kind of payment (dividends), and you only get paid if the company makes money. This is not specific to bonds. In most other cases when a stock price appreciates, this is to reflect new information not previously known, or earnings retained by the company rather than paid out as dividends. Most of the financial instruments where you can \"\"make\"\" money immediately are speculative, where two people are betting against each other, and one has to lose money for the other to make money. Again, it's not reasonable to say that any type of financial instrument is the \"\"worst\"\". They function differently, serve different purposes, and have different features that may or may not fit your needs and preferences. You seem to be saying that you simply don't find bond returns high enough to be attractive to you. That may be true, since different people have different investment objectives, risk tolerance, and preference for having money now versus more money later. However, some of your statements don't seem to be supported by facts. For example, retail banks are not highly profitable as an industry, so they are not making thousands of times what they are paying you. They also need to pay all of their operating expenses, as well as account for default risk and inflation, out of the different between what they lend and what they pay to savings account holders. Also, it's not reasonable to say that bonds are worthless, as I've explained. The world disagrees with you. If they agreed with you, they would stop buying bonds, and the people who need financing would have to lower bond prices until people became interested again. That is part of how markets work. In fact, much of the reason that bond yields are so low right now is that there has been such high global demand for safe investments like bonds, especially from other nations, such that bond issues (especially the US government) have not needed to pay high yields in order to raise money.\"" }, { "docid": "228668", "title": "", "text": "Yes those are really yields. A large portion of the world has negative yielding bonds in fact. This process has been in motion for the past 10 years for very specific reasons. So congratulations on discovering the bond market." }, { "docid": "278965", "title": "", "text": "no it would not. Did you read the article? corporations and funds are already paying the government to hold money short-term (negative real 2 year bond yields). or are you advocating that the government place an additional tax on people who buy government bonds?" }, { "docid": "248799", "title": "", "text": "\"I don't think the advice to take lots more risk when young makes so much sense. The additional returns from loading up on stocks are overblown; and the rocky road from owning 75-100% stocks will almost certainly mess you up and make you lose money. Everyone thinks they're different, but none of us are. One big advantage of stocks over bonds is tax efficiency only if you buy index funds and don't ever sell them. But this does not matter in a retirement account, and outside a retirement account you can use tax-exempt bonds. Stocks have higher returns in theory but to have a reasonable guarantee of higher returns from them, you need around a 30-year horizon. That is a long, long time. Psychologically, a 60/40 stocks/bonds portfolio, or something with similar risk mixing in a few more alternative assets like Swenson's, is SO MUCH better. With 100% stocks you can spend 10 or 15 years saving money and your investment returns may get you nowhere. Think what that does to your motivation to save. (And how much you save is way more important than what you invest in.) The same doesn't happen with a balanced portfolio. With a balanced portfolio you get reasonably steady progress. You can still have a down year, but you're a lot less likely to have a down decade or even a down few years. You save steadily and your balance goes up fairly steadily. The way humans really work, this is so important. For the same kind of reason, I think it's great to buy one fund that has both stocks and bonds in there. This forces you to view the thing as a whole instead of wrongly looking at the individual asset class \"\"buckets.\"\" And it also means rebalancing will happen automatically, without having to remember to do it, which you won't. Or if you remember you won't do it when you should, because stocks are doing so well, or some other rationalization. Speaking of rebalancing, that's where a lot of the steady, predictable returns come from if you have a nice balanced portfolio. You can make money over time even if both asset classes end up going nowhere, as long as they bounce around somewhat independently, so you'll buy low and sell high when you rebalance. To me the ideal is an all-in-one fund that aims for about 60/40 stocks/bonds level of risk, somewhat more diversified than stocks/bonds is great (international stock, commodities, high yield, REIT, etc.). You can just buy that at age 20 and keep it until you retire. In beautiful ideal-world economic theory, buy 90% stocks when young. Real world with human brain involved: I love balanced funds. The steady gains are such a mental win. The \"\"target retirement\"\" funds are not a bad option, but if you buy the matching year for your age, I personally wish they had less in stocks. If you want to read more on the \"\"equity premium\"\" (how much more you make from owning stocks) here are a couple of posts on it from a blog I like: Update: I wrote this up more comprehensively on my blog,\"" }, { "docid": "411966", "title": "", "text": "\"The most fundamental observation of bond pricing is this: Bond price is inversely proportional to bond yields When bond yields rise, the price of the bond falls. When bond yields fall, the price of the bond rises. Higher rates are \"\"bad\"\" for bonds. If a selloff occurs in the Russian government bond space (i.e. prices are going down), the yield on that bond is going to increase as a consequence.\"" }, { "docid": "306679", "title": "", "text": "\"First note that CIBC issued these bonds with a zero coupon, so they do not pay any interest. They were purchased by the market participants at a small premium, paying an average of 100.054 for a nominal value of 100. This equates to a negative annual \"\"redemption\"\" yield of 0.009% - i.e., if held until maturity, then the holder will witness a negative annual return of 0.009%. You ask \"\"why does this make sense?\"\". Clearly it makes no sense for a private individual to purchase these bonds since they will be better off simply holding cash. To understand why there is a demand for these bonds we need to look elsewhere. The European bond market is currently suffering a dwindling supply owing to the ECBs bond buying programme (i.e., quantitative easing). The ECB is purchasing EUR 80 billion per month of Eurozone sovereign debt. This means that the quantity of high grade bonds available for purchase is shrinking fast. Against this backdrop we have all of those European institutions and financial corporations who are legally obliged to purchase bonds to be held as assets against their obligations. These are mostly national and private pension funds as well as insurance companies and fund managers. In this sort of environment, the price of high quality bonds is quickly bid up to the point where we see negative yields. In this environment companies like CIBC can borrow by issuing bonds with a zero coupon and the market is willing to pay a small premium over their nominal value. TL/DR The situation is further complicated by the subdued inflation outlook for the Eurozone, with a very real possibility of deflation. Should a prolonged period of deflation materialise, then negative redemption yield bonds may provide a positive real return.\"" }, { "docid": "495600", "title": "", "text": "\"Question 1: How do I start? or \"\"the broker\"\" problem Get an online broker. You can do a wire transfer to fund the account from your bank. Question 2: What criticism do you have for my plan? Dividend investing is smart. The only problem is that everyone's currently doing it. There is an insatiable demand for yield, not just individual investors but investment firms and pension funds that need to generate income to fund retirements for their clients. As more investors purchase the shares of dividend paying securities, the share price goes up. As the share price goes up, the dividend yield goes down. Same for bonds. For example, if a stock pays $1 per year in dividends, and you purchase the shares at $20/each, then your yearly return (not including share price fluctuations) would be 1/20 = 5%. But if you end up having to pay $30 per share, then your yearly return would be 1/30 or 3.3% yield. The more money you invest, the bigger this difference becomes; with $100K invested you'd make about $1.6K more at 5%. (BTW, don't put all your money in any small group of stocks, you want to diversify). ETFs work the same way, where new investors buying the shares cause the custodian to purchase more shares of the underlying securities, thus driving up the price up and yield down. Instead of ETFs, I'd have a look at something called closed end funds, or CEFs which also hold an underlying basket of securities but often trade at a discount to their net asset value, unlike ETFs. CEFs usually have higher yields than their ETF counterparts. I can't fully describe the ins and outs here in this space, but you'll definately want to do some research on them to better understand what you're buying, and HOW to successfully buy (ie make sure you're buying at a historically steep discount to NAV [https://seekingalpha.com/article/1116411-the-closed-end-fund-trifecta-how-to-analyze-a-cef] and where to screen [https://www.cefconnect.com/closed-end-funds-screener] Regardless of whether you decide to buy stocks, bonds, ETFs, CEFs, sell puts, or some mix, the best advice I can give is to a) diversify (personally, with a single RARE exception, I never let any one holding account for more than 2% of my total portfolio value), and b) space out your purchases over time. b) is important because we've been in a low interest rate environment since about 2009, and when the risk free rate of return is very low, investors purchase stocks and bonds which results in lower yields. As the risk free rate of return is expected to finally start slowly rising in 2017 and gradually over time, there should be gradual downward pressure (ie selling) on the prices of dividend stocks and especially bonds meaning you'll get better yields if you wait. Then again, we could hit a recession and the central banks actually lower rates which is why I say you want to space your purchases out.\"" }, { "docid": "457729", "title": "", "text": "It's worth pointing out that a bulk of the bond market is institutional investors (read: large corporations and countries). For individuals, it's very easy to just put your cash in a checking account. Checking accounts are insured and non-volatile. But what happens when you're GE or Apple or Panama? You can't just flop a couple billion dollars in to a Chase checking account and call it a day. Although, you still need a safe place to store money that won't be terribly volatile. GE can buy a billion dollars of treasury bonds. Many companies need tremendous amounts of collateral on hand, amounts far in excess of the capacity of a checking account; those funds are stored in treasuries of some sort. Separately, a treasury bond is not a substitute investment for an S&P index fund. For individuals they are two totally different investments with totally different characteristics. The only reason an individual investor should compare the return of the S&P against the readily available yield of treasuries is to ensure the expected return of an equity investment can sufficiently pay for the additional risk." }, { "docid": "19693", "title": "", "text": "From your own cite: &gt; Sales were offset by China increasing its holdings But it's an article from March. From the same source, but in June: &gt; [Global investors have piled into US government bonds this year, drawn by the allure of high yields.](http://www.ft.com/intl/cms/s/0/6907c2a0-f24a-11e3-ac7a-00144feabdc0.html#axzz3AlhYHl8A) &gt; At a time when the Federal Reserve has steadily reduced bond purchases since January and announced a further reduction at Wednesday’s policy meeting, foreign buyers have effectively stepped up, followed by domestic banks." }, { "docid": "2085", "title": "", "text": "In a secular bull market, strong investor sentiment drives prices higher, as participants, over time, are net buyers. Secular markets are typically driven by large-scale national and worldwide events... demographic/ population shifts, governmental policies... bear market periods occur within the longer interval, but do not reverse the trend. There are still many reasons to buy the long bond, despite the lack of yield (nearly flat term structure of interest rates). Despite the recent credit ratings agency downgrades of U.S. sovereign risk, the T-bond offers greater relative security than many alternatives. If Germany were NOT part of the EU, its government bonds would be issued by the Bundesbank, denominated in Deutsche Marks. German government bonds would probably be a better choice than the U.S. Treasury's 30-year bond. Long-term maturity U.S. Treasuries are in demand by investment and portfolio managers because:" }, { "docid": "563009", "title": "", "text": "Ponder this. Suppose that a reputable company or government were to come out and say hey, we are going to issue some 10 year bonds at 6.4%. Anyone interested in buying some? Assume that the company or government is financially solid and there is zero chance that they will go bankrupt. Think those bonds would sell? Would you be interested in buying such a bond? Well, I would wager that these bonds would sell like hotcakes, despite the fact that the long term stock market return beats it by a half percent. Heck, vanguard's junk bond fund is hot right now. It only yields 4.9% and those are junk bonds, not rock solid companies (see vanguard high yield corporate bond fund) Every time you make an extra principal payment on your student loan, you are effectively purchasing a investment with a rock solid, guaranteed 6.4% return for 10 years (or whatever time you have left on the loan if make no extra payments). On top of that, paying off a loan early builds your credit reputation, improves your monthly cash flow once the loan is paid, may increase your purchasing power for a house or car, and if nothing else, it frees you from being a slave to that debt payment every month. Edit Improved wording based on Ross's comment" }, { "docid": "561140", "title": "", "text": "Having a good dividend yield doesn't guarantee that a stock is safe. In the future, the company may run into financial trouble, stop paying dividends, or even go bankrupt. For this reason, you should never buy a stock just because it has a high dividend yield. You also need some criteria to determine whether that stock is safe to buy. Personally, I consider a stock is reasonably safe if it meets the following criteria:" } ]

[ { "docid": "377322", "title": "", "text": "\"There are many different kinds of SEC filings with different purposes. Broadly speaking, what they have in common is that they are the ways that companies publicly disclose information that they are legally required to disclose. The page that you listed gives brief descriptions of many types, but if you click through to the articles on individual types of filings, you can get more info. One of the most commonly discussed filings is the 10-K, which is, as Wikipedia says, \"\"a comprehensive summary of a company's financial performance\"\". This includes info like earnings and executive pay. One example of a form that some people believe has potential utility for investors is Form 4, which is a disclosure of \"\"insider trading\"\". People with a privileged stake in a company (executives, directors, and major shareholders) cannot legally buy or sell shares without disclosing it by filing a Form 4. Some people think that you can make use of this information in the sense that if, for instance, the CEO of Google buys a bunch of Twitter stock, they may have some reason for thinking it will go up, so maybe you should buy it too. Whether such inferences are accurate, and whether you can garner a practical benefit from them (i.e., whether you can manage to buy before everyone else notices and drives the price up) is debatable. My personal opinion would be that, for an average retail investor, readng SEC filings is unlikely to be useful. The reason is that an average retail investor shouldn't be investing in individual companies at all, but rather in mutual funds or ETFs, which typically provide comparable returns with far less risk. SEC filings are made by individual companies, so it doesn't generally help you to read them unless you're going to take action related to an individual company. It doesn't generally make sense to take action related to an individual company if you don't have the time and energy to read a large number of SEC filings to decide which company to take action on. If you have the time and energy to read a large number of SEC filings, you're probably not an average retail investor. If you are a wheeler dealer who plays in the big leagues, you might benefit from reading SEC filings. However, if you aren't already reading SEC filings, you're probably not a wheeler dealer who plays in the big leagues. That said, if you're a currently-average investor with big dreams, it could be instructive to read a few filings to explore what you might do with them. You could, for instance, allocate a \"\"play money\"\" fund of a few thousand dollars and try your hand at following insider trades or the like. If you make some money, great; if not, oh well. Realistically, though, there are so many people who make a living reading SEC filings and acting on them every day that you have little chance of finding a \"\"diamond in the rough\"\" unless you also make a living by doing it every day. It's sort of like asking \"\"Should I read Boating Monthly to improve my sailing skills?\"\" If you're asking because you want to rent a Hobie Cat and go for a pleasure cruise now and then, sure, it can't hurt. If you're asking because you want to enter the America's Cup, you can still read Boating Monthly, but it won't in itself meaningfully increase your chances of winning the America's Cup.\"" } ]

[ { "docid": "549017", "title": "", "text": "There's a lot of hate on the SEC in this thread, but having had to deal with various daily reports generated by several different clearing firms -- I think a story about of all the different methods of delivery and file formats used in the industry would be worthy of TheDailyWTF. There seriously needs to be some industry standardization here. It's a nightmare for everyone involved." }, { "docid": "330288", "title": "", "text": "I must say that this is a question that you should hire a professional tax adviser (EA/CPA licensed in your State) to answer. It is way above our amateurs' pay-grade. That said, I'll tell you what I personally think on the issue. I'm not a licensed tax adviser, and nothing that I write here can be used in any way as a justification for any action. Read the full disclaimer in my profile. I believe you're right to treat those as assets. You bought them as an investment, and you intend to sell them for profit. Here the good news for you end. As we decided to define the domains as an asset, we need to decide what type of asset it is. I believe you're holding a Sec. 197 asset. This is because domain is essentially akin to franchise and trademark, and as such falls under the Sec. 197 definition. That means that your amortization period is 15 years. Your expenses related to these domains should also be amortized, on the same schedule. When you sell a domain, you can deduct the portion that you have not yet deducted from the amortization schedule from your proceeds. Keep in mind passive loss limitations, since losses from assets held as investment cannot offset Schedule C income." }, { "docid": "204297", "title": "", "text": "\"I interned for about six months at a firm that employed a few technical analysts, so I'll try to provide what little information I can. Since the bulk of the intra-day trading was decided algorithmically, technical analysts had two main functions: This basically boils down to my answer to your question. There are still enough people, trading firms, etc. who believe in candlestick charting and other visually subjective patterns that if you notice a trend, pattern, etc. before the majority of traders observing, you may be able to time the market successfully and profit. This is becoming increasingly dangerous, however, because of the steps I outlined above. Over time, the charting patterns that have been proven effective (often in many firms individually since the algorithms are all proprietary) are incorporated into computer algorithms, so the \"\"traders\"\" you're competing with to see the pattern are increasingly low-latency computer clusters less than a few blocks from the exchange. Summary: Candlestick charting, along with other forms of subjective technical analysis, has its believers, and assuming enough of these believers trade the standard strategies based on the standard patterns, one could conceivably time the market with enough skill to anticipate these traders acting on the pattern and therefore profit. However, the marginal benefits of doing so are decreasing rapidly as computers take over more trading responsibility. Caveats: I know you're in Australia, where the market penetration of HF/algo traders isn't as high as in the US, so it might be a few more years before the marginal benefits cease to be profitable; that being said, if various forms of technical analysis proved wildly profitable in Australia, above and beyond profits available in other markets, rest assured that large American or British trading firms would already have moved in. My experience is limited to one trading firm, so I certainly can't speak for the industry as a whole. I know I didn't address candlestick charts specifically, but since they're only one piece of visual technical analysis, I tried to address the issue as a whole. This somewhat ties into the debate between fundamental or technical analysis, which I won't get into. Investopedia has a short article on the subject. As I said, I won't get into this because while it's a nice debate for small traders, at large trading firms, they don't care; they want to make profit, and any strategy that can be vetted, whether it's fundamental, technical, or astrological, will be vetted. I want to add more information to my answer to clear up some of the misconceptions in the comments, including those talking about biased studies and a lack of evidence for or against technical analysis (and candlestick charts; I'll explore this relationship further down). It's important to keep in mind that charting methods, including candlestick charts, are visually subjective ways of representing data, and that any interpretations drawn from such charts should, ideally, represent objective technical indicators. A charting method is only as good as the indicators it's used to represent. Therefore, an analysis of the underlying indicators provides a suitable analysis for the visual medium in which they're presented. One important study that evaluates several of these indicators is Foundations of Technical Analysis: Computational Algorithms, Statistical Inference, and Empirical Implementation by Lo, Mamaysky, and Wang. Lest anyone accuse its authors of bias, I should point out that not only is it published by the National Bureau of Economic Research (a highly reputable organization within economics and finance), but also that the majority of its authors come from MIT's Sloan school, which holds a reputation second to none. This study finds that several technical indicators, e.g. head-and-shoulder, double-bottom, and various rectangle techniques, do provide marginal value. They also find that although human judgment is still superior to most computational algorithms in the area of visual pattern recognition, ... technical analysis can be improved by using automated algorithms Since this paper was published in 2000, computing power and statistical analysis have gained significant ground against human ability to identify and exploit for visual pattern detection like candlestick charts. Second, I suggest you look into David Aaronson's book, Evidence-Based Technical Analysis: Applying the Scientific Method and Statistical Inference to Trading Signals. He finds similar results to the Lo, et. al. paper, in that some technical indicators do add value to the investment process, but those that do are those that can be represented mathematically and thus programmed directly into trading algorithms (thus bypassing visual tools like candlestick charts). He describes how studies, including Lo, et al., have found that head and shoulders patterns are worse than random, i.e. you would earn higher returns if you simply traded at random. That point is worth than repeating. If a day-trader is using a candlestick chart and using head-and-shoulders patterns as part of their toolkit, he's rolling the dice when he uses that pattern and returns that come from its application come from chance. This reminds me of that old story about a company that sends out pamphlets predicting the results of sports games, complete with \"\"strategies\"\" and \"\"data\"\" to back up the predictions. The company sends out several versions of the pamphlet every game, each predicting a different winner. Given a large enough sample size, by the end of the season, there are a few people who have received a pamphlet that accurately predicted the winner for every game and they're convinced the system is perfect. The others weren't so lucky, however. Relying on candlestick charts and TA patterns that are relics from the pre-computerized era is reassuring to some traders and gives them a sense of control and \"\"beating the market,\"\" but how long will chance remain on your side? This is why I maintain that visual tools like candlestick charts are a slowly dying medium. They certainly still add value to some trading firms, which is why Bloomberg terminals still ship with this functionality built in, but as more and more research shows, automated algorithms and statistical indicators can provide more value. It's also important to think about whether the majority of the value added by visual tools like candlestick charts comes in the form of profit or a sense of security to traders who learned the field using them over the past few decades. Finally, it's extremely important to realize that the actions of retail investors in the equities market cannot begin to represent the behaviors of the market as a whole. In the equities markets alone, trading firms and institutional investors dwarf retail investors, and the difference in scale is even more vastly pronounced in derivatives and currency markets. The fact that some retail investors use candlestick charts and the technical indicators they (hope) underlie them provides nothing but minor anecdotal evidence as to their effectiveness.\"" }, { "docid": "188344", "title": "", "text": "What I'm going to write is far too long for a comment, so I'll put it here even though its not an answer. That's the closest thing to an answer you'll get here, I'm afraid. I'm not a tax professional, and you cannot rely on anything I say, as you undoubtedly know. But I'll give you some pointers. Things you should be researching when you have international clients: Check if Sec. 402 can apply to the pension funds, if so your life may become much easier. If not, and you have no idea what you're doing - consider referring the client elsewhere. You can end up with quite a liability suit if you make a mistake here, because the penalties on not filing the right piece of paper are enormous." }, { "docid": "529455", "title": "", "text": "They will not send a bill, though there's a chance they will eventually send an accusatory letter. You must proactively pay your taxes. The simplest route is to send a check to each taxing authority with the respective full amounts due. I wouldn't bother calling them. You could also file amended returns with each containing the correct information. As a general rule, tax advisors tend to counsel against giving bank account information to the IRS for payment purposes (as opposed to refund purposes), both to protect the timing of payment and to make it slightly more difficult for them to seize or lien your account. If you choose to send a check, you can use Form 1040-V and NY Form IT-201-V. Please triple check your Social Security Number matches your tax return SSN, so they correctly credit you for payment. You may include an explanation of the closed account if you are feeling either fearful or contrite, but if the amount due is paid in full, then neither taxing authority should really care about your error." }, { "docid": "493321", "title": "", "text": "\"There are several such \"\"lists.\"\" The one that is maintained by the company is called the shareholder registry. That is a list that the company has given to it by the brokerage firms. It is a start, but not a full list, because many individual shareholders hold their stock with say Merrill Lynch, in \"\"street name\"\" or anonymously. A more useful list is the one of institutional ownership maintained by the SEC. Basically, \"\"large\"\" holders (of more than 5 percent of the stock) have to register their holdings with the SEC. More to the point, large holders of stocks, the Vanguards, Fidelitys, etc. over a certain size, have to file ALL their holdings of stock with the SEC. These are the people you want to contact if you want to start a proxy fight. The most comprehensive list is held by the Depositary Trust Company. People try to get that list only in rare instances.\"" }, { "docid": "4883", "title": "", "text": "Retail brokers and are generally not members of exchanges and would generally not be members of exchanges unless they are directly routing orders to those exchanges. Most retail brokers charging $7 are considered discount brokers and such brokers route order to Market Makers (who are members of the exchanges). All brokers and market makers must be members of FINRA and must pay FINRA registration and licensing fees. Discount brokers also have operational costs which include the cost of their facilities, technology, clearing fees, regulation and human capital. Market makers will have the same costs but the cost of technology is probably much higher. Discount brokers will also have market data fees which they will have to pay to the exchanges for the right to show customer real time quotes. Some of their fees can be offset through payment for order flow (POF) where market makers pay routing brokers a small fee for sending orders to them for execution. The practice of POF has actually allowed retail brokers to keep their costs lower but to to shrinking margins and spread market makers POF has significantly declined over the years. Markets makers generally do not pass along Exchange access fees which are capped at $.003 (not .0035) to routing brokers. Also note that The SEC and FINRA charges transactions fees. SEC fee for sales are generally passed along to customers and noted on trade confirms. FINRA TAF is born by the market makers and often subtracted from POF paid to routing firms. Other (full service brokers) charging higher commissions are charging for the added value of their brokers providing advice and expertise in helping investors with investment strategies. They will generally also have the same fees associated with membership of all the exchanges as they are also market makers subject to some of the list of cost mentioned above. One point of note is that Market Making technology is quite sophisticates and very expensive. It has driven most of wholesale market makers of the 90s into consolidation. Retail routing firm's save a significant amount of money for not having to operate such a system (as well as worry about the regulatory headaches associated with running such a system). This allows them to provide much lower commissions that the (full service) or bulge bracket brokers." }, { "docid": "532181", "title": "", "text": "The toy retailer Toys R Us may be on the brink of filing for bankruptcy. It's one of several options the chain is considering to pay down $5 billion in debt it owes as a result of a leveraged buyout in 2005, according to The Wall Street Journal. And a filing could come as soon as this week, according to a new report from CNBC's Lauren Hirsch. The chain's trio of owners — the private-equity firms Kohlberg Kravis Roberts and Bain Capital Partners and the real-estate investment trust Vornado Realty Trust — bought the company in a deal worth $6.6 billion, taking it private. CNBC previously reported that the chain had hired the law firm Kirkland &amp; Ellis LLP, and that it was exploring options to take care of its debt and working with its creditors to stave off filing for Chapter 11 bankruptcy protection. Chapter 11 protection would allow the company to restructure $400 million in debt due in 2018 then renegotiate the rest, according to CNBC. The debt crisis looms at a critical time for the toy seller. Toys R Us last year made 40% of its sales in the fourth quarter, thanks to holiday shopping. Vendors are feeling increasingly anxious about the chain's ability to pay down its debts, according to the reports, which could lead to a shortage of toys to stock its shelves and further exacerbate the issue. Toys R Us has also struggled as it increasingly competes with online retailers in its two main businesses: baby goods and toys. A Toys R Us representative did not immediately respond to a request for comment." }, { "docid": "520395", "title": "", "text": "\"I've received letters notifying me of data breaches in the past. In the end, I've never signed up for the offered protection service, figuring if \"\"they\"\" can hack Target or ADP or the IRS, they can hack anybody, like... Equifax. And now Equifax has been hacked. My family's Social Security Numbers were stolen from a hospital database. I think that information, plus public information was used to gain further data from the IRS FAFSA tool. (we got a letter from the IRS). Ultimately, fraudsters used whatever data they had to file a tax return with the IRS and with the Cali FTB (we don't and never have lived in California). We got letters from both, and managed to stop the fraud before it really impacted us...other than having to file a paper tax form this past tax season. Anyway... in a world where Equifax gets hacked: the only solution is: I don't bother with the crazy password schemes you talk about... I have a few different passwords I use, but most my investment accounts use the same username and password. It's all about risk. Bruce Schneier says the same thing. The amount to spend on security should depend on what you're trying to protect. I don't care much if somebody gets into my google account, because I have a google account just because I have to. I barely use it at all. Similarly my yahoo account. My yahoo account uses my \"\"insecure password\"\", and my investment accounts use my \"\"secure password\"\". Credit Card info? Meh. Unless they get into the credit card company database, which undoubtedly has my Social Security Number, it's not that big of a deal. Yeah, they can make fraudulent charges, but there are legal protections, so in theory I can't be out any money. So think this way: what's the risk, and what's the appropriate level of effort to take to mitigate that risk.\"" }, { "docid": "527105", "title": "", "text": "I would echo @Victor's comments. One book and 1000 web pages doesnt make you a good investor/trader. There are some basic things you should be aware of and read up on There are a few books that I would recommend I have been trading for over 10 years, my dad for over 30 years and we are both continually learning new things. Don't read one book and assume you know it all. Bear in mind that there are always new indicators being thought up and new ways of using and interpreting the same information, so keep reading and educating yourself." }, { "docid": "541640", "title": "", "text": "lol information overload how about we share some of our frequent reads? i personally read Mike Shedlock's blog for global macro trends, albeit his content is leaning a bit to perma-bear and mercenary traders for trading related contents. I absolutely love their articles on trading systems,mentality etc etc. It played a critical role in building my very own profitable trading system, and forging the trader mindset i have today. I would not have gone far without these guys." }, { "docid": "366830", "title": "", "text": "First, you should probably have a proper consultation with a licensed tax adviser (EA/CPA licensed in your State). In fact you should have had it before you started, but that ship has sailed. You're talking about start-up expenses. You can generally deduct up to $5000 in the year your business starts, and the expenses in excess will be amortized over 180 months (15 years). This is per the IRC Sec. 195. The amortization starts when your business is active (i.e.: you can buy the property, but not actually open the restaurant - you cannot start the depreciation). I have a couple questions about accounting - should all the money I spent be a part of capital spending? Or is it just a part of it? If it qualifies as start-up/organizational expenses - it should be capitalized. If it is spent on capital assets - then it should also be capitalized, but for different reasons and differently. For example, costs of filing paperwork for permits is a start-up expense. Buying a commercial oven is a capital asset purchase which should be depreciated separately, as buying the tables and silverware. If it is a salary expense to your employees - then it is a current expense and shouldn't be capitalized. Our company is LLC if this matters. It matters to how it affects your personal tax return." }, { "docid": "502560", "title": "", "text": "\"Crowdfunding can be a legitimate means of funding very small startups. It is an innovative, but obviously risky, method of raising small amounts of money. As such it is now regulated by the SEC under \"\"Regulation Crowdfunding\"\" They have published guides for these types of business startups to help them with required disclosures and reporting requirements: https://www.sec.gov/info/smallbus/secg/rccomplianceguide-051316.htm Here's the introduction to the relevant regulatory authority of the SEC: Under the Securities Act of 1933, the offer and sale of securities must be registered unless an exemption from registration is available. Title III of the Jumpstart Our Business Startups (JOBS) Act of 2012 added Securities Act Section 4(a)(6) that provides an exemption from registration for certain crowdfunding transactions.[2] In 2015, the Commission adopted Regulation Crowdfunding to implement the requirements of Title III.[3] Under the rules, eligible companies will be allowed to raise capital using Regulation Crowdfunding starting May 16, 2016. It is obviously a new form of investment but you should be able to get historical data on the SEC's real time Edgar reporting system once there is some history. This is a search for all Form C's filed as of 12/2/16\"" }, { "docid": "147981", "title": "", "text": "the financial information is generally filed via SEDAR (Canada) or SEC (US) before the conference call with the investment community. This can take before either before the market opens or after the market closes. The information is generally distribute to the various newswire service and company website at the same time the filing is made with SEDAR/SEC." }, { "docid": "345793", "title": "", "text": "\"Overall the question is one of a political nature. However, this component can have objective answers: \"\"What behavior is trying to be prevented?\"\" There are mechanisms by which capital gains can be deferred (1031 like-kind exchange, or simply holding a long position for years) or eliminated by the estate step up in basis. With these available, mechanisms that enable basis-reduction are ripe for abuse. On the other hand, if this truly bothers you then if you meet the IRS qualifications of a day trader, you may elect to use \"\"mark to market\"\" accounting, eliminating this entirely as a concern. Special rules for traders of securities\"" }, { "docid": "266221", "title": "", "text": "\"Sure, Yahoo Finance makes mistakes from time to time. That's the nature of free data. However, I think the issue here is that yahoo is aggregating several line items into one. Like maybe reporting cash equivalents plus total investment securities minus loans as \"\"cash equivalents.\"\" This aggregation is done by a computer program somewhere and may or may not be appropriate for a particular purpose and firm. For this reason, if you are trying to do top quality research, it's always better to go to the original SEC filings, if you can. Then you will know for sure which items you are looking at. The only mistakes will be the ones made by the accountants at the firm in question. If there's a reason you prefer to use yahoo, like if it's easier for your code to scrape, then spend a little time comparing to the SEC filing to ensure you know where the numbers really come from before using it.\"" }, { "docid": "402437", "title": "", "text": "\"&gt; The base value from infrastructure is derived on a per-capita basis. It is a \"\"fixed cost\"\" as opposed to a variable one. In other words, roads are just as useful to me as they are to you regardless of my net worth. A1: Misleading: Infrastructure is useful to those who use it more independently of classifying it as [fixed vs variable](http://en.wikipedia.org/wiki/Fixed_cost). Take the FAA for example. The poor who cannot afford a plane ticket and/or order things via next-day air derive very little benefit from the FAA compared to a person who owns their own aircraft and can fly out at a moments notice knowing full well they can file a flight plan and communicate with a network of airports to ensure their plane will not crash into any other jets. &gt;A tank, a missile, a police officer protects me the same as it does anyone else. A2: But, A person with more net worth has more to lose than a person with low net worth. Therefore, even independent of A1 above, your statement is false. Those examples protect those with more property/net-worth/etc more-so than those with less. &gt; B) As a percentage of income, infrastructure is far more valuable to low-income individuals than high-income individuals It depends on the infrastructure: But there is far more infrastructure protecting the wealthy than the poor. Your example is the stock market. Why should the vast majority of people pay for SEC and rules and regulations to require/enforce honest filings when they cannot afford stock? Who benefits from SEC infrastructure. You and I do. Value to poor as a percentage of income = 0% . Value to rich &gt; 0% . QED. Your roads argument as an example of poor using more infrastructure than the rich is a bad one. The poor are more likely to take public transportation and/or work within 5 miles of their residence. The rich are more likely to have multiple cars, live in gated areas far from work and take long road trips. Staying at home to work is a function of more than just owning stock. There are at-home-parents, IT professionals, programmers, VOIP operators, etc, all working from home and completely independent of road use. &gt; C) The activities of business owners generate massive tax revenues. These far outweigh their personal utility from infrastructure. C1: \"\"personal utility\"\" You are mixing corporate and personal taxes and yet calling out \"\"personal\"\" utility. Unless you are talking about business owners flowing income to personal income (e.g. S-Corp) the mixing of terms is unfortunate because both business and people use infrastructure and both should pay for it. C2: \"\"Far outweigh\"\" Not true: See examples A1 and A2 above. And I'll go one more. Taxes on businesses are on NET revenue not gross revenue (ignoring things like SS and FICA). You probably invest in businesses with dividends and there is an incentive to keep a net revenue that can be distributed to stockholders. But in the private world there is no such motivation. In fact there is an anti-motivation to show profit as low as possible to limit tax liability. This has led to many \"\"hacks\"\" of the tax code/expenses to make sure that businesses end up with negative tax liability or an effective rate that is close to 0. How many poor people can claim negative tax liability? Again 0 &gt; not-zero. &gt;D) Society captures the majority of individual commercial efforts (estimates vary, but typically 85%). In other words, if I generate $10.00 of value as an entrepreneur, I will realistically be able to capture only $1.50 of that. D1: wat? Vague. Not all commercial efforts have a positive impact on the community. Irrelevant since we are talking about use vs cost. etc.\"" }, { "docid": "472515", "title": "", "text": "\"This company was a reputable rating agency for many years. See Weiss Research website, ratings section for a very different perspective on Martin Weiss's work than the websites with which he is now associated. I checked both links provided, and agree with the questioner in every way: These appear to be highly questionable investment research websites. I use such strong terms based on the fact that the website actually uses the distasteful pop-up ploy, \"\"Are you SURE you want to leave this site?\"\" Clearly, something changed between what Weiss Ratings was in the past (per company history since 1971) and what Martin Weiss is doing now. Larry Edelson seems to have been associated exclusively with questionable websites and high pressure investment advice since 2007. From 1996 through the present, he worked as either an employee or contractor of Weiss Research. Let's answer each of your questions. On June 22, 2006, the Commission instituted settled administrative proceedings against Weiss Research, Inc., Martin Weiss, and Lawrence Edelson (collectively, “Respondents”) for violations of the Investment Advisers Act of 1940 in connection with their operation of an unregistered investment adviser and the production and distribution of materially false and misleading marketing materials. Full details about Weiss Ratings operations, including its history from 1996 through 2001, when it operated in compliance with securities laws, then from 2001 through 2005, which was when the SEC filed charges for regulatory violations, are available from the June 2006 U.S. SEC court documents PDF. Finally, this quantitative assessment, \"\"Safe With Martin Weiss? (December 2010) by CXO Advisory (providers of \"\"objective research and reviews to aid investing decisions\"\") for its readers concluded the following: In summary, the performance of Martin Weiss’ premium services in aggregate over the past year is unimpressive. The study methodology was good, but I recommend reading the article (I posted the URL) to fully understand what caveats and assumptions were done to reach that conclusion.\"" }, { "docid": "339481", "title": "", "text": "Lol it's all good. Reddit just seems to be bothered when people do that. The confusion was from the word Platform. It could be thought of differently from a normal perspective to that of a programmer's. Probably should read it first though before posting anything." } ]

[ { "docid": "534059", "title": "", "text": "I use 10-K and 10-Qs to understand to read the disclosed risk factors related to a business. Sometimes they are very comical. But when you see that risk factor materializing you can understand how it will effect the company. For example, one microlending company's risk factor stated that if Elizabeth Warren becomes head of the Consumer Financial Protection Bureau we will have a hard time... so we are expanding in Mexico and taking our politically unfavorable lending practices there. I like seeing how many authorized shares there are or if there are plans to issue more. An example was where I heard from former employees of a company how gullible the other employees at that company were and how they all thought they were going to get rich or were being told so by upper management. Poor/Quirky/Questionable/Misleading management is one of my favorite things to look for in a company so I started digging into their SEC filings and saw that they were going to do a reverse split which would make the share prices trade higher (while experiencing no change in market cap), but then digging further I saw that they were only changing the already issued shares, but keeping the authorized shares at the much larger amount of shares, and that they planned to do financing by issuing more of the authorized shares. I exclaimed that this would mean the share prices would drop by 90%-99% after the reverse split and you mean to tell me that nobody realizes this (employees or the broad market). I was almost tempted to stand outside their office and ask employees if I could borrow their shares to short, because there wasn't enough liquidity on the stock market! This was almost the perfect short but it wasn't liquid or have any options so not perfect after all. It traded from $20 after the reverse split to $1.27 I like understanding how much debt a company is in and the structure of that debt, like if a loan shark has large payments coming up soon. This is generally what I use those particular forms for. But they contain a lot of information A lot of companies are able to act they way they do because people do not read." } ]

[ { "docid": "509432", "title": "", "text": "\"I really think the government should have a few 'elite' groups inside of each of their big divisions filled with mathematicians, statisticians, computer scientists, and experts in the fields. I'm thinking a group pursuing medicare fraud, a group pursuing SEC violations, a group pursuing DOD embezzling, etc. It's not like these criminals are especially competent, they just rely on staying under the radar. Hiring a team of 50 or 100 or whatever top notch analysts and then giving them a cut of the fraud they've exposed would go a long way toward attracting top talent in a way that is politically defensible. The SEC doesn't work because being an SEC lawyer pays about a twentieth of what being a lawyer for a hedge fund does. Imagine that same SEC lawyer getting 1% or 5% of the settlements / penalties that are levied against fraudulent companies. You could still become \"\"fuck you\"\" rich while working for the government and the US would be a lot better off.\"" }, { "docid": "330288", "title": "", "text": "I must say that this is a question that you should hire a professional tax adviser (EA/CPA licensed in your State) to answer. It is way above our amateurs' pay-grade. That said, I'll tell you what I personally think on the issue. I'm not a licensed tax adviser, and nothing that I write here can be used in any way as a justification for any action. Read the full disclaimer in my profile. I believe you're right to treat those as assets. You bought them as an investment, and you intend to sell them for profit. Here the good news for you end. As we decided to define the domains as an asset, we need to decide what type of asset it is. I believe you're holding a Sec. 197 asset. This is because domain is essentially akin to franchise and trademark, and as such falls under the Sec. 197 definition. That means that your amortization period is 15 years. Your expenses related to these domains should also be amortized, on the same schedule. When you sell a domain, you can deduct the portion that you have not yet deducted from the amortization schedule from your proceeds. Keep in mind passive loss limitations, since losses from assets held as investment cannot offset Schedule C income." }, { "docid": "591950", "title": "", "text": "I am confused as to what the author was talking about when speaking about the lack of features and research tools for stocks and how that is such a huge negative of Robinhood. If anything, I want a cheap, simple platform to efficiently trade. I might as well save a few bucks on commission, right? I can do my research online and through SEC filings, I don't need e-trade to tell me what stocks to buy, I decide. Whether I buy Cisco stock through TD Ameritrade's phone system for $45 per transaction or for free through Robinhood I'm still owning the same stock, the same company, at the same price probably within fractions of a penny per share. I get what the author is saying though about the general aurora of the app that is encouraging for people to invest who should not be investing. Maybe I don't see the problem with it because I like to think that I know what I am doing and don't just treat it like gambling." }, { "docid": "123287", "title": "", "text": "This is taxed as ordinary income. See the IRC Sec 988(a)(1). The exclusion you're talking about (the $200) is in the IRC Sec 988(e)(2), but you'll have to read the Treasury Regulations on this section to see if and how it can apply to you. Since you do this regularly and for profit (i.e.: not a personal transaction), I'd argue that it doesn't apply." }, { "docid": "345793", "title": "", "text": "\"Overall the question is one of a political nature. However, this component can have objective answers: \"\"What behavior is trying to be prevented?\"\" There are mechanisms by which capital gains can be deferred (1031 like-kind exchange, or simply holding a long position for years) or eliminated by the estate step up in basis. With these available, mechanisms that enable basis-reduction are ripe for abuse. On the other hand, if this truly bothers you then if you meet the IRS qualifications of a day trader, you may elect to use \"\"mark to market\"\" accounting, eliminating this entirely as a concern. Special rules for traders of securities\"" }, { "docid": "502560", "title": "", "text": "\"Crowdfunding can be a legitimate means of funding very small startups. It is an innovative, but obviously risky, method of raising small amounts of money. As such it is now regulated by the SEC under \"\"Regulation Crowdfunding\"\" They have published guides for these types of business startups to help them with required disclosures and reporting requirements: https://www.sec.gov/info/smallbus/secg/rccomplianceguide-051316.htm Here's the introduction to the relevant regulatory authority of the SEC: Under the Securities Act of 1933, the offer and sale of securities must be registered unless an exemption from registration is available. Title III of the Jumpstart Our Business Startups (JOBS) Act of 2012 added Securities Act Section 4(a)(6) that provides an exemption from registration for certain crowdfunding transactions.[2] In 2015, the Commission adopted Regulation Crowdfunding to implement the requirements of Title III.[3] Under the rules, eligible companies will be allowed to raise capital using Regulation Crowdfunding starting May 16, 2016. It is obviously a new form of investment but you should be able to get historical data on the SEC's real time Edgar reporting system once there is some history. This is a search for all Form C's filed as of 12/2/16\"" }, { "docid": "36723", "title": "", "text": "\"In US public stock markets there is no difference between the actions individual retail traders are \"\"permitted\"\" to take and the actions institutional/corporate traders are \"\"permitted\"\" to take. The only difference is the cost of those actions. For example, if you become a Registered Market Maker on, say, the BATS stock exchange, you'll get some amazing rebates and reduced transaction prices; however, in order to qualify for Registered Market Maker status you have to maintain constant orders in the book for hundreds of equities at significant volumes. An individual retail trader is certainly permitted to do that, but it's probably too expensive. Algorithmic trading is not the same as automated trading (algorithmic trading can be non-automated, and automated trading can be non-algorithmic), and both can be anywhere from low- to high-frequency. A low-frequency automated strategy is essentially indistinguishable from a person clicking their mouse several times per day, so: no, from a legal or regulatory perspective there is no special procedure an individual retail trader has to follow before s/he can automate a trading strategy. (Your broker, on the other hand, may have all sorts of hoops for you to jump through in order to use their automation platform.) Last (but certainly not least) you will almost certainly lose money hand over fist attempting bid-ask scalping as an individual retail trader, whether your approach is algorithmic or not, automated or not. Why? Because the only way to succeed at bid-ask scalping is to (a) always be at/near the front of the queue when a price change occurs in your favor, and (b) always cancel your resting orders before they are executed when a price change occurs against you. Unless your algorithms are smarter than every other algorithm in the industry, an individual retail trader operating through a broker's trading platform cannot react quickly enough to succeed at either of those. You would have to eschew the broker and buy direct market access to even have a chance, and that's the point at which you're no longer a retail trader. Good luck!\"" }, { "docid": "402437", "title": "", "text": "\"&gt; The base value from infrastructure is derived on a per-capita basis. It is a \"\"fixed cost\"\" as opposed to a variable one. In other words, roads are just as useful to me as they are to you regardless of my net worth. A1: Misleading: Infrastructure is useful to those who use it more independently of classifying it as [fixed vs variable](http://en.wikipedia.org/wiki/Fixed_cost). Take the FAA for example. The poor who cannot afford a plane ticket and/or order things via next-day air derive very little benefit from the FAA compared to a person who owns their own aircraft and can fly out at a moments notice knowing full well they can file a flight plan and communicate with a network of airports to ensure their plane will not crash into any other jets. &gt;A tank, a missile, a police officer protects me the same as it does anyone else. A2: But, A person with more net worth has more to lose than a person with low net worth. Therefore, even independent of A1 above, your statement is false. Those examples protect those with more property/net-worth/etc more-so than those with less. &gt; B) As a percentage of income, infrastructure is far more valuable to low-income individuals than high-income individuals It depends on the infrastructure: But there is far more infrastructure protecting the wealthy than the poor. Your example is the stock market. Why should the vast majority of people pay for SEC and rules and regulations to require/enforce honest filings when they cannot afford stock? Who benefits from SEC infrastructure. You and I do. Value to poor as a percentage of income = 0% . Value to rich &gt; 0% . QED. Your roads argument as an example of poor using more infrastructure than the rich is a bad one. The poor are more likely to take public transportation and/or work within 5 miles of their residence. The rich are more likely to have multiple cars, live in gated areas far from work and take long road trips. Staying at home to work is a function of more than just owning stock. There are at-home-parents, IT professionals, programmers, VOIP operators, etc, all working from home and completely independent of road use. &gt; C) The activities of business owners generate massive tax revenues. These far outweigh their personal utility from infrastructure. C1: \"\"personal utility\"\" You are mixing corporate and personal taxes and yet calling out \"\"personal\"\" utility. Unless you are talking about business owners flowing income to personal income (e.g. S-Corp) the mixing of terms is unfortunate because both business and people use infrastructure and both should pay for it. C2: \"\"Far outweigh\"\" Not true: See examples A1 and A2 above. And I'll go one more. Taxes on businesses are on NET revenue not gross revenue (ignoring things like SS and FICA). You probably invest in businesses with dividends and there is an incentive to keep a net revenue that can be distributed to stockholders. But in the private world there is no such motivation. In fact there is an anti-motivation to show profit as low as possible to limit tax liability. This has led to many \"\"hacks\"\" of the tax code/expenses to make sure that businesses end up with negative tax liability or an effective rate that is close to 0. How many poor people can claim negative tax liability? Again 0 &gt; not-zero. &gt;D) Society captures the majority of individual commercial efforts (estimates vary, but typically 85%). In other words, if I generate $10.00 of value as an entrepreneur, I will realistically be able to capture only $1.50 of that. D1: wat? Vague. Not all commercial efforts have a positive impact on the community. Irrelevant since we are talking about use vs cost. etc.\"" }, { "docid": "304999", "title": "", "text": "\"You can call CBOE and tell them you want that series or a particular contract. And this has nothing to do with FLEX. Tell them there is demand for it, if they ask who you are, DONT SAY YOU ARE A RETAIL INVESTOR, the contracts will be in the option chain the next day. I have done this plenty of times. The CBOE does not care and are only limited by OCC and the SEC, but the CBOE will trade and list anything if you can think of it, and convince them that \"\"some people want to trade it\"\" or that \"\"it has benefits for hedging\"\" I've gotten 50 cent strike prices on stocks under $5 , I've gotten additional LEAPS and far dated options traded, I've gotten entire large chains created. I also have been with prop shops before, so I could technically say I was a professional trader. But since you are using IB and are paying for data feeds, you can easily spin that too.\"" }, { "docid": "591230", "title": "", "text": "No, and using a 37 year old formula in finance that is as simple as: should make it obvious technical analysis is more of a game for retail traders than investment advice. When it comes to currencies, there are a myriad of macroeconomic occurrences that do not follow a predictable timescale. Using indicators like RSI on any time frame will not magically illuminate broad human psychology and give you an edge. It is theoretically possible for a single public stock's price to be driven by a range of technical traders who all buy at RSI 30 and sell at RSI 70, after becoming a favorite stock on social media, but it is infinitely more likely for all market participants to have completely different goals." }, { "docid": "218837", "title": "", "text": "\"* SEC. So I guess you're in favor of the little guys getting screwed while Insiders trade tips on stocks? If you bothered to do any sort of research you'd realize that for the scope of its mission, the SEC is not allocated near enough to do its job. The SEC is there to ensure that all play fair, but they are underfunded. *Govt Titty. I have no idea what you are going on about. Try to stay on topic. * Sales Tax. Off-topic again, but please re-examine your exremely demented Libertarian ideals. If you like roads, water, street lights, and not getting butt-raped b/c the police rescued you, then you like State Sales tax; you just don't know it yet. And of course it's their right. WTF. * Enron. Bad example. The SEC monitors trades, so they have the ability to know how many trades an Exchange has done. Of course, they have been underfunded so they don't have enough money to monitor all of them reliably, but more funding will fix that. * Market Death. Are you drunk? No, seriously. I make posts like this when I'm drunk. If not, then please explain how you relate a person dying to an Exchange being stable &amp; trustworthy? * Stability by Change. OK, now I'm pretty sure you are drunk. Geez, it's the middle of the day. \"\"Stability by change\"\"? Stability requires stability, not change. I'm embarrassed to even be responding to this right now.\"" }, { "docid": "147981", "title": "", "text": "the financial information is generally filed via SEDAR (Canada) or SEC (US) before the conference call with the investment community. This can take before either before the market opens or after the market closes. The information is generally distribute to the various newswire service and company website at the same time the filing is made with SEDAR/SEC." }, { "docid": "296006", "title": "", "text": "I'm a big believer in pulling the quarterly and or annual statements and deriving your own analysis. The automated parsing systems at Google, Yahoo, and others are a good starting point and they'll let you generally compare various metrics of different companies or market segments. With that in mind, there are any number of reasons Google's scripts could have broken out or combined a couple of cash flow line items. If you're digging this deep in the weeds on this company you should pull the SEC filings and build out your own data." }, { "docid": "316993", "title": "", "text": "Can't totally agree with that. Volatility trading is just one trading type of many. In my opinion it doesn't depend on whether you are a professional trader or not. As you might have heard, retail traders are said to create 'noise' on the market, mainly due to the fact that they aren't professional in their majority. So, I would assume, if an average retail trader decided to trade volatility he would create as much noise as if would have been betting on stock directions. Basically, most types of trading would require a considerable amount of effort spent on fundamental analysis of the underlying be it volatility or directional trading. Arbitrage trading would be an exception here, I guess. However, volatility trading relies more on trader's subjective expectations about future deviations, whereas trading stock directions requires deeper research of the underlying. Is it a drawback or an advantage? I.d.k. On the other hand-side volatility trading strategies cover both upward and downward movements, but you can set similar hedging strategies when going short or long on stocks, isn't it? To summarise, I think it is a matter of preference. Imagine yourself going long on S&P500 since 2009. Do you think there are many volatility traders who have outperformed that?" }, { "docid": "336005", "title": "", "text": "To issue corporate grade bonds the approval process very nearly matches that for issuing corporate equity. You must register with the sec, and then generally there is a initial debt offering similar to an IPO. (I say similar in terms of the process itself, but the actual sale of bonds is nothing like that for equities). It would be rare for a partnership to be that large as to issue debt in the form of bonds (although there are some that are pretty big), but I suppose it is possible as long as they want to file with the sec. Beyond that a business could privately place bonds with a large investor but there is still registration requirements with the sec. All that being said, it is also pretty rare for public bonds to be issued by a company that doesn't already have public equity. And the amounts we are talking about here are huge. The most common trade in corporate debt is a round lot of 100,000. So this isn't something a small corporation would have access to or have a need for. Generally financing for a smaller business comes from a bank." }, { "docid": "142136", "title": "", "text": "\"&gt; The Author clearly has no freaking idea what the hell he is talking about. I have an idea of what's going on. And my experience comes from earlier in my career, when I acted as an execution trader at several hedge funds. Rebates are offered by the exchange so that the exchange can make money. It isn't a public service or some great sacrifice. Let me tell you how it works: Somebody at XYZ exchange/bank takes you out for a nice steak dinner. Then maybe they take you to the strip club. There may be some blow involved. If the broker is particularly nice, they'll pay for an experience in the *actual* \"\"champagne room.\"\" Then you go back to your desk on Monday, look at the flows you're disbursing to various brokers and exchanges, and make your \"\"adjustments\"\" based on how much you enjoy hanging out with the broker/salesperson. Oh, and of course the \"\"rebates.\"\" Which to you barely make a difference, because you're just an execution trader. You aren't in it to make money. The analysts don't know what you're doing, and there's a good chance that the PM doesn't, either. It's easy to do, because tracking \"\"best execution\"\" is beyond the comprehension of the SEC. Oh, if they only knew...and could actually act on it. But we all know they don't really want to, because almost to a man they're each waiting for their turn at the revolving door that will usher them on to a lucrative private sector career.\"" }, { "docid": "349536", "title": "", "text": "You have not lost value. It is just that the shares you owned, are now not tradable on US stock exchanges. You still have the value of your shares protected. In cases like de-listing of a stock, typically a trust (may be managed by a bank) is setup to help customers liquidate their stocks. You should try to search the relevant SEC filings for de-listing of this stock to get more details on whom to contact." }, { "docid": "178896", "title": "", "text": "Don't worry about Buffett. I have a feeling this will be like Wells Fargo in the 90s where Buffett will make 1000% his investment by the end of the next decade. You can hate them all you want, but does anybody really think that Bank of America is going away? This is like when BP supposed caused a trillion of dollars in damage, and the market cap fell something like 140 billion. In the end, it's probably only going to cost them $20 billion. Life is already going on for the oil spill. Bank of America will get some more hate for a while. They'll get tons of lawsuits, but they'll probably settle for something like $30 billion (one year's earnings). In two or three years, you'll have a company earning $30 billion that is current valued at $50 billion. It's been 4 years since the bubble burst in 2007. Most of the crappy loans are gone already (either defaulted/written off or if they have been paying for 4 years then they are not really crappy at all). There are 4 years worth of prime loans on the books. In 2007, people assumed the somewhat opaque book of loans (mostly subprime) is worth 100 cents on the dollar. Today, people are assuming that the somewhat opaque book of loans (mostly prime) is worth 0 cents on the dollar. Just look around Reddit and see what people are saying about the banks' financial condition, even though they never read any SEC filings or analyst reports. I think (and apparently Buffett also thinks) that the book is worth something between 0 and 100, likely in the upper end." }, { "docid": "125981", "title": "", "text": "You can find out the general types of investments by reading the public corporation 10-Q report that is filed with the SEC it can be accessed via the EDGAR system. It will not tell you what securities they have, but it does identify the short term and long term investments categories and their value." } ]

[ { "docid": "456440", "title": "", "text": "A bank can reject a loan if they feel you do not meet the eligibility criteria. You can talk to few banks and find out." } ]

[ { "docid": "519231", "title": "", "text": "\"It depends on whether the loan is written as a non-recourse debt and what collateral was pledged. \"\"Non-recourse\"\" debt means that the issuer is limited to seizing the pledged collateral but cannot extend beyond those pledged assets. A \"\"recourse debt\"\" allows the issuer to seize the collateral and potentially other assets of those signed to the loan. In your example, a non-recourse loan would stop the issuer at seizing the property pledged as collateral (for instance the land remaining after the golden condor took your house), and it would stop there if that was the entirety of the collateral pledged. In the case of a recourse debt, each of you who signed loan are most likely going to be held responsible for the rest of the debt. http://en.wikipedia.org/wiki/Nonrecourse_debt http://en.wikipedia.org/wiki/Recourse_debt\"" }, { "docid": "571295", "title": "", "text": "\"You have figured out most of the answers for yourself and there is not much more that can be said. From a lender's viewpoint, non-immigrant students applying for car loans are not very good risks because they are going to graduate in a short time (maybe less than the loan duration which is typically three years or more) and thus may well be leaving the country before the loan is fully paid off. In your case, the issue is exacerbated by the fact that your OPT status is due to expire in about one year's time. So the issue is not whether you are a citizen, but whether the lender can be reasonably sure that you will be gainfully employed and able to make the loan payments until the loan is fully paid off. Yes, lenders care about work history and credt scores but they also care (perhaps even care more) about the prospects for steady employment and ability to make the payments until the loan is paid off. Yes, you plan on applying for a H1-B visa but that is still in the future and whether the visa status will be adjusted is still a matter with uncertain outcome. Also, these are not matters that can be explained easily in an on-line application, or in a paper application submitted by mail to a distant bank whose name you obtained from some list of \"\"lenders who have a reliable track record of extending auto loans to non-permanent residents.\"\" For this reason, I suggested in a comment that you consider applying at a credit union, especially if there is an Employees' Credit Union for those working for your employer. If you go this route, go talk to a loan officer in person rather than trying to do this on the phone. Similarly, a local bank,and especially one where you currently have an account (hopefully in good standing), is more likely to be willing to work with you. Failing all this, there is always the auto dealer's own loan offers of financing. Finally, one possibility that you might want to consider is whether a one-year lease might work for you instead of an outright purchase, and you can buy a car after your visa issue has been settled.\"" }, { "docid": "67370", "title": "", "text": "When borrowing a small sum from a bank, there's usually no collateral. i.e. no property to put a lien on, no gems put in a vault. It's a personal loan. A loan for a plane ticket for you or for them wont make a difference. If they have the borrowing ability, it's their loan. That said, if your family finances are so tight, no one can buy a full round trip ticket, you should not be taking this trip. If your (whole family) savings is not above 3-6 months living expenses, you still shouldn't take this trip." }, { "docid": "507431", "title": "", "text": "'We were encouraged en masse to apply to university, told a degree would guarantee us a good job, as long as we worked hard and did well.' This is what is really aggravating me, I worked hard and did very well, and am about to graduate my masters with a pile of job rejections. I mean I know no one 'owes me anything', but when I was in secondary school, a lot was promised, and I hardly think having a large portion of well educated young people jobless, or in unskilled labour is anywhere near an efficient use of human resource, let alone the misery that goes along side it. (I really needed a little bit of venting)" }, { "docid": "164262", "title": "", "text": "\"Assuming you live in the US, it is quite normal when you are applying for a loan that the application will ask you to confirm your identity. One of these methods is to ask you which of the following addresses you have lived at, with some of them being very similar (i.e. same city, or maybe even the same street). Sometimes they will ask questions and your answer would be \"\"None of the above.\"\" This is done to prevent fraudsters from applying for a loan under your identity. If you see no signs of unauthorized accounts or activities on your credit reports, and you initiated the car loan application, then you should be fine.\"" }, { "docid": "257399", "title": "", "text": "that's just not possible. 27% of all US scientists are immigrants and so are 48% of all engineers. America does not produce enough high educated/skilled workers. MS build, or planned on building, a research facility around 5 years ago. They said they can't get enough professors and doctors with adequate education to fill the 9,000 positions. so they asked the INS how to proceed. the INS told them to fill H1b visa applications. that is only once a year and they might get, statistically, only 2000-3000 out of it of they're lucky because most will be rejected or just not get picked (it's a lottery). MS asked Canada, Canada said do whatever, more taxes for us. MS built it in Ontario I think. at the same time Google wrote that angry blog post in their corporate blog about how shitty the H1b situation is." }, { "docid": "364567", "title": "", "text": "Obviously the best way to consolidate the real-estate loans is with a real-estate loan. Mortgages, being secured loans, provide much better interest rates. Also, interest can be deducted to some extent (depending on how the proceeds are used, but up to $100K of the mortgage can have deductible interest just for using the primary residence as a collateral). Last but not least, in many states mortgages on primary residence are non-recourse (again, may depend on the money use). That may prove useful if in the future your mother runs into troubles repaying it. So yes, your instincts are correct. How to convince your mother - that's between you and her." }, { "docid": "195498", "title": "", "text": "Loan Provider Company in India http://tirupatiinvestservices.com/ Tirupati Invest is a highly favorable company in Udaipur, India providing various types of services of loans, home loan, business loan, education loan, project loan, agriculture loan, joint venture funding and lot more. We provide all financial support required by our customers and our financial team is always available for providing all the best services." }, { "docid": "38712", "title": "", "text": "\"The first red-flag here is that an appraisal was not performed on an as-is basis - and if it could not be done, you should be told why. Getting an appraisal on an after-improvement basis only makes sense if you are proposing to perform such improvements and want that factored in as a basis of the loan. It seems very bizarre to me that a mortgage lender would do this without any explanation at all. The only way this makes sense is if the lender is only offering you a loan with specific underwriting guidelines on house quality (common with for instance VA-loans and how they require the roof be of a certain maximum age - among dozens of other requirements, and many loan products have their own standards). This should have been disclosed to you during the process, but one can certainly never assume anyone will do their job properly - or it may have only mentioned in some small print as part of pounds of paper products you may have been offered or made to sign already. The bank criteria is \"\"reasonable\"\" to the extent that generally mortgage companies are allowed to set underwriting criteria about the current condition of the house. It doesn't need to be reasonable to you personally, or any of us - it's to protect lender profits by aiding their risk models. Your plans and preferences don't even factor in to their guidelines. Not all criteria are on a a sliding scale, so it doesn't necessarily matter how well you meet their other standards. You are of course correct that paying for thousands of dollars in improvements on a house you don't own is lunacy, and the fact that this was suggested may on it's own suggest you should cut your losses now and seek out a different lender. Given the lender being uncooperative, the only reason to stick with it seems to be the sunk cost of the appraisal you've already paid for. I'd suggest you specifically ask them why they did not perform an as-is appraisal, and listen to the answer (if you can get one). You can try to contact the appraiser directly as well with this question, and ask if you can have the appraisal strictly as-is without having a new appraisal. They might be helpful, they might not. As for taking the appraisal with you to a new bank, you might be able to do this - or you might not. It is strictly up to each lender to set criteria for appraisals they accept, but I've certainly known of people re-using an appraisal done sufficiently recently in this way. It's a possibility that you will need to write off the $800 as an \"\"education expense\"\", but it's certainly worth trying to see if you can salvage it and take it with you - you'll just have to ask each potential lender, as I've heard it go both ways. It's not a crazy or super-rare request - lenders backing out based on appraisal results should be absolutely normal to anyone in the finance business. To do this, you can just state plainly the situation. You paid for an appraisal and the previous lender fell through, and so you would like to know if they would be able to accept that and provide you with a loan without having to buy a whole new appraisal. This would also be a good time to talk about condition requirements, in that you want a loan on an as-is basic for a house that is inhabitable but needs cosmetic repair, and you plan to do this in cash on your own time after the purchase closes. Some lenders will be happy to do this at below 75%-80% LTV, and some absolutely do not want to make this type of loan because the house isn't in perfect condition and that's just what their lending criteria is right now. Based on description alone, I don't think you really should need to go into alternate plans like buy cash and then get a home equity loan to get cash out, special rehab packages, etc. So I'd encourage you to try a more straight-forward option of a different lender, as well as trying to get a straight answer on their odd choice of appraisal order that you paid for, before trying anything more exotic or totally changing your purchase/finance plans.\"" }, { "docid": "216286", "title": "", "text": "\"This is really unfortunate. In general you can't back date individual policies. You could have (if it was available to you) elected to extend your employer's coverage via COBRA for the month of May, and possibly June depending on when your application was submitted, then let the individual coverage take over when it became effective. Groups have some latitude to retroactively cover and terminate employees but that's not an option in the world of individual coverage, the carriers are very strict about submission deadlines for specific effective dates. This is one of the very few ways that carriers are able to say \"\"no\"\" within the bounds of the ACA. You submit an application, you are assigned an effective date based on the date your application was received and subsequently approved. It has nothing to do with how much money you send them or whether or not you told them to back date your application. If someone at the New York exchange told you you could have a retroactive effective date they shouldn't have. Many providers have financial hardship programs. You should talk to the ER hospital and see what might be available to you. The insurer is likely out of the equation though if the dates of service occurred before your policy was effective. Regarding your 6th paragraph regarding having paid the premium. In this day and age carriers can only say \"\"no\"\" via administrative means. They set extremely rigid effective dates based on your application date. They will absolutely cancel you if you miss a payment. If you get money to them but it was after the grace period date (even by one minute) they will not reinstate you. If you're cancelled you must submit a new application which will create a new coverage gap. You pay a few hundred dollars each month to insure infinity risk, you absolutely have to cover your administrative bases because it's the only way a carrier can say \"\"no\"\" anymore so they cling to it.\"" }, { "docid": "459419", "title": "", "text": "The loan you will just have to get by applying to a bunch of banks or hiring someone (a broker) to line up bank financing on your behalf for a point on the loan. FHA is for your first house that you live in and allows you to get 97.5% loan to cost financing. That isn't for investment properties. However, FHA loans do exist for multifamily properties under section 207/223F. Your corporations should be SPEs so they don't affect each other. In the end, its up to you if you think it makes sense for all the single family homes to be in one portfolio. May make it easier to refi if you put all the properties in a cross collateralized pool for the bank to lend against. There is also no requirement for how long a corporation has been in existence for a loan. The loan has a claim on the property so it's pretty safe. So long as you haven't committed fraud before, they won't care about credit history." }, { "docid": "545339", "title": "", "text": "Running for-profit business doesn't pressure those involved to make the best product, it pressures them to make the best profit. Making the best profit pressures those involved to produce the cheapest product that the market won't reject marked at the highest price the market won't reject. Private companies have the freedom to avoid or limit the effect of that pressure if they choose, and sacrifice some profit for quality and improved customer satisfaction (though many still choose profit). Public companies, who are eventually beholdent to shareholders who sole goal is profitability, are much less likely to avoid the pressures to increase profits at all costs; particularly in the age of day traders and CEO merry-go-round, long-term planning is very difficult when short-term profitability is on the line. A company that made one widget a year for $1 and sold that widget for $10 billion would be a very successful company from the profit standpoint, and would likely have an excellent share price if the business model looked secure for the next year or two. Competition helps alleviate this morass and pushes for better products and lower prices by upping the bar of what the market will reject over time - increase the available alternatives, and the features/quality/price scale shifts. The importance of having a level playing field, anti-monopoly laws and ensure that new players can come onto the scene is fundamental to capitalism working - otherwise those who hold monopoly positions will prevent competition from emerging and charge as much as is possible for the cheapest product people will still buy. This is of particular issue when not buying the product is a threat to one's life or safety (medical care, emergency services, food, etc)." }, { "docid": "483018", "title": "", "text": "Hits to your credit rating for canceling one of the newer cards will be a small hit for a few months. You do have some options. I also believe that a person with good credit should have multiple cards: I like having a cash back card for the majority of our transactions. Unfortunately that card isn't accepted everywhere, so I have two other cards with broad market coverage to make sure we always have an option if the vendor doesn't take the main card. Also having multiple cards makes sure that if there is an issue with one card you are never caught without a card. One time the main card was rejected by a gas station because my wife just used the same account to buy gas across town. When we got home their was a fraud alert message on our phone." }, { "docid": "22268", "title": "", "text": "\"They don't actually need to. They accept deposits for historical reasons and because they make money doing so, but there's nothing key to their business that requires them to do so. Here's a decent summary, but I'll explain in great detail below. By making loans, banks create money. This is what we mean when we say the monetary supply is endogenous. (At least if you believe Sir Mervyn King, who used to run England's central bank...) The only real checks on this are regulatory--capitalization requirements and reserve requirements, which impose a sort of tax on a bank's circulating loans. I'll get into that later. Let's start with Why should you believe that story--that loans create deposits? It seems like a bizarre assertion. But it actually matches how banks behave in practice. If you go borrow money from a bank, the loan officer will do many things. She'll want to look at your credit history. She'll want to look at your income and assets. She'll want to look at what kind of collateral or guarantees you're providing that the loan will be repaid. What she will not do is call down to the vaults and make sure that there's enough bills stacked up for them to lend out. Loans are judged based on a profitability function determined by the interest rate and the loan risk. If those add up to \"\"profitable\"\", the bank makes the loan. So the limiting factor on the loans a bank makes are the available creditworthy borrowers--not the bank's stock of cash. Further, the story makes sense because loans are how banks make money. If a bank that was short of money suddenly stopped making loans, it'd be screwed: no new loans = no way to make money to pay back depositors and also keep the lights on = no more bank. And the story is believable because of the way banks make so little effort to solicit commercial deposit business. Oh sure, they used to give you a free toaster if you opened an account; but now it's really quite challenging to find a no-fee checking account that doesn't impose a super-high deposit limit. And the interest paid on savings deposits is asymptotically approaching zero. If banks actually needed your deposits, they'd be making a lot more of effort to get them. I mean, they won't turn up their noses; your deposited allowance is a couple basis points cheaper to the bank than borrowing from the Fed; but banks seem to value small-potatoes depositors more as a source of fees and sales opportunities for services and consumer credit than as a source of cash. (It's a bit different if you get north of seven figures, but smaller depositors aren't really worth the hassle just for their cash.) This is where someone will mention the regulatory requirements of fractional reserve banking: banks are obliged by regulators to keep enough cash on hand to pay out a certain percentage of deposits. Note nothing about loans was said in that statement: this requirement does not serve as a check on the bank making bad loans, because the bank is ultimately liable to all its depositors for the full value of their deposits; it's more making sure they have enough liquidity to prevent bank runs, the self-fulfilling prophecy in which an undercapitalized bank could be forced into bankruptcy. As you noted in your question, banks can always borrow from the Fed at the Fed Discount Rate (or from other banks at the interbank overnight rate, which is a little lower) to meet this requirement. They do have to pledge collateral, but loans themselves are collateral, so this doesn't present much of a problem. In terms of paying off depositors if the bank should collapse (and minimizing the amount of FDIC insurance payout from the government), it's really capital requirements that are actually important. I.E. the bank has to have investors who don't have a right to be paid back and whose investment is on the hook if the bank goes belly-up. But that's just a safeguard for the depositors; it doesn't really have anything to do with loans other than that bad loans are the main reason a bank might go under. Banks, like any other private business, have assets (things of value) and liabilities (obligations to other people). But banking assets and liabilities are counterintuitive. The bank's assets are loans, because they are theoretically recoverable (the principal) and also generate a revenue stream (the interest payments). The money the bank holds in deposits is actually a liability, because it has to pay that money out to depositors on demand, and the deposited money will never (by itself) bring the bank any revenue at all. In fact, it's a drain, because the bank needs to pay interest to its depositors. (Well, they used to anyway.) So what happens when a bank makes a loan? From a balance sheet perspective, strangely enough, the answer is nothing at all. If I grant you a loan, the minute we shake hands and you sign the paperwork, a teller types on a keyboard and money appears in your account. Your account with my bank. My bank has simultaneously created an asset (the loan you now have to repay me) and an equal-sized liability (the funds I loaned you, which are now deposited in your account). I'll make money on the deal, because the interest you owe me is a much higher rate than the interest I pay on your deposits, or the rate I'd have to pay if I need to borrow cash to cover your withdrawal. (I might just have the cash on hand anyway from interest and origination fees and whatnot from previous loans.) From an accounting perspective, nothing has happened to my balance sheet, but suddenly you owe me closing costs and a stream of extraneous interest payments. (Nice work if you can get it...) Okay, so I've exhaustively demonstrated that I don't need to take deposits to make loans. But we live in a world where banks do! Here's a few reasons: You can probably think of more, but at the end of the day, a bank should be designed so that if every single (non-borrowing) depositor withdrew their deposits, the bank wouldn't collapse or cease to exist.\"" }, { "docid": "562282", "title": "", "text": "This is normal with the dealer's financing. To add more details to littleadv's answer, what happens is when you get the financing through the dealer, at first, they will try to do the loan on your behalf with local banks in your area. This is why you see several hard inquiries; one from each back. If none of these banks wants to take the loan, then dealer's financing entity will take the loan. This was my exact experience with Hyundai. In addition, don't get surprise if you start receiving letters saying that your loan was rejected. The dealer will send the loan requests simultaneously, and some of the banks might deny the loan. This also happened to me, and I have been owning my car for around a year. Still, make sure that the letters matches with the credit inquiries." }, { "docid": "127838", "title": "", "text": "Saving for college you have a couple of options. 529 plans are probably the best bet for most people wanting to save for their kids college education. You can put a lot of money away ~$300k and you may get a state tax deduction. The downside is if you're kid doesn't go to college you may end up eating the 10% penalty. State specific prepaid tuition plans. The upside is you know roughly the return you are going to get on your money. The downside is your kid has to go to a state school in the state you prepaid or there are likely withdrawal penalties. For the most part these really aren't that great of a deal any more. ESAs are also an option but they only allow you to contribute $2k/year, but you have more investment options than with the 529 plans. Traditional and ROTH IRA accounts can also be used to pay for higher education. I wouldn't recommend this route in general but if you maxed out your 401k and weren't using your IRA contribution limits you could put extra money here and get more or really different flexibility than you can with a 529 account. I doubt IRA's will ever be asked for on a FAFSA which might be helpful. Another option is to save the money in a regular brokerage account. You would have more flexibility, but lower returns after taxes. One advantage to this route is if you think your kid might be borderline for financial aid a year or two before he starts college you could move this money into another investment that doesn't matter for financial aid purposes. A few words of caution, make sure you save for retirement before saving for your kids college. He can always get loans to pay for school but no one is going to give you a loan to pay for your retirement. Also be cautious with the amount of money you give your adult child, studies have shown that the more money that parents give their adult children the less successful they are compared to their peers." }, { "docid": "120090", "title": "", "text": "Short answer: yes, you can put up collateral for someone else's loan. The bank will be happy to take your money, give it to the other person, and return it to you on completion of the loan (keeping the interest the security makes on the money market and the interest they're charging the other person for themselves). If the above doesn't sound very appealing (you don't see any benefit from your investment, and can be left holding the bag if your friend defaults on their loan), it really isn't a great way to spend your money. However, as assistance to someone else, it provides several advantages over directly transferring the money:" }, { "docid": "442241", "title": "", "text": "A traditional bank is not likely to give you a loan if you have no source of income. Credit card application forms also ask for your current income level and may reject you based on not having a job. You might want to make a list of income and expenses and look closely at which expenses can be reduced or eliminated. Use 6 months of your actual bills to calculate this list. Also make a list of your assets and liabilities. A sheet that lists income/expenses and assets/liabilities is called a Financial Statement. This is the most basic tool you'll need to get your expenses under control. There are many other options for raising capital to pay for your monthly expenses: Sell off your possessions that you no longer need or can't afford Ask for short term loan help from family and friends Advertise for short term loan help on websites such as Kijiji Start a part-time business doing something that you like and people need. Tutoring, dog-walking, photography, you make the list and pick from it. Look into unemployment insurance. Apply as soon as you are out of work. The folks at the unemployment office are willing to answer all your questions and help you get what you need. Dip into your retirement fund. To reduce your expenses, here are a few things you may not have considered: If you own your home, make an appointment with your bank to discuss renegotiation of your mortgage payments. The bank will be more interested in helping you before you start missing payments than after. Depending on how much equity you have in your home, you may be able to significantly reduce payments by extending the life of the mortgage. Your banker will be impressed if you can bring them a balance sheet that shows your assets, liabilities, income and expenses. As above, for car payments as well. Call your phone, cable, credit card, and internet service providers and tell them you want to cancel your service. This will immediately connect you to Customer Retention. Let them know that you are having a hard time paying your bill and will either have to negotiate a lower payment or cancel the service. This tactic can significantly reduce your payments. When you have your new job, there are some things you can do to make sure this doesn't happen again: Set aside 10% of your income in a savings account. Have it automatically deducted from your income at source if you can. 75% of Americans are 4 weeks away from bankruptcy. You can avoid this by forcing yourself to save enough to manage your household finances for 3 - 6 months, a year is better. If you own your own home, take out a line of credit against it based on the available equity. Your bank can help you with that. It won't cost you anything as long as you don't use it. This is emergency money; do not use it for vacations or car repairs. There will always be little emergencies in life, this line of credit is not for that. Pay off your credit cards and loans, most expensive rate first. Use 10% of your income to do this. When the first one is paid off, use the 10% plus the interest you are now saving to pay off the next most expensive card/loan. Create a budget you can stick to. You can find a great budget calculator here: http://www.gailvazoxlade.com/resources/interactive_budget_worksheet.html Note I have no affiliation with the above-mentioned site, and have a great respect for this woman's ability to teach people about how to handle money." }, { "docid": "200821", "title": "", "text": "ICSE The subjects that are offered are isolated into three gatherings. ICSE Home Tuition in Mumbai Gathering I incorporates Compulsory Subjects — English, History and Civics, and Geography, and Indian Language, Group II which incorporates any two from Mathematics, Science (Physics, Biology, Chemistry) as partitioned subjects, Environmental Science, Computer Science, Agricultural Science, Commercial Studies, Technical Drawing, A Modern Foreign Language, ICSE Home Tuition in Mumbai A Classical Language and Economics, and Group III has any one from Computer Applications, Economic Applications, Commercial Applications, Art, Performing Arts, Home Science, Cookery, Fashion Designing, Physical Education, Technical Drawing Applications, Yoga, and Environmental Applications. In subjects where there are more than one paper (e.g., Science), the imprints acquired in the subject are figured by taking the normal of the considerable number of papers in the subject. Applicants showing up for the examination need to think about six subjects, with one to three papers in each subject. ICSE Home Tuition in Mumbai For subject HC&amp;G the paper 1 comprises of History and Civics and paper 2 comprises of Geography. ICSE Home Tuition in Mumbai Science comprises of three papers each for Physics, Chemistry, and Biology. This makes for a sum of eight to eleven papers, contingent upon the subjects. ICSC comes about are taken from best five of six subjects out of which English imprints is necessary. ICSE Home Tuition in Mumbai We are passionate about teaching. We ICSE Home Tuition in Mumbai Academy nurture our students to possess confidence and the necessary skills to get the success in exams. Why Choose OM Academy We IICSE Home Tuition in Mumbai completely believe in balance approach to excel in exams. Hence we provide the academic and non-academic courses to enhance the ability of the students to perform better in the real life challenges." } ]

[ { "docid": "451443", "title": "", "text": "No. $188.23 has $11.76 tax = $199.99 $188.24 has $11.77 tax - $200.01 So, unless the based price contained the half cent for $188.235, the register would never show $200.00 even. How does the receipt to customer look?" } ]

[ { "docid": "584231", "title": "", "text": "What is the formula for calculating the total cost of a loan with extra payments towards the principal? The formula you require is the standard one for calculating the time to repay. With larger repayments the time to completely repay the loan is reduced. Where The total cost of the loan is then n * d. Explanation & Calculation The formula for a loan is derived from the sum of the cash flows discounted to present value being equal to the principal. For further info see the section here titled: Calculating the Present Value of an Ordinary Annuity The summation can be reduced to a closed form by induction: Rearranging for d and n With the OP's figures The original monthly repayment is $1,006.96 Adding $200 each month ... With the higher repayment the loan is repaid in 257.36 months instead of 360. (Of course a bank would simply take a reduced payment in month 258, but the amounts work out the same.) The saving is $51,882.37 Addendum If the repayments increase was made part-way through the term of the loan the summation and formula would be Where Then For example, if for the first ten years the payments are $1,006.96 and for the remaining time the repayments are $1,206.96 The loan is completely repaid in 302.528 months. The saving is Plotting over a range of m months:" }, { "docid": "330229", "title": "", "text": "\"I second DJClayworth's suggestion to wait and save a larger down-payment. I'll also add: It looks like you neglected to consider CMHC insurance in your calculation. When you buy your first home with less than 20% down, the bank will require you to insure the mortgage. CMHC insurance protects the bank if you default – it does not protect you. But such insurance does make a bank feel better about lending money to people it otherwise wouldn't take a chance on. The kicker is you would be responsible for paying the CMHC insurance that's protecting the bank. The premium is usually added on to the amount borrowed, since a buyer requiring CMHC insurance doesn't, by definition, have enough money up front. The standard CMHC premium for a mortgage with 5% down, or as they would say a \"\"95% Loan-to-Value ratio\"\" is 2.75%. Refer to CMHC's table of premiums here. So, if you had a down-payment of $17,000 to borrow a remaining $323,000 from the bank to buy a $340,000 property, the money you owe the bank would be $331,883 due to the added 2.75% CMHC insurance premium. This added $8883, plus interest, obviously makes the case for buying less compelling. Then, are there other closing costs that haven't been fully considered? One more thing I ought to mention: Have you considered saving a larger down-payment by using an RRSP? There's a significant advantage doing it that way: You can save pre-tax dollars for your down-payment. When it comes time to buy, you'd take advantage of the Home Buyer's Plan (HBP) and get a tax-free loan of your own money from your RRSP. You'd have 15 years to put the money back into your RRSP. Last, after saving a larger downpayment, if you're lucky you may find houses not as expensive when you're ready to buy. I acknowledge this is a speculative statement, and there's a chance houses may actually be more expensive, but there is mounting evidence and opinion that real estate is currently over-valued in Canada. Read here, here, and here.\"" }, { "docid": "249912", "title": "", "text": "\"~~Don't know any specifics of GE or what they did, but they very would could have elected a carryback instead of a carryforward and received a refund.~~ Edit: Ok, I actually went and looked at the income statements for GE. They did *not* get a refund. They did *not* get a check from the government for the refund. This all took place between the balance sheet and the income statement. It goes down like this: GE has on their books \"\"Deferred Tax Asset\"\" for XX billion dollars. This came from a year when they had an operating loss. They are carrying this loss forward as a deduction on their taxes (that's what makes it an asset, it's an asset to the company as it decreases their taxes). For years, they've been reducing that Deferred Tax Asset account, and adding that amount to their \"\"Income After Tax\"\" amount. At the end of 2009, the amount they reduced that Deferred Tax Asset account by just so happened to be larger than the amount they decreased their income by due to taxable income that year. No one wrote them a check for the difference.\"" }, { "docid": "21957", "title": "", "text": "\"I don't understand the OP's desire \"\" I'd love to have a few hundred dollars coming in each month until I really get the hang of things. \"\" When growing your wealth so that it will be large enough in retirement to throw off enough profits to live on ... you must not touch the profits generated along the way. You must reinvest them to earn even more profits. The profits you earn need not show up as 'cash'. Most investments also grow in re-sale value. This growth is called capital gains, and is just-as/more important than cash flows like interest income or dividends. When evaluating investing choices, you think of your returns as a percent of your total savings at any time. So expecting $100/month equals $1,200/year would require a $12,000 investment to earn 10%/yr. From the sounds of it the OP's principal is not near that amount, and an average 10% should not be expected by an investment with reasonable risk. I would conclude that 'There is no free lunch'. You need to continually save and add to your principal. You must invest to expect a reasonable return (less than 10%) and you must reinvest all profits (whether cash or capital gains). Or else start a business - which cannot be compared to passive investing.\"" }, { "docid": "368587", "title": "", "text": "\"Putting a dollar amount on the valuation of a start up business is an art form that often has very little at all to do with any real numbers and more to do with your \"\"salesman\"\" abilities when talking with the VC. That said, there are a few starting points: First is past sales, the cost of those sales and a (hopefully) realistic growth curve. However, you don't have that so this gets harder. Do you have any actual assets? Machinery, computers, desks, patents, etc. Things that you actually own. If so, then add those in. If this is a software start-up, \"\"code\"\" is an asset, but without sales it's incredibly hard to put a value on it. The best I've come up with is \"\"How much would it cost for someone else to build it .. after they've seen yours\"\". Yes, you may have spent 5,000 hours building something but could someone else duplicate it, or at least the major parts, in 200 hours after seeing a demo? Use the lower number. If I was you, I'd look hard at my business plan. Hopefully you were as honest as you can be when writing it (and that it is as researched as possible). What is it going to take to get that first sale? What do you actually need to get there? (hint: your logo on the side of a building is NOT a necessary expense. Nor is really nice office space.) Once you have that first sale, what is the second going to take? Can you extrapolate out to 3 years? How many key members are there? How much is their contribution worth? At what point will you be profitable? Next is to look at risks. You haven't done this before, that's huge - I'm assuming simply because you asked this question. Another is competitors - hopefully they already exist because opening a new market is incredibly hard and expensive; on the flip side, hopefully there aren't that many because entering a crowded market is equally hard and expensive. Note: each are possible, but take radically different approaches and sums of money - and $200k isn't going to cut it no matter what it is you are selling. That said, competition should be able to at least point you in the direction of a price point and estimate for how long sales take. If any are publicly traded then you have additional info to help you set a valuation. Are there any potential regulatory or legal issues? What happens if a key member leaves, dies or is otherwise no longer available? Insurance only helps so much if the one guy that knows everything literally gets run over. God help you if this person likes to go skydiving. I bring risks up because you will have to surmount them during this negotiation. For example, asking for $200k with zero hard assets, while trying to sell software to government agencies assuming a 3 week sales cycle will have you laughed at for naivety. Whereas asking for $10m in the same situation, with a team that has governmental sales experience would likely work. Another big question is exit strategy: do you intend to IPO or sell to a competitor or a business in a related category? If selling, do you have evidence that the target company actually buys others, and if so, how did those deals work out? What did they look for in order to buy? Exit strategy is HUGE to a VC and they will want to make several multiples of their money back in a relatively short amount of time. Can you realistically support that for how much you are asking for? If not then going through an Angel group would be better. They have similar questions, but very different expectations. The main thing is that no one knows what your business is worth because it is 100% unproven after 2 years and is therefore a huge financial risk. If the money you are asking for is to complete product development then that risk factor just went up radically as you aren't even talking about sales. If the money is purely for the sales channel, then it's likely not enough. However if you know what it's going to take to get that first sale and have at least an educated idea on how much it's going to cost to repeat that then you should have an idea for how much money you want. From there you need to decide how much of the business it is worth to you to give up in order to get that money and, voila, you have a \"\"pre money valuation\"\". The real trick will be to convince the VC that you are right (which takes research and a rock solid presentation) and negotiating from there. No matter what offer a small percentage of the business for the money you want and realize you'll likely give up much more than that. A few things you should know: usually by year 3 it's apparent if a start-up is going to work out or not. You're in year 2 with no sales. That doesn't look good unless you are building a physical product, have a competent team with hard experience doing this, have patents (at least filed), a proven test product, and (hopefully) have a few pre-orders and just need cash to deliver. Although in that situation, I'd probably tell you to ask your friends and family before talking to a VC. Even kickstarter.com would be better. $200k just isn't a lot of money and should be very easy to raise from Friends or Angels. If you can't then that speaks volumes to an institutional VC. A plus is having two or three people financially invested in the company; more than that is sometimes a problem while having only 1 is a red flag. If it's a web thing and you've been doing this for 2 years with zero sales and still need another $200k to complete it then I'd say you need to take a hard look at what you've built and take it to market right now. If you can't do that, then I'd say it might be time to abandon this idea and move on as you'll likely have to give up 80%+ to get that $200k and most VCs I've run into wouldn't bother at that level. Which begs the question: how did the conversation with the VC start? Did you approach them or did they approach you? If the latter, how did they even find out about you? Do they actually know anything about you or is this a fishing expedition? If the latter, then this is probably a complete waste of your time. The above is only a rough guide because at the end of the day something is only worth what someone else is willing to pay. $200k in cash is a tiny sum for most VCs, so without more information I have no clue why one would be interested in you. I put a number of hard questions and statements in here. I don't actually want you to answer me, those are for you to think about. Also, none of this shouldn't be taken as a discouragement, rather it should shock you into a realistic viewpoint and, hopefully, help you understand how others are going to see your baby. If the VC has done a bit of research and is actually interested in investing then they will bring up all the same things (and likely more) in order to convince you to give up a very large part of it. The question you have to ask yourself is: is it worth it? Sometimes it is, often it's not.\"" }, { "docid": "280685", "title": "", "text": "\"There's no objective definition of what your house is worth between sales. If you sell it for $107K, then that's the current functional definition of its worth. There is not \"\"extra\"\" money to be had because you sold it for less than it was worth. If the buyer is able to flip it for more, then the value of the house effectively went up and he will pocket the difference when he sells it. EDIT This turned out to be unexpectedly controversial, so let me be more precise in my answer. I think this is important because it seems like many people misunderstand equity and how it figures (or doesn't) into the value of their home, which then leads to significant confusion and errors in what's many people's largest single investment. At any given time there are several possible ways to put a dollar value on your home. A non-exclusive list that includes: Some of these obviously are more \"\"official\"\" than others. It would not be strange for these different values to vary by quite a bit at any given time. (This is what I meant in my original answer when I said there's \"\"no objective definition of what your house is worth between sales.\"\") The interesting thing - and what I meant in my original answer when I wrote \"\"current functional definition of its worth\"\" - is that none of these factor directly into the transaction that the OP described of selling his house except for the last. Using the numbers from the OP's example, that means the $107K. Wherever the OP got the number $155K (either from one of the options on my list above or somewhere else), it won't be directly part of the sale between him and his friend. (For completeness, with a nod to Eric's comments on my original answer, some of these numbers may indirectly influence the sale. For example, the buyer typically won't be able to get a mortgage for a value greater than the appraised value of the house, and so that might influence what he's willing and able to bid. There may also be tax consequences if the price is artificially low, like, say, a gift. As further expounded below, however, that's not directly relevant to answering the OP's stated question.) Now, the OP seemed to believe that there is an \"\"extra\"\" $48K in cash up for grabs in this scenario. That comes from the $155K value that the OP claims his house has and the $107K price of the actual proposed sale. This is a complete misconception. When the buyer and seller sit down at closing and the title agent sums up who owes and who receives cash in this transaction, the $155K \"\"theoretical\"\" value will not enter into the calculation and therefore no one will pocket it. Subsequently, however, after the buyer takes possession, he may sell it. If it's true that he \"\"got a deal\"\" on the transaction at $107K, then he maybe able to flip it and turn a profit. But if that happens, it will be in a completely separate, subsequent transaction. Even if you look to this hypothetical second sale, however, the $155K doesn't really figure. The new owner will have to find his own buyer, and they will have to agree on a price. That might happen to be $155K, but there's no real reason to believe that it will or it won't.\"" }, { "docid": "444218", "title": "", "text": "Once wealth accumulates in the hands of a few, they're less likely to spend it, as opposed to when there's smaller amounts of wealth in the hands of many. That's one of the primary arguments for more economic equality. You then also have the case of that wealth being used to generate more wealth without really adding anything of value. Employing hedge fund managers, bankers, lawyers, and accountants to manage large amounts of that wealth in order to use it to generate more wealth, sometimes in ways that doesn't benefit society at all, and sometimes even to its detriment (toxic assets, tax evasion, etc). Overall, this has the effect of weakening the economy, at the very least inhibiting its growth, and I don't possibly see how you could argue that a weaker economy benefits *anyone*, especially those in the best position to take advantage of the goods produced by a stronger economy (the wealthy). A stronger economy means more and better goods on the market, that the rich can then benefit from. I don't think the luxury goods market would go anywhere either, and may even allow it to grow because of the people who are just under the wealthiest would get richer with more equality (remember it's only the top 10% who benefit from the current massive inequality)." }, { "docid": "25381", "title": "", "text": "Many states require that USE tax be paid on items purchased out of state and the subsequently brought to your home state. The vendor has the responsibility to collect based upon the shipping destination. It is the buyers responsibility to declare and pay taxes on purchases where the vendor is not required to collect them for your state(like when you purchase it out of state). So if you have an item shipped out of state to avoid sales tax and then bring it to your home state then you are required to pay sales tax in your home state as well. Some states (Florida for 1) allow for the reduction in sales tax owed by the amount paid in out of state sales taxes. Some states (Like CT) exempt purchases under a certain amount. Federation of Tax Administrators website has links to state revenue services where you can check the tax requirements for your (and other) states. Other State Links" }, { "docid": "420544", "title": "", "text": "If he asked you to invest his money with certain objectives which resulted in you buying specific stocks for him with his money, then sell all the stocks which you bought with his money and the capital and profits to him. You may want to calculate the trading fees that you incurred while buying these specific stocks and taxes from the sale of these stocks, withholding them to over the trading fees that you have already paid and the taxes that you might still need to pay. If you traded with his money no different than yours, then I would think of your investment account as a black box. Calculate the initial money that you both invested at the time you added his capital to the account, calculate how much it all is currently worth, then liquidate and return a percentage equal to that of his initial investment. You can account for trading fees and taxes, subtracting by the same percentage." }, { "docid": "377944", "title": "", "text": "Brokerage->Brokerage 13-16 The loss from the previous purchase will be added to the cost basis of the security for the second purchase. Since you sold it at a loss again it would increase your losses. Your loss from the first sale will be disallowed. Your loss will be added to the cost basis of the next purchase. Your gains will be taxed on the total of the cost basis which will reduce your gains. Which you will taxed 'less'. Your gains will be taxed. Your loss is allowed. You will be taxed on both. Wash Sales really only applies to losses. If you sell for gain, the tax man will be happy to take his share. From my understanding, it does not matter if it is IRA or Brokerage, the wash sale rule affects them all. Check this link: http://www.marketwatch.com/story/understanding-the-wash-sale-rules-2015-03-02" }, { "docid": "372921", "title": "", "text": "\"Basically, the easiest way to do this is to chart out the \"\"what-ifs\"\". Applying the amortization formula (see here) using the numbers you supplied and a little guesswork, I calculated an interest rate of 3.75% (which is good) and that you've already made 17 semi-monthly payments (8 and a half months' worth) of $680.04, out of a 30-year, 720-payment loan term. These are the numbers I will use. Let's now suppose that tomorrow, you found $100 extra every two weeks in your budget, and decided to put it toward your mortgage starting with the next payment. That makes the semi-monthly payments $780 each. You would pay off the mortgage in 23 years (making 557 more payments instead of 703 more). Your total payments will be $434,460, down from $478.040, so your interest costs on the loan were reduced by $43,580 (but, my mistake, we can't count this amount as money in the bank; it's included in the next amount of money to come in). Now, after the mortgage is paid off, you have $780 semi-monthly for the remaining 73 months of your original 30-year loan (a total of $113,880) which you can now do something else with. If you stuffed it in your mattress, you'd earn 0% and so that's the worst-case scenario. For anything else to be worth it, you must be getting a rate of return such that $100 payments, 24 times a year for a total of 703 payments must equal $113,880. We use the future value annuity formula (here): v = p*((i+1)n-1)/i, plugging in v ($113880, our FV goal), $100 for P (the monthly payment) and 703 for n (total number of payments. We're looking for i, the interest rate. We're making 24 payments per year, so the value of i we find will be 1/24 of the stated annual interest rate of any account you put it into. We find that in order to make the same amount of money on an annuity that you save by paying off the loan, the interest rate on the account must average 3.07%. However, you're probably not going to stuff the savings from the mortgage in your mattress and sleep on it for 6 years. What if you invest it, in the same security you're considering now? That would be 146 payments of $780 into an interest-bearing account, plus the interest savings. Now, the interest rate on the security must be greater, because you're not only saving money on the mortgage, you're making money on the savings. Assuming the annuity APR stays the same now vs later, we find that the APR on the annuity must equal, surprise, 3.75% in order to end up with the same amount of money. Why is that? Well, the interest growing on your $100 semi-monthly exactly offsets the interest you would save on the mortgage by reducing the principal by $100. Both the loan balance you would remove and the annuity balance you increase would accrue the same interest over the same time if they had the same rate. The main difference, to you, is that by paying into the annuity now, you have cash now; by paying into the mortgage now, you don't have money now, but you have WAY more money later. The actual real time-values of the money, however, are the same; the future value of $200/mo for 30 years is equal to $0/mo for 24 years and then $1560/mo for 6 years, but the real money paid in over 30 years is $72,000 vs $112,320. That kind of math is why analysts encourage people to start retirement saving early. One more thing. If you live in the United States, the interest charges on your mortgage are tax-deductible. So, that $43,580 you saved by paying down the mortgage? Take 25% of it and throw it away as taxes (assuming you're in the most common wage-earner tax bracket). That's $10895 in potential tax savings that you don't get over the life of the loan. If you penalize the \"\"pay-off-early\"\" track by subtracting those extra taxes, you find that the break-even APR on the annuity account is about 3.095%.\"" }, { "docid": "298985", "title": "", "text": "\"Is this amount an adequate starting amount to begin investing with? Yes. You can open an account at a brokerage with this amount. I'm not sure I would invest in individual stocks at this point. Which services should I use to start buying shares? (Currently my bank offers this service but I'm willing to use other sources) I can't make UK-specific recommendations, but I'd compare your bank's fees to those of a discount broker -- as well as the variety and level of service available. I would like to regularly increase the amount invested in shares. Is it worth doing this in say £200 increments? Take a look at the fees associated with each investment. Divide the fee by the increment to see what percent you'll lose to fees/commissions. Keep in mind that you have to gain more than that percentage to start earning a positive return on your investment. If you have access to fee-free automatic mutual fund investments, and you can commit to the £200 amount on a regular basis going forward, then this can be a completely free way of making these incremental investments. See also this answer on dollar cost averaging, and my comment on the other answer on that question for how fees impact returns. When buying shares should I focus on say two or three companies, or diversify more? I would diversify into two or three different index funds. Read up on asset allocation. For example, you might invest 1/3 of your balance into S&P 500 index fund, bond index fund, and MSCI EAFE index fund (but that's just a rough example, and not necessarily good for you). I highly recommend \"\"The Intelligent Asset Allocator\"\" by William Bernstein for excellent info on diversification and asset allocation.\"" }, { "docid": "422094", "title": "", "text": "\"Situation #1: I keep playing, and eventually earn 1000 PED. I withdraw this. Will I get taxed? If so, by how much? This is probably considered an \"\"award\"\", so whatever your country taxes for lottery/gambling winnings would be applicable. If there's no specific taxation on this kinds of income - then it is ordinary income. Situation #2: I deposit $5000, play the game, lose some money and withdraw PED equal to $4000. Will I get taxed? If so, by how much? Since it is a game, it is unlikely that deducting losses from your income would be allowed. However, the $4000 would probably not be taxed as income (since you are getting your own money back). Situation #3: I deposit $5000 and use this to buy in-game items. I later sell these items for massive profits (200%+, this can happen over the course of 2 years for sure). I withdraw $10000. Will I get taxed? If so, by how much? Either the same as #1 (i.e.: ordinary income) or as capital gains (although tax authority may argue that this was not a for-profit investment, and capital gains treatment shouldn't be applicable). Will I get taxed on withdrawals from Real Cash Economy games? And do the taxes apply to the full withdrawal, or only on the profits? Or only on the profits above a certain amount? Generally income taxes only apply on income. So if you paid $10000 and got back $12000 - only the $2000 is considered income. However some countries may tax full amounts under certain conditions. Such taxes are called \"\"franchise taxes\"\". For a proper tax advice consult with the locally licensed tax adviser.\"" }, { "docid": "354136", "title": "", "text": "\"This answer is applicable to the US. Similar rules may hold in some other countries as well. The shares in an open-ended (non-exchange-traded) mutual fund are not traded on stock exchanges and the \"\"market\"\" does not determine the share price the way it does for shares in companies as brokers make offers to buy and sell stock shares. The price of one share of the mutual fund (usually called Net Asset Value (NAV) per share) is usually calculated at the close of business, and is, as the name implies, the net worth of all the shares in companies that the fund owns plus cash on hand etc divided by the number of mutual fund shares outstanding. The NAV per share of a mutual fund might or might not increase in anticipation of the distribution to occur, but the NAV per share very definitely falls on the day that the distribution is declared. If you choose to re-invest your distribution in the same fund, then you will own more shares at a lower NAV per share but the total value of your investment will not change at all. If you had 100 shares currently priced at $10 and the fund declares a distribution of $2 per share, you will be reinvesting $200 to buy more shares but the fund will be selling you additional shares at $8 per share (and of course, the 100 shares you hold will be priced at $8 per share too. So, you will have 100 previous shares worth only $800 now + 25 new shares worth $200 for a total of 125 shares at $8 = $1000 total investment, just as before. If you take the distribution in cash, then you still hold the 100 shares but they are worth only $800 now, and the fund will send you the $200 as cash. Either way, there is no change in your net worth. However, (assuming that the fund is is not in a tax-advantaged account), that $200 is taxable income to you regardless of whether you reinvest it or take it as cash. The fund will tell you what part of that $200 is dividend income (as well as what part is Qualified Dividend income), what part is short-term capital gains, and what part is long-term capital gains; you declare the income in the appropriate categories on your tax return, and are taxed accordingly. So, what advantage is there in re-investing? Well, your basis in those shares has increased and so if and when you sell the shares, you will owe less tax. If you had bought the original 100 shares at $10 and sell the 125 shares a few years later at $11 and collect $1375, you owe (long-term capital gains) tax on just $1375-$1200 =$175 (which can also be calculated as $1 gain on each of the original 100 shares = $100 plus $3 gain on the 25 new shares = $175). In the past, some people would forget the intermediate transactions and think that they had invested $1000 initially and gotten $1375 back for a gain of $375 and pay taxes on $375 instead. This is less likely to occur now since mutual funds are now required to report more information on the sale to the shareseller than they used to in the past. So, should you buy shares in a mutual fund right now? Most mutual fund companies publish preliminary estimates in November and December of what distributions each fund will be making by the end of the year. They also usually advise against purchasing new shares during this period because one ends up \"\"buying a dividend\"\". If, for example, you bought those 100 shares at $10 on the Friday after Thanksgiving and the fund distributes that $2 per share on December 15, you still have $1000 on December 15, but now owe taxes on $200 that you would not have had to pay if you had postponed buying those shares till after the distribution was paid. Nitpickers: for simplicity of exposition, I have not gone into the detailed chronology of when the fund goes ex-dividend, when the distribution is recorded, and when cash is paid out, etc., but merely treated all these events as happening simultaneously.\"" }, { "docid": "308186", "title": "", "text": "Hold your visitors by adding an impressive and precise video on your website. We are an in-house Orange County video production company providing cost effective videos for company of all sizes to increase their traffic and get them converted into sales." }, { "docid": "308768", "title": "", "text": "If you were a business, all your assets would have a dollar value, so when you sold them you'd decrease the amount of assets by that amount and increase in cash, and if there was a profit on the sale it would go in as income, if there was loss it would count as a cost (or a loss)... so if there was a profit it would increase Equity, a loss then it would decrease Equity. Since it's not really worthwhile doing a estimated cost for everything that you have, I'd just report it as income like you are doing and let the amount of equity increase proportionately. So, implicitly you always had roughly that amount of equity, but some of it was in the form of assets, and now you're liquidating those assets so the amount shows up in GnuCash. When you buy new things you might sell later, you could consider adding them as assets to keep track of this explicitly (but even then you have problems-- the price of things changes with time and you might not want to keep up with those price changes, it's a lot of extra work for a family budget) -- for stuff you already have it's better to treat things as you are doing and just treat the money as income-- it's easier and doesn't really change anything-- you always had that in equity, some of it was just off the books and now you are bringing it into the books." }, { "docid": "557603", "title": "", "text": "\"Employers withhold at rates specified in Circular E issued by the IR. You can request that additional money be withheld (not an issue here) or you can have reduced withholding by claiming additional allowances on a W-4 (i.e., more than just for you and spouse and dependents) if you believe that this will result in withholding that will more closely match the tax due. (Note added in edit):Page 2 of the W-4 form has worksheets that can be used to figure out how many additional allowances to request. Also, I wonder if your withholding will be 37% or final tax bill be 26% of your adjusted gross income. The tax brackets are the tax on marginal income. If you are in the 28% tax bracket, you owe 28 cents in tax for each additional dollar of income, not 28 cents in tax for every dollar of income. Your overall tax might well be less than 20% of your income. As a specific example, in 2011 a married taxpayer filing jointly would be in the (highest) 35% tax bracket if the taxable income was $379,150 or more (marginal tax rate of 35% is applicable to every dollar more than $379,150) but the tax on $379,150 itself works out to be $102,574 or 27.05% of the taxable income. So if you do expect to be earning around $350K or more in salary between now and December 31 to hit that 26% that you expect you will owe, you might want to consider paying a tax accountant for advice on how to fill out your W-4 form for your new employer rather than relying on an Internet forum such as this for free advice. Note added in edit: Your comment \"\"... it is a cocktail of ... federal taxes, state taxes, local taxes, health care ...\"\" on the earlier version of my answer does raise the question of whether you want your employer to withhold 26% instead of 37% and have the money go to meet all these obligations or just 26% towards your Federal income tax liability only. The Federal W-4 form affects only how much money is withheld from your paycheck and sent to the US Treasury. Some of the money that each of your employers withholds (Social Security and Medicare taxes) is not affected by what you put down on the W-4 form. Now, if you hold two jobs and the total income shown on your W-2s is larger than the SS limit, you will have had too much Social Security taxes withheld, and the excess will be a credit towards your Federal income tax liability. You have self-employment income too on which you owe Social Security and Medicare taxes and you are making estimated tax payments. The excess Social Security tax payment can count towards this too (as well as income tax on your Schedule C income). Thus, if your new employer is withholding too much, you might be able to skip making the fourth quarterly payment of estimated tax or make a reduced payment (there is no requirement that the four installments must be equal). In short, there are lots of ramifications that you need to take into account before deciding that 26% is the right number. Instead of filling out a W-4 all by yourself right away, I strongly recommend reading up a lot on income taxes, or play with a tax preparation program (last year's version will do a pretty good job of at least getting you in the right ballpark), or consult with a tax accountant.\"" }, { "docid": "204870", "title": "", "text": "Like Bluetie Grasper have said. Can I create a PayPal account and receive €200 (or a similar amount) without adding a bank account, credit card, or anything but my email address? The answer is No. You can transfer the money to your PayPal account but until you verify it with your personal information with at least a credit card or mostly likely a bank account, PayPal will hold those funds until otherwise. Can I then use that money to buy on Amazon, still without adding anything but my email address? If not, can I buy gift cards and use those on Amazon? Amazon does not accept PayPal." }, { "docid": "519129", "title": "", "text": "\"Your confusion is that that answerer is not comparing a $5500 Roth IRA contribution to a $5500 Traditional IRA contribution. Rather, they were comparing a $3600 Roth IRA contribution to a $5000 Traditional IRA contribution. It is fairer to do such a comparison because (assuming that this person's marginal tax rate is 28%) both of them start with the same amount of pre-tax money ($5000 of pre-tax money is equivalent to $3600 of post-tax money in 28% tax bracket). As a result, both a $5000 Traditional IRA contribution and a $3600 Roth IRA contribution will leave you with the same amount of cash in your bank account at the end (after taxes are filed). That's why it's a fair comparison. And when you do such a comparison, it will mathematically indeed always turn out to the same result for Traditional and Roth if the contribution and withdrawal are at the same tax rate. On the other hand, if you were to compare a $5000 Roth IRA contribution to a $5000 Traditional IRA contribution, even though it's the same nominal dollar figure, you would be comparing apples and oranges because in one case it's a post-tax dollar amount and in the other case a pre-tax dollar amount. The Roth IRA contribution actually leaves you with less in your bank account at the end (after taxes are filed) than the same nominal dollar amount of Traditional IRA contribution. So you are comparing an (effectively) \"\"larger\"\" Roth IRA contribution to a \"\"smaller\"\" Traditional IRA contribution. Of course the \"\"larger\"\" contribution gets more tax advantages over time, and so the result looks better. Note that since Traditional IRA contribution and Roth IRA contributions share the same nominal dollar amount annual limit, but we know that $1 of Roth IRA contributions is effectively larger than $1 of Traditional IRA contributions, that means that Roth IRA contributions has an effectively \"\"higher\"\" annual limit than Traditional IRA contributions. For example, a $5500 Traditional IRA contribution is equivalent to a $3960 Roth IRA contribution for someone in the 28% bracket; whereas a $5500 Roth IRA contribution would be equivalent to a $7638.89 Traditional IRA contribution, which you can't do. So it's not possible to do a fair comparison when you go near the limit. If it is important to you to tax-advantage the \"\"largest\"\" amount of money, then that is a reason to go for Roth IRA, since it has an effectively higher annual limit. You cannot replicate the tax advantage of a $5500 Roth IRA contribution with a Traditional IRA contribution, because that money in pre-tax dollars is beyond the limit of a Traditional IRA contribution.\"" } ]

[ { "docid": "231947", "title": "", "text": "\"Don't worry about it. The State doesn't care about rounding error. All you need to do is say \"\"We charge our prices with tax included\"\" - you know, like carnivals and movie theaters. Then follow the procedures your state specifies for computing reportable tax. Quite likely it wants your pre-tax sales total for the reporting period. To get that, total up your gross sales that you collected, and divide by (1 + tax rate). Just like DJClayworth says, except do it on total sales instead of per-item. If you need to do the split per-transaction for Quickbooks or something, that's annoying. What Quickbooks says will be pennies off the method I describe above. The state don't care as long as it's just pennies, or in their favor.\"" } ]

[ { "docid": "298985", "title": "", "text": "\"Is this amount an adequate starting amount to begin investing with? Yes. You can open an account at a brokerage with this amount. I'm not sure I would invest in individual stocks at this point. Which services should I use to start buying shares? (Currently my bank offers this service but I'm willing to use other sources) I can't make UK-specific recommendations, but I'd compare your bank's fees to those of a discount broker -- as well as the variety and level of service available. I would like to regularly increase the amount invested in shares. Is it worth doing this in say £200 increments? Take a look at the fees associated with each investment. Divide the fee by the increment to see what percent you'll lose to fees/commissions. Keep in mind that you have to gain more than that percentage to start earning a positive return on your investment. If you have access to fee-free automatic mutual fund investments, and you can commit to the £200 amount on a regular basis going forward, then this can be a completely free way of making these incremental investments. See also this answer on dollar cost averaging, and my comment on the other answer on that question for how fees impact returns. When buying shares should I focus on say two or three companies, or diversify more? I would diversify into two or three different index funds. Read up on asset allocation. For example, you might invest 1/3 of your balance into S&P 500 index fund, bond index fund, and MSCI EAFE index fund (but that's just a rough example, and not necessarily good for you). I highly recommend \"\"The Intelligent Asset Allocator\"\" by William Bernstein for excellent info on diversification and asset allocation.\"" }, { "docid": "322246", "title": "", "text": "\"In a nutshell - Value Added Tax. America, as usual, discovers what others have known and used for years. The idea of not taxing income that's tied to it is ridiculous. If you're only taxing spending but not income, people will just take spending elsewhere (Canada, Mexico, further away), and the economy will go down the drain. That's similar to the way people avoid paying sales tax now, except that it will be in orders of magnitude. Why should a corporation by office supplies in the US, if it has a branch in China? Edit Also, Fair Tax doesn't take into account moving money overseas. I've mentioned living elsewhere down below, and that also got me thinking of how I personally would certainly gain from that ridiculous thing called \"\"Fair Tax\"\". Basically, that's exactly how the \"\"rich folks\"\", those who push for it, will gain from it. Being able to move money out of the US basically makes it a perfect tax shelter. You don't pay taxes on the income (that you have in the US), and you don't pay taxes on the spendings (that you have elsewhere, because in that country income is taxable so you only pay VAT or sales taxes). This means that all the wealthy people, while investing and gaining money from the American economy (stocks, property, etc), will actually not be spending it in the US. Thus, no taxes paid to the US, dollars flowing out. Perfect. Actually, I should be all for this stupid idea. Very fair to me, no need to pay any taxes at all, because food will probably be exempt anyway.\"" }, { "docid": "55666", "title": "", "text": "I don't think there's much you can do. Losses from the sale of personal-use automobiles (used for pleasure, commuting, etc) are not deductible as capital losses. See IRS Tax Topic 409, end of the first paragraph. The expenses you incurred in owning and operating the car (insurance, fuel, maintenance, service plans, etc) are not deductible either. If you used it partly for business, then some of your expenses might be deductible; see IRS Tax Topic 510. This includes depreciation (decline in value), but only according to a standard schedule; you don't generally just get to deduct the difference between your buying and selling price. Also, you'd need to have records to verify your business use. But anyway, these deductions would apply (or not) regardless of whether you sell the car. You don't get your sales tax refunded when you resell the vehicle. That's why it's a sales tax, not a value-added tax. Note, however, that if you do sell it, the sales tax on this new transaction will be the buyer's responsibility, not yours. You do have the option on your federal income tax return to deduct the state sales tax you paid when you bought the car; in fact, you can deduct all the sales taxes you paid in that year. (If you have already filed your taxes for that year, you can go back and amend them.) However, this takes the place of your state income tax deduction for the year; you can't deduct both. See Tax Topic 503. So this is only useful if your sales taxes for that year exceeded the state income tax you paid in that year. Also, note that state taxes are not deductible on your state income tax return. Again, this deduction applies whether you sell the car or not." }, { "docid": "596518", "title": "", "text": "I was not able to find any authority for the opinion you suggest. Wash sale rules should, IMHO, apply. According to the regulations, you attribute the newly purchased shares to the oldest sold shares for the purposes of the calculation of the disallowed loss and cost basis. (c) Where the amount of stock or securities acquired within the 61-day period is less than the amount of stock or securities sold or otherwise disposed of, then the particular shares of stock or securities the loss from the sale or other disposition of which is not deductible shall be those with which the stock or securities acquired are matched in accordance with the following rule: The stock or securities acquired will be matched in accordance with the order of their acquisition (beginning with the earliest acquisition) with an equal number of the shares of stock or securities sold or otherwise disposed of. You can resort to the claim that you have not, in fact, entered into the contract within 30 days, but when you gave the instructions to reinvest dividends. I don't know if such a claim will hold, but to me it sounds reasonable. This is similar to the rules re short sales (in (g) there). In this case, wash sale rules will not apply (unless you instructed to reinvest dividends within the 30 days prior to the sale). But I'd ask a tax professional if such a claim would hold, talk to a EA/CPA licensed in your state." }, { "docid": "82284", "title": "", "text": "\"See Publication 505, specifically the section on \"\"Annualized Income Installment Method\"\", which says: If you do not receive your income evenly throughout the year (for example, your income from a repair shop you operate is much larger in the summer than it is during the rest of the year), your required estimated tax payment for one or more periods may be less than the amount figured using the regular installment method. The publication includes a worksheet and explanation of how to calculate the estimated tax due for each period when you have unequal income. If you had no freelance income during a period, you shouldn't owe any estimated tax for that period. However, the process for calculating the estimated tax using this method is a good bit more complex and confusing than using the \"\"short\"\" method (in which you just estimate how much tax you will owe for the year and divide it into four equal pieces). Therefore, in future years you might want to still use the equal-payments method if you can swing it. (It's too late for this year since you missed the April deadline for the first payment.) If you can estimate the total amount of freelance income you'll receive (even though you might not be able to estimate when you'll receive it), you can probably still use the simpler method. If you really have no idea how much money you'll make over the year, you could either use the more complex computation, or you could use a very high estimate to ensure you pay enough tax, and you'll get a refund if you pay too much.\"" }, { "docid": "300133", "title": "", "text": "Both states will want to tax you. Your tax home is where you maintain a domicile, are registered to vote, etc. and you will probably want to keep this as MA since you state that MA is your permanent residence and you are staying in a rented place in PA. But be careful about voter registration; that is one of the items that can be used to determine your state of residence. OK, so if you and your spouse are MA residents, you should file jointly as residents in MA and as nonresidents in PA. Do the calculations on the nonresident return first, and then the calculations on the resident return. Typically, on a nonresident tax return, the calculations are effectively the following: Report all your income (usually AGI from the Federal return). Call this $X. Compute the PA state tax due on $X. Note that you follow the rules for nonresidents in doing this, not the calculations used by PA residents. Call the amount of tax you computed as $Y. What part of the total income $X is attributable to PA sources? If this amount is $Z, then you owe PA $Y times (Z/X). On the resident return in MA, you will likely get some credit for the taxes paid to PA, and this will reduce your MA tax burden. Usually the maximum credit is limited to the lesser of actual tax paid to PA and what you would have had to pay MA for the same income. As far as withholding is concerned, your employer in PA will withhold PA taxes as if you are a PA resident, but you can adjust the amount via the PA equivalent of IRS Form W4 so as to account for any additional tax that might be due because you will be filing as a nonresident. Else you can pay estimated taxes via the PA equivalent of IRS Form 1040ES. Similarly, your wife can adjust her withholding to account for the MA taxes that you will owe on the joint income, or you can pay estimated taxes to MA too. Note that it is unlikely that your employer in Pennsylvania will withhold Massachusetts taxes (and send them to Massachusetts) for you, e.g. if it is a ma-and-pa store, but there may be special deals available if your employer does business in both states, i.e. is a MA-and-PA store." }, { "docid": "422094", "title": "", "text": "\"Situation #1: I keep playing, and eventually earn 1000 PED. I withdraw this. Will I get taxed? If so, by how much? This is probably considered an \"\"award\"\", so whatever your country taxes for lottery/gambling winnings would be applicable. If there's no specific taxation on this kinds of income - then it is ordinary income. Situation #2: I deposit $5000, play the game, lose some money and withdraw PED equal to $4000. Will I get taxed? If so, by how much? Since it is a game, it is unlikely that deducting losses from your income would be allowed. However, the $4000 would probably not be taxed as income (since you are getting your own money back). Situation #3: I deposit $5000 and use this to buy in-game items. I later sell these items for massive profits (200%+, this can happen over the course of 2 years for sure). I withdraw $10000. Will I get taxed? If so, by how much? Either the same as #1 (i.e.: ordinary income) or as capital gains (although tax authority may argue that this was not a for-profit investment, and capital gains treatment shouldn't be applicable). Will I get taxed on withdrawals from Real Cash Economy games? And do the taxes apply to the full withdrawal, or only on the profits? Or only on the profits above a certain amount? Generally income taxes only apply on income. So if you paid $10000 and got back $12000 - only the $2000 is considered income. However some countries may tax full amounts under certain conditions. Such taxes are called \"\"franchise taxes\"\". For a proper tax advice consult with the locally licensed tax adviser.\"" }, { "docid": "521489", "title": "", "text": "\"If you have an S-Corp with several shareholders - you probably also have a tax adviser who suggested using S-Corp to begin with. You're probably best off asking that adviser about this issue. If you decided to use S-Corp for multiple shareholders without a professional guiding you, you should probably start looking for such a professional, or you may get yourself into trouble. That said, and reminding you that: 1. Free advice on the Internet is worth exactly what you paid for it, and 2. I'm not a tax professional or tax adviser, you should talk to a EA/CPA licensed in your state, here's this: Generally S-Corps are disregarded entities for tax purposes and their income flows to their shareholders individual tax returns through K-1 forms distributed by the S-Corp yearly. The shareholders don't have to actually withdraw the profits, but if not withdrawing - they're added to their cost bases in the shares. I'm guessing your corp doesn't distribute the net income, but keeps it on the corporate account, only distributing enough to cover the shareholders' taxes on their respective income portion. In this case - the amount not distributed is added to their basis, the amount distributed has already been taxed through K-1. If the corporation distributes more than the shareholder's portion of net income, then there can be several different choices, depending on the circumstances: The extra distribution will be treated as salary to the shareholder and a deduction to the corporation (i.e.: increasing the net income for the rest of the shareholders). The extra distribution will be treated as return of investment, reducing that shareholder's basis in the shares, but not affecting the other shareholders. If the basis is 0 then it is treated as income to the shareholder and taxed at ordinary rates. The extra distribution will be treated as \"\"buy-back\"\" - reducing that shareholder's ownership stake in the company and reallocating the \"\"bought-back\"\" portion among the rest of the shareholders. In this case it is treated as a sale of stock, and the gain is calculated as with any other stock sale, including short-term vs. long-term taxation (there's also Sec. 1244 that can come in handy here). The extra distribution will be treated as dividend. This is very rare for S-Corp, but can happen if it was a C-Corp before. In that case it will be taxed as dividends. Note that options #2, #3 and #4 subject the shareholder to the NIIT, while option #1 subjects the shareholder to FICA/Self Employment tax (and subjects the company to payroll taxes). There might be other options. Your licensed tax adviser will go with you through all the facts and circumstances and will suggest the best way to proceed.\"" }, { "docid": "308768", "title": "", "text": "If you were a business, all your assets would have a dollar value, so when you sold them you'd decrease the amount of assets by that amount and increase in cash, and if there was a profit on the sale it would go in as income, if there was loss it would count as a cost (or a loss)... so if there was a profit it would increase Equity, a loss then it would decrease Equity. Since it's not really worthwhile doing a estimated cost for everything that you have, I'd just report it as income like you are doing and let the amount of equity increase proportionately. So, implicitly you always had roughly that amount of equity, but some of it was in the form of assets, and now you're liquidating those assets so the amount shows up in GnuCash. When you buy new things you might sell later, you could consider adding them as assets to keep track of this explicitly (but even then you have problems-- the price of things changes with time and you might not want to keep up with those price changes, it's a lot of extra work for a family budget) -- for stuff you already have it's better to treat things as you are doing and just treat the money as income-- it's easier and doesn't really change anything-- you always had that in equity, some of it was just off the books and now you are bringing it into the books." }, { "docid": "205585", "title": "", "text": "\"Here's an answer to a related question I once wrote. I'm reposting here. I can, but it takes a significant amount of time. I'll do a short version which unfortunatley might leave more holes than you like. Basically, traders don't want to barter because it is hard to find the person with precisely the goods you want who wants to trade for the goods you have. Thus the need for \"\"coupons\"\" that represent value in a marketplace. Then you need to decide who gets to create coupons. If too many can issue them, problems arise, and no one trusts the coupons will be good later. Eventually you want one large bank/nation/trader to be able to issue them so everyone has the same level of trust in them, and you don't have the economic inefficiencies of many coupon issuers. Next, the number of coupons needs to be enough to facilitate trade. If the amount of trade increases a lot, and the number of coupons doesn't increase similarly they become worth more, and people start to hoard them. This causes deflation, which causes less investment, which causes less growth, which hurts everyone in the long run. If there are too many coupons added, this causes inflation, which causes people to spent them quicker instead of holding them. For reasons I won't cover here slight, predictable inflation is much better than deflation, so remember inflation is slightly preferred. Note that inflation is often caused not by the number of coupons but by external price changes. Now, for a modern economy to do well, somone has to watch the economy, measure it carefully, and add/subtract coupons into the system as needed. Coupons, like all money, have no real value (whatever that means), but only have value because the holder expects to be able to trade them *later* for goods and services. You cannot eat coupons, use them for shelter (usually!), or wear them, but you want to trade them for such needs. The same is true for paper money, gold, stones, or almost whatever money system one uses. Money in all these forms is merely an IOU tradable for future goods. The Fed is tasked (among other things) with making sure there is precisely enough coupons in the economy to keep trade functioning as well as possible. This is very hard to do since there are external and internal shocks to an economy (think disaster, foreign govts shutting off resources, rapid changes in people's tastes, etc.). Central banks such as the Fed need to be independent of political control, since empirical evidence has shown that politicians tend to add more money to the system than is needed, because the short term gains give them votes, but the long term consequences (rapid inflation, unemployment, lower economic growth) are bad for society. This is why the Fed is largely out of congressional control, and large amounts of empirical evidence across hundreds of years and dozens of cultures shows this to be good. Note: another function of the Fed is to be a lender of last resort to help prevent bank panics that were widespread in the 18th and early 19th century, something that none of us now remember, but it was a real problem. I'll skip that part for now. So now we're at the point where the Fed needs to add/subtract coupons from society. To do this part justice takes significant time to cover all the reasons why various rules are in place (banking reserve requirements, for example), and you cannot learn it from one pass of reading. But I'll try. Instead of being like the majority of internet fools that rail against the system, try to learn the *why* of all this, and you'll be much wiser and understand that it is all a pretty good system. One method they use is the interbank lending rate. Banks have a reserve requirement, which is the ratio of coupons they need to have on hand as a ratio compared to the total coupons depositors lent them. This is usually around 1:10. The amount deposited that they can lend goes to business loans, school loans, mortgage loans, etc., and helps economies grow. Now when a bank on a given day falls short due to too many withdrawals, other banks (or the Fed) offers an overnight loan to meet reserve requirements, and the Fed sets the interest rate, which in turn drives other interest rates in the system. This does not change the money supply very much. Secondly, the Fed sets the reserve requirement, which vastly can change the amount of money available to society. But they change this rate so rarely (all the historical data is on the St. Loius Fed site, among others) that it is not usually an issue. I'll explain below how this can drastically change the money supply though the money multiplier. Thirdly, and this is the part the poster above seems upset about, they conduct open market operations. This is the primary means by which the Fed exercises control over the number of coupons in play. The government, like businesses, like individuals, often needs to borrow money, in theory to invest in wise causes like infrastructure or perhaps money making enterprises such as technology investmeny (and I know what they often use the money for causes many to complain). The government, like companies, offers the sale of various contracts such as bonds to investors, who want a place to park some accumulated coupons for safety, and they get a return plus some interest. So the government sells bonds on the open market to investors, banks, pensions, foreign governments, basically to whomever wishes to purchase them at the market rate, and the government, like many individuals and banks, uses these loans to perform day to day functioning and possible smooth out volatility in spending needs. By law the Fed cannot purchase directly from Treasury. Now, once on the market, these bonds are traded, packaged, resold, etc., since they have inherent value, and since those owning them want to buy/sell them, perhaps before maturity date. This \"\"liquidity\"\" (ability to sell your goods) is necessary - fewer would purchase an item if they could not sell it when they desire. Thus bonds are bought, sold, and traded, and their prices fluctuate based on what the market thinks they are worth, just like any good. Now, the Fed can buy/sell these bonds on the *open market*, like anyone else. So when the Fed wishes to increase the money supply, they can buy bonds that are not \"\"spendable\"\" money and inject money into the system. Note they now hold a bond that had at the time of transaction the same value as the money they injected. Note investors freely bought these from Treasury, meaning the market thought at the time of purchase that this was a good invesement. It is *not* the government merely wishing more money into existance. It is market forces that require more money for trades and is selling goods from the marketplace of (presumably) equal value to the Fed. This increases liquidity, but takes valuable assets from circulation. When the Fed wishes to shrink the money supply, they sell these bonds back into circulation basically by offering better terms than Treasury. In fact, you can find graphs of the Fed operations and see how every December they inject money for more Christmas shpping (need more coupons for more trade) and every January they extract some. So open market transactions, buying and selling goods at market prices in the marketplace along with other traders, is how the Fed injects and removes money from the money supply. This is the primary mechanism that the Fed uses to control the number of coupons in the economy. Finally, a little about reserve requirements and the money multiplier, since it affects so much of the number of coupons in play. This also I must simplify drastically. Each bank needs to hold 1/10 of all deposits in cash. The rest can be lent, which lands in another bank, which again can be lent, etc... Thus each $1 deposited can result in loans totalling 9/10 + (9/10)^2 + (9/10)^3 +... = 9 more dollars. Many people claim that banks are printing money, which is nonsense, since each also has an equal debt to pay to the person they borrowed from. When all loans are paid back there is no net money gain. However, this allows for each $1 the Fed injects by buying bonds for there to be up to $9 in the economy, *if banks all loan to the fullest extent*. Banks tend to want to loan since loaned money makes them profit. Banks used to loan too much and runs on the banks caused significant problems, which is why laws were made to require *all* banks to have the same reserve requirement. Now, when banks get scared and stop loaning, this 9 fold multiplier dries up, and the Fed has much less inpact on being able to target the proper number of coupons to keep the economy smooth. During the recent crash when banks stopped loaning, as each dollar was paid back on debts, there was significant shrinkage of available money for transactions, and this kills the economy. This is the \"\"liquidity crisis\"\". Hope this helps. As I said, this is vastly simplified and I cannot go into all the reasons and historical items needed to understand it fully. It is a vastly complex (and necessarily so) and takes significant study to grasp the genius of it. It's similar to not being able to understand nuances of particle physics in one go, but as you study and work at it you see *why* things go as they do, and you learn all the failed methods (the gold standard is one example) that were thrown out for many good reasons. Cheers.\"" }, { "docid": "180539", "title": "", "text": "All the fees are added to the amount you actually spend, but they only occur when you do these kind of transactions. They do not happen for any other reason. If you transfer a balance from another credit card this fee is added to your balance. Since this is your first credit card you don't have to transfer any balance. This site says that this is a special type of check, linked to your credit card account, not to your checking account. If you write this type of check to a merchant the additional fees will apply. If you use your credit card at an ATM this fee will be applied on top of the money you withdraw. Usually it is a percentage of the amount you withdraw. According to this site, a cash equivalent is something like casino chips which can be easily converted back into money without any loss. If you use your credit card in a different currency, for example Euro but your credit cards currency is Dollar. Usually a percentage of the amount (~3-5%). If you withdraw money from a foreign currency ATM they add usually a fixed amount plus a percentage or any combination of this." }, { "docid": "330229", "title": "", "text": "\"I second DJClayworth's suggestion to wait and save a larger down-payment. I'll also add: It looks like you neglected to consider CMHC insurance in your calculation. When you buy your first home with less than 20% down, the bank will require you to insure the mortgage. CMHC insurance protects the bank if you default – it does not protect you. But such insurance does make a bank feel better about lending money to people it otherwise wouldn't take a chance on. The kicker is you would be responsible for paying the CMHC insurance that's protecting the bank. The premium is usually added on to the amount borrowed, since a buyer requiring CMHC insurance doesn't, by definition, have enough money up front. The standard CMHC premium for a mortgage with 5% down, or as they would say a \"\"95% Loan-to-Value ratio\"\" is 2.75%. Refer to CMHC's table of premiums here. So, if you had a down-payment of $17,000 to borrow a remaining $323,000 from the bank to buy a $340,000 property, the money you owe the bank would be $331,883 due to the added 2.75% CMHC insurance premium. This added $8883, plus interest, obviously makes the case for buying less compelling. Then, are there other closing costs that haven't been fully considered? One more thing I ought to mention: Have you considered saving a larger down-payment by using an RRSP? There's a significant advantage doing it that way: You can save pre-tax dollars for your down-payment. When it comes time to buy, you'd take advantage of the Home Buyer's Plan (HBP) and get a tax-free loan of your own money from your RRSP. You'd have 15 years to put the money back into your RRSP. Last, after saving a larger downpayment, if you're lucky you may find houses not as expensive when you're ready to buy. I acknowledge this is a speculative statement, and there's a chance houses may actually be more expensive, but there is mounting evidence and opinion that real estate is currently over-valued in Canada. Read here, here, and here.\"" }, { "docid": "475607", "title": "", "text": "The plumber will apply for and receive a refund of the amount of VAT he paid on the purchase amount. That's the cornerstone of how VAT works, as opposed to a sales tax. So for example: (Rounded approximate amounts for simplicity) Now, at each point, the amount between (original cost VAT) and (new VAT) is refunded. So by the end, a total of £3 VAT is paid on the pipe (not £6.2); and at each point the business 'adding value' at that stage pays that much. The material company adds £1 value; the producer adds £4 value; the supplier adds £5 value; the plumber adds £5 value. Each pays some amount of VAT on that amount, typically 20% unless it's zero/reduced rated. So the pipe supplier pays £1 but gets a £0.2 refund, so truly pays £0.8. The plumber pays £3 (from your payment) but gets a £2 refund. So at each level somebody paid a bit, and then that bit is then refunded to the next person up the ladder, with the final person in the chain paying the full amount. The £0.2 is refunded to the producer, the £1 is refunded to the supplier, the £2 is refunded to the plumber." }, { "docid": "411606", "title": "", "text": "\"A loan is not a taxable income. Neither is a gift. Loans are repaid with interest. The interest is taxable income to the lender, and may or may not be deductible to the borrower, depending on how the loan proceeds were used. Gifts are taxable to the donor (the person giving the gift) under the gift tax, they're not a taxable income to the recipient. Some gifts are exempt or excluded from gift tax (there's the annual exemption limit, lifetime exclusion which is correlated to the estate tax, various specific purpose gifts or transfers between spouses are exempt in general). If you trade for something of equal value, is that considered income? Yes. Sale proceeds are taxable income, however your basis in the item sold is deductible from it. If you borrow a small amount of money for a short time, is that considered income? See above. Loan proceeds are not income. does the friend have to pay taxes when they get back their $10? No, repayment of the loan is not taxable income. Interest on it is. Do you have to pay taxes if you are paid back in a different format than originally paid? Form of payment doesn't matter. Barter trade doesn't affect the tax liability. The friend sold you lunches and you paid for them. The friend can deduct the cost of the lunches from the proceeds. What's left - is taxable income. Everything is translated to the functional currency at the fair market value at the time of the trade. you are required to pay taxes on the gross amount Very rarely taxes apply to gross income. Definitely not the US Federal Income taxes for individuals. An example of an exception would be the California LLC taxes. The State of California taxes LLCs under its jurisdiction on gross proceeds, regardless of the actual net income. This is very uncommon. However, the IRC (the US Federal Tax Code) is basically \"\"everything is taxable except what's not\"\", and the cost of generating income is one of the \"\"what's not\"\". That is why you can deduct the basis of the asset from your gross proceeds when you sell stuff and only pay taxes on the net difference.\"" }, { "docid": "368587", "title": "", "text": "\"Putting a dollar amount on the valuation of a start up business is an art form that often has very little at all to do with any real numbers and more to do with your \"\"salesman\"\" abilities when talking with the VC. That said, there are a few starting points: First is past sales, the cost of those sales and a (hopefully) realistic growth curve. However, you don't have that so this gets harder. Do you have any actual assets? Machinery, computers, desks, patents, etc. Things that you actually own. If so, then add those in. If this is a software start-up, \"\"code\"\" is an asset, but without sales it's incredibly hard to put a value on it. The best I've come up with is \"\"How much would it cost for someone else to build it .. after they've seen yours\"\". Yes, you may have spent 5,000 hours building something but could someone else duplicate it, or at least the major parts, in 200 hours after seeing a demo? Use the lower number. If I was you, I'd look hard at my business plan. Hopefully you were as honest as you can be when writing it (and that it is as researched as possible). What is it going to take to get that first sale? What do you actually need to get there? (hint: your logo on the side of a building is NOT a necessary expense. Nor is really nice office space.) Once you have that first sale, what is the second going to take? Can you extrapolate out to 3 years? How many key members are there? How much is their contribution worth? At what point will you be profitable? Next is to look at risks. You haven't done this before, that's huge - I'm assuming simply because you asked this question. Another is competitors - hopefully they already exist because opening a new market is incredibly hard and expensive; on the flip side, hopefully there aren't that many because entering a crowded market is equally hard and expensive. Note: each are possible, but take radically different approaches and sums of money - and $200k isn't going to cut it no matter what it is you are selling. That said, competition should be able to at least point you in the direction of a price point and estimate for how long sales take. If any are publicly traded then you have additional info to help you set a valuation. Are there any potential regulatory or legal issues? What happens if a key member leaves, dies or is otherwise no longer available? Insurance only helps so much if the one guy that knows everything literally gets run over. God help you if this person likes to go skydiving. I bring risks up because you will have to surmount them during this negotiation. For example, asking for $200k with zero hard assets, while trying to sell software to government agencies assuming a 3 week sales cycle will have you laughed at for naivety. Whereas asking for $10m in the same situation, with a team that has governmental sales experience would likely work. Another big question is exit strategy: do you intend to IPO or sell to a competitor or a business in a related category? If selling, do you have evidence that the target company actually buys others, and if so, how did those deals work out? What did they look for in order to buy? Exit strategy is HUGE to a VC and they will want to make several multiples of their money back in a relatively short amount of time. Can you realistically support that for how much you are asking for? If not then going through an Angel group would be better. They have similar questions, but very different expectations. The main thing is that no one knows what your business is worth because it is 100% unproven after 2 years and is therefore a huge financial risk. If the money you are asking for is to complete product development then that risk factor just went up radically as you aren't even talking about sales. If the money is purely for the sales channel, then it's likely not enough. However if you know what it's going to take to get that first sale and have at least an educated idea on how much it's going to cost to repeat that then you should have an idea for how much money you want. From there you need to decide how much of the business it is worth to you to give up in order to get that money and, voila, you have a \"\"pre money valuation\"\". The real trick will be to convince the VC that you are right (which takes research and a rock solid presentation) and negotiating from there. No matter what offer a small percentage of the business for the money you want and realize you'll likely give up much more than that. A few things you should know: usually by year 3 it's apparent if a start-up is going to work out or not. You're in year 2 with no sales. That doesn't look good unless you are building a physical product, have a competent team with hard experience doing this, have patents (at least filed), a proven test product, and (hopefully) have a few pre-orders and just need cash to deliver. Although in that situation, I'd probably tell you to ask your friends and family before talking to a VC. Even kickstarter.com would be better. $200k just isn't a lot of money and should be very easy to raise from Friends or Angels. If you can't then that speaks volumes to an institutional VC. A plus is having two or three people financially invested in the company; more than that is sometimes a problem while having only 1 is a red flag. If it's a web thing and you've been doing this for 2 years with zero sales and still need another $200k to complete it then I'd say you need to take a hard look at what you've built and take it to market right now. If you can't do that, then I'd say it might be time to abandon this idea and move on as you'll likely have to give up 80%+ to get that $200k and most VCs I've run into wouldn't bother at that level. Which begs the question: how did the conversation with the VC start? Did you approach them or did they approach you? If the latter, how did they even find out about you? Do they actually know anything about you or is this a fishing expedition? If the latter, then this is probably a complete waste of your time. The above is only a rough guide because at the end of the day something is only worth what someone else is willing to pay. $200k in cash is a tiny sum for most VCs, so without more information I have no clue why one would be interested in you. I put a number of hard questions and statements in here. I don't actually want you to answer me, those are for you to think about. Also, none of this shouldn't be taken as a discouragement, rather it should shock you into a realistic viewpoint and, hopefully, help you understand how others are going to see your baby. If the VC has done a bit of research and is actually interested in investing then they will bring up all the same things (and likely more) in order to convince you to give up a very large part of it. The question you have to ask yourself is: is it worth it? Sometimes it is, often it's not.\"" }, { "docid": "41403", "title": "", "text": "You'd think I would remember this, having also bought a house in 2008, but I recall that earnest money was different from the nonrefundable deposit. Earnest money was typically some small amount - $500 or something - that was put on the table when you made the offer. After the offer was accepted, but before closing, the 1%-ish amount was put into escrow as part of the negiotiation process. Maybe this is just a Massachusetts thing, though." }, { "docid": "249450", "title": "", "text": "\"Split transactions are indispensable to anybody interested in accurately tracking their spending. If I go to the big-box pharmacy down the road to pick up a prescription and then also grab a loaf of bread and a jug of milk while there, then I'd want to enter the transaction into my software as: I desire entering precise data into the software so that I can rely on the reports it produces. Often, I don't need an exact amount and estimated category totals would have been fine, e.g. to inform budgeting, or compare to a prior period. However, in other cases, the expenses I'm tracking must be tracked accurately because I'd be using the total to claim an income tax deduction (or credit). Consider how Internet access might be commingled on the same bill with the home's cable TV service. One is a reasonable business expense and deduction for the work-at-home web developer, whereas the other is a personal non-deductible expense. Were split transaction capability not available, the somewhat unattractive alternatives are: Ignore the category difference and, say, categorize the entire transaction as the larger or more important category. But, this deliberately introduces error in the tracked data, rendering it useless for cases where the category totals need to be accurate, or, Split the transaction manually. This doesn't introduce error into the tracked data, but suffers another problem: It makes a lot of work. First, one would need to manually enter two (or more) top-level transactions instead of the single one with sub-amounts. Perhaps not that much more work than if a split were entered. Worse is when it comes time to reconcile: Now there are two (or more) transactions in the register, but the credit card statement has only one. Reconciling would require manually adding up those transactions from the register just to confirm the amount on the statement is correct. Major pain! I'd place split transaction capability near the top of the list of \"\"must have\"\" features for any finance management software.\"" }, { "docid": "220156", "title": "", "text": "\"What happened was that people would start an \"\"Internet\"\" company without any viable business plan, and investors would pour money. Any company with \"\".COM\"\" or \"\"eSomething\"\" or \"\"netXXX\"\" or whatever would get tons of money from investors, basically selling dreams of getting rich fast. The companies that flourished back than had often no sales and no income, yet they paid high salaries and provided very lucrative benefits to the employees. One of the examples is Mirabilis - company that invented the on-line messenger (ICQ), but provided free service and free products (there were no fees associated with using the ICQ messenger). They got bought for almost half a billion dollars when they had ZERO revenues, by AOL. AOL sold the company, ten years later, for less than 200 million dollars when at that time ICQ (or, as re-branded, AIM) was already providing revenue (from advertisements). Eventually, investors stopped pouring the money in (for various reasons, but amongst others the higher rates and the slower overall economy), and almost immediately companies started going out of business, and then it all blew up.\"" }, { "docid": "30912", "title": "", "text": "Withdrawals from a traditional 401(k) plan are always treated as cash income and the taxable portion is taxed at ordinary income tax rates, even if the money was held in stocks within the 401(k) plan and the amount withdrawn is equal to whatever capital gains you made by selling the stock within the 401(k) plan. If your plan permits you to take the distribution as stock shares (transferred to your taxable brokerage account), then, for tax purposes, it is treated as if you took a distribution of cash equal to the market price of the shares as of the day of the distribution and promptly bought the same number of shares in your brokerage account. And yes, if the 401(k) plan assets in your ex-employer's plan consists solely of pretax contributions and the earnings thereon, then the entire distribution is ordinary taxable income regardless of whether you sold the stock within the 401(k) plan or took a distribution of stock from the plan and promptly (or after a few days) sold it. The capital gains or losses (if any) from such a sale are, of course, outside the 401(k) plan and taxable accordingly. Finally, the 10% penalty for premature withdrawal from a traditional 401(k) will also apply if you are not 59.5 years of age or older (or maybe 55 since you are separated from service), and it will be computed on the entire distribution." } ]

[ { "docid": "261622", "title": "", "text": "Yes, it's a simple calculation. (x+0.0625x)=200 or x=200/1.0625 = $188.24 Technically $188.24 plus tax comes to $200.01. I would just eat the extra $0.01." } ]

[ { "docid": "286654", "title": "", "text": "\"In most jurisdictions, both the goods (raw materials) and the service (class) are being \"\"sold\"\" to the customer, who is the end user and thus the sale is subject to sales tax. So, when your friend charges for the class, that $100 is subject to all applicable sales taxes for the jurisdiction and all parent jurisdictions (usually city, county and state). The teacher should not have to pay sales tax when they buy the flowers from the wholesaler; most jurisdictions charge sales tax on end-user purchases only. However, they are required to have some proof of sales tax exemption for the purchase, which normally comes part and parcel with the DBA or other business entity registration paperwork in most cities/states. Wholesalers deal with non-end-user sales (exempt from sales tax) all the time, but your average Michael's or Hobby Lobby may not be able to deal with this and may have to charge your friend the sales tax at POS. Depending on the jurisdiction, if this happens, your friend may be able to reduce the amount the customer is paying that is subject to sales tax by the pre-tax value of the materials the customer has paid for, which your friend already paid the tax on.\"" }, { "docid": "55666", "title": "", "text": "I don't think there's much you can do. Losses from the sale of personal-use automobiles (used for pleasure, commuting, etc) are not deductible as capital losses. See IRS Tax Topic 409, end of the first paragraph. The expenses you incurred in owning and operating the car (insurance, fuel, maintenance, service plans, etc) are not deductible either. If you used it partly for business, then some of your expenses might be deductible; see IRS Tax Topic 510. This includes depreciation (decline in value), but only according to a standard schedule; you don't generally just get to deduct the difference between your buying and selling price. Also, you'd need to have records to verify your business use. But anyway, these deductions would apply (or not) regardless of whether you sell the car. You don't get your sales tax refunded when you resell the vehicle. That's why it's a sales tax, not a value-added tax. Note, however, that if you do sell it, the sales tax on this new transaction will be the buyer's responsibility, not yours. You do have the option on your federal income tax return to deduct the state sales tax you paid when you bought the car; in fact, you can deduct all the sales taxes you paid in that year. (If you have already filed your taxes for that year, you can go back and amend them.) However, this takes the place of your state income tax deduction for the year; you can't deduct both. See Tax Topic 503. So this is only useful if your sales taxes for that year exceeded the state income tax you paid in that year. Also, note that state taxes are not deductible on your state income tax return. Again, this deduction applies whether you sell the car or not." }, { "docid": "566205", "title": "", "text": "\"I'm not a financial expert, but saying that paying a $1 dividend will reduce the value of the stock by $1 sounds like awfully simple-minded reasoning to me. It appears to be based on the assumption that the price of a stock is equal to the value of the assets of a company divided by the total number of shares. But that simply isn't true. You don't even need to do any in-depth analysis to prove it. Just look at share prices over a few days. You should easily be able to find stocks whose price varied wildly. If, say, a company becomes the target of a federal investigation, the share price will plummet the day the announcement is made. Did the company's assets really disappear that day? No. What's happened is that the company's long term prospects are now in doubt. Or a company announces a promising new product. The share price shoots up. They may not have sold a single unit of the new product yet, they haven't made a dollar. But their future prospects now look improved. Many factors go into determining a stock price. Sure, total assets is a factor. But more important is anticipated future earning. I think a very simple case could be made that if a stock never paid any dividends, and if everyone knew it would never pay any dividends, that stock is worthless. The stock will never produce any profit to the owner. So why should you be willing to pay anything for it? One could say, The value could go up and you could sell at a profit. But on what basis would the value go up? Why would investors be willing to pay larger and larger amounts of money for an asset that produces zero income? Update I think I understand the source of the confusion now, so let me add to my answer. Suppose that a company's stock is selling for, say, $10. And to simplify the discussion let's suppose that there is absolutely nothing affecting the value of that stock except an expected dividend. The company plans to pay a dividend on a specific date of $1 per share. This dividend is announced well in advance. Everyone knows that it will be paid, and everyone is extremely confidant that in fact the company really will pay it -- they won't run out of money or any such. Then in a pure market, we would expect that as the date of that dividend approaches, the price of the stock would rise until the day before the dividend is paid, it is $11. Then the day after the dividend is paid the price would fall back to $10. Why? Because the person who owns the stock on the \"\"dividend day\"\" will get that $1. So if you bought the stock the day before the dividend, the next day you would immediately receive $1. If without the dividend the stock is worth $10, then the day before the dividend the stock is worth $11 because you know that the next day you will get a $1 \"\"refund\"\". If you buy the stock the day after the dividend is paid, you will not get the $1 -- it will go to the person who had the stock yesterday -- so the value of the stock falls back to the \"\"normal\"\" $10. So if you look at the value of a stock immediately after a dividend is paid, yes, it will be less than it was the day before by an amount equal to the dividend. (Plus or minus all the other things that affect the value of a stock, which in many cases would totally mask this effect.) But this does not mean that the dividend is worthless. Just the opposite. The reason the stock price fell was precisely because the dividend has value. BUT IT ONLY HAS VALUE TO THE PERSON WHO GETS IT. It does me no good that YOU get a $1 dividend. I want ME to get the money. So if I buy the stock after the dividend was paid, I missed my chance. So sure, in the very short term, a stock loses value after paying a dividend. But this does not mean that dividends in general reduce the value of a stock. Just the opposite. The price fell because it had gone up in anticipation of the dividend and is now returning to the \"\"normal\"\" level. Without the dividend, the price would never have gone up in the first place. Imagine you had a company with negligible assets. For example, an accounting firm that rents office space so it doesn't own a building, its only tangible assets are some office supplies and the like. So if the company liquidates, it would be worth pretty much zero. Everybody knows that if liquidated, the company would be worth zero. Further suppose that everyone somehow knows that this company will never, ever again pay a dividend. (Maybe federal regulators are shutting the company down because it's products were declared unacceptably hazardous, or the company was built around one genius who just died, etc.) What is the stock worth? Zero. It is an investment that you KNOW has a zero return. Why would anyone be willing to pay anything for it? It's no answer to say that you might buy the stock in the hope that the price of the stock will go up and you can sell at a profit even with no dividends. Why would anyone else pay anything for this stock? Well, unless their stock certificates are pretty and people like to collect them or something like that. Otherwise you're supposing that people would knowingly buy into a pyramid scheme. (Of course in real life there are usually uncertainties. If a company is dying, some people may believe, rightly or wrongly, that there is still hope of reviving it. Etc.) Don't confuse the value of the assets of a company with the value of its stock. They are related, of course -- all else being equal, a company with a billion dollars in assets will have a higher market capitalization than a company with ten dollars in assets. But you can't calculate the price of a company's stock by adding up the value of all its assets, subtracting liabilities, and dividing by the number of shares. That's just not how it works. Long term, the value of any stock is not the value of the assets but the net present value of the total future expected dividends. Subject to all sorts of complexities in real life.\"" }, { "docid": "330229", "title": "", "text": "\"I second DJClayworth's suggestion to wait and save a larger down-payment. I'll also add: It looks like you neglected to consider CMHC insurance in your calculation. When you buy your first home with less than 20% down, the bank will require you to insure the mortgage. CMHC insurance protects the bank if you default – it does not protect you. But such insurance does make a bank feel better about lending money to people it otherwise wouldn't take a chance on. The kicker is you would be responsible for paying the CMHC insurance that's protecting the bank. The premium is usually added on to the amount borrowed, since a buyer requiring CMHC insurance doesn't, by definition, have enough money up front. The standard CMHC premium for a mortgage with 5% down, or as they would say a \"\"95% Loan-to-Value ratio\"\" is 2.75%. Refer to CMHC's table of premiums here. So, if you had a down-payment of $17,000 to borrow a remaining $323,000 from the bank to buy a $340,000 property, the money you owe the bank would be $331,883 due to the added 2.75% CMHC insurance premium. This added $8883, plus interest, obviously makes the case for buying less compelling. Then, are there other closing costs that haven't been fully considered? One more thing I ought to mention: Have you considered saving a larger down-payment by using an RRSP? There's a significant advantage doing it that way: You can save pre-tax dollars for your down-payment. When it comes time to buy, you'd take advantage of the Home Buyer's Plan (HBP) and get a tax-free loan of your own money from your RRSP. You'd have 15 years to put the money back into your RRSP. Last, after saving a larger downpayment, if you're lucky you may find houses not as expensive when you're ready to buy. I acknowledge this is a speculative statement, and there's a chance houses may actually be more expensive, but there is mounting evidence and opinion that real estate is currently over-valued in Canada. Read here, here, and here.\"" }, { "docid": "224667", "title": "", "text": "Sure; you can deposit cash. A few notes apply: Does the source of cash need to be declared ? If you deposit more than $10,000 in cash or other negotiable instruments, you'll be asked to complete a form called a Currency Transaction Report (here's the US Government's guidance for consumers about this form). There's some very important information in that guidance document about structuring, which is a fairly serious crime that you can commit if you break up your deposits to avoid reporting. Don't do this. The linked document gives examples. Also don't refuse to make your deposit and walk away when presented with a CTR form. In addition, you are also required to report to Customs and Border Protection when you bring more than $10,000 in or out of the country. If you are caught not doing so, the money may be seized and you could be prosecuted criminally. Many countries have similar requirements, often with different dollar amounts, so it's important to make sure you comply with their laws as well. The information from this reporting goes to the government and is used to enforce finance and tax laws, but there's nothing wrong or illegal about depositing cash as long as you don't evade the reporting requirements. You will not need to declare precisely where the cash comes from, but they will want the information required on the forms. Is it taxable ? Simply depositing cash into your bank account is not taxable. Receiving some forms of income, whether as cash or a bank deposit, is taxable. If you seem to have a large amount of unexplained cash income, it is possible an IRS audit will want an explanation from you as to where it comes from and why it isn't taxable. In short, if the income was taxable, you should have paid taxes on it whether or not you deposit it in a bank account. What is the limit of the deposit ? There is no government limit. An individual bank may have their own limit and/or may charge a fee for larger deposits. You could always call the bank and ask." }, { "docid": "300133", "title": "", "text": "Both states will want to tax you. Your tax home is where you maintain a domicile, are registered to vote, etc. and you will probably want to keep this as MA since you state that MA is your permanent residence and you are staying in a rented place in PA. But be careful about voter registration; that is one of the items that can be used to determine your state of residence. OK, so if you and your spouse are MA residents, you should file jointly as residents in MA and as nonresidents in PA. Do the calculations on the nonresident return first, and then the calculations on the resident return. Typically, on a nonresident tax return, the calculations are effectively the following: Report all your income (usually AGI from the Federal return). Call this $X. Compute the PA state tax due on $X. Note that you follow the rules for nonresidents in doing this, not the calculations used by PA residents. Call the amount of tax you computed as $Y. What part of the total income $X is attributable to PA sources? If this amount is $Z, then you owe PA $Y times (Z/X). On the resident return in MA, you will likely get some credit for the taxes paid to PA, and this will reduce your MA tax burden. Usually the maximum credit is limited to the lesser of actual tax paid to PA and what you would have had to pay MA for the same income. As far as withholding is concerned, your employer in PA will withhold PA taxes as if you are a PA resident, but you can adjust the amount via the PA equivalent of IRS Form W4 so as to account for any additional tax that might be due because you will be filing as a nonresident. Else you can pay estimated taxes via the PA equivalent of IRS Form 1040ES. Similarly, your wife can adjust her withholding to account for the MA taxes that you will owe on the joint income, or you can pay estimated taxes to MA too. Note that it is unlikely that your employer in Pennsylvania will withhold Massachusetts taxes (and send them to Massachusetts) for you, e.g. if it is a ma-and-pa store, but there may be special deals available if your employer does business in both states, i.e. is a MA-and-PA store." }, { "docid": "249450", "title": "", "text": "\"Split transactions are indispensable to anybody interested in accurately tracking their spending. If I go to the big-box pharmacy down the road to pick up a prescription and then also grab a loaf of bread and a jug of milk while there, then I'd want to enter the transaction into my software as: I desire entering precise data into the software so that I can rely on the reports it produces. Often, I don't need an exact amount and estimated category totals would have been fine, e.g. to inform budgeting, or compare to a prior period. However, in other cases, the expenses I'm tracking must be tracked accurately because I'd be using the total to claim an income tax deduction (or credit). Consider how Internet access might be commingled on the same bill with the home's cable TV service. One is a reasonable business expense and deduction for the work-at-home web developer, whereas the other is a personal non-deductible expense. Were split transaction capability not available, the somewhat unattractive alternatives are: Ignore the category difference and, say, categorize the entire transaction as the larger or more important category. But, this deliberately introduces error in the tracked data, rendering it useless for cases where the category totals need to be accurate, or, Split the transaction manually. This doesn't introduce error into the tracked data, but suffers another problem: It makes a lot of work. First, one would need to manually enter two (or more) top-level transactions instead of the single one with sub-amounts. Perhaps not that much more work than if a split were entered. Worse is when it comes time to reconcile: Now there are two (or more) transactions in the register, but the credit card statement has only one. Reconciling would require manually adding up those transactions from the register just to confirm the amount on the statement is correct. Major pain! I'd place split transaction capability near the top of the list of \"\"must have\"\" features for any finance management software.\"" }, { "docid": "382725", "title": "", "text": "So some pretty complex math goes into play for stuff like this, notably increasing ad penetration in specific markets and demographics to test ad success - just like a TV ad. Usually TV ads are handled by network sales teams, so (let's ignore local advertisements) when you, me, and my dad all watch a show on ESPN at our homes, we're seeing the same ad for Gatorade. My dad shops at a grocery store in a location that's predominantly old people and families with a heavy lean toward $insert_sports_team in the suburbs, you and I live in the city (young professionals) but your city is notable for having a big tech sector and not a lot of sports interest, mine is big on banking and loves $other_sports_team. Based on sales numbers broken down by region and even stores through distributors if sales tick up at my dad's store for Gatorade but stay flat at your store and are down at mine they can assume the ad worked on older people with post-graduate education with incomes over $150k who love LeBron James, but didn't work so well with people in their 30s who are fans of the team LeBron is about to play in the big banking city, and that you didn't really care about the ad at all. The great thing about internet advertising is it's even more targeted. Dad, you, and I will almost never see the same ad for Gatorade on the internet, now- if they show one to people meeting my demographic at all. Your search history shows you don't care about sports, you don't work out, and you're big on technology- seeing the LeBron ad makes you think 'oh... it's that baseball guy?' Sales among your demographic stay flat at your store, mostly shopped by 'your type' of people. Sure- there are outliers like that gym rat in your building, but he's already buying the product and doesn't need convincing- they need a new strategy to hit you. My dad sees the ad on the AARP website because he's always searching for scores for his college team he played on 40 years ago. His school *invented* gatorade, so he's buying anyway but most of his neighborhood is old people who need Metamucil, not Gatorade. He's an outlier but if they want to get other old people the ad needs to start showing old footage of superstar baseball players from the 60s. When sales in my region drop because my city hates LeBron and is passionate about it they can make a lot of judgments based on the data. I got a little too 'up my own ass' with my anecdote but the point is targeted data from search history is basically TV ads on steroids, and just like anything else sales data is used to assess trends and ad success/failure." }, { "docid": "474705", "title": "", "text": "\"Time Value of Money - The simple calculation for this is FV = PV * (1+r)^N which reads The Future Value is equal to the Present Value times 1 plus the interest rate multiplied by itself by the number of periods that will pass. A simple way to look at this is that if interest rates were 5%/yr a dollar would be worth (1.05)^N where N is the number of years passing. The concept of compound interest cannot be separated from the above. Compounding is accounting for the interest on the interest that has accrued in prior periods. If I lend you a dollar at 6% simple interest for 30 years, you would pay me back $1 + $1.80 or $2.80. But - 1.06^30 = 5.74 so that dollar compounded at 6% annually for 30 years is $5.74. Quite a difference. Often, the time value of money is discussed in light of inflation. A dollar today is not the same dollar as 30 years ago or 30 years hence. In fact, inflation has eroded the value of the dollar by a factor of 3 over the past 30 years. An average item costing $100 would now cost $300. So when one invests, at the very least they try to stay ahead of inflation and seek additional return for their risk. One quirk of compounding is the \"\"rule of 72.\"\" This rule states that if you divide the interest rate into the number 72 the result is the number of years to double. So 10% per year will take about 7.2 years to double, 8%, 9 years, etc. It's not 100% precise, but a good \"\"back of napkin\"\" calculation. When people talk about the total payments over the thirty year life of a mortgage, they often ignore the time value of money. That payment even ten years from now has far less value than the same payment today.\"" }, { "docid": "257625", "title": "", "text": "\"This question and your other one indicate you're a bit unclear on how capital gains taxes work, so here's the deal: you buy an asset (like shares of stock or a mutual fund). You later sell it for more than you bought it for. You pay taxes on your profit: the difference between what you sold it for and what you bought it for. What matters is not the amount of money you \"\"withdraw\"\", but the prices at which assets are bought and sold. In fact, often you will be able to choose which individual shares you sell, which means you have some control over the tax you pay. For a simple example, suppose you buy 10 shares of stock for $100 each in January (an investment of $1000); we'll call these the \"\"early\"\" shares. The stock goes up to $200 in July, and you buy 10 more shares (investing an additional $2000); we'll call these the \"\"late\"\" shares. Then the stock drops to $150. Suppose you want $1500 in cash, so you are going to sell 10 shares. The 10 early shares you bought have increased in value, because you bought then for $100 but can now sell them for $150. The 10 late shares have decreased in value, because you bought them for $200 but can now only sell them for $150. If you choose to sell the early shares, you will have a capital gain of $500 ($1500 sale price minus $1000 purchase price), on which you may owe taxes. If you sell the late shares, you will have a capital loss of $500 ($1500 sale price minus $2000 purchase price is -$500), which you can potentially use to reduce your taxes. Or you could sell 5 of each and have no gain or loss (selling five early shares for $150 gives you a gain of $250, but selling five late shares for $150 gives you a loss of $250, and they cancel out). The point of all this is to say that the tax is not determined by the amount of cash you get, but by the difference between the sale price and the price you purchased for (known as the \"\"cost basis\"\"), and this in turn depends on which specific assets you sell. It is not enough to know the total amount you invested and the total gain. You need to know the specific cost basis (i.e., original purchase price) of the specific shares you're selling. (This is also the answer to your question about long-term versus short-term gains. It doesn't matter how much money you make on the sale. What matters is how long you hold the asset before selling it.) That said, many brokers will automatically sell your shares in a certain order unless you tell them otherwise (and some won't let you tell them otherwise). Often they will use the \"\"first in, first out\"\" rule, which means they will always sell the earliest-purchased shares first. To finally get to your specific question about Betterment, they have a page here that says they use a different method. Essentially, they try to sell your shares in a way that minimizes taxes. They do this by first selling shares that have a loss, and only then selling shares that have a gain. This basically means that if you want to cash out $X, and it is possible to do it in a way that incurs no tax liability, they will do that. What gets me very confused is if I continue to invest random amounts of money each month using Betterment, then I need to withdraw some cash, what are the tax implications. As my long answer above should indicate, there is no simple answer to this. The answer is \"\"it depends\"\". It depends on exactly when you bought the shares, exactly how much you paid for them, exactly when and how much the price rose or fell, and exactly how much you sell them for. Betterment is more or less saying \"\"Don't worry about any of this, trust us, we will handle everything so that your tax is minimized.\"\" A final note: if you really do want to track the details of your cost basis, Betterment may not be for you, because it is an automated platform that may do a lot of individual trades that a human wouldn't do, and that can make tracking the cost basis yourself very difficult. Almost the whole point of something like Betterment is that you are supposed to give them your money and forget about these details.\"" }, { "docid": "298985", "title": "", "text": "\"Is this amount an adequate starting amount to begin investing with? Yes. You can open an account at a brokerage with this amount. I'm not sure I would invest in individual stocks at this point. Which services should I use to start buying shares? (Currently my bank offers this service but I'm willing to use other sources) I can't make UK-specific recommendations, but I'd compare your bank's fees to those of a discount broker -- as well as the variety and level of service available. I would like to regularly increase the amount invested in shares. Is it worth doing this in say £200 increments? Take a look at the fees associated with each investment. Divide the fee by the increment to see what percent you'll lose to fees/commissions. Keep in mind that you have to gain more than that percentage to start earning a positive return on your investment. If you have access to fee-free automatic mutual fund investments, and you can commit to the £200 amount on a regular basis going forward, then this can be a completely free way of making these incremental investments. See also this answer on dollar cost averaging, and my comment on the other answer on that question for how fees impact returns. When buying shares should I focus on say two or three companies, or diversify more? I would diversify into two or three different index funds. Read up on asset allocation. For example, you might invest 1/3 of your balance into S&P 500 index fund, bond index fund, and MSCI EAFE index fund (but that's just a rough example, and not necessarily good for you). I highly recommend \"\"The Intelligent Asset Allocator\"\" by William Bernstein for excellent info on diversification and asset allocation.\"" }, { "docid": "120466", "title": "", "text": "I owned a restaurant for over 5 years. Sales tax was only collected on POST discount price, though every state that collects sales tax may have different laws regarding collection. For example, when a customer used a gift certificate, that did NOT reduce the amount that tax was collected on. Why? Because the restaurant at some point or another collected the full amount of the bill." }, { "docid": "168912", "title": "", "text": "To be in a health savings account you must be in a high deductible health plan, but the advantage is that the money rolls over from year to year if you don't use it, but it can only be used for qualified medical expenses. A flexible spending account has its advantage as well: You can use it for dependent care as well as medical expenses, but it's part of a cafeteria plan and you lose the money that you don't spend by the end of the year (rather than it simply rolling over to the next). Another benefit in a FSA is that if you allocate 200/mo to it, and you need to get surgery in January that costs 2400 dollars and then you lose your job in February, you just got 2400 dollars of surgery for 200 dollars pre-tax :) In summary: Move to France for real health care :) just kidding" }, { "docid": "516267", "title": "", "text": "To avoid having it become overly complicated, I suggest it be run as would a mutual fund. Mutual funds transact each evening to set a price. Transactions for purchases or sales are done at that price each evening. Initially, you have a dollar amount invested for each person. You can calculate the percent of the 'fund' each has, and, assuming the total is under $10K, 7 digits after the decimal accuracy is enough to track each share to the 1/10 cent. When new money is added, that night, you calculate the exact value of investments, and add the new funds, so each person now has a smaller share of the larger fund. If you wish, you can normalize this to 'share value' so my initial investment of $1000 is 100 shares regardless of the total amount invested. Then when new money comes in, the 'shares' increase as well. This may feel better as a declining percent may just seem awkward, even though that's the case." }, { "docid": "170318", "title": "", "text": "It depends on your investment profile but basically, dividends increase your taxable income. Anyone making an income will effectively get 'lower returns' on their investments due to this effect. If you had the choice between identical shares that either give a dividend or don't, you'll find that stock that pays a dividend has a lower price, and increases in value more slowly than stock that doesn't. (all other things being equal) There's a whole bunch of economic theory behind this but in short, the current stock price is a measure of how much the company is worth combined with an estimation of how much it will be worth in the future (NPV of all future dividends is the basic model). When the company makes profit, it can keep those profits, and invest in new projects or distribute a portion of those profits to shareholders (aka dividends). Distributing the value to shareholders reduces the value of the company somewhat, but the shareholders get the money now. If the company doesn't give dividends, it has a higher value which will be reflected in a higher stock price. So basically, all other things being equal (which they rarely are, but I digress) the price and growth difference reflects the fact that dividends are paying out now. (In other words, if you wanted non-dividend shares you could get them by buying dividend shares and re-investing the dividend as new shares every time there was a payout, and you could get dividend-share like properties by selling a percentage of non-dividend shares periodically). Dividend income is taxable as part of your income right away, however taxes on capital gains only happen when you sell the asset in question, and also has a lower tax rate. If you buy and hold Berkshire Hatheway, you will not have to pay taxes on the gains you get until you decide to sell the shares, and even then the tax rate will be lower. If you are investing for retirement, this is great, since your income from other sources will be lower, so you can afford to be taxed then. In many jurisdictions, income from capital gains is subject to a different tax rate than the rest of your income, for example in the US for most people with money to invest it's either 15% or 20%, which will be lower than normal income tax would be (since most people with money to invest would be making enough to be in a higher bracket). Say, for example, your income now is within the 25% bracket. Any dividend you get will be taxed at that rate, so let's say that the dividend is about 2% and the growth of the stock is about 4%. So, your effective growth rate after taxation is 5.5% -- you lose 0.5% from the 25% tax on the dividend. If, instead, you had stock with the same growth but no dividend it would grow at a rate of 6%. If you never withdrew the money, after 20 years, $1 in the dividend stock would be worth ~$2.92 (1.055^20), whereas $1 in the non-dividend stock would be worth ~$3.21 (1.06^20). You're talking about a difference of 30 cents per dollar invested, which doesn't seem huge but multiply it by 100,000 and you've got yourself enough money to renovate your house purely out of money that would have gone to the government instead. The advantage here is if you are saving up for retirement, when you retire you won't have much income so the tax on the gains (even ignoring the capital gains effect above) will definitely be less then when you were working, however if you had a dividend stock you would have been paying taxes on the dividend, at a higher rate, throughout the lifetime of the investment. So, there you go, that's what Mohnish Pabrai is talking about. There are some caveats to this. If the amount you are investing isn't large, and you are in a lower tax bracket, and the stock pays out relatively low dividends you won't really feel the difference much, even though it's there. Also, dividend vs. no dividend is hardly the highest priority when deciding what company to invest in, and you'll practically never be able to find identical companies that differ only on dividend/no dividend, so if you find a great buy you may not have a choice in the matter. Also, there has been a trend in recent years to also make capital gains tax progressive, so people who have a higher income will also pay more in capital gains, which negates part of the benefit of non-dividend stocks (but doesn't change the growth rate effects before the sale). There are also some theoretical arguments that dividend-paying companies should have stronger shareholders (since the company has less capital, it has to 'play nice' to get money either from new shares or from banks, which leads to less risky behavior) but it's not so cut-and-dried in real life." }, { "docid": "105543", "title": "", "text": "So long as you don't hate what you are doing, I'd say the price is somewhere in the neighborhood of $100-200 year of income to be worth the bookkeeping. I'd only say more than that if you have a ridiculously complex tax situation, you have an irrational hatred of filling out a few forms once a year, or if you just have such a stupidly large amount of money that even having a few hundred dollars a year to donate to people in desperate need just doesn't mean anything to you. Or if you are under special income limits and just a few dollars of income would put you in a bad situation (like a loss of medical benefits, etc). The reason is actually quite simple: the taxes aren't really that hard or time consuming. I've handled three self-employment businesses in my life, and unless you are trying to itemize every last dollar of business deductions and expenses, or you really want to scrape out every last cent from minor deductions that require considerable extra paperwork, it's a few extra forms on your taxes. Most of the extra taxes are as a percentage, so it reduces the benefits, but really not by much. You don't have to make it extra complicated if the extra complexity doesn't give you a big payoff in benefit. I would suggest you pick the simplest imaginable possible system for accounting for this, so that you might only spend an extra few hours per year on the books and taxes. Don't keep $10 sheet music receipts if you feel it's a burden to try to itemize expenses, etc. Instead, the decision should be if you (or in this case your wife) would enjoy doing it, and bringing in money can just be nice in it's own way. I'd suggest she keep some out for little extra niceties, earmark some for feel-good charitable giving, and then of course sock away the rest. Don't let extra income be an unnecessary burden that prevents you from getting it in the first place." }, { "docid": "308402", "title": "", "text": "Now, technically she is supposed to pay rent, but legally I am not sure. Her name is not there in the rental agreement so she is not eligible to pay the rent. Since, she is already living in the same house, there is some basic courtesy to pay the $200. Now thing here is how are we going to divide it? If she is paying $200, will that be deducted out of your room mate's or yours. Fact of the matter is, who is taking more space and who is paying for it, since there is no change to your space, you should continue paying the same amount, because there is no change in your space as you mentioned before. Moreover the fact that she is paying the utilities is good enough because that is shared by all 3. So keep the arrangement like somewhat like this, you pay half the rent + utilities, and your friend and his girlfriend will pay their share of the rent which is equal to yours, and they will share the utilities too. Hope this makes sense. Thanks, Thenicejerk" }, { "docid": "420544", "title": "", "text": "If he asked you to invest his money with certain objectives which resulted in you buying specific stocks for him with his money, then sell all the stocks which you bought with his money and the capital and profits to him. You may want to calculate the trading fees that you incurred while buying these specific stocks and taxes from the sale of these stocks, withholding them to over the trading fees that you have already paid and the taxes that you might still need to pay. If you traded with his money no different than yours, then I would think of your investment account as a black box. Calculate the initial money that you both invested at the time you added his capital to the account, calculate how much it all is currently worth, then liquidate and return a percentage equal to that of his initial investment. You can account for trading fees and taxes, subtracting by the same percentage." }, { "docid": "577082", "title": "", "text": "\"Ok, I actually went and looked at the income statements for GE. They did not get a refund. They did not get a check from the government for the refund. This all took place between the balance sheet and the income statement. It goes down like this: GE has on their books \"\"Deferred Tax Asset\"\" for XX billion dollars. This came from a year when they had an operating loss. They are carrying this loss forward as a deduction on their taxes (that's what makes it an asset, it's an asset to the company as it decreases their taxes). For years, they've been reducing that Deferred Tax Asset account, and adding that amount to their \"\"Income After Tax\"\" amount. At the end of 2009, the amount they reduced that Deferred Tax Asset account by just so happened to be larger than the amount they decreased their income by due to taxable income that year. For reference, their end of fiscal year 2009 pre-tax income is $9.864B, and their post tax income is $11.006B. No one wrote them a check for the difference. It all comes from their own books. If anyone else wants to look at the actual data and draw their own conclusions: https://www.google.com/finance?q=NYSE%3AGE&amp;fstype=ii&amp;ei=QSxpUNi4Kc3LiQKOZw On that page, click \"\"Annual Data\"\".\"" } ]

[ { "docid": "331332", "title": "", "text": "Its actually a good thing. The #1 factor to your credit score is your credit utilization. So if you don't spend money unwisely and they don't have any annual fee I would keep them and use them each twice a year to keep them in your credit mix." } ]

[ { "docid": "61734", "title": "", "text": "\"would it make sense to set up multiple bank accounts to avoid going above their thresholds? Quite possiblly yes but you need to pay attention to the fine print. I don't know what the situation is in poland but in the UK accounts that pay high interest often have strings attached. For example the santander 123 current account pays very good interest but it has an account fee and some other requirements that are difficult to meet if you are not using it as your \"\"main current account\"\". You need to read the terms carefully, if you go over the threshold does the lower rate only apply to money over the threshold? or does it apply to all the money in the account? Are there any other restrictions on how you use the account. Also I don't know if poland has any provisions for limited tax-advantaged savings (like the ISA scheme we have in the UK). If it does then that can add further complications. How to calculate how to maximize the profit here? Well in theory you would get the best account you can and fill it to the threshold. Then the next best account and so-on. You would move any interest paid in an account that was already full to the threshold to the best non-full account (or if the account strongly peanalises going over perhaps move an ammount of money equivilent to the interest just before the interest is paid). In practice that is a lot of work, so if the rates on the different accounts are similar you may want to leave some margin for interest or (in the case of an account that pays the lower rate on the overage while still paying the higher rate on money below the threshold) accepting that some of your money will earn slightly less than idea. Another option some accounts may offer is just to pay the interest to another account, avoiding the need to move it yourself. Finally you should check out your government's limits for compensation in the event of banks going bust. As a general rule you don't want to put more than that ammount in a single bank even if doing so would get you the best interest.\"" }, { "docid": "80826", "title": "", "text": "Starting with the Dummy Forex account is a wise move for every new forex trader. Do forex trading with a dummy account at least for a year. Startling directly with real money is a terribly costly move. Therefore, it is wise to have a solid trading strategy to execute. Make sure that your strategy is realistic and practical. Most importantly, using your dummy forex account, it is must for you to make at least one or two profits in a year. At last, be sure to invest money that you can recover without any tension." }, { "docid": "490831", "title": "", "text": "Do not try to deposit piece wise. Either use the system in complete transparence, or do not use it at all. The fear of having your bank account frozen, even if you are in your rights, is justified. In any case, I don't advise you to put in bank before reaching IRS. Also keep all the proof that you indeed contacted them. (Recommended letter and copy of any form you submit to them) Be ready to also give those same documents to your bank to proove your good faith. If they are wrong, you'll be considered in bad faith until you can proove otherwise, without your bank account. Do not trust their good faith, they are not bad people, but very badly organized with too much power, so they put the burden of proof on you just because they can. If it is too burdensome for you then keep cash or go bitcoin. (but the learning curve to keep so much money in bitcoin secure against theft is high) You should declare it in this case anyway, but at least you don't have to fear having your money blocked arbitrarily." }, { "docid": "7944", "title": "", "text": "\"I added \"\"Shared money in account\"\" (SMIA) as sub-account of my bank checking (CA) account and moved current difference to that account so total of CA was not changed but now private and shared money is separated. My cases would be handled the following The only downside I see is that now my balance in CA transaction log do not match exactly with bank so reconciliation will be slightly harder.\"" }, { "docid": "267128", "title": "", "text": "It will not affect your tax bracket so long as he files his taxes. It will not affect your credit negatively so long as the joint account takes out no debts. If it does take out debts, then someone would need to pay them to avoid negative credit. Ideally debts should take signatures from both of you (ask the bank). The IRS will not automatically assume that the only reason that two people might have a joint account is illegal activities. If he withdraws money from the account in such a way to cause an overdraft, you might be responsible for it. However, it sounds like he isn't supposed to be withdrawing money from that account. So that's a potential problem but not a guaranteed problem. Make sure that you have the power to close the account without him (so if you break up later, you can take your name off unilaterally). Realize that you might have to pay a little to close the account if he overdraws it. If possible, have the bank refuse overdrafts. Consider a savings account rather than a checking account. The rules may better fit what you want to do. In particular, if you are limited to transfers, that's safer than checks. Schedule a time to talk to someone at the bank about the account. Ask them to leave plenty of time because you have questions. Explain what you want and let them tell you how to structure the account." }, { "docid": "439779", "title": "", "text": "I want to shop in the currency that will be cheapest in CAD at any given time. How do you plan to do this? If you are using a debit or credit card on a CAD account, then you will pay that bank's exchange rate to pay for goods and services that are billed in foreign currency. If you plan on buying goods and services from merchants that offer to bill you in CAD for items that are priced in foreign currency (E.g. buying from Amazon.co.uk GBP priced goods, but having Amazon bill your card with equivalent CAD) then you will be paying that merchant's exchange rate. It is very unlikely that either of these scenarios would result in you paying mid-market rates (what you see on xe.com), which is the average between the current ask and bid prices for any currency pair. Instead, the business handling your transaction will set their own exchange rate, which will usually be less favorable than the mid-market rate and may have additional fees/commission bolted on as a separate charge. For example, if I buy 100 USD worth of goods from a US vendor, but use a CAD credit card to pay, the mid-market rate on xe.com right now indicates an equivalent value of 126.97 CAD. However the credit card company is more likely to charge closer to 130.00 CAD and add a foreign transaction fee of maybe $2-3, or a percentage of the transaction value. Alternatively, if using something like Amazon, they may offer to bill the CAD credit card in CAD for those 100 USD goods. No separate foreign transaction fee in this case, but they are still likely to exchange at the less favorable 130.00 rate instead of the mid-market rates. The only way you can choose to pay in the cheapest equivalent currency is if you already have holdings of all the different currencies. Then just pay using whichever currency gets you the most bang for your buck. Unless you are receiving payments/wages in multiple currencies though, you're still going to have to refill these accounts periodically, thus incurring some foreign transaction fees and being subject to the banker's exchange rates. Where can I lookup accurate current exchange rates for consumers? It depends on who will be handling your transaction. Amazon will tell you at the checkout what exchange rate they will apply if you are having them convert a bill into your local currency for you. For credit/debit card transactions processed in a different currency than the attached account, you need to look at your specific agreement or contact the bank to see which rate they use for daily transactions (and where you can obtain these rates), whether they convert on the day of the transaction vs. the day it posts to your account, and how much they add on ($ and/or %) in fees and commission." }, { "docid": "477357", "title": "", "text": "I have also tried Mvelopes in the past, and my experiences match yours. I currently use the desktop version of YNAB:You Need a Budget (YNAB 4), and I like it much better. Where we failed after a while with Mvelopes, we are succeeding with YNAB, and have been now for the last 3.5 years. I don't want this to sound like a commercial for YNAB (I will give important caveats about YNAB later), but here is why I believe we have done better now with YNAB than before with Mvelopes. I hope that these reasons will be useful to you when you are evaluating your next options. As you said, we also found Mvelopes' interface to be slow and glitchy. YNAB 4 is a desktop app (with synching capabilities) that we found to be much quicker and easier to work with than Mvelopes' Flash-based interface. (That was 4 years ago; hopefully Mvelopes has redone their interface since then.) We also struggled with Mvelopes' connection with our banks. With YNAB 4, there is no connection to the bank: everything has to be entered manually. I initially thought this might be worse, but for us it has been better. I can either enter transactions as they happen on the mobile app, or I can hold on to receipts and enter them every day or two in the evening, categorizing as I go. We always have an up-to-date picture of our finances, and we don't have to mess with trying to match up downloaded transactions that have been screwed up, duplicated, or are missing. We aren't really using YNAB much differently than we were using Mvelopes, but we have learned a few tricks that I think have contributed to our success. One of the things we do differently is that I don't obsess about the cash accounts too much. Cash accounts, for us, are the hardest to keep track of, because most of our cash transactions don't have a receipt: we are paying a friend or family member for something, or leaving a tip, or something like that which we forget about when it comes time to enter into the software. As a result, the cash account balances get off. I periodically enter a correcting transaction to get the balances right, and have a budget category specifically for this that we have to put money in for these unknown transactions. Fortunately for us, our cash spending is a small percent of our total spending (we usually pay with a credit card) so this bit of untracked spending isn't that big of a concern. With YNAB, the current month's budget is right in front of you as soon as you open up the app, which makes it easy to adjust your budget during the month, if necessary. With Mvelopes (at least how their app worked 4 years ago), the budget was somewhat hidden after you funded your budget categories, and it was a bit of a pain to move money around between categories. The ability to adjust your budget in the middle of the month is crucial; if you don't do that, you'll get frustrated the first time you find that you don't have enough money in a category for something you need. YNAB makes it very easy to move money around inside your budget. That having been said, you need to be aware that the current version of YNAB is not a desktop application but a web-based app. YNAB 4, the old desktop version which we have been using, is officially unsupported as of the end of 2016. However, I see that it is still available for sale, if you are interested in it, the YNAB4 help site is still up, and the mobile app you would need to work with it on your phone (called YNAB Classic) is still in the app store. As I said, the current YNAB is now a web app, complete with automatic downloading of transactions from your bank. I have no experience with it (other than playing around with it a little), and so I can't tell you how quick the interface is or how well the auto-downloading of transactions works. As an alternative, another web-based solution is EveryDollar, from Dave Ramsey's company. (I have never tried it.) The advantage of this one is that it is free if you choose not to link it to your banks; the automatic downloading of transactions is a paid feature. I wrote an answer a couple of years ago in which I describe two different approaches that budgeting software packages tend to take. I'm not familiar with Buxfer, so I don't know which approach it takes, but perhaps that answer will help you evaluate all of your software options. On the behavior side of things, besides the relaxing of the cash accounting I mentioned above, we also involve my wife a little less in the budgeting process than we used to. (This is by her choice!) I am the one who enters all the transactions into the software (she hands me all her receipts), I reconcile the accounts at the end of the month, and I set the budget for the next month. We have been doing this long enough now that she knows what the budget is, and we only need to discuss it if we want to do something different with the budget than we have been doing in the past. She has the YNAB app on her phone and can see where we are at with all of our budget categories." }, { "docid": "77248", "title": "", "text": "\"You are right on track with your idea of setting up a separate account for invoiced income. Create a new account with the type other asset and call it \"\"Receivables\"\" (or something similar). Every time you invoice a client, enter a credit to this account with the amount of the invoice. Once the client pays and you deposit a check, enter a transfer from the \"\"Receivables\"\" account to the bank account. EDIT I overlooked that you wish to account for not-yet-invoiced income. I think that's a bad idea. It will become confusing and will give you the false sense that your financial condition is better than it really is. There are plenty of stories about businesses that have stellar sales, but fail because of lack of cash flow (the business' bills become due before it gets paid by its own customers).\"" }, { "docid": "415574", "title": "", "text": "So does Japan's. Japan Post is a bank as well as a post office. Which is something that would be a big boost to low income people who may have difficulty opening bank accounts. USPS bank accounts could be a kind of default for people to choose where their paychecks are deposited, allowing people to avoid those awful, awful check cashing sharks. Of course, the check cashing sharks have plenty of money to lobby against this, so it won't happen anytime soon." }, { "docid": "147837", "title": "", "text": "\"One way to look at insurance is that it replaces an unpredictable expenses with a predictable fees. That is, you pay a set monthly amount (\"\"premium\"\") instead of the sudden costs associated with a collision or other covered event. Insurance works as a business, which means they intend to make a substantial profit for providing that service. They put a lot of effort in to measuring probabilities, and carefully set the premiums to get make a steady profit*. The odds are in their favor. You have to ask yourself: if X happened tomorrow, how would I feel about the financial impact? Also, how much will it cost me to buy insurance to cover X? If you have a lot of savings, plenty of available credit, a bright financial future, and you take the bus to work anyway, then totaling your car may not be a big deal, money wise. Skip the insurance. If you have no savings, plenty of debt, little prospects for that improving, and you depend on your car to get to work just so you can pay what you already owe, then totaling your car would probably be a big problem for you. Stick with insurance. There is a middle ground. You can adjust your deductible. Raise it as high as you can comfortably handle. You cover the small stuff out of pocket, and save the insurance for the big ticket items. *Insurance companies also invest the money they take as premiums, until they pay out a claim. That's not relevant to this discussion, though.\"" }, { "docid": "264565", "title": "", "text": "\"The terms debit and credit come from double-entry book-keeping. In this system, every transaction is applied against two accounts: it debits one and credits the other by equal amounts. (Or more technically, it affects two or more accounts, and the total of the credits equals the total of the debits.) Whether a debit or a credit adds or subtracts from the balance depends on the type of account. The types of accounts were defined so that it is always possible to have these matching debits and credits. Assets, like cash or property that you own, are \"\"debit accounts\"\", that is, a debit is an increase in the balance of the account. Liabilities, like money you owe, are \"\"credit accounts\"\", that is, a credit is an increase. To get into all the details would require giving a tutorial on double-entry book-keeping, which I think is beyond the scope of a forum post. By a quick Bing search I find this one: http://simplestudies.com/double-entry-accounting-system.html. I haven't gone through it so I can't say if it's a particularly good tutorial. There are plenty of others on the Web and in bookstores. Note that the terminology can be backwards when someone you're doing business with is describing the account, because their viewpoint may be the opposite of yours. For example, to me, my credit card is a liability: I owe the bank money. So when I post a charge, that's a credit, and when I pay it off, that's a debit. But to the bank, my account is an asset: the customer (me) owes them money. So to the bank, a charge is a debit and a payment is a credit.\"" }, { "docid": "11429", "title": "", "text": "First, make sure you are contacting the bank directly - use an old invoice you have on hand with a phone number direct to the bank and call them. Do not use the provided number, or you may wind up being pulled into a scam (It is entirely possible that the bank is also confused at this point - so you should not rely on the number provided at all). Second, once you can confirm that your account is being closed, find out when it is being closed so you know when you need to act on it - it's possible you still have access to your account, and do not need to launch into a panic just yet. Third, get the bank to explain exactly why they are closing your account - make it clear that if they cannot explain, you will be forced to transfer to a new account and close business with them permanently - this is not a threat, this is a matter of fact because... Finally, if you cannot keep your account open, find a different bank and open up a new account. Frankly, if your current bank is closing your account and only managed to get a letter out to you a month late, you should probably find a new bank. If instead they simply cannot figure out if your bank account is closed or not, this is also a bad sign and you may want a new bank account anyway. But please, go through these steps in order, because you need to verify with your bank what is going on. Keep @Brick 's answer in mind as well, in case you need to get your money out of your account quickly." }, { "docid": "452540", "title": "", "text": "If the checking account is in a FDIC insured bank or a NCUA insured Credit Union then you don't have to worry about what happens if the bank goes out of business. In the past the government has made sure that any disruption was minimal. The fraud issue can cause a bigger problem. If they get a hold of your debit card, they can drain your account. Yes the bank gives you fraud protection so that the most you can lose is $50 or $500; many even make your liability $0 if you report it in a timely manor. But there generally is a delay in getting the money put back in your account. One way to minimize the problem is to open a savings account,it also has the FDIC and NCUA coverage . The account may even earn a little interest. If you don't allow the bank to automatically provide an overdraft transfer from savings to checking account, then the most they can temporarily steal is your checking account balance. Getting a credit card can provide additional protection. It also limits your total losses if there is fraud. The bill is only paid once a month so if they steal the card or the number, they won't be able to drain the money in the bank account. The credit card, if used wisely can also start to build a positive credit file so that in a few years you can get a loan for a car or a place to live. Of course if they steal your entire wallet with both the credit and the debit card..." }, { "docid": "40338", "title": "", "text": "\"If you are going to keep your US bank account for any period of time, the very best option I know of is to withdraw Euros from an atm using your US card once you are in Germany. I draw on my US account regularly (I'm in Munich) and always get the going \"\"mid market\"\" exchange rate, which is better than what you get from a currency conversion service, transfer agency, or bank transfer, and there are no fees from the atm or my bank for the currency conversion or withdrawal. Of course you should check with your bank to verify their rules and fees for atm use internationally. It would also be wise to put a travel advisory on your account to be sure your transaction is not denied because you are out of country.\"" }, { "docid": "142613", "title": "", "text": "For cross-border transactions like this you should really take advice from an accountant or lawyer who specialises in them, because there may be tax treaties between the two that complicate the situation. However, in general borrowing money doesn't have tax implications in itself, and there's no limit as such. You do need to consider the following points: If this is zero or less than you could plausibly get commercially, your friend is effectively giving you the difference between the interest rates. If your friend in Korea has a connection to the US she or he may be subject to the gift tax. In practice this only matters if the total amount of gifts they give to anyone over their lifetime plus the size of their estate over their lifetime is large. Non US-persons are exempt though if the amounts are large enough they may need to be reported. Financial institutions are generally required to report large international transactions (typical thresholds are around $10,000) for scrutiny by the government, in case the transaction is related to something illegal. This shouldn't be a problem in itself but you should be aware it'll happen. It shouldn't make any difference how you transfer the money, but it would be wise to get as much documentation as possible in case of later questions. The best place to get further advice would be the US bank you'll be transferring the money into initially. This is really a question for a lawyer given the cross-border nature of the transaction, but you and your friend should sign a contract specifying how and when the loan will be repaid. Your friend should also consider setting up the loan as a mortgage and taking a charge on your home. Even if your friend trusts you, a charge on the home will protect him or her in the event of you having financial problems and another creditor laying claim to the home." }, { "docid": "423639", "title": "", "text": "In Germany you can register a Einzelunternehmen and receive payments into your personal bank account with a German bank. Apple will certainly be able to transfer to accounts in Germany as payments go via the European SEPA standard. Tax wise if you are living in Germany you will need to pay tax in Germany, so this is really the easiest way of doing it." }, { "docid": "5644", "title": "", "text": "\"Your instructor's numbers do not seem to have any basis in current reality. At this page you can see a comparison of interest rates offered by banks and credit unions. In the most recent table for June 2014, banks paid an average interest rate of 0.12 percent on savings accounts, while credit unions paid an average of 0.13 percent. If you look back further, you will see that interest rates paid by banks and credit unions are generally comparable. Credit union rates tend to be a little bit higher, but certainly not 7 times higher. The last time any financial institution paid as much as 15% on a savings account would probably be the early 1980s. You can see here a historical chart of the \"\"prime rate\"\" for lending. Savings account rates (at either banks or credit unions) would typically be lower. (This is based on the US, in accordance with your tag. Interest rates in other places, especially developing countries with less stable currencies, can be dramatically different.)\"" }, { "docid": "528186", "title": "", "text": "\"Your credit-score is concerned with your current credit accounts (credit-cards, HELOC, loans, mortgage, et cetera) - your Current/Checking bank account is not a credit account so it is not reported to the credit agencies. Granted, being overdrawn is effectively the same as having a very expensive loan from the bank- however banks do not routinely report these to the credit-agencies - and of course, if you fail to pay overdraft fees in a timely manner then your bank will take it to collections or possibly even get a judgement against you, and that will be reported in your credit report (under the \"\"Derogatory remarks\"\" section). I cannot find any sources as to whether repeated but always-paid overdrafts will be reported - but certainly your bank isn't complaining because they'll be making lots of money from you. (Via https://www.thebalance.com/will-a-bank-overdraft-hurt-my-credit-score-960554).\"" }, { "docid": "373223", "title": "", "text": "There is (at least) one service that allows you to convert USD, GBP and EUR at the interbank spot rate, and make purchases using a prepaid MasterCard in many more currencies (also at the interbank rate). They currently don't charge any fees (as of September 2015). You could use your US prepaid card to fund your account with Revolut and then spend them in your local currency (HRK?) without fees (you can check the current USD/HRK rate with their currency calculator); you can also withdraw to non-EUR SEPA-enabled bank accounts, but then your bank would charge you for the necessary currency conversion (both by fees and their exchange rate). If you have a bank account in EUR, you could alternatively convert your USD balance to EUR and then withdraw that to your EUR bank account. If your US prepaid card has a corresponding bank account which can be used for ACH direct debit or domestic wire transfers (ask the issuer if you are unsure), TransferWise or a similar service might also be an option; they allow you to fund a transaction using one of those methods and then credit an account in" } ]

[ { "docid": "417301", "title": "", "text": "You should not open bank accounts just to get additional credit cards. You should be careful about carrying too many credit cards and incurring too much debt as you could find yourself in a situation whereby you may not be able to pay off your monthly interest, much less the principal balance. Credit cards are not insurance. With many years of experience under my belt I can tell you that the best approach is to live within (or below) your means and avoid carrying a balance on credit cards. I carry only one credit card (really a charge card) and I pay off the balance every month. Treat a credit card as a 30 day interest free loan and pay your balance off in full every month...as you progress through life you will save yourself a lot of heartache (and money) if you take this approach." } ]

[ { "docid": "272328", "title": "", "text": "It's never too early, but age 3 is when we started a piggy bank. Age 4 is when we opened a bank account. When you go shopping with your children, discuss what items cost (such as bread, milk, books, etc.) Start teaching them that everything has a value...then relate it to how much they have saved. Kids need to learn 3 basic things from their parents: how to save/invest, how to spend wisely, how to share/donate" }, { "docid": "364378", "title": "", "text": "As an LLC you are required to have a separate bank account (so you can't have one account and mix personal and business finances together as you could if you were a sole trader) - but there's no requirement for it to be a business bank account. However, the terms and conditions of most high street bank personal current accounts specifically exclude business banking, so unless you could find one that would allow it, you'd have to open a business bank account." }, { "docid": "72024", "title": "", "text": "\"Not all call options that have value at expiration, exercise by purchasing the security (or attempting to, with funds in your account). On ETNs, they often (always?) settle in cash. As an example of an option I'm currently looking at, AVSPY, it settles in cash (please confirm by reading the documentation on this set of options at http://www.nasdaqomxtrader.com/Micro.aspx?id=Alpha, but it is an example of this). There's nothing it can settle into (as you can't purchase the AVSPY index, only options on it). You may quickly look (wikipedia) at the difference between \"\"American Style\"\" options and \"\"European Style\"\" options, for more understanding here. Interestingly I just spoke to my broker about this subject for a trade execution. Before I go into that, let me also quickly refer to Joe's answer: what you buy, you can sell. That's one of the jobs of a market maker, to provide liquidity in a market. So, when you buy a stock, you can sell it. When you buy an option, you can sell it. That's at any time before expiration (although how close you do it before the closing bell on expiration Friday/Saturday is your discretion). When a market maker lists an option price, they list a bid and an ask. If you are willing to sell at the bid price, they need to purchase it (generally speaking). That's why they put a spread between the bid and ask price, but that's another topic not related to your question -- just note the point of them buying at the bid price, and selling at the ask price -- that's what they're saying they'll do. Now, one major difference with options vs. stocks is that options are contracts. So, therefore, we can note just as easily that YOU can sell the option on something (particularly if you own either the underlying, or an option deeper in the money). If you own the underlying instrument/stock, and you sell a CALL option on it, this is a strategy typically referred to as a covered call, considered a \"\"risk reduction\"\" strategy. You forfeit (potential) gains on the upside, for money you receive in selling the option. The point of this discussion is, is simply: what one buys one can sell; what one sells one can buy -- that's how a \"\"market\"\" is supposed to work. And also, not to think that making money in options is buying first, then selling. It may be selling, and either buying back or ideally that option expiring worthless. -- Now, a final example. Let's say you buy a deep in the money call on a stock trading at $150, and you own the $100 calls. At expiration, these have a value of $50. But let's say, you don't have any money in your account, to take ownership of the underlying security (you have to come up with the additional $100 per share you are missing). In that case, need to call your broker and see how they handle it, and it will depend on the type of account you have (e.g. margin or not, IRA, etc). Generally speaking though, the \"\"margin department\"\" makes these decisions, and they look through folks that have options on things that have value, and are expiring, and whether they have the funds in their account to absorb the security they are going to need to own. Exchange-wise, options that have value at expiration, are exercised. But what if the person who has the option, doesn't have the funds to own the whole stock? Well, ideally on Monday they'll buy all the shares with the options you have at the current price, and immediately liquidate the amount you can't afford to own, but they don't have to. I'm mentioning this detail so that it helps you see what's going or needs to go on with exchanges and brokerages and individuals, so you have a broader picture.\"" }, { "docid": "373223", "title": "", "text": "There is (at least) one service that allows you to convert USD, GBP and EUR at the interbank spot rate, and make purchases using a prepaid MasterCard in many more currencies (also at the interbank rate). They currently don't charge any fees (as of September 2015). You could use your US prepaid card to fund your account with Revolut and then spend them in your local currency (HRK?) without fees (you can check the current USD/HRK rate with their currency calculator); you can also withdraw to non-EUR SEPA-enabled bank accounts, but then your bank would charge you for the necessary currency conversion (both by fees and their exchange rate). If you have a bank account in EUR, you could alternatively convert your USD balance to EUR and then withdraw that to your EUR bank account. If your US prepaid card has a corresponding bank account which can be used for ACH direct debit or domestic wire transfers (ask the issuer if you are unsure), TransferWise or a similar service might also be an option; they allow you to fund a transaction using one of those methods and then credit an account in" }, { "docid": "121230", "title": "", "text": "\"Here are some things you want to look at for evaluating a bank or credit union for your regular spending accounts: Convenience. Do they have a branch in a convenient location for you? Do they have no-fee ATMs near you? Website. If you are like me, you will spend more time on the bank's website than you do inside a branch. Some bank's websites are great, some are terrible. Unfortunately, this is generally difficult to evaluate until you actually get an account. You want a website that is easy to use. It should allow you to easily move money between your accounts, get instant lists of transactions, show you your monthly statements, and have a billpay feature that works well. If you use budgeting software that interfaces online with your bank, you want to ensure that it works well with your bank. Fee structure. Some banks will nickel-and-dime you to death. Watch out for minimum balance fees and ATM fees. Banks and credit unions usually have a fee schedule page on their website that lists every fee they charge, making it easy to compare different banks. I would not be very concerned about interest rates for savings. Currently, all savings accounts have a universally terrible interest rate. Therefore, I wouldn't base my bank choice on the interest rate. Sure, one might offer double the interest rate of another, but double \"\"next-to-nothing\"\" is still \"\"next-to-nothing.\"\" When you accumulate enough savings that you want to start maximizing your earnings, you can look for a better rate at another bank to move your savings to, and you can keep your checking account at the bank with the best convenience and fee structure. In my limited experience, I have had better luck with credit unions than with banks when it comes to fees.\"" }, { "docid": "439617", "title": "", "text": "I think it's wise to account for those inevitable but unpredictable expenses like car/house repairs and abnormal medical bills when deciding on your emergency fund amount. So if you average $100/month for car repairs, and you have a 6-month emergency fund, then part of that fund is $600 for car repairs. If your total annual out of pocket for health insurance is $5,000/year, then emergency fund gets $2,500 and so on. This way, you add cushion to your emergency fund to handle those unpredictable but inevitable expenses without setting up a bunch of separate accounts. It doesn't have to be inflexible either, I know my furnace and air conditioner are way past their expected life, so I'm keeping a larger than normal emergency fund. Ultimately it's personal preference, to me, cash is all the same no matter what account it's in, but other people do best by keeping some logical/physical separation of funds intended for different purposes." }, { "docid": "378024", "title": "", "text": "\"If it is planned, then one can get a Bankers Check payable overseas; if destination is known. 1.) What will happen to the money? It will eventually go to Government as escheating. Unlcaimed.org can help you trace the funds and recover it. 2.) Will the banks close the accounts? 3.) After how much time will the banks close the accounts? Eventually Yes. If there is no activity [Note the definition of activity is different, A credit interest is not considered as activity, a authentic phone call / correspondence to change the address or any servicing request is considered activity] for a period of One year, the account is classified as \"\"Dormant\"\". Depending on state, after a period of 3-5 years, it would be inactive and the funds escheated. i.e. handed over to Government. 4.) Is there anything else to do? Any ideas? Before leaving? Try keeping it active by using internet banking or credit / debit cards linked to the account. These will be valid activities. 5.) Is there any way to send a relative to the US with any kind of paper of power, to unfreeze the accounts? 6.) The banks say they would need a power of attorney, but does that person actually need to be an attorney in the US, or can it simply be a relative WITH a paper (a paper that says power of attorney) or what is a power of attorney exactly, is it an actual attorney person, or just a paper? 7.) Is there any other way to unfreeze the accounts? Although I can confirm first hand; I think there would be an exception process if a person cannot travel to the Bank. It could even be that a person is in some remote state, not well etc and can't travel in person. I think if you are out of country, you could walk-in to an US embassy and provide / sign relevant documents there and get it attested. Although for different purpose, I know a Power of Attorney being created in other country and stamped / verified by US embassy and sent it over to US. This was almost a decade back. Not sure about it currently.\"" }, { "docid": "129997", "title": "", "text": "I can understand your fears, and there is nothing wrong with taking action to protect yourself from them. How much income do you need in retirement? For arguments sake, lets say you need to pull 36K per year from your 401K or 3K per month. Lets also assume that you current contribute (with any match) 1,000 per month. Please adjust to your actual numbers accordingly. One option would be to pull out 48K right now and put it in a money market. With your contributions, I would then put half into the money market and half into more aggressive investments. In 10 years, you would have about 110K in your money market account. You could live off of that for three years. If the market does crash, this should give you plenty of time to recover. Taking this option opens you to another risk, which is being beat up by inflation or lack of growth on a nice pile of cash. My time frame is not that different then yours (I am about 12 years away), but am still all in stocks. Having 48K and more with not opportunity for growth frightens me more than any temporary stock market crash. Having said that I think it would be a horrible mistake to get completely out of stocks. Many of those destroyed in 2008 also missed 2012 through 2014 which were awesome years. So do some. Set aside a year or three of income in something nice and safe. Maybe one year of income in money market, one in bonds and preferred stocks, and one in blue chips." }, { "docid": "69800", "title": "", "text": "\"I'm no accountant, but I think the way I'd want to approach this kind of thing in Gnucash would be to track it as an Asset, since it is. It sounds like your actual concern is that your tracked asset value isn't reflecting its current \"\"market\"\" value. Presumably because it's risky it's also illiquid, so you're not sure how much value it should have on your books. Your approach suggested here of having it as just as expense gives it a 0 value as an asset, but without tracking that there's something that you own. The two main approaches to tracking an investment in Gnucash are: Of course, both of these approaches do assume that you have some notion of your investment's \"\"current value\"\", which is what you're tracking. As the section on Estimating Valuation of the concepts guide says of valuing illiquid assets, \"\"There is no hard rule on this, and in fact different accountants may prefer to do this differently.\"\" If you really think that the investment isn't worth anything at the moment, then I suppose you should track it at 0, but presumably you think it's worth something or you wouldn't have bought it, right? Even if it's just for your personal records, part of a regular (maybe annual?) review of your investments should include coming up with what you currently value that investment at (perhaps your best guess of what you could sell it for, assuming that you could find a willing buyer), and updating your records accordingly. Of course, if you need a valuation for a bank or for tax purposes or the like, they have more specific rules about how they are tracking what things are worth, but presumably you're trying to track your personal assets for your own reasons to get a handle on what you currently own. So, do that! Take the time to get a handle on the worth of what you currently own. And don't worry about getting the value wrong, just take your best guess, since you can always update it later when you learn new information about what your investment is worth.\"" }, { "docid": "574691", "title": "", "text": "Yes, this is fine: You can save up to £20,000 in one type of account or split the allowance across some or all of the other types. You can only pay £4,000 into your Lifetime ISA in a tax year ... Example You could save £11,000 in a cash ISA, £2,000 in a stocks and shares ISA, £3,000 in an innovative finance ISA and £4,000 in a Lifetime ISA in one tax year. https://www.gov.uk/individual-savings-accounts/how-isas-work You might want to consider whether it is wise to be fully invested in shares. If you're going to have to dip into them for things like holidays and a car, you're taking a risk that you might have to sell when the market is low. As a basic rate taxpayer, you have a £1 000 personal savings allowance. You don't need to chase the tax break with a cash ISA, which often have poor rates. However, you should consider keeping some of your savings in cash, for example in a current account that pays decent interest on the balance." }, { "docid": "77248", "title": "", "text": "\"You are right on track with your idea of setting up a separate account for invoiced income. Create a new account with the type other asset and call it \"\"Receivables\"\" (or something similar). Every time you invoice a client, enter a credit to this account with the amount of the invoice. Once the client pays and you deposit a check, enter a transfer from the \"\"Receivables\"\" account to the bank account. EDIT I overlooked that you wish to account for not-yet-invoiced income. I think that's a bad idea. It will become confusing and will give you the false sense that your financial condition is better than it really is. There are plenty of stories about businesses that have stellar sales, but fail because of lack of cash flow (the business' bills become due before it gets paid by its own customers).\"" }, { "docid": "308150", "title": "", "text": "\"If I understand correctly, the Traditional IRA, if you have 401k with an employer already, has the following features: Actually, #1 and #2 are characteristics of Roth IRAs, not Traditional IRAs. Only #3 is a characteristic of a Traditional IRA. Whether you have a 401(k) with your employer or not makes absolutely no difference in how your IRAs are taxed for the vast majority of people. (The rules for IRAs are different if you have a very high income, though). You're allowed to have and contribute to both kinds of accounts. (In fact, I personally have both). Traditional IRAs are tax deferred (not tax-free as people sometimes mistakenly call them - they're very different), meaning that you don't have to pay taxes on the contributions or profits you make inside the account (e.g. from dividends, interest, profits from stock you sell, etc.). Rather, you pay taxes on any money you withdraw. For Roth IRAs, the contributions are taxed, but you never have to pay taxes on the money inside the account again. That means that any money you get over and above the contributions (e.g. through interest, trading profits, dividends, etc.) are genuinely tax-free. Also, if you leave any of the money to people, they don't have to pay any taxes, either. Important point: There are no tax-free retirement accounts in the U.S. The distinction between different kinds of IRAs basically boils down to \"\"pay now or pay later.\"\" Many people make expensive mistakes in their retirement strategy by not understanding that point. Please note that this applies equally to Traditional and Roth 401(k)s as well. You can have Roth 401(k)s and Traditional 401(k)s just like you can have Roth IRAs and Traditional IRAs. The same terminology and logic applies to both kinds of accounts. As far as I know, there aren't major differences tax-wise between them, with two exceptions - you're allowed to contribute more money to a 401(k) per year, and you're allowed to have a 401(k) even if you have a high income. (By way of contrast, people with very high incomes generally aren't allowed to open IRAs). A primary advantage of a Traditional IRA is that you can (in theory, at least) afford to contribute more money to it due to the tax break you're getting. Also, you can defer taxes on any profits you make (e.g. through dividends or selling stock at a profit), so you can grow your money faster.\"" }, { "docid": "456397", "title": "", "text": "Most modern bank accounts can be set up to automatically pay bills for anyone, even someone who has no control over the account. This account would be in a trustee's name for the untrustworthy party. An automatic transfer could be set up from the source account to the irresponsible party's bank account to pay their allowance. It would be wise to remove all overdraft capability from the recipients account, but the whole system might help them learn some responsibility. There are more formal legal structures for forming a long term care-taking trust (with spendthrift provisions to protect the trust from legal action). The trust would need to be maintained by a trustee, resulting in maintenance fees on the principle. It might also help to know if there are legally recognized factors that impair the beneficiaries ability to take care of themselves (substance abuse, depression, age, mental impairment, etc.), but depending on state law, trusts can be designed very flexibly to cover the lifetime of an heir and even their heirs." }, { "docid": "481401", "title": "", "text": "Personal finance is a fairly broad area. Which part might you be starting with? From the very basics, make sure you understand your current cashflow: are you bank balances going up or down? Next, make a budget. There's plenty of information to get started here, and it doesn't require a fancy piece of software. This will make sure you have a deeper understanding of where your money is going, and what is it being saved for. Is it just piling up, or is it allocated for specific purchases (i.e. that new car, house, college tuition, retirement, or even a vacation or a rainy day)? As part of the budgeting/cashflow exercise, make sure you have any outstanding debts covered. Are your credit card balances under control? Do you have other outstanding loans (education, auto, mortgage, other)? Normally, you'd address these in order from highest to lowest interest rate. Your budget should address any immediate mandatory expenses (rent, utilities, food) and long term existing debts. Then comes discretionary spending and savings (especially until you have a decent emergency fund). How much can you afford to spend on discretionary purchases? How much do you want to be able to spend? If the want is greater than the can, what steps can you take to rememdy that? With savings you can have a whole new set of planning to consider. How much do you leave in the bank? Do you keep some amount in a CD ladder? How much goes into retirement savings accounts (401k, Roth vs. Traditional IRA), college savings accounts, or a plain brokerage account? How do you balance your overall portfolio (there is a wealth of information on portfolio management)? What level of risk are you comfortable with? What level of risk should you consider, given your age and goals? How involved do you want to be with your portfolio, or do you want someone else to manage it? Silver Dragon's answer contains some good starting points for portfolio management and investing. Definitely spend some time learning the basics of investing and portfolio management even if you decide to solicit professional expertise; understanding what they're doing can help to determine earlier whether your interests are being treated as a priority." }, { "docid": "163353", "title": "", "text": "\"What are the options available for safe, short-term parking of funds? Savings accounts are the go-to option for safely depositing funds in a way that they remain accessible in the short-term. There are many options available, and any recommendations on a specific account from a specific institution depend greatly on the current state of banks. As you're in the US, If you choose to save funds in a savings account, it's important that you verify that the account (or accounts) you use are FDIC insured. Also be aware that the insurance limit is $250,000, so for larger volumes of money you may need to either break up your savings into multiple accounts, or consult a Accredited Investment Fiduciary (AIF) rather than random strangers on the internet. I received an inheritance check... Money is a token we exchange for favors from other people. As their last act, someone decided to give you a portion of their unused favors. You should feel honored that they held you in such esteem. I have no debt at all and aside from a few deferred expenses You're wise to bring up debt. As a general answer not geared toward your specific circumstances: Paying down debt is a good choice, if you have any. Investment accounts have an unknown interest rate, whereas reducing debt is guaranteed to earn you the interest rate that you would have otherwise paid. Creating new debt is a bad choice. It's common for people who receive large windfalls to spend so much that they put themselves in financial trouble. Lottery winners tend to go bankrupt. The best way to double your money is to fold it in half and put it back in your pocket. I am not at all savvy about finances... The vast majority of people are not savvy about finances. It's a good sign that you acknowledge your inability and are willing to defer to others. ...and have had a few bad experiences when trying to hire someone to help me Find an AIF, preferably one from a largish investment firm. You don't want to be their most important client. You just want them to treat you with courtesy and give you simple, and sound investment advice. Don't be afraid to shop around a bit. I am interested in options for safe, short \"\"parking\"\" of these funds until I figure out what I want to do. Apart from savings accounts, some money market accounts and mutual funds may be appropriate for parking funds before investing elsewhere. They come with their own tradeoffs and are quite likely higher risk than you're willing to take while you're just deciding what to do with the funds. My personal recommendation* for your specific circumstances at this specific time is to put your money in an Aspiration Summit Account purely because it has 1% APY (which is the highest interest rate I'm currently aware of) and is FDIC insured. I am not affiliated with Aspiration. I would then suggest talking to someone at Vanguard or Fidelity about your investment options. Be clear about your expectations and don't be afraid to simply walk away if you don't like the advice you receive. I am not affiliated with Vanguard or Fidelity. * I am not a lawyer, fiduciary, or even a person with a degree in finances. For all you know I'm a dog on the internet.\"" }, { "docid": "506066", "title": "", "text": "\"There are no \"\"on-line\"\" banks in Israel. There were various attempts to create something that would look like an online bank (HaYashir HaRishon comes to mind, Mizrahi did something similar recently), but that essentially is a branch of a brick and mortar bank (Leumi and Mizrahi, respectively) that allows you online management and phone service instead of walking into a branch, not a replacement for a traditional bank. Thus there are no significant operational savings for the banks through which they could have afforded higher savings rates. I agree with the other responder that the banking system in Israel is very well regulated, but I agree with you also - it is not competitive at all. That said, at the current inflation rate and the current strength of the currency, the 2.02% that you have is actually pretty good. Israel has no interest in paying high rates on incoming money since its currency is too strong and it hurts exports, so don't expect much at home on this issue. Opening an account outside of Israel poses a different problem - tax reporting. You'll have to file an annual tax return and pay your taxes on the interest you earn, something most Israelis never have to do. That will cost you and will probably eat up much, if not all, of the gain. Also, currency fluctuations will hurt you, as no-one will open an account in Shekels outside of Israel and you'll have to convert back and forth. In fact, the first thing to happen when the rates in Israel go up would be for the currency to go down, so whatever you might gain abroad will disappear when you actually decide to move the money back. And you will still be taxed on the interest income (can't deduct capital loss from interest income). Your options, as I see them, are either the stock market or the bonds market (or, more likely, a mix). In Israel, the bonds similar to the US T-Bills (short term bonds) are called \"\"makam\"\" and you can either invest in them directly or through mutual funds. These are traded at TASE and can be held for free (banks are not allowed to charge you for holding them). They're taxed at lower rates than capital gains (15% vs 25%). During the times of low interest these may provide much better alternative than bank savings (pakam).\"" }, { "docid": "542213", "title": "", "text": "\"From the IRS perspective, there's no difference between \"\"your taxes\"\" and \"\"your sole proprietorship's taxes\"\", they're all just \"\"your taxes\"\". While I could see it being very useful and wise to track your business's activities separately, and use separate bank accounts and the like, this is just a convenience to help you in your personal accounting, and not something that needs to relate directly to how tax forms are completed or taxes are paid. When calculating your taxes, if you want to figure out how much \"\"you\"\" owe vs. how much \"\"your business\"\" owes, you'll have to do so yourself. One approach might be just to take the amount that your Schedule C puts as income on your return and multiply by your marginal tax rate. Another approach might be to have your tax software run the calculations as though you had no business income, and see what just \"\"your personal\"\" taxes would have been without the business. If you think of the business income as being \"\"first\"\" and should use up the lower brackets rather than your personal income, maybe do it the other way around and have your software run the calculations as though you had only the business income and no other personal/investment income, and see what the amount of taxes would be then. Once you've figured out a good allocation, the actual mechanics of paying some \"\"personal tax amount\"\" from your personal bank account and some \"\"business tax amount\"\" from your business bank account are up to you. I'd probably just transfer the money from my business account to my personal account and pay all the taxes from the personal account. Writing two separate checks, one from each account, that total to the correct amount, I'm sure would work just fine as well. You can probably make separate payments from each account electronically through Direct Pay or EFTPS as well. As long as all taxes are paid by the deadline, I don't think the IRS is too picky about the details of how many payments are made.\"" }, { "docid": "513921", "title": "", "text": "\"P/E is price to earnings, or the price of the company divided by annual earnings. Earnings, as reported, are reported on accrual basis. Accrual basis accounting is...without going too deep, like taking a timeline, chopping it up and throwing different bits and pieces of every year into different piles. Costs from 2008 might show up in 2011, or the company might take costs in 2011 that aren't necessarily costs until 2012. Examples would include one-time charges for specific investments, like new shipping centers, servers for their hosting services, etc. Free cash flow is the amount of cash Amazon is generating from its operations. Free cash flow is almost always different from earnings because it's the amount of Earnings + adjustments for non-cash activities - capital expenditures (long-term investments.) Earnings is one thing. Cash generation is a completely different animal. There are plenty of companies that \"\"earn\"\" billions, but only have a few hundred million in cash to show for it because their earnings have to be reinvested into new stuff to grow/maintain the business. To have a free cash flow yield of 2.5% is to have a company valued at $40 for each $1 of free cash flow that the company generates each year. $1/$40 = 2.5%. SGA = Selling, General, &amp; Administrative expenses. These are the costs of running the company - paying salaries, advertising, etc. This cost is second only to COGS, which is Cost of Goods Sold. Currently, Amazon pays $.774 for every $1 product it sells. Its operations add another ~$.20 to that total. After taxes, Amazon keeps about 2 cents of every dollar's worth of product it sells. This 2 cents is Amazon's net margin of 2%. Net margin is (net income)/(sales). If Amazon earned $3 for every $100 in sales it would have a net margin of 3%. Let me know if this makes no sense. If there's anything in particular that is especially confusing, definitely reply and I'll better clarify on specific items. Fire away with any questions, also. I love to discuss finance and accounting.\"" }, { "docid": "166441", "title": "", "text": "\"Your bank is maintaining different states for transactions, and changing the state depending on real-world events and the passage of time. withdraw €100 from my bank account on 30 September […] my bank does not process the transaction until 2 October. The bank probably have that transaction marked as “pending” on 30 September, and “cleared” on 2 October. transfer €100 from Bank A to Bank B, Bank A's statement dates the transaction on 20 September, but Bank B dates it as coming in on 22 September. Similarly, bank A will have the transaction marked as “pending” initially. Bank B won't have a corresponding transaction at all, until later; they'll have it “pending” too, until they confirm the transfer. Then (probably at different times from each other) the banks will each mark the corresponding transactions “cleared”. The bookkeeping software that I use doesn't seem to allow for this \"\"transfer time\"\" between accounts. When I enter a transfer from one account to another, they both have to have the same date. You may want to learn about different bases of accounting. The simpler option is “cash-based” accounting. The simplification comes from assuming transactions take no time to transfer from one account to another, and are instantly available after that. Your book-keeping software probably books using this simpler basis for your personal finances. The more complex “accrual-based” accounting tracks each individual transaction through multiple states – “pending”, “transfer”, “cleared”, etc. – with state changes at different times – time of trade, time of settlement, etc. – to more accurately reflect the real world agreements between parties, and different availability of the money to each party. So if your book-keeping program uses “cash basis”, you'll need to pick which inaccuracy you want: book the transfer when you did it, or book the transfer when the money is available at the other end.\"" } ]

[ { "docid": "189303", "title": "", "text": "Another thing to factor in are deals provided by banks. In general, banks care about new customers more than their existing customers. Hence they explicitly restrict the best deals on credit cards, savings accounts, etc, to new customers only. (Of course, there are occasionally good deals for existing customers, and some banks choose not to discriminate.) If you have many different bank accounts, you are making yourself unavailable for switching bonuses and introductory rates." } ]

[ { "docid": "7944", "title": "", "text": "\"I added \"\"Shared money in account\"\" (SMIA) as sub-account of my bank checking (CA) account and moved current difference to that account so total of CA was not changed but now private and shared money is separated. My cases would be handled the following The only downside I see is that now my balance in CA transaction log do not match exactly with bank so reconciliation will be slightly harder.\"" }, { "docid": "185104", "title": "", "text": "The United States Federal Reserve has decided that interest rates should be low. (They think it may help the economy. The details matter little here though.) It will enforce this low rate by buying Treasury bonds at this very low interest rate. (Bonds are future money, so this means they pay a lot of money up front, for very little interest in the future. The Fed will pay more than anyone who offers less money up front, so they can set the price as long as they're willing to buy.) At the end of the day, Treasury bonds pay nearly no interest. Since there's little money to be made with Treasuries, people who want better-than-zero returns will bid up the current-price of any other bonds or similar loan-like instruments to get what whatever rate of return that they can. There's really no more than one price for money; you can think of the price of those bonds as basically (Treasury rate + some modifier based on the risk) percent. I realize thinking about bond prices is weird and different than other prices (you're measuring future-money using present-money and it's easy to be confused) and assure you it ultimately makes sense :) Anyway. Your savings account money has to compete with everyone else willing to lend money to banks. Everyone-else lends money for peanuts, so you get peanuts on your savings account too. Your banking is probably worth more to your bank on account of your check-card payment processing fees (collected from the merchant) than from the money they make lending out your savings (notice how many places have promotional rates if you make your direct deposits or use your check card to make a purchase N times a month). In Europe, it's similar, except you've got a different central bank. If Europe's bank operated radically differently for an extended period of time, you'd expect to see a difference in the exchange rates which would ultimately make the returns from investing in those currencies pretty similar as well. Such a change may show up domestically as inflation in the country with the loose-money policy, and internationally as weakness against other currencies. There's really only one price for money around the entire world. Any difference boils down to a difference in (perceived) risk." }, { "docid": "528186", "title": "", "text": "\"Your credit-score is concerned with your current credit accounts (credit-cards, HELOC, loans, mortgage, et cetera) - your Current/Checking bank account is not a credit account so it is not reported to the credit agencies. Granted, being overdrawn is effectively the same as having a very expensive loan from the bank- however banks do not routinely report these to the credit-agencies - and of course, if you fail to pay overdraft fees in a timely manner then your bank will take it to collections or possibly even get a judgement against you, and that will be reported in your credit report (under the \"\"Derogatory remarks\"\" section). I cannot find any sources as to whether repeated but always-paid overdrafts will be reported - but certainly your bank isn't complaining because they'll be making lots of money from you. (Via https://www.thebalance.com/will-a-bank-overdraft-hurt-my-credit-score-960554).\"" }, { "docid": "40338", "title": "", "text": "\"If you are going to keep your US bank account for any period of time, the very best option I know of is to withdraw Euros from an atm using your US card once you are in Germany. I draw on my US account regularly (I'm in Munich) and always get the going \"\"mid market\"\" exchange rate, which is better than what you get from a currency conversion service, transfer agency, or bank transfer, and there are no fees from the atm or my bank for the currency conversion or withdrawal. Of course you should check with your bank to verify their rules and fees for atm use internationally. It would also be wise to put a travel advisory on your account to be sure your transaction is not denied because you are out of country.\"" }, { "docid": "477357", "title": "", "text": "I have also tried Mvelopes in the past, and my experiences match yours. I currently use the desktop version of YNAB:You Need a Budget (YNAB 4), and I like it much better. Where we failed after a while with Mvelopes, we are succeeding with YNAB, and have been now for the last 3.5 years. I don't want this to sound like a commercial for YNAB (I will give important caveats about YNAB later), but here is why I believe we have done better now with YNAB than before with Mvelopes. I hope that these reasons will be useful to you when you are evaluating your next options. As you said, we also found Mvelopes' interface to be slow and glitchy. YNAB 4 is a desktop app (with synching capabilities) that we found to be much quicker and easier to work with than Mvelopes' Flash-based interface. (That was 4 years ago; hopefully Mvelopes has redone their interface since then.) We also struggled with Mvelopes' connection with our banks. With YNAB 4, there is no connection to the bank: everything has to be entered manually. I initially thought this might be worse, but for us it has been better. I can either enter transactions as they happen on the mobile app, or I can hold on to receipts and enter them every day or two in the evening, categorizing as I go. We always have an up-to-date picture of our finances, and we don't have to mess with trying to match up downloaded transactions that have been screwed up, duplicated, or are missing. We aren't really using YNAB much differently than we were using Mvelopes, but we have learned a few tricks that I think have contributed to our success. One of the things we do differently is that I don't obsess about the cash accounts too much. Cash accounts, for us, are the hardest to keep track of, because most of our cash transactions don't have a receipt: we are paying a friend or family member for something, or leaving a tip, or something like that which we forget about when it comes time to enter into the software. As a result, the cash account balances get off. I periodically enter a correcting transaction to get the balances right, and have a budget category specifically for this that we have to put money in for these unknown transactions. Fortunately for us, our cash spending is a small percent of our total spending (we usually pay with a credit card) so this bit of untracked spending isn't that big of a concern. With YNAB, the current month's budget is right in front of you as soon as you open up the app, which makes it easy to adjust your budget during the month, if necessary. With Mvelopes (at least how their app worked 4 years ago), the budget was somewhat hidden after you funded your budget categories, and it was a bit of a pain to move money around between categories. The ability to adjust your budget in the middle of the month is crucial; if you don't do that, you'll get frustrated the first time you find that you don't have enough money in a category for something you need. YNAB makes it very easy to move money around inside your budget. That having been said, you need to be aware that the current version of YNAB is not a desktop application but a web-based app. YNAB 4, the old desktop version which we have been using, is officially unsupported as of the end of 2016. However, I see that it is still available for sale, if you are interested in it, the YNAB4 help site is still up, and the mobile app you would need to work with it on your phone (called YNAB Classic) is still in the app store. As I said, the current YNAB is now a web app, complete with automatic downloading of transactions from your bank. I have no experience with it (other than playing around with it a little), and so I can't tell you how quick the interface is or how well the auto-downloading of transactions works. As an alternative, another web-based solution is EveryDollar, from Dave Ramsey's company. (I have never tried it.) The advantage of this one is that it is free if you choose not to link it to your banks; the automatic downloading of transactions is a paid feature. I wrote an answer a couple of years ago in which I describe two different approaches that budgeting software packages tend to take. I'm not familiar with Buxfer, so I don't know which approach it takes, but perhaps that answer will help you evaluate all of your software options. On the behavior side of things, besides the relaxing of the cash accounting I mentioned above, we also involve my wife a little less in the budgeting process than we used to. (This is by her choice!) I am the one who enters all the transactions into the software (she hands me all her receipts), I reconcile the accounts at the end of the month, and I set the budget for the next month. We have been doing this long enough now that she knows what the budget is, and we only need to discuss it if we want to do something different with the budget than we have been doing in the past. She has the YNAB app on her phone and can see where we are at with all of our budget categories." }, { "docid": "378024", "title": "", "text": "\"If it is planned, then one can get a Bankers Check payable overseas; if destination is known. 1.) What will happen to the money? It will eventually go to Government as escheating. Unlcaimed.org can help you trace the funds and recover it. 2.) Will the banks close the accounts? 3.) After how much time will the banks close the accounts? Eventually Yes. If there is no activity [Note the definition of activity is different, A credit interest is not considered as activity, a authentic phone call / correspondence to change the address or any servicing request is considered activity] for a period of One year, the account is classified as \"\"Dormant\"\". Depending on state, after a period of 3-5 years, it would be inactive and the funds escheated. i.e. handed over to Government. 4.) Is there anything else to do? Any ideas? Before leaving? Try keeping it active by using internet banking or credit / debit cards linked to the account. These will be valid activities. 5.) Is there any way to send a relative to the US with any kind of paper of power, to unfreeze the accounts? 6.) The banks say they would need a power of attorney, but does that person actually need to be an attorney in the US, or can it simply be a relative WITH a paper (a paper that says power of attorney) or what is a power of attorney exactly, is it an actual attorney person, or just a paper? 7.) Is there any other way to unfreeze the accounts? Although I can confirm first hand; I think there would be an exception process if a person cannot travel to the Bank. It could even be that a person is in some remote state, not well etc and can't travel in person. I think if you are out of country, you could walk-in to an US embassy and provide / sign relevant documents there and get it attested. Although for different purpose, I know a Power of Attorney being created in other country and stamped / verified by US embassy and sent it over to US. This was almost a decade back. Not sure about it currently.\"" }, { "docid": "365804", "title": "", "text": "\"Your best shot in terms of credit card \"\"compatibility\"\" would probably be a very large private European Bank, like Deutsche Bank, HSCB or the like issueing a MasterCard. In England it is quite difficult to get an account without being a resident, but I think HSBC offers a so called \"\"Passport\"\" account to non-residents with all the usual cards and benefits, even overdraft, but it's probably expensive. I think you underestimate how heterogeneous the banking world in Europe is. There are plenty of different local systems in each country. France has it's custom CB system and Germany has a system called GiroPay and a cashless system called GeldKarte (which no one really uses). Even if you have a Mastercard or Visa with pin from a European bank, there is no guarantee that it'll work everywhere reliably. I remember my German housemate having loads of trouble with his amazon.de Mastercard in England. In addition, you will most likely be charged for paying with your CC and ATM/Cashpoint withdrawals in any other country. Fees can range up to 3% for a transaction. So ideally you profile which European country you travel to the most and set up the account there. You should also look for cooperations between certain European banks. I remember Barclays and Deutsche Bank cooperating. On a side note: I'm still amazed by how backwards some banking systems are, e.g. the English. I've been using secure (pin/tan) online-banking in Germany for over 10 years. Transfers are quick, international transfers are free, as long as they are in Euro etc. Everything runs pretty smooth. Not so in England, you need to confirm online transactions over the phone (wtf?) and your only security is a pin and memorable information. Inter-bank transfers, if not set up online, cost up to 30 pounds, even though I could just go to the other bank, draw the cash there and pay it in to the account for free. International transfers start at 20 quid etc. I could hardly imagine, living in a cheque reliant system like the states anymore.\"" }, { "docid": "187124", "title": "", "text": "\"There's already an excellent answer here from @BenMiller, but I wanted to expand a bit on Types of Investments with some additional actionable information. You can invest in stocks, bonds, mutual funds (which are simply collections of stocks and bonds), bank accounts, precious metals, and many other things. Discussing all of these investments in one answer is too broad, but my recommendation is this: If you are investing for retirement, you should be investing in the stock market. However, picking individual stocks is too risky; you need to be diversified in a lot of stocks. Stock mutual funds are a great way to invest in the stock market. So how does one go about actually investing in the stock market in a diversified way? What if you also want to diversify a bit into bonds? Fortunately, in the last several years, several products have come about that do just these things, and are targeted towards newer investors. These are often labeled \"\"robo-advisors\"\". Most even allow you to adjust your allocation according to your risk preferences. Here's a list of the ones I know about: While these products all purport to achieve similar goals of giving you an easy way to obtain a diversified portfolio according to your risk, they differ in the buckets of stocks and funds they put your money into; the careful investor would be wise to compare which specific ETFs they use (e.g. looking at their expense ratios, capitalization, and spreads).\"" }, { "docid": "308150", "title": "", "text": "\"If I understand correctly, the Traditional IRA, if you have 401k with an employer already, has the following features: Actually, #1 and #2 are characteristics of Roth IRAs, not Traditional IRAs. Only #3 is a characteristic of a Traditional IRA. Whether you have a 401(k) with your employer or not makes absolutely no difference in how your IRAs are taxed for the vast majority of people. (The rules for IRAs are different if you have a very high income, though). You're allowed to have and contribute to both kinds of accounts. (In fact, I personally have both). Traditional IRAs are tax deferred (not tax-free as people sometimes mistakenly call them - they're very different), meaning that you don't have to pay taxes on the contributions or profits you make inside the account (e.g. from dividends, interest, profits from stock you sell, etc.). Rather, you pay taxes on any money you withdraw. For Roth IRAs, the contributions are taxed, but you never have to pay taxes on the money inside the account again. That means that any money you get over and above the contributions (e.g. through interest, trading profits, dividends, etc.) are genuinely tax-free. Also, if you leave any of the money to people, they don't have to pay any taxes, either. Important point: There are no tax-free retirement accounts in the U.S. The distinction between different kinds of IRAs basically boils down to \"\"pay now or pay later.\"\" Many people make expensive mistakes in their retirement strategy by not understanding that point. Please note that this applies equally to Traditional and Roth 401(k)s as well. You can have Roth 401(k)s and Traditional 401(k)s just like you can have Roth IRAs and Traditional IRAs. The same terminology and logic applies to both kinds of accounts. As far as I know, there aren't major differences tax-wise between them, with two exceptions - you're allowed to contribute more money to a 401(k) per year, and you're allowed to have a 401(k) even if you have a high income. (By way of contrast, people with very high incomes generally aren't allowed to open IRAs). A primary advantage of a Traditional IRA is that you can (in theory, at least) afford to contribute more money to it due to the tax break you're getting. Also, you can defer taxes on any profits you make (e.g. through dividends or selling stock at a profit), so you can grow your money faster.\"" }, { "docid": "147837", "title": "", "text": "\"One way to look at insurance is that it replaces an unpredictable expenses with a predictable fees. That is, you pay a set monthly amount (\"\"premium\"\") instead of the sudden costs associated with a collision or other covered event. Insurance works as a business, which means they intend to make a substantial profit for providing that service. They put a lot of effort in to measuring probabilities, and carefully set the premiums to get make a steady profit*. The odds are in their favor. You have to ask yourself: if X happened tomorrow, how would I feel about the financial impact? Also, how much will it cost me to buy insurance to cover X? If you have a lot of savings, plenty of available credit, a bright financial future, and you take the bus to work anyway, then totaling your car may not be a big deal, money wise. Skip the insurance. If you have no savings, plenty of debt, little prospects for that improving, and you depend on your car to get to work just so you can pay what you already owe, then totaling your car would probably be a big problem for you. Stick with insurance. There is a middle ground. You can adjust your deductible. Raise it as high as you can comfortably handle. You cover the small stuff out of pocket, and save the insurance for the big ticket items. *Insurance companies also invest the money they take as premiums, until they pay out a claim. That's not relevant to this discussion, though.\"" }, { "docid": "589616", "title": "", "text": "Ask them to send a SWIFT payment [aka International Wire]. You would need to give them your bank details, essentially Bank Account, Bank Name & Address, SWIFT BIC, etc. Almost all Public Sector Bank and all leading Private scetor banks are members of SWIFT and can give you a the SWIFT BIC. If you are not sure about other party, it would be wise to open a new account and give the details of this account rather than your normal account." }, { "docid": "153670", "title": "", "text": "\"I'll try to give you some clues on how to find an answer to your question, rather than answering directly the question asked. Why not answer it directly? Well, I can, but it won't help you (or anyone else) much in two months when the rates change again. Generally, you won't find such in brick-and-mortar banks. You can save some time and only look at online banks. Examples: ING Direct (CapitalOne), CapitalOne, Amex FSB, E*Trade, Ally, etc. There are plenty. Go to their web sites, look for promotions, and compare. Sometimes you can find coupons/promotions which will yield more than the actual savings rate. For example, ING frequently have a $50 promotion for opening a new account. You need to understand that rates change frequently, and the highest rate account today may become barely average in a week. There are plenty of sites that offer various levels of comparison information. One of the most comprehensive ones (IMHO) is Bankrate.com. Another place to look is MoneyRates.com. These sites provide various comparisons, and you can also find some promotions advertised there. There are more similar sites. Also, search the Internet and you can find various blog posts with additional promotions – frequently banks give \"\"referral bonuses\"\" to provide incentive for clients to promote the banks. Do some due diligence on the results that appear promising. Not much. You won't find any savings account that would keep the value (purchasing power) of your money over the long term. Keeping money in savings accounts is a sure way to lose value because the inflation rate is much higher than even high-yield savings accounts. But, savings accounts are safe (insured by FDIC/NCUA up to the limit), and very convenient to keep short term savings – such as an emergency fund – that you cannot afford to lose to investments. Sometimes you'll get slightly better rates by locking up your money in a Certificate of Deposit (CD), but not significantly higher when the CD is short-term.\"" }, { "docid": "203298", "title": "", "text": "My possible new job requires me to do dfast and ccar among others. A few questions 1) My background is public accounting and tax. I noted that these jobs requires experience from public firms. My past experience has nothing to do with banking. Any reasons? I have been reading up dfast in the past week and it seems they trust me to pick up fast. Another job ad from another bank indicates the same thing. 2) What type of job this is under? I tried risk analyst but quite a lot of times the results are quite different from what my job is. 3) What is the job outlook? My eventual plan is to a more data analyst role and/or job opportunities in EU. Currently in EA/SEA market. 4) Any programming language should I learn to speed up data extraction? I will be learning either python/r. And will surface 3 do? My current laptop is not working and the repair shop indicates the costs of repairing doesnt worth it." }, { "docid": "163353", "title": "", "text": "\"What are the options available for safe, short-term parking of funds? Savings accounts are the go-to option for safely depositing funds in a way that they remain accessible in the short-term. There are many options available, and any recommendations on a specific account from a specific institution depend greatly on the current state of banks. As you're in the US, If you choose to save funds in a savings account, it's important that you verify that the account (or accounts) you use are FDIC insured. Also be aware that the insurance limit is $250,000, so for larger volumes of money you may need to either break up your savings into multiple accounts, or consult a Accredited Investment Fiduciary (AIF) rather than random strangers on the internet. I received an inheritance check... Money is a token we exchange for favors from other people. As their last act, someone decided to give you a portion of their unused favors. You should feel honored that they held you in such esteem. I have no debt at all and aside from a few deferred expenses You're wise to bring up debt. As a general answer not geared toward your specific circumstances: Paying down debt is a good choice, if you have any. Investment accounts have an unknown interest rate, whereas reducing debt is guaranteed to earn you the interest rate that you would have otherwise paid. Creating new debt is a bad choice. It's common for people who receive large windfalls to spend so much that they put themselves in financial trouble. Lottery winners tend to go bankrupt. The best way to double your money is to fold it in half and put it back in your pocket. I am not at all savvy about finances... The vast majority of people are not savvy about finances. It's a good sign that you acknowledge your inability and are willing to defer to others. ...and have had a few bad experiences when trying to hire someone to help me Find an AIF, preferably one from a largish investment firm. You don't want to be their most important client. You just want them to treat you with courtesy and give you simple, and sound investment advice. Don't be afraid to shop around a bit. I am interested in options for safe, short \"\"parking\"\" of these funds until I figure out what I want to do. Apart from savings accounts, some money market accounts and mutual funds may be appropriate for parking funds before investing elsewhere. They come with their own tradeoffs and are quite likely higher risk than you're willing to take while you're just deciding what to do with the funds. My personal recommendation* for your specific circumstances at this specific time is to put your money in an Aspiration Summit Account purely because it has 1% APY (which is the highest interest rate I'm currently aware of) and is FDIC insured. I am not affiliated with Aspiration. I would then suggest talking to someone at Vanguard or Fidelity about your investment options. Be clear about your expectations and don't be afraid to simply walk away if you don't like the advice you receive. I am not affiliated with Vanguard or Fidelity. * I am not a lawyer, fiduciary, or even a person with a degree in finances. For all you know I'm a dog on the internet.\"" }, { "docid": "377357", "title": "", "text": "\"UPDATE: Unfortunately Citibank have removed the \"\"standard\"\" account option and you have to choose the \"\"plus\"\" account, which requires a minimum monthly deposit of 1800 sterling and two direct debits. Absolutely there is. I would highly recommend Citibank's Plus Current Account. It's a completely free bank account available to all UK residents. http://www.citibank.co.uk/personal/banking/bankingproducts/currentaccounts/sterling/plus/index.htm There are no monthly fees and no minimum balance requirements to maintain. Almost nobody in the UK has heard of it and I don't know why because it's extremely useful for anyone who travels or deals in foreign currency regularly. In one online application you can open a Sterling Current Account and Deposit Accounts in 10 other foreign currencies (When I opened mine around 3 years ago you could only open up to 7 (!) accounts at any one time). Citibank provide a Visa card, which you can link to any of your multi currency accounts via a phone call to their hotline (unfortunately not online, which frequently annoys me - but I guess you can't have everything). For USD and EUR you can use it as a Visa debit for USD/EUR purchases, for all other currencies you can't make debit card transactions but you can make ATM withdrawals without incurring an FX conversion. Best of all for your case, a free USD cheque book is also available: http://www.citibank.co.uk/personal/banking/international/eurocurrent.htm You can fund the account in sterling and exchange to USD through online banking. The rates are not as good as you would get through an FX broker like xe.com but they're not terrible either. You can also fund the account by USD wire transfer, which is free to deposit at Citibank - but the bank you issue the payment from will likely charge a SWIFT fee so this might not be worth it unless the amount is large enough to justify the fee. If by any chance you have a Citibank account in the US, you can also make free USD transfers in/out of this account - subject to a daily limit.\"" }, { "docid": "364378", "title": "", "text": "As an LLC you are required to have a separate bank account (so you can't have one account and mix personal and business finances together as you could if you were a sole trader) - but there's no requirement for it to be a business bank account. However, the terms and conditions of most high street bank personal current accounts specifically exclude business banking, so unless you could find one that would allow it, you'd have to open a business bank account." }, { "docid": "506066", "title": "", "text": "\"There are no \"\"on-line\"\" banks in Israel. There were various attempts to create something that would look like an online bank (HaYashir HaRishon comes to mind, Mizrahi did something similar recently), but that essentially is a branch of a brick and mortar bank (Leumi and Mizrahi, respectively) that allows you online management and phone service instead of walking into a branch, not a replacement for a traditional bank. Thus there are no significant operational savings for the banks through which they could have afforded higher savings rates. I agree with the other responder that the banking system in Israel is very well regulated, but I agree with you also - it is not competitive at all. That said, at the current inflation rate and the current strength of the currency, the 2.02% that you have is actually pretty good. Israel has no interest in paying high rates on incoming money since its currency is too strong and it hurts exports, so don't expect much at home on this issue. Opening an account outside of Israel poses a different problem - tax reporting. You'll have to file an annual tax return and pay your taxes on the interest you earn, something most Israelis never have to do. That will cost you and will probably eat up much, if not all, of the gain. Also, currency fluctuations will hurt you, as no-one will open an account in Shekels outside of Israel and you'll have to convert back and forth. In fact, the first thing to happen when the rates in Israel go up would be for the currency to go down, so whatever you might gain abroad will disappear when you actually decide to move the money back. And you will still be taxed on the interest income (can't deduct capital loss from interest income). Your options, as I see them, are either the stock market or the bonds market (or, more likely, a mix). In Israel, the bonds similar to the US T-Bills (short term bonds) are called \"\"makam\"\" and you can either invest in them directly or through mutual funds. These are traded at TASE and can be held for free (banks are not allowed to charge you for holding them). They're taxed at lower rates than capital gains (15% vs 25%). During the times of low interest these may provide much better alternative than bank savings (pakam).\"" }, { "docid": "367754", "title": "", "text": "I feel the need to separate my freelance accounts from my personal accounts. Yes, you should. Should I start another savings account or a current account? Do you need the money for daily spending? Do you need to re-invest in your business? Use a current account. If you don't need the money for business expenses, put it away in your savings account or even consider term deposits. Don't rule out a hybrid approach either (some in savings account, some in current account). What criteria should I keep in mind while choosing a bank? (I thought of SBI since it has a lot of branches and ATMs). If you are involved in online banking and that is sufficient for most of your needs, bank and ATM locations shouldn't matter all that much. If you are saving a good chunk of money, you want to at least have that keep up with inflation. Research bank term deposit interest rates. The tend to be higher than just having your money sit in a savings account. Again, it depends on how and when you expect to need the money. What do I keep in mind while paying myself? Paying yourself could have tax implications. This depends on how are set up to freelance. Are you a business entity or are you an individual? You should look in to the following in India: The other thing to consider is rewarding yourself for the good work done. Pay yourself a reasonable amount. If you decide to expand and hire people going forward, you will have a better sense of business expenses involved when paying salaries. Tips on managing money in the business account. This is a very generic question. I can only provide a generic response. Know how much you are earning and how much your are putting back in to the business. Be reasonable in how much you pay yourself and do the proper research and paperwork from a taxation point of view." }, { "docid": "233781", "title": "", "text": "\"That's accurate. Here is another risk with the current checking system, which many people are not aware of: Anyone who knows your checking account number can learn what your balance in that account is. (This is bank-specific, but it is possible at the major banks I've checked.) How does that work? Many banks have a phone line where you can dial up and interact with an automated voice response system, for various customer service tasks. One of the options is something like \"\"merchant check verification\"\". That option is intended to help a merchant who receives a check to verify whether the person writing the check has enough money in their account for the check to clear. If you select that option in the phone tree, it will prompt you to enter in the account number on the check and the amount of the check, and then it will respond by telling you either \"\"there are currently sufficient funds in the account to cash this check\"\" or \"\"there are not sufficient funds; this check would bounce\"\". Here's how you can abuse this system to learn how much someone has in their bank account, if you know their account number. You call up and check whether they've enough money to cash a $10,000 check (note that you don't actually have to have a check for $10,000 in your hands; you just need to know the account number). If the system says \"\"nope, it'd bounce\"\", then you call again and try $5,000. If the system says \"\"yup, sufficient funds for a $5,000 check\"\", then you try $7,500. If it says \"\"nope, not enough for that\"\", you try $6,250. Etcetera. At each step, you narrow the range of possible account balances by a factor of two. Consequently, after about a dozen or so steps, you will likely know their balance to within a few dollars. (Computer scientists know this procedure by the name \"\"binary search\"\". The rest of us may recognize it as akin to a game of \"\"20 questions\"\".) If this bothers you, you may be able to protect your self by calling up your bank and asking them how to prevent it. When I talked to my bank (Bank of America), they told me they could put a fraud alert flag on your account, which would disable the merchant check verification service for my account. It does mean that I have to provide a 3-digit PIN any time I phone up my bank, but that's fine with me. I realize many folks may terribly not be concerned about revealing their bank account balance, so in the grand scheme of things, this risk may be relatively minor. However, I thought I'd document it here for others to be aware of.\"" } ]

[ { "docid": "180673", "title": "", "text": "I don't think there's any law against having lots of bank accounts. But what are you really gaining? Every new account is a paperwork hassle. Every new account is another target for con men who might steal your information and write bad checks or make phony credit card purchases in your name. Yes, it's not unreasonable to have a credit card or two that you keep for emergencies. I'd advise anyone with running up debts while having no idea how you will pay them off. But to say that you might keep some credit available so that if you have a legitimate emergency -- like, say, your car breaks down and you don't have the cash to fix it and you can't get to work without it -- you have some a fallback. But do you really need ten credit cards for that sort of thing? And how much credit are they giving you on each card? I don't know how the banks work this, but I'd think if they're rational, they'd consider your total credit before giving you more. I have three credit cards that I use regularly -- two personal and one business. And I find that a real pain to keep track of, to make sure that I keep each one paid by the due date and to keep a handle on how much I owe and so forth. I can't imagine trying to deal with ten. I suppose you could just stuff all these cards in a drawer and only use them in case of emergency." } ]

[ { "docid": "129997", "title": "", "text": "I can understand your fears, and there is nothing wrong with taking action to protect yourself from them. How much income do you need in retirement? For arguments sake, lets say you need to pull 36K per year from your 401K or 3K per month. Lets also assume that you current contribute (with any match) 1,000 per month. Please adjust to your actual numbers accordingly. One option would be to pull out 48K right now and put it in a money market. With your contributions, I would then put half into the money market and half into more aggressive investments. In 10 years, you would have about 110K in your money market account. You could live off of that for three years. If the market does crash, this should give you plenty of time to recover. Taking this option opens you to another risk, which is being beat up by inflation or lack of growth on a nice pile of cash. My time frame is not that different then yours (I am about 12 years away), but am still all in stocks. Having 48K and more with not opportunity for growth frightens me more than any temporary stock market crash. Having said that I think it would be a horrible mistake to get completely out of stocks. Many of those destroyed in 2008 also missed 2012 through 2014 which were awesome years. So do some. Set aside a year or three of income in something nice and safe. Maybe one year of income in money market, one in bonds and preferred stocks, and one in blue chips." }, { "docid": "378024", "title": "", "text": "\"If it is planned, then one can get a Bankers Check payable overseas; if destination is known. 1.) What will happen to the money? It will eventually go to Government as escheating. Unlcaimed.org can help you trace the funds and recover it. 2.) Will the banks close the accounts? 3.) After how much time will the banks close the accounts? Eventually Yes. If there is no activity [Note the definition of activity is different, A credit interest is not considered as activity, a authentic phone call / correspondence to change the address or any servicing request is considered activity] for a period of One year, the account is classified as \"\"Dormant\"\". Depending on state, after a period of 3-5 years, it would be inactive and the funds escheated. i.e. handed over to Government. 4.) Is there anything else to do? Any ideas? Before leaving? Try keeping it active by using internet banking or credit / debit cards linked to the account. These will be valid activities. 5.) Is there any way to send a relative to the US with any kind of paper of power, to unfreeze the accounts? 6.) The banks say they would need a power of attorney, but does that person actually need to be an attorney in the US, or can it simply be a relative WITH a paper (a paper that says power of attorney) or what is a power of attorney exactly, is it an actual attorney person, or just a paper? 7.) Is there any other way to unfreeze the accounts? Although I can confirm first hand; I think there would be an exception process if a person cannot travel to the Bank. It could even be that a person is in some remote state, not well etc and can't travel in person. I think if you are out of country, you could walk-in to an US embassy and provide / sign relevant documents there and get it attested. Although for different purpose, I know a Power of Attorney being created in other country and stamped / verified by US embassy and sent it over to US. This was almost a decade back. Not sure about it currently.\"" }, { "docid": "423639", "title": "", "text": "In Germany you can register a Einzelunternehmen and receive payments into your personal bank account with a German bank. Apple will certainly be able to transfer to accounts in Germany as payments go via the European SEPA standard. Tax wise if you are living in Germany you will need to pay tax in Germany, so this is really the easiest way of doing it." }, { "docid": "490831", "title": "", "text": "Do not try to deposit piece wise. Either use the system in complete transparence, or do not use it at all. The fear of having your bank account frozen, even if you are in your rights, is justified. In any case, I don't advise you to put in bank before reaching IRS. Also keep all the proof that you indeed contacted them. (Recommended letter and copy of any form you submit to them) Be ready to also give those same documents to your bank to proove your good faith. If they are wrong, you'll be considered in bad faith until you can proove otherwise, without your bank account. Do not trust their good faith, they are not bad people, but very badly organized with too much power, so they put the burden of proof on you just because they can. If it is too burdensome for you then keep cash or go bitcoin. (but the learning curve to keep so much money in bitcoin secure against theft is high) You should declare it in this case anyway, but at least you don't have to fear having your money blocked arbitrarily." }, { "docid": "463893", "title": "", "text": "Honing in on your last question: Is there a better way? I think there is, but it would require you to change the way you handle your spending, and that may not be of interest to you. Right now you have a lot of manual work, keeping track of expenditures and then entering the, every day. The great thing about switching to a habit where you pay for everything using a debit or credit card is that you can skip the manual entry by importing your transactions from your bank. You mention that your bank doesn't allow for exporting. There's still a chance that your bank can connect with a solution like Wave Accounting (http://www.waveaccouting.com), which is free and made for small business accounting. (Full disclosure: I represent Wave.) If your current bank doesn't permit export or connections with Wave, it may be worth switching to a different bank. It's a bit of a pain to make the switch, I know, but you really will save a massive amount of time and effort over the course of the year, as well as minimize the risk of human error, compared to entering your receipts on a daily basis. In Wave, you can still enter all of your cash receipts manually if you want to continue with your current practice of cash payments. One important thing to mention, too: If you're looking for a better way of doing things, make sure it includes proper backup. There would be nothing worse than entering all that data onto a spreadsheet and then something happening to your computer and you lose it all. Wave Accounting is backed up hourly and uses bank-level security to keep your information safe. One last thing: as I mention above, Wave Accounting is free. So if it is a good match for your small business accounting needs, it will also be a nice fit for your wallet." }, { "docid": "375877", "title": "", "text": "There is really much simpler explanation for the interest rate differences in different countries. It is the interest rate arbitrage. It is a very well explored economic concept, so you can look it up on the Internet, in case you want to know more. 1) Interest rates for the same currency in different countries Basically, as one smart person here pointed out, there is only one price of money in free market economy. It happens, because investors can move their money unrestrictedly anywhere in the World to capitalize on the local interest rates advantage. For instance, if I can take a loan in the USA at 3-4% annual interest and receive 5-6% annual income on my dollar deposit in Russia, I would take a loan in the US and open a deposit in Russia to enjoy a risk free interest rate differential income of 2% (5-6% - 3-4% ~ 2%). So, would any reasonable person. However, in real World very few banks in Russia or anywhere would pay you an an interest rate higher than it can borrow money at. It'd probably lose money if it'd do so. Anyways, the difference between the risk free rate and interest rate on the dollar deposit can be attributed to the risk premium of this particular bank. The higher expected return, the greater risk premium. If there is a positive difference in the interest rates on the dollar deposits in different countries, it will almost entirely accounted for the risk premium. It is generally much riskier to keep money in, say Russian bank, than American. That's why investors want greater return on their dollar deposits in Russian banks than in American. Of course, if you'd want to park your USD in Russian bank you'd also have to consider transaction costs. So, as you may have already guessed, there is no free lunch. 2) Interest rates in different currencies for different countries If we are talking about the interest rates in different sovereign currencies, it is a somewhat similar concept, only there is more risk if you keep money in local currency (risk premium is much higher). Probably, the biggest component of this risk is inflation (that is only attributed to the prices in local currency). For that reason, current interest rates on deposits in Russian Rubles are at 10-12%, but only 1-3% in the US Dollars. An economic concept that discusses this phenomenon in great detail is Interest Rate Parity. Hope this was helpful. P.S. It doesn't look quite realistic that you can get an 8% annual income for USD deposit in Russia with the interest rates in the U.S. being at 1-2%. At present moment, a 30-year mortgage annual interest rate in the US is at ~2-3% and an annual interest rates for dollar deposits in Sberbank (one of the safest Russian banks = very little risk premium) is at 1-3%. So, arbitrage is impossible." }, { "docid": "166441", "title": "", "text": "\"Your bank is maintaining different states for transactions, and changing the state depending on real-world events and the passage of time. withdraw €100 from my bank account on 30 September […] my bank does not process the transaction until 2 October. The bank probably have that transaction marked as “pending” on 30 September, and “cleared” on 2 October. transfer €100 from Bank A to Bank B, Bank A's statement dates the transaction on 20 September, but Bank B dates it as coming in on 22 September. Similarly, bank A will have the transaction marked as “pending” initially. Bank B won't have a corresponding transaction at all, until later; they'll have it “pending” too, until they confirm the transfer. Then (probably at different times from each other) the banks will each mark the corresponding transactions “cleared”. The bookkeeping software that I use doesn't seem to allow for this \"\"transfer time\"\" between accounts. When I enter a transfer from one account to another, they both have to have the same date. You may want to learn about different bases of accounting. The simpler option is “cash-based” accounting. The simplification comes from assuming transactions take no time to transfer from one account to another, and are instantly available after that. Your book-keeping software probably books using this simpler basis for your personal finances. The more complex “accrual-based” accounting tracks each individual transaction through multiple states – “pending”, “transfer”, “cleared”, etc. – with state changes at different times – time of trade, time of settlement, etc. – to more accurately reflect the real world agreements between parties, and different availability of the money to each party. So if your book-keeping program uses “cash basis”, you'll need to pick which inaccuracy you want: book the transfer when you did it, or book the transfer when the money is available at the other end.\"" }, { "docid": "119906", "title": "", "text": "\"I meant \"\"we\"\" in terms of the US Treasury, which currently owes over 100% of GDP. And that's cooking the debt numbers down using cash accounting and cooking the GDP up by lying about inflation, among other things. Plenty of people are doing better than ever, particularly those who have their hands in the cheap money thrown around by the Fed.\"" }, { "docid": "506066", "title": "", "text": "\"There are no \"\"on-line\"\" banks in Israel. There were various attempts to create something that would look like an online bank (HaYashir HaRishon comes to mind, Mizrahi did something similar recently), but that essentially is a branch of a brick and mortar bank (Leumi and Mizrahi, respectively) that allows you online management and phone service instead of walking into a branch, not a replacement for a traditional bank. Thus there are no significant operational savings for the banks through which they could have afforded higher savings rates. I agree with the other responder that the banking system in Israel is very well regulated, but I agree with you also - it is not competitive at all. That said, at the current inflation rate and the current strength of the currency, the 2.02% that you have is actually pretty good. Israel has no interest in paying high rates on incoming money since its currency is too strong and it hurts exports, so don't expect much at home on this issue. Opening an account outside of Israel poses a different problem - tax reporting. You'll have to file an annual tax return and pay your taxes on the interest you earn, something most Israelis never have to do. That will cost you and will probably eat up much, if not all, of the gain. Also, currency fluctuations will hurt you, as no-one will open an account in Shekels outside of Israel and you'll have to convert back and forth. In fact, the first thing to happen when the rates in Israel go up would be for the currency to go down, so whatever you might gain abroad will disappear when you actually decide to move the money back. And you will still be taxed on the interest income (can't deduct capital loss from interest income). Your options, as I see them, are either the stock market or the bonds market (or, more likely, a mix). In Israel, the bonds similar to the US T-Bills (short term bonds) are called \"\"makam\"\" and you can either invest in them directly or through mutual funds. These are traded at TASE and can be held for free (banks are not allowed to charge you for holding them). They're taxed at lower rates than capital gains (15% vs 25%). During the times of low interest these may provide much better alternative than bank savings (pakam).\"" }, { "docid": "588571", "title": "", "text": "\"Simplistic yes, but are you seriously saying \"\"plenty of bankers were laid off\"\", even comes close to comparing percentage wise to the percent layoffs of the general workforce? I would not say that, and that is my simplistic view.\"" }, { "docid": "391605", "title": "", "text": "\"Should I invest the money I don't need immediately and only withdraw it next year when I need it for living expenses or should I simply leave it in my current account? This might come as a bit of a surprise, but your money is already invested. We talk of investment vehicles. An investment vehicle is basically a place where you can put money and have it either earn a return, or be able to get it back later, or both. (The neither case is generally called \"\"spending\"\".) There are also investment classes which are things like cash, stocks, bonds, precious metals, etc.: different things that you can buy within an investment vehicle. You currently have the money in a bank account. Bank accounts currently earn very low interest rates, but they are also very liquid and very secure (in the sense of being certain that you will get the principal back). Now, when you talk about \"\"investing the money\"\", you are probably thinking of moving it from where it is currently sitting earning next to no return, to somewhere it can earn a somewhat higher return. And that's fine, but you should keep in mind that you aren't really investing it in that case, only moving it. The key to deciding about an asset allocation (how much of your money to put into what investment classes) is your investment horizon. The investment horizon is simply for how long you plan on letting the money remain where you put it. For money that you do not expect to touch for more than five years, common advice is to put it in the stock market. This is simply because in the long term, historically, the stock market has outperformed most other investment classes when looking at return versus risk (volatility). However, money that you expect to need sooner than that is often recommended against putting it in the stock market. The reason for this is that the stock market is volatile -- the value of your investment can fluctuate, and there's always the risk that it will be down when you need the money. If you don't need the money within several years, you can ride that out; but if you need the money within the next year, you might not have time to ride out the dip in the stock market! So, for money that you are going to need soon, you should be looking for less volatile investment classes. Bonds are generally less volatile than stocks, with government bonds generally being less volatile than corporate bonds. Bank accounts are even less volatile, coming in at practically zero volatility, but also have much lower expected rates of return. For the money that you need within a year, I would recommend against any volatile investment class. In other words, you might take whichever part you don't need within a year and put in bonds (except for what you don't foresee needing within the next half decade or more, which you can put in stocks), then put the remainder in a simple high-yield deposit-insured savings account. It won't earn much, but you will be basically guaranteed that the money will still be there when you want it in a year. For the money you put into bonds and stocks, find low-cost index mutual funds or exchange-traded funds to do so. You cannot predict the future rate of return of any investment, but you can predict the cost of the investment with a high degree of accuracy. Hence, for any given investment class, strive to minimize cost, as doing so is likely to lead to better return on investment over time. It's extremely rare to find higher-cost alternatives that are actually worth it in the long term.\"" }, { "docid": "258423", "title": "", "text": "\"What I've found works best when working on my personal budget is to track my income and spending two different ways: bank accounts and budget categories. Here is what I mean: When I deposit my paycheck, I do two things with it: It goes into my checking account, so the balance of my checking account goes up by the amount of my paycheck. I also \"\"deposit\"\" the money from my checking account into my various budget category balances. This is separate from my bank account balances. Some of my paycheck money goes into my groceries category, some goes into clothing, some into car fuel, entertainment, mortgage, phone, etc. Some goes into longer range bills that only happen once or twice a year, such as car insurance, life insurance, property tax, etc. Some goes into savings goals of ours, such as car replacement, vacation, furniture, etc. Every dollar that we have in a bank account or in cash in our wallets is also accounted for in a budget category. If you add up the balances of our bank accounts and cash, and you add up the balances of our budget categories, they add up to the same number. When we make a purchase, this also gets accounted for twice: The appropriate bank account (or cash wallet) balance gets reduced by the purchase amount. The appropriate budget category gets reduced by the purchase amount. In this way, we don't really need to worry about having separate bank accounts for different purposes. We don't need to put our savings goal money in a separate bank account from our grocery money, if we don't want to. The budget category accounting keeps track of how much money is allocated to each purpose. Now, the budget category amounts are not spent yet; the money in them is still in our bank account, and we can move money around in the categories, if we change our mind on how to allocate them. For example, if we don't spend all of our gas money for the month, we can either keep that money in the gas category, or we can move it to a different category, such as the car replacement category or the vacation category. If the phone bill is more than we expect, we can move money around from a different category to cover it. Now, back to your question: We allocate some money from each paycheck into our furniture category. But the money is not really spent until we actually buy some furniture. When we do, the furniture category balance and bank account balance both go down by the amount of the purchase. All of this can be kept track of on the computer in a spreadsheet. However, it's not easy to keep track of so many categories and bank balances. An easier solution is custom budgeting software designed for this purpose. I use and recommend YNAB.\"" }, { "docid": "523960", "title": "", "text": "I have worked for BNP (BNP PARIBAS) a french bank. From my experience it is the easiest sale to make when working for a bank. Because saving is sold as a long term investment your client is not likely to close the account any time soon. From this product on you could open a broker account if the client wants to take more risks ( yhea yet another sale). If the client is very keen on no risks, there are insurance products (they make plenty of money from insurance) or callable investments that you can propose. Retail banking works by attracting a maximum number of people and selling them a maximum amount of product. To answer you question is it profitable? I am sure it is not ( right now your savings account costs the bank money because of super low rates in the EU). I think it is all about increasing or maintaining market-share that you see some banks offering some cash just for opening an account. At the moment we have to sell credit cards to people that is where banks make good money. If you would like me to go more in depth on a specific subject i mentioned here just ask. Hope it helped." }, { "docid": "380263", "title": "", "text": "While it's wise, easier and safer to check your transactions online a few times a month, I opt to receive and file paper statements as a hard copy back up of account history. Any reconciliation I perform is a quick glance to make sure the numbers sound right. It's probably a small waste of time and space, but it settles some of my paranoia (due to my training as a computer engineer) about failure of electronic banking systems. If someone tampers with bank records or a SAN explodes and wipes out a bunch of account data, then I will have years worth of paper statements to back up my numbers. Having years worth of statements printed on the banks stationary will have better credibility in court than a .pdf or printout thereof that could have been doctored, in case I ever needed to take my bank to court. A little piece of mind for the price of a letter opener, a square foot file box and a couple of minutes a month." }, { "docid": "479663", "title": "", "text": "\"I have three savings accounts that are currently open in India in different banks. Is it legal to have savings accounts open while I am in the US? If you are NRI [from what you have stated you are], you cannot hold a \"\"Savings\"\" account in India. Please have the accounts converted as NRO at the earliest. It is a simple matter of contacting Bank and completing formalities with some paperwork. do I have to declare this fact in the tax filings in US given that my tax is already deducted? Yes, interest would be taxable in US. Does my father have to declare the additional deposits? No. Edit to reply to comment: RBI Economic Times\"" }, { "docid": "233781", "title": "", "text": "\"That's accurate. Here is another risk with the current checking system, which many people are not aware of: Anyone who knows your checking account number can learn what your balance in that account is. (This is bank-specific, but it is possible at the major banks I've checked.) How does that work? Many banks have a phone line where you can dial up and interact with an automated voice response system, for various customer service tasks. One of the options is something like \"\"merchant check verification\"\". That option is intended to help a merchant who receives a check to verify whether the person writing the check has enough money in their account for the check to clear. If you select that option in the phone tree, it will prompt you to enter in the account number on the check and the amount of the check, and then it will respond by telling you either \"\"there are currently sufficient funds in the account to cash this check\"\" or \"\"there are not sufficient funds; this check would bounce\"\". Here's how you can abuse this system to learn how much someone has in their bank account, if you know their account number. You call up and check whether they've enough money to cash a $10,000 check (note that you don't actually have to have a check for $10,000 in your hands; you just need to know the account number). If the system says \"\"nope, it'd bounce\"\", then you call again and try $5,000. If the system says \"\"yup, sufficient funds for a $5,000 check\"\", then you try $7,500. If it says \"\"nope, not enough for that\"\", you try $6,250. Etcetera. At each step, you narrow the range of possible account balances by a factor of two. Consequently, after about a dozen or so steps, you will likely know their balance to within a few dollars. (Computer scientists know this procedure by the name \"\"binary search\"\". The rest of us may recognize it as akin to a game of \"\"20 questions\"\".) If this bothers you, you may be able to protect your self by calling up your bank and asking them how to prevent it. When I talked to my bank (Bank of America), they told me they could put a fraud alert flag on your account, which would disable the merchant check verification service for my account. It does mean that I have to provide a 3-digit PIN any time I phone up my bank, but that's fine with me. I realize many folks may terribly not be concerned about revealing their bank account balance, so in the grand scheme of things, this risk may be relatively minor. However, I thought I'd document it here for others to be aware of.\"" }, { "docid": "377357", "title": "", "text": "\"UPDATE: Unfortunately Citibank have removed the \"\"standard\"\" account option and you have to choose the \"\"plus\"\" account, which requires a minimum monthly deposit of 1800 sterling and two direct debits. Absolutely there is. I would highly recommend Citibank's Plus Current Account. It's a completely free bank account available to all UK residents. http://www.citibank.co.uk/personal/banking/bankingproducts/currentaccounts/sterling/plus/index.htm There are no monthly fees and no minimum balance requirements to maintain. Almost nobody in the UK has heard of it and I don't know why because it's extremely useful for anyone who travels or deals in foreign currency regularly. In one online application you can open a Sterling Current Account and Deposit Accounts in 10 other foreign currencies (When I opened mine around 3 years ago you could only open up to 7 (!) accounts at any one time). Citibank provide a Visa card, which you can link to any of your multi currency accounts via a phone call to their hotline (unfortunately not online, which frequently annoys me - but I guess you can't have everything). For USD and EUR you can use it as a Visa debit for USD/EUR purchases, for all other currencies you can't make debit card transactions but you can make ATM withdrawals without incurring an FX conversion. Best of all for your case, a free USD cheque book is also available: http://www.citibank.co.uk/personal/banking/international/eurocurrent.htm You can fund the account in sterling and exchange to USD through online banking. The rates are not as good as you would get through an FX broker like xe.com but they're not terrible either. You can also fund the account by USD wire transfer, which is free to deposit at Citibank - but the bank you issue the payment from will likely charge a SWIFT fee so this might not be worth it unless the amount is large enough to justify the fee. If by any chance you have a Citibank account in the US, you can also make free USD transfers in/out of this account - subject to a daily limit.\"" }, { "docid": "452540", "title": "", "text": "If the checking account is in a FDIC insured bank or a NCUA insured Credit Union then you don't have to worry about what happens if the bank goes out of business. In the past the government has made sure that any disruption was minimal. The fraud issue can cause a bigger problem. If they get a hold of your debit card, they can drain your account. Yes the bank gives you fraud protection so that the most you can lose is $50 or $500; many even make your liability $0 if you report it in a timely manor. But there generally is a delay in getting the money put back in your account. One way to minimize the problem is to open a savings account,it also has the FDIC and NCUA coverage . The account may even earn a little interest. If you don't allow the bank to automatically provide an overdraft transfer from savings to checking account, then the most they can temporarily steal is your checking account balance. Getting a credit card can provide additional protection. It also limits your total losses if there is fraud. The bill is only paid once a month so if they steal the card or the number, they won't be able to drain the money in the bank account. The credit card, if used wisely can also start to build a positive credit file so that in a few years you can get a loan for a car or a place to live. Of course if they steal your entire wallet with both the credit and the debit card..." }, { "docid": "574691", "title": "", "text": "Yes, this is fine: You can save up to £20,000 in one type of account or split the allowance across some or all of the other types. You can only pay £4,000 into your Lifetime ISA in a tax year ... Example You could save £11,000 in a cash ISA, £2,000 in a stocks and shares ISA, £3,000 in an innovative finance ISA and £4,000 in a Lifetime ISA in one tax year. https://www.gov.uk/individual-savings-accounts/how-isas-work You might want to consider whether it is wise to be fully invested in shares. If you're going to have to dip into them for things like holidays and a car, you're taking a risk that you might have to sell when the market is low. As a basic rate taxpayer, you have a £1 000 personal savings allowance. You don't need to chase the tax break with a cash ISA, which often have poor rates. However, you should consider keeping some of your savings in cash, for example in a current account that pays decent interest on the balance." } ]

[ { "docid": "487067", "title": "", "text": "The original poster indicates that he lives in the UK, but there are likely strong similarities with the US banking system that I am more familiar with: The result is that you are likely going to be unable to be approved for 10 checking accounts opened in rapid succession, at least in the US. Finally, in the US, there is no need to have checking accounts with a bank in order to open a credit card with them (although sometimes it can help if you have a low credit score)." } ]

[ { "docid": "180295", "title": "", "text": "I am going to give advice that is slightly differently based on my own experiences. First, regarding the financing, I have found that the dealers do in fact have access to the best interest rates, but only after negotiating with a better financing offer from a bank. When I bought my current car, the dealer was offering somewhere around 3.3%, which I knew was way above the current industry standard and I knew I had good credit. So, like I did with my previous car and my wife's car, I went to local and national banks, came back with deals around 2.5 or 2.6%. When I told the dealer, they were able to offer 2.19%. So it's ok to go with the dealer's financing, just never take them at face value. Whatever they offer you and no matter how much they insist it's the best deal, never believe it! They can do better! With my first car, I had little credit history, similar to your situation, and interest rates were much higher then, like 6 - 8%. The dealer offered me 10%. I almost walked out the door laughing. I went to my own bank and they offered me 8%, which was still high, but better than 10%. Suddenly, the dealer could do 7.5% with a 0.25% discount if I auto-pay through my checking account. Down-payment wise, there is nothing wrong with a 35% down payment. When I purchased my current car, I put 50% down. All else being equal, the more cash down, the better off you'll be. The only issue is to weigh that down payment and interest rate against the cost of other debts you may have. If you have a 7% student loan and the car loan is only 3%, you're better off paying the minimum on the car and using your cash to pay down your student loan. Unless your student loan balance is significantly more than the 8k you need to finance (like a 20k or 30k loan). Also remember that a car is a depreciating asset. I pay off cars as fast as I can. They are terrible debt to have. A home can rise in value, offsetting a mortgage. Your education keeps you employed and employable and will certainly not make you dumber, so that is a win. But a car? You pay $15k for a car that will be worth $14k the next day and $10k a year from now. It's easy to get underwater with a car loan if the down payment is small, interest rate high, and the car loses value quickly. To make sure I answer your questions: Do you guys think it's a good idea to put that much down on the car? If you can afford it and it will not interfere with repayment of much higher interest debts, then yes. A car loan is a major liability, so if you can minimize the debt, you'll be better off. What interest rate is reasonable based on my credit score? I am not a banker, loan officer, or dealer, so I cannot answer this with much credibility. But given today's market, 2.5 - 4% seems reasonable. Do you think I'll get approved? Probably, but only one way to find out!" }, { "docid": "5644", "title": "", "text": "\"Your instructor's numbers do not seem to have any basis in current reality. At this page you can see a comparison of interest rates offered by banks and credit unions. In the most recent table for June 2014, banks paid an average interest rate of 0.12 percent on savings accounts, while credit unions paid an average of 0.13 percent. If you look back further, you will see that interest rates paid by banks and credit unions are generally comparable. Credit union rates tend to be a little bit higher, but certainly not 7 times higher. The last time any financial institution paid as much as 15% on a savings account would probably be the early 1980s. You can see here a historical chart of the \"\"prime rate\"\" for lending. Savings account rates (at either banks or credit unions) would typically be lower. (This is based on the US, in accordance with your tag. Interest rates in other places, especially developing countries with less stable currencies, can be dramatically different.)\"" }, { "docid": "264565", "title": "", "text": "\"The terms debit and credit come from double-entry book-keeping. In this system, every transaction is applied against two accounts: it debits one and credits the other by equal amounts. (Or more technically, it affects two or more accounts, and the total of the credits equals the total of the debits.) Whether a debit or a credit adds or subtracts from the balance depends on the type of account. The types of accounts were defined so that it is always possible to have these matching debits and credits. Assets, like cash or property that you own, are \"\"debit accounts\"\", that is, a debit is an increase in the balance of the account. Liabilities, like money you owe, are \"\"credit accounts\"\", that is, a credit is an increase. To get into all the details would require giving a tutorial on double-entry book-keeping, which I think is beyond the scope of a forum post. By a quick Bing search I find this one: http://simplestudies.com/double-entry-accounting-system.html. I haven't gone through it so I can't say if it's a particularly good tutorial. There are plenty of others on the Web and in bookstores. Note that the terminology can be backwards when someone you're doing business with is describing the account, because their viewpoint may be the opposite of yours. For example, to me, my credit card is a liability: I owe the bank money. So when I post a charge, that's a credit, and when I pay it off, that's a debit. But to the bank, my account is an asset: the customer (me) owes them money. So to the bank, a charge is a debit and a payment is a credit.\"" }, { "docid": "267128", "title": "", "text": "It will not affect your tax bracket so long as he files his taxes. It will not affect your credit negatively so long as the joint account takes out no debts. If it does take out debts, then someone would need to pay them to avoid negative credit. Ideally debts should take signatures from both of you (ask the bank). The IRS will not automatically assume that the only reason that two people might have a joint account is illegal activities. If he withdraws money from the account in such a way to cause an overdraft, you might be responsible for it. However, it sounds like he isn't supposed to be withdrawing money from that account. So that's a potential problem but not a guaranteed problem. Make sure that you have the power to close the account without him (so if you break up later, you can take your name off unilaterally). Realize that you might have to pay a little to close the account if he overdraws it. If possible, have the bank refuse overdrafts. Consider a savings account rather than a checking account. The rules may better fit what you want to do. In particular, if you are limited to transfers, that's safer than checks. Schedule a time to talk to someone at the bank about the account. Ask them to leave plenty of time because you have questions. Explain what you want and let them tell you how to structure the account." }, { "docid": "185104", "title": "", "text": "The United States Federal Reserve has decided that interest rates should be low. (They think it may help the economy. The details matter little here though.) It will enforce this low rate by buying Treasury bonds at this very low interest rate. (Bonds are future money, so this means they pay a lot of money up front, for very little interest in the future. The Fed will pay more than anyone who offers less money up front, so they can set the price as long as they're willing to buy.) At the end of the day, Treasury bonds pay nearly no interest. Since there's little money to be made with Treasuries, people who want better-than-zero returns will bid up the current-price of any other bonds or similar loan-like instruments to get what whatever rate of return that they can. There's really no more than one price for money; you can think of the price of those bonds as basically (Treasury rate + some modifier based on the risk) percent. I realize thinking about bond prices is weird and different than other prices (you're measuring future-money using present-money and it's easy to be confused) and assure you it ultimately makes sense :) Anyway. Your savings account money has to compete with everyone else willing to lend money to banks. Everyone-else lends money for peanuts, so you get peanuts on your savings account too. Your banking is probably worth more to your bank on account of your check-card payment processing fees (collected from the merchant) than from the money they make lending out your savings (notice how many places have promotional rates if you make your direct deposits or use your check card to make a purchase N times a month). In Europe, it's similar, except you've got a different central bank. If Europe's bank operated radically differently for an extended period of time, you'd expect to see a difference in the exchange rates which would ultimately make the returns from investing in those currencies pretty similar as well. Such a change may show up domestically as inflation in the country with the loose-money policy, and internationally as weakness against other currencies. There's really only one price for money around the entire world. Any difference boils down to a difference in (perceived) risk." }, { "docid": "308150", "title": "", "text": "\"If I understand correctly, the Traditional IRA, if you have 401k with an employer already, has the following features: Actually, #1 and #2 are characteristics of Roth IRAs, not Traditional IRAs. Only #3 is a characteristic of a Traditional IRA. Whether you have a 401(k) with your employer or not makes absolutely no difference in how your IRAs are taxed for the vast majority of people. (The rules for IRAs are different if you have a very high income, though). You're allowed to have and contribute to both kinds of accounts. (In fact, I personally have both). Traditional IRAs are tax deferred (not tax-free as people sometimes mistakenly call them - they're very different), meaning that you don't have to pay taxes on the contributions or profits you make inside the account (e.g. from dividends, interest, profits from stock you sell, etc.). Rather, you pay taxes on any money you withdraw. For Roth IRAs, the contributions are taxed, but you never have to pay taxes on the money inside the account again. That means that any money you get over and above the contributions (e.g. through interest, trading profits, dividends, etc.) are genuinely tax-free. Also, if you leave any of the money to people, they don't have to pay any taxes, either. Important point: There are no tax-free retirement accounts in the U.S. The distinction between different kinds of IRAs basically boils down to \"\"pay now or pay later.\"\" Many people make expensive mistakes in their retirement strategy by not understanding that point. Please note that this applies equally to Traditional and Roth 401(k)s as well. You can have Roth 401(k)s and Traditional 401(k)s just like you can have Roth IRAs and Traditional IRAs. The same terminology and logic applies to both kinds of accounts. As far as I know, there aren't major differences tax-wise between them, with two exceptions - you're allowed to contribute more money to a 401(k) per year, and you're allowed to have a 401(k) even if you have a high income. (By way of contrast, people with very high incomes generally aren't allowed to open IRAs). A primary advantage of a Traditional IRA is that you can (in theory, at least) afford to contribute more money to it due to the tax break you're getting. Also, you can defer taxes on any profits you make (e.g. through dividends or selling stock at a profit), so you can grow your money faster.\"" }, { "docid": "415574", "title": "", "text": "So does Japan's. Japan Post is a bank as well as a post office. Which is something that would be a big boost to low income people who may have difficulty opening bank accounts. USPS bank accounts could be a kind of default for people to choose where their paychecks are deposited, allowing people to avoid those awful, awful check cashing sharks. Of course, the check cashing sharks have plenty of money to lobby against this, so it won't happen anytime soon." }, { "docid": "380263", "title": "", "text": "While it's wise, easier and safer to check your transactions online a few times a month, I opt to receive and file paper statements as a hard copy back up of account history. Any reconciliation I perform is a quick glance to make sure the numbers sound right. It's probably a small waste of time and space, but it settles some of my paranoia (due to my training as a computer engineer) about failure of electronic banking systems. If someone tampers with bank records or a SAN explodes and wipes out a bunch of account data, then I will have years worth of paper statements to back up my numbers. Having years worth of statements printed on the banks stationary will have better credibility in court than a .pdf or printout thereof that could have been doctored, in case I ever needed to take my bank to court. A little piece of mind for the price of a letter opener, a square foot file box and a couple of minutes a month." }, { "docid": "546275", "title": "", "text": "&gt;i dont see what's the big deal, all the banks got bailed out. Govt printed over 7 trillion bucks, not much inflation. govt has to help private sector. gave plenty of freebies to the rich mother fukers in the banking sector. Yes that was bullshit, I agree. The difference is that most of the money that went to the banks is held with the banks. It didn't cause inflation because it isn't circulating in the economy. The government also had to do something with the banks because it would have triggered a major depression if they didn't. I don't think they handled it the best way at all. They should have nationalized the banks after the bailouts rather than let them keep thriving. However, students don't **need** that extra debt. That would be $1 trillion extra that actually is circulating in the economy, which would cause serious inflation. That would mean [doubling](http://www.federalreserve.gov/faqs/currency_12773.htm) the amount of money in circulation. That is a lot different than the trillions the government printed, mostly just to set monetary policy." }, { "docid": "576362", "title": "", "text": "Before answering specific question, you are liable to pay tax as per your bracket on the income generated. I work with my partner and currently we transfer all earning on my personal bank account. Can this create any issue for me? If you are paying your partner from your account, you would need to maintain proper paperwork to show the portion of money transferred is not income to you. Alternatively create a join Current Account. Move funds there and then move it to your respective accounts. Which sort off account should be talk and by whose name? Can be any account [Savings/Current]. If you are doing more withdrawls open Current else open Savings. It does not matter on whos name the account is. Paperwork to show income matters from tax point of view. What should we take care while transfering money from freelance site to bank? Nothing specific Is there any other alternative to bank? There is paypal etc. However ultimately it flows into a Bank Account. What are other things to be kept in mind? Keep proper record of actual income of each of you, along with expenses. There are certain expenses you can claim from income, for example laptop, internet, mobile phone etc. Consult a CA he will be able to guide and it does not cost much." }, { "docid": "477357", "title": "", "text": "I have also tried Mvelopes in the past, and my experiences match yours. I currently use the desktop version of YNAB:You Need a Budget (YNAB 4), and I like it much better. Where we failed after a while with Mvelopes, we are succeeding with YNAB, and have been now for the last 3.5 years. I don't want this to sound like a commercial for YNAB (I will give important caveats about YNAB later), but here is why I believe we have done better now with YNAB than before with Mvelopes. I hope that these reasons will be useful to you when you are evaluating your next options. As you said, we also found Mvelopes' interface to be slow and glitchy. YNAB 4 is a desktop app (with synching capabilities) that we found to be much quicker and easier to work with than Mvelopes' Flash-based interface. (That was 4 years ago; hopefully Mvelopes has redone their interface since then.) We also struggled with Mvelopes' connection with our banks. With YNAB 4, there is no connection to the bank: everything has to be entered manually. I initially thought this might be worse, but for us it has been better. I can either enter transactions as they happen on the mobile app, or I can hold on to receipts and enter them every day or two in the evening, categorizing as I go. We always have an up-to-date picture of our finances, and we don't have to mess with trying to match up downloaded transactions that have been screwed up, duplicated, or are missing. We aren't really using YNAB much differently than we were using Mvelopes, but we have learned a few tricks that I think have contributed to our success. One of the things we do differently is that I don't obsess about the cash accounts too much. Cash accounts, for us, are the hardest to keep track of, because most of our cash transactions don't have a receipt: we are paying a friend or family member for something, or leaving a tip, or something like that which we forget about when it comes time to enter into the software. As a result, the cash account balances get off. I periodically enter a correcting transaction to get the balances right, and have a budget category specifically for this that we have to put money in for these unknown transactions. Fortunately for us, our cash spending is a small percent of our total spending (we usually pay with a credit card) so this bit of untracked spending isn't that big of a concern. With YNAB, the current month's budget is right in front of you as soon as you open up the app, which makes it easy to adjust your budget during the month, if necessary. With Mvelopes (at least how their app worked 4 years ago), the budget was somewhat hidden after you funded your budget categories, and it was a bit of a pain to move money around between categories. The ability to adjust your budget in the middle of the month is crucial; if you don't do that, you'll get frustrated the first time you find that you don't have enough money in a category for something you need. YNAB makes it very easy to move money around inside your budget. That having been said, you need to be aware that the current version of YNAB is not a desktop application but a web-based app. YNAB 4, the old desktop version which we have been using, is officially unsupported as of the end of 2016. However, I see that it is still available for sale, if you are interested in it, the YNAB4 help site is still up, and the mobile app you would need to work with it on your phone (called YNAB Classic) is still in the app store. As I said, the current YNAB is now a web app, complete with automatic downloading of transactions from your bank. I have no experience with it (other than playing around with it a little), and so I can't tell you how quick the interface is or how well the auto-downloading of transactions works. As an alternative, another web-based solution is EveryDollar, from Dave Ramsey's company. (I have never tried it.) The advantage of this one is that it is free if you choose not to link it to your banks; the automatic downloading of transactions is a paid feature. I wrote an answer a couple of years ago in which I describe two different approaches that budgeting software packages tend to take. I'm not familiar with Buxfer, so I don't know which approach it takes, but perhaps that answer will help you evaluate all of your software options. On the behavior side of things, besides the relaxing of the cash accounting I mentioned above, we also involve my wife a little less in the budgeting process than we used to. (This is by her choice!) I am the one who enters all the transactions into the software (she hands me all her receipts), I reconcile the accounts at the end of the month, and I set the budget for the next month. We have been doing this long enough now that she knows what the budget is, and we only need to discuss it if we want to do something different with the budget than we have been doing in the past. She has the YNAB app on her phone and can see where we are at with all of our budget categories." }, { "docid": "490831", "title": "", "text": "Do not try to deposit piece wise. Either use the system in complete transparence, or do not use it at all. The fear of having your bank account frozen, even if you are in your rights, is justified. In any case, I don't advise you to put in bank before reaching IRS. Also keep all the proof that you indeed contacted them. (Recommended letter and copy of any form you submit to them) Be ready to also give those same documents to your bank to proove your good faith. If they are wrong, you'll be considered in bad faith until you can proove otherwise, without your bank account. Do not trust their good faith, they are not bad people, but very badly organized with too much power, so they put the burden of proof on you just because they can. If it is too burdensome for you then keep cash or go bitcoin. (but the learning curve to keep so much money in bitcoin secure against theft is high) You should declare it in this case anyway, but at least you don't have to fear having your money blocked arbitrarily." }, { "docid": "258423", "title": "", "text": "\"What I've found works best when working on my personal budget is to track my income and spending two different ways: bank accounts and budget categories. Here is what I mean: When I deposit my paycheck, I do two things with it: It goes into my checking account, so the balance of my checking account goes up by the amount of my paycheck. I also \"\"deposit\"\" the money from my checking account into my various budget category balances. This is separate from my bank account balances. Some of my paycheck money goes into my groceries category, some goes into clothing, some into car fuel, entertainment, mortgage, phone, etc. Some goes into longer range bills that only happen once or twice a year, such as car insurance, life insurance, property tax, etc. Some goes into savings goals of ours, such as car replacement, vacation, furniture, etc. Every dollar that we have in a bank account or in cash in our wallets is also accounted for in a budget category. If you add up the balances of our bank accounts and cash, and you add up the balances of our budget categories, they add up to the same number. When we make a purchase, this also gets accounted for twice: The appropriate bank account (or cash wallet) balance gets reduced by the purchase amount. The appropriate budget category gets reduced by the purchase amount. In this way, we don't really need to worry about having separate bank accounts for different purposes. We don't need to put our savings goal money in a separate bank account from our grocery money, if we don't want to. The budget category accounting keeps track of how much money is allocated to each purpose. Now, the budget category amounts are not spent yet; the money in them is still in our bank account, and we can move money around in the categories, if we change our mind on how to allocate them. For example, if we don't spend all of our gas money for the month, we can either keep that money in the gas category, or we can move it to a different category, such as the car replacement category or the vacation category. If the phone bill is more than we expect, we can move money around from a different category to cover it. Now, back to your question: We allocate some money from each paycheck into our furniture category. But the money is not really spent until we actually buy some furniture. When we do, the furniture category balance and bank account balance both go down by the amount of the purchase. All of this can be kept track of on the computer in a spreadsheet. However, it's not easy to keep track of so many categories and bank balances. An easier solution is custom budgeting software designed for this purpose. I use and recommend YNAB.\"" }, { "docid": "506066", "title": "", "text": "\"There are no \"\"on-line\"\" banks in Israel. There were various attempts to create something that would look like an online bank (HaYashir HaRishon comes to mind, Mizrahi did something similar recently), but that essentially is a branch of a brick and mortar bank (Leumi and Mizrahi, respectively) that allows you online management and phone service instead of walking into a branch, not a replacement for a traditional bank. Thus there are no significant operational savings for the banks through which they could have afforded higher savings rates. I agree with the other responder that the banking system in Israel is very well regulated, but I agree with you also - it is not competitive at all. That said, at the current inflation rate and the current strength of the currency, the 2.02% that you have is actually pretty good. Israel has no interest in paying high rates on incoming money since its currency is too strong and it hurts exports, so don't expect much at home on this issue. Opening an account outside of Israel poses a different problem - tax reporting. You'll have to file an annual tax return and pay your taxes on the interest you earn, something most Israelis never have to do. That will cost you and will probably eat up much, if not all, of the gain. Also, currency fluctuations will hurt you, as no-one will open an account in Shekels outside of Israel and you'll have to convert back and forth. In fact, the first thing to happen when the rates in Israel go up would be for the currency to go down, so whatever you might gain abroad will disappear when you actually decide to move the money back. And you will still be taxed on the interest income (can't deduct capital loss from interest income). Your options, as I see them, are either the stock market or the bonds market (or, more likely, a mix). In Israel, the bonds similar to the US T-Bills (short term bonds) are called \"\"makam\"\" and you can either invest in them directly or through mutual funds. These are traded at TASE and can be held for free (banks are not allowed to charge you for holding them). They're taxed at lower rates than capital gains (15% vs 25%). During the times of low interest these may provide much better alternative than bank savings (pakam).\"" }, { "docid": "203298", "title": "", "text": "My possible new job requires me to do dfast and ccar among others. A few questions 1) My background is public accounting and tax. I noted that these jobs requires experience from public firms. My past experience has nothing to do with banking. Any reasons? I have been reading up dfast in the past week and it seems they trust me to pick up fast. Another job ad from another bank indicates the same thing. 2) What type of job this is under? I tried risk analyst but quite a lot of times the results are quite different from what my job is. 3) What is the job outlook? My eventual plan is to a more data analyst role and/or job opportunities in EU. Currently in EA/SEA market. 4) Any programming language should I learn to speed up data extraction? I will be learning either python/r. And will surface 3 do? My current laptop is not working and the repair shop indicates the costs of repairing doesnt worth it." }, { "docid": "364378", "title": "", "text": "As an LLC you are required to have a separate bank account (so you can't have one account and mix personal and business finances together as you could if you were a sole trader) - but there's no requirement for it to be a business bank account. However, the terms and conditions of most high street bank personal current accounts specifically exclude business banking, so unless you could find one that would allow it, you'd have to open a business bank account." }, { "docid": "45583", "title": "", "text": "Coming to London at this point of time is not a wise decision, not that I mean to discourage you. The job market is quite competitive because loads of developers are in the markets, because of the layoffs. So be ready to wait for some time to land a role. Banks aren't recruiting that heavily, but that might change if the economy picks up. Regarding salaries, the contract rates you quote are primarily for banking sector jobs, some outside banking also pay those rates, but they are few. You can quote what you want to a recruiter, most contracts are through them as most managers have a fincancial get go between recruiters and themselves. Recruiters take their cut what they bill, 400+200(just a guess). So the more they take from the 400, better is their margin. So they try to decrease the 400 portion. But the important point is be ready to keep your chair warm for some time. I am not sure why you have to move to London. Keep your current job. Get a Skype number or something and get the calls diverted to your phone in Germany. You can come down to London for interviews and schedule them so you come in a week and give all your interviews. London is a costly place, you can find cheap places to stay too. But without a job and searching for one will get you depressed(been there and experienced it)" }, { "docid": "72024", "title": "", "text": "\"Not all call options that have value at expiration, exercise by purchasing the security (or attempting to, with funds in your account). On ETNs, they often (always?) settle in cash. As an example of an option I'm currently looking at, AVSPY, it settles in cash (please confirm by reading the documentation on this set of options at http://www.nasdaqomxtrader.com/Micro.aspx?id=Alpha, but it is an example of this). There's nothing it can settle into (as you can't purchase the AVSPY index, only options on it). You may quickly look (wikipedia) at the difference between \"\"American Style\"\" options and \"\"European Style\"\" options, for more understanding here. Interestingly I just spoke to my broker about this subject for a trade execution. Before I go into that, let me also quickly refer to Joe's answer: what you buy, you can sell. That's one of the jobs of a market maker, to provide liquidity in a market. So, when you buy a stock, you can sell it. When you buy an option, you can sell it. That's at any time before expiration (although how close you do it before the closing bell on expiration Friday/Saturday is your discretion). When a market maker lists an option price, they list a bid and an ask. If you are willing to sell at the bid price, they need to purchase it (generally speaking). That's why they put a spread between the bid and ask price, but that's another topic not related to your question -- just note the point of them buying at the bid price, and selling at the ask price -- that's what they're saying they'll do. Now, one major difference with options vs. stocks is that options are contracts. So, therefore, we can note just as easily that YOU can sell the option on something (particularly if you own either the underlying, or an option deeper in the money). If you own the underlying instrument/stock, and you sell a CALL option on it, this is a strategy typically referred to as a covered call, considered a \"\"risk reduction\"\" strategy. You forfeit (potential) gains on the upside, for money you receive in selling the option. The point of this discussion is, is simply: what one buys one can sell; what one sells one can buy -- that's how a \"\"market\"\" is supposed to work. And also, not to think that making money in options is buying first, then selling. It may be selling, and either buying back or ideally that option expiring worthless. -- Now, a final example. Let's say you buy a deep in the money call on a stock trading at $150, and you own the $100 calls. At expiration, these have a value of $50. But let's say, you don't have any money in your account, to take ownership of the underlying security (you have to come up with the additional $100 per share you are missing). In that case, need to call your broker and see how they handle it, and it will depend on the type of account you have (e.g. margin or not, IRA, etc). Generally speaking though, the \"\"margin department\"\" makes these decisions, and they look through folks that have options on things that have value, and are expiring, and whether they have the funds in their account to absorb the security they are going to need to own. Exchange-wise, options that have value at expiration, are exercised. But what if the person who has the option, doesn't have the funds to own the whole stock? Well, ideally on Monday they'll buy all the shares with the options you have at the current price, and immediately liquidate the amount you can't afford to own, but they don't have to. I'm mentioning this detail so that it helps you see what's going or needs to go on with exchanges and brokerages and individuals, so you have a broader picture.\"" }, { "docid": "40338", "title": "", "text": "\"If you are going to keep your US bank account for any period of time, the very best option I know of is to withdraw Euros from an atm using your US card once you are in Germany. I draw on my US account regularly (I'm in Munich) and always get the going \"\"mid market\"\" exchange rate, which is better than what you get from a currency conversion service, transfer agency, or bank transfer, and there are no fees from the atm or my bank for the currency conversion or withdrawal. Of course you should check with your bank to verify their rules and fees for atm use internationally. It would also be wise to put a travel advisory on your account to be sure your transaction is not denied because you are out of country.\"" } ]

[ { "docid": "179756", "title": "", "text": "I did find this information from the US Department of the Treasury: What are the penalties for withdrawing money early from a Time Certificate of Deposit (CD)? Federal law stipulates that all time certificates of deposit (CD) that are cashed out early are subject to a minimum penalty. If you withdraw an amount within the first six days after deposit, the penalty consists of at least seven days' simple interest. Other than that, national banks can set their own penalties; there is no maximum. Additionally, you may want to review the Account Agreement that the bank provided when you opened the account, as it explains the early withdrawal penalties. Check the paperwork to see if there is a short period at the start where the penalty is minimal. Each bank can set their own rules for the maximum penalty. Some base it on x months interest, some as a percentage of the CD, others may use a more complex formula." } ]

[ { "docid": "430034", "title": "", "text": "Yes, there are some real dangers in having your money locked into an investment. Those dangers are well worth thinking about and planning for. Where you are going off the rails is acting like those are the only dangers to your money, and perhaps having an exaggerated idea of the size of the dangers. It is an excellent idea to keep an emergency fund with a few months living expenses in a readily accessible savings or checking account. However, a standard retail savings account is always going to pay less in interest then you are loosing through inflation. We're living in a low-inflation period, but it's still continuously eating away at the value of your savings. It makes sense to accept the danger of inflation for your emergency fund, but probably not for your retirement savings. To reduce the hazards of inflation, you need to find an investment that has some chance of paying more than the inflation rate. This is inevitably going to mean locking up your money for some period of time or accepting some other type of risk. There is no guaranteed safe path in the world. You can only do your best to understand the risks you are running. As an example, you could put your savings in a CD rather than a vanilla savings account. A CD these days won't pay much in interest, but it will be more than a savings account. However, you have to commit to a term for the CD. If you take your money out early you will have to pay a penalty. How much of a penalty? In the worse case it could be in the neighborhood of 4% of the amount you withdraw. So, yeah if you deposit $10,000 in a 5-year CD and end up needing it all back the very next day, you could end up paying the bank $400. If you withdraw money from a 401k before you are 59 1/2, you will pay a 10% penalty, and you will have to have income tax withheld on the amount you withdraw. On the other hand, if your employer matches 100% of your 401k contributions, you could be throwing away 50% of your possible retirement savings because of your fear of the possibility of a 10% loss! In addition 401k plans do have some exceptions to the early withdrawal penalty. There are provisions for medical emergencies and home purchases for example. However, the qualifications are not entirely straight-forward, and you should read up on them before enrolling. The real answer to your fears is planning. Figure out your living expenses. Figure out how much you want in an emergency fund. Figure out when you will be wanting to buy a house, have a child, or go back to school. Set aside the savings you'll need for all those, and then for the remainder of your money you can consider long term investments with some confidence that you probably won't need to face the early withdrawal penalties." }, { "docid": "426559", "title": "", "text": "Could someone please explain to me how interest rates work? I like to think of interest rates as the price of money. It is specified as a percentage paid per unit of time (for example, 3%/year). To figure out how much interest money you get (or have to pay) for a given amount and time, multiply the amount with the interest rate and then divide by the time divided by the interest rate's specified time. That sounds awfully complicated, so let's look at a simple example instead. You deposit $1,000 at a fixed interest rate of 2% per year, for two and a half years, where the interest is paid at the end of the term. This means that you earn $1,000 * 2% = $20 per year in interest. Multiply this by [2.5 years] / [year] = 2.5, and you will have received $20 * 2.5 = $50 in interest over 2.5 years. If the interest is paid yearly, this gets slightly more complicated, but the principle is the same. Now imagine that you deposit $5,000 at a fixed 3% per year, for half a year. Again, the interest is paid at the end of the term. You now earn $5,000 * 3% [per year] * [[0.5 years] / [year]] = $75 in interest over six months. Variable interest rates makes this a little more complicated, but it is exactly the same thing in principle: calculate the interest paid for each period (taking any compounding into account), then add up all periods to get the total amount of interest paid over time. It also works the same way if you take out a loan rather than depositing money. Tax effects (capitals gains taxes or interest expense deductions) may make the actual amount paid or received different, but that does not change the fundamental aspect of how to calculate interest. Do CD's make more money with higher interest rates, or is it the other way around? Usually fixed interest rate instruments such as certificates of deposit, or loans with fixed rates, pay a higher interest rate for longer terms. This is because it is harder to judge credit risk in a longer term, so whoever gives the loan usually wants a premium for the additional risk. So a 6-month CD will normally pay a smaller percentage interest per year than a five-year CD. Note that this is not always the case; the technical term for when this does not hold is inverted yield curve. Interest rates are almost always formally specified in terms of percent per year, which makes it easy to compare rates. If you buy a $100 6-month CD paying 1% (I told you these were only examples :)) and then reinvest the money at the end of the term in another 6-month CD also paying 1%, the total amount paid will be ($100 * 1 + (1% * 6/12)) = $100.50 for the first term, then ($100.50 * 1 + (1% * 6/12)) = $101.0025 at the end of the second term. As you can see, the compounding of the interest makes this return slightly more than a single $100 12-month CD ($100 * 1 + 1% = $101), but unless you are dealing with large amounts of money, the difference is small enough to be negligible. If you were to put $100 in a 2% one-year CD, you'd get back $102 at the end of the year. Put the same amount in a 5% one-year CD, and you get back $105. So yes, higher interest rates means more interest money paid, for loans as well as deposits. Keep in mind that loans and deposits really are essentially the same thing, and interest calculations work the same way for both. The interest rate of a normal certificate of deposit does not change if the variable interest rates change, but rather is locked in when the money is deposited (or the CD is bought, whichever way you prefer to look at it)." }, { "docid": "334488", "title": "", "text": "I think it is just semantics, but this example demonstrates what they mean by that: If you put $100 in a CD today, it will grow and you will be able to take out a greater amount plus the original principal at a later time. If you put $100 extra on your house payment today, you may save some money in the long run, but you won't have an asset that you wouldn't otherwise have at the end of the term that you can draw on without selling the property. But of course, you can't live on the street, so you need another house. So ultimately you can't easily realize the investment. If you get super technical, you could probably rationalize it as an investment, just like you could call clipping coupons investing, but it all comes down to what your financial goals are. What the advisers are trying to tell you is that you shouldn't consider paying down your mortgage early as an acceptable substitute for socking away some money for retirement or other future expenses. House payments for a house you live in should be considered expenses, in my opinion. So my view is that paying off a note early is just a way of cutting expenses." }, { "docid": "176104", "title": "", "text": "Some banks and credit unions have IRA accounts. They pay interest like a savings account or a CD but they are an IRA. After the 15th you can roll them over into a IRA at one of the big investment companies so you can get invest in an index or Target Retirement Fund. But it is not too late. Opening an account at one of the big companies takes ten minutes (you need to know your social security number and your bank account info) they can pull it out of your bank account. I helped my kid do the same thing this week. We went on-line Tuesday night, and they pulled the money from his account on Thursday morning. Also know which type you want (Roth or regular) before you start. Also make sure you specify that the money is for 2013 not 2014." }, { "docid": "250800", "title": "", "text": "For such a short timeframe, I'd have it in the currency (euros) you need, and in a savings account. The 5 months is not a time to 'invest' this money. Even 2-4 years would suggest just a CD or short term Government bond." }, { "docid": "260676", "title": "", "text": "\"What exactly is \"\"Call Protection\"\"? Is \"\"NO\"\" normal for a CD? A \"\"callable\"\" cd (or one without protection can be revoked before maturity by the issuer. For example, if interest rates drop they might recall the CD since they can borrow money at a lower rate. A callable CD should offer a better return in exchange for this. Is \"\"first coupon date\"\" the first time it actually pays interest? Yes. Given that the first coupon date is in 6 months, and it's semiannual, is it fair to assume that this pays every six months? Yes Given that the maturity date is 9/29/2025, this is really a 15-year CD, right? It depends. CDs can be resold on the market. So it is AT LEAST a 15 year CD. It could also be a 20 year CD originally issued in 2005. What does \"\"Price (Ask)\"\" mean? It says 100 - does that mean you buy in chunks of $100? Yes. More accurately, they are $100 per CD. What is \"\"Yield to Worst (Ask)\"\"? Is this the worst yield that this CD will return? The lowest potential yield that can be received on a bond without the issuer actually defaulting. 3.25% is the best yield I've seen from something as stable as a CD. Would it be silly, though, to lock money up in an investment like this for 15 years? There is no way to really say without a crystal ball. If you aren't willing to accept more risk and think that interest rates will remain at these historic lows for a long while, then it is probably a good deal. If you think interest rates are due to go up substantially, then it is probably smarter to ladder your investments in shorter term CDs. In investment circles this is known as \"\"Interest Rate Risk\"\"\"" }, { "docid": "10089", "title": "", "text": "Congratulations on deciding to save for retirement. Since you cite Dave Ramsey as the source of your 15% number, what does he have to say about where to invest the money? If you want to have instantaneous penalty-free access to your retirement money, all you need to do is set up one or more ordinary accounts that you think of as your retirement money. Just be careful not to put the money into CDs since Federal law requires a penalty of three months interest if you cash in the CD before its maturity date (penalty!) or put the money into those pesky mutual funds that charge a redemption fee (penalty!) if you take the money out within x months of investing it where x can be anywhere from 3 to 24 or more. In Federal tax law (and in most state tax laws as well) a retirement account has special privileges accorded to it in that the interest, dividends, capital gains, etc earned on the money in your retirement account are not taxed in the year earned (as they would be in a non-retirement account), but the tax is either deferred till you withdraw money from the account (Traditional IRAs, 401ks etc) or is waived completely (Roth IRAs, Roth 401ks etc). In return for this special treatment, penalties are imposed (in addition to tax) if you withdraw money from your retirement account before age 59.5 which presumably is on the distant horizon for you. (There are some exceptions (including first-time home buying and extraordinary medical expenses) to this rule that I won't bother going into). But You are not required to invest your retirement money into such a specially privileged retirement account. It is perfectly legal to keep your retirement money in an ordinary savings account if you wish, and pay taxes on the interest each year. You can invest your retirement money into municipal bonds whose interest is free of Federal tax (and usually free of state tax as well if the municipality is located in your state of residence) if you like. You can keep your retirement money in a sock under your mattress if you like, or buy a collectible item (e.g. a painting) with it (this is not permitted in an IRA), etc. In short, if you are concerned about the penalties imposed by retirement accounts on early withdrawals, forgo the benefits of these accounts and put your retirement money elsewhere where there is no penalty for instant access. If you use a money management program such as Mint or Quicken, all you need to do is name one or more accounts or a portfolio as MyRetirementMoney and voila, it is done. But those accounts/portfolios don't have to be retirement accounts in the sense of tax law; they can be anything at all." }, { "docid": "497993", "title": "", "text": "Duffbeer703 covers most everything. The entire point of an emergency fund IS for it to be liquid. Now I do understand (if you feel your situation requires over 6 months of living expenses): That is a lot of money to have sitting in a statement savings account! Under no circumstances should you take any sort of risk with an emergency fund. However, you COULD do this: Invest some of the assets in a six month, 1 year or 2 year CD if returns were enough to be worthwhile. If you don't need the money, then fine, great. But if you do, you can break a Certificate of Deposit before maturity. There will be a penalty fee. You might lose interest too. But you'll have access to your money, no liquidity risk. So maybe you could put most, say 60% of your rainy day funds in truly liquid assets. The remainder could be in longer term CD's which you hopefully won't need because you'll be back to non rainy day living again." }, { "docid": "527939", "title": "", "text": "\"The Roth vs not debate is irrelevant to the question. It doesn't matter where your emergency fund is kept, as long as it is liquid and safe. I said it before in an answer to another question: your emergency fund is not an investment -- it's your safety net This answer also says it well: an \"\"emergency fund\"\" is just that... for emergencies... NOT investment. While it \"\"hurts\"\" not to have your emergency money making more money... its MORE IMPORTANT to have quick access to it. So at TD Ameritrade, just park it in their FDIC deposit account. It will not earn any meaningful interest (at least until rates rise), but you'll be able to have access to it when you need it. Note that I would caution against putting it in a money market mutual fund. They're safer than many other investments, but they're not FDIC insured against loss and there is a potential for temporary loss of liquidity. In late 2008 when the credit markets collapsed, a lot of people suddenly became unemployed -- and needed access to their emergency funds. When Lehman Brothers went bust in September, the Reserve Primary Fund (with billions of dollars in their fund) \"\"broke the buck\"\" -- they lowered the price of shares below $1, meaning investors lost principal. The worst part is that investors were not as liquid as they wanted to be: the fund froze and it was hard to get money out. The lesson to take away from this is that one of the times you're likely to need access to your emergency fund is during a macroeconomic crisis. This is also the time when any investment that isn't guaranteed safe may potentially be (at least temporarily) unavailable or decline in value. Emergency funds should be 100% government insured. When you have your Roth funded to the point where there's extra money beyond the emergency fund, you can start investing in higher-yielding vehicles: stock or bond index ETFs would be a good start. But then that part of your Roth starts to look like a retirement account and not an emergency fund. If it were me, I'd open a Roth at a stable local bank and just keep it in their FDIC insured money market deposit account. Then if I wanted a slight boost, I might put the \"\"upper half\"\" of my emergency fund into short term CDs, but even CDs aren't worth much at the moment.\"" }, { "docid": "274948", "title": "", "text": "Try and save up for another month's expenses in your emergency fund, but while you are doing so begin building what is called a ladder of CDs. Tomorrow is April 1, so open a three-month CD (yes, the rates are abysmal but better than money-market fund rates) with one month's emergency fund. Repeat the process on May 1. So now you have two CDs maturing on July 1 and August 1. On June 1, take whatever of that extra month's expense you have saved up and open yet another three-month CD. On July 1, re-invest the proceeds of the first CD into a new three-month CD. Ditto on August 1. On September 1, add the additional savings towards the additional month that you managed to make to the smaller CD to bring it closer to one month's expenses. Lather, rinse, repeat. You will, I hope, soon be in a state where you will have four months of expenses in your emergency fund: one month on hand for immediate use if needed right away, and three months of additional expenses becoming available in 30 days or less, between 30 and 60 days, and between 60 and 90 days." }, { "docid": "175693", "title": "", "text": "It seems like you are asking two different questions, one is, how do I know if I can afford a house? The other is, how do I know what type of mortage to get? The first question is fairly simple to answer, there's plenty of calculators out there that will tell you what you can afford, but rule of thumb is 30% of income can goto housing. Now what type of mortgage to get can be much more confusing, because the mortgage industry makes money off of these confusing products. The best thing to do in my opionion in situations like this is to keep it simple. You need to be careful buying a house. So much money is changing hands and there are so many parasites involved in the transaction I would be extremely wary of anybody who is going to tell you what mortgage to get. I've never heard of a fee only independent mortgage broker, and if I found one that claimed to be I wouldn't believe him. I would just ignore all the exotic non-conforming products and just answer one simple question. Are you the type of person that buys an insurance policy or that likes to self insure? If you like insurance, get a 30 year fixed mortgage. If you like to self insure, get a 7 year ARM. The average lenghth someone owns a house is 7 years, plus in 7 years time, it might not adjust up, and even if it does, you can just accelerate your payments and pay it off quickly (this is the self insurance part of it). If you're like me, I'm willing to pay an extra .5% for the 30 year so that my payment never changes and I'm never forced to move (which is admitedly extremely unlikely, but I like the safety). I don't like 15 year term loans because rates are so low, you can get way better returns in the stock market right now, so why pay off sooner then you need to. Heck, if I had a paid off house right now I'd refi into a 30 year and invest the money. In summary, pick 30 year or ARM, then just shop around to find the lowest rate (which is extremely easy)." }, { "docid": "140055", "title": "", "text": "If you're getting the same total amount of money every year, then the main issue is psychological. I mean, you may find it easier to manage your money if you get it on one schedule rather than another. It's generally better to get money sooner rather than later. If you can deposit it into an account that pays interest or invest it between now and when you need it, then you'll come out ahead. But realistically, if we're talking about getting money a few days or a week or two sooner, that's not going to make much difference. If you get a paycheck just before the end of the year versus just after the end of the year, there will be tax implications. If the paycheck is delayed until January, then you don't have to pay taxes on it this year. Of course you'll have to pay the taxes next year, so that could be another case of sooner vs later. But it can also change your total taxes, because, in the US and I think many other countries, taxes are not a flat percentage, but the more you make, the higher the tax rate. So if you can move income to a year when you have less total income, that can lower your total taxes. But really, the main issue would be how it affects your budgeting. Others have discussed this so I won't repeat." }, { "docid": "212540", "title": "", "text": "\"So, you have $100k to invest, want a low-maintenance investment, and personal finance bores you to death. Oooohhh, investment companies are gonna love you. You'll hand them a wad of cash, and more or less say \"\"do what you want.\"\" You're making someone's day. (Just probably not yours.) Mutual fund companies make money off of you regardless of whether you make money or not. They don't care one bit how carefully you look at your investments. As long as the money is in their hands, they get their fee. If I had that much cash, I'd be looking around for a couple of distressed homes in good neighborhoods to buy as rentals. I could put down payments on two of them, lock in fixed 30-year mortgages at 4% (do you realize how stupid low that is?) and plop tenants in there. Lots of tax write-offs, cash flow, the works. It's a 10% return if you learn about it and do it correctly. Or, there have been a number of really great websites that were sold on Flippa.com that ran into five figures. You could probably pay those back in a year. But that requires some knowledge, too. Anything worthwhile requires learning, maintenance and effort. You'll have to research stocks, mutual funds, bonds, anything, if you want a better than average chance of getting worthwhile returns (that is, something that beats inflation, which savings accounts and CDs are unlikely to do). There is no magic bullet. If someone does manage to find a magic bullet, what happens? Everyone piles on, drives the price up, and the return goes down. Your thing might not be real estate, but what is your thing? What excites you (i.e., doesn't bore you to death)? There are lots of investments out there, but you'll get out of it what you put into it.\"" }, { "docid": "594257", "title": "", "text": "\"My original plan was to wait for the next economic downturn and invest in index funds. These funds have historically yielded 6-7% annually when entered at any given time, but maybe around 8-9% annually when entered during a recession. These numbers have been adjusted for inflation. Questions or comments on this strategy? Educate yourself as index funds are merely a strategy that could be applied to various asset classes such as US Large-cap value stocks, Emerging Market stocks, Real Estate Investment Trusts, US Health Care stocks, Short-term bonds, and many other possibilities. Could you be more specific about which funds you meant as there is some great work by Fama and French on the returns of various asset classes over time. What about a Roth IRA? Mutual fund? Roth IRA is a type of account and not an investment in itself, so while I think it is a good idea to have Roth IRA, I would highly advise researching the ins and outs of this before assuming you can invest in one. You do realize that index funds are just a special type of mutual fund, right? It is also worth noting that there are a few kinds of mutual funds: Open-end, exchange-traded and closed-end. Which kind did you mean? What should I do with my money until the market hits another recession? Economies have recessions, markets have ups and downs. I'd highly consider forming a real strategy rather than think, \"\"Oh let's toss it into an index fund until I need the money,\"\" as that seems like a recipe for disaster. Figure out what long-term financial goals do you have in mind, how OK are you with risk as if the market goes down for more than a few years straight, are you OK with seeing those savings be cut in half or worse?\"" }, { "docid": "515440", "title": "", "text": "\"My father imparted this advice to me when I was a teenager, and it hasn't failed me yet. > Pay yourself first What this means is that the first \"\"bill\"\" you pay should always be your savings. Preferably in a way that automatically comes out of your paycheck or account without requiring you to take an active step to make it happen. I save a ton of money, but I am no more disciplined than anyone else. I just realized that over the years of progressing in my career that I gradually got higher and higher salaries, yet never had a substantial increase in the money I had leftover in my bank at the end of the month despite the fact that I make about 8x the money I used to live reasonably comfortably on. Therein is the point, we spend whatever money we see, so you almost have to hide it from yourself. First, participate to the fullest in your company's 401k if they offer it. After a while you will adjust naturally to the net take home pay and won't miss the savings you are accumulating. Absent that, or in addition to that, set up a separate bank or investment account and arrange an automatic transfer from your checking account every month. Then set up automatic investing in CD's or some other less-liquid-than-cash investment so you it is just enough hassle to get at the money that you won't do it on a whim. It sounds too simple, but it works.\"" }, { "docid": "178303", "title": "", "text": "\"Some thoughts: 1) Do you have a significant emergency fund (3-6 months of after-tax living expenses)? If not, you stand to take a significant loss if you have an unexpected need for cash that is tied up in investments. What if you lose/hate your job or your car breaks down? What if a you want to spend some time with a relative or significant other who learns they only have a few months to live? Having a dedicated emergency fund is an important way to avoid downside risk. 2) Lagerbaer has a good suggestion. Given that if you'd reinvested your dividends, the S&P 500 has returned about 3.5% over the last 5 years, you may be able to get a very nice risk-free return. 3) Do you have access to employer matching funds, such as in a 401(k) at work? If you get a dollar-for-dollar match, that is a risk-free pre-tax 100% return and should be a high priority. 4) What do you mean by \"\"medium\"\" volatility? Given that you are considering a 2/3 equity allocation, it would not be at all out of the realm of possibility that your balance could fall by 15% or more in any given year and take several years to recover. If that would spook you, you may want to consider lowering your equity weights. A high quality bond fund may be a good fit. 5) Personally, I would avoid putting money into stocks that I didn't need back for 10 years. If you only want to tie your money up for 2-5 years, you are taking a significant risk that if prices fall, you won't have time to recover before you need your money back. The portfolio you described would be appropriate for someone with a long-term investment horizon and significant risk tolerance, which is usually the case for young people saving for retirement. However, if your goals are to invest for 2-5 years only, your situation would be significantly different. 6) You can often borrow from an investment account to purchase a primary residence, but you must pay that amount back in order to avoid significant taxes and fees, unless you plan to liquidate assets. If you plan to buy a house, saving enough to avoid PMI is a good risk-free return on your money. 7) In general, and ETF or index fund is a good idea, the key being to minimize the compound effect of expenses over the long term. There are many good choices a la Vanguard here to choose from. 8) Don't worry about \"\"Buy low, sell high\"\". Don't be a speculator, be an investor (that's my version of Anthony Bourdain's, \"\"don't be a tourist, be a traveler\"\"). A speculator wants to sell shares at a higher price than they were purchased at. An investor wants to share in the profits of a company as a part-owner. If you can consistently beat the market by trying to time your transactions, good for you - you can move to Wall Street and make millions. However, almost no one can do this consistently, and it doesn't seem worth it to me to try. I don't mean to discourage you from investing, just make sure you have your bases covered so that you don't have to cash out at a bad time. Best of luck! Edit Response to additional questions below. 1) Emergency fund. I would recommend not investing in anything other than cash equivalents (money market, short-term CDs, etc.) until you've built up an emergency fund. It makes sense to want to make the \"\"best\"\" use of your money, but you also have to account for risk. My concern is that if you were to experience one or more adverse life events, that you could lose a lot of money, or need to pay a lot in interest on credit card debt, and it would be prudent to self-insure against some of those risks. I would also recommend against using an investment account as an emergency fund account. Taking money out of investment accounts is inefficient because the commissions/taxes/fees can easily eat up a significant portion of your returns. Ideally, you would want to put money in and not touch it for a long time in order to take advantage of compounding returns. There are also high penalties for early disbursements from retirement funds. Just like you need enough money in your checking account to buy food and pay the rent every month, you need enough money in an emergency fund to pay for things that are a real possibility, even if they are less common. Using a credit card or an investment account is a relatively expensive way to do this. 2) Invest at all? I would recommend starting an emergency fund, and then beginning to invest for retirement. Once your retirement savings are on track, you can begin saving for whatever other goals you may have\"" }, { "docid": "328691", "title": "", "text": "It really is dependent upon your goals. What are your short term needs? Do you need a car/clothing/high cost apartment/equipment when you start your career? For those kinds of things, a savings account might be best as you will need to have quick access to cash. Many have said that people need two careers, the one they work in and being an investor. You can start on that second career now. Open up some small accounts to get the feel for investing. This can be index funds, or something more specialized. I would put money earmarked for a home purchase in funds with a lower beta (fluctuation) and some in index funds. You probably would want to get a feel for what and where you will actually be doing in your career prior to making a leap into a home purchase. So figure you have about 5 years. That gives you time to ride out the waves in the market. BTW, good job on your financial situation. You are set up to succeed." }, { "docid": "339791", "title": "", "text": "You could open up CDs or try a few stocks. Once I saved up enough to where I was comfortable in savings and in a retirement account, I went to CDs. Once I was comfortable with CDs I started doing stocks with dividends. Now that I'm happy with what I am receiving in dividends I just recently bought a risky stock. I highly recommend Navy Federal for CDs, if you are eligible and USAA for stocks. Congrats!" }, { "docid": "376800", "title": "", "text": "The top long-term capital gains tax rate will rise to 20% effective 1 Jan, 2011, unless Congress decides to do something about it before then. (Will they? Who knows!! There's been talk about it, but, well, it's Congress. They don't even know what they're going to do.) Anyway. The rules about when you can sell stock are mostly concerned with when you can realize a capital loss: if you sell a stock at a loss and then re-buy it for tax purposes within 30 days, it's a wash sale and not eligible for a deduction. However, I don't believe this applies to any stocks once you realize a gain - once you've realized the gain and paid your tax for it, it's all yours, locked in at whatever rate. Your replacement stock will be subject to short-term capital gains for the next year afterwards, and you might need to be careful with identifying the holding period on different lots of your stock, but I don't believe there will be any particular trouble. Please do not rely entirely on my advice and consult also with your tax preparer or lawyer. :) And the IRS documentation: Special Addendum for Nov/Dec 2012! Spoiler alert! Congress did indeed act: they extended the rates, but only temporarily, so now we're looking at tax hikes starting in 2013 instead, only the new top rate++ will be something like 23.8% on account of an extra 3.8% medicare tax on passive earnings (brought to you via Obamacare legislation). But the year and the rates' specifics aside, same thing still applies. And the Republican house and Democratic senate/President are still duking it out. Have fun. ++ 3.8% surtax applies to the lesser of (a) net investment income (b) income over $200,000 ($250k if married). 20% tax rate applies to people in the 15% income tax bracket for ordinary income or higher. Additional tax discounts for property held over 5 years may be available. Consult tax law and your favorite tax professional and prepare to be confused." } ]

[ { "docid": "369239", "title": "", "text": "In my experience, the only penalty to breaking a CD is to lose a certain amount of accumulated interest. Your principal investment will be fine. Close the CD. A few days of interest is nothing." } ]

[ { "docid": "21468", "title": "", "text": "\"If you've already got emergency savings sufficient for your needs, I agree that you'd be better served by sending that $500 to your student loan(s). I, personally, house the bulk of my emergency savings in CDs because I'm not planning to touch it and it yields a little better than a vanilla savings account. To address the comment about liquidity. In addition to my emergency savings I keep plain vanilla savings accounts for miscellaenous sudden expenses. To me \"\"emergency\"\" means lost job, not new water pump for my car; I have other budgeted savings for that but would spend it on a credit card and reimburse myself anyway so liquidity there isn't even that important. The 18 month CDs I use are barely less liquid than vanilla savings and the penalty is just a couple months of the accrued interest. When you compare a possible early distribution penalty against the years of increased yield you're likely to come out ahead after years of never touching your emergency savings, unless you're budgeted such that a car insurance deductible is an emergency expense. Emergency funds should be guaranteed and non-volatile. If I lose my job, 90 days of accrued interest isn't a hindrance to breaking open some of my CDs, and the process isn't so daunting that I'd meaningfully harm my finances. Liquidity in 2017 and liquidity in whatever year a text book was initially written are two totally different animals. My \"\"very illiquid\"\" brokerage account funds are only one transaction and 3 settlement days less liquid than my \"\"very liquid\"\" savings account. There's no call the bank, sell the security, wait for it to clear, my brokerage cuts a check, mail the check, cash the check, etc. I can go from Apple stock on Monday to cash in my hand on like Thursday. On the web portal for the bank that holds my CDs I can instantly transfer the funds from a CD to my checking account there net of a negligible penalty for early distribution. To call CDs illiquid in 2017 is silly.\"" }, { "docid": "212540", "title": "", "text": "\"So, you have $100k to invest, want a low-maintenance investment, and personal finance bores you to death. Oooohhh, investment companies are gonna love you. You'll hand them a wad of cash, and more or less say \"\"do what you want.\"\" You're making someone's day. (Just probably not yours.) Mutual fund companies make money off of you regardless of whether you make money or not. They don't care one bit how carefully you look at your investments. As long as the money is in their hands, they get their fee. If I had that much cash, I'd be looking around for a couple of distressed homes in good neighborhoods to buy as rentals. I could put down payments on two of them, lock in fixed 30-year mortgages at 4% (do you realize how stupid low that is?) and plop tenants in there. Lots of tax write-offs, cash flow, the works. It's a 10% return if you learn about it and do it correctly. Or, there have been a number of really great websites that were sold on Flippa.com that ran into five figures. You could probably pay those back in a year. But that requires some knowledge, too. Anything worthwhile requires learning, maintenance and effort. You'll have to research stocks, mutual funds, bonds, anything, if you want a better than average chance of getting worthwhile returns (that is, something that beats inflation, which savings accounts and CDs are unlikely to do). There is no magic bullet. If someone does manage to find a magic bullet, what happens? Everyone piles on, drives the price up, and the return goes down. Your thing might not be real estate, but what is your thing? What excites you (i.e., doesn't bore you to death)? There are lots of investments out there, but you'll get out of it what you put into it.\"" }, { "docid": "127825", "title": "", "text": "\"I would like to buy hubby a beer and talk some sense into him. Do you have 2 years gross income saved as your retirement balance? That's about where he should be at age 30. I wrote about this in an article Retirement Savings Ratio. Blowing the 401(k) for anything less than an extreme emergency is downright foolish. The decision whether to roll it to an IRA or the new account isn't so simple. If you roll it to new plan, yes you can borrow, up to 60 months at a low rate, 4% or so. Taking the cash and then making an IRA deposit just means paying the penalty for nothing, unless you manage it just right, depositing the amount within 60 day, etc. You don't mention what he wants to do with it. You need to sit down and have a long \"\"money talk.\"\" Keep in mind, if you oversave, it's easy to retire early, or at 50 just stop saving, spend every new dime. But it's something else to turn 50 and realize you will have to work till you die. I've seen both situations. (I am 48, the Mrs, 54 our multiple is now 13. The target is 20 to retire. The house is not counted as it can't be spent. The mortgage IS counted as it must be paid) Edit - as I read this again, I see the OP asked about opening an IRA in the same year they withdraw the 401(k) and pay tax and penalty. Wow. I also see her user reverted to generic, which means, I think, she's never returned. I hope they made the right decision, to keep the money in retirement accounts. Hubby never even said what he wanted the money for.\"" }, { "docid": "567193", "title": "", "text": "Under US law, a bank is not obligated to honor a check that is more than six months old. § 4-404. BANK NOT OBLIGED TO PAY CHECK MORE THAN SIX MONTHS OLD. A bank is under no obligation to a customer having a checking account to pay a check, other than a certified check, which is presented more than six months after its date, but it may charge its customer's account for a payment made thereafter in good faith. Note the law says the bank is not OBLIGATED to honor the check, but they are not forbidden from doing so. I don't have a survey on this, but I think most banks won't honor a check after more than 6 months to a year. I've had a few occasions where early in the year someone accidentally wrote the previous year on a check, like on January 10, 2017 they dated the check January 10, 2016, and the bank has given me a hard time about cashing it. The statute of limitations to challenge payment or non-payment of a check is 6 years: § 3-118. STATUTE OF LIMITATIONS. (b) Except as provided in subsection (d) or (e), if demand for payment is made to the maker of a note payable on demand, an action to enforce the obligation of a party to pay the note must be commenced within six years after the demand. I understand your frustration about being denied money that you presumably worked for and earned. But look at it from the other side. Suppose you wrote a check to someone, and years later they still had not cashed it. At some point you'd want to be able to clear this off your bank account. What if you want to close the account? What happens when you die? Would your heirs have to keep this account open for years ... decades ... centuries ... on the possibility that someday someone will cash this check? Realistically, there has to be SOME time limit. 6 months should be plenty of time for someone to make it to the bank with a check. If the company still exists then you could argue they have a MORAL obligation to pay you. If they have records that show that they did indeed give you this check and you never cashed it there'd be no question that you were trying to cheat them. But a moral obligation and a legal obligation are two different things. Legally, they paid you, and it's your problem that you failed to cash the check. You could talk to a lawyer, but if you live in the US, I think you are out of luck. (Of course other countries have different laws.)" }, { "docid": "587768", "title": "", "text": "4.7 is a pretty low rate, especially if you are deducting that from your taxes. If you reduce the number by your marginal tax rate to get the real cost of the money you end up with a number that isn't far off from inflation, and also represents a pretty low 'yield' in terms of paying off the loan early. (e.g. if your marginal tax rate is 28%, then the net you are paying in interest after the tax deduction is 4.7 * .72 = 3.384) While I'm all for paying off loans with higher rates (since it's in effect the same as making that much risk free on the money) it doesn't make a lot of sense when you are down at 3.4 unless there is a strong 'security factor' (which really makes a difference to some folks) to be had that really helps you sleep at night. (to be realistic, for some folks close to retirement, there can be a lot to be said for the security of not having to worry about house payments, although you don't seem to be in that situation yet) As others have said, first make sure you have enough liquid 'emergency money' in something like a money market account, or a ladder of short term CD's If you are sure that the sprouts will be going to college, then there's a lot to be said for kicking a decent amount into a 529, Coverdell ESA (Educational Savings Account), uniform gift to minors account, or some combination of those. I'm not sure if any of those plans can be used for a kid that has not been born yet however. I'd recommend http://www.savingforcollege.com as a good starting point to get more information on your various options. As with retirement savings, money put in earlier has a lot more 'power' over the final balance due to compounding interest, so there's a lot to be said for starting early, although depending on what it takes to qualify for the plans there could be such a thing as too early ;-) ). There's nothing wrong with Managed mutual funds as long as the fund objective and investing style is in alignment with your objectives and risk tolerance; The fund is giving you a good return relative to the market as a whole; You are not paying high fees or load charges; You are not losing a lot to taxes. I would always look at the return after expenses when comparing to other options, and if the money is not in a tax deferred account, also look at what sort of tax burden you will be faced with. A fund that trades a lot will generate more short term gains which means more taxes than compared to a more passive fund. Anything lost to taxes is money lost to you so needs to come out of the total return when you calculate that. Sometimes such funds are better off as a choice inside an IRA or 401K, and you can instead use more tax efficient vehicles for money where you have to pay the taxes every year on the gains. The reason a lot of folks like index funds better is that: Given your described age, it's not appropriate now, but in the long run as you get closer to retirement, you may want to start looking at building up some investments that are geared more towards generating income, such as bonds, or depending on taxes where you live, Municipal bonds. In any case, the more money you can set aside for retirement now, both inside and outside of tax deferred accounts, the sooner you will get to the point of the 'critical mass' you need to retire, at that point you can work because you want to, not because you have to." }, { "docid": "411669", "title": "", "text": "I think you need to understand the options better before you go around calling anything worthless... $11k in a 1% savings account gets you just over $100 each year. Obviously you're not buying Ferraris with your returns but it's $100 more than your checking account will pay you. And, you're guaranteed to get your money back. I think a CD ladder is a great way to store your emergency fund. The interest rate on a CD is typically a bit better than a regular savings account, though the money is locked away and while we seem to be on the cusp of a rate increase it might not be the best time to put the money in jail. Generally there is some sort of fee or lost interest from cashing a CD early. You're still guaranteed to get your money back. Stock trading is probably a terrible idea. If you want some market exposure I'd take half of the money and buy a low expense S&P ETF, I wouldn't put my whole savings if I were you (or if I were me). Many large brokers have an S&P ETF option that you can generally buy with no commission and no loads. Vanguard is a great option VOO, Schwab has an S&P mutual fund SWPPX, and there are others. Actively trading individual stocks is a great way to let commissions and fees erode your account. There are some startup alternatives with lower fees, but personally I would stay away from individual stock picking unless you are in school for Finance and have some interest in paying attention and you're ready to possibly never see the money again. You're not guaranteed to get your money back. There are also money market accounts. These will typically pay some interest based on exposing your funds to some risk. It can be a bit better return than a savings account, but I probably wouldn't bother. An IRA (ROTH and Traditional) is just an account wrapper that offers certain tax benefits while placing certain restrictions on the use of some or all of the money until you reach retirement age. As a college student you should probably be more concerned about an emergency fund or traveling than retirement savings, though some here may disagree with me. With your IRA you can buy CDs or annuities, or stocks and ETFs or any other kind of security. Depending on what you buy inside the IRA, you might not be guaranteed to get your money back. First you need to figure out what you'd like to use the money for. Then, you need to determine when you'd need the money for that use. Then, you need to determine if you can sleep at night while your stock account fluctuates a few percent each day. If you can't, or you don't have answers for these questions, a savings account is a really low friction/low risk place store money and combat inflation while you come up with answers for those questions." }, { "docid": "153670", "title": "", "text": "\"I'll try to give you some clues on how to find an answer to your question, rather than answering directly the question asked. Why not answer it directly? Well, I can, but it won't help you (or anyone else) much in two months when the rates change again. Generally, you won't find such in brick-and-mortar banks. You can save some time and only look at online banks. Examples: ING Direct (CapitalOne), CapitalOne, Amex FSB, E*Trade, Ally, etc. There are plenty. Go to their web sites, look for promotions, and compare. Sometimes you can find coupons/promotions which will yield more than the actual savings rate. For example, ING frequently have a $50 promotion for opening a new account. You need to understand that rates change frequently, and the highest rate account today may become barely average in a week. There are plenty of sites that offer various levels of comparison information. One of the most comprehensive ones (IMHO) is Bankrate.com. Another place to look is MoneyRates.com. These sites provide various comparisons, and you can also find some promotions advertised there. There are more similar sites. Also, search the Internet and you can find various blog posts with additional promotions – frequently banks give \"\"referral bonuses\"\" to provide incentive for clients to promote the banks. Do some due diligence on the results that appear promising. Not much. You won't find any savings account that would keep the value (purchasing power) of your money over the long term. Keeping money in savings accounts is a sure way to lose value because the inflation rate is much higher than even high-yield savings accounts. But, savings accounts are safe (insured by FDIC/NCUA up to the limit), and very convenient to keep short term savings – such as an emergency fund – that you cannot afford to lose to investments. Sometimes you'll get slightly better rates by locking up your money in a Certificate of Deposit (CD), but not significantly higher when the CD is short-term.\"" }, { "docid": "118104", "title": "", "text": "\"Of course CDs are worth it compared to the stock market. In fact, most institutional investors are envious of the CDs you have access to as an individual investor that are unavailable to them. You just need to be competent enough to shop around for the best rates and understand your time horizon. There are several concepts to understand here: Banks give out CDs with competitive rates projecting future interest rates. So while the Federal funds rate is currently extremely low, banks know that in order to get any takers on their CDs they have to factor in the public expectation that rates will rise, so if you lock in a longer term CD you get a competitive rate. Institutional investors do not have access to FDIC insured CDs and the closest analog they participate in are the auctions and secondary markets of US Treasuries. These two types of assets have equivalent default (non-)risk if held to maturity: backed by the full faith and credit of the U.S. Here are the current rates (as of question's date) taken from Vanguard that I can get on CDs versus Treasuries (as an individual investor). Notice that CDs outperform Treasuries across any maturity timescale! For fixed-income and bond allocations, institutional investors are lining up for buying treasuries. And yet here you are saying \"\"CDs are not worth it.\"\" Might want to rethink that. Now going into the stock market as an investor with expectations of those high returns you quote, means you're willing to stay there for the long-term (at least a decade) and stay the course during volatility to actually have any hope of coming up with the average rate of return. Even then, there's the potential downside of risk that you still lose principal after that duration. So given that assumption, it's only fair to compare against >= 10 year CDs which are currently rated at 2 percent APY. In addition, CDs can be laddered -- allowing you to lock-in newer (and potentially higher) rates as they become available. You essentially stagger your buyin into these investments, and either reinvest upon the stilted maturity dates or use as income. Also keep in mind that while personal emergencies requiring quick access to cash can happen at any time, the most common scenario is during the sudden change from a bull market into a recession -- the time when stocks plummet. If you need money right away, selling your stocks at these times would lock in severe losses, whereas with CDs you still won't lose principal with an early exit and the only penalty is usually a sacrifice of a few months of potential interest. It's easy to think of the high yields during a protracted bull market (such as now), but personal finance has a huge behavioral component to it that is largely ignored until it's too late. One risk that isn't taken care of by either CDs or Treasuries is inflation risk. All the rates here and in the original question are nominal rates, and the real return will depend on inflation (or deflation). There are other options here besides CDs, Treasuries, and the stock market to outpace inflation if you'd like to hedge that risk with inflation protection: Series I Savings Bonds and TIPS.\"" }, { "docid": "180429", "title": "", "text": "Money you need in less than 5 years should be saved not invested. The only place I would be comfortable the money would be a money market account or Certificate of Deposit (CD). I usually go for the money market account because they pay at or close to CD rates and there are no restrictions on getting to the money. However in this case I might choose a CD to keep me from being tempted to borrow some of it for something else. But even after typing that I still think I would put it in a money market, because if interest rates rise they rise in the money market but not the CD, and I just don't think interest can go much lower." }, { "docid": "114054", "title": "", "text": "\"I'm not following what's the meaning of \"\"open a mutual fund\"\". You don't open a mutual fund, you invest in it. There's a minimum required investment ($2000? Could be, some funds have lower limits, you don't have to go with the Fidelity one necessarily), but in general it has nothing to do with your Roth IRA account. You can invest in mutual funds with any trading account, not just Roth IRA (or any other specific kind). If you invest in ETF's - you can invest in funds just as well (subject to the minimums set). As to the plan itself - buying and selling ETF's will cost you commission, ~2-3% of your investment. Over several months, you may get positive returns, and may get negative returns, but keep in mind that you start with the 2-3% loss on day 1. Within a short period of time, especially in the current economic climate (which is very unstable - just out of recession, election year, etc etc), I would think that keeping the cash in a savings account would be a better choice. While with ETF you don't have any guarantees other than -3%, then with savings accounts you can at least have a guaranteed return of ~1% APY (i.e.: won't earn much over the course of your internship, but you'll keep your money safe for your long term investment). For the long term - the fluctuations of month to month don't matter much, so investing now for the next 50 years - you shouldn't care about the stock market going 10% in April. So, keep your 1000 in savings account, and if you want to invest 5000 in your Roth IRA - invest it then. Assuming of course that you're completely positive about not needing this money in the next several decades.\"" }, { "docid": "221873", "title": "", "text": "\"Shem - I recommend looking into online banks or credit unions. I know ally has around ~0.8% rate on their savings accounts NOT MMS. Meaning you don't need a ~$2,500 minimum balance so your money is COMPLETELY liquid. CD's and MMC/S are worth next to nothing, and if you ask me are pointless with the minimum balances they require. Ally also reimburses you for all ATM withdrawal fees, meaning you have complete access to all your money, with next to no minimum, with at least some % back that is comparable to CD rates currently offered. CD's are around ~1.8-2% with tens of thousands of dollars (50-75k+) which isn't worth keeping \"\"liquid\"\",if you would consider CD's liquid (because you can withdraw on a penalty or have laddered CD's), unless you're rich and that's your emergency fund. If I were you I would look into a retirement account, and saving what you need to in an Emergency Fund. Check out a 401(k), Traditional IRA or Roth IRA. They each have their benefits and you need to assess your financial situation before picking one. I would recommend spending a great deal of time researching this before making your decision, because switching from one to another could cost you, depending on your choice. This is, of course, if you live in the U.S.\"" }, { "docid": "527939", "title": "", "text": "\"The Roth vs not debate is irrelevant to the question. It doesn't matter where your emergency fund is kept, as long as it is liquid and safe. I said it before in an answer to another question: your emergency fund is not an investment -- it's your safety net This answer also says it well: an \"\"emergency fund\"\" is just that... for emergencies... NOT investment. While it \"\"hurts\"\" not to have your emergency money making more money... its MORE IMPORTANT to have quick access to it. So at TD Ameritrade, just park it in their FDIC deposit account. It will not earn any meaningful interest (at least until rates rise), but you'll be able to have access to it when you need it. Note that I would caution against putting it in a money market mutual fund. They're safer than many other investments, but they're not FDIC insured against loss and there is a potential for temporary loss of liquidity. In late 2008 when the credit markets collapsed, a lot of people suddenly became unemployed -- and needed access to their emergency funds. When Lehman Brothers went bust in September, the Reserve Primary Fund (with billions of dollars in their fund) \"\"broke the buck\"\" -- they lowered the price of shares below $1, meaning investors lost principal. The worst part is that investors were not as liquid as they wanted to be: the fund froze and it was hard to get money out. The lesson to take away from this is that one of the times you're likely to need access to your emergency fund is during a macroeconomic crisis. This is also the time when any investment that isn't guaranteed safe may potentially be (at least temporarily) unavailable or decline in value. Emergency funds should be 100% government insured. When you have your Roth funded to the point where there's extra money beyond the emergency fund, you can start investing in higher-yielding vehicles: stock or bond index ETFs would be a good start. But then that part of your Roth starts to look like a retirement account and not an emergency fund. If it were me, I'd open a Roth at a stable local bank and just keep it in their FDIC insured money market deposit account. Then if I wanted a slight boost, I might put the \"\"upper half\"\" of my emergency fund into short term CDs, but even CDs aren't worth much at the moment.\"" }, { "docid": "515440", "title": "", "text": "\"My father imparted this advice to me when I was a teenager, and it hasn't failed me yet. > Pay yourself first What this means is that the first \"\"bill\"\" you pay should always be your savings. Preferably in a way that automatically comes out of your paycheck or account without requiring you to take an active step to make it happen. I save a ton of money, but I am no more disciplined than anyone else. I just realized that over the years of progressing in my career that I gradually got higher and higher salaries, yet never had a substantial increase in the money I had leftover in my bank at the end of the month despite the fact that I make about 8x the money I used to live reasonably comfortably on. Therein is the point, we spend whatever money we see, so you almost have to hide it from yourself. First, participate to the fullest in your company's 401k if they offer it. After a while you will adjust naturally to the net take home pay and won't miss the savings you are accumulating. Absent that, or in addition to that, set up a separate bank or investment account and arrange an automatic transfer from your checking account every month. Then set up automatic investing in CD's or some other less-liquid-than-cash investment so you it is just enough hassle to get at the money that you won't do it on a whim. It sounds too simple, but it works.\"" }, { "docid": "312359", "title": "", "text": "There are many considerations before deciding on the best place for your funds: How liquid do you need the funds to be? If this is for an emergency fund I would keep at least some in an account that you have instant access to, What is your risk (volatility) tolerance? Would you be OK with the value dropping by as much as 30% in a year knowing that over time you'll probably earn 8-12% on it? If not, then equity funds or other stock investments are probably not the best move for you. Do you need the funds now or are they for long-term (retirement) savings? Are you eligible to fund an IRA? That would defer your taxes until you withdraw the funds from the account, but there are age restrictions that you must heed to avoid penalties. Are CDs a good idea? They do pay decent interest, but in return for that you lock up your funds for a set period of time. All that to say that there are many facets to determining the best place for your funds. If you provide more specifics you can get a more specific answer." }, { "docid": "274948", "title": "", "text": "Try and save up for another month's expenses in your emergency fund, but while you are doing so begin building what is called a ladder of CDs. Tomorrow is April 1, so open a three-month CD (yes, the rates are abysmal but better than money-market fund rates) with one month's emergency fund. Repeat the process on May 1. So now you have two CDs maturing on July 1 and August 1. On June 1, take whatever of that extra month's expense you have saved up and open yet another three-month CD. On July 1, re-invest the proceeds of the first CD into a new three-month CD. Ditto on August 1. On September 1, add the additional savings towards the additional month that you managed to make to the smaller CD to bring it closer to one month's expenses. Lather, rinse, repeat. You will, I hope, soon be in a state where you will have four months of expenses in your emergency fund: one month on hand for immediate use if needed right away, and three months of additional expenses becoming available in 30 days or less, between 30 and 60 days, and between 60 and 90 days." }, { "docid": "10089", "title": "", "text": "Congratulations on deciding to save for retirement. Since you cite Dave Ramsey as the source of your 15% number, what does he have to say about where to invest the money? If you want to have instantaneous penalty-free access to your retirement money, all you need to do is set up one or more ordinary accounts that you think of as your retirement money. Just be careful not to put the money into CDs since Federal law requires a penalty of three months interest if you cash in the CD before its maturity date (penalty!) or put the money into those pesky mutual funds that charge a redemption fee (penalty!) if you take the money out within x months of investing it where x can be anywhere from 3 to 24 or more. In Federal tax law (and in most state tax laws as well) a retirement account has special privileges accorded to it in that the interest, dividends, capital gains, etc earned on the money in your retirement account are not taxed in the year earned (as they would be in a non-retirement account), but the tax is either deferred till you withdraw money from the account (Traditional IRAs, 401ks etc) or is waived completely (Roth IRAs, Roth 401ks etc). In return for this special treatment, penalties are imposed (in addition to tax) if you withdraw money from your retirement account before age 59.5 which presumably is on the distant horizon for you. (There are some exceptions (including first-time home buying and extraordinary medical expenses) to this rule that I won't bother going into). But You are not required to invest your retirement money into such a specially privileged retirement account. It is perfectly legal to keep your retirement money in an ordinary savings account if you wish, and pay taxes on the interest each year. You can invest your retirement money into municipal bonds whose interest is free of Federal tax (and usually free of state tax as well if the municipality is located in your state of residence) if you like. You can keep your retirement money in a sock under your mattress if you like, or buy a collectible item (e.g. a painting) with it (this is not permitted in an IRA), etc. In short, if you are concerned about the penalties imposed by retirement accounts on early withdrawals, forgo the benefits of these accounts and put your retirement money elsewhere where there is no penalty for instant access. If you use a money management program such as Mint or Quicken, all you need to do is name one or more accounts or a portfolio as MyRetirementMoney and voila, it is done. But those accounts/portfolios don't have to be retirement accounts in the sense of tax law; they can be anything at all." }, { "docid": "391605", "title": "", "text": "\"Should I invest the money I don't need immediately and only withdraw it next year when I need it for living expenses or should I simply leave it in my current account? This might come as a bit of a surprise, but your money is already invested. We talk of investment vehicles. An investment vehicle is basically a place where you can put money and have it either earn a return, or be able to get it back later, or both. (The neither case is generally called \"\"spending\"\".) There are also investment classes which are things like cash, stocks, bonds, precious metals, etc.: different things that you can buy within an investment vehicle. You currently have the money in a bank account. Bank accounts currently earn very low interest rates, but they are also very liquid and very secure (in the sense of being certain that you will get the principal back). Now, when you talk about \"\"investing the money\"\", you are probably thinking of moving it from where it is currently sitting earning next to no return, to somewhere it can earn a somewhat higher return. And that's fine, but you should keep in mind that you aren't really investing it in that case, only moving it. The key to deciding about an asset allocation (how much of your money to put into what investment classes) is your investment horizon. The investment horizon is simply for how long you plan on letting the money remain where you put it. For money that you do not expect to touch for more than five years, common advice is to put it in the stock market. This is simply because in the long term, historically, the stock market has outperformed most other investment classes when looking at return versus risk (volatility). However, money that you expect to need sooner than that is often recommended against putting it in the stock market. The reason for this is that the stock market is volatile -- the value of your investment can fluctuate, and there's always the risk that it will be down when you need the money. If you don't need the money within several years, you can ride that out; but if you need the money within the next year, you might not have time to ride out the dip in the stock market! So, for money that you are going to need soon, you should be looking for less volatile investment classes. Bonds are generally less volatile than stocks, with government bonds generally being less volatile than corporate bonds. Bank accounts are even less volatile, coming in at practically zero volatility, but also have much lower expected rates of return. For the money that you need within a year, I would recommend against any volatile investment class. In other words, you might take whichever part you don't need within a year and put in bonds (except for what you don't foresee needing within the next half decade or more, which you can put in stocks), then put the remainder in a simple high-yield deposit-insured savings account. It won't earn much, but you will be basically guaranteed that the money will still be there when you want it in a year. For the money you put into bonds and stocks, find low-cost index mutual funds or exchange-traded funds to do so. You cannot predict the future rate of return of any investment, but you can predict the cost of the investment with a high degree of accuracy. Hence, for any given investment class, strive to minimize cost, as doing so is likely to lead to better return on investment over time. It's extremely rare to find higher-cost alternatives that are actually worth it in the long term.\"" }, { "docid": "190844", "title": "", "text": "Unfortunately you can't use your HSA to pay for expenses in year A. Qualified medical expenses for an HSA must occur after the date the HSA account was established. (Established typically means the date the account was opened in your name.) The other answers already mostly answered your other questions, but I want to really hit home some particular points that many people may not realize: The most important thing to do when you are eligible to have an HSA account, is to open an HSA account ASAP. This is true even if you don't put any money in it and you leave it empty for years. The reason is that once the account is established, all qualified medical expenses that occur after that date are eligible for distributions, even if you wait years before you fund your HSA account. The second most important thing to do is to keep track of all out of pocket medical expenses you incur after you open the HSA account. All you need is a simple spreadsheet and a place to store your receipts. Once you have the account and are tracking expenses, now you can put money into your HSA and take it out whenever you'd like. (With limits- you can't put in more than the contribution limit for a single tax year, and you can't take out more than your eligible expenses to date.) Helpful Tip: Many people don't fund their HSA because they can't afford to set aside extra money to do so. Fortunately, you don't have to. For example, suppose you have some dental work and it costs you $500. Once you get the bill, before you pay it, put the $500 into your HSA account. The next day, take the $500 back out and pay your dental bill with it. Most HSA accounts will give you a debit card to make this even easier to pay the bill. By putting the money into your HSA for 1 day you just received a $500 tax deduction. Alternatively you can always pay out of pocket like you normally would, track your receipts, and wait until the end of the year (or up until April 15 of the next year). I like this option because I can pay all of my medical bills with a credit card and get cash back. Then at the end of the year, I add up the expenses, deposit that much into my HSA, and if I'd rather put that money somewhere else I just pull it out the next day. If you decide you don't need the money right away that's even better since you can leave it in the HSA account and invest it. Like a Roth account, you don't pay tax on the growth you achieve inside of an HSA. Another Tip: if your employer offers the service of automatically making deposits into your HSA by reducing your paycheck, you should definitely try to do that if you can afford it, rather than manually making contributions as I described in the previous tip. When your employer makes the contributions for you, your wages are reduced by that amount on your W2, so you end up saving an additional 7% in FICA taxes." }, { "docid": "136879", "title": "", "text": "\"Wow. It's clear I'm outnumbered. When I'm approached with the question (and keep in mind, it's usually a couple data points and little else) \"\"I am getting started, with no other money do I fund a retirement or emergency account?\"\" I often suggest they put the funds into a Roth, in a money market fund, and treat it like an emergency account. If there's in fact an emergency, there's no penalty to withdraw the deposit and we're talking peanuts for interest today. With no emergency, two things could happen: A) As the account grows beyond what's needed for emergencies, the excess can be invested long term. B) As the investor earns more money and saves up enough to have a true emergency account separate from the IRA, the Roth can be fully invested long term. The 'Bad idea' stems from the view that one is using their Roth as an emergency account, which of course is bad. The subtle difference is one has no retirement savings and puts their Emergency account into the otherwise unused Roth. As time passes, they've protected more funds to grow tax free. In the end, the most important thing is whether the person is saving and not tapping for simple non-emergency things. I'd rather see a guy with $25K in his Roth and no other funds than to have $5000 in his bank account because every time it gets larger he feels compelled to spend it. My answer to Matt is to treat it for now as you intended, low risk, CD or cash (money market).\"" } ]

[ { "docid": "13139", "title": "", "text": "\"In my experience when a salesperson says a particular deal is only good if you purchase right now, 100% of the time it is not true. Of course I can't guarantee that is universally the case, but if you leave and come back 5 minutes later, or tomorrow, or next week, it's extremely likely that they'll still take your money for the original price. (In fact, sometimes after you leave you get a call with even a lower price than the \"\"excellent offer\"\"...) Most of the time when you are presented with high pressure sales accompanied by a \"\"this price is only good right now\"\" pitch, it ends up being because they don't want you to go search the competition and read reviews. In this case you have already done that and deemed the item to be worthwhile. Perhaps a better tactic for the salesperson would have been to try to convince you that others are interested in the item and if you wait it might be sold to someone else at that excellent price. Sales is an art, and it requires the salesperson to size you up and try to figure out your vulnerability and exploit it. This particular salesperson obviously misjudged you and/or you don't have an easily exploitable vulnerability. I wouldn't let the shortcomings of the salesperson get in the way of your purchase. If you are worried about the scenario of someone else snatching up the item, consider offering a deposit to hold the item for a certain amount of time while you \"\"reflect\"\" and/or \"\"arrange for the funds\"\".\"" } ]

[ { "docid": "20064", "title": "", "text": "This is really shallow analysis. Just because revenues are up does not mean the market is healthy. This might indicate that a market dominating participant such as Amazon is causing prices to be aggressively driven up. The real issue isn't so much quaint dead tree versions facing off against e-books, but who is getting the money from this trade which is getting locked down to various shiny devices." }, { "docid": "545633", "title": "", "text": "I just don't see that many suckers falling for cheap or subprime loans, given their student loans. Yellen raising rates will dampen aggressive bank profits somewhat. Smucks will be smucks, but smarter buyers would appraise their debt load and opt for renting or cheaper houses. But then again, people don't even learn from recent history. US market is at recovery/pre-euphoria stage now. Canada is soon to pop a year after rates rise courtesy of Yellen. Given the size of the US gen y cohort, it is likely that many in their 30s in 2020 will buy. And will cry when the next bubble pops, as Boomers start selling assets to fund their retirements." }, { "docid": "36190", "title": "", "text": "First of all I recommend reading this short e-book that is aimed at young investors. The book is written for American investors but they same rules apply with different terms (e.g. the equivalent tax-free savings wrappers are called ISAs in the UK). If you don't anticipate needing the money any time soon then your best bet is likely a stocks and share ISA in an aggressive portfolio of assets. You are probably better off with an even more aggressive asset allocation than the one in the book, e.g. 0-15% bond funds 85-100% equity funds. In the long term, this will generate the most income. For an up-to-date table of brokers I recommend Monevator. If you are planning to use the money as a deposit on a mortgage then your best bet might be a Help to Buy ISA, you'll have to shop around for the best deals. If you would rather have something more liquid that you can draw into to cover expenses while at school, you can either go for a more conservative ISA (100% bond funds or even a cash ISA) or try to find a savings account with a comparable interest rate." }, { "docid": "101902", "title": "", "text": "Assuming you max-out your Roth IRA with $5000 in inflation-adjusted contributions every year from 25-65, your balance at age 65 will depend on the post-inflation return you get in the account. Assuming you withdraw 4% per year after that, here is what your income will be: (All numbers are in inflation-adjusted 2011 dollars.) If your post-inflation return is zero - if you buy treasury bonds, money-market accounts, or something like that - you'll have a simple $5000 * 40 = $200,000, which will give you an income of around $8000 per year. If you get a 3% post-inflation return - e.g. fairly safe Muni bonds, corporate bonds, and boring stocks - you'll approximately double your money to around $393,000, giving you an income of over $15,000 per year. If you get a 6% return - e.g. more aggressive stocks and more risk-taking - you'll approximately double your money again to over $825,000. A 4% withdrawal rate will give you an income of around $33,000 per year. Stocks have historically returned around inflation + 8% - that will get you over $1.4 million - and an annual income of over $56,000 per year. So, yes, it is feasible to retire on nothing but a maxed-out Roth IRA." }, { "docid": "582507", "title": "", "text": "\"What you are saying is a very valid concern. After the flash crash many institutions in the US replaced \"\"true market orders\"\" (where tag 40=1 and has no price) with deep in the money limit orders under the hood, after the CFTC-SEC joint advisory commission raised concerns about the use of market orders in the case of large HFT traders, and concerns on the lack of liquidity that caused market orders that found no limit orders to execute on the other side of the trade, driving the prices of blue chip stocks into the pennies. We also applaud the CFTC requesting comment regarding whether it is appropriate to restrict large order execution design that results in disruptive trading. In particular, we believe there are questions whether it is ever appropriate to permit large order algorithms that employ unlimited use of market orders or that permit executions at prices which are a dramatic percentage below the present market price without a pause for human review So although you still see a market order on the front end, it is transformed to a very aggressive limit in the back end. However, doing this change manually, by selling at price 0 or buying at 9999 may backfire since it may trigger fat finger checks and prevent your order from reaching the market. For example BATS Exchange rejects orders that are priced too aggressively and don't comply with the range of valid prices. If you want your trade to execute right now and you are willing to take slippage in order to get fast execution, sending a market order is still the best alternative.\"" }, { "docid": "62109", "title": "", "text": "I imagine the same results would occur as with any other business that is owed money. For a short period the company will try to collect their debts directly from the consumer. If unsuccessful, the company may then sell their right to the debt over to a collections agency. The collection agency will then pursue more aggressive collections tactics and/or legal action to collect." }, { "docid": "412108", "title": "", "text": "No it isn't, at least from my perspective. For example many drugs are illegal. Do I think they are unethical to use? Absolutely not. I believe in the non-aggression principle, if you aren't hurting anyone else in any way you are not doing anything wrong. Portugal has decriminalized drug use, many anabolics are freely available in middle eastern countries. Is everyone a drug addict or a 280lb freak? No. We should govern what we do with our bodies, not the government." }, { "docid": "296231", "title": "", "text": "\"Past results are not a predictor of future results. There is no explicit upper bound on a market, and even if individual companies' values were remaining unchanged one would expect the market to drift upward in the long term. Plus, there's been some shift from managing companies for dividends to managing stocks for growth, which will tend to increase the upward push. Trying to time the market -- to guess when it's going to move in any particular direction -- is usually closer to gambling than investing. The simplest answer remains a combination of buy-and-hold and dollar-cost averaging. Buy at a constant number of dollars per month (or whatever frequency you prefer), and you will automatically buy more when the stock/fund is lower, less when it is higher. That takes advantage of downturns as buying opportunities without missing out on possible gains at the other end. Personally, I add a bit of contrarian buying to that -- I increased my buying another notch or two while the market was depressed, since I had money I wouldn't need any time soon (buy and hold) and I was reasonably confident that enough of the market would come back strongly enough that I wasn't at significant risk of losing the investment. That's one of the things which causes me to be categorized as an \"\"aggressive investor\"\" even though I'm operating with a very vanilla mix of mutual funds and not attempting to micromanage my money. My goal is to have the money work for me, not vice versa.\"" }, { "docid": "231679", "title": "", "text": "Summarized article: On Thursday, stocks posted the worst decline in 3 weeks on weak worldwide manufacturing data. A manufacturing survey for the Euro zone showed a contraction, Chinese manufacturing declined and the Philadelphia branch of the Federal Reserve also reported a manufacturing slowdown. Additionally, previously owned home sales dropped 1.5% in May and the 4-week average of new unemployment claims jumped to the highest level since December. Goldman Sachs made a bearish call on the S&amp;P 500 index and recommended its clients to build short positions in the index. The news came one day after the Federal Reserve cut its estimates for economic growth and said it would extend a bond-buying program. Disappointed investors had hoped for more aggressive action from the central bank to stimulate the economy. The Dow was down 1.96%, the S&amp;P 500 index was down 2.23% and the NASDAQ was down 2.44%. * For more summarized news, subscribe to the [/r/SkimThat](http://www.reddit.com/r/SkimThat) subreddit" }, { "docid": "230908", "title": "", "text": "There are few main reasons I can think of that the salesperson would do this: A lot of people assume it's the 3rd option always. But if the person is reputable, it's most likely 1 or 2. You can't run a business doing option 3 for long without getting a reputation." }, { "docid": "250644", "title": "", "text": "\"But if we raise the price of the juicer to something rediculous, it will seem like a \"\"premium\"\" product, and if we lock our customers into buying their juice from us only, and auto expire the fruit on an aggressive schedule we'll make a ton of money. It's the hottest trend right now. We can slap that model on anything and it's guaranteed to make us money, just like it says in this $80k Power Point deck. Open source fruit is a thing of the past folks. Squeezing fruit by hand is for plebians and suckers.\"" }, { "docid": "80797", "title": "", "text": "My equities portfolio breaks down like this: (I'm 26 years old, so it is quite aggressive) Additionally, I have a portfolio of direct real estate investments I have made over the past 4 years. I invested very aggressively into real estate due to the financial crisis. As a result of my aggressive investing & strong growth in real estate, my overall asset breakdown is quite out of balance. (~80% Real Estate, ~20% Equities) I will be bringing this into a more sensible balance over the next few years as I unwind some of my real estate investments & reinvest the proceeds into other asset classes. As for the alternative asset groups you mentioned, I looked quite seriously at Peer to Peer lending a few years back. (Lending Club) However, interest rates were quite low & I felt that Real Estate was a better asset class to be in at the time. Furthermore, I was borrowing heavily to fund real estate purchases at the time, and I felt it didn't make much sense to be lending cash & borrowing at the same time. I needed every dime I could get a hold of. :) I will give it another look once rates come back up. I've shied away from investing in things like actively managed mutual funds, hedge funds, etc ... not because I don't think good managers can get superior returns ... rather, in my humble opinion, if they DO get above average returns then they simply charge higher management fees to reflect their good performance. Hope this helps!" }, { "docid": "107595", "title": "", "text": "\"Sales tactics for permanent insurance policies can get pretty sleazy. Sending home a flier from school is a way for an insurance salesperson to get his/her message out to 800 families without any effort at all, and very little advertising cost (just a ream of paper and some toner). The biggest catchphrases used are the \"\"just pennies per day\"\" and \"\"in case they get (some devastating medical condition) and become uninsurable.\"\" Sure, both are technically true, but are definitely used to trigger the grown ups' insecurities. Having said that (and having been in the financial business for a time, which included selling insurance policies), there is a place for insurance of children. A small amount can be used to offset the loss of income for the parents who may have to take extended time away from work to deal with the event of the loss of their child, and to deal with the costs of funeral and burial. Let's face it, the percentage of families who have a sufficiently large emergency fund is extremely small compared to the overall population. Personally, I have added a child rider to my own (term) insurance policies that covers any/all of my children. It does add some cost to my premiums, but it's a small cost on top of something that is already justifiably in place for myself. One other thing to be aware of: if you're in a group policy (any life insurance where you're automatically accepted without any underwriting process, like through a benefit at work, or some other club or association), the healthy members are subsidizing the unhealthy ones. If you're on the healthy side, you might consider foregoing that policy in favor of getting your own policy through an insurance company of your choice. If you're healthy, it will always be cheaper than the group coverage.\"" }, { "docid": "7796", "title": "", "text": "\"Okay, so... &gt; Lifting* the offer (hit bids, lift offers). And I suppose that's a stategy, albeit a somewhat simple one. Passive routing strategies differ from firm to firm and algo to algo. What is your customer going to think if you bid up a new price level only for the stock to rally completely away from it? I mean if you have an open order for more than 10 times the amount currently offered with a limit above the offer, and you havent gotten filled on the bid, what can you do but lift the offer and try to be first at the next price level up? At least you would have gotten some at the price they quoted, or are they fill or kill? &gt; \"\"Bidding it up to attract sellers\"\" sounds an awful lot like spoofing, just a heads up. Sure though, if you want to tighten a spread or create new levels with aggressive passive liquidity, that is a strategy. The same caveats as I mentioned above apply. Just to be clear, 'aggressively adding passive liquidity' is the more apt way to put it - I'm talking about when you actually want to get filled on those bids but you're having trouble finding sellers. Could you give me an example of what you might consider passive or aggressive, just for scale - would a mkt impact of .10% raise any eyebrows? How do you gauge fair value or does that matter less to you than just accumulating/selling what you can for what you were asked to? &gt; Anyway, if market impact isn't an issue for the customer, sure, take liquidity until you're filled. Don't forget about getting good size done in the opening and closing auctions (MOO/MOC). If you're too passive you risk the market moving away from you and pissing off the customer. If you're too aggressive you risk moving the market too much and pissing off the customer. So then is the question more 'how motivated is the buyer or seller?' I'm glad you bring up the MOO/MOC, are there certain securities that don't have much of a market in those auctions? Trying to suss out how a large firm can hold a position in some of the less popular names with next to no liquidity and little in the way of dark pool, auction, block sales, etc.\"" }, { "docid": "317260", "title": "", "text": "10 years into my career. Here are my notes: 1. Don't work overtime as a salaried employee. If there's more work than people then management needs to hire more people. Sure, there are times when shit hits the fan and there's no other option, but that should be a 'once every two years' event, not a 'once every week' event. 2. Be a rockstar. If you're spending time 'looking busy' because you finished a 3 hour job in 1 hour ship the results to your manager and ask for more. Those results will be noticed and will move you from entry-level to mid-level to senior. 3. Skills pay the bills. Always work on learning new things to bring value to your employer. This is also required to move up the chain in your career, and leads into my #4. 4. Get paid what you're worth. Maintain an understanding of what similar skillsets are paying in your area and either maintain or exceed that. Your employer has an incentive to pay you as little as possible. Show them comparable salaries for the same position paying more and make them match it. If they won't match it find someone who will. 5. Don't correct your boss/salesperson when they are presenting to management/customers. Instead, let them know after the meeting. Your #2 points (both of them) are something that I struggled with when I was new in my career. It was incredibly frustrating to *know* something, but not have anyone listen due to the fact that I was a 'kid'. Unfortunately it's a part of life. If you can do #2 and #3 on my list for a couple of years people will start listening. It's a great feeling being a 24 year old kid in a room full of my boss's bosses, and my boss's boss's bosses and having them listen and consider my opinion, but it's not something that's given to everyone. You need to earn it." }, { "docid": "324661", "title": "", "text": "\"Making these difficult portfolio decisions for you is the point of Target-Date Retirement Funds. You pick a date at which you're going to start needing to withdraw the money, and the company managing the fund slowly turns down the aggressiveness of the fund as the target date approaches. Typically you would pick the target date to be around, say, your 65th birthday. Many mutual fund companies offer a variety of funds to suit your needs. Your desire to never \"\"have to recover\"\" indicates that you have not yet done quite enough reading on the subject of investing. (Or possibly that your sources have been misleading you.) A basic understanding of investing includes the knowledge that markets go up and down, and that no portfolio will always go up. Some \"\"recovery\"\" will always be necessary; having a less aggressive portfolio will never shield you completely from losing money, it just makes loss less likely. The important thing is to only invest money that you can afford to lose in the short-term (with the understanding that you'll make it back in the long term). Money that you'll need in the short-term should be kept in the absolute safest investment vehicles, such as a savings account, a money market account, short-term certificates of deposit, or short-term US government bonds.\"" }, { "docid": "93828", "title": "", "text": "You can make a start to learn how to make better investing decisions by learning and understanding what your current super funds are invested in. Does the super fund give you choices of where you can invest your funds, and how often does it allow you to change your investment choices each year? If you are interested in one area of investing over others, eg property or shares, then you should learn more on this subject, as you can also start investing outside of superannuation. Your funds in superannuation are taxed less but you are unable to touch them for another 30 to 35 years. You also need to consider investing outside super to help meet your more medium term goals and grow your wealth outside of super as well. If you are interested in shares then I believe you should learn about both fundamental and technical analysis, they can help you to make wiser decisions about what to invest in and when to invest. Above is a chart of the ASX200 over the last 20 years until January 2015. It shows the Rate Of Change (ROC) indicator below the chart. This can be used to make medium to long term decisions in the stock market by investing when the ROC is above zero and getting out of the market when the ROC is below zero. Regarding your aggressiveness in your investments, most would say that yes because you are still young you should be aggressive because you have time on your side, so if there is a downturn in your investments then you still have plenty of time for them to recover. I have a different view, and I will use the stock market as an example. Refer back to the chart above, I would be more aggressive when the ROC is above zero and less aggressive when the ROC is below zero. How can you relate this to your super fund? If it does provide you to change your investment choices, then I would be invested in more aggressive investments like shares when the ROC crosses above zero, and then when the ROC moves below zero take a less aggressive approach by moving your investments in the super fund to a more balanced or capital guaranteed strategy where less of your funds are invested in shares and more are invested in bonds and cash. You can also have a similar approach with property. Learn about the property cycles (remember super funds usually invest in commercial and industrial property rather than houses, so you would need to learn about the commercial and industrial property cycles which would be different to the residential property cycle). Regarding your question about SMSFs, if you can increase your knowledge and skills in investing, then yes switching to a SMSF will give you more control and possibly better returns. However, I would avoid switching your funds to a SMSF right now. Two reasons, firstly you would want to increase your knowledge as mentioned above, and secondly you would want to have at least $300,000 in funds before switching to a SMSF or else the setup and compliance costs would be too high as a percentage of your funds at the moment ($70,000). You do have time on your side, so whilst you are increasing your funds you can use that time to educate yourself in your areas of interest. And remember a SMSF is not only an investment vehicle whilst you are building your funds during your working life, but it is also an investment vehicle when you are retired and it becomes totally tax free during this phase, where any investment returns are tax free and any income you take out is also tax free." }, { "docid": "339796", "title": "", "text": "This is quite possibly a tactic to attract new clients.. ICICI is one of the banks with a small presence in Canada. There are also banks like Tangerine and PC Financial that are aggressively trying to get new clients to switch over from the big 5 banks. At the time of writing, for a limited time, PC Financial is paying 2.5% interest on savings accounts versus 1.4% for a 1 year GIC." }, { "docid": "460054", "title": "", "text": "\"Seems to me you don't have a ton of great choices, but of them: Keep going as you are. If/when the car becomes unusable without significant expenses, stop using it. Buy another junker and use that to get by until your loan is paid off. From now until then, put aside a few hundred (or whatever you can, if more) each month towards the anticipated purchase. When you do buy this junker, pay in cash - no loan. Just get something that will take you to work, and that includes \"\"bike\"\" if that's a possibility. When you can, sell the no longer usable car to finish paying off the loan. Start aggressively paying off the current loan, with the eye of getting it down to where you're not underwater anymore. Then sell the car and dispose of the loan, and buy a better replacement. Scrimp and save and cut everything - eat cheaply (and never out), cut your personal expenses everywhere you can. If you get another $250 a month towards principal, you can probably be no-longer-underwater in about a year. Get a personal loan today for the amount that you're underwater, and immediately sell the car. This gets you out of the loan and car the quickest, and if you think the car will devalue significantly between now and when you might be not underwater anymore, this might be the best option. But it's the most expensive, likely - you'll pay 12% to 20% on the difference. Now, 12% of $5000 is less than 5% of 15000, so it might actually be a good financial deal - but you'll probably have to shop around to get 12-15% with a 660 (though it's probably possible). You'll still be without a car at this point, though, so you'd have to buy another one (or live without for a while), and you'd still have a payment of some sort, but perhaps a more manageable one ($5000 @ 12% @ 5 years means something a bit over $100 a month, for example.) I recommend that if you can get by without a car for a while, option 2 is your best bet. All of these will require some financial care for a while, and probably cutting back on expenses for a year or two; but realistically, you shouldn't expect anything else. Get a budgeting app if it will help see how to do this. As far as getting out of the loan without paying it, I don't recommend that at all. Your credit will be ruined for at least seven years, and 660 is not bad at all really, and then would take yet more years to recover. You will likely be sued for the balance plus collection costs, beyond repossession. The consequences would be far, far worse than just paying it off, and I mean that financially as well as ethically.\"" } ]

[ { "docid": "230908", "title": "", "text": "There are few main reasons I can think of that the salesperson would do this: A lot of people assume it's the 3rd option always. But if the person is reputable, it's most likely 1 or 2. You can't run a business doing option 3 for long without getting a reputation." } ]

[ { "docid": "80797", "title": "", "text": "My equities portfolio breaks down like this: (I'm 26 years old, so it is quite aggressive) Additionally, I have a portfolio of direct real estate investments I have made over the past 4 years. I invested very aggressively into real estate due to the financial crisis. As a result of my aggressive investing & strong growth in real estate, my overall asset breakdown is quite out of balance. (~80% Real Estate, ~20% Equities) I will be bringing this into a more sensible balance over the next few years as I unwind some of my real estate investments & reinvest the proceeds into other asset classes. As for the alternative asset groups you mentioned, I looked quite seriously at Peer to Peer lending a few years back. (Lending Club) However, interest rates were quite low & I felt that Real Estate was a better asset class to be in at the time. Furthermore, I was borrowing heavily to fund real estate purchases at the time, and I felt it didn't make much sense to be lending cash & borrowing at the same time. I needed every dime I could get a hold of. :) I will give it another look once rates come back up. I've shied away from investing in things like actively managed mutual funds, hedge funds, etc ... not because I don't think good managers can get superior returns ... rather, in my humble opinion, if they DO get above average returns then they simply charge higher management fees to reflect their good performance. Hope this helps!" }, { "docid": "531005", "title": "", "text": "\"I got started by reading the following two books: You could probably get by with just the first of those two. I haven't been a big fan of the \"\"for dummies\"\" series in the past, but I found both of these were quite good, particularly for people who have little understanding of investing. I also rather like the site, Canadian Couch Potato. That has a wealth of information on passive investing using mutual funds and ETFs. It's a good next step after reading one or the other of the books above. In your specific case, you are investing for the fairly short term and your tolerance for risk seems to be quite low. Gold is a high-risk investment, and in my opinion is ill-suited to your investment goals. I'd say you are looking at a money market account (very low risk, low return) such as e.g. the TD Canadian Money Market fund (TDB164). You may also want to take a look at e.g. the TD Canadian Bond Index (TDB909) which is only slightly higher risk. However, for someone just starting out and without a whack of knowledge, I rather like pointing people at the ING Direct Streetwise Funds. They offer three options, balancing risk vs reward. You can fill in their online fund selector and it'll point you in the right direction. You can pay less by buying individual stock and bond funds through your bank (following e.g. one of the Canadian Couch Potato's model portfolios), but ING Direct makes things nice and simple, and is a good option for people who don't care to spend a lot of time on this. Note that I am not a financial adviser, and I have only a limited understanding of your needs. You may want to consult one, though you'll want to be careful when doing so to avoid just talking to a salesperson. Also, note that I am biased toward passive index investing. Other people may recommend that you invest in gold or real estate or specific stocks. I think that's a bad idea and believe I have the science to back this up, but I may be wrong.\"" }, { "docid": "156908", "title": "", "text": "\"This is basically the short-term/long-term savings question in another form: savings that you hope are long-term but which may turn short-term very suddenly. You can never completely eliminate the risk of being forced to draw on long term savings during a period when the market is doing Something Unpleasant that would force you to take a loss (or right before it does Something Pleasant that you'd like to be fully invested during). You can only pick the degree of risk that you're willing to accept, balancing that hazard of forced sales against the lower-but-more-certain returns you'd get from a money market or equivalent. I'm considered a moderately aggressive investor -- which doesn't mean I'm pushing the boundaries on what I'm buying (not by a long shot!), but which does mean I'm willing to keep more of my money in the market and I'm more likely to hold or buy into a dip than to sell off to try to minimize losses. That level of risk-tolerance also means I'm willing to maintain a ready-cash pool which is sufficient to handle expected emergencies (order of $10K), and not become overly paranoid about lost opportunity value if it turns out that I need to pull a few thou out of the investments. I've got decent health insurance, which helps reduce that risk. I'm also not particularly paranoid about the money. On my current track, I should be able to maintain my current lifestyle \"\"forever\"\" without ever touching the principal, as long as inflation and returns remain vaguely reasonable. Having to hit the account for a larger emergency at an Inconvenient Time wouldn't be likely to hurt me too much -- delaying retirement for a year or two, perhaps. It's just money. Emergencies are one of the things it's for. I try not to be stupid about it, but I also try not to stress about it more than I must.\"" }, { "docid": "36190", "title": "", "text": "First of all I recommend reading this short e-book that is aimed at young investors. The book is written for American investors but they same rules apply with different terms (e.g. the equivalent tax-free savings wrappers are called ISAs in the UK). If you don't anticipate needing the money any time soon then your best bet is likely a stocks and share ISA in an aggressive portfolio of assets. You are probably better off with an even more aggressive asset allocation than the one in the book, e.g. 0-15% bond funds 85-100% equity funds. In the long term, this will generate the most income. For an up-to-date table of brokers I recommend Monevator. If you are planning to use the money as a deposit on a mortgage then your best bet might be a Help to Buy ISA, you'll have to shop around for the best deals. If you would rather have something more liquid that you can draw into to cover expenses while at school, you can either go for a more conservative ISA (100% bond funds or even a cash ISA) or try to find a savings account with a comparable interest rate." }, { "docid": "361976", "title": "", "text": "I love technical analysis, and use candlesticks as part of my technical analysis system for trading mutual funds in my 401K. However, I would never use a candlestick chart on its own. I use combination of candlesticks, 2 different EMAs, MACD, bollinger bands, RSI and hand drawn trend lines that I constantly tweak. That's about as much data input as I can handle, but it is possible to graph it all at once and see it at a glance if you have the right trading platform. My approach is very personal, not very aggressive, and took me years to develop. But it's fairly effective - 90% + of my trades are winners. The big advantage of technical analysis is that it forces you to create repeatable rules around which you base your trading. A lot of the time I have little attention at all on what fund I am trading or why it is doing well in that particular market condition. It's basically irrelevant as the technical system tells when to buy and sell, and stops you trying to second guess whether housing, chemicals, gold or asian tigers are is doing well right now. If you don't keep to your own rules, you have only yourself to blame. This keeps you from blaming the market, which is completely out of your control. I explain many of my trades with anotated graphs at http://neurotrade.blogspot.com/" }, { "docid": "142136", "title": "", "text": "\"&gt; The Author clearly has no freaking idea what the hell he is talking about. I have an idea of what's going on. And my experience comes from earlier in my career, when I acted as an execution trader at several hedge funds. Rebates are offered by the exchange so that the exchange can make money. It isn't a public service or some great sacrifice. Let me tell you how it works: Somebody at XYZ exchange/bank takes you out for a nice steak dinner. Then maybe they take you to the strip club. There may be some blow involved. If the broker is particularly nice, they'll pay for an experience in the *actual* \"\"champagne room.\"\" Then you go back to your desk on Monday, look at the flows you're disbursing to various brokers and exchanges, and make your \"\"adjustments\"\" based on how much you enjoy hanging out with the broker/salesperson. Oh, and of course the \"\"rebates.\"\" Which to you barely make a difference, because you're just an execution trader. You aren't in it to make money. The analysts don't know what you're doing, and there's a good chance that the PM doesn't, either. It's easy to do, because tracking \"\"best execution\"\" is beyond the comprehension of the SEC. Oh, if they only knew...and could actually act on it. But we all know they don't really want to, because almost to a man they're each waiting for their turn at the revolving door that will usher them on to a lucrative private sector career.\"" }, { "docid": "477851", "title": "", "text": "\"Just brainstorming here, but my gut feeling is it should be possible to sell your home to yourself with the sole purpose of resetting your basis. Taken at face value it feels illegal, but since I think we all would agree that you could sell your house to a third party and purchase the identical house next door for the same price (thus resetting your basis), why can't you purchase the same home right back? If one is legal, it seems odd for the other not to be. That being said, I have no idea how to legally do it. Perhaps you truly need a third party to step in which you sell it to, and then buy it back from them sometime in the future. Or perhaps you could start an LLC and have it purchase your home from you. Either way, I highly suggest finding an expert real estate attorney/accountant before attempting this, and don't be surprised if you get multiple opposite opinions. I suspect this is a gray area which will highly depend on how tax \"\"aggressive\"\" you are willing to be.\"" }, { "docid": "285033", "title": "", "text": "\"Here I thought I would not ever answer a question on this site and boom first ten minutes. First and foremost I am in the automotive industry, specifically one of our core competencies is finance department management consulting and the sales process both for the sale of the care as well as the financial transaction. First and foremost new vehicle gross profits are nowhere near 20% for the dealership. In an entry level vehicle like say a Toyota Corolla there is only a few hundreds of dollars in markup from invoice to M.S.R.P. There is also something called holdback that dealers get for achieving certain goals such as sales volume. These are usually pretty easy to hit. As a matter of fact I have never heard of a dealer not getting the hold back on a deal. This hold back is there to cover overhead for the car, the cost of getting it ready to sell, having a lot to park it on, making it ready for delivery, offset some of the cost of sales labor etc. Most dealerships consider the holdback portion of the invoice to not be part of the deal when it comes to negotiations. Certain brands such as KIA and Chrysler have something called \"\"Dealer Cash\"\" these payouts are usually stair stepped according to volume and vary by dealer, location, past history, how the guys at the factory feel that day and any number of combinations. Then there is CSI or Customer Service Index payments, these payments are usually made every 1/4 are on the Parts Statement not the Sales Doc and while they effect the dealers bottom line they almost never affect the sales managers or sales persons payroll so they are not considered a part of the cost of the car. They are however extremely important to the dealer and this is why after you have your new car they want you to bring in your survey for a free oil change or something. IF you are going to give a bad survey they want to throw it away and not send it in, if you are going to give a good survey they want to make sure you fill it out correctly. This is because lets say they ask you on a scale of 1-10 how was your sales person and you put a 9 that is a failing score. Dumb I know but that is how every factory CSI score system I have seen worked. According to NADA the average New Vehicle gross profit including hold back and dealer cash is around $1000.00. No where near 20%. Dealerships would love it if they made 20% on your new F250 Supercrew Diesel at around $50,000.00. One last thing there is something on the invoice called Wholesale Finance Reserve. This is the amount of money the factory forwards to the Dealership to offset the cost of financing vehicle on the floor plan so they can have it for you to look at before you buy. This is usually equal to around 3 months of interest and while you might buy a vehicle that has been on the lot for 2 days they have plenty that have been there much longer so this equals out in a fair to middling run store. General Mangers that know what they are doing can make this really pad their net profit to statement. On to incentives, there are basically 3 kinds. Cash to customer in the form of rebates, Dealer Cash in the form of incentives to dealerships based on volume or the undesirability of a vehicle, and incentive rates or Subvented leases. The rates are pretty self explanatory as they advertised as such (example 0% for 60 Months). Subvented Leased are harder to figure out and usually not disclosed as they are hard to explain and also a source of increased profit. Subvented leases are usually powered by lower cost of money called a money factor (think of it as an interest rate) that is discounted from the lease company or a subsidized residual. Subsidized residuals are virtually verboten on domestic vehicles due to their poor resell values. A subsidized residual works like this, you buy a Toyota Camry and the ALG (automotive lease guide) says it has a residual at 36 months of 48%. Well Toyota Motor Credit says we will give you a subvented residual of 60% basically subsidizing a 2% increase in residual. Since they do not expect to be able to sell the car at auction for that amount they have to set aside the 2% as a future expense. What does this mean to you, it means a lower payment. Also a good rule of thumb if you are told a money factor by your salesperson to figure out what the interest rate is just multiply it by 2400. So if a money factor is give of .00345 you know your actual interest rate is a little bit lower than 8.28% (illustration purposes only money factors are much lower than that right now). So how does this save you money well a lease is basically calculated by multiplying the MSRP by the residual and then subtracting that amount from the \"\"Capitalized Cost\"\" which is the Price paid for the car - trade in + payoff + TT&L-Rebate-Down Payment. That is the depreciation. Then you divide that number by the term of the loan and you have the depreciation amount. So if you have 20K CC and 10K R your D = 10K / 36 = 277 monthly payment. For the rest of the monthly payment you add (I think been a long time since I did this with out a computer) the Residual plus the CC for $30,000 * MF of .00345 = 107 for a total payment of 404 ish. This is not completely accurate but you can use it to make sure a salesperson/finance person is not trying to do one thing and say another as so often happens on leases. 0% how the heck do they make money at that, well its simple. First in 2008 the Fed made all the \"\"Captive\"\" lenders into actual banks instead of whatever they were before. So now they have access to the Fed's discounting window which with todays monetary policies make it almost free money. In the past these lenders had to go through all kinds of hoops to raise funds and securitize loans even for super prime credit. Those days are essentially over. Now they get their short term money just like Bank of America does. Eventually they still bundle these loans and sell them. So in the short term YOU pay for the 0% by giving up part or all of your rebate. This is really important DO NOT GIVE up your rebate for 0% unless it makes sense to do so. When you can get the money at 2.5% and get a $7000.00 rebate (customer cash) on that F250 or 0% take the cash. First of all make the finance guy/gal show you the the difference in total cost they can do do this using the federal truth in lending disclosures on a finance contract. Secondly how long will you keep the vehicle? If you come out ahead by say $1500 by taking the lower rate but you usually trade out every three years this is not going to work. Also and this is important if you are involved in a situation with a total loss like a stolen car or even worse a bad wreck before the breakeven point you lose that price break. Finally on judging what is right for you, just know that future value of the vehicle on for resell or trade-in will take into effect all of these past rebates and value the car accordingly. So if a vehicle depreciates 20% a year for the first 3 years the starting point will essentially be $7000.00 less than you actually paid, using rough numbers. How does this help the dealers and car companies? Well while a dealer struggles to make money on new cars the factory makes all of their money on the new cars and the new car financing. While your individual loan might lose money that money is offset by the loss of rebate and I think Ford does actually pay Ford Motor Credit Company the difference in the rate. The most important thing is what happens later FMCC now has 2500 loans with people with perfect credit. They can now use those loans to budle with people with not so perfect credit that they financed at 12%-18% and buy that money with interest rates in the 2%-3% range. Well that is a hell of a lot of profit. 'How does it help the dealership, well the more super prime credit they have in their portfolio the more subprime credit the banks will buy for them. This means they have more loans originated that are more profitable for them. Say you come in for the 0% but have 590 credit score, they get FMCC to buy the deal because they have a good portfolio and you win because the dealer gets to buy the money at say 9% and sell it to you at say 12% making the spread. You win there because you actually qualified for a rate of around 18% with a subprime company like Santander or Capital One (yes that capital one) so you save a ton on your overall cost of the car. Any dealership that is half way well run makes as much or money in the finance and insurance office than the rest of the dealership. When you factor in what a good F&I Director can do to get deals done with favorable terms that really goes up. Think about that the guys sitting a desk drinking coffee making more than the service department guys all put together. Well that was long winded but there I broke down the car business for whoever read this far.\"" }, { "docid": "416225", "title": "", "text": "\"This depends on the country(ies) involved. US citizen/resident giving gifts is required to pay a gift tax. The recipient of the gift, however, pays nothing. The value of the gift at the time of the gift-giving is used to determine the tax, and an exclusion of $14000 per person per year (as of 2013) is available to allow smaller gifts to be given without too much of a red tape. There's also a lifetime exemption which is shared between the gift tax and the estate tax. This exemption is $5.25M in 2013. The reason the gift tax exists in the US is because the US tax code is very aggressive. This is basically double taxation, similarly to estate tax. Gifts/estates are after-tax money, i.e.: income tax has been paid on them, yet the government taxes them again. Why? The excuse is to disallow shifting of income: if one person has high income tax brackets, he may give some of his income-producing property to another person with lesser brackets who would then pay less income taxes (for example, parents would transfer property to children). Similarly capital gains could be shifted. Generation-skipping tax is yet another complication to disallow people use gifts to avoid estate taxes: a grandparent would gift stuff to grandchildren, thus skipping a level of estate taxes (the parents in between). In other countries the tax codes may be less aggressive, and not tax gifts/inheritance as this money has been taxed before. This is a more fair situation, IMHO, yet it means that wealth moves from generation to generation without the \"\"general public\"\" benefiting from it. So if you're a US person and considering giving or receiving a gift - you need to consult with a tax adviser about the consequences. Similarly with other countries, if you are subject to their tax laws.\"" }, { "docid": "384983", "title": "", "text": "\"You mentioned three concepts: (1) trading (2) diversification (3) buy and hold. Trading with any frequency is for people who want to manage their investments as a hobby or profession. You do not seem to be in that category. Diversification is a critical element of any investment strategy. No matter what you do, you should be diversified. All the way would be best (this means owning at least some of every asset out there). The usual way to do this is to own a mutual or index fund. Or several. These funds own hundreds or thousands of stocks, so that buying the fund instantly diversifies you. Buy and hold is the only reasonable approach to a portfolio for someone who is not interested in spending a lot of time managing it. There's no reason to think a buy-and-hold portfolio will underperform a typical traded portfolio, nor that the gains will come later. It's the assets in the portfolio that determine how aggressive/risky it is, not the frequency with which it is traded. This isn't really a site for specific recommendations, but I'll provide a quick idea: Buy a couple of index funds that cover the whole universe of investments. Index funds have low expenses and are the cheapest/easiest way to diversify. Buy a \"\"total stock market\"\" fund and a \"\"total bond fund\"\" in a ratio that you like. If you want, also buy an \"\"international fund.\"\" If you want specific tickers and ratios, another forum would be better(or just ask your broker or 401(k) provider). The bogleheads forum is one that I respect where people are very happy to give and debate specific recommendations. At the end of the day, responsibly managing your investment portfolio is not rocket science and shouldn't occupy a lot of time or worry. Just choose a few funds with low expenses that cover all the assets you are really interested in, put your money in them in a reasonable-ish ratio (no one knows that the best ratio is) and then forget about it.\"" }, { "docid": "250644", "title": "", "text": "\"But if we raise the price of the juicer to something rediculous, it will seem like a \"\"premium\"\" product, and if we lock our customers into buying their juice from us only, and auto expire the fruit on an aggressive schedule we'll make a ton of money. It's the hottest trend right now. We can slap that model on anything and it's guaranteed to make us money, just like it says in this $80k Power Point deck. Open source fruit is a thing of the past folks. Squeezing fruit by hand is for plebians and suckers.\"" }, { "docid": "520132", "title": "", "text": "\"&gt; Is your time frame any longer than intraday? I imagine you wouldn't want to carry that risk overnight if you're a broker or selling a route.. Most brokers these days are executing in an agent capacity, so they're never holding the risk. They execute what they can, the customer keeps what they can't. &gt; So, say for instance you join a bid a few levels down, you aren't really get filled, you start hitting the offer and eventually you realize you're competing with someone for the shares offered, so you take out the price level and bid on all the exchanges so that you're first on the bid at that level, then repeat until someone that can match your appetite starts to fill you on the bid? Lifting* the offer (hit bids, lift offers). And I suppose that's a stategy, albeit a somewhat simple one. Passive routing strategies differ from firm to firm and algo to algo. What is your customer going to think if you bid up a new price level only for the stock to rally completely away from it? &gt; Right, so say you need 100k shares, there are 10k offered at 9.98, 25k offered at 9.99, and 65k at 10.00, you might just enter an intermarket sweep order of 100k @ 10 limit and hope that you can get most of the shares off before everyone can cancel? I imagine there has to be a lot of bidding it up to attract sellers and then letting people take out your bids all day... \"\"Bidding it up to attract sellers\"\" sounds an awful lot like [spoofing](https://en.wikipedia.org/wiki/Spoofing_(finance\\)), just a heads up. Sure though, if you want to tighten a spread or create new levels with aggressive passive liquidity, that is a strategy. The same caveats as I mentioned above apply. Anyway, if market impact isn't an issue for the customer, sure, take liquidity until you're filled. Don't forget about getting good size done in the opening and closing auctions (MOO/MOC). If you're too passive you risk the market moving away from you and pissing off the customer. If you're too aggressive you risk moving the market too much and pissing off the customer.\"" }, { "docid": "260838", "title": "", "text": "Two years ago, I wrote an article titled Student Loans and Your First Mortgage in response to this exact question posed by a fellow blogger. The bottom line is that the loan payment doesn't lower your borrowing power as it fits in the slice between 28% (total housing cost) and 38% (total monthly debt burden) when applying for a loan. But, the $20K is 20% down on $100K worth of house. With median home prices in the US in the mid-high $100Ks, you're halfway there. In the end, it's not about finance, it's a question of how badly you want to buy a house. If I got along with the parents, I'd stay as long as I was welcome, and save every dollar I could. Save for retirement, save for as large a downpayment as you can, and after you buy the house, pay the student loan aggressively. I moved out the week after I graduated." }, { "docid": "171629", "title": "", "text": "\"I have my \"\"safe\"\" money in index funds but like to dabble in individual stocks. My criteria and thought process are usually like this, let's use SBUX as an example: Understand what the company does. Also paraphrased as \"\"buy what you know\"\". A profitable/growing business doesn't need to be complicated. Open stores. Sell coffee. For SBUX, my decision process literally started inside a store: \"\"Rocky, why are you standing in line to overpay for coffee? Wow, look at all these people! Hmmm. I wonder if this is a good stock to buy?\"\" Check out their fundamentals. Are they profitable? P.E.ratio, book value, and PEG are helpful, and I tend to use them as a gauge for whether I think the stock is overpriced or not. I compare those values to others in the industry. SBUX right now has a PE of ~30, which looks about average for its peers (PEP, KKD, GMCR). So far so good. Does it pay a dividend? This isn't necessarily good or bad, just useful to know. I like dividend-paying stocks, even if it means the stock price might not grow as aggressively. Also, a company that pays a dividend is naturally confident in its ability to turn a profit and generate cash. So it's a safer pick, in my opinion. SBUX pays a dividend, a small one, but that's a plus for me. Am I willing to watch the stock? With my index funds, I buy and forget. With my stocks, I keep an eye on the situation, read the news, and have to make a buy/sell decision regularly. With SBUX, I don't watch all that closely, I just keep up with the news. IMO, it's still a buy based on all the above criteria. And I feel less silly now standing in line to overpay for coffee.\"" }, { "docid": "47566", "title": "", "text": "\"They will show up ad they will be given the money when the time comes. The central message out there right now is still \"\"don't buy a house\"\" especially while the smart money investors are still buying. Messaging will change when the time comes. Wait til housing prices are soaring and the media is completely in the tank with it. Yeah I know it sounds crazy but when banks want to sell loans, they will market aggressively and people will buy. Just like last time.\"" }, { "docid": "175463", "title": "", "text": "Michigan's 529 plan offers a wide variety of investment options, ranging from a very conservative guaranteed investment option (currently earning 1.75% interest) to a variety of index-based funds, most of which are considered aggressive. You said that you are unhappy with the 5% you have earned the past year, and that you thought you should be able to get 8% elsewhere. But according to your comment, you have 30% of your money earning a fixed 1.75% rate, and another 40% of your money invested in one of the moderate balanced options (which includes both stocks and bonds). You've only got 30% invested in the more aggressive investments that you seem to be looking for. If you want to be invested more agressively (which is reasonable, since your daughter won't need this money for many years), you can select more aggressive investments inside the 529. Michigan's 529 offers you the ability to deduct up to $10,000 (if you are married filing jointly) of contributions off your Michigan state income tax each year. In addition, the earnings inside the 529 are federally tax-free if the money is spent on college education." }, { "docid": "534909", "title": "", "text": "They have ETFs for most of what you listed above. Except the deep-fried candy bars. You know that's just a distributed candy bar that is THEN fried right? They have a few religious ETFs as well as some socially responsible ones. There is no reason to make one based on a single person's preference though - ETFs make their money on fees. For that they need VOLUME. Move Volume = More Money Also, there are over 1,411 ETF's in the US as of 2014. That means there are a lot of options already. You could always create your own if you are a great salesperson though. Source" }, { "docid": "62109", "title": "", "text": "I imagine the same results would occur as with any other business that is owed money. For a short period the company will try to collect their debts directly from the consumer. If unsuccessful, the company may then sell their right to the debt over to a collections agency. The collection agency will then pursue more aggressive collections tactics and/or legal action to collect." }, { "docid": "135879", "title": "", "text": "If you are younger, and you not under undue pressure to buy a home at any particular time, investing in the market is a reasonable way to prepare. Your risk tolerance should be high. Understand that this means you may buy in 3-4 years instead of 1-2 if the market takes a down turn. It took ~3-4 years for the S&P 500 to recover from the 2008 crash. I doubt anything that severe is in the making, but there is always an element of risk involved in investing. If you and your family will be busting at the seams of your current rental in a year, then maybe the bond fund advice others have provided is a better option. If you are willing to be flexible, a more aggressive strategy might be appropriate. Likely, you want something along the lines of the Vanguard S&P 500 mutual fund - something that is diversified (a large number of stocks), in relatively safe companies (in this case the 500 companies that Standard and Poor's think are most likely to repay corporate bonds), and 'indexed' vice 'actively managed' (indexed funds have lower fees because they are using 'rules' to pick the stocks rather than paying a person to evaluate them.) It's going to depend on you and your situation - and regardless of what you choose consistency will be key: put your investment on automatic so it happens every month without your input." } ]

[ { "docid": "584685", "title": "", "text": "\"This is way too long for a comment, so I am posting this as an answer. My bet is that you're buying a new piano. It is the only instrument that makes sense. The rest of this answer are going to assume this, but this should apply well if you're going after a violin or marimba for example. For those readers that do not know, a piano is a very delicate and expensive music instrument. My piano is literally more expensive than my car. There are a lot of similarities in sales negotiation between buying a piano and buying a car. You may be surprised to know that the cost for the dealer to acquire a piano is only around half the listed price. Therefore, the salesperson has a lot of room to negotiate a sale price to you. This explains why he was able to make a good offer for the model you are not intending to buy. You are best by comparing the final sale price with other similar models in your region, or the exact model around your region, which you have already did. Those indicate the standard price in your negotiation. You described the dealer had the exact model you desire, only in different appearance. I assume you want a black color while they have a white or wood-pattern one in their showroom. Note, every piano is different. Even with the exact same model, there will be very slight differences in the tune and touch, since some processes are hand finished. (If you're buying a Steinway, treat each of them as an individual hand crafted art.) Play the exact instrument you will be buying before closing the deal. If they do not have your desired model in the showroom, ask for a visit to their inventory facility. Again, play the exact instrument, not a showroom model. Some dishonest dealers will have their showroom pianos regulated and tuned differently than the \"\"standard\"\" pianos from shipping. If you get an extremely good offer, proceed with caution. There may be defects in that particular instrument. Look for rust or oxidized layers on the strings. Look for groves in the hammers. Listen to clicking noises when playing the keys. These are signs that the instrument has been around for quite a while and they cannot sell it. You can also copy down the serial number and look up the manufacturing date online. Before you close the deal, ask for after-sale services. How many free tunings will they provide? Will they polish your piano after delivery? These are bargain chips you can use for final adjustment of the price.\"" } ]

[ { "docid": "501209", "title": "", "text": "This article is very one-sided and absolutist. It also pulls the struggles from one industry and uses that as a basis to declare resumes are a useless part of the hiring process in general. What works for a Tech start up doesn't work for someone hiring a nurse or an accountant or a salesperson. Most egregious is that this article completely ignores the point of a resume. Of course anyone using a resume to make a hiring decision will see poor results. A resume is there to be able to pare down your candidate pool to see who you are interested to bring in for interviews and eventually assessments to learn more about them. It is also pretty easy to verify employment history with a single call or services like The Work Number. You can provide assessments and ask interview questions to see if someone really knows the information they claim to know on a resume. In order to remove the resume from the hiring process, you have to solve the issue of being able to easily and effectively narrow down a pool of applicants while having a tangible summary of education, experience, skills, etc. Online methods of eliminating applications by keywords have shown to exclude highly qualified candidates. Until such a method is discovered, the resume is still by far the best took to summarize a candidate, and to decide who you want to learn more about." }, { "docid": "349941", "title": "", "text": "I'll agree with the other commenter. There is a ton more to sales than speaking the language and being a decent public speaker. Unless you know what you're getting into and feel confident you can get it done (or you believe that the company is willing to help you learn and grow as a salesperson and that's interesting to you from a career development perspective), I'd recommend avoiding a sales role and encouraging your boss to hire an actual sales person who meets his or her criteria. EDIT: Source: am startup founder with no sales background who is having to do founder selling right now and learning just how hard it is." }, { "docid": "49133", "title": "", "text": "No shit, Sherlock. Let's see: - Valuation down like 80% since last year... - Massive competition from categorically better products with infinitely deep pockets (Android, iPhone)... - Only customers are a rapidly-eroding base of legacy enterprise customers with aggressive cost/feature requirements and bulk-purchase negotiating power. Sounds like a winner!" }, { "docid": "187571", "title": "", "text": "I think you may be drawing the wrong conclusion about why you put what type of investment in a taxable vs. tax-advantaged account. It is not so much about risk, but type of return. If you're investing both tax-advantaged and taxable accounts, you can benefit by putting more tax-inefficient investments inside your tax-advantaged accounts. Some aggressive asset types, like real estate, can throw off a lot of taxable income. If your asset allocation calls for investing in real estate, holding it in a 401k or IRA can allow more of your money to remain invested, rather than having to use it to pay for taxes. And if you're holding in a Roth IRA, you get that tax free. But bonds, a decidedly non-aggressive asset, also throw off a lot of taxable income. You're able to hold them in a tax-advantaged account and not pay taxes on the income until you withdraw it from the account (or tax free in the case of a Roth account.) An aggressive stock fund that is primarily expected to provide returns via price appreciation would do well in a taxable account because there's likely little tax consequence to you until it is sold." }, { "docid": "525213", "title": "", "text": "An option, by definition, is a guess about the future value of the stock. If you guess too aggressively, you lose the purchase price of the option; if you guess too conservatively, you may not take the option or may not gain as much as you might have. You need to figure out what you expect to happen, and how confident you are about it, against the cost of taking the option -- and be reasonably confident that the change in the stock's value will be at least large enough to cover the cost of buying into the game. Opinion: Unless you're comfortable with expectation values and bell curves around them, it's significantly easier to lose money on options than to profit on them. And I'm not convinced that even statisticians can really do this well. I've always been told that the best use for options is hedging an investment you've already made; treating them as your primary bet is gambling, not investment." }, { "docid": "188423", "title": "", "text": "As a customer I absolutely hate aggressive marketing . If a shop aggressively markets to me I avoid it - this is why I avoid [Shell](http://www.shell.com/) and [WHSmith](http://whsmith.com/) . It is also why I prefer to shop at [Morrisons](http://www.morrisons.co.uk/) rather than at [Tesco](http://www.tesco.com/) ( although I will use the machines there ) . And it is also why , as a corpoprate and as a personal buyer , after 15 years , I will no longer be buying Toshiba - their laptops now come infested with spyware and adware . I also pulled out of LinkedIn when they started spamming me repeatedly despite me saying no marketing emails . I also avoid getting my car serviced in the UK because of all the agressive marketing . I don't put my details on marketing lists - I keep very tight control of address details including email addresses and I use source based email addresses so I can easily cut out any offending party . Re, Ford - why does he \\ they no longer sell just black cars ?! The companies that do their marketing well succeed very well . From what I have read [Steam](http://store.steampowered.com/) is one of these . We have a massive situation at the moment where many of the large corporations are having huge problems with getting sufficient sales - they are going the way of the dinosaurs . Part of this is that their customer base has been so impoverished that they can't afford to buy their products . But a large part of it is that they no longer supply the products , the price and the service that the customers are looking for . So customers look elsewhere and they get elsewhere - they find the products they want at a good price and with good service on the Internet and these are usually supplied by small and medium sized companies that are much more nimble . It's a case of bottom up progressive evolution winning over top down mass extinction events . There are a number of products that I have difficulty locating . One such range is men's clothes . The main stores don't stock what I am looking for . I can find what I am looking for in the odd small store in some parts of the world some of the time and I can find what I am looking for on the Internet - if the vendor's web site would work . Does this mean that I walk around dressed like a 15yr old ? No ! - it means that I hold off purchases - things that I would normally purchase every 2 years now get purchased every 6 years ." }, { "docid": "63042", "title": "", "text": "\"Welcome to Personal Finance and Money. This answer will depend a lot on what is most important to the buyer, for example, whether it is important to always be in a newer car, to save money, or strike a balance between the two. There are trade-offs and I don't think there is one right answer for all circumstances. Leasing Leasing does make financial sense for at least two types of people I'm aware of: The company I work for provides company cars to sales executives, which we lease. We lease because it wouldn't be appropriate for a salesperson to meet a client in a car that clearly appears used. Similarly, I know people who value being in a newer car all the time, and for them, leasing makes more financial sense then buying a new car every 2-3 years, and selling their old car which is now 2-3 years old and has depreciated significantly. They understand that they are paying more to always be able to be in a newer car. I used to work with a manager who, every time the new model of the car he owned came out, would see the car and buy it on the spot, even though he already owned last year's model, and he didn't need two cars. He just couldn't help himself; he felt he had to have the new model. It's no use sermonizing about how he \"\"should\"\" learn to save money by just being content with what he had. In reality, if he is going to buy the new model every year no matter what, he should lease rather than buy. From my experience, I would only recommend leasing if you would otherwise be buying a new car on a regular basis, and the lease would be less expensive. This is probably the most cost effective way to maintain the highest possible quality, but would cost much more than buying and holding a new car or buying a value used car. I don't see reliability as much of a factor here since the seller will have a very good idea of how much maintenance will cost, but you will pay a premium to be able to pay a fixed cost for maintenance instead of risking a worse-than-average experience. Buying New According to Edmunds and BIGResearch, only a relatively small number of people are ever in the market for a new car at a given point in time. While you do pay quite a bit more to own a brand new car instead of the same car that is 2-3 years old, there are several reasons I'm aware of why people buy new cars: Number 4 is probably the biggest reason, and many people are willing to pay for the certainty of knowing that the miles are correct, the parts are new, the car is in good working condition, etc. Additionally, some makes of cars have much higher resale values than others (such as Hondas), meaning that there isn't as large of a drop in price between a new car and a used car. Many people consider buying a new car the best way to ensure they get the best reliability since they know the initial condition of the car and can care for it meticulously from that point on. This can especially make sense when the buyer intends to keep the car for the like of the car as the buyer will then benefit from having no car payments once it is paid off. Buying Used Buying a used car is the most affordable option, but for a given quality of car the reliability can be a significant potential pitfall. It can be very difficult for a non-professional to tell whether they are getting a good value. Additionally, it is hard for an owner who wants to sell a used car in excellent condition to get the true value of the car, and much easier for an unscrupulous seller to to get the market price by selling to an unaware buyer (the \"\"lemons\"\" problem in economics). You could buy an inspected car with a limited warranty from a retail seller like CarMax or a dealership, but you often pay a significant premium that cancels out much of the biggest reason to buy used - saving money. However, there is an opportunity to save money when buying used if you're willing to compromise on the condition of the car (if you don't care whether a car has hail damage, for example), or if you are able to wait until you find a motivated/distressed seller who needs to sell quickly and is willing to sell at a discount. If cost is your primary priority, buying a used car is likely the best option, but I would recommend the following in all circumstances: If the seller isn't willing to offer both of these, I would walk away. When buying used, you will also need to consider maintenance, which will vary significantly based on the make and model of the car as well as the condition, which is another risk you need to be willing to take on if you choose to buy used.\"" }, { "docid": "418551", "title": "", "text": "\"Aggressiveness in a retirement portfolio is usually a function of your age and your risk tolerance. Your portfolio is usually a mix of the following asset classes: You can break down these asset classes further, but each one is a topic unto itself. If you are young, you want to invest in things that have a higher return, but are more volatile, because market fluctuations (like the current financial meltdown) will be long gone before you reach retirement age. This means that at a younger age, you should be investing more in stocks and foreign/developing countries. If you are older, you need to be into more conservative investments (bonds, money market, etc). If you were in your 50s-60s and still heavily invested in stock, something like the current financial crisis could have ruined your retirement plans. (A lot of baby boomers learned this the hard way.) For most of your life, you will probably be somewhere in between these two. Start aggressive, and gradually get more conservative as you get older. You will probably need to re-check your asset allocation once every 5 years or so. As for how much of each investment class, there are no hard and fast rules. The idea is to maximize return while accepting a certain amount of risk. There are two big unknowns in there: (1) how much return do you expect from the various investments, and (2) how much risk are you willing to accept. #1 is a big guess, and #2 is personal opinion. A general portfolio guideline is \"\"100 minus your age\"\". This means if you are 20, you should have 80% of your retirement portfolio in stocks. If you are 60, your retirement portfolio should be 40% stock. Over the years, the \"\"100\"\" number has varied. Some financial advisor types have suggested \"\"150\"\" or \"\"200\"\". Unfortunately, that's why a lot of baby boomers can't retire now. Above all, re-balance your portfolio regularly. At least once a year, perhaps quarterly if the market is going wild. Make sure you are still in-line with your desired asset allocation. If the stock market tanks and you are under-invested in stocks, buy more stock, selling off other funds if necessary. (I've read interviews with fund managers who say failure to rebalance in a down stock market is one of the big mistakes people make when managing a retirement portfolio.) As for specific mutual fund suggestions, I'm not going to do that, because it depends on what your 401k or IRA has available as investment options. I do suggest that your focus on selecting a \"\"passive\"\" index fund, not an actively managed fund with a high expense ratio. Personally, I like \"\"total market\"\" funds to give you the broadest allocation of small and big companies. (This makes your question about large/small cap stocks moot.) The next best choice would be an S&P 500 index fund. You should also be able to find a low-cost Bond Index Fund that will give you a healthy mix of different bond types. However, you need to look at expense ratios to make an informed decision. A better-performing fund is pointless if you lose it all to fees! Also, watch out for overlap between your fund choices. Investing in both a Total Market fund, and an S&P 500 fund undermines the idea of a diversified portfolio. An aggressive portfolio usually includes some Foreign/Developing Nation investments. There aren't many index fund options here, so you may have to go with an actively-managed fund (with a much higher expense ratio). However, this kind of investment can be worth it to take advantage of the economic growth in places like China. http://www.getrichslowly.org/blog/2009/04/27/how-to-create-your-own-target-date-mutual-fund/\"" }, { "docid": "231679", "title": "", "text": "Summarized article: On Thursday, stocks posted the worst decline in 3 weeks on weak worldwide manufacturing data. A manufacturing survey for the Euro zone showed a contraction, Chinese manufacturing declined and the Philadelphia branch of the Federal Reserve also reported a manufacturing slowdown. Additionally, previously owned home sales dropped 1.5% in May and the 4-week average of new unemployment claims jumped to the highest level since December. Goldman Sachs made a bearish call on the S&amp;P 500 index and recommended its clients to build short positions in the index. The news came one day after the Federal Reserve cut its estimates for economic growth and said it would extend a bond-buying program. Disappointed investors had hoped for more aggressive action from the central bank to stimulate the economy. The Dow was down 1.96%, the S&amp;P 500 index was down 2.23% and the NASDAQ was down 2.44%. * For more summarized news, subscribe to the [/r/SkimThat](http://www.reddit.com/r/SkimThat) subreddit" }, { "docid": "232083", "title": "", "text": "\"Why thank you for this unbiassed information, trust deed salesperson. Basically, trust deeds are a pawn shop for your house, except they aren't well regulated like a pawn shop. \"\"Banks are too trustworthy. I'm going to give my house to Joe, because he'll give me one third of one more percent, and it seems smart to me to gamble my home on a couple hundred bucks and some social network advice.\"\"\"" }, { "docid": "457059", "title": "", "text": "\"There are different schools of thought. You can ask the IRS - and it would not surprise me if you got different answers on different phone calls. One interpretation is that a put is not \"\"substantially identical\"\" to the disposed stock, therefore no wash is triggered by that sale. However if that put is exercised, then you automatically purchase the security, and that is identical. As to whether the IRS (or your brokerage firm) recognizes the identical security when it falls out of an option, I can't say; but technically they could enforce it because the rule is based on 30 days and a \"\"substantially identical\"\" stock or security. In this interpretation (your investor) would probably at least want to stay out of the money in choosing a strike price, to avoid exercise; however, options are normally either held or sold, rather than be exercised, until at or very close to the expiration date (because time value is left on the table otherwise). So the key driver in this interpretation would be expiration date, which should be at least 31 days out from the stock sale; and it would be prudent to sell an out of the money put as well, in order to avoid the wash sale trigger. However there is also a more unfavorable opinion - see fairmark.com/capgain/wash/wsoption.htm where they hold that a \"\"deep in the money\"\" option is an immediate trigger (regardless of exercise). This article is sage, in that they say that the Treasury (IRS) may interpret an option transaction as a wash if it's ballpark to being exercisable. And, if the IRS throws paper, it always beats each of paper, rock and scissors :( A Schwab article (\"\"A Primer on Wash Sales\"\") says, if the CUSIPs match, bang, wash. This is the one that they may interpret unfavorably on in any case, supporting Schwab's \"\"play it safe\"\" position: \"\"3. Acquire a contract or option to buy substantially identical stock or securities...\"\" . This certainly nails buying a call. As to selling a put, well, it is at least conceivable that an IRS official would call that a contract to buy! SO it's simply not a slam dunk; there are varying opinions that you might describe as ranging from \"\"hell no\"\" to \"\"only if blatant.\"\" If you can get an \"\"official\"\" predetermination, or you like to go aggressive in your tax strategy, there's that; they may act adversely, so Caveat Taxfiler!\"" }, { "docid": "582507", "title": "", "text": "\"What you are saying is a very valid concern. After the flash crash many institutions in the US replaced \"\"true market orders\"\" (where tag 40=1 and has no price) with deep in the money limit orders under the hood, after the CFTC-SEC joint advisory commission raised concerns about the use of market orders in the case of large HFT traders, and concerns on the lack of liquidity that caused market orders that found no limit orders to execute on the other side of the trade, driving the prices of blue chip stocks into the pennies. We also applaud the CFTC requesting comment regarding whether it is appropriate to restrict large order execution design that results in disruptive trading. In particular, we believe there are questions whether it is ever appropriate to permit large order algorithms that employ unlimited use of market orders or that permit executions at prices which are a dramatic percentage below the present market price without a pause for human review So although you still see a market order on the front end, it is transformed to a very aggressive limit in the back end. However, doing this change manually, by selling at price 0 or buying at 9999 may backfire since it may trigger fat finger checks and prevent your order from reaching the market. For example BATS Exchange rejects orders that are priced too aggressively and don't comply with the range of valid prices. If you want your trade to execute right now and you are willing to take slippage in order to get fast execution, sending a market order is still the best alternative.\"" }, { "docid": "486768", "title": "", "text": "You are correct, a possible Dead Cat Bounce is forming on the stock markets. If it does form it will mean that prices have not reached their bottom, as this pattern is a bearish continuation pattern. For a Dead Cat Bounce to form prices will need to break through support formed by the lows last week. If prices bounce off the support and go back up it could become a double bottom pattern, which is a reversal pattern. The double bottom would be confirmed if prices break above the recent high a couple of days ago. Regarding the psychology of the dead cat bounce pattern, is that after a distinct and quick reversal of prices from recent highs you have 2 groups of market participants who create demand in the market. Firstly you have those who were short covering their short positions to take profits, and secondly you have those who are looking for a bargain buying at what they think is the low. So for a few days you have the bulls taking over the bears. Then as more less positive news comes in, the bears hit the market again. These are more participants opening short positions, but more so those who missed out in selling previously because prices fell too quickly, seeing another opportunity to sell at a better price. So the bears take over again. Unless there is very good news around the corner it is likely that the bears will stay in control and prices will fall further. How to trade a dead cat bounce (assuming you have been stopped out of your long possistions already)? If you are aggressive you can go short as prices start reversing from the top of the bounce (with your stop loss just above the top of the bounce). If you are more conservative you would place your entry for a short position just below the support at the start of the bounce (with your stop above the top of the bounce). You could also place an order for a long position above the top of the bounce if a double bottom eventuated. A One Cancels the Other (OCO) would be an appropriate order for such a situation." }, { "docid": "218293", "title": "", "text": "Terminology aside. Your gains for this year in a mutual fund do seem low. These are things that can be quickly, and precisely answered through a conversation with your broker. You can request info on the performance of the fund you are invested in from the broker. They are required to disclose this information to you. They can give you the performance of the fund overall, as well as break down for you the specific stocks and bonds that make up the fund, and how they are performing. Talk about what kind of fund it is. If your projected retirement date is far in the future your fund should probably be on the aggressive side. Ask what the historic average is for the fund you're in. Ask about more aggressive funds, or less if you prefer a lower average but more stable performance. Your broker should be able to adequately, and in most cases accurately, set your expectation. Also ask about fees. Good brokerages charge reasonable fees, that are typically based on the gains the fund makes, not your total investment. Make sure you understand what you are paying. Even without knowing the management fees, your growth this year should be of concern. It is exceptionally low, in a year that showed good gains in many market sectors. Speak with your broker and decide if you will stick with this fund or have your IRA invest in a different fund. Finally JW8 makes a great point, in that your fund may perform well or poorly over any given short term, but long term your average should fall within the expected range for the type of fund you're invested in (though, not guaranteed). MOST importantly, actually talk to your broker. Get real answers, since they are as easy to come by as posting on stack." }, { "docid": "317260", "title": "", "text": "10 years into my career. Here are my notes: 1. Don't work overtime as a salaried employee. If there's more work than people then management needs to hire more people. Sure, there are times when shit hits the fan and there's no other option, but that should be a 'once every two years' event, not a 'once every week' event. 2. Be a rockstar. If you're spending time 'looking busy' because you finished a 3 hour job in 1 hour ship the results to your manager and ask for more. Those results will be noticed and will move you from entry-level to mid-level to senior. 3. Skills pay the bills. Always work on learning new things to bring value to your employer. This is also required to move up the chain in your career, and leads into my #4. 4. Get paid what you're worth. Maintain an understanding of what similar skillsets are paying in your area and either maintain or exceed that. Your employer has an incentive to pay you as little as possible. Show them comparable salaries for the same position paying more and make them match it. If they won't match it find someone who will. 5. Don't correct your boss/salesperson when they are presenting to management/customers. Instead, let them know after the meeting. Your #2 points (both of them) are something that I struggled with when I was new in my career. It was incredibly frustrating to *know* something, but not have anyone listen due to the fact that I was a 'kid'. Unfortunately it's a part of life. If you can do #2 and #3 on my list for a couple of years people will start listening. It's a great feeling being a 24 year old kid in a room full of my boss's bosses, and my boss's boss's bosses and having them listen and consider my opinion, but it's not something that's given to everyone. You need to earn it." }, { "docid": "93828", "title": "", "text": "You can make a start to learn how to make better investing decisions by learning and understanding what your current super funds are invested in. Does the super fund give you choices of where you can invest your funds, and how often does it allow you to change your investment choices each year? If you are interested in one area of investing over others, eg property or shares, then you should learn more on this subject, as you can also start investing outside of superannuation. Your funds in superannuation are taxed less but you are unable to touch them for another 30 to 35 years. You also need to consider investing outside super to help meet your more medium term goals and grow your wealth outside of super as well. If you are interested in shares then I believe you should learn about both fundamental and technical analysis, they can help you to make wiser decisions about what to invest in and when to invest. Above is a chart of the ASX200 over the last 20 years until January 2015. It shows the Rate Of Change (ROC) indicator below the chart. This can be used to make medium to long term decisions in the stock market by investing when the ROC is above zero and getting out of the market when the ROC is below zero. Regarding your aggressiveness in your investments, most would say that yes because you are still young you should be aggressive because you have time on your side, so if there is a downturn in your investments then you still have plenty of time for them to recover. I have a different view, and I will use the stock market as an example. Refer back to the chart above, I would be more aggressive when the ROC is above zero and less aggressive when the ROC is below zero. How can you relate this to your super fund? If it does provide you to change your investment choices, then I would be invested in more aggressive investments like shares when the ROC crosses above zero, and then when the ROC moves below zero take a less aggressive approach by moving your investments in the super fund to a more balanced or capital guaranteed strategy where less of your funds are invested in shares and more are invested in bonds and cash. You can also have a similar approach with property. Learn about the property cycles (remember super funds usually invest in commercial and industrial property rather than houses, so you would need to learn about the commercial and industrial property cycles which would be different to the residential property cycle). Regarding your question about SMSFs, if you can increase your knowledge and skills in investing, then yes switching to a SMSF will give you more control and possibly better returns. However, I would avoid switching your funds to a SMSF right now. Two reasons, firstly you would want to increase your knowledge as mentioned above, and secondly you would want to have at least $300,000 in funds before switching to a SMSF or else the setup and compliance costs would be too high as a percentage of your funds at the moment ($70,000). You do have time on your side, so whilst you are increasing your funds you can use that time to educate yourself in your areas of interest. And remember a SMSF is not only an investment vehicle whilst you are building your funds during your working life, but it is also an investment vehicle when you are retired and it becomes totally tax free during this phase, where any investment returns are tax free and any income you take out is also tax free." }, { "docid": "204176", "title": "", "text": "A Certified Financial Planner has passed a licensing exam and will advise you and help you reach your financial goals. A good CFP can help you a lot, especially if you are unsure how to set up your insurance, investment, savings, and financial plans on your own. You do not need a CFP to get a life insurance policy. If you do get a CFP, he or she should help you above and beyond life insurance -- i.e. retirement planning, investment advice, education planning, etc. It's advantageous to you to pay a fixed price for services instead of a percentage or commission. Negotiate fees up front. For life insurance, in most cases a term policy will fit your needs. Whole life, universal life, etc., combine investments and life insurance into a single product and are big commission makers for the salesman. They make it sound like the best thing ever, so be aware. One of my rules of thumb is that, generally speaking, the larger the commission is for the salesperson, the worse the product is for the consumer. Welcome to life insurance pitches. Term life is far less expensive and provides a death benefit and nothing else. If you just had a baby and need to protect your family, for example, term life is often a good solution, easy to buy, and inexpensive. As you stated, any of the major providers will do just fine." }, { "docid": "198328", "title": "", "text": "Your first problem is looking at these as monthly expenses rather than looking longer-term at how to remove the expenses. You have a $600/month loan, but what is the interest rate? If you paid that loan more aggressively it would free up 10% of your income, but you can't pay the loan aggressively if you don't have an emergency fund. You need enough cash-flow to take care of emergencies so you don't incur more debt on less advantageous terms. The way you describe the problem, it appears that you don't know where all of the money is going, so the first step is to track all of your expenses and formulate a budget. The budget is a plan on how to spend the money for next month. At least 10% should be money you are saving for a short-term emergency fund. Another 10% should be money you are saving for retirement. Until you have 6 months of expenses saved for your emergency fund, you need to skip luxuries like taxi rides and maybe you need to reduce the amount you send home. 22% is a large amount and unless your parents are using that money to become independent (so that they won't rely on your contributions forever) it will only prevent you from becoming wealthy enough to really help them later. Only you can determine what can be cut from your monthly expenses--but if you want to save--spending less is required." }, { "docid": "142136", "title": "", "text": "\"&gt; The Author clearly has no freaking idea what the hell he is talking about. I have an idea of what's going on. And my experience comes from earlier in my career, when I acted as an execution trader at several hedge funds. Rebates are offered by the exchange so that the exchange can make money. It isn't a public service or some great sacrifice. Let me tell you how it works: Somebody at XYZ exchange/bank takes you out for a nice steak dinner. Then maybe they take you to the strip club. There may be some blow involved. If the broker is particularly nice, they'll pay for an experience in the *actual* \"\"champagne room.\"\" Then you go back to your desk on Monday, look at the flows you're disbursing to various brokers and exchanges, and make your \"\"adjustments\"\" based on how much you enjoy hanging out with the broker/salesperson. Oh, and of course the \"\"rebates.\"\" Which to you barely make a difference, because you're just an execution trader. You aren't in it to make money. The analysts don't know what you're doing, and there's a good chance that the PM doesn't, either. It's easy to do, because tracking \"\"best execution\"\" is beyond the comprehension of the SEC. Oh, if they only knew...and could actually act on it. But we all know they don't really want to, because almost to a man they're each waiting for their turn at the revolving door that will usher them on to a lucrative private sector career.\"" } ]

[ { "docid": "439467", "title": "", "text": "I often spend weeks or months (and sometimes even years) deciding whether to buy something. Certainly the dealer should recognize you by now if you take a third opportunity to look at the same instrument. You could politely remind him that you've twice declined his excellent prices. From there you can assert that you will purchase only when you are ready." } ]

[ { "docid": "531005", "title": "", "text": "\"I got started by reading the following two books: You could probably get by with just the first of those two. I haven't been a big fan of the \"\"for dummies\"\" series in the past, but I found both of these were quite good, particularly for people who have little understanding of investing. I also rather like the site, Canadian Couch Potato. That has a wealth of information on passive investing using mutual funds and ETFs. It's a good next step after reading one or the other of the books above. In your specific case, you are investing for the fairly short term and your tolerance for risk seems to be quite low. Gold is a high-risk investment, and in my opinion is ill-suited to your investment goals. I'd say you are looking at a money market account (very low risk, low return) such as e.g. the TD Canadian Money Market fund (TDB164). You may also want to take a look at e.g. the TD Canadian Bond Index (TDB909) which is only slightly higher risk. However, for someone just starting out and without a whack of knowledge, I rather like pointing people at the ING Direct Streetwise Funds. They offer three options, balancing risk vs reward. You can fill in their online fund selector and it'll point you in the right direction. You can pay less by buying individual stock and bond funds through your bank (following e.g. one of the Canadian Couch Potato's model portfolios), but ING Direct makes things nice and simple, and is a good option for people who don't care to spend a lot of time on this. Note that I am not a financial adviser, and I have only a limited understanding of your needs. You may want to consult one, though you'll want to be careful when doing so to avoid just talking to a salesperson. Also, note that I am biased toward passive index investing. Other people may recommend that you invest in gold or real estate or specific stocks. I think that's a bad idea and believe I have the science to back this up, but I may be wrong.\"" }, { "docid": "36190", "title": "", "text": "First of all I recommend reading this short e-book that is aimed at young investors. The book is written for American investors but they same rules apply with different terms (e.g. the equivalent tax-free savings wrappers are called ISAs in the UK). If you don't anticipate needing the money any time soon then your best bet is likely a stocks and share ISA in an aggressive portfolio of assets. You are probably better off with an even more aggressive asset allocation than the one in the book, e.g. 0-15% bond funds 85-100% equity funds. In the long term, this will generate the most income. For an up-to-date table of brokers I recommend Monevator. If you are planning to use the money as a deposit on a mortgage then your best bet might be a Help to Buy ISA, you'll have to shop around for the best deals. If you would rather have something more liquid that you can draw into to cover expenses while at school, you can either go for a more conservative ISA (100% bond funds or even a cash ISA) or try to find a savings account with a comparable interest rate." }, { "docid": "266015", "title": "", "text": "Yeah building keys for the NSA, sending all kinds of telemetry and caching data from my system is really a great feature that is fucking near impossible to disable for the layman and keep disabled as updates turn them back on. Yeah bill makes some great points, but he's not running the show and windows 10 is a load of shit. They even acknowledge that they were too aggressive. Windows had been relegated to a VM where it belongs, and I only turn it on if I absolutely have to." }, { "docid": "230908", "title": "", "text": "There are few main reasons I can think of that the salesperson would do this: A lot of people assume it's the 3rd option always. But if the person is reputable, it's most likely 1 or 2. You can't run a business doing option 3 for long without getting a reputation." }, { "docid": "500807", "title": "", "text": "\"It is if you want apps. The platform is stuck in a Catch-22, where people won't buy the phone because it has no apps, and devs won't make apps for it because no one is buying the phone. Windows 8 will probably ease the problem with its app store and presumed port channel, but given how MS has handled potential devs so far, the future is not bright. They should have been pursuing aggressively and digging into their massive warchest to basically throw money at devs to get hem on board and kick-start the ecosystem. I personally couldn't give a crap about apps, as I just want my phone to make and take calls, guide me with map directions, and let me Google quick bits of information on-demand. It's not a \"\"platform\"\" to me. It's a tool. But I'm apparently in the minority.\"" }, { "docid": "285033", "title": "", "text": "\"Here I thought I would not ever answer a question on this site and boom first ten minutes. First and foremost I am in the automotive industry, specifically one of our core competencies is finance department management consulting and the sales process both for the sale of the care as well as the financial transaction. First and foremost new vehicle gross profits are nowhere near 20% for the dealership. In an entry level vehicle like say a Toyota Corolla there is only a few hundreds of dollars in markup from invoice to M.S.R.P. There is also something called holdback that dealers get for achieving certain goals such as sales volume. These are usually pretty easy to hit. As a matter of fact I have never heard of a dealer not getting the hold back on a deal. This hold back is there to cover overhead for the car, the cost of getting it ready to sell, having a lot to park it on, making it ready for delivery, offset some of the cost of sales labor etc. Most dealerships consider the holdback portion of the invoice to not be part of the deal when it comes to negotiations. Certain brands such as KIA and Chrysler have something called \"\"Dealer Cash\"\" these payouts are usually stair stepped according to volume and vary by dealer, location, past history, how the guys at the factory feel that day and any number of combinations. Then there is CSI or Customer Service Index payments, these payments are usually made every 1/4 are on the Parts Statement not the Sales Doc and while they effect the dealers bottom line they almost never affect the sales managers or sales persons payroll so they are not considered a part of the cost of the car. They are however extremely important to the dealer and this is why after you have your new car they want you to bring in your survey for a free oil change or something. IF you are going to give a bad survey they want to throw it away and not send it in, if you are going to give a good survey they want to make sure you fill it out correctly. This is because lets say they ask you on a scale of 1-10 how was your sales person and you put a 9 that is a failing score. Dumb I know but that is how every factory CSI score system I have seen worked. According to NADA the average New Vehicle gross profit including hold back and dealer cash is around $1000.00. No where near 20%. Dealerships would love it if they made 20% on your new F250 Supercrew Diesel at around $50,000.00. One last thing there is something on the invoice called Wholesale Finance Reserve. This is the amount of money the factory forwards to the Dealership to offset the cost of financing vehicle on the floor plan so they can have it for you to look at before you buy. This is usually equal to around 3 months of interest and while you might buy a vehicle that has been on the lot for 2 days they have plenty that have been there much longer so this equals out in a fair to middling run store. General Mangers that know what they are doing can make this really pad their net profit to statement. On to incentives, there are basically 3 kinds. Cash to customer in the form of rebates, Dealer Cash in the form of incentives to dealerships based on volume or the undesirability of a vehicle, and incentive rates or Subvented leases. The rates are pretty self explanatory as they advertised as such (example 0% for 60 Months). Subvented Leased are harder to figure out and usually not disclosed as they are hard to explain and also a source of increased profit. Subvented leases are usually powered by lower cost of money called a money factor (think of it as an interest rate) that is discounted from the lease company or a subsidized residual. Subsidized residuals are virtually verboten on domestic vehicles due to their poor resell values. A subsidized residual works like this, you buy a Toyota Camry and the ALG (automotive lease guide) says it has a residual at 36 months of 48%. Well Toyota Motor Credit says we will give you a subvented residual of 60% basically subsidizing a 2% increase in residual. Since they do not expect to be able to sell the car at auction for that amount they have to set aside the 2% as a future expense. What does this mean to you, it means a lower payment. Also a good rule of thumb if you are told a money factor by your salesperson to figure out what the interest rate is just multiply it by 2400. So if a money factor is give of .00345 you know your actual interest rate is a little bit lower than 8.28% (illustration purposes only money factors are much lower than that right now). So how does this save you money well a lease is basically calculated by multiplying the MSRP by the residual and then subtracting that amount from the \"\"Capitalized Cost\"\" which is the Price paid for the car - trade in + payoff + TT&L-Rebate-Down Payment. That is the depreciation. Then you divide that number by the term of the loan and you have the depreciation amount. So if you have 20K CC and 10K R your D = 10K / 36 = 277 monthly payment. For the rest of the monthly payment you add (I think been a long time since I did this with out a computer) the Residual plus the CC for $30,000 * MF of .00345 = 107 for a total payment of 404 ish. This is not completely accurate but you can use it to make sure a salesperson/finance person is not trying to do one thing and say another as so often happens on leases. 0% how the heck do they make money at that, well its simple. First in 2008 the Fed made all the \"\"Captive\"\" lenders into actual banks instead of whatever they were before. So now they have access to the Fed's discounting window which with todays monetary policies make it almost free money. In the past these lenders had to go through all kinds of hoops to raise funds and securitize loans even for super prime credit. Those days are essentially over. Now they get their short term money just like Bank of America does. Eventually they still bundle these loans and sell them. So in the short term YOU pay for the 0% by giving up part or all of your rebate. This is really important DO NOT GIVE up your rebate for 0% unless it makes sense to do so. When you can get the money at 2.5% and get a $7000.00 rebate (customer cash) on that F250 or 0% take the cash. First of all make the finance guy/gal show you the the difference in total cost they can do do this using the federal truth in lending disclosures on a finance contract. Secondly how long will you keep the vehicle? If you come out ahead by say $1500 by taking the lower rate but you usually trade out every three years this is not going to work. Also and this is important if you are involved in a situation with a total loss like a stolen car or even worse a bad wreck before the breakeven point you lose that price break. Finally on judging what is right for you, just know that future value of the vehicle on for resell or trade-in will take into effect all of these past rebates and value the car accordingly. So if a vehicle depreciates 20% a year for the first 3 years the starting point will essentially be $7000.00 less than you actually paid, using rough numbers. How does this help the dealers and car companies? Well while a dealer struggles to make money on new cars the factory makes all of their money on the new cars and the new car financing. While your individual loan might lose money that money is offset by the loss of rebate and I think Ford does actually pay Ford Motor Credit Company the difference in the rate. The most important thing is what happens later FMCC now has 2500 loans with people with perfect credit. They can now use those loans to budle with people with not so perfect credit that they financed at 12%-18% and buy that money with interest rates in the 2%-3% range. Well that is a hell of a lot of profit. 'How does it help the dealership, well the more super prime credit they have in their portfolio the more subprime credit the banks will buy for them. This means they have more loans originated that are more profitable for them. Say you come in for the 0% but have 590 credit score, they get FMCC to buy the deal because they have a good portfolio and you win because the dealer gets to buy the money at say 9% and sell it to you at say 12% making the spread. You win there because you actually qualified for a rate of around 18% with a subprime company like Santander or Capital One (yes that capital one) so you save a ton on your overall cost of the car. Any dealership that is half way well run makes as much or money in the finance and insurance office than the rest of the dealership. When you factor in what a good F&I Director can do to get deals done with favorable terms that really goes up. Think about that the guys sitting a desk drinking coffee making more than the service department guys all put together. Well that was long winded but there I broke down the car business for whoever read this far.\"" }, { "docid": "463943", "title": "", "text": "\"A kid can lose everything he owns in a crap shoot and live. But a senior citizen might not afford medical treatment if interest rates turn and their bonds underperform. In modern portfolio theory, risk/\"\"aggression\"\" is measured by beta and you get more return by increasing risk. Risk-adjusted return is measured by the Sharpe ratio and the efficient frontier shows how much return you get for each level of risk. For simplicity, we will assume that choosing beta is the only investment choice you make. You are buying a house tomorrow all cash, you should set aside that much in liquid assets today. (Return = who cares, Beta = 0) Your kids go to college in 5 years, so you invest funds now with a 5 year investment horizon to produce, with a reasonable level of certainty, the needed cash then. (Beta = low) You wish to leave money in your estate. Invest for the highest return with a horizon of your lifetime. (Return = maximum, Beta = who cares) In other words, you set risk based on how important your expenses are now or later. And your portfolio is a weighted average. On paper, let's say you have sold yourself into indentured servitude. In return you have received a paid-up-front annuity which pays dividends and increases annually. For someone in their twenties: This adds up to a present value of $1 million. When young, the value of lifetime remaining wages is high. It is also low risk, you will probably find a job eventually in any market condition. If your portfolio is significantly smaller than $1 million this means that the low risk of future wages pulls down your beta, and therefore: Youth invest aggressively with available funds because they compensate large, low-risk future earnings to meet their desired risk appetite.\"" }, { "docid": "296231", "title": "", "text": "\"Past results are not a predictor of future results. There is no explicit upper bound on a market, and even if individual companies' values were remaining unchanged one would expect the market to drift upward in the long term. Plus, there's been some shift from managing companies for dividends to managing stocks for growth, which will tend to increase the upward push. Trying to time the market -- to guess when it's going to move in any particular direction -- is usually closer to gambling than investing. The simplest answer remains a combination of buy-and-hold and dollar-cost averaging. Buy at a constant number of dollars per month (or whatever frequency you prefer), and you will automatically buy more when the stock/fund is lower, less when it is higher. That takes advantage of downturns as buying opportunities without missing out on possible gains at the other end. Personally, I add a bit of contrarian buying to that -- I increased my buying another notch or two while the market was depressed, since I had money I wouldn't need any time soon (buy and hold) and I was reasonably confident that enough of the market would come back strongly enough that I wasn't at significant risk of losing the investment. That's one of the things which causes me to be categorized as an \"\"aggressive investor\"\" even though I'm operating with a very vanilla mix of mutual funds and not attempting to micromanage my money. My goal is to have the money work for me, not vice versa.\"" }, { "docid": "242310", "title": "", "text": "\"Its important to note that aggression, or better yet volatility, does not necessarily offer higher returns. One can find funds that have a high beta (measure of volatility) and lower performance then stock funds with a lower beta. Additionally, to Micheal's point, better performance could be undone by higher fees. Age is unimportant when deciding the acceptable volatility. Its more important as to when the money is to be available. If there might be an immediate need, or even less than a year, then stick to a savings account. Five years, some volatility can be accepted, if 10 years or more seek to maximize rate of return. For example assume a person is near retirement age. They are expected to have 50K per year expenses. If they have 250K wrapped up in CDs and savings, and another 250K in some conservative investments, they can, and should, be \"\"aggressive\"\" with any remaining money. On the contrary a person your age that is savings for a house intends to buy one in three years. Savings for the down payment should be pretty darn conservative. Something like 75% in savings accounts, and maybe 25% in some conservative investments. As the time to buy approaches they can pull the money out of the conservative investments at a optimal time. Also you should not be investing without an emergency fund in place. Get that done first, then look to invest. If your friend does not understand these basic concepts there is no point in paying for his advice.\"" }, { "docid": "199237", "title": "", "text": "\"This is basically what financial advisers have been saying for years...that you should invest in higher risk securities when you are young and lower risk securities when you get older. However, despite the fact that this is taken as truth by so many financial professionals, financial economists have been unable to formulate a coherent theory that supports it. By changing the preferences of their theoretical investors, they can get solutions like putting all your investments in a super safe asset until you get to a minimum survival level for retirement and then investing aggressively and many other solutions. But for none of the typically assumed preferences does investing aggressively when young and becoming more conservative as you near retirement seem to be the solution. I'm not saying there can be no such preferences, but the difficulty in finding them makes me think maybe this idea is not actually correct. Couple of problems with your intuition that you should think about: It's not clear that things \"\"average out\"\" over time. If you lose a bunch of money in some asset, there's no reason to think that by holding that asset for a while you will make back what you lost--prices are not cyclical. Moreover, doesn't your intuition implicitly suggest that you should transition out of risky securities as you get older...perhaps after having lost money? You can invest in safe assets (or even better, the tangency portfolio from your graph) and then lever up if you do want higher risk/return. You don't need to change your allocation to risky assets (and it is suboptimal to do so--you want to move along the CAL, not the curve). The riskiness of your portfolio should generally coincide (negatively) with your risk-aversion. When you are older and more certain about your life expectancy and your assets, are you exposed to more or less risks? In many cases, less risks. This means you would choose a more risky portfolio (because you are more sure you will have enough to live on until death even if your portfolio takes a dive). Your actual portfolio consists both of your investments and your human capital (the present value of your time and skills). When you are young, the value of this capital changes significantly with market performance so you already have background risk. Buying risky securities adds to that risk. When you are old, your human capital is worth little, so your overall portfolio becomes less risky. You might want to compensate by increasing the risk of your investments. EDIT: Note that this point may depend on how risky your human capital is (how likely it is that your wage or job prospects will change with the economy). Overall the answer to your question is not definitively known, but there is theoretical evidence that investing in risky securities when young isn't optimal. Having said that, most people do seem to invest in riskier securities when young and safer when they are older. I suspect this is because with life experience people become less optimistic as they get older, not because it is optimal to do so. But I can't be sure.\"" }, { "docid": "51777", "title": "", "text": "The UK has historically aggressive financial law, inherited from Dutch friendship, influence, and acquisitions by conquest. The law is so open that nearly anyone can invest through the UK without much difficulty, and citizens have nearly no restrictions on where to invest. A UK citizen can either open an account in the US with paperwork hassles or at home with access to all world markets and less paperwork. Here is the UK version of my broker, Interactive Brokers. Their costs are the lowest, but you will be charged a minimum fee if you do not trade enough, and their minimum opening balance can be prohibitively high for some. If you do buy US products, be sure to file your W-8BEN." }, { "docid": "101902", "title": "", "text": "Assuming you max-out your Roth IRA with $5000 in inflation-adjusted contributions every year from 25-65, your balance at age 65 will depend on the post-inflation return you get in the account. Assuming you withdraw 4% per year after that, here is what your income will be: (All numbers are in inflation-adjusted 2011 dollars.) If your post-inflation return is zero - if you buy treasury bonds, money-market accounts, or something like that - you'll have a simple $5000 * 40 = $200,000, which will give you an income of around $8000 per year. If you get a 3% post-inflation return - e.g. fairly safe Muni bonds, corporate bonds, and boring stocks - you'll approximately double your money to around $393,000, giving you an income of over $15,000 per year. If you get a 6% return - e.g. more aggressive stocks and more risk-taking - you'll approximately double your money again to over $825,000. A 4% withdrawal rate will give you an income of around $33,000 per year. Stocks have historically returned around inflation + 8% - that will get you over $1.4 million - and an annual income of over $56,000 per year. So, yes, it is feasible to retire on nothing but a maxed-out Roth IRA." }, { "docid": "520177", "title": "", "text": "Actually I think direct financial kickbacks are a minor factor in this problem. In most cases a physician makes nothing from the writing of a prescription. What does influence a physician is the never ending attempts of pharmaceutical companies to 'educate' them. This goes far beyond simple drug reps visits given that most medical conventions and a goodly number of 'continuing education' events are manufacturer sponsored. There are many hidden benefits that flow from this tactic, and few could be expressed as 'direct payoffs'. It's a race between professional ethics and marketing tactics, and at least in the USA ethics are often left in the dust. There is also another factor which may have even greater weight - the demand from patients, one's medical education/indoctrination and society in general to ''do something''. The value of literally doing nothing isn't emphasized enough in medical education; nor is it appreciated by the general public. Sometimes ''doing something'' is fairly benign. Wave your hands, prescribe a pill or engage in alternative/voodoo medicine. Most diseases will get better on their own despite the doctor's best efforts. Once more this situation is at its worst in the USA. American physicians are notoriously aggressive and are very prone to overtreatment. Given the long standing and well documented failure of the American system to measure up in terms of outcomes compared to other countries this aggression has nothing but negative empirical support in its favour. The dismal performance of US medicine isn't only because of its gross inequalities. There are other factors at play, and overtreatment is one. You won't necessarily get *better* treatment because you are either wealthy or have wonderful insurance, but you will definitely get *more* treatment." }, { "docid": "412108", "title": "", "text": "No it isn't, at least from my perspective. For example many drugs are illegal. Do I think they are unethical to use? Absolutely not. I believe in the non-aggression principle, if you aren't hurting anyone else in any way you are not doing anything wrong. Portugal has decriminalized drug use, many anabolics are freely available in middle eastern countries. Is everyone a drug addict or a 280lb freak? No. We should govern what we do with our bodies, not the government." }, { "docid": "486768", "title": "", "text": "You are correct, a possible Dead Cat Bounce is forming on the stock markets. If it does form it will mean that prices have not reached their bottom, as this pattern is a bearish continuation pattern. For a Dead Cat Bounce to form prices will need to break through support formed by the lows last week. If prices bounce off the support and go back up it could become a double bottom pattern, which is a reversal pattern. The double bottom would be confirmed if prices break above the recent high a couple of days ago. Regarding the psychology of the dead cat bounce pattern, is that after a distinct and quick reversal of prices from recent highs you have 2 groups of market participants who create demand in the market. Firstly you have those who were short covering their short positions to take profits, and secondly you have those who are looking for a bargain buying at what they think is the low. So for a few days you have the bulls taking over the bears. Then as more less positive news comes in, the bears hit the market again. These are more participants opening short positions, but more so those who missed out in selling previously because prices fell too quickly, seeing another opportunity to sell at a better price. So the bears take over again. Unless there is very good news around the corner it is likely that the bears will stay in control and prices will fall further. How to trade a dead cat bounce (assuming you have been stopped out of your long possistions already)? If you are aggressive you can go short as prices start reversing from the top of the bounce (with your stop loss just above the top of the bounce). If you are more conservative you would place your entry for a short position just below the support at the start of the bounce (with your stop above the top of the bounce). You could also place an order for a long position above the top of the bounce if a double bottom eventuated. A One Cancels the Other (OCO) would be an appropriate order for such a situation." }, { "docid": "231679", "title": "", "text": "Summarized article: On Thursday, stocks posted the worst decline in 3 weeks on weak worldwide manufacturing data. A manufacturing survey for the Euro zone showed a contraction, Chinese manufacturing declined and the Philadelphia branch of the Federal Reserve also reported a manufacturing slowdown. Additionally, previously owned home sales dropped 1.5% in May and the 4-week average of new unemployment claims jumped to the highest level since December. Goldman Sachs made a bearish call on the S&amp;P 500 index and recommended its clients to build short positions in the index. The news came one day after the Federal Reserve cut its estimates for economic growth and said it would extend a bond-buying program. Disappointed investors had hoped for more aggressive action from the central bank to stimulate the economy. The Dow was down 1.96%, the S&amp;P 500 index was down 2.23% and the NASDAQ was down 2.44%. * For more summarized news, subscribe to the [/r/SkimThat](http://www.reddit.com/r/SkimThat) subreddit" }, { "docid": "231720", "title": "", "text": "It is great that you came up with a plan to own a rental home, free and clear, and also move up in home. It is also really good of you to recognize that curtailing spending has a profound effect on your net worth, many people fail to acknowledge that factoid and prefer to instead blame things outside their control. Good work there. Here are some items of your plan that I have comments on. 11mo by aggressively curtailing elective spending How does your spouse feel about this? They have to be on board, but it is such a short time frame this is very doable. cashing out all corporate stock, This will probably trigger capital gains. You have to be prepared to pay the tax man, but this is a good source of cash for your plan. You also have to have an additional amount that will likely be due next April 15th. redirecting all contributions to my current non-matched R401(k) This is fine as well because of the short time frame. withdrawing the principal from a Roth IRA This I kind of hate. We are so limited in money that we can put into tax favored plans, that taking money out bothers me. Also it is that much more difficult to save in a ROTH because of the sting of taxes. I would not do this, but would favor instead to take a few extra months to make your plan happen. buy home #2 How are you going to have a down payment for home #2? Is your intention to pay off home and save a while, then purchase home #2? I would do anything to avoid PMI. Besides I would take some time to live in a paid for house. Overall I would grade your plan a B. If take a bit longer, and remove the withdrawing from the ROTH, it then becomes an A-. With a good explanation of how you come up with the down payment for house 2, you could easily move to an A+." }, { "docid": "63042", "title": "", "text": "\"Welcome to Personal Finance and Money. This answer will depend a lot on what is most important to the buyer, for example, whether it is important to always be in a newer car, to save money, or strike a balance between the two. There are trade-offs and I don't think there is one right answer for all circumstances. Leasing Leasing does make financial sense for at least two types of people I'm aware of: The company I work for provides company cars to sales executives, which we lease. We lease because it wouldn't be appropriate for a salesperson to meet a client in a car that clearly appears used. Similarly, I know people who value being in a newer car all the time, and for them, leasing makes more financial sense then buying a new car every 2-3 years, and selling their old car which is now 2-3 years old and has depreciated significantly. They understand that they are paying more to always be able to be in a newer car. I used to work with a manager who, every time the new model of the car he owned came out, would see the car and buy it on the spot, even though he already owned last year's model, and he didn't need two cars. He just couldn't help himself; he felt he had to have the new model. It's no use sermonizing about how he \"\"should\"\" learn to save money by just being content with what he had. In reality, if he is going to buy the new model every year no matter what, he should lease rather than buy. From my experience, I would only recommend leasing if you would otherwise be buying a new car on a regular basis, and the lease would be less expensive. This is probably the most cost effective way to maintain the highest possible quality, but would cost much more than buying and holding a new car or buying a value used car. I don't see reliability as much of a factor here since the seller will have a very good idea of how much maintenance will cost, but you will pay a premium to be able to pay a fixed cost for maintenance instead of risking a worse-than-average experience. Buying New According to Edmunds and BIGResearch, only a relatively small number of people are ever in the market for a new car at a given point in time. While you do pay quite a bit more to own a brand new car instead of the same car that is 2-3 years old, there are several reasons I'm aware of why people buy new cars: Number 4 is probably the biggest reason, and many people are willing to pay for the certainty of knowing that the miles are correct, the parts are new, the car is in good working condition, etc. Additionally, some makes of cars have much higher resale values than others (such as Hondas), meaning that there isn't as large of a drop in price between a new car and a used car. Many people consider buying a new car the best way to ensure they get the best reliability since they know the initial condition of the car and can care for it meticulously from that point on. This can especially make sense when the buyer intends to keep the car for the like of the car as the buyer will then benefit from having no car payments once it is paid off. Buying Used Buying a used car is the most affordable option, but for a given quality of car the reliability can be a significant potential pitfall. It can be very difficult for a non-professional to tell whether they are getting a good value. Additionally, it is hard for an owner who wants to sell a used car in excellent condition to get the true value of the car, and much easier for an unscrupulous seller to to get the market price by selling to an unaware buyer (the \"\"lemons\"\" problem in economics). You could buy an inspected car with a limited warranty from a retail seller like CarMax or a dealership, but you often pay a significant premium that cancels out much of the biggest reason to buy used - saving money. However, there is an opportunity to save money when buying used if you're willing to compromise on the condition of the car (if you don't care whether a car has hail damage, for example), or if you are able to wait until you find a motivated/distressed seller who needs to sell quickly and is willing to sell at a discount. If cost is your primary priority, buying a used car is likely the best option, but I would recommend the following in all circumstances: If the seller isn't willing to offer both of these, I would walk away. When buying used, you will also need to consider maintenance, which will vary significantly based on the make and model of the car as well as the condition, which is another risk you need to be willing to take on if you choose to buy used.\"" }, { "docid": "433730", "title": "", "text": "I think it may be best to take everything you're asking line-by-line. Once you buy stocks on X day of the month, the chances of stocks never actually going above and beyond your point of value on the chart are close to none. This is not true. Companies can go out of business, or take a major hit and never recover. Take Volkswagen for example, in 2015 due to a scandal they were involved in, their stocks went downhill. Now their stocks are starting to rise again. The investors goal is not to wait as long as necessary to make a profit on every stock purchase, but to make the largest profit possible in the shortest time possible. Sometimes this means selling a stock before it recovers (if it ever does). I think the problem with most buyers is that they desire the most gain they can possibly have. However, that is very risky. This can be true. Every investor needs to gauge the risk they're willing to take and high-gain investments are riskier. Therefore, it's better to be winning [small/medium] amounts of money (~)100% of the time than [any] amount of money <~25%. Safer investments do tend to yield more consistent returns, but this doesn't mean that every investor should aim for low-yield investments. Again, this is driven by the investor's risk tolerance. To conclude, profitable companies' stock tends to increase over time and less aggressive investments are safer, but it is possible to lose from any stock investment." } ]

[ { "docid": "264297", "title": "", "text": "\"My advice is to quit worrying about the salesman's tactics. They are a distraction. What do you want? How much are you willing to pay for it. If you want the instrument, decide how much you want to pay for it. Round down to the next even hundred. Take that much in $100 bills. Put the money in his hand and say, \"\"This is what I have, take it or leave it\"\". You must be prepared to walk out of the store without the instrument.\"" } ]

[ { "docid": "69150", "title": "", "text": "\"While the question is highly subjective as you noted, putting extra money will of course save you interest payments, it depends on how much \"\"enjoyment\"\" is worth now. I would suggest you to not be overly aggressive as you might dig yourself a ditch, your minimum monthly payments might get adjust upwards if some of these loans are student loans as it might seem you have a higher degree of disposable income to play with. Be aggressive in paying them off but not to aggressive, I also think the interest is tax deductible. What it really comes down to is, how much more interest do you want to pay them for enjoyment now, 50 months is not long its just north of 4 years. I'd say if you think you can put 800 extra towards them, don't. Instead if it were me I would put an extra 400 towards the highest until its paid and then take the 400 plus the monthly minimum and add that to the next highest and keep the other 400 for a rainy day, you will still get paid off quick but will leave yourself some scratch if necessary.\"" }, { "docid": "285033", "title": "", "text": "\"Here I thought I would not ever answer a question on this site and boom first ten minutes. First and foremost I am in the automotive industry, specifically one of our core competencies is finance department management consulting and the sales process both for the sale of the care as well as the financial transaction. First and foremost new vehicle gross profits are nowhere near 20% for the dealership. In an entry level vehicle like say a Toyota Corolla there is only a few hundreds of dollars in markup from invoice to M.S.R.P. There is also something called holdback that dealers get for achieving certain goals such as sales volume. These are usually pretty easy to hit. As a matter of fact I have never heard of a dealer not getting the hold back on a deal. This hold back is there to cover overhead for the car, the cost of getting it ready to sell, having a lot to park it on, making it ready for delivery, offset some of the cost of sales labor etc. Most dealerships consider the holdback portion of the invoice to not be part of the deal when it comes to negotiations. Certain brands such as KIA and Chrysler have something called \"\"Dealer Cash\"\" these payouts are usually stair stepped according to volume and vary by dealer, location, past history, how the guys at the factory feel that day and any number of combinations. Then there is CSI or Customer Service Index payments, these payments are usually made every 1/4 are on the Parts Statement not the Sales Doc and while they effect the dealers bottom line they almost never affect the sales managers or sales persons payroll so they are not considered a part of the cost of the car. They are however extremely important to the dealer and this is why after you have your new car they want you to bring in your survey for a free oil change or something. IF you are going to give a bad survey they want to throw it away and not send it in, if you are going to give a good survey they want to make sure you fill it out correctly. This is because lets say they ask you on a scale of 1-10 how was your sales person and you put a 9 that is a failing score. Dumb I know but that is how every factory CSI score system I have seen worked. According to NADA the average New Vehicle gross profit including hold back and dealer cash is around $1000.00. No where near 20%. Dealerships would love it if they made 20% on your new F250 Supercrew Diesel at around $50,000.00. One last thing there is something on the invoice called Wholesale Finance Reserve. This is the amount of money the factory forwards to the Dealership to offset the cost of financing vehicle on the floor plan so they can have it for you to look at before you buy. This is usually equal to around 3 months of interest and while you might buy a vehicle that has been on the lot for 2 days they have plenty that have been there much longer so this equals out in a fair to middling run store. General Mangers that know what they are doing can make this really pad their net profit to statement. On to incentives, there are basically 3 kinds. Cash to customer in the form of rebates, Dealer Cash in the form of incentives to dealerships based on volume or the undesirability of a vehicle, and incentive rates or Subvented leases. The rates are pretty self explanatory as they advertised as such (example 0% for 60 Months). Subvented Leased are harder to figure out and usually not disclosed as they are hard to explain and also a source of increased profit. Subvented leases are usually powered by lower cost of money called a money factor (think of it as an interest rate) that is discounted from the lease company or a subsidized residual. Subsidized residuals are virtually verboten on domestic vehicles due to their poor resell values. A subsidized residual works like this, you buy a Toyota Camry and the ALG (automotive lease guide) says it has a residual at 36 months of 48%. Well Toyota Motor Credit says we will give you a subvented residual of 60% basically subsidizing a 2% increase in residual. Since they do not expect to be able to sell the car at auction for that amount they have to set aside the 2% as a future expense. What does this mean to you, it means a lower payment. Also a good rule of thumb if you are told a money factor by your salesperson to figure out what the interest rate is just multiply it by 2400. So if a money factor is give of .00345 you know your actual interest rate is a little bit lower than 8.28% (illustration purposes only money factors are much lower than that right now). So how does this save you money well a lease is basically calculated by multiplying the MSRP by the residual and then subtracting that amount from the \"\"Capitalized Cost\"\" which is the Price paid for the car - trade in + payoff + TT&L-Rebate-Down Payment. That is the depreciation. Then you divide that number by the term of the loan and you have the depreciation amount. So if you have 20K CC and 10K R your D = 10K / 36 = 277 monthly payment. For the rest of the monthly payment you add (I think been a long time since I did this with out a computer) the Residual plus the CC for $30,000 * MF of .00345 = 107 for a total payment of 404 ish. This is not completely accurate but you can use it to make sure a salesperson/finance person is not trying to do one thing and say another as so often happens on leases. 0% how the heck do they make money at that, well its simple. First in 2008 the Fed made all the \"\"Captive\"\" lenders into actual banks instead of whatever they were before. So now they have access to the Fed's discounting window which with todays monetary policies make it almost free money. In the past these lenders had to go through all kinds of hoops to raise funds and securitize loans even for super prime credit. Those days are essentially over. Now they get their short term money just like Bank of America does. Eventually they still bundle these loans and sell them. So in the short term YOU pay for the 0% by giving up part or all of your rebate. This is really important DO NOT GIVE up your rebate for 0% unless it makes sense to do so. When you can get the money at 2.5% and get a $7000.00 rebate (customer cash) on that F250 or 0% take the cash. First of all make the finance guy/gal show you the the difference in total cost they can do do this using the federal truth in lending disclosures on a finance contract. Secondly how long will you keep the vehicle? If you come out ahead by say $1500 by taking the lower rate but you usually trade out every three years this is not going to work. Also and this is important if you are involved in a situation with a total loss like a stolen car or even worse a bad wreck before the breakeven point you lose that price break. Finally on judging what is right for you, just know that future value of the vehicle on for resell or trade-in will take into effect all of these past rebates and value the car accordingly. So if a vehicle depreciates 20% a year for the first 3 years the starting point will essentially be $7000.00 less than you actually paid, using rough numbers. How does this help the dealers and car companies? Well while a dealer struggles to make money on new cars the factory makes all of their money on the new cars and the new car financing. While your individual loan might lose money that money is offset by the loss of rebate and I think Ford does actually pay Ford Motor Credit Company the difference in the rate. The most important thing is what happens later FMCC now has 2500 loans with people with perfect credit. They can now use those loans to budle with people with not so perfect credit that they financed at 12%-18% and buy that money with interest rates in the 2%-3% range. Well that is a hell of a lot of profit. 'How does it help the dealership, well the more super prime credit they have in their portfolio the more subprime credit the banks will buy for them. This means they have more loans originated that are more profitable for them. Say you come in for the 0% but have 590 credit score, they get FMCC to buy the deal because they have a good portfolio and you win because the dealer gets to buy the money at say 9% and sell it to you at say 12% making the spread. You win there because you actually qualified for a rate of around 18% with a subprime company like Santander or Capital One (yes that capital one) so you save a ton on your overall cost of the car. Any dealership that is half way well run makes as much or money in the finance and insurance office than the rest of the dealership. When you factor in what a good F&I Director can do to get deals done with favorable terms that really goes up. Think about that the guys sitting a desk drinking coffee making more than the service department guys all put together. Well that was long winded but there I broke down the car business for whoever read this far.\"" }, { "docid": "260838", "title": "", "text": "Two years ago, I wrote an article titled Student Loans and Your First Mortgage in response to this exact question posed by a fellow blogger. The bottom line is that the loan payment doesn't lower your borrowing power as it fits in the slice between 28% (total housing cost) and 38% (total monthly debt burden) when applying for a loan. But, the $20K is 20% down on $100K worth of house. With median home prices in the US in the mid-high $100Ks, you're halfway there. In the end, it's not about finance, it's a question of how badly you want to buy a house. If I got along with the parents, I'd stay as long as I was welcome, and save every dollar I could. Save for retirement, save for as large a downpayment as you can, and after you buy the house, pay the student loan aggressively. I moved out the week after I graduated." }, { "docid": "199237", "title": "", "text": "\"This is basically what financial advisers have been saying for years...that you should invest in higher risk securities when you are young and lower risk securities when you get older. However, despite the fact that this is taken as truth by so many financial professionals, financial economists have been unable to formulate a coherent theory that supports it. By changing the preferences of their theoretical investors, they can get solutions like putting all your investments in a super safe asset until you get to a minimum survival level for retirement and then investing aggressively and many other solutions. But for none of the typically assumed preferences does investing aggressively when young and becoming more conservative as you near retirement seem to be the solution. I'm not saying there can be no such preferences, but the difficulty in finding them makes me think maybe this idea is not actually correct. Couple of problems with your intuition that you should think about: It's not clear that things \"\"average out\"\" over time. If you lose a bunch of money in some asset, there's no reason to think that by holding that asset for a while you will make back what you lost--prices are not cyclical. Moreover, doesn't your intuition implicitly suggest that you should transition out of risky securities as you get older...perhaps after having lost money? You can invest in safe assets (or even better, the tangency portfolio from your graph) and then lever up if you do want higher risk/return. You don't need to change your allocation to risky assets (and it is suboptimal to do so--you want to move along the CAL, not the curve). The riskiness of your portfolio should generally coincide (negatively) with your risk-aversion. When you are older and more certain about your life expectancy and your assets, are you exposed to more or less risks? In many cases, less risks. This means you would choose a more risky portfolio (because you are more sure you will have enough to live on until death even if your portfolio takes a dive). Your actual portfolio consists both of your investments and your human capital (the present value of your time and skills). When you are young, the value of this capital changes significantly with market performance so you already have background risk. Buying risky securities adds to that risk. When you are old, your human capital is worth little, so your overall portfolio becomes less risky. You might want to compensate by increasing the risk of your investments. EDIT: Note that this point may depend on how risky your human capital is (how likely it is that your wage or job prospects will change with the economy). Overall the answer to your question is not definitively known, but there is theoretical evidence that investing in risky securities when young isn't optimal. Having said that, most people do seem to invest in riskier securities when young and safer when they are older. I suspect this is because with life experience people become less optimistic as they get older, not because it is optimal to do so. But I can't be sure.\"" }, { "docid": "552934", "title": "", "text": "What I'm saying is the NATO thing is also aggressive, and the coup was aggressive. Also I think ukraine is just another battle in a very long war between Russian and American oil interests. That's why I don't want to take a side, except keep the American military out of it." }, { "docid": "250644", "title": "", "text": "\"But if we raise the price of the juicer to something rediculous, it will seem like a \"\"premium\"\" product, and if we lock our customers into buying their juice from us only, and auto expire the fruit on an aggressive schedule we'll make a ton of money. It's the hottest trend right now. We can slap that model on anything and it's guaranteed to make us money, just like it says in this $80k Power Point deck. Open source fruit is a thing of the past folks. Squeezing fruit by hand is for plebians and suckers.\"" }, { "docid": "198328", "title": "", "text": "Your first problem is looking at these as monthly expenses rather than looking longer-term at how to remove the expenses. You have a $600/month loan, but what is the interest rate? If you paid that loan more aggressively it would free up 10% of your income, but you can't pay the loan aggressively if you don't have an emergency fund. You need enough cash-flow to take care of emergencies so you don't incur more debt on less advantageous terms. The way you describe the problem, it appears that you don't know where all of the money is going, so the first step is to track all of your expenses and formulate a budget. The budget is a plan on how to spend the money for next month. At least 10% should be money you are saving for a short-term emergency fund. Another 10% should be money you are saving for retirement. Until you have 6 months of expenses saved for your emergency fund, you need to skip luxuries like taxi rides and maybe you need to reduce the amount you send home. 22% is a large amount and unless your parents are using that money to become independent (so that they won't rely on your contributions forever) it will only prevent you from becoming wealthy enough to really help them later. Only you can determine what can be cut from your monthly expenses--but if you want to save--spending less is required." }, { "docid": "218293", "title": "", "text": "Terminology aside. Your gains for this year in a mutual fund do seem low. These are things that can be quickly, and precisely answered through a conversation with your broker. You can request info on the performance of the fund you are invested in from the broker. They are required to disclose this information to you. They can give you the performance of the fund overall, as well as break down for you the specific stocks and bonds that make up the fund, and how they are performing. Talk about what kind of fund it is. If your projected retirement date is far in the future your fund should probably be on the aggressive side. Ask what the historic average is for the fund you're in. Ask about more aggressive funds, or less if you prefer a lower average but more stable performance. Your broker should be able to adequately, and in most cases accurately, set your expectation. Also ask about fees. Good brokerages charge reasonable fees, that are typically based on the gains the fund makes, not your total investment. Make sure you understand what you are paying. Even without knowing the management fees, your growth this year should be of concern. It is exceptionally low, in a year that showed good gains in many market sectors. Speak with your broker and decide if you will stick with this fund or have your IRA invest in a different fund. Finally JW8 makes a great point, in that your fund may perform well or poorly over any given short term, but long term your average should fall within the expected range for the type of fund you're invested in (though, not guaranteed). MOST importantly, actually talk to your broker. Get real answers, since they are as easy to come by as posting on stack." }, { "docid": "440856", "title": "", "text": "No, they are not recession proof. Assume several companies, that issued bonds in the fund, go bankrupt. Those bonds could be worthless, they could miss principle payments, or they could be restructured. All would mean a decline in value. When the economy shrinks (which is what a recession is) how does the Fed respond? By lowering interest rates. This makes current bonds more valuable as presumably they were issued at a higher rate, thus the recession proof prejudice. However, there is nothing to stop a company (in good financial shape) from issuing more bonds to pay the par value on high-interest bonds, thus refinancing their debt. Sort of like how the bank feels when one refinances the mortgage for a lower rate. The thing that troubles me the most is that rates have been low for a long time. What happens if we have a recession now? How does the Fed fix it? I am not sure exactly what the fallout would be, but it could be significant. If you are troubled, you should look for sectors that would be hurt and helped by a Trump-induced recession. Move money away from those that will be hurt. Typically aggressive growth companies are hurt (during recessions), so you may want to move money away from them. Typically established blue chip companies fare okay in a recession so you may want to move money toward them. Move some money to cash, and perhaps some towards bonds. All that being said, I'd keep some money in things like aggressive growth in case you are wrong." }, { "docid": "81906", "title": "", "text": "Aggressively paying of Mortgage is better. If you have more cash available [assuming you have covered all other aspects i.e. emergency funds, retirement etc], the only question you need to ask is where will you invest and what returns would you get. So if your mortgage is say at 5%, if the spare money can get you more than this, its beneficial, if its in Bank CD with say near zero interest, its not worth it. However if you are sure you can make 10% returns on the investments, then go ahead and don't pay the mortgage aggressively." }, { "docid": "171629", "title": "", "text": "\"I have my \"\"safe\"\" money in index funds but like to dabble in individual stocks. My criteria and thought process are usually like this, let's use SBUX as an example: Understand what the company does. Also paraphrased as \"\"buy what you know\"\". A profitable/growing business doesn't need to be complicated. Open stores. Sell coffee. For SBUX, my decision process literally started inside a store: \"\"Rocky, why are you standing in line to overpay for coffee? Wow, look at all these people! Hmmm. I wonder if this is a good stock to buy?\"\" Check out their fundamentals. Are they profitable? P.E.ratio, book value, and PEG are helpful, and I tend to use them as a gauge for whether I think the stock is overpriced or not. I compare those values to others in the industry. SBUX right now has a PE of ~30, which looks about average for its peers (PEP, KKD, GMCR). So far so good. Does it pay a dividend? This isn't necessarily good or bad, just useful to know. I like dividend-paying stocks, even if it means the stock price might not grow as aggressively. Also, a company that pays a dividend is naturally confident in its ability to turn a profit and generate cash. So it's a safer pick, in my opinion. SBUX pays a dividend, a small one, but that's a plus for me. Am I willing to watch the stock? With my index funds, I buy and forget. With my stocks, I keep an eye on the situation, read the news, and have to make a buy/sell decision regularly. With SBUX, I don't watch all that closely, I just keep up with the news. IMO, it's still a buy based on all the above criteria. And I feel less silly now standing in line to overpay for coffee.\"" }, { "docid": "242310", "title": "", "text": "\"Its important to note that aggression, or better yet volatility, does not necessarily offer higher returns. One can find funds that have a high beta (measure of volatility) and lower performance then stock funds with a lower beta. Additionally, to Micheal's point, better performance could be undone by higher fees. Age is unimportant when deciding the acceptable volatility. Its more important as to when the money is to be available. If there might be an immediate need, or even less than a year, then stick to a savings account. Five years, some volatility can be accepted, if 10 years or more seek to maximize rate of return. For example assume a person is near retirement age. They are expected to have 50K per year expenses. If they have 250K wrapped up in CDs and savings, and another 250K in some conservative investments, they can, and should, be \"\"aggressive\"\" with any remaining money. On the contrary a person your age that is savings for a house intends to buy one in three years. Savings for the down payment should be pretty darn conservative. Something like 75% in savings accounts, and maybe 25% in some conservative investments. As the time to buy approaches they can pull the money out of the conservative investments at a optimal time. Also you should not be investing without an emergency fund in place. Get that done first, then look to invest. If your friend does not understand these basic concepts there is no point in paying for his advice.\"" }, { "docid": "470758", "title": "", "text": "\"One approach is to invest in \"\"allocation\"\" mutual funds that use various methods to vary their asset allocation. Some examples (these are not recommendations; just to show you what I am talking about): A good way to identify a useful allocation fund is to look at the \"\"R-squared\"\" (correlation) with indexes on Morningstar. If the allocation fund has a 90-plus R-squared with any index, it probably isn't doing a lot. If it's relatively uncorrelated, then the manager is not index-hugging, but is making decisions to give you different risks from the index. If you put 10% of your portfolio in a fund that varies allocation to stocks from 25% to 75%, then your allocation to stocks created by that 10% would be between 2.5% to 7.5% depending on the views of the fund manager. You can use that type of calculation to invest enough in allocation funds to allow your overall allocation to vary within a desired range, and then you could put the rest of your money in index funds or whatever you normally use. You can think of this as diversifying across investment discipline in addition to across asset class. Another approach is to simply rely on your already balanced portfolio and enjoy any downturns in stocks as an opportunity to rebalance and buy some stocks at a lower price. Then enjoy any run-up as an opportunity to rebalance and sell some stocks at a high price. The difficulty of course is going through with the rebalance. This is one advantage of all-in-one funds (target date, \"\"lifecycle,\"\" balanced, they have many names), they will always go through with the rebalance for you - and you can't \"\"see\"\" each bucket in order to get stressed about it. i.e. it's important to think of your portfolio as a whole, not look at the loss in the stocks portion. An all-in-one fund keeps you from seeing the stocks-by-themselves loss number, which is a good way to trick yourself into behaving sensibly. If you want to rebalance \"\"more aggressively\"\" then look at value averaging (search for \"\"value averaging\"\" on this site for example). A questionable approach is flat-out market-timing, where you try to get out and back in at the right times; a variation on this would be to buy put options at certain times; the problem is that it's just too hard. I think it makes more sense to buy an allocation fund that does this for you. If you do market time, you want to go in and out gradually, and value averaging is one way to do that.\"" }, { "docid": "231720", "title": "", "text": "It is great that you came up with a plan to own a rental home, free and clear, and also move up in home. It is also really good of you to recognize that curtailing spending has a profound effect on your net worth, many people fail to acknowledge that factoid and prefer to instead blame things outside their control. Good work there. Here are some items of your plan that I have comments on. 11mo by aggressively curtailing elective spending How does your spouse feel about this? They have to be on board, but it is such a short time frame this is very doable. cashing out all corporate stock, This will probably trigger capital gains. You have to be prepared to pay the tax man, but this is a good source of cash for your plan. You also have to have an additional amount that will likely be due next April 15th. redirecting all contributions to my current non-matched R401(k) This is fine as well because of the short time frame. withdrawing the principal from a Roth IRA This I kind of hate. We are so limited in money that we can put into tax favored plans, that taking money out bothers me. Also it is that much more difficult to save in a ROTH because of the sting of taxes. I would not do this, but would favor instead to take a few extra months to make your plan happen. buy home #2 How are you going to have a down payment for home #2? Is your intention to pay off home and save a while, then purchase home #2? I would do anything to avoid PMI. Besides I would take some time to live in a paid for house. Overall I would grade your plan a B. If take a bit longer, and remove the withdrawing from the ROTH, it then becomes an A-. With a good explanation of how you come up with the down payment for house 2, you could easily move to an A+." }, { "docid": "531005", "title": "", "text": "\"I got started by reading the following two books: You could probably get by with just the first of those two. I haven't been a big fan of the \"\"for dummies\"\" series in the past, but I found both of these were quite good, particularly for people who have little understanding of investing. I also rather like the site, Canadian Couch Potato. That has a wealth of information on passive investing using mutual funds and ETFs. It's a good next step after reading one or the other of the books above. In your specific case, you are investing for the fairly short term and your tolerance for risk seems to be quite low. Gold is a high-risk investment, and in my opinion is ill-suited to your investment goals. I'd say you are looking at a money market account (very low risk, low return) such as e.g. the TD Canadian Money Market fund (TDB164). You may also want to take a look at e.g. the TD Canadian Bond Index (TDB909) which is only slightly higher risk. However, for someone just starting out and without a whack of knowledge, I rather like pointing people at the ING Direct Streetwise Funds. They offer three options, balancing risk vs reward. You can fill in their online fund selector and it'll point you in the right direction. You can pay less by buying individual stock and bond funds through your bank (following e.g. one of the Canadian Couch Potato's model portfolios), but ING Direct makes things nice and simple, and is a good option for people who don't care to spend a lot of time on this. Note that I am not a financial adviser, and I have only a limited understanding of your needs. You may want to consult one, though you'll want to be careful when doing so to avoid just talking to a salesperson. Also, note that I am biased toward passive index investing. Other people may recommend that you invest in gold or real estate or specific stocks. I think that's a bad idea and believe I have the science to back this up, but I may be wrong.\"" }, { "docid": "388396", "title": "", "text": "\"Yes I thought his flow charts did a nice job with a complex system. Some thoughts: * he makes the \"\"if your house ran a blah blah blah\"\". That is a horrible analogy to make for an economy. * He quotes the revenue to debt ratio as if it is static. We are spending much more now then we traditionally do at the same times as revenues are lower than historic levels. Ratios change over time. * Either he chooses to ignore, or doesn't know, that a lot of the issues with the PIIGS comes from the aggressive use of derivative products to clean their books for the joining of the EU. Like his ARM example, now the rates have changed and those trades have moved against the sovereigns. * His lists the outcome of current monetary policy as binary. Either we inflate to infinity, and the world explodes, or we default and the world explodes. One outcome that comes to my mind is that we ease out of aggressive capital injection and move through this liquidity issue. We then pay back our debt and live on. I am sure there are many other outcomes * Almost all the problems seemed to be supply side ideas. \"\"banks just won't lend\"\". I would argue banks and even corporations have cash, but lack demand for NPV positive projects and thus are sitting on it. And or they are waiting for things to play out so they can invest with better certainty. * I thought his discussion on Current accounts was very good. We also need to remember in many of these countries you have weak and corrupt tax systems which make it hard to fund your way out of these issues. I only point these things out for others who may watch the video and want some counter points to what the speaker says.\"" }, { "docid": "595427", "title": "", "text": "\"It sounds like the kinds of planners you're talking to might be a poor fit, because they are essentially salespersons selling investments for a commission. Some thoughts on finding a financial planner The good kind of financial planner is going to be able to do a comprehensive plan - look at your whole life, goals, and non-investment issues such as insurance. You should expect to get a document with a Monte Carlo simulation showing your odds of success if you stick to the plan; for investments, you should expect to see a recommended asset allocation and an emphasis on low-cost no-commission (commission is \"\"load\"\") funds. See some of the other questions from past posts, for example What exactly can a financial advisor do for me, and is it worth the money? A good place to start for a planner might be http://napfa.org ; there's also a franchise of planners providing hourly advice called the Garrett Planning Network, I helped my mom hire someone from them and she was very happy, though I do think your results would depend mostly on the individual rather than the franchise. Anyway see http://www.garrettplanningnetwork.com/map.html , they do require planners to be fee-only and working on their CFP credential. You should really look for the Certified Financial Planner (CFP) credential. There are a lot of credentials out there, but many of them mean very little, and others might be hard to get but not mean the right thing. Some other meaningful ones include Chartered Financial Analyst (CFA) which would be a solid investment expert, though not necessarily someone knowledgeable in financial planning generally; and IRS Enrolled Agent, which means someone who knows a lot about taxes. A CPA (accountant) would also be pretty meaningful. A law degree (and estate law know-how) is very relevant to many planning situations, too. Some not-very-meaningful certifications include Certified Mutual Fund Specialist (which isn't bogus, but it's much easier to get than CFP or CFA); Registered Investment Adviser (RIA) which mostly means the person is supposed to understand securities fraud laws, but doesn't mean they know a lot about financial planning. There are some pretty bogus certifications out there, many have \"\"retirement\"\" or \"\"senior\"\" in the name. A good question for any planner is \"\"Are you a fiduciary?\"\" which means are they legally required to act in your interests and not their own. Most sales-oriented advisors are not fiduciaries; they wouldn't charge you a big sales commission if they were, and they are not \"\"on your side\"\" legally speaking. It's a good idea to check with your state regulators or the SEC to confirm that your advisor is registered and ask if they have had any complaints. (Small advisors usually register with the state and larger ones with the federal SEC). If they are registered, they may still be a salesperson who isn't acting in your interests, but at least they are following the law. You can also see if they've been in trouble in the past. When looking for a planner, one firm I found had a professional looking web site and didn't seem sketchy at all, but the state said they were not properly registered and not in compliance. Other ideas A good book is: http://www.amazon.com/Smart-Simple-Financial-Strategies-People/dp/0743269942 it's very approachable and you'd feel more confident talking to someone maybe with more background information. For companies to work with, stick to the ones that are very consumer-friendly and sell no-load funds. Vanguard is probably the one you'll hear about most. But T. Rowe Price, Fidelity, USAA are some other good names. Fidelity is a bit of a mixture, with some cheap consumer-friendly investments and other products that are less so. Avoid companies that are all about charging commission: pretty much anyone selling an annuity is probably bad news. Annuities have some valid uses but mostly they are a bad deal. Not knowing your specific situation in any detail, it's very likely that 60k is not nearly enough, and that making the right investment choices will make only a small difference. You could invest poorly and maybe end up with 50K when you retire, or invest well and maybe end up with 80-90k. But your goal is probably more like a million dollars, or more, and most of that will come from future savings. This is what a planner can help you figure out in detail. It's virtually certain that any planner who is for real, and not a ripoff salesperson, will talk a lot about how much you need to save and so forth, not just about choosing investments. Don't be afraid to pay for a planner. It's well worth it to pay someone a thousand dollars for a really thorough, fiduciary plan with your interests foremost. The \"\"free\"\" planners who get a commission are going to get a whole lot more than a thousand dollars out of you, even though you won't write a check directly. Be sure to convert those mutual fund expense ratios and sales commissions into actual dollar amounts! To summarize: find someone you're paying, not someone getting a commission; look for that CFP credential showing they passed a demanding exam; maybe read a quick and easy book like the one I mentioned just so you know what the advisor is talking about; and don't rush into anything! And btw, I think you ought to be fine with a solid plan. You and your husband have time remaining to work with. Good luck.\"" }, { "docid": "135879", "title": "", "text": "If you are younger, and you not under undue pressure to buy a home at any particular time, investing in the market is a reasonable way to prepare. Your risk tolerance should be high. Understand that this means you may buy in 3-4 years instead of 1-2 if the market takes a down turn. It took ~3-4 years for the S&P 500 to recover from the 2008 crash. I doubt anything that severe is in the making, but there is always an element of risk involved in investing. If you and your family will be busting at the seams of your current rental in a year, then maybe the bond fund advice others have provided is a better option. If you are willing to be flexible, a more aggressive strategy might be appropriate. Likely, you want something along the lines of the Vanguard S&P 500 mutual fund - something that is diversified (a large number of stocks), in relatively safe companies (in this case the 500 companies that Standard and Poor's think are most likely to repay corporate bonds), and 'indexed' vice 'actively managed' (indexed funds have lower fees because they are using 'rules' to pick the stocks rather than paying a person to evaluate them.) It's going to depend on you and your situation - and regardless of what you choose consistency will be key: put your investment on automatic so it happens every month without your input." }, { "docid": "232083", "title": "", "text": "\"Why thank you for this unbiassed information, trust deed salesperson. Basically, trust deeds are a pawn shop for your house, except they aren't well regulated like a pawn shop. \"\"Banks are too trustworthy. I'm going to give my house to Joe, because he'll give me one third of one more percent, and it seems smart to me to gamble my home on a couple hundred bucks and some social network advice.\"\"\"" } ]

[ { "docid": "235925", "title": "", "text": "\"I have a very simple rule. For anything other than trivial purchases (a small fraction of my monthly income), the only final decision I will make in the presence of a salesperson is \"\"No\"\". After I have the terms nailed down, and still feel that I am likely to buy the item, I leave the store, car dealership etc., and think about it by myself. Often, I go to a mall coffee shop to do the thinking. If it is really big, I sleep on it and make my decision the next day. Once I have made my decision, I inform the salesperson. If the decision is \"\"No\"\" I do not discuss my reasons - that gives them an overcome-the-objection lever. I just tell them I have decided not to buy the item, which is all they need to know.\"" } ]

[ { "docid": "199237", "title": "", "text": "\"This is basically what financial advisers have been saying for years...that you should invest in higher risk securities when you are young and lower risk securities when you get older. However, despite the fact that this is taken as truth by so many financial professionals, financial economists have been unable to formulate a coherent theory that supports it. By changing the preferences of their theoretical investors, they can get solutions like putting all your investments in a super safe asset until you get to a minimum survival level for retirement and then investing aggressively and many other solutions. But for none of the typically assumed preferences does investing aggressively when young and becoming more conservative as you near retirement seem to be the solution. I'm not saying there can be no such preferences, but the difficulty in finding them makes me think maybe this idea is not actually correct. Couple of problems with your intuition that you should think about: It's not clear that things \"\"average out\"\" over time. If you lose a bunch of money in some asset, there's no reason to think that by holding that asset for a while you will make back what you lost--prices are not cyclical. Moreover, doesn't your intuition implicitly suggest that you should transition out of risky securities as you get older...perhaps after having lost money? You can invest in safe assets (or even better, the tangency portfolio from your graph) and then lever up if you do want higher risk/return. You don't need to change your allocation to risky assets (and it is suboptimal to do so--you want to move along the CAL, not the curve). The riskiness of your portfolio should generally coincide (negatively) with your risk-aversion. When you are older and more certain about your life expectancy and your assets, are you exposed to more or less risks? In many cases, less risks. This means you would choose a more risky portfolio (because you are more sure you will have enough to live on until death even if your portfolio takes a dive). Your actual portfolio consists both of your investments and your human capital (the present value of your time and skills). When you are young, the value of this capital changes significantly with market performance so you already have background risk. Buying risky securities adds to that risk. When you are old, your human capital is worth little, so your overall portfolio becomes less risky. You might want to compensate by increasing the risk of your investments. EDIT: Note that this point may depend on how risky your human capital is (how likely it is that your wage or job prospects will change with the economy). Overall the answer to your question is not definitively known, but there is theoretical evidence that investing in risky securities when young isn't optimal. Having said that, most people do seem to invest in riskier securities when young and safer when they are older. I suspect this is because with life experience people become less optimistic as they get older, not because it is optimal to do so. But I can't be sure.\"" }, { "docid": "47566", "title": "", "text": "\"They will show up ad they will be given the money when the time comes. The central message out there right now is still \"\"don't buy a house\"\" especially while the smart money investors are still buying. Messaging will change when the time comes. Wait til housing prices are soaring and the media is completely in the tank with it. Yeah I know it sounds crazy but when banks want to sell loans, they will market aggressively and people will buy. Just like last time.\"" }, { "docid": "582507", "title": "", "text": "\"What you are saying is a very valid concern. After the flash crash many institutions in the US replaced \"\"true market orders\"\" (where tag 40=1 and has no price) with deep in the money limit orders under the hood, after the CFTC-SEC joint advisory commission raised concerns about the use of market orders in the case of large HFT traders, and concerns on the lack of liquidity that caused market orders that found no limit orders to execute on the other side of the trade, driving the prices of blue chip stocks into the pennies. We also applaud the CFTC requesting comment regarding whether it is appropriate to restrict large order execution design that results in disruptive trading. In particular, we believe there are questions whether it is ever appropriate to permit large order algorithms that employ unlimited use of market orders or that permit executions at prices which are a dramatic percentage below the present market price without a pause for human review So although you still see a market order on the front end, it is transformed to a very aggressive limit in the back end. However, doing this change manually, by selling at price 0 or buying at 9999 may backfire since it may trigger fat finger checks and prevent your order from reaching the market. For example BATS Exchange rejects orders that are priced too aggressively and don't comply with the range of valid prices. If you want your trade to execute right now and you are willing to take slippage in order to get fast execution, sending a market order is still the best alternative.\"" }, { "docid": "260838", "title": "", "text": "Two years ago, I wrote an article titled Student Loans and Your First Mortgage in response to this exact question posed by a fellow blogger. The bottom line is that the loan payment doesn't lower your borrowing power as it fits in the slice between 28% (total housing cost) and 38% (total monthly debt burden) when applying for a loan. But, the $20K is 20% down on $100K worth of house. With median home prices in the US in the mid-high $100Ks, you're halfway there. In the end, it's not about finance, it's a question of how badly you want to buy a house. If I got along with the parents, I'd stay as long as I was welcome, and save every dollar I could. Save for retirement, save for as large a downpayment as you can, and after you buy the house, pay the student loan aggressively. I moved out the week after I graduated." }, { "docid": "242310", "title": "", "text": "\"Its important to note that aggression, or better yet volatility, does not necessarily offer higher returns. One can find funds that have a high beta (measure of volatility) and lower performance then stock funds with a lower beta. Additionally, to Micheal's point, better performance could be undone by higher fees. Age is unimportant when deciding the acceptable volatility. Its more important as to when the money is to be available. If there might be an immediate need, or even less than a year, then stick to a savings account. Five years, some volatility can be accepted, if 10 years or more seek to maximize rate of return. For example assume a person is near retirement age. They are expected to have 50K per year expenses. If they have 250K wrapped up in CDs and savings, and another 250K in some conservative investments, they can, and should, be \"\"aggressive\"\" with any remaining money. On the contrary a person your age that is savings for a house intends to buy one in three years. Savings for the down payment should be pretty darn conservative. Something like 75% in savings accounts, and maybe 25% in some conservative investments. As the time to buy approaches they can pull the money out of the conservative investments at a optimal time. Also you should not be investing without an emergency fund in place. Get that done first, then look to invest. If your friend does not understand these basic concepts there is no point in paying for his advice.\"" }, { "docid": "500807", "title": "", "text": "\"It is if you want apps. The platform is stuck in a Catch-22, where people won't buy the phone because it has no apps, and devs won't make apps for it because no one is buying the phone. Windows 8 will probably ease the problem with its app store and presumed port channel, but given how MS has handled potential devs so far, the future is not bright. They should have been pursuing aggressively and digging into their massive warchest to basically throw money at devs to get hem on board and kick-start the ecosystem. I personally couldn't give a crap about apps, as I just want my phone to make and take calls, guide me with map directions, and let me Google quick bits of information on-demand. It's not a \"\"platform\"\" to me. It's a tool. But I'm apparently in the minority.\"" }, { "docid": "520177", "title": "", "text": "Actually I think direct financial kickbacks are a minor factor in this problem. In most cases a physician makes nothing from the writing of a prescription. What does influence a physician is the never ending attempts of pharmaceutical companies to 'educate' them. This goes far beyond simple drug reps visits given that most medical conventions and a goodly number of 'continuing education' events are manufacturer sponsored. There are many hidden benefits that flow from this tactic, and few could be expressed as 'direct payoffs'. It's a race between professional ethics and marketing tactics, and at least in the USA ethics are often left in the dust. There is also another factor which may have even greater weight - the demand from patients, one's medical education/indoctrination and society in general to ''do something''. The value of literally doing nothing isn't emphasized enough in medical education; nor is it appreciated by the general public. Sometimes ''doing something'' is fairly benign. Wave your hands, prescribe a pill or engage in alternative/voodoo medicine. Most diseases will get better on their own despite the doctor's best efforts. Once more this situation is at its worst in the USA. American physicians are notoriously aggressive and are very prone to overtreatment. Given the long standing and well documented failure of the American system to measure up in terms of outcomes compared to other countries this aggression has nothing but negative empirical support in its favour. The dismal performance of US medicine isn't only because of its gross inequalities. There are other factors at play, and overtreatment is one. You won't necessarily get *better* treatment because you are either wealthy or have wonderful insurance, but you will definitely get *more* treatment." }, { "docid": "429169", "title": "", "text": "I disagree with the other posters, the best sales person has a very easy job, but a great network of connections to clients. The company is paying a lot for the connections, because that's how they make money, and some amount of money for the salesperson's (less technical) work. Depending on how much you trust the management above you to treat you well, you should either continue working hard and hopefully get promoted, or slouch, do no more work than your job requires, and write off any advancement at your current employer." }, { "docid": "218293", "title": "", "text": "Terminology aside. Your gains for this year in a mutual fund do seem low. These are things that can be quickly, and precisely answered through a conversation with your broker. You can request info on the performance of the fund you are invested in from the broker. They are required to disclose this information to you. They can give you the performance of the fund overall, as well as break down for you the specific stocks and bonds that make up the fund, and how they are performing. Talk about what kind of fund it is. If your projected retirement date is far in the future your fund should probably be on the aggressive side. Ask what the historic average is for the fund you're in. Ask about more aggressive funds, or less if you prefer a lower average but more stable performance. Your broker should be able to adequately, and in most cases accurately, set your expectation. Also ask about fees. Good brokerages charge reasonable fees, that are typically based on the gains the fund makes, not your total investment. Make sure you understand what you are paying. Even without knowing the management fees, your growth this year should be of concern. It is exceptionally low, in a year that showed good gains in many market sectors. Speak with your broker and decide if you will stick with this fund or have your IRA invest in a different fund. Finally JW8 makes a great point, in that your fund may perform well or poorly over any given short term, but long term your average should fall within the expected range for the type of fund you're invested in (though, not guaranteed). MOST importantly, actually talk to your broker. Get real answers, since they are as easy to come by as posting on stack." }, { "docid": "339796", "title": "", "text": "This is quite possibly a tactic to attract new clients.. ICICI is one of the banks with a small presence in Canada. There are also banks like Tangerine and PC Financial that are aggressively trying to get new clients to switch over from the big 5 banks. At the time of writing, for a limited time, PC Financial is paying 2.5% interest on savings accounts versus 1.4% for a 1 year GIC." }, { "docid": "285033", "title": "", "text": "\"Here I thought I would not ever answer a question on this site and boom first ten minutes. First and foremost I am in the automotive industry, specifically one of our core competencies is finance department management consulting and the sales process both for the sale of the care as well as the financial transaction. First and foremost new vehicle gross profits are nowhere near 20% for the dealership. In an entry level vehicle like say a Toyota Corolla there is only a few hundreds of dollars in markup from invoice to M.S.R.P. There is also something called holdback that dealers get for achieving certain goals such as sales volume. These are usually pretty easy to hit. As a matter of fact I have never heard of a dealer not getting the hold back on a deal. This hold back is there to cover overhead for the car, the cost of getting it ready to sell, having a lot to park it on, making it ready for delivery, offset some of the cost of sales labor etc. Most dealerships consider the holdback portion of the invoice to not be part of the deal when it comes to negotiations. Certain brands such as KIA and Chrysler have something called \"\"Dealer Cash\"\" these payouts are usually stair stepped according to volume and vary by dealer, location, past history, how the guys at the factory feel that day and any number of combinations. Then there is CSI or Customer Service Index payments, these payments are usually made every 1/4 are on the Parts Statement not the Sales Doc and while they effect the dealers bottom line they almost never affect the sales managers or sales persons payroll so they are not considered a part of the cost of the car. They are however extremely important to the dealer and this is why after you have your new car they want you to bring in your survey for a free oil change or something. IF you are going to give a bad survey they want to throw it away and not send it in, if you are going to give a good survey they want to make sure you fill it out correctly. This is because lets say they ask you on a scale of 1-10 how was your sales person and you put a 9 that is a failing score. Dumb I know but that is how every factory CSI score system I have seen worked. According to NADA the average New Vehicle gross profit including hold back and dealer cash is around $1000.00. No where near 20%. Dealerships would love it if they made 20% on your new F250 Supercrew Diesel at around $50,000.00. One last thing there is something on the invoice called Wholesale Finance Reserve. This is the amount of money the factory forwards to the Dealership to offset the cost of financing vehicle on the floor plan so they can have it for you to look at before you buy. This is usually equal to around 3 months of interest and while you might buy a vehicle that has been on the lot for 2 days they have plenty that have been there much longer so this equals out in a fair to middling run store. General Mangers that know what they are doing can make this really pad their net profit to statement. On to incentives, there are basically 3 kinds. Cash to customer in the form of rebates, Dealer Cash in the form of incentives to dealerships based on volume or the undesirability of a vehicle, and incentive rates or Subvented leases. The rates are pretty self explanatory as they advertised as such (example 0% for 60 Months). Subvented Leased are harder to figure out and usually not disclosed as they are hard to explain and also a source of increased profit. Subvented leases are usually powered by lower cost of money called a money factor (think of it as an interest rate) that is discounted from the lease company or a subsidized residual. Subsidized residuals are virtually verboten on domestic vehicles due to their poor resell values. A subsidized residual works like this, you buy a Toyota Camry and the ALG (automotive lease guide) says it has a residual at 36 months of 48%. Well Toyota Motor Credit says we will give you a subvented residual of 60% basically subsidizing a 2% increase in residual. Since they do not expect to be able to sell the car at auction for that amount they have to set aside the 2% as a future expense. What does this mean to you, it means a lower payment. Also a good rule of thumb if you are told a money factor by your salesperson to figure out what the interest rate is just multiply it by 2400. So if a money factor is give of .00345 you know your actual interest rate is a little bit lower than 8.28% (illustration purposes only money factors are much lower than that right now). So how does this save you money well a lease is basically calculated by multiplying the MSRP by the residual and then subtracting that amount from the \"\"Capitalized Cost\"\" which is the Price paid for the car - trade in + payoff + TT&L-Rebate-Down Payment. That is the depreciation. Then you divide that number by the term of the loan and you have the depreciation amount. So if you have 20K CC and 10K R your D = 10K / 36 = 277 monthly payment. For the rest of the monthly payment you add (I think been a long time since I did this with out a computer) the Residual plus the CC for $30,000 * MF of .00345 = 107 for a total payment of 404 ish. This is not completely accurate but you can use it to make sure a salesperson/finance person is not trying to do one thing and say another as so often happens on leases. 0% how the heck do they make money at that, well its simple. First in 2008 the Fed made all the \"\"Captive\"\" lenders into actual banks instead of whatever they were before. So now they have access to the Fed's discounting window which with todays monetary policies make it almost free money. In the past these lenders had to go through all kinds of hoops to raise funds and securitize loans even for super prime credit. Those days are essentially over. Now they get their short term money just like Bank of America does. Eventually they still bundle these loans and sell them. So in the short term YOU pay for the 0% by giving up part or all of your rebate. This is really important DO NOT GIVE up your rebate for 0% unless it makes sense to do so. When you can get the money at 2.5% and get a $7000.00 rebate (customer cash) on that F250 or 0% take the cash. First of all make the finance guy/gal show you the the difference in total cost they can do do this using the federal truth in lending disclosures on a finance contract. Secondly how long will you keep the vehicle? If you come out ahead by say $1500 by taking the lower rate but you usually trade out every three years this is not going to work. Also and this is important if you are involved in a situation with a total loss like a stolen car or even worse a bad wreck before the breakeven point you lose that price break. Finally on judging what is right for you, just know that future value of the vehicle on for resell or trade-in will take into effect all of these past rebates and value the car accordingly. So if a vehicle depreciates 20% a year for the first 3 years the starting point will essentially be $7000.00 less than you actually paid, using rough numbers. How does this help the dealers and car companies? Well while a dealer struggles to make money on new cars the factory makes all of their money on the new cars and the new car financing. While your individual loan might lose money that money is offset by the loss of rebate and I think Ford does actually pay Ford Motor Credit Company the difference in the rate. The most important thing is what happens later FMCC now has 2500 loans with people with perfect credit. They can now use those loans to budle with people with not so perfect credit that they financed at 12%-18% and buy that money with interest rates in the 2%-3% range. Well that is a hell of a lot of profit. 'How does it help the dealership, well the more super prime credit they have in their portfolio the more subprime credit the banks will buy for them. This means they have more loans originated that are more profitable for them. Say you come in for the 0% but have 590 credit score, they get FMCC to buy the deal because they have a good portfolio and you win because the dealer gets to buy the money at say 9% and sell it to you at say 12% making the spread. You win there because you actually qualified for a rate of around 18% with a subprime company like Santander or Capital One (yes that capital one) so you save a ton on your overall cost of the car. Any dealership that is half way well run makes as much or money in the finance and insurance office than the rest of the dealership. When you factor in what a good F&I Director can do to get deals done with favorable terms that really goes up. Think about that the guys sitting a desk drinking coffee making more than the service department guys all put together. Well that was long winded but there I broke down the car business for whoever read this far.\"" }, { "docid": "384983", "title": "", "text": "\"You mentioned three concepts: (1) trading (2) diversification (3) buy and hold. Trading with any frequency is for people who want to manage their investments as a hobby or profession. You do not seem to be in that category. Diversification is a critical element of any investment strategy. No matter what you do, you should be diversified. All the way would be best (this means owning at least some of every asset out there). The usual way to do this is to own a mutual or index fund. Or several. These funds own hundreds or thousands of stocks, so that buying the fund instantly diversifies you. Buy and hold is the only reasonable approach to a portfolio for someone who is not interested in spending a lot of time managing it. There's no reason to think a buy-and-hold portfolio will underperform a typical traded portfolio, nor that the gains will come later. It's the assets in the portfolio that determine how aggressive/risky it is, not the frequency with which it is traded. This isn't really a site for specific recommendations, but I'll provide a quick idea: Buy a couple of index funds that cover the whole universe of investments. Index funds have low expenses and are the cheapest/easiest way to diversify. Buy a \"\"total stock market\"\" fund and a \"\"total bond fund\"\" in a ratio that you like. If you want, also buy an \"\"international fund.\"\" If you want specific tickers and ratios, another forum would be better(or just ask your broker or 401(k) provider). The bogleheads forum is one that I respect where people are very happy to give and debate specific recommendations. At the end of the day, responsibly managing your investment portfolio is not rocket science and shouldn't occupy a lot of time or worry. Just choose a few funds with low expenses that cover all the assets you are really interested in, put your money in them in a reasonable-ish ratio (no one knows that the best ratio is) and then forget about it.\"" }, { "docid": "333265", "title": "", "text": "Common financial advice is just that - it is common and general in nature and not specific for your financial needs, your goals and your risk tolerance. Regarding the possibility of a US market not going anywhere over a long period of time, well it is not a possibility, it has happened. See chart below: It took 13 years for the S&P 500 to break through 1550, a level first reached in March 2000, tested in October 2007 (just before the GFC) and finally broken through in March 2013. If you had bought in early 2000 you would still be behind when you take inflation into account. If you took the strategy of dollar cost averaging and bought the same dollar value (say $10,000) of the index every six months (beginning of each January and each July) starting from the start of 2000 and bought your last portion in January 2013, you would have a return of about 35% over 13.5 years (or an average of 2.6% per year). Now lets look at the same chart below, but this time add some trend lines. If we instead bought whenever the price crossed above the downtrend-line and sold whenever the price crossed below the uptrend-line (with the first purchase at the start of January 2000), we would have a return of 93% over the 13.5 years (or an average of 6.9% per year). Another more aggressive option (but manageable if you incorporate a risk management strategy) is to buy long when the price crosses the downtrend-line and sell your existing long position and sell short when the price drops below the uptrend-line. That is profiting both up-trending and down-trending markets. Again we start our buying at the start of January 2000. By shorting the index when the market is in a down-trend you could increase the above returns of 93% by another 54%, for a total return of 147% over 13.5 years (or an average of 10.9% per year). To conclude, using a simple long term strategy to time the markets may result in considerably higher returns than dollar cost averaging over the medium to long term, and I know which strategy would help me sleep better at night." }, { "docid": "139230", "title": "", "text": "It depends on you. If you're not an aggressive shopper and travel , you'll recoup your membership fee in hotel savings with one or two stays. Hilton brands, for example, give you a 10% discount. AARP discounts can sometimes be combined with other offers as well. From an insurance point of view, you should always shop around, but sometimes group plans like AARP's have underwriting standards that work to your advantage." }, { "docid": "277", "title": "", "text": "My super fund and I would say many other funds give you one free switch of strategies per year. Some suggest you should change from high growth option to a more balance option once you are say about 10 to 15 years from retirement, and then change to a more capital guaranteed option a few years from retirement. This is a more passive approach and has benefits as well as disadvantages. The benefit is that there is not much work involved, you just change your investment option based on your life stage, 2 to 3 times during your lifetime. This allows you to take more risk when you are young to aim for higher returns, take a balanced approach with moderate risk and returns during the middle part of your working life, and take less risk with lower returns (above inflation) during the latter part of your working life. A possible disadvantage of this strategy is you may be in the higher risk/ higher growth option during a market correction and then change to a more balanced option just when the market starts to pick up again. So your funds will be hit with large losses whilst the market is in retreat and just when things look to be getting better you change to a more balanced portfolio and miss out on the big gains. A second more active approach would be to track the market and change investment option as the market changes. One approach which shouldn't take much time is to track the index such as the ASX200 (if you investment option is mainly invested in the Australian stock market) with a 200 day Simple Moving Average (SMA). The concept is that if the index crosses above the 200 day SMA the market is bullish and if it crosses below it is bearish. See the chart below: This strategy will work well when the market is trending up or down but not very well when the market is going sideways, as you will be changing from aggressive to balanced and back too often. Possibly a more appropriate option would be a combination of the two. Use the first passive approach to change investment option from aggressive to balanced to capital guaranteed with your life stages, however use the second active approach to time the change. For example, if you were say in your late 40s now and were looking to change from aggressive to balanced in the near future, you could wait until the ASX200 crosses below the 200 day SMA before making the change. This way you could capture the majority of the uptrend (which could go on for years) before changing from the high growth/aggressive option to the balanced option. If you where after more control over your superannuation assets another option open to you is to start a SMSF, however I would recommend having at least $300K to $400K in assets before starting a SMSF, or else the annual costs would be too high as a percentage of your total super assets." }, { "docid": "418551", "title": "", "text": "\"Aggressiveness in a retirement portfolio is usually a function of your age and your risk tolerance. Your portfolio is usually a mix of the following asset classes: You can break down these asset classes further, but each one is a topic unto itself. If you are young, you want to invest in things that have a higher return, but are more volatile, because market fluctuations (like the current financial meltdown) will be long gone before you reach retirement age. This means that at a younger age, you should be investing more in stocks and foreign/developing countries. If you are older, you need to be into more conservative investments (bonds, money market, etc). If you were in your 50s-60s and still heavily invested in stock, something like the current financial crisis could have ruined your retirement plans. (A lot of baby boomers learned this the hard way.) For most of your life, you will probably be somewhere in between these two. Start aggressive, and gradually get more conservative as you get older. You will probably need to re-check your asset allocation once every 5 years or so. As for how much of each investment class, there are no hard and fast rules. The idea is to maximize return while accepting a certain amount of risk. There are two big unknowns in there: (1) how much return do you expect from the various investments, and (2) how much risk are you willing to accept. #1 is a big guess, and #2 is personal opinion. A general portfolio guideline is \"\"100 minus your age\"\". This means if you are 20, you should have 80% of your retirement portfolio in stocks. If you are 60, your retirement portfolio should be 40% stock. Over the years, the \"\"100\"\" number has varied. Some financial advisor types have suggested \"\"150\"\" or \"\"200\"\". Unfortunately, that's why a lot of baby boomers can't retire now. Above all, re-balance your portfolio regularly. At least once a year, perhaps quarterly if the market is going wild. Make sure you are still in-line with your desired asset allocation. If the stock market tanks and you are under-invested in stocks, buy more stock, selling off other funds if necessary. (I've read interviews with fund managers who say failure to rebalance in a down stock market is one of the big mistakes people make when managing a retirement portfolio.) As for specific mutual fund suggestions, I'm not going to do that, because it depends on what your 401k or IRA has available as investment options. I do suggest that your focus on selecting a \"\"passive\"\" index fund, not an actively managed fund with a high expense ratio. Personally, I like \"\"total market\"\" funds to give you the broadest allocation of small and big companies. (This makes your question about large/small cap stocks moot.) The next best choice would be an S&P 500 index fund. You should also be able to find a low-cost Bond Index Fund that will give you a healthy mix of different bond types. However, you need to look at expense ratios to make an informed decision. A better-performing fund is pointless if you lose it all to fees! Also, watch out for overlap between your fund choices. Investing in both a Total Market fund, and an S&P 500 fund undermines the idea of a diversified portfolio. An aggressive portfolio usually includes some Foreign/Developing Nation investments. There aren't many index fund options here, so you may have to go with an actively-managed fund (with a much higher expense ratio). However, this kind of investment can be worth it to take advantage of the economic growth in places like China. http://www.getrichslowly.org/blog/2009/04/27/how-to-create-your-own-target-date-mutual-fund/\"" }, { "docid": "457059", "title": "", "text": "\"There are different schools of thought. You can ask the IRS - and it would not surprise me if you got different answers on different phone calls. One interpretation is that a put is not \"\"substantially identical\"\" to the disposed stock, therefore no wash is triggered by that sale. However if that put is exercised, then you automatically purchase the security, and that is identical. As to whether the IRS (or your brokerage firm) recognizes the identical security when it falls out of an option, I can't say; but technically they could enforce it because the rule is based on 30 days and a \"\"substantially identical\"\" stock or security. In this interpretation (your investor) would probably at least want to stay out of the money in choosing a strike price, to avoid exercise; however, options are normally either held or sold, rather than be exercised, until at or very close to the expiration date (because time value is left on the table otherwise). So the key driver in this interpretation would be expiration date, which should be at least 31 days out from the stock sale; and it would be prudent to sell an out of the money put as well, in order to avoid the wash sale trigger. However there is also a more unfavorable opinion - see fairmark.com/capgain/wash/wsoption.htm where they hold that a \"\"deep in the money\"\" option is an immediate trigger (regardless of exercise). This article is sage, in that they say that the Treasury (IRS) may interpret an option transaction as a wash if it's ballpark to being exercisable. And, if the IRS throws paper, it always beats each of paper, rock and scissors :( A Schwab article (\"\"A Primer on Wash Sales\"\") says, if the CUSIPs match, bang, wash. This is the one that they may interpret unfavorably on in any case, supporting Schwab's \"\"play it safe\"\" position: \"\"3. Acquire a contract or option to buy substantially identical stock or securities...\"\" . This certainly nails buying a call. As to selling a put, well, it is at least conceivable that an IRS official would call that a contract to buy! SO it's simply not a slam dunk; there are varying opinions that you might describe as ranging from \"\"hell no\"\" to \"\"only if blatant.\"\" If you can get an \"\"official\"\" predetermination, or you like to go aggressive in your tax strategy, there's that; they may act adversely, so Caveat Taxfiler!\"" }, { "docid": "317260", "title": "", "text": "10 years into my career. Here are my notes: 1. Don't work overtime as a salaried employee. If there's more work than people then management needs to hire more people. Sure, there are times when shit hits the fan and there's no other option, but that should be a 'once every two years' event, not a 'once every week' event. 2. Be a rockstar. If you're spending time 'looking busy' because you finished a 3 hour job in 1 hour ship the results to your manager and ask for more. Those results will be noticed and will move you from entry-level to mid-level to senior. 3. Skills pay the bills. Always work on learning new things to bring value to your employer. This is also required to move up the chain in your career, and leads into my #4. 4. Get paid what you're worth. Maintain an understanding of what similar skillsets are paying in your area and either maintain or exceed that. Your employer has an incentive to pay you as little as possible. Show them comparable salaries for the same position paying more and make them match it. If they won't match it find someone who will. 5. Don't correct your boss/salesperson when they are presenting to management/customers. Instead, let them know after the meeting. Your #2 points (both of them) are something that I struggled with when I was new in my career. It was incredibly frustrating to *know* something, but not have anyone listen due to the fact that I was a 'kid'. Unfortunately it's a part of life. If you can do #2 and #3 on my list for a couple of years people will start listening. It's a great feeling being a 24 year old kid in a room full of my boss's bosses, and my boss's boss's bosses and having them listen and consider my opinion, but it's not something that's given to everyone. You need to earn it." }, { "docid": "20064", "title": "", "text": "This is really shallow analysis. Just because revenues are up does not mean the market is healthy. This might indicate that a market dominating participant such as Amazon is causing prices to be aggressively driven up. The real issue isn't so much quaint dead tree versions facing off against e-books, but who is getting the money from this trade which is getting locked down to various shiny devices." } ]

[ { "docid": "168796", "title": "", "text": "From your question and how you have framed it, I get you find Agressive Sales tactics disturb the buying process for you. ;) I understand because I also find the whole process of Research / Negotiating / Buying / Owning / Using is all on one continuum, so anything that ruins the process will likely lose the sale or enjoyment of the item, at the end of the day. [Very long answer .... Sorry :) ] The answer to this is to KNOW what you want before you have to deal with the Sales people. A good Sales person likes a customer who knows what they want. I would suggest that you follow my 'Buying Process' (Much you have already done) : Before you Buy: Identify the item you want and the max/min 'realistic' price you would buy at. [Stick to this price else 'Buyers Remorse' may bite later.] Write the questions you have down on paper before you visit the Dealer. Write the answers you want on the same list, if known. Decide which questions are most important and therefore must get the answer you want. These should be the questions you ask first. Mark these on the list. Re-visit points 1-3 are they complete and to your satisfaction ? Would you buy if all the answers & the price are right ? If NO then re-visit point 1-3 else you are not ready to buy now !!! If YES then Organise your visit to the Dealer. [Book appointment etc if needed.] At Dealer: Meet your Sales person and clearly state what you want (the item) and importantly when you intend to buy, if all your questions are answered to your satisfaction. There is no need to discuss price at this point as the 'haggling' is only possible IF the questions are answered to your satisfaction. Do not give information such as your maximum budget or similar requests, as they give the sales person the upper hand to maximise his/her pricing. If asked state that your budget is conditional on the answers you get. As the questions are answered assess the answer and assign +/- to the question on your list. If any of your most critical / important questions are answered in the negative, they are the reasons you have to call it a day and walk out. You can assess whether they are worth ignoring but you will need to factor this into your price and if you have identified your questions correctly there should be little room for debate. Assuming you have got all your questions answered you should know what you are buying and have assessed what is a reasonable price for it, if you still want it as this point. If you have lost interest, say so and let the Sales person go. Don't waste their time. They may make some sort of offer to you BUT don't forget that if you have doubts now they will not go away easily no matter what the 'great' price is. If you want it then continue. Buying your Item: [None of the following is really usefull if you have told the Sales person your Budget, as they will be aiming for the highest end of your budget. You will often find that the best price is very close to your maximum budget !!! :)] Do not forget your realistic price range, this should limit your buying price no matter what tactics are used by the Sales person. Only you know what you are prepared to pay and if an extra 1% or 50% is considered worth it to you, if you have to have the item :) Regardless, you have to have some idea of your limit and be prepared to stick to it. You must be able to walk away if the price is silly and not worth it. Assuming you have not been smitten by your item and funds are NOT unlimited, ask for the price and assess it against your price range. At this point I can only offer pointers as there are no 'magic' rules to get what you want at the lowest price. The only advice I would offer is that you will be lucky to get something at your 1st offer price unless the seller really needs to sell, because of this your 1st offer should be less than your price range lowest band. You will need to assess how much less but be prepared to get a 'No' response. If you get a 'Yes' and your research is good 'Buy It !!!' If you get too enthusiastic a response, question your research & if not sure bail out [No Sale] :) At this point you are likely to be 'Haggling' so you need to be ready for all the 'Must buy Now' tactics. If you have clearly stated your wants and timescales there is no reason to be pulled in by these tactics and they can be ignored until the price has reached the level you are happy with. If the price is not moving where you want than clearly state you cannot 'buy at that price'. If you get a total stop and no movement than you need to assess your 'need' and if priced too high then you should walk out. Remember if you stated that you had a timescale to buy of 1/2/3 weeks you should act like you have 1/2/3 weeks to keep looking. Any eagerness on your part will tell the Sales person that you have lied !!! :) You can always come back and try again, reminding the Sales person that the 'item' is still there and perhaps it is priced too high to sell and make the same offer. !!! (A bit of cheek sometimes works.) If the price is close and you still want it and the Sales person is not moving you need to try walking out while stating that you would love the 'item' if it was priced better, if no improved offer as you go, try an increased offer but again you need to assess how much and remember you can only go up, or walk out and come back another day. If the price is at a level you are happy with then you should have no reason not to buy (if you have followed this process) but this does not mean that you should be forced into buying now if you do not want to. Regardless of any 'Must buy now' tactics if the price is right and you cannot buy now, tell the Sales person when you CAN buy and see if you can get an agreement with this. It is unfair to expect a price to be held for an indeterminate time, so you do need to state when you could buy if not now when a price has been agreed. This is a point where the deal may break down if the Sales person thinks they have a sale and trys to force the Sale now. Once again you have to assess your 'need' and whether buying now is better than walking out. If the deal breaks down there is nothing stopping you from coming back and offering the same price when you can buy. A final option is to agree if a deposit can be left to reserve the item until you can buy. This gives the Sales person some assurance that you will come back and is sometimes NON-Refundable unless you agree otherwise before you pay, so check this detail first. (This tends to be smaller Dealers but generally in the UK the large companies offer refundable deposits as part of their Customer Service, the advantage of using larger Stores/Dealers etc.) Apologies for the epic reply, hope it helps." } ]

[ { "docid": "231720", "title": "", "text": "It is great that you came up with a plan to own a rental home, free and clear, and also move up in home. It is also really good of you to recognize that curtailing spending has a profound effect on your net worth, many people fail to acknowledge that factoid and prefer to instead blame things outside their control. Good work there. Here are some items of your plan that I have comments on. 11mo by aggressively curtailing elective spending How does your spouse feel about this? They have to be on board, but it is such a short time frame this is very doable. cashing out all corporate stock, This will probably trigger capital gains. You have to be prepared to pay the tax man, but this is a good source of cash for your plan. You also have to have an additional amount that will likely be due next April 15th. redirecting all contributions to my current non-matched R401(k) This is fine as well because of the short time frame. withdrawing the principal from a Roth IRA This I kind of hate. We are so limited in money that we can put into tax favored plans, that taking money out bothers me. Also it is that much more difficult to save in a ROTH because of the sting of taxes. I would not do this, but would favor instead to take a few extra months to make your plan happen. buy home #2 How are you going to have a down payment for home #2? Is your intention to pay off home and save a while, then purchase home #2? I would do anything to avoid PMI. Besides I would take some time to live in a paid for house. Overall I would grade your plan a B. If take a bit longer, and remove the withdrawing from the ROTH, it then becomes an A-. With a good explanation of how you come up with the down payment for house 2, you could easily move to an A+." }, { "docid": "101902", "title": "", "text": "Assuming you max-out your Roth IRA with $5000 in inflation-adjusted contributions every year from 25-65, your balance at age 65 will depend on the post-inflation return you get in the account. Assuming you withdraw 4% per year after that, here is what your income will be: (All numbers are in inflation-adjusted 2011 dollars.) If your post-inflation return is zero - if you buy treasury bonds, money-market accounts, or something like that - you'll have a simple $5000 * 40 = $200,000, which will give you an income of around $8000 per year. If you get a 3% post-inflation return - e.g. fairly safe Muni bonds, corporate bonds, and boring stocks - you'll approximately double your money to around $393,000, giving you an income of over $15,000 per year. If you get a 6% return - e.g. more aggressive stocks and more risk-taking - you'll approximately double your money again to over $825,000. A 4% withdrawal rate will give you an income of around $33,000 per year. Stocks have historically returned around inflation + 8% - that will get you over $1.4 million - and an annual income of over $56,000 per year. So, yes, it is feasible to retire on nothing but a maxed-out Roth IRA." }, { "docid": "346531", "title": "", "text": "&gt;Amazon is always going to be pointless for screws and nails because you can't ship that economically. You can't do items like lumber, sheet rock, or concrete due to weight. You can never ship large items due to size. Amazon appears to be aggressively buying retailers that have physical presence in many communities. I would not put it past them to begin buying building supply companies that specialize in delivery of bulk building materials." }, { "docid": "36190", "title": "", "text": "First of all I recommend reading this short e-book that is aimed at young investors. The book is written for American investors but they same rules apply with different terms (e.g. the equivalent tax-free savings wrappers are called ISAs in the UK). If you don't anticipate needing the money any time soon then your best bet is likely a stocks and share ISA in an aggressive portfolio of assets. You are probably better off with an even more aggressive asset allocation than the one in the book, e.g. 0-15% bond funds 85-100% equity funds. In the long term, this will generate the most income. For an up-to-date table of brokers I recommend Monevator. If you are planning to use the money as a deposit on a mortgage then your best bet might be a Help to Buy ISA, you'll have to shop around for the best deals. If you would rather have something more liquid that you can draw into to cover expenses while at school, you can either go for a more conservative ISA (100% bond funds or even a cash ISA) or try to find a savings account with a comparable interest rate." }, { "docid": "418551", "title": "", "text": "\"Aggressiveness in a retirement portfolio is usually a function of your age and your risk tolerance. Your portfolio is usually a mix of the following asset classes: You can break down these asset classes further, but each one is a topic unto itself. If you are young, you want to invest in things that have a higher return, but are more volatile, because market fluctuations (like the current financial meltdown) will be long gone before you reach retirement age. This means that at a younger age, you should be investing more in stocks and foreign/developing countries. If you are older, you need to be into more conservative investments (bonds, money market, etc). If you were in your 50s-60s and still heavily invested in stock, something like the current financial crisis could have ruined your retirement plans. (A lot of baby boomers learned this the hard way.) For most of your life, you will probably be somewhere in between these two. Start aggressive, and gradually get more conservative as you get older. You will probably need to re-check your asset allocation once every 5 years or so. As for how much of each investment class, there are no hard and fast rules. The idea is to maximize return while accepting a certain amount of risk. There are two big unknowns in there: (1) how much return do you expect from the various investments, and (2) how much risk are you willing to accept. #1 is a big guess, and #2 is personal opinion. A general portfolio guideline is \"\"100 minus your age\"\". This means if you are 20, you should have 80% of your retirement portfolio in stocks. If you are 60, your retirement portfolio should be 40% stock. Over the years, the \"\"100\"\" number has varied. Some financial advisor types have suggested \"\"150\"\" or \"\"200\"\". Unfortunately, that's why a lot of baby boomers can't retire now. Above all, re-balance your portfolio regularly. At least once a year, perhaps quarterly if the market is going wild. Make sure you are still in-line with your desired asset allocation. If the stock market tanks and you are under-invested in stocks, buy more stock, selling off other funds if necessary. (I've read interviews with fund managers who say failure to rebalance in a down stock market is one of the big mistakes people make when managing a retirement portfolio.) As for specific mutual fund suggestions, I'm not going to do that, because it depends on what your 401k or IRA has available as investment options. I do suggest that your focus on selecting a \"\"passive\"\" index fund, not an actively managed fund with a high expense ratio. Personally, I like \"\"total market\"\" funds to give you the broadest allocation of small and big companies. (This makes your question about large/small cap stocks moot.) The next best choice would be an S&P 500 index fund. You should also be able to find a low-cost Bond Index Fund that will give you a healthy mix of different bond types. However, you need to look at expense ratios to make an informed decision. A better-performing fund is pointless if you lose it all to fees! Also, watch out for overlap between your fund choices. Investing in both a Total Market fund, and an S&P 500 fund undermines the idea of a diversified portfolio. An aggressive portfolio usually includes some Foreign/Developing Nation investments. There aren't many index fund options here, so you may have to go with an actively-managed fund (with a much higher expense ratio). However, this kind of investment can be worth it to take advantage of the economic growth in places like China. http://www.getrichslowly.org/blog/2009/04/27/how-to-create-your-own-target-date-mutual-fund/\"" }, { "docid": "250644", "title": "", "text": "\"But if we raise the price of the juicer to something rediculous, it will seem like a \"\"premium\"\" product, and if we lock our customers into buying their juice from us only, and auto expire the fruit on an aggressive schedule we'll make a ton of money. It's the hottest trend right now. We can slap that model on anything and it's guaranteed to make us money, just like it says in this $80k Power Point deck. Open source fruit is a thing of the past folks. Squeezing fruit by hand is for plebians and suckers.\"" }, { "docid": "47566", "title": "", "text": "\"They will show up ad they will be given the money when the time comes. The central message out there right now is still \"\"don't buy a house\"\" especially while the smart money investors are still buying. Messaging will change when the time comes. Wait til housing prices are soaring and the media is completely in the tank with it. Yeah I know it sounds crazy but when banks want to sell loans, they will market aggressively and people will buy. Just like last time.\"" }, { "docid": "139230", "title": "", "text": "It depends on you. If you're not an aggressive shopper and travel , you'll recoup your membership fee in hotel savings with one or two stays. Hilton brands, for example, give you a 10% discount. AARP discounts can sometimes be combined with other offers as well. From an insurance point of view, you should always shop around, but sometimes group plans like AARP's have underwriting standards that work to your advantage." }, { "docid": "210937", "title": "", "text": "That depends where you put the top bracket, but probably there is little way to jack income tax to anywhere near that without serious detrimental effect to the economy. The real issue is not that the wealthiest earn too much but that they have too much. There is a huge glut of massive savings at the top that is continually growing and taking money from the economy. This savings drives the creation of public debt more than any other factor. It is that which needs to be, at least in the near term, taxed aggressively." }, { "docid": "324661", "title": "", "text": "\"Making these difficult portfolio decisions for you is the point of Target-Date Retirement Funds. You pick a date at which you're going to start needing to withdraw the money, and the company managing the fund slowly turns down the aggressiveness of the fund as the target date approaches. Typically you would pick the target date to be around, say, your 65th birthday. Many mutual fund companies offer a variety of funds to suit your needs. Your desire to never \"\"have to recover\"\" indicates that you have not yet done quite enough reading on the subject of investing. (Or possibly that your sources have been misleading you.) A basic understanding of investing includes the knowledge that markets go up and down, and that no portfolio will always go up. Some \"\"recovery\"\" will always be necessary; having a less aggressive portfolio will never shield you completely from losing money, it just makes loss less likely. The important thing is to only invest money that you can afford to lose in the short-term (with the understanding that you'll make it back in the long term). Money that you'll need in the short-term should be kept in the absolute safest investment vehicles, such as a savings account, a money market account, short-term certificates of deposit, or short-term US government bonds.\"" }, { "docid": "361976", "title": "", "text": "I love technical analysis, and use candlesticks as part of my technical analysis system for trading mutual funds in my 401K. However, I would never use a candlestick chart on its own. I use combination of candlesticks, 2 different EMAs, MACD, bollinger bands, RSI and hand drawn trend lines that I constantly tweak. That's about as much data input as I can handle, but it is possible to graph it all at once and see it at a glance if you have the right trading platform. My approach is very personal, not very aggressive, and took me years to develop. But it's fairly effective - 90% + of my trades are winners. The big advantage of technical analysis is that it forces you to create repeatable rules around which you base your trading. A lot of the time I have little attention at all on what fund I am trading or why it is doing well in that particular market condition. It's basically irrelevant as the technical system tells when to buy and sell, and stops you trying to second guess whether housing, chemicals, gold or asian tigers are is doing well right now. If you don't keep to your own rules, you have only yourself to blame. This keeps you from blaming the market, which is completely out of your control. I explain many of my trades with anotated graphs at http://neurotrade.blogspot.com/" }, { "docid": "520177", "title": "", "text": "Actually I think direct financial kickbacks are a minor factor in this problem. In most cases a physician makes nothing from the writing of a prescription. What does influence a physician is the never ending attempts of pharmaceutical companies to 'educate' them. This goes far beyond simple drug reps visits given that most medical conventions and a goodly number of 'continuing education' events are manufacturer sponsored. There are many hidden benefits that flow from this tactic, and few could be expressed as 'direct payoffs'. It's a race between professional ethics and marketing tactics, and at least in the USA ethics are often left in the dust. There is also another factor which may have even greater weight - the demand from patients, one's medical education/indoctrination and society in general to ''do something''. The value of literally doing nothing isn't emphasized enough in medical education; nor is it appreciated by the general public. Sometimes ''doing something'' is fairly benign. Wave your hands, prescribe a pill or engage in alternative/voodoo medicine. Most diseases will get better on their own despite the doctor's best efforts. Once more this situation is at its worst in the USA. American physicians are notoriously aggressive and are very prone to overtreatment. Given the long standing and well documented failure of the American system to measure up in terms of outcomes compared to other countries this aggression has nothing but negative empirical support in its favour. The dismal performance of US medicine isn't only because of its gross inequalities. There are other factors at play, and overtreatment is one. You won't necessarily get *better* treatment because you are either wealthy or have wonderful insurance, but you will definitely get *more* treatment." }, { "docid": "486768", "title": "", "text": "You are correct, a possible Dead Cat Bounce is forming on the stock markets. If it does form it will mean that prices have not reached their bottom, as this pattern is a bearish continuation pattern. For a Dead Cat Bounce to form prices will need to break through support formed by the lows last week. If prices bounce off the support and go back up it could become a double bottom pattern, which is a reversal pattern. The double bottom would be confirmed if prices break above the recent high a couple of days ago. Regarding the psychology of the dead cat bounce pattern, is that after a distinct and quick reversal of prices from recent highs you have 2 groups of market participants who create demand in the market. Firstly you have those who were short covering their short positions to take profits, and secondly you have those who are looking for a bargain buying at what they think is the low. So for a few days you have the bulls taking over the bears. Then as more less positive news comes in, the bears hit the market again. These are more participants opening short positions, but more so those who missed out in selling previously because prices fell too quickly, seeing another opportunity to sell at a better price. So the bears take over again. Unless there is very good news around the corner it is likely that the bears will stay in control and prices will fall further. How to trade a dead cat bounce (assuming you have been stopped out of your long possistions already)? If you are aggressive you can go short as prices start reversing from the top of the bounce (with your stop loss just above the top of the bounce). If you are more conservative you would place your entry for a short position just below the support at the start of the bounce (with your stop above the top of the bounce). You could also place an order for a long position above the top of the bounce if a double bottom eventuated. A One Cancels the Other (OCO) would be an appropriate order for such a situation." }, { "docid": "107595", "title": "", "text": "\"Sales tactics for permanent insurance policies can get pretty sleazy. Sending home a flier from school is a way for an insurance salesperson to get his/her message out to 800 families without any effort at all, and very little advertising cost (just a ream of paper and some toner). The biggest catchphrases used are the \"\"just pennies per day\"\" and \"\"in case they get (some devastating medical condition) and become uninsurable.\"\" Sure, both are technically true, but are definitely used to trigger the grown ups' insecurities. Having said that (and having been in the financial business for a time, which included selling insurance policies), there is a place for insurance of children. A small amount can be used to offset the loss of income for the parents who may have to take extended time away from work to deal with the event of the loss of their child, and to deal with the costs of funeral and burial. Let's face it, the percentage of families who have a sufficiently large emergency fund is extremely small compared to the overall population. Personally, I have added a child rider to my own (term) insurance policies that covers any/all of my children. It does add some cost to my premiums, but it's a small cost on top of something that is already justifiably in place for myself. One other thing to be aware of: if you're in a group policy (any life insurance where you're automatically accepted without any underwriting process, like through a benefit at work, or some other club or association), the healthy members are subsidizing the unhealthy ones. If you're on the healthy side, you might consider foregoing that policy in favor of getting your own policy through an insurance company of your choice. If you're healthy, it will always be cheaper than the group coverage.\"" }, { "docid": "199237", "title": "", "text": "\"This is basically what financial advisers have been saying for years...that you should invest in higher risk securities when you are young and lower risk securities when you get older. However, despite the fact that this is taken as truth by so many financial professionals, financial economists have been unable to formulate a coherent theory that supports it. By changing the preferences of their theoretical investors, they can get solutions like putting all your investments in a super safe asset until you get to a minimum survival level for retirement and then investing aggressively and many other solutions. But for none of the typically assumed preferences does investing aggressively when young and becoming more conservative as you near retirement seem to be the solution. I'm not saying there can be no such preferences, but the difficulty in finding them makes me think maybe this idea is not actually correct. Couple of problems with your intuition that you should think about: It's not clear that things \"\"average out\"\" over time. If you lose a bunch of money in some asset, there's no reason to think that by holding that asset for a while you will make back what you lost--prices are not cyclical. Moreover, doesn't your intuition implicitly suggest that you should transition out of risky securities as you get older...perhaps after having lost money? You can invest in safe assets (or even better, the tangency portfolio from your graph) and then lever up if you do want higher risk/return. You don't need to change your allocation to risky assets (and it is suboptimal to do so--you want to move along the CAL, not the curve). The riskiness of your portfolio should generally coincide (negatively) with your risk-aversion. When you are older and more certain about your life expectancy and your assets, are you exposed to more or less risks? In many cases, less risks. This means you would choose a more risky portfolio (because you are more sure you will have enough to live on until death even if your portfolio takes a dive). Your actual portfolio consists both of your investments and your human capital (the present value of your time and skills). When you are young, the value of this capital changes significantly with market performance so you already have background risk. Buying risky securities adds to that risk. When you are old, your human capital is worth little, so your overall portfolio becomes less risky. You might want to compensate by increasing the risk of your investments. EDIT: Note that this point may depend on how risky your human capital is (how likely it is that your wage or job prospects will change with the economy). Overall the answer to your question is not definitively known, but there is theoretical evidence that investing in risky securities when young isn't optimal. Having said that, most people do seem to invest in riskier securities when young and safer when they are older. I suspect this is because with life experience people become less optimistic as they get older, not because it is optimal to do so. But I can't be sure.\"" }, { "docid": "69150", "title": "", "text": "\"While the question is highly subjective as you noted, putting extra money will of course save you interest payments, it depends on how much \"\"enjoyment\"\" is worth now. I would suggest you to not be overly aggressive as you might dig yourself a ditch, your minimum monthly payments might get adjust upwards if some of these loans are student loans as it might seem you have a higher degree of disposable income to play with. Be aggressive in paying them off but not to aggressive, I also think the interest is tax deductible. What it really comes down to is, how much more interest do you want to pay them for enjoyment now, 50 months is not long its just north of 4 years. I'd say if you think you can put 800 extra towards them, don't. Instead if it were me I would put an extra 400 towards the highest until its paid and then take the 400 plus the monthly minimum and add that to the next highest and keep the other 400 for a rainy day, you will still get paid off quick but will leave yourself some scratch if necessary.\"" }, { "docid": "100051", "title": "", "text": "Their aggressive takeover tactics? However, to be honest I don't know what the others are like. I'm fortunate enough to have drinking water from the tap. Which I bottle myself. I'll sell you a bottle 20% cheaper then nestle if you'd like" }, { "docid": "63042", "title": "", "text": "\"Welcome to Personal Finance and Money. This answer will depend a lot on what is most important to the buyer, for example, whether it is important to always be in a newer car, to save money, or strike a balance between the two. There are trade-offs and I don't think there is one right answer for all circumstances. Leasing Leasing does make financial sense for at least two types of people I'm aware of: The company I work for provides company cars to sales executives, which we lease. We lease because it wouldn't be appropriate for a salesperson to meet a client in a car that clearly appears used. Similarly, I know people who value being in a newer car all the time, and for them, leasing makes more financial sense then buying a new car every 2-3 years, and selling their old car which is now 2-3 years old and has depreciated significantly. They understand that they are paying more to always be able to be in a newer car. I used to work with a manager who, every time the new model of the car he owned came out, would see the car and buy it on the spot, even though he already owned last year's model, and he didn't need two cars. He just couldn't help himself; he felt he had to have the new model. It's no use sermonizing about how he \"\"should\"\" learn to save money by just being content with what he had. In reality, if he is going to buy the new model every year no matter what, he should lease rather than buy. From my experience, I would only recommend leasing if you would otherwise be buying a new car on a regular basis, and the lease would be less expensive. This is probably the most cost effective way to maintain the highest possible quality, but would cost much more than buying and holding a new car or buying a value used car. I don't see reliability as much of a factor here since the seller will have a very good idea of how much maintenance will cost, but you will pay a premium to be able to pay a fixed cost for maintenance instead of risking a worse-than-average experience. Buying New According to Edmunds and BIGResearch, only a relatively small number of people are ever in the market for a new car at a given point in time. While you do pay quite a bit more to own a brand new car instead of the same car that is 2-3 years old, there are several reasons I'm aware of why people buy new cars: Number 4 is probably the biggest reason, and many people are willing to pay for the certainty of knowing that the miles are correct, the parts are new, the car is in good working condition, etc. Additionally, some makes of cars have much higher resale values than others (such as Hondas), meaning that there isn't as large of a drop in price between a new car and a used car. Many people consider buying a new car the best way to ensure they get the best reliability since they know the initial condition of the car and can care for it meticulously from that point on. This can especially make sense when the buyer intends to keep the car for the like of the car as the buyer will then benefit from having no car payments once it is paid off. Buying Used Buying a used car is the most affordable option, but for a given quality of car the reliability can be a significant potential pitfall. It can be very difficult for a non-professional to tell whether they are getting a good value. Additionally, it is hard for an owner who wants to sell a used car in excellent condition to get the true value of the car, and much easier for an unscrupulous seller to to get the market price by selling to an unaware buyer (the \"\"lemons\"\" problem in economics). You could buy an inspected car with a limited warranty from a retail seller like CarMax or a dealership, but you often pay a significant premium that cancels out much of the biggest reason to buy used - saving money. However, there is an opportunity to save money when buying used if you're willing to compromise on the condition of the car (if you don't care whether a car has hail damage, for example), or if you are able to wait until you find a motivated/distressed seller who needs to sell quickly and is willing to sell at a discount. If cost is your primary priority, buying a used car is likely the best option, but I would recommend the following in all circumstances: If the seller isn't willing to offer both of these, I would walk away. When buying used, you will also need to consider maintenance, which will vary significantly based on the make and model of the car as well as the condition, which is another risk you need to be willing to take on if you choose to buy used.\"" }, { "docid": "349941", "title": "", "text": "I'll agree with the other commenter. There is a ton more to sales than speaking the language and being a decent public speaker. Unless you know what you're getting into and feel confident you can get it done (or you believe that the company is willing to help you learn and grow as a salesperson and that's interesting to you from a career development perspective), I'd recommend avoiding a sales role and encouraging your boss to hire an actual sales person who meets his or her criteria. EDIT: Source: am startup founder with no sales background who is having to do founder selling right now and learning just how hard it is." } ]

[ { "docid": "120279", "title": "", "text": "\"He sounds like a very bad salesman and I should know, because I was a sales manager at a bike shop which sold bikes from $200 to $10k. Now I had a clear goal, which is to sell as many bikes at the highest price possible, but I didn't do that by making customers uncomfortable. Each customer received different treatment depending on what they were looking for. For example, the $200 beach cruiser buyer was going to be told \"\"You look great on that bike... can I ring you up?\"\", whereas the racer interested in saving grams will receive a detailed discussion about his bike options. The $200 bike customer won't have very sophisticated questions (although I could give a lecture on cruisers), so giving out too much info complicates a likely quick impulse buy. On the other hand, we are building a relationship with the racer which will include detailed fitting sessions and time-consuming mechanical service. While I also want to close a high priced sale, it will take several visits to prove both I have the right bike and this is the best shop. But no matter what you were buying, I was always pleasant and unhurried, and my customers left happy. Specifically with this situation of high pressure tactics, the problem is the competition with internet sales. Often customers will have only 2 criteria, the model and the price, and if a shop does not meet both, the customer walks right out. Possibly this sales guy is a bit cynical with his tactics, but the reality is that if you have no relationship with that shop, you fall into the category of internet buyer. One thing the sales guy could have done was not tell you we wasn't going to honor this price if you came back. Occasionally there would be an internet buyer, and I showed no unpleasantness even though internet sellers could crush our brick and mortar shop. I would mention a competitive price and if he bought it, great, and if not, that's just business. As for the buyer, I would treat these tactics with a certain detachment. I would personally chuckle at his treatment and ask if I could kick the tires, an user car saying. I suppose the bottom line is if you are ready to buy this specific model, and if the price is right (and the shop is ethical so you won't get ripped off with garbage), then you have to be ready to buy on the spot. I will point out one horrible experience I had at a car dealership. I came in 15 minutes before closing and a sales person gave me a price almost a third cheaper than list. I wasn't ready to buy on my first visit ever to a dealership and of course, buying a car has all kinds of hidden fees. I asked will this be the price tomorrow, and he said absolutely not. I told him, \"\"so if I come in tomorrow morning, your dealer clock has only gone 15 minutes\"\" but that logic did not register with him. Maybe he thought I was going to spend 15k on the spot and pressure tactics would work on me. I never came back, but I did go another dealership and bought a car after a reasonable negotiation.\"" } ]

[ { "docid": "188423", "title": "", "text": "As a customer I absolutely hate aggressive marketing . If a shop aggressively markets to me I avoid it - this is why I avoid [Shell](http://www.shell.com/) and [WHSmith](http://whsmith.com/) . It is also why I prefer to shop at [Morrisons](http://www.morrisons.co.uk/) rather than at [Tesco](http://www.tesco.com/) ( although I will use the machines there ) . And it is also why , as a corpoprate and as a personal buyer , after 15 years , I will no longer be buying Toshiba - their laptops now come infested with spyware and adware . I also pulled out of LinkedIn when they started spamming me repeatedly despite me saying no marketing emails . I also avoid getting my car serviced in the UK because of all the agressive marketing . I don't put my details on marketing lists - I keep very tight control of address details including email addresses and I use source based email addresses so I can easily cut out any offending party . Re, Ford - why does he \\ they no longer sell just black cars ?! The companies that do their marketing well succeed very well . From what I have read [Steam](http://store.steampowered.com/) is one of these . We have a massive situation at the moment where many of the large corporations are having huge problems with getting sufficient sales - they are going the way of the dinosaurs . Part of this is that their customer base has been so impoverished that they can't afford to buy their products . But a large part of it is that they no longer supply the products , the price and the service that the customers are looking for . So customers look elsewhere and they get elsewhere - they find the products they want at a good price and with good service on the Internet and these are usually supplied by small and medium sized companies that are much more nimble . It's a case of bottom up progressive evolution winning over top down mass extinction events . There are a number of products that I have difficulty locating . One such range is men's clothes . The main stores don't stock what I am looking for . I can find what I am looking for in the odd small store in some parts of the world some of the time and I can find what I am looking for on the Internet - if the vendor's web site would work . Does this mean that I walk around dressed like a 15yr old ? No ! - it means that I hold off purchases - things that I would normally purchase every 2 years now get purchased every 6 years ." }, { "docid": "139230", "title": "", "text": "It depends on you. If you're not an aggressive shopper and travel , you'll recoup your membership fee in hotel savings with one or two stays. Hilton brands, for example, give you a 10% discount. AARP discounts can sometimes be combined with other offers as well. From an insurance point of view, you should always shop around, but sometimes group plans like AARP's have underwriting standards that work to your advantage." }, { "docid": "230908", "title": "", "text": "There are few main reasons I can think of that the salesperson would do this: A lot of people assume it's the 3rd option always. But if the person is reputable, it's most likely 1 or 2. You can't run a business doing option 3 for long without getting a reputation." }, { "docid": "156908", "title": "", "text": "\"This is basically the short-term/long-term savings question in another form: savings that you hope are long-term but which may turn short-term very suddenly. You can never completely eliminate the risk of being forced to draw on long term savings during a period when the market is doing Something Unpleasant that would force you to take a loss (or right before it does Something Pleasant that you'd like to be fully invested during). You can only pick the degree of risk that you're willing to accept, balancing that hazard of forced sales against the lower-but-more-certain returns you'd get from a money market or equivalent. I'm considered a moderately aggressive investor -- which doesn't mean I'm pushing the boundaries on what I'm buying (not by a long shot!), but which does mean I'm willing to keep more of my money in the market and I'm more likely to hold or buy into a dip than to sell off to try to minimize losses. That level of risk-tolerance also means I'm willing to maintain a ready-cash pool which is sufficient to handle expected emergencies (order of $10K), and not become overly paranoid about lost opportunity value if it turns out that I need to pull a few thou out of the investments. I've got decent health insurance, which helps reduce that risk. I'm also not particularly paranoid about the money. On my current track, I should be able to maintain my current lifestyle \"\"forever\"\" without ever touching the principal, as long as inflation and returns remain vaguely reasonable. Having to hit the account for a larger emergency at an Inconvenient Time wouldn't be likely to hurt me too much -- delaying retirement for a year or two, perhaps. It's just money. Emergencies are one of the things it's for. I try not to be stupid about it, but I also try not to stress about it more than I must.\"" }, { "docid": "175463", "title": "", "text": "Michigan's 529 plan offers a wide variety of investment options, ranging from a very conservative guaranteed investment option (currently earning 1.75% interest) to a variety of index-based funds, most of which are considered aggressive. You said that you are unhappy with the 5% you have earned the past year, and that you thought you should be able to get 8% elsewhere. But according to your comment, you have 30% of your money earning a fixed 1.75% rate, and another 40% of your money invested in one of the moderate balanced options (which includes both stocks and bonds). You've only got 30% invested in the more aggressive investments that you seem to be looking for. If you want to be invested more agressively (which is reasonable, since your daughter won't need this money for many years), you can select more aggressive investments inside the 529. Michigan's 529 offers you the ability to deduct up to $10,000 (if you are married filing jointly) of contributions off your Michigan state income tax each year. In addition, the earnings inside the 529 are federally tax-free if the money is spent on college education." }, { "docid": "285033", "title": "", "text": "\"Here I thought I would not ever answer a question on this site and boom first ten minutes. First and foremost I am in the automotive industry, specifically one of our core competencies is finance department management consulting and the sales process both for the sale of the care as well as the financial transaction. First and foremost new vehicle gross profits are nowhere near 20% for the dealership. In an entry level vehicle like say a Toyota Corolla there is only a few hundreds of dollars in markup from invoice to M.S.R.P. There is also something called holdback that dealers get for achieving certain goals such as sales volume. These are usually pretty easy to hit. As a matter of fact I have never heard of a dealer not getting the hold back on a deal. This hold back is there to cover overhead for the car, the cost of getting it ready to sell, having a lot to park it on, making it ready for delivery, offset some of the cost of sales labor etc. Most dealerships consider the holdback portion of the invoice to not be part of the deal when it comes to negotiations. Certain brands such as KIA and Chrysler have something called \"\"Dealer Cash\"\" these payouts are usually stair stepped according to volume and vary by dealer, location, past history, how the guys at the factory feel that day and any number of combinations. Then there is CSI or Customer Service Index payments, these payments are usually made every 1/4 are on the Parts Statement not the Sales Doc and while they effect the dealers bottom line they almost never affect the sales managers or sales persons payroll so they are not considered a part of the cost of the car. They are however extremely important to the dealer and this is why after you have your new car they want you to bring in your survey for a free oil change or something. IF you are going to give a bad survey they want to throw it away and not send it in, if you are going to give a good survey they want to make sure you fill it out correctly. This is because lets say they ask you on a scale of 1-10 how was your sales person and you put a 9 that is a failing score. Dumb I know but that is how every factory CSI score system I have seen worked. According to NADA the average New Vehicle gross profit including hold back and dealer cash is around $1000.00. No where near 20%. Dealerships would love it if they made 20% on your new F250 Supercrew Diesel at around $50,000.00. One last thing there is something on the invoice called Wholesale Finance Reserve. This is the amount of money the factory forwards to the Dealership to offset the cost of financing vehicle on the floor plan so they can have it for you to look at before you buy. This is usually equal to around 3 months of interest and while you might buy a vehicle that has been on the lot for 2 days they have plenty that have been there much longer so this equals out in a fair to middling run store. General Mangers that know what they are doing can make this really pad their net profit to statement. On to incentives, there are basically 3 kinds. Cash to customer in the form of rebates, Dealer Cash in the form of incentives to dealerships based on volume or the undesirability of a vehicle, and incentive rates or Subvented leases. The rates are pretty self explanatory as they advertised as such (example 0% for 60 Months). Subvented Leased are harder to figure out and usually not disclosed as they are hard to explain and also a source of increased profit. Subvented leases are usually powered by lower cost of money called a money factor (think of it as an interest rate) that is discounted from the lease company or a subsidized residual. Subsidized residuals are virtually verboten on domestic vehicles due to their poor resell values. A subsidized residual works like this, you buy a Toyota Camry and the ALG (automotive lease guide) says it has a residual at 36 months of 48%. Well Toyota Motor Credit says we will give you a subvented residual of 60% basically subsidizing a 2% increase in residual. Since they do not expect to be able to sell the car at auction for that amount they have to set aside the 2% as a future expense. What does this mean to you, it means a lower payment. Also a good rule of thumb if you are told a money factor by your salesperson to figure out what the interest rate is just multiply it by 2400. So if a money factor is give of .00345 you know your actual interest rate is a little bit lower than 8.28% (illustration purposes only money factors are much lower than that right now). So how does this save you money well a lease is basically calculated by multiplying the MSRP by the residual and then subtracting that amount from the \"\"Capitalized Cost\"\" which is the Price paid for the car - trade in + payoff + TT&L-Rebate-Down Payment. That is the depreciation. Then you divide that number by the term of the loan and you have the depreciation amount. So if you have 20K CC and 10K R your D = 10K / 36 = 277 monthly payment. For the rest of the monthly payment you add (I think been a long time since I did this with out a computer) the Residual plus the CC for $30,000 * MF of .00345 = 107 for a total payment of 404 ish. This is not completely accurate but you can use it to make sure a salesperson/finance person is not trying to do one thing and say another as so often happens on leases. 0% how the heck do they make money at that, well its simple. First in 2008 the Fed made all the \"\"Captive\"\" lenders into actual banks instead of whatever they were before. So now they have access to the Fed's discounting window which with todays monetary policies make it almost free money. In the past these lenders had to go through all kinds of hoops to raise funds and securitize loans even for super prime credit. Those days are essentially over. Now they get their short term money just like Bank of America does. Eventually they still bundle these loans and sell them. So in the short term YOU pay for the 0% by giving up part or all of your rebate. This is really important DO NOT GIVE up your rebate for 0% unless it makes sense to do so. When you can get the money at 2.5% and get a $7000.00 rebate (customer cash) on that F250 or 0% take the cash. First of all make the finance guy/gal show you the the difference in total cost they can do do this using the federal truth in lending disclosures on a finance contract. Secondly how long will you keep the vehicle? If you come out ahead by say $1500 by taking the lower rate but you usually trade out every three years this is not going to work. Also and this is important if you are involved in a situation with a total loss like a stolen car or even worse a bad wreck before the breakeven point you lose that price break. Finally on judging what is right for you, just know that future value of the vehicle on for resell or trade-in will take into effect all of these past rebates and value the car accordingly. So if a vehicle depreciates 20% a year for the first 3 years the starting point will essentially be $7000.00 less than you actually paid, using rough numbers. How does this help the dealers and car companies? Well while a dealer struggles to make money on new cars the factory makes all of their money on the new cars and the new car financing. While your individual loan might lose money that money is offset by the loss of rebate and I think Ford does actually pay Ford Motor Credit Company the difference in the rate. The most important thing is what happens later FMCC now has 2500 loans with people with perfect credit. They can now use those loans to budle with people with not so perfect credit that they financed at 12%-18% and buy that money with interest rates in the 2%-3% range. Well that is a hell of a lot of profit. 'How does it help the dealership, well the more super prime credit they have in their portfolio the more subprime credit the banks will buy for them. This means they have more loans originated that are more profitable for them. Say you come in for the 0% but have 590 credit score, they get FMCC to buy the deal because they have a good portfolio and you win because the dealer gets to buy the money at say 9% and sell it to you at say 12% making the spread. You win there because you actually qualified for a rate of around 18% with a subprime company like Santander or Capital One (yes that capital one) so you save a ton on your overall cost of the car. Any dealership that is half way well run makes as much or money in the finance and insurance office than the rest of the dealership. When you factor in what a good F&I Director can do to get deals done with favorable terms that really goes up. Think about that the guys sitting a desk drinking coffee making more than the service department guys all put together. Well that was long winded but there I broke down the car business for whoever read this far.\"" }, { "docid": "250644", "title": "", "text": "\"But if we raise the price of the juicer to something rediculous, it will seem like a \"\"premium\"\" product, and if we lock our customers into buying their juice from us only, and auto expire the fruit on an aggressive schedule we'll make a ton of money. It's the hottest trend right now. We can slap that model on anything and it's guaranteed to make us money, just like it says in this $80k Power Point deck. Open source fruit is a thing of the past folks. Squeezing fruit by hand is for plebians and suckers.\"" }, { "docid": "82632", "title": "", "text": "Could Uber not as well? Stop burning cash to establish Uber Eats, stop being so aggressive in new markets, and live off the cash flows from places like NYC. It would cap their growth, but I doubt it would take long to become profitable if they decided that was more important than expansion." }, { "docid": "500807", "title": "", "text": "\"It is if you want apps. The platform is stuck in a Catch-22, where people won't buy the phone because it has no apps, and devs won't make apps for it because no one is buying the phone. Windows 8 will probably ease the problem with its app store and presumed port channel, but given how MS has handled potential devs so far, the future is not bright. They should have been pursuing aggressively and digging into their massive warchest to basically throw money at devs to get hem on board and kick-start the ecosystem. I personally couldn't give a crap about apps, as I just want my phone to make and take calls, guide me with map directions, and let me Google quick bits of information on-demand. It's not a \"\"platform\"\" to me. It's a tool. But I'm apparently in the minority.\"" }, { "docid": "406876", "title": "", "text": "I can't agree more. If you have unique IP and know-how you can very well be a single successful proprietorship. That said you can even be more successful, if you can grow beyond that. The reality is that you have to be an exceptional salesperson, if you want to grow a pure commoditized services business. Otherwise you just keep on adding overhead and there is very little left over for you. Unless of course you make your money off the back of your employees." }, { "docid": "7796", "title": "", "text": "\"Okay, so... &gt; Lifting* the offer (hit bids, lift offers). And I suppose that's a stategy, albeit a somewhat simple one. Passive routing strategies differ from firm to firm and algo to algo. What is your customer going to think if you bid up a new price level only for the stock to rally completely away from it? I mean if you have an open order for more than 10 times the amount currently offered with a limit above the offer, and you havent gotten filled on the bid, what can you do but lift the offer and try to be first at the next price level up? At least you would have gotten some at the price they quoted, or are they fill or kill? &gt; \"\"Bidding it up to attract sellers\"\" sounds an awful lot like spoofing, just a heads up. Sure though, if you want to tighten a spread or create new levels with aggressive passive liquidity, that is a strategy. The same caveats as I mentioned above apply. Just to be clear, 'aggressively adding passive liquidity' is the more apt way to put it - I'm talking about when you actually want to get filled on those bids but you're having trouble finding sellers. Could you give me an example of what you might consider passive or aggressive, just for scale - would a mkt impact of .10% raise any eyebrows? How do you gauge fair value or does that matter less to you than just accumulating/selling what you can for what you were asked to? &gt; Anyway, if market impact isn't an issue for the customer, sure, take liquidity until you're filled. Don't forget about getting good size done in the opening and closing auctions (MOO/MOC). If you're too passive you risk the market moving away from you and pissing off the customer. If you're too aggressive you risk moving the market too much and pissing off the customer. So then is the question more 'how motivated is the buyer or seller?' I'm glad you bring up the MOO/MOC, are there certain securities that don't have much of a market in those auctions? Trying to suss out how a large firm can hold a position in some of the less popular names with next to no liquidity and little in the way of dark pool, auction, block sales, etc.\"" }, { "docid": "93828", "title": "", "text": "You can make a start to learn how to make better investing decisions by learning and understanding what your current super funds are invested in. Does the super fund give you choices of where you can invest your funds, and how often does it allow you to change your investment choices each year? If you are interested in one area of investing over others, eg property or shares, then you should learn more on this subject, as you can also start investing outside of superannuation. Your funds in superannuation are taxed less but you are unable to touch them for another 30 to 35 years. You also need to consider investing outside super to help meet your more medium term goals and grow your wealth outside of super as well. If you are interested in shares then I believe you should learn about both fundamental and technical analysis, they can help you to make wiser decisions about what to invest in and when to invest. Above is a chart of the ASX200 over the last 20 years until January 2015. It shows the Rate Of Change (ROC) indicator below the chart. This can be used to make medium to long term decisions in the stock market by investing when the ROC is above zero and getting out of the market when the ROC is below zero. Regarding your aggressiveness in your investments, most would say that yes because you are still young you should be aggressive because you have time on your side, so if there is a downturn in your investments then you still have plenty of time for them to recover. I have a different view, and I will use the stock market as an example. Refer back to the chart above, I would be more aggressive when the ROC is above zero and less aggressive when the ROC is below zero. How can you relate this to your super fund? If it does provide you to change your investment choices, then I would be invested in more aggressive investments like shares when the ROC crosses above zero, and then when the ROC moves below zero take a less aggressive approach by moving your investments in the super fund to a more balanced or capital guaranteed strategy where less of your funds are invested in shares and more are invested in bonds and cash. You can also have a similar approach with property. Learn about the property cycles (remember super funds usually invest in commercial and industrial property rather than houses, so you would need to learn about the commercial and industrial property cycles which would be different to the residential property cycle). Regarding your question about SMSFs, if you can increase your knowledge and skills in investing, then yes switching to a SMSF will give you more control and possibly better returns. However, I would avoid switching your funds to a SMSF right now. Two reasons, firstly you would want to increase your knowledge as mentioned above, and secondly you would want to have at least $300,000 in funds before switching to a SMSF or else the setup and compliance costs would be too high as a percentage of your funds at the moment ($70,000). You do have time on your side, so whilst you are increasing your funds you can use that time to educate yourself in your areas of interest. And remember a SMSF is not only an investment vehicle whilst you are building your funds during your working life, but it is also an investment vehicle when you are retired and it becomes totally tax free during this phase, where any investment returns are tax free and any income you take out is also tax free." }, { "docid": "105343", "title": "", "text": "\"This is a complicated subject, because professional traders don't rely on brokers for stock quotes. They have access to market data using Level II terminals, which show them all of the prices (buy and sell) for a given stock. Every publicly traded stock (at least in the U.S.) relies on firms called \"\"market makers\"\". Market makers are the ones who ultimately actually buy and sell the shares of companies, making their money on the difference between what they bought the stock at and what they can sell it for. Sometimes those margins can be in hundreds of a cent per share, but if you trade enough shares...well, it adds up. The most widely traded stocks (Apple, Microsoft, BP, etc) may have hundreds of market makers who are willing to handle share trades. Each market maker sets their own price on what they'll pay (the \"\"bid\"\") to buy someone's stock who wants to sell and what they'll sell (the \"\"ask\"\") that share for to someone who wants to buy it. When a market maker wants to be competitive, he may price his bid/ask pretty aggressively, because automated trading systems are designed to seek out the best bid/ask prices for their trade executions. As such, you might get a huge chunk of market makers in a popular stock to all set their prices almost identically to one another. Other market makers who aren't as enthusiastic will set less competitive prices, so they don't get much (maybe no) business. In any case, what you see when you pull up a stock quote is called the \"\"best bid/ask\"\" price. In other words, you're seeing the highest price a market maker will pay to buy that stock, and the lowest price that a market maker will sell that stock. You may get a best bid from one market maker and a best ask from a different one. In any case, consumers must be given best bid/ask prices. Market makers actually control the prices of shares. They can see what's out there in terms of what people want to buy or sell, and they modify their prices accordingly. If they see a bunch of sell orders coming into the system, they'll start dropping prices, and if people are in a buying mood then they'll raise prices. Market makers can actually ignore requests for trades (whether buy or sell) if they choose to, and sometimes they do, which is why a limit order (a request to buy/sell a stock at a specific price, regardless of its current actual price) that someone places may go unfilled and die at the end of the trading session. No market maker is willing to fill the order. Nowadays, these systems are largely automated, so they operate according to complex rules defined by their owners. Very few trades actually involve human intervention, because people can't digest the information at a fast enough pace to keep up with automated platforms. So that's the basics of how share prices work. I hope this answered your question without being too confusing! Good luck!\"" }, { "docid": "232083", "title": "", "text": "\"Why thank you for this unbiassed information, trust deed salesperson. Basically, trust deeds are a pawn shop for your house, except they aren't well regulated like a pawn shop. \"\"Banks are too trustworthy. I'm going to give my house to Joe, because he'll give me one third of one more percent, and it seems smart to me to gamble my home on a couple hundred bucks and some social network advice.\"\"\"" }, { "docid": "501209", "title": "", "text": "This article is very one-sided and absolutist. It also pulls the struggles from one industry and uses that as a basis to declare resumes are a useless part of the hiring process in general. What works for a Tech start up doesn't work for someone hiring a nurse or an accountant or a salesperson. Most egregious is that this article completely ignores the point of a resume. Of course anyone using a resume to make a hiring decision will see poor results. A resume is there to be able to pare down your candidate pool to see who you are interested to bring in for interviews and eventually assessments to learn more about them. It is also pretty easy to verify employment history with a single call or services like The Work Number. You can provide assessments and ask interview questions to see if someone really knows the information they claim to know on a resume. In order to remove the resume from the hiring process, you have to solve the issue of being able to easily and effectively narrow down a pool of applicants while having a tangible summary of education, experience, skills, etc. Online methods of eliminating applications by keywords have shown to exclude highly qualified candidates. Until such a method is discovered, the resume is still by far the best took to summarize a candidate, and to decide who you want to learn more about." }, { "docid": "20064", "title": "", "text": "This is really shallow analysis. Just because revenues are up does not mean the market is healthy. This might indicate that a market dominating participant such as Amazon is causing prices to be aggressively driven up. The real issue isn't so much quaint dead tree versions facing off against e-books, but who is getting the money from this trade which is getting locked down to various shiny devices." }, { "docid": "346531", "title": "", "text": "&gt;Amazon is always going to be pointless for screws and nails because you can't ship that economically. You can't do items like lumber, sheet rock, or concrete due to weight. You can never ship large items due to size. Amazon appears to be aggressively buying retailers that have physical presence in many communities. I would not put it past them to begin buying building supply companies that specialize in delivery of bulk building materials." }, { "docid": "520177", "title": "", "text": "Actually I think direct financial kickbacks are a minor factor in this problem. In most cases a physician makes nothing from the writing of a prescription. What does influence a physician is the never ending attempts of pharmaceutical companies to 'educate' them. This goes far beyond simple drug reps visits given that most medical conventions and a goodly number of 'continuing education' events are manufacturer sponsored. There are many hidden benefits that flow from this tactic, and few could be expressed as 'direct payoffs'. It's a race between professional ethics and marketing tactics, and at least in the USA ethics are often left in the dust. There is also another factor which may have even greater weight - the demand from patients, one's medical education/indoctrination and society in general to ''do something''. The value of literally doing nothing isn't emphasized enough in medical education; nor is it appreciated by the general public. Sometimes ''doing something'' is fairly benign. Wave your hands, prescribe a pill or engage in alternative/voodoo medicine. Most diseases will get better on their own despite the doctor's best efforts. Once more this situation is at its worst in the USA. American physicians are notoriously aggressive and are very prone to overtreatment. Given the long standing and well documented failure of the American system to measure up in terms of outcomes compared to other countries this aggression has nothing but negative empirical support in its favour. The dismal performance of US medicine isn't only because of its gross inequalities. There are other factors at play, and overtreatment is one. You won't necessarily get *better* treatment because you are either wealthy or have wonderful insurance, but you will definitely get *more* treatment." }, { "docid": "545633", "title": "", "text": "I just don't see that many suckers falling for cheap or subprime loans, given their student loans. Yellen raising rates will dampen aggressive bank profits somewhat. Smucks will be smucks, but smarter buyers would appraise their debt load and opt for renting or cheaper houses. But then again, people don't even learn from recent history. US market is at recovery/pre-euphoria stage now. Canada is soon to pop a year after rates rise courtesy of Yellen. Given the size of the US gen y cohort, it is likely that many in their 30s in 2020 will buy. And will cry when the next bubble pops, as Boomers start selling assets to fund their retirements." } ]

[ { "docid": "365240", "title": "", "text": "As described by the other answers, there are pretty harmless explanations for that behaviour. You could be slightly worried because he gave you exceptionally good deals for both instruments, but that's neither here nor there. Maybe he simply prices all items way up to be able to give a great discount on either sale. You can't ever know; the actual price you pay in the end is what counts. What I would do: If I expect in advance (or if I notice during the negotiation) that I am put under pressure in this way, I usually try to do exactly the same, in reverse. That is, I take a minute to explain up front that I will not, under any circumstance, buy right now, but that this is a purely informational event. I will make sure not to have my money/card with me. Any high-end salesman worth his sale should have no problem with that at all. Money aside, you are shopping for something that will mean a lot to you. The salesman is not some peddler of arbitrary wares. Everybody understands that not only do you not want to pay too high a price, but also that you want to really get the item you want, and want to be happy with it for a long time. This is a tough decision, often, and if the salesman cannot, or does not want to respect that, then it would be a clear signal for me that dubious things are going on. In fact, you would probably be unhappier if you got the wrong item for a great price than if you got a great item for a slightly too-high price. That is something you should probably not tell the salesman ;), but can keep in mind. So getting the greatest deal of all times is probably not so high on your priority list." } ]

[ { "docid": "49133", "title": "", "text": "No shit, Sherlock. Let's see: - Valuation down like 80% since last year... - Massive competition from categorically better products with infinitely deep pockets (Android, iPhone)... - Only customers are a rapidly-eroding base of legacy enterprise customers with aggressive cost/feature requirements and bulk-purchase negotiating power. Sounds like a winner!" }, { "docid": "20064", "title": "", "text": "This is really shallow analysis. Just because revenues are up does not mean the market is healthy. This might indicate that a market dominating participant such as Amazon is causing prices to be aggressively driven up. The real issue isn't so much quaint dead tree versions facing off against e-books, but who is getting the money from this trade which is getting locked down to various shiny devices." }, { "docid": "266015", "title": "", "text": "Yeah building keys for the NSA, sending all kinds of telemetry and caching data from my system is really a great feature that is fucking near impossible to disable for the layman and keep disabled as updates turn them back on. Yeah bill makes some great points, but he's not running the show and windows 10 is a load of shit. They even acknowledge that they were too aggressive. Windows had been relegated to a VM where it belongs, and I only turn it on if I absolutely have to." }, { "docid": "384983", "title": "", "text": "\"You mentioned three concepts: (1) trading (2) diversification (3) buy and hold. Trading with any frequency is for people who want to manage their investments as a hobby or profession. You do not seem to be in that category. Diversification is a critical element of any investment strategy. No matter what you do, you should be diversified. All the way would be best (this means owning at least some of every asset out there). The usual way to do this is to own a mutual or index fund. Or several. These funds own hundreds or thousands of stocks, so that buying the fund instantly diversifies you. Buy and hold is the only reasonable approach to a portfolio for someone who is not interested in spending a lot of time managing it. There's no reason to think a buy-and-hold portfolio will underperform a typical traded portfolio, nor that the gains will come later. It's the assets in the portfolio that determine how aggressive/risky it is, not the frequency with which it is traded. This isn't really a site for specific recommendations, but I'll provide a quick idea: Buy a couple of index funds that cover the whole universe of investments. Index funds have low expenses and are the cheapest/easiest way to diversify. Buy a \"\"total stock market\"\" fund and a \"\"total bond fund\"\" in a ratio that you like. If you want, also buy an \"\"international fund.\"\" If you want specific tickers and ratios, another forum would be better(or just ask your broker or 401(k) provider). The bogleheads forum is one that I respect where people are very happy to give and debate specific recommendations. At the end of the day, responsibly managing your investment portfolio is not rocket science and shouldn't occupy a lot of time or worry. Just choose a few funds with low expenses that cover all the assets you are really interested in, put your money in them in a reasonable-ish ratio (no one knows that the best ratio is) and then forget about it.\"" }, { "docid": "100051", "title": "", "text": "Their aggressive takeover tactics? However, to be honest I don't know what the others are like. I'm fortunate enough to have drinking water from the tap. Which I bottle myself. I'll sell you a bottle 20% cheaper then nestle if you'd like" }, { "docid": "260838", "title": "", "text": "Two years ago, I wrote an article titled Student Loans and Your First Mortgage in response to this exact question posed by a fellow blogger. The bottom line is that the loan payment doesn't lower your borrowing power as it fits in the slice between 28% (total housing cost) and 38% (total monthly debt burden) when applying for a loan. But, the $20K is 20% down on $100K worth of house. With median home prices in the US in the mid-high $100Ks, you're halfway there. In the end, it's not about finance, it's a question of how badly you want to buy a house. If I got along with the parents, I'd stay as long as I was welcome, and save every dollar I could. Save for retirement, save for as large a downpayment as you can, and after you buy the house, pay the student loan aggressively. I moved out the week after I graduated." }, { "docid": "198328", "title": "", "text": "Your first problem is looking at these as monthly expenses rather than looking longer-term at how to remove the expenses. You have a $600/month loan, but what is the interest rate? If you paid that loan more aggressively it would free up 10% of your income, but you can't pay the loan aggressively if you don't have an emergency fund. You need enough cash-flow to take care of emergencies so you don't incur more debt on less advantageous terms. The way you describe the problem, it appears that you don't know where all of the money is going, so the first step is to track all of your expenses and formulate a budget. The budget is a plan on how to spend the money for next month. At least 10% should be money you are saving for a short-term emergency fund. Another 10% should be money you are saving for retirement. Until you have 6 months of expenses saved for your emergency fund, you need to skip luxuries like taxi rides and maybe you need to reduce the amount you send home. 22% is a large amount and unless your parents are using that money to become independent (so that they won't rely on your contributions forever) it will only prevent you from becoming wealthy enough to really help them later. Only you can determine what can be cut from your monthly expenses--but if you want to save--spending less is required." }, { "docid": "440856", "title": "", "text": "No, they are not recession proof. Assume several companies, that issued bonds in the fund, go bankrupt. Those bonds could be worthless, they could miss principle payments, or they could be restructured. All would mean a decline in value. When the economy shrinks (which is what a recession is) how does the Fed respond? By lowering interest rates. This makes current bonds more valuable as presumably they were issued at a higher rate, thus the recession proof prejudice. However, there is nothing to stop a company (in good financial shape) from issuing more bonds to pay the par value on high-interest bonds, thus refinancing their debt. Sort of like how the bank feels when one refinances the mortgage for a lower rate. The thing that troubles me the most is that rates have been low for a long time. What happens if we have a recession now? How does the Fed fix it? I am not sure exactly what the fallout would be, but it could be significant. If you are troubled, you should look for sectors that would be hurt and helped by a Trump-induced recession. Move money away from those that will be hurt. Typically aggressive growth companies are hurt (during recessions), so you may want to move money away from them. Typically established blue chip companies fare okay in a recession so you may want to move money toward them. Move some money to cash, and perhaps some towards bonds. All that being said, I'd keep some money in things like aggressive growth in case you are wrong." }, { "docid": "250644", "title": "", "text": "\"But if we raise the price of the juicer to something rediculous, it will seem like a \"\"premium\"\" product, and if we lock our customers into buying their juice from us only, and auto expire the fruit on an aggressive schedule we'll make a ton of money. It's the hottest trend right now. We can slap that model on anything and it's guaranteed to make us money, just like it says in this $80k Power Point deck. Open source fruit is a thing of the past folks. Squeezing fruit by hand is for plebians and suckers.\"" }, { "docid": "93828", "title": "", "text": "You can make a start to learn how to make better investing decisions by learning and understanding what your current super funds are invested in. Does the super fund give you choices of where you can invest your funds, and how often does it allow you to change your investment choices each year? If you are interested in one area of investing over others, eg property or shares, then you should learn more on this subject, as you can also start investing outside of superannuation. Your funds in superannuation are taxed less but you are unable to touch them for another 30 to 35 years. You also need to consider investing outside super to help meet your more medium term goals and grow your wealth outside of super as well. If you are interested in shares then I believe you should learn about both fundamental and technical analysis, they can help you to make wiser decisions about what to invest in and when to invest. Above is a chart of the ASX200 over the last 20 years until January 2015. It shows the Rate Of Change (ROC) indicator below the chart. This can be used to make medium to long term decisions in the stock market by investing when the ROC is above zero and getting out of the market when the ROC is below zero. Regarding your aggressiveness in your investments, most would say that yes because you are still young you should be aggressive because you have time on your side, so if there is a downturn in your investments then you still have plenty of time for them to recover. I have a different view, and I will use the stock market as an example. Refer back to the chart above, I would be more aggressive when the ROC is above zero and less aggressive when the ROC is below zero. How can you relate this to your super fund? If it does provide you to change your investment choices, then I would be invested in more aggressive investments like shares when the ROC crosses above zero, and then when the ROC moves below zero take a less aggressive approach by moving your investments in the super fund to a more balanced or capital guaranteed strategy where less of your funds are invested in shares and more are invested in bonds and cash. You can also have a similar approach with property. Learn about the property cycles (remember super funds usually invest in commercial and industrial property rather than houses, so you would need to learn about the commercial and industrial property cycles which would be different to the residential property cycle). Regarding your question about SMSFs, if you can increase your knowledge and skills in investing, then yes switching to a SMSF will give you more control and possibly better returns. However, I would avoid switching your funds to a SMSF right now. Two reasons, firstly you would want to increase your knowledge as mentioned above, and secondly you would want to have at least $300,000 in funds before switching to a SMSF or else the setup and compliance costs would be too high as a percentage of your funds at the moment ($70,000). You do have time on your side, so whilst you are increasing your funds you can use that time to educate yourself in your areas of interest. And remember a SMSF is not only an investment vehicle whilst you are building your funds during your working life, but it is also an investment vehicle when you are retired and it becomes totally tax free during this phase, where any investment returns are tax free and any income you take out is also tax free." }, { "docid": "105343", "title": "", "text": "\"This is a complicated subject, because professional traders don't rely on brokers for stock quotes. They have access to market data using Level II terminals, which show them all of the prices (buy and sell) for a given stock. Every publicly traded stock (at least in the U.S.) relies on firms called \"\"market makers\"\". Market makers are the ones who ultimately actually buy and sell the shares of companies, making their money on the difference between what they bought the stock at and what they can sell it for. Sometimes those margins can be in hundreds of a cent per share, but if you trade enough shares...well, it adds up. The most widely traded stocks (Apple, Microsoft, BP, etc) may have hundreds of market makers who are willing to handle share trades. Each market maker sets their own price on what they'll pay (the \"\"bid\"\") to buy someone's stock who wants to sell and what they'll sell (the \"\"ask\"\") that share for to someone who wants to buy it. When a market maker wants to be competitive, he may price his bid/ask pretty aggressively, because automated trading systems are designed to seek out the best bid/ask prices for their trade executions. As such, you might get a huge chunk of market makers in a popular stock to all set their prices almost identically to one another. Other market makers who aren't as enthusiastic will set less competitive prices, so they don't get much (maybe no) business. In any case, what you see when you pull up a stock quote is called the \"\"best bid/ask\"\" price. In other words, you're seeing the highest price a market maker will pay to buy that stock, and the lowest price that a market maker will sell that stock. You may get a best bid from one market maker and a best ask from a different one. In any case, consumers must be given best bid/ask prices. Market makers actually control the prices of shares. They can see what's out there in terms of what people want to buy or sell, and they modify their prices accordingly. If they see a bunch of sell orders coming into the system, they'll start dropping prices, and if people are in a buying mood then they'll raise prices. Market makers can actually ignore requests for trades (whether buy or sell) if they choose to, and sometimes they do, which is why a limit order (a request to buy/sell a stock at a specific price, regardless of its current actual price) that someone places may go unfilled and die at the end of the trading session. No market maker is willing to fill the order. Nowadays, these systems are largely automated, so they operate according to complex rules defined by their owners. Very few trades actually involve human intervention, because people can't digest the information at a fast enough pace to keep up with automated platforms. So that's the basics of how share prices work. I hope this answered your question without being too confusing! Good luck!\"" }, { "docid": "470758", "title": "", "text": "\"One approach is to invest in \"\"allocation\"\" mutual funds that use various methods to vary their asset allocation. Some examples (these are not recommendations; just to show you what I am talking about): A good way to identify a useful allocation fund is to look at the \"\"R-squared\"\" (correlation) with indexes on Morningstar. If the allocation fund has a 90-plus R-squared with any index, it probably isn't doing a lot. If it's relatively uncorrelated, then the manager is not index-hugging, but is making decisions to give you different risks from the index. If you put 10% of your portfolio in a fund that varies allocation to stocks from 25% to 75%, then your allocation to stocks created by that 10% would be between 2.5% to 7.5% depending on the views of the fund manager. You can use that type of calculation to invest enough in allocation funds to allow your overall allocation to vary within a desired range, and then you could put the rest of your money in index funds or whatever you normally use. You can think of this as diversifying across investment discipline in addition to across asset class. Another approach is to simply rely on your already balanced portfolio and enjoy any downturns in stocks as an opportunity to rebalance and buy some stocks at a lower price. Then enjoy any run-up as an opportunity to rebalance and sell some stocks at a high price. The difficulty of course is going through with the rebalance. This is one advantage of all-in-one funds (target date, \"\"lifecycle,\"\" balanced, they have many names), they will always go through with the rebalance for you - and you can't \"\"see\"\" each bucket in order to get stressed about it. i.e. it's important to think of your portfolio as a whole, not look at the loss in the stocks portion. An all-in-one fund keeps you from seeing the stocks-by-themselves loss number, which is a good way to trick yourself into behaving sensibly. If you want to rebalance \"\"more aggressively\"\" then look at value averaging (search for \"\"value averaging\"\" on this site for example). A questionable approach is flat-out market-timing, where you try to get out and back in at the right times; a variation on this would be to buy put options at certain times; the problem is that it's just too hard. I think it makes more sense to buy an allocation fund that does this for you. If you do market time, you want to go in and out gradually, and value averaging is one way to do that.\"" }, { "docid": "218293", "title": "", "text": "Terminology aside. Your gains for this year in a mutual fund do seem low. These are things that can be quickly, and precisely answered through a conversation with your broker. You can request info on the performance of the fund you are invested in from the broker. They are required to disclose this information to you. They can give you the performance of the fund overall, as well as break down for you the specific stocks and bonds that make up the fund, and how they are performing. Talk about what kind of fund it is. If your projected retirement date is far in the future your fund should probably be on the aggressive side. Ask what the historic average is for the fund you're in. Ask about more aggressive funds, or less if you prefer a lower average but more stable performance. Your broker should be able to adequately, and in most cases accurately, set your expectation. Also ask about fees. Good brokerages charge reasonable fees, that are typically based on the gains the fund makes, not your total investment. Make sure you understand what you are paying. Even without knowing the management fees, your growth this year should be of concern. It is exceptionally low, in a year that showed good gains in many market sectors. Speak with your broker and decide if you will stick with this fund or have your IRA invest in a different fund. Finally JW8 makes a great point, in that your fund may perform well or poorly over any given short term, but long term your average should fall within the expected range for the type of fund you're invested in (though, not guaranteed). MOST importantly, actually talk to your broker. Get real answers, since they are as easy to come by as posting on stack." }, { "docid": "142136", "title": "", "text": "\"&gt; The Author clearly has no freaking idea what the hell he is talking about. I have an idea of what's going on. And my experience comes from earlier in my career, when I acted as an execution trader at several hedge funds. Rebates are offered by the exchange so that the exchange can make money. It isn't a public service or some great sacrifice. Let me tell you how it works: Somebody at XYZ exchange/bank takes you out for a nice steak dinner. Then maybe they take you to the strip club. There may be some blow involved. If the broker is particularly nice, they'll pay for an experience in the *actual* \"\"champagne room.\"\" Then you go back to your desk on Monday, look at the flows you're disbursing to various brokers and exchanges, and make your \"\"adjustments\"\" based on how much you enjoy hanging out with the broker/salesperson. Oh, and of course the \"\"rebates.\"\" Which to you barely make a difference, because you're just an execution trader. You aren't in it to make money. The analysts don't know what you're doing, and there's a good chance that the PM doesn't, either. It's easy to do, because tracking \"\"best execution\"\" is beyond the comprehension of the SEC. Oh, if they only knew...and could actually act on it. But we all know they don't really want to, because almost to a man they're each waiting for their turn at the revolving door that will usher them on to a lucrative private sector career.\"" }, { "docid": "285033", "title": "", "text": "\"Here I thought I would not ever answer a question on this site and boom first ten minutes. First and foremost I am in the automotive industry, specifically one of our core competencies is finance department management consulting and the sales process both for the sale of the care as well as the financial transaction. First and foremost new vehicle gross profits are nowhere near 20% for the dealership. In an entry level vehicle like say a Toyota Corolla there is only a few hundreds of dollars in markup from invoice to M.S.R.P. There is also something called holdback that dealers get for achieving certain goals such as sales volume. These are usually pretty easy to hit. As a matter of fact I have never heard of a dealer not getting the hold back on a deal. This hold back is there to cover overhead for the car, the cost of getting it ready to sell, having a lot to park it on, making it ready for delivery, offset some of the cost of sales labor etc. Most dealerships consider the holdback portion of the invoice to not be part of the deal when it comes to negotiations. Certain brands such as KIA and Chrysler have something called \"\"Dealer Cash\"\" these payouts are usually stair stepped according to volume and vary by dealer, location, past history, how the guys at the factory feel that day and any number of combinations. Then there is CSI or Customer Service Index payments, these payments are usually made every 1/4 are on the Parts Statement not the Sales Doc and while they effect the dealers bottom line they almost never affect the sales managers or sales persons payroll so they are not considered a part of the cost of the car. They are however extremely important to the dealer and this is why after you have your new car they want you to bring in your survey for a free oil change or something. IF you are going to give a bad survey they want to throw it away and not send it in, if you are going to give a good survey they want to make sure you fill it out correctly. This is because lets say they ask you on a scale of 1-10 how was your sales person and you put a 9 that is a failing score. Dumb I know but that is how every factory CSI score system I have seen worked. According to NADA the average New Vehicle gross profit including hold back and dealer cash is around $1000.00. No where near 20%. Dealerships would love it if they made 20% on your new F250 Supercrew Diesel at around $50,000.00. One last thing there is something on the invoice called Wholesale Finance Reserve. This is the amount of money the factory forwards to the Dealership to offset the cost of financing vehicle on the floor plan so they can have it for you to look at before you buy. This is usually equal to around 3 months of interest and while you might buy a vehicle that has been on the lot for 2 days they have plenty that have been there much longer so this equals out in a fair to middling run store. General Mangers that know what they are doing can make this really pad their net profit to statement. On to incentives, there are basically 3 kinds. Cash to customer in the form of rebates, Dealer Cash in the form of incentives to dealerships based on volume or the undesirability of a vehicle, and incentive rates or Subvented leases. The rates are pretty self explanatory as they advertised as such (example 0% for 60 Months). Subvented Leased are harder to figure out and usually not disclosed as they are hard to explain and also a source of increased profit. Subvented leases are usually powered by lower cost of money called a money factor (think of it as an interest rate) that is discounted from the lease company or a subsidized residual. Subsidized residuals are virtually verboten on domestic vehicles due to their poor resell values. A subsidized residual works like this, you buy a Toyota Camry and the ALG (automotive lease guide) says it has a residual at 36 months of 48%. Well Toyota Motor Credit says we will give you a subvented residual of 60% basically subsidizing a 2% increase in residual. Since they do not expect to be able to sell the car at auction for that amount they have to set aside the 2% as a future expense. What does this mean to you, it means a lower payment. Also a good rule of thumb if you are told a money factor by your salesperson to figure out what the interest rate is just multiply it by 2400. So if a money factor is give of .00345 you know your actual interest rate is a little bit lower than 8.28% (illustration purposes only money factors are much lower than that right now). So how does this save you money well a lease is basically calculated by multiplying the MSRP by the residual and then subtracting that amount from the \"\"Capitalized Cost\"\" which is the Price paid for the car - trade in + payoff + TT&L-Rebate-Down Payment. That is the depreciation. Then you divide that number by the term of the loan and you have the depreciation amount. So if you have 20K CC and 10K R your D = 10K / 36 = 277 monthly payment. For the rest of the monthly payment you add (I think been a long time since I did this with out a computer) the Residual plus the CC for $30,000 * MF of .00345 = 107 for a total payment of 404 ish. This is not completely accurate but you can use it to make sure a salesperson/finance person is not trying to do one thing and say another as so often happens on leases. 0% how the heck do they make money at that, well its simple. First in 2008 the Fed made all the \"\"Captive\"\" lenders into actual banks instead of whatever they were before. So now they have access to the Fed's discounting window which with todays monetary policies make it almost free money. In the past these lenders had to go through all kinds of hoops to raise funds and securitize loans even for super prime credit. Those days are essentially over. Now they get their short term money just like Bank of America does. Eventually they still bundle these loans and sell them. So in the short term YOU pay for the 0% by giving up part or all of your rebate. This is really important DO NOT GIVE up your rebate for 0% unless it makes sense to do so. When you can get the money at 2.5% and get a $7000.00 rebate (customer cash) on that F250 or 0% take the cash. First of all make the finance guy/gal show you the the difference in total cost they can do do this using the federal truth in lending disclosures on a finance contract. Secondly how long will you keep the vehicle? If you come out ahead by say $1500 by taking the lower rate but you usually trade out every three years this is not going to work. Also and this is important if you are involved in a situation with a total loss like a stolen car or even worse a bad wreck before the breakeven point you lose that price break. Finally on judging what is right for you, just know that future value of the vehicle on for resell or trade-in will take into effect all of these past rebates and value the car accordingly. So if a vehicle depreciates 20% a year for the first 3 years the starting point will essentially be $7000.00 less than you actually paid, using rough numbers. How does this help the dealers and car companies? Well while a dealer struggles to make money on new cars the factory makes all of their money on the new cars and the new car financing. While your individual loan might lose money that money is offset by the loss of rebate and I think Ford does actually pay Ford Motor Credit Company the difference in the rate. The most important thing is what happens later FMCC now has 2500 loans with people with perfect credit. They can now use those loans to budle with people with not so perfect credit that they financed at 12%-18% and buy that money with interest rates in the 2%-3% range. Well that is a hell of a lot of profit. 'How does it help the dealership, well the more super prime credit they have in their portfolio the more subprime credit the banks will buy for them. This means they have more loans originated that are more profitable for them. Say you come in for the 0% but have 590 credit score, they get FMCC to buy the deal because they have a good portfolio and you win because the dealer gets to buy the money at say 9% and sell it to you at say 12% making the spread. You win there because you actually qualified for a rate of around 18% with a subprime company like Santander or Capital One (yes that capital one) so you save a ton on your overall cost of the car. Any dealership that is half way well run makes as much or money in the finance and insurance office than the rest of the dealership. When you factor in what a good F&I Director can do to get deals done with favorable terms that really goes up. Think about that the guys sitting a desk drinking coffee making more than the service department guys all put together. Well that was long winded but there I broke down the car business for whoever read this far.\"" }, { "docid": "406876", "title": "", "text": "I can't agree more. If you have unique IP and know-how you can very well be a single successful proprietorship. That said you can even be more successful, if you can grow beyond that. The reality is that you have to be an exceptional salesperson, if you want to grow a pure commoditized services business. Otherwise you just keep on adding overhead and there is very little left over for you. Unless of course you make your money off the back of your employees." }, { "docid": "388396", "title": "", "text": "\"Yes I thought his flow charts did a nice job with a complex system. Some thoughts: * he makes the \"\"if your house ran a blah blah blah\"\". That is a horrible analogy to make for an economy. * He quotes the revenue to debt ratio as if it is static. We are spending much more now then we traditionally do at the same times as revenues are lower than historic levels. Ratios change over time. * Either he chooses to ignore, or doesn't know, that a lot of the issues with the PIIGS comes from the aggressive use of derivative products to clean their books for the joining of the EU. Like his ARM example, now the rates have changed and those trades have moved against the sovereigns. * His lists the outcome of current monetary policy as binary. Either we inflate to infinity, and the world explodes, or we default and the world explodes. One outcome that comes to my mind is that we ease out of aggressive capital injection and move through this liquidity issue. We then pay back our debt and live on. I am sure there are many other outcomes * Almost all the problems seemed to be supply side ideas. \"\"banks just won't lend\"\". I would argue banks and even corporations have cash, but lack demand for NPV positive projects and thus are sitting on it. And or they are waiting for things to play out so they can invest with better certainty. * I thought his discussion on Current accounts was very good. We also need to remember in many of these countries you have weak and corrupt tax systems which make it hard to fund your way out of these issues. I only point these things out for others who may watch the video and want some counter points to what the speaker says.\"" }, { "docid": "552934", "title": "", "text": "What I'm saying is the NATO thing is also aggressive, and the coup was aggressive. Also I think ukraine is just another battle in a very long war between Russian and American oil interests. That's why I don't want to take a side, except keep the American military out of it." }, { "docid": "508868", "title": "", "text": "Rebates are offered on exchange to promote liquidity offers so that aggressive buy/sell can be done, otherwise a sizable sell/buy would crash the price of a stock with no liquidity, it is perfectly normal for a firm to attempt look for the rebate if the customer is willing to wait longer for the execution to happen. The Author clearly has no freaking idea what the hell he is talking about." } ]

[ { "docid": "449079", "title": "", "text": "If something in any transaction in life—financial or otherwise—doesn’t make you feel comfortable and the choice is between saving money with one thing versus another, don’t sell your personal needs short. Pay more elsewhere that treats you the way you expect to be treated. In the long run the $$$ you “save” in a cheaper transaction might cost you more in the headaches and annoyance you have to swallow in dealing with this “bargain” in the future. Your question is this: “Do his sales tactics indicate other underlying problems? How can I deal effectively with those tactics?” And you state this as well: “To make a long story short, the dealer's aggressive sales tactics have made me somewhat uncomfortable.” And finally ask: “How can I deal effectively with those tactics?” Okay, first and foremost if you feel discomfort in anything in life—not just a financial situation—just walk away. You might have to say “No…” when doing this but it’s not always the case you will have to counter aggression with aggression. And specifically in the case of a purchase like this, you need to also ask yourself: “Is this discount being offered me worth the headache I am getting?” At the end of the day money is meaningless and has it’s main worth as an economic motivator/stimulator: Someone has a need and someone else has something that can solve that need. What would it take for the side of need to connect to the side of solution to that need? This is the basic concept surrounding all economics. So that said, I have personally avoided buying things for less money and paid slightly more elsewhere for a service experience that made me feel comfortable. At the end of the day, if you feel happy in the transaction it helps in the long run more than—let’s say—the $20 to $40 you “save” by buying from someone else. Also—on the side of customer service—this person’s sales techniques sound like something out of a very old fashioned sales playbook. Nowadays it’s all about relationships and service: The immediate sale is not as important for competent and reputable businesses because they know a better customer service experience will bring people back. So it doesn’t matter how long this guy has been in business: It could be that he’s been in business a long time just because he has been in business a long time. That said—and in the case of musical instruments—maybe this guy is really good at care and upkeep of instruments but has crappy sales techniques. Keep that in mind as well and just push back on their sales methods. For things like musical instruments, people might be jerks on the sales side but in the maintenance and repair side they are great. Will you need to go to them if/when your instrument needs repair? Or you don’t care? At the end of the day, go with your gut. And if your gut says, “No…” then just go somewhere else and spend your money on an item you like from a place that treats you the way you need." } ]

[ { "docid": "349941", "title": "", "text": "I'll agree with the other commenter. There is a ton more to sales than speaking the language and being a decent public speaker. Unless you know what you're getting into and feel confident you can get it done (or you believe that the company is willing to help you learn and grow as a salesperson and that's interesting to you from a career development perspective), I'd recommend avoiding a sales role and encouraging your boss to hire an actual sales person who meets his or her criteria. EDIT: Source: am startup founder with no sales background who is having to do founder selling right now and learning just how hard it is." }, { "docid": "525213", "title": "", "text": "An option, by definition, is a guess about the future value of the stock. If you guess too aggressively, you lose the purchase price of the option; if you guess too conservatively, you may not take the option or may not gain as much as you might have. You need to figure out what you expect to happen, and how confident you are about it, against the cost of taking the option -- and be reasonably confident that the change in the stock's value will be at least large enough to cover the cost of buying into the game. Opinion: Unless you're comfortable with expectation values and bell curves around them, it's significantly easier to lose money on options than to profit on them. And I'm not convinced that even statisticians can really do this well. I've always been told that the best use for options is hedging an investment you've already made; treating them as your primary bet is gambling, not investment." }, { "docid": "36190", "title": "", "text": "First of all I recommend reading this short e-book that is aimed at young investors. The book is written for American investors but they same rules apply with different terms (e.g. the equivalent tax-free savings wrappers are called ISAs in the UK). If you don't anticipate needing the money any time soon then your best bet is likely a stocks and share ISA in an aggressive portfolio of assets. You are probably better off with an even more aggressive asset allocation than the one in the book, e.g. 0-15% bond funds 85-100% equity funds. In the long term, this will generate the most income. For an up-to-date table of brokers I recommend Monevator. If you are planning to use the money as a deposit on a mortgage then your best bet might be a Help to Buy ISA, you'll have to shop around for the best deals. If you would rather have something more liquid that you can draw into to cover expenses while at school, you can either go for a more conservative ISA (100% bond funds or even a cash ISA) or try to find a savings account with a comparable interest rate." }, { "docid": "139230", "title": "", "text": "It depends on you. If you're not an aggressive shopper and travel , you'll recoup your membership fee in hotel savings with one or two stays. Hilton brands, for example, give you a 10% discount. AARP discounts can sometimes be combined with other offers as well. From an insurance point of view, you should always shop around, but sometimes group plans like AARP's have underwriting standards that work to your advantage." }, { "docid": "384983", "title": "", "text": "\"You mentioned three concepts: (1) trading (2) diversification (3) buy and hold. Trading with any frequency is for people who want to manage their investments as a hobby or profession. You do not seem to be in that category. Diversification is a critical element of any investment strategy. No matter what you do, you should be diversified. All the way would be best (this means owning at least some of every asset out there). The usual way to do this is to own a mutual or index fund. Or several. These funds own hundreds or thousands of stocks, so that buying the fund instantly diversifies you. Buy and hold is the only reasonable approach to a portfolio for someone who is not interested in spending a lot of time managing it. There's no reason to think a buy-and-hold portfolio will underperform a typical traded portfolio, nor that the gains will come later. It's the assets in the portfolio that determine how aggressive/risky it is, not the frequency with which it is traded. This isn't really a site for specific recommendations, but I'll provide a quick idea: Buy a couple of index funds that cover the whole universe of investments. Index funds have low expenses and are the cheapest/easiest way to diversify. Buy a \"\"total stock market\"\" fund and a \"\"total bond fund\"\" in a ratio that you like. If you want, also buy an \"\"international fund.\"\" If you want specific tickers and ratios, another forum would be better(or just ask your broker or 401(k) provider). The bogleheads forum is one that I respect where people are very happy to give and debate specific recommendations. At the end of the day, responsibly managing your investment portfolio is not rocket science and shouldn't occupy a lot of time or worry. Just choose a few funds with low expenses that cover all the assets you are really interested in, put your money in them in a reasonable-ish ratio (no one knows that the best ratio is) and then forget about it.\"" }, { "docid": "361976", "title": "", "text": "I love technical analysis, and use candlesticks as part of my technical analysis system for trading mutual funds in my 401K. However, I would never use a candlestick chart on its own. I use combination of candlesticks, 2 different EMAs, MACD, bollinger bands, RSI and hand drawn trend lines that I constantly tweak. That's about as much data input as I can handle, but it is possible to graph it all at once and see it at a glance if you have the right trading platform. My approach is very personal, not very aggressive, and took me years to develop. But it's fairly effective - 90% + of my trades are winners. The big advantage of technical analysis is that it forces you to create repeatable rules around which you base your trading. A lot of the time I have little attention at all on what fund I am trading or why it is doing well in that particular market condition. It's basically irrelevant as the technical system tells when to buy and sell, and stops you trying to second guess whether housing, chemicals, gold or asian tigers are is doing well right now. If you don't keep to your own rules, you have only yourself to blame. This keeps you from blaming the market, which is completely out of your control. I explain many of my trades with anotated graphs at http://neurotrade.blogspot.com/" }, { "docid": "126719", "title": "", "text": "You pointed out that HFT does not create ipods are mine minerals. Neither does human trading. HFT is a proxy for human trading. Although the computer is executing trades automatically based on an algorithm, it is still using money from a human being's account so the trading is still being done with someone's money. Fast execution of trades is desirable in exchanges. Imagine two exchanges: One only executes trades once a month, the other executes trades once a week. Which exchange would be more desirable? The exchange that trades once a week. Why? Because if I'm holding a stock that I would like to sell, I want to sell it now - not a month from now. Same reason for buying. This concept works all the way down to seconds and fractions of seconds. The issue with HFT, however, is there are cases where the market goes against the HFT algorithm and the algorithm continues to execute trades driving prices up or down by large amounts in the matter of minutes or even seconds. The exchange frequently cancels these trades which only encourages more aggressive HFT trading since HFT traders can have their losses cancelled. This is a privilege that LFTs (low frequency traders) do not receive. This is a valid criticism of HFTs. A short list of such cancelled trades: 8/26/2010: Nasdaq cancels trades of CORE stock 10/4/2010: Nasdaq cancels trades of CENX stock 10/15/2010: NYSE cancels trades of PAY stock 10/18/2010: NYSE cancels $500 million worth of SPY trades 5/18/2011: NYSE cancels 15,900 trades of BEE.PR.C 6/21/2011: Nasdaq cancels CNTY trades 12/2/2011: London Metals Exchange cancel trades of copper" }, { "docid": "242310", "title": "", "text": "\"Its important to note that aggression, or better yet volatility, does not necessarily offer higher returns. One can find funds that have a high beta (measure of volatility) and lower performance then stock funds with a lower beta. Additionally, to Micheal's point, better performance could be undone by higher fees. Age is unimportant when deciding the acceptable volatility. Its more important as to when the money is to be available. If there might be an immediate need, or even less than a year, then stick to a savings account. Five years, some volatility can be accepted, if 10 years or more seek to maximize rate of return. For example assume a person is near retirement age. They are expected to have 50K per year expenses. If they have 250K wrapped up in CDs and savings, and another 250K in some conservative investments, they can, and should, be \"\"aggressive\"\" with any remaining money. On the contrary a person your age that is savings for a house intends to buy one in three years. Savings for the down payment should be pretty darn conservative. Something like 75% in savings accounts, and maybe 25% in some conservative investments. As the time to buy approaches they can pull the money out of the conservative investments at a optimal time. Also you should not be investing without an emergency fund in place. Get that done first, then look to invest. If your friend does not understand these basic concepts there is no point in paying for his advice.\"" }, { "docid": "520132", "title": "", "text": "\"&gt; Is your time frame any longer than intraday? I imagine you wouldn't want to carry that risk overnight if you're a broker or selling a route.. Most brokers these days are executing in an agent capacity, so they're never holding the risk. They execute what they can, the customer keeps what they can't. &gt; So, say for instance you join a bid a few levels down, you aren't really get filled, you start hitting the offer and eventually you realize you're competing with someone for the shares offered, so you take out the price level and bid on all the exchanges so that you're first on the bid at that level, then repeat until someone that can match your appetite starts to fill you on the bid? Lifting* the offer (hit bids, lift offers). And I suppose that's a stategy, albeit a somewhat simple one. Passive routing strategies differ from firm to firm and algo to algo. What is your customer going to think if you bid up a new price level only for the stock to rally completely away from it? &gt; Right, so say you need 100k shares, there are 10k offered at 9.98, 25k offered at 9.99, and 65k at 10.00, you might just enter an intermarket sweep order of 100k @ 10 limit and hope that you can get most of the shares off before everyone can cancel? I imagine there has to be a lot of bidding it up to attract sellers and then letting people take out your bids all day... \"\"Bidding it up to attract sellers\"\" sounds an awful lot like [spoofing](https://en.wikipedia.org/wiki/Spoofing_(finance\\)), just a heads up. Sure though, if you want to tighten a spread or create new levels with aggressive passive liquidity, that is a strategy. The same caveats as I mentioned above apply. Anyway, if market impact isn't an issue for the customer, sure, take liquidity until you're filled. Don't forget about getting good size done in the opening and closing auctions (MOO/MOC). If you're too passive you risk the market moving away from you and pissing off the customer. If you're too aggressive you risk moving the market too much and pissing off the customer.\"" }, { "docid": "467141", "title": "", "text": "In Order To Be Safe From A Fraudulent Stock Loss Recovery Firms, You Need To Be Careful And Notice Some Warning Signs Beforehand. Aggressive Unexpected calls, asking advance fee, self-praise online and elsewhere all these are characteristics of such a firm" }, { "docid": "391861", "title": "", "text": "Asset Allocation serves many purposes, not just mitigating risk via a diversification of asset classes, but also allowing you to take a level of risk that is appropriate for a given investor at a given time by how much is allocated to which asset classes. A younger investor with a longer timeframe, may wish to take a lot more risk, investing heavily in equities, and perhaps managed funds that are of the 'aggressive growth' variety, seeking better than market returns. Someone a little older may wish to pull back a bit, especially after a bull market has brought them substantial gains, and begin to 'take money off the table' perhaps by starting to establish some fixed income positions, or pulling back to slightly less risky index, 'value' or 'balanced' funds. An investor who is near or in retirement will generally want even less risk, going to a much more balanced approach with half or more of their investments in fixed income, and the remainder often in income producing 'blue chip' type stocks, or 'income funds'. This allows them to protect a good amount of their wealth from potential loss at a time when they have to be able to depend on it for a majority of their income. An institution such as Yale has very different concerns, and may always be in a more aggressive 'long term' mode since 'retirement' is not a factor for them. They are willing to invest mostly in very aggressive ways, using diversification to protect them from one of those choices 'tanking' but still overall taking a pretty high level of risk, much more so than might be appropriate for an individual who will generally need to seek safety and to preserve gains as they get older. For example look at the PDF that @JLDugger linked, and observe the overall risk level that Yale is taking, and in addition observe the large allocations they make to things like private equity with a 27%+ risk level compared to their very small amount of fixed income with a 10% risk level. Yale has a very long time horizon and invests in a way that is atypical of the needs and concerns of an individual investor. They also have as you pointed out, the economy of scale (with something like #17B in assets?) to afford to hire proven experts, and their own internal PHD level experts to watch over the whole thing, all of which very few individual investors have. For either class of investor, diversification, is a means to mitigate risk by not having all your eggs in one basket. Via having multiple different investments (such as picking multiple individual stocks, or aggressive funds with different approaches, or just an index fund to get multiple stocks) you are protected from being wiped out as might happen if a single choice might fail. For example imagine what would have happened if you had in 2005 put all your money into a single stock with a company that had been showing record profits such as Lehman Brothers, and left it there until 2008 when the stock tanked. or even faster collapses such as Enron, etc that all 'looked great' up until shortly after they failed utterly. Being allocated across multiple asset classes provides some diversification all on it's own, but you can also be diversified within a class. Yale uses the diversification across several asset classes to have lower risk than being invested in a single asset class such as private equity. But their allocation places much more of their funds in high risk classes and much less of their funds in the lowest risk classes such as fixed income." }, { "docid": "582507", "title": "", "text": "\"What you are saying is a very valid concern. After the flash crash many institutions in the US replaced \"\"true market orders\"\" (where tag 40=1 and has no price) with deep in the money limit orders under the hood, after the CFTC-SEC joint advisory commission raised concerns about the use of market orders in the case of large HFT traders, and concerns on the lack of liquidity that caused market orders that found no limit orders to execute on the other side of the trade, driving the prices of blue chip stocks into the pennies. We also applaud the CFTC requesting comment regarding whether it is appropriate to restrict large order execution design that results in disruptive trading. In particular, we believe there are questions whether it is ever appropriate to permit large order algorithms that employ unlimited use of market orders or that permit executions at prices which are a dramatic percentage below the present market price without a pause for human review So although you still see a market order on the front end, it is transformed to a very aggressive limit in the back end. However, doing this change manually, by selling at price 0 or buying at 9999 may backfire since it may trigger fat finger checks and prevent your order from reaching the market. For example BATS Exchange rejects orders that are priced too aggressively and don't comply with the range of valid prices. If you want your trade to execute right now and you are willing to take slippage in order to get fast execution, sending a market order is still the best alternative.\"" }, { "docid": "333265", "title": "", "text": "Common financial advice is just that - it is common and general in nature and not specific for your financial needs, your goals and your risk tolerance. Regarding the possibility of a US market not going anywhere over a long period of time, well it is not a possibility, it has happened. See chart below: It took 13 years for the S&P 500 to break through 1550, a level first reached in March 2000, tested in October 2007 (just before the GFC) and finally broken through in March 2013. If you had bought in early 2000 you would still be behind when you take inflation into account. If you took the strategy of dollar cost averaging and bought the same dollar value (say $10,000) of the index every six months (beginning of each January and each July) starting from the start of 2000 and bought your last portion in January 2013, you would have a return of about 35% over 13.5 years (or an average of 2.6% per year). Now lets look at the same chart below, but this time add some trend lines. If we instead bought whenever the price crossed above the downtrend-line and sold whenever the price crossed below the uptrend-line (with the first purchase at the start of January 2000), we would have a return of 93% over the 13.5 years (or an average of 6.9% per year). Another more aggressive option (but manageable if you incorporate a risk management strategy) is to buy long when the price crosses the downtrend-line and sell your existing long position and sell short when the price drops below the uptrend-line. That is profiting both up-trending and down-trending markets. Again we start our buying at the start of January 2000. By shorting the index when the market is in a down-trend you could increase the above returns of 93% by another 54%, for a total return of 147% over 13.5 years (or an average of 10.9% per year). To conclude, using a simple long term strategy to time the markets may result in considerably higher returns than dollar cost averaging over the medium to long term, and I know which strategy would help me sleep better at night." }, { "docid": "346531", "title": "", "text": "&gt;Amazon is always going to be pointless for screws and nails because you can't ship that economically. You can't do items like lumber, sheet rock, or concrete due to weight. You can never ship large items due to size. Amazon appears to be aggressively buying retailers that have physical presence in many communities. I would not put it past them to begin buying building supply companies that specialize in delivery of bulk building materials." }, { "docid": "406876", "title": "", "text": "I can't agree more. If you have unique IP and know-how you can very well be a single successful proprietorship. That said you can even be more successful, if you can grow beyond that. The reality is that you have to be an exceptional salesperson, if you want to grow a pure commoditized services business. Otherwise you just keep on adding overhead and there is very little left over for you. Unless of course you make your money off the back of your employees." }, { "docid": "101902", "title": "", "text": "Assuming you max-out your Roth IRA with $5000 in inflation-adjusted contributions every year from 25-65, your balance at age 65 will depend on the post-inflation return you get in the account. Assuming you withdraw 4% per year after that, here is what your income will be: (All numbers are in inflation-adjusted 2011 dollars.) If your post-inflation return is zero - if you buy treasury bonds, money-market accounts, or something like that - you'll have a simple $5000 * 40 = $200,000, which will give you an income of around $8000 per year. If you get a 3% post-inflation return - e.g. fairly safe Muni bonds, corporate bonds, and boring stocks - you'll approximately double your money to around $393,000, giving you an income of over $15,000 per year. If you get a 6% return - e.g. more aggressive stocks and more risk-taking - you'll approximately double your money again to over $825,000. A 4% withdrawal rate will give you an income of around $33,000 per year. Stocks have historically returned around inflation + 8% - that will get you over $1.4 million - and an annual income of over $56,000 per year. So, yes, it is feasible to retire on nothing but a maxed-out Roth IRA." }, { "docid": "199237", "title": "", "text": "\"This is basically what financial advisers have been saying for years...that you should invest in higher risk securities when you are young and lower risk securities when you get older. However, despite the fact that this is taken as truth by so many financial professionals, financial economists have been unable to formulate a coherent theory that supports it. By changing the preferences of their theoretical investors, they can get solutions like putting all your investments in a super safe asset until you get to a minimum survival level for retirement and then investing aggressively and many other solutions. But for none of the typically assumed preferences does investing aggressively when young and becoming more conservative as you near retirement seem to be the solution. I'm not saying there can be no such preferences, but the difficulty in finding them makes me think maybe this idea is not actually correct. Couple of problems with your intuition that you should think about: It's not clear that things \"\"average out\"\" over time. If you lose a bunch of money in some asset, there's no reason to think that by holding that asset for a while you will make back what you lost--prices are not cyclical. Moreover, doesn't your intuition implicitly suggest that you should transition out of risky securities as you get older...perhaps after having lost money? You can invest in safe assets (or even better, the tangency portfolio from your graph) and then lever up if you do want higher risk/return. You don't need to change your allocation to risky assets (and it is suboptimal to do so--you want to move along the CAL, not the curve). The riskiness of your portfolio should generally coincide (negatively) with your risk-aversion. When you are older and more certain about your life expectancy and your assets, are you exposed to more or less risks? In many cases, less risks. This means you would choose a more risky portfolio (because you are more sure you will have enough to live on until death even if your portfolio takes a dive). Your actual portfolio consists both of your investments and your human capital (the present value of your time and skills). When you are young, the value of this capital changes significantly with market performance so you already have background risk. Buying risky securities adds to that risk. When you are old, your human capital is worth little, so your overall portfolio becomes less risky. You might want to compensate by increasing the risk of your investments. EDIT: Note that this point may depend on how risky your human capital is (how likely it is that your wage or job prospects will change with the economy). Overall the answer to your question is not definitively known, but there is theoretical evidence that investing in risky securities when young isn't optimal. Having said that, most people do seem to invest in riskier securities when young and safer when they are older. I suspect this is because with life experience people become less optimistic as they get older, not because it is optimal to do so. But I can't be sure.\"" }, { "docid": "250644", "title": "", "text": "\"But if we raise the price of the juicer to something rediculous, it will seem like a \"\"premium\"\" product, and if we lock our customers into buying their juice from us only, and auto expire the fruit on an aggressive schedule we'll make a ton of money. It's the hottest trend right now. We can slap that model on anything and it's guaranteed to make us money, just like it says in this $80k Power Point deck. Open source fruit is a thing of the past folks. Squeezing fruit by hand is for plebians and suckers.\"" }, { "docid": "218293", "title": "", "text": "Terminology aside. Your gains for this year in a mutual fund do seem low. These are things that can be quickly, and precisely answered through a conversation with your broker. You can request info on the performance of the fund you are invested in from the broker. They are required to disclose this information to you. They can give you the performance of the fund overall, as well as break down for you the specific stocks and bonds that make up the fund, and how they are performing. Talk about what kind of fund it is. If your projected retirement date is far in the future your fund should probably be on the aggressive side. Ask what the historic average is for the fund you're in. Ask about more aggressive funds, or less if you prefer a lower average but more stable performance. Your broker should be able to adequately, and in most cases accurately, set your expectation. Also ask about fees. Good brokerages charge reasonable fees, that are typically based on the gains the fund makes, not your total investment. Make sure you understand what you are paying. Even without knowing the management fees, your growth this year should be of concern. It is exceptionally low, in a year that showed good gains in many market sectors. Speak with your broker and decide if you will stick with this fund or have your IRA invest in a different fund. Finally JW8 makes a great point, in that your fund may perform well or poorly over any given short term, but long term your average should fall within the expected range for the type of fund you're invested in (though, not guaranteed). MOST importantly, actually talk to your broker. Get real answers, since they are as easy to come by as posting on stack." } ]

[ { "docid": "40966", "title": "", "text": "It took me a while to understand the concept, so I'll break it down as best as I can. There are three parts to the accounting equation: Assets = Liabilities + Owner's Equity We'll look at this in two ways 1. As a business owner you invest (say) 10,000 USD into your bank. The entry would be: Debit: Assets: Cash for 10,000 Credit: Owner's Equity: Contributions for 10,000 In this case, you have assets of 10,000 from your deposit, but it is due to owner contributions and not business transactions. Another example (say a sale): Debit: Assets: Cash for 10,000 Credit: Owner's Equity: Sales for 10,000 Debit: Assets: Cash for 10,000 Credit: Liabilities: Deposits for 10,000 Deposits are a banking term to reflect a bank's obligation to return the amount on demand (though the bank has free reign with it, see fractional banking) You will NEVER debit or credit your bank as it is assumed you will be storing your money there, note bank reconciliation. Hope this helps, comment with any more questions." } ]

[ { "docid": "513477", "title": "", "text": "Here's a simple answer: If your debit card has a visa or mc logo, it can be used as a 'credit card'. In order to do so, you shouldn't enter the pin, instead choose 'credit' and sign for it. Unlike a credit card, you can't spend money you don't have but like a credit card, your purchase is protected by the credit card company (visa/mc) and gives you privileges like zero fraud liability and purchase disputes. http://www.moneycone.com/should-you-sign-for-a-debit-card-purchase-or-use-your-pin/" }, { "docid": "6113", "title": "", "text": "I'm surprised by all the pro-credit answers here, debit has some definite advantages. Most importantly, when you pay with a credit card, the merchant pays around 3% of the transaction to the credit company. In many states, they are forced to charge you the same amount, and this is frequently toted as ''consumer protection''. But consider what this means for the business: they loose money for every credit transaction, and they're legally forbidden to do anything about it. So you're taking 3% from a business and handing it over to a massive cooperation. To make matters worse, the buisness is inevitably going to have to raise their prices (albiet by a small amount), so in the end the average consumer has gained nothing. On the other hand, the credit card company wins big, and they use their profits to pay lobbyists and lawyers to keep these rules in place. To put in the worst possible light, it's essentially legal extortion, verging on corruption. As for the fraud protection offered, while it may be true that credit cards will offer a more hassle-free reimbursement (i.e. you just don't have to pay the bill) if your card is stolen, consumer protection laws also extend to debit: in many cases your bank is legally required to cut you a check for all the money you lost." }, { "docid": "414932", "title": "", "text": "As other answers and comments suggest you are trying to do something... odd to say the least. No one wants to use a credit card to finance a checking/current account because you are creating a debt on that credit card (unless you are in the odd situation where the card is in credit) that will immediately start accruing interest at a rate probably in excess of 10% per annum. That is not a clever thing to do. What you really need to do is find an account that one of you owns that has a positive balance and use an internet banking service to transfer part of that positive balance onto the debit card. The other solution is not to use the debit card at all but use the credit card to complete the purchases you are trying to manage with the debit card. The reason that BofA and AmEx customer support can't help you is that no one would ever do what you want to do; they would either move existing money from another account or ask for a bank loan." }, { "docid": "443609", "title": "", "text": "\"In short you have to wait till the hold expires. If its one week, its great. Few years back it was one Month. It is advisable you use a Credit Card for these type of transactions. With Credit Cards you are not out of funds like in Debit Cards. Plus the reversals are as much as I know automatic. In case of Debit Cards, the Holds are not automatically released on cancelled transactions but released only after expiry. Where as in Credit Cards, the holds are released immediately on cancelled transactions. \"\"Does the hold reserve it for them or for the original transaction?\"\" Yes hold is for that specific transaction from that specific merchant. i.e. if you try and book the same item from the same merchant, you will not be able to as you have money blocked. Although the merchant sends an unblock message when cancelling, on Debit cards these messages are not supported in India\"" }, { "docid": "264631", "title": "", "text": "\"Transferring the balance of a credit card is what they call moving your debt from one credit card to another credit card or loan. A debit card, however, is not debt. It is a card that is tied to a checking account with money in it. You can't transfer debt to your checking account. If you have enough money in your checking account to cover the balance of your credit card, you can pay it off. That is a really good thing to do, because the balance on your credit card is costing you a lot in interest charges each month. Were you perhaps thinking of \"\"transferring a balance\"\" from your debit card's checking account to a new credit card, where you would then have a new debt on the credit card, and extra cash in your debit card's checking account? This is possible with most credit cards, and is usually called a cash advance. However, just to caution you, cash advances typically have high interest rates. Often you will see promotions where they will offer low (or no) interest rate for a short time, but this is just a trick to entice you to borrow extra, knowing that if you need the money now, you'll most likely still need it in 6 months when the promotion expires. I don't recommend it.\"" }, { "docid": "585661", "title": "", "text": "\"Yes, merchants may charge a fee for using a credit card. For a credit card transaction, interchange fees flow from the merchant to the card issuer. This is why Australians are seeing a boom in \"\"Debit\"\" MasterCard/VISA cards - the issuing banks make income when you select \"\"Credit\"\". These costs can be passed from the merchant to the customer as a \"\"Credit Card Fee\"\". For an EFTPOS transaction, the interchange flows the other way, from the card issuer to the acquiring bank (The merchant's bank). As an aside, the setup of these fees is why some large supermarket chains in Australia restrict you from selecting \"\"Credit\"\" with a scheme debit card (MasterCard and VISA are 'schemes'). They are 'acquirers' in the payments networks and they make interchange fees when you hit \"\"Savings\"\" and pay if you hit \"\"Credit\"\" - therefore where you can hit either \"\"Credit\"\" or \"\"Savings\"\" they prefer (and may force) you to press \"\"Savings\"\".\"" }, { "docid": "78086", "title": "", "text": "Whether your card will work, I believe, depends on the institution that issued it. You'll just have to try. What I can tell you, is that the process of using a debit card or credit card in the US is fairly straight forward. If your card has a chip, you'll 'insert' your card, chip end first, into the bottom slot of the reader, assuming the reader has one. This technology is still being distributed / accepted, so you may encounter some areas where they don't have this, or they have an insert or sign that says something along the lines of 'No chip reader / swipe instead'. If your card doesn't have a chip, which looks like the bottom end of a cellular phone's SIM card, you just swipe your card in the reader. There will / may be on-screen prompts, which will explain any additional input necessary from you. Depending on how they 'process' your card - As a debit card or credit card (They can 'process' a debit card as if it's a standard credit card), you may or may not be asked to enter your debit card's PIN. If they process it as debit, you'll have to enter your PIN. If they process it as if it were a credit card, it will still go through but you'll be asked to sign the receipt. IMPORTANT FOR YOU TO NOTE: You need to find out whether your card issuer will charge you foreign transaction fees when you use your Indian debit card in the US. Is the card carrying a different currency than the US?" }, { "docid": "2018", "title": "", "text": "\"As i see it, with a debit card, they are taken kinda out of the game. They are not lending money, it seems really bad for them. Not exactly. It is true that they're not lending money, but they charge a hefty commission from the retailers for each swipe which is pure profit with almost no risk. One of the proposals considered (or maybe approved already, don't know) in Congress is to cap that hefty commission, which will really make the debit cards merely a service for the checking account holder, rather than a profit maker for the bank. On the other hand, it's definitely good for individuals. I disagree with that. Debit cards are easier to use than checks, but they provide much less protection than credit cards. Here's what I had to say on this a while ago, and seems like the community agrees. But, why do we really need a credit history to buy some of the more expensive stuff Because the system is broken. It rewards people in debt by giving them more opportunities to get into even more debts, while people who owe nothing to noone cannot get a credit when they do need one. With the current system the potential creditor can only asses the risk of someone who has debt already, they have no way of assessing risks of someone with no debts. To me, all this credit card system seems like an awfully nice way to make loads of money, backed by governments as well. Well, credit cards have nothing to do with it. It's the credit scores system that is broken. If we replace the \"\"card\"\" with \"\"score\"\" in your question - then yes, you're thinking correctly. That of course is true for the US, in other countries I have no knowledge on how the creditors assess the risks.\"" }, { "docid": "388874", "title": "", "text": "There are four sides to this transaction. You increase in money: A debit. (increases your Current Assets, if you will) You also gain the requirement to pay that money in the future. A credit: Definitely a Liability. When you repay the money, your cash will decrease: a credit, and your liabilities will also decrease, which is a debit (since you don't have to repay the money anymore). the account would be short-term loans, the money doesn't have a name, it's just cash and would go into whatever cash accounts you have. The bookkeeping entry would be the same as you would make for any short-term loan." }, { "docid": "165995", "title": "", "text": "If it is one of those debit cards you use just like a credit card without a PIN, I'd cancel it regardless of whatever you are trying to do with your finances. They just seem too dangerous to me. Unlike a credit card, if someone makes fraudulent purchases on a debit card the money is gone from your bank account until you resolve the issue with the issue. With a credit card, the BANK is out the money until it gets worked out. My brother once had his credit card number (not the card) stolen and the criminals emptied his bank account. Eventually the bank put the money back after an investigation, but it had two really nasty side effects: 1) Dozens of checks bounced. The bank refunded the bounced check fees, but not all of the stores would. 2) He had no money in his account until it was resolved. Luckily in his case they resolved it in a few days, but he was already making preparations to borrow money to pay his rent/bills." }, { "docid": "102746", "title": "", "text": "Deposit on a Debit Card have a different effect, and many people don't understand it (and make a big stink), or cannot afford it (or both). Either of it results in lots of trouble for the business: In addition, having a credit card showes that some bank trusts the customer with an unsecured credit of this height, which is some reassurance for the business. A debit card proves only that he was able to get a checking account, which needs much less liquidity and stability." }, { "docid": "479985", "title": "", "text": "Not sure I understand your question. If you're talking about paying off the payable, you decrease the liability and decrease an asset. Aka when you actually pay the wages, decrease cash and decrease wages payable. If you're talking about closing expense accounts, you simply credit the expense to zero and debit retained earnings for the same amount (which will reduce RE since RE is equity and has a normal credit balance). If you're talking about accruing revenue, you simply do the opposite of an expense. If revenue is accrued, then you credit a revenue account (increase it) and increase cash or acc receivable. If you're closing a revenue account, you debit the account to zero and credit Retained Earnings or Income Summary (which eventually gets closed into RE anyways). The sum of these revenues and expenses will leave you either with a debit or credit balance in RE. A credit balance means you have a profit and a debit balance means you have a loss. Other expenses like sales tax and other expenses excluding COGS might also be taken directly from RE or identified at the time of sale and held in its own separate account. But I'm not sure if this will answer your question since I'm not sure what you're asking." }, { "docid": "533933", "title": "", "text": "My view is from the Netherlands, a EU country. Con: Credit cards are more risky. If someone finds your card, they can use it for online purchases without knowing any PIN, just by entering the card number, expiration date, and security code on the back. Worse, sometimes that information is stored in databases, and those get stolen by hackers! Also, you can have agreed to do periodic payments on some website and forgot about them, stopped using the service, and be surprised about the charge later. Debit cards usually need some kind of device that requires your PIN to do online payments (the ones I have in the Netherlands do, anyway), and automated periodic payments are authorized at your bank where you can get an overview of the currently active ones. Con: Banks get a percentage of each credit card payment. Unlike debit cards where companies usually pay a tiny fixed fee for each transaction (of, say, half a cent), credit card payments usually cost them a percentage and it comes to much more, a significant part of the profit margin. I feel this is just wrong. Con: automatic monthly payment can come at an unexpected moment With debit cards, the amount is withdrawn immediately and if the money isn't there, you get an error message allowing you to pay some other way (credit card after all, other bank account, cash, etc). When a recent monthly payment from my credit card was due to be charged from my bank account recently, someone else had been paid from it earlier that day and the money wasn't there. So I had to pay interest, on something I bought weeks ago... Pro: Credit cards apparently have some kind of insurance. I've never used this and don't know how it works, but apparently you can get your money back easily after fraudulent charges. Pro: Credit cards can be more easily used internationally for online purchases I don't know how it is with Visa or MC-issued debit cards, but many US sites accept only cards that have number/expiration date/security code and thus my normal bank account debit card isn't useable. Conclusion: definitely have one, but only use it when absolutely necessary." }, { "docid": "338701", "title": "", "text": "I'm not familiar with Gnucash, but I can discuss double-entry bookkeeping in general. I think the typical solution to something like this is to create an Asset account for what this other person owes you. This represents the money that he owes you. It's an Accounts Receivable. Method 1: Do you have/need separate accounts for each company that you are paying for this person? Do you need to record where the money is going? If not, then all you need is: When you pay a bill, you credit (subtract from) Checking and debit (add to) Friend Account. When he pays you, you credit (subtract from) Friend Account and debit (add to) Checking. That is, when you pay a bill for your friend you are turning one asset, cash, into a different kind of asset, receivable. When he pays you, you are doing the reverse. There's no need to create a new account each time you pay a bill. Just keep a rolling balance on this My Friend account. It's like a credit card: you don't get a new card each time you make a purchase, you just add to the balance. When you make a payment, you subtract from the balance. Method 2: If you need to record where the money is going, then you'd have to create accounts for each of the companies that you pay bills to. These would be Expense accounts. Then you'd need to create two accounts for your friend: An Asset account for the money he owes you, and an Income account for the stream of money coming in. So when you pay a bill, you'd credit Checking, debit My Friend Owes Me, credit the company expense account, and debit the Money from My Friend income account. When he repays you, you'd credit My Friend Owes Me and debit Checking. You don't change the income or expense accounts. Method 3: You could enter bills when they're received as a liability and then eliminate the liability when you pay them. This is probably more work than you want to go to." }, { "docid": "568625", "title": "", "text": "When you borrow money - you create a liability to yourself (you credit your Liabilities:Loans account and debit your Asset:Bank account). When you lend money - you create an asset to yourself (you debit your Asset:Loan account and credit your Asset:Bank account)." }, { "docid": "219181", "title": "", "text": "Because even if you won the lottery, without at least some credit history you will have trouble renting cars and hotel rooms. I learned about the importance, and limitations of credit history when, in the 90's, I switched from using credit cards to doing everything with a debit card and checks purely for convenience. Eventually, my unused credit cards were not renewed. At that point in my life I had saved a lot and had high liquidity. I even bought new autos every 5 years with cash. Then, last decade, I found it increasingly hard to rent cars and sometimes even a hotel rooms with a debit card even though I would say they could precharge whatever they thought necessary to cover any expenses I might run. I started investigating why and found out that hotels and car rentals saw having a credit card as a proxy for low risk that you would damage the car or hotel room and not pay. So then I researched credit cards, credit reports, and how they worked. They have nothing about any savings, investments, or bank accounts you have. I had no idea this was the case. And, since I hadn't had cards or bought anything on credit in over 10 years there were no records in my credit files. Old, closed accounts had fallen off after 10 years. So, I opened a couple of secured credit cards with the highest security deposit allowed. They unsecured after a year or so. Then, I added several rewards cards. I use them instead of a debit card and always pay in full and they provide some cash back so I save money compared to just using a debit card. After 4 years my credit score has gone to 800+ even though I have never carried any debt and use the cards as if they were debit cards. I was very foolish to have stopped using credit cards 20 years ago but just had no idea of the importance of an established credit history. And note that establishing a great credit history does not require that you borrow money or take out loans for anything. just get credit cards and pay them in full each month." }, { "docid": "3789", "title": "", "text": "Based on the definitions I found on Investopedia, it depends on whether or not it is going against an asset or a liability. I am not sure what type of accounting you are performing, but I know in my personal day-to-day dealings credits are money coming into my account and debits are money going out of my account. Definition: Credit, Definition: Debit" }, { "docid": "576269", "title": "", "text": "Unfortunately not. Even if the credit card balance is positive (i.e. customer has overpaid the credit card account), you cannot withdraw cash (for free) - as any cash withdrawal is subject to 12.9% interest - even if repaid in full at the end of the month! The clarity credit card is one of the best cards for overseas spending, as its load free (no fees for purchases abroad) and it gives near perfect exchange rates. If your balance is positive, you start at £0, then fund that credit card account from your bank account £500. You can then spend on your credit card, and when your next bill is due at the end of the month - they will use that extra £500 sitting in your account first, and ask for the remainder from you. i.e. scenario1: scenario 2: It is better in my opinion, to set up a direct debit to always clear out the full amount on your credit card. That way, you have cash in your bank account for emergencies (getting £500 back from a credit card will take a few days to process as opposed to having the ability to withdraw cash from the cashpoint 24/7). And once the direct debit is paid automatically at the end of the month, there are no fees - voila your credit card is almost like a debit card, spend on it when you like, it gets paid automatically, no hassle, no worries. This approach does take a careful mindset though, as you need to know your credit limits and also you need to ensure your bank account has enough to pay off the direct debit at the end of the month. Otherwise those darn fees will get you (and hurt your credit rating). For cash spending, you will want to either take cash with you (check online here for best rates & get the money well in advance to avoid fees). Also in some countries the exchange rate is better there, than in the UK, google will help you here. If you dont like the idea of carrying large sums of cash with you can use a prepaid card like CaxtonFX, which is one of the better ones out there. The other well known ones are FairFX and Travelex Cash Passport." }, { "docid": "183839", "title": "", "text": "\"Until the CARD act, credit card rules required that merchants had no minimum purchase requirement to use a card. New rules permit a minimum but it must be clearly posted. Update - Stores can now refuse small credit card charges is an excellent article which clarifies the rules. It appears that these rules apply to credit, not debit cards. So to be clear - the minimum do not apply to the OP as he referenced using a debit card. \"\"Superiority\"\"? Hm. I'd be a bit embarrassed to charge such small amounts. Although when cash in my wallet is very low, I may have little choice. Note, and disclaimer, I am 48, 30 years ago when I started using cards, there were no POS machines. Credit card transactions had a big device that got a card imprint and the merchant looked up to see if your card was stolen in a big book they got weekly/monthly. Times have changed, and debit cards may be faster, especially if with cash you give the cashier $5.37 for a $2.37 transaction, but the guy entered $5 already. This often takes a manager to clear up.\"" } ]

[ { "docid": "563025", "title": "", "text": "In view of business, we have to book the entries. Business view, owner and business are different. When capital is invested in business by owner, in future business has to repay it. That's why, capital always credit. When we come about bank (business prospective) - cash, bank, fd are like assets which can help in the business. Bank is current asset (Real account) - Debit (what comes into the business) Credit (what goes out of the business) Hence credit and debit differs from what type of account is it.... credit - when business liables debit - what business has and receivables" } ]

[ { "docid": "84036", "title": "", "text": "\"Ditto Nate Eldredge in many ways, but let me add some other thoughts. BTW there are not four types of account, but five. You're forgetting equity, also called capital. Would it be possible to design an accounting system that does not have 5 types of accounts, maybe is simpler in other ways, and is internally consistent and logical? I'm sure it is. But what's the advantage? As Nate points out, the existing system has been in use for hundreds of years. Lots of people know how it works and understand it. I'd add: People have long since worked out how to deal with all the common situations and 99% of the odd cases you're likely to hit. If you invent your own system, you're starting from scratch. You'd have to come up with conventions to handle all sorts of situations. How do I record buying a consumable with cash? How do I record buying a capital asset with credit? How do I record paying off debts? How do I record depreciation? Etc etc. If you worked at it long and hard enough and you're a reasonably bright guy, maybe you could come up with solutions to all the problems. But why? If you were approaching this saying, \"\"I see these flaws in the way accounting is done today. I have an idea for a new, better way to do accounting\"\", I'd say good luck, you have a lot of work ahead of you working out all the details to make a fully functioning system, and then persuading others to use it, but if you really do have a better idea, maybe you can revolutionize the world of accounting. But, \"\"The present system is too much trouble and I don't want to bother to learn it\"\" ... I think that's a mistake. The work involved in inventing your own system is going to end up being way more than what it would take to learn the existing system. As to, Aren't liabilities a lot like assets? Well, in a sense I suppose. A credit card is like a checking account in that you can use it to pay for things. But they're very different, too. From an accounting point of view, with a checking account you buy something and then the money is gone, so there's one transaction: reduce cash and increase office supplies or whatever. But with a credit card there has to be a second transaction, when you pay off the charge: So, step 1, increase debt and increase office supplies; step 2, decrease debt and decrease cash. Credit cards charge interest, well you don't pay interest to use your own cash. Etc. One of the beauties of double-entry book-keeping is that every transaction involves a debit and a credit of equal amounts (or a set of debits and credits where the total of the debits equals the total of the credits). If you combine assets and liabilities into, whatever you call it, \"\"balance accounts\"\" say, then some transactions would involve a matching debit and credit while others would involve a positive debit and a matching negative debit and no credit. I'm sure you could make such a system work, but one of the neat built-in protections against error is lost. There's a very logical distinction between things that you have or that others owe you, and things that you owe to others. It makes a lot of sense to want to list them separately and manage them separately. I think you'd pretty quickly find yourself saying, \"\"well, we have two types of balance accounts, those that represent things we have and which normally have positive balances, which we list on chart A, and those that represent things we owe and which normally have negative balances, which we list on chart B\"\". And before you know it you've just reinvented assets and liabilities.\"" }, { "docid": "140809", "title": "", "text": "\"First of all, this does not sound like a debit situation. Every debit has to be authorized by the entry of a pin code. So, the hotel could not have arbitrarily created a new debit charge. Usually, hotel charges are credit charges. Once they have your credit card number, they can charge anything they want to the credit card. If it is an accidental double charge, you can call the hotel and ask them to refund $100 or whatever the mistake was plus your overdraft fee. In all probability they will refund any double charge, but not agree to refund the fee. You can also contest the charge and do a \"\"chargeback\"\" of the amount which was double charged. You will probably not be able to collect the overdraft fee that you got from the hotel unless you sue them in small claims court, or you luck out and the hotel agrees to refund the fee as well.\"" }, { "docid": "773", "title": "", "text": "For the US government, they've just credited Person B with a Million USD and haven't gained anything (afterall, those digits are intangible and don't really have a value, IMO). Two flaws in this reasoning: The US government didn't do anything. The receiving bank credited the recipient. If the digits are intangible, such that they haven't gained anything, they haven't lost anything either. In practice, the role of governments in the transfer is purely supervisory. The sending bank debits the sender's account and the receiving bank credits the recipient's account. Every intermediary makes some money on this transaction because the cost to the sender exceeds the credit to the recipient. The sending bank typically receives a credit to their account at a correspondent bank. The receiving bank typically receives a debit from their account at a correspondent bank. If a bank sends lots of money, eventually its account at its correspondent will run dry. If a bank receives lots of money, eventually its account at its correspondent will have too much money. This is resolved with domestic payments, sometimes handled by governmental or quasi-governmental agencies. In the US, banks have an account with the federal reserve and adjust balances there. The international component is handled by the correspondent bank(s). They also internally will credit and debit. If they get an imbalance between two currencies they can't easily correct, they will have to sell one currency to buy the other. Fortunately, worldwide currency exchange is extremely efficient." }, { "docid": "102002", "title": "", "text": "Is it normal in QuickBooks to have credit card expenses being shows as liabilities? Is there a way I can correct this? If they are expenses they shouldn't be negative liabilities unless you overpaid your credit card by that amount. It sounds like perhaps when you linked the account the credit/debit mapping may have been mixed up. I've not used QB Online, but it looks like you might have to un-link the account, move all the existing transactions to 'excluded' and then link the account again and flip-flop the debit/credit mapping from what it is now. Hopefully there's an easier way. This QB community thread seems to address the same issue." }, { "docid": "121063", "title": "", "text": "Credit cards are a golden goose for banks, as they get to issue high-interest loans and simultaneously generate alot of fee income. Debit cards aren't quite as good, but they still generate substantial fee income -- ~2% of every credit/non-PIN debit transaction goes to the bank and credit card network. Credit histories exist because they are the most effective tool available to predict whether you will pay back your loans or not. You don't need a credit history to buy most things, you need a credit history to get a large loan. Think of it from perspective of a lender: Credit scoring is the bank's way screening out people who are expensive to do business with. It's objective, doesn't discriminate on the basis of race, sex or other factors, and you have recourse if the rating agencies have incorrect information." }, { "docid": "30090", "title": "", "text": "There are several reasons why credit cards are popular in the US: On the other hand, debit cards do not have any of these going for them. A debit card doesn't make much money for the bank unless you overdraw or something, so banks don't have incentive to push you to use them as much. As a result they don't offer rewards other benefits. Some people say the ability to spend more than you have is a downside of a credit card. But it's really an upside. The behavior of doing that when it isn't needed is bad, but that's not the card's fault, it's the users'. You can get a credit card with a very small limit if this is an issue for you. The question I find interesting is why debit cards are more popular in your home country. I can't think of any advantage they offer besides free cash back. But most people in the US don't use cash much either. I have to think in your home country the banks have a different revenue model or perhaps your country isn't as eager to offer tons of easy credit to everyone as the US is." }, { "docid": "18832", "title": "", "text": "\"Just to add about using debit card as \"\"credit\"\" vs \"\"debit\"\" way: In addition to the difference of having to enter the PIN when using \"\"debit\"\" mode (vs having to sign in \"\"credit\"\" mode), for stores that offer cash back (i.e. get cash out of your account at the same time as paying), you can only get cash back when using \"\"debit\"\" mode.\"" }, { "docid": "444590", "title": "", "text": "I was hoping to comment on the original question, but it looks to me like the asker lives in the EU, where credit cards are a lot less common and a lot of the arguments (car rental, building up of credit etc) brought forward by people living in the US just don't apply. In fact especially airlines (and other merchants) will charge you extra when using a credit card instead of a debit card and this can add up fairly quickly. I hold a credit card purely for travelling outside the EU and occasionally I will travel for work and make my own arrangements, then it can come in handy as I am able to reclaim my expenses before I have to pay my credit card bill (in this case I will also claim the extra credit card fees from my employer). This however is for my personal convenience and not strictly necessary. (I could fill out a bunch of paperwork and claim the costs from my employer as an advance.) In the EU I find that if my VISA debit card will not work in a shop, neither will my credit card, so on that note it's pretty pointless. So to answer the asker question: If you live (and travel) in the EU you don't need a credit card, ever. If you travel to the US, it would be advantageous to get one. Occasionally banks will offer you a credit card for free and there's no harm in taking it (apart from the fact that you have one more card to keep track off), but if you do, set up a direct debit to pay it off automatically. And as other people have said: Don't spend money you don't have. If you are not absolutely sure you can't do this, don't get a credit card." }, { "docid": "217629", "title": "", "text": "\"I'm not sure if this is your point of confusion, but when an account is said to be debited (or credited), the words \"\"debited\"\" or \"\"credited\"\" are not referring to a type of account (such as \"\"checking\"\"). They are referring to an operation that is performed on an account. The same account can be credited at one time and debited at another time.\"" }, { "docid": "375170", "title": "", "text": "A few reasons make sense: They have a defined process for rentals, risk assessment, and customer credit. Especially for a large corporation, making changes to that process is not trivial, adds risk/uncertainty, and will be costly. Such changes for a relatively small customer base might not makes sense. Many rental companies DO allow you to rent with a debit card. Why do some businesses take cash only? With a debit card, there is no third party guarantee. With a credit card, the cash is coming from a well-established third party who will pay (assuming no disputes) and has a well-established history of paying. Even if the merchant holds your account, it is still your cash under the control of you and your bank until the deposit clears the merchants bank. It is not surprising they view that as more risk and potentially not worth hassling with debit." }, { "docid": "557870", "title": "", "text": "\"A credit card is a way to borrow money. That's all. Sometimes the loans are very small - $5 - and sometimes they are larger. You can have a credit card with a company (bank or whatever) that you have no other relationship with. They're not a property of a bank account, they are their own thing. The card you describe sounds exactly like a debit card here, and you can treat your Canadian debit card like your French credit card - you pay for things directly from your bank account, assuming the money is in there. In Canada, many small stores take debit but not credit, so do be sure to get a debit card and not only a credit card. Now as to your specific concerns. You aren't going to \"\"forget to make a wire.\"\" You're going to get a bill - perhaps a paper one, perhaps an email - and it will say \"\"here is everything you charged on your credit card this month\"\" along with a date, which will be perhaps 21 days from the statement date, not the date you used the card. Pay the entire balance (not just the minimum payment) by that date and you'll pay no interest. The bill date will be a specific date each month (eg the 23rd) so you can set yourself a reminder to check and pay your bill once a month. Building a credit history has value if you want to borrow a larger amount of money to buy a car or a house, or to start a business. Unlike the US, it doesn't really have an impact on things like getting a job. If you use your card for groceries, you use it enough, no worries. In 5 years it is nice to look back and see \"\"never paid late; mostly paid the entire amount each month; never went over limit; never went into collections\"\" and so on. In my experience you can tell they like you because they keep raising your limit without you asking them to. If you want to buy a $2500 item and your credit limit is $1500 you could prepay $1000 onto the credit card and then use it. Or you could tell the vendor you'd rather use your debit card. Or you could pay $1500 on the credit card and then rest with your debit card. Lots of options. In my experience once you get up to that kind of money they'd rather not use a credit card because of the merchant fees they pay.\"" }, { "docid": "388874", "title": "", "text": "There are four sides to this transaction. You increase in money: A debit. (increases your Current Assets, if you will) You also gain the requirement to pay that money in the future. A credit: Definitely a Liability. When you repay the money, your cash will decrease: a credit, and your liabilities will also decrease, which is a debit (since you don't have to repay the money anymore). the account would be short-term loans, the money doesn't have a name, it's just cash and would go into whatever cash accounts you have. The bookkeeping entry would be the same as you would make for any short-term loan." }, { "docid": "77178", "title": "", "text": "\"The bank \"\"credit's\"\" your account for money coming into it. In double entry accounting, you always have a debit and a credit to balance the accounts. As an Example: for $500 that the bank credited to your checking account, you would post a debit to Cash and a Credit to Income Earned. The accounting equation is: Assets = Liabilities + Owner's Equity $500 = $500 Cash is the \"\"Asset\"\" side of the equation, Income is part of Owner's Equity, and so is the Credit side... to make the equation balanced.\"" }, { "docid": "497408", "title": "", "text": "I can't answer the question if you should or shouldn't get a credit card; after all, you seem to manage fine without one (which is good). I started using credit cards when I lived in the UK as the consumer protection you get from a credit card there tends to be better than from a debit card. I'd also treat it as a debit or charge card, ie pay it off in full every month. That way, because you're not carrying a balance the high interest rate doesn't matter and you avoid the trap of digging yourself deeper into the hole each month. Cashback or other perks offered by a credit card can be worth it, but (a) make sure that they're worth more than the yearly fee and (b) that they're perks you're actually using. For that reason, cashback tends to work best. I'd get a VISA or Mastercard, they seem to be the ones that pretty much everybody accepts. Amex can have better perks but tends to be more expensive and isn't accepted everywhere, especially not outside the US. But in the end, do you really need one if you're managing fine without one?" }, { "docid": "347269", "title": "", "text": "\"The term for money owed to you by a company would be a credit balance. Consider, when an item is credited to your account, it's in your favor. Whereas, money you owe to a company may be referred to simply as a balance, or balance owing, or less frequently a debit balance. A related term balance due would be the payment you owe in the current period, i.e. not representative of the entire amount owed. I don't think the terms \"\"positive balance\"\" or \"\"negative balance\"\" are considered idiomatic in business. Rather, accounting terms like debit and credit have taken hold instead – and are often a source of confusion. But I suggest that if you have a negative balance on a credit card, it's a credit balance in your favor. Unless they mix it up.\"" }, { "docid": "456147", "title": "", "text": "It is the people who you bought the ticket from. Blocking is frequently done by hotels, gas stations, or rental car companies. Also, for anything where the credit card might be used to cover any damages or charges you might incur later as part of the transaction. In essence, they are reserving part of your credit limit, ostensibly to cover charges they reasonably expect you might incur. For example, when you start pumping gas using a credit card they may block out $100 to make sure you don't pump a full tank and your credit card is declined because you ran over your limit at $3. In general, the blocks clear fairly quickly after you settle up with the company on your final bill. You can also ask the company to clear the block, but I don't think they are required to by law in any specific time period. It may be up to their (and your) agreement with the credit card company. Normally it isn't an issue and you don't even notice this going on behind the scenes, but if you keep your credit card near its limit, or use a debit card it can lead to nasty surprises (e.g. they can make you overdraw your account). One more reason not to use debit cards. More information is available here on the Federal Trade Commission's website." }, { "docid": "502781", "title": "", "text": "My reason for not using direct debit is #4 on Dheer's list. I just don't know where exactly I'm going to have what balance on what day, because I usually don't leave more than $100-$200 on my checking, all my cash is in Savings. I also don't want to direct debit from Savings in order to not break the 6-withdrawals limit accidentally. I use direct debit to my credit card where its available, but most places charge for that and I don't want to pay the extra fee. So, I prefer to pay my bills manually. What I don't understand is the people who pay the credit card bills when the statement arrives. I haven't received a credit card statement in years. Don't they have on-line access? Can't they set reminders there? If so - throw the card away, and get a normal one. Same with mailing checks, by the way. I'm still not even half done with the free checks I got from Washington Mutual 5 years ago. I almost never write checks. All the bills are paid online, whether through bill-pay service or an ACH transfer." }, { "docid": "183839", "title": "", "text": "\"Until the CARD act, credit card rules required that merchants had no minimum purchase requirement to use a card. New rules permit a minimum but it must be clearly posted. Update - Stores can now refuse small credit card charges is an excellent article which clarifies the rules. It appears that these rules apply to credit, not debit cards. So to be clear - the minimum do not apply to the OP as he referenced using a debit card. \"\"Superiority\"\"? Hm. I'd be a bit embarrassed to charge such small amounts. Although when cash in my wallet is very low, I may have little choice. Note, and disclaimer, I am 48, 30 years ago when I started using cards, there were no POS machines. Credit card transactions had a big device that got a card imprint and the merchant looked up to see if your card was stolen in a big book they got weekly/monthly. Times have changed, and debit cards may be faster, especially if with cash you give the cashier $5.37 for a $2.37 transaction, but the guy entered $5 already. This often takes a manager to clear up.\"" }, { "docid": "38720", "title": "", "text": "A search quickly led to http://www.cardfellow.com/blog/debit-card-credit-card-difference-charges/ which shows the difference in merchant fees charged. A $200 charge costs $3.50-$3.60, a debit charge, $2.34-$2.39 but a PIN Debit, $1.87. The debit cards are a full percent less cost to the merchant, so the money collected is less to use for rewards. (I can't help but wonder how my card gives me 2% cash back, no fee, when I never pay interest.)" } ]

[ { "docid": "441120", "title": "", "text": "That's not especially high income, and while I can't speak for Canadians, most of us south of the border just pay the tax. There are tax-advantged retirement savings plans, and charitable donations are often offset by a tax credit, and there are some tax incentives for mortgages, and so on.. but generally the right answer is to just accept that the income tax money was never yours to begin with." } ]

[ { "docid": "520924", "title": "", "text": "I would definitely recommend contributing to an IRA. You don't know for sure you'll get hired full-time and be eligible for the 401(k) with match, so you should save for retirement on your own. I would recommend Roth over Traditional IRA in your situation, because let's say you do get hired full-time. Since the company offers a retirement plan, your 2015 Traditional IRA contribution would no longer be deductible at your income level (assuming you're single), and non-deductible Traditional IRAs aren't a very good deal (see here and here). If there's a decent chance you would get hired, this factor would override the pre-tax versus post-tax debate for me. At your income level you could go either way on that anyway. A Solo 401(k) would be worth looking into if you wanted to increase your contribution limit beyond what IRAs offer, but given that it sounds like you're just starting out saving for retirement, and you may be eligible for a 401(k) soon, it's probably overkill at this point." }, { "docid": "322311", "title": "", "text": "I will add one point missing from the answers by CQM and THEAO. When you take a loan and invest the proceeds, the interest that you pay on the loan is deductible on Schedule A, Line 14 of your Federal income tax return under the category of Investment Interest Expense. If the interest expense is larger than all your investment earnings (not just those from the loan proceeds), then you can deduct at most the amount of the earnings, and carry over the excess investment interest paid this year for deduction against investment earnings in future years. Also, if some of the earnings are long-term capital gains and you choose to deduct the corresponding investment interest expense, then those capital gains are taxed as ordinary income instead of at the favored LTCG rate. You also have the option of choosing to deduct only that amount of interest that offsets dividend (and short-term capital gain) income that is taxed at ordinary rates, pay tax at the LTCG rate on the capital gains, and carry over rest of the interest for deduction in future years. In previous years when the tax laws called for reduction in the Schedule A deductions for high-income earners, this investment interest expense was exempt from the reduction. Whether future tax laws will allow this exemption depends on Congress. So, this should be taken into account when dealing with the taxes issue in deciding whether to take a loan to invest in the stock market." }, { "docid": "385221", "title": "", "text": "As the name says, its for income earned in a Foreign country. If you have been paying US income tax on this while living in the US, nothing is going to change here. You should be informing yourself on how to avoid double taxation in your new country of residence. Passive income earned abroad (dividends, interest) also do not fall under this exemption. The purpose of the Foreign Earned Income Exclusion is to make it easy for expats who work abroad to avoid double income taxation without going through the complicated process of applying for tax credits. The US is the only industrial country that taxes its residents regardless of where they reside. That is also why it only goes to about $100,000 a year. If you are a high earner, they want to make it more difficult. Also as a side note, since you are going to be abroad for a year. I will point out that if you have more than $10,000 in foreign accounts at any point in the year you need to declare this in an FBAR form. This is not advertised as well as it should be and carries ridiculous penalties for non-compliance. I can't count the number of times I have heard a US expat say that they were unaware of this." }, { "docid": "449001", "title": "", "text": "There are too many nuances to the question asked to explore fully but here are a few points to keep in mind. If you are a cash-basis taxpayer (most individuals are), then you are not required to pay taxes on the money that has been billed but not received as yet. If you operate on an accrual basis, then the income accrues to you the day you perform the service and not on the day you bill the client. You can make four equal payments of estimated tax on the due dates, and if these (together with any income tax withholding from wage-paying jobs) are at least 90% of your tax liability for that year, then you owe no penalties for underpayment of tax regardless of how your income varied over the year. If your income does vary considerably over the year (even for people who only have wages but who invest in mutual funds, the income can vary quite a bit since mutual funds typically declare dividends and capital gains in December), then you can pay different amounts in each quarterly installment of estimated tax. This is called the annualization method (a part of Form 2210 that is best avoided unless you really need to use it). Your annualized income for the payment due on June 15 is 2.4 = 12/5 times your taxable income through May 31. Thus, on Form 2210, you are allowed to assume that your average monthly taxable income through May 31 will continue for the rest of the year. You then compute the tax due on that annualized income and you are supposed to have paid at least 45% of that amount by June 15. Similarly for September 15 for which you look at income through August 31, you use a multiplier of 1.5 = 12/8 and need to pay 67.5% of the tax on the annualized income, and so on. If you miscalculate these numbers and pay too little tax in any installment, then you owe penalties for that quarter. Most people find that guesstimating the tax due for the entire year and paying it in equal installments is simpler than keeping track of nuances of the annualized method. Even simpler is to pay 100% of last year's tax in four equal installments (110% for high earners) and then no penalty is due at all. If your business is really taking off and your income is going to be substantially higher in one year, then this 100%/110% of last year's tax deal could allow you to postpone a significant chunk of your tax bill till April 15." }, { "docid": "542463", "title": "", "text": "Certainly there are people who do pay off their homes. Others do not. It's a question of risk tolerance and preference. Some considerations relevant to this question: Taxes - Interest on a mortgage is tax deductible. Particularly for high earners, this is a significant incentive to maintain a mortgage balance and place extra money in the market instead. Liquidity - If you lose your job, you can sell stocks to pay the mortgage. But if you have made principle payments on your mortgage but still owe some outstanding balance, you are still required to make monthly payments without any source of income. Rates - In recent years it is been common to get a mortgage for 3.2% to 3.5%. The difference between those rates and 9% rate of return for the market is substantial. There are other considerations but the answer in the end is that for many people the risk / reward calculus says the ~5% difference in rate of return is worth the potential risks." }, { "docid": "332938", "title": "", "text": "\"I take it you have nearly zero expenses, since you don't mention any savings and with your income you wouldn't have much left over for investing. At your level of income, any actual investing is either going to unwisely reduce your cash available should you need it (such as investment in mutual funds, which often have minimum investment periods of 2-6 months or more to avoid fees), or cost you a high percentage of your income in commissions (stock trading). So, I wouldn't recommend investing at all — yet. I find Dave Ramsey's baby steps to be very good general money management advice. Here is how I would adapt the first three steps to your income and stage in life. Beyond this, Dave recommends saving for retirement, college (for kids) and paying off your house early. These things are a little beyond your stage in life, but it would be good to start thinking about them. For you, I recommend following DJClayworth's advice to \"\"invest in yourself\"\". Specifically, plan to get through college debt-free. Put away money so that you have a head start once you do have living expenses — save for a car, save money for rent, etc. so that you don't have to live month to month as most people do starting out. So, what this boils down to: Put away every cent you have, in a savings account.\"" }, { "docid": "105264", "title": "", "text": "\"Actually, the other answer isn't strictly correct. It's an estimate, giving a lower bound that gets less accurate as income increases. Consider: U.S. income tax is based on a progressive tax system where there are income bracket levels with increasing tax rates. Example: Given U.S. 2009 federal tax rates for an individual filing as \"\"single\"\": Imagine somebody making $100000. Assuming no other credits, deductions, or taxes, then income tax based on the above brackets & rates would be calculated as follows: Meaning the average tax rate for the single individual earning $100,000 is 21.72%. However, a pre-tax deduction from that income actually comes off at the top marginal tax rate. Consider the same calculation but with taxable income reduced to $99,000 instead (i.e. simulating a pre-tax $1000 deduction): That's a difference of $280, which is more than the $217.20 savings that would have been estimated if just using the average tax rate method. Consequently, when trying to determine how much money would be saved by a tax deduction, it makes better sense to estimate using the marginal tax rate, which in this case was 28%. It gets a little trickier if the deduction crosses a bracket boundary. (Left as an exercise to the reader :-) Finally, in the case of the deduction being discussed, it also looks like payroll FICA taxes paid by the employee (Social Security's 6.2%, and Medicare's 1.45%) would be avoided as well; so add that to the marginal tax rate savings. The surest way to know how much would be saved, though, would be to do one's income tax return calculation without the deduction, and then with, and compare the numbers. Tax software can make this very easy to do.\"" }, { "docid": "555947", "title": "", "text": "\"Let's start with income $80K. $6,667/mo. The 28/36 rule suggests you can pay up to $1867 for the mortgage payment, and $2400/mo total debt load. Payment on the full $260K is $1337, well within the numbers. The 401(k) loan for $12,500 will cost about $126/mo (I used 4% for 10 years, the limit for the loan to buy a house) but that will also take the mortgage number down a bit. The condo fee is low, and the numbers leave my only concern with the down payment. Have you talked to the bank? Most loans charge PMI if more than 80% loan to value (LTV). An important point here - the 28/36 rule allows for 8% (or more ) to be \"\"other than house debt\"\" so in this case a $533 student loan payment wouldn't have impacted the ability to borrow. When looking for a mortgage, you really want to be free of most debt, but not to the point where you have no down payment. PMI can be expensive when viewed that it's an expense to carry the top 15% or so of the mortgage. Try to avoid it, the idea of a split mortgage, 80% + 15% makes sense, even if the 15% portion is at a higher rate. Let us know what the bank is offering. I like the idea of the roommate, if $700 is reasonable it makes the numbers even better. Does the roommate have access to a lump sum of money? $700*24 is $16,800. Tell him you'll discount the 2yrs rent to $15000 if he gives you it in advance. This is 10% which is a great return with rates so low. To you it's an extra 5% down. By the way, the ratio of mortgage to income isn't fixed. Of the 28%, let's knock off 4% for tax/insurance, so a $100K earner will have $2167/mo for just the mortgage. At 6%, it will fund $361K, at 5%, $404K, at 4.5%, $427K. So, the range varies but is within your 3-5. Your ratio is below the low end, so again, I'd say the concern should be the payments, but the downpayment being so low. By the way, taxes - If I recall correctly, Utah's state income tax is 5%, right? So about $4000 for you. Since the standard deduction on Federal taxes is $5800 this year, you probably don't itemize (unless you donate over $2K/yr, in which case, you do). This means that your mortgage interest and property tax are nearly all deductible. The combined interest and property tax will be about $17K, which in effect, will come off the top of your income. You'll start as if you made $63K or so. Can you live on that?\"" }, { "docid": "274360", "title": "", "text": "No. Income inside an RRSP is sheltered from income tax until you withdraw it. That is, indeed, the major benefit of RRSPs. Note that you will eventually declare this as income. Consider the following case: - in 2015, you make $1000 in income. - in 2015, you contribute $100 to your RRSPs. You store this in an account that pays interest, rather than investing it in stocks, bonds, or mutual funds. - between 2015 and 2025, your money makes an additional $100 in interest. - in 2025, you are retired and pull out the entire amount in your RRSP, i.e. $200. Now, between 2015 and 2025, you did not declare the income from interest. You'd have had to do this if the money was in a regular bank account (instead of an RRSP or a TFSA). Indeed, your bank would have issued tax forms in that case. But you don't report income sheltered in an RRSP. This is good, as it increases the power of compounding. In 2015, you pay tax on only $900 rather than the full $1000. In 2025, you pull out the entire $200. You report all $200 as income (or, actually, as a withdrawal from your RRSP, but it's the same thing). You pay tax on the initial $100 investment (which you did not do in 2015), and you also pay tax on the $100 that your investment has made (and which you are now pulling out). The hope is that your income is now lower, as you are retired. So you'll end up paying less income tax. Plus, your investment has had many years of opportunity to compound, tax-free. TL;DNR: You don't pay tax on, or report gains in, an RRSP account. The bank or investment house won't even issue tax forms, not until you withdraw the money." }, { "docid": "83769", "title": "", "text": "\"I think there are several issues here. First, there's the contribution. As littleadv said, there is no excess contribution. Excess contribution is only if you exceed the contribution limit. The contribution limit for Traditional IRAs does not depend on how high your income goes or whether you have a 401(k). It's the deduction limit that may depend on those things. Not deducting it is perfectly legitimate, and is completely different than an \"\"excess contribution\"\", which has a penalty. Second, the withdrawal. You are allowed to withdraw contributions made during a year, plus any earnings from those contributions, before the tax filing deadline for the taxes of that year (which is April 15 of the following year, or even up to October 15 of the following year), and it will be treated as if the contribution never happened. No penalties. The earnings will be taxed as regular income (as if you put it in a bank account). That sounds like what you did. So the withdrawal was not an \"\"early withdrawal\"\", and the 1099-R should reflect that (what distribution code did they put?). Third, even if (and it does not sound like the case, but if) it doesn't qualify as a return of contributions before the tax due date as described above (maybe you withdrew it after October 15 of the following year), as littleadv mentioned, your contribution was a non-deductible contribution, and when withdrawing it, only the earnings portion (which after such a short time should only be a very small part of the distribution) would be subject to tax and penalty.\"" }, { "docid": "342833", "title": "", "text": "The point of an RRSP is that you can put money in when you are paying a lot of taxes (maybe a 50% marginal rate) and take it out later when you are paying less taxes (maybe a 30% marginal rate.) You will thus end up with more money. Since you are not paying high taxes on your modest income, this aspect of an RRSP doesn't really apply to you. When the time comes that you start withdrawing from your RRSP, you will pay taxes on the entire withdrawal, both principal and interest. A TFSA on the other hand allows withdrawals (typically limited to some small number a year) without the principal or the interest being considered taxable income. That seems like a better approach for you. However, they are not very liquid - you can't deposit, withdraw, deposit, withdraw week after week. Look around for not-exactly-banks that offer higher interest rates than the banks do. Set up a TFSA with one, and put about 8k in it. (If you have time to investigate GICs, ETFs, and whatnot, fine, investigate that for a while and set up a TFSA that holds those.) Put the other 2k in a high-interest savings account from that institution. High interest will be between 1 and 2% which isn't very high, but oh well. Assuming you get some notice when you need to replace your car, you could withdraw from the TFSA to get that money. Or you might be lucky and need a car at a terrible time for dealers to sell cars, and get a great deal on a new car with a long warranty, something you could keep for another 15 or 20 years. If you could afford the loan payment then your savings could stick around for a rainier day." }, { "docid": "303078", "title": "", "text": "\"After doing a little research, I was actually surprised to find many internet resources on this topic (including sites from Intuit) gave entirely incorrect information. The information that follows is quoted directly from IRS Publication 929, rules for dependents First, I will assume that you are not living on your own, and are claimed as a \"\"dependent\"\" on someone else's tax return (such as a parent or guardian). If you were an \"\"emancipated minor\"\", that would be a completely different question and I will ignore this less-common case. So, how much money can you make, as a minor who is someone else's dependent? Well, the most commonly quoted number is $6,300 - but despite this numbers popularity, this is not true. This is how much you can earn in wages from regular employment without filing your own tax return, but this does not apply to your scenario. Selling your products online as an independent game developer would generally be considered self-employment income, and according to the IRS: A dependent must also file a tax return if he or she: Had wages of $108.28 or more from a church or qualified church-controlled organization that is exempt from employer social security and Medicare taxes, or Had net earnings from self-employment of at least $400. So, your first $400 in earnings triggers absolutely no requirement to file a tax return - blast away, and good luck! After that, you do not necessarily owe much in taxes, however you will need to file a tax return even if you owe $0, as this was self-employment income. If you had, for instance, a job at a grocery store, you could earn up to $6,300 without filing a return, because the store would be informing the IRS about your employment anyway - as well as deducting Medicare and Social Security payments, etc. How much tax will you pay as your income grows beyond $400? Based upon the IRS pages for Self-Employment Tax and Family Businesses, while you will not likely have to pay income tax until you make $6,300 in a year, you will still have to pay Social Security and Medicare taxes after the first $400. Roughly this should be right about 16% of your income, so if you make $6000 you'll owe just under $1000 (and be keeping the other $5000). If your income grows even more, you may want to learn about business expense deductions. This would allow you to pay for things like advertisement, software, a new computer for development purposes, etc, and deduct the expenses out of your income so you pay less in taxes. But don't worry - having such things to wonder about would mean you were raking in thousands of dollars, and that's an awfully good problem to have as a young entrepreneur! So, should you keep your games free or try to make some money? Well, first of all realize that $400 can be a lot harder to make when you are first starting in business than it probably sounds. Second, don't be afraid of making too much money! Tax filing software - even totally free versions - make filing taxes much, much easier, and at your income level you would still be keeping the vast majority of the money you earn even without taking advantage of special business deductions. I'd recommend you not be a afraid of trying to make some money! I'd bet money it will help you learn a lot about game development, business, and finances, and will be a really valuable experience for you - whether you make money or not. Having made so much money you have to pay taxes is not something to be afraid of - it's just something adults like to complain about :) Good luck on your adventures, and you can always come back and ask questions about how to file taxes, what to do with any new found wealth, etc!\"" }, { "docid": "155045", "title": "", "text": "Your $400/month contributions are still tax deductible in the current tax year. However, each subsequent tax year, you will be required to repay at least 1/15 of the total amount you withdrew. In your example, let's say you used $25,000 for the home buyer's plan in the 2015 tax year. Throughout 2015, you contribute $400/month toward your RRSP. For the 2015 tax year, you are able to claim $4800 in RRSP contributions. For the 2016 tax year, you continue to contribute $400/month toward your RRSP. However, you are only able to claim $3133.33 in RRSP contributions, and must put at least $1666.67 toward repayment of your HBP. This will continue until you have entirely repaid the HBP. You are free to repay it early. This CRA page has the details." }, { "docid": "435576", "title": "", "text": "\"You seem to really have your financial act together. Your combination of assets, and ongoing savings makes you the ideal candidate for paying it off. One way to look at it is that your mortgage offers you a place to 'invest' at a fixed 2-7/8% rate. \"\"I'd really like to not have a house payment\"\" is all I need to hear. The flip side is the lecture that talks about long term market returns, the fact that the combination of your deductible mortgage, but 15% cap gain rate means you need 2.5% return to break even, and odds are pretty high that will occur over the next 15 years. \"\"pretty high\"\" does not equal \"\"guaranteed\"\". And I won't debate the value of sleeping soundly vs an excess 5-8% return on this money that you'd maybe achieve. You haven't missed anything. In fact, though I advocate saving first, you are already doing that. This is above and beyond. Good work.\"" }, { "docid": "498228", "title": "", "text": "\"The advantages of the TFSA are This makes them great for 50-somethings who didn't do any saving yet, for whom clawbacks when they drawdown RRSPs will have a big impact on taxes and government-related income. It also makes them great for \"\"I will save up for that car / my downpayment / the kids skating fees next year\"\" when the money would come out of an RRSP at the same or even a higher tax rate and would not have time to compound for long. This may apply to you. And finally it makes them great for highly paid people who just don't know what the heck to do with all the money that is piling up and have no intention of ever using any of it while they're working, but have filled up their RRSPs. My 20-somethings are using them because they pay essentially no taxes now, so are waiting to use their RRSP room later. If you have money that you are saving for something other than retirement, put it in a TFSA. If you've maxed the RRSP and still have money left over, put it in an TFSA. If you have children, consider an RESP first, because of the bonus money. But don't think TFSA first unless it's for timelimited saving like towards a car or renovation.\"" }, { "docid": "361509", "title": "", "text": "\"if you have 401k with an employer already, has the following features: Your contributions are taxed That's only true if you're a high income earner. https://www.irs.gov/retirement-plans/2017-ira-deduction-limits-effect-of-modified-agi-on-deduction-if-you-are-covered-by-a-retirement-plan-at-work For example, married filing jointly allows full deduction up to $99,000 even if you have a 401(k). \"\"the timing is just different\"\" And that's a good thing, since if your retirement tax rate is less than your current tax rate, you'll pay less tax on that money.\"" }, { "docid": "177736", "title": "", "text": "My first question to you is if you itemize? If not the charitable contributions will not do any good. Along these lines, donating unused items to Goodwill or similar can help boost your charitable giving. The bottom line is that the 401K is one of the few real deductions high earners have. If you anticipate earning similarly next year, you could both contribute the max. You still have some time before the end of the year, can you get more in your wife's account? Does your state have income tax? You might be able to deduct sales tax for larger purchases if you made any. However, I would not justify a large purchase just to write off the sales tax. Conventional wisdom will tell you that you should have a large mortgage in order to deduct the interests. However, it does not make sense to pay the bank 10K so you can get 3K back from the government. That seems pretty dumb. If you did not do additional withholding, you probably will have to pay a significant amount plus penalty if you owe more than $1000. You still have time to make one more quarterly payment, so you may want to do so by January 15th. For next year I would recommend the following: The funny thing about giving is that it rarely helps the recipient, it does so much more for the giver. It helps you build wealth. For myself I like to give to charities that have a bent to helping people out of poverty or homelessness. We have two excellent ones here in Orlando, FL: Orlando Rescue Mission and Christian Help. Both have significant job training and budgeting programs." }, { "docid": "502150", "title": "", "text": "\"The biggest and primary question is how much money you want to live on within retirement. The lower this is, the more options you have available. You will find that while initially complex, it doesn't take much planning to take complete advantage of the tax system if you are intending to retire early. Are there any other investment accounts that are geared towards retirement or long term investing and have some perk associated with them (tax deferred, tax exempt) but do not have an age restriction when money can be withdrawn? I'm going to answer this with some potential alternatives. The US tax system currently is great for people wanting to early retire. If you can save significant money you can optimize your taxes so much over your lifetime! If you retire early and have money invested in a Roth IRA or a traditional 401k, that money can't be touched without penalty until you're 55/59. (Let's ignore Roth contributions that can technically be withdrawn) Ok, the 401k myth. The \"\"I'm hosed if I put money into it since it's stuck\"\" perspective isn't true for a variety of reasons. If you retire early you get a long amount of time to take advantage of retirement accounts. One way is to primarily contribute to pretax 401k during working years. After retiring, begin converting this at a very low tax rate. You can convert money in a traditional IRA whenever you want to be Roth. You just pay your marginal tax rate which.... for an early retiree might be 0%. Then after 5 years - you now have a chunk of principle that has become Roth principle - and can be withdrawn whenever. Let's imagine you retire at 40 with 100k in your 401k (pretax). For 5 years, you convert $20k (assuming married). Because we get $20k between exemptions/deduction it means you pay $0 taxes every year while converting $20k of your pretax IRA to Roth. Or if you have kids, even more. After 5 years you now can withdraw that 20k/year 100% tax free since it has become principle. This is only a good idea when you are retired early because you are able to fill up all your \"\"free\"\" income for tax conversions. When you are working you would be paying your marginal rate. But your marginal rate in retirement is... 0%. Related thread on a forum you might enjoy. This is sometimes called a Roth pipeline. Basically: assuming you have no income while retired early you can fairly simply convert traditional IRA money into Roth principle. This is then accessible to you well before the 55/59 age but you get the full benefit of the pretax money. But let's pretend you don't want to do that. You need the money (and tax benefit!) now! How beneficial is it to do traditional 401ks? Imagine you live in a state/city where you are paying 25% marginal tax rate. If your expected marginal rate in your early retirement is 10-15% you are still better off putting money into your 401k and just paying the 10% penalty on an early withdrawal. In many cases, for high earners, this can actually still be a tax benefit overall. The point is this: just because you have to \"\"work\"\" to get money out of a 401k early does NOT mean you lose the tax benefits of it. In fact, current tax code really does let an early retiree have their cake and eat it too when it comes to the Roth/traditional 401k/IRA question. Are you limited to a generic taxable brokerage account? Currently, a huge perk for those with small incomes is that long term capital gains are taxed based on your current federal tax bracket. If your federal marginal rate is 15% or less you will pay nothing for long term capital gains, until this income pushes you into the 25% federal bracket. This might change, but right now means you can capture many capital gains without paying taxes on them. This is huge for early retirees who can manipulate income. You can have significant \"\"income\"\" and not pay taxes on it. You can also stack this with before mentioned Roth conversions. Convert traditional IRA money until you would begin owing any federal taxes, then capture long term capital gains until you would pay tax on those. Combined this can represent a huge amount of money per year. So littleadv mentioned HSAs but.. for an early retiree they can be ridiculously good. What this means is you can invest the maximum into your HSA for 10 years, let it grow 100% tax free, and save all your medical receipts/etc. Then in 10 years start withdrawing that money. While it sucks healthcare costs so much in America, you might as well take advantage of the tax opportunities to make it suck slightly less. There are many online communities dedicated to learning and optimizing their lives in order to achieve early retirement. The question you are asking can be answered superficially in the above, but for a comprehensive plan you might want other resources. Some you might enjoy:\"" }, { "docid": "302521", "title": "", "text": "This is similar to your TFSA question. While the S in RRSP or TFSA stands for savings, it does not stipulate exactly what instruments you use to build up those savings. With few exceptions, you can hold any type of investment in either an RRSP or TFSA. Thus, do not think of them as savings accounts per se, but more like umbrella accounts, or plans. It's actually the financial industry that creates these misnomers of so-called RRSPs, which are usually GICs or balanced mutual funds held inside an RRSP plan, or TFSAs, which are literally savings accounts held inside a TFSA plan. The most versatile accounts are the self-directed RRSP or TFSA accounts, usually through a discount broker, where you can purchase many different types of investments inside your registered accounts, including stocks, bonds, mutual funds, GICs, gold, etc. Thus a share purchase plan held inside an RRSP is completely eligible and may be a sensible investment for retirement savings." } ]

[ { "docid": "146021", "title": "", "text": "\"I'm not convinced this is completely possible without additional data. I'm categorizing my purchases now, and I keep running into things like \"\"was this hardware store purchase for home repair, hobby tools and supplies, cookware, ...\"\" Ditto for department stores, ditto for cash purchases which appear only as an ATM withdrawal. Sometimes I remember, sometimes I guess, sometimes I just give up. In the end, this budget tracking isn't critical for me so that's good enough. If you really want accuracy, though, I think you are stuck with keeping all your receipts, of taking notes, so you can resolve these gaps.\"" } ]

[ { "docid": "513281", "title": "", "text": "\"First, let me say that $1000 is not that much of amount to invest in stocks. You need to remember that each transaction (buy/sell) has fees, which vary between $4-$40 (depending on the broker, you mentioned Scottrade - they charge $7 per transaction for stocks and about twice as much for some mutual funds). Consider this: you invest $1000, you gain $100. You'll pay $15 in fees just to buy/sell, that's 1.5% expense ratio. If you invest in more than 1 stock - multiply your fees. To avoid that you can look into mutual funds. Different brokers offer different funds for free, and almost all of them carry many of the rest for a fee. When looking into funds, you can find their expense ratio and compare. Remember that a fund with 1% expense ratio diversifies and invests in many stocks, while for you 1.5% expense ratio is for investing in a single stock. Is it a good idea to invest only in US or diversify worldwide? You can invest in the US, but in funds that diversify worldwide or across industries. Generally it is a good idea to diversify. I am 28. Should I be a conservative investor or take some risks? Depends on how bad of a shape will you be if you lose all your principle. What online brokerage service is the best? I have heard a lot about Scotttrade but want to be sure before I start. It seems to be the least expensive and most user-friendly to me. \"\"Best\"\" is a problematic term. Scottrade is OK, E*Trade is OK, you can try Sharebuilder, Ameritrade, there are several \"\"discount\"\" online brokers and plenty of on-line reviews and comparisons amongst them. What is a margin account and how would it affect my investing? From what I understand it comes into play when an investor borrows money from the broker. Do I need to use it at all as I won't be investing on a big scale yet. You understand right. There are rules to use margin accounts, and with the amount you have I'd advise against them even if you get approved. Read through the brokers' FAQ's on their requirement. Should I keep adding money on a monthly basis to my brokerage account to give me more money to invest or keep it at a certain amount for an extended period of time? Sharebuilder has a mechanism to purchase monthly at discounted prices. But be careful, they give you discounted prices to buy, but not to sell. You may end up with a lot of positions, and the discounts you've gotten to buy will cause you spend much more on selling. Generally, averaging (investing monthly) is a good way to save and mitigate some risks, but the risks are still there. This is good only for long term savings. How should my breakdown my investments in terms of bonds vs stocks? Depends on your vulnerability and risk thresholds.\"" }, { "docid": "58511", "title": "", "text": "\"I have 2 PayPal accounts for this purpose (with different email addresses). The first account is tied to my real email address, and has my real name, phone and home address associated with it. This account is also connected to my bank account and credit cards. For riskier transactions where I don't need physical delivery (or will accept delivery to my local post-office in cases where I don't trust the seller with my personal details) I use my secondary account, which has a secondary email address of mine, and a fake name and with a fake address, it is not connected to any external accounts. To send or receive money \"\"anonymously\"\" I first send money from my real account to my fake account (inter-account transfers are free with PayPal), and then send the money to the seller from the fake account. This is in violation of PayPal's terms of service, but I've been using this system for the past 5+ years without any issues.\"" }, { "docid": "291278", "title": "", "text": "Do you need such a detailed budget? I have found that a detailed budget creates two problems: I would suggest starting simple, and adding complexity as you discover you need it. Create a budget with just a few categories Then, I enforce my budget with my auto deposit. My required expenses, which I have a pretty good notion of the total amount get paid from one online bank. Enough money goes in and I electronically pay. Retirement money and e-fund money get deposited into the brokerage and credit union where I keep those piles at. Finally, my optional expenses go into a second bank (I am using simple.com at the moment) and I spend from there with a card. They have a nice reporting feature, and if I want to save up for a toy or something I save up there. Bonuses and other extra income end up there as well. This way, I really only have to monitor the last account to see if I can have fun or buy a new item. My bills and retirement are different pools of money, and I don't carry around a card that can access that money." }, { "docid": "544765", "title": "", "text": "\"The whole point of the \"\"envelope system\"\" as I understand it is that it makes it easy to see that you are staying within your budget: If the envelope still has cash in it, then you still have money to spend on that budget category. If you did this with a bunch of debit cards, you would have to have a way to quickly and easily see the balance on that card for it to work. There is no physical envelope to look in. If your bank lets you check your balance with a cell-phone app I guess that would work. But at that point, why do you need separate debit cards? Just create a spreadsheet and update the numbers as you spend. The balance the bank shows is always going to be a little bit behind, because it takes time for transactions to make it through the system. I've seen on my credit cards that sometimes transactions show up the same day, but other times they can take several days or even a week or more. So keeping a spreadsheet would be more accurate, or at least, more timely. But all that said, I can check my bank balance and my credit card balances on web sites. I've never had a desire to check from a cell phone but at least some banks have such apps -- my daughter tells me she regularly checks her credit card balance from her cell phone. So I don't see why you couldn't do it with off-the-shelf technology. Side not, not really related to your question: I don't really see the point of the envelope system. Personally, I keep my checkbook electronically, using a little accounting app that I wrote myself so it's customized to my needs. I enter fixed bills, like insurance premiums and the mortgage payment, about a month in advance, so I can see that that money is already spoken for and just when it is going out. Besides that, what's the advantage of saying that you allot, say, $50 per month for clothes and $100 for gas for the car and $60 for snacks, and if you use up all your gas money this month than you can't drive anywhere even though you have money left in the clothes and snack envelopes? I mean, it makes good sense to say, \"\"The mortgage payment is due next week so I can't spend that money on entertainment, I have to keep it to pay the mortgage.\"\" But I don't see the point in saying, \"\"I can't buy new shoes because the shoe envelope is empty. I've accumulated $5000 in the shampoo account since I went bald and don't use shampoo any more, but that money is off limits for shoes because it's allocated to shampoo.\"\"\"" }, { "docid": "216678", "title": "", "text": "\"but there's that risk of me simply logging on to my online banking and transferring extra cash over if I cave in. Yep, there's no reasonable substitute for self-control. You could pay someone else to manage your money and dole out an allowance for your discretionary spending, but that's not reasonable for most people. Your money will be accessible to you, you don't need it inaccessible, you need to change the way you think about your available money. Many people struggle with turning a corner when it comes to saving, a tool that helps many is a proper budget. Plan ahead how all of your money will be used, including entertainment. If you want to spend £200/month on entertainment, then plan for it in a budget, and track your spending to help keep within that budget. It's a discipline thing, but a budget makes it easier to be disciplined, having a defined plan makes it easier to say \"\"I can't\"\" rather than \"\"I shouldn't, but... okay!\"\" There are many budgeting tools, just pick one that has you planning how all your money is spent, you want to be proactive and plan for saving, not hoping you have some leftover at the end of the month. Here's a good article on How and Why to Use a Zero-Sum Budget. Some people have envelopes of cash for various budget items, and that can be helpful if you struggle to stick to your budget, once the entertainment envelope is empty, you can't spend on entertainment until next month, but it won't stop you from blowing the budget by just getting more cash, as you mentioned.\"" }, { "docid": "173807", "title": "", "text": "Personally, I keep two regular checking accounts at different banks. One gets a direct deposit totaling the sum of my regular monthly bills and a prorated provision for longer term regular bills like semi-annual car insurance premiums. I leave a buffer in the account to account for the odd expensive electrical bill or rate increase or whatever. One gets a direct deposit of the rest which I then allocate to savings and spending. It makes sense to me to separate off regular planned expenses (rent/mortgage, utility bills, insurance premiums) from spending money because it lets me put the basics of my life on autopilot. An added benefit is I have a failover checking account in the event something happens to one of them. I don't keep significant amounts of money in either account and don't give transfer access to the savings accounts that store the bulk of my money. I wear a tinfoil hat when it comes to automatic bank transfers and account access... It doesn't make sense to me to keep deposits separate from spending, it makes less sense to me to spend off of a savings account." }, { "docid": "580168", "title": "", "text": "\"Trying to figure out how much money you have available each day sounds like you're making this more complicated than it needs to be. Unless you're extremely tight and you're trying to squeeze by day by day, asking \"\"do I have enough cash to buy food for today?\"\" and so on, you're doing too much work. Here's what I do. I make a list of all my bills. Some are a fixed amount every month, like the mortgage and insurance premiums. Others are variable, like electric and heating bills, but still pretty predictable. Most bills are monthly, but I have a few that come less frequently, like water bills in my area come every 3 months and I have to pay property taxes twice a year. For these you have to calculate how much they cost each month. Like for the water bill, it's once every 3 months so I divide a typical bill by 3. Always round up or estimate a little high to be safe. Groceries are a little tricky because I don't buy groceries on any regular schedule, and sometimes I buy a whole bunch at once and other times just a few things. When groceries were a bigger share of my income, I kept track of what I spent for a couple of months to figure out an average per month. (Today I'm a little richer and I just think of groceries as coming from my spending money.) I allocate a percentage of my income for contributions to church and charities and count this just like bills. It's a good idea to put aside something for savings and/or paying down any outstanding loans every month. Then I add these up to say okay, here's how much I need each month to pay the bills. Subtract that from my monthly income and that's what I have for spending money. I get paid twice a month so I generally pay bills when I get paid. For most bills the due date is far enough ahead that I can wait the maximum half a month to pay it. (Worst case the bill comes the day after I pay the bills from this paycheck.) Then I keep enough money in my checking account to, (a) Cover any bills until the next paycheck and allow for the particularly large bills; and (b) provide some cushion in case I make a mistake -- forget to record a check or make an arithmetic error or whatever; and (c) provide some cushion for short-term unexpected expenses. To be safe, (a) should be the total of your bills for a month, or as close to that as you can manage. (b) should be a couple of hundred dollars if you can manage it, more if you make a lot of mistakes. If you've calculated your expenses properly and only spend the difference, keeping enough money in the bank should fall out naturally. I think it's a lot easier to try to manage your money on a monthly basis than on a daily basis. Most of us don't spend money every day, and we spend wildly different amounts from day to day. Most days I probably spend zero, but then one day I'll buy a new TV or computer and spend hundreds. Update in response to question What I do in real life is this: To calculate my available cash to spend, I simply take the balance in my checking account -- assuming that all checks and electronic payments have cleared. My mortgage is deducted from my checking every month so I post that to my checking a month in advance. I pay a lot of things with automatic charges to a credit card these days, so my credit card bills are large and can't be ignored. So subtract my credit card balances. Subtract my reserve amount. What's left is how much I can afford to spend. So for example: Say I look at the balance in my checkbook today and it's, say, $3000. That's the balance after any checks and other transactions have cleared, and after subtracting my next mortgage payment. Then I subtract what I owe on credit cards. Let's say that was $1,200. So that leaves $1,800. I try to keep a reserve of $1,500. That's plenty to pay my routine monthly bills and leave a healthy reserve. So subtract another $1,500 leaves $300. That's how much I can spend. I could keep track of this with a spreadsheet or a database but what would that gain? The amount in my checking account is actual money. Any spreadsheet could accumulate errors and get farther and farther from accurate values. I use a spreadsheet to figure out how much spending money I should have each month, but that's just to use as a guideline. If it came to, say, $100, I wouldn't make grandiose plans about buying a new Mercedes. If it came to $5,000 a month than buying a fancy new car might be realistic. It also tells me how much I can spend without having to carefully check balances and add it up. These days I have a fair amount of spending money so when, for example, I recently decided I wanted to buy some software that cost $100 I just bought it with barely a second thought. When my spending money was more like $100 a month, lunch at a fast food place was a big event that I planned weeks in advance. (Obviously, I hope, don't get stupid about \"\"small amounts\"\". If you can easily afford $100 for an impulse purchase, that doesn't mean that you can afford $100 five times a day every day.) Two caveats: 1. It helps to have a limited number of credit cards so you can keep the balances under control. I have two credit cards I use for almost everything, so I only have two balances to keep track of. I used to have more and it got confusing, it was easy to lose track of how much I really owed, which is a set up for getting in trouble.\"" }, { "docid": "64578", "title": "", "text": "\"You don't want to set up your investment account as a savings or spending (budget) account. There are a couple of reasons. First, investment account balances change daily based on the market. If you set it up as a budget account, then your budget category balances would need to have money added or removed from them daily as the market value changes. Second, because you are investing for retirement, this money will be untouchable for many years; there is no need to include that in your spending budget. Instead, enter your monthly investment amount as an expense transaction (not a transfer to another budget account). If, for example, you are sending $400 per month to your retirement account, just enter that as a monthly $400 expense out of your checking account, assigning it to a Retirement category. That money then leaves your budget. If you want to see the value of your investment account in YNAB (so that your Net Worth is accurate), add the account as an investment account. The value will not affect your budget categories, but it will affect the net worth on the \"\"All Accounts\"\" page. Either set it up as an online account so that the balance will update automatically, or add it as a manual account and simply update the balance manually when you get your monthly statement.\"" }, { "docid": "272008", "title": "", "text": "\"Yes when I place an order with my broker they send it out to the exchange. - For individual investors, what are some cons and pros of trading on the exchanges directly versus indirectly via brokers? I may be mistaken(I highly doubt it), but from my understanding you cannot trade directly through an exchange as a retail investor. BATS allows membership but it is only for Your firm must be a registered broker-dealer, registered with a Self Regulatory Organization (SRO) and connected with a clearing firm. No apple (aapl) is listed on the NASDAQ so trades go through the NASDAQ for aapl. Caterpillar Inc (CAT) is listed on the NYSE so trades go through the NYSE. The exchange you trade on is dependent on the security, if it is listed on the NYSE then you trade on the NYSE. As a regular investor you will be going through a broker. When looking to purchase a security it is more important to know about the company and less important to know what exchange it is listed on. Since there are rules a company must comply with for it to be listed on certain exchanges, it does make a difference but that is more the case when speaking about a stock listed Over the Counter(OTC) or NYSE. It is not important when asking NYSE or NASDAQ? Selecting a broker is something that's dependent on your needs. You should ask your self, \"\"whats important to me?\"\", \"\"Do I want apps(IE: iPhone, android)?\"\" \"\"Do I need fancy trading tools?\"\". Generally all the brokers you listed will most likely do the trick for you. Some review sites: Brokerage Review Online Broker Review 2012 Barron's 2012 Online Broker Review\"" }, { "docid": "1519", "title": "", "text": "\"Not knowing anything about your situation or what makes it so complex, I would have to agree with the other commenters. If your accountant screws up your business goes under, but at least your personal finances are safe from that and you'll recover (unless all your wealth is tied up in your business). If your virtual assistant uses your personal information to take all your money, ruin your credit, or any number of other things, you're going to spend a loooong time trying to get things \"\"back to normal\"\". If the few hours per month spent managing your finances is starting to add up, I might suggest looking into other ways to automate and manage them. For instance, are all of your bills (or as many as you can) e-bills that can be issued electronically to your bank? Have you set up online bill pay with your bank, so that you can automatically pay all the bills when they arrive? Have you tried using any number of online services (Mint, Thrive, your bank's \"\"virtual wallet/portfolio\"\") to help with budget, expense tracking, etc.? Again, I don't know your exact situation, but hopefully some of these suggestions help. Once I started automating my savings and a lot of my bill paying, it gave me a lot of peace of mind.\"" }, { "docid": "430900", "title": "", "text": "Unlike other responses, I am also not good with money. Actually, I understand personal finance well, but I'm not good at executing my financial life responsibly. Part is avoiding tough news, part is laziness. There are tools that can help you be better with your money. In the past, I used YNAB (You Need a Budget). (I'm not affiliated, and I'm not saying this product is better than others for OP.) Whether you use their software or not, their strategy works if you stick with it. Each time you get paid, allocate every dollar to categories where your budget tells you they need to be, prioritizing expenses, then bills, then debt reduction, then wealth building. As you spend money, mark it against those categories. Reconcile them as you spend the money. If you go over in one category (eating out for example), you have to take from another (entertainment). There's no penalties for going over, but you have to take from another category to cover it. So the trick to all of it is being honest with yourself, sticking to it, recording all expenditures, and keeping priorities straight. I used it for three months. Like many others, I saved enough the first month to pay the cost of the software. I don't remember why I stopped using it, but I wish I had not. I will start again soon." }, { "docid": "509073", "title": "", "text": "\"Yup. It's totally legit and it is not a money market account. Though interest rates are so low across the board, this is about as high as savings accounts get and so it is called a \"\"high-yield savings account\"\". A number of banks offer these. There are different offerings nation-wide versus local/state. I would use this compare tool at DepositAccounts.com to find them and the blog is very good with updates and trends. Here are some well advertised accounts: If you don't already have a rewards checking account, get one of those first. DepositAccounts.com will direct you to these as well. A reasonable interest rate on rewards checking is 2.5% and up. So much better. The only catches are reasonable - online statements, direct deposit or autopay, and use your debit card 10 or 12 times a month for any transaction amount (groceries, coffee, gas - easy). The other major thing I would consider when opening any account is where you live and the current accounts you have. If you have an AMEX card already, just use their savings account. That way you have unified accounts, faster transfers, your personal information isn't spread thinly around all different banks, you have more leverage with the company as a \"\"long-standing customer\"\", etc. As far as using a bank in the state where you live, it simplifies taxes. Two more things: I would always choose a credit union over a bank (and many have excellent rewards checking accounts). If you use Mint, Yodlee, or other financial software, make sure the potential new bank integrates with that service.\"" }, { "docid": "351340", "title": "", "text": "In my opinion, every person, regardless of his or her situation, should be keeping track of their personal finances. In addition, I believe that everyone, regardless of their situation, should have some sort of budget/spending plan. For many people, it is tempting to ignore the details of their finances and not worry about it. After all, the bank knows how much money I have, right? I get a statement from them each month that shows what I have spent, and I can always go to the bank's website and find out how much money I have, right? Unfortunately, this type of thinking can lead to several different problems. Overspending. In olden days, it was difficult to spend more money than you had. Most purchases were made in cash, so if your wallet had cash in it, you could spend it, and when your wallet was empty, you were required to stop spending. In this age of credit and electronic transactions, this is no longer the case. It is extremely easy to spend money that you don't yet have, and find yourself in debt. Debt, of course, leads to interest charges and future burdens. Unpreparedness for the future. Without a plan, it is difficult to know if you have saved up enough for large future expenses. Will you have enough money to pay the water bill that only shows up once every three months or the property tax bill that only shows up once a year? Will you have enough money to pay to fix your car when it breaks? Will you have enough money to replace your car when it is time? How about helping out your kids with college tuition, or funding your retirement? Without a plan, all of these are very difficult to manage without proper accounting. Anxiety. Not having a clear picture of your finances can lead to anxiety. This can happen whether or not you are actually overspending, and whether or not you have enough saved up to cover future expenses, because you simply don't know if you have adequately covered your situation or not. Making a plan and doing the accounting necessary to ensure you are following your plan can take the worry out of your finances. Fear of spending. There was an interesting question from a user last year who was not at all in trouble with his finances, yet was always afraid to spend any money, because he didn't have a budget/spending plan in place. If you spend money on a vacation, are you putting your property tax bill in jeopardy? With a good budget in place, you can know for sure whether or not you will have enough money to pay your future expenses and can spend on something else today. This can all be done with or without the aid of software, but like many things, a computer makes the job easier. A good personal finance program will do two things: Keeps track of your spending and balances, apart from your bank. The bank can only show you things that have cleared the bank. If you set up future payments (outside of the bank), or you write a check that has not been cashed yet, or you spend money on a credit card and have not paid the bill yet, these will not be reflected in your bank balance online. However, if you manually enter these things into your own personal finance program, you can see how much money you actually have available to spend. Lets you plan for future spending. The spending plan, or budget, lets you assign a job to every dollar that you own. By doing this, you won't spend rent money at the bar, and you won't spend the car insurance money on a vacation. I've written before about the details on how some of these software packages work. To answer your question about double-entry accounting: Some software packages do use true double-entry accounting (GnuCash, Ledger) and some do not (YNAB, EveryDollar, Mvelopes). In my opinion, double-entry accounting is an unnecessary complication for personal finances. If you don't already know what double-entry accounting is, stick with one of the simpler solutions." }, { "docid": "104492", "title": "", "text": "\"First thing is that your English is pretty damn good. You should be proud. There are certainly adult native speakers, here in the US, that cannot write as well. I like your ambition, that you are looking to save money and improve yourself. I like that you want to move your funds into a more stable currency. What is really tough with your plan and situation is your salary. Here in the US banks will typically have minimum deposits that are high for you. I imagine the same is true in the EU. You may have to save up before you can deposit into an EU bank. To answer your question: Yes it is very wise to save money in different containers. My wife and I have one household savings account. Yet that is broken down by different categories (using a spreadsheet). A certain amount might be dedicated to vacation, emergency fund, or the purchase of a luxury item. We also have business and accounts and personal accounts. It goes even further. For spending we use the \"\"envelope system\"\". After our pay check is deposited, one of us goes to the bank and withdraws cash. Some goes into the grocery envelope, some in the entertainment envelope, and so on. So yes I think you have a good plan and I would really like to see a plan on how you can increase your income.\"" }, { "docid": "441148", "title": "", "text": "Envudu (envudu.com) looks very promising, and I think what they are planning to put out will do essentially everything you want. It's a single prepaid card, but with a connected app. On the app you choose which budget category you're going to spend on next, and then swipe your card. Your purchase gets deducted from that category. There aren't a ton of details yet on their website (e.g., what happens if you try to swipe on a category that doesn't have the funds available?) and there is going to be a $20/year fee, but I think it meets all of your criteria, even though it's a single card--you'll just need to use a smartphone with it." }, { "docid": "591950", "title": "", "text": "I am confused as to what the author was talking about when speaking about the lack of features and research tools for stocks and how that is such a huge negative of Robinhood. If anything, I want a cheap, simple platform to efficiently trade. I might as well save a few bucks on commission, right? I can do my research online and through SEC filings, I don't need e-trade to tell me what stocks to buy, I decide. Whether I buy Cisco stock through TD Ameritrade's phone system for $45 per transaction or for free through Robinhood I'm still owning the same stock, the same company, at the same price probably within fractions of a penny per share. I get what the author is saying though about the general aurora of the app that is encouraging for people to invest who should not be investing. Maybe I don't see the problem with it because I like to think that I know what I am doing and don't just treat it like gambling." }, { "docid": "533789", "title": "", "text": "Keep in mind, this is a matter of preference, and the answers here are going to give you a look at the choices and the member's view on the positive/negative for each one. My opinion is to put 20% down (to avoid PMI) if the bank will lend you the full 80%. Then, buy the house, move in, and furnish it. Keep track of your spending for 2 years minimum. It's the anti-budget. Not a list of constraints you have for each category of spending, but a rear-view mirror of what you spend. This will help tell you if, in the new house, you are still saving well beyond that 401(k) and other retirement accounts, or dipping into that large reserve. At that point, start to think about where kids fit into your plans. People in million dollar homes tend to have child care that's 3-5x the cost the middle class has. (Disclosure - 10 years ago, our's cost $30K/year). Today, your rate will be about 4%, and federal marginal tax rate of 25%+, meaning a real cost of 3%. Just under the long term inflation rate, 3.2% over the last 100 years. I am 53, and for my childhood right through college, the daily passbook rate was 5%. Long term government debt is also at a record low level. This is the chart for 30 year bonds. I'd also suggest you get an understanding of the long term stock market return. Long term, 10%, but with periods as long as 10 years where the return can be negative. Once you are at that point, 2-3 years in the house, you can look at the pile of cash, and have 3 choices. We are in interesting times right now. For much of my life I'd have said the potential positive return wasn't worth the risk, but then the mortgage rate was well above 6-7%. Very different today." }, { "docid": "579473", "title": "", "text": "A technique that is working pretty well for me: Hide the money from myself: I have two bank accounts at different banks. Let's call them A and B. I asked my employer to send my salary into account A. Furthermore I have configured an automatic transfer of money from account A to account B on the first of each month. I only use account B for all my expenses (rent, credit card, food, etc) and I check its statement quite often. Since the monthly transfer is only 80% of my salary I save money each month in account A. I don't have a credit card attached to the savings account and I almost never look at its statement. Since that money is out of sight, I do not think much about it and I do not think that I could spend it. I know it is a cheap trick, but it works pretty well for me." }, { "docid": "438284", "title": "", "text": "First: great job on getting it together. This is good for your family in any respect I can think of. This is a life long process and skill, but it will pay off for you and yours if you work on it. Your problem is that you don't seem to know where you money goes. You can't decide how whacky your expenses are until you know what they are. Looking at just your committed expenses and ignore the other stuff might be the problem here. You state that you feel you live modestly, but you need to be able to measure it completely to decide. I would suggest an online tool like mint.com (if you can get it in your country) because it will go back for 90 days and get transactions for you. If you primarily work in cash, this isn't helpful, but based on your credit card debt I am hoping not. (Although, a cash lifestyle would be good if you tend to overspend.) Take the time and sort your transactions into categories. Don't setup a budget, just sort them out. I like to limit the number of categories for clarity sake, especially to start. Don't get too crazy, and don't get too detailed at first. If you buy a magazine at the grocery store, just call it groceries. Once you know what you spend, then you can setup a budget for the categories. If somethings are important, create new categories. If one category is a problem, then break it down and find the specific issue. The key is that you budget not be more than you earn but also representative of what you spend. Follow up with mint every other day or every weekend so the categorization is a quick and easy process. Put it on your iPhone and do it at every lunch break. Share the information with your spouse and talk about it often." } ]

[ { "docid": "268992", "title": "", "text": "I use Banktivity. It's very much not free, but it automatically downloads all my bank and credit card activity and has excellent reporting options." } ]

[ { "docid": "521044", "title": "", "text": "\"I have worked with venture capitalists on a few different online based tools. There is no rule. I have seen deals go through for as little as 10% and up to 80%. There are a number of factors in place: What it really comes down to in the tech world is \"\"Is this a side job or your life and can you live while your site isn't generating income... and then can you pay others that you need to pay for your site to exist?\"\" Venture capitalists are into risky ventures that offer a high return. They have a portfolio of businesses and one going down will be made up for with a huge return on another. They will shut you down super quick though if they think your team/idea is a dud. What they initially take from your business is so negotiable there is no reason for me to give a number. We might be able to give you a half-assed forecast if you tell us your idea/staff size/current revenue and expenses/projections/amount of investment looking for.\"" }, { "docid": "520395", "title": "", "text": "\"I've received letters notifying me of data breaches in the past. In the end, I've never signed up for the offered protection service, figuring if \"\"they\"\" can hack Target or ADP or the IRS, they can hack anybody, like... Equifax. And now Equifax has been hacked. My family's Social Security Numbers were stolen from a hospital database. I think that information, plus public information was used to gain further data from the IRS FAFSA tool. (we got a letter from the IRS). Ultimately, fraudsters used whatever data they had to file a tax return with the IRS and with the Cali FTB (we don't and never have lived in California). We got letters from both, and managed to stop the fraud before it really impacted us...other than having to file a paper tax form this past tax season. Anyway... in a world where Equifax gets hacked: the only solution is: I don't bother with the crazy password schemes you talk about... I have a few different passwords I use, but most my investment accounts use the same username and password. It's all about risk. Bruce Schneier says the same thing. The amount to spend on security should depend on what you're trying to protect. I don't care much if somebody gets into my google account, because I have a google account just because I have to. I barely use it at all. Similarly my yahoo account. My yahoo account uses my \"\"insecure password\"\", and my investment accounts use my \"\"secure password\"\". Credit Card info? Meh. Unless they get into the credit card company database, which undoubtedly has my Social Security Number, it's not that big of a deal. Yeah, they can make fraudulent charges, but there are legal protections, so in theory I can't be out any money. So think this way: what's the risk, and what's the appropriate level of effort to take to mitigate that risk.\"" }, { "docid": "428941", "title": "", "text": "\"&gt; 1). How is a loan an asset? I'm the bank and I have 100$. I loan Jimmy 20$. With interest I expect him to pay back 25$. My books sure as shit shouldn't say I'm worth 105$ or even 100$! If you *extend* a loan to someone, the loan is an asset to you and a liability to them. It's a liability to them because they *owe* you the loan + interest back. It's an *asset* to you because you expect to retrieve the full loan principal AND interest back. There is no difference, cash flow wise, between spending $100 on a machine that makes fidget spinners and earns you $110 back ($10 profit) and extending a loan to Billy at 10% interest (you'll get $110 back, $10 profit). &gt; My books sure as shit shouldn't say I'm worth 105$ or even 100$! Why not? I have $100 cash. I loan it out to Billy at 10% interest. Billy is creditworthy and reliable, and certain collateral is in place. I'm worth, essentially, a discounted cash flow of $110 (which as long as my required return is less than 10%, means I'm worth *more* than $100). &gt; I gave away 20$. I'm worth 80$ right? No. That assumes you spent $20 and won't get *any* of it back. It's the same as ordering a $20 pizza and eating it all. Now, the *cash* you have on your *balance sheet* would be $80, but you'd have a loan outstanding as an asset at $20, which is a net 0 movement in equity on the other side. &gt; Sure I can put it on my books that Jimmy owes me 20$ but I cannot be acting like I HAVE that 20$ can I? Well, yes and no. On one hand, you are certainly *worth* more than $80 in your scenario. However, banks have some stringent regulations preventing banks from being overly risky. &gt; Isn't that how the 08' crash happened? No. '08 happened from a culmination of many different events, including risky and predatory loan origination, conflicts of interest in credit rating agencies, and low Fed rates, among other issues, including several \"\"domino effect\"\" secondary issues. &gt; Is the risk of default accounted for? Theoretically, the risk of default is accounted for in two areas: 1. The interest rate extended to the debtor. 2. A provision for loan losses. &gt; \"\" because default risk is not transferred with the asset.\"\" In what context was this seen? No one would willingly sell an asset but hold on to the risk (or they'd charge a high price, at least, for that). Student loans are a special case. In the U.S., they are generally *non-cancellable.* They survive everything, including bankruptcy. They don't have collateral. Basically, they're going to follow the person around, regardless of situation, INCLUDING simply not paying. This makes default risk (or rather loss risk) lower. A large portion of loans come from the federal government, which means to a pretty high degree, they are guaranteed by the government. This also makes loss risk lower. The government can garnish wages and all sorts of unpleasant things to get the money back. Even if losses are realized, taxes can (and will) make up the difference. Private loans have a bit less leeway in these regards, but they still are immune to bankruptcy currently. As such, while they don't have all the tools of the government, they're still essentially invincible.\"" }, { "docid": "178181", "title": "", "text": "\"There are a lot of good answers, but I will share my experience. First, a savings account needs to be for savings. If your in the US you have \"\"Regulation D\"\" to deal with and that will bite you on the rear if you go over those limits. Specially easy to do if your purchasing from a savings account. Next having an \"\"Income\"\" account and a \"\"Spending\"\" account can be a very good tool to build a nest egg. So for example you get $1500 into your income account and then move $1000 to your spending account then budget based on that $1000. This is an amazing thing to do, so long as you have the discipline to never transfer that extra $500, and pretend your broke when you run out of the $1000. That being said there is no reason that you can't do that in one account. It's all preference. My wife and I use YNAB (an envelope budgeting system) to do just that. We don't need the separate accounts. We are no more likely to \"\"not spend\"\" in one account then we are to \"\"not spend\"\" in two accounts. It's all just self discipline and what you need to do. This does lead to the situation we call YNAB broke. It's when we have to start choosing between \"\"going hungry\"\" or getting that new DVD, even though our bank account has $5,000 in it. It's even harder when you choose \"\"go hungry\"\" and have to follow through with it, even though you have enough to buy a used car in your bank account. But rather it's \"\"YNAB broke\"\" or your spending account is empty and your income account it full, the result is the same. It's up to \"\"you\"\" to have the self discipline not to spend. Rather that's in one account or two makes little difference.\"" }, { "docid": "140657", "title": "", "text": "I use MoneyStrands (formerly called Expensr), but mostly just to track expenses and look at reports on my spending habits. It has some really pretty charts, with the ability to drill down into categories and sub-categories, or graph monthly spending for any custom date range. It does a half-decent job of auto-categorizing the imported bank transactions, and you can set up additional rules for common vendors, but I still have to do some manual work after each import. It does a good job of integrating my credit cards, bank accounts, and I can even manually add cash transactions. It has some basic budgeting capabilities, but they're not very useful for someone who needs to carefully budget thier monthly spending. Another one I've heard about is mint.com, but it only supports American banks (last I heard, anyway)." }, { "docid": "104492", "title": "", "text": "\"First thing is that your English is pretty damn good. You should be proud. There are certainly adult native speakers, here in the US, that cannot write as well. I like your ambition, that you are looking to save money and improve yourself. I like that you want to move your funds into a more stable currency. What is really tough with your plan and situation is your salary. Here in the US banks will typically have minimum deposits that are high for you. I imagine the same is true in the EU. You may have to save up before you can deposit into an EU bank. To answer your question: Yes it is very wise to save money in different containers. My wife and I have one household savings account. Yet that is broken down by different categories (using a spreadsheet). A certain amount might be dedicated to vacation, emergency fund, or the purchase of a luxury item. We also have business and accounts and personal accounts. It goes even further. For spending we use the \"\"envelope system\"\". After our pay check is deposited, one of us goes to the bank and withdraws cash. Some goes into the grocery envelope, some in the entertainment envelope, and so on. So yes I think you have a good plan and I would really like to see a plan on how you can increase your income.\"" }, { "docid": "28411", "title": "", "text": "That definitely hit home. I'd be thinking the same thing every time I submitted an online application and its quite frustrating. I'm beginning to realize I shot my self in the foot after graduation when a friend put me in contact with a friend of his who works at a large aerospace firm. The contact seemed more than willing to help me out and I figured at the very least i'd get an interview. So I dedicated all my time prepping for the position and following up with my contact. 2 months later it all fell through when the firm changed the requirements for the position. I asked my contact what happened and he basically said oh well. So yeah I spent all this time so focused on one job that I thought I would get and it didn't work out. In school I learned what to do in a job but due to my circumstances (working 30 hours a week in a bar in order to pay for school) I never learned HOW to get a job. given that, I appreciate your suggestions and although everything you said seems obvious now, I think I've mainly been in denial and don't want to give up on what I really want. But thankfully I do have connections in other industries and friends who are more than willing to give mock interviews. I have the tools but as you said now its up to me to stop sulking and take the initiative. Thanks for the response, definitely needed to hear that. I will also send you my resume if you don't mid taking a quick look." }, { "docid": "359039", "title": "", "text": "If your debit card has no fraud protection then you need to find a different bank, many debit cards include it. Even with fraud protection, I don't like to keep excess money in the checking account, so I have checking and savings accounts with an online bank. I can transfer money from savings to checking instantly, 6 times per month, which allows me to keep only what is needed in the checking account. Many online banks have a better overdraft policy as well, where you simply pay a small amount of interest on the over-drawn amount, rather than a set ~$35 overdraft fee, or a $20 fee for them to automatically transfer money from your savings account. I've heard of, but not made use of threshold-based fraud alerts or two-factor approval, which you can set up so that any purchase in excess of $N triggers the need for additional approval via your phone." }, { "docid": "272008", "title": "", "text": "\"Yes when I place an order with my broker they send it out to the exchange. - For individual investors, what are some cons and pros of trading on the exchanges directly versus indirectly via brokers? I may be mistaken(I highly doubt it), but from my understanding you cannot trade directly through an exchange as a retail investor. BATS allows membership but it is only for Your firm must be a registered broker-dealer, registered with a Self Regulatory Organization (SRO) and connected with a clearing firm. No apple (aapl) is listed on the NASDAQ so trades go through the NASDAQ for aapl. Caterpillar Inc (CAT) is listed on the NYSE so trades go through the NYSE. The exchange you trade on is dependent on the security, if it is listed on the NYSE then you trade on the NYSE. As a regular investor you will be going through a broker. When looking to purchase a security it is more important to know about the company and less important to know what exchange it is listed on. Since there are rules a company must comply with for it to be listed on certain exchanges, it does make a difference but that is more the case when speaking about a stock listed Over the Counter(OTC) or NYSE. It is not important when asking NYSE or NASDAQ? Selecting a broker is something that's dependent on your needs. You should ask your self, \"\"whats important to me?\"\", \"\"Do I want apps(IE: iPhone, android)?\"\" \"\"Do I need fancy trading tools?\"\". Generally all the brokers you listed will most likely do the trick for you. Some review sites: Brokerage Review Online Broker Review 2012 Barron's 2012 Online Broker Review\"" }, { "docid": "463893", "title": "", "text": "Honing in on your last question: Is there a better way? I think there is, but it would require you to change the way you handle your spending, and that may not be of interest to you. Right now you have a lot of manual work, keeping track of expenditures and then entering the, every day. The great thing about switching to a habit where you pay for everything using a debit or credit card is that you can skip the manual entry by importing your transactions from your bank. You mention that your bank doesn't allow for exporting. There's still a chance that your bank can connect with a solution like Wave Accounting (http://www.waveaccouting.com), which is free and made for small business accounting. (Full disclosure: I represent Wave.) If your current bank doesn't permit export or connections with Wave, it may be worth switching to a different bank. It's a bit of a pain to make the switch, I know, but you really will save a massive amount of time and effort over the course of the year, as well as minimize the risk of human error, compared to entering your receipts on a daily basis. In Wave, you can still enter all of your cash receipts manually if you want to continue with your current practice of cash payments. One important thing to mention, too: If you're looking for a better way of doing things, make sure it includes proper backup. There would be nothing worse than entering all that data onto a spreadsheet and then something happening to your computer and you lose it all. Wave Accounting is backed up hourly and uses bank-level security to keep your information safe. One last thing: as I mention above, Wave Accounting is free. So if it is a good match for your small business accounting needs, it will also be a nice fit for your wallet." }, { "docid": "386095", "title": "", "text": "I have only been comfortable using my credit unions online bill payment system where the service they use already has the target in the database. When I enter the name of the company and the zip code from the bill, the system responds with the address that matches what is on the bill. In most cases the money is not sent via mail, but it is sent electronically. This eliminates the case of somebody finding the check. Though electronic delivery doesn't guarantee that I didn't type the wrong account number. When adding a new target, I like to pick those that also have an online system that I can check in a few days to make sure the money was received and properly credited. Recently a company failed to credit my account in a timely manner, my credit union actually noticed that the payment hadn't been cashed, and alerted me. I asked the credit union about mistakes, either by me or by them. They claimed that the payment is treated like any other check, and that if there was a problem the money could be pulled back, and my account credited with the funds. Your bank should have a disclosure document stating the risks and protections with the service." }, { "docid": "344236", "title": "", "text": "\"A few practical thoughts: A practical thing that helps me immensely not to loose important paperwork (such as bank statements, bills, payroll statement, all those statements you need for filing tax return, ...) is: In addition to the folder (Aktenordner) where the statements ultimately need to go I use a Hängeregistratur. There are also standing instead of hanging varieties of the same idea (may be less expensive if you buy them new - I got most of mine used): you have easy-to-add-to folders where you can just throw in e.g. the bank statement when it arrives. This way I give the statement a preliminary scan for anything that is obviously grossly wrong and throw it into the respective folder (Hängetasche). Every once in a while I take care of all my book-keeping, punch the statements, file them in the Aktenordner and enter them into the software. I used to hate and never do the filing when I tried to use Aktenordner only. I recently learned that it is well known that Aktenordner and Schnellhefter are very time consuming if you have paperwork arriving one sheet at a time. I've tried different accounting software (being somewhat on the nerdy side, I use gnucash), including some phone apps. Personally, I didn't like the phone apps I tried - IMHO it takes too much time to enter things, so I tend to forget it. I'm much better at asking for a sales receipt (Kassenzettel) everywhere and sticking them into a calendar at home (I also note cash payments for which I don't have a receipt as far as I recall them - the forgotten ones = difference ends up in category \"\"hobby\"\" as they are mostly the beer or coke after sports). I was also to impatient for the cloud/online solutions I tried (I use one for business, as there the archiving is guaranteed to be according to the legal requirements - but it really takes far more time than entering the records in gnucash).\"" }, { "docid": "584391", "title": "", "text": "\"Practically, as an ebay buyer I have never seen any way to keep a balance in paypal and top it off from my bank account under my own control. It is all automated, and as I seem to recall linking with a bank account or credit card was necessary to get some kind of \"\"confirmed address\"\" status out of Paypal so that eBay sellers would be more willing to trust me as a buyer and know that my shipping address was legitimate. As a seller, I can keep a balance at paypal from eBay sales and ask for it back in my checking account instead of keeping it in paypal to purchase items later. In terms of advice, in my opinion the paypal transfer limits or how to set them is not the answer needed to protect one's finances in this situation. In an error or cyberattack scenario, you have to consider the possibility that any limits are exceeded. When your online activity of any kind is linked to a bank account, any amount in that linked bank account is probably at risk. It doesn't really matter if it is paypal, or a server rental account, or amazon. If it can be abused, and it is linked to your bank account, then someone might abuse it and leave you with a bill. That you might be ultimately victorious is of little consequence if someone steals money you really needed right now and the devotion of time and energy to \"\"work the bureaucracy\"\" to get your money back will distract from performance at work or school. So the next step up in protection is to firewall the bank account you use for online purchases from your other bank accounts where your salary is received. The best way to do it is with different banks instead of merely different accounts, but that is also the most inconvenient for filling the account back up. Nowadays -- at least in the USA -- at several banks you can open a \"\"free\"\" checking account for a minimum deposit like $500 or $1000 that must stay in the account to be fee free at the end of each month. Whatever balance you keep in the account you use for your \"\"risky\"\" online transactions will be the maximum that can disappear in an incident, downside being you have to feed the account from time to time to keep it above the minimum as you make purchases.\"" }, { "docid": "513281", "title": "", "text": "\"First, let me say that $1000 is not that much of amount to invest in stocks. You need to remember that each transaction (buy/sell) has fees, which vary between $4-$40 (depending on the broker, you mentioned Scottrade - they charge $7 per transaction for stocks and about twice as much for some mutual funds). Consider this: you invest $1000, you gain $100. You'll pay $15 in fees just to buy/sell, that's 1.5% expense ratio. If you invest in more than 1 stock - multiply your fees. To avoid that you can look into mutual funds. Different brokers offer different funds for free, and almost all of them carry many of the rest for a fee. When looking into funds, you can find their expense ratio and compare. Remember that a fund with 1% expense ratio diversifies and invests in many stocks, while for you 1.5% expense ratio is for investing in a single stock. Is it a good idea to invest only in US or diversify worldwide? You can invest in the US, but in funds that diversify worldwide or across industries. Generally it is a good idea to diversify. I am 28. Should I be a conservative investor or take some risks? Depends on how bad of a shape will you be if you lose all your principle. What online brokerage service is the best? I have heard a lot about Scotttrade but want to be sure before I start. It seems to be the least expensive and most user-friendly to me. \"\"Best\"\" is a problematic term. Scottrade is OK, E*Trade is OK, you can try Sharebuilder, Ameritrade, there are several \"\"discount\"\" online brokers and plenty of on-line reviews and comparisons amongst them. What is a margin account and how would it affect my investing? From what I understand it comes into play when an investor borrows money from the broker. Do I need to use it at all as I won't be investing on a big scale yet. You understand right. There are rules to use margin accounts, and with the amount you have I'd advise against them even if you get approved. Read through the brokers' FAQ's on their requirement. Should I keep adding money on a monthly basis to my brokerage account to give me more money to invest or keep it at a certain amount for an extended period of time? Sharebuilder has a mechanism to purchase monthly at discounted prices. But be careful, they give you discounted prices to buy, but not to sell. You may end up with a lot of positions, and the discounts you've gotten to buy will cause you spend much more on selling. Generally, averaging (investing monthly) is a good way to save and mitigate some risks, but the risks are still there. This is good only for long term savings. How should my breakdown my investments in terms of bonds vs stocks? Depends on your vulnerability and risk thresholds.\"" }, { "docid": "477932", "title": "", "text": "\"It's a real pain in the rear to get cash only from a bank teller (the end result of cutting the card as suggested). There is a self control issue here that, like weight loss, should ultimately be addressed for a psychologically healthy lifestyle. You don't mention a budget here. A budget is one of the first tools necessary for setting spending limits. Categorizing your money into inviolable categories, such as: will force you to look at any purchase in context of your other needs and goals. Note that savings is at the top of the list, supporting the aphorism to, \"\"Pay yourself first.\"\" Make realistic allowances for each budget category, then force yourself to stick to this budget by whatever means necessary. Cash in several envelopes labeled with each category can physically reinforce your priorities (the debit card is usually left at home for now). Roll remaining funds from each month over into the next month to cover irregular larger expenses, such as auto repairs. What sort of investing are we talking about? If you are just talking about retirement savings, an automatic deduction of just $50 to a Roth IRA account at a discount brokerage every pay check is a good start. An emergency fund of 6 months expenses is also common financial advice, and can likewise be built from small automatic deductions. In defense of wise use of plastic, a debit card can be a great retroactive budgeting tool because it records all spending for you. It takes a lot more effort to save and enter receipts for cash, and a compulsive spender without a budget is just as likely to run out of money whether or not he uses plastic. You could keep receipts in the envelope you take the cash out of when you're getting started. If you are so addicted to spending that you must cut your debit card to enforce your budget, at least consider this a temporary measure to get yourself under control. When the bank issues you a new card, re-evaluate this decision and the self control measures you've implemented to see if you've grown enough to keep the card.\"" }, { "docid": "457989", "title": "", "text": "\"In answering your question as it's written: I don't think you're really \"\"missing\"\" something. Different banks offer different rates. Online banks, or eBanking solutions, such as CapitalOne, Ally, Barclays, etc., typically offer higher interest rates on basic savings accounts. There are differences between Money Market accounts and Standard Savings accounts, but primarily it comes down to how you can access your cash. This may vary based on bank, but Ally has a decent blurb about it: Regular savings accounts are easy to open and, when you choose an online bank like Ally Bank, you tend to get interest rates that are more competitive than brick-and-mortar counterparts, according to Bankrate.com. Additionally, as a member of the FDIC, Ally Bank gives you peace of mind knowing that the money in your Ally Bank Online Savings Account is insured to the maximum allowed by the law. Money market accounts are easy to open, too. And again, online banks may offer better rates than traditional banks. Generally, you have a bit more flexibility of access with a money market account than you do with a savings account. You can access funds in your Ally Bank Money Market Account through electronic fund transfers, checks, debit cards and ATM withdrawals. With savings accounts, your access is limited to electronic funds transfers or telephone withdrawals (and in-person withdrawals at traditional banks). Both types of accounts are subject to federal transaction limits. Here's a bit more information about a Money Market Account and why the rate might be a little bit higher (from thesimpledollar.com): A money market deposit account is a bit different. The restrictions on what a bank can do with that money are somewhat looser – they can often invest that money in things such as treasury notes, certificates of deposit, municipal bonds, and so on in addition to the tight restrictions of a normal savings accounts. In other words, the bank can take your money and invest it in other investments that are very safe. Now outside of your question, if you have $100K that you want to earn interest on, I'd suggest looking at options with higher rates of return rather than a basic savings account which will top out around 1% or so. What you do with that money is dependent on how quickly you need access to it, and there are a lot of Q&A's on this site that cover suggestions.\"" }, { "docid": "526568", "title": "", "text": "\"I started storing and summing all my receipts, bills, etc. It has the advantage of letting me separate expenses by category, but it's messy and it takes a long time. It sounds from this like you are making your summaries far too detailed. Don't. Instead, start by painting with broad strokes. For example, if you spent $65.17 at the grocery store, don't bother splitting that amount into categories like toiletries, hygiene products, food, and snacks: just categorize it as \"\"grocery spending\"\" and move on to the next line on your account statement. Similarly, unless your finances are heavily reliant on cash, don't worry about categorizing each cash expense; rather, just categorize the withdrawal of cash as miscellaneous and don't spend time trying to figure out exactly where the money went after that. Because honestly, you probably spent it on something other than savings. Because really, when you are just starting out getting a handle on your spending, you don't need all the nitty-gritty details. What you need, rather, is an idea of where your money is going. Figure out half a dozen or so categories which make sense for you to categorize your spending into (you probably have some idea of where your money is going). These could be loans, cost of living (mortgage/rent, utilities, housing, home insurance, ...), groceries, transportation (car payments, fuel, vehicle taxes, ...), savings, and so on -- whatever fits your situation. Add a miscellaneous category for anything that doesn't neatly fit into one of the categories you thought of. Go back something like 3-4 months among your account statements, do a quick categorization for each line on your account statements into one of these categories, and then sum them up per category and per month. Calculate the monthly average for each category. That's your starting point: the budget you've been living by (intentionally or not). After that, you can decide how you want to allocate the money, and perhaps dig a bit more deeply into some specific category. Turns out you are spending a lot of money on transportation which you didn't expect? Look more closely at those line items and see if there's something you can cut. Are you spending more money at the grocery store than you thought? Then look more closely at that. And so on. Once you know where you are and where you want to be (such as for example bumping the savings category by $200 per month), you can adjust your budget to take you closer to your goals. Chances are you won't realistically be able to do an about-face turn on the spot, but you can try to reduce some discretionary category by, say, 10% each month, and transfer that into savings instead. That way, in 6-7 months, you have cut that category in half.\"" }, { "docid": "591950", "title": "", "text": "I am confused as to what the author was talking about when speaking about the lack of features and research tools for stocks and how that is such a huge negative of Robinhood. If anything, I want a cheap, simple platform to efficiently trade. I might as well save a few bucks on commission, right? I can do my research online and through SEC filings, I don't need e-trade to tell me what stocks to buy, I decide. Whether I buy Cisco stock through TD Ameritrade's phone system for $45 per transaction or for free through Robinhood I'm still owning the same stock, the same company, at the same price probably within fractions of a penny per share. I get what the author is saying though about the general aurora of the app that is encouraging for people to invest who should not be investing. Maybe I don't see the problem with it because I like to think that I know what I am doing and don't just treat it like gambling." }, { "docid": "545780", "title": "", "text": "Adsense don't pay you daily. They pay you every month (as they have to calculate the final value). I'd say you only have to declare it when it hits your bank account. £60 actually isn't that much. It only took me a couple of months of just making a few quid, to making enough to get a monthly payment, and I only tot up what goes into my bank account. I've opened up a second account with my bank to send and receive payments relating to my online adventures. Then any in/out goes into a spreadsheet that I do at the end of the month keeping track of everything. If Mr. Taxman want to investigate at the end of the tax year, it's all logged in that account. It gets a bit murkier if you start doing US Amazon affiliates. The simplest method is to get the cheque delivered, and then log the amount that goes into your bank (after $->£ conversion). I have a Payoneer account, and transfer most of the money into my account (after it hits $500), and keep a little bit in for things I buy that are in USD. Hope that helps." } ]

[ { "docid": "411044", "title": "", "text": "Yes, there are a bunch. I have used Paypal and it worked quite nicely. I see endless ads these days for Square, a tiny card reader that you plug into a smartphone that lets you swipe the card. (With Paypal you have to type in the credit card number.)" } ]

[ { "docid": "443487", "title": "", "text": "Generally, credit card networks (as opposed to debit/ATM cards that may or may not have Visa/MC logos) have a rule that a merchant must accept any credit card with their logo. Visa rules for merchants in the US say it explicitly: Accept all types of valid Visa cards. Although Visa card acceptance rules may vary based on country specific requirements or local regulations, to offer the broadest possible range of payment options to cardholder customers, most merchants choose to accept all categories of Visa debit, credit, and prepaid cards.* Unfortunately the Visa site for China is in Chinese, so I can't find similar reference there. You can complain against a merchant who you think had violated Visa rules here. That said, its not a law, its a contract between the merchant processor and the Visa International organization, and merchants are known to break these rules here and there (most commonly - refusing to accept foreign cards, including in the US). Also, local laws may affect these contracts (for example, in the US it is legal to set minimum amount requirements when accepting credit cards). This only affects credit card processing, and merchants that don't accept credit cards may still accept debit cards since those work in different networks, under a different set of rules. Those who accept credit cards, are also required to accept debit cards (at least if used as credit)." }, { "docid": "462036", "title": "", "text": "\"This may be a bit advanced now, but once you start really working and get a place, I think this will apply more... Do I set up a bank account now? Yes. There is no reason not to. As an adult you will be using this much more than you think. Assuming you have a little money, you can walk in to any bank almost any day of the week and set up an account with them in very little time. Note that they may require you to be 18 if your parents won't be with you on the account. Otherwise, just ask any bank representative to help you do this. Just to be clear, if you can get a credit union account over a typical bank account, this is a great idea. Credit unions provide exactly the same financial services as a normal bank, but typically have variety of advantages over banks. Bank Account Parts Bank accounts typically have two parts, a checking account and a savings account. Your checking account typically is what you use for most day-to-day transactions and your savings account is generally used for, well, saving money. Having a bank account often gives you the following advantages: They give you an ability to store money without having large amounts of cash on hand. Once you start working regularly, you'll find you won't want to keep ~$600+ cash every two weeks in your wallet or apartment. They help you pay bills. When you set up your bank account, you will likely be able to get a Visa debit card which will process like a regular credit card but simply deduct funds from your checking account. You can use this card online to pay utilities (i.e. electricity and water), general bills (e.g. your cell phone and cable), purchase items (ex. at Amazon) or use it in stores to pay in lieu of cash. Be aware -- some banks will give you an ATM-only card before they send you the Visa debit card in the mail. This ATM-only card can only be used at ATMs as it's name implies. Similarly, if you can invest about ~$200 to build your credit, you can often get a deposit secured credit card attached to your account (basically a credit card where the bank keeps your money in case you can't pay your bill). If you treat this card with responsibility, you can eventually transition to an unsecured credit card. They save you hassles when cashing your check. If you don't have a bank where you can cash your check (e.g. you don't have an account), you will likely be charged check cashing fees (usually by places such as grocery stores or payday loan chains, or even other banks). Furthermore, if your check is over a certain amount, some places may refuse to cash your check period and a bank may be your only option. They give you a way to receive money electronically. The most common example of this is direct deposit. Many employers will send your money directly to your bank account instead of requiring you to cash a check. If they are prompt, this money gets to you faster and saves you trouble (on payday, you'll just receive a pay stub detailing your wages and the amount deposited rather than a check). Also, since you asked about taxes, you should know that when you do eventually file with the IRS, they have an option to receive your tax refund electronically as well (e.g. direct deposit into your bank account) and that can literally save you months in some cases depending on when you file your return and how many paper checks they have to process. Does it cost money to setup? It depends. Some banks have special offers, some don't. Most places will set up an account for free, but may require a minimum deposit to open the account (typically $50-$100). The Visa debit card mentioned above generally comes free. If you want a secured credit card as above, you will want about an additional $200 (so $250 - $300 total). Note that this is absolutely NOT required. You can exclusively use the Visa debit card above if you wish. Bank Account Fees Any fees charged when you have a bank account are usually minor anymore. Regardless, the bank will hand you a whole bunch of paperwork (mostly in legalese) detailing exactly how your account works. That said, the bank person helping set things up will cover what you need to know about keeping the account in plain English. The most common types of fee associated with a bank account are monthly maintenance fees and overdraft fees, but these aren't always necessarily charged. Likewise, there may be some other fees associated with the account but these vary from bank to bank. Monthly Maintenance Fees To give some examples... Overdraft Fees Overdraft fees are typically charged when you attempt to spend more money than you have in your bank account and the bank has to cover these charges. Overdraft fees typically apply to using paper checks (which it is unlikely you will be using), but not always. That said, it is very unlikely you will be charged overdraft fees for three reasons: Many banks have done away with these fees in lieu of other ways of generating revenue. Banks that still charge these fees usually have \"\"overdraft protection\"\" options for a little more money a month, effectively negating the possibility you will be charged these fees. The ability to deduct an amount of money from your checking account is now typically checked electronically before the payment is authorized. That is, using a Visa debit card, the card balance is checked immediately, and even when using paper check, most retailers have check scanning machines that do roughly the same thing. On a personal note, the bank that I have allows my account to be deducted below my checking account balance only if the payment is requested electronically (e.g. someone who has my card information charges me for a monthly service). In this case, the funds are simply listed in the negative and deducted from any amount I deposit till the proper amount is repaid (e.g. if I'm at -$25 dollars due to a charge when my account balance was $0 and then I deposit $100, my available balance will then be $75, not $100). Finally, per the comment by @Thebluefish, while I minimize the likelihood you will be charged overdraft fees, it is good to check into the exact circumstances under which you might be charged unexpectedly by your bank. Read the documentation they give you carefully, including any mailed updates, and you'll reduce the chance of receiving a nasty surprise. For reference, here are some of the fees charged by Bank of America. What about taxes? When you begin working, an employer will usually have you fill out a tax form such as a W-4 Employee's Withholding Allowance Certificate so that your employer can withhold the correct federal income tax from your wages. If they don't, then it is your responsibility to calculate and file your own income taxes (if you are self-employed, an independent contractor or paid under the table). If your employer is reputable, they will send you additional information (generally in February) you need to properly file your taxes prior to April 15th (the IRS tax deadline for most people). This additional information will likely be some variation of a W-2 Wage and Tax Statement or possibly a Form 1099-MISC. Do I have to worry about money in my bank account? Unless you have a significant amount in your bank savings account earning interest (see \"\"Should I save for the future?\"\" below), you won't have to pay any sort of tax on money in your bank account. If you do earn enough taxable interest, the bank will send you the proper forms to file your taxes. How do I file taxes? While it won't apply till next year, you will likely be able to fill out a Form 1040EZ Income Tax Return for Single and Joint Filers With No Dependents, as long as you don't have any kids in the meantime. ;-) You will either mail in the paper form (available at your local IRS office, post office, public library, etc.) or file electronically. There will be a lot of information on how to do this when the time comes, so don't worry about details just yet. Assuming your all paid up on your taxes (very likely unless you get a good paying job and take a lot of deductions throughout the year on your W-4), you'll probably get money back from the IRS when you file your tax return. As I mentioned above, if you have a bank account, you can opt to have your refund money returned electronically and get it much sooner than if you didn't have a bank account (again, possibly saving you literal months of waiting). Should I save for my future? If so, how much? Any good articles? Yes, you should save for the future, and start as soon as possible. It's outside the scope of this answer, but listen to your Economics professor talk about compound interest. In short, the later you start saving, the less money you have when you retire. Not that it makes much difference now, but you have to think that over 45 years of working (age 20-65), you likely have to have enough money for another 20+ years of not working (65-85+). So if you want $25,000 a year for retirement, you need to make ~$50,000 - $75,000 a year between your job and any financial instruments you have (savings account, stocks, bonds, CDs, mutual funds, IRAs, job retirement benefits, etc.) Where you should stick money your money is a complicated question which you can investigate at length as you get older. Personally, though, I would recommend some combination of IRA (Individual Retirement Account), long term mutual funds, and some sort of savings bonds. There is a metric ton of information regarding financial planning, but you can always read something like Investing For Dummies or you can try the Motley Fool's How To Invest (online and highly recommended). But I'm Only 17... So what should you do now? Budget. Sounds dumb, but just look at your basic expenses and total them all up (rent, utilities, phone, cable, food, gas, other costs) and divide by two. Out of each paycheck, this is how much money you need to save not to go into debt. Try to save a little each month. $50 - $100 a month is a good starting amount if you can swing it. You can always try to save more later. Invest early. You may not get great returns, but you don't need much money to start investing. Often you can get started with as little as $20 - $100. You'll have to do research but it is possible. Put money in your savings account. Checking accounts do not typically earn interest but money in savings accounts often do (that is, the bank will actually add money to your savings assuming you leave it in there long enough). Unfortunately, this rate of interest is only about 3.5% on average, which for most people means they don't get rich off it. You have to have a significant amount of money ($5,000+) to see even modest improvements in your savings account balance each month. But still, you may eventually get there. Get into the habit of putting money places that make you money in the long run. Don't go into debt. Don't get payday loans, pawn items, or abuse credit cards. Besides wrecking your credit, even a small amount of debt ($500+) can be very hard to break out of if you don't have a great paying job and can even make you homeless (no rent means no apartment). Remember, be financially responsible -- but assuming your parents aren't totally tight with money, don't be afraid to ask for cash when you really need it. This is a much better option than borrowing from some place that charges outrageous interest or making your payments late. Have an emergency account. As already mentioned in another excellent answer, you need to have money to \"\"smooth things out\"\" when you encounter unexpected events (your employer has trouble with your check, you have to pay for some sort of repair bill, you use more gas in your car in a month than normal, etc.) Anywhere from $200 - $2000+ should do it, but ideally you should have at least enough to cover a month of basic expenses. Build good credit. Avoid the temptation to get a lot of credit cards, even if stores and banks are dying to give them to you. You really only need one to build good credit (preferably a secured one from your bank, as mentioned above). Never charge more than you can pay off in a single month. Charging, then paying that amount off before the due date on your next statement, will help your credit immensely. Likewise, pay attention to your rent, utilities and monthly services (cell phone, cable, etc.). Even though these seem like options you can put off (\"\"Oh my electric bill is only $40? I'll pay that next month...\"\") late payments on all of these can negatively affect your credit score, which you will need later to get good loans and buy a house. Get health insurance. Now that the Affordable Care Act (ACA a.k.a Obamacare) has been enacted, it is now simpler to get health insurance, and it is actually required you have some. Hopefully, your employer will offer health coverage, you can find reasonably priced coverage on your own, or you live in a state with a health exchange. Even if you can't otherwise get/afford insurance, you may qualify for some sort of state coverage depending on income. If you don't have some sort of health insurance (private or otherwise), the IRS can potentially fine you when you file your taxes. Not to be too scary, but the fine as currently proposed is jumping up to about $700 for individuals in 2016 or so. So... even if you don't grab health insurance (which you absolutely should), you need to save about $60 a month, even if just for the fine. This answer turned out a bit longer than intended, but hopefully it will help you a little bit. Welcome to the wonderful world of adult financial responsibility. :-)\"" }, { "docid": "125497", "title": "", "text": "\"I too am a full-monthly-statement-balance payer and I received a balance transfer offer from my credit-card company. This one was quite different from many others that I have read about on this forum. I could do a balance transfer for any amount up to $X from another credit card, or use the enclosed \"\"checks\"\" to pay some other (non-credit-card) bills, and I would not have to pay any interest for 12 months on the amount thus borrowed. But, There would be a 2% service charge on the amount I was borrowing. This amount would be billed on the next monthly statement, and it would have to be paid in full by the due date of that month's payment, that is, within the 25-day grace period allowed for payment of monthly statements. Else, interest would start being charged on the unpaid part of the service charge at the usual humongous rate of H% per month. If I had not paid the previous month's balance in full, I would be charged interest at H% per month on the service charge starting from Day One; no free ride till the due date of the next month's statement. Of course, the balance carried over from last month would also be charged interest at H%. If I had paid last month's bill in full, but there were any other charges (purchases) during the current month, then unless the entire amount due, this month's purchases plus service charge and that \"\"interest-free-for-twelve-months loan\"\" balance was paid off within the 25-day grace period, my purchases would be deemed unpaid and would start being charged interest. In short, the only way to avoid paying interest on the amount borrowed was to start with a card showing a $0 balance due on the previous month's statement, not make any charges on that card for a whole year, and pay off that 2% service charge within the grace period. It might also have required that one-twelfth of that interest-free loan be repaid each month, but I had stopped reading the offer at this point and filed it in the round circular file. In short, while @JoeTaxpayer's tale of how \"\"As a pay-in-full user, I've used the zero rate to throw $20K at the 5.25% mortgage\"\" is undoubtedly how things worked once, it is not at all clear that they still work that way. At least, they don't work that way for me. Heck, once upon a time, for a period of about 3 months, you could earn 1.5% interest per month from the credit card company by overpaying your credit card bill considerably. Their computers then just \"\"added on\"\" 1.5% interest by multiplying your credit balance -$X by 1.015 and so you got 1.5% per month interest from the credit card company. The credit card agreements (and the software!) got changed in a hurry, and nowdays all credit-card agreements state in the fine print that if you overpay your bill, you don't earn any interest on the overpayment.\"" }, { "docid": "21576", "title": "", "text": "\"TL;DR summary: 0% balance transfer offers and \"\"free checks usable anywhere\"\" rarely are a good deal for the customer. 0% rate balance transfer offers (and the checks usable anywhere including payment of taxes) come with a transaction fee because the credit card company is paying off the balance on the other card (or the tax or the electric bill) in the full amount of $X as stated on the other card statement or on the tax/electric bill). This is in contrast to a purchase transaction where if you buy something for $X, you pay the card company $X but the card company pays the merchant something less than $X$. (Of course, the merchant has jacked up the sale price of the item to pass on the charge to you.) Can you get the credit card company to waive the transaction fee? You can try asking them but it is unlikely that you will succeed if your credit score is good! I have seen balance transfer offers with no transaction fees made to people who have don't have good credit scores and are used to carrying a balance on their credit cards. I assume that the company making the offer knows that it will make up the transaction fee from future interest payments. A few other points to keep in mind with respect to using a 0% balance transfer offer to pay off a student loan (or anything else for that matter):\"" }, { "docid": "346852", "title": "", "text": "\"I don't think credit cards support depositing money into to begin with. Anyone could deposit money to a Credit Card acccount. All they need is your bank's name, Visa/Mastercard, and 16 digit number. It is done through the \"\"Pay Bills / Make Payments\"\" function in online banking. So tell me, what does it mean that PayPal will transfer the money to my VISA card You can use the new balance for spending via Credit Card, the effect is same as making a payment from your chequing account to credit card account. Will it simply just get transferred to my bank account by the local bank after that Some banks would refund the excess amount from your Credit Card to your Chequing Account after a while, but most don't. People keep credit balance on credit card to make a purchaes larger than credit limit. For example, if your credit limit is $1000, balance is $0, and you made $500 payment to the credit card, you can make a purchase of $1500 without asking for credit limit increase.\"" }, { "docid": "171761", "title": "", "text": "In some stores that is done. When I shop at the Apple store or at the Farmers market the receipt is automatically sent to my email address. Why don't others do it? If the target of the itemized receipt is a credit card company they would be sending data that they spent collecting to another corporation. The grocery store is collecting your data so they can sell it to their vendors. They sell to vendors the info that Gen X shoppers that buy cat food are more likely to use brand X laundry detergent then Millennials. The credit card companies could gather even more Meta data that they could sell. Privacy. Some people don't join the reward program at the store because they don't want a company to know exactly what they buy. Even fewer would want the credit card company to have that information. The credit card companies would have to want this level of data that would have to be stored, maintained, and protected." }, { "docid": "338701", "title": "", "text": "I'm not familiar with Gnucash, but I can discuss double-entry bookkeeping in general. I think the typical solution to something like this is to create an Asset account for what this other person owes you. This represents the money that he owes you. It's an Accounts Receivable. Method 1: Do you have/need separate accounts for each company that you are paying for this person? Do you need to record where the money is going? If not, then all you need is: When you pay a bill, you credit (subtract from) Checking and debit (add to) Friend Account. When he pays you, you credit (subtract from) Friend Account and debit (add to) Checking. That is, when you pay a bill for your friend you are turning one asset, cash, into a different kind of asset, receivable. When he pays you, you are doing the reverse. There's no need to create a new account each time you pay a bill. Just keep a rolling balance on this My Friend account. It's like a credit card: you don't get a new card each time you make a purchase, you just add to the balance. When you make a payment, you subtract from the balance. Method 2: If you need to record where the money is going, then you'd have to create accounts for each of the companies that you pay bills to. These would be Expense accounts. Then you'd need to create two accounts for your friend: An Asset account for the money he owes you, and an Income account for the stream of money coming in. So when you pay a bill, you'd credit Checking, debit My Friend Owes Me, credit the company expense account, and debit the Money from My Friend income account. When he repays you, you'd credit My Friend Owes Me and debit Checking. You don't change the income or expense accounts. Method 3: You could enter bills when they're received as a liability and then eliminate the liability when you pay them. This is probably more work than you want to go to." }, { "docid": "220828", "title": "", "text": "\"standard NFC-for-payments ... reads a straight copy of the card details ... does not generate any one-time-use card number ... does not employ any over-the-air encryption or even a challenge-response system [?] The normal contactless payment process does involve transaction-specific cryptographic-signatures. However what process is used depends on the vendor equipment and the scheme (Visa, Mastercard, Amex, ...) A \"\"Magstripe mode\"\", if supported, allows the card number and expiry date to be read. There is a good description at Level2Kernel which covers \"\"Magnetic Stripe Mode\"\" and \"\"EMV Mode\"\" etc for each scheme (Mastercard, Visa etc do things differently). MasterCard Contactless MasterCard transactions can be performed in either EMV mode or Mag-Stripe mode. After Entry Point has initiated a transaction the MasterCard Kernel issues a Get Processing Options command. In the response from the card a data object called the Application Interchange Profile (AIP) determines whether the transaction will continue in either EMV Mode or Mag-Stripe Mode. The AIP also determines if “On-device cardholder verification” (CDCVM) is supported. EMV Mode (M/Chip) The commands exchanged with the card for EMV Mode closely resemble those used for an EMV contact transaction, with Read Record commands being used to retrieve all the card data, followed by a Generate Application Cryptogram (GENAC) request to obtain a unique, transaction-specific, cryptogram from the card. Once all of these exchanges have been completed, the card can be removed from the RF field. However, unlike for contact transactions, not all the transaction processing occurs before the card exchanges have been completed. This is to optimise the contactless transaction performance by reducing the amount of time the card is required to remain in the RF field. (my emphasis) According to VISA UK Our technology uses the chip on your card to generate unique cryptograms (that’s techie speak for a type of puzzle that consists of a short piece of encrypted or encoded text) and digital signatures to protect your payments. Digital signatures are like handwritten signatures in some ways – but they are much more difficult to forge. (my emphasis) According to the UK Card Association Rumour: A fraudster can steal my details from my contactless card. Fact: You have to be extremely close to someone for their gadget to be able to read your card - and even then all they would ever get is the card number and expiry date. That’s the same information you see by simply looking at the front of any card.There’s no way anyone can get the security code on the back of the card, your name and address, or bank account details. The vast majority of online retailers require additional details like these and others to make a purchase. However, according to a Guardian newspaper report of 2015-07-25: Researchers bought cheap, widely available card scanners from a mainstream website to see if they could “steal” key details from a contactless card. They tested 10 different credit and debit cards, that were meant to be coded to “mask” personal data, and were able to read crucial data that was meant to be hidden. It then went shopping with the information it had obtained and was able to successfully place orders for items including a £3,000 television set. So yes, even in the civilized world, our security is undermined by a combination of: How does Apple Pay work? See Apple Pay Must Be Using the Mag-Stripe Mode of the EMV Contactless Specifications Clearly, Apple Pay must following the EMV contactless specifications of books C-2, C-3 and C-4 for MasterCard, Visa and American Express transactions respectively. More specifically, it must be following what I called above the “mobile phone profile” of the contactless specifications. It must be implementing the contactless mag-stripe mode, since magnetic stripe infrastructure is still prevalent in the US. It may or may not be implementing contactless EMV mode today, but will probably implement it in the future as the infrastructure for supporting payments with contact cards is phased in over the next year in the US.\"" }, { "docid": "171339", "title": "", "text": "\"One of the factors of a credit score is the \"\"length of time revolving accounts have been established\"\". Having a credit card with any line of credit will help in this regard. The account will age regardless of your use or utilization. If you are having issues with credit limits and no credit history, you may have trouble getting financing for the purchase. You should be sure you're approved for financing, and not just that the financing option is \"\"available\"\" (potentially with the caveat of \"\"for well qualified borrowers\"\"). Generally, if you've gotten approved for financing, that will come in the form of another credit card account (many contracting and plumbing companies will do this in hopes you will use the card for future purchases) or a bank loan account (more common for auto and home loans). With the credit card account, you might be able to perform a balance transfer, but there are usually fees associated with that. For bank loan accounts, you probably can't pay that off with a credit card. You'll need to transfer money to the account via ACH or send in a check. In short: I wouldn't bet on paying with your current credit card to get any benefit. IANAL. Utilizing promotional offers, whether interest-free for __ months, no balance transfer fees, or whatever, and passing your debt around is not illegal, not fraudulent, and in many cases advised (this is a link), though that is more for people to distribute utilization across multiple cards, and to minimize interest accrued. Many people, myself included, use a credit card for purchasing EVERYTHING, then pay it off in full every month (or sometimes immediately) to reap the benefit of cash back rewards and other cardholder benefits. I've also made a major payment (tuition, actually) on a Discover card, and opened up a new Visa card with 18-months of no interest and no balance transfer fees to let the bill sit for 12 months while I finished school and got a job.\"" }, { "docid": "89403", "title": "", "text": "Apparently it is up to the credit card company on how they want to report your available balance. Another disadvantage to the no-limit credit card may not be apparent to most people, but it is something noted by organizations like The Motley Fool, which is expert in many issues of finance and investment. Part of your credit score, about 30%, considers the amount of money you have borrowed, and the limit on your present credit cards. A no-limit credit card company may report your limit as $0 if you have not used the card, or they may report a maximum limit available to you. They may not, nor are they obligated, to report times when you put tons of expenses on a credit card and then paid them off. While some companies will report your timely payments and paid off amounts, others simply report an extremely low limit. For instance if you spent $100 US Dollars (USD), your limit might be considered $100 USD, or it may merely be reported as zero. You’ll need to check with a credit card company on how they report payments and limits on a no-limit credit card before you obtain one. Some people who are scrupulous are paying off their cards at the end of each month suffer major losses to their credit score, without even realizing it, if their spending ability is rated at zero, or their payments don’t count toward showing credit worthiness. Source" }, { "docid": "423505", "title": "", "text": "I'm sure it depends on the company, but I routinely run balances greater than 0 on my credit card. The reason is simple: I already budgeted to spend the money, I know I'm going to spend the money, and it's easier to put the extra money on the card at the beginning of my budget period rather than waiting until I spend the money and get a bill. There are 2 relevant numbers: First is the balance on your bill. It can show a positive or negative value, as people have talked about. The balance on my card tends to update fairly infrequently. The second is the available credit. When I overpay on my card, the available credit does not show more than the available debt. The latter value, however, updates for me immediately -- I can see within minutes any transaction on my credit card based on the credit available. One important caveat: Refunds don't always immediately process. You may have to wait days or weeks until that money shows up in your account. Spending the money before it appears in your account will cause your card to behave exactly as if you don't have the money." }, { "docid": "521688", "title": "", "text": "In most cases, the brand on the card, eg Visa or MasterCard, is a middleman. The company processes the transaction, transferring $xx from the bank to the seller, and telling the bank to debit the buyer's account. The bank is at risk, not the company transacting the purchase. What's interesting is that American Express started as both. My first Amex card, issued in 1979 (long expired, but in my box of memorabilia) had no bank. American Express offered a card that offered no extended credit, it was pay in full each month. Since then, Amex started offering extended credit, i.e. with annual interest, and minimum payments, and more recently, offering transaction processing for banks which take on the credit risk, essentially becoming very similar to MasterCard and Visa." }, { "docid": "452486", "title": "", "text": "when they make the most money off of charging interest on late payments? This is incorrect. Do you have any data to back this? In the past decade there was a tendency by financial institutions to make money from late payments and there were certain rewards / incentives for people who paid late. However the bubble cracked soon enough and there were huge losses in the card industry. Today most of the revenue for card companies is from margins on customers who pay on time and growth avenues are promoting to pay every transaction by card. why do they actively seek people who pay their bills on time (as evidence by requiring good credit scores to get approved for a card), instead of they opposite? As indicated above. Remember if one customer defaults it wipes out margins made by tons of customers. In spite of giving credit to people with good credit score, the average credit card debit an US individual holds is still quite high." }, { "docid": "395379", "title": "", "text": "I've kind of been there myself. I stretched my finances for the deposit on a house, and lived off my credit card for a few months to build up what I was short on the deposit. Add some unexpected car repairs, and I ended up with £10k on the card. The problem I had then was that interest on the card ran at around 20%, and although I could meet the interest payments I couldn't clear the £10k. I simply went and talked to my bank. In the UK there are some clear rules about banks giving customers a chance to restructure their debts. That's the BANK doing it, not some shady loan-shark. We went through my finances and established that in principle it was repayable. So I got a 2-year unsecured loan at around 5%, cleared the card, and spent the next 2 years paying off a loan that I could afford. My credit score is still aces. Forget the loan-sharks. Talk to your bank. If they're crap, talk to another bank. If no bank is going to help you, consider bankrupcy as per advice above. Debt restructuring companies are ALWAYS a con, no exceptions." }, { "docid": "189889", "title": "", "text": "Each ATM, the machine, belongs to one or more networks. Those networks work with multiple types of cards. Each card belongs to one or more networks. The overlap of the networks the machine belongs to, and the card belongs to determines if the card works and what fees and limits apply. In general if the credit card belongs to one of the major networks (VISA, Master Card, American Express and Discover) you shouldn't have a problem finding a ATM that will give you a cash advance, or even a cash advance without an ATM Fee. Each credit card network should have a web interface to show you where the ATMs are that will work with the card. If it is a store credit card it still might belong to one of the major networks. If the bank that issues the card is local you can probably get a cash advance at the bank branch. Use the website to see if the ATM/Branch locations are convenient for you. The actual limits are a function of the card type, and the credit limit that you have been approved for. In my experience the maximum amount of cash advance outstanding is half the credit limit, but you need to check with your card. Keep in mind unless you have a special offer from the credit card company expect that there will be a fee charged by the credit card company for the cash advance, this is in addition to a fee charged by the ATM. Also remember that interest starts to accumulate on day one of the cash advance. It isn't like a regular purchase that might not be charged interest until the cycle closes and the payment is due. The documentation from the credit card company will describe all the fees and limits." }, { "docid": "553418", "title": "", "text": "\"The service processors are providing is absorbing the risk. The flow goes, roughly (and I say roughly because it's a complicated process): 1. You swipe/insert your card at Bob's House of Eatery and get charged $10 for a bucket of ramen or something. 2. The device you swipe your card in, (\"\"a terminal\"\") encodes the card number, amount, and some other transaction details and contacts a \"\"Payment Gateway\"\". 3. The gateway decodes the blob of data, and is responsible for determining the issuing financial institution (\"\"Chase\"\", \"\"US Bank\"\", etc.). 4. The gateway contacts the above and asks, \"\"Can card # 555.. charge $10?\"\" 5. The gateway also sends this answer to the processor. 5. The processor _immediately_ proxies that yes/no back to the merchant's terminal. 6. The processor, having a transaction ID, and a yes/no, sends the response to the merchant's systems so your receipt can be printed or order processed, and so on. 7. Meanwhile, the processor has a transaction ID and is busy figuring out things like interchange fees. The amount depends on a whole host of things, and almost everyone involved in the process wants their cut -- the bank, the gateway, the processor, and it all depends on the type of card, customer, rewards, and so on. 8. At the end of the day, week, whatever, the processor collects money from the issuing financial institution and is responsible for giving the right amount -- less fees -- to the merchant. The processor here also absorbs the risk and costs for things like chargebacks, as almost everyone in that chain (gateway, issuing bank) want their pound of flesh for a chargeback, and often the processor doesn't pass that full cost on to the merchant and instead does some risk analysis to determine if they think this merchant is going to be okay to do business with. That's what you're paying for.\"" }, { "docid": "119416", "title": "", "text": "\"I think you misunderstand the purpose of the liability account. I would suggest you review the standard accounting model, but to give you a brief overview: Income and expenses are money coming into and out of your possession. They are the pipes flowing into and out of your \"\"box\"\". Inside your box, you have assets (bank, savings, cash, etc) and liabilities (credit cards, unpaid debts, etc). Money can flow into and out of either asset or liability accounts, for example: deposit a payment (income to asset), buy office supplies with cash (asset to expense), pay a bill with credit card (liability to expense), customer pays one of your debts directly (income to liability). Paying off a debt with an asset does not affect your overall net worth, so paying a check to your credit card bill (asset to liability) doesn't decrease your total balance, it merely moves the value from one bucket to another. Now to your question: Mandatory payments, such as taxes or insurance (or for that matter, utilities, rent, food- all things that \"\"must\"\" be bought occasionally) are not liabilities, instead they are all expenses. They might be paid FROM a liability account, if they are paid on credit for example, but the money still flows from liability to expense. In my own records I have Expense:Taxes and Expense:Insurance, with sub-accounts in each. Where the money comes from depends entirely on how I pay my bills, whether from cash or banks (asset) or whether it's a charge (liability). Sometimes you receive payments back from an insurance company. I find that rather than treating insurance premiums as a positive balance in a liability (with eventual payments as debits to the liability account), it is better to treat any payment from the insurance as income. Hope that helps!\"" }, { "docid": "206267", "title": "", "text": "\"First, a note of my personal experience: up until a year ago, my credit lines were composed exclusively of credit cards with perfect payment histories, and my credit score is fine. If you mean that credit cards have no impact on a person's credit score until they miss a payment, that is certainly not correct. FICO's website identifies \"\"payment history\"\" as 35% of your FICO score: The first thing any lender wants to know is whether you’ve paid past credit accounts on time. This is one of the most important factors in a FICO® Score. ... Credit payment history on many types of accounts Account types considered for payment history include: ... Details on late or missed payments (\"\"delinquencies\"\") and public record and collection items FICO® Scores consider: How many accounts show no late payment A good track record on most of your credit accounts will increase your FICO® Scores. Clearly, from the last item alone, we see that credit lines (a category which includes credit cards) with no late payments is a factor in computing your FICO score, and certainly other credit bureaus behave similarly. Possibly the banker was trying to explain some other point, like \"\"If you're careful not to spend more on your card than you have in the bank, you can functionally treat your credit card as a debit line,\"\" but did so in a confusing way.\"" }, { "docid": "299840", "title": "", "text": "\"You are correct. Credit card companies charge the merchant for every transaction. But the merchant isn't necessarily going to give you discount for paying in cash. The idea is that by providing more payment options, they increase sales, covering the cost of the transaction fee. That said, some merchants require a minimum purchase for using a credit card, though this may be against the policies of some issuers in the U.S. (I have no idea about India.) Also correct. They hope that you'll carry a balance so that they can charge you interest on it. Some credit cards are setup to charge as many fees as they possibly can. These are typically those low limit cards that are marketed as \"\"good\"\" ways to build up your credit. Most are basically scams, in the fact that the fees are outrageous. Update regarding minimum purchases: Apparently, Visa is allowing minimum purchase requirements in the U.S. of $10 or less. However, it seems that MasterCard still does not allow them, for the most part. Moral of the story: research the credit card issuers' policies. A further update regarding minimum purchases: In the US, merchants will be allowed to require a minimum purchase of up to $10 for credit card transactions. (I am guessing that prompted the Visa rule change mentioned above.) More detail can be found here in this answer, along with a link to the text of the bill itself.\"" } ]

[ { "docid": "395912", "title": "", "text": "\"Using the Transfer category is the best place to put these categories, as that accurately reflects what the transaction is. If you have your credit card and bank account linked in Mint, the debit and credit to both accounts will net to $0 in the category. I would not recommend using \"\"Hide from budget and trends\"\" as sometimes multiple (erroneous) transactions pop up and having a category that should but, in error, does not net to $0 will raise your attention to possibly duplicate transactions. You can ask Mint to always categorize certain transactions in certain ways. On any of your payments, if you click \"\"Edit Details\"\" and then select the Transfer category, you can ask Mint to always make that classification:\"" } ]

[ { "docid": "345482", "title": "", "text": "\"in theory, yes. in practice, no. largely because merchants pay a fee to process credit card transactions which normally exceeds the cash back you can get. i tried this with square, since their vendor fee was 2.75%, and i got 5% back on restaurants. however, even though i registered with square as a restaurant, transactions were categorized as \"\"other services\"\" or something, so i only got 1% back and lost 1.75% net. moreover, if you did find a card/processor combination that left you with a net gain, they would eventually catch on and charge you with some sort of fraud. i wasn't worried about it with the square experiment because it was only 1$, but if you tried to do this with large sums, a human would catch you. and if it was enough money to matter, there would be a lawsuit. if you were really unlucky, you might get charged with some terrorism crap like \"\"structuring\"\" deposits.\"" }, { "docid": "442241", "title": "", "text": "A traditional bank is not likely to give you a loan if you have no source of income. Credit card application forms also ask for your current income level and may reject you based on not having a job. You might want to make a list of income and expenses and look closely at which expenses can be reduced or eliminated. Use 6 months of your actual bills to calculate this list. Also make a list of your assets and liabilities. A sheet that lists income/expenses and assets/liabilities is called a Financial Statement. This is the most basic tool you'll need to get your expenses under control. There are many other options for raising capital to pay for your monthly expenses: Sell off your possessions that you no longer need or can't afford Ask for short term loan help from family and friends Advertise for short term loan help on websites such as Kijiji Start a part-time business doing something that you like and people need. Tutoring, dog-walking, photography, you make the list and pick from it. Look into unemployment insurance. Apply as soon as you are out of work. The folks at the unemployment office are willing to answer all your questions and help you get what you need. Dip into your retirement fund. To reduce your expenses, here are a few things you may not have considered: If you own your home, make an appointment with your bank to discuss renegotiation of your mortgage payments. The bank will be more interested in helping you before you start missing payments than after. Depending on how much equity you have in your home, you may be able to significantly reduce payments by extending the life of the mortgage. Your banker will be impressed if you can bring them a balance sheet that shows your assets, liabilities, income and expenses. As above, for car payments as well. Call your phone, cable, credit card, and internet service providers and tell them you want to cancel your service. This will immediately connect you to Customer Retention. Let them know that you are having a hard time paying your bill and will either have to negotiate a lower payment or cancel the service. This tactic can significantly reduce your payments. When you have your new job, there are some things you can do to make sure this doesn't happen again: Set aside 10% of your income in a savings account. Have it automatically deducted from your income at source if you can. 75% of Americans are 4 weeks away from bankruptcy. You can avoid this by forcing yourself to save enough to manage your household finances for 3 - 6 months, a year is better. If you own your own home, take out a line of credit against it based on the available equity. Your bank can help you with that. It won't cost you anything as long as you don't use it. This is emergency money; do not use it for vacations or car repairs. There will always be little emergencies in life, this line of credit is not for that. Pay off your credit cards and loans, most expensive rate first. Use 10% of your income to do this. When the first one is paid off, use the 10% plus the interest you are now saving to pay off the next most expensive card/loan. Create a budget you can stick to. You can find a great budget calculator here: http://www.gailvazoxlade.com/resources/interactive_budget_worksheet.html Note I have no affiliation with the above-mentioned site, and have a great respect for this woman's ability to teach people about how to handle money." }, { "docid": "522734", "title": "", "text": "You need to find out if the credit card has been reporting these failed automated payments as late or missed payments to your credit report. To do this, go to annualcreditreport.com (the official site to get your free credit reports) and request your report from all three bureaus. If you see late or missing payments reported for the months where you made a payment but then they did an automatic payment anyway, you should call up the credit card company, explain the situation, and ask them to retract those negative reports. If they refuse, you should dispute the reports directly with the credit bureaus. If they have been reporting late payments even though you have been making the payments, that will impact your credit much more than the fact that they closed your account. Unfortunately, they can turn off your credit account for any reason they like, and there isn't much you can do about that. Find yourself another job as soon as you can, get back on your feet, pay off your debt, and think very carefully before you open another credit card in the future. Don't start a new credit card unless you can ensure that you will pay it off in full every month." }, { "docid": "465801", "title": "", "text": "I concur with pretty much what everyone else said. Let me break it down in a concrete plan of action. First, though, note that at least the minimum payments for the credit cards needs to be on this list of fixed expenses. Also, you have $868 remaining in a normal month -- food could be $500 or more easily for a family, so find out how much! Adding in just those 2 things, and you're already at your max. And there are other expenses in life. Ok, cutting from the top: DirectTv -- gone. Pure luxury, and between netflix, hulu and your internet connection (hook your computer to the tv), there's no need for it. $80 savings. Cell phones -- you're already moving in the right direction, but not far enough. In a financial crunch why does your stay-at-home wife have a cell? Especially when she could just as easily use Google Voice for free? Both plans gone, replaced by one of the prepaids @$45. $105 savings, total $186 savings. 529 plans -- Of course you want to save for your kids college, but it doesn't help them for you to drown financially. Gone until your credit card debit is too. $50 savings, $236 total. Ok, we're already up to $236/month in savings just cutting items you don't need. That probably gets you back into the black, but why stop there? Trimming expenses Electric -- ok, I know it's summer, but can you cut this back? Is the thermostat set as high as you can comfortably bear? Are you diligent in turning of lights, especially incandescent? Do you turn off your computer when you're not using it? See if you can get the Electric down by 10%. That's $20/month savings. Doesn't seem like much, but it adds up. Gas -- same with gas. Do you have gas hot water? If so, cut shower length. Saves on water too. Food -- this one you didn't list. But as I said, you could be spending $500 or $600 a month easily for a family. Do you guys plan meals, and thus plan shopping trips? If not, do it. You'll be surprised how much you can save. Either way, 10% reduction should be doable. That's $50/month. If you don't plan now, 20% is within reach -- that's $100/month. Ok, that may have added as much as $130 or so. If so, you're now up to $366/month savings. That's like a 15% raise. Simply cutting, however, is only half the plan. You want to improve your situation, so you can get the Directtv back (assuming you'll even want it at that point), and the wife's cell phone, for starters. To do that, you've got to nail down that debt. I figure you've got minimum $567.23/month in debt payments. That's not including your mortgage, and including an assumed $80/month minimum credit card payments. You pay over 21% of your take-home to short term and consumer debt! Yea, that's why you're hurting. Here's what you do In both cases, apply the extra payments entirely to one balance at a time. Pick either the smallest balance (psychologically best because you quickly see a loan & it's payment dissappear), or the highest interest (mathematically the best). Roll each regular payment that's paid off into the extra debt payments. You didn't list total debt balances, but you did say you had $4000 in credit card debt. Applying an extra $250/month to debt (out of that $366 savings), plus two extra paychecks of $1300 each, is $5600/year paid off. In under a year, you could have those credit cards paid off, and likely that window loan too. Start the 529s again, but keep going paying down the rest. When you have the car paid off, bring back the wife's cell (you and I both know that's going to be #1 on the list :) ), then finish off those student loans. Then bask in the extra $567/month - 21% of your income - you'll have in sweet, sweet green cash!" }, { "docid": "599142", "title": "", "text": "Why would you need to have a separate checking account just for tax payments? As long as your categorize your expense properly, you can run a report based on that category to present only your tax responsibilities. You can set up your account how you want, but IMO it seems excessive for quarterly tax payments. My other thought is that you may also be required to pay monthly bank charges to have a second business checking." }, { "docid": "11936", "title": "", "text": "\"What you have is usually called a pre-paid credit card. You pay some money (Indian Rupees) to the credit card company, and then you can use the card to pay for purchases etc in foreign (non-Indian) currencies upto the remaining balance on the card. If a proposed charge exceeds the remaining balance, the transaction will be declined when you try to use the card. There might be multiple ways that the card is set up, e.g. it might be restricted to charge purchases denominated in US dollars alone, or you might be able to use it anywhere in the world (except India). The balance on the card might be denominated in INR, or in US$, say. In the latter case, the exchange rate at which your INR payment was converted into the $US balance is fixed and agreed to at the time of the original payment: you paid INR 70K (say) and the balance was set to US$ 1000 even though the exchange rate on the open market would have given you a few more US dollars. In the former case with the balance denominated in INR, a charge of US$ 100, say, would be converted to INR at a fixed agreed-upon rate, or at the current exchange rate that the Visa or MasterCard network is using, plus (typically) a 3% fee currency exchange fee, and your balance in INR will decrease accordingly. With all that as prologue, if you made a purchase from Walmart USA and later returned it for a credit, it should increase your credit card balance appropriately. You may be whacked with currency conversion fees along the way depending on how your card is set up, but with a US$-denominated card, a credit of US$100 should increase your card balance by US$100. So, that $US 100 can be spent on something else instead. In short, the card is your \"\"bank\"\" account. You cannot spend more than the remaining balance on the card just like you cannot withdraw more money from your bank account than you have in the account, and you can recharge your card by making more INR payments into it so as to increase the available balance. But it is like a current account in that you are unlikely to earn interest on the balance the way you do with a savings account. So what if you are back in India and have no further use of this card? Can you get your balance back as cash or deposit into your regular bank account? Call the Customer Help line, or read the card agreement you signed.\"" }, { "docid": "217804", "title": "", "text": "The whole point of a credit report and, by extension, a credit score, is to demonstrate (and judge) your ability to repay borrowed funds. Everything stems from that goal; available credit, payment history, collections, etc all serve to demonstrate whether or not you personally are a good investment for lenders to pursue. Revolving credit balances are tricky because they are more complicated than fixed loans (for the rest of this answer, I'll just talk about credit cards, though it also applies to lines of credit such as overdraft protection for checking accounts, HELOCs, and other such products). Having a large available balance relative to your income means that at any time you could suddenly drown yourself in debt. Having no credit cards means you don't have experience managing them (and personal finances are governed largely by behavior, meaning experience is invaluable). Having credit cards but carrying a high balance means you know how to borrow money, but not pay it back. Having credit cards but carrying no balance means you don't know how to borrow money (or you don't trust yourself to pay it back). Ideally, lenders will see a pattern of you borrowing a portion of the available credit, and then paying it down. Generally that means utilizing up to 30% of your available credit. Even if you maintain the balance in that range without paying it off completely, it at least shows that you have restraint, and are able to stop spending at a limit you personally set, rather than the limit the bank sets for you. So, to answer your question, 0% balance on your credit cards is bad because you might as well not have them. Use it, pay it off, rinse and repeat, and it will demonstrate your ability to exercise self control as well as your ability to repay your debts." }, { "docid": "322614", "title": "", "text": "mint.com does a decent job categorizing your spending for you, it will do exactly what you asked your advisor I would also put some %% into saving from your every paycheck before you deposit the rest to checking(spending) and make a rule, you can't touch the saving account. Just like you are have enough courage not to use credit cards." }, { "docid": "143844", "title": "", "text": "\"There's a difference between missing a payment and \"\"carrying a balance\"\" (making an on-time payments that are less than the full balance due). I have heard mortgage brokers claim that, if you have no other credit history, carrying a small balance here and there on a credit card may improve your score. (\"\"Small\"\" is in relation to your available credit and your ability to pay it off.) But actually missing a payment will probably hurt your score. Example: You have a card with a credit limit of $1000. In July you charge $300 worth of stuff. You get the next statement and it shows the balance due of $300 and a minimum payment of $100. If you pay the entire $300 balance in that cycle, most cards won't charge you any interest. You are not carrying a balance, so the credit scores may not reflect that you actually took a $300 loan and paid it off. If you instead pay $200, you'll be in good standing (because $200 is greater than the minimum payment). But you'll be carrying a $100 balance into the next statement cycle. Plus interest will accrue on that $100. If you do this regularly, your credit score will probably take into account that you've taken a small loan and made the payments. For those with no other credit history, this may be an appropriate way to increase your credit score. (But you're paying interest, so it's not free.) And if the average balance you carry is considered high relative to your ability to pay or to the total credit available to you, then this could adversely affect your score (or, at least, the amount of credit another provider is willing to extend to you). If you instead actually miss a payment, or make a payment that's less than the minimum payment, that will almost certainly hurt your credit score. It will also incur penalties as well as interest. You want to avoid that whenever possible. My guess is that, in the game of telephone from the banker to you, the \"\"carrying a balance\"\" was misinterpreted as \"\"missing a payment.\"\"\"" }, { "docid": "211503", "title": "", "text": "I would investigate mint.com further. Plenty of people have written off using them because Intuit purchased them, but that seems like cutting of your nose to spite your face. I think mint.com is worth it for its Trends functionality alone, not to mention its automatic categorization of your purchases, reminders when bills are due, notifications of increased credit card interest rates, and overdraft notices. I don't think mint.com schedules bills & deposits, but it tracks stocks & mutual fund investments and compares your portfolio returns against Dow Jones, S&P 500, or NASDAQ if you wish. I'm not sure I see the advantage of manual transaction entry, but you can add cash or check transactions manually. As I mentioned earlier, automated categorization is a great feature. In addition, you can tag certain transactions as reimbursable or tax-related. If the primary feature you're interested in is stock quotes, maybe something like Yahoo Finance or Google Finance will be enough." }, { "docid": "336922", "title": "", "text": "Is it possible to pay off my balance more than once in a payment period in order to increase the amount I can spend in a payment period? Yes, but you should only do that if you expect an expense that is larger than your limit allows. Then, provide an extra payment before your expense occurs since it will take longer for the issuer to apply it to the outstanding balance. For instance, when going on holiday you could deposit additional money to increase your balance temporarily. That said if your goal is to improve your credit score I would recommend using the card, staying within your limit and pay it off every month. The 2 largest factors going into calculating your credit score are: By paying off the balance each month you After 6-9 months you can probably get a bigger limit, to improve your score. I wouldn't change to a different card or get a second one, as some issuers will run a check on your creditscore that lowers it temporarily. Also: you're entitled to a free credit report each year. I'd recommend asking for one every year so you can keep track on how your credit score improves. It also gives you the opportunity to check for mistakes on your report. Check here for more information: http://www.myfico.com/crediteducation/whatsinyourscore.aspx" }, { "docid": "192641", "title": "", "text": "It may or may not be a good idea to borrow money from your family; there are many factors to consider here, not the least of which is what you would do if you got in serious financial trouble and couldn't make your scheduled payments on the loan. Would you arrange with them to sell the property ASAP? Or could they easily manage for a few months without your scheduled payments if it were necessary? A good rule of thumb that some people follow when lending to family is this: don't do it unless you're 100% OK with the possibility that they might not pay you back at all. That said, your question was about credit scores specifically. Having a mortgage and making on-time payments would factor into your score, but not significantly more heavily than having revolving credit (eg a credit card) and making on time payments, or having a car loan or installment loan and making on time payments. I bought my house in 2011, and after years of paying the mortgage on time my credit score hasn't changed at all. MyFico has a breakdown of factors affecting your credit score here: http://www.myfico.com/crediteducation/whatsinyourscore.aspx. The most significant are a history of on-time payments, low revolving credit utilization (carrying a $4900 balance on a card with a $5000 limit is bad, carrying a $10 balance on the same card is good), and overall length of your credit history. As to credit mix, they have this to say: Types of credit in use Credit mix determines 10% of my FICO Score The FICO® Score will consider your mix of credit cards, retail accounts, installment loans, finance company accounts and mortgage loans. It's not necessary to have one of each, and it's not a good idea to open credit accounts you don’t intend to use. The credit mix usually won’t be a key factor in determining your FICO Score—but it will be more important if your credit report does not have a lot of other information on which to base a score. Have credit cards – but manage them responsibly Having credit cards and installment loans with a good payment history will raise your FICO Score. People with no credit cards tend to be viewed as a higher risk than people who have managed credit cards responsibly." }, { "docid": "5953", "title": "", "text": "The answer depends on how much you spend every month. The DTI is calculated using the minimum payment on the balance owed on your card. Credit card minimum payments are ridiculous, often being only $50 for balances of a couple thousand dollars. In any case, when you get preapproved, the lender will tell you (based on your DTI) the maximum amount they will approve you for. If your minimum payment is $50, that's another $50 that could go towards your mortgage, which could mean an additional $10,000 financed. It's up to you to decide if $10,000 will make enough of a difference in the houses you look at." }, { "docid": "529456", "title": "", "text": "Without using the cash advance feature of your credit card, I'm going to say no. No mortgage lender would let you simply charge the down payment to your credit card. The reason is the merchant transaction fees. Typical credit card transaction fees that the merchant pays are around 3%. If the lender accepted credit cards on a $30K down payment, they would be giving up around $900. In addition to that, the whole reason for requiring a down payment is to ensure that the buyer has some equity in their own home. Many lenders will want to know the source of the down payment and will not allow you to borrow this down payment, because they want to ensure that you are not too far into debt. No-money-down home purchases are much more rare than they were 10 years ago." }, { "docid": "284162", "title": "", "text": "\"I've just received my first Credit Card statement from HSBC. All I can say is all the information you need is there. It's really easy to pay off your credit card bill just have to read the instructions! Here are the bank account numbers and steps how to set up a standing order (as it was written in my statement): \"\"Standing Order/ bill payment Pay a fixed amount to your HSBC Bank Credit Card using the following information: Type of Card Card ------------------------ Number Begins ----Account Number MasterCard: HSBC Bank and Welsh --- 543460 ----------------29004734 Visa: HSBC and Welsh ---------------------454638 ----------------09003649 Gold Visa ---------------------------------------494120 ----------------69005161 Remember, if payments are made using the wrong card details, sort code or account number, they may be delayed or not applied.\"\" hope it was helpful\"" }, { "docid": "247306", "title": "", "text": "If it is a credit card bill, the money goes towards your balance because on all of my cards, the interest for the month will show up as a line item that increases the balance. So all your payment goes towards the balance. This is good because your interest is probably calculated daily, and any amount you can lower your balance will therefore lower the interest you have to pay. Additionally, in the US the CARD act means that you payment must be applied to items with the highest interest rates first. http://www.helpwithmybank.gov/faqs/credit_late_payment.html#drop11 http://www.creditcards.com/credit-card-news/law-bans-credit-card-payment-allocation-trickery-1282.php" }, { "docid": "30770", "title": "", "text": "How will going from 75% Credit Utilization to 0% Credit Utilization affect my credit score? might answer your question if US based. In the US, what counts is what shows on the bill. I've run $20K through a card with a $10K limit, but still ended the month under $2K by making extra payments. As long as you stay ahead of the limit by making mid-cycle payments, I see no issue with this strategy. If you keep running $30K/mo through a card with a $10K limit, the bank will eventually catch this and raise your limit as you will have proven you are more credit worthy." }, { "docid": "346852", "title": "", "text": "\"I don't think credit cards support depositing money into to begin with. Anyone could deposit money to a Credit Card acccount. All they need is your bank's name, Visa/Mastercard, and 16 digit number. It is done through the \"\"Pay Bills / Make Payments\"\" function in online banking. So tell me, what does it mean that PayPal will transfer the money to my VISA card You can use the new balance for spending via Credit Card, the effect is same as making a payment from your chequing account to credit card account. Will it simply just get transferred to my bank account by the local bank after that Some banks would refund the excess amount from your Credit Card to your Chequing Account after a while, but most don't. People keep credit balance on credit card to make a purchaes larger than credit limit. For example, if your credit limit is $1000, balance is $0, and you made $500 payment to the credit card, you can make a purchase of $1500 without asking for credit limit increase.\"" }, { "docid": "399406", "title": "", "text": "\"I'm not sure if the rules in Canada and the US are the same. I'm as amazed as you are by the amounts of debts people have, but I can see how this credit can be extended. Generally, with good credit history and above average pay - it is not unheard of to get about $100K credit limit with a bunch of credit cards. What you do with that after that depends on your own ability to manage your finances and discipline. Good credit history is defined by paying your credit cards on time with at least minimum payment amount (which is way lower than the actual statement amount). Above average pay is $60K+. So you can easily have tons of debt, yet be considered \"\"low risk\"\" with good credit history. And that's the most lucrative market for the credit card issuers - people who do not default, but also have debt and pay interest.\"" } ]

[ { "docid": "107092", "title": "", "text": "Your account entries are generally correct, but do note that the last transaction is a mixture of the balance sheet and income statement. If Quickbooks doesn't do this automatically then the expense must be manually removed from the balance sheet. The expense should be recognized on the balance sheet and income statement when it accrues, and it accrues when the prepaid rent is extinguished when consumed by the landlord, so that is when the second entry in your question should be booked. The cash flow statement will reflect all of these cash transactions immediately." } ]

[ { "docid": "568803", "title": "", "text": "\"The US government requires corporations to follow certain accounting standards, while exempting itself. For example, companies financial reports must reflect the future costs of things like employee pensions, healthcare and other liabilities. So if you own a company and have an obligation to pay someone $100 in ten years, that obligation must be reflected on your current financial statements. Most US governments operate under a cash accounting scheme that don't necessarily recognize the current costs of big future promises. At the State and Local levels, politicians actively and openly flaunt this -- Governors, mayors, etc routinely do things like give employees enhanced benefits (whose costs kick in the down line) or unlimited sick/vacation time accruals with payouts to employees to avoid impacting the short-term fiscal picture. As an example, a New York City tabloid ran a big story a few years ago about certain transit authorities -- the standards for disability pensions were so low that 95% of employees were categorized as \"\"disabled\"\" and were receiving pensions that were in many cases greater than the employees salary while working.\"" }, { "docid": "538727", "title": "", "text": "There are all sorts of topics in finance that take a lot of time to learn. You have valuation (time value of money, capital asset pricing model, dividend discount model, etc.), financial statement analysis (ratio analysis, free cash flow &amp; discounted cash flow, etc.) , capital structure analysis(Modgliani &amp; Miller theories of capital structure, weighted average cost of capital, more CAPM, the likes), and portfolio management (asset allocation, security selection, integrates financial statement analysis + other fields like derivatives, fixed income, forex, and commodity markets) and all sorts. My opinion of Investopedia is that there is a lot of wheat with the chaff. I think articles/entries are just user-submitted and there are good gems in Investopedia but a lot of it only covers very basic concepts. And you often don't know what you don't know, so you might come out with a weak understanding of something. To begin, you need to understand TVM and why it works. Time value of money is a critical concept of finance that I feel many people don't truly grasp and just understand you need some 'rate' to use for this formula. Also, as a prereq, you should understand basics of accrual accounting (debits &amp; credits) and how the accounting system works. Don't need to know things like asset retirement obligations, or anything fancy, just how accounting works and how things affect certain financial statements. After that, I'd jump into CAPM and cost of capital. Cost of capital is also a very misunderstood concept since schools often just give students the 'cost of capital' for math problems when in reality, it's not just an explicit number but more of a 'general feeling' in the environment. Calculating cost of capital is actually often very tricky (market risk premium) and subjective, sometimes it's not (LIBOR based). After that, you can build up on those basic concepts and start to do things like dividend discount models (basic theory underlying asset pricing models) and capital asset pricing models, which builds on the idea of cost of capital. Then go into valuation. Learn how to price equities, bonds, derivatives, etc. For example, you have the dividend discount model with typical equities and perpetuities. Fixed income has things like duration &amp; convexity to measure risk and analyze yield curves. Derivatives, you have the Black-Scholes model and other 'derivatives' (heh) of that formula for calculating prices of options, futures, CDOs, etc. Valuation is essentially taking the idea of TVM to the next logical step. Then you can start delving into financial modelling. Free cash flows, discounted cash flows, ratio analysis, pro forma projections. Start small, use a structured problem that gives you some inputs and just do calculations. Bonuses* would be ideas of capital structure (really not necessary for entry level positions) like the M&amp;M theorems on capital structure (debt vs equity), portfolio management (risk management, asset allocation, hedging, investment strategies like straddles, inverse floaters, etc), and knowledge of financial institutions and banking regulations (Basel accords, depository regulations, the Fed, etc.). Once you gain an understanding of how this works, pick something out there and do a report on it. Then you'll be left with a single 'word problem' that gives you nothing except a problem and tells you to find an answer. You'll have to find all the inputs and give reasons why these inputs are sound and reasonable inputs for this analysis. A big part that people don't understand about projections and analysis is that **inputs don't exist in plain sight**. You have to make a lot of judgment calls when making these assumptions and it takes a lot of technical understanding to make a reasonable assumption--of which the results of your report highly depend on. As a finance student, you get a taste for all of this. I'm gonna say it's going to be hard to learn a lot of substantial info in 2 months, but I'm not exactly sure what big business expects out of their grunts. You'll mostly be doing practical work like desk jockey business, data entry, and other labor-based jobs. If you know what you're talking about, you can probably work up to something more specialized like underwriting or risk management or something else. Source: Finance degree but currently working towards starting a (finance related) company to draw on my programming background as well." }, { "docid": "334470", "title": "", "text": "The 3% and 9% figures are based on the cost of borrowing money and all the other ownership costs associated with real estate. From the same article: http://patrick.net/housing/crash1.html Because it's usually still much cheaper to rent than to own the same size and quality house, in the same school district. In rich neighborhoods, annual rents are typically only 3% of purchase price while mortgage rates are 4% with fees, so it costs more to borrow the money as it does to borrow the house. Renters win and owners lose! Worse, total owner costs including taxes, maintenance, and insurance come to about 8% of purchase price, which is more than twice the cost of renting and wipes out any income tax benefit. Imagine you are renting a house. If the cost of your annual rent is lower than X then renting is obviously the best idea from a monetary calculation. If rent is greater than Y being a landlord makes more sense. In the middle it is debatable, and the non-monetary reasons need to be considered." }, { "docid": "219303", "title": "", "text": "Help finding casinos that take prepaid credit cards is now easy to find with the advent of this site. It really breaks down the different prepaid options and tells readers which online casinos accept them. This site really saved me time!" }, { "docid": "558301", "title": "", "text": "Yes, it is safe, we have been doing it for years. We prefer our tenants to make their rent payments in this manner. In fact, we prefer that they set up an automatic payment for the rent, either through their online banking or through their bank directly. Apart from getting your rent on time, this method also has the added benefit of both parties having their own records of rent payments through their bank statements, in case there is a dispute about the rent sometime down the track. Having a separate bank account just for the rent does make sense as well, it makes it easier for you to check if rent has come in, it makes it easier if you need to compare your statement without having to highlight all the rent payments amongst all other payments (you might not want to show your other incomes and spending habits to others), and you can withdraw the rents to your other account (which might offer higher interest) after it has come in, leaving a small balance most of the time in your rent account." }, { "docid": "553133", "title": "", "text": "\"A couple of thoughts and experiences (Germany/Italy): First of all, I recommend talking to the Belgian bank (and possibly to a Dutch bank of your choice). I have similar conditions for my German bank accounts. But even though they talk about it as salary account (\"\"Gehaltskonto\"\") all they really ask for is a monthly inflow of more than xxxx € - which can be satisfied with an automatic direct transfer (I have some money automatically circulating for this reason which \"\"earns\"\" about 4% p.a. by saving fees). In that case it may be a feasible way to have a Belgian and a Dutch bank account and set up some money circulation. Experiences working in Italy (some years ago, SEPA payments were kind of new and the debits weren't implemented then): My guess with your service providers is that they are allowed to offer you contracts that are bound to rather arbitrary payment conditions. After all, you probably can also get a prepaid phone or a contract with a bill that you can then pay by wire transfer - however, AFAIK they are allowed to offer discounts/ask fees for different payment methods. Just like there is no law that forces the store around your corner to accept credit cards or even large EUR denominations as long as they tell you so beforehand. AFAIK, there is EU regulation saying your bank isn't allowed to charge you more for wire transger to foreign country within the SEPA zone than a national wire transfer.\"" }, { "docid": "510063", "title": "", "text": "Depends on your credit score. If you came from foreign country, you might not be having enough Credit Score. In that case, you have to go for Prepaid Credit Card offered by Banks. For prepaid credit card,you have to deposit certain amount of money which will act as your credit line." }, { "docid": "262895", "title": "", "text": "If it was me, I'd wait until/if you get contacted again by the collection agency. Once you do, I'd offer to settle for less. Perhaps 1000-1250 to start, and I would not go any higher than 2K. Get it in writing that this settles your debt in full, and do not give them direct access to your checking account. You can pay them by certified check or with a prepaid credit card or something. If you do the latter, throw that prepaid card away, and never use it again. You may also try to get them to agree that you do not owe the full 5K, and again get that in writing. Otherwise, you will be 1099'd for the difference between it and the amount you settle and therefore it will be treated as income. I'd stick 2k in a bank account for a while, perhaps two years, and you are free to use the remaining 3K to meet other goals. After two years, I would check my credit and see if it is still in the report. You might also choose to dispute the collection and see what happens there. If it is successful it will come off your report. Prior to a big credit decision (aka buying a home), I would check on the status of this collection. Only at that time would I contact that collection agency and again try to settle. If I contacted them, I would start the negotiations around 500 or so." }, { "docid": "521010", "title": "", "text": "\"In general what you will find is that a prepaid debit card will allow you to make any sort of purchase that is not also used as a \"\"Security\"\" against possibly open ended charges. A hotel wants to have a method of payment on file that they can potentially charge for damages to a room for example. The same goes for a car rental. Another limitation you will discover is when you are getting close to the amount of money that remains on the card. A restaurant will typically send through a preauthorization for the bill amount + 25%(for example) to account for a tip. If you have $60 left on your card and the bill is $50, the preauth may not be approved. Some prepaid debit cards, particularly those that are non-reloadable, start charging a service fee just for having the card after a certain period of time. This seems to be after a year, but YMMV. Lastly make sure that the card you get is reloadable. Some, like gift cards and rebate cards are sold to the buyer with a fixed amount on them and you cannot add additional money to them.\"" }, { "docid": "315307", "title": "", "text": "Home of Shanghai is Chinese real estate agency based in Shanghai. http://www.homeofshanghai.com help exparts to rent apartment in Shanghai and find their dream home in China. http://www.homeofshanghai.com offers Shanghai Properties for rent by Type: New apartments for rent in Shanghai Old apartments for rent in Shanghai Lane houses for rent in Shanghai Villas for rent in Shanghai Offices for rent in Shanghai Serviced apartments for rent in Shanghai" }, { "docid": "96538", "title": "", "text": "\"Have you been rejected from a rental for a specific reason (leading to this question)? Landlords are in the business of exchanging space for regular payments with no drama. Anything they ask in an application should be something to minimize the risk of drama. The \"\"happy path\"\" optimistic goal is that you pay your rent by the due date every month. If your income is not sufficient for this, demonstrating you have assets and would be able to pay for the full term of the lease is part of the decision to enter into the lease with you. In the non-happy-path, say you fall off the face of the earth before ending the lease. The landlord could be owed several months of rent, and could pursue a legal judgment on your assets. With a court order, they can make the bank pay out what is owed; having bank information reduces the landlord's cost and research efforts in the event the story has degenerated to this point (in the jargon of landlording, this means the tenant is \"\"collectable\"\"). While of course you could have zeroed out your accounts or moved money to a bank you didn't tell the landlord in the meantime, if you are not the bad actor in this story, you probably wouldn't have. If you get any kind of \"\"spidey-sense\"\" about a landlord or property at all there is probably a better rental situation in your city. You also want to minimize drama. If the landlord is operating like a business, they're not in this to perform identity theft. If the landlord is sloppy, or has sloppy office workers, that would be different. In the event sharing your asset information truly bothers you, and the money is for rental expense anyway, you could offer to negotiate a 1 year prepaid rental (of course knock another 5%-10% off for time value of money and lower risk to landlord) if you're sure you wouldn't want to leave early.\"" }, { "docid": "282419", "title": "", "text": "\"Most banks offer prepaid cards nowadays that should fit the bill here. I would recommend first checking with your bank to see what they offer, as that's probably the easiest, and perhaps cheapest, option. My bank, for example, has an entirely fee-free prepaid card that, while marketed towards teens, is entirely applicable for this case. Other banks seem to offer similar products; some of them have more or less fees, but almost all that I've seen are better than the commercial products you'd find in a grocery store. As an example (and I don't know anything about it so I don't specifically recommend this, just exemplifying what I mean): Note that the fees vary, some should be able to be used without ever incurring fees and some have fees you won't avoid. Most seem to have the concept of \"\"sponsor\"\", or NFCU inverts it (you are the cardholder, your dad would be the \"\"companion cardholder\"\"), but in either way it means you can load money (and generally would be the sole money loader) and your dad could then spend it. If your bank doesn't offer what you want, you may want to consider getting an account with a provider that offers what you're looking for, so to make deposits easier. Most of these allow deposits from other sources than checking accounts with that bank, but in many cases you may incur a fee or take longer for the money to clear.\"" }, { "docid": "21223", "title": "", "text": "You generally need to use the prepaid debit card in the form it is received. Many don't allow you to remove the money from them at an ATM. If you can find out the prepaid debit card brand ahead of time, this would tell you whether or not it can be used at an ATM. For example, MoneyPass does allow ATM access for its prepaid debit cards. You could always try asking your employer to choose one that specifically allows for ATM access. Source: https://www.nerdwallet.com/blog/banking/prepaid-debit-cards-what-you-should-know/" }, { "docid": "375170", "title": "", "text": "A few reasons make sense: They have a defined process for rentals, risk assessment, and customer credit. Especially for a large corporation, making changes to that process is not trivial, adds risk/uncertainty, and will be costly. Such changes for a relatively small customer base might not makes sense. Many rental companies DO allow you to rent with a debit card. Why do some businesses take cash only? With a debit card, there is no third party guarantee. With a credit card, the cash is coming from a well-established third party who will pay (assuming no disputes) and has a well-established history of paying. Even if the merchant holds your account, it is still your cash under the control of you and your bank until the deposit clears the merchants bank. It is not surprising they view that as more risk and potentially not worth hassling with debit." }, { "docid": "428783", "title": "", "text": "Yes. It's called executive hedging, and it's a lot more common than most people know. As long as it's properly disclosed and the decision is based on publicly available information, there's technically nothing wrong with it. Krispy Kreme, Enron, MCI, and ImClone are the most notable companies that had executives do it on a large scale, but almost every company has or had executives execute a complex form of hedging known as a prepaid variable forward (PVF). In a PVF, the executive gives his shares to an investment bank in exchange for a percentage of cash up front. The bank then uses the executive shares to hedge in both directions for them. This provides a proxy that technically isn't the executive that needs to disclose. There's talk about it needing to be more public at the SEC right now. http://www.sec.gov/news/statement/020915-ps-claa.html" }, { "docid": "428689", "title": "", "text": "Is my understanding okay ? If so, it seems to me that this system is rather error prone. By that I mean I could easily forget to make a wire some day and be charged interests while I actually have more than enough money on the check account to pay the debt. Which is where the credit card company can add fees so you pay more and they make more money. Don't forget that in the credit case, you are borrowing money rather than using your own. Another thing that bothers me is that the credit card apparently has a rather low credit limit. If I wanted to buy something that costs $2500 but only have a credit limit of $1500, can I make a preemptive wire from my check account to the VISA account to avoid facing the limit ? If so, what is the point for the customer of having two accounts (and two cards for that matter...) ? If you were the credit card company, do you believe people should be given large limits first? There are prepaid credit cards where you could put a dollar amount on and it would reject if the balance gets low enough. Iridium Prepaid MasterCard would be an example here that I received one last year as I was involved in the floods in my area and needed access to government assistance which was given this way. Part of the point of building up a credit history is that this is part of how one can get the credit limits increased on cards so that one can have a higher limit after demonstrating that they will pay it back and otherwise the system could be abused. There may be a risk that if you prepay onto a credit card and then want to take back the money that there may be fees involved in the transaction. Generally, with credit cards the company makes money on the fees involved for transactions which may come from merchants or yourself as a cash advance on a credit card will be charged interest right away while if you buy merchandise in a store there may not be the interest charged right away." }, { "docid": "597117", "title": "", "text": "You're welcome, good questions on a confusing topic! Let me see if I can unpack it a bit, try to clear up the way accrual accounting jukes and jives... &gt; I buy an airline today. I get to recognize the revenue from any pre-sold tickets starting tomorrow and reduce my deferred revenue liability... Hmm... Are you sure that's the case? Does purchasing the business somehow cause those future events to resolve? I could be way off base here so let me know if I'm missing something, but whenever an airline ticket is purchased in advance, it's a balance sheet issue. Cash is increased and there is a liability created for Deferred Revenue. The revenue hits the income statement only when the flight takes place. As you noted, this would be accompanied with the usual trappings of costs and expenses, etc. &gt; However, I don't get that cash as it has already been paid to the previous owner. Sure you do! Their bank account is now yours, right? I imagine that buying an airline company would be a matter of transferring ownership rather than to resolve any underlying uncertainty in the recognition of earnings, yeah? As for valuation, it may depend on if you're looking at the income statement in isolation and relying on EPS or if you're using a more integrated approach with the balance sheet, which would bring these sorts of developments to light. Does that help? Any part still clear as mud? EDIT: words" }, { "docid": "546020", "title": "", "text": "Some people cannot get bank accounts because they have been seized by a creditor or they're illegal. Some companies don't (or can't) deal with paper checks. Giving them a prepaid debit card and auto depositing it to the card is sometimes simpler or cheaper. Hell, when I was on unemployment the government tried to make me receive the funds on a debit card. It was a major pain just to get the money sent to my bank account." }, { "docid": "123535", "title": "", "text": "It's not unusual/undesirable. If everyone prepaid their mortgage, banks would not like this, but we're in no danger of that :). Also, the amount you are pre-paying is not so significant as to make them pay special attention. In many cases when a borrower pre-pays, they will not continue to do so over the life of the loan since it's so easy to stop at any time, and the extra payments are voluntary. Depending on who originated the mortgate, it might be sold even more often than in your case. It's no longer commonplace for a bank to hold a mortgage to maturity, now that banks and other institutions have separated the origination of the loan from its servicing. It's likely that your mortgage was bundled with others through a process called securitization, and will be bought/sold based on the bank's need for liquitity or to balance out the maturity of its assets and liabilities (whether they need more cash now versus later), or based on the types of ways your bank has decided that it wants to make money versus farming out other types of business to others. What would substantially change the value of your mortgage to a bank is if it were performing (ie you are paying on time) but then became non-performing (ie you fall behind in your payments). It's also possible that if you have a very small mortgage or principal balance, that there is very little risk to the bank, and little difference between the present and future values of your loan, but banks don't typically make these types of transactions based on the characteristics of an individual loan." } ]

[ { "docid": "288537", "title": "", "text": "Be ruthlessly meticulous about the IRS regulations for deducting a home office. If it's allowed, it's allowed." } ]

[ { "docid": "470388", "title": "", "text": "The rent versus buy question is a deeply personal one in which your personal desires for a living space need to be carefully combined with what makes economic sense. Do you want your own place with all the joys of having it be yours and all the pains of having to handle all the maintenance and be the one ultimately responsible? Have you tried living for a few months putting aside the amount required for not only a mortgage payment but the taxes and insurance on a house/condo in your price range to see if you can really afford it? You can use a real estate website such as trulia to see the assessments of some for sale homes and figure out tax values. The average home insurance in the US is around $900/year if I remember right - more for homes that are more expensive and less for less expensive ones, with flooding and other hazards as a factor. Make sure you can afford to pay for all these items. From a financial perspective realize that you'll always be spending money on your living space. Even if you pay for a house with cash you will be paying property tax and maintenance and would be wise to continue paying for insurance. The value of the house at that point is, as contributor fennec often says, the rent you aren't paying. I personally don't recommend trying to time the market. You can't predict the future - will real estate in your area be a double dip or has it bottomed and is it going up? What you can do is buy a home only when you are sure that you can deal with its relative lack of liquidity by staying there for a long time. Five years is usually a reasonable minimum. There is a way that I recommend figuring out if it is likely bad financial decision to buy, and that's by looking at a financial comparison of renting versus buying. In some cases even with the bursting of the bubble it is still a bad deal to buy. DC went from renting being more cost effective to buying, but San Francisco is one area where buying is still not necessarily the best choice. To figure out what the case is for your area, look at the New York Times rent versus buy calculator. Find a home for rent on craigslist similar to what you'd look to buy. Find a home for sale on one of the MLS aggregator sites that represents something you think you'd like. Plug in the numbers. Figure out how many years you'd have to stay in your purchase for it to be a good deal. In the likely event that the calculator says buy, start saving if that's what you really want. You're never going to be able to absolutely guarantee that you won't be upside down. What you can control is getting as much principal in that house as you can. The more you have, the less likely you will be upside down. Build a down payment now, reap the rewards later." }, { "docid": "186804", "title": "", "text": "\"I encourage you to think of this home purchase decision as a chance to buy into a community that you want your children to grow up in. Try to find a place where you will be happy for the next 20 years, not just the next 2 or 7 years. In your situation, option 1 seems like a bad idea. It will create an obstacle to having children, instead of establishing a place for them to grow up in. Option 2 is close to \"\"buying a house on a layaway plan\"\". It offers the most financial flexibility. It also could result in the best long-term outcome, because you will buy in an established area, and you will know exactly what quality house you will have. But you and your fiancé need to ask yourselves some hard questions: Are you willing to put up with the mess and hassles of remodelling? Are you good at designing such projects? Can you afford to pay for the projects as they occur? Or if you need to finance them, can you get a HELOC to cover them? Especially if you and your fiancé do much of the work yourselves, break down the projects into small enough pieces that you can quickly finish off whatever you are working on at the time, and be happy living in the resulting space. You do not want to be nagging your husband about an unfinished project \"\"forever\"\" -- or silently resenting that a project never got wrapped up. I posted some suggestions for incrementally finishing a basement on the Home Improvement Stack Exchange. If you are up to the job of option 2, it is less risky than option 3. Option 3 has several risks: You don't know what sort of people will live in the neighborhood 5 - 20 years from now. Will the homes be owner-occupied? Or rentals? Will your neighbors care about raising children well? Or will lots of kids grow up in broken homes? Will the schools be good? Disappointing? Or dangerous? Whereas in an established neighborhood, you can see what the neighborhood is currently like, and how it has been changing. Unless you custom-build (or remodel), you don't control the quality of the construction. Some neighborhoods built by Pulte in the last 10 years were riddled with construction defects. You will be paying up-front for features you don't need yet. You might never need some of them. And some of them might interfere with what you realize later on might be better. In stable markets, new homes (especially ones with lots of \"\"upgrades\"\") often decline in value during the first few years. This is because part of the value is in the \"\"newness\"\" and being \"\"up-to-date\"\" with the latest fads. This part of the value wears off over time. Are the homes \"\"at the edge of town\"\" already within reasonable walking distance of parks, schools, church, grocery stores, et cetera? Might the commute from the \"\"edge of town\"\" to work get worse over the next 5 - 20 years?\"" }, { "docid": "422331", "title": "", "text": "Buying a property and renting it out can be a good investment if it matches your long term goals. Buying an investment property is a long term investment. A large chunk of your money will be tied up with the property and difficult to access. If you put your money into dividend producing stocks you can always sell the stock and have your money back in a matter of days this is not so with a property. (But you can always do a Home equity line of credit (HELOC)) I would also like to point out landlording is not a passive endeavor as JohnFx stated dealing with a tenant can be a lot of work. This is not work you necessarily have to deal with, it is possible to contract with a property management company that would place tenants and take care of those late night calls. Property management companies often charge 10% of your monthly rent and will eat a large portion of your profits. It could be worth the time and headache of tenant relations. You should build property management into you expenses anyway in case you decide to go that route in the future. There are good things about owning an investment property. It can produce returns in a couple of ways. If you choose this route it can be lucrative but be sure to do your homework. You must know the area you are investing very well. Know the rent, and vacancy rates for Single family homes, look at multifamily homes as a way of mitigating risk(if one unit is vacant the others are still paying)." }, { "docid": "213975", "title": "", "text": "&gt;means less demand for absurdly priced homes which means prices will drop to affordable levels. Rent and home prices are obviously variable but in my area home prices are pretty aligned with rents. Assuming both home prices and rent goes up with inflation and accounting for insurance, taxes, tax advantages, maintenance and a list of other issues the prices are comparable. If you have the capital for a down payment and plan to stay in one house (or aparment) for 5 years you are probably better off buying. To say home prices are absurd you need to be comparing it to what you consider it's true worth but how are you determining that? Edit: Perhaps both rent and home prices will go down as more people live with their parents and room mates but I haven't seen that trend start yet and vacancy rates aren't that high (as far as I know) so I don't see it starting soon. If that trend did start I imagine new construction would be the first ones to go but housing developments are going strong around me." }, { "docid": "255171", "title": "", "text": "&gt;Umm actually asking to be refinanced at a lower rate IS asking them to forgive/give up part of the mortgage. Either my knowledge of finance is wrong or how interest rates work is wrong if that statement is true. Here is why your statement is not true: * The interest rate is money the bank makes on the loan. For example, say you buy a home valued at $250,000, put 10% down and your interest rate is 5% for 30 years. Well now you've got a mortgage ($225,000) that you pay $1,207.85 monthly. Now expand this out to 30 years, which means you'll make 360 payments for a total balance of $434,825.5. So even though you have a mortgage of $225,000 and your home is only valued at $250,000 due to the interest rate on that loan, you will be giving the bank $209,825.5 in profit for that $225,000 loan. Refinancing the loan at a lower rate is not debt forgiveness or a write off. &gt;Peoples greed in getting themselves into upside down mortgages are why we have problems, not the banks not helping them out enough. Actually it's the bank's greed which is wanting to keep the homeowner at the higher interest rate because it will make them more money over the long run. If the bank was to reduce the interest rate on the loan, they would be reducing their potential profits. And now you know why I support non profit banks." }, { "docid": "112271", "title": "", "text": "I would go with the 2nd option (put down as little as possible) with a small caveat: avoid the mortgage insurance if you can and put down 20%. Holding your rental property(ies)'s mortgage has some benefits: You can write off the mortgage interest. In Canada you cannot write off the mortgage interest from your primary residence. You can write off stuff renovations and new appliances. You can use this to your advantage if you have both a primary residence and a rental property. Get my drift? P.S. I do not think it's a good time right now to buy a property and rent it out simply because the housing prices are over-priced. The rate of return of your investment is too low. P.S.2. I get the feeling from your question that you would like to purchase several properties in the long-term future. I would like to say that the key to good and low risk investing is diversification. Don't put all of your money into one basket. This includes real estate. Like any other investment, real estate goes down too. In the last 50 or so years real estate has only apprepriated around 2.5% per year. While, real estate is a good long term investment, don't make it 80% of your investment portfolio." }, { "docid": "125482", "title": "", "text": "\"There is a term for this. If you google \"\"House Hacking\"\" you will get lots of articles and advice. Some of it will pertain to multifamily properties but a good amount should be owner occupied and renting bedrooms. I would play with a mortgage calculator like Whats My Payment. Include Principle, interest, taxes and insurance see how much it will cost. At 110k your monthly fixed payments will depend on a number of factors (down payment, interest, real estate tax rate and insurance cost) but $700-$1000 would be a decent guess in my area. Going off that with two roommates willing to pay $500 a month you would have no living expenses except any maintenance or utilities. With your income I would expect you could make the payment alone if needed (and it may be needed) so it seems fairly low risk from my perspective. You need somewhere to live you are used to roommates and you can pay the entire cost yourself in a worst case. Some more things to consider.. Insurance will be more expensive, you want to ensure you as the landlord you are covered if anything happens. If a tenant burns down your house or trips and falls and decides to sue you insurance will protect you. Capital Expenses (CapEx) replacing things as they wear out. On a home the roof, siding, flooring and all mechanicals(furnace, water heater, etc.) have a lifespan and will need to be replaced. On rental properties a portion of rent should be set aside to replace these things in the future. If a roof lasts 20yrs,costs $8,000 and your roof is 10years old you should be setting aside $70 a month so in the future when this know expense comes up it is not a hardship. Taxes Yes there is a special way to report income from an arrangement like this. You will fill out a Schedule E form in addition to your regular tax documents. You will also be able to write off a percent of housing expenses and depreciation on the home. I have been told it is not a simple tax situation and to consult a CPA that specializes in real estate.\"" }, { "docid": "497927", "title": "", "text": "The bank I work with would be more inclined to expand an existing HELOC rather than write a new one. I think that would be your best bet if you decide to continue borrowing against your home. Consider that your own income would have to support the repayment of these larger homes. If it is, why didn't you buy a larger home to begin with? As far as increasing the appraisal, you don't usually get one dollar of increased appraisal for each dollar you spend on improvements unless you have a rundown house in a nice neighborhood; part of the appraisal comes from a comparison with the appraisals of the other homes nearby. Eventually you get close enough to par with the other houses that anyone looking for something more expensive will often choose a different neighborhood entirely. Update: To your edit that mentions the original lender will cap the amount you can borrow, you can take additional secondary mortgages/HELOCs, but the interest rate is usually higher because it is not the first mortgage. I don't generally recommend it, but the option is there." }, { "docid": "372497", "title": "", "text": "\"The biggest problem with the company was that they had really good employees for a long time who were passionate about their jobs, but they then made progressing through the company awful in certain regions. For instance, at one point, if you wanted to become an assistant manager of your department, you had to agree to a rotation within your metro stores for what was basically a two dollar raise. You might start at a store two miles from your home, and then end up 30 miles from home. Then, six months later, be 40 miles away. So, a lot of people who were intelligent, looked at that and said \"\"Yeah, I can just stay here and make two dollars less. I live down the street.\"\" But, the worst part was: their employees were able to make the shitty systems work most of the time. So they were never viewed as shitty, despite the fact that their employees routinely told them of their shittiness and how awful they were to use. Then they laid off the several thousand people (they used some very interesting calculations to come up with their 1500 person layoff figure a while back) who were responsible for keeping the ship afloat, and put all those duties on the backs of other people. Disclosure: I was out before the layoffs. Left of my own free will, and still like the people I worked with. I left because I looked at moving up and was like: NOPE. These people are morons.\"" }, { "docid": "8464", "title": "", "text": "People rave about Basecamp by 37signals. The impressive part is all the add-ins you can get for it. There are add-ins for invoicing, billing, accounting, and time tracking." }, { "docid": "542024", "title": "", "text": "Will buying a flat which generates $250 rent per month be a good decision? Whether investing in real estate is a good decision or not depends on many things, including the current and future supply/demand for rental units in your particular area. There are many questions on this site about this topic, and another answer to this question which already addresses many risks associated with owning property (though there are also benefits to consider). I just want to focus on this point you raised: I personally think yes, because rent adjusts with inflation and the rise in the price of the property is another benefit. Could this help me become financially independent in the long run since inflation is getting adjusted in it? In my opinion, the fact that rental income general adjusts with 'inflation' is a hedge against some types of economic risk, not an absolute increase in value. First, consider buying a house to live in, instead of to rent: If you pay off your mortgage before your retire, then you have reduced your cost of accommodations to only utilities, property taxes, and repairs. This gives you a (relatively) known, fixed requirement of cash outflows. If the value of property goes up by the time you retire - it doesn't cost you anything extra, because you already own your house. If the value of property goes down by the time you retire, then you don't save anything, because you already own your house. If you instead rent your whole life, and save money each month (instead of paying off a mortgage), then when you retire, you will have a larger amount of savings which you can use to pay your monthly rental costs each month. By the time you retire, your cost of accommodations will be the market price for rent at that time. If the value of property goes up by the time you retire - you will have to pay more on rent. If the value of property goes down by the time you retire, you will save money on rent. You will have larger savings, but your cash outflow will be a little bit less certain, because you don't know what the market price for rent will be. You can see that, because you need to put a roof over your own head, just by existing you bear risk of the cost of property rising. So, buying your own home can be a hedge against that risk. This is called a 'natural hedge', where two competing risks can mitigate each-other just by existing. This doesn't mean buying a house is always the right thing to do, it is just one piece of the puzzle to comparing the two alternatives [see many other threads on buying vs renting on this site, or on google]. Now, consider buying a house to rent out to other people: In the extreme scenario, assume that you do everything you can to buy as much property as possible. Maybe by the time you retire, you own a small apartment building with 11 units, where you live in one of them (as an example), and you have no other savings. Before, owning your own home was, among other pros and cons, a natural hedge against the risk of your own personal cost of accommodations going up. But now, the risk of your many rental units is far greater than the risk of your own personal accommodations. That is, if rent goes up by $100 after you retire, your rental income goes up by $1,000, and your personal cost of accommodations only goes up by $100. If rent goes down by $50 after you retire, your rental income goes down by $500, and your personal cost of accommodations only goes down by $50. You can see that only investing in rental properties puts you at great risk of fluctuations in the rental market. This risk is larger than if you simply bought your own home, because at least in that case, you are guaranteeing your cost of accommodations, which you know you will need to pay one way or another. This is why most investment advice suggests that you diversify your investment portfolio. That means buying some stocks, some bonds, etc.. If you invest to heavily in a single thing, then you bear huge risks for that particular market. In the case of property, each investment is so large that you are often 'undiversified' if you invest heavily in it (you can't just buy a house $100 at a time, like you could a stock or bond). Of course, my above examples are very simplified. I am only trying to suggest the underlying principle, not the full complexities of the real estate market. Note also that there are many types of investments which typically adjust with inflation / cost of living; real estate is only one of them." }, { "docid": "285745", "title": "", "text": "\"Its best to seek a lawyer, but it is unlikely you can force him to pay. You probably know couples, that are in some part of the divorce process, that have trouble obtaining court ordered payments. In your case you have less of a legal standing (exception: if you have children together). As far as the house goes, the two of you entered into some sort of business arrangement and it will be difficult to \"\"force\"\" him to pay. One thing that works for you is that he has excellent credit. If he is interested in keeping a high credit rating he will ensure that no payments are late on the home. Your question suggests that the two of you are not getting along very well right now, and that needs to stop. The best financial decision you can make right now is to get along with him. It seems that the two of you have not officially broken up. If you do decide to depart ways, do so as amicably as possible. You will have to work to get the home in your name only, and him off the deed. This benefits both of you as you will have sole control of the house and this ill advised business decision can end. He will have the home off his credit and will not be responsible if you miss a payment and can also buy a home or whatever of his own. Good luck and do your best to work this out. Seeking peace will cost you a lot less money in the long run. Fighting in court cost a lot of money. Giving in to semi-reasonable demands are far cheaper then fighting. Here is an example. Lets say he normally contributes $500 to the mortgage, and he decides to move out. I would ask him to contribute $200 until you can get his name off the loan, say 6 months at the most. After that you will put the house up for sale if you cannot obtain a mortgage in your own name and will split any profits.\"" }, { "docid": "411933", "title": "", "text": "Real estate is a lousy investment because: Renting a home and buying a home, all else being equal, are pretty similar in costs in the long term (if you can force yourself to invest the would-be down payment). So, buy a home if you want to enjoy the benefits of home ownership. Buy a home if you need to hedge against rising housing prices (e.g. you're on a fixed income and couldn't cope if rent increased a bunch when the economy heated up). Maybe buy a home if you're in a high tax bracket to save yourself from being taxed on your imputed rent, if it works out that way (consult your financial advisor). But don't consider it a really great investment vehicle. Returns are average and the risk profile isn't that attractive." }, { "docid": "226704", "title": "", "text": "You can either write it off or pursue it. If you write it off I wouldn't do business with the client again, until they bring their balance owed to you back to zero. If you pursue it, try to reach out to the client and find out why they are not paying what they owe you and try to work out a deal with them if they seem negotiable. If they aren't negotiable then you could take the issue to court, but you'll only be proving a point by then." }, { "docid": "462831", "title": "", "text": "In the US there's no significant difference between what a business can deduct and what an individual can deduct. However, you can only deduct what is an expense to produce income. Businesses are allowed to write off salaries, but individuals can't write off what they pay their gardener or maid (at least in the US) If you're a sole proprietor in the business of managing properties - you can definitely deduct payments to gardeners or maids. Business paying for a gardener on a private property not related to producing the income (like CEO's daughter's house) cannot deduct that expense for tax purposes (although it is still recorded in the business accounting books as an expense - with no tax benefit). Businesses are allowed to deduct utility expenses as overhead, individuals cannot Same thing exactly. I can deduct utility expenses for my rental property, but not for my primary residence. Food, shelter, clothing and medical care are fundamental human needs, but we still pay for them with after-tax money, and pay additional sales tax. Only interest (and not principal) on a mortgage is deductible in the US, which is great for people who take out mortgages (and helps banks get more business, I'm sure), but you're out of luck if you pay cash for your house, or are renting. Sales taxes are deductible. You can deduct sales taxes you paid during the year if you itemize your deduction. You can chose - you either deduct the sales taxes or the State income taxes, whatever is more beneficial for you. BTW in many states food and medicine are exempt from sales tax. Medical expenses are deductible if they're significant compared to your total income. You can deduct medical expenses in excess of 10% of your AGI. With the ACA kicking in - I don't see how would people even get to that. If your AGI is low you get subsidies for insurance, and the insurance keeps your expenses capped. For self-employed and employed, insurance premiums are pre-tax (i.e.: not even added to your AGI). Principle for mortgage is not deductible because it is not an expense - it is equity. You own an asset, don't you? You do get the standard deduction, even if your itemized (real) deductions are less - business don't get that. You also get an exemption amount (for your basic living needs), which businesses don't get. You can argue about the amounts - but it is there. In some States (like California) renters get tax breaks for renting, depending on the AGI. CA renters credit is phasing out at AGI of about $60K, which is pretty high." }, { "docid": "556072", "title": "", "text": "It depends what rate mortgage you can get for any extra loans... If you remortgage you are likely to get a rate of 3.5-4%... depending who you go with. With deposit accounts in the UK maying around 1% (yes, you can get more by tying it up for longer but not a huge amount more) clearly you're better off not having a mortgage rather than money in the bank. Does your 8k income allow for tax? If it does, you are getting 6% return on the money tied up in the flat. If you are getting 6% after tax on the invested money, that's way better than you would get on any left over cash paid into an investment. Borrowing money on a mortgage would cost you less than 6%... so you are better off borrowing rather than selling the flat. If you are getting 6% before tax... depending on your tax rate... it probably makes very little difference. You'd need to work out how much an extra 80k mortgage would cost you, how much the 50k on deposit would earn you and how much you make after tax. There is a different route. Set up a mortgage on the rental flat. You can claim the interest payment off the flat's income... reduce your tax bill so the effective mortgage rate on the flat would be less than what you could get with a mortgage on the new house. Use the money from the flat's mortgage to finance the difference in house price. In fact from a tax view, you may be better off having a mortgage free house and maxing out the mortgage on the flat so you can write off as much as possible against your tax bill. All of the above assume ... that the flat is rented all the time. The odd dry spell on the flat could influence the sums a lot. All of the above assume that your cash flow works whichever route you choose. As no-one on stack exchange has all of the numbers for your specific circumstances it may be worth talking to a tax accountant. They could advise you properly, knowing the numbers, which makes the best sense for you in terms of overall cost, cash flow, risk and so on." }, { "docid": "6363", "title": "", "text": "\"This might sound harsh, but the first thing I would suggest is to stop making excuses. I wasn't able to continue due to pressure from college and family The college I went to was horrible. Employers can very easily hire foreign work-force for very cheap; for example as a citizen if I work $10 an hour, they can get someone from outside to work for $5 per hour There's no guarantee that the project will succeed. I cannot really work and at the same time develop software on my free time. Despite my failures in the past, I was not the main person that's responsible for those failures. Even if all of this is true, it's not helping you move forward and it seems to be getting in the way of creating a good action plan and motivating yourself to succeed. If you believe (based on past experiences) that you are doomed to fail, then you are indeed doomed to fail. You need to take a step back and re-evaluate your current circumstances and what you can do to reach your goals. You have a couple of things working in your favor here. It's great that you are debt free. That already puts you ahead of a lot of your peers. You have the option of living with your parents. Presumably for no rent, or at least much lower rent than you would have to pay if you move out. This is worth literally thousands of $/£/€ for every year you stay. Now, onto your questions: 1) Should I quit regular programming for a normal job because I never monetized programming so I can move out of my parents' home? Are you being paid for this \"\"regular programming\"\"? If so, are you being paid more than minimum wage? If not, it's perfectly acceptable to consider alternative ways to spend your time and generate income. However, this doesn't have to be at the expense of living with your parents. Have you thought about getting a new or second job while still living with them? If you absolutely must move out of your parent's home, consider renting a room in a house with other people to keep the rent costs to a minimum. That way, even if your main job is low paying, you should be able to put aside some money each month for future endeavors. 2) Should I monetize programming and gamble with the future? What does this mean? Are you thinking you'll write a mobile app and sell thousands of copies for 99¢ each? That would indeed be a big gamble, but maybe that's not what you meant, so you'll need to clarify. 3) Would it be wise to essentially quit programming for the sake of a minimum wage job? I'm not sure how this is different from question 1. So I'll reiterate what I said there - moving out is going to be expensive. You can still do it, but you're asking on a Personal Finance site where the focus is usually how to minimize living costs and maximize income. Without knowing more about where you live (employment opportunities, cost of living) the default recommendation is usually to save money by staying in your parents house. TLDR: Don't focus on anyone else. They are not preventing you from getting the job you want. Look at your own skills and qualifications (not just programming, consider all of your abilities). What are you good at? Who might need those skills? What is the cost of reaching those people (commute time, moving nearer)? What is the reward? If the reward exceeds the cost, start approaching those people. Show them what you can do.\"" }, { "docid": "300297", "title": "", "text": "\"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\"" }, { "docid": "303851", "title": "", "text": "\"Exactly it. I declared bankruptcy over 7 years ago. I was in a bad situation - I was laid off, the jobs in Salt Lake dried up after the Olympics, everything was in the crapper. I found new work - in California. Went off and lived there alone for six months while my wife and children stayed behind. We used all of our savings keeping up on the mortgage, paying bills - and living like paupers. Once my wife came down, we knew we couldn't afford a place in CA *and* our home, so we rented it out. To people who didn't pay their rent for six months, and we were so far away we couldn't just fly back to make it happen. And my wife was pregnant this whole time. Finally, because of my wife, we gave in. And I felt awful. I had failed my family, I had failed my wife - and I felt like I had failed myself. I remember being so ashamed I told *no one* for almost 6 years. Until I found out I wasn't the only one. Until I had close friends tell me of their troubles. I hadn't been overly irresponsible, I hadn't been buying up big TVs and junk. I was just trying to make a living, did good work - and just got caught up in bad luck. But the shame didn't go away. And it's only now, when I know more, when I see companies declare bankruptcy, or very wealthy people do so, that I realize that yeah - I have to take care of my shit, and I do everything I can for that. But at the same time, if bad stuff happens, I shouldn't spend my life beating up on myself because I had \"\"shit happen.\"\" Shit happens. Everybody should have a second chance to try again. Learn from the mistakes you made, plan better if you can, and realize that the best laid plans of might and men oft go awry. Try again, and hopefully it'll work out better next time.\"" } ]

[ { "docid": "339488", "title": "", "text": "Tax regulations vary from country to country - some permitting more deductions, some less - but here are a few guidelines. As regards the home-office: As regards the deductions: Think of it like this: in order to have space for a home-office you needed a bigger home. That leads to increased rates, heating, insurance and so on. Many tax regulators recognise that these are genuine expenses. The alternative is to rent a separate office and incur greater expenses, leading to increased deductions and less overall tax paid (which won't finance the deficit). The usual test for deductions is: was the expense legitimately incurred in the pursuit of revenue? The flexibility permitted will vary by tax authority but you can frequently deduct more than you expected." } ]

[ { "docid": "212540", "title": "", "text": "\"So, you have $100k to invest, want a low-maintenance investment, and personal finance bores you to death. Oooohhh, investment companies are gonna love you. You'll hand them a wad of cash, and more or less say \"\"do what you want.\"\" You're making someone's day. (Just probably not yours.) Mutual fund companies make money off of you regardless of whether you make money or not. They don't care one bit how carefully you look at your investments. As long as the money is in their hands, they get their fee. If I had that much cash, I'd be looking around for a couple of distressed homes in good neighborhoods to buy as rentals. I could put down payments on two of them, lock in fixed 30-year mortgages at 4% (do you realize how stupid low that is?) and plop tenants in there. Lots of tax write-offs, cash flow, the works. It's a 10% return if you learn about it and do it correctly. Or, there have been a number of really great websites that were sold on Flippa.com that ran into five figures. You could probably pay those back in a year. But that requires some knowledge, too. Anything worthwhile requires learning, maintenance and effort. You'll have to research stocks, mutual funds, bonds, anything, if you want a better than average chance of getting worthwhile returns (that is, something that beats inflation, which savings accounts and CDs are unlikely to do). There is no magic bullet. If someone does manage to find a magic bullet, what happens? Everyone piles on, drives the price up, and the return goes down. Your thing might not be real estate, but what is your thing? What excites you (i.e., doesn't bore you to death)? There are lots of investments out there, but you'll get out of it what you put into it.\"" }, { "docid": "92403", "title": "", "text": "You want to buy a house for $150,000. It may be possible to do this with $10,000 and a 3.5% downpayment, but it would be a lot better to have $40,000 and make a 20% downpayment. That would give you a cushion in case house prices fall, and there are often advantages to a 20% downpayment (lower rate; less mandatory insurance). You have an income of $35,000 and expenses of $23,000 (if you are careful with the money--what if you aren't?). You should have savings of either $17,500 or $11,500 in case of emergencies. Perhaps you simply weren't mentioning that. Note that you also need at least $137 * 26 = $3562 more to cover mortgage payments, so $15,062 by the expenses standard. This is in addition to the $40,000 for downpayment and closing costs. What do you plan to do if there is a problem with the new house, e.g. you need a new roof? Or smaller expenses like a new furnace or appliance? A plumbing problem? Damages from a storm? What if the tenants' teenage child has a party and trashes the place? What if your tenants stop paying rent but refuse to move out, trashing the place while being evicted? Your emergency savings need to be able to cover those situations. You checked comps (comparable properties). Great! But notice that you are looking at a one bathroom property for $150,000 and comparing to $180,000 houses. Consider that you may not get the $235 for that house, which is cheaper. Perhaps the rent for that house will only be $195 or less, because one bathroom doesn't really support three bedrooms of people. While real estate can be part of a portfolio, balance would suggest that much more of your portfolio be in things like stocks and bonds. What are you doing for retirement? Are you maxing out any tax-advantaged options that you have available? It might be better to do that before entering the real estate market. I am a 23 year old Australian man with a degree in computer science and a steady job from home working as a web developer. I'm a bit unclear on this. What makes the job steady? Is it employment with a large company? Are you self-employed with what has been a steady flow of customers? Regardless of which it is, consider the possibility of a recession. The company can lay you off (presumably you are at the bottom of the seniority). The new customers may be reluctant to start new projects while their cash flow is restrained. And your tenants may move out. At the same time. What will you do then? A mortgage is an obligation. You have to pay it regardless. While currently flush, are you the kind of flush that can weather a major setback? I would feel a lot better about an investment like this if you had $600,000 in savings and were using this as a complementary investment to broaden your portfolio. Even if you had $60,000 in savings and would still have substantial savings after the purchase. This feels more like you are trying to maximize your purchase. Money burning a hole in your pocket and trying to escape. It would be a lot safer to stick to securities. The worst that happens there is that you lose your investment (and it's more likely that the value will be reduced but recover). With mortgages, you can lose your entire investment and then some. Yes, the price may recover, but it may do so after the bank forecloses on the mortgage." }, { "docid": "422331", "title": "", "text": "Buying a property and renting it out can be a good investment if it matches your long term goals. Buying an investment property is a long term investment. A large chunk of your money will be tied up with the property and difficult to access. If you put your money into dividend producing stocks you can always sell the stock and have your money back in a matter of days this is not so with a property. (But you can always do a Home equity line of credit (HELOC)) I would also like to point out landlording is not a passive endeavor as JohnFx stated dealing with a tenant can be a lot of work. This is not work you necessarily have to deal with, it is possible to contract with a property management company that would place tenants and take care of those late night calls. Property management companies often charge 10% of your monthly rent and will eat a large portion of your profits. It could be worth the time and headache of tenant relations. You should build property management into you expenses anyway in case you decide to go that route in the future. There are good things about owning an investment property. It can produce returns in a couple of ways. If you choose this route it can be lucrative but be sure to do your homework. You must know the area you are investing very well. Know the rent, and vacancy rates for Single family homes, look at multifamily homes as a way of mitigating risk(if one unit is vacant the others are still paying)." }, { "docid": "422468", "title": "", "text": "\"In some cases perhaps, but in others not. Several homes near me were sold over and over again during the bubble years (at incrementally higher and higher sale prices) -- the last owners in nearly all cases defaulted and the banks (after dragging their feet for a couple of years) finally foreclosed and sold the homes off cheap. In all but one of the \"\"distressed sale\"\" cases, the people buying the houses now ARE in fact moving into them as their primary home (the exception being a current resident who bought the adjacent home with the intentions of fixing it up &amp; renting it out, I believe at least initially to a family member); but in ALL cases (in no small part due to the fact that they were able to purchase the properties cheap) these new owners are investing substantial money into fixing them up (new roof &amp; gutters, new windows &amp; doors, paint and/or siding, often all new carpeting, some landscaping, etc). Also, from the perspective of our homeowners association, all of these new people think our annual HOA fees are a \"\"bargain\"\", whereas the previous bubble-era \"\"homeowners\"\" (if, having invested almost nothing, they could truly be called that) did nothing but whine and complain (well, and once they began defaulting on their mortgages, they also defaulted on their HOA fees). So it's a win-win for our neighborhood. We're getting good, solid residents who are planning on taking care of their properties... the exact opposite of what you are claiming. (The \"\"house-flippers\"\" you decry were the ones buying with \"\"no money down\"\" during the bubble era -- and they nearly killed the neighborhood.)\"" }, { "docid": "112271", "title": "", "text": "I would go with the 2nd option (put down as little as possible) with a small caveat: avoid the mortgage insurance if you can and put down 20%. Holding your rental property(ies)'s mortgage has some benefits: You can write off the mortgage interest. In Canada you cannot write off the mortgage interest from your primary residence. You can write off stuff renovations and new appliances. You can use this to your advantage if you have both a primary residence and a rental property. Get my drift? P.S. I do not think it's a good time right now to buy a property and rent it out simply because the housing prices are over-priced. The rate of return of your investment is too low. P.S.2. I get the feeling from your question that you would like to purchase several properties in the long-term future. I would like to say that the key to good and low risk investing is diversification. Don't put all of your money into one basket. This includes real estate. Like any other investment, real estate goes down too. In the last 50 or so years real estate has only apprepriated around 2.5% per year. While, real estate is a good long term investment, don't make it 80% of your investment portfolio." }, { "docid": "580292", "title": "", "text": "No. This logic is dangerous. The apples to apples comparison between renting and buying should be between similar living arrangements. One can't (legitimately) compare living in a 600 sq ft studio to a 3500 sq ft house. With the proposal you offer, one should get the largest mortgage they qualify for, but that can result in a house far too big for their needs. Borrowing to buy just what you need makes sense. Borrowing to buy a house with rooms you may never visit, not a great idea. By the way, do the numbers. The 30 year rate is 4%. You'd need a $250,000 mortgage to get $10,000 in interest the first year, that's a $312,000 house given an 80% loan. On a median income, do you think it makes sense to buy a house twice the US median? Last, a portion of the tax savings is 'lost' to the fact that you have a standard deduction of nearly $6,000 in 2012. So that huge mortgage gets you an extra $4000 in write-off, and $600 back in taxes. Don't ever let the Tax Tail wag the Investing Dog, or in this case the House Dog. Edit - the investment return on real estate is a hot topic. I think it's fair to say that long term one must include the rental value of the house in calculating returns. In the case of buying of way-too-big house, you are not getting the return, it's the same as renting a four bedroom, but leaving three empty. If I can go on a bit - I own a rental, it's worth $200K and after condo fee and property tax, I get $10K/yr. A 5% return, plus whatever appreciation. Now, if I lived there, I'd correctly claim that part of my return is the rental value, the rent I don't pay elsewhere, so the return to me is the potential growth as well as saved rent. But if the condo rents for $1200, and I'd otherwise live in a $600 apartment with less space, the return to me is lost. In my personal case, in fact, I bought a too big house. Not too big for our paycheck, the cost and therefore the mortgage were well below what the bank qualified us for. Too big for the need. I paid for two rooms we really don't use." }, { "docid": "523949", "title": "", "text": "As a general rule, diversification means carrying sufficient amounts in cash equivalents, stocks, bonds, and real estate. An emergency fund should have six months income (conservative) or expenses (less conservative) in some kind of cash equivalent (like a savings account). As you approach retirement, that number should increase. At retirement, it should be something like five years of expenses. At that time, it is no longer an emergency fund, it's your everyday expenses. You can use a pension or social security to offset your effective monthly expenses for the purpose of that fund. You should five years net expenses after income in cash equivalents after retirement. The normal diversification ratio for stocks, bonds, and real estate is something like 60% stocks, 20% bonds, and 20% real estate. You can count the equity in your house as part of the real estate share. For most people, the house will be sufficient diversification into real estate. That said, you should not buy a second home as an investment. Buy the second home if you can afford it and if it makes you happy. Then consider if you want to keep your first home as an investment or just sell it now. Look at your overall ownership to determine if you are overweighted into real estate. Your primary house is not an investment, but it is an ownership. If 90% of your net worth is real estate, then you are probably underinvested in securities like stocks and bonds. 50% should probably be an upper bound, and 20% real estate would be more diversified. If your 401k has an employer match, you should almost certainly put enough in it to get the full match. I prefer a ratio of 70-75% stocks to 25-30% bonds at all ages. This matches the overall market diversification. Rebalance to stay in that range regularly, possibly by investing in the underweight security. Adding real estate to that, my preference would be for real estate to be roughly a quarter of the value of securities. So around 60% stocks, 20% bonds, and 20% real estate. A 50% share for real estate is more aggressive but can work. Along with a house or rental properties, another option for increasing the real estate share is a Real Estate Investment Trust (REIT). These are essentially a mutual fund for real estate. This takes you out of the business of actively managing properties. If you really want to manage rentals, make sure that you list all the expenses. These include: Also be careful that you are able to handle it if things change. Perhaps today there is a tremendous shortage of rental properties and the vacancy rate is close to zero. What happens in a few years when new construction provides more slack? Some kinds of maintenance can't be done with tenants. Also, some kinds of maintenance will scare away new tenants. So just as you are paying out a large amount of money, you also aren't getting rent. You need to be able to handle the loss of income and the large expense at the same time. Don't forget the sales value of your current house. Perhaps you bought when houses were cheaper. Maybe you'd be better off taking the current equity that you have in that house and putting it into your new house's mortgage. Yes, the old mortgage payment may be lower than the rent you could get, but the rent over the next thirty years might be less than what you could get for the house if you sold it. Are you better off with minimal equity in two houses or good equity with one house? I would feel better about this purchase if you were saying that you were doing this in addition to your 401k. Doing this instead of your 401k seems sketchy to me. What will you do if there is another housing crash? With a little bad luck, you could end up underwater on two mortgages and unable to make payments. Or perhaps not underwater on the current house, but not getting much back on a sale either. All that said, maybe it's a good deal. You have more information about it than we do. Just...be careful." }, { "docid": "6363", "title": "", "text": "\"This might sound harsh, but the first thing I would suggest is to stop making excuses. I wasn't able to continue due to pressure from college and family The college I went to was horrible. Employers can very easily hire foreign work-force for very cheap; for example as a citizen if I work $10 an hour, they can get someone from outside to work for $5 per hour There's no guarantee that the project will succeed. I cannot really work and at the same time develop software on my free time. Despite my failures in the past, I was not the main person that's responsible for those failures. Even if all of this is true, it's not helping you move forward and it seems to be getting in the way of creating a good action plan and motivating yourself to succeed. If you believe (based on past experiences) that you are doomed to fail, then you are indeed doomed to fail. You need to take a step back and re-evaluate your current circumstances and what you can do to reach your goals. You have a couple of things working in your favor here. It's great that you are debt free. That already puts you ahead of a lot of your peers. You have the option of living with your parents. Presumably for no rent, or at least much lower rent than you would have to pay if you move out. This is worth literally thousands of $/£/€ for every year you stay. Now, onto your questions: 1) Should I quit regular programming for a normal job because I never monetized programming so I can move out of my parents' home? Are you being paid for this \"\"regular programming\"\"? If so, are you being paid more than minimum wage? If not, it's perfectly acceptable to consider alternative ways to spend your time and generate income. However, this doesn't have to be at the expense of living with your parents. Have you thought about getting a new or second job while still living with them? If you absolutely must move out of your parent's home, consider renting a room in a house with other people to keep the rent costs to a minimum. That way, even if your main job is low paying, you should be able to put aside some money each month for future endeavors. 2) Should I monetize programming and gamble with the future? What does this mean? Are you thinking you'll write a mobile app and sell thousands of copies for 99¢ each? That would indeed be a big gamble, but maybe that's not what you meant, so you'll need to clarify. 3) Would it be wise to essentially quit programming for the sake of a minimum wage job? I'm not sure how this is different from question 1. So I'll reiterate what I said there - moving out is going to be expensive. You can still do it, but you're asking on a Personal Finance site where the focus is usually how to minimize living costs and maximize income. Without knowing more about where you live (employment opportunities, cost of living) the default recommendation is usually to save money by staying in your parents house. TLDR: Don't focus on anyone else. They are not preventing you from getting the job you want. Look at your own skills and qualifications (not just programming, consider all of your abilities). What are you good at? Who might need those skills? What is the cost of reaching those people (commute time, moving nearer)? What is the reward? If the reward exceeds the cost, start approaching those people. Show them what you can do.\"" }, { "docid": "269380", "title": "", "text": "If commuting is a big budget item, then can you: A side job is one way to make extra money, but I'd suggest a home business. If your wife substitute teaches, I bet she writes fairly well, and in any case you can. Write a personal finance blog or just a site with articles. Focus on surviving and thriving with child(ren) in a one-income Christian household in the suburbs of Philadelphia. Or if you have a hobby that stokes your furnace, write about that. Heck, do both. The content just stays there and gets traffic day after day that you can monetize. My main suggestion would be to start this now because it's not overnight money. But in the long run it can turn into a nice, fairly passive income. The big advantage of this is that mommy gets to stay home with the kids and build up a decent business. The cost is $10/year for the domain (per domain) and maybe $10/month for hosting. Or, if some other legitimate work-at-home business presents itself, go with that. I suggest blogging because it's what I know, but everyone's an expert in something unique." }, { "docid": "64456", "title": "", "text": "1) How does owning a home fit into my financial portfolio? Most seem to agree that at best it is a hedge against rent or dollar inflation, and at worst it should be viewed as a liability, and has no place alongside other real investments. Periods of high inflation are generally accompanied with high(er) interest rates. Any home is a liability, as has been pointed out in other answers; it costs money to live in, it costs money to keep in good shape, and it offers you no return unless you sell it for more than you have paid for it in total (in fact, as long as you have an outstanding mortgage, it actually costs you money to own, even when not considering things like property taxes, utilities etc.). The only way to make a home an investment is to rent it out for more than it costs you in total to own, but then you can't live in it instead. 2) How should one view payments on a home mortgage? How are they similar or different to investing in low-risk low-reward investments? Like JoeTaxpayer said in a comment, paying off your mortgage should be considered the same as putting money into a certificate of deposit with a term and return equivalent to your mortgage interest cost (adjusting for tax effects). What is important to remember about paying off a mortgage, besides the simple and not so unimportant fact that it lowers your financial risk over time, is that over time it improves your cash flow. If interest rates don't change (unlikely), then as long as you keep paying the interest vigilantly but don't pay down the principal (assuming that the bank is happy with such an arrangement), your monthly cost remains the same and will do so in perpetuity. You currently have a cash flow that enables you to pay down the principal on the loan, and are putting some fairly significant amount of money towards that end. Now, suppose that you were to lose your job, which means a significant cut in the household income. If this cut means that you can't afford paying down the mortgage at the same rate as before, you can always call the bank and tell them to stop the extra payments until you get your ducks back in the proverbial row. It's also possible, with a long history of paying on time and a loan significantly smaller than what the house would bring in in a sale, that you could renegotiate the loan with an extended term, which depending on the exact terms may lower your monthly cost further. If the size of the loan is largely the same as or perhaps even exceeds the market value of the house, the bank would be a lot more unlikely to cooperate in such a scenario. It's also a good idea to at the very least aim to be free of debt by the time you retire. Even if one assumes that the pension systems will be the same by then as they are now (some don't, but that's a completely different question), you are likely to see a significant cut in cash flow on retirement day. Any fixed expenses which cannot easily be cut if needed are going to become a lot more of a liability when you are actually at least in part living off your savings rather than contributing to them. The earlier you get the mortgage paid off, the earlier you will have the freedom to put into other forms of savings the money which is now going not just to principal but to interest as well. What is important to consider is that paying off a mortgage is a very illiquid form of savings; on the other hand, money in stocks, bonds, various mutual funds, and savings accounts, tends to be highly liquid. It is always a good idea to have some savings in easily accessible form, some of it in very low-risk investments such as a simple interest-bearing savings account or government bonds (despite their low rate of return) before you start to aggressively pay down loans, because (particularly when you own a home) you never know when something might come up that ends up costing a fair chunk of money." }, { "docid": "425397", "title": "", "text": "\"This particular topic has probably been beaten to death already. But from the other comments, it seems that splitting finances them is a popular solution on this forum. I can see the individual benefit of this - makes it easy to go buy whatever you want. But it can hurt too. What if the situation changes, and you are no longer employed? Your setup will cause stress because now you are having to ask your spouse to pay for everything. If this works for you - congratulations. But, fights may ensue - divorce may follow. I would like to offer an alternative. In my situation, I bring home a paycheck, while my wife does not. In this case, each of us paying 50% would simply not work. Not to say my wife doesn't work - she works her butt off cleaning house, raising kids, etc. What we do is have any money that comes in go into a pot. We budget (Oh no, the B-word!) out regular expenses (lights, gas, rent). Anything that isn't allocated goes towards retirement savings (In the US, an IRA is an Individual Retirement Account), or towards a war-chest for big project (such as home ownership). And each of us gets the same \"\"blow money\"\" allowance every week that we can do with as we please. Keep in mind, using this mentality allows the possibility of me staying home at some point in the future when my wife goes back to her dream job. And there is no financial stress about \"\"whom owns what\"\", or \"\"who paid for what\"\". We own it because we decided to pay for it.\"" }, { "docid": "303851", "title": "", "text": "\"Exactly it. I declared bankruptcy over 7 years ago. I was in a bad situation - I was laid off, the jobs in Salt Lake dried up after the Olympics, everything was in the crapper. I found new work - in California. Went off and lived there alone for six months while my wife and children stayed behind. We used all of our savings keeping up on the mortgage, paying bills - and living like paupers. Once my wife came down, we knew we couldn't afford a place in CA *and* our home, so we rented it out. To people who didn't pay their rent for six months, and we were so far away we couldn't just fly back to make it happen. And my wife was pregnant this whole time. Finally, because of my wife, we gave in. And I felt awful. I had failed my family, I had failed my wife - and I felt like I had failed myself. I remember being so ashamed I told *no one* for almost 6 years. Until I found out I wasn't the only one. Until I had close friends tell me of their troubles. I hadn't been overly irresponsible, I hadn't been buying up big TVs and junk. I was just trying to make a living, did good work - and just got caught up in bad luck. But the shame didn't go away. And it's only now, when I know more, when I see companies declare bankruptcy, or very wealthy people do so, that I realize that yeah - I have to take care of my shit, and I do everything I can for that. But at the same time, if bad stuff happens, I shouldn't spend my life beating up on myself because I had \"\"shit happen.\"\" Shit happens. Everybody should have a second chance to try again. Learn from the mistakes you made, plan better if you can, and realize that the best laid plans of might and men oft go awry. Try again, and hopefully it'll work out better next time.\"" }, { "docid": "184310", "title": "", "text": "\"If you or they feel uneasy about you simply paying more rent than them for equal usage, you can work out an agreement where they \"\"pay\"\" in other ways. For example, I once lived with someone that made about double what I did, and so he paid more rent than I did. In exchange, I was responsible for cleaning the kitchen. If your roommates hate cleaning then you could substitute something like running errands, cooking, or looking after plants/landscaping. If they have some specialized skills then they might be able to provide those instead (car maintenance, financial management, etc.). Of course you'll want to agree ahead of time on what the conditions of satisfaction for the task are, such as how often the kitchen will have to be cleaned and what the definition of \"\"clean\"\" is. You also can't be a jerk and make their job extra hard, such as by completely trashing the kitchen every night. Obviously it will depend on the temperament of your roommates whether or not they'll be happy with this or feel insulted being \"\"the help\"\". It worked for us because it was a task he hated and one I didn't mind, and it kept me from feeling like I was mooching off him. I would feel them out when you propose a possible rent and utilities split. If they feel like it's an unfair burden on you, but they can't afford more, then you could suggest this as a way for everyone to contribute equally. Whatever you decide to do, don't hold it over their heads that you pay more. Agree on something that everyone feels is fair, whatever that is. If you want a concession due to paying more (such as you get the garage, get to pick the art on the walls, whatever), then agree to that up front. Then accept that you've made a fair deal and they don't owe you anything beyond what you've all agreed to. It's awful to feel like you live in someone else's home and that you are getting into ever deeper debt with a close friend or significant other, and it will breed resentment. If you can't do that, then don't share an apartment with them at all. The most important thing is that everyone feels it's fair, regardless of the numbers. If you cannot get to that agreement through dollars alone, you can have them contribute to the home in other ways, such as cleaning, cooking, or performing maintenance. Just make sure that everyone truly does feel it's fair and that you are all equals.\"" }, { "docid": "473692", "title": "", "text": "What you are suggesting will not work. Banks have strict guidelines about what they can and cannot do with an FHA loan property. Remember the FHA is only an insurance policy to the bank saying that if you default they will cover a high percentage of the loan. The bank won't take the risk of violating their insurance policy and the government refusing to pay them off if you default. Instead, consider doing a creative sale on your property, maybe a rent to own deal or owner financing. As long as you pay the mortgage the bank won't even know you don't live there and you can rent the house out to someone who eventually will buy it after the timeframe expires. Meanwhile you can go and get a new home or condo either thru regular financing or owner financing(search the internet to see how to do this) and you can use owner financing until you complete the sale of the first house. Otherwise just tough it out in the house you are in until the time expires and then sell. You made no mention of the property value but I am assuming if you bought it 3 years ago that you may have a little equity. Pleas note that if you sell at that time though you will likely have to come out of cash because your equity won't cover the realtor fee and closing cost. But if you do the rent to own I suggested earlier you can sell at a slightly higher price making sure you can cover those cost. I realize this answer is a little out the box but I deal with people who don't want properties all day and I have completed transactions like this many times. Good Luck and God Bless!" }, { "docid": "226704", "title": "", "text": "You can either write it off or pursue it. If you write it off I wouldn't do business with the client again, until they bring their balance owed to you back to zero. If you pursue it, try to reach out to the client and find out why they are not paying what they owe you and try to work out a deal with them if they seem negotiable. If they aren't negotiable then you could take the issue to court, but you'll only be proving a point by then." }, { "docid": "271525", "title": "", "text": "\"First, pay off the highest interest first. If you have 80%, pay it first. Paying off a card/loan with a lower rate, but a lower payment or a lower balance can help your mental capacity by having fewer things to pay. But, this should be a decision where things are similar, such as 20-25%, not 20-80%. What about any actual loans? Any loans with a fixed payment and a fixed amount? If you must continue to use CC while paying them off, use the one with the lowest interest rate. Call all of your debtors and ask for reduction in interest rate. This is not the option to take first... This is a strategic possibility and will cause credit score issues... If you are considering bankruptcy or not paying back some, then you have even more negotiation power. Consider calling them all and telling them that you only have a little bit of money and would like to negotiate a settlement with them. \"\"I have only a limited amount of money, and lots of debt. I will pay back whomever gives me the best deal.\"\" See what they say. They may not negotiate until you stop paying them for a few months... It is not uncommon to get them to reduce interest (even to 0%) and/or take a reduction in the amount due - up to 25 cents on the dollar. To do this, you might need to pay the amount all at once, so look into loans from sources like retirement, home equity, life insurance, family... Also, cut out all expenses. Cut them hard; cut until it hurts. Cut out the cell phone (get a pre-paid plan and/or budget $10-20/month), cut out all things like alcohol, tobacco, firearms, lottery, tattoos, cable tv, steak, eating out. Some people would suggest that you consider pets and finding them a new home. No games, no trips, no movies, no new clothes... Cut out soft drinks, candy, and junk food. Take precautions to stay healthy - don't wear shoes in the house, brush your teeth, take a multi vitamin, get exercise, eat healthy (this is not expensive, organic stuff, just regular groceries). Consider other ways to save, like moving in with family or friends. Having family or friends live with you and pay rent. Analyze costs like daycare vs. job income. Apply for assistance - there are lots of levels, and some don't rely on others, such as daycare. Consider making more money - new job, 2nd job, overtime, new career. Consider commute - walk, bike, take the bus. Work 4/10's. Telework. Make a list of every expense and prioritize them. Only keep things which are really necessary. Good Luck.\"" }, { "docid": "64400", "title": "", "text": "Whenever you put less than 20% down, you are usually required to pay private mortgage insurance (PMI) to protect the lender in case you default on your loan. You pay this until you reach 20% equity in your home. Check out an amortization calculator to see how long that would take you. Most schedules have you paying more interest at the start of your loan and less principal. PMI gets you nothing - no interest or principal paid - it's throwing money away in a very real sense (more in this answer). Still, if you want to do it, make sure to add PMI to the cost per month. It is also possible to get two mortgages, one for your 20% down payment and one for the 80%, and avoid PMI. Lenders are fairly cautious about doing that right now given the housing crash, but you may be able to find one who will let you do the two mortgages. This will raise your monthly payment in its own way, of course. Also remember to factor in the costs of home ownership into your calculations. Check the county or city website to figure out the property tax on that home, divide by twelve, and add that number to your payment. Estimate your homeowners insurance (of course you get to drop renters insurance, so make sure to calculate that on the renting side of the costs) and divide the yearly cost by 12 and add that in. Most importantly, add 1-2% of the value of the house yearly for maintenance and repair costs to your budget. All those costs are going to eat away at your 3-400 a little bit. So you've got to save about $70 a month towards repairs, etc. for the case of every 10-50 years when you need a new roof and so on. Many experts suggest having the maintenance money in savings on top of your emergency fund from day one of ownership in case your water heater suddenly dies or your roof starts leaking. Make sure you've also estimated closing costs on this house, or that the seller will pay your costs. Otherwise you loose part of that from your down payment or other savings. Once you add up all those numbers you can figure out if buying is a good proposition. With the plan to stay put for five years, it sounds like it truly might be. I'm not arguing against it, just laying out all the factors for you. The NYT Rent Versus Buy calculator lays out most of these items in terms of renting or buying, and might help you make that decision. EDIT: As Tim noted in the comments below, real monthly cost should take into account deductions from mortgage interest and property tax paid. This calculator can help you figure that out. This question will be one to watch for answers on how to calculate cost and return on home buying, with the answer by mbhunter being an important qualification" }, { "docid": "349672", "title": "", "text": "The answer is simple. You can generally claim a deduction for an expense if that expense was used to derive an income. Of course social policy sometimes gets in the way and allows for deductions where they usually wouldn't be allowed. Your rent is not tax deductible because this expense is not used to derive your income. If however you were working from your home, example - you had a home based business, and you dedicated a part of your home for your work, say an office, then part of your rent may then become tax deductible." }, { "docid": "534645", "title": "", "text": "I'd rent and put the $30K/ yr into savings. When the short sale comes off your credit, you'll have a substantial downpayment. You don't mention the balance, but the current rate you're paying is 3% too high. Even if you get the rate reduced, you have a $100K issue. I recommend reading through Will Short Sale Prevent Me From Getting VA Home Loan Later? A bit different question, but it talks more about the short sale. A comment for that question makes a key point - if you have a short sale, will the bank chase you for the balance? If not, you have a choice to make. Adding note after user11043 commented - First, run the numbers. If you were to pay the $100K off over 7 years, it's $1534/mo extra. Nearly $130K, and even then, you might not be at 80% LTV. I don't know what rents are like in your area, but do the math. First, if the rent is less than the current mortgage+property tax and maintenance, you will immediately have better cash flow each month, and over time, save towards the newer house. If you feel compelled to work this out and stay put, I'd go to the bank and tell them you'd like them to recast the loan to a new rate. They have more to lose than you do, and there's nothing wrong with a bit of a threat. You can walk away, or they can do what's reasonable, to just fix your rate. With a 4% rate, you'd easily attack the principal if you wish. As you commented above, if the bank offers no option, I'd seriously consider the short sale. There's nothing wrong with that option from a moral standpoint, in my opinion. This is not Bedford Falls, and you are not hurting your neighbors. The bank is amoral, if not immoral." } ]

[ { "docid": "389446", "title": "", "text": "Before starting to do this, make sure that you are squeaky clean in all aspects of your tax preparation and are prepared to back up any claims that you make with documentation. Home office deductions are a huge red flag that often trigger audits. Follow mbhunter's advice and be incredibly meticulous about following the rules and keeping records." } ]

[ { "docid": "213975", "title": "", "text": "&gt;means less demand for absurdly priced homes which means prices will drop to affordable levels. Rent and home prices are obviously variable but in my area home prices are pretty aligned with rents. Assuming both home prices and rent goes up with inflation and accounting for insurance, taxes, tax advantages, maintenance and a list of other issues the prices are comparable. If you have the capital for a down payment and plan to stay in one house (or aparment) for 5 years you are probably better off buying. To say home prices are absurd you need to be comparing it to what you consider it's true worth but how are you determining that? Edit: Perhaps both rent and home prices will go down as more people live with their parents and room mates but I haven't seen that trend start yet and vacancy rates aren't that high (as far as I know) so I don't see it starting soon. If that trend did start I imagine new construction would be the first ones to go but housing developments are going strong around me." }, { "docid": "115862", "title": "", "text": "My experience with owning a home is that its like putting down roots and can be like an anchor holding you to an area. Before considering whether you can financially own a home consider some of the other implications. Once you own it you are stuck for awhile and cannot quickly move away like you can with renting. So if a better job opportunity comes up or your employer moves you to another office across town that doubles your commute time, you'll be regretting the home purchase as it will be a barrier to moving to a more convenient location. I, along with my fiancée and two children, are being forced to move out of my parents home ASAP. Do not rush buying a home. Take your time and find what you want. I made the mistake once of buying a home thinking I could take on some DIY remodeling to correct some features I wasn't fond of. Life intervenes and finding extra time for DIY house updates doesn't come easy, especially with children. Speaking of children, consider the school district when buying a home too. Often times homes in good school districts cost more. If you don't consider the school district now, then you may be faced with a difficult decision when the kids start school. IF you are confident you won't want to move anytime soon and can find a house you like and want to jump into home ownership there are some programs that can help first time buyers, but they can require some effort on your part. FHA has a first time buyer program with a 3.5% down payment. You will need to search for a lender that offers FHA loans and work with them. FHA covers this program by charging mortgage insurance every month that's part of your house payment. Fannie Mae has the HomeReady program where first time home buyers can purchase a foreclosed home from their inventory for as little as 3% down and possibly get up to 3% from the seller to apply toward closing costs. Private mortgage insurance (PMI) is required with this program too. Their inventory of homes can be found on the https://www.homepath.com/ website. There is also NACA, which requires attending workshops and creating a detailed plan to prove you're ready for homeownership. This might be a good option if they have workshops in your area and you want to talk with someone in person. https://www.naca.com/about/" }, { "docid": "303851", "title": "", "text": "\"Exactly it. I declared bankruptcy over 7 years ago. I was in a bad situation - I was laid off, the jobs in Salt Lake dried up after the Olympics, everything was in the crapper. I found new work - in California. Went off and lived there alone for six months while my wife and children stayed behind. We used all of our savings keeping up on the mortgage, paying bills - and living like paupers. Once my wife came down, we knew we couldn't afford a place in CA *and* our home, so we rented it out. To people who didn't pay their rent for six months, and we were so far away we couldn't just fly back to make it happen. And my wife was pregnant this whole time. Finally, because of my wife, we gave in. And I felt awful. I had failed my family, I had failed my wife - and I felt like I had failed myself. I remember being so ashamed I told *no one* for almost 6 years. Until I found out I wasn't the only one. Until I had close friends tell me of their troubles. I hadn't been overly irresponsible, I hadn't been buying up big TVs and junk. I was just trying to make a living, did good work - and just got caught up in bad luck. But the shame didn't go away. And it's only now, when I know more, when I see companies declare bankruptcy, or very wealthy people do so, that I realize that yeah - I have to take care of my shit, and I do everything I can for that. But at the same time, if bad stuff happens, I shouldn't spend my life beating up on myself because I had \"\"shit happen.\"\" Shit happens. Everybody should have a second chance to try again. Learn from the mistakes you made, plan better if you can, and realize that the best laid plans of might and men oft go awry. Try again, and hopefully it'll work out better next time.\"" }, { "docid": "212540", "title": "", "text": "\"So, you have $100k to invest, want a low-maintenance investment, and personal finance bores you to death. Oooohhh, investment companies are gonna love you. You'll hand them a wad of cash, and more or less say \"\"do what you want.\"\" You're making someone's day. (Just probably not yours.) Mutual fund companies make money off of you regardless of whether you make money or not. They don't care one bit how carefully you look at your investments. As long as the money is in their hands, they get their fee. If I had that much cash, I'd be looking around for a couple of distressed homes in good neighborhoods to buy as rentals. I could put down payments on two of them, lock in fixed 30-year mortgages at 4% (do you realize how stupid low that is?) and plop tenants in there. Lots of tax write-offs, cash flow, the works. It's a 10% return if you learn about it and do it correctly. Or, there have been a number of really great websites that were sold on Flippa.com that ran into five figures. You could probably pay those back in a year. But that requires some knowledge, too. Anything worthwhile requires learning, maintenance and effort. You'll have to research stocks, mutual funds, bonds, anything, if you want a better than average chance of getting worthwhile returns (that is, something that beats inflation, which savings accounts and CDs are unlikely to do). There is no magic bullet. If someone does manage to find a magic bullet, what happens? Everyone piles on, drives the price up, and the return goes down. Your thing might not be real estate, but what is your thing? What excites you (i.e., doesn't bore you to death)? There are lots of investments out there, but you'll get out of it what you put into it.\"" }, { "docid": "6363", "title": "", "text": "\"This might sound harsh, but the first thing I would suggest is to stop making excuses. I wasn't able to continue due to pressure from college and family The college I went to was horrible. Employers can very easily hire foreign work-force for very cheap; for example as a citizen if I work $10 an hour, they can get someone from outside to work for $5 per hour There's no guarantee that the project will succeed. I cannot really work and at the same time develop software on my free time. Despite my failures in the past, I was not the main person that's responsible for those failures. Even if all of this is true, it's not helping you move forward and it seems to be getting in the way of creating a good action plan and motivating yourself to succeed. If you believe (based on past experiences) that you are doomed to fail, then you are indeed doomed to fail. You need to take a step back and re-evaluate your current circumstances and what you can do to reach your goals. You have a couple of things working in your favor here. It's great that you are debt free. That already puts you ahead of a lot of your peers. You have the option of living with your parents. Presumably for no rent, or at least much lower rent than you would have to pay if you move out. This is worth literally thousands of $/£/€ for every year you stay. Now, onto your questions: 1) Should I quit regular programming for a normal job because I never monetized programming so I can move out of my parents' home? Are you being paid for this \"\"regular programming\"\"? If so, are you being paid more than minimum wage? If not, it's perfectly acceptable to consider alternative ways to spend your time and generate income. However, this doesn't have to be at the expense of living with your parents. Have you thought about getting a new or second job while still living with them? If you absolutely must move out of your parent's home, consider renting a room in a house with other people to keep the rent costs to a minimum. That way, even if your main job is low paying, you should be able to put aside some money each month for future endeavors. 2) Should I monetize programming and gamble with the future? What does this mean? Are you thinking you'll write a mobile app and sell thousands of copies for 99¢ each? That would indeed be a big gamble, but maybe that's not what you meant, so you'll need to clarify. 3) Would it be wise to essentially quit programming for the sake of a minimum wage job? I'm not sure how this is different from question 1. So I'll reiterate what I said there - moving out is going to be expensive. You can still do it, but you're asking on a Personal Finance site where the focus is usually how to minimize living costs and maximize income. Without knowing more about where you live (employment opportunities, cost of living) the default recommendation is usually to save money by staying in your parents house. TLDR: Don't focus on anyone else. They are not preventing you from getting the job you want. Look at your own skills and qualifications (not just programming, consider all of your abilities). What are you good at? Who might need those skills? What is the cost of reaching those people (commute time, moving nearer)? What is the reward? If the reward exceeds the cost, start approaching those people. Show them what you can do.\"" }, { "docid": "359177", "title": "", "text": "Heres what you need to know: This can be prevented by what a previous renter did to us. This is a smart, kind of a jerky way to do it but its VERY SMART, as long as your property is worth it, raise the rent higher. You must have a very nice, clean, everything working, house. You must be willing to have anything fixed. this is all to make up the high rent. You don't want the rent way out of proportion but just a bit higher. This is because, more than likely, people who are going to pay for a higher rent don't usually leave a mess, (higher class families vs lower class people living alone..) What might also help from the risk of damage is create a fee (also what my renter did) of any painting needed done like finger prints on the wall, nails in the wall, carpet stains, etc when the tenant is ready to move out. I would suggest a required professional carpet cleaning as well when lease is up. My renter was very nice, but very strict and did all these things. He has a few properties that are very nice middle class houses. Your home sounds like it could easily pass for this kind of business depending on where you live. If the tenant leaves before his lease is up you could charge a 1-2 month's rent to be able to find a new tenant. Be proactive on finding a tenant before the lease is up. This would be a bit of work to first set up and usually maintain, but its a good thing to think about." }, { "docid": "580292", "title": "", "text": "No. This logic is dangerous. The apples to apples comparison between renting and buying should be between similar living arrangements. One can't (legitimately) compare living in a 600 sq ft studio to a 3500 sq ft house. With the proposal you offer, one should get the largest mortgage they qualify for, but that can result in a house far too big for their needs. Borrowing to buy just what you need makes sense. Borrowing to buy a house with rooms you may never visit, not a great idea. By the way, do the numbers. The 30 year rate is 4%. You'd need a $250,000 mortgage to get $10,000 in interest the first year, that's a $312,000 house given an 80% loan. On a median income, do you think it makes sense to buy a house twice the US median? Last, a portion of the tax savings is 'lost' to the fact that you have a standard deduction of nearly $6,000 in 2012. So that huge mortgage gets you an extra $4000 in write-off, and $600 back in taxes. Don't ever let the Tax Tail wag the Investing Dog, or in this case the House Dog. Edit - the investment return on real estate is a hot topic. I think it's fair to say that long term one must include the rental value of the house in calculating returns. In the case of buying of way-too-big house, you are not getting the return, it's the same as renting a four bedroom, but leaving three empty. If I can go on a bit - I own a rental, it's worth $200K and after condo fee and property tax, I get $10K/yr. A 5% return, plus whatever appreciation. Now, if I lived there, I'd correctly claim that part of my return is the rental value, the rent I don't pay elsewhere, so the return to me is the potential growth as well as saved rent. But if the condo rents for $1200, and I'd otherwise live in a $600 apartment with less space, the return to me is lost. In my personal case, in fact, I bought a too big house. Not too big for our paycheck, the cost and therefore the mortgage were well below what the bank qualified us for. Too big for the need. I paid for two rooms we really don't use." }, { "docid": "324386", "title": "", "text": "\"Living in one unit of a multi-family while renting out the others, although not without its risks, can be a viable (if gradual) way to build wealth. It's been rebranded recently as \"\"house hacking\"\", but the underlying mechanics have been around for many years (many cities in the Northeast in particular remain chock full of neighborhoods of 3-family homes built and used for exactly that purpose for decades, though now frequently sub-divided into condos). It's true you'd need to borrow money, but there are a number of reasons why it's certainly at least worth exploring (which is what you seem to be asking -- should you bother doing the homework -- tl;dr: yes): And yes, you would be relying on tenants to meet your monthly expenses, including a mortgage bill that will arrive whether the other units are vacant or not. But in most markets, rental prices are far less volatile than home prices (from the San Francisco Federal Reserve): The main result from this decomposition is that the behavior of the price-rent ratio for housing mirrors that of the price-dividend ratio for stocks. The majority of the movement of the price-rent ratio comes from future returns, not rental growth rates. (Emphasis added) It's also important to remember that rental income must do more than just cover your mortgage -- there's lots of other expenses associated with a rental property, including insurance, taxes, maintenance, vacancy (an allowance for the periods when the property will be empty in between tenants), reserves for capital improvements, and more. As with any investment, it's all about whether the numbers work. (You mentioned not being interested in the \"\"upkeep work\"\", so that's another 8-10% off the top to pay for a property manager.) If you can find a property at an attractive price, secure financing on attractive terms, and can be reasonably confident that it will rent in the ballpark of 1.5-2% of the purchase price, then it might be a fine choice for you, assuming you are willing and able to handle the work of being a landlord -- something worth at least as much of your research time as the investment itself. It sounds like you're still a ways away from having enough for even an FHA down payment, which gives you a great opportunity to find and talk with some local folks who already manage rental properties in your area (for example, you might look for a local chapter of the national Real Estate Investment Association), to get a sense of what's really involved.\"" }, { "docid": "366961", "title": "", "text": "\"In most parts of the US, even the more expensive parts, a $100k income can afford the rent or mortgage on a reasonably safe* 2-3 bedroom home within an hour commute of your work, plus the means to commute, plus health insurance, plus retirement savings, plus at least some discretionary income (i.e., choice between living in a nicer neighborhood, eating out more often, buying brand-name apparel, etc). In some places, $100k affords a very comfortable lifestyle, with plenty of savings. A lot of people who live in or around big, expensive cities think it is outrageous that their $100k income doesn't get them a designer apartment, a wardrobe full of fitted suits, eating out twice a week, two overseas vacations per year, etc. They confuse not having a Hollywood lifestyle, with being poor. Those are some of the most obnoxious people in the world. *because this post is sure to draw the ire of some privileged people who think that \"\"reasonably safe\"\" means top 5%, I will offer the definition of \"\"reasonably safe\"\" as one of the top three quintiles of US zip codes with lowest violent crime rates per capita.\"" }, { "docid": "112271", "title": "", "text": "I would go with the 2nd option (put down as little as possible) with a small caveat: avoid the mortgage insurance if you can and put down 20%. Holding your rental property(ies)'s mortgage has some benefits: You can write off the mortgage interest. In Canada you cannot write off the mortgage interest from your primary residence. You can write off stuff renovations and new appliances. You can use this to your advantage if you have both a primary residence and a rental property. Get my drift? P.S. I do not think it's a good time right now to buy a property and rent it out simply because the housing prices are over-priced. The rate of return of your investment is too low. P.S.2. I get the feeling from your question that you would like to purchase several properties in the long-term future. I would like to say that the key to good and low risk investing is diversification. Don't put all of your money into one basket. This includes real estate. Like any other investment, real estate goes down too. In the last 50 or so years real estate has only apprepriated around 2.5% per year. While, real estate is a good long term investment, don't make it 80% of your investment portfolio." }, { "docid": "577658", "title": "", "text": "\"The bottom line is that you can decide whatever you want to do. It is good of you to get everything in writing. What happens if she decides to move to a different city? What happens if she also wants to be bought out? It should also include contingencies for your husband and yourself. God forbid anything negative happens, but what happens if you two get divorced? Does your husband want to be an agreement with your sister if you pass away? There does not seem to be any math to do in this case. While she is paying the lion's share of the payment, she is also receiving the benefit of having a place to live. It is unlikely that she can rent an equivalent place for anything close to 1400/month. I would estimate it would be at least 1800/month to rent an equivalent property. So she put no money down, and she is paying below market \"\"rent\"\" to live somewhere. Many people would be happy to have $400/month off and handle their own repairs (let alone you still kicking in half). Now all that said, if you want to give her some equity based upon generosity or the desire to give her some dignity, then you are free to do so. Perhaps 10%?\"" }, { "docid": "64400", "title": "", "text": "Whenever you put less than 20% down, you are usually required to pay private mortgage insurance (PMI) to protect the lender in case you default on your loan. You pay this until you reach 20% equity in your home. Check out an amortization calculator to see how long that would take you. Most schedules have you paying more interest at the start of your loan and less principal. PMI gets you nothing - no interest or principal paid - it's throwing money away in a very real sense (more in this answer). Still, if you want to do it, make sure to add PMI to the cost per month. It is also possible to get two mortgages, one for your 20% down payment and one for the 80%, and avoid PMI. Lenders are fairly cautious about doing that right now given the housing crash, but you may be able to find one who will let you do the two mortgages. This will raise your monthly payment in its own way, of course. Also remember to factor in the costs of home ownership into your calculations. Check the county or city website to figure out the property tax on that home, divide by twelve, and add that number to your payment. Estimate your homeowners insurance (of course you get to drop renters insurance, so make sure to calculate that on the renting side of the costs) and divide the yearly cost by 12 and add that in. Most importantly, add 1-2% of the value of the house yearly for maintenance and repair costs to your budget. All those costs are going to eat away at your 3-400 a little bit. So you've got to save about $70 a month towards repairs, etc. for the case of every 10-50 years when you need a new roof and so on. Many experts suggest having the maintenance money in savings on top of your emergency fund from day one of ownership in case your water heater suddenly dies or your roof starts leaking. Make sure you've also estimated closing costs on this house, or that the seller will pay your costs. Otherwise you loose part of that from your down payment or other savings. Once you add up all those numbers you can figure out if buying is a good proposition. With the plan to stay put for five years, it sounds like it truly might be. I'm not arguing against it, just laying out all the factors for you. The NYT Rent Versus Buy calculator lays out most of these items in terms of renting or buying, and might help you make that decision. EDIT: As Tim noted in the comments below, real monthly cost should take into account deductions from mortgage interest and property tax paid. This calculator can help you figure that out. This question will be one to watch for answers on how to calculate cost and return on home buying, with the answer by mbhunter being an important qualification" }, { "docid": "545800", "title": "", "text": "\"The general answer to this is \"\"yes\"\". When you're dealing with single-digit millionaires, the answer is that their insurance habits and needs are basically the same as everyone else. When you get into the double digit and triple digit millionaires, or people worth billions, they have additional options, but those basically boil down to using \"\"self-insurance\"\" rather than paying a company for an insurance policy. The following is based on both what I've read and a fair deal of personal experience working for or with various stripes of millionaire, and even one billionaire. Addressing the types of insurance you mention: This is generally used to provide survivors with a replacement for income you can no longer provide when dead, in addition to paying for costs associated with dying (funeral, hospital/hospice bills, etc). Even millionaires and billionaires have this, yes, but the higher your net worth, the less value it has. If you're worth 9 or 10 figures, you probably already have trust funds set up for your family members, so an extra payout from an insurance policy is probably going to represent a small fraction of the wealth you're leaving your survivors, and as has been noted, insurance makes a profit, so the expectation by the insurance company is that they'll make more money on the policy than they'll have to pay out on death. That being said, the members of the 9+ figure club I've worked for all had multi-million dollar life insurance policies on them, which were paid for or heavily subsidized by the companies they owned or worked for. I doubt they would have held those policies if they had to pay the full cost, but when it's free or cheap, why not? Absolutely. As health insurance in America is an untaxed employment benefit, owing to regulations from World War II, all the wealthy folks I've had contact with got outrageously good plans as part of the companies they work for or owned. Having said that, even their trust fund beneficiaries held health insurance, because this type of insurance (in America, at least) is actually not really insurance, it's more of a pre-payment plan for medical expenses, and as such, it provides broader access to health care than you'd get from simply having enough money to pay for whatever treatments you need. If you walk into a hospital as a millionaire and state that you'll definitely be able to pay for your open-heart surgery with cash, you'll get a very different response than if you walk in with your insurance card and your \"\"diamond-level\"\" coverage. So, in this case, it's not as much as about the monetary benefits (although this is a type of \"\"insurance\"\" that's generally free or heavily discounted to the individual, so that's a factor) as it is about easier access to health care. Although this is required by law, it's one of the common forms of insurance that the very wealthy can, and often do handle differently than the rest of us. Most (if not all) US states have a provision to allow motorists to self-insure themselves, which amount to putting up a bond to cover claims against them. Basically, you deposit the minimum amount the state determines is required for auto insurance with the responsible state organization, get a certificate of self-insurance and you're good to go. All the high wealth individuals I know when this route, for two reasons - first of all, they didn't have to deal with insurance companies (or pay sky-high rates on account of all the speeding tickets they picked up) and secondly, they made their deposit with government bonds they had in their portfolios anyway, and they could still collect the interest on their self-insurance deposits. Of course, this meant that if they wrecked or dinged up their Maserati or Bentley or whatever, they'd be out of pocket to repair or replace it... but I guess if you can afford one $200,000 car, you can afford to buy a second one if you wreck it, or get by riding one of your other luxury automobiles instead. Since someone else mentioned kidnapping insurance, I'll point out here that what Robert DeNiro did in Casino when he put a couple million dollars into a safety deposit box for his wife to use if he was kidnapped or needed to pay off a government official is essentially the same thing as \"\"self-insurance\"\". Putting money away somewhere for unexpected events in lieu of buying an insurance policy against them. In real life, the very wealthy will often do this with US treasuries, government bonds and other interest-bearing, safe investments. They make a little money, diversify their portfolios and at the same time, self-insure against a potential big loss. This is another insurance area where even the very wealthy are remarkably similar to the rest of us, in that they all generally have it, yes, although the reason is a little different. For normal folks, the home they own is generally the largest part of their net worth, or at least a very substantial fraction, for those older folks with retirement savings that exceed the value of their homes. So for us, we have home owners insurance to prevent a catastrophic event from wiping out the lion's share of our net worth. If you're an ultra-wealthy individual who can afford an 8 figure home, that's not really the case (at least with the ones I've dealt with, who made their fortunes in business and are good managing their wealth and diversifying their assets - could be different for sports stars or the entertainment industry), and these people generally own multiple homes anyway, so it's not as big a deal if they lose one. However, no one actually buys a multi-million dollar home by writing a multi-million dollar check. They get a mortgage, just like the rest of us. And to get a mortgage, insurance on the property is a requirement. So yes, even the ultra wealthy generally have insurance on their home(s). There is an element of not wanting to shell out another 20 million if the place burns down, or someone breaks in and steals your valuables, but the bigger part of the reason is that it's required to get a mortgage in the first place, which is generally done for financial reasons - interest on your mortgage is a tax deduction, and you don't want to sink millions of dollars all at once into buying a property that's not going to appreciate in value, when you can get a mortgage and invest those millions of dollars to make more money instead.\"" }, { "docid": "353081", "title": "", "text": "\"With 40% of your take-home available, you have a golden opportunity here. Actually two, and the second builds out easily from the first. Golden Opportunity # 1: Layoff Immunity Ok, not really immunity. Most people don't think of themselves getting laid off, and don't prepare. Of course it may not happen to you, but it can. It's happened to me twice. The layoff itself is an emotional burden (getting rejected is hard), but then you're suddenly faced with a gut-wrenching, \"\"how am I gonna pay the rent????\"\" If you have no savings, it's terrifying. Put yourself in that spot. Imagine that tomorrow, you're out of a job. For how many months could you pay your expenses with the money you have? Three months? One? Not even that? How about shooting for 12 months? It's really, really comforting to be able to say: \"\"I don't have to worry about it for a year\"\". 12 months saved up gives you emotional and financial stability, and it gives you options -- you don't have to take the first job that comes along. Now, saving 12 months of expenses is huge. But, you're in the wonderful spot where you can save 40% of your income. It would only take 2.5 years to save up a year's worth of income! But, actually, it's better than that. Because your 12-month Layoff Immunity fund doesn't have to include the amount for retirement, or taxes, or that 40% we're talking about. Your expenses are less than 60% of take-home -- you'd only need 12 months of that. So, you could have a fully funded 12-Month Layoff Immunity Fund only in a year and a half! Golden Opportunity #2: Freedom Fund Do you like your Job? Would you still do it, if you didn't need the money? If so, great. But if not, why not get yourself into a position where you don't need it? That is, build up enough money from saving and investing to where you can pay your expenses - forever - from your investments. The number to keep in mind is 25. Figure out your annual expenses, and multiply it by 25. That's the amount you'd need to never need a job again. (That works out to a 4% withdrawal rate, adjusting for inflation every year, with a low risk of running out of money. It's a rule of thumb, but smart people doing a lot of math worked it out.) Here you keep saving and investing that 40% in solid mutual funds in a regular, taxable account. Between your savings and the compounding returns off the investments, you could easily have a fully funded \"\"Freedom Fund\"\" by the time you're 50. In fact, by 45 isn't unreasonable. It could be even better. If you live in that high-rent area because of the job, and wouldn't mind living were the rents are lower once you quit, your target amount would be lower. Between that, working dedicatedly toward this goal, and maybe a little luck, you might even be able to do this by age 40. Final Thoughts There are other things you could put that money toward, like a house, of course. The key take-away here, is to save it, and invest it. You're in a unique position of being able to do that with 40% of your income. That's fabulous! But don't think it's the norm. Most people can't save that much, and, once you lose the ability to save that much, it's very difficult to get it back. Expenses creep in, lifestyle \"\"wants\"\" become \"\"needs\"\", and so on. If you get into the habit of spending it, it's very difficult to shrink your lifestyle back down - down to what right now you're perfectly comfortable with. So, spend some time figuring out what you want out of life -- and in the mean time, sock that 40% away.\"" }, { "docid": "384924", "title": "", "text": "\"The first issue you'll find is that if you aren't going to immediately live in the house as a primary residence, this property counts as a \"\"second home\"\" or \"\"investment property\"\". You'll generally pay a higher interest rate, have a larger down payment, and qualify for less government-backed programs/incentives/subsidies than you would otherwise. The lending criteria on such properties is always more strict - and generally more costly - than an equivalent primary residence. Lenders won't really care that in 10 years you or your parents plan to move in - you can't be held to that, so they'll generally ignore that plan entirely. On a related note, you should be aware that insurance for the property will also generally cost more, but you'd need to get quotes to determine if that is at all significant in your situation. You'll need to talk with a few potential lenders, but from a first read it sounds like it would be best \"\"storied\"\" like so: you and your parents want to buy a 2nd home or vacation home, which you'll share the use of (vacations, etc, and being converted to a primary residence later). It'll need to be clear what plan to use the property for - if you intend to rent out the home in the interim years then instead make that clear and state it will be an investment home; if it is what you are planning it might make it easier, as expected rent for the property will be considered. Saying you want a mortgage for a home no one will live in for a decade probably isn't a good idea, as a general plan anyway. Either way, this can be called a \"\"joint mortgage\"\". When I was a loan officer we didn't use that term, but it's basically just a mortgage application with multiple people on it, all of whom are combined together to qualify for the loan. Everyone's income, debts, assets, and credit get included, which can work or one person's situation can cause the whole thing to collapse. From your description I think this could work for you, and one option is to set it up where only one of the parents is on the application if the other parent has problematic credit situation. Note that his possibility is often restricted by local law, so it may not be an option for you in your jurisdiction, but worth being aware of. An alternative is you just buy the property and the parents gift you the down payment, and you list them as beneficiaries in will/trust in case something happens to you before they retire, but I don't know if that would make any sense in your situation. This is a single applicant mortgage, and it means only you are considered as buying it, which sometimes is the only option depending on your parents current financial situation. It's usually something you try if the other option doesn't work, but it's a fallback plan. Some lenders will allow guarantors (co-signers in US parlance), but this will vary by lender and locale - often what they actually want is a joint mortgage, not really a guarantor/cosigner. Finally, you'll need to plan for what happens if things don't go as planned, regardless of what happens. What if your income changes, if either of your parents become deceased in advance of retirement, if they get a divorced from each other, or if either/both become ill or disabled and need assisted care? Planning for such unpleasant possibilities (even if they seem crazy and not going to happen in your mind right now) can save you all a tremendous amount of heart ache later on when the unexpected (including things I didn't mention) pops up.\"" }, { "docid": "257980", "title": "", "text": "\"Here are some important things to think about. Alan and Denise Fields discuss them in more detail in Your New House. Permanent work. Where do you want to live? Are there suitable jobs nearby? How much do they pay? Emergency fund. Banks care that you have \"\"reserves\"\" (and/or an unsecured line of credit) in case you have a run of bad luck. This also helps with float the large expenses when closing a loan. Personal line of credit. Who are you building for? If you are not married, then you should consider whether building a home makes that easier, or harder. If you hope to have kids, you should consider whether your home will make it easier to have kids, or harder. If you are married (or seriously considering it), make sure that your spouse helps with the shopping, and is in agreement on the priorities and choices. If you are not married, then what will you do if/when you get married? Will you sell? expand? build another house on the same lot? rent the home out? Total budget. How much can the lot, utilities, permits, taxes, financing charges, building costs, and contingency allowance come to? Talk with a banker about how much you can afford. Talk with a build-on-your-lot builder about how much house you can get for that budget. Consider a new mobile or manufactured home. But if you do choose one, ask your banker how that affects what you can borrow, and how it affects your rates and terms. Talk with a good real estate agent about how much the resale value might be. Finished lot budget. How much can you budget for the lot, utilities, permits required to get zoning approval, fees, interest, and taxes before you start construction? Down payment. It sounds like you have a plan for this. Loan underwriting. Talk with a good bank loan officer about what their expectations are. Ask about the \"\"front-end\"\" and \"\"back-end\"\" Debt-To-Income ratios. In Oregon, I recommend Washington Federal for lot loans and construction loans. They keep all of their loans, and service the loans themselves. They use appraisers who are specially trained in evaluating new home construction. Their appraisers tend to appraise a bit low, but not ridiculously low like the incompetent appraisers used by some other banks in the area. (I know two banks with lots of Oregon branches that use an appraiser who ignores 40% of the finished, heated area of some to-be-built homes.) Avoid any institution (including USAA and NavyFed) that outsources their lending to PHH. Lot loan. In Oregon, Washington Federal offers lot loans with 30% down payments, 20-year amortization, and one point, on approved credit. The interest rate can be a fixed rate, but is typically a few percentage points per year higher than for a mortgage secured by a permanent house. If you have the financial wherewithal to start building within two years, Washington Federal also offers short-term lot loans. Ask about the costs of appraisals, points, and recording fees. Rent. How much will it cost to rent a place to live, between when you move back to Oregon, and when your new home is ready to move into? Commute. How much time will it take to get from your new home to work? How much will it cost? (E.g., car ownership, depreciation, maintenance, insurance, taxes, fuel? If public transportation is an option, how much will it cost?) Lot availability. How many are there to choose from? Can you talk a farmer into selling off a chunk of land? Can you homestead government land? How much does a lot cost? Is it worth getting a double lot (or an extra large lot)? Utilities. Do you want to live off the grid? Are you willing to make the choices needed to do that? (E.g., well, generator, septic system, satellite TV and telephony, fuel storage) If not, how much will it cost to connect to such systems? (For practical purposes, subtract twice the value of these installation costs from the cost of a finished lot, when comparing lot deals.) Easements. These provide access to your property, access for others through your property, and affect your rights. Utility companies often ask for far more rights than they need. Until you sign on the dotted line, you can negotiate them down to just what they need. Talk to a good real estate attorney. Zoning. How much will you be allowed to build? (In terms of home square footage, garage square footage, roof area, and impermeable surfaces.) How can the home be used? (As a business, as a farm, how many unrelated people can live there, etc.) What setbacks are required? How tall can the building(s) be? Are there setbacks from streams, swamps, ponds, wetlands, or steep slopes? Choosing a builder. For construction loans, banks want builders who will build what is agreed upon, in a timely fashion. If you want to build your own house, talk to your loan officer about what the bank expects in a builder. Plansets and permits. The construction loan process. If you hire a general contractor, and if you have difficulties with the contractor, you might be forced to refuse to accept some work as being complete. A good bank will back you up. Ask about points, appraisal charges, and inspection fees. Insurance during construction. Some companies have good plans -- if the construction takes 12 months or less. Some (but not all) auto insurance companies also offer good homeowners' insurance for homes under construction. Choose your auto insurance company accordingly. Property taxes. Don't forget to include them in your post-construction budget. Homeowners' insurance. Avoid properties that need flood insurance. Apply a sanity check to flood maps -- some of them are unrealistic. Strongly consider earthquake insurance. Don't forget to include these costs in your post-construction budget. Energy costs. Some jurisdictions require you to calculate how large a heating system you need. Do not trust their design temperatures -- they may not allow for enough heating during a cold snap, especially if you have a heat pump. (Some heat pumps work at -10°F -- but most lose their effectiveness between 10°F and 25°F.) You can use these calculations, in combination with the number of \"\"heating degree days\"\" and \"\"cooling degree days\"\" at your site, to accurately estimate your energy bills. If you choose a mobile or manufactured home, calculate how much extra its energy bills will be. Home design. Here are some good sources of ideas: A Pattern Language, by Christopher Alexander. Alexander emphasizes building homes and neighborhoods that can grow, and that have niches within niches within niches. The Not-So-Big House, by Sarah Susanka. This book applies many Alexander's design patterns to medium and large new houses. Before the Architect. The late Ralph Pressel emphasized the importance of plywood sheathing, flashing, pocket doors, wide hallways, wide stairways, attic trusses, and open-truss or I-joist floor systems. Lots of outlets and incandescent lighting are good too. (It is possible to have too much detail in a house plan, and too much room in a house. For examples, see any of his plans.) Tim Garrison, \"\"the builder's engineer\"\". Since Oregon is in earthquake country -- and the building codes do not fully reflect that risk -- emphasize that you want a building that would meet San Jose, California's earthquake code.\"" }, { "docid": "78409", "title": "", "text": "10 people live in country X in 10 separate households, 5 own their homes and the others rent unrelated property. Home ownership = 50% 10 people live in Country Y in 5 seperate households, 5 own their homes while the others rent from them. Home ownership = 50% One day, person 1 leaves his rented spot in one of the homes to opt for a new home elsewhere. Home ownership = 50%. It doesn't work out, so he moves back in with mom and dad. Home ownership = 50% Where am I making a mistake?" }, { "docid": "92403", "title": "", "text": "You want to buy a house for $150,000. It may be possible to do this with $10,000 and a 3.5% downpayment, but it would be a lot better to have $40,000 and make a 20% downpayment. That would give you a cushion in case house prices fall, and there are often advantages to a 20% downpayment (lower rate; less mandatory insurance). You have an income of $35,000 and expenses of $23,000 (if you are careful with the money--what if you aren't?). You should have savings of either $17,500 or $11,500 in case of emergencies. Perhaps you simply weren't mentioning that. Note that you also need at least $137 * 26 = $3562 more to cover mortgage payments, so $15,062 by the expenses standard. This is in addition to the $40,000 for downpayment and closing costs. What do you plan to do if there is a problem with the new house, e.g. you need a new roof? Or smaller expenses like a new furnace or appliance? A plumbing problem? Damages from a storm? What if the tenants' teenage child has a party and trashes the place? What if your tenants stop paying rent but refuse to move out, trashing the place while being evicted? Your emergency savings need to be able to cover those situations. You checked comps (comparable properties). Great! But notice that you are looking at a one bathroom property for $150,000 and comparing to $180,000 houses. Consider that you may not get the $235 for that house, which is cheaper. Perhaps the rent for that house will only be $195 or less, because one bathroom doesn't really support three bedrooms of people. While real estate can be part of a portfolio, balance would suggest that much more of your portfolio be in things like stocks and bonds. What are you doing for retirement? Are you maxing out any tax-advantaged options that you have available? It might be better to do that before entering the real estate market. I am a 23 year old Australian man with a degree in computer science and a steady job from home working as a web developer. I'm a bit unclear on this. What makes the job steady? Is it employment with a large company? Are you self-employed with what has been a steady flow of customers? Regardless of which it is, consider the possibility of a recession. The company can lay you off (presumably you are at the bottom of the seniority). The new customers may be reluctant to start new projects while their cash flow is restrained. And your tenants may move out. At the same time. What will you do then? A mortgage is an obligation. You have to pay it regardless. While currently flush, are you the kind of flush that can weather a major setback? I would feel a lot better about an investment like this if you had $600,000 in savings and were using this as a complementary investment to broaden your portfolio. Even if you had $60,000 in savings and would still have substantial savings after the purchase. This feels more like you are trying to maximize your purchase. Money burning a hole in your pocket and trying to escape. It would be a lot safer to stick to securities. The worst that happens there is that you lose your investment (and it's more likely that the value will be reduced but recover). With mortgages, you can lose your entire investment and then some. Yes, the price may recover, but it may do so after the bank forecloses on the mortgage." }, { "docid": "255171", "title": "", "text": "&gt;Umm actually asking to be refinanced at a lower rate IS asking them to forgive/give up part of the mortgage. Either my knowledge of finance is wrong or how interest rates work is wrong if that statement is true. Here is why your statement is not true: * The interest rate is money the bank makes on the loan. For example, say you buy a home valued at $250,000, put 10% down and your interest rate is 5% for 30 years. Well now you've got a mortgage ($225,000) that you pay $1,207.85 monthly. Now expand this out to 30 years, which means you'll make 360 payments for a total balance of $434,825.5. So even though you have a mortgage of $225,000 and your home is only valued at $250,000 due to the interest rate on that loan, you will be giving the bank $209,825.5 in profit for that $225,000 loan. Refinancing the loan at a lower rate is not debt forgiveness or a write off. &gt;Peoples greed in getting themselves into upside down mortgages are why we have problems, not the banks not helping them out enough. Actually it's the bank's greed which is wanting to keep the homeowner at the higher interest rate because it will make them more money over the long run. If the bank was to reduce the interest rate on the loan, they would be reducing their potential profits. And now you know why I support non profit banks." } ]

[ { "docid": "579763", "title": "", "text": "4) Beef up my emergency fund, make sure my 401(k) or IRA was fully funded, put the rest into investments. See many past answers. A house you are living in is not an investment. It is a purchase, just as rental is a purchase. Buying a house to rent out is starting a business. If you want to spend the ongoing time and effort and cash running a business, and if you can buy at the right time in the right place for the righr price, this can be a reasonable investment. If you aren't willing to suffer the pains of being a landlord, it's less attractive; you can hire someone to manage it for you but that cuts the income significantly. Starting a business: Remember that many, perhaps most, small businesses fail. If you really want to run a business it can be a good investment, again assuming you can buy at the right time/price/place and are willing and able to invest the time and effort and money to support the business. Nothing produces quick return with low risk." } ]

[ { "docid": "270818", "title": "", "text": "\"You seem to be treating your Roth IRA as a sort of savings account for use in emergency situations. I would use a savings account for savings as withdrawing money from an IRA will have penalties under various circumstances (more than contributions, Roth IRA less than 5 years old, more than $10k for a down payment). Also, you mention folding your IRA into your 401k so that it will \"\"grow faster\"\". However, this will not have that effect. Imagine you have $30k in an IRA and $100k in a 401k and you are averaging a return of 8% / year on each. This will be identical to having a single 401k with $130k and an 8% / year return. This is not one of your questions, but employer matches are not counted in the 401k contribution limit. If your 22% calculation of your salary includes the match to reach the max contribution, you can still contribute more.\"" }, { "docid": "272664", "title": "", "text": "\"I agree with JoeTaxpayer's answer. The question you should be asking is not \"\"how do I spend more\"\" but \"\"how do I become happier\"\". From what you say, it may be that you could increase your happiness simply by cutting back on these aggressive attempts to save a few bucks here and there. At the same time, if you do this, on some level your personality is probably not the type that would allow to simply \"\"forget it\"\". I think many frugal people are somewhat as you describe: they don't like wasting money. In such cases, often what matters is not so much the actual saving money as the feeling of saving money. Therefore, I'd suggest that you take a look at which of the \"\"money-losing\"\" activities you mention are really worth it. The easiest ones to drop would be things like the home-improvement project, which even you acknowledge does not save you money. If you like saving money, give yourself a pat on the back when you hire the contractor. If you want, run the numbers so you can \"\"prove\"\" to yourself how much money you are saving by not doing the work. For some of the other things, it may be that spending time to save a small amount can \"\"gamify\"\" an everyday experience and make it more interesting. For instance, comparing products to save a few bucks is not necessarily bad unless you actually don't like doing it. If spending a few hours comparing two toaster ovens on Amazon or whatever makes you feel good, go for it; it's no worse than spending a few hours watching TV. By acknowledging that you get something out of it --- the feeling of getting a bargain --- and savoring that, you can feel better about, and also potentially \"\"get it out of your system\"\" so that you won't feel the need to do it for every little thing. We all have our little pet obsessions, and it's possible to acknowledge that they're irrational, while still accepting them as part of your personality, and finding a way to satisfy them in a controlled manner that doesn't stress you out too much.\"" }, { "docid": "427522", "title": "", "text": "\"Having just gone through selling a car, I can tell you that CarMax will most likely not be the best solution. I recently sold my '09 Pontiac Vibe which had a KBB and Edmonds value (private party sale) of around $6k. Trade-in value was around $4,800. I took it to the local CarMax for a quote, and they came back with $3,500. Refinancing is tricky. Banks have a set limit on how old a car they will finance. Many won't even offer financing if the vehicle has over 100k miles. We looked at refinancing our other car, and even getting the APR down over a point we would only have saved $15/mo or so. Banks typically offer much higher interest rates for used non-dealership cars and refinancing than they do for new cars, or even used cars purchased from a dealership. Assuming you have 2-3 years left on your loan, I don't think that refinancing would save you enough to be worth considering. CarMax sells cars in 1 of 2 ways. They are also up front with you about the process. They do not reference KBB or Edmonds or any other valuation tool other than their own internal system. They either take the car, spruce it up a bit, then resell it on their lot, or they sell it at auction. If they determine your car will be sold at auction, then they will offer you a rock bottom price. The determining factors that come into play include age of the car, mileage, and of course overall condition. If you Mini is still in good shape and doesn't have a lot of miles, then they may try to resell it on their lot, for which they could offer you closer to personal-sale price than trade-in. How many 2007's are for sale in your area? How much are they selling for? I did sell them a truck back in 2005 and received $200 more than KBB valued it for, but it was in great shape, only a couple of years old, relatively low mileage, and it was in high demand. God bless the South and their love for trucks! I ended up selling my Pontiac to another local car dealership. They offered me $5,300 (after negotiating, leaving the dealership, then negotiating more over the phone). It took me a day and a half and really very little effort. I have several friends that have gone through the same thing with selling cars, and all have had similar luck going to other dealerships, where prices can be negotiated, rather than CarMax. CarMax has no incentive to \"\"settle\"\" or forgive your loan. If you really want to pay it off, save up what you believe the difference will be, then shop your car around the local dealerships and get prices for your Mini. Remember that dealers have to turn a profit, so be reasonable with your negotiation. If you can find comparable vehicles in your area listed for $X,000 then knock $1,500 off that price and tell the dealerships that's what you want.\"" }, { "docid": "223585", "title": "", "text": "Anyone can do many jobs that require a degree. Can you cut leaves and put them in a test tube? Because that pays $20 an hour after 2 years in raises. Because I don't need 4 years of college to learn this 'skill'. You don't know that guy, maybe he's qualified for the 80 year old piping and no one else is. Security clearance at a highly guarded private school. Can have 2 janitors and not 3 because he's highly efficient. 100k in Manhattan is like 40k everywhere else. But yeah you're right, the fact her job requires a degree to put leaves in test tubes means she deserves benefits and a great pay and a guy who needs to know what chemicals can't mix with each other doesn't. Does he deserve 100k if the school requires 'any' 4 year degree?" }, { "docid": "273567", "title": "", "text": "Sample Numbers: Owe $100k on house. House (after 'crash') valued at: $50K. Reason for consternation: What rational person pays $100k for property that is only worth half that amount? True Story: My neighbor paid almost $250K (a quarter-of-a-million dollars - think about that..) for a house that when he walked (ran!) away from it was sold by the bank for $88K. Unless he declares bankruptcy (and forgoes all his other assets, including retirement savings) he still owes the bank the difference. And even with bankruptcy, he may still owe the bank - this should cause anyone to be a bit concerned about being up-side down in a mortgage loan." }, { "docid": "560872", "title": "", "text": "To keep the math simple, say you are in the 25% federal tax bracket. Your 4% mortgage effectively costs you 3%. Did Mr Advisor tell you what he suggests investing the money in? Borrowing at 3% net to put the money in .1% CDs makes little sense. And for most people, investing it in the stock market hoping to come out ahead, also makes little sense. Credentials or not, people like him give humans a bad name, and make me love my dog even more. I'd stay far away from this guy. Very far away. Edit - on further reflection (seeing mhoran's reference to $100K) it occurred to me that once a house is paid off, the only deductions allowed is for the first $100K of new mortgage or HELOC, absent a renovation or improvement of some kind. Given the limit and current 4% rates, it would seem to me that a rich retiree paying a fortune in taxes, isn't going to benefit much for a $4000 deduction." }, { "docid": "135781", "title": "", "text": "I am 10 years out of college and been debt free for 4. My school would have cost me $180k for 4 years. I was aware of the cost to go to the school I wanted and so I worked in highschool for every possible scholarship available. I then went into a degree program which I knew was a good investment, engineering. I came out of college in the middle of the recession with you guessed it, around $100k in debt. I moved to a place where the cost of living made it so I could get a job and save. I did not live a lavish lifestyle, I invested my money well, and I worked hard. Garbage in, garbage out. Go to a bad school, not worth it. Do not work hard in college, not worth it. Work hard in a major which has no economic value, not worth it. Do not set yourself up for success by working hard in high school, getting things like AP credits and scholarships, not worth it." }, { "docid": "233394", "title": "", "text": "\"Paying someone to look after your money always costs something - it doesn't matter whether you're inside a pension or not. Fees are highest for \"\"actively managed\"\" funds and lowest for passively managed funds or things where you choose the investments directly - but in the latter case you might pay out a lot in dealing fees. Typically pensions will have some small additional costs on top of that, but those are hugely outweighed by the tax advantages - payments into a pension are made from gross salary (subject to an annual limit), and growth inside the pension is tax free. You do pay income tax when you take the money out though - but by then your marginal tax rate may well have dropped. If you want to control your own investments within a pension you can do this, subject to choosing the right provider - you don't have to be invested in the stockmarket at all (my own pension isn't at the moment). I wrote an answer to another question a while ago which briefly summarises the options As far as an annuity goes, it's not as simple as the company taking the money you saved when you die. The point of an annuity is that you can't predict when you'll die. Simplifying massively, suppose the average life expectancy when you retire is 20 years and you have 100K saved, and ignore inflation and interest for now. Then on average you should have 5K/year available - but since you don't know when you'll die if you just spend your money at that rate you might run out after 20 years but still be alive needing money. Annuities provide a way of pooling that risk - in exchange for losing what's left if you die \"\"early\"\", you keep getting paid beyond what you put in if you die \"\"late\"\". Your suggestion of taking the dividends from an index tracker fund - or indeed the income from any other investment - is fine, but the income will be substantially less than an annuity bought with the same money because you won't be using up any capital, whereas an annuity implicitly does that. Depending on the type of investment, it might also be substantially more risky. Overall, you only need to secure the income you actually need/want to live on. Beyond that level, keeping your money outside the pension system makes some sense, though this might change with the new rules referred to in other answers that mean you don't have to buy an annuity if you have enough guaranteed income anyway. In any case, I strongly suggest you focus first on ensuring you have enough to live on in retirement before you worry about leaving an inheritance. As far as setting up a trust goes, you might be able to do that, but it would be quite expensive and the government tends to view trusts as tax avoidance schemes so you may well fall foul of future changes in the rules.\"" }, { "docid": "567282", "title": "", "text": "In this equation the withdrawal rate is the percent you must pull from your savings to meet your expenses. For example if your savings is $100,000 and you need $10,000 annually for your living expenses then your withdrawal rate would be 10% (where 10k is 10% of 100k). To complete this formula, you need to know how much savings you need to be financially independent before you can use this formula to find out how long it will take you." }, { "docid": "559852", "title": "", "text": "Of course, 100k a year is middle to upper middle in almost every location except the global hubs of America (la, San Fran, new york, etc etc). I know where i live a family making 100k is just 227$ away from upper class (according to Washington posts calculator). Hell growing up my mother made 38k and she was able to afford a 150k house, yearly vacation trips abroad, and a new car paid off in 1 year. By all means of the article that is the aspirations Joe Biden quoted. The only difference is we live in the midwest. I think no one living in California, New York city, miami, etc. should get delusional and believe that our most demanded locations will have room for everyone, especially at a reasonable rate. People are willing to spend 5k for a studio in New York because it is a city of opportunity, San Francisco is not a place to let life come to you. What i love about the Midwest is that living is incredibly cheap, and if you have established yourself soon enough there is a fortune to be made, especially in real estate. Not to mention we have Chicago, Detroit, Cedar Point which almost every family is close enough and earns enough to visit at least once a year. We may not have enough to afford Lamborghini's, multi million dollar houses, or to visit paris on a whim but I feel most in the midwest have enough to love comfortably and save for retirement atleast (minus maybe the bible belt)" }, { "docid": "449294", "title": "", "text": "If you can get a rate of savings that is higher than your debt, you save. If you can't then you pay off your debt. That makes the most of the money you have. Also to think about: what are you goals? Do you want to own a home, start a family, further your education, move to a new town? All of these you would need to save up for. If you can do these large transactions in cash you will be better off. If it were me I would do what I think is a parroting of Dave Ramsay's advice Congratulations by the way. It isn't easy to do what you have accomplished and you will lead a simpler life if you don't have to worry about money everyday." }, { "docid": "457989", "title": "", "text": "\"In answering your question as it's written: I don't think you're really \"\"missing\"\" something. Different banks offer different rates. Online banks, or eBanking solutions, such as CapitalOne, Ally, Barclays, etc., typically offer higher interest rates on basic savings accounts. There are differences between Money Market accounts and Standard Savings accounts, but primarily it comes down to how you can access your cash. This may vary based on bank, but Ally has a decent blurb about it: Regular savings accounts are easy to open and, when you choose an online bank like Ally Bank, you tend to get interest rates that are more competitive than brick-and-mortar counterparts, according to Bankrate.com. Additionally, as a member of the FDIC, Ally Bank gives you peace of mind knowing that the money in your Ally Bank Online Savings Account is insured to the maximum allowed by the law. Money market accounts are easy to open, too. And again, online banks may offer better rates than traditional banks. Generally, you have a bit more flexibility of access with a money market account than you do with a savings account. You can access funds in your Ally Bank Money Market Account through electronic fund transfers, checks, debit cards and ATM withdrawals. With savings accounts, your access is limited to electronic funds transfers or telephone withdrawals (and in-person withdrawals at traditional banks). Both types of accounts are subject to federal transaction limits. Here's a bit more information about a Money Market Account and why the rate might be a little bit higher (from thesimpledollar.com): A money market deposit account is a bit different. The restrictions on what a bank can do with that money are somewhat looser – they can often invest that money in things such as treasury notes, certificates of deposit, municipal bonds, and so on in addition to the tight restrictions of a normal savings accounts. In other words, the bank can take your money and invest it in other investments that are very safe. Now outside of your question, if you have $100K that you want to earn interest on, I'd suggest looking at options with higher rates of return rather than a basic savings account which will top out around 1% or so. What you do with that money is dependent on how quickly you need access to it, and there are a lot of Q&A's on this site that cover suggestions.\"" }, { "docid": "121305", "title": "", "text": "We can go back and forth all day if this should be illegal, should there be qualifications, standards etc. The bigger issue at hand really is what qualifies as being able to live a basic standard of living in regards to income. Can we even define this? This is the core of the issue at hand. Does someone who was making 40k a year deserve it more or less than someone who was making 1mil a year? I don't know. I do know this, if i can make 100k a year and still live a great life with the ability to save enough to have enough stashed away for 6-8 mos of unemployment, why can't people making 1 million+? It should be rather apparent why people making 40k a year can't do that as easy." }, { "docid": "468984", "title": "", "text": "I agree with the previous comments one thing that got brought up a while back when I was looking into purchasing a Prius was the battery replacement, someone once told me it was very expensive in the event it failed and needed to be changed, I'm not talking about the 12 volt but the big nickel metal hydride one. Another thing to factor is the gas that you will save, normally the Prius get double the gas milage of that of civic or a corolla but unless you drive a bunch of miles per day you really don't see the pay off. Also if you can pull a CarFax on the car, the 20 dollar investment is worth it because you can find out if it was in an accident or if it's a lemon! I once bought a bmw and didn't do a CarFax and later ended up finding out that the car had more owners than a taxi had customers. Also just like said above 200k car vs 100k doest always mean the 100k is better off, especially if the previous owner never services it well. Get the car checkout before you make the deal to buy." }, { "docid": "147093", "title": "", "text": "\"I hope this image is clear. A spreadsheet is how I look at these things. Unfortunately, you didn't offer the starting balance so I use $100K which makes it easy to scale. You build a simple spreadsheet and enter the \"\"what if\"\" scenario, this tells me that worse case, an increase of 1% on the rate each year results in a near 60% increase in payments over the 10 years. Of course, this isn't the end of the story, I'd first change the payments to reflect the 5% rate, and see how much that drives the balance down. This would reduce the principal enough that the increase would be much less. On $100K, you'd pay $536.82 based on a 5% rate, regardless of the required payment. At 7.75% the payment is $563.11, not even 5% higher. If you'd like a spreadsheet started for you, I'll put it someplace for you to grab it.\"" }, { "docid": "252859", "title": "", "text": "Considering I'm putting 30% down and having my father cosign is there any chance I would be turned down for a loan on a $100k car? According to BankRate, the average credit score needed to buy a new car is 714, but they also show average interest rates at 6.39% for new-car loans to people with credit scores in the 601-660 range. High income certainly helps offset credit score to some extent. Not every bank/dealership does things the same way. Being self-employed you'd most likely be required to show 2 years of tax returns, and they'd use those as a basis for your income rather than whatever you have made recently. If using a co-signer, their income matters. Another key factor is debt to income ratio, if too much of someone's income is already spoken for by other debts a lender will shy away. So, yes, there's a chance, given all the information we don't know and the variability with lender policies, that you could be turned down for a car loan. How should I go about this? If you're set on pursuing the car loan, just go talk to some lenders. You'll want to shop around for a good rate anyway, so no need to speculate just go find out. Include the dealership as a potential financing option, they can have great rates. Personally, I'd get a much cheaper car. Your insurance premium on a 100k car will be quite high due to your age. You might be rightly confident in your earning potential, but nothing is guaranteed, situations can change wildly in short order. A new car is not a good investment or a value-retaining asset, so why bother going into debt for one if you don't have to? If you buy something in cash now, you could upgrade in a few years without financing if your earning prediction holds and would save quite a bit in car insurance and interest over the years between." }, { "docid": "293897", "title": "", "text": "\"Let me run some simplistic numbers, ignoring inflation. You have the opportunity to borrow up to 51K. What matters (and varies) is your postgraduation salary. Case 1 - you make 22K after graduation. You pay back 90 a year for 30 years, paying off at most 2700 of the loan. In this case, whether you borrow 2,800 or 28,000 makes no difference to the paying-off. You would do best to borrow as much as you possibly can, treating it as a grant. Case 2 - you make 100K after graduation. You pay back over 7K a year. If you borrowed the full 51, after 7 or 8 years it would be paid off (yeah, yeah, inflation, interest, but maybe that might make it 9 years.) In this case, the more you borrow the more you have to pay back, but you can easily pay it back, so you don't care. Invest your sponsorships and savings into something long term since you know you won't be needing to draw on them. Case 3 - you make 30K after graduation. Here, the payments you have to make actually impact how much disposable income you have. You pay back 810 a year, and over 30 years that's about 25K of principal. It will be less if you account for some (even most) of the payment going to interest, not principal. Anything you borrow above 25K (or the lower, more accurate amount) is \"\"free\"\". If you borrow substantially less than that (by using your sponsorship, savings, and summer job) you may be able to stop paying sooner than 30 years. But even if you borrow only 12K (or half the more accurate number), it will still be 15 years of payments. Running slightly more realistic versions of these calculations where your salary goes up, and you take interest into account, I think you will discover, for each possible salary path, a number that represents how much of your loan is really loan: everything above that is actually a grant you do not pay back. The less you are likely to make, the more of it is really grant. On top of that, it seems to me that no matter the loan/grant ratio, \"\"borrow as much as you can from this rather bizarre source\"\" appears to be the correct answer. In the cases where it's all loan, you have a lot of income and don't care much about this loan payment. Borrowing the whole 51K lets you invest all the money you get while you're a student, and you can use the returns on those investments to make the loan payments.\"" }, { "docid": "406314", "title": "", "text": "Math time. 24 means 2 years out of college, or 6 years out of highschool, the latter being much more plausible given the poster's content quality. $100k / 6 = $16.7k/year 16.7k / 52 weeks = $321/week $321 / (11/hr * (1 - 15% taxes)) = 34 hours per week. So he worked 34 hours per week, without fail, for 6 years, with NO expenses of any kind whatsoever. OR, much more likely, he managed to save only $10k, not $100k in 6 years." }, { "docid": "537721", "title": "", "text": "Lets do the math, using your numbers. We start off with $100K, a desire to buy a house and invest, and 30 years to do it. Scenario #1 We buy a house for $100K mortgage at 5% interest over 30 years. Monthly payment ends up being $536.82/month. We then take the $100K we still have and invest it in stocks, earning an average of 9% annually and paying 15% taxes. Scenario #2 We buy a house for our $100K cash, and then, every month, we invest the $536.82 we would have paid for the mortgage. Again, investments make 9% annually long term, and we pay 15% taxes. How would it look in 30 years? Scenario #1 Results: 30 years later we would have a paid off house and $912,895 in investments Scenario #2 Results: 30 years later we would have a paid off house and $712,745 in investments Conclusion: NOT paying off your mortgage early results in an additional $200,120 in networth after 30 years. That's 28% more. Therefore, not paying off your mortgage is the superior scenario. Caveats/Notes/Things to consider Play with the numbers yourself:" } ]

[ { "docid": "546538", "title": "", "text": "\"The real answer is \"\"Why do you want to waste a windfall chasing quick returns?\"\" Instead, use this windfall to improve your financial situation, and maybe boost you toward financial independence, or at least a secure retirement. In simplest terms, forget the short term, go for long term. Whatever you do, avoid lifestyle creep.\"" } ]

[ { "docid": "7311", "title": "", "text": "Which way would save the most money? Paying of the car today would save the most money. Would you borrow money at 20% to put it in a savings account? That's effectively what she is doing by not paying off the car. If it were me, I would pay off the car today, and add the car payment to my savings account each month. If the car payment is $400, that's $1,500 a month that can be saved, and the $12k will be back in 8 months. That said - remember that this is your GIRLFRIEND, not a spouse. You are not in control (or responsible for) her finances. I would not tell her that she SHOULD do this - only explain it to her in different ways, and offer advice as to what YOU would do. Look together at how much has been paid in principal and interest so far, how much she's paying in interest each month now, and how much she'll pay for the car over the life of the loan. (I would also encourage her not to buy cars with a 72-month loan, which I'm guessing is how she got here). In the end, though, it's her decision." }, { "docid": "121305", "title": "", "text": "We can go back and forth all day if this should be illegal, should there be qualifications, standards etc. The bigger issue at hand really is what qualifies as being able to live a basic standard of living in regards to income. Can we even define this? This is the core of the issue at hand. Does someone who was making 40k a year deserve it more or less than someone who was making 1mil a year? I don't know. I do know this, if i can make 100k a year and still live a great life with the ability to save enough to have enough stashed away for 6-8 mos of unemployment, why can't people making 1 million+? It should be rather apparent why people making 40k a year can't do that as easy." }, { "docid": "270818", "title": "", "text": "\"You seem to be treating your Roth IRA as a sort of savings account for use in emergency situations. I would use a savings account for savings as withdrawing money from an IRA will have penalties under various circumstances (more than contributions, Roth IRA less than 5 years old, more than $10k for a down payment). Also, you mention folding your IRA into your 401k so that it will \"\"grow faster\"\". However, this will not have that effect. Imagine you have $30k in an IRA and $100k in a 401k and you are averaging a return of 8% / year on each. This will be identical to having a single 401k with $130k and an 8% / year return. This is not one of your questions, but employer matches are not counted in the 401k contribution limit. If your 22% calculation of your salary includes the match to reach the max contribution, you can still contribute more.\"" }, { "docid": "547636", "title": "", "text": "In short, your scenario could work in theory, but is not realistic... Generally speaking, you can borrow up to some percentage of the value of the property, usually 80-90% though it can vary based on many factors. So if your property currently has a value of $100k, you could theoretically borrow a total of $80-90k against it. So how much you can get at any given time depends on the current value as compared to how much you owe. A simple way to ballpark it would be to use this formula: (CurrentValue * PercentageAllowed) - CurrentMortgageBalance = EquityAvailable. If your available equity allowed you to borrow what you wanted, and you then applied it to additions/renovations, your base property value would (hopefully) increase. However as other people mentioned, you very rarely get a value increase that is near what you put into the improvements, and it is not uncommon for improvements to have no significant impact on the overall value. Just because you like something about your improvements doesn't mean the market will agree. Just for the sake of argument though, lets say you find the magic combination of improvements that increases the property value in line with their cost. If such a feat were accomplished, your $40k improvement on a $100k property would mean it is now worth $140k. Let us further stipulate that your $40k loan to fund the improvements put you at a 90% loan to value ratio. So prior to starting the improvements you owed $90k on a $100k property. After completing the work you would owe $90k on what is now a $140k property, putting you at a loan to value ratio of ~64%. Meaning you theoretically have 26% equity available to borrow against to get back to the 90% level, or roughly $36k. Note that this is 10% less than the increase in the property value. Meaning that you are in the realm of diminishing returns and each iteration through this process would net you less working capital. The real picture is actually a fair amount worse than outlined in the above ideal scenario as we have yet to account for any of the costs involved in obtaining the financing or the decreases in your credit score which would likely accompany such a pattern. Each time you go back to the bank asking for more money, they are going to charge you for new appraisals and all of the other fees that come out at closing. Also each time you ask them for more money they are going to rerun your credit, and see the additional inquires and associated debt stacking up, which in turn drops your score, which prompts the banks to offer higher interest rates and/or charge higher fees... Also, when a bank loans against a property that is already securing another debt, they are generally putting themselves at the back of the line in terms of their claim on the property in case of default. In my experience it is very rare to find a lender that is willing to put themselves third in line, much less any farther back. Generally if you were to ask for such a loan, the bank would insist that the prior commitments be paid off before they would lend to you. Meaning the bank that you ask for the $36k noted above would likely respond by saying they will loan you $70k provided that $40k of it goes directly to paying off the previous equity line." }, { "docid": "92403", "title": "", "text": "You want to buy a house for $150,000. It may be possible to do this with $10,000 and a 3.5% downpayment, but it would be a lot better to have $40,000 and make a 20% downpayment. That would give you a cushion in case house prices fall, and there are often advantages to a 20% downpayment (lower rate; less mandatory insurance). You have an income of $35,000 and expenses of $23,000 (if you are careful with the money--what if you aren't?). You should have savings of either $17,500 or $11,500 in case of emergencies. Perhaps you simply weren't mentioning that. Note that you also need at least $137 * 26 = $3562 more to cover mortgage payments, so $15,062 by the expenses standard. This is in addition to the $40,000 for downpayment and closing costs. What do you plan to do if there is a problem with the new house, e.g. you need a new roof? Or smaller expenses like a new furnace or appliance? A plumbing problem? Damages from a storm? What if the tenants' teenage child has a party and trashes the place? What if your tenants stop paying rent but refuse to move out, trashing the place while being evicted? Your emergency savings need to be able to cover those situations. You checked comps (comparable properties). Great! But notice that you are looking at a one bathroom property for $150,000 and comparing to $180,000 houses. Consider that you may not get the $235 for that house, which is cheaper. Perhaps the rent for that house will only be $195 or less, because one bathroom doesn't really support three bedrooms of people. While real estate can be part of a portfolio, balance would suggest that much more of your portfolio be in things like stocks and bonds. What are you doing for retirement? Are you maxing out any tax-advantaged options that you have available? It might be better to do that before entering the real estate market. I am a 23 year old Australian man with a degree in computer science and a steady job from home working as a web developer. I'm a bit unclear on this. What makes the job steady? Is it employment with a large company? Are you self-employed with what has been a steady flow of customers? Regardless of which it is, consider the possibility of a recession. The company can lay you off (presumably you are at the bottom of the seniority). The new customers may be reluctant to start new projects while their cash flow is restrained. And your tenants may move out. At the same time. What will you do then? A mortgage is an obligation. You have to pay it regardless. While currently flush, are you the kind of flush that can weather a major setback? I would feel a lot better about an investment like this if you had $600,000 in savings and were using this as a complementary investment to broaden your portfolio. Even if you had $60,000 in savings and would still have substantial savings after the purchase. This feels more like you are trying to maximize your purchase. Money burning a hole in your pocket and trying to escape. It would be a lot safer to stick to securities. The worst that happens there is that you lose your investment (and it's more likely that the value will be reduced but recover). With mortgages, you can lose your entire investment and then some. Yes, the price may recover, but it may do so after the bank forecloses on the mortgage." }, { "docid": "306842", "title": "", "text": "I would move some or all of the money. With £30K savings, you have a 20% deposit, whereas you can get a much better mortgage rate with a 40 or 50% deposit. That's true no matter how good/bad your credit rating, and it's possible that with a bad credit rating you may not even be able to get a mortgage with a small deposit. Also, you will almost certainly save significantly more by paying less mortgage interest compared to the interest rates on your savings in the Netherlands. Shop around for a cheap option to transfer money. I had a quick look at Transferwise (no affiliation, they just happen to have a convenient calculator on their website), and the all-in cost for a large one-way transfer seems to be about 0.5%. I think you'll more than make that back in terms of savings on your mortgage. If you intend to move back to the Netherlands at some point, then you are taking some exchange rate risk by moving your savings to the UK - you don't know if it'll be better or worse when you want to transfer money back. But I guess it won't be that soon if you want to buy a house, so I think the risk is probably worthwhile. (I calculated the cost of the transfer by converting €100k into GBP, and then converting the resulting amount back again. That left €99k, so a two-way transfer cost 1% and from that I deduced that a one-way transfer costs roughly 0.5%)" }, { "docid": "252859", "title": "", "text": "Considering I'm putting 30% down and having my father cosign is there any chance I would be turned down for a loan on a $100k car? According to BankRate, the average credit score needed to buy a new car is 714, but they also show average interest rates at 6.39% for new-car loans to people with credit scores in the 601-660 range. High income certainly helps offset credit score to some extent. Not every bank/dealership does things the same way. Being self-employed you'd most likely be required to show 2 years of tax returns, and they'd use those as a basis for your income rather than whatever you have made recently. If using a co-signer, their income matters. Another key factor is debt to income ratio, if too much of someone's income is already spoken for by other debts a lender will shy away. So, yes, there's a chance, given all the information we don't know and the variability with lender policies, that you could be turned down for a car loan. How should I go about this? If you're set on pursuing the car loan, just go talk to some lenders. You'll want to shop around for a good rate anyway, so no need to speculate just go find out. Include the dealership as a potential financing option, they can have great rates. Personally, I'd get a much cheaper car. Your insurance premium on a 100k car will be quite high due to your age. You might be rightly confident in your earning potential, but nothing is guaranteed, situations can change wildly in short order. A new car is not a good investment or a value-retaining asset, so why bother going into debt for one if you don't have to? If you buy something in cash now, you could upgrade in a few years without financing if your earning prediction holds and would save quite a bit in car insurance and interest over the years between." }, { "docid": "418108", "title": "", "text": "The value of debt is that it allows you to profit from the return of equity beyond the amount of actual net equity you own. Of course, this only works if the cost of borrowing is less than your return on equity. Market timing matters a great deal but isn't accounted for in this view. For my answer I would like to hand-wave away market timing considerations. One plausible justification is that you could default on your current home and then immediately go buy one of equal value. If you buy a new home of a lesser value (due to lack of funds) and then prices appreciate, then you missed some opportunity cost but probably not $100k worth of it. Moving on, here are some helpful assumptions I'll make. I'll ignore performance of your portfolio after retirement and only seek to optimize F, which will be your net worth upon retirement. In either case, your current net worth is earning the R2 rate. We can convert this for both your current net worth and future savings using conversion formulas. Present to future value F = P (1+R2)^x Annual to future value F = S ( (1+R2)^x - 1 ) / R2 Adding these together is sufficient to obtain F in the case that you have no borrowing power. The case where you do not default and maintain your credit score is different due to an initial $100k penalty and the amortized value of borrowing power. In a completely theoretical sense, you get an effective (R2-R1) yield on all borrowed money. The future value will be the following: F = A1 (1+R2-R1)^x One step is missing, however, which is to convert this value (the value of having a good credit score) into present value to compare to value of your defaulting. P of borrowing power = F / (1+R2)^x = A1 { (1+R2-R1)/(1+R2) }^x Now, let's put some specific values in. Say that you can borrow $300k with your good credit history and this applies for the next 25 years, after which you retire. The borrowing rate is 7% and the time-value of money to you is 10%. I would then calculate: P of borrowing power = $58 k < $100 k This indicates that it would be more economical to default. Of course, some people might point out that it will be removed from your record after 7 years. If you plug 7 years instead of 25 years into the equation, almost no assumptions about rates will lead to the option of keeping your house being preferable. So in a nutshell, the value of your credit is probably less than $100k in a purely mathematical sense. But there are other factors too. If you don't have that borrowing ability maybe you wouldn't be able to borrow money to start the business of your dreams. If you are a rock star entrepreneur, then time-value of money to you could be 1,000% yield, sure, then maybe you could make the above numbers work (to favor keeping the house). I've also neglected ethics. As other people point out, it would be like stealing from the bank." }, { "docid": "251740", "title": "", "text": "Quality of life, success and happiness are three factors that are self define by each individual. Most of the time all three factors go hand by hand with your ability to generate wealth and save. Actually, a recent study showed that there were more happy families with savings than with expensive products (car, jewelry and others). These 3 factors, will be very difficult to maintain after someone commit such action. First, because you will fear every interaction with the origin of the money. Second, because every individual has a notion of wrong doing. Third, for the reasons that Jaydles express. Also, most cards, will call you and stop the cards ability to give money, if they see an abusive pattern. Ether, skipping your country has some adverse psychological impact in the family and individual that most of the time 100K is not enough to motivate such change. Thanks for reading. Geo" }, { "docid": "162562", "title": "", "text": "People ... are nearly twice as likely to ... feel confident Great, confidence is amazing. That and $5 will buy you a cup of coffee. 44% [who hired a pro] have $100K or more [vs.] 9% of DIYers There's no way to examine these numbers without a link to the source, but it stands to reason that if you have a plan that you're sticking to you'll save more money than if you are just investing haphazardly. It's too bad that we can't see what the returns are for those using a pro vs. DIYers. That would be much more valuable than an arbitrary dollar level. Unfortunately $100K isn't really that much money if you live in the US, so it's an irrelevant talking point. The real question is whether investment knowledge is readily available to the masses or if having a person who specializes in finance is required to make good decisions about investment. I think the fact that the conventional wisdom prefers index funds to actively managed funds demonstrates that investment professionals are less useful than they might have been even a decade or two ago. If money should be spent on professional advice, it's probably better spent on CPAs or other tax professionals who can help optimize your investments for tax efficiency, though even that is now available as more common knowledge." }, { "docid": "212568", "title": "", "text": "\"Here are the issues, as I see them - It's not that I don't trust banks, but I just feel like throwing all of our money into intangible investments is unwise. Banks have virtually nothing to do with this. And intangible assets has a different meaning than you assume. You don't have to like the market, but try to understand it, and dislike it for a good reason. (Which I won't offer here). Do your 401(k) accounts offer company match? When people start with \"\"we'd like to reduce our deposits\"\" that's the first thing we need to know. Last - you plan to gain \"\"a few hundred dollars a month.\"\" I bet it's closer to zero or a loss. I'll return to edit, we have recent posts here that reviewed the expenses to consider, and I'd bet that if you review the numbers, you've ignored some of them. \"\"A few hundred\"\" - say it's $300. Or $4000/yr. It would take far less work and risk to simply save $100K in your retirement accounts to produce this sum each year. The investment may very well be excellent. I'm just offering the flip side, things you might have missed. Edit - please read the discussion at How much more than my mortgage should I charge for rent? The answers offer a good look at the list of expenses you need to consider. In my opinion, this is one of the most important things. I've seen too many new RE investors \"\"forget\"\" about so many expenses, a projected monthly income reverts to annual losses.\"" }, { "docid": "203201", "title": "", "text": "I spent some time comparing banks' interest rates until I realized that it didn't actually matter (to me). The only money I keep in checking and savings accounts is money that I'm going to spend shortly or is part of an emergency fund, and in both those cases convenience of liquidity is far more important than small differences in interest (I want to be able to go to a nearby branch, even if traveling, and pull out large sums of money). The majority of our money goes into investment accounts, where it's earning much more than even the best savings account. Most of your 100k would be much better served in a stock/bonds mix. Are standard taxable investment accounts one of those things you can't open? What about if you opened one in your home country?" }, { "docid": "133120", "title": "", "text": "\"Your question is listed as \"\"How to invest 100k\"\", not how would I find someone without a hidden agenda - so I'll answer that: It depends. I believe the best choices available are essentially as follows: If you are looking to pay for your childrens' college, it might be nice just to put the money in a Roth IRA and have that done right off the bat. If you disciplined enough to keep the money invested in some type of stock indexed fund, that might be good - the stock market has often outperformed almost every other form of investment over the very long haul. But if you could see yourself tapping it for things, then you might not want this. Another option is to put the money against your house. If that doesn't pay it off, refinance the remaining portion into a lower rate for less years. Obviously this knocks down a huge portion of the interest (duh) and gives you a nice cash flow you can use for investing. Also, the money you've put into a primary residence is pretty safe. I believe in some cases, safe even from bankruptcy. But as you've noted, being underwater on the home you are essentially throwing that money away in some way or fashion. And really, all in all, houses are terrible investments. You never really get your money out of your primary home, unless you downsize. The money is essentially \"\"saved\"\" without an equity line. This is a good choice if you're not disciplined. Your choice depends on: Of course, you can do any combination of these things and as Dave Ramsey is apt to remind his listeners and callers: you ought to have your emergency fund set before you do any of these things.\"" }, { "docid": "273567", "title": "", "text": "Sample Numbers: Owe $100k on house. House (after 'crash') valued at: $50K. Reason for consternation: What rational person pays $100k for property that is only worth half that amount? True Story: My neighbor paid almost $250K (a quarter-of-a-million dollars - think about that..) for a house that when he walked (ran!) away from it was sold by the bank for $88K. Unless he declares bankruptcy (and forgoes all his other assets, including retirement savings) he still owes the bank the difference. And even with bankruptcy, he may still owe the bank - this should cause anyone to be a bit concerned about being up-side down in a mortgage loan." }, { "docid": "212540", "title": "", "text": "\"So, you have $100k to invest, want a low-maintenance investment, and personal finance bores you to death. Oooohhh, investment companies are gonna love you. You'll hand them a wad of cash, and more or less say \"\"do what you want.\"\" You're making someone's day. (Just probably not yours.) Mutual fund companies make money off of you regardless of whether you make money or not. They don't care one bit how carefully you look at your investments. As long as the money is in their hands, they get their fee. If I had that much cash, I'd be looking around for a couple of distressed homes in good neighborhoods to buy as rentals. I could put down payments on two of them, lock in fixed 30-year mortgages at 4% (do you realize how stupid low that is?) and plop tenants in there. Lots of tax write-offs, cash flow, the works. It's a 10% return if you learn about it and do it correctly. Or, there have been a number of really great websites that were sold on Flippa.com that ran into five figures. You could probably pay those back in a year. But that requires some knowledge, too. Anything worthwhile requires learning, maintenance and effort. You'll have to research stocks, mutual funds, bonds, anything, if you want a better than average chance of getting worthwhile returns (that is, something that beats inflation, which savings accounts and CDs are unlikely to do). There is no magic bullet. If someone does manage to find a magic bullet, what happens? Everyone piles on, drives the price up, and the return goes down. Your thing might not be real estate, but what is your thing? What excites you (i.e., doesn't bore you to death)? There are lots of investments out there, but you'll get out of it what you put into it.\"" }, { "docid": "340209", "title": "", "text": "\"I think the basic question you're asking is whether you'd be better off putting the $20K into an IRA or similar investment, or if your best bet is to pay down your mortgage. The answer is...that depends. What you didn't share is what your mortgage balance is so that we can understand how using that money to pay down the mortgage would affect you. The lower your remaining balance on the mortgage, the more impact paying it down will affect your long-term finances. For example, if your remaining principal balance is more than $200k, paying down $20k in principal will not have as significant an effect as if you only have $100k principal balance and were paying down $20k of that. To me, one option is to put the $20k toward mortgage principal, then perhaps do a refinance on your remaining mortgage with the goal of getting a better interest rate. This would double the benefit to you. First, your mortgage payment would be lower by virtue of a lower principal balance (assuming you keep the same term period in your refinanced mortgage as you have now. In other words, if you have a 15-year now, your new mortgage should be 15 years also to see the best effect on your payment). Further, if you can obtain a lower interest rate on the new loan, now you have the dual benefit of a lower principal balance to pay down plus the reduced interest cost on that principal balance. This would put money into your pocket immediately, which I think is part of your goal, although the question does hinge on what you'd pay in points and fees for a refinance. You can invest, but with that comes risk, and right now may not be the ideal time to enter the markets given all of the uncertainties with the \"\"Brexit\"\" issue. By paying down your mortgage principal, even if you do nothing else, you can save yourself considerable interest in the long term which might be more beneficial than the return you'd get from the markets or an IRA at this point. I hope this helps. Good luck!\"" }, { "docid": "567282", "title": "", "text": "In this equation the withdrawal rate is the percent you must pull from your savings to meet your expenses. For example if your savings is $100,000 and you need $10,000 annually for your living expenses then your withdrawal rate would be 10% (where 10k is 10% of 100k). To complete this formula, you need to know how much savings you need to be financially independent before you can use this formula to find out how long it will take you." }, { "docid": "503723", "title": "", "text": "When you pay off a loan early, you pay the remaining principal, and you save all of the remaining interest. So you do save on interest, but it's the interest you would have paid in the future, not the interest you have paid in the past. (Your remaining balance when you pay off the loan only includes the principal, not the projected interest.) Interest is a factor of the amount borrowed, the interest rate and the amount of time you borrow the money. The sooner you repay the money, the less interest you pay. Imagine if you had taken a 30 year loan at 4% interest but were allowed to make no payments until the loan term ended. If you waited 15 years to make your first payment, you wouldn't owe the same money as if you'd made payments every month. No, instead of owing ~$64k, you'd owe ~$182k, because you had borrowed $100k for 15 years (plus the interest due) rather than borrowing a declining sum. So that's why you don't get a refund on interest for previous months. If you had started with a 16 year loan, then you would have been paying more principal every month, and your monthly amount due would have been higher to reflect that. As you paid the principal off faster, the interest each month would drop faster. Paying a huge portion of the principal at the end of the loan is not the same as steadily paying it down in the same time frame. You will pay a lot more interest in the former case, and rightfully so. It might help to consider a credit card payment in comparison. If you run up a balance and pay only the minimum each month, you pay a lot of interest over time, because your principal goes down slowly. If you suddenly pay off your credit card, you don't have to pay any more interest, but you also don't get any interest back for previous months. That's because the interest accrued each month is based on your current balance, just like your mortgage. The minimum payments are calculated differently, but the interest accrued each month uses essentially the same mechanism." }, { "docid": "34893", "title": "", "text": "3 years ago I wrote Student Loans and Your First Mortgage in response to this exact question by a fellow blogger in my state. What I focused on was the way banks qualify you for a loan, a percentage for the housing cost, and a higher number that also comprises all other debt. If the goal is speed-to-purchase, you make minimum payments on the student loan, and save for the $100K downpayment as fast as you can. The question back to you is whether the purchase is your priority, and how debt averse you are. I'd caution, if you work for a company with a matched 401(k), I'd still deposit to the match, but no more. Personal finance is just that, personal. We don't know your entire situation, your current rental expenses vs your total condo cost when you buy. If you are in a location where renting costs far more than your cost of ownership, Ben might change his mind a bit. If the reverse is true, you're living a college student's lifestyle with a room costing $400/mo sharing a house with friends, I'll back off and say to pay the loan and save until you can't tolerate the situation. You'll find there are few situations that have a perfect answer without having all the details." } ]

[ { "docid": "187404", "title": "", "text": "I would buy an ETF (or maybe a couple) in stable, blue chip companies with a decent yield (~3%) and then I'd play a conservative covered call strategy on the stock selling a new position about once a month. That's just me." } ]

[ { "docid": "483777", "title": "", "text": "If I were in your shoes (I would be extremely happy), here's what I would do: Get on a detailed budget, if you aren't doing one already. (I read the comments and you seemed unsure about certain things.) Once you know where your money is going, you can do a much better job of saving it. Retirement Savings: Contribute up to the employer match on the 401(k)s, if it's greater than the 5% you are already contributing. Open a Roth IRA account for each of you and make the max contribution (around $5k each). I would also suggest finding a financial adviser (w/ the heart of a teacher) to recommend/direct your mutual fund investing in those Roth IRAs and in your regular mutual fund investments. Emergency Fund With the $85k savings, take it down to a six month emergency fund. To calculate your emergency fund, look at what your necessary expenses are for a month, then multiply it by six. You could place that six month emergency fund in ING Direct as littleadv suggested. That's where we have our emergency funds and long term savings. This is a bare-minimum type budget, and is based on something like losing your job - in which case, you don't need to go to starbucks 5 times a week (I don't know if you do or not, but that is an easy example for me to use). You should have something left over, unless your basic expenses are above $7083/mo. Non-retirement Investing: Whatever is left over from the $85k, start investing with it. (I suggest you look into mutual funds) it. Some may say buy stocks, but individual stocks are very risky and you could lose your shirt if you don't know what you're doing. Mutual funds typically are comprised of many stocks, and you earn based on their collective performance. You have done very well, and I'm very excited for you. Child's College Savings: If you guys decide to expand your family with a child, you'll want to fund what's typically called a 529 plan to fund his or her college education. The money grows tax free and is only taxed when used for non-education expenses. You would fund this for the max contribution each year as well (currently $2k; but that could change depending on how the Bush Tax cuts are handled at the end of this year). Other resources to check out: The Total Money Makeover by Dave Ramsey and the Dave Ramsey Show podcast." }, { "docid": "203201", "title": "", "text": "I spent some time comparing banks' interest rates until I realized that it didn't actually matter (to me). The only money I keep in checking and savings accounts is money that I'm going to spend shortly or is part of an emergency fund, and in both those cases convenience of liquidity is far more important than small differences in interest (I want to be able to go to a nearby branch, even if traveling, and pull out large sums of money). The majority of our money goes into investment accounts, where it's earning much more than even the best savings account. Most of your 100k would be much better served in a stock/bonds mix. Are standard taxable investment accounts one of those things you can't open? What about if you opened one in your home country?" }, { "docid": "35834", "title": "", "text": "If you had originally borrowed $100k at 4.75% for 15 years, the last 5 years would include a total of $3,300-$3,500 in interest payment. That is the total universe of savings available to you if you were able to get a 0.0% mortgage. Unless the mortgage is huge, I think that in most scenarios the upfront closing costs, taxes and other fees would immediately exceed any savings. If you have the money, pay it down. Otherwise, keep on truckin' -- you have 60 short months to go." }, { "docid": "404352", "title": "", "text": "I'd prefer having it (more or less) fluent at any time, if possible... And the Swiss National Bank (SNB) will do their darndest to make this a costly option. That's exactly the point of negative interest rates. They don't want to help you saving money. So you will have to choose what to give up: liquidity, or profitability. But for now, you still have alternatives. The way you described it one could think that all banks will soon start to charge all their clients. That's just a distortion of facts. If you are happy with a (close to) 0 income, you might consider opening multiple bank accounts. Many banks charge the negative interest only from certain thresholds (i.e. CHF 100k). Since you're clearly a Swiss resident, that's easy to do for you. If you don't want to give up making an income, then you have to sacrifice liquidity. There simply aren't any short term (less than 2-3 years) instruments in Swiss Franc that are both safe and yielding a positive income. Which means that you will have to take much more risk then you had with a savings account. Ask your advisor for an investment proposal, but also consider bank independent advisors." }, { "docid": "121621", "title": "", "text": "\"As a contractor, I have done this exact calculation many times so I can compare full time employment offers when they come. The answer varies greatly depending on your situation, but here's how to calculate it: So, subtracting the two and you get I've run many different scenarios with multiple plans and employers, and in my situation with a spouse and 1 child, the employer plans usually ended up saving me approximately $5k per year. So then, to answer your question: ...salary is \"\"100k\"\", \"\"with healthcare\"\", or then \"\"X\"\" \"\"with no healthcare\"\" - what do we reckon? I reckon I would want to be paid $5K more, or $105K. This is purely hypothetical though and assumes there are no other differences except for with or without health insurance. In reality, contractor vs employee will have quite a few other differences. But in general, the calculation varies by company and the more generous the employer's health benefits, the more you need to be compensated to make up for not having it. Note: the above numbers are very rough, and there are many other factors that come into play, some of which are: As a side note, many years ago, during salary talks with a company, I was able to negotiate $2K in additional yearly salary by agreeing not to take the health insurance since I had better insurance through my spouse. Health insurance in the US was much cheaper back then so I think closer to $5K today would be about right and is consistent with my above ballpark calculation. I always wondered what would have happened if I turned around and enrolled the following year. I suspect had I done that they could not have legally lowered my salary due to my breaking my promise, but I wouldn't be surprised if I didn't get a raise that year either.\"" }, { "docid": "285864", "title": "", "text": "Everyone would like a savings/checking account that has the same liquidity as others but pays multiple times as much, but such a thing would break the laws of finance. The thing keeping savings and checking accounts cheap isn't particularly the FDIC insurance but the high liquidity and near certainty that you will not lose money. In all of finance you are compensated for the risk (and perhaps illiquidity) you bear. If you insist on a risk-free and highly liquid investment, you will get the risk-free and highly liquid rate, which is currently around 1%. Doesn't matter what type of investment it is (savings, money market, treasuries, etc.). Money market funds, in particular, were designed to be a replacement for savings accounts. They have decent liquidity and almost no risk (and no FDIC insurance). But they earn about what good savings accounts do, because that's what risk-free investments earn. If you wish to earn more you must decide what you will give up: Decide on one (or both) of those to sacrifice and you will find yourself with options." }, { "docid": "427522", "title": "", "text": "\"Having just gone through selling a car, I can tell you that CarMax will most likely not be the best solution. I recently sold my '09 Pontiac Vibe which had a KBB and Edmonds value (private party sale) of around $6k. Trade-in value was around $4,800. I took it to the local CarMax for a quote, and they came back with $3,500. Refinancing is tricky. Banks have a set limit on how old a car they will finance. Many won't even offer financing if the vehicle has over 100k miles. We looked at refinancing our other car, and even getting the APR down over a point we would only have saved $15/mo or so. Banks typically offer much higher interest rates for used non-dealership cars and refinancing than they do for new cars, or even used cars purchased from a dealership. Assuming you have 2-3 years left on your loan, I don't think that refinancing would save you enough to be worth considering. CarMax sells cars in 1 of 2 ways. They are also up front with you about the process. They do not reference KBB or Edmonds or any other valuation tool other than their own internal system. They either take the car, spruce it up a bit, then resell it on their lot, or they sell it at auction. If they determine your car will be sold at auction, then they will offer you a rock bottom price. The determining factors that come into play include age of the car, mileage, and of course overall condition. If you Mini is still in good shape and doesn't have a lot of miles, then they may try to resell it on their lot, for which they could offer you closer to personal-sale price than trade-in. How many 2007's are for sale in your area? How much are they selling for? I did sell them a truck back in 2005 and received $200 more than KBB valued it for, but it was in great shape, only a couple of years old, relatively low mileage, and it was in high demand. God bless the South and their love for trucks! I ended up selling my Pontiac to another local car dealership. They offered me $5,300 (after negotiating, leaving the dealership, then negotiating more over the phone). It took me a day and a half and really very little effort. I have several friends that have gone through the same thing with selling cars, and all have had similar luck going to other dealerships, where prices can be negotiated, rather than CarMax. CarMax has no incentive to \"\"settle\"\" or forgive your loan. If you really want to pay it off, save up what you believe the difference will be, then shop your car around the local dealerships and get prices for your Mini. Remember that dealers have to turn a profit, so be reasonable with your negotiation. If you can find comparable vehicles in your area listed for $X,000 then knock $1,500 off that price and tell the dealerships that's what you want.\"" }, { "docid": "212540", "title": "", "text": "\"So, you have $100k to invest, want a low-maintenance investment, and personal finance bores you to death. Oooohhh, investment companies are gonna love you. You'll hand them a wad of cash, and more or less say \"\"do what you want.\"\" You're making someone's day. (Just probably not yours.) Mutual fund companies make money off of you regardless of whether you make money or not. They don't care one bit how carefully you look at your investments. As long as the money is in their hands, they get their fee. If I had that much cash, I'd be looking around for a couple of distressed homes in good neighborhoods to buy as rentals. I could put down payments on two of them, lock in fixed 30-year mortgages at 4% (do you realize how stupid low that is?) and plop tenants in there. Lots of tax write-offs, cash flow, the works. It's a 10% return if you learn about it and do it correctly. Or, there have been a number of really great websites that were sold on Flippa.com that ran into five figures. You could probably pay those back in a year. But that requires some knowledge, too. Anything worthwhile requires learning, maintenance and effort. You'll have to research stocks, mutual funds, bonds, anything, if you want a better than average chance of getting worthwhile returns (that is, something that beats inflation, which savings accounts and CDs are unlikely to do). There is no magic bullet. If someone does manage to find a magic bullet, what happens? Everyone piles on, drives the price up, and the return goes down. Your thing might not be real estate, but what is your thing? What excites you (i.e., doesn't bore you to death)? There are lots of investments out there, but you'll get out of it what you put into it.\"" }, { "docid": "407591", "title": "", "text": "I remember reading in an earlier version of Pub 590 (or possibly the Instructions for Form 8606) that timely contributions for Year X to an IRA are deemed to have been made on January 1 of Year X regardless of when they were actually made, but I don't seem to be able to find it now in current versions of Pubs 590a or 590b and so cannot include a citation of chapter and verse. Be that as it may, the calculations on on Form 8606 Part I effectively track basis on an annual basis rather than on a daily basis, and so the fact that the Traditional IRA has a zero balance (and basis 0 too) at some time during the year doesn't matter in the least. In detail (though you didn't ask for it) Note that the whole $6500 that you put in remains non-deductible in its entirety, but you owe taxes on only $93,900 of that $100K that you rolled over into a Roth IRA and not on the whole $100K as you were assuming would have been the case. So, in effect, of that $6500 nondeductible contribution to your Traditional IRA, you did really get to deduct $6100 from your taxable income for 2016, and make only a $400 nondeductible contribution, exactly equal to your basis in your Traditional IRA as per the Form 8606 calculations. I can only assume that the software package that you are using reproduces the above calculations exactly and does what the IRS says you must do on Form 8606 rather than what you get by tracking the basis on a daily basis. IRS regulations and instructions are not necessarily the same as what the tax law says; they are interpretations of the tax law based on what the IRS understands the tax law to say. People have challenged various specific IRS regulations and interpretations as being different from what the law says in Tax Court and been successful in some cases and failed in others. If you believe that tracking basis on a daily basis is what the law says (instead of just being reasonable and rational: reasonableness and rationality are not required either of Congress in the laws that they write or the IRS regulations that interpret the laws), you should take up the matter with the IRS or the Tax Court." }, { "docid": "567282", "title": "", "text": "In this equation the withdrawal rate is the percent you must pull from your savings to meet your expenses. For example if your savings is $100,000 and you need $10,000 annually for your living expenses then your withdrawal rate would be 10% (where 10k is 10% of 100k). To complete this formula, you need to know how much savings you need to be financially independent before you can use this formula to find out how long it will take you." }, { "docid": "547636", "title": "", "text": "In short, your scenario could work in theory, but is not realistic... Generally speaking, you can borrow up to some percentage of the value of the property, usually 80-90% though it can vary based on many factors. So if your property currently has a value of $100k, you could theoretically borrow a total of $80-90k against it. So how much you can get at any given time depends on the current value as compared to how much you owe. A simple way to ballpark it would be to use this formula: (CurrentValue * PercentageAllowed) - CurrentMortgageBalance = EquityAvailable. If your available equity allowed you to borrow what you wanted, and you then applied it to additions/renovations, your base property value would (hopefully) increase. However as other people mentioned, you very rarely get a value increase that is near what you put into the improvements, and it is not uncommon for improvements to have no significant impact on the overall value. Just because you like something about your improvements doesn't mean the market will agree. Just for the sake of argument though, lets say you find the magic combination of improvements that increases the property value in line with their cost. If such a feat were accomplished, your $40k improvement on a $100k property would mean it is now worth $140k. Let us further stipulate that your $40k loan to fund the improvements put you at a 90% loan to value ratio. So prior to starting the improvements you owed $90k on a $100k property. After completing the work you would owe $90k on what is now a $140k property, putting you at a loan to value ratio of ~64%. Meaning you theoretically have 26% equity available to borrow against to get back to the 90% level, or roughly $36k. Note that this is 10% less than the increase in the property value. Meaning that you are in the realm of diminishing returns and each iteration through this process would net you less working capital. The real picture is actually a fair amount worse than outlined in the above ideal scenario as we have yet to account for any of the costs involved in obtaining the financing or the decreases in your credit score which would likely accompany such a pattern. Each time you go back to the bank asking for more money, they are going to charge you for new appraisals and all of the other fees that come out at closing. Also each time you ask them for more money they are going to rerun your credit, and see the additional inquires and associated debt stacking up, which in turn drops your score, which prompts the banks to offer higher interest rates and/or charge higher fees... Also, when a bank loans against a property that is already securing another debt, they are generally putting themselves at the back of the line in terms of their claim on the property in case of default. In my experience it is very rare to find a lender that is willing to put themselves third in line, much less any farther back. Generally if you were to ask for such a loan, the bank would insist that the prior commitments be paid off before they would lend to you. Meaning the bank that you ask for the $36k noted above would likely respond by saying they will loan you $70k provided that $40k of it goes directly to paying off the previous equity line." }, { "docid": "385736", "title": "", "text": "\"So, let's take a mortgage loan that allows prepayment without penalty. Say I have a 30 year mortgage and I have paid it for 15 years. By the 16th year almost all the interest on the 30 year loan has been paid to the bank This is incorrect thinking. On a 30 year loan, at year 15 about 2/3's of the total interest to be paid has been paid, and the principal is about 1/3 lower than the original loan amount. You may want to play with some amortization calculators that are freely available to see this in action. If you were to pay off the balance, at that point, you would avoid paying the remaining 1/3 of interest. Consider a 100K 30 year mortgage at 4.5% In month two the payment breaks down with $132 going to principal, and $374 going to interest. If, in month one, you had an extra $132 and directed it to principal, you would save $374 in interest. That is a great ROI and why it is wonderful to get out of debt as soon as possible. The trouble with this is of course, is that most people can barely afford the mortgage payment when it is new so lets look at the same situation in year 15. Here, $271 would go to principal, and $235 to interest. So you would have to come up with more money to save less interest. It is still a great ROI, but less dramatic. If you understand the \"\"magic\"\" of compounding interest, then you can understand loans. It is just compounding interest in reverse. It works against you.\"" }, { "docid": "233394", "title": "", "text": "\"Paying someone to look after your money always costs something - it doesn't matter whether you're inside a pension or not. Fees are highest for \"\"actively managed\"\" funds and lowest for passively managed funds or things where you choose the investments directly - but in the latter case you might pay out a lot in dealing fees. Typically pensions will have some small additional costs on top of that, but those are hugely outweighed by the tax advantages - payments into a pension are made from gross salary (subject to an annual limit), and growth inside the pension is tax free. You do pay income tax when you take the money out though - but by then your marginal tax rate may well have dropped. If you want to control your own investments within a pension you can do this, subject to choosing the right provider - you don't have to be invested in the stockmarket at all (my own pension isn't at the moment). I wrote an answer to another question a while ago which briefly summarises the options As far as an annuity goes, it's not as simple as the company taking the money you saved when you die. The point of an annuity is that you can't predict when you'll die. Simplifying massively, suppose the average life expectancy when you retire is 20 years and you have 100K saved, and ignore inflation and interest for now. Then on average you should have 5K/year available - but since you don't know when you'll die if you just spend your money at that rate you might run out after 20 years but still be alive needing money. Annuities provide a way of pooling that risk - in exchange for losing what's left if you die \"\"early\"\", you keep getting paid beyond what you put in if you die \"\"late\"\". Your suggestion of taking the dividends from an index tracker fund - or indeed the income from any other investment - is fine, but the income will be substantially less than an annuity bought with the same money because you won't be using up any capital, whereas an annuity implicitly does that. Depending on the type of investment, it might also be substantially more risky. Overall, you only need to secure the income you actually need/want to live on. Beyond that level, keeping your money outside the pension system makes some sense, though this might change with the new rules referred to in other answers that mean you don't have to buy an annuity if you have enough guaranteed income anyway. In any case, I strongly suggest you focus first on ensuring you have enough to live on in retirement before you worry about leaving an inheritance. As far as setting up a trust goes, you might be able to do that, but it would be quite expensive and the government tends to view trusts as tax avoidance schemes so you may well fall foul of future changes in the rules.\"" }, { "docid": "135781", "title": "", "text": "I am 10 years out of college and been debt free for 4. My school would have cost me $180k for 4 years. I was aware of the cost to go to the school I wanted and so I worked in highschool for every possible scholarship available. I then went into a degree program which I knew was a good investment, engineering. I came out of college in the middle of the recession with you guessed it, around $100k in debt. I moved to a place where the cost of living made it so I could get a job and save. I did not live a lavish lifestyle, I invested my money well, and I worked hard. Garbage in, garbage out. Go to a bad school, not worth it. Do not work hard in college, not worth it. Work hard in a major which has no economic value, not worth it. Do not set yourself up for success by working hard in high school, getting things like AP credits and scholarships, not worth it." }, { "docid": "418108", "title": "", "text": "The value of debt is that it allows you to profit from the return of equity beyond the amount of actual net equity you own. Of course, this only works if the cost of borrowing is less than your return on equity. Market timing matters a great deal but isn't accounted for in this view. For my answer I would like to hand-wave away market timing considerations. One plausible justification is that you could default on your current home and then immediately go buy one of equal value. If you buy a new home of a lesser value (due to lack of funds) and then prices appreciate, then you missed some opportunity cost but probably not $100k worth of it. Moving on, here are some helpful assumptions I'll make. I'll ignore performance of your portfolio after retirement and only seek to optimize F, which will be your net worth upon retirement. In either case, your current net worth is earning the R2 rate. We can convert this for both your current net worth and future savings using conversion formulas. Present to future value F = P (1+R2)^x Annual to future value F = S ( (1+R2)^x - 1 ) / R2 Adding these together is sufficient to obtain F in the case that you have no borrowing power. The case where you do not default and maintain your credit score is different due to an initial $100k penalty and the amortized value of borrowing power. In a completely theoretical sense, you get an effective (R2-R1) yield on all borrowed money. The future value will be the following: F = A1 (1+R2-R1)^x One step is missing, however, which is to convert this value (the value of having a good credit score) into present value to compare to value of your defaulting. P of borrowing power = F / (1+R2)^x = A1 { (1+R2-R1)/(1+R2) }^x Now, let's put some specific values in. Say that you can borrow $300k with your good credit history and this applies for the next 25 years, after which you retire. The borrowing rate is 7% and the time-value of money to you is 10%. I would then calculate: P of borrowing power = $58 k < $100 k This indicates that it would be more economical to default. Of course, some people might point out that it will be removed from your record after 7 years. If you plug 7 years instead of 25 years into the equation, almost no assumptions about rates will lead to the option of keeping your house being preferable. So in a nutshell, the value of your credit is probably less than $100k in a purely mathematical sense. But there are other factors too. If you don't have that borrowing ability maybe you wouldn't be able to borrow money to start the business of your dreams. If you are a rock star entrepreneur, then time-value of money to you could be 1,000% yield, sure, then maybe you could make the above numbers work (to favor keeping the house). I've also neglected ethics. As other people point out, it would be like stealing from the bank." }, { "docid": "306842", "title": "", "text": "I would move some or all of the money. With £30K savings, you have a 20% deposit, whereas you can get a much better mortgage rate with a 40 or 50% deposit. That's true no matter how good/bad your credit rating, and it's possible that with a bad credit rating you may not even be able to get a mortgage with a small deposit. Also, you will almost certainly save significantly more by paying less mortgage interest compared to the interest rates on your savings in the Netherlands. Shop around for a cheap option to transfer money. I had a quick look at Transferwise (no affiliation, they just happen to have a convenient calculator on their website), and the all-in cost for a large one-way transfer seems to be about 0.5%. I think you'll more than make that back in terms of savings on your mortgage. If you intend to move back to the Netherlands at some point, then you are taking some exchange rate risk by moving your savings to the UK - you don't know if it'll be better or worse when you want to transfer money back. But I guess it won't be that soon if you want to buy a house, so I think the risk is probably worthwhile. (I calculated the cost of the transfer by converting €100k into GBP, and then converting the resulting amount back again. That left €99k, so a two-way transfer cost 1% and from that I deduced that a one-way transfer costs roughly 0.5%)" }, { "docid": "247449", "title": "", "text": "\"I'll assume you live in the US for the start of my answer - Do you maximize your retirement savings at work, at least getting your employer's match in full, if they do this. Do you have any other debt that's at a higher rate? Is your emergency account funded to your satisfaction? If you lost your job and tenant on the same day, how long before you were in trouble? The \"\"pay early\"\" question seems to hit an emotional nerve with most people. While I start with the above and then segue to \"\"would you be happy with a long term 5% return?\"\" there's one major point not to miss - money paid to either mortgage isn't liquid. The idea of owing out no money at all is great, but paying anything less than \"\"paid in full\"\" leaves you still owing that monthly payment. You can send $400K against your $500K mortgage, and still owe $3K per month until paid. And if you lose your job, you may not so easily refinance the remaining $100K to a lower payment so easily. If your goal is to continue with real estate, you don't prepay, you save cash for the next deal. Don't know if that was your intent at some point. Disclosure - my situation - Maxing out retirement accounts was my priority, then saving for college. Over the years, I had multiple refinances, each of which was a no-cost deal. The first refi saved with a lower rate. The second, was in early 2000s when back interest was so low I took a chunk of cash, paid principal down and went to a 20yr from the original 30. The kid starts college, and we target retirement in 6 years. I am paying the mortgage (now 2 years into a 10yr) to be done the month before the kid flies out. If I were younger, I'd be at the start of a new 30 yr at the recent 4.5% bottom. I think that a cost of near 3% after tax, and inflation soon to near/exceed 3% makes borrowing free, and I can invest conservatively in stocks that will have a dividend yield above this. Jane and I discussed the plan, and agree to retire mortgage free.\"" }, { "docid": "546187", "title": "", "text": "\"If I have a house that its market value went from $100k to $140k can I get HELOC $40K? Maybe - the amount that you can borrow depends on the market value of the house, so if you already have $100k borrowed against it, it will be tough to borrow another $40k without paying a higher interest rate, since there is a real risk that the value will decrease and you will be underwater. Can I again ask for HELOC after I finish the renovation in order to do more renovation and maybe try to end up renovating the house so its value raises up to $500k? I doubt you can just \"\"renovate\"\" a house and increase its market value from $140k to $500K. Much of a house's value is determined by its location, and you can quickly outgrow a neighborhood. If you put $360k in improvements in a neighborhood where other homes are selling for $140k you will not realize nearly that amount in actual market value. People that buy $500k houses generally want to be in an area where other homes are worth around the same amount. If you want to to a major renovation (such as an addition) I would instead shop around for a Home Improvement Loan. The main difference is that you can use the expected value of the house after improvements to determine the loan balance, instead of using the current value. Once the renovations are complete, you roll it and the existing mortgage into a new mortgage, which will likely be cheaper than a mortgage + HELOC. The problem is that the cost of the improvements is generally more than the increase in market value. It also helps you make a wise decision, versus taking out a $40k HELOC and spending it all on renovations, only to find out that the increase in market value is only $10k and you're now underwater. So in your case, talk to a contractor to plan out what you want to do, which will tell you how much it will cost. Then talk to a realtor to determine what the market value with those improvements will be, which will tell you how much you can borrow. It's highly likely that you will need to pay some out-of-pocket to make up the difference, but it depends on what the improvements are and what comparable homes sell for.\"" }, { "docid": "524752", "title": "", "text": "The banks are required to file Currency Transaction Reports (CTR) to the IRS for aggregate transfers of over $10k. They file Suspicious Activity Reports for suspicious activity with an aggregate value of over $5,000 to the US Treasury. You're probably ok for what you're doing provided you aren't doing to regularly, but I would consider looking into alternate means of transferring funds such as a check to avoid the appearance of impropriety. Also, you should be able to call your bank to do a one time ACH transfer for up to $100k with minimal fees." } ]

[ { "docid": "496225", "title": "", "text": "Upstream is into businesses that supply the original business; downstream is into businesses that make use of the original product. So in that description, what they are saying is that the original business received products from plantations and sent products to manufacturing. This is also called vertical integration. Meaning that they are diversifying along their supply chain so that they control more of it. This is in contrast with horizontal integration, where they move into new products that either compete with the existing products or which are entirely separate. In general, the upside of vertical integration is that a company is less reliant on suppliers (and intermediate consumers) and has more control over its supply chain. The downside is that they have less opportunity to partner with other companies in the same supply chain, as they compete with them. Some companies are better at managing to do both. For example, Amazon.com has integrated fulfillment and sales. But partners can still do their own fulfillment and/or sales, choosing how much to send out to Amazon. If you are investing in individual stocks, integrated companies can be problematic in that they cut across diversification areas. So they can be harder to balance with other stocks. You can either buy plantations, transport, and manufacturing together or not buy at all. If your investment strategy says to increase plantations and reduce manufacturing, this can be difficult to implement with an integrated company. Of course, everyone else has the same problem, which can lead to integrated companies being undervalued. So they may be an opportunity as a value stock." } ]

[ { "docid": "512381", "title": "", "text": "\"&gt; can I use venture like that in a financial context, or does it refer specifically to venture capital? Yes, any business is a \"\"venture\"\" so to speak. &gt; so they would receive a smaller return, yes? POSSIBLY yes. Mezzanine investors are, well, \"\"middle\"\" investors. They're beyond seed and venture capital, but before more \"\"late-stage\"\" private investment. That doesn't *necessarily* mean they're \"\"after a seed or venture capital investment.\"\" It can mean that, or it can simply mean the business is a little more advanced than a pure idea, or pre-revenue, etc. Let's say a company is pre-destined to get to $100m in value IF it can secure funding. Naturally, later investors will have a smaller return. Of course, private investments are generally for smaller, younger companies, and thus are more risky, so an investor can still *lose* value in a private equity investment. &gt; Is mezzanine investing particularly profitable? Yes, absolutely. You have to understand, with investments in private equity, firms and individuals are often looking for a *multiple* of their investment (i.e. if an investor invests $1m, they expect $2m, $3m, etc. back). This is not necessarily for all levels of private equity, but many levels will attempt this. Generally the idea (as far as I'm aware) is a 20% IRR (which means that generally, the investment grows by 20% *compounding* yearly). &gt; Secondly, why is dilution so important further down the road? Is it to do with valuation? Absolutely. Let's think of our example earlier, where you, me, and Joe each own 33% at $300 total value. If suddenly another company wants to buy ALL of our equity for $600, then we're all pretty happy. Each of us will get $200. HOWEVER, let's say Joe hadn't come along. If that other company *then* made an offer for $600, we'd both get *$300* for the company. There's some other things about dilution too, such as the possible loss of control, but we'll save that for later. &gt; Finally, at what point would a company aim to meet an IPO? Is it case specific, or is there a general understanding of the \"\"best time\"\"? It's VERY case specific. In *most* cases, depending on the industry, the company will be relatively a bit older, have both revenue and profitability, and a history of operations. In some cases, companies like this will choose to *never* go IPO (such as the Big 4 auditing firms, for one, among others). There are, of course, exceptions. Many smaller pharmacueticals are *pre-revenue* and are traded on the market. Tesla is getting revenue, but *not profitable* and it's on the markets as well. These are, naturally, riskier investments, but at least you've got liquidity to help a bit with that. When a private equity (PE) firm is looking to exit (sell their stake) through an IPO, they will try to engineer the company to be as attractive as possible to public investors. In fact, many PE firms will stipulate specific terms, and possibly get control of the company from the owner, when they initially invest. But there's a lot that goes into it. Perhaps /u/wreckingcru or /u/Seraphinic can go into a bit more detail on PE exits as while it's my chief interest and my career goal, it's not quite where I'm at *yet.*\"" }, { "docid": "395765", "title": "", "text": "College professor here. I often think about the fact that all the information I teach is available online. Students are paying a premium for my course- what of value do I bring? **Filter** There is a lot of good information online, but there is also a lot of inaccurate information. I filter out inaccurate information. **Structure** I organize material in a way that makes it easier to digest **Elaboration** I provide context and examples. I'm able to explain complex topics in several different ways in case students don't get it the first time. **Motivation** I explain *why* students need to learn something; I hold them accountable for deadlines. **Social interaction** I get students to talk with one another and see material from multiple view points. **Feedback** This is, in my opinion, the most valuable thing I provide to students, and I invest *a lot* of time in it. What are students doing well? What are they not doing well? How can they improve? This doesn't mean intelligent, motivated individuals can't learn from online materials as well as in a classroom- I believe they can. But the classroom environment does provide some advantages over teaching yourself material online." }, { "docid": "516108", "title": "", "text": "\"Fair question, I'm being a bit broad there, and innovation in many ways. I am not sure what the original context is here. In my experience, when people say \"\"technology race\"\" they are typically referring to to the business context, i.e. computer manufacturers and their competing product portfolios, like Apple vs Samsung vs Google, or Uber vs Lyft. If it's a thing other than that, I've never heard of it\"" }, { "docid": "501395", "title": "", "text": "\"Those who say a person should invest in riskier assets when young are those who equate higher returns with higher risk. I would argue that any investment you do not understand is risky and allows you to lose money at a more rapid rate than someone who understands the investment. The way to reduce risk is to learn about what you want to invest in before you invest in it. Learning afterward can be a very expensive proposition, possibly costing you your retirement. Warren Buffet told the story on Bloomberg Radio in late 2013 of how he read everything in his local library on investing as a teenager and when his family moved to Washington he realized he had the entire Library of Congress at his disposal. One of Mr. Buffett's famous quotes when asked why he doesn't invest in the tech sector was: \"\"I don't invest in what I do not understand.\"\". There are several major asset classes: Paper (stocks, bonds, mutual funds, currency), Commodities (silver, gold, oil), Businesses (creation, purchase or partnership as opposed to common stock ownership) and Real Estate (rental properties, flips, land development). Pick one that interests you and learn everything about it that you can before investing. This will allow you to minimize and mitigate risks while increasing the rewards.\"" }, { "docid": "591312", "title": "", "text": "\"&gt; AMERICA is growing, Western Europe is stagnant, China and most of East Asia is expanding relatively quickly So staring into the face of evidence from his own intro context that generally the more active fiscal intervention since the GFC, the better economies have fared, the author proceeds to prognosticate about impending doom for the Chinese if they don't conclusively switch &amp; stick to austerity and ignore growth to focus on hidden inflation monsters. For the US somehow everything comes down to fed monetary policy, despite the fact that 4 years of the fed's alphabet soup programs without any fiscal assistance from congress hasn't kicked the US back into preferred growth and GDP is seeming to slow back down toward recession/stagnation. And finally the eurozone is apparently most plagued by \"\"overblown public debt\"\" and government spending somehow \"\"crowding out\"\" investment that just wishes it had the chance to invest if those pesky profligate politicians would get out of the way, and maybe the countries should fork over their economic sovereignty to the ECB so they can be structurally reformed (bloodletting/grave robbing). Just my opinion, this whole article seems like shitty oldschool/backward economic views coming out of academic economics, likely angling to be a ['very serious person' in ECB bureaucratic/advisory politics](http://www.geopolitical-info.com/en/expert/professor-enrico-colombatto). The lack of being able to comprehend &amp; adjust to real world results is just sad.\"" }, { "docid": "568526", "title": "", "text": "\"When an IPO happens, the buyers pay some price (let's say $20 per share) and the seller (the company) receives a different price ($18.60). Who paid the commission? Well, the commission caused a spread between buyer and seller. It doesn't matter who technically pays the commission because it costs both parties. In an IPO, the company technically pays the commission, but they use buyers' money to do it and the buyer must pay more than he/she would if there was no commission. The same thing happens when you buy a home. Technically the seller pays both realtors' commissions but it came from money the buyer gave the seller and the commissions pushed up the price, so didn't the buyer pay the commission? They both did. The second paragraph suggests that if the investment bankers act as a simple broker, buying public securities instead of newly issued shares for their clients, then the commissions will be much lower. Obviously. I wonder if this is really the right interpretation, though, as no broker charges 4% to a large client for this service. I would need more context to be sure that's what's meant. The gyst is that IPOs generate a lot of money for the investment bankers who act as intermediaries. If you are participating in the transaction, that money is in some way coming out of your pocket, even if it doesn't show up as a \"\"brokerage fee\"\" on your statement.\"" }, { "docid": "371304", "title": "", "text": "\"What is actually a halal investment? Your definition of halal investment is loose and subject to interpretation. On one hand, nothing is fixed in the financial world. You might get a 10 Year Germany Bund with a fixed coupon rate of 1%, but the real rate of return of this investment is far from fixed. It depends on the market environment, the inflation, etc. (Also, you can trade this investment on the secondary market at any time.) Moreover, the country can default. For example, nothing is \"\"fixed\"\" if you hold the Argentina bonds. You might think a saving account in the bank is a fixed investment. But again, what about the inflation? And if you talk with the account holders in Cyprus, you will understand there is no such thing that you are \"\"guaranteed to profit a fixed amount each month or year\"\". So, from this point of view, everything is \"\"halal\"\", because nothing is fixed and the risk of losing the principle is alway there. On the other hand, if you assume that investing a government bond and having a saving account is not halal by definition, you will end up with a situation that every investment is not halal. Suppose you invest in a company. What does the company do with your money? Sure, they will use some of your money to buy equipments, hire new people, and so on. But they will always save some money as cash reserves to meet the short-term and emergency funding needs. Those cash reserves are usually in the form of highly liquid investment, such as short-term bonds, money market funds, savings in a bank account, etc. Because those investments are not halal per definition, is your investment in the company still halal? So in the end, you might just do whatever you want depending on your interpretation.\"" }, { "docid": "419926", "title": "", "text": "\"Real Estate has historically been the most sound investment of all times. Not only does property consistant increase in value (which is what you want every investment to do), it does so at the highest rate with the lowest risk. Most return on investment (like a stock in the market) the potential rate of gain is proportionat to the potential loss. The more secure an investment, the lower the potential gain. But, with Real Estate, property typically doubles in value every 10 years. Our overall R.E. economy is on an upward turn, recovering from a time where values tanked. to jump in now, is probably better than waiting for any amount of time, be it 1 month, or 1 year. You concern about being \"\"tied in\"\" to this investment is a valid concern, however, since the market is in an upward turn, you should be more and more able to turn around and sell it later on. The best thing that you could potentially do would be to invest in a rental property where your cost of investment (your mortgage note) is paid by the renters. However, being a landlord is always a risky business (hence, the higher rate of return, which considering your investment is ultimately zero, the return rate is huge :-) The trick would be to take the reters payments to you and keep it in an account that you use to pay for any repairs, upgrades, or marketing in between when the unit is vacant. But, with your parents losing their house, this may not be possible - unless you take their home and then keep the living arrangments the same as they are now. One possibility to help you get your foot in the door of being a property owner (not necessarily \"\"investor\"\") and help your parents keep their house (if that is what they would like to do) is re-finance with them... if you can't afford the entire mortgage, but they are capable of filling the gap between what you can afford and what their property costs, then you become partnered with them, and when/if their circumstances change, they can always buy you out.\"" }, { "docid": "282376", "title": "", "text": "First of all, I think I'll clear off some confusion in the topic. The Sterling Ratio is a very simple investment portfolio measurement that fits nicely to the topic of personal finance, although not so much to a foreign exchange trading system. The Sterling Ratio is mainly used in the context of hedge funds to measure its risk-reward ratio for long term investments. To do so, it has been adapted to the following in order to appear more like the Sharpe Ratio: I Suppose this is why you question the Average Largest Draw-down. I'll come back to that later. It's original definition, suggested by the company Deane Sterling Jones, is a little different and perhaps the one you should use if you want to measure your trading system's long term risk-reward ratio, which is as followed: Note: Average Annual Draw-down has to be negative on the above-mentioned formula. This one is very simple to calculate and the one to use if you want to measure any portfolio's long-term results, such an example of a 5 or 10 years period and calculate the average of each years largest drawdown. To answer @Dheer's comment, this specific measurement can also be used in personal investments portfolio, which is considered a topic related to personal finance. Back to the first one, which answers your question. It's used in most cases in investment strategies, such as hedging, not trading systems. By hedging I mean that in these cases long term investments are made in anti-correlated securities to obtain a diversified portfolio with a very stable growth. This one is calculated normally annually because you rely on the Annual Risk-Free Rate. Having that in mind I think you can guess that the Average Largest Drawdown is the average between the Largest/Maximum Drawdown from each security in the portfolio. And this doesn't make sense in a trading system. Example: If you have invested in 5 different securities where we calculated the Largest Draw-down for each, such as represented in the following array: MaxDD[5] = { 0.12, 0.23, 0.06, 0.36, 0.09 }, in this case your Average Largest Draw-down is the average(MaxDD) that equals 0.172 or 17,2% If your portfolio's annual return is 15% and the Risk-free Rate is 10%, your Sterling Ratio SR = (0.15 - 0.10)/0.172, which result to 0.29. The higher the rate better is the risk-reward ratio of your portfolio. I suggest in your case to only use the original Sterling Ratio to calculate your long-term risk-reward, in any other case I suggest looking at the Sharpe and Sortino ratios instead." }, { "docid": "567608", "title": "", "text": "If you're worried about investing all at once, you can deploy your starting chunk of cash gradually by investing a bit of it each month, quarter, etc. (dollar-cost averaging). The financial merits and demerits of this have been debated, but it is unlikely to lose you a lot of money, and if it has the psychological benefit of inducing you to invest, it can be worth it even if it results in slightly less-than-optimal gains. More generally, you are right with what you say at the end of your question: in the long run, when you start won't matter, as long as you continue to invest regularly. The Boglehead-style index-fund-based theory is basically that, yes, you might save money by investing at certain times, but in practice it's almost impossible to know when those times are, so the better choice is to just keep investing no matter what. If you do this, you will eventually invest at high and low points, so the ups and downs will be moderated. Also, note that from this perspective, your example of investing in 2007 is incorrect. It's true that a person who put money in 2007, and then sat back and did nothing, would have barely broken even by now. But a person who started to invest in 2007, and continued to invest throughout the economic downturn, would in fact reap substantial rewards due to continued investing throughout the post-2007 lows. (Happily, I speak from experience on this point!)" }, { "docid": "108770", "title": "", "text": "\"A bit strange but okay. The way I would think about this is again that you need to determine for what purpose you're computing this, in much the same way you would if you were to build out the model. The IPO valuation is not going to be relevant to the accretion/dilution analysis unless you're trying to determine whether the transaction was net accretive at exit. But that's a weird analysis to do. For longer holding periods like that you're more likely to look at IRR, not EPS. EPS is something investors look at over the short to medium term to get a sense of whether the company is making good acquisition decisions. And to do that short-to-medium term analysis, they look at earnings. Damodaran would say this is a shitty way of looking at things and that you should probably be looking at some measure of ROIC instead, and I tend to agree, but I don't get paid to think like an investor, I get paid to sell shit to them (if only in indirect fashion). The short answer to your question is that no, you should not incorporate what you are calling liquidation value when determining accretion/dilution, but only because the market typically computes accretion/dilution on a 3-year basis tops. I've never put together a book or seen a press release in my admittedly short time in finance that says \"\"the transaction is estimated to be X% accretive within 4 years\"\" - that just seems like an absurd timeline. Final point is just that from an accounting perspective, a gain on a sale of an asset is not going to get booked in either EBITDA or OCF, so just mechanically there's no way for the IPO value to flow into your accretion/dilution analysis there, even if you are looking at EBITDA/shares. You could figure the gain on sale into some kind of adjusted EBITDA/shares version of EPS, but this is neither something I've ever seen nor something that really makes sense in the context of using EPS as a standardized metric across the market. Typically we take OUT non-recurring shit in EPS, we don't add it in. Adding something like this in would be much more appropriate to measuring the success of an acquisition/investing vehicle like a private equity fund, not a standalone operating company that reports operational earnings in addition to cash flow from investing. And as I suggest above, that's an analysis for which the IRR metric is more ideally situated. And just a semantic thing - we typically wouldn't call the exit value a \"\"liquidation value\"\". That term is usually reserved for dissolution of a corporate entity and selling off its physical or intangible assets in piecemeal fashion (i.e. not accounting for operational synergies across the business). IPO value is actually just going to be a measure of market value of equity.\"" }, { "docid": "526926", "title": "", "text": "\"I used to work in finance for a number of years and I believe some of the use of these cliches are context-relevant (as others have said), but I also think they are often used as a placeholder for an actual thought or point, when one is lacking. It is also quite jarring to hear these phrases for the first time, as I had when I first started working at an investment bank. I thought they were sealing themselves within their culture. I found it limiting and really suffocating. My (least) favorite was \"\"it is what it is.\"\" I always wanted to say: \"\"When isn't it?\"\" In any event, I have been collecting articles like this for a while. I have an idea to write a short story about a newly minted undergrad (or MBA) joining a company and all the other characters *only* speak in these phrases and sentences. And the main character is forced to deal with his/her initial confusion and then struggles to decide whether to assimilate (drink the kool-aid, if you will) and then realize his/her ability to think and identify as an individual is being challenged, so he/she ultimately abandons that company/job/industry.\"" }, { "docid": "114527", "title": "", "text": "Context: assessed project as part of a tech internship in an investment bank, working in small groups, task: to design an app using a financial solution that has an ethical impact. We came up with (what I hope) is the smart sounding idea of an app for impoverished farmers in developing countries who lack the information and market access that larger or unionised farmers would have. The app would use some kind of decision tree (which may grow with machine learning) to assess the best kind of crops to grow given the region and local conditions for max profitability, and would provide access to some kind of derivatives market, and insurance, allowing the farmers a consistent income. Struggling with the specifics of how the business/finance side of things would work. Let's assume the bank builds the app and puts it on the app-store as part of some charitable initiative. 1) Would the farmers go directly to the bank to price and purchase derivatives on their crops? 2) Options/futures/forwards - which is most appropriate, or would it make sense to offer all three? 3) Is there any way this could be adjusted to provide regular payments, with a lump sum at the end? Would this be something the bank chooses to do, or is there an existing financial instrument for this kind of setup? 4) How does this tie in with the commodities markets (or is that what the derivatives already are?) 5) Probably a long-shot but any chance of know-your-customer implementations for countries with terrible infrastructure? 6) (probably a dumb question) Say the farmer sells an option on his crops, would this be sold directly to the bank or a 3rd party who'd be more interested in actually buying the crop? Or is this a far too simplistic view? Basically who would the farmer actually deliver the crops to? 7) Any other issues/oversights? Any ideas to make this sound somewhat viable? It doesn't have to strictly be realistic in any sense, but it also can't be flat-out incorrect! tyvm in advance, edited to make questions clearer" }, { "docid": "178306", "title": "", "text": "Possibly living beyond her means but I assume that was the business gross and 300K in Utah is not that great. I have no idea what the margin is in the plant nursery business or how many employee's she had but I bet her personal income was closer to 100K. Once people stopped buying plants to fix up their homes to flip it was all over for her I'm sure. The bigger problem is that this is playing out for millions of other people that relied on housing for an income from real estate sales people, loan brokers, builders, construction workers simply everything downstream of housing has been hit hard and many many people are in this same boat or soon will be. The really bad thing is there is no quick fix for all these people as housing is not coming back for years if not decades. So basically we have a whole segment of the economy that has been decimated and these people have no where to turn. It's not going to be pretty any way you look at it." }, { "docid": "554237", "title": "", "text": "\"What do you think is a reasonable rate of return? A reasonable rate really breaks down into three things: opportunity cost, what you need, and risk appetite. Opportunity cost comes into play because whatever returns you make should at least exceed, after expenses, the next best option. Typically the \"\"next best option\"\" is the risk free return you can get somewhere else, which is typically a savings account or some other (safe) investment vehicle (e.g. a guaranteed investment certificate/GIC, bonds, etc). But, this opportunity cost could also be an alternative investment (e.g. an index ETF), which is not necessarily risk free (but it may represent the next best option). Risk appetite comes down to the amount of risk you are willing to take on any investment, and is completely subjective. This is typically \"\"how much can you sleep with losing\"\" amount. What you need is the most subjective element. All things being equal (e.g. identical risk profiles, access to same next-best-thing to invest in), if your cost of living expenses are only expected to go up 2% per year, but mine are expected to go up 3% per year, then my reasonable rate of return must exceed 3%, but yours must only exceed 2%. That said, an appropriate return is whatever works for you, period. Nobody can tell you otherwise. For your own investing, what you can do is measure yourself against a benchmark. E.g. if your benchmark is the S&P 500, then the S&P 500 SPDR ETF is your opportunity cost (e.g. what you would have made if you didn't do your own investing). In that way, you are guaranteed the market return (caveat: the market return is not guaranteed to be positive). As an aside.. Don't ever, ever, ever let someone else handle your money, unless you want somebody else have your money. There is nothing wrong with letting someone else handle your money, provided you can live with the triple constraint above. Investing takes time and effort, and time and effort equals opportunity. If you can do something better with the time and effort you would spend to do your own investing, then by all means, do it. Think about it: if you have to spend 1 day a month managing your own investments, but that day costs you $100 in foregone income (e.g. you are a sole proprietor, so every day is a working day), that is $1,200 per year. But if you can find an investment advisor who will manage your books for you, and costs you only $500 per year, what is the better investment? If you do it yourself, you are losing $1,200. If you pay someone, you are losing $500. Clearly, it is cheaper to outsource. Despite what everyone says, not everyone can be an investor. Not everyone wants to live with the psychological, emotional, and mental effort of looking up stocks, buying them, and then second guessing themselves; they are more than happy to pay someone to do that (which also lets them point the finger at that person later, if things go sideways).\"" }, { "docid": "210175", "title": "", "text": "The context actually was higher education and student debt load (which extends to cost). You can try to broaden it but the title of the thread, the linked article, the comment I replied to and my comments all reference higher education and costs. Once again, your comment is correct in a broader context, just not in the one we were in, at least not to all readers clearly. You want to be right but what you need to accept is that you just flubbed your post (tbh I agree with you on most points here) and should likely add some more detail to your statements." }, { "docid": "121765", "title": "", "text": "The short answer: it depends. The long answer.. Off the top of my head, there are quite a number of factors that an analyst may look at when analyzing a stock, to come up with a recommendation. Some example factors to look at include: The list goes on. Quite literally, any and all factors are fair game for a recommendation. So, the question isn't really what analysts do with financial data, it is what do analysts do with financial data that meets your investment needs? As an example, if you have two analysts, one who is focused on growth stocks, and one who is focused on dividend growth, they may have completely different views on a company. If both analysts were to analyze Apple (AAPL) 5 years ago, the dividend analyst would likely say SELL or at the most HOLD, because back then Apple did not have a dividend. However, an analyst focused on growth would likely have said BUY, because Apple appeared to be on a clear upward trend in terms of growth. Likewise, if you have analysts who are focused on shorting stocks, and ones who are focused on deep value investing, the sell analyst may be selling SELL because they are confident the stock will go down in price, so you can make money on the short position. Conversely, the deep value investor may be saying BUY, because they believe that based on the companies strong balance sheet, and recent shake-ups in management the stock will eventually turn around. Two completely different views for the same company: the analyst focused on shorting is looking to make money by capitalizing on falling share price, while the analyst focused on deep value is looking for unloved companies in a tailspin whom s/he believe will turn around, the thesis being that if you dollar-cost-average as the price drops, when it corrects, you'll reap the rewards. That all said, to answer the question about what analysts look for: So really, you should be looking for analysts who align with your investment style, and use those recommendations as a starting point for your own purchases. Personally, I am a dividend investor, so I have passed many BUY recommendations from analysts and my former broker because those were based on growth stories. That does not mean that the analysts, my former broker, or myself, are wrong. But we were all incorrect given the context of how I invest, and what they recommend." }, { "docid": "296142", "title": "", "text": "How am I dodging them? I answered your question directly about the pace of change of technological progress. I said its not faster than the pace at which people can get retrained and reeducated. Do you want a direct reply or a reply in context? Yes, technological change is increasing. It always has been. So what? I put it in context for you in terms of automation and the whole debate about basic income." }, { "docid": "176230", "title": "", "text": "Let us consider the risks in the investment opportunities: Now, what are the returns in each of the investment: What are the alternatives to these investments, then?" } ]

[ { "docid": "490443", "title": "", "text": "Why not just do an FHA loan? The minimum credit score is 580, and you can sometimes even go lower than that. Another alternative is to consider a rent-to-own agreement with his landlord, since it sounds like if he doesn't buy he'd continue renting there anyway." } ]

[ { "docid": "205715", "title": "", "text": "\"From the comments, it sounds like you have a technical background. So I'm going to suggest you think of this as a technical problem: it's an optimization problem, where the variable you're trying to optimize for is total interest paid over the lifetime of the loans. Step 1 is making sure you're using the credit available to you most efficiently. If there's room in the credit limit for card #1 to move more of your debt there, then definitely move your balances from the higher-interest cards. However, be careful; some cards will have different interest rates for balance transfers or cash advances. And definitely don't move any principal from Card #3 until the 0% interest rate expires. Pursuing a bank loan as part of step 1 is valid as well. You could start with the bank you use for your checking account today. Credit unions can be a good source of lower-interest loans as well. Ensure that you fully understand the terms and interest rates, particularly if they change. Just be careful about applying for them; too many rejections can affect your credit rating negatively. You also mention in the comments that you're paying \"\"her\"\" mortgage. I don't know how the ownership is set up there, but either refinancing or taking out a home equity loan can be a way to consolidate debt. The interest rate on a home loan will almost assuredly be less than on your higher rate cards, especially taking the tax deduction into account. Step 2 is paying down the debt efficiently. The rule here is simple: Pay the minimum payment on all cards except for the one with the highest interest rate; any money you have above the minimum payments should go into paying down the principal on that one. In your case, that's Card #2. Good luck!\"" }, { "docid": "122807", "title": "", "text": "\"I actually had a similar situation when I tried to buy my house. I paid off all my loans and was proud of my \"\"debt free\"\" status. I had no car note, no student loans... absolutely no debt, but I did have a bank-issued credit card. (USAA, not Chase, but I assume the same may apply). When I tried to get a home loan they told me I had \"\"absolutely no information on my credit report.\"\" AKA I had no credit. The mortgage lender had no idea what was going on, nor did I or anybody else. It took a lot of research before I realized that the credit bureaus use a formula for the credit rating that involves a lot of things, but if you haven't had a current line of credit reported to the agency in over a year (maybe it was longer, I didn't have anything for 3 years) you aren't going to have a credit score. Because I was \"\"debt free\"\" I was also credit report free and eventually the credit bureaus had nothing to go on, and my score disappeared. The bank-issued credit card was on my credit report, but they didn't report monthly balances so the bureaus couldn't use it to determine if I was paying off the card or if I even had a balance on it. It was essentially not doing my credit any favors, despite what I had thought. In short, based on the fact that you have no debt in her name, and you have taken on all debt in your own name, its very plausible that she has no credit rating anymore. It won't take long to get it back. Once you have ANYTHING on your credit that's actually reported the formula can kick back in and look at credit history as well as current credit and she'll be fine.\"" }, { "docid": "384924", "title": "", "text": "\"The first issue you'll find is that if you aren't going to immediately live in the house as a primary residence, this property counts as a \"\"second home\"\" or \"\"investment property\"\". You'll generally pay a higher interest rate, have a larger down payment, and qualify for less government-backed programs/incentives/subsidies than you would otherwise. The lending criteria on such properties is always more strict - and generally more costly - than an equivalent primary residence. Lenders won't really care that in 10 years you or your parents plan to move in - you can't be held to that, so they'll generally ignore that plan entirely. On a related note, you should be aware that insurance for the property will also generally cost more, but you'd need to get quotes to determine if that is at all significant in your situation. You'll need to talk with a few potential lenders, but from a first read it sounds like it would be best \"\"storied\"\" like so: you and your parents want to buy a 2nd home or vacation home, which you'll share the use of (vacations, etc, and being converted to a primary residence later). It'll need to be clear what plan to use the property for - if you intend to rent out the home in the interim years then instead make that clear and state it will be an investment home; if it is what you are planning it might make it easier, as expected rent for the property will be considered. Saying you want a mortgage for a home no one will live in for a decade probably isn't a good idea, as a general plan anyway. Either way, this can be called a \"\"joint mortgage\"\". When I was a loan officer we didn't use that term, but it's basically just a mortgage application with multiple people on it, all of whom are combined together to qualify for the loan. Everyone's income, debts, assets, and credit get included, which can work or one person's situation can cause the whole thing to collapse. From your description I think this could work for you, and one option is to set it up where only one of the parents is on the application if the other parent has problematic credit situation. Note that his possibility is often restricted by local law, so it may not be an option for you in your jurisdiction, but worth being aware of. An alternative is you just buy the property and the parents gift you the down payment, and you list them as beneficiaries in will/trust in case something happens to you before they retire, but I don't know if that would make any sense in your situation. This is a single applicant mortgage, and it means only you are considered as buying it, which sometimes is the only option depending on your parents current financial situation. It's usually something you try if the other option doesn't work, but it's a fallback plan. Some lenders will allow guarantors (co-signers in US parlance), but this will vary by lender and locale - often what they actually want is a joint mortgage, not really a guarantor/cosigner. Finally, you'll need to plan for what happens if things don't go as planned, regardless of what happens. What if your income changes, if either of your parents become deceased in advance of retirement, if they get a divorced from each other, or if either/both become ill or disabled and need assisted care? Planning for such unpleasant possibilities (even if they seem crazy and not going to happen in your mind right now) can save you all a tremendous amount of heart ache later on when the unexpected (including things I didn't mention) pops up.\"" }, { "docid": "289450", "title": "", "text": "\"How much is rent in your area? You should compare a rental payment versus your mortgage payment now, bearing in mind the opportunity cost of the difference. Let's say that a rental unit in your area that has the same safety & convenience as your house costs $1600 per month to rent, and your mortgage is $2400. By staying in the house, you are losing that $800 month as well as interest earned on banking that money (however, right now, interest rates are negligible). Factor in total cost of ownership too, meaning extra utilities for one or the other (sometimes houses are cheaper, sometime not), property insurance and taxes for the house (if they aren't already in escrow through your mortgage) and generic house repair stuff. If the savings for a rental are worth more than a couple hundred a month, then I suggest you consider bailing. Start multiplying $500-1000 per month out over a year or two and decide if that extra cash is better for you than crappy credit. Also, this is not the most ethical thing, but I do know of one couple who stopped paying their mortgage for several months, knowing they were going to give the house back at the end. They took what they would have spent in mortgage payments during that time into a savings account, and will have more than enough cash to float for the few years that their credit is lowered by the default. Also something to consider is that we are in a time of ridiculous numbers of people defaulting. As such, a poor credit score might start to be more common among people with decent incomes, to the point where a \"\"poor\"\" score in 5 years is worth about the same as an \"\"average\"\" score today. I wouldn't count on that, but it might soften the blow of your bad credit if you default.\"" }, { "docid": "192641", "title": "", "text": "It may or may not be a good idea to borrow money from your family; there are many factors to consider here, not the least of which is what you would do if you got in serious financial trouble and couldn't make your scheduled payments on the loan. Would you arrange with them to sell the property ASAP? Or could they easily manage for a few months without your scheduled payments if it were necessary? A good rule of thumb that some people follow when lending to family is this: don't do it unless you're 100% OK with the possibility that they might not pay you back at all. That said, your question was about credit scores specifically. Having a mortgage and making on-time payments would factor into your score, but not significantly more heavily than having revolving credit (eg a credit card) and making on time payments, or having a car loan or installment loan and making on time payments. I bought my house in 2011, and after years of paying the mortgage on time my credit score hasn't changed at all. MyFico has a breakdown of factors affecting your credit score here: http://www.myfico.com/crediteducation/whatsinyourscore.aspx. The most significant are a history of on-time payments, low revolving credit utilization (carrying a $4900 balance on a card with a $5000 limit is bad, carrying a $10 balance on the same card is good), and overall length of your credit history. As to credit mix, they have this to say: Types of credit in use Credit mix determines 10% of my FICO Score The FICO® Score will consider your mix of credit cards, retail accounts, installment loans, finance company accounts and mortgage loans. It's not necessary to have one of each, and it's not a good idea to open credit accounts you don’t intend to use. The credit mix usually won’t be a key factor in determining your FICO Score—but it will be more important if your credit report does not have a lot of other information on which to base a score. Have credit cards – but manage them responsibly Having credit cards and installment loans with a good payment history will raise your FICO Score. People with no credit cards tend to be viewed as a higher risk than people who have managed credit cards responsibly." }, { "docid": "393629", "title": "", "text": "Should I treat this house as a second home or a rental property on my 2015 taxes? If it was not rented out or available for rent then you could treat it as your second home. But if it was available for rent (i.e.: you started advertising, you hired a property manager, or made any other step towards renting it out), but you just didn't happen to find a tenant yet - then you cannot. So it depends on the facts and circumstances. I've read that if I treat this house as a rental property, then the renovation cost is a capital expenditure that I can claim on my taxes by depreciating it over 28 years. That is correct. 27.5 years, to be exact. I've also read that if I treat this house as a personal second home, then I cannot do that because the renovation costs are considered non-deductible personal expenses. That is not correct. In fact, in both cases the treatment is the same. Renovation costs are added to your basis. In case of rental, you get to depreciate the house. Since renovations are considered part of the house, you get to depreciate them too. In case of a personal use property, you cannot depreciate. But the renovation costs still get added to the basis. These are not expenses. But does mortgage interest get deducted against my total income or only my rental income? If it is a personal use second home - you get to deduct the mortgage interest up to a limit on your Schedule A. Depending on your other deductions, you may or may not have a tax benefit. If it is a rental - the interest is deducted from the rental income only on your Schedule E. However, there's no limit (although some may be deferred if the deduction is more than the income) if you're renting at fair market value. Any guidance would be much appreciated! Here's the guidance: if it is a rental - treat it as a rental. Otherwise - don't." }, { "docid": "174336", "title": "", "text": "\"If there is any fee at all on the cash advance, and zero interest on the student loans (for now), it's not worth it mathematically. And for only 8 months of \"\"free\"\" money, it's rare for it to be worth it overall. You need to save a significant amount either by having a good net interest rate (e.g., saving 20% on another card and not paying any interest on the new loan) or by saving a lot on principal (e.g., paying off $100k now and not paying the interest on that for the next 8 months). I wouldn't worry about it hurting your credit score unless your credit is going to be evaluated during the time you're maxing your card. Part of your score (20-30% IIRC) is your credit utilization ratio, which is how much you have available vs. how much you're using. It's separate from the part that accounts for history, so it's only relevant at the time you're looked up.\"" }, { "docid": "219181", "title": "", "text": "Because even if you won the lottery, without at least some credit history you will have trouble renting cars and hotel rooms. I learned about the importance, and limitations of credit history when, in the 90's, I switched from using credit cards to doing everything with a debit card and checks purely for convenience. Eventually, my unused credit cards were not renewed. At that point in my life I had saved a lot and had high liquidity. I even bought new autos every 5 years with cash. Then, last decade, I found it increasingly hard to rent cars and sometimes even a hotel rooms with a debit card even though I would say they could precharge whatever they thought necessary to cover any expenses I might run. I started investigating why and found out that hotels and car rentals saw having a credit card as a proxy for low risk that you would damage the car or hotel room and not pay. So then I researched credit cards, credit reports, and how they worked. They have nothing about any savings, investments, or bank accounts you have. I had no idea this was the case. And, since I hadn't had cards or bought anything on credit in over 10 years there were no records in my credit files. Old, closed accounts had fallen off after 10 years. So, I opened a couple of secured credit cards with the highest security deposit allowed. They unsecured after a year or so. Then, I added several rewards cards. I use them instead of a debit card and always pay in full and they provide some cash back so I save money compared to just using a debit card. After 4 years my credit score has gone to 800+ even though I have never carried any debt and use the cards as if they were debit cards. I was very foolish to have stopped using credit cards 20 years ago but just had no idea of the importance of an established credit history. And note that establishing a great credit history does not require that you borrow money or take out loans for anything. just get credit cards and pay them in full each month." }, { "docid": "277815", "title": "", "text": "You have a few options and sometimes challenges help us improve our situation. First, you can not borrow to buy a car. Reducing the massive depreciation that cars undergo will help you be wealthier. It is hard to find a good use car that you can buy for cash, but it will play out best for your finances in the long run. If your heart is set on borrowing, I would encourage you to go to the bank/credit union where you have your checking account. They will see your history of deposits and may grant you a loan based on that. Also you are likely to get a better deal from the bank than from the car dealer. Thirdly, you can simply go to your employer's HR department and ask them. Surely someone has applied for a loan during the company's history. What did they do for them?" }, { "docid": "517633", "title": "", "text": "If I was you I would not borrow from my 401K and shred the credit card offer. Both are very risky ventures, and you are already in a situation that is risky. Doing either will increase your risk significantly. I'd also consider selling the rental house. You seem to be cutting very close on the numbers if you can't raise 17K in cash to refi the house. What happens if you need a roof on the rental, and an HVAC in your current home? My assumption is that you will not sell the home, okay I get it. I would recommend either giving your tenant a better deal then the have now, or something very similar. Having a good tenant is an asset." }, { "docid": "477048", "title": "", "text": "You could consider turning your current place into a Rental Property. This is more easily done with a fixed rate loan, and you said you have an ARM. The way it would work: If you can charge enough rent to cover your current mortgage plus the interest-difference on your new mortgage, then the income from your rental property can effectively lower the interest rate on your new home. By keeping your current low rate, month-after-month, you'll pay the market rate on your new home, but you'll also receive rental income from your previous home to offset the increased cost. Granted, a lot of your value will be locked up in equity in your former home, and not be easily accessible (except through a HELOC or similar), but if you can afford it, it is a good possibility." }, { "docid": "313935", "title": "", "text": "I would imagine that it goes beyond purpose and also addresses the demographic as a poor credit risk. Those seeking a post secondary education are a poor credit risk. They are at the beginning of their careers so tend to have low income, a short credit history, and a very short time of managing money on their own. Also many don't know how to work. This later fact, to me, is a great predictor of financial success. Reading into the financial data surrounding student loans, it pretty easy to see that this demographic makes poor money decisions. I live near a state university. A large percentage of students drive late model luxury cars, frequent expensive bars and restaurants, and wear pretty nice clothes. They also graduate with, on average 60K in student loans. Keep in mind a 4 year degree could be had for about 30K and could be paid for working a part time job. And that, to me, is the wisdom in bank's decision. Sure they will loan you all the money you want with a government guarantee. However, once that disappears they will not you money for unnecessary purposes." }, { "docid": "468104", "title": "", "text": "I'll write this up as a more formal answer, here. I'd suggest looking into a Home Equity Line of Credit, or HELOC. You didn't mention in your question how much equity you have in the home, but assuming at least 20%, you might be able to open a HELOC with a line of $40,000. My experience is that you can do 50% of your equity, but depends on the bank. Here are a few notes that are generally in play with HELOC's (YMMV, so be sure to know the specifics before signing on the line) Doing this, at least when we did 8 years ago, did not subject us to PMI. There are certainly plenty of things to research, but it sounds like you're pretty astute based on how you're evaluating the financial side of this endeavor. There are no guarantees in real estate. Houses could be selling like crazy now, but in 6 months they might not. It certainly sounds like that's a lower risk in your area, but you never know what might happen. If you're taking on this extra line of credit, make sure that it's something you could afford should the worst case scenario happen. Equity loans are also available. This is a more traditional fixed-rate loan rather than line of credit, so you'd be looking at set monthly payments rather than the flexibility of paying interest only when you need to. There's a brief write-up on the differences here. I have also heard of a construction loan, which falls into the same category as the aforementioned options, but I can't speak to today's market on those." }, { "docid": "396933", "title": "", "text": "I would say you are typical. The way people are able to build their available credit, then subsequently build their average balances is buy building their credit score. According to FICO your credit score is made up as follows: Given that you had no history, and only new credit you are pretty much lacking in all areas. What the typical person does, is get a card, pay on it for 6 months and assuming good history will either get an automatic bump; or, they can request a credit limit increase. Credit score has nothing to do with wealth or income. So even if you had 100K in the bank you would likely still be facing the same issue. The bank that holds the money might make an exception. It is very easy to see how a college student can build to 2000 or more. They start out with a $200 balance to a department store and in about 6 months they get a real CC with a 500 balance and one to a second department store. Given at least a decent payment history, that limit could easily increase above 2500 and there could be more then one card open. Along the lines of what littleadv says, the companies even welcome some late payments. The fees are more lucrative and they can bump the interest rate. All is good as long as the payments are made. Getting students and children involved with credit cards is a goal of the industry. They can obtain an emotional attachment that goes beyond good business reasoning." }, { "docid": "529123", "title": "", "text": "\"There's two scenarios: the loan accrues interest on the remaining balance, or the total interest was computed ahead of time and your payments were averaged over x years so your payments are always the same. The second scenarios is better for the bank, so guess what you probably have... In the first scenario, I would pay it off to avoid paying interest. (Unless there is a compelling reason to keep the cash available for something else, and you don't mind paying interest) In the second case, you're going to pay \"\"interest over x years\"\" as computed when you bought the car no matter how quickly you pay it off, so take your time. (If you pay it earlier, it's like paying interest that would not have actually accrued, since you're paying it off faster than necessary) If you pay it off, I'm not sure if it would \"\"close\"\" the account, your credit history might show the account as being paid, which is a good thing.\"" }, { "docid": "80607", "title": "", "text": "Talk to the property manager and explain your situation. They may be more willing to work with you than you think. At the very least they will tell you if you should even bother filling out the application. In most cases they are obligated to do a background and credit check so you will have to provide them with the required information one way or another. What they are really looking for is your ability to pay the rent. Property managers take a lot more things into consideration than a mortgage company would for a loan. If you have a history of paying on time in the past (a reference from a previous landlord perhaps) and if you show proof of the ability to pay now and in the future they will usually take that into consideration regardless of what the credit check says. It all depends on how motivated they are to fill the rental and how willing they are to take on a potential risk. Keep in mind property managers don't make money on empty rentals." }, { "docid": "360872", "title": "", "text": "what are my options for raising the funds? Assuming you have decent credit, you can either mortgage your home or apply for a land loan in order to purchase the land. Since both your home and the land have value, either one can act as collateral in case you default on your loan. Land loans tend to have a higher interest rate and down payment, however. This is because banks see land loans as a riskier investment since it's easier for you to walk away from an empty plot of land than your own home." }, { "docid": "263999", "title": "", "text": "There are two very small catches. You have just increased your available credit. In some cases when you want to make a loan, they will check your available credit against your creditworthiness (your income and credit history). In the short term with a greater credit limit, you may have more difficulty getting a large loan. On the other hand, your greater credit limit will make you seem more creditworthy (as you have been walking around with the ability to borrow a whole pile and demonstrated the ability to not go bankrupt). The other possible catch is that if something goes wrong and your credit line is maxed (maybe you have a psychotic episode; maybe you give your credit card and pin number to someone who buys a car on you), your liability is larger. If you can maintain spending discipline and don't need every ounce of credit head room right now, neither of these apply. In the medium to long term, a lower credit utilization and a higher total limit will make you more creditworthy." }, { "docid": "371133", "title": "", "text": "\"The title is misleading (shocker, right?). The exact wording in the cited study is \"\"in order to afford a modest two-bedroom rental home at the Fair Market Rent without spending more than 30% income on rent\"\". HUD says: &gt; The Fair Market Rent is HUD’s best estimate of what a household seeking a modest rental home in a short amount of time can expect to pay for rent and utilities in the current market. So that's not the minimum available 2BR unit available. It's more like 50th percentile rent per zip code. Check rent.com for 2BR prices in Tennessee and Arkansas. They start in the lower $500s. Also worth noting that if you work 40hr/week all year at minimum wage and claim 1 dependent then you don't owe a dime of Federal income tax.\"" } ]

[ { "docid": "566480", "title": "", "text": "Here are some (not all) things that can help overcome a low credit score: Getting a new job may actually hurt unless it's a substantial increase in income. Banks usually look at salary going back 2 years, and look for consistent, maintainable income. If you just got a new job that pays more, the bank may conservatively assume that it may not last." } ]

[ { "docid": "477048", "title": "", "text": "You could consider turning your current place into a Rental Property. This is more easily done with a fixed rate loan, and you said you have an ARM. The way it would work: If you can charge enough rent to cover your current mortgage plus the interest-difference on your new mortgage, then the income from your rental property can effectively lower the interest rate on your new home. By keeping your current low rate, month-after-month, you'll pay the market rate on your new home, but you'll also receive rental income from your previous home to offset the increased cost. Granted, a lot of your value will be locked up in equity in your former home, and not be easily accessible (except through a HELOC or similar), but if you can afford it, it is a good possibility." }, { "docid": "371133", "title": "", "text": "\"The title is misleading (shocker, right?). The exact wording in the cited study is \"\"in order to afford a modest two-bedroom rental home at the Fair Market Rent without spending more than 30% income on rent\"\". HUD says: &gt; The Fair Market Rent is HUD’s best estimate of what a household seeking a modest rental home in a short amount of time can expect to pay for rent and utilities in the current market. So that's not the minimum available 2BR unit available. It's more like 50th percentile rent per zip code. Check rent.com for 2BR prices in Tennessee and Arkansas. They start in the lower $500s. Also worth noting that if you work 40hr/week all year at minimum wage and claim 1 dependent then you don't owe a dime of Federal income tax.\"" }, { "docid": "313935", "title": "", "text": "I would imagine that it goes beyond purpose and also addresses the demographic as a poor credit risk. Those seeking a post secondary education are a poor credit risk. They are at the beginning of their careers so tend to have low income, a short credit history, and a very short time of managing money on their own. Also many don't know how to work. This later fact, to me, is a great predictor of financial success. Reading into the financial data surrounding student loans, it pretty easy to see that this demographic makes poor money decisions. I live near a state university. A large percentage of students drive late model luxury cars, frequent expensive bars and restaurants, and wear pretty nice clothes. They also graduate with, on average 60K in student loans. Keep in mind a 4 year degree could be had for about 30K and could be paid for working a part time job. And that, to me, is the wisdom in bank's decision. Sure they will loan you all the money you want with a government guarantee. However, once that disappears they will not you money for unnecessary purposes." }, { "docid": "460401", "title": "", "text": "\"You could debate the \"\"why\"\"s of tax policy endlessly. There are lots of things in tax law that I think are bad ideas, and probably a few here and there that I think are good ideas. I am well aware that there are things that I think are good ideas that others think are bad ideas and vice versa. To your specific point: I suppose you could say that having a place to live is a necessity. But most people do not live in the absolute minimum necessary to give them a place to sleep and protection from the weather. You could survive with a one-room apartment with a bed on one side and a toilet and some minimal cooking facilities on the other. Most people have considerably more than that. At some point that's luxury and not necessity. And if you want to push it, you COULD live in a cardboard box under a bridge, you don't NEED a house or apartment to survive. Personally I think it's absurd that as a home-owner I get a deduction for my mortgage interest, while if someone were to rent an identical house with a monthly rental equal to exactly the same amount that I am paying on my mortgage, he would receive no deduction. The stated goal of that one was to encourage home ownership. But people who own homes are generally richer than those who rent, so the net result is that the poor are paying higher taxes to help subsidize the homes of the rich. And then the rich congratulate themselves on how they are giving these tax breaks to help make housing more affordable for poor people. To reiterate @keshlam, tax laws only makes sense when understood politically. Yes, some people have fine ideas about what is fair and just. Others simply want tax breaks that benefit their business or people with tough financial situations that just happen by chance to resemble their own. Many of the people with noble ideas have little concept of what the implications of the policies they push are. Many of the ideas that some people view as worthy and noble, others view as frivolous, counter-productive, or even evil. Then you mash all these competing groups and interest together and see what comes out.\"" }, { "docid": "583142", "title": "", "text": "Closing a credit card decreases your total available balance, which can have a small negative effect if that credit card is a significant portion of your available credit. If it is not, then it likely will have little impact on your credit in that department. However, the case you explained - get a card, use it for a short while, then dump it - won't have much long-term impact to your available credit, since you will end up with the same amount as you started. The second factor will be the average age of accounts. This will affect you both in the short and long term, if you've had accounts open for a fairly long time, but won't impact you much if your credit history is fairly short. Even closed accounts affect the Average Age of Accounts for FICO scores (but not for some other scoring methods such as VantageScore). If you have only one other account, and it was 10 years old, then opening and closing this decreases your average age of accounts from 10 to 5 years - a significant hit which will not go away for years (10+ years in some cases, though usually 7 years). This will lower your score some. If you have had a lot of accounts, though (including things like mortgage, student loan, etc.), this won't have as significant of an impact, and if you had a short history in the first place, it won't hurt you much either. The third factor will be the hard credit pull. That will have a small negative impact for around six months; so don't do this just before getting a mortgage, but mostly this won't be a significant impactor for you." }, { "docid": "398318", "title": "", "text": "Empirial evidence for the second scenario: Can banks individually create money out of nothing? — The theories and the empirical evidence. Excerpt: It was examined whether in the process of making money available to the borrower the bank transfers these funds from other accounts (within or outside the bank). In the process of making loaned money available in the borrower's bank account, it was found that the bank did not transfer the money away from other internal or external accounts, resulting in a rejection of both the fractional reserve theory and the financial intermediation theory. Instead, it was found that the bank newly ‘invented’ the funds by crediting the borrower's account with a deposit, although no such deposit had taken place. This is in line with the claims of the credit creation theory. Thus it can now be said with confidence for the first time – possibly in the 5000 years' history of banking - that it has been empirically demonstrated that each individual bank creates credit and money out of nothing, when it extends what is called a ‘bank loan’. The bank does not loan any existing money, but instead creates new money. The money supply is created as ‘fairy dust’ produced by the banks out of thin air." }, { "docid": "402705", "title": "", "text": "There were several areas where the mortgage and car loan have affected your credit. The mortgage had the following impacts, The car loan (purchased shortly after the house) had the following impacts, You did not mention your payment history, but since you had an 800 prior to the house purchase, we can assume that your payment history is current (nothing late). You did not mention your credit utilization, but you want to keep your utilization low (various experts suggest 10%, 20% and 30% as thresholds). The down payment on the house likely drained your available funds, and replacing the car may have also put stress on your funds. And when you buy a house, often there are additional expenses that further strain budgets. My guess is that your utilization percentage has increased. My suggestion would be to reduce your utilization ratio on your revolving accounts. And since you have plenty of credit lines, you might want to payoff the car. Your Chase card has a good age, which helps with age of credit, and though you will find experts that say you should only have 2-4 revolving accounts (credit cards), other experience shows that having accounts with age on them is a good thing. And having a larger number of accounts does not cause problems (unless you have higher utilization or you miss payments). You did not mention whether the Chase card has any fees or expenses, as that would be a reason to either negotiate with Chase to reduce or eliminate the fees, or to cancel the card. Have you checked your credit report for errors? You can get a free report from each of the three bureaus once per year." }, { "docid": "250722", "title": "", "text": "Paying on time is the most critical factor. Paying ahead on the loan will not help you from a credit score POV, but it will not hurt you either. In general, to maintain a good credit history, don't bother focusing on credit scores. Frankly, there is very little reason for you to even know what your score is. Just do the following: Lenders want to deal with people with long histories of paying debts back on time." }, { "docid": "393629", "title": "", "text": "Should I treat this house as a second home or a rental property on my 2015 taxes? If it was not rented out or available for rent then you could treat it as your second home. But if it was available for rent (i.e.: you started advertising, you hired a property manager, or made any other step towards renting it out), but you just didn't happen to find a tenant yet - then you cannot. So it depends on the facts and circumstances. I've read that if I treat this house as a rental property, then the renovation cost is a capital expenditure that I can claim on my taxes by depreciating it over 28 years. That is correct. 27.5 years, to be exact. I've also read that if I treat this house as a personal second home, then I cannot do that because the renovation costs are considered non-deductible personal expenses. That is not correct. In fact, in both cases the treatment is the same. Renovation costs are added to your basis. In case of rental, you get to depreciate the house. Since renovations are considered part of the house, you get to depreciate them too. In case of a personal use property, you cannot depreciate. But the renovation costs still get added to the basis. These are not expenses. But does mortgage interest get deducted against my total income or only my rental income? If it is a personal use second home - you get to deduct the mortgage interest up to a limit on your Schedule A. Depending on your other deductions, you may or may not have a tax benefit. If it is a rental - the interest is deducted from the rental income only on your Schedule E. However, there's no limit (although some may be deferred if the deduction is more than the income) if you're renting at fair market value. Any guidance would be much appreciated! Here's the guidance: if it is a rental - treat it as a rental. Otherwise - don't." }, { "docid": "295688", "title": "", "text": "\"There are actually a few questions you are asking here. I will try and address each individually. Down Payment What you put down can't really be quantified in a dollar amount here. $5k-$10k means nothing. If the house costs $20k then you're putting 50% down. What is relevant is the percent of the purchase price you're putting down. That being said, if you go to purchase a property as an investment property (something you wont be moving into) then you are much more likely to be putting a down payment much closer to 20-25% of the purchase price. However, if you are capable of living in the property for a year (usually the limitation on federal loans) then you can pay much less. Around 3.5% has been my experience. The Process Your plan is sound but I would HIGHLY suggest looking into what it means to be a landlord. This is not a decision to be taken lightly. You need to know the tenant landlord laws in your city AND state. You need to call a tax consultant and speak to them about what you will be charging for rent, and how much you should withhold for taxes. You also should talk to them about what write offs are available for rental properties. \"\"Breaking Even\"\" with rent and a mortgage can also mean loss when tax time comes if you don't account for repairs made. Financing Your first rental property is the hardest to get going (if you don't have experience as a landlord). Most lenders will allow you to use the potential income of a property to qualify for a loan once you have established yourself as a landlord. Prior to that though you need to have enough income to afford the mortgage on your own. So, what that means is that qualifying for a loan is highly related to your debt to income ratio. If your properties are self sustaining and you still work 40 hours a week then your ability to qualify in the future shouldn't be all that impacted. If anything it shows that you are a responsible credit manager. Conclusion I can't stress enough to do YOUR OWN research. Don't go off of what your friends are telling you. People exaggerate to make them seem like they are higher on the socioeconomic ladder then they really are. They also might have chicken little syndrome and try to discourage you from making a really great choice. I run into this all the time. People feel like they can't do something or they're to afraid so you shouldn't be able to either. If you need advice go to a professional or read a book. Good luck!\"" }, { "docid": "1472", "title": "", "text": "\"From what I've heard in the past, debt can be differentiated between secured debt and unsecured debt. Secured debt is a debt for which something stands good such as a mortgage on your house. You have a debt, but that debt is covered by the value of an asset and if you needed to free yourself of the debt, then you could by selling that asset. This is what is known as \"\"good\"\" debt. Unsecured debt is debt that is incurred where the only thing that is available to pay it back is your income. An example of this is credit card debt where you purchase something that couldn't be sold again to pay off the debt. This is know as \"\"bad\"\" debt. You have to be careful about thinking that house debt is always \"\"good\"\" debt because the house stands good for it though. The problem with that is that the house could go down in value and then suddenly your \"\"good\"\" debt is \"\"bad\"\" debt (or no longer secured). Cars are very risky this way because they go down in value. It is really easy to get a car loan where before long you are upside down. This is the problem with the term \"\"good\"\" debt. The label makes it sound like it is a good idea to have that debt, and the risk associated with having the debt is trivialized and allows yourself to feel good about your financial plan. Perhaps this is why so many houses are in foreclosure right now, people believed the \"\"good\"\" debt myth and thought that it was ok to borrow MORE than the home was worth to get into a house. Thus they turned a secured debt into an unsecured debt and put their residence at risk by levels of debt they couldn't afford. Other advice I've heard and tend to agree with, is that you should only borrow for a house, an education and maybe a car (danger on that last one), being careful to buy a modest house, car etc that is well within your means to repay. So if you do have to borrow for a car, go for basic transportation instead of the $40,000 BMW. Keep you house payment less than 1/4th of your take home pay. Pay off the school loans as quickly as possible. Regardless of the label, \"\"good\"\" \"\"bad\"\" \"\"unsecured\"\" \"\"secured\"\", I think that less debt is better than more debt. There is definitely such a thing as too much \"\"good\"\" debt!\"" }, { "docid": "223166", "title": "", "text": "It sounds like you may need to look into the different types of personal loans that are available to you. Typically, they are in 2 categories: secured vs unsecured. A personal loan is usually of the unsecured variety, meaning that the bank is loaning you money with no collateral to use if you default. These loans will have much higher interest rates than a secured loan. A prime example of a secured loan would be a mortgage or an equity line of credit. If you want an unsecured personal loan to use towards making those improvements, then whether or not you receive the loan will depend on your credit rating and income status. As Aganju stated, these loans don't really care what the money is used for. Because it's not your property that you're fixing up, you won't be able to get a secured loan against that property. If your mother took out a loan against her home (like a second mortgage), she may be able to get a significantly lower interest rate than what you'll get with an unsecured loan. She could also look into a renovation/remodeling loan, which would require information regarding the work being done such as costs and how it will improve the value of the property. If she used an equity line of credit instead, then they don't typically care what the money will be used for as it's just a credit line against the equity she's already built into her mortgage payments over the years." }, { "docid": "344573", "title": "", "text": "Honestly, the best way to manage this risk is to manage your savings appropriately. Many experts recommend that maintain a reasonably liquid account with 6-9x your minimum monthly expenses for just this occurrence. I know, easier said than done. Right? As for insurance, I can only speak for what is the case in the US. Here, most mortgages will require you to get PMI insurance until you have at least 20% equity in your house. However, that insurance only protects the BANK from losing money if you can't pay. It doesn't save you from foreclosure or ruining your credit. Really, the type of insurance you are talking about is Unemployment insurance which all states in the US make available to workers via deductions from their paycheck. The best advice, I suppose, is to keep your expenses low enough to cover them with an unemployment check until you have accumulated enough savings to get through a rough patch. That may mean buying a less expensive home, or just waiting until you have saved a bigger down payment. If you didn't plan ahead, and you are already in the house, another option might be to extend your mortgage. For example from a 20 to a 30 year to reduce your payments to a manageable level. A more risky option might be to convert to a variable rate loan temporarily, which typically carries a lower interest rate. However, it might be hard to secure a new loan if you don't currently have an income." }, { "docid": "489561", "title": "", "text": "I have a car loan paid in full and even paid off early, and 2 personal loans paid in full from my credit union that don't seem to reflect in a positive way and all 3 were in good standing. But you also My credit card utilization is 95%. I have a total of 4 store credit cards, a car loan, 2 personal loans. So assuming no overlap, you've paid off three of your ten loans (30%). And you still have 95% utilization. What would you do if you were laid off for six months? Regardless of payment history, you would most likely stop making payments on your loans. This is why your credit score is bad. You are in fact a credit risk. Not due to payment history. If your payment history was bad, you'd likely rank worse. But simple fiscal reality is that you are an adverse event away from serious fiscal problems. For that matter, the very point that you are considering bankruptcy says that they are right to give you a poor score. Bankruptcy has adverse effects on you, but for your creditors it means that many of them will never get paid or get paid less than what they loaned. The hard advice that we can give is to reduce your expenses. Stop going to restaurants. Prepare breakfast and supper from scratch and bag your lunch. Don't put new expenses on your credit cards unless you can pay them this month. Cut up your store cards and don't shop for anything but necessities. Whatever durables (furniture, appliances, clothes, shoes, etc.) you have now should be enough for the next year or so. Cut your expenses. Have premium channels on your cable or the extra fast internet? Drop back to the minimum instead. Turn the heat down and the A/C temperature up (so it cools less). Turn off the lights if you aren't using them. If you move, move to a cheaper apartment. Nothing to do? Get a second job. That will not only keep you from being bored, it will help with your financial issues. Bankruptcy will not itself fix the problems you describe. You are living beyond your means. Bankruptcy might make you stop living beyond your means. But it won't fix the problem that you make less money than you want to spend. Only you can do that. Better to stop the spending now rather than waiting until bankruptcy makes your credit even worse and forces you to cut spending. If you have extra money at the end of the month, pick the worst loan and pay as much of it as you can. By worst, I mean the one with the worst terms going forward. Highest interest rate, etc. If two loans have the same rate, pay the smaller one first. Once you pay off that loan, it will increase the amount of money you have left to pay off your other loans. This is called the debt snowball (snowball effect). After you finish paying off your debt, save up six months worth of expenses or income. These will be your emergency savings. Once you have your emergency fund, write out a budget and stick to it. You can buy anything you want, so long as it fits in your budget. Avoid borrowing unless absolutely necessary. Instead, save your money for bigger purchases. With savings, you not only avoid paying interest, you may actually get paid interest. Even if it's a low rate, paid to you is better than paying someone else. One of the largest effects of bankruptcy is that it forces you to act like this. They offer you even less credit at worse terms. You won't be able to shop on credit anymore. No new car loan. No mortgage. No nice clothes on credit. So why declare bankruptcy? Take charge of your spending now rather than waiting until you can't do anything else." }, { "docid": "384924", "title": "", "text": "\"The first issue you'll find is that if you aren't going to immediately live in the house as a primary residence, this property counts as a \"\"second home\"\" or \"\"investment property\"\". You'll generally pay a higher interest rate, have a larger down payment, and qualify for less government-backed programs/incentives/subsidies than you would otherwise. The lending criteria on such properties is always more strict - and generally more costly - than an equivalent primary residence. Lenders won't really care that in 10 years you or your parents plan to move in - you can't be held to that, so they'll generally ignore that plan entirely. On a related note, you should be aware that insurance for the property will also generally cost more, but you'd need to get quotes to determine if that is at all significant in your situation. You'll need to talk with a few potential lenders, but from a first read it sounds like it would be best \"\"storied\"\" like so: you and your parents want to buy a 2nd home or vacation home, which you'll share the use of (vacations, etc, and being converted to a primary residence later). It'll need to be clear what plan to use the property for - if you intend to rent out the home in the interim years then instead make that clear and state it will be an investment home; if it is what you are planning it might make it easier, as expected rent for the property will be considered. Saying you want a mortgage for a home no one will live in for a decade probably isn't a good idea, as a general plan anyway. Either way, this can be called a \"\"joint mortgage\"\". When I was a loan officer we didn't use that term, but it's basically just a mortgage application with multiple people on it, all of whom are combined together to qualify for the loan. Everyone's income, debts, assets, and credit get included, which can work or one person's situation can cause the whole thing to collapse. From your description I think this could work for you, and one option is to set it up where only one of the parents is on the application if the other parent has problematic credit situation. Note that his possibility is often restricted by local law, so it may not be an option for you in your jurisdiction, but worth being aware of. An alternative is you just buy the property and the parents gift you the down payment, and you list them as beneficiaries in will/trust in case something happens to you before they retire, but I don't know if that would make any sense in your situation. This is a single applicant mortgage, and it means only you are considered as buying it, which sometimes is the only option depending on your parents current financial situation. It's usually something you try if the other option doesn't work, but it's a fallback plan. Some lenders will allow guarantors (co-signers in US parlance), but this will vary by lender and locale - often what they actually want is a joint mortgage, not really a guarantor/cosigner. Finally, you'll need to plan for what happens if things don't go as planned, regardless of what happens. What if your income changes, if either of your parents become deceased in advance of retirement, if they get a divorced from each other, or if either/both become ill or disabled and need assisted care? Planning for such unpleasant possibilities (even if they seem crazy and not going to happen in your mind right now) can save you all a tremendous amount of heart ache later on when the unexpected (including things I didn't mention) pops up.\"" }, { "docid": "376016", "title": "", "text": "If you have the money to pay cash for the car. Then 0 months will save you the most money. There are of course several caveats. The money for the car has to be in a relatively liquid form. Selling stocks which would trigger taxes may make the pay cash option non-optimal. Paying cash for the car shouldn't leave you car rich but cash poor. Taking all your savings to pay cash would not be a good idea. Note: paying cash doesn't involve taking a wheelbarrow full of bills to the dealer; You can use a a check. If cash is not an option then the longest time period balanced by the rates available is best. If the bank says x percent for 12-23 months, y percent for 24-47 months, Z percent for 48 to... It may be best to take the 47 month loan, because it keeps the middle rate for a long time. You want to lock in the lowest rate you can, for the longest period they allow. The longer period keeps the required minimum monthly payment as low as possible. The lower rate saves you on interest. Remember you generally can pay the loan off sooner by making extra or larger payments. Leasing. Never lease unless you are writing off the monthly lease payment as a business expense. If the choice is monthly lease payments or depreciation for tax purposes the lease can make the most sense. If business taxes aren't involved then leasing only means that you have a complex deal where you finance the most expensive part of the ownership period, you have to watch the mileage for several years, and you may have to pay a large amount at the end of the period for damages and excess miles. Plus many times you don't end up with the car at the end of the lease. In the United States one way to get a good deal if you have to get a loan: take the rebate from the dealer; and the loan from a bank/credit Union. The interest rate at banking institution is a better range of rates and length. Plus you get the dealer cash. Many times the dealer will only give you the 0% interest rate if you pay in 12 months and skip the rebate; where the interest paid to the bank will be less than the rebate." }, { "docid": "396933", "title": "", "text": "I would say you are typical. The way people are able to build their available credit, then subsequently build their average balances is buy building their credit score. According to FICO your credit score is made up as follows: Given that you had no history, and only new credit you are pretty much lacking in all areas. What the typical person does, is get a card, pay on it for 6 months and assuming good history will either get an automatic bump; or, they can request a credit limit increase. Credit score has nothing to do with wealth or income. So even if you had 100K in the bank you would likely still be facing the same issue. The bank that holds the money might make an exception. It is very easy to see how a college student can build to 2000 or more. They start out with a $200 balance to a department store and in about 6 months they get a real CC with a 500 balance and one to a second department store. Given at least a decent payment history, that limit could easily increase above 2500 and there could be more then one card open. Along the lines of what littleadv says, the companies even welcome some late payments. The fees are more lucrative and they can bump the interest rate. All is good as long as the payments are made. Getting students and children involved with credit cards is a goal of the industry. They can obtain an emotional attachment that goes beyond good business reasoning." }, { "docid": "556558", "title": "", "text": "\"I think the part of your question about not wanting to \"\"mess up more\"\" is the most important element. You say you know someone with good credit who is willing to co-sign for you, but let's be honest -- your credit isn't bad for no reason. Your credit's bad because you have a history of not paying on your obligations. Putting someone else's credit at risk, even though they may be willing to try and help, could be doing exactly what you said you're trying to avoid -- messing up more. This person's heart is in the right place, but you really have to ask yourself if you should put them in jeopardy by agreeing to guarantee your debts. So the vehicle you bought is older and has a lot of miles -- you knew that when you bought it. So you're paying a high interest rate because of your bad credit history -- you knew that when you bought it. Why you think the vehicle's only going to last another year is what confuses me. There are many vehicles out there with much higher mileage that are still on the road, and with proper preventative maintenance there's no reason your truck can't do the same. The fact is, you just don't like what you're paying or what you're driving (even though you were good with both when someone was willing to extend you credit), so now you see this other person's willingness to co-sign for you as your ticket out of a situation you no longer want to be in. My suggestion is that you stay with the loan you have, take care of the vehicle to make it last, and prove that you can pay your obligations. Hopping from loan to loan isn't going to do your credit any favors. One of the big factors for your credit score is the average age of accounts. Going and signing a new loan now will only drag that number down and hurt your score, not help it. And there's no guarantee the next car you buy with your friend's help is going to last the length of that loan either. I would be careful about this \"\"grass is greener on the other side\"\" attitude and just bear through your situation, if only to prove to yourself that you can do it. There's nothing saying your friend won't still be willing to co-sign for you later on down the line of something does happen to the truck, but you can show them that you're trying to be responsible in the meantime by following through on what you already agreed to.\"" }, { "docid": "526477", "title": "", "text": "\"So you work, and give a small irregular amount to you parents. You live with very low expenses. Assuming you make a bit below the average salary in the UK, you should be able to save around £1000. If you found a part time job could you save double? I bet you could. So why do you need credit? Why do you need a credit score? Having poor or no credit can be remedied by having a large down payment. Essentially the bank asks, if this person could afford the payment of this loan why have they not been saving the money? You could save the money and either buy the thing(s) you desire with cash (the smartest), or put 50% down. Putting 50% or more down turns you into a good credit risk despite having no credit history. In case you missed it: why not just save the money and buy it for cash? Why have compounding interest working against you? Why do you want to work for the bank? Making the interest payments on loans in order to build a credit score is just silly. It is an instance of a \"\"tail wagging the dog\"\".\"" } ]

[ { "docid": "78176", "title": "", "text": "Take the long term view. Build up the cash. Once you have enough cash in the bank, you don't need a credit score. With 6 months living expenses in the bank after paying 20% down on a small house, he should have no issues getting a reasonably priced mortgage. However, if he waited just a bit longer he might buy the same house outright with cash. When I ran the computations for myself many years ago, it would have taken me half as long to save the money and pay cash for my home as it did for me to take a mortgage and pay it off." } ]

[ { "docid": "393629", "title": "", "text": "Should I treat this house as a second home or a rental property on my 2015 taxes? If it was not rented out or available for rent then you could treat it as your second home. But if it was available for rent (i.e.: you started advertising, you hired a property manager, or made any other step towards renting it out), but you just didn't happen to find a tenant yet - then you cannot. So it depends on the facts and circumstances. I've read that if I treat this house as a rental property, then the renovation cost is a capital expenditure that I can claim on my taxes by depreciating it over 28 years. That is correct. 27.5 years, to be exact. I've also read that if I treat this house as a personal second home, then I cannot do that because the renovation costs are considered non-deductible personal expenses. That is not correct. In fact, in both cases the treatment is the same. Renovation costs are added to your basis. In case of rental, you get to depreciate the house. Since renovations are considered part of the house, you get to depreciate them too. In case of a personal use property, you cannot depreciate. But the renovation costs still get added to the basis. These are not expenses. But does mortgage interest get deducted against my total income or only my rental income? If it is a personal use second home - you get to deduct the mortgage interest up to a limit on your Schedule A. Depending on your other deductions, you may or may not have a tax benefit. If it is a rental - the interest is deducted from the rental income only on your Schedule E. However, there's no limit (although some may be deferred if the deduction is more than the income) if you're renting at fair market value. Any guidance would be much appreciated! Here's the guidance: if it is a rental - treat it as a rental. Otherwise - don't." }, { "docid": "6343", "title": "", "text": "Depending on the state this might not be possible. Loans are considered contracts, and various states regulate how minors may enter into them. For example, in the state of Oregon, a minor may NOT enter into a contract without their parent being on the contract as well. So you are forced to wait until you turn 18. At that time you won't have a credit history, and to lenders that often is worse than having bad credit. I can't help with the car (other than to recommend you buy a junker for $500-$1,000 and just live with it for now), but you could certainly get a secured credit card or line of credit from your local bank. The way they are arranged is, you make a deposit of an amount of your choosing (generally at least $200 for credit cards, and $1,000 for lines of credit), and receive a revolving line with a limit of that same amount. As you use and pay on this loan, it will be reported in your credit history. If you start that now, by the time you turn 18 you will have much better options for purchasing vehicles." }, { "docid": "468104", "title": "", "text": "I'll write this up as a more formal answer, here. I'd suggest looking into a Home Equity Line of Credit, or HELOC. You didn't mention in your question how much equity you have in the home, but assuming at least 20%, you might be able to open a HELOC with a line of $40,000. My experience is that you can do 50% of your equity, but depends on the bank. Here are a few notes that are generally in play with HELOC's (YMMV, so be sure to know the specifics before signing on the line) Doing this, at least when we did 8 years ago, did not subject us to PMI. There are certainly plenty of things to research, but it sounds like you're pretty astute based on how you're evaluating the financial side of this endeavor. There are no guarantees in real estate. Houses could be selling like crazy now, but in 6 months they might not. It certainly sounds like that's a lower risk in your area, but you never know what might happen. If you're taking on this extra line of credit, make sure that it's something you could afford should the worst case scenario happen. Equity loans are also available. This is a more traditional fixed-rate loan rather than line of credit, so you'd be looking at set monthly payments rather than the flexibility of paying interest only when you need to. There's a brief write-up on the differences here. I have also heard of a construction loan, which falls into the same category as the aforementioned options, but I can't speak to today's market on those." }, { "docid": "97708", "title": "", "text": "You're lending the money to your business by paying for it directly. The company accounts must reflect a credit (the amount you lend to it) and a debit (what it then puts that loan towards). It's fairly normal for a small(ish) owner-driven company to reflect a large loan-account for the owners. For example, if you have a room at home dedicated for the business it is impractical to pay rent directly via the company. The rental agreement is probably in your name, you pay the rent, and you reconcile it with the company later. You could even charge your company (taxable) interest on this loan. When you draw down the loan from the company you reverse this, debit your loan account and credit the company (paying off the debt). As far as tracking that expenditure, simply handle those third-party invoices in the normal way and file them for reference." }, { "docid": "584278", "title": "", "text": "Sorry, I don't think a bounty is the issue here. You seem to understand LTV means the bank you are talking to will lend you 60% of the value of the home you wish to purchase. You can't take the dollars calculated and simply buy a smaller house. To keep the numbers simple, you can get a $600K mortgage on a $1M house. That's it. You can get a $540K mortgage on a $900K house, etc. Now, 60% LTV is pretty low. It might be what I'd expect for rental property or for someone with bad or very young credit history. The question and path you're on need to change. You should understand that the 'normal' LTV is 80%, and for extra cost, in the form of PMI (Private Mortgage Insurance) you can even go higher. As an agent, I just sold a home to a buyer who paid 3% down. The way you originally asked the question has a simple answer. You can't do what you're asking." }, { "docid": "526477", "title": "", "text": "\"So you work, and give a small irregular amount to you parents. You live with very low expenses. Assuming you make a bit below the average salary in the UK, you should be able to save around £1000. If you found a part time job could you save double? I bet you could. So why do you need credit? Why do you need a credit score? Having poor or no credit can be remedied by having a large down payment. Essentially the bank asks, if this person could afford the payment of this loan why have they not been saving the money? You could save the money and either buy the thing(s) you desire with cash (the smartest), or put 50% down. Putting 50% or more down turns you into a good credit risk despite having no credit history. In case you missed it: why not just save the money and buy it for cash? Why have compounding interest working against you? Why do you want to work for the bank? Making the interest payments on loans in order to build a credit score is just silly. It is an instance of a \"\"tail wagging the dog\"\".\"" }, { "docid": "517633", "title": "", "text": "If I was you I would not borrow from my 401K and shred the credit card offer. Both are very risky ventures, and you are already in a situation that is risky. Doing either will increase your risk significantly. I'd also consider selling the rental house. You seem to be cutting very close on the numbers if you can't raise 17K in cash to refi the house. What happens if you need a roof on the rental, and an HVAC in your current home? My assumption is that you will not sell the home, okay I get it. I would recommend either giving your tenant a better deal then the have now, or something very similar. Having a good tenant is an asset." }, { "docid": "591163", "title": "", "text": "Lenders pay attention to where your down payment money comes from. If they see a large transfer of money into your bank account within about a year before your purchase, this WILL cause an issue for you. Down payments are not just there to make the principal smaller; they are primarily used as an underwriting data-point to assess your quality as a borrower. If you take the money as loan, it will count against your credit worthiness. If you take the money as a gift, it will raise some other red flags. All of this is done for a reason: if you can't get a down payment, you are a higher credit risk (poor discipline, lack of consistent income), even if you can (currently) pay the monthly cost of a mortgage. (PS - The cost of home ownership is much higher than the monthly mortgage payment.) Will all this mean you WON'T get a loan? Of course not. You can almost always get SOME loan. But it will likely be at a higher rate than you otherwise would qualify for if you just waited a little bit and saved money for a down payment. (Another option: cheaper house.) EDIT: The below comments provide examples where gifts were/are NOT a problem. My experience from buying a house just a few years ago (and my several friends who bought house in the same period, some with family gifts and some without) is that it IS an issue. Your best bet is to TALK, IN PERSON with an actual mortgage broker in your area who can go through the options with you, and the downsides to various approaches." }, { "docid": "12247", "title": "", "text": "You want to have 2-4 credit cards, with a credit utilization ratio below 30%. If you only have 2 cards, closing 1 would reduce your credit diversity and thus lower your credit score. You also want at least 2 years credit history, so closing an older credit card may shorten your credit history, again lowering your credit score. You want to keep around at least 1-2 older cards, even if they are not the best. You have 4 cards: But having 2-4 cards (you have 4) means you can add a 5th, and then cancel one down to 4, or cancel one down to 3 and then add a 4th, for little net effect. Still, there will be effect, as you have decreased the age of your credit, and you have opened new credit (always a ding to your score). Do you have installment loans (cars), you mention a new mortgage, so you need to wait about 3 months after the most recent credit activity to let the effects of that change settle. You want both spouses to have separate credit cards, and that will increase the total available to 4-8. That would allow you to increase the number of benefits available." }, { "docid": "277815", "title": "", "text": "You have a few options and sometimes challenges help us improve our situation. First, you can not borrow to buy a car. Reducing the massive depreciation that cars undergo will help you be wealthier. It is hard to find a good use car that you can buy for cash, but it will play out best for your finances in the long run. If your heart is set on borrowing, I would encourage you to go to the bank/credit union where you have your checking account. They will see your history of deposits and may grant you a loan based on that. Also you are likely to get a better deal from the bank than from the car dealer. Thirdly, you can simply go to your employer's HR department and ask them. Surely someone has applied for a loan during the company's history. What did they do for them?" }, { "docid": "75132", "title": "", "text": "Many Web sites and articles warn against buying former rental cars, because people renting these cars often mistreat them. Rental cars are typically driven by people over 25, these are typically people with some financial means (air travel, credit card). Additionally, rental cars are subject to frequent inspection and likely to be on tighter maintenance schedules than many owners would keep. So while some people may drive a rental harder than they would their own car, it's not typical, and not likely to result in some hidden damage that makes a rental less desirable (all else being equal) on the used-car market. Does the fact that they sell the car mean during this time suggest that they know the car's cost of further maintenance or other costs will be higher? Or is there another reason they sell at this time which, has a calculated advantage to them, but which is less than idea statistically for me, the purchaser? Rental companies buy at incredible volumes, as such, some manufacturers have programs where they will buy back used cars from the rental company at a set price and/or time. Other incentives are guaranteed depreciation, wherein the manufacturer will make up the difference if the used vehicle doesn't sell for a set percentage of it's purchase price after a set amount of time. Outside of these incentive programs, rental companies also get substantial volume discounts, and they typically are buying base models which hold value better than their higher-trim counterparts (according to KBB market analyst). So the conventional wisdom about depreciation doesn't really apply. The timing of their sales is primarily based on their purchasing arrangements and their desire to keep an up to date fleet, not on projected maintenance/repair costs. The best you can do with any used-car purchase is to test-drive, get a pre-purchase inspection, and review whatever history is available." }, { "docid": "371133", "title": "", "text": "\"The title is misleading (shocker, right?). The exact wording in the cited study is \"\"in order to afford a modest two-bedroom rental home at the Fair Market Rent without spending more than 30% income on rent\"\". HUD says: &gt; The Fair Market Rent is HUD’s best estimate of what a household seeking a modest rental home in a short amount of time can expect to pay for rent and utilities in the current market. So that's not the minimum available 2BR unit available. It's more like 50th percentile rent per zip code. Check rent.com for 2BR prices in Tennessee and Arkansas. They start in the lower $500s. Also worth noting that if you work 40hr/week all year at minimum wage and claim 1 dependent then you don't owe a dime of Federal income tax.\"" }, { "docid": "596272", "title": "", "text": "These are your options: Unfortunately this will not be a quick process. You should note that until a potential lender goes through a detailed review of your finances you have only been pre-qualified. This is not as good as pre-approved. With pre-qualified they are basing the determination on what you told them, not what you can prove. Because you are aware of your short period of continuous employment you are best to be completely honest with a potential lender. That way you don't run into problems 30 days down the road when they realize the issue. The home seller will not be happy; and there was time and money wasted on down payments, credit checks, home inspections, and appraisals. In the US in most markets while there is a significant risk that a particular house will not be available in 5 months, there is a very slight risk that a neighborhood will not be available in 5 months." }, { "docid": "295688", "title": "", "text": "\"There are actually a few questions you are asking here. I will try and address each individually. Down Payment What you put down can't really be quantified in a dollar amount here. $5k-$10k means nothing. If the house costs $20k then you're putting 50% down. What is relevant is the percent of the purchase price you're putting down. That being said, if you go to purchase a property as an investment property (something you wont be moving into) then you are much more likely to be putting a down payment much closer to 20-25% of the purchase price. However, if you are capable of living in the property for a year (usually the limitation on federal loans) then you can pay much less. Around 3.5% has been my experience. The Process Your plan is sound but I would HIGHLY suggest looking into what it means to be a landlord. This is not a decision to be taken lightly. You need to know the tenant landlord laws in your city AND state. You need to call a tax consultant and speak to them about what you will be charging for rent, and how much you should withhold for taxes. You also should talk to them about what write offs are available for rental properties. \"\"Breaking Even\"\" with rent and a mortgage can also mean loss when tax time comes if you don't account for repairs made. Financing Your first rental property is the hardest to get going (if you don't have experience as a landlord). Most lenders will allow you to use the potential income of a property to qualify for a loan once you have established yourself as a landlord. Prior to that though you need to have enough income to afford the mortgage on your own. So, what that means is that qualifying for a loan is highly related to your debt to income ratio. If your properties are self sustaining and you still work 40 hours a week then your ability to qualify in the future shouldn't be all that impacted. If anything it shows that you are a responsible credit manager. Conclusion I can't stress enough to do YOUR OWN research. Don't go off of what your friends are telling you. People exaggerate to make them seem like they are higher on the socioeconomic ladder then they really are. They also might have chicken little syndrome and try to discourage you from making a really great choice. I run into this all the time. People feel like they can't do something or they're to afraid so you shouldn't be able to either. If you need advice go to a professional or read a book. Good luck!\"" }, { "docid": "82472", "title": "", "text": "\"It's rarely advisable to pay interest for something you can afford with cash. Just because you have no credit or loan history doesn't mean you aren't credit worthy. When applying for loans or credit, the lending institutions look at your credit report, not just your credit score. There are lots of things that show up on the reports they receive including (but not limited to): Right now, so many people are focused on their credit score, they're taking on unnecessary debt and potentially losing money in the long run. Yes, having a higher credit score will ultimately be beneficial, but your score will start growing naturally as you live your life. Unless of course you can and do pay for everything with cash. The concept of monitoring your score and striving to get it as high as possible is being shoved down our throats by advertisers at the moment. Don't fall for it. Rather than taking out a loan, which will cost you money in interest and actually show up as a closed account once it's paid off, you might be better served by applying for a credit card and using it sparingly just to start getting that credit history together. (Add usual \"\"don't spend more than you can pay back\"\" mantra here). Get a card with no annual fee and maybe some cash back options, and use it as the auto-payment for a utility if possible. You build credit history, increase your score, and it doesn't cost you any more than you'd be paying anyways. With regards to the investment question: With little to no credit history, you're not going to be approved for a loan with a low enough interest rate anyways. Think double digits. With a co-signer, you'll get a better rate, but then you need a co-signer. I don't know the exact math, but in today's market I'd say you'd need a loan interest rate of 2% or lower for investing to be worth thinking about. I believe this answer helps clarify the loan to invest math: https://money.stackexchange.com/a/26193/30798\"" }, { "docid": "391361", "title": "", "text": "\"I am a bit confused here as to how a 4K loan will negatively effect your credit score if payments are made on time. FICO scores are based upon how well you borrow. If you borrow, pay back on time, your score will not go down. Perhaps a bit in the short run when you first secure the loan, but that should come back quickly. In the long run it will help improve your score which seems like it would be more important to you. Having the provider finance your loan will probably not show up on your credit unless you fail to pay and they send to collections. If the score is so important to you, which I think is somewhat unwise, then use a credit card. With a 750 you should be able to get a pretty good rate, but assume it is 18%. In less then 9 months you will have it paid off, paying about $293 in interest. You could consider that a part of the cost of doing business for maintaining a high credit score. Again not what I would advise, but it might meet your needs. One alternative is go with lending club. With that kind of score, you are looking at 7% or so. At $500 a month, you are still looking at just over 8 months and paying about $100 in interest. Much less money for improving your credit score. Edit based upon the comment: \"\"My understanding is that using a significant portion of your available credit balance is bad for your credit, even if you pay your bills on time.\"\" Define bad. As I said it might go down slightly in the short term. In three months you will have almost 33% of the loan paid off, which is significantly lower then the original balance. If you go the credit card route, you may be approved for quite a bit more then the 4000, which may not move the needle at all. Are you planning on buying a home in the next 90 days? If not, why does a small short term dip matter? Will your life really be effected if your score goes down to 720 for three months? Keep in mind this is exactly the kind of behavior that the banks want you to engage in. If you worship your FICO score, which gives no indication of wealth then you should do exactly what I am suggesting.\"" }, { "docid": "566408", "title": "", "text": "\"Trying to determine what the best investment option is when buying a home is like predicting the stock market. Not likely to work out. Forget about the \"\"investment\"\" part of buying a home and look at the quality of life, monthly/annual financial burden, and what your goals are. Buy a home that you'll be happy living in and in an area you like. Buy a home with the plan being to remain in that home for at least 6 years. If you're planning on having kids, then buy a home that will accommodate that. If you're not planning on living in the same place at least 6 years, then buying might not be the best idea, and certainly might not be the best \"\"investment\"\". You're buying a home that will end up having emotional value to you. This isn't like buying a rental property or commercial real estate. Chances are you won't lose money in the long run, unless the market crashes again, but in that case everyone pretty much gets screwed so don't worry about it. We're not in a housing market like what existed in decades past. The idea of buying a home so that you'll make money off it when you sell it isn't really as reliable a practice as it once was. Take advantage of the ridiculously low interest rates, but note that if you wait, they're not likely to go up by an amount that will make a huge difference in the grand scheme of things. My family and I went through the exact same thought process you're going through right now. We close on our new house tomorrow. We battled over renting somewhere - we don't have a good rental market compared to buying here, buying something older for less money and fixing it up - we're HGTV junkies but we realized we just don't have the time or emotional capacity to deal with that scenario, or buying new/like new. There are benefits and drawbacks to all 3 options, and we spent a long time weighing them and eventually came to a conclusion that was best for us. Go talk to a realtor in your area. You're under no obligation to use them, but you can get a better feel for your options and what might best suit you by talking to a professional. For what it's worth, our realtor is a big fan of Pulte Homes in our area because of their home designs and quality. We know some people who have bought in that neighborhood and they're very happy. There are horror stories too, same as with any product you might buy.\"" }, { "docid": "1472", "title": "", "text": "\"From what I've heard in the past, debt can be differentiated between secured debt and unsecured debt. Secured debt is a debt for which something stands good such as a mortgage on your house. You have a debt, but that debt is covered by the value of an asset and if you needed to free yourself of the debt, then you could by selling that asset. This is what is known as \"\"good\"\" debt. Unsecured debt is debt that is incurred where the only thing that is available to pay it back is your income. An example of this is credit card debt where you purchase something that couldn't be sold again to pay off the debt. This is know as \"\"bad\"\" debt. You have to be careful about thinking that house debt is always \"\"good\"\" debt because the house stands good for it though. The problem with that is that the house could go down in value and then suddenly your \"\"good\"\" debt is \"\"bad\"\" debt (or no longer secured). Cars are very risky this way because they go down in value. It is really easy to get a car loan where before long you are upside down. This is the problem with the term \"\"good\"\" debt. The label makes it sound like it is a good idea to have that debt, and the risk associated with having the debt is trivialized and allows yourself to feel good about your financial plan. Perhaps this is why so many houses are in foreclosure right now, people believed the \"\"good\"\" debt myth and thought that it was ok to borrow MORE than the home was worth to get into a house. Thus they turned a secured debt into an unsecured debt and put their residence at risk by levels of debt they couldn't afford. Other advice I've heard and tend to agree with, is that you should only borrow for a house, an education and maybe a car (danger on that last one), being careful to buy a modest house, car etc that is well within your means to repay. So if you do have to borrow for a car, go for basic transportation instead of the $40,000 BMW. Keep you house payment less than 1/4th of your take home pay. Pay off the school loans as quickly as possible. Regardless of the label, \"\"good\"\" \"\"bad\"\" \"\"unsecured\"\" \"\"secured\"\", I think that less debt is better than more debt. There is definitely such a thing as too much \"\"good\"\" debt!\"" }, { "docid": "143844", "title": "", "text": "\"There's a difference between missing a payment and \"\"carrying a balance\"\" (making an on-time payments that are less than the full balance due). I have heard mortgage brokers claim that, if you have no other credit history, carrying a small balance here and there on a credit card may improve your score. (\"\"Small\"\" is in relation to your available credit and your ability to pay it off.) But actually missing a payment will probably hurt your score. Example: You have a card with a credit limit of $1000. In July you charge $300 worth of stuff. You get the next statement and it shows the balance due of $300 and a minimum payment of $100. If you pay the entire $300 balance in that cycle, most cards won't charge you any interest. You are not carrying a balance, so the credit scores may not reflect that you actually took a $300 loan and paid it off. If you instead pay $200, you'll be in good standing (because $200 is greater than the minimum payment). But you'll be carrying a $100 balance into the next statement cycle. Plus interest will accrue on that $100. If you do this regularly, your credit score will probably take into account that you've taken a small loan and made the payments. For those with no other credit history, this may be an appropriate way to increase your credit score. (But you're paying interest, so it's not free.) And if the average balance you carry is considered high relative to your ability to pay or to the total credit available to you, then this could adversely affect your score (or, at least, the amount of credit another provider is willing to extend to you). If you instead actually miss a payment, or make a payment that's less than the minimum payment, that will almost certainly hurt your credit score. It will also incur penalties as well as interest. You want to avoid that whenever possible. My guess is that, in the game of telephone from the banker to you, the \"\"carrying a balance\"\" was misinterpreted as \"\"missing a payment.\"\"\"" } ]

[ { "docid": "419768", "title": "", "text": "If you get 1099-G for state tax refund, you need to declare it as income only if you took deduction on state taxes in the prior year. I.e.: if you took standard deductions - you don't need to declare the refund as income. If you did itemize, you have to declare the refund as income, and deduct the taxes paid last year on your schedule A. If this year you're not itemizing - you lost the tax benefit. If it was not clear from my answer - the taxes paid and the refund received are unrelated. The fact that you paid tax and received refund in the same year doesn't make them in any way related, even if both refer to the same taxable year." } ]

[ { "docid": "23747", "title": "", "text": "\"IRS Pub 554 states (click to read full IRS doc): \"\"Do not file a federal income tax return if you do not meet the filing requirements and are not due a refund. ... If you are a U.S. citizen or resident alien, you must file a return if your gross income for the year was at least the amount shown on the appropriate line in Table 1-1 below. \"\" You may not have wage income, but you will probably have interest, dividend, capital gains, or proceeds from sale of a house (and there is a special note that you must file in this case, even if you enjoy the exclusion for primary residence)\"" }, { "docid": "156499", "title": "", "text": "There are a few methods you can use to estimate your taxes. On the results screen, the app will show you your estimated tax burden, your estimated withholding for the year, and your estimated overpayment/refund or shortfall/tax due. It may also have recommendations for you on how to adjust your W-4 (although, this late in the year, I think it only tells you to come back next year to reevaluate). Your state might also have income tax, and if you are curious about that, you can find the state tax form and estimate your state income tax as well. My guess is that you will be getting a refund this year, as you have only worked half of the year. But that is only a guess." }, { "docid": "52622", "title": "", "text": "\"I also don't know the specific details for Finland and/or Belgium, however many countries have tax treaties, which generally prevent double taxation (i.e., paying tax in both countries on the same base income). Being that both Finland and Belgium are EU member states, I'm quite certain there's a provision that covers this, and the same would apply: You pay taxes on what you earn while in Finland to Finland, and to Belgium what you earn while in Belgium. All of this is similar to what you presented, however there's also a section where you'd declare how much taxes were paid in other countries. One other thing to note, which will be the determining factor in the above, is whether EU law requires you to change residence to BE for the time you're there. If not then you'll be paying taxes in Finland the entire time on the entire amount. This comes from an Irish governmental site: \"\"By working in another member state and by transferring your residence there, you are likely to become \"\"resident for tax purposes\"\" there. The definition of fiscal residence varies from one member state to another. You must comply with the laws of the country where you have established your residence. The laws on personal taxation vary considerably from one member state to another and you may be liable for taxation in more than one country. In general, you are subject to income tax in the country where you are living but this may not be the case if you are a “posted worker” – see below. In general, property is taxed in the country in which it is situated but, again, there are variations. Tax agreements have been concluded between most of the member states of the EU, which are intended to avoid double taxation, if you derive income from different countries. In general, national fiscal rules must respect the fundamental principle of non-discrimination against nationals of another EU country.\"\"\"" }, { "docid": "438874", "title": "", "text": "A more recent article on inheritance taxes than the one cited by @JohnBensin says that Maryland does not charge inheritance tax on inheritances received from parents (and other close relatives as well). Thus, there is no inheritance tax due to Maryland on your inheritance, and of course, estate tax (both Federal and State) is imposed on the estate and payable by the estate, and thus should have been taken into account by the executor before determining the amount to be divided among the children. If the executor screwed up on this point, some of the inheritance may have to be returned to the estate so that the estate can pay the taxes due, or be paid directly to the Federal Government and/or the State of Maryland on behalf of the estate. Some part of the inheritance might be taxable income to you if it came in the form of an Inherited IRA on which Federal (and possibly State) taxes have to paid on the (taxable part of) any distribution from the IRA including the Required Minimum Distribution that must be made from the IRA each year. (There is also a 50% penalty for not taking at least the RMD each year). Note that the value of the IRA is not taxable income in the year of inheritance, just the money taken as a distribution. Some people liquidate the IRA within 5 years, as used to be required for non-spouse inheritors under earlier tax law, and thus end up paying a lot more income tax than they would have to pay if they went the RMD route. If your uncle took the help of a lawyer in winding up your father's estate, you are probably OK in that all the rules were likely followed, but if it was a do-it-yourself job (or you don't trust your uncle not to screw it up anyway!), then, as John Bensin has already told you, you should certainly consult a tax professional in Maryland to make sure you don't run afoul of tax authorities." }, { "docid": "285301", "title": "", "text": "As @littleadv's comment on your question said, it is unlikely that you and your husband paid a total of $5K in income tax on $185K of wages in 2013. More likely, your 2013 tax return (assumed to be a Married Filing Jointly tax return) showed that you had not arranged to have enough tax withheld from your salaries and thus you still owed $5K to the IRS for 2013 taxes. Most likely, that $5K sum included not just the unpaid amount of tax but also penalties for not paying enough income tax during 2013 and interest on the amounts not paid on time. Just to be clear, note that the income tax you paid for 2013 during 2013 is the total of all income tax withheld from your wages by your employers (plus any estimated tax payments that you might have made for 2013). If your 2014 tax return (that you will be filing by April 15, 2015) will likely show a similar amount due for 2014 taxes, you can avoid the penalties and interest by increasing your income tax withholding by a substantial amount for the remainder of 2014. If you are paid monthly and have two paychecks still to be received, then having $2500 extra withheld from each paycheck will cover the $5K shortfall that you expect to have for 2014 taxes. I assume that this is what your husband intended you to do, and to do this, you need to fill out a new W-4 Form (asking that an addiitonal $2500 be withheld from each paycheck) and give this form to your employer soon (i.e. well before Payroll processes your next paycheck which usually happens a few days before you get the paycheck). If you do so, your take-home pay will be reduced by $2500 on each of the next two monthly paychecks because your employer will withhold this extra amount from your pay and include it in the amount sent to the IRS as income tax withheld from your paycheck. After your last paycheck for 2014 has been received, you should submit a new W-4 Form to your asking for only $417 in extra income tax to be withheld from each paycheck starting January 1, 2015, so that the expected $5K shortfall for 2015 is paid in 12 equal monthly installments. If you neglect to do this, your employer will continue to withhold $2500 extra as income tax, and you will get $2500 less in take-home pay month after month in 2015. This money will not disappear forever; come 2016 when you file your income tax return for 2015, you will receive a substantial refund because you overpaid income tax by a lot during 2015. You will not, however, receive any interest on the amount that the IRS is returning to you unless the IRS delays in sending you the refund for some reason. Alternatively, you can file a new W-4 asking for no additional tax to be withheld from 2015 paychecks, and a year from now, go through the same exercise as above: have $2500 extra withheld from the last two paychecks for 2015, right when the holidays are coming and people are shopping for gifts." }, { "docid": "366869", "title": "", "text": "There is no interest outstanding, per se. There is only principal outstanding. Initially, principal outstanding is simply your initial loan amount. The first two sections discuss the math needed - just some arithmetic. The interest that you owe is typically calculated on a monthly basis. The interested owed formula is simply (p*I)/12, where p is the principal outstanding, I is your annual interest, and you're dividing by 12 to turn annual to monthly. With a monthly payment, take out interest owed. What you have left gets applied into lowering your principal outstanding. If your actual monthly payment is less than the interest owed, then you have negative amortization where your principal outstanding goes up instead of down. Regardless of how the monthly payment comes about (eg prepay, underpay, no payment), you just apply these two calculations above and you're set. The sections below will discuss these cases in differing payments in detail. For a standard 30 year fixed rate loan, the monthly payment is calculated to pay-off the entire loan in 30 years. If you pay exactly this amount every month, your loan will be paid off, including the principal, in 30 years. The breakdown of the initial payment will be almost all interest, as you have noticed. Of course, there is a little bit of principal in that payment or your principal outstanding would not decrease and you would never pay off the loan. If you pay any amount less than the monthly payment, you extend the duration of your loan to longer than 30 years. How much less than the monthly payment will determine how much longer you extend your loan. If it's a little less, you may extend your loan to 40 years. It's possible to extend the loan to any duration you like by paying less. Mathematically, this makes sense, but legally, the loan department will say you're in breach of your contract. Let's pay a little less and see what happens. If you pay exactly the interest owed = (p*I)/12, you would have an infinite duration loan where your principal outstanding would always be the same as your initial principal or the initial amount of your loan. If you pay less than the interest owed, you will actually owe more every month. In other words, your principal outstanding will increase every month!!! This is called negative amortization. Of course, this includes the case where you make zero payment. You will owe more money every month. Of course, for most loans, you cannot pay less than the required monthly payments. If you do, you are in default of the loan terms. If you pay more than the required monthly payment, you shorten the duration of your loan. Your principal outstanding will be less by the amount that you overpaid the required monthly payment by. For example, if your required monthly payment is $200 and you paid $300, $100 will go into reducing your principal outstanding (in addition to the bit in the $200 used to pay down your principal outstanding). Of course, if you hit the lottery and overpay by the entire principal outstanding amount, then you will have paid off the entire loan in one shot! When you get to non-standard contracts, a loan can be structured to have any kind of required monthly payments. They don't have to be fixed. For example, there are Balloon Loans where you have small monthly payments in the beginning and large monthly payments in the last year. Is the math any different? Not really - you still apply the one important formula, interest owed = (p*I)/12, on a monthly basis. Then you break down the amount you paid for the month into the interest owed you just calculated and principal. You apply that principal amount to lowering your principal outstanding for the next month. Supposing that what you have posted is accurate, the most likely scenario is that you have a structured 5 year car loan where your monthly payments are smaller than the required fixed monthly payment for a 5 year loan, so even after 2 years, you owe as much or more than you did in the beginning! That means you have some large balloon payments towards the end of your loan. All of this is just part of the contract and has nothing to do with your prepay. Maybe I'm incorrect in my thinking, but I have a question about prepaying a loan. When you take out a mortgage on a home or a car loan, it is my understanding that for the first years of payment you are paying mostly interest. Correct. So, let's take a mortgage loan that allows prepayment without penalty. If I have a 30 year mortgage and I have paid it for 15 years, by the 16th year almost all the interest on the 30 year loan has been paid to the bank and I'm only paying primarily principle for the remainder of the loan. Incorrect. It seems counter-intuitive, but even in year 16, about 53% of your monthly payment still goes to interest!!! It is hard to see this unless you try to do the calculations yourself in a spreadsheet. If suddenly I come into a large sum of money and decide I want to pay off the mortgage in the 16th year, but the bank has already received all the interest computed for 30 years, shouldn't the bank recompute the interest for 16 years and then recalculate what's actually owed in effect on a 16 year loan not a 30 year loan? It is my understanding that the bank doesn't do this. What they do is just tell you the balance owed under the 30 year agreement and that's your payoff amount. Your last sentence is correct. The payoff amount is simply the principal outstanding plus any interest from (p*I)/12 that you owe. In your example of trying to payoff the rest of your 30 year loan in year 16, you will owe around 68% of your original loan amount. That seems unfair. Shouldn't the loan be recalculated as a 16 year loan, which it actually has become? In fact, you do have the equivalent of a 15 year loan (30-15=15) at about 68% of your initial loan amount. If you refinanced, that's exactly what you would see. In other words, for a 30y loan at 5% for $10,000, you have monthly payments of $53.68, which is exactly the same as a 15y loan at 5% for $6,788.39 (your principal outstanding after 15 years of payments), which would also have monthly payments of $53.68. A few years ago I had a 5 year car loan. I wanted to prepay it after 2 years and I asked this question to the lender. I expected a reduction in the interest attached to the car loan since it didn't go the full 5 years. They basically told me I was crazy and the balance owed was the full amount of the 5 year car loan. I didn't prepay it because of this. That is the wrong reason for not prepaying. I suspect you have misunderstood the terms of the loan - look at the Variable Monthly Payments section above for a discussion. The best thing to do with all loans is to read the terms carefully and do the calculations yourself in a spreadsheet. If you are able to get the cashflows spelled out in the contract, then you have understood the loan." }, { "docid": "357717", "title": "", "text": "\"Not to detract from the other answers at all (which are each excellent and useful in their own right), but here's my interpretation of the ideas: Equity is the answer to the question \"\"Where is the value of the company coming from?\"\" This might include owner stakes, shareholder stock investments, or outside investments. In the current moment, it can also be defined as \"\"Equity = X + Current Income - Current Expenses\"\" (I'll come back to X). This fits into the standard accounting model of \"\"Assets - Liabilities = Value (Equity)\"\", where Assets includes not only bank accounts, but also warehouse inventory, raw materials, etc.; Liabilities are debts, loans, shortfalls in inventory, etc. Both are abstract categories, whereas Income and Expense are hard dollar amounts. At the end of the year when the books balance, they should all equal out. Equity up until this point has been an abstract concept, and it's not an account in the traditional (gnucash) sense. However, it's common practice for businesses to close the books once a year, and to consolidate outstanding balances. When this happens, Equity ceases to be abstract and becomes a hard value: \"\"How much is the company worth at this moment?\"\", which has a definite, numeric value. When the books are opened fresh for a new business year, the Current Income and Current Expense amounts are zeroed out. In this situation, in order for the big equation to equal out: Assets - Liabilities = X + Income - Expeneses the previous net value of the company must be accounted for. This is where X comes in, the starting (previous year's) equity. This allows the Assets and Liabilities to be non-zero, while the (current) Income and Expenses are both still zeroed out. The account which represents X in gnucash is called \"\"Equity\"\", and encompasses not only initial investments, but also the net increase & decreases from previous years. While the name would more accurately be called \"\"Starting Equity\"\", the only problem caused by the naming convention is the confusion of the concept Equity (X + Income - Expenses) with the account X, named \"\"Equity\"\".\"" }, { "docid": "125827", "title": "", "text": "When you initiate a chargeback, the merchant has the right to dispute the chargeback. If they can provide proof that the purchase actually took place, the chargeback will fail. We don't know all the details of your situation, of course, but it appears from what you have said that the tax chain probably has documents that you signed agreeing to the charges. They prepared your return (even if they did a poor job), and so from their perspective, they have decided that they deserve to be paid. Whether or not they did a good job is a matter of opinion, of course; their position might be that they did it correctly, and the second business did it poorly. The chargeback is a powerful tool, but it is not a magic button that makes a charge disappear. If the merchant can show that a sale did indeed take place and show that the proper amount was charged, the chargeback will fail. For a service, it isn't enough usually to simply state that you were unsatisfied; if you received the service at the agreed-upon price, the charge is valid. A chargeback is sort of a nuclear option when it comes to getting a refund. There are negative ramifications and expenses every time a merchant gets a chargeback (even if they ultimately win), and so often they will be willing to work something out to avoid a chargeback. You should go to the merchant first, if you can, and ask for a refund before considering the chargeback option. If you file a chargeback without even giving them the opportunity to work it out with you, the merchant will usually want to fight back." }, { "docid": "532629", "title": "", "text": "A simplistic answer would be that it's a multiplier on how much money per paycheck to subtract from your tax withholding (taxes per paycheck), then at the end of the year you will have paid taxes on your income minus the amount of your withholding allowances. If you get a decent (roughly 3% or more of your gross annual salary) refund you are letting the government withhold too much (and should increase your allowances), if you have to pay a decent amount of taxes at the end of the year then the amount withheld is not high enough (and should decrease your allowances). I definitely recommend using the calculator that Stephen Cleary mentions, but I think it's just as easy to adjust it up or down by 1 or 2 each year based on whether you got a large refund, no refund, or paid taxes. If you are disciplined with your money many experts advise to increase withholding allowances, save the extra in a safe short term interest account so that you earn money on your money and not the government." }, { "docid": "42999", "title": "", "text": "After reading OP Mark's question and the various answers carefully and also looking over some old pay stubs of mine, I am beginning to wonder if he is mis-reading his pay stub or slip of paper attached to the reimbursement check for the item(s) he purchases. Pay stubs (whether paper documents attached to checks or things received in one's company mailbox or available for downloading from a company web site while the money is deposited electronically into the employee's checking account) vary from company to company, but a reasonably well-designed stub would likely have categories such as Taxable gross income for the pay period: This is the amount from which payroll taxes (Federal and State income tax, Social Security and Medicare tax) are deducted as well as other post-tax deductions such as money going to purchase of US Savings Bonds, contributions to United Way via payroll deduction, contribution to Roth 401k etc. Employer-paid group life insurance premiums are taxable income too for any portion of the policy that exceeds $50K. In some cases, these appear as a lump sum on the last pay stub for the year. Nontaxable gross income for the pay period: This would be sum total of the amounts contributed to nonRoth 401k plans, employee's share of group health-care insurance premiums for employee and/or employee's family, money deposited into FSA accounts, etc. Net pay: This is the amount of the attached check or money sent via ACH to the employee's bank account. Year-to-date amounts: These just tell the employee what has been earned/paid/withheld to date in the various categories. Now, OP Mark said My company does not tax the reimbursement but they do add it to my running gross earnings total for the year. So, the question is whether the amount of the reimbursement is included in the Year-to-date amount of Taxable Income. If YTD Taxable Income does not include the reimbursement amount, then the the OP's question and the answers and comments are moot; unless the company has really-messed-up (Pat. Pending) payroll software that does weird things, the amount on the W2 form will be whatever is shown as YTD Taxable Income on the last pay stub of the year, and, as @DJClayworth noted cogently, it is what will appear on the W2 form that really matters. In summary, it is good that OP Mark is taking the time to investigate the matter of the reimbursements appearing in Total Gross Income, but if the amounts are not appearing in the YTD Taxable Income, his Payroll Office may just reassure him that they have good software and that what the YTD Taxable Income says on the last pay stub is what will be appearing on his W2 form. I am fairly confident that this is what will be the resolution of the matter because if the amount of the reimbursement was included in Taxable Income during that pay period and no tax was withheld, then the employer has a problem with Social Security and Medicare tax underwithholding, and nonpayment of this tax plus the employer's share to the US Treasury in timely fashion. The IRS takes an extremely dim view of such shenanigans and most employers are unlikely to take the risk." }, { "docid": "235484", "title": "", "text": "\"Is all interest on a first time home deductible on taxes? What does that even mean? If I pay $14,000 in taxes will My taxes be $14,000 less. Will my taxable income by that much less? If you use the standard deduction in the US (assuming United States), you will have 0 benefit from a mortgage. If you itemize deductions, then your interest paid (not principal) and your property tax paid is deductible and reduces your income for tax purposes. If your marginal tax rate is 25% and you pay $10000 in interest and property tax, then when you file your taxes, you'll owe (or get a refund) of $2500 (marginal tax rate * (amount of interest + property tax)). I have heard the term \"\"The equity on your home is like a bank\"\". What does that mean? I suppose I could borrow using the equity in my home as collateral? If you pay an extra $500 to your mortgage, then your equity in your house goes up by $500 as well. When you pay down the principal by $500 on a car loan (depreciating asset) you end up with less than $500 in value in the car because the car's value is going down. When you do the same in an appreciating asset, you still have that money available to you though you either need to sell or get a loan to use that money. Are there any other general benefits that would drive me from paying $800 in rent, to owning a house? There are several other benefits. These are a few of the positives, but know that there are many negatives to home ownership and the cost of real estate transactions usually dictate that buying doesn't make sense until you want to stay put for 5-7 years. A shorter duration than that usually are better served by renting. The amount of maintenance on a house you own is almost always under estimated by new home owners.\"" }, { "docid": "198033", "title": "", "text": "If the $9000 was deposited in February 2016 then it must be declared on your 2015 taxes, not 2016. You never have a choice about when to declare a contribution - the only choice you have is when to claim it as a deduction (and it's very rarely a good idea to delay claiming it). You may want to take a look at your Notice of Assessment from tax year 2015 to see if the CRA noticed the error and adjusted your return for you - the text portion would usually mention any such adjustments. If you cannot find your NoA, it can be accessed by logging in to CRA's My Account service. If your 2015 RRSP contribution amount was not already adjusted for you, then this service is also a good way to request a change to your 2015 return. Though most people don't realize it, you technically gain your contribution room based on the previous year's income on January 1st. It's just that you usually don't know your exact income until you get your T4. This means that on Jan 1, 2016 you received that $6000 room and thus despite being wrong about which tax year the $9000 is declared, you are still right about being over by $3000. You are allowed a little wiggle room on your limit, but only $2000, so you'll be charged 1% per month for every dollar in excess of $2000 over. On January 1 2017, you would have received more contribution room based on your 2016 income, and so as of then you are no longer over your limit. That should mean that your penalty applies for 11 months, for a total of $110. You can try calling the CRA to see if they will waive or reduce your penalty, on the grounds that you were unaware of your employer's deposit. Best of luck! To answer your final question: yes, that 3K over-contribution will now basically just be reducing your available contribution room for 2017. Think of it as having -$3000 room left between February 2016 and Jan 2017, and then more room was added in January making that a positive number. So you don't need to withdraw or do anything further to fix things, other than paying your penalty or getting it waived." }, { "docid": "295153", "title": "", "text": "\"Keep in mind that all of the information below assumes: That being said, here are some examples of national tax laws relating to barter transactions. Obviously this isn't an exhaustive list, but based on my grossly non-representative sample, I think it's fairly safe to assume that barter transactions are more likely taxable than not. You're referring to a barter system; in the United States, the IRS is very specific about this (see the section titled Bartering). Bartering is an exchange of property or services. The fair market value of goods and services exchanged is fully taxable and must be included on Form 1040 in the income of both parties. The IRS also provides more details: Bartering occurs when you exchange goods or services without exchanging money. An example of bartering is a plumber doing repair work for a dentist in exchange for dental services. You must include in gross income in the year of receipt the fair market value of goods and services received in exchange for goods or services you provide or may provide under the bartering arrangement. Generally, you report this income on Form 1040, Schedule C (PDF), Profit or Loss from Business or Form 1040, Schedule C-EZ (PDF), Net Profit from Business. If you failed to report this income, correct your return by filing a Form 1040X (PDF). Refer to Topic 308 for amended return information. So yes, the net value of bartered goods or services is most likely taxable. According to the Australian Tax Office: Barter transactions are assessable and deductible for income tax purposes to the same extent as other cash or credit transactions. Her Majesty's Revenue and Customs states that: If you supply services or goods (new or second-hand) and receive other goods or services in payment, there are two separate supplies: You must account for VAT, and so must your customer if they're VAT-registered. The VAT treatment is the same as for part-exchanges. You must both account for VAT on the amounts you would each have paid for the goods or services if there had been no barter and they had been paid for with money. Searching the website of the Federal Tax Service for the Russian/Cryllic word for barter (бартер) doesn't yield any results, but that might be because even between Google Translate and the rest of the internet, I don't speak Russian. That being said, I did manage to find this (translated from the first full paragraph of the Russian, beginning with \"\"Налог на доходы...\"\": The tax on personal income is paid by citizens of the Russian Federation with all types of income received by them in the calendar year, either in cash or in kind. Since bartering would probably qualify as an in kind transaction, it would likely be taxable. The South African Revenue Service includes barter transactions in the supply of goods taxed under the VAT. The term “supply” is defined very broadly and includes all forms of supply and any derivative of the term, irrespective of where the supply is effected. The term includes performance in terms of a sale, rental agreement, instalment credit agreement or barter transaction. Look for section 3.6, Supply and Taxable Supply, found on p17 of the current version of the linked document.\"" }, { "docid": "362060", "title": "", "text": "I am not an accountant, but I have a light accounting background, despite being primarily an engineer. I also have a tiny schedule C business which has both better and worse years. I am also in the United States and pay US taxes. I assume you are referring to the US Form 1040 tax return, with the attached Schedule C. However little I know about US taxes, I know nothing about foreign taxes. You are a cash-basis taxpayer, so the transactions that happen in each tax year are based on the cash paid and cash received in that year. You were paid last year, you computed your schedule C based on last year's actual transactions, and you paid taxes on that income. You can not recompute last years schedule C based on the warranty claim. You might want to switch to an accrual accounting method, where you can book allowances for warranty claims. It is more complex, and if your business is spotty and low volume, it may be more trouble than it is worth. At this point, you have two months to look for ways to shift expenses into next year or being income into this year, both of which help offset this loss. Perhaps a really aggressive accountant would advise otherwise (and remember, I am not an accountant), but I would take the lumps and move on. This article on LegalZoom (link here) discusses how to apply a significant net operating loss (NOL) in this year to the previous two years, and potentially carry it forward to the next two years. This does involve filing amended returns for the prior two years, showing this year's NOL. For this to be relevant, your schedule C loss this year must exceed your other W2 and self-employment income this year, with other tests also applied. Perhaps a really aggressive accountant would advise otherwise (and remember, I am not an accountant), but I would take the lumps and move on." }, { "docid": "282770", "title": "", "text": "If you don't receive a W2, there are 2 scenarios you should consider: If you have reason to believe that scenario 1 is accurate, then you could file your taxes based on the last valid paycheck you received. If you have reason to believe that scenario 2 is accurate, then you need to do some extra math, but fortunately it is straight forward. Simply treat your final paychecks as if the gross amount of your check was equal to the sum of your taxes paid, and the net amount of the check is $0. This way your income will increase by the proper amount, and you will still receive credit for the taxes paid. This should work out cleanly for federal and state taxes, but will likely result in an overpayment of FICA taxes. You can use form 843 to receive a refund of excess FICA taxes. As a side note, I'd recommend spot checking the YTD numbers on your last paychecks against previous paystubs to make sure there wasn't any fuzzy math going on when they realized they were going out of business." }, { "docid": "535705", "title": "", "text": "The money in the checking account was already taxed. It was income this year or last, or a gift from somebody, or earned interest that will be taxed. If it was a deductible IRA you would declare it next April and get a refund from the government." }, { "docid": "224918", "title": "", "text": "TL/DR Yes, The David popularized the Debt Snowball. The method of paying low balance first. It's purely psychological. The reward or sense of accomplishment is a motivator to keep pushing to the next card. There's also the good feeling of following one you believe to be wise. The David is very charismatic, and speaks in a no-nonsense my way or the highway voice. History is riddled with religious leaders who offer advice which is followed without question. The good feeling, in theory, leads to a greater success rate. And really, it's easier to follow a plan that comes at a cost than to follow one that your guru takes issue with. In the end, when I produce a spreadsheet showing the cost difference, say $1000 over a 3 year period, the response is that it's worth the $1000 to actually succeed. My sole purpose is to simply point out the cost difference between the two methods. $100? Go with the one that makes you feel good. $2000? Just think about it first. If it's not clear, my issue is less with the fact that the low balance method is inferior and more with its proponents wishing to obfuscate the fact that the high interest method is not only valid but has some savings built in. When a woman called into The David's radio show and said her friend recommended the high rate first method, he dismissed it, and told her that low balance was the only way to go. The rest of this answer is tangent to the real issue, answered above. The battle reminds me of how people brag about getting a tax refund. With all due respect to the Tax Software people, the goal should be minimizing one's tax bill. Getting a high refund means you misplanned all year, and lent Uncle Sam money at zero interest(1). And yet you feel good about getting $3000 back in April. (Disclosure - when my father in law passed away, I took over my mother in law's finances. Her IRA RMD, and taxes. First year, I converted some money to Roth, and we had a $100 tax bill. Frowny face on mom. Since then, I have Schwab hold too much federal tax, and we always get about $100 back. This makes her happy, and I'll ignore the 27 cents lost interest.) (1) - I need to acknowledge that there are cases where the taxpayer has had zero dollars withheld, yet receives a 'tax refund.' The earned income tax credit (EITC) produces a refundable benefit, i.e. a payment that's not conditional on tax due. Obviously, those who benefit from this are not whom I am talking about. Also, in response to a comment below, the opportunity cost is not the sub-1% rate the bank would have paid you on the money had you held on to it. It's the 18% card you should be paying off. That $3000 refund likely cost over $400 in the interest paid over the prior year." }, { "docid": "121065", "title": "", "text": "\"If you withdraw 401K then 10% penalty is applied. Also the amount you withdraw is considered as \"\"Income\"\" for that year. Whether you go back to India or Not, the amount is considered Income. Depending on the reason you state during withdraw, the Income tax (default @ 10%) might be \"\"withheld\"\" (Note: Sometime they may not withhold tax). If you are relocating to India, as per international tax rule (between India & US), when filing tax in India then you are supposed to show this as income (the 401K amount) and pay tax according to the total income including amount earned in India (could be upto 30%!!). If there was tax \"\"withheld\"\" in US, you can show it as International tax paid and pay the difference between 10% and your tax rate (upto 30%). If you are relocating to India, but still filing in US (it's possible) then 401K amount will be taxed at US tax rate (could be upto 35%). In either case (filing in India or US) the amount \"\"Withheld\"\" can be shown as tax paid, but yet you will pay the tax difference (could be 20% or 25% more) as per the income for that year. You are not supposed to pay tax in two countries for the same year, as per regulations (might end up with Audit in both country). Hope it helps!\"" }, { "docid": "205922", "title": "", "text": "&gt;On Monday he declared victory, saying he had wanted since February to get reform of Horizon. &gt;But the legislation was a far cry from the initial proposal, which would have allowed the state to use Horizon surplus to fund opioid treatment. Instead any surplus above a capped amount must go back to policyholders. &gt;Christie said it was a win because there was no cap on surplus before he stepped in to regulate the company. And I thought Republicans were anti-regulation." } ]

[ { "docid": "33602", "title": "", "text": "\"http://www.irs.gov/taxtopics/tc503.html says you can deduct \"\"Any prior year's state or local income tax you paid during the year.\"\" So I would say as long as you have good records, you can deduct the excess refund you had to pay back in the year in which you paid it. Whether or not your return was amended shouldn't affect whether or not it is deductible.\"" } ]

[ { "docid": "116675", "title": "", "text": "Dividend yield is a tough thing to track because it's a moving target. Dividends are paid periodically the yield is calculated based on the stock price when the dividend is declared (usually, though some services may update this more frequently). I like to calculate my own dividend by annualizing the dividend payment divided by my cost basis per share. As an example, say you have shares in X, Co. X issues a quarterly dividend of $1 per share and the share price is $100; coincidentally this is the price at which you purchased your shares. But a few years goes by and now X issues it's quarterly dividend of $1.50 per share, and the share price is $160. However your shares only cost you $100. Your annual yield on X is 6%, not the published 3.75%. All of this is to say that looking back on dividend yields is somewhat similar to nailing jello to the wall. Do you look at actual dividends paid through the year divided by share price? Do you look at the annualized dividend at the time of issue then average those? The stock price will fluctuate, that will change the yield; depending on where you bought your stock, your actual yield will vary from the published amount as well." }, { "docid": "295153", "title": "", "text": "\"Keep in mind that all of the information below assumes: That being said, here are some examples of national tax laws relating to barter transactions. Obviously this isn't an exhaustive list, but based on my grossly non-representative sample, I think it's fairly safe to assume that barter transactions are more likely taxable than not. You're referring to a barter system; in the United States, the IRS is very specific about this (see the section titled Bartering). Bartering is an exchange of property or services. The fair market value of goods and services exchanged is fully taxable and must be included on Form 1040 in the income of both parties. The IRS also provides more details: Bartering occurs when you exchange goods or services without exchanging money. An example of bartering is a plumber doing repair work for a dentist in exchange for dental services. You must include in gross income in the year of receipt the fair market value of goods and services received in exchange for goods or services you provide or may provide under the bartering arrangement. Generally, you report this income on Form 1040, Schedule C (PDF), Profit or Loss from Business or Form 1040, Schedule C-EZ (PDF), Net Profit from Business. If you failed to report this income, correct your return by filing a Form 1040X (PDF). Refer to Topic 308 for amended return information. So yes, the net value of bartered goods or services is most likely taxable. According to the Australian Tax Office: Barter transactions are assessable and deductible for income tax purposes to the same extent as other cash or credit transactions. Her Majesty's Revenue and Customs states that: If you supply services or goods (new or second-hand) and receive other goods or services in payment, there are two separate supplies: You must account for VAT, and so must your customer if they're VAT-registered. The VAT treatment is the same as for part-exchanges. You must both account for VAT on the amounts you would each have paid for the goods or services if there had been no barter and they had been paid for with money. Searching the website of the Federal Tax Service for the Russian/Cryllic word for barter (бартер) doesn't yield any results, but that might be because even between Google Translate and the rest of the internet, I don't speak Russian. That being said, I did manage to find this (translated from the first full paragraph of the Russian, beginning with \"\"Налог на доходы...\"\": The tax on personal income is paid by citizens of the Russian Federation with all types of income received by them in the calendar year, either in cash or in kind. Since bartering would probably qualify as an in kind transaction, it would likely be taxable. The South African Revenue Service includes barter transactions in the supply of goods taxed under the VAT. The term “supply” is defined very broadly and includes all forms of supply and any derivative of the term, irrespective of where the supply is effected. The term includes performance in terms of a sale, rental agreement, instalment credit agreement or barter transaction. Look for section 3.6, Supply and Taxable Supply, found on p17 of the current version of the linked document.\"" }, { "docid": "481692", "title": "", "text": "\"I remember in the 19th and early 20th century was the problem of Trusts set up by the wealthy to avoid taxes (hence the term \"\"Anti-Trust\"\") That's not what antitrust means. The trusts in that case were monopolies that used their outsized influence to dominate customers and suppliers. They weren't for tax evasion purposes. Trusts were actually older than a permanent income tax. Antitrust law was passed around the same time as a permanent income tax becoming legal. Prior to that income taxes were temporary taxes imposed to pay for wars. The primary ways to evade taxes was to move expenses out of the personal and into businesses or charities. The business could pay for travel, hotels, meals, and expenses. Or a charity could pay for a trip as a promotion activity (the infamous safari to Africa scheme). Charities can pay salaries to employees, so someone could fund a charity (tax deductible) and then use that money to pay people rather than giving gifts. If you declare your house as a historical landmark, a charity could maintain it. Subscribe to magazines at the office and set them in the waiting room after you read them. Use loyalty program rewards from business expenses for personal things. Sign up for a benefit for all employees at a steep discount and pay everyone a little less as a result. Barter. You do something for someone else (e.g. give them a free car), and they return the favor. Call it marketing or promotion (\"\"Trump is carried away from his eponymous Tower in a sparkling new Mercedes Benz limousine.\"\"). Another option is to move income and expenses to another tax jurisdiction that has even fewer laws about it. Where the United States increasingly cracked down on personal expenses masquerading as business expenses, many jurisdictions would be happy just to see the money flow through and sit in their banks briefly. Tax policy is different now than it was then. Many things that would have worked then wouldn't work now. The IRS is more aggressive about insisting that some payments be considered income even if the organization writes the check directly to someone else. It's unclear what would happen if United States tax rates went back to the level they had in the fifties or even the seventies. Would tax evasion become omnipresent again? Or would it stay closer to current levels. The rich actually pay a higher percentage of the overall income taxes now than they did in the forties and fifties. And the rich in the United States pay a higher percentage of the taxes paid than the rich in other countries with higher marginal rates. Some of this may be more rich people in the US than other countries, but tax policy is part of that too. High income taxes make it hard to become rich.\"" }, { "docid": "278902", "title": "", "text": "The advice is always to not get a big refund from the IRS, because that is giving them an interest free loan. You actually have an opportunity to get an interest free loan from them. When you file your taxes for 2013 note how much you paid in taxes. Not the check you had to send in with your tax form or the refund you received, but the total amount in taxes you paid. Multiply that amount by 1.1 or (110%). For example $8,000 * 1.10 = $8,800. When you get your paychecks in 2014 you goal is to make sure that your federal taxes (not state, Social security or medicare) taken from your paycheck will get you over that number $8,800 /26 or ~350 a paycheck. Keep in mind that the later you start the more each check needs to be. You will owe them a big check in April 2015. But because of the 110% rule you will not owe interest, penalties, or have to deal with quarterly taxes. The 110% rule exempts you from these if you end them 110% as much a you paid in taxes the previous year. Note that no matter how you pay your taxes for 2014: big check now, extra per paycheck, or minimum now; you will have to watch your withholding during 2015 because the 110% rule won't protect you." }, { "docid": "103590", "title": "", "text": "Having a large state return also means that there is a potential income tax liability created at the federal level for the following year, as the situation resulted from the deduction of more on one's federal return than should have been deducted. The state refund is treated as federal income in the year it is refunded. http://blog.turbotax.intuit.com/tax-tips/is-my-state-tax-refund-taxable-and-why-90/" }, { "docid": "274360", "title": "", "text": "No. Income inside an RRSP is sheltered from income tax until you withdraw it. That is, indeed, the major benefit of RRSPs. Note that you will eventually declare this as income. Consider the following case: - in 2015, you make $1000 in income. - in 2015, you contribute $100 to your RRSPs. You store this in an account that pays interest, rather than investing it in stocks, bonds, or mutual funds. - between 2015 and 2025, your money makes an additional $100 in interest. - in 2025, you are retired and pull out the entire amount in your RRSP, i.e. $200. Now, between 2015 and 2025, you did not declare the income from interest. You'd have had to do this if the money was in a regular bank account (instead of an RRSP or a TFSA). Indeed, your bank would have issued tax forms in that case. But you don't report income sheltered in an RRSP. This is good, as it increases the power of compounding. In 2015, you pay tax on only $900 rather than the full $1000. In 2025, you pull out the entire $200. You report all $200 as income (or, actually, as a withdrawal from your RRSP, but it's the same thing). You pay tax on the initial $100 investment (which you did not do in 2015), and you also pay tax on the $100 that your investment has made (and which you are now pulling out). The hope is that your income is now lower, as you are retired. So you'll end up paying less income tax. Plus, your investment has had many years of opportunity to compound, tax-free. TL;DNR: You don't pay tax on, or report gains in, an RRSP account. The bank or investment house won't even issue tax forms, not until you withdraw the money." }, { "docid": "461084", "title": "", "text": "Why shouldn't I just keep my money in the savings account and earn the same amount (both accounts have the same APY in this case)? I will assume that you are transferring money from your savings account into a Traditional IRA and deducting the contribution from your income. While you may think that the money that is being transferred is yours already -- it is sitting in your savings account, for Pete's sake! -- you are deducting that amount in getting to your taxable income, and so you are effectively contributing it from current income and not paying taxes on the amount contributed. So, consider the same amount of money sitting in your savings account versus the same amount of money sitting in your Traditional IRA account. While you will earn the same amount of interest in both accounts, you will have to pay taxes each year on the interest earned in the savings account. You might choose, as most people do, to not take money out of the savings account to pay theses taxes but just pay them from ready cash/checking account/current income etc., or these taxes might just reduce the refund that you will getting from the IRS and your State income tax authority, but in either case, you have paid taxes on the interest earned in your non-IRA savings account, and of course, long ago, you also paid taxes on the original amount in the non-IRA savings account. So, if you take any money out of the non-IRA savings account, you don't pay any taxes on the amount withdrawn except possibly for the interest earned from January 1 till the date of withdrawal (which you are paying from ready cash). On the other hand, consider the Traditional IRA. The original deposit was not taxed in the sense that you got a deduction (reduced tax or increased refund) when you made the contribution. The annual interest earned was not taxed each year either. So when you make a qualified withdrawal (after age 59.5 or by meeting one of the other exceptions allowing withdrawal before age 59.5), you are taking money on which you have not paid any taxes at all, and the IRS wants its cut. The money withdrawn is taxable income to you. Furthermore, the money withdrawn is not eligible for any kind of favorable treatment such as having it count as qualified dividends or as long-term capital gains even if your IRA was invested in stocks and the money in the account is all qualified dividends or long-term capital gains. If you make an unqualified withdrawal, you owe a penalty (technically named an excise tax) in addition to income tax on the amount withdrawn. If you are investing in a Roth IRA, you will not be getting a deduction when you make the contribution, and qualified withdrawals are completely tax-free, and so the answer is completely different from the above." }, { "docid": "306059", "title": "", "text": "It sounds like the postage amount was paid to you rather than returned. If it had been returned and the payment originated on the card, they would have to return it to the card. If it was processed as a payment, it looks like someone is giving you money. PayPal can't credit it to the card, as the sender could request a refund. If PayPal put the money on the card against a previous payment, then they wouldn't be able to refund. If they add money to your bank account, then they can withdraw it if a refund is required. One reason that you might get a payment is if you were being reimbursed for spending money outside of PayPal. If the amount is more than you originally paid, they can't put it on your card. They can only refund to the card. They can't deposit to it. If you don't want to give them your bank account information, you can just wait until the next time you use PayPal and use your balance to pay. Then you can bill the remainder to your credit card. If you don't normally use PayPal and just want your money back, you can process a chargeback through your credit card. Note that this would probably annoy PayPal, as it costs them aggravation and potentially money. To do this, you must have paid the postage with your credit card originally. If you spent money outside PayPal and were reimbursed through PayPal, then there's nothing to chargeback. In that circumstance, you'd have to accept one of their options: pay with balance or deposit to bank account." }, { "docid": "488615", "title": "", "text": "Since the bondholders have voted to reject the emergency manager's plan, which would have paid them pennies on the dollar, the city is now attempting to discharge its short-term and long-term debt. If they get what they want in court, it is likely these bonds will become worthless. Even if they are only able to restructure the debt, its likely that bondholders will need to accept large concessions. However, this may not be immediately reflected in bond prices as it's very possible that the market for these bonds will be very limited in terms of who they could sell them to. If you were to buy them now , that would be a bet on some outcome other than bankruptcy and the discharge of the city's long-term obligations. President Obama has already stated that he monitoring the situation, and it seems unlikely to me that after all of the support given to the auto industry in the last several years that the federal government will do nothing, if only to avert job losses. However, I think it's likely that state aid will be limited at best, as Michigan's economy has been struggling for a number of years. There aren't many large precedents to look at for guidance. One of the largest public entities to declare bankruptcy, Orange County, was a very different situation because this was due to malfeasance on the part of its investment manager, whereas Detroit's situation is a much larger structural problem with its declining economy and tax base. I think the key question will be whether the Federal Government will consider a Detroit bankruptcy to be a large enough embarassment/failure to take significant action." }, { "docid": "453784", "title": "", "text": "\"No to both. The deposit refund is not taxable, but in states where security must earn interest, that small amount is subject to tax. I just returned a $750 deposit to a tenant, and after a year, it accrued $0.24. A rebate of fees you pay such as ATM fees is just you getting back your own money. As is \"\"cash back\"\" on credit card purchases. Not taxable.\"" }, { "docid": "307688", "title": "", "text": "\"Summary: The corporation pays 33.3% tax on dividends it receives and gets a tax refund at the same rate when it pays dividends out. According to http://www.kpmg.com/Ca/en/IssuesAndInsights/ArticlesPublications/TaxRates/Federal-and-Provincial-Territorial-Tax-Rates-for-Income-Earned-CCPC-2015-Dec-31.pdf the corporate tax rates for 2015 are: According to page 3: The federal and provincial tax rates shown in the tables apply to investment income earned by a CCPC, other than capital gains and dividends received from Canadian corporations. The rates that apply to capital gains are one-half of the rates shown in the tables. Dividends received from Canadian corporations are deductible in computing regular Part I tax, but may be subject to Part IV tax, calculated at a rate of 33 1/3%. If I understand that correctly, this means that a Corporation in Quebec pays 46.6% on investment income other than capital gains and dividends, 23.3% on capital gains and 33.33% on dividends. I'm marking this answer as community wiki so anyone can correct these numbers if they are incorrect. UPDATE: According to http://www.pwc.com/ca/en/tax/publications/pwc-facts-figures-2014-07-en.pdf page 22 the tax rate on taxable dividends received from certain Canadian corporations is 33 1/3%. Further, this is refunded to the corporation through the \"\"refundable dividend tax on hand\"\" (RDTOH) mechanism at a rate of $1 for every $3 of taxable dividends paid. My interpretation is as follows: if the corporation receives $100 of dividends from another company, it pays $33.33 tax. If that corporation then pays out $100 of dividends at a later time, it receives a tax refund of $33.33. Meaning, the original tax gets refunded. Note the first line is for the 2015 tax year while the second link is for the 2014 tax year. The numbers might be a little different but the tax/refund process remains the same.\"" }, { "docid": "482244", "title": "", "text": "Start the process by contacting the company that services the mortgage. They can answer all your questions. They should have a form that needs to be submitted. You will want to get from them the most up-to-date payoff amount X days from now. The amount changes each day. They will be sending you a document signifying that the debt has been met. They will also be filing paperwork with the county/city/township releasing the property from the mortgage obligation. Because all my mortgage payoffs have either been or refinancing or I have sold the property, the balance due was significant and the lender required a cashiers check. Contact them to ask. If it only a few thousand left they might take a regular check. Sending the checks via overnight delivery speeds up the process, and cuts down on the uncertainty of the delivery date. Ask for a return receipt so that you have proof of the date it was received. Overpay by a couple of days. They will refund the overage. If you let the mortgage run its course, you will still get a document back from them; they will still file the documents with the local government; and they will refund any overage. If you look at the coupon book, or the paperwork they gave you at settlement the last payment is usually a different amount due to rounding of the monthly payments. Of course if you have been making extra payments or larger than required payments the numbers on the original coupon book are moot so contact the company for the last payment amount." }, { "docid": "240931", "title": "", "text": "Students at college employed by the college are exempt from the FICA taxes (Social Security and Medicare). You are not exempt from federal and state income taxes, but if you are a part time employee making a small amount of money, you probably aren't projected to be paid enough between now and the end of the year to trigger the withholding. If you are concerned that your tax burden for the year will require you to send in money at tax time next year, you can estimate what your taxes will be, and if you determine that you will owe too much, you can fill out a new W-4 form with your HR department and request that additional tax be withheld." }, { "docid": "443806", "title": "", "text": "\"The number one rule of thumb that will generally answer the \"\"is it taxable\"\" question for any money you may have or receive: \"\"Did you pay taxes on it already?\"\". Pretty much any money you actually get in your paycheck/DD has already been taxed (or at least the projected amount of tax has been withheld) is your money, to dispense with as you will (or according to your pre-arranged obligations, for most of it). Deposits paid are one such example; if you wrote a check or obtained a money order that they then cashed, that's still your money until it isn't; the contract states that it is being held effectively in escrow (though the landlord has free use of it so long as he can pony up according to the contract). Anything not used to pay for damages is yours, and you get it back. The ATM fee refund is trickier, but basically this is a benefit offered to you as a service by your bank. You front for the ATM fees incurred when withdrawing, and then those fees are refunded to you by your bank (effectively increasing the number of ATMs you can withdraw from \"\"for free\"\"). As long as there is no net income, it's treated like a mail-in rebate; you didn't gain any money, so there's nothing new to tax. There are a couple of specific exceptions to this otherwise overarching rule of thumb. One is Roth IRAs. Typically, on investments, you either pay income tax on the money going in and capital gains tax on the money coming out, or you pay nothing going in and income tax coming out. With a Roth, however, you pay income tax going in and nothing coming out, even though you're (eventually) getting back more than you put in. Another is gifts. Whoever gave you the gift paid the taxes on it (or the money to buy it). However, if they give you a gift valued more than a certain limit (changes every year, and there's a lifetime limit), they have to pay an additional gift tax of 35% on any amount over the limit. That's taxing taxed income (usually). There are other examples, but for the overwhelming majority of situations, if it's money you already had after any and all applicable taxes, it's not taxable even if you haven't seen that money for a while.\"" }, { "docid": "127974", "title": "", "text": "There is a shortcut you can use when calculating federal estimated taxes. Some states may allow the same type of estimation, but I know at least one (my own--Illinois) that does not. The shortcut: you can completely base your estimated taxes for this year on last year's tax return and avoid any underpayment penalty. A quick summary can be found here (emphasis mine): If your prior year Adjusted Gross Income was $150,000 or less, then you can avoid a penalty if you pay either 90 percent of this year's income tax liability or 100 percent of your income tax liability from last year (dividing what you paid last year into four quarterly payments). This rule helps if you have a big spike in income one year, say, because you sell an investment for a huge gain or win the lottery. If wage withholding for the year equals the amount of tax you owed in the previous year, then you wouldn't need to pay estimated taxes, no matter how much extra tax you owe on your windfall. Note that this does not mean you will not owe money when you file your return next April; this shortcut ensures that you pay at least the minimum allowed to avoid penalty. You can see this for yourself by filling out the worksheet on form 1040ES. Line 14a is what your expected tax this year will be, based on your estimated income. Line 14b is your total tax from last year, possibly with some other modifications. Line 14c then asks you to take the lesser of the two numbers. So even if your expected tax this year is one million dollars, you can still base your estimated payments on last year's tax." }, { "docid": "593111", "title": "", "text": "Ask the company if they can make an adjustment for the next paycheck. If they can't then do the following: Increase the number of Federal exemptions by 1. In 2014 a personal exemption reduces your apparent income by $3950. If you are in the 10 % tax bracket and you are paid every two weeks you will see the amount of taxes withheld drop by ($3950*0.10/26) or ~$15. The 13 Paychecks later change it back. If you are in the 15 % tax bracket and you are paid every two weeks you will see the amount of taxes withheld drop by ($3950*0.15/26) or ~$23. Then 9 Paychecks later change it back If you are in the 25 % tax bracket and you are paid every two weeks you will see the amount of taxes withheld drop by ($3950*0.10/26) or ~$38. Then 5 paychecks later change it back. Remember the money isn't gone, it has just been transferred prematurely to the federal treasury. You could also wait until you complete your taxes this spring, then see if you needed to make an adjustment to your exemptions. If you normally get a large refund then you should be increasing your exemptions anyway. If you are always writing a check to the IRS then you weren't getting enough withheld. Also make sure that payroll has the correct numbers. Most companies include the number of federal and state exemptions on the paycheck stub, or the pdf of the stub." }, { "docid": "357717", "title": "", "text": "\"Not to detract from the other answers at all (which are each excellent and useful in their own right), but here's my interpretation of the ideas: Equity is the answer to the question \"\"Where is the value of the company coming from?\"\" This might include owner stakes, shareholder stock investments, or outside investments. In the current moment, it can also be defined as \"\"Equity = X + Current Income - Current Expenses\"\" (I'll come back to X). This fits into the standard accounting model of \"\"Assets - Liabilities = Value (Equity)\"\", where Assets includes not only bank accounts, but also warehouse inventory, raw materials, etc.; Liabilities are debts, loans, shortfalls in inventory, etc. Both are abstract categories, whereas Income and Expense are hard dollar amounts. At the end of the year when the books balance, they should all equal out. Equity up until this point has been an abstract concept, and it's not an account in the traditional (gnucash) sense. However, it's common practice for businesses to close the books once a year, and to consolidate outstanding balances. When this happens, Equity ceases to be abstract and becomes a hard value: \"\"How much is the company worth at this moment?\"\", which has a definite, numeric value. When the books are opened fresh for a new business year, the Current Income and Current Expense amounts are zeroed out. In this situation, in order for the big equation to equal out: Assets - Liabilities = X + Income - Expeneses the previous net value of the company must be accounted for. This is where X comes in, the starting (previous year's) equity. This allows the Assets and Liabilities to be non-zero, while the (current) Income and Expenses are both still zeroed out. The account which represents X in gnucash is called \"\"Equity\"\", and encompasses not only initial investments, but also the net increase & decreases from previous years. While the name would more accurately be called \"\"Starting Equity\"\", the only problem caused by the naming convention is the confusion of the concept Equity (X + Income - Expenses) with the account X, named \"\"Equity\"\".\"" }, { "docid": "372921", "title": "", "text": "\"Basically, the easiest way to do this is to chart out the \"\"what-ifs\"\". Applying the amortization formula (see here) using the numbers you supplied and a little guesswork, I calculated an interest rate of 3.75% (which is good) and that you've already made 17 semi-monthly payments (8 and a half months' worth) of $680.04, out of a 30-year, 720-payment loan term. These are the numbers I will use. Let's now suppose that tomorrow, you found $100 extra every two weeks in your budget, and decided to put it toward your mortgage starting with the next payment. That makes the semi-monthly payments $780 each. You would pay off the mortgage in 23 years (making 557 more payments instead of 703 more). Your total payments will be $434,460, down from $478.040, so your interest costs on the loan were reduced by $43,580 (but, my mistake, we can't count this amount as money in the bank; it's included in the next amount of money to come in). Now, after the mortgage is paid off, you have $780 semi-monthly for the remaining 73 months of your original 30-year loan (a total of $113,880) which you can now do something else with. If you stuffed it in your mattress, you'd earn 0% and so that's the worst-case scenario. For anything else to be worth it, you must be getting a rate of return such that $100 payments, 24 times a year for a total of 703 payments must equal $113,880. We use the future value annuity formula (here): v = p*((i+1)n-1)/i, plugging in v ($113880, our FV goal), $100 for P (the monthly payment) and 703 for n (total number of payments. We're looking for i, the interest rate. We're making 24 payments per year, so the value of i we find will be 1/24 of the stated annual interest rate of any account you put it into. We find that in order to make the same amount of money on an annuity that you save by paying off the loan, the interest rate on the account must average 3.07%. However, you're probably not going to stuff the savings from the mortgage in your mattress and sleep on it for 6 years. What if you invest it, in the same security you're considering now? That would be 146 payments of $780 into an interest-bearing account, plus the interest savings. Now, the interest rate on the security must be greater, because you're not only saving money on the mortgage, you're making money on the savings. Assuming the annuity APR stays the same now vs later, we find that the APR on the annuity must equal, surprise, 3.75% in order to end up with the same amount of money. Why is that? Well, the interest growing on your $100 semi-monthly exactly offsets the interest you would save on the mortgage by reducing the principal by $100. Both the loan balance you would remove and the annuity balance you increase would accrue the same interest over the same time if they had the same rate. The main difference, to you, is that by paying into the annuity now, you have cash now; by paying into the mortgage now, you don't have money now, but you have WAY more money later. The actual real time-values of the money, however, are the same; the future value of $200/mo for 30 years is equal to $0/mo for 24 years and then $1560/mo for 6 years, but the real money paid in over 30 years is $72,000 vs $112,320. That kind of math is why analysts encourage people to start retirement saving early. One more thing. If you live in the United States, the interest charges on your mortgage are tax-deductible. So, that $43,580 you saved by paying down the mortgage? Take 25% of it and throw it away as taxes (assuming you're in the most common wage-earner tax bracket). That's $10895 in potential tax savings that you don't get over the life of the loan. If you penalize the \"\"pay-off-early\"\" track by subtracting those extra taxes, you find that the break-even APR on the annuity account is about 3.095%.\"" }, { "docid": "532629", "title": "", "text": "A simplistic answer would be that it's a multiplier on how much money per paycheck to subtract from your tax withholding (taxes per paycheck), then at the end of the year you will have paid taxes on your income minus the amount of your withholding allowances. If you get a decent (roughly 3% or more of your gross annual salary) refund you are letting the government withhold too much (and should increase your allowances), if you have to pay a decent amount of taxes at the end of the year then the amount withheld is not high enough (and should decrease your allowances). I definitely recommend using the calculator that Stephen Cleary mentions, but I think it's just as easy to adjust it up or down by 1 or 2 each year based on whether you got a large refund, no refund, or paid taxes. If you are disciplined with your money many experts advise to increase withholding allowances, save the extra in a safe short term interest account so that you earn money on your money and not the government." } ]

[ { "docid": "466718", "title": "", "text": "\"From the poster's description of this activity, it doesn't look like he is engaged in a business, so Schedule C would not be appropriate. The first paragraph of the IRS Instructions for Schedule C is as follows: Use Schedule C (Form 1040) to report income or loss from a business you operated or a profession you practiced as a sole proprietor. An activity qualifies as a business if your primary purpose for engaging in the activity is for income or profit and you are involved in the activity with continuity and regularity. For example, a sporadic activity or a hobby does not qualify as a business. To report income from a nonbusiness activity, see the instructions for Form 1040, line 21, or Form 1040NR, line 21. What the poster is doing is acting as a nominee or agent for his members. For instance, if I give you $3.00 and ask you to go into Starbucks and buy me a pumpkin-spice latte, you do not have income or receipts of $3.00, and you are not engaged in a business. The amounts that the poster's members are forwarding him are like this. Money that the poster receives for his trouble should be reported as nonbusiness income on Line 21 of Form 1040, in accordance with the instructions quoted above and the instructions for Form 1040. Finally, it should be noted that the poster cannot take deductions or losses relating to this activity. So he can't deduct any expenses of organizing the group buy on his tax return. Of course, this would not be the case if the group buy really is the poster's business and not just a \"\"hobby.\"\" Of course, it goes without saying that the poster should document all of this activity with receipts, contemporaneous emails (and if available, contracts) - as well as anything else that could possibly be relevant to proving the nature of this activity in the event of an audit.\"" } ]

[ { "docid": "309923", "title": "", "text": "Selling one fund and buying another will incur capital gains tax on the sale for the amount of the gain. I'm not aware of any sort of exemption available due to you moving out of the country. However, long-term capital gains for low-tax-bracket taxpayers is 0%. As long as your total income including the gains fits within the 15% regular tax bracket, you don't pay any long-term capital gains. Options for you that I see to avoid taxes are: Note that even if you do sell it all, it's only the amount of gains that would take your income over the 15% normal tax bracket that would be taxed at the long-term rate of 15%, which may not end up being that much of a tax hit. It may be worth calculating just how bad it would be based on your actual income. Also note that all I'm saying here is for US federal income taxes. The state you most recently lived in may still charge taxes if you're still considered a resident there in some fashion, and I don't know if your new home's government may try to take a cut as well." }, { "docid": "200131", "title": "", "text": "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." }, { "docid": "539244", "title": "", "text": "There's nothing new about Whole Life Insurance. The agent stands to earn a pretty hefty commission if he can sell it to you. I don't think your assets warrant using it for avoiding the taxes that would be due on a larger estate. I don't see a compelling reason to buy it." }, { "docid": "596111", "title": "", "text": "\"If I were you, I would rent. Wait to buy a home. Here is why: When you say that renting is equal in cost to a 30-year mortgage, you are failing to consider several aspects. See this recent answer for a list of things that need to be considered when comparing buying and renting. You have no down payment. Between the two of you, you have $14,000, but this money is needed for both your emergency fund and your fiancée's schooling. In your words: \"\"we can’t reeaallllly afford a home.\"\" A home is a big financial commitment. If you buy a home before you are financially ready, it will be continuous trouble. If you need a cosigner, you aren't ready to buy a home. I would absolutely advise whoever you are thinking about cosigning for you not to do so. It puts them legally on the hook for a house that you can't yet afford. You aren't married yet. You should never buy something as big as a home with someone you aren't married to; there are just too many things that can go wrong. (See comments for more explanation.) Wait until you are married before you buy. Your income is low right now. And that is okay for now; you've been able to avoid the credit card debt that so many people fall into. However, you do have student loans to pay, and taking on a huge new debt right now would be potentially disastrous for you. Your family income will eventually increase when your fiancée gets her degree and gets a job, and at that time, you will be in a much better situation to consider buying a house. You need to move \"\"ASAP.\"\" Buying a house when you are in a hurry is a generally a bad idea. When you look for a home, you need to take some time looking so you aren't rushed into a bad deal that you will regret. Even if you decide you want to buy, you should first find a place to rent; then you can take your time finding the right house. To answer your question about escrow: When you own a house, two of the required expenses that you will have besides the mortgage payment are property taxes and homeowner's insurance. These are large payments that are only due once a year. The bank holding the mortgage wants to make sure that they get paid. So to help you budget for these expenses and to ensure that these expenses are paid, the bank will add these to your monthly mortgage payment, and set them aside in a savings account (called an escrow account). Then when these bills come due once a year, they are paid for out of the escrow account.\"" }, { "docid": "94088", "title": "", "text": "\"It depends on when you can get the money, not when you know that you won or when you choose to take the ticket in. If you can present your ticket this year and get paid this year, the taxes are due this year, whether or not you actually choose to claim the prize this year. If you cannot receive payment until next year, then taxes will be due next year. This is \"\"constructive receipt,\"\" which applies to most individual tax situations. This assumes that you chose to receive a lump sum. If you get installments, then your taxes would be due as the installments are available, but the constructive receipt still applies.\"" }, { "docid": "181330", "title": "", "text": "You can withdraw from your RRSP to pay your taxes. While not necessarily advisable, it is permitted — yet the tax consequences are no different just because you happen to be using the money to pay a prior year's income tax balance due. When you make the withdrawal from your RRSP, an amount will be withheld towards your income tax for the withdrawal year. Assuming you have other income, then you are likely to owe CRA even more than the amount withheld, because the withdrawal is effectively taxed at your marginal rate. In that case, consider the withholding tax merely a downpayment. You'll figure the final amount due when you file your next income tax return. e.g. If you were to withdraw money from your RRSP today (in 2015) to pay your 2014 income tax balance due, then on your 2015 income tax return, you'll need to declare the withdrawn amount as income for 2015. You'll get credit for the withholding taxes already paid when you made the withdrawal. Your tax return will indicate how much more you'll need to pay to settle your 2015 taxes. If you then pay your 2015 income tax balance due with an RRSP withdrawal in 2016, then ... repeat. Better to save up funds elsewhere (e.g. in a bank account, or a TFSA) to cover an anticipated income tax balance owing." }, { "docid": "405791", "title": "", "text": "\"I seem not to be able to comment on the first answer due to reputation, so I'll aim to enhanced the first answer which is generally good but with these caveats: 1) Dividends are not \"\"guaranteed\"\" to preferred shareholders. Rather, preferred shareholders are normally in line ahead (i.e. in preference to or \"\"preferred\"\") of common shareholders in terms of dividend payment. This is an extremely important distinction, because unlike investments that we generally consider \"\"guaranteed\"\" such as CDs (known as GICs in Canada), a company's board can suspend the dividend at anytime for long periods of time without significant repercussions -- whereas a missed payment to a bank or secured bondholder can often push a company into bankruptcy very quickly. 2) Due to point 1), it is extremely important to know the \"\"convenants\"\" or rules sorrounding both the preferred shares you are buying and the other more senior creditors of that issuing company (i.e. taxes (almost always come first), banks loans, leases, bonds etc.). It is also important to know if a particular preferred share has \"\"cumulative\"\" dividends. You generally only want to buy preferred's that have \"\"cumulative\"\" dividends, since that means that anytime the company misses a payment, they must pay those dividends first before any other dividends at the same or lower priority in the future. 3) Unlike a common stock, your upside on a preferred stock is relatively fixed: you get a fixed share of the company's profit and that's it, whereas a common shareholder gets everything that's left over after interest and preferred dividends are paid. So if the company does really well you will theoretically do much better with common stock over time. For the above reasons, it is generally advisable to think of preferred shares as being more similar to really risky bonds in the same company, rather than similar to common stock. Of course, if you are an advanced investor there are a lot more variables in play such as tax considerations and whether the preferred have special options attached to them such conversion into common shares.\"" }, { "docid": "390066", "title": "", "text": "Mostly ditto Pete B's answer. There's little you can do about closing costs. Some closing costs are government fees. There's nothing you can do about this. Sad and unfair as it is, taxes are not optional and not generally negotiable. Title insurance and fire insurance are required by the lender. Even if you're paying cash, you don't really want to skip on these. If your house burns down and you have no insurance ... well, if you're worried about saving a few hundred on your closing costs, I assume that losing $200,000 because your house burned down and you have no insurance would be a pretty bad thing. Title insurance protects you against the possibility that the seller doesn't really legally own the property, maybe a scam, more likely a mistake or a technicality. You can, and certainly should, shop around for a better deal on insurance. Last couple of housing transactions I made, title insurance was a one-time fee of around $200. (I'm sure this depends on the cost of the house, where you live, maybe other factors.) Maybe by shopping around I could have saved $10 or $20, but I doubt there's someone out there charging $50 when everyone else is charging $200. Fire insurance you're probably paying a couple of thousand a year, more opportunity for savings. Typically the buyer and the seller each have a realtor and they split the fee. If you go without a realtor but the seller hires one, she'll keep the entire fee. So the only way to avoid this expense is if neither of you has a realtor. I've never done that. Realtors cost a ton of money but they provide a useful service: not only helping you find a house but also knowing how to deal with all the paperwork. Plenty of people do it, though. I presume they get the title agency or the bank or somebody to help with the paperwork. There are also discount realtors out there who don't show your home, do little or nothing to market it, basically just help you with the paperwork, and then charge a very low fee. Timing closing for a certain day of the month can reduce what you owe at closing time -- by reducing the amount of interest you pay on the first month's loan payment -- but it doesn't save you any money. You'll make it up over the course of the loan. You might possibly save some money by timing closing around when property taxes are due. Theoretically this shouldn't matter: the theory is that they pro-rate property taxes between buyer and seller so each pays the taxes for the time when they own the house. So again, you might need less cash at closing but you'll make it up the next time property taxes are due. But the formulas the banks use on this are often goofy. Maybe if you live some place with high property taxes this is worth investigating. You could skip the inspection. But inspections I've had done generally cost about $500. If they found something that was a major issue, they might save you from buying a house that would cost tens of thousands in repairs. Or less dramatically, you can use the inspection report for leverage with the seller to get repairs done at the seller's expense. I once had an inspector report problems with the roof and so I negotiated with the seller that they would pay for a percentage of roof repair. I suppose if you're buying a house that you know is run down and will require major work, an inspection might be superfluous. Or if you know enough about construction that you can do an inspection yourself. Otherwise, it's like not buying insurance: sure, you save a little up front, but you're taking a huge risk. So what can you control? (a) Shop around for fire insurance. Maybe save hundreds of dollars. (b) Find a seller who's not using a realtor and then you don't use a realtor either. Save big bucks, 6 to 7% in my area, but you then have to figure out how to do all the paperwork yourself and you severely limit your buying options as most sellers DO use a realtor. Besides that, there's not much you can do." }, { "docid": "20796", "title": "", "text": "\"I've had a mortgage changing hands with mid size companies for many years with no problems. I've handled many complex financial and technical transactions with multiple parties with no problems over the course decades. Then, after my last refinance, my mortgage fell into the hands of JP Morgan Chase. The bank sent one letter to let me know of the transfer, and in the next week they sent my loan to collections for what I later found to be Chase's process error in the transfer. For the next three months, I ended up in customer service hell as one Chase group threatened to foreclose on my house while another group told me to ignore the imminent foreclosure notices. One started to \"\"investigate\"\" the transfer while the collections group tried to make me pay my mortgage payment twice. The mess only ended up being taken care of after I tracked down the old owner of my loan and had them refund the \"\"lost\"\" payment directly to me - normally they would have sent it to the company buying the loan, but could not get Chase to accept the payment. Then I paid Chase that exact same mortgage payment. All the time the Chase internal investigations and collections department were completely incapable of a simple call to previous holder of the loan. A company handling millions of mortgage transactions is somehow incapable of handling a minor glitch in a mortgage transfer? It's either utter incompetence or total malice in picking up extra penalty fees or maybe an occasional forclosure if homeowners didn't say on top of the details. This is what we used our collective tax dollars to bail out.\"" }, { "docid": "390864", "title": "", "text": "I sold it at 609.25 and buy again at 608.75 in the same day If you Sold and bought the same day, it would be considered as intra-day trade. Profit will be due and would be taxed at normal tax brackets. Edits Best Consult a CA. This is covered under Indian Accounting Standard AG51 The following examples illustrate the application of the derecognition principles of this Standard. (e) Wash sale transaction. The repurchase of a financial asset shortly after it has been sold is sometimes referred to as a wash sale. Such a repurchase does not preclude derecognition provided that the original transaction met the derecognition requirements. However, if an agreement to sell a financial asset is entered into concurrently with an agreement to repurchase the same asset at a fixed price or the sale price plus a lender's return, then the asset is not derecognised. This is more relevant now for shares/stocks as Long Term Capital Gains are tax free, Long Term Capital Loss cannot be adjusted against anything. Short Term Gains are taxed differentially. Hence the transaction can be interpreted as tax evasion, professional advise is recommended. A simple way to avoid this situation; sell on a given day and buy it next or few days later." }, { "docid": "446878", "title": "", "text": "\"They do not. M&amp;A execution is housed within industry coverage groups; there's no separate group that executes. They have a group called \"\"M&amp;A\"\" that advises on tax structuring, anti-raid, and other assorted issues (e.g. MASA) but they don't run the model and they're not really executing. Most of the people there are ex-lawyers or experienced bankers. Trust me on this, if you tell someone at GS you're interested in working in the M&amp;A group, you're not getting an offer.\"" }, { "docid": "177648", "title": "", "text": "Your first scenario, involving shareholders in a private corp being limited by a contractual agreement, is common in practice. Frequent clauses include methods of valuing the shares if someone wants to sell, first right of refusal [you have to attempt to sell to the other shareholders, before you can sell to a 3rd party], and many others. These clauses are governed by contract law [ie: some clauses may be illegal in contract law, and therefore couldn't be applied here]. A Universal Shareholders' Agreement is just the same as the above, but applied to more people. You would never get an already public company to convert to a universal shareholders' agreement - because even 1 share voting 'no' would block it [due to corporate law limiting the power of a corporation from abusing minority shareholder value]. In practice, these agreements universally exist at the start of incorporation, or at least at the first moment shares become available. An example is the Canadian mega-construction company PCL*, which is employee-owned. When the original owner transferred the corporation to his employees, there was a USA in place which still today governs how the corporation operates. In theory you could have a 'public company' where most shares are already owned by the founders, and 100% of remaining shares are owned by a specific group of individuals, in which case you may be able to get a USA signed. But it wouldn't really happen in practice. *[Note that while PCL is broadly owned by a large group of employees, it is not a 'public company' because any random schmuck can't simply buy a share on the Toronto Stock Exchange. I assume most exchanges would prevent corporations from being listed if they had ownership restrictions like this]." }, { "docid": "299591", "title": "", "text": "The home owner does not start foreclosure, the bank decides when to foreclose. Therefore you cannot really decide a time to foreclose if you are trying to time the decision. The process You miss payments, and the banks will send you a late notice for the missing payments. Expect many notices. The bank will call you at home, on your cell phone and at work. They will mail you letters regarding the missing payments. If you continue to miss payments, the bank will probably demand the loan be paid in full. You will owe the bank the full balance of the principle, all past due interest, all past due late charges and junk fees. The bank won't even take a normal monthly payment from you should you try to pay your regular payment again. Some law enforcement will notify you on the bank's intent to foreclose. The bank has begun legal proceedings. Legal notices are published in the local newspaper. Soon the notices and the legal waiting period will expire. Court proceedings happen. The court will then allow the bank to foreclose. Notices to into the paper again about the updated status of the foreclosure. The house is sold at auction. Money from the auction is used to pay taxes owned, then mortgages, then other liens or creditors who file. Further debt for the home owner Taxes When sold, if the mortgage debt exceeds the home's fair market value, US Federal Tax rules say the selling price as the fair market value. The fair market value can still be higher than the tax basis (which I think is the value of the house at the time of original purchase plus improvements.). If the fair market value is higher, you will own taxes on sale. However tax rules in the US say if you have owned the home more than two years and make less than $250,000 in the transaction ($500,000 if married) you will not owe any tax. State taxes can be different. Additionally, if the mortgage lender forgives the debt and doesn't create a deficiency, that income is taxable as well. This is more an more common these days. There are exceptions if the home is your primary residence. This whole process an take several months to occur, but depends on where you live. If you continue to live in the home after the auction, the new owner must evict you from the property which is another set of legal proceedings. Your credit and ability to buy are home will be damaged for the next several years. I am not so sure on how PMI works for the banks, but I know they are getting some money back." }, { "docid": "240350", "title": "", "text": "\"I don't know of a situation where rejecting a raise would make sense. Often, one can be in a phaseout of some benefit, so that even though you're in a certain tax bracket, the impact of the next $100 is greater than the bracket rate alone. Taxation of social security benefits is one such anomaly. It can be high, but never over 100%. Update - The Affordable Care Act contains such an anomaly - go to the Kaiser Foundation site, and see the benefit a family of three might receive. A credit for up to $4631 toward their health care insurance cost. But, increase the income to above $78120 Modified Adjusted Gross Income (MAGI) and the benefit drops to zero. The fact that the next dollar of income will cost you $4631 in the lost credit is an example of a step-function in the tax code. I'd still not turn down the raise, but I'd ask that it be deposited to my 401(k). And when reconciling my taxes each April, I'd use an IRA in case I still went over a bit. Consider, it's April, and your MAGI is $80,120. Even if you don't have to cash to deposit to the IRA, you borrow it, from a 24% credit card if need be. Because the $2000 IRA will trigger not just $300 less Federal tax, but a $4631 health care credit. Note - the above example will apply to a limited, specific group who are funding their own health care expense and paying above a certain percent of income. It's not a criticism of ACA, just a mathematical observation appropriate to this question. For those in this situation, a close look at their projected MAGI is in order. Another example - the deduction for college tuition and fees. This is another \"\"step function.\"\" Go a dollar over the threshold, $130K joint, and the deduction drops from $4000 to $2000. You can claim that a $2000 deduction is a difference of 'only' $500 in tax due, but the result is a quick spike in the marginal rate. For those right at this number, it would be worth it to increase their 401(k) deduction to get back under this limit.\"" }, { "docid": "318338", "title": "", "text": "\"Assuming that the will that bequeathed the money to your son did not stipulate any restrictions or set up a trust to hold the money until your son turns 25, or something like that, I don't think you have much choice except to put the money in a UTMA account (which of course can be invested in whatever the trustee (which could be you, or you and your wife jointly) decides. Note: not a UGMA account since the money is not a gift. You also don't have any option except to turn the account over to your son when he turns eighteen. The point is, the investment can be in anything as long as the account is registered as a UTMA account. But do remember also that your son is entitled to sue you for breach of fiduciary duty if you don't take good care of the money, so that blowing it all in risky investments is also not a good idea. If you are worried about taxes and your son's income being taxed at your rate, one way of deferring the issue is to buy US Savings Bonds. The interest can be deferred from taxation until the bonds are redeemed. Edit added in response to JoeTaxpayer's comments: But a better strategy is to declare the accrued interest each year as unearned income of the child on the kiddie tax form that is part of your tax return, and pay the tax, if any, that results To ease your mind or conscience, think of the tax that you pay on your child's behalf as a gift to your child! In any case, there will likely not be much tax due since the first $950 of unearned income of a child is tax-free and the next $950 taxed at 10%. Then, when the bonds are cashed in, the interest that accrued (and was \"\"taxed\"\") in earlier years can be deducted from the interest (cash in price minus purchase price) that you (or your son) will be told is the interest that the bonds earned. Of course, if kiddie tax is not a concern (and it shouldn't be, given the amount available for investment), an even better strategy is to set up the UTMA account(s) in long-term investments in low-cost index funds or ETFs (as JoeTaxpayer suggests) and pay the tax, if any, as it comes due.\"" }, { "docid": "66834", "title": "", "text": "\"It's impossibly difficult to time the market. Generally speaking, you should buy low and sell high. Picking 25% as an arbitrary ceiling on your gains seems incorrect to me because sometimes you'll want to hold a stock for longer or sell it sooner, and those decisions should be based on your research (or if you need the money), not an arbitrary number. To answer your questions: If the reasons you still bought a stock in the first place are still valid, then you should hold and/or buy more. If something has changed and you can't find a reason to buy more, then consider selling. Keep in mind you'll pay capital gains taxes on anything you sell that is not in a tax-deferred (e.g. retirement) account. No, it does not make sense to do a wash sale where you sell and buy the same stock. Capital gains taxes are one reason. I'm not sure why you would ever want to do this -- what reasons were you considering? You can always sell just some of the shares. See above (and link) regarding wash sales. Buying more of a stock you already own is called \"\"dollar cost averaging\"\". It's an effective method when the reasons are right. DCA minimizes variance due to buying or selling a large amount of shares at an arbitrary single-day price and instead spreads the cost or sale basis out over time. All that said, there's nothing wrong with locking in a gain by selling all or some shares of a winner. Buy low, sell high!\"" }, { "docid": "584929", "title": "", "text": "It will be said that Delaware incorporation is a type popular technique of growing incorporation, for each; human beings residing in US or remote places. For example, Delaware incorporation is powerful to businesses that plan to provide their stocks to the public. Delaware incorporation is simply a whole lot easier and beneficial for groups as opposed to different country, due to these kinds of contributors. Another gain of Delaware incorporation is Delaware's comprehensive and frequently without problems interpretable law. Delaware incorporation is also useful due to the fact buyers and administrators could make selections by means of single posted approval in area of reputable meetings." }, { "docid": "374867", "title": "", "text": "Does this make sense? I'm concerned that by buying shares with post tax income, I'll have ended up being taxed twice or have increased my taxable income. ... The company will then re-reimburse me for the difference in stock price between the vesting and the purchase share price. Sure. Assuming you received a 100-share RSU for shares worth $10, and your marginal tax rate is 30% (all made up numbers), either: or So you're in the same spot either way. You paid $300 to get $1,000 worth of stock. Taxes are the same as well. The full value of the RSU will count as income either way, and you'll either pay tax on the gains of the 100 shares in your RSU our you'll pay tax on gains on the 70 shares in your RSU and the 30 shares you bought. Since they're reimbursing you for any difference the cost basis will be the same (although you might get taxed on the reimbursement, but that should be a relatively small amount). This first year I wanted to keep all of the shares, due to tax reasons and because believe the share price will go up. I don't see how this would make a difference from a tax standpoint. You're going to pay tax on the RSU either way - either in shares or in cash. how does the value of the shares going up make a difference in tax? Additionally I'm concerned that by doing this I'm going to be hit by my bank for GBP->USD exchange fees, foreign money transfer charges, broker purchase fees etc. That might be true - if that's the case then you need to decide whether to keep fighting or decide if it's worth the transaction costs." }, { "docid": "88947", "title": "", "text": "At the end of each calendar year the mutual fund company will send you a 1099 form. It will tell you and the IRS what your account earned. You will see boxes for: You will end up paying taxes on these, unless the fund is part of a 401K or IRA. These taxes will be due even if you never sold any shares. They are due even if it was a bad year and the value of your account went down. Most if not all states will levy an income tax yon your dividends and capital gains each year. When you sell your shares you may also owe income taxes if you made a profit. The actual taxes due is a more complex calculation due to long term vs short term, and what other gains or losses you have. Partial sales also take into account which shares are sold." } ]

[ { "docid": "243503", "title": "", "text": "You do actually have some profits (whatever is left from donations). The way it goes is that you report everything on your Schedule C. You will report this: Your gross profits will then flow to Net Profit (line 31) since you had no other expenses (unless you had some other expenses, like paypal fees, which will appear in the relevant category in part II), and from line 31 it will go to your 1040 for the final tax calculation." } ]

[ { "docid": "374867", "title": "", "text": "Does this make sense? I'm concerned that by buying shares with post tax income, I'll have ended up being taxed twice or have increased my taxable income. ... The company will then re-reimburse me for the difference in stock price between the vesting and the purchase share price. Sure. Assuming you received a 100-share RSU for shares worth $10, and your marginal tax rate is 30% (all made up numbers), either: or So you're in the same spot either way. You paid $300 to get $1,000 worth of stock. Taxes are the same as well. The full value of the RSU will count as income either way, and you'll either pay tax on the gains of the 100 shares in your RSU our you'll pay tax on gains on the 70 shares in your RSU and the 30 shares you bought. Since they're reimbursing you for any difference the cost basis will be the same (although you might get taxed on the reimbursement, but that should be a relatively small amount). This first year I wanted to keep all of the shares, due to tax reasons and because believe the share price will go up. I don't see how this would make a difference from a tax standpoint. You're going to pay tax on the RSU either way - either in shares or in cash. how does the value of the shares going up make a difference in tax? Additionally I'm concerned that by doing this I'm going to be hit by my bank for GBP->USD exchange fees, foreign money transfer charges, broker purchase fees etc. That might be true - if that's the case then you need to decide whether to keep fighting or decide if it's worth the transaction costs." }, { "docid": "283459", "title": "", "text": "\"Please declare everything you earn in India as well as the total amount of assets (it's called FBAR). The penalties for not declaring is jail time no matter how small the amount (and lots of ordinary people every 2-3 years are regularly sent to jail for not declaring such income). It's taken very seriously by the IRS - and any Indian bank who has an office in the US or does business here, can be asked by IRS to provide any bank account details for you. You will get deductions for taxes already paid to a foreign country due to double taxation, so there won't be any additional taxes because income taxes in US are on par or even lower than that in India. Using tricks (like transferring ownership to your brother) may not be worth it. Note: you pay taxes only when you realize gains anyway - both in India or here, so why do you want to take such hassles. If you transfer to your brother, it will be taxed only until you hold them. Make sure you have exact dates of gains between the date you came to US and the date you \"\"gifted\"\" to your brother. As long as you clearly document that the stocks transferred to your brother was a gift and you have no more claims on them, it should be ok, but best to consult a CPA in the US. If you have claims on them, example agreement that you will repurchase them, then you will still continue to pay taxes. If you sell your real estate investments in India, you have to pay tax on the gains in the US (and you need proof of the original buying cost and your sale). If you have paid taxes on the real estate gains in India, then you can get deduction due to double tax avoidance treaty. No issues in bringing over the capital from India to US.\"" }, { "docid": "318579", "title": "", "text": "The principal of the contribution can definitely be withdrawn tax-free and penalty-free. However, there is a section that makes me think that the earnings part may be subject to penalty in addition to tax. In Publication 590-A, under Traditional IRAs -> When Can You Withdraw or Use Assets? -> Contributions Returned Before Due Date of Return -> Early Distributions Tax, it says: The 10% additional tax on distributions made before you reach age 59½ does not apply to these tax-free withdrawals of your contributions. However, the distribution of interest or other income must be reported on Form 5329 and, unless the distribution qualifies as an exception to the age 59½ rule, it will be subject to this tax. This section is only specifically about the return of contributions before the due date of return, not a general withdrawal (as you can see from the first sentence that the penalty doesn't apply to contributions, which wouldn't be true of general withdrawals). Therefore, the second sentence must be about the earnings part of the withdrawal that you must make together with the contribution part as part of the return of contributions before the due date of the return. If the penalty it is talking about is only about other types of withdrawals and doesn't apply to the earnings part of the return of contribution before the due date of the return, then this sentence wouldn't make sense as it's in a part that's only about return of contribution before the due date of the return." }, { "docid": "165113", "title": "", "text": "\"&gt; how the market going up and down in dramatic fashions due to speculative behavior by traders (of any kind) should have the power to decide the worth of thousands of companies going about their normal business. Wow. I don't even know where to start. First: why shouldn't traders be able to decide (as a group) what the companies are worth? If not them, who? Some committee you and your friends in the government get to appoint? Second: do you really think that intraday (or even intraweek) prices are really representative of what \"\"the market\"\" thinks a company is valued at? Third: compared to the effect of long term buy and holders changing their mind about a company, the effect of any HFT people on the valuation of a stock is practically nothing - like I said, there's just about no evidence of speculators causing significant mispricing over any significant period. Fourth: there's no credible evidence that outside of individual events like the Knight Capital farce HFT has actually increased volatility.\"" }, { "docid": "436165", "title": "", "text": "(Oops - I had been meaning to come back to this Q. sooner. Just saw my reminder, so here goes.) Shortly before this question was asked, I actually read a good blog post on the subject of disability insurance at Evolution of Wealth - 7 Ways Your Group Disability Will Fail. I know the OP doesn't have group disability (and hence the question), but the reason I'm highlighting it is: Even somebody with a group disability policy from their employer may want to consider supplementing it with an individual policy that has better coverage. In my case, the reason I opted for an individual policy was due to point #6 from the post: ... ways that group disability coverage will fail you: ... [etc] 6) You can go work somewhere else. With disability insurance there is a feature called own-occupation. This means that you are unable to perform the duties of your specific occupation even if you are able to work in an other occupation. Good group disability coverage will cover your own-occupation for a period of 2 years after that if you can work anywhere (yes, even McDonald’s) then you receive no more benefits. Notice I said ‘good’ coverage, a lot of policies don’t even have the own-occupation benefit. ... I made sure my own individual LTD policy included coverage of own-occupation until age 65. So, do pay attention to the specific features and limitations of LTD policies when shopping for one." }, { "docid": "466718", "title": "", "text": "\"From the poster's description of this activity, it doesn't look like he is engaged in a business, so Schedule C would not be appropriate. The first paragraph of the IRS Instructions for Schedule C is as follows: Use Schedule C (Form 1040) to report income or loss from a business you operated or a profession you practiced as a sole proprietor. An activity qualifies as a business if your primary purpose for engaging in the activity is for income or profit and you are involved in the activity with continuity and regularity. For example, a sporadic activity or a hobby does not qualify as a business. To report income from a nonbusiness activity, see the instructions for Form 1040, line 21, or Form 1040NR, line 21. What the poster is doing is acting as a nominee or agent for his members. For instance, if I give you $3.00 and ask you to go into Starbucks and buy me a pumpkin-spice latte, you do not have income or receipts of $3.00, and you are not engaged in a business. The amounts that the poster's members are forwarding him are like this. Money that the poster receives for his trouble should be reported as nonbusiness income on Line 21 of Form 1040, in accordance with the instructions quoted above and the instructions for Form 1040. Finally, it should be noted that the poster cannot take deductions or losses relating to this activity. So he can't deduct any expenses of organizing the group buy on his tax return. Of course, this would not be the case if the group buy really is the poster's business and not just a \"\"hobby.\"\" Of course, it goes without saying that the poster should document all of this activity with receipts, contemporaneous emails (and if available, contracts) - as well as anything else that could possibly be relevant to proving the nature of this activity in the event of an audit.\"" }, { "docid": "240350", "title": "", "text": "\"I don't know of a situation where rejecting a raise would make sense. Often, one can be in a phaseout of some benefit, so that even though you're in a certain tax bracket, the impact of the next $100 is greater than the bracket rate alone. Taxation of social security benefits is one such anomaly. It can be high, but never over 100%. Update - The Affordable Care Act contains such an anomaly - go to the Kaiser Foundation site, and see the benefit a family of three might receive. A credit for up to $4631 toward their health care insurance cost. But, increase the income to above $78120 Modified Adjusted Gross Income (MAGI) and the benefit drops to zero. The fact that the next dollar of income will cost you $4631 in the lost credit is an example of a step-function in the tax code. I'd still not turn down the raise, but I'd ask that it be deposited to my 401(k). And when reconciling my taxes each April, I'd use an IRA in case I still went over a bit. Consider, it's April, and your MAGI is $80,120. Even if you don't have to cash to deposit to the IRA, you borrow it, from a 24% credit card if need be. Because the $2000 IRA will trigger not just $300 less Federal tax, but a $4631 health care credit. Note - the above example will apply to a limited, specific group who are funding their own health care expense and paying above a certain percent of income. It's not a criticism of ACA, just a mathematical observation appropriate to this question. For those in this situation, a close look at their projected MAGI is in order. Another example - the deduction for college tuition and fees. This is another \"\"step function.\"\" Go a dollar over the threshold, $130K joint, and the deduction drops from $4000 to $2000. You can claim that a $2000 deduction is a difference of 'only' $500 in tax due, but the result is a quick spike in the marginal rate. For those right at this number, it would be worth it to increase their 401(k) deduction to get back under this limit.\"" }, { "docid": "581509", "title": "", "text": "In the US, an opposite-sex spouse who is a citizen as well, can receive an unlimited inheritance with no tax due from the estate. IRAs and retirement accounts which were pretax accounts, are inherited by a spouse who can then either treat the accounts as her own, i.e. even co-mingle with current IRAs, or treat as inherited IRA, and begin RMDs. In which case tax is due to the extent the money wasn't already taxed. I see the edits above. No tax should have been due. Mom can gift the kids up to $14,000 per year per kid with no paperwork at all. And another $14K to the kid's spouses or grandchildren. Above this number, a form 709 is used to tap into the lifetime exclusion. As it stands now, it's unclear why any tax would have been due in the first place." }, { "docid": "596111", "title": "", "text": "\"If I were you, I would rent. Wait to buy a home. Here is why: When you say that renting is equal in cost to a 30-year mortgage, you are failing to consider several aspects. See this recent answer for a list of things that need to be considered when comparing buying and renting. You have no down payment. Between the two of you, you have $14,000, but this money is needed for both your emergency fund and your fiancée's schooling. In your words: \"\"we can’t reeaallllly afford a home.\"\" A home is a big financial commitment. If you buy a home before you are financially ready, it will be continuous trouble. If you need a cosigner, you aren't ready to buy a home. I would absolutely advise whoever you are thinking about cosigning for you not to do so. It puts them legally on the hook for a house that you can't yet afford. You aren't married yet. You should never buy something as big as a home with someone you aren't married to; there are just too many things that can go wrong. (See comments for more explanation.) Wait until you are married before you buy. Your income is low right now. And that is okay for now; you've been able to avoid the credit card debt that so many people fall into. However, you do have student loans to pay, and taking on a huge new debt right now would be potentially disastrous for you. Your family income will eventually increase when your fiancée gets her degree and gets a job, and at that time, you will be in a much better situation to consider buying a house. You need to move \"\"ASAP.\"\" Buying a house when you are in a hurry is a generally a bad idea. When you look for a home, you need to take some time looking so you aren't rushed into a bad deal that you will regret. Even if you decide you want to buy, you should first find a place to rent; then you can take your time finding the right house. To answer your question about escrow: When you own a house, two of the required expenses that you will have besides the mortgage payment are property taxes and homeowner's insurance. These are large payments that are only due once a year. The bank holding the mortgage wants to make sure that they get paid. So to help you budget for these expenses and to ensure that these expenses are paid, the bank will add these to your monthly mortgage payment, and set them aside in a savings account (called an escrow account). Then when these bills come due once a year, they are paid for out of the escrow account.\"" }, { "docid": "181330", "title": "", "text": "You can withdraw from your RRSP to pay your taxes. While not necessarily advisable, it is permitted — yet the tax consequences are no different just because you happen to be using the money to pay a prior year's income tax balance due. When you make the withdrawal from your RRSP, an amount will be withheld towards your income tax for the withdrawal year. Assuming you have other income, then you are likely to owe CRA even more than the amount withheld, because the withdrawal is effectively taxed at your marginal rate. In that case, consider the withholding tax merely a downpayment. You'll figure the final amount due when you file your next income tax return. e.g. If you were to withdraw money from your RRSP today (in 2015) to pay your 2014 income tax balance due, then on your 2015 income tax return, you'll need to declare the withdrawn amount as income for 2015. You'll get credit for the withholding taxes already paid when you made the withdrawal. Your tax return will indicate how much more you'll need to pay to settle your 2015 taxes. If you then pay your 2015 income tax balance due with an RRSP withdrawal in 2016, then ... repeat. Better to save up funds elsewhere (e.g. in a bank account, or a TFSA) to cover an anticipated income tax balance owing." }, { "docid": "20796", "title": "", "text": "\"I've had a mortgage changing hands with mid size companies for many years with no problems. I've handled many complex financial and technical transactions with multiple parties with no problems over the course decades. Then, after my last refinance, my mortgage fell into the hands of JP Morgan Chase. The bank sent one letter to let me know of the transfer, and in the next week they sent my loan to collections for what I later found to be Chase's process error in the transfer. For the next three months, I ended up in customer service hell as one Chase group threatened to foreclose on my house while another group told me to ignore the imminent foreclosure notices. One started to \"\"investigate\"\" the transfer while the collections group tried to make me pay my mortgage payment twice. The mess only ended up being taken care of after I tracked down the old owner of my loan and had them refund the \"\"lost\"\" payment directly to me - normally they would have sent it to the company buying the loan, but could not get Chase to accept the payment. Then I paid Chase that exact same mortgage payment. All the time the Chase internal investigations and collections department were completely incapable of a simple call to previous holder of the loan. A company handling millions of mortgage transactions is somehow incapable of handling a minor glitch in a mortgage transfer? It's either utter incompetence or total malice in picking up extra penalty fees or maybe an occasional forclosure if homeowners didn't say on top of the details. This is what we used our collective tax dollars to bail out.\"" }, { "docid": "178497", "title": "", "text": "Stock options represent an option to buy a share at a given price. What you have been offered is the option to buy the company share at a given price ($5) starting a given date (your golden handcuffs aka vesting schedule). If the company's value doubles in 1 year and the shares are liquid (i.e. you can sell them) then you've just made $125k of profit. If the company's value has gone to zero in 1 year then you've lost nothing other than your hopes of getting rich. As others have mentioned, the mechanics of exercising the option and selling the shares can typically be accomplished without any cash involved. The broker will do both in a single transaction and use the proceeds of the sale to pay the cost of buying the shares. You should always at least cover the taxable portion of the transaction and typically the broker will withhold that tax anyways. Otherwise you could find yourself in a position where you have actually lost money due to tax being owed while the shares decline in value below that tax. You don't have to worry about that right now. Again as people have mentioned options will typically expire 10 years from vesting or 90 days from leaving your employment with the company. I'm sure there are some variations on the theme. Make sure you ask and all this should be part of some written contract. I'm sure you can ask to see it if you wish. Also typical is that stock option grants have to be approved by the board which is normally a technicality. Some general advice:" }, { "docid": "88947", "title": "", "text": "At the end of each calendar year the mutual fund company will send you a 1099 form. It will tell you and the IRS what your account earned. You will see boxes for: You will end up paying taxes on these, unless the fund is part of a 401K or IRA. These taxes will be due even if you never sold any shares. They are due even if it was a bad year and the value of your account went down. Most if not all states will levy an income tax yon your dividends and capital gains each year. When you sell your shares you may also owe income taxes if you made a profit. The actual taxes due is a more complex calculation due to long term vs short term, and what other gains or losses you have. Partial sales also take into account which shares are sold." }, { "docid": "52438", "title": "", "text": "\"Highly Compensated Employee Rules Aim to Make 401k's Fair would be the piece that I suspect you are missing here. I remember hearing of this rule when I worked in the US and can understand why it exists. A key quote from the article: You wouldn't think the prospect of getting money from an employer would be nerve-wracking. But those jittery co-workers are highly compensated employees (HCEs) concerned that they will receive a refund of excess 401k contributions because their plan failed its discrimination test. A refund means they will owe more income tax for the current tax year. Geersk (a pseudonym), who is also an HCE, is in information services and manages the computers that process his firm's 401k plan. 401(k) - Wikipedia reference on this: To help ensure that companies extend their 401(k) plans to low-paid employees, an IRS rule limits the maximum deferral by the company's \"\"highly compensated\"\" employees, based on the average deferral by the company's non-highly compensated employees. If the less compensated employees are allowed to save more for retirement, then the executives are allowed to save more for retirement. This provision is enforced via \"\"non-discrimination testing\"\". Non-discrimination testing takes the deferral rates of \"\"highly compensated employees\"\" (HCEs) and compares them to non-highly compensated employees (NHCEs). An HCE in 2008 is defined as an employee with compensation of greater than $100,000 in 2007 or an employee that owned more than 5% of the business at any time during the year or the preceding year.[13] In addition to the $100,000 limit for determining HCEs, employers can elect to limit the top-paid group of employees to the top 20% of employees ranked by compensation.[13] That is for plans whose first day of the plan year is in calendar year 2007, we look to each employee's prior year gross compensation (also known as 'Medicare wages') and those who earned more than $100,000 are HCEs. Most testing done now in 2009 will be for the 2008 plan year and compare employees' 2007 plan year gross compensation to the $100,000 threshold for 2007 to determine who is HCE and who is a NHCE. The threshold was $110,000 in 2010 and it did not change for 2011. The average deferral percentage (ADP) of all HCEs, as a group, can be no more than 2 percentage points greater (or 125% of, whichever is more) than the NHCEs, as a group. This is known as the ADP test. When a plan fails the ADP test, it essentially has two options to come into compliance. It can have a return of excess done to the HCEs to bring their ADP to a lower, passing, level. Or it can process a \"\"qualified non-elective contribution\"\" (QNEC) to some or all of the NHCEs to raise their ADP to a passing level. The return of excess requires the plan to send a taxable distribution to the HCEs (or reclassify regular contributions as catch-up contributions subject to the annual catch-up limit for those HCEs over 50) by March 15 of the year following the failed test. A QNEC must be an immediately vested contribution. The annual contribution percentage (ACP) test is similarly performed but also includes employer matching and employee after-tax contributions. ACPs do not use the simple 2% threshold, and include other provisions which can allow the plan to \"\"shift\"\" excess passing rates from the ADP over to the ACP. A failed ACP test is likewise addressed through return of excess, or a QNEC or qualified match (QMAC). There are a number of \"\"safe harbor\"\" provisions that can allow a company to be exempted from the ADP test. This includes making a \"\"safe harbor\"\" employer contribution to employees' accounts. Safe harbor contributions can take the form of a match (generally totaling 4% of pay) or a non-elective profit sharing (totaling 3% of pay). Safe harbor 401(k) contributions must be 100% vested at all times with immediate eligibility for employees. There are other administrative requirements within the safe harbor, such as requiring the employer to notify all eligible employees of the opportunity to participate in the plan, and restricting the employer from suspending participants for any reason other than due to a hardship withdrawal.\"" }, { "docid": "449001", "title": "", "text": "There are too many nuances to the question asked to explore fully but here are a few points to keep in mind. If you are a cash-basis taxpayer (most individuals are), then you are not required to pay taxes on the money that has been billed but not received as yet. If you operate on an accrual basis, then the income accrues to you the day you perform the service and not on the day you bill the client. You can make four equal payments of estimated tax on the due dates, and if these (together with any income tax withholding from wage-paying jobs) are at least 90% of your tax liability for that year, then you owe no penalties for underpayment of tax regardless of how your income varied over the year. If your income does vary considerably over the year (even for people who only have wages but who invest in mutual funds, the income can vary quite a bit since mutual funds typically declare dividends and capital gains in December), then you can pay different amounts in each quarterly installment of estimated tax. This is called the annualization method (a part of Form 2210 that is best avoided unless you really need to use it). Your annualized income for the payment due on June 15 is 2.4 = 12/5 times your taxable income through May 31. Thus, on Form 2210, you are allowed to assume that your average monthly taxable income through May 31 will continue for the rest of the year. You then compute the tax due on that annualized income and you are supposed to have paid at least 45% of that amount by June 15. Similarly for September 15 for which you look at income through August 31, you use a multiplier of 1.5 = 12/8 and need to pay 67.5% of the tax on the annualized income, and so on. If you miscalculate these numbers and pay too little tax in any installment, then you owe penalties for that quarter. Most people find that guesstimating the tax due for the entire year and paying it in equal installments is simpler than keeping track of nuances of the annualized method. Even simpler is to pay 100% of last year's tax in four equal installments (110% for high earners) and then no penalty is due at all. If your business is really taking off and your income is going to be substantially higher in one year, then this 100%/110% of last year's tax deal could allow you to postpone a significant chunk of your tax bill till April 15." }, { "docid": "209688", "title": "", "text": "So I was working at my dad's perfume store yesterday so he can take a day off. And I don't have that much experience, I occasionally fill in whenever he needs to take a day off for something. So yesterday I thought it was my lucky day cause I had two groups of people come in and buy nearly 500$ worth of items each but with credit cards. Now once again I don't have that much experience with this type of work. I just sold them the stuff but the procedure was the same as with any other group of people buying multiple items. Show them multiple stuff, bargain, and eventually they buy the stuff. I entered the price on the machine, they put in the card, they put in the pin, they signed the receipt and it was the end of that. Turns out both groups used stolen cards. So I get a call from my brother today saying both cards were stolen and we might not get the money for the stuff. But I pretty much followed the procedure I was told to, its just I don't know why we wouldn't get the money back." }, { "docid": "390864", "title": "", "text": "I sold it at 609.25 and buy again at 608.75 in the same day If you Sold and bought the same day, it would be considered as intra-day trade. Profit will be due and would be taxed at normal tax brackets. Edits Best Consult a CA. This is covered under Indian Accounting Standard AG51 The following examples illustrate the application of the derecognition principles of this Standard. (e) Wash sale transaction. The repurchase of a financial asset shortly after it has been sold is sometimes referred to as a wash sale. Such a repurchase does not preclude derecognition provided that the original transaction met the derecognition requirements. However, if an agreement to sell a financial asset is entered into concurrently with an agreement to repurchase the same asset at a fixed price or the sale price plus a lender's return, then the asset is not derecognised. This is more relevant now for shares/stocks as Long Term Capital Gains are tax free, Long Term Capital Loss cannot be adjusted against anything. Short Term Gains are taxed differentially. Hence the transaction can be interpreted as tax evasion, professional advise is recommended. A simple way to avoid this situation; sell on a given day and buy it next or few days later." }, { "docid": "121811", "title": "", "text": "\"Oh! Well, on that mark, we are in agreement! But we need to get to the source of the issue so we can correct it properly, rather than blanketing it as \"\"the government\"\". Sources of issues: 1) Lobbyists for special interests can actually push through garbage bills due to lack of knowledge by, and financial influences over, congress. 2) Regulation groups are also infested with Lobbyists and special interest groups whose goals are counter to the regulating. Regulators are being financially influenced as well. 3) Voting is manipulated by Gerrymandering and inadequate voting systems. First Past the Post removes choice from the voters in favor of the preferences of a \"\"faux\"\" two part system. 4) Bills that already disrupt the healthy economic working of the nation are already in place and causing damage. Things like the Post Office need revamped to foster competition rather than stifle it. What else am I missing in this list?\"" }, { "docid": "406623", "title": "", "text": "Here's an answer copied from https://www.quora.com/Why-is-the-second-quarter-of-estimated-quarterly-taxes-only-two-months Estimated taxes used to be paid based on a calendar quarter, but in the 60's the Oct due date was moved back to Sept to pull the third quarter cash receipts into the previous federal budget year which begins on Oct 1 every year, allowing the federal government to begin the year with a current influx of cash. That left an extra month that had to be accounted for in the schedule somewhere. Since individuals and most businesses report taxes on a calendar year, the fourth quarter needed to continue to end on Dec 31 which meant the Jan 15 due date could not be changed, that left April and July 15 dues dates that could change. April 15 was already widely known as the tax deadline, so the logical choice was the second quarter which had its due date changed from July 15 to June 15." } ]

[ { "docid": "2996", "title": "", "text": "Yes, the borrower is responsible for paying back the full amount of the loan. Foreclosure gives the bank possession of the property, which they can (and do) sell. Any shortfall is still the borrower's responsibility. But, no, the bank can't sell the property for a dollar; they have to make a reasonable effort. Usually the sale is done through a sheriff's sale, that is, a more or less carefully supervised auction. Bankruptcy will wipe out the shortfall, and most other debts, but the downside is that most of the rest of your assets will also be sold to help pay off what you owe. Details of what you can keep vary from state to state. If you want to go this route, hire a lawyer." } ]

[ { "docid": "595029", "title": "", "text": "This is an all too common problem and is not easy to resolve. Divorce agreements do not alter prior mortgage contracts. Most importantly, the bank is not required, and will not normally, remove the girlfriend from the mortgage even if she quitclaimed it to her Ex. If he has abandoned the property there is a good chance he will not make any more future payments. She should be prepared to make the payments if he doesn't or expect her credit to continue to deteriorate rapidly. She needs to contact her divorce attorney to review their mutual obligations. A court can issue orders to try to force the Ex to fulfill the divorce agreement. However, a court cannot impose a change to the mortgage obligations the borrowers made to the bank. Focus on this. It's far more important than adding her to a car loan or credit card. Sorry for the bad news. As for the car loan, it's best to leave her off the loan. You will get better terms without her as a joint owner. You can add her as an additional driver for insurance purposes. Adding her to your credit cards will help her credit but not a lot if the mortgage goes to default or foreclosure." }, { "docid": "271919", "title": "", "text": "its not against the rules anymore, ever since uber lost one of its many lawsuits, i think it was deemed to be in violation of certain state laws. With that said, it was a concession to drivers especially after uber cut rates to bare bones and drivers weren't making any money at all. really, tips just subsidize drivers lost income from rate cuts that uber used to kill competition over the years, drivers arent making anywhere near what they made using uber in 13/14/15 and the promises of increased ridership never panned out, not to mention the disasters that were uber pool, uber driverless (compounded by a rate cut at the same time making it look like an intimidation tactic to drivers), etc. I drove for both only until i got the bonuses, job sucks, still find glitter in my car (its been 2 fucking years), and my cynicism was reaffirmed by the experience, I wouldn't mind if uber died and left lyft to pick at its decaying corpse. Hell, I wouldnt mind if Travis kal-whatever got hit by an ex uberdriver and left for buzzards to pick at his decaying corpse, guys a douche." }, { "docid": "333583", "title": "", "text": "I wouldn't confront him. It's really none of your business what he has done or not done with your money as long as you've been a faithful tenant. Whoever gets the house after the foreclosure wants you to stay. I mean, a faithful tenant paying rent is a whole lot better than no one in the house at all. The new landlord (if it's the bank) probably will leave you alone for the most part. Just take MrChrister's advice and document everything and don't let the bank bully you around. It's not your fault the owner got foreclosed on. Remember that the foreclosure process takes months so just because papers got served today (hypothetically) doesn't mean next week the bank takes over the house." }, { "docid": "408213", "title": "", "text": "Re (1), I don't think it makes any difference. What does make a difference is the presence of your signature on the loan documents, unfortunately. And even if your ex-business partner didn't include the LoC in his bankruptcy, if he or his company don't have any money the bank is still going to come after you." }, { "docid": "544663", "title": "", "text": "\"This is more of a long comment but may answer user's situation too. I have dealt with joint mortgages before in 3 states in the US. Basically in all three states if one party wants to sell, the home goes up for sale. This can be voluntary or it can go up via auction (not a great choice). In 2 of the 3 states the first person to respond to the court about the property, the other party pays all legal fees. Yes you read this right. In one case I had an ex who was on my mortgage, she had no money invested in the house ($0 down and still in college with no job). [If she wasn't on the mortgage I wouldn't have gotten loan - old days of dumb rules] When we split her lawyer was using the house as a way to extort other money from me. Knowing the state's laws I already filed a petition for the property but put it on hold with the clerk. Meaning that no one else could file but if someone tried mine would no longer be on hold. My ex literally spent thousands of dollars on this attorney and they wanted to sell the house and get half the money from the house. So sale price minus loan amount divided between us. This is the law in almost every state if there is no formal contract. I was laughing because she wanted what would be maybe 50-75K for paying no rent, no money down, and me paying for her college. Finally I broke her attorney down (I didn't lawyer up but had many friends who were lawyers advising). After I told her lawyer she wasn't getting anything - might have said it in not a nice way - her lawyer gave me her break down. To paraphrase she said, \"\"We are going to file now. My assistant is in the court clerk's office. You can tell the court whatever you want. Maybe they will give you a greater percentage since you put the money down and paid for everything but you are taking that chance. But you will pay for your lawyer and you will need one. And you will pay for me the entire time. And this will be a lengthy process. You would be better served to pay my client half now.\"\" Her office was about 2 blocks from court. I laughed at her and simply told her to have her assistant do whatever she wanted. I then left to go to clerk's office to take the hold off. She had beat me to the office (I moved my car out of her garage). By the time I got there she was outside yelling at her assistant, throwing a hissy fit, and papers were flying everywhere. We \"\"settled\"\" the next day. She got nothing other than the things she had already stolen from me. If I wouldn't have known about this loophole my ex would have gotten or cost me through attorney's fees around 40-50K for basically hiring a lawyer. My ex didn't really have any money so I am pretty sure lawyer was getting a percent. Moral of the story: In any contract like this you always want to be the one bringing in the least amount of money. There are no laws that I know of in any country where the person with the least amount on a contract will come out worse (%-wise). Like I said in the US the best case scenario that I know of for joint property is that the court pays out the stakeholder all of their contributions then it splits things 50/50. This is given no formal contract that the court upholds. Don't even get me started with hiring attorneys because I have seen the courts throw out so many property contracts it isn't even funny. One piece of advice on a contract if you do one. Make it open and about percentages. Party A contributes 50K, Party B 10K, Party A will pay this % of mortgage and maintenance and will get this % when home is sold. I have found the more specific things are the more loopholes for getting out of them. There are goofy ass laws everywhere that make no sense. Why would the person first filing get their lawyers paid for??? The court systems in almost all countries can have their comical corners. You will never be able to write a contract that covers everything. If the shower handle breaks, who pays for it? There is just too many one-off things with a house. You are in essence getting in a relationship with this person. I hear others say it is a business transaction. NO. You are living with this person. There is no way to make it purely business. For you to be happy with this outcome both of you must remain somewhat friends and at the very least civil with each other. To add on to the previous point, the biggest risk is this other person's character and state of mind. They are putting in the most money so you don't exactly have a huge money risk. You do have a time and a time-cost risk. Your time or the money you do have in this may be tied up in trying to get your money out or house sold. A jerk could basically say that you get nothing, and make you traverse the court system for a couple years to get a few thousand back. And that isn't the worst case scenario. Always know your worst case scenario. Yours is this dude is in love with you. When he figures out 2-3 years later after making you feel uncomfortable the entire time that you are not in love with him, he starts going nuts. So he systematically destroys your house. Your house worth plummets, you want out, you can't sell the house for price of loan, lenders foreclose or look to sue you, you pay \"\"double rent\"\" because you can't live with the guy, and you have to push a scooter to get to work. That is just the worst case scenario. Would I do this if I were 25 and had no family? Yea, why not if I trusted the other person and was friends with them? If it were just a co-worker? That is really iffy with me. Edit: Author said he will not be living with the person. So wording can be changed to say \"\"potentially\"\" in front of living with him in my examples.\"" }, { "docid": "321742", "title": "", "text": "They are not supposed to force any tax or escrow payments in addition to your normal principal and interest payment, unless you are delinquent on your taxes and insurance. If you are late or delinquent at all they can force you into escrows depending on how your Deed of Trust (mortgage) is worded. That being said, I've had to deal with BoA on behalf of clients over the same issues you just mentioned. Their whole system is made to cause chaos and confusion, especially for poor souls trying to complete a short sale, or a loan restructuring program. They are forever losing vital paperwork, or saying they didn't get documents in time, even though you spoke with someone to confirm receipt. They aren't really set up to help anyone, they just give the illusion of it before they foreclose. I owned a Title and Escrow company for many years, and most all mortgages with most all lenders (in our state) read they had the right to force escrow in the case of delinquency or even accelerate to foreclosure. If you've never been late on either or let your insurance lapse, or taxes fall delinquent, they shouldn't be able to require escrows, unless there is specific language in your original mortgage that says they can. Also, most people aren't aware that non payment isn't the only reason a lender can foreclose. Most mortgages read a lender can foreclose for the following reasons: -Non payment -Failure to keep homeowners insurance -Failure to pay taxes -Condemnation -Storing toxic waste, or hazardous materials -Illegal operations and usage (meth labs, etc...)" }, { "docid": "527636", "title": "", "text": "You only have to hold the shares at the opening of the ex-dividend date to get the dividends. So you can actually sell the shares on ex-dividend date and still get the dividends. Ex-dividend date occurs before the record date and payment date, so you will get the dividend even if you sold before the record date." }, { "docid": "304407", "title": "", "text": "(a) you give away your money - gift tax The person who receives the gift doesn't owe any tax. If you give it out in small amounts, there will be no gift tax. It could have tax and Estate issues for you depending on the size of the gift, the timing, and how much you give away in total. Of course if you give it away to a charity you could deduct the gift. (b) you loan someone some money - tax free?? It there is a loan, and and you collect interest; you will have to declare that interest as income. The IRS will expect that you charge a reasonable rate, otherwise the interest could be considered a gift. Not sure what a reasonable rate is with savings account earning 0.1% per year. (c) you pay back the debt you owe - tax free ?? tax deductible ?? The borrower can't deduct the interest they pay, unless it is a mortgage on the main home, or a business loan. I will admit that there may be a few other narrow categories of loans that would make it deductible for the borrower. If the loan/gift is for the down payment on a house, the lender for the rest of the mortgage will want to make sure that the gift/loan nature is correctly documented. The need to fully understand the obligations of the homeowner. If it is a loan between family members the IRS may want to see the paperwork surrounding a loan, to make sure it isn't really a gift. They don't look kindly on loans that are never paid back and no interest collected." }, { "docid": "41922", "title": "", "text": "This would be no different than asking if you can live in one state and earn a paycheck, then move to another state with a lower tax rate before your tax bill is due so you can save on your taxes for that income. Answer -- No The tax on lottery winnings is based on the state where the lottery was held, because for legal purposes that's where the winnings are considered to have been earned for taxation purposes. Also, changing where you live after earning money does not change your tax liability at all. You still owe the state where the money was earned the tax that is due. I hope this helps. Good luck!" }, { "docid": "175996", "title": "", "text": "HARP is the Home Affordable Refinance Program. Announced in March 2009, HARP is a federally funded government program designed to help the 5 million homeowners who currently owe more on their mortgage then their home is currently worth, otherwise known as being underwater or near-underwater, refinance their mortgages into a fixed loan with a lower monthly payment. However, as of Aug. 31, only 894,000 borrowers have refinanced through HARP." }, { "docid": "323642", "title": "", "text": "\"From the HLSS 1st quarter 10Q: \"\"Match funded advances on loans serviced for others result from our transfers of residential loan servicing advances to SPEs in exchange for cash. The SPEs issue debt supported by collections on the transferred advances. We made these transfers under the terms of our advance facility agreements. These transfers do not qualify for sale accounting because we retain control over the transferred assets. As a result, we account for these transfers as financings and classify the transferred advances on our Interim Condensed Consolidated Balance Sheet as Match funded advances and the related liabilities as Match funded liabilities. We use collections on the Match funded advances pledged to the SPEs to repay principal and to pay interest and the expenses of the entity. Holders of the debt issued by this entity can look only to the assets of the entity itself for satisfaction of the debt and have no recourse against HLSS.\"\" I'm not an expert in the accounting of these things but I'll take a stab from the view of a bond investor. Let's assume the mortgage(s) in question have been pooled together and sold into the bond market in the form of a mortgage-backed security (MBS). When a homeowner falls behind on their payment, scheduled principal and interest (their monthly mortgage payment amount, or \"\"P&amp;I\"\") is advanced as if the borrower is still current to the person who holds the MBS. This is typically done from the time they first fall behind until either they 1) catch up on their payments or, 2) are foreclosed upon and the home is sold to repay the mortgage balance. In either instance the advanced monthly payments are recaptured by the servicer before the holder of the MBS is paid. In this sense, the servicer develops a sort of prepaid asset over time by advancing money they are almost certain to recover at a future date (usually via foreclosure and liquidation). Due to a high number of borrowers falling behind on their payments since the housing crisis and the resulting time it takes to foreclose on a property, the servicers (OCN, HLSS, etc.) have built a large balance of advances on the asset side of their balance sheet. To free up this cash prior to liquidation of the home, they have sold short term bonds against this asset (via an SPE), thereby creating the liability you reference. So in essence they have, say, a home they expect to be liquidated in twelve months that they have advanced P&amp;I on. The short term bonds sold via the SPE offset this asset at an equivalent term, thereby making the asset and liability \"\"match funded\"\".\"" }, { "docid": "409266", "title": "", "text": "\"Just like foreclosing is less than optimal for the banks, a tax sale has drawbacks for the county. At a minimum, there the manpower needed to process the foreclosure and sale, and in many cases the value for which the property can be sold is probably less than the taxes due. The problem is this flies in the face of the \"\"personal responsibility\"\" talking point that many bankers have been spreading since the beginning of the financial crisis. It's a moral failing for a homeowner to walk away from an upside-down mortgage, but when the bank does the same thing for a tax bill it's a simple business decision.\"" }, { "docid": "201987", "title": "", "text": "In addition to the reasons discussed in JoeTaxpayer's answer, consider that a 401(k) plan is run by an employer (though the details might be delegated to a plan administrator) and it is a headache to have to deal with ex-employees (including retirees) with whom one might have no further relationship once the employment has ceased. Pension plans in addition to 401(k) plans are a rarity these days. Hence, no RMDs need be taken while still employed past age 70.5, but after that, let's keep in touch at least once a year so that we can send you some of the money we are holding for you." }, { "docid": "417257", "title": "", "text": "You might want to bring this fancy new IRS rule to your employer's attention. If your employer sets it up, an After-Tax 401(k) Plan allows employees to contribute after-tax money above the $18k/year limit into a special 401(k) that allows deferral of tax on all earnings until withdrawal in retirement. Now, if you think about it, that's not all that special on its own. Since you've already paid tax on the contribution, you could imitate the above plan all by yourself by simply investing in things that generate no income until the day you sell them and then just waiting to sell them until retirement. So basically you're locking up money until retirement and getting zero benefit. But here's the cool part: the new IRS rule says you can roll over these contributions into a Roth 401(k) or Roth IRA with no extra taxes or penalties! And a Roth plan is much better, because you don't have to pay tax ever on the earnings. So you can contribute to this After-Tax plan and then immediately roll over into a Roth plan and start earning tax-free forever. Now, the article I linked above gets some important things slightly wrong. It seems to suggest that your company is not allowed to create a brand new 401(k) bucket for these special After-Tax contributions. And that means that you would have to mingle pre-tax and post-tax dollars in your existing Traditional 401(k), which would just completely destroy the usefulness of the rollover to Roth. That would make this whole thing worthless. However, I know from personal experience that this is not true. Your company can most definitely set up a separate After-Tax plan to receive all of these new contributions. Then there's no mingling of pre-tax and post-tax dollars, and you can do the rollover to Roth with the click of a button, no taxes or penalties owed. Now, this new plan still sits under the overall umbrella of your company's total retirement plan offerings. So the total amount of money that you can put into a Traditional 401(k), a Roth 401(k), and this new After-Tax 401(k) -- both your personal contributions and your company's match (if any) -- is still limited to $53k per year and still must satisfy all the non-discrimination rules for HCEs, etc. So it's not trivial to set up, and your company will almost certainly not be able to go all the way to $53k, but they could get a lot closer than they currently do." }, { "docid": "506826", "title": "", "text": "Unfortunately assets placed in a safety deposit box are not covered under the Federal Deposit Insurance Program (FDIC). Unless the bank is found to be negligent in the way it handled or protected your safety deposit box, neither them nor their private insurance company will reimburse you for the loss. Find out if in the duration you had your box with them, they moved, transitioned or merged with another entity. In this specific situation, you may be able to demonstrate negligence on the part of the banks as they have seemingly misplaced your box during their transition phase, and depending upon the value of the items placed in your safety deposit box, you may be entitled to some form of recovery. Some homeowner's insurance policies may also cover the loss, but if you didn't document what you kept in the box, you have difficulty verifying proof of the value. Valuables are often lost but documents can often be reconstructed. You can get stock and bonds by paying a fee for new certificates. For wills and trusts, you can reach out to the lawyer that prepared them for a copy. You should always keep 3 copies of such documents. When you put stuff in the box, always videotape it (photographs can be challenged) but if the video shows it was put in there, although it can still be taken out by you after you turn off the camera, yields more weight in establishing content and potential value. Also know the value of the items and check with your homeowner policy to make sure the default amount covers it, if not then you may need to include a rider to add the difference in value and the video, receipts, appraisals and such will serve you well in the future in such unfortunate circumstances. If the contents of a safety deposit box are lost because you didn't pay the fee, then depending on the state you are in the time frame might vary (3 years on average), but none the less they are sent to the State's unclaimed property/funds department. You can search for these online often times or by contacting the state. It would help for you to find out which scenario you are in, their fault or yours, and proceed accordingly. Good luck." }, { "docid": "388414", "title": "", "text": "\"I appreciate the actually reasonable initial response. I've been consistently called a fake and a fraud mostly by, as you can probably guess, my competitors and my ex who has turned genuinely psycho. She and her father have now made the news for being directly connected to well documented international and American human rights violations, her father being directly connected to apparently a police chiefs admitted systematic protected records falsification/tampering/destruction and so much else. Those two groups arent exactly mutually exclusive at the moment. Her father works in PR/lobbying and she basically tried to make it a goal to ruin me. Why you might ask? Thats a great question. Could have something to do with the money I make people and people potentially owing me more than a few million. You really have to also consider though that would be an absurdly small price to pay for a billion especially if it took about 20 min to deliver in just that instance. Also the fact that she couldnt keep her clothes on to save her life after that point. All of the fake/fraud rhetoric is despite the fact, and probably because, I literally completed industry leading and often freely available open source economic work for no pay for several years as well as my comp (when I actually bill) being largely entirely performance based which almost nobody in the industry will even contemplate. Im not even that smart I just basically as it appears comparably dont have a sudden compulsive need to actively feel like I'm causing problems for people or just bullshit people frankly. Quite the opposite. A good number of the people who have tried to discredit or defame me in some way, if they knew the cause of this situation, probably wouldnt exactly be happy with it. Especially so considering how much money its likely very tangibly cost them just largely due to a psycho ex. On an anecdotal basis, despite previously knowing this was reflected in the data, I can hardly think of more of a good reason to just actually work with people and see how it goes than this. All of its to basically say I'm sure a guy (and his company) who is that wealthy publicly has had a few situations that make his life complicated and some probably without any good reason. You might have missed out. I know a few very skilled people who went to work for them. If you were offered to be flown out to them for an interview like that (again), definitely go (especially if you have fallback(s)) and just see what they are willing to do to address your concerns. I know Amazon being stressful is a common thing thats said; however, Amazon isnt a dumb company. They need skilled people and if it makes sense for them it wouldnt surprise me if they could figure something out that would work for both of you. Plus you can always quit as opposed to some things that you cant just say \"\"stop\"\" or \"\"be reasonable\"\" and have it resolved in a few weeks or less. I hope this helps you in some way.\"" }, { "docid": "364332", "title": "", "text": "The largest problem and source of anxiety / ruin for homeowners during the housing market collapse was caused by the inability to refinance. Many people had bought homes which they were stretched to afford, by using variable-rate mortgages. These would typically offer a very attractive initial rate, with an annual cap on the potential increase of rate. Many of these people intended to refinance their variable-rate to a fixed rate once terms were more favorable. If their house won't appraise for the value needed to obtain a new loan, they are stuck in their current contract with potentially unfavorable rates in the later years (9.9% above prime was not unheard of.) Also, many people, especially those in areas of high inflation in the housing market, used a financial device known as a Balloon Mortgage, which essentially forced you to get a new loan after some number of years (2, 5, 10) when the entire note became due. Some of those loans offered payments less than Principal + Interest! So, say you move near Los Angeles and can't afford the $1.2M for the 3-bedroom ranch in which you wish to live. You might work out a deal with your mortgage broker/banker in which you agree contractually to only pay $500/month, with a balloon payment of $1.4M due in 5 years, which seemed like a good deal since you (and everyone else,) actually expect the house to be 'worth' $1.5M in 5 years. This type of thing was done all the time back in the day. Now, imagine the housing bubble bursts and your $1.2M home is suddenly only valued at, perhaps, $750k. You still owe $1.4M sometime in the next several years (maybe very soon, depending on timing,) and can only get approved financing for the current $750k value -- so you're basically anticipating becoming homeless and bankrupt within the same year. That is a source of much anxiety about being upside-down on a loan. See this question for an unfortunate example." }, { "docid": "391644", "title": "", "text": "Insurance you purchase is paid to you. However, even if the home is destroyed, you still owe all the money to the bank, and you no longer have the house as part of the land's value to guarantee the loan. So depending on how much the land is still worth versus how much you owe -- and exactly what the terms of the loan are -- you may need to use some or all of that money to repay enough of the loan to bring it back within the bank's policies. Read the terms of the loan -- consider asking a lawyer to clarify it for you if necessary; having a lawyer review that kind of major contract is always wise anyway. –" }, { "docid": "247449", "title": "", "text": "\"I'll assume you live in the US for the start of my answer - Do you maximize your retirement savings at work, at least getting your employer's match in full, if they do this. Do you have any other debt that's at a higher rate? Is your emergency account funded to your satisfaction? If you lost your job and tenant on the same day, how long before you were in trouble? The \"\"pay early\"\" question seems to hit an emotional nerve with most people. While I start with the above and then segue to \"\"would you be happy with a long term 5% return?\"\" there's one major point not to miss - money paid to either mortgage isn't liquid. The idea of owing out no money at all is great, but paying anything less than \"\"paid in full\"\" leaves you still owing that monthly payment. You can send $400K against your $500K mortgage, and still owe $3K per month until paid. And if you lose your job, you may not so easily refinance the remaining $100K to a lower payment so easily. If your goal is to continue with real estate, you don't prepay, you save cash for the next deal. Don't know if that was your intent at some point. Disclosure - my situation - Maxing out retirement accounts was my priority, then saving for college. Over the years, I had multiple refinances, each of which was a no-cost deal. The first refi saved with a lower rate. The second, was in early 2000s when back interest was so low I took a chunk of cash, paid principal down and went to a 20yr from the original 30. The kid starts college, and we target retirement in 6 years. I am paying the mortgage (now 2 years into a 10yr) to be done the month before the kid flies out. If I were younger, I'd be at the start of a new 30 yr at the recent 4.5% bottom. I think that a cost of near 3% after tax, and inflation soon to near/exceed 3% makes borrowing free, and I can invest conservatively in stocks that will have a dividend yield above this. Jane and I discussed the plan, and agree to retire mortgage free.\"" } ]

[ { "docid": "387218", "title": "", "text": "\"Generally, yes, although not in all states. According to this article in Time: But in non-recourse states — Alaska, Arizona, California, Connecticut, Florida, Idaho, Minnesota, North Carolina, North Dakota, Texas, Utah, and Washington — the bank has no recourse beyond the repossession of the property. As for the question about what price the bank can sell it: again, each state makes its own rules, and states may have rules against selling it for much below market value. Quick Google for \"\"ohio state law foreclosure deficiency judgement market value\"\" turned this up: Limitation on Deficiency Judgments. The property cannot be sold at foreclosure sale for less than two-thirds of the appraised fair market value. (Ohio Rev. Code §§ 2329.20, 2329.17). (source: http://www.nolo.com/legal-encyclopedia/deficiency-judgments-after-foreclosure-ohio.html)\"" } ]

[ { "docid": "586759", "title": "", "text": "Your understanding is incorrect. The date of record is when you have to own the stock by. The ex-dividend date is calculated so that transaction before that date settles in time to get you listed as owner by the date of record. If you buy the stock before the ex-dividend date, you get the dividend. If you buy it on or after the ex-dividend date, the seller gets the dividend." }, { "docid": "148440", "title": "", "text": "\"The ex indicator is meant to be a help for market participants. On the ex-day orders will go into a different order book, the ex order book, which at the start of the ex day will be totally empty, i.e. no orders from the non-ex day book have been copied over. Why does this help? Well imagine you had a long-standing buy order in the book, well below the current price, and now the share price halves due to a 2-for-1 split, would you want to see your order executed? If so, your order should have gone into the ex-book which is only active on the ex-day (and orders in the ex book are usually copied over to the normal book on the day after the ex-day but this is exchange-specific). Think of it as an additional safety net to tell the exchange: \"\"I know what I'm doing: I want to buy this stock totally overpriced after the 2-for-1 split\"\". Now some exchanges and/or some securities (mostly derivatives) linked with the security in question don't have this notion of ex or the ex-book, and they will tell you by \"\"will not be quoted ex\"\" or \"\"the ex indicator is missing\"\". In your case (SNE) it is a sponsored ADR, the ex-date was Mar 28 2016, one day before the ex date of the Japanese original. According to my understanding of NYSE rules, there is no specific rule for or against omitting the ex-indicator. It seems to be a decision on a case by case basis. Looking through the dividends of other Japanese ADRs I drew the conclusion none of them have an ex-book and so all of them are announced as: \"\"Will not be quoted ex by the exchange\"\". Again, this is based on my observations.\"" }, { "docid": "391644", "title": "", "text": "Insurance you purchase is paid to you. However, even if the home is destroyed, you still owe all the money to the bank, and you no longer have the house as part of the land's value to guarantee the loan. So depending on how much the land is still worth versus how much you owe -- and exactly what the terms of the loan are -- you may need to use some or all of that money to repay enough of the loan to bring it back within the bank's policies. Read the terms of the loan -- consider asking a lawyer to clarify it for you if necessary; having a lawyer review that kind of major contract is always wise anyway. –" }, { "docid": "175996", "title": "", "text": "HARP is the Home Affordable Refinance Program. Announced in March 2009, HARP is a federally funded government program designed to help the 5 million homeowners who currently owe more on their mortgage then their home is currently worth, otherwise known as being underwater or near-underwater, refinance their mortgages into a fixed loan with a lower monthly payment. However, as of Aug. 31, only 894,000 borrowers have refinanced through HARP." }, { "docid": "36251", "title": "", "text": "\"To Many question and they are all treated differently. I was wondering how the logistics of interest and dividend payments are handled on assets , such as mortgages, bonds, stocks, What if the owner is some high-frequency algorithm that buys and sells bonds and stocks in fractions of a second? When the company decides to pay dividends, does it literally track down every single owner of that stock and deposit x cents per share in that person's bank account? (This sounds absolutely absurd and seems like it would be a logistical nightmare). In Stocks, the dividends are issued periodically. The dividend date is declared well in advance. As on end of the day on Dividend date, the list of individuals [or entities] who own the stock is available with the Stock-Exchange / Registrar of the companies. To this list the dividends are credited in next few days / weeks via banking channel. Most of this is automated. What if the owner is some high-frequency algorithm that buys and sells bonds and stocks in fractions of a second? On bonds, things work slightly differently. An Bond is initially issued for say 95 [discount of 5%] and payment of 100 after say 5 years. So when the person sells it after an year, he would logically look to get a price of 96. Of course there are other factors that could fetch him a price of 94.50 or 95.50. So every change in ownership factors in the logical rate of interest. The person who submits in on maturity gets 100. For the homeowner, I'm assuming he / she still makes mortgage payments to the initial bank they got the mortgage from, even if the bank no longer \"\"owns\"\" the mortgage. In this case, does the trader on the secondary market who owns the mortgage also come back to that bank to collect his interest payment? This depends on how the original financial institution sells the mortgage to new institutions. Generally the homeowner would keep paying initial financial institution and they would then take a margin and pay the secondary investor. If this was collateral-ized as Mortgage backed security, it is a very different story.\"" }, { "docid": "457269", "title": "", "text": "\"Usually... I think that's overstating the case. You CAN get a bargain (especially if the place is in not-so-great condition), but not every foreclosure will be a good deal even if it is priced well below its most recently appraised value. As the buyer it's your responsibility to determine whether it's priced well or not, and to decide whether you're willing and able to repair its deficiencies after you buy it. The same's true when purchasing any house; foreclosures just make it more likely that there are problems and (hopefully) wind up being priced to allow for them. I don't know of a single website which lists all foreclosures. Some of the home listing websites do have a \"\"show me foreclosure listings\"\" filter, and I'm sure that the better tools available to real estate agents can select these. But if that's the direction you're interested in going, you should be looking at distressed properties generally, NOT just foreclosures; you may get a better deal, in the long run, by going for the one that has been mechanically maintained but is just plain ugly rather than the one with a pretty skin whose heating system hasn't been serviced for the last decade. Do your homework, shop around, don't fall in love with any one house... all the same rules apply at this end of the spectrum just as strongly as they do in the mid or upper ranges. Perhaps more so. Happy hunting!\"" }, { "docid": "309196", "title": "", "text": "Income tax write off idea would be difficult in California with prop 13 in place. Also, the current legislature would find some way of jumping on its coat tails to impose even more taxes and fees. And current homeowners would oppose it seeing as property values would drop. Still though, getting the foreign money out of the market would give people a fighting chance at homeownership in the areas they want to buy in." }, { "docid": "247449", "title": "", "text": "\"I'll assume you live in the US for the start of my answer - Do you maximize your retirement savings at work, at least getting your employer's match in full, if they do this. Do you have any other debt that's at a higher rate? Is your emergency account funded to your satisfaction? If you lost your job and tenant on the same day, how long before you were in trouble? The \"\"pay early\"\" question seems to hit an emotional nerve with most people. While I start with the above and then segue to \"\"would you be happy with a long term 5% return?\"\" there's one major point not to miss - money paid to either mortgage isn't liquid. The idea of owing out no money at all is great, but paying anything less than \"\"paid in full\"\" leaves you still owing that monthly payment. You can send $400K against your $500K mortgage, and still owe $3K per month until paid. And if you lose your job, you may not so easily refinance the remaining $100K to a lower payment so easily. If your goal is to continue with real estate, you don't prepay, you save cash for the next deal. Don't know if that was your intent at some point. Disclosure - my situation - Maxing out retirement accounts was my priority, then saving for college. Over the years, I had multiple refinances, each of which was a no-cost deal. The first refi saved with a lower rate. The second, was in early 2000s when back interest was so low I took a chunk of cash, paid principal down and went to a 20yr from the original 30. The kid starts college, and we target retirement in 6 years. I am paying the mortgage (now 2 years into a 10yr) to be done the month before the kid flies out. If I were younger, I'd be at the start of a new 30 yr at the recent 4.5% bottom. I think that a cost of near 3% after tax, and inflation soon to near/exceed 3% makes borrowing free, and I can invest conservatively in stocks that will have a dividend yield above this. Jane and I discussed the plan, and agree to retire mortgage free.\"" }, { "docid": "76285", "title": "", "text": "You will need to buy a stock before the ex-dividend date to receive the dividends. You can sell a stock on the ex-dividend date or after and you will receive the dividends. So if the ex-dividend date is the 5th August, you need to buy before the 5th and you can sell on the 5th or after, to receive the dividends. Definitions from the ASX: Record date The Record Date is 5.00pm on the date a company closes its share register to determine which shareholders are entitled to receive the current dividend. It is the date where all changes to registration details must be finalised. Ex dividend date The ex dividend date occurs two business days before the company's Record Date. To be entitled to a dividend a shareholder must have purchased the shares before the ex dividend date. If you purchase shares on or after that date, the previous owner of the shares (and not you) is entitled to the dividend. A company's share price may move up as the ex dividend date approaches and then fall after the ex dividend date." }, { "docid": "422468", "title": "", "text": "\"In some cases perhaps, but in others not. Several homes near me were sold over and over again during the bubble years (at incrementally higher and higher sale prices) -- the last owners in nearly all cases defaulted and the banks (after dragging their feet for a couple of years) finally foreclosed and sold the homes off cheap. In all but one of the \"\"distressed sale\"\" cases, the people buying the houses now ARE in fact moving into them as their primary home (the exception being a current resident who bought the adjacent home with the intentions of fixing it up &amp; renting it out, I believe at least initially to a family member); but in ALL cases (in no small part due to the fact that they were able to purchase the properties cheap) these new owners are investing substantial money into fixing them up (new roof &amp; gutters, new windows &amp; doors, paint and/or siding, often all new carpeting, some landscaping, etc). Also, from the perspective of our homeowners association, all of these new people think our annual HOA fees are a \"\"bargain\"\", whereas the previous bubble-era \"\"homeowners\"\" (if, having invested almost nothing, they could truly be called that) did nothing but whine and complain (well, and once they began defaulting on their mortgages, they also defaulted on their HOA fees). So it's a win-win for our neighborhood. We're getting good, solid residents who are planning on taking care of their properties... the exact opposite of what you are claiming. (The \"\"house-flippers\"\" you decry were the ones buying with \"\"no money down\"\" during the bubble era -- and they nearly killed the neighborhood.)\"" }, { "docid": "456470", "title": "", "text": "What is a dividend? Essentially, for every share of a dividend stock that you own, you are paid a portion of the company’s earnings. You get paid simply for owning the stock! For example, let’s say Company X pays an annualized dividend of 20 cents per share. Most companies pay dividends quarterly (four times a year), meaning at the end of every business quarter, the company will send a check for 1/4 of 20 cents (or 5 cents) for each share you own. This may not seem like a lot, but when you have built your portfolio up to thousands of shares, and use those dividends to buy more stock in the company, you can make a lot of money over the years. The key is to reinvest those dividends! Source: http://www.dividend.com/dividend-investing-101/what-are-dividend-stocks/ What is an ex dividend date Once the company sets the record date, the ex-dividend date is set based on stock exchange rules. The ex-dividend date is usually set for stocks two business days before the record date. If you purchase a stock on its ex-dividend date or after, you will not receive the next dividend payment. Instead, the seller gets the dividend. If you purchase before the ex-dividend date, you get the dividend. Source: https://www.sec.gov/answers/dividen.htm That said, as long as you purchased the stock before 6/4/17 you are entitled to the next dividend. If not, you'll get the following one after that." }, { "docid": "323642", "title": "", "text": "\"From the HLSS 1st quarter 10Q: \"\"Match funded advances on loans serviced for others result from our transfers of residential loan servicing advances to SPEs in exchange for cash. The SPEs issue debt supported by collections on the transferred advances. We made these transfers under the terms of our advance facility agreements. These transfers do not qualify for sale accounting because we retain control over the transferred assets. As a result, we account for these transfers as financings and classify the transferred advances on our Interim Condensed Consolidated Balance Sheet as Match funded advances and the related liabilities as Match funded liabilities. We use collections on the Match funded advances pledged to the SPEs to repay principal and to pay interest and the expenses of the entity. Holders of the debt issued by this entity can look only to the assets of the entity itself for satisfaction of the debt and have no recourse against HLSS.\"\" I'm not an expert in the accounting of these things but I'll take a stab from the view of a bond investor. Let's assume the mortgage(s) in question have been pooled together and sold into the bond market in the form of a mortgage-backed security (MBS). When a homeowner falls behind on their payment, scheduled principal and interest (their monthly mortgage payment amount, or \"\"P&amp;I\"\") is advanced as if the borrower is still current to the person who holds the MBS. This is typically done from the time they first fall behind until either they 1) catch up on their payments or, 2) are foreclosed upon and the home is sold to repay the mortgage balance. In either instance the advanced monthly payments are recaptured by the servicer before the holder of the MBS is paid. In this sense, the servicer develops a sort of prepaid asset over time by advancing money they are almost certain to recover at a future date (usually via foreclosure and liquidation). Due to a high number of borrowers falling behind on their payments since the housing crisis and the resulting time it takes to foreclose on a property, the servicers (OCN, HLSS, etc.) have built a large balance of advances on the asset side of their balance sheet. To free up this cash prior to liquidation of the home, they have sold short term bonds against this asset (via an SPE), thereby creating the liability you reference. So in essence they have, say, a home they expect to be liquidated in twelve months that they have advanced P&amp;I on. The short term bonds sold via the SPE offset this asset at an equivalent term, thereby making the asset and liability \"\"match funded\"\".\"" }, { "docid": "366869", "title": "", "text": "There is no interest outstanding, per se. There is only principal outstanding. Initially, principal outstanding is simply your initial loan amount. The first two sections discuss the math needed - just some arithmetic. The interest that you owe is typically calculated on a monthly basis. The interested owed formula is simply (p*I)/12, where p is the principal outstanding, I is your annual interest, and you're dividing by 12 to turn annual to monthly. With a monthly payment, take out interest owed. What you have left gets applied into lowering your principal outstanding. If your actual monthly payment is less than the interest owed, then you have negative amortization where your principal outstanding goes up instead of down. Regardless of how the monthly payment comes about (eg prepay, underpay, no payment), you just apply these two calculations above and you're set. The sections below will discuss these cases in differing payments in detail. For a standard 30 year fixed rate loan, the monthly payment is calculated to pay-off the entire loan in 30 years. If you pay exactly this amount every month, your loan will be paid off, including the principal, in 30 years. The breakdown of the initial payment will be almost all interest, as you have noticed. Of course, there is a little bit of principal in that payment or your principal outstanding would not decrease and you would never pay off the loan. If you pay any amount less than the monthly payment, you extend the duration of your loan to longer than 30 years. How much less than the monthly payment will determine how much longer you extend your loan. If it's a little less, you may extend your loan to 40 years. It's possible to extend the loan to any duration you like by paying less. Mathematically, this makes sense, but legally, the loan department will say you're in breach of your contract. Let's pay a little less and see what happens. If you pay exactly the interest owed = (p*I)/12, you would have an infinite duration loan where your principal outstanding would always be the same as your initial principal or the initial amount of your loan. If you pay less than the interest owed, you will actually owe more every month. In other words, your principal outstanding will increase every month!!! This is called negative amortization. Of course, this includes the case where you make zero payment. You will owe more money every month. Of course, for most loans, you cannot pay less than the required monthly payments. If you do, you are in default of the loan terms. If you pay more than the required monthly payment, you shorten the duration of your loan. Your principal outstanding will be less by the amount that you overpaid the required monthly payment by. For example, if your required monthly payment is $200 and you paid $300, $100 will go into reducing your principal outstanding (in addition to the bit in the $200 used to pay down your principal outstanding). Of course, if you hit the lottery and overpay by the entire principal outstanding amount, then you will have paid off the entire loan in one shot! When you get to non-standard contracts, a loan can be structured to have any kind of required monthly payments. They don't have to be fixed. For example, there are Balloon Loans where you have small monthly payments in the beginning and large monthly payments in the last year. Is the math any different? Not really - you still apply the one important formula, interest owed = (p*I)/12, on a monthly basis. Then you break down the amount you paid for the month into the interest owed you just calculated and principal. You apply that principal amount to lowering your principal outstanding for the next month. Supposing that what you have posted is accurate, the most likely scenario is that you have a structured 5 year car loan where your monthly payments are smaller than the required fixed monthly payment for a 5 year loan, so even after 2 years, you owe as much or more than you did in the beginning! That means you have some large balloon payments towards the end of your loan. All of this is just part of the contract and has nothing to do with your prepay. Maybe I'm incorrect in my thinking, but I have a question about prepaying a loan. When you take out a mortgage on a home or a car loan, it is my understanding that for the first years of payment you are paying mostly interest. Correct. So, let's take a mortgage loan that allows prepayment without penalty. If I have a 30 year mortgage and I have paid it for 15 years, by the 16th year almost all the interest on the 30 year loan has been paid to the bank and I'm only paying primarily principle for the remainder of the loan. Incorrect. It seems counter-intuitive, but even in year 16, about 53% of your monthly payment still goes to interest!!! It is hard to see this unless you try to do the calculations yourself in a spreadsheet. If suddenly I come into a large sum of money and decide I want to pay off the mortgage in the 16th year, but the bank has already received all the interest computed for 30 years, shouldn't the bank recompute the interest for 16 years and then recalculate what's actually owed in effect on a 16 year loan not a 30 year loan? It is my understanding that the bank doesn't do this. What they do is just tell you the balance owed under the 30 year agreement and that's your payoff amount. Your last sentence is correct. The payoff amount is simply the principal outstanding plus any interest from (p*I)/12 that you owe. In your example of trying to payoff the rest of your 30 year loan in year 16, you will owe around 68% of your original loan amount. That seems unfair. Shouldn't the loan be recalculated as a 16 year loan, which it actually has become? In fact, you do have the equivalent of a 15 year loan (30-15=15) at about 68% of your initial loan amount. If you refinanced, that's exactly what you would see. In other words, for a 30y loan at 5% for $10,000, you have monthly payments of $53.68, which is exactly the same as a 15y loan at 5% for $6,788.39 (your principal outstanding after 15 years of payments), which would also have monthly payments of $53.68. A few years ago I had a 5 year car loan. I wanted to prepay it after 2 years and I asked this question to the lender. I expected a reduction in the interest attached to the car loan since it didn't go the full 5 years. They basically told me I was crazy and the balance owed was the full amount of the 5 year car loan. I didn't prepay it because of this. That is the wrong reason for not prepaying. I suspect you have misunderstood the terms of the loan - look at the Variable Monthly Payments section above for a discussion. The best thing to do with all loans is to read the terms carefully and do the calculations yourself in a spreadsheet. If you are able to get the cashflows spelled out in the contract, then you have understood the loan." }, { "docid": "453582", "title": "", "text": "\"Investopedia explains how a stock split impacts the stock's options: Each option contract is typically in control of 100 shares of an underlying security at a predetermined strike price. To find the new coverage of the option, take the split ratio and multiply by the old coverage (normally 100 shares). To find the new strike price, take the old strike price and divide by the split ratio. Say, for example, you own a call for 100 shares of XYZ with a strike price of $75. Now, if XYZ had a stock split of 2 for 1, then the option would now be for 200 shares with a strike price of $37.50. If, on the other hand, the stock split was 3 for 2, then the option would be for 150 shares with a strike price of $50. So, yes, a 2 for 1 stock split would halve the option strike prices. Also, in case the Investopedia article isn't clear, after a split the options still control 100 shares per contract. Regarding how a dividend affects option prices, I found an article with a good explanation: As mentioned above, dividends payment could reduce the price of a stock due to reduction of the company's assets. It becomes intuitive to know that if a stock is expected to go down, its call options will drop in extrinsic value while its put options will gain in extrinsic value before it happens. Indeed, dividends deflate the extrinsic value of call options and inflate the extrinsic value of put options weeks or even months before an expected dividend payment. Extrinsic value of Call Options are deflated due to dividends not only because of an expected reduction in the price of the stock but also due to the fact that call options buyers do not get paid the dividends that the stock buyers do. This makes call options of dividend paying stocks less attractive to own than the stocks itself, thereby depressing its extrinsic value. How much the value of call options drop due to dividends is really a function of its moneyness. In the money call options with high delta would be expected to drop the most on ex-date while out of the money call options with lower delta would be least affected. If a stock is expected to drop by a certain amount, that drop would already have been priced into the extrinsic value of its put options way beforehand. This is what happens to put options of dividend paying stocks. This effect is again a function of options moneyness but this time, in the money put options raise in extrinsic value more than out of the money put options. This is because in the money put options with delta of close to -1 would gain almost dollar or dollar on the drop of a stock. As such, in the money put options would rise in extrinsic value almost as much as the dividend rate itself while out of the money put options may not experience any changes since the dividend effect may not be strong enough to bring the stock down to take those out of the money put options in the money. So, no, a dividend of $1 will not necessarily decrease an option's price by $1 on the ex-dividend date. It depends on whether it's a call or put option, and whether the option is \"\"in the money\"\" or \"\"out of the money\"\" and by how much.\"" }, { "docid": "482755", "title": "", "text": "According to the Trulia reference on the issue, New York is a recourse state. Recourse means that the lender can go after you for the difference between the foreclosure discharge amount (in New York - the higher of the FMV or the actual sale price) and the debt balance. That includes garnishing your wages, seizing your assets, and any other method of collecting the judgement. The relevant law is in the New York Consolidated Laws - RPA Article 13. The option you're talking about is the option any lender has anywhere - not to sue you for the difference (provision 3 of the paragraph): If no motion for a deficiency judgment shall be made as herein prescribed the proceeds of the sale regardless of amount shall be deemed to be in full satisfaction of the mortgage debt and no right to recover any deficiency in any action or proceeding shall exist. So if during the foreclosure they didn't sue you for the difference - they cannot change their mind after that. If you're not sure you can repay the loan - you should probably walk away from the deal." }, { "docid": "546190", "title": "", "text": "Whether or not you'll be allowed to enter the UK is a topic for a different forum (and really more a topic for a lawyer rather than strangers on the internet). That being said, as a non-lawyer giving my opinion of the situation, you should be granted access to the UK as the banks/money lenders/phone companies don't have a relationship with Border Entry. With regards to debts in the UK, there is some precedent to debts being waived after a certain period of time, but the minimum is 6 years for unsecured debt, and the companies you owe money to can still chase you for payment, but can't use legal proceedings to force you to pay. However, the big caveat to this is that this only applies to residents of England and Wales. From the cleardebt.co.uk site: What is out of date debt? Debts like these are covered by the Limitation Act 1980, which is a statute of limitations that provides time scales as to how long a creditor can chase you (the debtor) for an unpaid debt. The Limitation Act 1980 only applies when no acknowledgement of a debt has been made between you and the creditor for six years for unsecured debts or 12 years for mortgage shortfalls and secured loans. This law only applies to residents of England and Wales. When does debt go out of date? If the creditor fails to maintain contact with you for six years or more, you may be able to claim that the outstanding debt is statute barred under the Limitation Act 1980. This means the creditor cannot use the legal system to enforce payment of the outstanding debt. The time limit starts from when you last acknowledged owing the debt or made a payment to the account. When can a creditor pursue an unsecured debt? You may think a creditor has written off your debt if you haven’t heard from them for a long time. The reality is that the debt still exists. The creditor can still contact you and they are entitled to chase the outstanding debt, even if the debt has been statute barred, but they are unable to use legal proceedings to force you to pay. Creditors can pursue an unsecured debt if:" }, { "docid": "304304", "title": "", "text": "The trades after that date were Ex-DIV, meaning after 5 pm Dec 12, new trades did not include the shares that were to be spun out. The process is very orderly, no one pays $60 without getting the spinoff, and no one pays $30 but still gets it. The real question is why there's that long delay nearly three weeks to make the spinoff shares available. I don't know. By the way, the stock options are adjusted as well. Someone owning a $50 put isn't suddenly in the money on 12/13. Edit - (I am not a hoarder. I started a fire last night and realized I had a few Barron's in the paper pile) This is how the ABT quote appeared in the 12/24 issue of Barron's. Both the original quote, and the WI (when issued) for the stock less the spin off company." }, { "docid": "352415", "title": "", "text": "\"Not minutes, but hours. The \"\"ex-dividend\"\" date is the deadline for acquiring a stock to receive a dividend. If you hold a stock at the beginning of this day, you will receive the dividend. So you could buy a stock right at the end of the day on the day before the ex-dividend date, and sell it the next day (on the ex-dividend date), and you would get your dividend. See this page from the SEC for more information. The problem with this strategy, however, is that the value of the stock typically drops by the same amount as the dividend on that day. If you take a look at the historical price of the stock you are interested in, you'll see this. Of course, it makes sense why: a seller knows that selling before the date results in a loss of the dividend, so they want a higher price to compensate. Likewise, a buyer on or after the date knows that the dividend is already gone, so they want to pay a lower price.\"" }, { "docid": "269061", "title": "", "text": "The ex-dividend date is the first date on which you may sell without losing your dividend. In this case that date is August 5th (thanks, Victor). The price opens on the ex-dividend date lower than it closed on the previous day (by the amount of the dividend). Therefore you may sell any time on August 5th (including during pre-market trading) and still get the dividend. You must be the owner of the stock as of the end of after-hours trading on the 4th (and therefore overnight) in order to get the dividend. Intel's Dividend Dates The record date isn't important to your trading decision." } ]

[ { "docid": "550172", "title": "", "text": "It is in the bank's interest to sell the property for as much as they can (although it is doubtful they will put as much effort/time into selling it as the owner might). They will certainly not sell it for $1. The main reason for this is that the bank would prefer to own $100k, than a loan to them from a customer for $100k. Banks have to discount the value of loans to take into account the likelihood of the loan not being repaid. They classify certain loans as riskier than others, and these are discounted more heavily. An unsecured home loan to a customer that has already defaulted, has no collateral, and now needs to pay rent AND loan repayments would count as an extremely risky loan." } ]

[ { "docid": "91926", "title": "", "text": "\"For the mortgage, you're confusing cause and effect. Loans like mortgages generally have a very simple principle behind them: at any given time, the interest charged at that time is the product of the amount still owing and the interest rate. So for example on a mortgage of $100,000, at an interest rate of 5%, the interest charged for the first year would be $5,000. If you pay the interest plus another $20,000 after the first year, then in the second year the interest charge would be $4,000. This view is a bit of an over-simplification, but it gets the basic point across. [In practice you would actually make payments through the year so the actual balance that interest is charged on would vary. Different mortgages would also treat compounding slightly differently, e.g. the interest might be added to the mortgage balance daily or monthly.] So, it's natural that the interest charged on a mortgage reduces year-by-year as you pay off some of the mortgage. Mortgages are typically setup to have constant payments over the life of the mortgage (an \"\"amortisation schedule\"\"), calculated so that by the end of the planned mortgage term, you'll have paid off all of the principal. It's a straightforward effect of the way that interest works in general that these schedules incorporate higher interest payments early on in the mortgage, because that's the time when you owe more money. If you go for a 15-year mortgage, each payment will involve you paying off significantly more principal each time than with a 30-year mortgage for the same balance - because with a 15-year mortgage, you need to hit 0 after 15 years, not 30. So since you pay off the principal faster, you naturally pay less interest even when you just compare the first 15 years. In your case what you're talking about is paying off the mortgage using the 30-year payments for the first 15 years, and then suddenly paying off the remaining principal with a lump sum. But when you do that, overall you're still paying off principal later than if it had been a 15-year mortgage to begin with, so you should be charged more interest, because what you've done is not the same as having a 15-year mortgage. You still will save the rest of the interest on the remaining 15 years of the term, unless there are pre-payment penalties. For the car loan I'm not sure what is happening. Perhaps it's the same situation and you just misunderstood how it was explained. Or maybe it's setup with significant pre-payment penalties so you genuinely don't save anything by paying early.\"" }, { "docid": "209369", "title": "", "text": "Real world example. AGNC = 21.79 time of post. Upcoming .22 cents ex-div Mar 27th Weekly options Mar 27th - $22 strike put has a bid ask spread of .22 / .53. If you can get that put for less than .21 after trade fee's, you'll have yourself a .22 cent arbitrage. Anything more than .21 per contract eats into your arbitrage. At .30 cents you'll only see .13 cent arbitrage. But still have tax liability on .22 cents. (maybe .05 cents tax due to REIT non-exempt dividend rates) So that .13 gain is down to a .08 cents after taxes." }, { "docid": "422484", "title": "", "text": "\"Time-Barred Debts and STATE STATUTES OF LIMITATION ON COLLECTING DEBTS are good places to start on the issues of what can be collected and for how long. What seems to be at issue is bankruptcy vs. time-barred debts vs. what creditors (original debt owners, not collection agencies or those who buy debt) can do. You should also check out The Fair Credit Reporting Act which governs some of the question. The Fair Credit Reporting Act and the section on time-barred debts applies to collection agencies, etc. (so-called debt owners as pointed out by @littleadv, since they buy debt from the creditors) not actual creditors (those the debt is/was originally owed to). Creditors (those to whom the debt was originally owed) have different rules than debt collectors and can do things debt collectors can't. State law generally governs what creditors, as original owners of the debt, can do legally and for how long. Bankruptcy Bankruptcy is a legal action that frees someone from paying all or part of debt owed (they are crying \"\"Uncle!\"\" and stating they don't have enough money to pay their creditors). On a credit report, accounts will generally be updated to show “included in bankruptcy\"\" or similar. Debt that is determined to still be owed often will be reduced in amount/payments. Time-barred Debts Time-barred debts are debts that are still owed, but cannot be collected through direct legal action (suing). Each state has its own statute of limitations on how long different types of debt can be collected by suing after initial default before being considered time-barred. This period is typically 3-6 years but a few states such as Kentucky allow much longer time periods (up to 15 years). Being a time-barred debt does NOT prevent a collector from contacting someone about a debt. Collectors can still try to collect a debt forever -- and probably will -- but they can't normally sue and collect payment once the statute of limitations period has passed. There are gotchas with time-barred debts regarding collection, however, which can make them still legally actionable. Making any payment, no matter how small, making a verbal commitment to pay or even acknowledging the time-barred debt is often enough to make the debt legally collectable, even if it would normally be past the statute of limitations for collection. This is again state-dependent, but it is a pitfall for many people. The process of making a debt collectable again is often called \"\"re-aging\"\". Re-aging essentially means the clock starts anew on the statute of limitations, extending the time that a creditor may use the courts to collect that debt. If someone is taken to court over a time-barred debt that is legally noncollectable (has not been legally re-aged), nothing happens to them. However, being time-barred does not prevent legal action in the sense that you still have to prove the debt is time-barred and noncollectable in court if your sued over it. Being time-barred does not mean the debt \"\"dissolves\"\". A debt is always owed unless the debt has been forgiven or discharged in bankruptcy court. This means that, combined with the ability of debt collectors to contact someone about out of statute debt and the pitfalls of re-aging, it is entirely possible for a debt collector to get a 20 year old debt actionable again. Also note that while someone is trying to dodge a debt to make it time-barred (e.g. by not paying anything), creditors and debt collectors can still take legal action to sue over the debt, and if they get a judgment against someone, this can extend the debt indefinitely. Judgements will eventually lapse, but often only after 10 years or more, and many states allow dormant judgements to be \"\"revived\"\" within that time period. Credit Reports Regarding credit reports, whether someone owes a debt and whether it appears on a credit report are two separate things. As previously stated, no debt \"\"dissolves\"\" or goes away unless some sort of legal action makes it so. As far as reporting is concerned, however, most \"\"bad\"\" credit stops being reported after seven years (by federal law). That is, accounts on a credit report will be deleted seven years from the original delinquency dates of the accounts regardless of being included in bankruptcy or as time-barred debt. This assumes no legal process allows the account to continue being reported (as is often the case with re-aging). As an FYI, a bankruptcy discharge date has nothing to do with when account information will be removed from your credit report. Note that some debts, such as tax liens, can be reported indefinitely. Should bankruptcy be considered? The decision to do bankruptcy is mostly a matter of how severe the debt is. If it is an extremely large amount and assets are very small, bankruptcy is a good route in so far as it will legally take care of a lot of loose ends and likely relieve most or all of the burden of actually owing the money. Credit-wise, 10 years is the maximum a bankruptcy (specifically) will appear on a credit report. Accounts may drop off a credit report before bankruptcy because they are past the seven years they can be legally reported. Debts owed to the state such as child support, student loans, income tax, etc. generally cannot be written off and aren't subject normal debt statute of limitations on collection. Finally, bad credit is bad credit -- there is likely to be little difference in terms of ability to get loans between bankruptcy and attempting to dodge legal action to make debts time-barred. If the debt is significant, bankruptcy may be the only sensible option.\"" }, { "docid": "433801", "title": "", "text": "Note: I am not a lawyer. This is my personal opinion and interpretation. First, your source is European Law, which obviously doesn't apply outside of the EU. The EU cannot make laws that bind entities in other countries; so you cannot claim that the VAT was needed to be mentioned. Second, if you owe something, you owe it; it doesn't matter if it was forgotten to be mentioned. At best, you can say that under those circumstances you don't want the software anymore, and i would assume you can send it back and get your money back (minus a fee for having it used for a while...) - this gets quite difficult to calculate clearly, so it's probably not a good avenue to follow for you. As the company has to send the VAT to your country (they will not be allowed to keep a dime of it, and have to bear the complete cost for the handling), it is a debt you have to your government; they are just the entity responsible for collecting it. Still, if you just ignore them, they will probably suck it up, and your government will also not do a thing to you. If they only have your email address, they have no way of knowing if you even still have/use this address; for all they know, it could be you never got it. They also cannot simply charge your card, as they probably don't have the card data any more (they are not supposed to keep it after the transaction is complete, and they thought it was complete at the time). All in all, you should be safe to ignore it. It's between you and your god/consciousness, if you feel obliged to pay it, as technically you owe it." }, { "docid": "201987", "title": "", "text": "In addition to the reasons discussed in JoeTaxpayer's answer, consider that a 401(k) plan is run by an employer (though the details might be delegated to a plan administrator) and it is a headache to have to deal with ex-employees (including retirees) with whom one might have no further relationship once the employment has ceased. Pension plans in addition to 401(k) plans are a rarity these days. Hence, no RMDs need be taken while still employed past age 70.5, but after that, let's keep in touch at least once a year so that we can send you some of the money we are holding for you." }, { "docid": "294246", "title": "", "text": "I am not a financial expert, but I'm pretty sure that it DOES matter. When you take out a mortgage on a home, you are using the home itself as collateral. If you fail to make payments on that home, and go into foreclosure, the bank takes possession of your home. With that understanding, imagine you borrow $500K for a purchase of a home. If the cost of the home was $1M, the bank will have more confidence they can recover the money they lent you (by selling the home should it go into foreclosure) than they would if the house was only worth $700K. In effect, the larger your down payment, the easier it would be for the bank to recover their money should you go into foreclosure early on. As far as 50% overcoming a low credit score... that's a very open-ended question. There are just too many factors at play to give a simple yes or no answer to that." }, { "docid": "51205", "title": "", "text": "Here's what Investopedia says about payouts for ex-dividend stocks: A stock trades ex-dividend on or after the ex-dividend date (ex-date). At this point, the person who owns the security on the ex-dividend date will be awarded the payment, regardless of who currently holds the stock. After the ex-date has been declared, the stock will usually drop in price by the amount of the expected dividend. Read more: Ex-Dividend Definition | Investopedia http://www.investopedia.com/terms/e/ex-dividend.asp#ixzz4Nl4J3s4k I hope this helps. Good luck!" }, { "docid": "366869", "title": "", "text": "There is no interest outstanding, per se. There is only principal outstanding. Initially, principal outstanding is simply your initial loan amount. The first two sections discuss the math needed - just some arithmetic. The interest that you owe is typically calculated on a monthly basis. The interested owed formula is simply (p*I)/12, where p is the principal outstanding, I is your annual interest, and you're dividing by 12 to turn annual to monthly. With a monthly payment, take out interest owed. What you have left gets applied into lowering your principal outstanding. If your actual monthly payment is less than the interest owed, then you have negative amortization where your principal outstanding goes up instead of down. Regardless of how the monthly payment comes about (eg prepay, underpay, no payment), you just apply these two calculations above and you're set. The sections below will discuss these cases in differing payments in detail. For a standard 30 year fixed rate loan, the monthly payment is calculated to pay-off the entire loan in 30 years. If you pay exactly this amount every month, your loan will be paid off, including the principal, in 30 years. The breakdown of the initial payment will be almost all interest, as you have noticed. Of course, there is a little bit of principal in that payment or your principal outstanding would not decrease and you would never pay off the loan. If you pay any amount less than the monthly payment, you extend the duration of your loan to longer than 30 years. How much less than the monthly payment will determine how much longer you extend your loan. If it's a little less, you may extend your loan to 40 years. It's possible to extend the loan to any duration you like by paying less. Mathematically, this makes sense, but legally, the loan department will say you're in breach of your contract. Let's pay a little less and see what happens. If you pay exactly the interest owed = (p*I)/12, you would have an infinite duration loan where your principal outstanding would always be the same as your initial principal or the initial amount of your loan. If you pay less than the interest owed, you will actually owe more every month. In other words, your principal outstanding will increase every month!!! This is called negative amortization. Of course, this includes the case where you make zero payment. You will owe more money every month. Of course, for most loans, you cannot pay less than the required monthly payments. If you do, you are in default of the loan terms. If you pay more than the required monthly payment, you shorten the duration of your loan. Your principal outstanding will be less by the amount that you overpaid the required monthly payment by. For example, if your required monthly payment is $200 and you paid $300, $100 will go into reducing your principal outstanding (in addition to the bit in the $200 used to pay down your principal outstanding). Of course, if you hit the lottery and overpay by the entire principal outstanding amount, then you will have paid off the entire loan in one shot! When you get to non-standard contracts, a loan can be structured to have any kind of required monthly payments. They don't have to be fixed. For example, there are Balloon Loans where you have small monthly payments in the beginning and large monthly payments in the last year. Is the math any different? Not really - you still apply the one important formula, interest owed = (p*I)/12, on a monthly basis. Then you break down the amount you paid for the month into the interest owed you just calculated and principal. You apply that principal amount to lowering your principal outstanding for the next month. Supposing that what you have posted is accurate, the most likely scenario is that you have a structured 5 year car loan where your monthly payments are smaller than the required fixed monthly payment for a 5 year loan, so even after 2 years, you owe as much or more than you did in the beginning! That means you have some large balloon payments towards the end of your loan. All of this is just part of the contract and has nothing to do with your prepay. Maybe I'm incorrect in my thinking, but I have a question about prepaying a loan. When you take out a mortgage on a home or a car loan, it is my understanding that for the first years of payment you are paying mostly interest. Correct. So, let's take a mortgage loan that allows prepayment without penalty. If I have a 30 year mortgage and I have paid it for 15 years, by the 16th year almost all the interest on the 30 year loan has been paid to the bank and I'm only paying primarily principle for the remainder of the loan. Incorrect. It seems counter-intuitive, but even in year 16, about 53% of your monthly payment still goes to interest!!! It is hard to see this unless you try to do the calculations yourself in a spreadsheet. If suddenly I come into a large sum of money and decide I want to pay off the mortgage in the 16th year, but the bank has already received all the interest computed for 30 years, shouldn't the bank recompute the interest for 16 years and then recalculate what's actually owed in effect on a 16 year loan not a 30 year loan? It is my understanding that the bank doesn't do this. What they do is just tell you the balance owed under the 30 year agreement and that's your payoff amount. Your last sentence is correct. The payoff amount is simply the principal outstanding plus any interest from (p*I)/12 that you owe. In your example of trying to payoff the rest of your 30 year loan in year 16, you will owe around 68% of your original loan amount. That seems unfair. Shouldn't the loan be recalculated as a 16 year loan, which it actually has become? In fact, you do have the equivalent of a 15 year loan (30-15=15) at about 68% of your initial loan amount. If you refinanced, that's exactly what you would see. In other words, for a 30y loan at 5% for $10,000, you have monthly payments of $53.68, which is exactly the same as a 15y loan at 5% for $6,788.39 (your principal outstanding after 15 years of payments), which would also have monthly payments of $53.68. A few years ago I had a 5 year car loan. I wanted to prepay it after 2 years and I asked this question to the lender. I expected a reduction in the interest attached to the car loan since it didn't go the full 5 years. They basically told me I was crazy and the balance owed was the full amount of the 5 year car loan. I didn't prepay it because of this. That is the wrong reason for not prepaying. I suspect you have misunderstood the terms of the loan - look at the Variable Monthly Payments section above for a discussion. The best thing to do with all loans is to read the terms carefully and do the calculations yourself in a spreadsheet. If you are able to get the cashflows spelled out in the contract, then you have understood the loan." }, { "docid": "546190", "title": "", "text": "Whether or not you'll be allowed to enter the UK is a topic for a different forum (and really more a topic for a lawyer rather than strangers on the internet). That being said, as a non-lawyer giving my opinion of the situation, you should be granted access to the UK as the banks/money lenders/phone companies don't have a relationship with Border Entry. With regards to debts in the UK, there is some precedent to debts being waived after a certain period of time, but the minimum is 6 years for unsecured debt, and the companies you owe money to can still chase you for payment, but can't use legal proceedings to force you to pay. However, the big caveat to this is that this only applies to residents of England and Wales. From the cleardebt.co.uk site: What is out of date debt? Debts like these are covered by the Limitation Act 1980, which is a statute of limitations that provides time scales as to how long a creditor can chase you (the debtor) for an unpaid debt. The Limitation Act 1980 only applies when no acknowledgement of a debt has been made between you and the creditor for six years for unsecured debts or 12 years for mortgage shortfalls and secured loans. This law only applies to residents of England and Wales. When does debt go out of date? If the creditor fails to maintain contact with you for six years or more, you may be able to claim that the outstanding debt is statute barred under the Limitation Act 1980. This means the creditor cannot use the legal system to enforce payment of the outstanding debt. The time limit starts from when you last acknowledged owing the debt or made a payment to the account. When can a creditor pursue an unsecured debt? You may think a creditor has written off your debt if you haven’t heard from them for a long time. The reality is that the debt still exists. The creditor can still contact you and they are entitled to chase the outstanding debt, even if the debt has been statute barred, but they are unable to use legal proceedings to force you to pay. Creditors can pursue an unsecured debt if:" }, { "docid": "417257", "title": "", "text": "You might want to bring this fancy new IRS rule to your employer's attention. If your employer sets it up, an After-Tax 401(k) Plan allows employees to contribute after-tax money above the $18k/year limit into a special 401(k) that allows deferral of tax on all earnings until withdrawal in retirement. Now, if you think about it, that's not all that special on its own. Since you've already paid tax on the contribution, you could imitate the above plan all by yourself by simply investing in things that generate no income until the day you sell them and then just waiting to sell them until retirement. So basically you're locking up money until retirement and getting zero benefit. But here's the cool part: the new IRS rule says you can roll over these contributions into a Roth 401(k) or Roth IRA with no extra taxes or penalties! And a Roth plan is much better, because you don't have to pay tax ever on the earnings. So you can contribute to this After-Tax plan and then immediately roll over into a Roth plan and start earning tax-free forever. Now, the article I linked above gets some important things slightly wrong. It seems to suggest that your company is not allowed to create a brand new 401(k) bucket for these special After-Tax contributions. And that means that you would have to mingle pre-tax and post-tax dollars in your existing Traditional 401(k), which would just completely destroy the usefulness of the rollover to Roth. That would make this whole thing worthless. However, I know from personal experience that this is not true. Your company can most definitely set up a separate After-Tax plan to receive all of these new contributions. Then there's no mingling of pre-tax and post-tax dollars, and you can do the rollover to Roth with the click of a button, no taxes or penalties owed. Now, this new plan still sits under the overall umbrella of your company's total retirement plan offerings. So the total amount of money that you can put into a Traditional 401(k), a Roth 401(k), and this new After-Tax 401(k) -- both your personal contributions and your company's match (if any) -- is still limited to $53k per year and still must satisfy all the non-discrimination rules for HCEs, etc. So it's not trivial to set up, and your company will almost certainly not be able to go all the way to $53k, but they could get a lot closer than they currently do." }, { "docid": "175996", "title": "", "text": "HARP is the Home Affordable Refinance Program. Announced in March 2009, HARP is a federally funded government program designed to help the 5 million homeowners who currently owe more on their mortgage then their home is currently worth, otherwise known as being underwater or near-underwater, refinance their mortgages into a fixed loan with a lower monthly payment. However, as of Aug. 31, only 894,000 borrowers have refinanced through HARP." }, { "docid": "148440", "title": "", "text": "\"The ex indicator is meant to be a help for market participants. On the ex-day orders will go into a different order book, the ex order book, which at the start of the ex day will be totally empty, i.e. no orders from the non-ex day book have been copied over. Why does this help? Well imagine you had a long-standing buy order in the book, well below the current price, and now the share price halves due to a 2-for-1 split, would you want to see your order executed? If so, your order should have gone into the ex-book which is only active on the ex-day (and orders in the ex book are usually copied over to the normal book on the day after the ex-day but this is exchange-specific). Think of it as an additional safety net to tell the exchange: \"\"I know what I'm doing: I want to buy this stock totally overpriced after the 2-for-1 split\"\". Now some exchanges and/or some securities (mostly derivatives) linked with the security in question don't have this notion of ex or the ex-book, and they will tell you by \"\"will not be quoted ex\"\" or \"\"the ex indicator is missing\"\". In your case (SNE) it is a sponsored ADR, the ex-date was Mar 28 2016, one day before the ex date of the Japanese original. According to my understanding of NYSE rules, there is no specific rule for or against omitting the ex-indicator. It seems to be a decision on a case by case basis. Looking through the dividends of other Japanese ADRs I drew the conclusion none of them have an ex-book and so all of them are announced as: \"\"Will not be quoted ex by the exchange\"\". Again, this is based on my observations.\"" }, { "docid": "113855", "title": "", "text": "\"I would not advise buying a home because you think you will make money. (1) Return on Investment If you have $290K, have you asked yourself how much your investment would grow if you invested it in other ways. At 2% growth re-invested, your money would grow to $307K (or 17K) after 4 years. $290,000 * 1.02 = $295,800 * 1.02 = $301,716 * 1.02 = $307,750 (2) Homeowner Experience Without the experience of owning your own home, it's hard to know relate to complaints and expectations that your tenants might have. It's hard to know to anticipate problems and repairs and costs due to home ownership. Homeowners have many decisions to make regarding upkeep of a home. The costs are difficult to predict if you have no experience to draw upon. (3) Managing Rental Property: It's a \"\"job\"\". You either take on this responsibility, or you subcontract it to someone else who you pay to manage the property and contracts! Is this something you are passionate about doing? If you need to travel back to the home, it's clear across country. It's not close enough to visit.\"" }, { "docid": "388414", "title": "", "text": "\"I appreciate the actually reasonable initial response. I've been consistently called a fake and a fraud mostly by, as you can probably guess, my competitors and my ex who has turned genuinely psycho. She and her father have now made the news for being directly connected to well documented international and American human rights violations, her father being directly connected to apparently a police chiefs admitted systematic protected records falsification/tampering/destruction and so much else. Those two groups arent exactly mutually exclusive at the moment. Her father works in PR/lobbying and she basically tried to make it a goal to ruin me. Why you might ask? Thats a great question. Could have something to do with the money I make people and people potentially owing me more than a few million. You really have to also consider though that would be an absurdly small price to pay for a billion especially if it took about 20 min to deliver in just that instance. Also the fact that she couldnt keep her clothes on to save her life after that point. All of the fake/fraud rhetoric is despite the fact, and probably because, I literally completed industry leading and often freely available open source economic work for no pay for several years as well as my comp (when I actually bill) being largely entirely performance based which almost nobody in the industry will even contemplate. Im not even that smart I just basically as it appears comparably dont have a sudden compulsive need to actively feel like I'm causing problems for people or just bullshit people frankly. Quite the opposite. A good number of the people who have tried to discredit or defame me in some way, if they knew the cause of this situation, probably wouldnt exactly be happy with it. Especially so considering how much money its likely very tangibly cost them just largely due to a psycho ex. On an anecdotal basis, despite previously knowing this was reflected in the data, I can hardly think of more of a good reason to just actually work with people and see how it goes than this. All of its to basically say I'm sure a guy (and his company) who is that wealthy publicly has had a few situations that make his life complicated and some probably without any good reason. You might have missed out. I know a few very skilled people who went to work for them. If you were offered to be flown out to them for an interview like that (again), definitely go (especially if you have fallback(s)) and just see what they are willing to do to address your concerns. I know Amazon being stressful is a common thing thats said; however, Amazon isnt a dumb company. They need skilled people and if it makes sense for them it wouldnt surprise me if they could figure something out that would work for both of you. Plus you can always quit as opposed to some things that you cant just say \"\"stop\"\" or \"\"be reasonable\"\" and have it resolved in a few weeks or less. I hope this helps you in some way.\"" }, { "docid": "457269", "title": "", "text": "\"Usually... I think that's overstating the case. You CAN get a bargain (especially if the place is in not-so-great condition), but not every foreclosure will be a good deal even if it is priced well below its most recently appraised value. As the buyer it's your responsibility to determine whether it's priced well or not, and to decide whether you're willing and able to repair its deficiencies after you buy it. The same's true when purchasing any house; foreclosures just make it more likely that there are problems and (hopefully) wind up being priced to allow for them. I don't know of a single website which lists all foreclosures. Some of the home listing websites do have a \"\"show me foreclosure listings\"\" filter, and I'm sure that the better tools available to real estate agents can select these. But if that's the direction you're interested in going, you should be looking at distressed properties generally, NOT just foreclosures; you may get a better deal, in the long run, by going for the one that has been mechanically maintained but is just plain ugly rather than the one with a pretty skin whose heating system hasn't been serviced for the last decade. Do your homework, shop around, don't fall in love with any one house... all the same rules apply at this end of the spectrum just as strongly as they do in the mid or upper ranges. Perhaps more so. Happy hunting!\"" }, { "docid": "269061", "title": "", "text": "The ex-dividend date is the first date on which you may sell without losing your dividend. In this case that date is August 5th (thanks, Victor). The price opens on the ex-dividend date lower than it closed on the previous day (by the amount of the dividend). Therefore you may sell any time on August 5th (including during pre-market trading) and still get the dividend. You must be the owner of the stock as of the end of after-hours trading on the 4th (and therefore overnight) in order to get the dividend. Intel's Dividend Dates The record date isn't important to your trading decision." }, { "docid": "364332", "title": "", "text": "The largest problem and source of anxiety / ruin for homeowners during the housing market collapse was caused by the inability to refinance. Many people had bought homes which they were stretched to afford, by using variable-rate mortgages. These would typically offer a very attractive initial rate, with an annual cap on the potential increase of rate. Many of these people intended to refinance their variable-rate to a fixed rate once terms were more favorable. If their house won't appraise for the value needed to obtain a new loan, they are stuck in their current contract with potentially unfavorable rates in the later years (9.9% above prime was not unheard of.) Also, many people, especially those in areas of high inflation in the housing market, used a financial device known as a Balloon Mortgage, which essentially forced you to get a new loan after some number of years (2, 5, 10) when the entire note became due. Some of those loans offered payments less than Principal + Interest! So, say you move near Los Angeles and can't afford the $1.2M for the 3-bedroom ranch in which you wish to live. You might work out a deal with your mortgage broker/banker in which you agree contractually to only pay $500/month, with a balloon payment of $1.4M due in 5 years, which seemed like a good deal since you (and everyone else,) actually expect the house to be 'worth' $1.5M in 5 years. This type of thing was done all the time back in the day. Now, imagine the housing bubble bursts and your $1.2M home is suddenly only valued at, perhaps, $750k. You still owe $1.4M sometime in the next several years (maybe very soon, depending on timing,) and can only get approved financing for the current $750k value -- so you're basically anticipating becoming homeless and bankrupt within the same year. That is a source of much anxiety about being upside-down on a loan. See this question for an unfortunate example." }, { "docid": "145404", "title": "", "text": "\"Someone has to hand out cash to the seller. Even if no physical money changes hands (and I've bought a house; I can tell you a LOT of money changes hands at closing in at least the form of a personal check), and regardless of exactly how the bank accounts for the actual disbursement of the loan, the net result is that the buyer has cash that they give the seller, and are now in debt to the bank for least that amount (but, they now have a house). Now, the bank probably didn't have that money just sitting in its vault. Money sitting in a vault is money that is not making more money for the bank; therefore most banks keep only fractionally more than the percentage of deposit balances that they are required to keep by the Feds. There are also restrictions on what depositors' money can be spent on, and loans are not one of them; the model of taking in money in savings accounts and then loaning it out is what caused the savings and loan collapse in the 80s. So, to get the money, it turns to investors; the bank sells bonds, putting itself in debt to bond holders, then takes that money and loans it out at a higher rate, covering the interest on the bond and making itself a tidy profit for its own shareholders. Banks lose money on defaults in two ways. First, they lose all future interest payments that would have been made on the loan. Technically, this isn't \"\"revenue\"\" until the interest is calculated for each month and \"\"accrues\"\" on the loan; therefore, it doesn't show on the balance sheet one way or the other. However, the holders of those bonds will expect a return, and the banks no longer have the mortgage payment to cover the coupon payments that they themselves have to pay bondholders, creating cash flow problems. The second, and far more real and damaging, way that banks lose money on a foreclosure is the loss of collateral value. A bank virtually never offers an unsecured \"\"signature loan\"\" for a house (certainly not at the advertised 3-4% interest rates). They want something to back up the loan, so if you disappear off the face of the earth they have a clear claim to something that can help them recover their money. Usually, that's the house itself; if you default, they get the house from you and sell it to recover their money. Now, a major cause of foreclosure is economic downturn, like the one we had in 2009 and are still recovering from. When the economy goes in the crapper, a lot of things we generally consider \"\"stores of value\"\" lose that value, because the value of the whatzit (any whatzit, really) is based on what someone else would pay to have it. When fewer people are looking to buy that whatzit, demand drops, bringing prices with it. Homes and real estate are one of the real big-ticket items subject to this loss of value; when the average Joe doesn't know whether he'll have a job tomorrow, he doesn't go house-hunting. This average Joe may even be looking to sell an extra parcel of land or an income property for cash, increasing supply, further decreasing prices. Economic downturn can often increase crime and decrease local government spending on upkeep of public lands (as well as homeowners' upkeep of their own property). By the \"\"broken window\"\" effect, this makes the neighborhood even less desirable in a vicious cycle. What made this current recession a double-whammy for mortgage lenders is that it was caused, in large part, by a housing bubble; cheap money for houses made housing prices balloon rapidly, and then when the money became more expensive (such as in sub-prime ARMs), a lot of those loans, which should never have been signed off on by either side, went belly-up. Between the loss of home value (a lot of which will likely turn out to be permanent; that's the problem with a bubble, things never recover to their peak) and the adjustment of interest rates on mortgages to terms that will actually pay off the loan, many homeowners found themselves so far underwater (and sinking fast) that the best financial move for them was to walk away from the whole thing and try again in seven years. Now the bank's in a quandary. They have this loan they'll never see repaid in cash, and they have this home that's worth maybe 75% of the mortgage's outstanding balance (if they're lucky; some homes in extremely \"\"distressed\"\" areas like Detroit are currently trading for 30-40% of what they sold for just before the bubble burst). Multiply that by, say, 100,000 distressed homes with similar declines in value, and you're talking about tens of billions of dollars in losses. On top of that, the guarantor (basically the bank's insurance company against these types of losses) is now in financial trouble themselves, because they took on so many contracts for debt that turned out to be bad (AIG, Fannie/Freddie); they may very well declare bankruptcy and leave the bank holding the bag. Even if the guarantor remains solvent (as they did thanks to generous taxpayer bailouts), the bank's swap contract with the guarantor usually requires them to sell the house, thus realizing the loss between what they paid and what they finally got back, before the guarantor will pay out. But nobody's buying houses anymore, because prices are on their way down; the only people who'd buy a house now versus a year from now (or two or three years) are the people who have no choice, and if you have no choice you're probably in a financial situation that would mean you'd never be approved for the loan anyway. In order to get rid of them, the bank has to sell them at auction for pennies on the dollar. That further increases the supply of cheap homes and further drives down prices, making even the nicer homes the bank's willing to keep on the books worth less (there's a reason these distresed homes were called \"\"toxic assets\"\"; they're poisonous to the banks whether they keep or sell them). Meanwhile, all this price depression is now affecting the people who did everything right; even people who bought their homes years before the bubble even formed are watching years of equity-building go down the crapper. That's to say nothing of the people with prime credit who bought at just the wrong time, when the bubble was at its peak. Even without an adjusting ARM to contend with, these guys are still facing the fact that they paid top dollar for a house that likely will not be worth its purchase price again in their lifetime. Even with a fixed mortgage rate, they'll be underwater, effectively losing their entire payment to the bank as if it were rent, for much longer than it would take to have this entire mess completely behind them if they just walked away from the whole thing, moved back into an apartment and waited it out. So, these guys decide on a \"\"strategic default\"\"; give the bank the house (which doesn't cover the outstanding balance of course) and if they sue, file bankruptcy. That really makes the banks nervous; if people who did everything right are considering the hell of foreclosure and bankruptcy to be preferable to their current state of affairs, the bank's main threat keeping people in their homes is hollow. That makes them very reluctant to sign new mortgages, because the risk of default is now much less certain. Now people who do want houses in this market can't buy them, further reducing demand, further decreasing prices... You get the idea. That's the housing collapse in a nutshell, and what banks and our free market have been working through for the past five years, with only the glimmer of a turnaround picking up home sales.\"" }, { "docid": "71511", "title": "", "text": "\"You have to be the owner of record before the ex-dividend date, which is not the same day as the date the dividend is paid. This also implies that if you sell on or after the ex-dividend date, you'll still get the dividend, even if you no longer own the stock. Keep in mind, also, that the quoted price of the stock (and on any open orders that are not specifically marked as \"\"do not reduce\"\") on its ex-dividend date is dropped by the amount of the dividend, first thing in the morning before trading starts. If you happen to be the first order of the day, before market forces cause the price to move, you'll end up with zero gain, since the dividend is built into the price, and you got the same value out of it -- the dividend in cash, and the remaining value in stock. As pointed out in the comments (Thanks @Brick), you'll still get a market price for your trade, but the price reduction will have had some impact on the first trade of the day. Source: NYSE Rule 118.30 Also, remember that the dividend yield is expressed in annualized terms. So a 3% yield can only be fully realized by receiving all of the dividend payments made by the company for the year. You can, of course, forget about individual companies and just look for dividends to create your own effective yield over time. But, see the final point... Finally, if you keep buying and selling just to play games with the dividends, you're going to pay far more in transaction fees than you will earn in dividends. And, depending on your individual circumstances, you may end up paying more in capital gains taxes.\"" } ]

[ { "docid": "467044", "title": "", "text": "Yes, quite easily, in fact. You left a lot of numbers out, so lets start with some assumptions. If you are at the median of middle income families in the US that might mean $70,000/year. 15% of that is an investment of $875 per month. If you invest that amount monthly and assume a 6% return, then you will have a million dollars at approximately 57 years old. 6% is a very conservative number, and as Ben Miller points out, the S&P 500 has historically returned closer to 11%. If you assumed an aggressive 9% return, and continued with that $875/month for 40 years until you turn 65, that becomes $4 million. Start with a much more conservative $9/hr for $18,720 per year (40 hours * 52 weeks, no overtime). If that person saved 14% of his/her income or about $219 per month from 25 to 65 years old with the same 9%, they would still achieve $1 million for retirement. Is it much harder for a poor person? Certainly, but hopefully these numbers illustrate that it is better to save and invest even a small amount if that's all that can be done. High income earners have the most to gain if they save and the most to lose if they don't. Let's just assume an even $100,000/year salary and modest 401(k) match of 3%. Even married filing jointly a good portion of that salary is going to be taxed at the 25% rate. If single you'll be hitting the 28% income tax rate. If you can max out the $18,000 (2017) contribution limit and get an additional $3,000 from an employer match (for a total monthly contribution of $1750) 40 years of contributions would become $8.2 million with the 9% rate of return. If you withdrew that money at 4% per year you would have a residual income of $300k throughout your retirement." } ]

[ { "docid": "587192", "title": "", "text": "If you're under age 55 and in good health generally you cannot withdraw your funds from super and your super fund cannot provide you with any financial assistance eg lend you money. However, for a very small percentage of people with unrestricted non preserved superannuation components ( check your statement most people's superannuation is 'preserved'which means they cannot access it until they meet a 'condition of release')they may withdraw their super benefits upto the unrestricted non preserved amount. For healthy (& able) persons aged 55 and over they may access their super under the following conditions: I can understand your frustration of having your money compulsory tied up in superannuation especially given the poor investment returns of the past 5 years. However, superannuation may be more flexible than you realize, I am an adviser at Grant Thornton and I am constantly telling clients that superannuation is not an invest but it the most tax effective long term savings vehicle available to Australians for their investment savings eg max 15% tax on income and capital gains if held for a year are taxed at 10%. If you're not happy with your investment returns you may like to seek some advice or,set up your own super fund - a self managed super fund where you can invest a wide variety of assets; shares, managed funds,cash, term deposits, property( your super fund can even borrow to help acquire the property) I hope this helps" }, { "docid": "109982", "title": "", "text": "Something that's come up in comments and been alluded to in answers, but not explicit as far as I can tell: Even if your marginal tax rate now were equal to your marginal tax rate in retirement, or even lower, a traditional IRA may have advantages. That's because it's your effective tax rate that matters on withdrawls. (Based on TY 2014, single person, but applies at higher numbers for other arrangements): You pay 0 taxes on the first $6200 of income, and then pay 10% on the next $9075, then 15% on $27825, then 25% on the total amount over that up to $89530, etc. As such, even if your marginal rate is 25% (say you earn $80k), your effective rate is much less: for example, $80k income, you pay taxes on $73800. That ends up being $14,600, for an effective rate in total of 17.9%. Let's say you had the same salary, $80k, from 20 to 65, and for 45 years saved up 10k a year, plus earned enough returns to pay you out $80k a year in retirement. In a Roth, you pay 25% on all $10k. In a traditional, you save that $2500 a year (because it comes off the top, the amount over $36900), and then pay 17.9% during retirement (your effective tax rate, because it's the amount in total that matters). So for Roth you had 7500*(returns), while for Traditional the correct amount isn't 10k*(returns)*0.75, but 10k*(returns)*0.821. You make the difference between .75 and .82 back even with the identical income. [Of course, if your $10k would take you down a marginal bracket, then it also has an 'effective' tax rate of something between the two rates.] Thus, Roth makes sense if you expect your effective tax rate to be higher in retirement than it is now. This is very possible, still, because for people like me with a mortgage, high property taxes, two kids, and student loans, my marginal tax rate is pretty low - even with a reasonably nice salary I still pay 15% on the stuff that's heading into my IRA. (Sadly, my employer has only a traditional 401k, but they also contribute to it without requiring a match so I won't complain too much.) Since I expect my eventual tax rate to be in that 18-20% at a minimum, I'd benefit from a Roth IRA right now. This matters more for people in the middle brackets - earning high 5 figure salaries as individuals or low 6 figure as a couple - because the big difference is relevant when a large percentage of your income is in the 15% and below brackets. If you're earning $200k, then so much of your income is taxed at 28-33% it doesn't make nearly as much of a difference, and odds are you can play various tricks when you're retiring to avoid having as high of a tax rate." }, { "docid": "67276", "title": "", "text": "\"Your real question, \"\"why is this not discussed more?\"\" is intriguing. I think the media are doing a better job bringing these things into the topics they like to ponder, just not enough, yet. You actually produced the answer to How are long-term capital gains taxed if the gain pushes income into a new tax bracket? so you understand how it works. I am a fan of bracket topping. e.g. A young couple should try to top off their 15% bracket by staying with Roth but then using pretax IRA/401(k) to not creep into 25% bracket. For this discussion, 2013 numbers, a blank return (i.e. no schedule A, no other income) shows a couple with a gross $92,500 being at the 15%/25% line. It happens that $20K is exactly the sum of their standard deduction, and 2 exemptions. The last clean Distribution of Income Data is from 2006, but since wages haven't exploded and inflation has been low, it's fair to say that from the $92,000 representing the top 20% of earners, it won't have many more than top 25% today. So, yes, this is a great opportunity for most people. Any married couple with under that $92,500 figure can use this strategy to exploit your observation, and step up their basis each year. To littleadv objection - I imagine an older couple grossing $75K, by selling stock with $10K in LT gains just getting rid of the potential 15% bill at retirement. No trading cost if a mutual fund, just $20 or so if stocks. The more important point, not yet mentioned - even in a low cost 401(k), a lifetime of savings results in all gains being turned in ordinary income. And the case is strong for 'deposit to the match but no no more' as this strategy would let 2/3 of us pay zero on those gains. (To try to address the rest of your questions a bit - the strategy applies to a small sliver of people. 25% have income too high, the bottom 50% or so, have virtually no savings. Much of the 25% that remain have savings in tax sheltered accounts. With the 2013 401(k) limit of $17,500, a 40 year old couple can save $35,000. This easily suck in most of one's long term retirement savings. We can discuss demographics all day, but I think this addresses your question.) If you add any comments, I'll probably address them via edits, avoiding a long dialog below.\"" }, { "docid": "454333", "title": "", "text": "If you're in the 25% tax bracket, then you probably shouldn't be doing a Roth conversion right now. You'd prefer to do Roth conversions when you can do so at a 15% rate. You could contribute some of your current annual contributions to Roth directly, but even that isn't a great idea except to diversify your holdings. Odds are you won't be paying 25% average tax rate on your retirement, unless you're doing very well in your retirement account. Odds are you'll be somewhere around 15%. Converting at a 15% rate therefore is fine; basically, you'll have something like this, based on some assumptions (I'm making up dollars, brackets, etc.; obviously these will change): Doing this, you pay 0-15% tax on up to 75k, then pay 0 tax after that on the Roth (which you paid 15% tax on already). Therefore, you don't end up paying more than 15% on any single dollar, and you pay less on the total sum. But you also don't really want to be paying 25% on any of it, since that won't really help you out any and could hurt you (will hurt you, if you end up getting some of that 15% bracket income from the Roth). If you're in the 25% bracket now, then you probably are better off just keeping everything in regular IRA (unless you're expecting to be in the 28% bracket after retirement?). Putting some in Roth isn't a terrible idea, just for diversification's sake, but it's probably going to cost you money unless tax rates rise dramatically (which they certainly could, though not as likely to rise on the 'middle class' 0-100k range). They'd have to double for you to be worse off this way. And finally: do not ever withdraw from the 401k to pay taxes on a conversion. You're subject to a 10% penalty for doing that (as it's an early withdrawal) and also have to pay taxes on that withdrawal. Ick. For more information about when Roth makes sense, read site moderator JoeTaxpayer's Blog article on the subject, which explains this in great detail." }, { "docid": "339553", "title": "", "text": "\"An investment in knowledge always pays the best interest, as Ben Franklin said. However, this is not a question I can answer for you, as it depends on the opportunities that are specifically available to you as an individual. Sometimes opportunities will knock on your door and you can take advantage, other times you have to create that door to allow opportunities to knock. Maybe you have a friend that is opening a side business, maybe there is a class you can get into at a trivial cost. What I suggest is to start investing just to get into the habit of it, not so much for the returns. Before you do, however, any financial advisor will advise you to begin with a emergency fund, worth about 3-6 months of your expenses for that time. I wanted to hit the ground running and start investing in stocks, but first things first I guess. \"\"Millionaire Next Door\"\" will help you get into a saving mindset, \"\"I will teach you to be rich\"\" is ok, plenty of other books. My advice is keep doing what you're doing, learn to start saving, and once you have obtained an emergency fund of the amount of your choosing, start looking to invest in Index Funds or ETFs through any platform that has LOW FEES!! I use Betterment, but Vanguard is good too, as they allow you to get your feet wet and it's passive. Hope this helps.\"" }, { "docid": "586626", "title": "", "text": "You mention only two debts, mortgage and student loan, but you mention $19K in savings, which suggests that you are a saver, and likely do not have other debts. You did not mention your (net) income and expenses (income statement), but since you have substantial savings, you likely live within your means (income > expenses). Since you mention $38K in retirement, we might conclude you are regularly saving for retirement (are you saving 10% toward retirement)? You did not mention any medical condition or other debts, that might require a large savings, so I would suggest having 6 months savings ($2.5K x 6 = $15K) but should your net expenses be less, you might reduce this ($2K x 6 = $12K). You do not mention any investment you might want to make, but since you did not mention any candidate investments, we can assume you have no (specific) investments you find particularly attractive. You did not mention anything you were saving to purchase that you might want to purchase. You have combined $19K + $50K = $69K savings, and $15K would be a comfortable emergency savings, leaving $54K you could use to reduce mortgage or student loan debt. The mortgage debt interest @4.5%, is higher, so paying that debt off would be like earning 4.5% guaranteed return on your money, tax-free. At your income, your marginal tax rate is low enough that the mortgage interest deduction (if you do itemize) would not reduce this return much (15% if you itemize). The student loan debt interest @2.8%, would be like earning 2.8% guaranteed return on your money, tax-free. Clearly the higher return on your 'investment' in paying off debt would be reducing your mortgage balance (over 50% higher return on investment, compared to the student loan debt). You did not mention any circumstance that might cause the student loan rate to increase, the mortgage rate to increase, nor did you mention any difficulty making both the mortgage and student loan payments, the amounts of either payment, nor the number of years remaining to pay on either. Should you need (or desire) to reduce your payments, you could choose to payoff the student loan to eliminate one payment, and thus decrease your expenses. Or you could choose to pay down the mortgage, and refinance (or refactor) the mortgage to obtain a smaller payment. Another strategy (assuming you have had your house for 5-7 years), might be to pay the mortgage down enough to refinance into a 15 year loan, and (assuming you have a good credit score) obtain a lower (3%) rate. But I am going to suggest you consider a blended approach. Combine the Dave Ramsey Debt Snowball approach with the reduce the interest rate approach. Take the $54K ($57K?) available (after reserving 6 months emergency fund), and split between both. You pay your mortgage down by $27K and your student loan debt down by $27K. Your blended return on investment is (2.8+4.5)/2 = 3.65%, and you have the following Balance Sheet: Assets: Debts: The next steps would be to, There are two great reasons for paying off the student loan debt. One is the Dave Ramsey Debt Snowball approach which is that this is the smaller debt, and thus represents a psychological win, and the other is that student loan debt has special treatment even in bankruptcy." }, { "docid": "80844", "title": "", "text": "After looking at your profile, I see your age...28. Still a baby. At your age, and given your profession, there really is no need to build investment income. You are still working and should be working for many years. If I was you, I'd be looking to do a few different things: Eliminating debt reduces risk, and also reduces the need for future income. Saving for, and purchasing a home essentially freezes rent increases. If home prices double in your area, in theory, so should rent prices. If you own a home you might see some increases in taxes and insurance rates, but they are minor in comparison. This also reduces the need for future income. Owning real estate is a great way to build residual income, however, there is a lot of risk and even if you employ a management company there is a lot more hands on work and risk. Easier then that you can build an after tax investment portfolio. You can start off with mutual funds for diversification purposes and only after you have built a sizable portfolio should (if ever) make the transition to individual stocks. Some people might suggest DRIPs, but given the rate at which you are investing I would suggest the pain of such accounts is more hassle then it is worth." }, { "docid": "502150", "title": "", "text": "\"The biggest and primary question is how much money you want to live on within retirement. The lower this is, the more options you have available. You will find that while initially complex, it doesn't take much planning to take complete advantage of the tax system if you are intending to retire early. Are there any other investment accounts that are geared towards retirement or long term investing and have some perk associated with them (tax deferred, tax exempt) but do not have an age restriction when money can be withdrawn? I'm going to answer this with some potential alternatives. The US tax system currently is great for people wanting to early retire. If you can save significant money you can optimize your taxes so much over your lifetime! If you retire early and have money invested in a Roth IRA or a traditional 401k, that money can't be touched without penalty until you're 55/59. (Let's ignore Roth contributions that can technically be withdrawn) Ok, the 401k myth. The \"\"I'm hosed if I put money into it since it's stuck\"\" perspective isn't true for a variety of reasons. If you retire early you get a long amount of time to take advantage of retirement accounts. One way is to primarily contribute to pretax 401k during working years. After retiring, begin converting this at a very low tax rate. You can convert money in a traditional IRA whenever you want to be Roth. You just pay your marginal tax rate which.... for an early retiree might be 0%. Then after 5 years - you now have a chunk of principle that has become Roth principle - and can be withdrawn whenever. Let's imagine you retire at 40 with 100k in your 401k (pretax). For 5 years, you convert $20k (assuming married). Because we get $20k between exemptions/deduction it means you pay $0 taxes every year while converting $20k of your pretax IRA to Roth. Or if you have kids, even more. After 5 years you now can withdraw that 20k/year 100% tax free since it has become principle. This is only a good idea when you are retired early because you are able to fill up all your \"\"free\"\" income for tax conversions. When you are working you would be paying your marginal rate. But your marginal rate in retirement is... 0%. Related thread on a forum you might enjoy. This is sometimes called a Roth pipeline. Basically: assuming you have no income while retired early you can fairly simply convert traditional IRA money into Roth principle. This is then accessible to you well before the 55/59 age but you get the full benefit of the pretax money. But let's pretend you don't want to do that. You need the money (and tax benefit!) now! How beneficial is it to do traditional 401ks? Imagine you live in a state/city where you are paying 25% marginal tax rate. If your expected marginal rate in your early retirement is 10-15% you are still better off putting money into your 401k and just paying the 10% penalty on an early withdrawal. In many cases, for high earners, this can actually still be a tax benefit overall. The point is this: just because you have to \"\"work\"\" to get money out of a 401k early does NOT mean you lose the tax benefits of it. In fact, current tax code really does let an early retiree have their cake and eat it too when it comes to the Roth/traditional 401k/IRA question. Are you limited to a generic taxable brokerage account? Currently, a huge perk for those with small incomes is that long term capital gains are taxed based on your current federal tax bracket. If your federal marginal rate is 15% or less you will pay nothing for long term capital gains, until this income pushes you into the 25% federal bracket. This might change, but right now means you can capture many capital gains without paying taxes on them. This is huge for early retirees who can manipulate income. You can have significant \"\"income\"\" and not pay taxes on it. You can also stack this with before mentioned Roth conversions. Convert traditional IRA money until you would begin owing any federal taxes, then capture long term capital gains until you would pay tax on those. Combined this can represent a huge amount of money per year. So littleadv mentioned HSAs but.. for an early retiree they can be ridiculously good. What this means is you can invest the maximum into your HSA for 10 years, let it grow 100% tax free, and save all your medical receipts/etc. Then in 10 years start withdrawing that money. While it sucks healthcare costs so much in America, you might as well take advantage of the tax opportunities to make it suck slightly less. There are many online communities dedicated to learning and optimizing their lives in order to achieve early retirement. The question you are asking can be answered superficially in the above, but for a comprehensive plan you might want other resources. Some you might enjoy:\"" }, { "docid": "56924", "title": "", "text": "Your gut feeling is absolutely spot on - you shouldn't be worrying about pension now, not at the age of 25. Assuming that you're not a footballer in the middle of the most productive part of your career and already have a fat wad of crunchy banknotes under your pillow that you're looking to set aside for a rainy day when you won't be able to play at your prime any longer. That doesn't mean you shouldn't invest, nor that means that you mustn't save. There are several factors at play here. First of all as a young person you are likely to have a high tolerance for risk, there is still plenty of time to recover should expected returns not materialise. Even a pension fund with the most aggressive risk / return strategy might just not quite do it for you. You could invest into education instead, improve health, obtain a profitable skill, create social capital by building connections, pay for experience, buy a house, start a family or even a business. Next, as a young professional you're unlikely to have reached your full earning potential yet and due to the law of diminishing marginal utility a hundred pounds per month now have greater utility (i.e. positive impact on your lifestyle) than a seven hundred pounds will in 7-10 years time once your earnings plateaued. That is to say it's easier to save £700 month from £3000 and maintain a reasonable level of personal comfort than carve £100 from £1300 monthly income. And last, but not the least, lets face it from a human point of view - forty years is a very long investment horizon and many things might and will change. One of the downsides of UK pensions is that you have very little control over the money until you reach a certain age. Tactically I suggest saving up to build a cushion consisting of cash or near cash assets; the size of the stash should be such that it is enough to cover all of your expenses from a minimum of 2 months to a maximum of a year. The exact size will depend on your personal comfort level, whatever social net you have (parents, wife, partner) and how hard it will be to find a new source of income should the current cease to produce cash. On a strategic level you can start looking into investing any surplus cash into the foundation of what will bring joy and happiness into the next 40 years of your life. Your or your partners training and education is one of the most sensible choices whilst you're young. Starting a family is another one. Both might help you reach you full earning potential much quicker. Finding what you love to do and learning how to do it really well - cash can accelerate this process bringing you quicker there you want to be. If you were a start-up business in front of a huge uncaptured market would you rather use cash to pay dividends or finance growth?" }, { "docid": "323873", "title": "", "text": "Just to punch it in, my friend owns bars/restaurants and is a multi millionaire at the age of 29. His career choice wasn't corporate ladder, but entrepreneur. I'm investing his wealth and he is giving me a generous deal, I'm starting my own investment firm and having him as a client is the only client I need to be potentially a millionaire as well too. Don't pigeonhole yourself like everyone else does, but also know what you are capable of. Some people just aren't made to be their own boss as much as they say they could so it takes a bit of swallowing your pride and moving along to your best pathway. I could no way ever work for someone else so I swallowed my pride in a way and went my own path by saying bye to the corporate world. Some people think this is the ultimate goal, but I would relinquish potentially moving up that ladder and having that sort of prestige etc." }, { "docid": "310780", "title": "", "text": "\"I'm an American so I don't claim to know anything about Scottish tax law. But just based on what you say above: First, think about how it would work if there were no taxes. If you make a payment against the mortgage, you save 5% in interest. If you put money into a retirement account, you make whatever the profits are on the investment. If that amount comes to more than 5%, then you are better of investing in the retirement account. If it's less than 5%, you are better off paying off the mortgage. As most investments pay significantly better than 5%, this is the superior strategy. On the other hand, apparently you are paying a variable-rate mortgage, but still, mortgage rates are relatively stable. Investment returns vary all over the place and can be negative. So if you are very cautious, that's a reason to pay off the mortgage rather than invest. The younger you are, the less of a concern this should be, as in the long term, investments pretty much always recover lost ground. If you were planning to retire next year I'd have very different advice than if you are planning to retire in 30 years. But sadly, you do have to pay taxes, and that needs to be factored in. So you say that you would have to pay 25% dividend tax on any money you used to pay the mortgage. But the effective tax rate on the retirement money is 15%. So in effect money put against the mortgage pays a 25% tax, and so effectively generates only 5% * .75 = 3.75%. But money invested in the retirement plan pays only 15% tax, and so if the investment returns 3.75% / .85 = 4.4% it would give the same effective return. So if you can invest in something that gives returns of at least 4.4% per year, you're better off putting into the retirement plan than paying off the mortgage. There may be other Scottish tax implications I don't know about. As to \"\"Substantially less paperwork\"\", I have no idea how much paperwork is involved in putting money into a retirement account in Scotland. Here in the U.S., you basically call a financial management company of one sort or another and say \"\"hey, I want to open a retirement account with your company\"\", and they'll prepare most of the forms for you and you just sign them. It could be done with half an hour of your time. Of course the more you research different investment options, etc, the more time it will take. \"\"More flexible e.g. if I want to retire early\"\" If there are restrictions on when you can withdraw money from a retirement account and receive that 25% freebie you mentioned, yes, this could be a factor. Again, I don't know Scottish tax law, there may be other considerations. Here in the U.S., there's a 10% tax penalty if you withdraw money from a retirement account before the legal retirement age. Realistically that's a minor issue, if you have money in there for several years the tax benefits will be more than 10%. But yeah, it would be stupid to put money in in December and then take it out the following January and have to pay the 10% penalty. \"\"Doesn't incur the risk that the government will change the pension rules between now and when I retire\"\" Maybe. But then laws might change in your favor, too. And as you indicated that your mortgage interest rate could change, there could be risk on that side too. That all comes down to what you think the risks are all around.\"" }, { "docid": "86304", "title": "", "text": "\"Your question is very broad. Whole books can and have been written on this topic. The right place to start is for you and your wife to sit down together and figure out your goals. Where do you want to be in 5 years, 25 years, 50 years? To quote Yogi Berra \"\"If you don't know where you are going, you'll end up someplace else.\"\" Let's go backwards. 50 Years I'm guessing the answer is \"\"retired, living comfortably and not having to worry about money\"\". You say you work an unskilled government job. Does that job have a pension program? How about other retirement savings options? Will the pension be enough or do you need to start putting money into the other retirement savings options? Career wise, do you want to be working as in unskilled government jobs until you retire, or do you want to retire from something else? If so, how do you get there? Your goals here will affect both your 25 year plan and your 5 year plan. Finally, as you plan for death, which will happen eventually. What do you want to leave for your children? Likely the pension will not be transferred to your children, so if you want to leave them something, you need to start planning ahead. 25 Years At this stage in your life, you are likely talking, college for the children and possibly your wife back at work (could happen much earlier than this, e.g., when the kids are all in school). What do you want for your children in college? Do you want them to have the opportunity to go without having to take on debt? What savings options are there for your children's college? Also, likely with all your children out of the house at college, what do you and your wife want to do? Travel? Give to charity? Own your own home? 5 Years You mention having children and your wife staying at home with them. Can your family live on just your income? Can you do that and still achieve your 50 and 25 year goals? If not, further education or training on your part may be needed. Are you in debt? Would you like to be out of debt in the next 5-10 years? I know I've raised more questions than answers. This is due mostly to the nature of the question you've asked. It is very personal, and I don't know you. What I find most useful is to look at where I want to be in the near, mid and long term and then start to build a plan for how I get there. If you have older friends or family who are where you want to be when you reach their age, talk to them. Ask them how they got there. Also, there are tons of resources out there to help you. I won't suggest any specific books, but look around at the local library or look online. Read reviews of personal finance books. Read many and see how they can give you the advice you need to reach your specific goals. Good luck!\"" }, { "docid": "559556", "title": "", "text": "\"It's called disposable income for a reason. It's what's left after obligations, whatever bills you have, and saving. Saving half one's income is pretty much at one end of the spectrum, very few can afford this. The combination of high savings and low actual spending will enable you to retire very early if you wish. Saving 'only' 15% might actually be out of your comfort zone, maybe 25% will keep you happy. What remains is yours to spend on what you wish, whatever makes you happy. There was a time I joked \"\"I spent most of my money on women and beer. The rest, I wasted.\"\" Now, I don't mind travel, but it's not my passion. If traveling the world is yours, do it. Enjoy every minute of it.\"" }, { "docid": "52080", "title": "", "text": "\"This may be more of a comment than an answer, but it's too long for a comment. Perhaps the Stackexchange Gods will forgive my impudence. That said: Even with the tax penalties, it can be to your advantage to put money into a \"\"retirement\"\" account and withdraw it before retirement. The trick is: Is the amount of the tax penalty more than the benefit of untaxed compound growth? For example, just to make up some numbers: Suppose you have $1000 of gross income to invest. You are considering whether to invest in an ordinary, non-tax favored account, or a classic IRA. Either way you will get 10% returns. Your tax rate, both when you put the money in and when you take it out, is 15%. There is a 10% tax penalty for early withdrawal. With an ordinary account you will pay 15% tax off the top, so you are only investing $850. Then each year 15% of your returns are paid in taxes, so your net return is 8.5%. But when you withdraw the money there are no additional taxes. With an IRA you do not pay any taxes up front, so you can invest the entire $1000. You collect 10% each year with no taxes. When you withdraw, you pay 15% plus the 10% penalty equals 25%. So after 5 years, the ordinary account would yield $850 x 1.085^5 = $1504. The IRA would yield $1000 x 1.1^5 x 0.75 = $1208. The tax penalty hurts. You are better to use the ordinary account. But if you could leave your money in for 25 years, then the ordinary account would yield $850 x 1.085^25 = $7687. The IRA would yield $1000 x 1.1^25 x 0.75 = $8126. The IRA, even with the tax penalty, is better. Of course my numbers are just made up. What your tax bracket is, what returns you get, and how long you think you might leave the money in the investment, all vary.\"" }, { "docid": "260677", "title": "", "text": "Hopefully this $1000 is just a start, and not the last investment you will ever make. Assuming that, there are a couple of big questions to consider: One: What are you saving for? Are you thinking that this is for retirement 40 or 50 years from now, or something much sooner, like buying a car or a house? You didn't say where you live. In the U.S., if you put money into an IRA or a 401k or some other account that the government classes as a retirement account, you don't pay taxes on the profits from the investment, only on the original principal. If you leave the money invested for a long period of time, the profits can be many times the original investment, so this makes a huge difference. Like suppose that you pay 15% of your income in state and local taxes. And suppose you invest your $1000 in something that gives a 7% annual return and leave it there for 40 years. (Of course I'm just making up numbers for an example, but I think these are in a plausible range. And I'm ignoring the difference between regular income tax and capital gains tax, etc etc. It doesn't change the point.) If you put the money in a classic IRA, you pay 0% taxes the year you open the account, so you have your full $1000, figure that compound interest for 40 years, you'll end up with -- crunch crunch crunch the numbers -- $14,974. Then you pay 15% when you take it leaving you with $12,728. (The end result with a Roth IRA is exactly the same. Feel free to crunch those numbers.) But now suppose you invest in a no-retirement account so you have to pay taxes every year. Your original investment is only $850 because you have to pay tax on that, and your effective return is only 5.95% because you have to pay 15% of the 7%. So after 40 years you have -- crunch crunch -- $10,093. Quite a difference. But if you put money in a retirement account and then take it out before you retire, you pay substantial penalties. I think it's 20%. If you plan to take the money out after a year or two, that would really hurt. Two: How much risk are you willing to take? The reality of investment is that, almost always, the more risk you take, the bigger the potential returns, and vice versa. Investments that are very safe tend to have very low returns. As you're young, if you're saving for retirement, you can probably afford a fairly high amount of risk. If you lose a lot of money this year, odds are you'll get it back over the next few years, or at least be able to put more money into investments to make up for it. If you're 64 and planning to retire next year, you want to take very low-risk investments. In general, investing in government bonds is very safe but has very low returns. Corporate bonds are less safe but offer higher returns. Stocks are a little more. Of course different companies have different levels of risk: new start-ups tend to be very risky, but can give huge returns. Commodities are much higher risk. Buying on margin or selling short are ways to really leverage your money, but you could end up losing more than you invested. Mutual funds are a relatively safe way to invest in stocks and bonds because they spread your risk over many companies. Three: How much effort are you willing to put into managing your investments? How much do you know about the stock market and the commodities market and international finance and so on, and how much are you willing to learn? If your answer is that you know a lot about these things or are willing to dive in and learn a lot, that you can invest in individual stocks, bonds, commodities, etc. If your answer is that you really don't know much about all this, then it makes a lot of sense to just put your money into a mutual fund and let the people who manage the fund do all the work." }, { "docid": "426461", "title": "", "text": "\"Between \"\"fresh out of college\"\" and \"\"I have no debts, and a support system in place which because of which I can take higher risks.\"\" I would put every penny I could afford in the riskiest investment platform I was willing to. Holding onto money in a bank account is likely to cost you %1-%2 a year depending on what interest rates are and what inflation looks like. Money invested in a market could loose it all for you or you could become an overnight millionaire. Loosing it all would suck but you are young you will bounce back. Losing it slowly to inflation is just silly when you are young. If there is something you know you have to do in the next few years start to save for it but otherwise use the fact that you are young and have a safety net to try to make money.\"" }, { "docid": "599757", "title": "", "text": "What is the goal of the money? If it is to use in the short term, like savings for a car or college, then stick it in the bank and use it for that purpose. If you really want this money to mean something, then in my opinion you have only one choice: Open a ROTH IRA with something like Vanguard or Fidelity and invest in an index fund. Then do something that will be very difficult: Don't touch it. By the time you are 65, it will grow to about 60,000. However, assuming a 20% tax bracket, the value of that money is really more like 75,000. Clearly this will not make or break you either way. The way you live the rest of your life will have far more of an impact. It will get you started on the right path. BTW this is advice I gave my son who is about your age, and does not earn a ton of money as a state trooper. Half of his overtime pay goes into a ROTH. If he lives the rest of his life like he does now, he will be a wealthy man despite making an average income. No debt, and investing a decent portion of his pay." }, { "docid": "83623", "title": "", "text": "The range is fine. It's ~ 1-2X your annual income. First, and foremost - your comment on the 401(k), not knowing the fees, is a red flag to me. The difference between low cost options (say sub .25%) and the high fees (over .75%) has a huge impact to your long term savings, and on the advice I'd give regarding maximizing the deposits. At 26, you and your wife have about 20% of your income as savings. This is on the low side, in my opinion, but others suggest a year's salary by age 35 which implies you're not too far behind. Given your income, you are most likely in the 25% federal bracket. I'd like you to research your 401(k) expenses, and if they are reasonable, maximise the deposit. If your wife has no 401(k) at work, she can deposit to an IRA, pre-tax. It's wise to keep 6 months of expenses as liquid cash (or short term CDs) as an emergency fund in case of such things as a job layoff. They say to expect a month of job hunting for each $10K you make, so having even a year to find a new job isn't unheard of. One thing to consider is to simply kill the mortgage. Before suggesting this, I'd ask what your risk tolerance is? If you took $100K and put it right into the S&P, would you worry every time you heard the market was down today? Or would you happily leave it there for the next 40 years? If you prefer safety, or at least less risk, paying off the mortgage will free up the monthly payment, and let you dollar cost average into the new investments over time. You'll have the experience of seeing your money grow and learn to withstand the volatility. The car loan is a low rate, if you prefer to keep the mortgage for now, paying the car loan is still a guaranteed 3%, vs the near 0% the bank will give you." }, { "docid": "434972", "title": "", "text": "They start at six figures with just a bachelor's, and their raises tend to be pretty substantial. Many of them will earn more than $200k before they are age 30. Basically, if they were to live relatively normal lifestyles (many do not), save and invest most of their earnings, then they should be able to become a millionaire at around age 30 while just following their career path, without taking big risks such as starting a business." } ]

[ { "docid": "583640", "title": "", "text": "It depends on how much you save, how much your savings earns each year. You can model it with a very simple spreadsheet: Formula view: You can change this simple model with any other assumptions you wish to make and model. This spreadsheet presumes that you only make $50,000/year, never get a raise, that your savings earns 6% per year and that the market never has a crash like 2008. The article never states the assumptions that the author has made, and therefore we can't honestly determine how truthful the author is. I recommend the book Engineering Your Retirement as it has more detailed models and goes into more details about what you should expect. I wrote a slightly more detailed post that showed a spreadsheet that is basically what I use at home to track my retirement savings." } ]

[ { "docid": "175305", "title": "", "text": "Mortgage rates are at record lows. The 30 yr fixed is now below 4%, if you are in the 25% bracket and itemize (state income tax, property tax, donations, easy to pass the minimum) it costs you 3% post tax. This is the rate of long term inflation, effectively making this money free. You are likely to be able to average a far greater return than this mortgage is costing you. These rates may last another year or two, but long term, they are an anomaly. ETFs such as DVY (the Dow high dividend stocks) are yielding over 3.75%, 3.2% after the 15% cap gain tax. i.e. you get a small positive return, and the potential for capital gains. If this ETF rises just 3%/yr it's all profit above your cost of money. That said, there are those who sleep better with a paid in full house, regardless of the rate. To that extreme, I've read those who make paying their mortgage a priority ahead of funding their matched 401(k). While I can guess what the market will return, but can't know what will actual happen, it's foolish to skip one's match. They reason that the market can crash, I reply the 401(k) has to have a short term fund, money market or T-bill type returns, but a 100% match is a no-brainer. Using an estimated 4% for the 30 and 3.5% for the 15, the payment on the 15 yr mortgage will be 50% higher, $1430 (15yr) for $200K vs $955 for the 30. How does this play in your budget? Do you have an adequate emergency fund? Are you funding your retirement plan at a decent level? In the end, there is no right answer, just what's right for you. Understanding the rest of your financial picture will get you more detailed advice. Not knowing your situation limits the answers. Edit 6/30/2015 - When I wrote this answer, the DVY was trading at $48.24. $100,000 invested would have given off $3187/yr after a 15% dividend tax rate. At $75/share now, the $100,000 investment would be worth $155,472 and yielding $5597 for a net $4757 after tax. The choice to go DVY would have been profitable from the start, with room now for a 35% crash before losing any money." }, { "docid": "387030", "title": "", "text": "While the other answers are good, I wanted to expand a little on why I feel a ROTH is a bad way to go unless you are young. First, let's pretend you have a 25% tax rate. And your investments will go up 5% per year for 10 years. You contribute 6% of income for one year. You can do a traditional or a roth 401k/IRA. Here's the math: Traditional: 6% of income invested. Grows at 5% for 10 years. Taxed at 25% on withdrawl. = (Income * 6%) * (1.05 ^ 10) * (100% - 25%) = (Income * 6%) * 1.63 * .75 = 7.33% of your original income - but this is after taxes ROTH: Taxes taken out of income. Then 6% of that goes into the fund(s). Still grows at 5% for 10 years. Not taxed at withdrawl. = (Income * (100% - 25%) * 6%) * (1.05 ^ 10) = (Income * 75% * 6%) * 1.63 = 7.33% of your original income - again this is after taxes. Look familiar? They are the same. It's the simple transitive property of mathematics. So why do a traditional vs. a ROTH? The reason is that your tax bracket changes. This changes because your income changes. Say when you retire you plan to have your home or vehicle paid for. You expect to be able to live on $50,000 per year. This means when you make MORE than $50,000 you should do a traditional plan and when you make less than this you should do a ROTH plan. Example: You make $100,000 and your upper bracket is now 30%. You save 30% by doing a traditional and then pay back 10, 20, and 30% as you withdraw a salary of $50,000. Traditional = better. Example: You make $30,000 annually. Your upper bracket is 20%. You pay 20% on a roth. Then you withdraw funds to get to $50,000 anually and never pay the higher bracket. Roth = better. ROTH advocates typically bring up tax rates. Of course they will go up they insist. So you always should do a ROTH. Not so fast. Taxes have gone down in recent years (No one please start a political debate with me. Some went up, some went down, but overall, federal income rates dropped). Even if taxes rose 5%, a traditional will still be better than a ROTH in many cases." }, { "docid": "253552", "title": "", "text": "\"First of all, the numbers you give are most probably nowhere near the total expenses you have/need to budget: Maybe you should have a look at the expenses you had over the last years (look at how much money came in and how much went to the savings and compare this expenses to the sum of all the expenses you have on your list of expenses as plausibility check. Just starting on some numbers you give and assuming the house is the main goal. House of 300 - 500 k€, assuming downpayment of 30 - 40 %, i.e. somewhere between 90 and 200 k€. I'll go on calculating with 150 k€ which would be 50 % of 300 k€ or 30 % of 500 k€. You want to be there in 8 - 15 a: this means saving 10 - 19 k€ per year. 19 k€/a is clearly impossible with 20 k€ net wage. 10 k€ with 20 k€ net wage means a savings quote of 50 %, so for each € you spend, one goes towards the house. This is doable in the sense that if you continue with 4 k€/a for rent plus a Harz 4 (= 400 €/month) style of life, that would put you to 9 k€ expenses/a, thus 1 k€ saving for unexpected disaster (I'd actually first get a couple of k€ together for such things, and then go as much as possible towards the house). Still, this is not the life style the rest of your goals sounds like. (You can update this somewhat with the expected income of your girlfriend/wife. But remember that she needs food and clothes as well and you assume she'll need a car of her own) Let me rephrase the savings goal of 150 k€: you'd try to save 3 times the median German household equity within 8 to 15 years. This should tell you that it is a very steep proposition. On the other hand, e.g. Slowakians manage to have a median household equity of ca 60 k€ out of a median income that is roughly half the median income in Germany. So again it is somehow possible, but it will be really tough to live a life style like a Slowakian or Harz 4ler between peers that spend roughly everything (good approximation as we're talking about savings rates above 50 % of net income) they earn. I think the \"\"easiest\"\" way to get your savings going is to postpone lifestyle upgrades. On the other hand, around Waldeck, 150 k€ would buy you a complete new house of the same size that costs 300 - 500 k€ around Darmstadt. So if you really want to go for the house, I'd recommend not only to save as hard as you can*, but also to look out for possibilities to relocate to a cheaper area. 8 - 15 years should be enough time to decide what area you'd like and then to look for an opportunity without too much pressure. And actually this should be enough time so that also your girlfriend/wife could get herself transferred to another Bundesland. * In reality saving as hard as possible will probably get you nowhere near 150 k€ (there are very few people who manage to do this - though they exist), but if you get to 75 k€ that would mean a reasonably good position for both starting negotiations with the bank about buying a 150 k€ house plus the corresponding payment of the mortgage. If you get there within less than 15 years that would also leave some air in case you change opinion with regard to kids and then leaves a reasonable amount of time to put together your pension. Consider your psychology about saving towards the house. Even if both of you know that you want it really hard, it may be good to enter a building savings contract (15 years should be reasonable for that way) which will enforce you to keep up the savings rate and also does not allow you to divert money for other purposes. However, I'd say that 6 months into the first job it may be a bit early to fix such savings rates. Maybe for the beginning a savings account that includes some hassle to get the money out again (set low limit and allow any outgoing money to go only to another account of yours) with an automatic savings deposit every month is a way how to safely determine the savings rate you can manage. Maybe you can use this to first put together your new emergency savings which should be first priority anyways. If you want to cut expenses in order to save, look at the recommendations for people who try to get out of debt: budget your expenses, cook yourself and enjoy this (maybe taking a cooking class together with your girlfriend is a lot of fun, leads to food that may even be more to your taste than restaurant stuff - and is much cheaper), keep book, pay in cash (not by card) and so on. If you're not a DIY person, try whether you could enjoy becoming one - no magic involved there. I guess the most important point is to find out how much you want the house and then how hard you are willing to save. This is something only you and your girlfriend can decide (together!). IMHO you really don't need to invest (unless you drop the house plan), you need to save towards your goals. You may decide to invest a small part of the money while saving in order to learn slowly how that works, but if the house goal is already kind of fixed in time, you don't want to find yourself in the situation that you have to get out of investments at a bad time in order to be able to buy the house. Even if you consider 15 years long enough to do some investing now and then get out some time during the next 15 years, you don't have any money to invest now. Later, the risk posed by the fixed point in time when you need the money is too large: Considering the rather steep saving propositions, the marginal costs of having less money are really large. This means you don't want to go for risky investments => plain old saving is what you need. Consider also that low house prices tend to come during economic crisis (people cannot pay mortgage and have to sell) so within the time window, you want to have your money for anticyclic buying if possible.\"" }, { "docid": "10440", "title": "", "text": "I see a lot of answers calculcating with incomes that are much higher than yours, here is something for your situation: If you would keep your current income for the rest of your life, here is approximately how things would turn out after 40 years: All interest is calculated relative to the amount in your portfolio. Therefore, lets start with 1 dollar for 40 years: With your current income, 15% would be 82.5 dollar. At 12% this would over 40 years get you almost 1 million dollar. I would call a required return of more than 12% not 'likely'. The good news, is that your income will likely increase, and especially if this happens fast things will start to look up. The bad news is, that your current salary is quite low. So, it basically means that you need to make some big jumps in the next few years in order to make this scenario likely. If you can quickly move your salary towards ranges that are more common in the US, then 15% of your income can build up to a million before you retire. However, if you just follow gradual growth, you would need to get quite lucky to reach a million. Note that even if reaching a million appears unlikely, it is probably still a good idea to save!" }, { "docid": "68872", "title": "", "text": "\"Note - this is a complicated topic. I've read the rules multiple times and I'm still not sure I understand them perfectly. So please take this with a pinch of salt and read the rules for yourself. The time(s) at which a test is done against the LTA are known as a \"\"Benefit Crystallization Event\"\" (BCE). There are 13 of these (!) - they're numbered 1-9 with the addition of some extras numbered 5A-D. However, the most important ones for those with defined contribution pensions are: Broadly, the idea is that a BCE occurs when you start taking money out of your pension, and when you reach age 75. Each time one happens, the amount you are taking out (\"\"crystallizing\"\") gets compared against the LTA and a certain percentage of your LTA gets designated as being used. Crystallising doesn't necessarily mean you actually receive the money immediately, just that some of your money is switched into a mode where you can start receiving it in different ways. The rules are designed to avoid double counting, so broadly anything that was taken off your LTA won't be taken off a second time. The cumulative use of your LTA is tracked as a percentage rather than an absolute amount, to take account of any changes in the LTA between the different times you crystallise money. For example if you crystallise £100K when the LTA is £1mn, that's 10% of your LTA gone. If later on the LTA has risen to £1.1mn and you take out £110K, that's another 10%. Once you hit 100%, you start paying a LTA charge on any excess. The really simple path here is if you just get an annuity with your entire pot, before hitting age 75 (and you don't make any further pension contributions after). Then only BCE 4 applies: your pension pot, all of which is being used to buy the annuity, is compared with the LTA. After this point your entire pension pot is considered to be crystallized, so no more BCEs will apply - the tests at age 75 only apply if you still have money that you haven't taken out or used to buy an annuity. The annuity payments themselves will be subject to income tax at your normal rate at the time you receive them, i.e. 0%, 20%, 40% or 45% depending on how much other income you have. In reality most people would want to take 25% of their pot as a lump sum at the same time as buying an annuity, given that it's tax-free if you're under the LTA. At this point BCE 6 applies in addition to BCE 4, but again the overall effect of the test is pretty simple, look at the total pension pot (lump sum + cost of annuity), and if it's under the LTA you're fine. Again, at this point no more BCEs will apply as all the money is considered to have been fully distributed. If you only use part of the money for an annuity/lump sum, then only that part of the money is compared against the LTA, and the rest stays in your pension and will be compared later. The 25% limit for a tax-free lump sum applies to the total you are taking out at that point: if you have £200K and are taking out £100K, you can take out £25K as a tax-free lump sum and use £75K for the annuity. The other £100K stays in your pension. Many people see annuity rates as very low and will want to take on more risk (and reward) by using \"\"Drawdown\"\" for at least part of their pension. Essentially, you can designate part of your pension for drawdown, and at that point BCE 1 applies to the money you designate. Once designated, you can start drawing the money out as income, which will be taxed at your normal income tax rate at the time you receive it. Again, you can take 25% as a lump sum at this point which will be subject to BCE 6. There's also an alternative route where you put everything into \"\"flexi-access drawdown\"\" without taking any lump sum immediately, and then as you actually withdraw income, 25% is tax-free and the rest is taxed as income. The overall effect is the same, but it gives you more control over when you get the tax-free bit. However, because with drawdown you can actually leave the money in your pension and growing tax-free, there's a further test against the LTA at age 75 under BCE 5A. To avoid double-counting (\"\"prevention of overlap\"\"), the amount left in the drawdown fund at that point is reduced by whatever was previously tested against BCE 1. So if you put £150K into drawdown initially, and it's grown to £200K by age 75, then another £50K will crystallise under BCE 5A. I think that if you put £150K into drawdown initially and it grows by £50K, but you take that out as income so that only £150K (or less) remains at age 75, then the amount crystallising under BCE 5A is nil. Also, when money is in drawdown, you can choose to use it to buy an annuity. BCE 4 is applied at this point (if before age 75), but as with BCE 5A, this is reduced by anything that was previously crystallised under BCE 1. If you only use some of it to buy an annuity, the reduction is pro-rataed, e.g. if you started out with £150K moved into drawdown, and later it has grown to £200K and you use £100K to buy an annuity, then the reduction is £75K so £25K is considered to have crystallised under BCE 4. Once you reach age 75, as well as any money that's still in drawdown, anything you haven't yet crystallised at all gets tested against the LTA under BCE 5B. Broadly, once you go over the LTA, the charges are simple: There's never any explanation given for these two rates, but I think it's all based on trying to at least cancel out the benefit you got from using your pension, on the assumption that: So with the 25% charge + 20% income tax, if you take out £100, you'll end up with £75 gross income, so £60 net income - just the same as if you'd originally paid 40% tax. (This ignores the effect of investment growth, but if you would have saved the £60 in an ISA, the end result is the same: if you had growth of say 50% over the time the money was in your pension, it'll be the same effect if you had £100 growing to £150 and now received 60% of it, or if you had £60 growing to £90 untaxed in an ISA.) The 55% lump sum charge is in case you are paying 40% tax when you take it out, to make sure that it's not a more attractive option than the 25%+income tax: if you have £100, either you get £45 tax free via a lump sum, or you get £75 gross and hence £45 net. I haven't covered lots of cases here: defined benefit pensions. Roughly, when you start receiving the pension, 20x the initial income from the pension is deemed to crystallise under BCE 2 and any lump sum you receive crystallises under BCE 6. In the former case, you could end up having to pay the LTA charge with money you haven't actually got yet, and you can ask the pension administrator to instead reduce your pension to pay it. However, there are lots of special cases for defined benefit pensions, mostly for historical reasons, so you should make sure you check with your pension administrator about this. if you die before age 75, at which point the LTA test is applied via either BCE 5C/5D, or BCE 7. After paying the LTA charge if any, your dependents or whoever else you leave it to gets the remainder tax-free. transferring overseas (BCE 8). \"\"scheme pensions\"\" under BCE 2 and BCE 3 (I think these are relatively uncommon) some corner cases covered by regulations (BCE 9)\"" }, { "docid": "426461", "title": "", "text": "\"Between \"\"fresh out of college\"\" and \"\"I have no debts, and a support system in place which because of which I can take higher risks.\"\" I would put every penny I could afford in the riskiest investment platform I was willing to. Holding onto money in a bank account is likely to cost you %1-%2 a year depending on what interest rates are and what inflation looks like. Money invested in a market could loose it all for you or you could become an overnight millionaire. Loosing it all would suck but you are young you will bounce back. Losing it slowly to inflation is just silly when you are young. If there is something you know you have to do in the next few years start to save for it but otherwise use the fact that you are young and have a safety net to try to make money.\"" }, { "docid": "338943", "title": "", "text": "Yes you can't simply withdraw your super until you are aged 60 (and that may go up slightly on Budget night 13/05/14). But you can roll it over into a SMSF where you decide where you invest your super funds. However, I would advise against you starting a SMSF at this early age with a very small super fund account. The Admin. and audit fees would eat your super account up in one year. It is recommended that you have at least $300,000 to $400,000 in super fund assets before starting a SMSF to make the fees competitive and efficient. Now if you are with a partner and start a SMSF together, then it is your combined funds that need to be over the $300K mark (a SMSF can have between 1 to 4 members). The cheapest fund I could find was First State Super. The fees are $52 + 0.64% per year (for the High Growth option). So for a balance of $1000 you would pay $58.40 or 5.84% per year. The High Growth Investment Option has returned 18.4% over the last year, 12.7% pa over the last 5 years, and 8.2% pa over the last 10 years (which includes the period covering the GFC). So even with a small balance of $1000 your super investment will still continue to grow. If you could slowly grow your super account to $2000 your fees would be $64.80 or 3.24%, and at $3000 balance your fees would be $71.20 or 2.37%. The great thing about super is the tax advantages. You may be complaining now about fees on a small balance, and yes you should try to minimise these fees, not only when you have a small balance but also when your balance is larger, but the tax advantages available through superannuation will really come into play when you are on a high income paying the tax at or near the highest marginal tax rate. Compare the top marginal tax rate (plus Medicare Levy) at 46.5% compared to the tax rate of 15% on super contributions and investment returns. And it gets better, when you retire and take a pension or lump sum from your super after age 60 you pay zero tax on the income stream or lump sum. and you also pay zero tax on any ongoing investment returns in your super. The benefits of superannuation are numerous, and the best way to reduce your fees for now is to find a fund with lowest fees, try to increase your balance so your percentage fees go down, and try to consolidate all your super funds into the one with the lowest fees, if you have more than one super fund." }, { "docid": "181179", "title": "", "text": "\"This is the best tl;dr I could make, [original](https://www.nytimes.com/2017/09/16/business/economy/bump-in-us-incomes-doesnt-erase-50-years-of-pain.html) reduced by 91%. (I'm a bot) ***** &gt; Starting with 1957, the team looked at actual earnings during the prime working years - the ages of 25 to 55. &gt; The result was that a 25-year-old man who entered the work force in 1967 and worked for the next three decades earned as much as $250,000 more, after taking inflation into account, than a man who had the same type of career but was 15 years younger. &gt; Most younger men ended up with less because they started out earning less than their counterparts in previous years, and saw little growth in their early years. ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/70q0gc/bump_in_us_incomes_doesnt_erase_50_years_of_pain/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ \"\"Version 1.65, ~211729 tl;drs so far.\"\") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr \"\"PM's and comments are monitored, constructive feedback is welcome.\"\") | *Top* *keywords*: **work**^#1 **income**^#2 **men**^#3 **earned**^#4 **more**^#5\"" }, { "docid": "260677", "title": "", "text": "Hopefully this $1000 is just a start, and not the last investment you will ever make. Assuming that, there are a couple of big questions to consider: One: What are you saving for? Are you thinking that this is for retirement 40 or 50 years from now, or something much sooner, like buying a car or a house? You didn't say where you live. In the U.S., if you put money into an IRA or a 401k or some other account that the government classes as a retirement account, you don't pay taxes on the profits from the investment, only on the original principal. If you leave the money invested for a long period of time, the profits can be many times the original investment, so this makes a huge difference. Like suppose that you pay 15% of your income in state and local taxes. And suppose you invest your $1000 in something that gives a 7% annual return and leave it there for 40 years. (Of course I'm just making up numbers for an example, but I think these are in a plausible range. And I'm ignoring the difference between regular income tax and capital gains tax, etc etc. It doesn't change the point.) If you put the money in a classic IRA, you pay 0% taxes the year you open the account, so you have your full $1000, figure that compound interest for 40 years, you'll end up with -- crunch crunch crunch the numbers -- $14,974. Then you pay 15% when you take it leaving you with $12,728. (The end result with a Roth IRA is exactly the same. Feel free to crunch those numbers.) But now suppose you invest in a no-retirement account so you have to pay taxes every year. Your original investment is only $850 because you have to pay tax on that, and your effective return is only 5.95% because you have to pay 15% of the 7%. So after 40 years you have -- crunch crunch -- $10,093. Quite a difference. But if you put money in a retirement account and then take it out before you retire, you pay substantial penalties. I think it's 20%. If you plan to take the money out after a year or two, that would really hurt. Two: How much risk are you willing to take? The reality of investment is that, almost always, the more risk you take, the bigger the potential returns, and vice versa. Investments that are very safe tend to have very low returns. As you're young, if you're saving for retirement, you can probably afford a fairly high amount of risk. If you lose a lot of money this year, odds are you'll get it back over the next few years, or at least be able to put more money into investments to make up for it. If you're 64 and planning to retire next year, you want to take very low-risk investments. In general, investing in government bonds is very safe but has very low returns. Corporate bonds are less safe but offer higher returns. Stocks are a little more. Of course different companies have different levels of risk: new start-ups tend to be very risky, but can give huge returns. Commodities are much higher risk. Buying on margin or selling short are ways to really leverage your money, but you could end up losing more than you invested. Mutual funds are a relatively safe way to invest in stocks and bonds because they spread your risk over many companies. Three: How much effort are you willing to put into managing your investments? How much do you know about the stock market and the commodities market and international finance and so on, and how much are you willing to learn? If your answer is that you know a lot about these things or are willing to dive in and learn a lot, that you can invest in individual stocks, bonds, commodities, etc. If your answer is that you really don't know much about all this, then it makes a lot of sense to just put your money into a mutual fund and let the people who manage the fund do all the work." }, { "docid": "475397", "title": "", "text": "There is no advantage to using one type of account or the other if you are in the same tax bracket at retirement that you are in during your working years. However, for tax planning reasons, it is good to have some money in both a Roth and a traditional IRA plan. JoeTaxpayer has often advocated a good rule of thumb to use a Roth when your tax bracket is 15% or lower, and use a traditional account when in the 25% bracket or above. The reason for this rule of thumb is that you are less likely to be in the higher tax bracket when you are living off retirement savings unless you put away an awful lot of money between now and then. If you are making enough money to be paying a 25% marginal rate on some of the money you would be putting away for retirement, then by all means, put all of that money in a traditional 401k. If after contributing that portion of your savings taxed at the higher rate, you still have money to put away for retirement, put the rest in a Roth and pay the 15% taxes on it. When you are younger, it is likely that you are making less than you will a few years hence, and it is also likely that a larger portion of your income will be paying tax deductible interest on a mortgage. If those are true for you, then by all means, use the Roth. That was true of me when I was single and just getting started. When you do finally retire, it is possible that the tax brackets will be increased to match inflation, and if so, then there is no benefit to having tax free money at retirement vs. paying taxes on deferred accounts, but there is also usually more flexibility in when to spend money. You may find that you have a year where you have to spend a lot, so it is good to be able to pull money out without it increasing your marginal rate for that year, and other years where you spend relatively smaller amounts, and you can withdraw taxable money and pay a lower rate on that money. No one knows what the tax code will look like in 40 years, but having some money in each type of account will give you flexibility to minimize your tax bill at retirement." }, { "docid": "5188", "title": "", "text": "Basically you have 4 options: Use your cash to pay off the student loans. Put your cash in an interest-bearing savings account. Invest your cash, for example in the stock market. Spend your cash on fun stuff you want right now. The more you can avoid #4 the better it will be for you in the long term. But you're apparently wise enough that that wasn't included as an option in your question. To decide between 1, 2, and 3, the key questions are: What interest are you paying on the loan versus what return could you get on savings or investment? How much risk are you willing to take? How much cash do you need to keep on hand for unexpected expenses? What are the tax implications? Basically, if you are paying 2% interest on a loan, and you can get 3% interest on a savings account, then it makes sense to put the cash in a savings account rather than pay off the loan. You'll make more on the interest from the savings account than you'll pay on interest on the loan. If the best return you can get on a savings account is less than 2%, then you are better off to pay off the loan. However, you probably want to keep some cash reserve in case your car breaks down or you have a sudden large medical bill, etc. How much cash you keep depends on your lifestyle and how much risk you are comfortable with. I don't know what country you live in. At least here in the U.S., a savings account is extremely safe: even the bank goes bankrupt your money should be insured. You can probably get a much better return on your money by investing in the stock market, but then your returns are not guaranteed. You may even lose money. Personally I don't have a savings account. I put all my savings into fairly safe stocks, because savings accounts around here tend to pay about 1%, which is hardly worth even bothering. You also should consider tax implications. If you're a new grad maybe your income is low enough that your tax rates are low and this is a minor factor. But if you are in, say, a 25% marginal tax bracket, then the effective interest rate on the student loan would be more like 1.5%. That is, if you pay $20 in interest, the government will then take 25% of that off your taxes, so it's the equivalent of paying $15 in interest. Similarly a place to put your money that gives non-taxable interest -- like municipal bonds -- gives a better real rate of return than something with the same nominal rate but where the interest is taxable." }, { "docid": "454333", "title": "", "text": "If you're in the 25% tax bracket, then you probably shouldn't be doing a Roth conversion right now. You'd prefer to do Roth conversions when you can do so at a 15% rate. You could contribute some of your current annual contributions to Roth directly, but even that isn't a great idea except to diversify your holdings. Odds are you won't be paying 25% average tax rate on your retirement, unless you're doing very well in your retirement account. Odds are you'll be somewhere around 15%. Converting at a 15% rate therefore is fine; basically, you'll have something like this, based on some assumptions (I'm making up dollars, brackets, etc.; obviously these will change): Doing this, you pay 0-15% tax on up to 75k, then pay 0 tax after that on the Roth (which you paid 15% tax on already). Therefore, you don't end up paying more than 15% on any single dollar, and you pay less on the total sum. But you also don't really want to be paying 25% on any of it, since that won't really help you out any and could hurt you (will hurt you, if you end up getting some of that 15% bracket income from the Roth). If you're in the 25% bracket now, then you probably are better off just keeping everything in regular IRA (unless you're expecting to be in the 28% bracket after retirement?). Putting some in Roth isn't a terrible idea, just for diversification's sake, but it's probably going to cost you money unless tax rates rise dramatically (which they certainly could, though not as likely to rise on the 'middle class' 0-100k range). They'd have to double for you to be worse off this way. And finally: do not ever withdraw from the 401k to pay taxes on a conversion. You're subject to a 10% penalty for doing that (as it's an early withdrawal) and also have to pay taxes on that withdrawal. Ick. For more information about when Roth makes sense, read site moderator JoeTaxpayer's Blog article on the subject, which explains this in great detail." }, { "docid": "228694", "title": "", "text": "\"This is the infographic from the Fidelity. It exemplifies what's wrong with the financial industry, and the sad state of innumeracy that we are in. To be clear, Fidelity treats the 401(k) correctly, although the assumption that the withdrawals are all at a marginal 28% is a poor one. The Roth side, they assume the $5000 goes in at a zero tax rate. This is nonsense, as Elaine can't deposit $5000, she has to pay tax first, no? She'd deposit $3600, and would have the identical $27,404 at withdrawal time. And this is pure nonsense - \"\"Let’s look at the numbers another way. Tom takes the $1,400 he saved in taxes from his $5,000 pretax contributions, and invests that money in a taxable brokerage account. That could boost his total at age 75 to $35,445.\"\" The $1400 saved is in his 401(k) already, there's no extra $1400. $5000 went in pretax. Let me go one more step, and explain what I think Joe meant in his comment below - tax table first - At retirement, say a couple has exactly $168,850 of income. With the $20K in standard deduction and exemptions, they are right at the top of the 25% bracket. And have a federal tax bill of $28,925. Overall, an effective rate of 17%. Of course this is a blend from 0%-25%, and I maintain that if some money could have gone in post tax while in the 10%/15% brackets, that would be great, but in the end, if it all skims off at 25%, and comes out at an effective 17%, that's not too bad. The article is incorrect. Misleading. And offends any of us that have any respect for numbers. And the fact that the article claim that \"\"87% found this helpful\"\" just makes me... sad. I've said it elsewhere, and will repeat, there are not just two points in time. The ability to convert Traditional 401(k) to Roth 401(k), and if in IRAs, not just convert, but also recharacterize, opens up other possibilities. It's worth a bit of attention and ongoing paperwork to minimize your lifetime tax bill. Time makes no difference. There is no \"\"crossover point\"\" as with other financial decisions. For this illustration, the results are identical regardless of time. By the way, in today's dollars, it would take $4M pretax to produce an annual withdrawal of $160K. This number is about top 2-3%. The 90%ers need not worry about saving their way to a higher tax bracket.\"" }, { "docid": "93185", "title": "", "text": "\"If you are just barely scraping by on your current income, then you shouldn't be thinking about buying a car or house unless you can present (at least to yourself) clear evidence that doing so will actually lower your monthly expenses. Yes, there are times when even buying depreciating assets such as a car can lower your expenses, but you need to think hard about whether that is the case or if it is just something you want to get because you feel you \"\"should\"\". Remember the old adage that rich people buy themselves income streams (investments that either earn money or reduce expenses), while poor people buy expenses. If you are in the situation of barely scraping by on your current income, then the first step in my mind is to find out exactly what you are spending your money on (do this for a month or two, and then try to include non-regular or rarely-occuring bills such as subscriptions, insurance, perhaps utilities, and so on). Once you know where your money is going right now, outline that in a budget. At this point, you aren't judging your spending, but rather simply looking at the facts. Once you have a decent idea of where your money is going, only then try to think about what you can cut back on. Some things will be easier than others to change (it's much easier to cancel a premium TV channels package than to move to cheaper living quarters, for example, although in some cases simply picking the low-hanging fruit alone won't help you). Make a revised budget for the next month based on the new numbers, and try to live by it. Keep writing down what you actually spend your money on, then rinse and repeat. (Of course, you can make a budget for whatever period of time works for you; if you get paid every two weeks, budgeting per two weeks might be easier than budgeting per month.) The bottom line is that a budget is useless without a follow-up process to see how well your spending actually matches the budgeted amounts, so you need to spend some time following up on it and making adjustments. No budget will ever match reality exactly; think of the budget as a map, not a footstep-by-footstep guide for getting from A to B. When you find some wiggle room in your budget (for example, let's say you decide to cancel the premium TV channels package you got some time ago because it turns out you aren't watching much TV anyway), don't put that money into a \"\"discretionary spending\"\" category. There is an old rule in personal finance that says pay yourself first. If you are able to find $5/month of wiggle room, put it into savings of some kind. If you are unsure what kind of savings vehicle you should use, I'd suggest starting off with a simple savings account; it certainly won't earn you a great return (you'll be lucky if you can keep up with inflation), but it will get you into the habit of saving which at this point is a lot more important. And make that savings transfer as soon as the money hits your account. If you can, get the depositor to put a portion of your income directly into the savings account; if you cannot, make the transfer yourself immediately afterwards. And try to force yourself to live with the money that's left, not touching the savings account. Ideally, you should save a decent fraction of your income - I've seen figures everywhere from 10% to 25% of your after-tax income recommended by various people - and start out by budgeting that to savings and then working with whatever is left. In practice, saving anything and putting the money anywhere is much better than saving nothing. Just make sure that the savings are liquid (easy to convert to cash and withdraw without a penalty, should the need arise), set up a regular bank transfer for whatever amount you can find in that budget, and try to forget about it until you get the bank statement for the savings account and get that warm, fuzzy feeling for actually having a decent amount of money set aside should something ever happen making you need it. Then, later, you can decide whether to use the money to buy a car, start a company, take early retirement, or something entirely different. Having the money will give you the options, and you can decide what is more important to you yourself. Just keep on saving.\"" }, { "docid": "286017", "title": "", "text": "You don't start out buying a shopping mall, you have to work up to it. You can start with any amount and work up to a larger amount. For me, I saved 30% of my salary(net), investing in stocks for 8 years. It was tough to live on less, but I had a goal to buy passive income. I put down this money to buy 3 houses, putting 35% down and maintaining enough cash to make 5 years of payments. I rented out the houses making a cap of 15%. The cap is the net payment per year / cost of the property, where the net accounts for taxes and repairs. I did not spend any of the profits, but I did start saving less salary. After 5 years of appreciation, mortgage payments and rental profit, I sold one house to get a loan for a convenience store. Buildings go on the market all the time, it takes 14 years to directly recoup an investment at a 7% cap, which is the average for a commercial property sale. Many people cash out for this reason, it's slow, but steady growth, though the earnings on property appreciation is a nice bonus. Owning real estate is a long term game, after a long time of earning, you can reinvest, but it comes with the risk of bad or no tenants. You can start both slower and smaller, just make sure you're picking up assets, not liabilities. Like investing in cars is generally bad unless you are sure it will appreciate." }, { "docid": "438778", "title": "", "text": "Craig touched on it, but let me expand on the point. Deposits, by definition, are withheld at your marginal rate. And since you can choose Roth vs Traditional right till filing time, you know with certainty the rate you are at each year. Absent any other retirement income, i.e. no pension, and absent an incredibly major change to our tax code, I know your starting rate, zero. The first $10K or so per person is part of their standard deduction and exemption. For a couple, the next $18k is taxed at 10%, and so on. Let me stop here to expand this important point. This is $38,000 for the couple, and the tax on it is less than $1900. 5%. There is no 5% bracket of course. It's the first $20K with zero tax, and that first $18,000 taxed at 10%. That $38,000 takes nearly $1M in pretax accounts to offer as an annual withdrawal. The 15% bracket starts after this, and applies to the next $57K of withdrawals each year. Over $95K in gross withdrawals of pretax money, and you still aren't in the 25% bracket. This is why 100% in traditional, or 100% in Roth aren't either ideal. I continue to offer the example I consider more optimizing - using Roth for income that would otherwise be taxed at 15%, but going pretax when you hit 25%. Then at retirement, you withdraw enough traditional to just stay at 10 or 15% and Roth for the rest. It would be a shame to retire 100% Roth and realize you paid 25% but now have no income to use up those lower brackets. Oddly, time value of money isn't part of my analysis. It makes no difference. And note, the exact numbers do change a bit each year for inflation. There's a also a good chance the exemptions goes away in favor of a huge increased standard deduction." }, { "docid": "418864", "title": "", "text": "\"Keep in mind, there are too many variables to address in a single post. I could (and might) write a full book on the topic. One simple way to comprehend your perceived observation. In the 25% bracket, you have $1000 of income and two choices. Net out $750, and deposit to Roth, or deposit the full $1000 to the traditional IRA or 401(k). Sufficient time passes for the investment to grow 10 fold. For what it's worth, 8% at 30 years will do that. The Roth is now worth $7500 tax free. The traditional 401(k) is worth $10000 but subject to tax. At 25%, we're at the same $7500. For those looking to invest more than a gross $18,000, the Roth flavor is an effective $24,000, as post tax, this is $18,000. I wrote a bit more on this in the whimsically titled The Density of Your IRA. This is really a top 10%er issue, as it takes quite a bit of income for the $23,000 combined IRA and 401(k) limits to be a problem. In my writing, the larger case to be made is for taking advantage of the tax rate difference between the time of deposit and withdrawal. A look at the 2016 tax rates is in order. Let's stick with 25% while working. Now, at retirement, but before social security, as that's another story, the couple has $20,600 in standard deduction and exemption, and both the 10 and 15% brackets to enjoy. Ignoring any other deductions, potential credits, etc, let's look at a gross $80,000 withdrawal. The numbers happen to work out to an average 10%, with the couple being in a marginal 15% bracket. A full 25% or $20,000 tax would be the break-even to the \"\"same bracket in/out\"\" analysis, so this produces a $12,000 benefit. This issue is often treated as if there were 2 points in time, the deposit, and the withdrawal. For most people, that may be the case. Keep in mind, current law allows a conversion to Roth any time in between. This gives an opportunity to make a deposit while in the 25% bracket, and convert in any year the marginal rate drops back to 15% for whatever reason. Last - I can't ignore the Social Security problem. Simply put, when half of your Social Security benefits plus other income exceed $25,000 ($32,000 if married filing joint) your benefits start to become taxable, until 85% of your benefits are fully taxed. This issue is worthy of multiple posts by itself. It's not a deal killer, just another point to consider. A very high income earner might be beyond these levels already, in which case the point is moot. A low income earner, not impacted at all. It's those who are in the range to navigate this that would benefit to take advantage of the scenario I presented above and spend down pre-tax accounts, while planning to use the Roths when Social Security starts. This should make it clear - it's not all or none. Those retiring with $2M in 100% pretax, or $1.5M 100% in Roth have both missed the chance to have the optimal mix.\"" }, { "docid": "434972", "title": "", "text": "They start at six figures with just a bachelor's, and their raises tend to be pretty substantial. Many of them will earn more than $200k before they are age 30. Basically, if they were to live relatively normal lifestyles (many do not), save and invest most of their earnings, then they should be able to become a millionaire at around age 30 while just following their career path, without taking big risks such as starting a business." }, { "docid": "365285", "title": "", "text": "Rule of thumb: To retire with a yearly income of $X, you need to save $(20*X) -- in other words, the safe assumption is that you'll average 4% returns on your stabilized savings/investments. In the case of retiring with a $50k passive pretax income, that means you need savings of $1M by the time you retire. If you want the $50,000 to be real post-tax spendable dollars, and your savings aren't in something like a Roth 401k or Roth IRA, increase that proportionately to account for taxes. How you get there depends on what you start with, how much you put into it every year, how you invest it and how many years you have before your retirement date. Passive investment alone will not do it unless you start with a lot of money; passive ongoing investment may depending on how much you can make yourself save when. To find out whether any specific plan will do what you need, you have to work with real numbers." } ]

[ { "docid": "597247", "title": "", "text": "Millionaire, Shmillionaire! Let's do this calculation Bruno Mars style (I wanna be a Billionaire...) If my calculations are correct, in the above scenario, at age 80, you would have more than a billion in the bank, after taxes." } ]

[ { "docid": "80844", "title": "", "text": "After looking at your profile, I see your age...28. Still a baby. At your age, and given your profession, there really is no need to build investment income. You are still working and should be working for many years. If I was you, I'd be looking to do a few different things: Eliminating debt reduces risk, and also reduces the need for future income. Saving for, and purchasing a home essentially freezes rent increases. If home prices double in your area, in theory, so should rent prices. If you own a home you might see some increases in taxes and insurance rates, but they are minor in comparison. This also reduces the need for future income. Owning real estate is a great way to build residual income, however, there is a lot of risk and even if you employ a management company there is a lot more hands on work and risk. Easier then that you can build an after tax investment portfolio. You can start off with mutual funds for diversification purposes and only after you have built a sizable portfolio should (if ever) make the transition to individual stocks. Some people might suggest DRIPs, but given the rate at which you are investing I would suggest the pain of such accounts is more hassle then it is worth." }, { "docid": "399543", "title": "", "text": "Does your employer provide a matching contribution to your 401k? If so, contribute enough to the 401k that you can fully take advantage of the 401k match (e.g. if you employer matches 3% of your income, contribute 3% of your income). It's free money, take advantage of it. Next up, max out your Roth IRA. The limit is $5000 currently a year. After maxing your Roth, revisit your 401k. You can contribute up to 16,500 per year. You savings account is a good place to keep a rainy day fund (do you have one?), but it lacks the tax advantages of a Roth IRA or 401k, so it is not really suitable for retirement savings (unless you have maxed out both your 401k and Roth IRA). Once you have take care of getting money into your 401k and Roth IRA accounts, the next step is investing it. The specific investment options available to you will vary depending on who provides your retirement account(s), so these are general guidelines. Generally, you want to invest in higher-risk, higher-return investments when you are young. This includes things like stocks and developing countries. As you get older (>30), you should look at moving some of your investments into things that less volatile. Bond funds are the usual choice. They tend to be safer than stocks (assuming you don't invest in Junk bonds), but your investment grows at a slower rate. Now this doesn't mean you immediately dump all of your stock and buy bonds. Rather, it is a gradual transition over time. As you get older and older, you gradually shift your investments to bond funds. A general rule of thumb I have seen: 100 - (YOUR AGE) = Percentage of your portfolio that should be in stocks Someone that is 30 would have 70% of their portfolio in stock, someone that is 40 would have 60% in stock, etc. As you get closer to retirement (50s-60s), you will want to start looking at investments that are more conservatie than bonds. Start to look at fixed-income and money market funds." }, { "docid": "338943", "title": "", "text": "Yes you can't simply withdraw your super until you are aged 60 (and that may go up slightly on Budget night 13/05/14). But you can roll it over into a SMSF where you decide where you invest your super funds. However, I would advise against you starting a SMSF at this early age with a very small super fund account. The Admin. and audit fees would eat your super account up in one year. It is recommended that you have at least $300,000 to $400,000 in super fund assets before starting a SMSF to make the fees competitive and efficient. Now if you are with a partner and start a SMSF together, then it is your combined funds that need to be over the $300K mark (a SMSF can have between 1 to 4 members). The cheapest fund I could find was First State Super. The fees are $52 + 0.64% per year (for the High Growth option). So for a balance of $1000 you would pay $58.40 or 5.84% per year. The High Growth Investment Option has returned 18.4% over the last year, 12.7% pa over the last 5 years, and 8.2% pa over the last 10 years (which includes the period covering the GFC). So even with a small balance of $1000 your super investment will still continue to grow. If you could slowly grow your super account to $2000 your fees would be $64.80 or 3.24%, and at $3000 balance your fees would be $71.20 or 2.37%. The great thing about super is the tax advantages. You may be complaining now about fees on a small balance, and yes you should try to minimise these fees, not only when you have a small balance but also when your balance is larger, but the tax advantages available through superannuation will really come into play when you are on a high income paying the tax at or near the highest marginal tax rate. Compare the top marginal tax rate (plus Medicare Levy) at 46.5% compared to the tax rate of 15% on super contributions and investment returns. And it gets better, when you retire and take a pension or lump sum from your super after age 60 you pay zero tax on the income stream or lump sum. and you also pay zero tax on any ongoing investment returns in your super. The benefits of superannuation are numerous, and the best way to reduce your fees for now is to find a fund with lowest fees, try to increase your balance so your percentage fees go down, and try to consolidate all your super funds into the one with the lowest fees, if you have more than one super fund." }, { "docid": "512096", "title": "", "text": "\"(Congratulations on the little one on the way.) I'd recommend saving outside of tax-advantaged accounts. Pay your taxes and be done with them. I'd recommend putting your old-age fund first before shelling out a lot of money for college. I'd recommend not shelling out a lot of money for college. Ideally, none. There are ways today to get a four-year degree for $15,000. Not $15,000 per year. $15,000 total. Check here. (This isn't an affiliate link.) They can pay for this themselves! I'd recommend making sure you hold the hammer. Don't let them party on your nickel. I'd recommend teaching your kids to \"\"fish\"\" as soon as possible. Help them start a business. They could be millionaires by the time they're teenagers. Then they can make their own money. You won't have to give them a dime.\"" }, { "docid": "353081", "title": "", "text": "\"With 40% of your take-home available, you have a golden opportunity here. Actually two, and the second builds out easily from the first. Golden Opportunity # 1: Layoff Immunity Ok, not really immunity. Most people don't think of themselves getting laid off, and don't prepare. Of course it may not happen to you, but it can. It's happened to me twice. The layoff itself is an emotional burden (getting rejected is hard), but then you're suddenly faced with a gut-wrenching, \"\"how am I gonna pay the rent????\"\" If you have no savings, it's terrifying. Put yourself in that spot. Imagine that tomorrow, you're out of a job. For how many months could you pay your expenses with the money you have? Three months? One? Not even that? How about shooting for 12 months? It's really, really comforting to be able to say: \"\"I don't have to worry about it for a year\"\". 12 months saved up gives you emotional and financial stability, and it gives you options -- you don't have to take the first job that comes along. Now, saving 12 months of expenses is huge. But, you're in the wonderful spot where you can save 40% of your income. It would only take 2.5 years to save up a year's worth of income! But, actually, it's better than that. Because your 12-month Layoff Immunity fund doesn't have to include the amount for retirement, or taxes, or that 40% we're talking about. Your expenses are less than 60% of take-home -- you'd only need 12 months of that. So, you could have a fully funded 12-Month Layoff Immunity Fund only in a year and a half! Golden Opportunity #2: Freedom Fund Do you like your Job? Would you still do it, if you didn't need the money? If so, great. But if not, why not get yourself into a position where you don't need it? That is, build up enough money from saving and investing to where you can pay your expenses - forever - from your investments. The number to keep in mind is 25. Figure out your annual expenses, and multiply it by 25. That's the amount you'd need to never need a job again. (That works out to a 4% withdrawal rate, adjusting for inflation every year, with a low risk of running out of money. It's a rule of thumb, but smart people doing a lot of math worked it out.) Here you keep saving and investing that 40% in solid mutual funds in a regular, taxable account. Between your savings and the compounding returns off the investments, you could easily have a fully funded \"\"Freedom Fund\"\" by the time you're 50. In fact, by 45 isn't unreasonable. It could be even better. If you live in that high-rent area because of the job, and wouldn't mind living were the rents are lower once you quit, your target amount would be lower. Between that, working dedicatedly toward this goal, and maybe a little luck, you might even be able to do this by age 40. Final Thoughts There are other things you could put that money toward, like a house, of course. The key take-away here, is to save it, and invest it. You're in a unique position of being able to do that with 40% of your income. That's fabulous! But don't think it's the norm. Most people can't save that much, and, once you lose the ability to save that much, it's very difficult to get it back. Expenses creep in, lifestyle \"\"wants\"\" become \"\"needs\"\", and so on. If you get into the habit of spending it, it's very difficult to shrink your lifestyle back down - down to what right now you're perfectly comfortable with. So, spend some time figuring out what you want out of life -- and in the mean time, sock that 40% away.\"" }, { "docid": "425293", "title": "", "text": "\"I've never invested in penny stocks. My #1 investing rule, buy what you know and use. People get burned because they hear about the next big thing, go invest! to just end up losing everything because they have no clue in what they're investing in. From what I've found, until you have minimum of $5k to invest, put everything in a single investment. The reason for this, as others have mentioned, is that commissions eat up just about all your profits. My opinion, don't put it in a bond, returns are garbage right now - however they are \"\"safe\"\". Because this is $1000 we're talking about and not your life savings, put it in a equity like a stock to try and maximize your return. I aim for 15% returns on stocks and can generally achieve 10-15% consistently. The problem is when you get greedy and keep thinking it will go above once you're at 10-15%. Sell it. Sell it right away :) If it drops down -15% you have to be willing to accept that risk. The nice thing is that you can wait it out. I try to put a 3 month time frame on things I buy to make money. Once you start getting a more sizable chunk of money to play around with you should start to diversify. In Canada at least, once you have a trading account with a decent size investment the commissions get reduced to like $10 a trade. With your consistent 10% returns and additional savings you'll start to build up your portfolio. Keep at it and best of luck!\"" }, { "docid": "83623", "title": "", "text": "The range is fine. It's ~ 1-2X your annual income. First, and foremost - your comment on the 401(k), not knowing the fees, is a red flag to me. The difference between low cost options (say sub .25%) and the high fees (over .75%) has a huge impact to your long term savings, and on the advice I'd give regarding maximizing the deposits. At 26, you and your wife have about 20% of your income as savings. This is on the low side, in my opinion, but others suggest a year's salary by age 35 which implies you're not too far behind. Given your income, you are most likely in the 25% federal bracket. I'd like you to research your 401(k) expenses, and if they are reasonable, maximise the deposit. If your wife has no 401(k) at work, she can deposit to an IRA, pre-tax. It's wise to keep 6 months of expenses as liquid cash (or short term CDs) as an emergency fund in case of such things as a job layoff. They say to expect a month of job hunting for each $10K you make, so having even a year to find a new job isn't unheard of. One thing to consider is to simply kill the mortgage. Before suggesting this, I'd ask what your risk tolerance is? If you took $100K and put it right into the S&P, would you worry every time you heard the market was down today? Or would you happily leave it there for the next 40 years? If you prefer safety, or at least less risk, paying off the mortgage will free up the monthly payment, and let you dollar cost average into the new investments over time. You'll have the experience of seeing your money grow and learn to withstand the volatility. The car loan is a low rate, if you prefer to keep the mortgage for now, paying the car loan is still a guaranteed 3%, vs the near 0% the bank will give you." }, { "docid": "323873", "title": "", "text": "Just to punch it in, my friend owns bars/restaurants and is a multi millionaire at the age of 29. His career choice wasn't corporate ladder, but entrepreneur. I'm investing his wealth and he is giving me a generous deal, I'm starting my own investment firm and having him as a client is the only client I need to be potentially a millionaire as well too. Don't pigeonhole yourself like everyone else does, but also know what you are capable of. Some people just aren't made to be their own boss as much as they say they could so it takes a bit of swallowing your pride and moving along to your best pathway. I could no way ever work for someone else so I swallowed my pride in a way and went my own path by saying bye to the corporate world. Some people think this is the ultimate goal, but I would relinquish potentially moving up that ladder and having that sort of prestige etc." }, { "docid": "337561", "title": "", "text": "\"The only time to stop saving money for retirement is when you have enough money to retire tomorrow. Not all of your \"\"retirement savings\"\" need to be in a 401k, it is just better if you can. Be sure to get as much as you can from the employer matching program. Unfortunately some employer matching programs discourage you from putting in too much. I've been able to max out the 401k contribution a number of times, which helps. Remember: you are likely to live to 100, so you better save enough to live that long. I don't trust social security to be there. I recommend saving so that you end up with \"\"enough to be comfortable\"\" -- this is usually about 25x your current income - PLUS inflation between now and when you plan to retire (age 62 is a good target). It is worth knowing your \"\"retirement savings number\"\". If you are making $100K per year now, you need to target $2.5M - PLUS allowance for inflation between now and when you plan to retire. This usually means you need to also arrange to make more money as well as save as much as you can and to use passive investing. Finance advisors are not worth it if you have less than $1M to invest.\"" }, { "docid": "561636", "title": "", "text": "You're misunderstanding the concept of retirement savings. IRA distributions are taxed, in their entirety, as ordinary income. If you withdraw before the retirement age, additional 10% penalty is added. Investment income has preferential treatment - long term capital gains and qualified dividends are taxed at lower rates than ordinary income. However, IRA contributions are tax deductible. I.e.: you don't pay taxes on the amounts contributed to the IRA when you earned the money, only when you withdraw. In the mean time, the money is growing, tax free, based on your investments. Anything inside the IRA is tax free, including dividends, distributions (from funds to your IRA, not from IRA to you), capital gains, etc. This is very powerful, when taking into account the compounding effect of reinvesting your dividends/sale proceeds without taking a chunk out for taxes. Consider you make an investment in a fund that appreciated 100% in half a year. You cash out to reinvest in something less volatile to lock the gains. In a regular account - you pay taxes when you sell, based on your brackets. In the IRA you reinvest all of your sale proceeds. That would be ~25-35% more of the gains to reinvest and continue working for you! However, if you decide to withdraw - you pay ordinary rate taxes on the whole amount. If you would invest in a single fund for 30 years in a regular account - you'd pay 20% capital gains tax (on the appreciation, not the dividends). In the IRA, if you invest in the same fund for the same period - you'll pay your ordinary income rates. However, the benefit of reinvesting dividends tax-free softens the blow somewhat, but that's much harder to quantify. Bottom line: if you want to plan for retirement - plan for retirment. Otherwise - IRA is not an investment vehicle. Also consider Roth IRA/conversions. Roth IRA has the benefit of tax free distributions at retirement. If your current tax bracket is at 20%, for example, contributing $5K to Roth IRA instead of a traditional will cost you $1K of taxes now, but will save you all the taxes during the retirement (for the distributions from the Roth IRA). It may be very much worth your while, especially if you can contribute directly to Roth IRA (there are some income limitations and phaseouts). You can withdraw contributions (but not earnings) from Roth IRA - something you cannot do with a traditional IRA." }, { "docid": "559556", "title": "", "text": "\"It's called disposable income for a reason. It's what's left after obligations, whatever bills you have, and saving. Saving half one's income is pretty much at one end of the spectrum, very few can afford this. The combination of high savings and low actual spending will enable you to retire very early if you wish. Saving 'only' 15% might actually be out of your comfort zone, maybe 25% will keep you happy. What remains is yours to spend on what you wish, whatever makes you happy. There was a time I joked \"\"I spent most of my money on women and beer. The rest, I wasted.\"\" Now, I don't mind travel, but it's not my passion. If traveling the world is yours, do it. Enjoy every minute of it.\"" }, { "docid": "374803", "title": "", "text": "See Started new job. Rollover previous employer 401k to new 401k, IRA or Roth IRA? for a start. Kevin, the discussion is far more complex than you might think. Say your account grows by X, (pretend it's 10 if you wish) and your tax rate is Y (25%?). If you take the initial sum, tax it at Y, but then grow it X, the result is identical to doing it in the reverse order. So $1000 to start can grow to $10,000, then after tax, $7500. Or $1000 taxed to $750, then grow to $7500. For pretax deposits, the key is that you deposit those contributions at your marginal rate, i.e. the rate you'd pay on the last $X taxed. But withdrawals start at zero. In the perfect scenario, you will save 25-28% tax on deposits, but at retirement, enjoy taxation at 0%,10%,15% for a large portion or all of the withdrawals. (Note, others can suggest rates will rise, and they may be right. My answer is based on the current tax structure.) A new earner, at 10 or 15% may be better off starting with Roth, and as they earn their way to 25% or higher slide over to pre-tax deposits. My 14 year old baby sits, and makes enough to fund a Roth, but pays no tax as she earns less than her own standard deduction for what that's worth." }, { "docid": "286017", "title": "", "text": "You don't start out buying a shopping mall, you have to work up to it. You can start with any amount and work up to a larger amount. For me, I saved 30% of my salary(net), investing in stocks for 8 years. It was tough to live on less, but I had a goal to buy passive income. I put down this money to buy 3 houses, putting 35% down and maintaining enough cash to make 5 years of payments. I rented out the houses making a cap of 15%. The cap is the net payment per year / cost of the property, where the net accounts for taxes and repairs. I did not spend any of the profits, but I did start saving less salary. After 5 years of appreciation, mortgage payments and rental profit, I sold one house to get a loan for a convenience store. Buildings go on the market all the time, it takes 14 years to directly recoup an investment at a 7% cap, which is the average for a commercial property sale. Many people cash out for this reason, it's slow, but steady growth, though the earnings on property appreciation is a nice bonus. Owning real estate is a long term game, after a long time of earning, you can reinvest, but it comes with the risk of bad or no tenants. You can start both slower and smaller, just make sure you're picking up assets, not liabilities. Like investing in cars is generally bad unless you are sure it will appreciate." }, { "docid": "586626", "title": "", "text": "You mention only two debts, mortgage and student loan, but you mention $19K in savings, which suggests that you are a saver, and likely do not have other debts. You did not mention your (net) income and expenses (income statement), but since you have substantial savings, you likely live within your means (income > expenses). Since you mention $38K in retirement, we might conclude you are regularly saving for retirement (are you saving 10% toward retirement)? You did not mention any medical condition or other debts, that might require a large savings, so I would suggest having 6 months savings ($2.5K x 6 = $15K) but should your net expenses be less, you might reduce this ($2K x 6 = $12K). You do not mention any investment you might want to make, but since you did not mention any candidate investments, we can assume you have no (specific) investments you find particularly attractive. You did not mention anything you were saving to purchase that you might want to purchase. You have combined $19K + $50K = $69K savings, and $15K would be a comfortable emergency savings, leaving $54K you could use to reduce mortgage or student loan debt. The mortgage debt interest @4.5%, is higher, so paying that debt off would be like earning 4.5% guaranteed return on your money, tax-free. At your income, your marginal tax rate is low enough that the mortgage interest deduction (if you do itemize) would not reduce this return much (15% if you itemize). The student loan debt interest @2.8%, would be like earning 2.8% guaranteed return on your money, tax-free. Clearly the higher return on your 'investment' in paying off debt would be reducing your mortgage balance (over 50% higher return on investment, compared to the student loan debt). You did not mention any circumstance that might cause the student loan rate to increase, the mortgage rate to increase, nor did you mention any difficulty making both the mortgage and student loan payments, the amounts of either payment, nor the number of years remaining to pay on either. Should you need (or desire) to reduce your payments, you could choose to payoff the student loan to eliminate one payment, and thus decrease your expenses. Or you could choose to pay down the mortgage, and refinance (or refactor) the mortgage to obtain a smaller payment. Another strategy (assuming you have had your house for 5-7 years), might be to pay the mortgage down enough to refinance into a 15 year loan, and (assuming you have a good credit score) obtain a lower (3%) rate. But I am going to suggest you consider a blended approach. Combine the Dave Ramsey Debt Snowball approach with the reduce the interest rate approach. Take the $54K ($57K?) available (after reserving 6 months emergency fund), and split between both. You pay your mortgage down by $27K and your student loan debt down by $27K. Your blended return on investment is (2.8+4.5)/2 = 3.65%, and you have the following Balance Sheet: Assets: Debts: The next steps would be to, There are two great reasons for paying off the student loan debt. One is the Dave Ramsey Debt Snowball approach which is that this is the smaller debt, and thus represents a psychological win, and the other is that student loan debt has special treatment even in bankruptcy." }, { "docid": "439249", "title": "", "text": "\"With no match, the traditional 401(k) for someone otherwise in the 15% bracket makes little sense. I'd suggest contributing just enough if you were in the 25% bracket to be in the taxable 15% but no more. Use a Roth IRA if you are saving more than that. I'm adding this based on OP's statement that the fees on the 401(k) range .8-1.4%. I wrote an article Are you 401(k)o’ed? in which I discuss how fees of this range negate the benefit of the mantra \"\"save at 25% to withdraw at 15%\"\" and if one were in the 15% bracket to start, this level off fee will cost you money in no time at all. The people advising you to max out the 401(k) first, given the rest of your situation and that of the account, are misguided. I'd given them the benefit of the doubt and assume they don't have all the details. And with all due respect to the other posters here, everyone of them a bright, valued colleague, your answers should be addressed to the OP's exact situation. 15% bracket, no match, high fees. I suspect some of answers will change on reviewing this.\"" }, { "docid": "253552", "title": "", "text": "\"First of all, the numbers you give are most probably nowhere near the total expenses you have/need to budget: Maybe you should have a look at the expenses you had over the last years (look at how much money came in and how much went to the savings and compare this expenses to the sum of all the expenses you have on your list of expenses as plausibility check. Just starting on some numbers you give and assuming the house is the main goal. House of 300 - 500 k€, assuming downpayment of 30 - 40 %, i.e. somewhere between 90 and 200 k€. I'll go on calculating with 150 k€ which would be 50 % of 300 k€ or 30 % of 500 k€. You want to be there in 8 - 15 a: this means saving 10 - 19 k€ per year. 19 k€/a is clearly impossible with 20 k€ net wage. 10 k€ with 20 k€ net wage means a savings quote of 50 %, so for each € you spend, one goes towards the house. This is doable in the sense that if you continue with 4 k€/a for rent plus a Harz 4 (= 400 €/month) style of life, that would put you to 9 k€ expenses/a, thus 1 k€ saving for unexpected disaster (I'd actually first get a couple of k€ together for such things, and then go as much as possible towards the house). Still, this is not the life style the rest of your goals sounds like. (You can update this somewhat with the expected income of your girlfriend/wife. But remember that she needs food and clothes as well and you assume she'll need a car of her own) Let me rephrase the savings goal of 150 k€: you'd try to save 3 times the median German household equity within 8 to 15 years. This should tell you that it is a very steep proposition. On the other hand, e.g. Slowakians manage to have a median household equity of ca 60 k€ out of a median income that is roughly half the median income in Germany. So again it is somehow possible, but it will be really tough to live a life style like a Slowakian or Harz 4ler between peers that spend roughly everything (good approximation as we're talking about savings rates above 50 % of net income) they earn. I think the \"\"easiest\"\" way to get your savings going is to postpone lifestyle upgrades. On the other hand, around Waldeck, 150 k€ would buy you a complete new house of the same size that costs 300 - 500 k€ around Darmstadt. So if you really want to go for the house, I'd recommend not only to save as hard as you can*, but also to look out for possibilities to relocate to a cheaper area. 8 - 15 years should be enough time to decide what area you'd like and then to look for an opportunity without too much pressure. And actually this should be enough time so that also your girlfriend/wife could get herself transferred to another Bundesland. * In reality saving as hard as possible will probably get you nowhere near 150 k€ (there are very few people who manage to do this - though they exist), but if you get to 75 k€ that would mean a reasonably good position for both starting negotiations with the bank about buying a 150 k€ house plus the corresponding payment of the mortgage. If you get there within less than 15 years that would also leave some air in case you change opinion with regard to kids and then leaves a reasonable amount of time to put together your pension. Consider your psychology about saving towards the house. Even if both of you know that you want it really hard, it may be good to enter a building savings contract (15 years should be reasonable for that way) which will enforce you to keep up the savings rate and also does not allow you to divert money for other purposes. However, I'd say that 6 months into the first job it may be a bit early to fix such savings rates. Maybe for the beginning a savings account that includes some hassle to get the money out again (set low limit and allow any outgoing money to go only to another account of yours) with an automatic savings deposit every month is a way how to safely determine the savings rate you can manage. Maybe you can use this to first put together your new emergency savings which should be first priority anyways. If you want to cut expenses in order to save, look at the recommendations for people who try to get out of debt: budget your expenses, cook yourself and enjoy this (maybe taking a cooking class together with your girlfriend is a lot of fun, leads to food that may even be more to your taste than restaurant stuff - and is much cheaper), keep book, pay in cash (not by card) and so on. If you're not a DIY person, try whether you could enjoy becoming one - no magic involved there. I guess the most important point is to find out how much you want the house and then how hard you are willing to save. This is something only you and your girlfriend can decide (together!). IMHO you really don't need to invest (unless you drop the house plan), you need to save towards your goals. You may decide to invest a small part of the money while saving in order to learn slowly how that works, but if the house goal is already kind of fixed in time, you don't want to find yourself in the situation that you have to get out of investments at a bad time in order to be able to buy the house. Even if you consider 15 years long enough to do some investing now and then get out some time during the next 15 years, you don't have any money to invest now. Later, the risk posed by the fixed point in time when you need the money is too large: Considering the rather steep saving propositions, the marginal costs of having less money are really large. This means you don't want to go for risky investments => plain old saving is what you need. Consider also that low house prices tend to come during economic crisis (people cannot pay mortgage and have to sell) so within the time window, you want to have your money for anticyclic buying if possible.\"" }, { "docid": "3059", "title": "", "text": "Too long for a comment - It's great that you are saving to the match on the 401(k). Does your company offer a Roth 401(k)? If so, you might consider that, instead. From the numbers you offered, you are likely in the 15% bracket now, but will find you move to 25% in years to come. The 2014 tax rates are out and how the 15% bracket ending at $36,900. (Over $47,000 gross income). I'd rather see you pay tax at 15% now, and use pre-tax accounts as your income rises. If the Roth is available." }, { "docid": "310780", "title": "", "text": "\"I'm an American so I don't claim to know anything about Scottish tax law. But just based on what you say above: First, think about how it would work if there were no taxes. If you make a payment against the mortgage, you save 5% in interest. If you put money into a retirement account, you make whatever the profits are on the investment. If that amount comes to more than 5%, then you are better of investing in the retirement account. If it's less than 5%, you are better off paying off the mortgage. As most investments pay significantly better than 5%, this is the superior strategy. On the other hand, apparently you are paying a variable-rate mortgage, but still, mortgage rates are relatively stable. Investment returns vary all over the place and can be negative. So if you are very cautious, that's a reason to pay off the mortgage rather than invest. The younger you are, the less of a concern this should be, as in the long term, investments pretty much always recover lost ground. If you were planning to retire next year I'd have very different advice than if you are planning to retire in 30 years. But sadly, you do have to pay taxes, and that needs to be factored in. So you say that you would have to pay 25% dividend tax on any money you used to pay the mortgage. But the effective tax rate on the retirement money is 15%. So in effect money put against the mortgage pays a 25% tax, and so effectively generates only 5% * .75 = 3.75%. But money invested in the retirement plan pays only 15% tax, and so if the investment returns 3.75% / .85 = 4.4% it would give the same effective return. So if you can invest in something that gives returns of at least 4.4% per year, you're better off putting into the retirement plan than paying off the mortgage. There may be other Scottish tax implications I don't know about. As to \"\"Substantially less paperwork\"\", I have no idea how much paperwork is involved in putting money into a retirement account in Scotland. Here in the U.S., you basically call a financial management company of one sort or another and say \"\"hey, I want to open a retirement account with your company\"\", and they'll prepare most of the forms for you and you just sign them. It could be done with half an hour of your time. Of course the more you research different investment options, etc, the more time it will take. \"\"More flexible e.g. if I want to retire early\"\" If there are restrictions on when you can withdraw money from a retirement account and receive that 25% freebie you mentioned, yes, this could be a factor. Again, I don't know Scottish tax law, there may be other considerations. Here in the U.S., there's a 10% tax penalty if you withdraw money from a retirement account before the legal retirement age. Realistically that's a minor issue, if you have money in there for several years the tax benefits will be more than 10%. But yeah, it would be stupid to put money in in December and then take it out the following January and have to pay the 10% penalty. \"\"Doesn't incur the risk that the government will change the pension rules between now and when I retire\"\" Maybe. But then laws might change in your favor, too. And as you indicated that your mortgage interest rate could change, there could be risk on that side too. That all comes down to what you think the risks are all around.\"" }, { "docid": "426461", "title": "", "text": "\"Between \"\"fresh out of college\"\" and \"\"I have no debts, and a support system in place which because of which I can take higher risks.\"\" I would put every penny I could afford in the riskiest investment platform I was willing to. Holding onto money in a bank account is likely to cost you %1-%2 a year depending on what interest rates are and what inflation looks like. Money invested in a market could loose it all for you or you could become an overnight millionaire. Loosing it all would suck but you are young you will bounce back. Losing it slowly to inflation is just silly when you are young. If there is something you know you have to do in the next few years start to save for it but otherwise use the fact that you are young and have a safety net to try to make money.\"" } ]

[ { "docid": "124027", "title": "", "text": "Yes, becoming a millionaire is a reasonable goal. Saving 15% of your income starting at age 25 and investing in the stock market will likely get you there. The CAGR (Compound Annual Growth Rate) of the S&P 500 over the last 35 years has been about 11%. (That 35 years includes at least two fairly serious crashes.) You may get more or less than that number in the future, but let's guess that you'll average 9%. Let's say that you begin with nothing invested, and you start investing $100 per week at age 25. (If your annual income is $35,000, that is about 15% of your income.) You decide to invest your money in an S&P 500 index mutual fund. 35 years from now when you are 60 years old, you would be a millionaire ($1.2 Million, actually). You may earn less than the assumed 9%, depending on how the stock market does. However, if you stick with your 15% investment amount throughout your whole career, you'll most likely end up with more, because your income will probably increase during your career. And you will probably be working past age 60, giving your investments time to earn even more." } ]

[ { "docid": "512096", "title": "", "text": "\"(Congratulations on the little one on the way.) I'd recommend saving outside of tax-advantaged accounts. Pay your taxes and be done with them. I'd recommend putting your old-age fund first before shelling out a lot of money for college. I'd recommend not shelling out a lot of money for college. Ideally, none. There are ways today to get a four-year degree for $15,000. Not $15,000 per year. $15,000 total. Check here. (This isn't an affiliate link.) They can pay for this themselves! I'd recommend making sure you hold the hammer. Don't let them party on your nickel. I'd recommend teaching your kids to \"\"fish\"\" as soon as possible. Help them start a business. They could be millionaires by the time they're teenagers. Then they can make their own money. You won't have to give them a dime.\"" }, { "docid": "86304", "title": "", "text": "\"Your question is very broad. Whole books can and have been written on this topic. The right place to start is for you and your wife to sit down together and figure out your goals. Where do you want to be in 5 years, 25 years, 50 years? To quote Yogi Berra \"\"If you don't know where you are going, you'll end up someplace else.\"\" Let's go backwards. 50 Years I'm guessing the answer is \"\"retired, living comfortably and not having to worry about money\"\". You say you work an unskilled government job. Does that job have a pension program? How about other retirement savings options? Will the pension be enough or do you need to start putting money into the other retirement savings options? Career wise, do you want to be working as in unskilled government jobs until you retire, or do you want to retire from something else? If so, how do you get there? Your goals here will affect both your 25 year plan and your 5 year plan. Finally, as you plan for death, which will happen eventually. What do you want to leave for your children? Likely the pension will not be transferred to your children, so if you want to leave them something, you need to start planning ahead. 25 Years At this stage in your life, you are likely talking, college for the children and possibly your wife back at work (could happen much earlier than this, e.g., when the kids are all in school). What do you want for your children in college? Do you want them to have the opportunity to go without having to take on debt? What savings options are there for your children's college? Also, likely with all your children out of the house at college, what do you and your wife want to do? Travel? Give to charity? Own your own home? 5 Years You mention having children and your wife staying at home with them. Can your family live on just your income? Can you do that and still achieve your 50 and 25 year goals? If not, further education or training on your part may be needed. Are you in debt? Would you like to be out of debt in the next 5-10 years? I know I've raised more questions than answers. This is due mostly to the nature of the question you've asked. It is very personal, and I don't know you. What I find most useful is to look at where I want to be in the near, mid and long term and then start to build a plan for how I get there. If you have older friends or family who are where you want to be when you reach their age, talk to them. Ask them how they got there. Also, there are tons of resources out there to help you. I won't suggest any specific books, but look around at the local library or look online. Read reviews of personal finance books. Read many and see how they can give you the advice you need to reach your specific goals. Good luck!\"" }, { "docid": "399543", "title": "", "text": "Does your employer provide a matching contribution to your 401k? If so, contribute enough to the 401k that you can fully take advantage of the 401k match (e.g. if you employer matches 3% of your income, contribute 3% of your income). It's free money, take advantage of it. Next up, max out your Roth IRA. The limit is $5000 currently a year. After maxing your Roth, revisit your 401k. You can contribute up to 16,500 per year. You savings account is a good place to keep a rainy day fund (do you have one?), but it lacks the tax advantages of a Roth IRA or 401k, so it is not really suitable for retirement savings (unless you have maxed out both your 401k and Roth IRA). Once you have take care of getting money into your 401k and Roth IRA accounts, the next step is investing it. The specific investment options available to you will vary depending on who provides your retirement account(s), so these are general guidelines. Generally, you want to invest in higher-risk, higher-return investments when you are young. This includes things like stocks and developing countries. As you get older (>30), you should look at moving some of your investments into things that less volatile. Bond funds are the usual choice. They tend to be safer than stocks (assuming you don't invest in Junk bonds), but your investment grows at a slower rate. Now this doesn't mean you immediately dump all of your stock and buy bonds. Rather, it is a gradual transition over time. As you get older and older, you gradually shift your investments to bond funds. A general rule of thumb I have seen: 100 - (YOUR AGE) = Percentage of your portfolio that should be in stocks Someone that is 30 would have 70% of their portfolio in stock, someone that is 40 would have 60% in stock, etc. As you get closer to retirement (50s-60s), you will want to start looking at investments that are more conservatie than bonds. Start to look at fixed-income and money market funds." }, { "docid": "519798", "title": "", "text": "\"Not at all. The Millionaire Next Door offers a book full of anecdotes on couples that earned money and saved their way to being millionaires. I believe about 1/3 or so had businesses, but the rest were employed and simply saved wisely. $3860/yr saved for 40 years at 8% will return $1M. Adjust the numbers to hit a million sooner or reach a higher goal. The Author might be accused of survey bias. This is the phenomenon of studying the final results without looking at the pool of people years prior. Little Adv' is correct that while 1/3 of millionaires may have gotten that way by starting a business, that says nothing about how many businesses need to start to find the one millionaire that resulted. I view the book more as a lesson of \"\"spend beneath your means\"\" and focus on his anecdotes of the dual income couples who saved their way to this status. If you are in no rush, get this book from your library and spend the few hours to read it. In response to my Friend Dilip's comment, MoneyChimp offers a good look at compound growth (for the S&P) over time. The 40 years ending 2012, which obviously include the 'lost decade,' returned a CAGR of 9.78%. Not to be confused with the average 11.43%. When I pull the numbers for each year's return and apply an annual $3860 deposit, the 40 years ends with $2.2M. A 1% fee, or 1% lower return resulted in $1.6M. If 8% isn't conservative, of course you can run the numbers you wish. The 40 years contained both a lost decade and two great ones. Will the 3 decades post-lost average to get the Quad-Decade period to 8%+? I don't know.\"" }, { "docid": "83623", "title": "", "text": "The range is fine. It's ~ 1-2X your annual income. First, and foremost - your comment on the 401(k), not knowing the fees, is a red flag to me. The difference between low cost options (say sub .25%) and the high fees (over .75%) has a huge impact to your long term savings, and on the advice I'd give regarding maximizing the deposits. At 26, you and your wife have about 20% of your income as savings. This is on the low side, in my opinion, but others suggest a year's salary by age 35 which implies you're not too far behind. Given your income, you are most likely in the 25% federal bracket. I'd like you to research your 401(k) expenses, and if they are reasonable, maximise the deposit. If your wife has no 401(k) at work, she can deposit to an IRA, pre-tax. It's wise to keep 6 months of expenses as liquid cash (or short term CDs) as an emergency fund in case of such things as a job layoff. They say to expect a month of job hunting for each $10K you make, so having even a year to find a new job isn't unheard of. One thing to consider is to simply kill the mortgage. Before suggesting this, I'd ask what your risk tolerance is? If you took $100K and put it right into the S&P, would you worry every time you heard the market was down today? Or would you happily leave it there for the next 40 years? If you prefer safety, or at least less risk, paying off the mortgage will free up the monthly payment, and let you dollar cost average into the new investments over time. You'll have the experience of seeing your money grow and learn to withstand the volatility. The car loan is a low rate, if you prefer to keep the mortgage for now, paying the car loan is still a guaranteed 3%, vs the near 0% the bank will give you." }, { "docid": "568629", "title": "", "text": "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!" }, { "docid": "273925", "title": "", "text": "\"You're making $100k together per year: you're not in the donut hole, you're in the top 25% of all households, and the top 10% of non-family households (as yours would be). To be blunt, you're not in the \"\"rely on assistance\"\" area: you're in the \"\"save up for your downpayment\"\" sector. My suggestion would be to figure out a way to save more than $200-$400 a month for now. $100k gross income means you have about $8k net income per month; $2k for rent and other necessities means you have $6k per month that you can potentially save. Even half of that - $3k per month - means you have $24000 saved by the end of this year, and $36000 on an annual basis. As far as marriage or domestic partnership - I wouldn't get into one based on whether it helps you afford a home. It might be a good idea because it helps you handle some of the details arising when you have joint property, perhaps, but not solely for the financial aspect. And as far as how much home is realistic? $250k is certainly realistic if you can save up enough for a good down payment. Try to get to the 20-25% range. If you're already halfway there, another year of renting won't kill you, and it will mean no PMI and much better rates. Also consider a 15 year mortgage; we're in the same general income category as you and manage a 15 year on a $250k range house quite nicely. It doesn't add all that much to your monthly payment amount, compared to what you'd expect - particularly since the monthly payment includes property taxes which won't increase based on the length of the mortgage. Now that we have actual numbers from the OP: So, without cutting anything, you have $2k yourself you can be saving. (This assumes your rent number of $1345 is your portion of rent, and not the 100% amount.) That's $24000 per year, just by yourself. On top of that, you've got another $40k or so coming from your partner, at least some of which should be available as well if he/she is going to be co-owning? But if not, at least you have about $2000 a month you can be saving. You could also downsize the car, cut cable TV, downsize the phone, and have another $500 or so available - but it doesn't really look like you need to do that, given how much you have available now. I'd look at what you're doing with that ~$2000 per month right now, and see how you can free most of it up. You haven't mentioned a few things like utilities, not sure if that's just forgetfulness or if your partner is paying them; so perhaps not all of it is available. But - even $1000 a month is $12000 to add to the $20000 you have now, which makes a big dent in that down payment.\"" }, { "docid": "52080", "title": "", "text": "\"This may be more of a comment than an answer, but it's too long for a comment. Perhaps the Stackexchange Gods will forgive my impudence. That said: Even with the tax penalties, it can be to your advantage to put money into a \"\"retirement\"\" account and withdraw it before retirement. The trick is: Is the amount of the tax penalty more than the benefit of untaxed compound growth? For example, just to make up some numbers: Suppose you have $1000 of gross income to invest. You are considering whether to invest in an ordinary, non-tax favored account, or a classic IRA. Either way you will get 10% returns. Your tax rate, both when you put the money in and when you take it out, is 15%. There is a 10% tax penalty for early withdrawal. With an ordinary account you will pay 15% tax off the top, so you are only investing $850. Then each year 15% of your returns are paid in taxes, so your net return is 8.5%. But when you withdraw the money there are no additional taxes. With an IRA you do not pay any taxes up front, so you can invest the entire $1000. You collect 10% each year with no taxes. When you withdraw, you pay 15% plus the 10% penalty equals 25%. So after 5 years, the ordinary account would yield $850 x 1.085^5 = $1504. The IRA would yield $1000 x 1.1^5 x 0.75 = $1208. The tax penalty hurts. You are better to use the ordinary account. But if you could leave your money in for 25 years, then the ordinary account would yield $850 x 1.085^25 = $7687. The IRA would yield $1000 x 1.1^25 x 0.75 = $8126. The IRA, even with the tax penalty, is better. Of course my numbers are just made up. What your tax bracket is, what returns you get, and how long you think you might leave the money in the investment, all vary.\"" }, { "docid": "242310", "title": "", "text": "\"Its important to note that aggression, or better yet volatility, does not necessarily offer higher returns. One can find funds that have a high beta (measure of volatility) and lower performance then stock funds with a lower beta. Additionally, to Micheal's point, better performance could be undone by higher fees. Age is unimportant when deciding the acceptable volatility. Its more important as to when the money is to be available. If there might be an immediate need, or even less than a year, then stick to a savings account. Five years, some volatility can be accepted, if 10 years or more seek to maximize rate of return. For example assume a person is near retirement age. They are expected to have 50K per year expenses. If they have 250K wrapped up in CDs and savings, and another 250K in some conservative investments, they can, and should, be \"\"aggressive\"\" with any remaining money. On the contrary a person your age that is savings for a house intends to buy one in three years. Savings for the down payment should be pretty darn conservative. Something like 75% in savings accounts, and maybe 25% in some conservative investments. As the time to buy approaches they can pull the money out of the conservative investments at a optimal time. Also you should not be investing without an emergency fund in place. Get that done first, then look to invest. If your friend does not understand these basic concepts there is no point in paying for his advice.\"" }, { "docid": "84642", "title": "", "text": "\"Having worked for a financial company for years, my advice is to stay away from all the \"\"Freedom Funds\"\" offered. They're a new way for Fidelity to justify charging a higher management fee on those particular funds. That extra 1% or so a year is great for making the company money; it will kill your rate of return over the next 25+ years you're putting money into your retirement account. All these funds do is change the percentage of your funds in stocks vs. more fixed investments (bonds, etc.) so you have a higher percentage in stocks while you're young and slowly move the percentage more towards fixed as you get older. If you take a few hours every 5 years to re-balance your portfolio and just slowly shift more money towards fixed investments, you'll achieve the same thing WITHOUT the extra annual fee. So how much difference are we talking here? Let's do a quick example. Based on your salary of $70k and a 4% match by your company, you'll have $5,600 a year to put in your 401(k) (your 4% plus matched 4%). I'll also assume an 8% annual return for both funds. Here is what that 1% extra service charge will cost you: Fund with a 1% service charge: Annual Fee Paid Year 1 - $60.00 Annual Fee Paid Year 25 (assuming 8% growth in assets) - $301.00 Total Fees Year 1 through 25: $3,782 Fund with a 2% service charge: Annual Fee Paid Year 1 - $121.00 Annual Fee Paid Year 25 (assuming 8% growth in assets) - $472.00 Total Fees Year 1 through 25: $6,489 That's a total of $2,707 in extra fees over 25 years on just the investment you make this year! Next year if you invest the same amount in your 401k that will be another $2,707 paid over 25 years to the management company. This pattern repeats EACH year you pay the higher management fee. Trust me, if you invest that money in stock instead of paying it as fees, you'll have a whole lot more money saved when it's time to retire. My advice, pick a percentage you're comfortable with in stocks at your age, maybe 85 - 90%, and pick the stock funds with the lowest management fees (the remaining 10 - 15% should go into a fixed fund). Make sure you pick at least some of your stock money, I do 20 - 25%, and select a diverse (lots of different countries) international fund. For any retirement money you plan to save above the 4% getting matched by your company, set up a Roth IRA. That will give you the freedom to invest in any stocks or funds you want. Find some low-cost index funds (such as VTI for stocks, and BND for bonds) and put your money in those. Invest the same amount every month, automatically, and your cost average will work itself out through up markets and down. Good luck!\"" }, { "docid": "260677", "title": "", "text": "Hopefully this $1000 is just a start, and not the last investment you will ever make. Assuming that, there are a couple of big questions to consider: One: What are you saving for? Are you thinking that this is for retirement 40 or 50 years from now, or something much sooner, like buying a car or a house? You didn't say where you live. In the U.S., if you put money into an IRA or a 401k or some other account that the government classes as a retirement account, you don't pay taxes on the profits from the investment, only on the original principal. If you leave the money invested for a long period of time, the profits can be many times the original investment, so this makes a huge difference. Like suppose that you pay 15% of your income in state and local taxes. And suppose you invest your $1000 in something that gives a 7% annual return and leave it there for 40 years. (Of course I'm just making up numbers for an example, but I think these are in a plausible range. And I'm ignoring the difference between regular income tax and capital gains tax, etc etc. It doesn't change the point.) If you put the money in a classic IRA, you pay 0% taxes the year you open the account, so you have your full $1000, figure that compound interest for 40 years, you'll end up with -- crunch crunch crunch the numbers -- $14,974. Then you pay 15% when you take it leaving you with $12,728. (The end result with a Roth IRA is exactly the same. Feel free to crunch those numbers.) But now suppose you invest in a no-retirement account so you have to pay taxes every year. Your original investment is only $850 because you have to pay tax on that, and your effective return is only 5.95% because you have to pay 15% of the 7%. So after 40 years you have -- crunch crunch -- $10,093. Quite a difference. But if you put money in a retirement account and then take it out before you retire, you pay substantial penalties. I think it's 20%. If you plan to take the money out after a year or two, that would really hurt. Two: How much risk are you willing to take? The reality of investment is that, almost always, the more risk you take, the bigger the potential returns, and vice versa. Investments that are very safe tend to have very low returns. As you're young, if you're saving for retirement, you can probably afford a fairly high amount of risk. If you lose a lot of money this year, odds are you'll get it back over the next few years, or at least be able to put more money into investments to make up for it. If you're 64 and planning to retire next year, you want to take very low-risk investments. In general, investing in government bonds is very safe but has very low returns. Corporate bonds are less safe but offer higher returns. Stocks are a little more. Of course different companies have different levels of risk: new start-ups tend to be very risky, but can give huge returns. Commodities are much higher risk. Buying on margin or selling short are ways to really leverage your money, but you could end up losing more than you invested. Mutual funds are a relatively safe way to invest in stocks and bonds because they spread your risk over many companies. Three: How much effort are you willing to put into managing your investments? How much do you know about the stock market and the commodities market and international finance and so on, and how much are you willing to learn? If your answer is that you know a lot about these things or are willing to dive in and learn a lot, that you can invest in individual stocks, bonds, commodities, etc. If your answer is that you really don't know much about all this, then it makes a lot of sense to just put your money into a mutual fund and let the people who manage the fund do all the work." }, { "docid": "175305", "title": "", "text": "Mortgage rates are at record lows. The 30 yr fixed is now below 4%, if you are in the 25% bracket and itemize (state income tax, property tax, donations, easy to pass the minimum) it costs you 3% post tax. This is the rate of long term inflation, effectively making this money free. You are likely to be able to average a far greater return than this mortgage is costing you. These rates may last another year or two, but long term, they are an anomaly. ETFs such as DVY (the Dow high dividend stocks) are yielding over 3.75%, 3.2% after the 15% cap gain tax. i.e. you get a small positive return, and the potential for capital gains. If this ETF rises just 3%/yr it's all profit above your cost of money. That said, there are those who sleep better with a paid in full house, regardless of the rate. To that extreme, I've read those who make paying their mortgage a priority ahead of funding their matched 401(k). While I can guess what the market will return, but can't know what will actual happen, it's foolish to skip one's match. They reason that the market can crash, I reply the 401(k) has to have a short term fund, money market or T-bill type returns, but a 100% match is a no-brainer. Using an estimated 4% for the 30 and 3.5% for the 15, the payment on the 15 yr mortgage will be 50% higher, $1430 (15yr) for $200K vs $955 for the 30. How does this play in your budget? Do you have an adequate emergency fund? Are you funding your retirement plan at a decent level? In the end, there is no right answer, just what's right for you. Understanding the rest of your financial picture will get you more detailed advice. Not knowing your situation limits the answers. Edit 6/30/2015 - When I wrote this answer, the DVY was trading at $48.24. $100,000 invested would have given off $3187/yr after a 15% dividend tax rate. At $75/share now, the $100,000 investment would be worth $155,472 and yielding $5597 for a net $4757 after tax. The choice to go DVY would have been profitable from the start, with room now for a 35% crash before losing any money." }, { "docid": "374803", "title": "", "text": "See Started new job. Rollover previous employer 401k to new 401k, IRA or Roth IRA? for a start. Kevin, the discussion is far more complex than you might think. Say your account grows by X, (pretend it's 10 if you wish) and your tax rate is Y (25%?). If you take the initial sum, tax it at Y, but then grow it X, the result is identical to doing it in the reverse order. So $1000 to start can grow to $10,000, then after tax, $7500. Or $1000 taxed to $750, then grow to $7500. For pretax deposits, the key is that you deposit those contributions at your marginal rate, i.e. the rate you'd pay on the last $X taxed. But withdrawals start at zero. In the perfect scenario, you will save 25-28% tax on deposits, but at retirement, enjoy taxation at 0%,10%,15% for a large portion or all of the withdrawals. (Note, others can suggest rates will rise, and they may be right. My answer is based on the current tax structure.) A new earner, at 10 or 15% may be better off starting with Roth, and as they earn their way to 25% or higher slide over to pre-tax deposits. My 14 year old baby sits, and makes enough to fund a Roth, but pays no tax as she earns less than her own standard deduction for what that's worth." }, { "docid": "434972", "title": "", "text": "They start at six figures with just a bachelor's, and their raises tend to be pretty substantial. Many of them will earn more than $200k before they are age 30. Basically, if they were to live relatively normal lifestyles (many do not), save and invest most of their earnings, then they should be able to become a millionaire at around age 30 while just following their career path, without taking big risks such as starting a business." }, { "docid": "353081", "title": "", "text": "\"With 40% of your take-home available, you have a golden opportunity here. Actually two, and the second builds out easily from the first. Golden Opportunity # 1: Layoff Immunity Ok, not really immunity. Most people don't think of themselves getting laid off, and don't prepare. Of course it may not happen to you, but it can. It's happened to me twice. The layoff itself is an emotional burden (getting rejected is hard), but then you're suddenly faced with a gut-wrenching, \"\"how am I gonna pay the rent????\"\" If you have no savings, it's terrifying. Put yourself in that spot. Imagine that tomorrow, you're out of a job. For how many months could you pay your expenses with the money you have? Three months? One? Not even that? How about shooting for 12 months? It's really, really comforting to be able to say: \"\"I don't have to worry about it for a year\"\". 12 months saved up gives you emotional and financial stability, and it gives you options -- you don't have to take the first job that comes along. Now, saving 12 months of expenses is huge. But, you're in the wonderful spot where you can save 40% of your income. It would only take 2.5 years to save up a year's worth of income! But, actually, it's better than that. Because your 12-month Layoff Immunity fund doesn't have to include the amount for retirement, or taxes, or that 40% we're talking about. Your expenses are less than 60% of take-home -- you'd only need 12 months of that. So, you could have a fully funded 12-Month Layoff Immunity Fund only in a year and a half! Golden Opportunity #2: Freedom Fund Do you like your Job? Would you still do it, if you didn't need the money? If so, great. But if not, why not get yourself into a position where you don't need it? That is, build up enough money from saving and investing to where you can pay your expenses - forever - from your investments. The number to keep in mind is 25. Figure out your annual expenses, and multiply it by 25. That's the amount you'd need to never need a job again. (That works out to a 4% withdrawal rate, adjusting for inflation every year, with a low risk of running out of money. It's a rule of thumb, but smart people doing a lot of math worked it out.) Here you keep saving and investing that 40% in solid mutual funds in a regular, taxable account. Between your savings and the compounding returns off the investments, you could easily have a fully funded \"\"Freedom Fund\"\" by the time you're 50. In fact, by 45 isn't unreasonable. It could be even better. If you live in that high-rent area because of the job, and wouldn't mind living were the rents are lower once you quit, your target amount would be lower. Between that, working dedicatedly toward this goal, and maybe a little luck, you might even be able to do this by age 40. Final Thoughts There are other things you could put that money toward, like a house, of course. The key take-away here, is to save it, and invest it. You're in a unique position of being able to do that with 40% of your income. That's fabulous! But don't think it's the norm. Most people can't save that much, and, once you lose the ability to save that much, it's very difficult to get it back. Expenses creep in, lifestyle \"\"wants\"\" become \"\"needs\"\", and so on. If you get into the habit of spending it, it's very difficult to shrink your lifestyle back down - down to what right now you're perfectly comfortable with. So, spend some time figuring out what you want out of life -- and in the mean time, sock that 40% away.\"" }, { "docid": "181179", "title": "", "text": "\"This is the best tl;dr I could make, [original](https://www.nytimes.com/2017/09/16/business/economy/bump-in-us-incomes-doesnt-erase-50-years-of-pain.html) reduced by 91%. (I'm a bot) ***** &gt; Starting with 1957, the team looked at actual earnings during the prime working years - the ages of 25 to 55. &gt; The result was that a 25-year-old man who entered the work force in 1967 and worked for the next three decades earned as much as $250,000 more, after taking inflation into account, than a man who had the same type of career but was 15 years younger. &gt; Most younger men ended up with less because they started out earning less than their counterparts in previous years, and saw little growth in their early years. ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/70q0gc/bump_in_us_incomes_doesnt_erase_50_years_of_pain/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ \"\"Version 1.65, ~211729 tl;drs so far.\"\") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr \"\"PM's and comments are monitored, constructive feedback is welcome.\"\") | *Top* *keywords*: **work**^#1 **income**^#2 **men**^#3 **earned**^#4 **more**^#5\"" }, { "docid": "352178", "title": "", "text": "\"that would deprive me of the rental income from the property. Yes, but you'd gain by not paying the interest on your other mortgage. So your net loss (or gain) is the rental income minus the interest you're paying on your home. From a cash flow perspective, you'd gain the difference between the rental income and your total payment. Any excess proceeds from selling the flat and paying off the mortgage could be saved and use later to buy another rental for \"\"retirement income\"\". Or just invest in a retirement account and leave it alone. Selling the flat also gets rid of any extra time spent managing the property. If you keep the flat, you'll need a mortgage of 105K to 150K plus closing costs depending on the cost of the house you buy, so your mortgage payment will increase by 25%-100%. My fist choice would be to sell the flat and buy your new house debt-free (or with a very small mortgage). You're only making 6% on it, and your mortgage payment is going to be higher since you'll need to borrow about 160k if you want to keep the flat and buy a $450K house, so you're no longer cash-flow neutral. Then start saving like mad for a different rental property, or in non-real estate retirement investments.\"" }, { "docid": "223872", "title": "", "text": "Lets imagine two scenarios: 1) You make 10.4k (40% of total income) yearly contributions to a savings account that earns 1% interest for 10 years. In this scenario, you put in 104k and earned 5.89k in interest, for a total of 109.9k. 2) You make the same 10.4k yearly contribution to an index fund that earns 7% on average for 10 years. In this scenario you put in the same 104k, but earned 49.7k in interest*, for a total of 153.7k. The main advantage is option 1) has more liquidity -- you can get the money out faster. Option 2) requires time to divest any stocks / bonds. So you need enough savings to get you through that divestment period. Imagine another two scenarios where you stop earning income: 1-b) You stop working and have only your 109.9k principal amount in a 1% savings account. If you withdraw 15.6k yearly for your current cost of living, you will run through your savings in 7 years. 2-b) You stop working and have only 20k (2 years of savings) in savings that earns 1% with 153.7k in stocks that earns 7%. If you withdraw your cost of living currently at 15.6k, you will run through your investments in 15 years and your savings in 2 years, for a total of 17 years. The two years of income in savings is extremely generous for how long it starts the divestment process. In summary, invest your money. It wasn't specified what currency we are talking about, but you can easily find access to an investment company no matter where you are in the world. Keep a small amount for a rainy day." }, { "docid": "587727", "title": "", "text": "\"IRAs have huge tax-advantages. You'll pay taxes when you liquidate gold and silver. While volatile, \"\"the stock market has never produced a loss during any rolling 15-year period (1926-2009)\"\" [PDF]. This is perhaps the most convincing article for retirement accounts over at I Will Teach You To Be Rich. An IRA is just a container for your money and you may invest the money however you like (cash, stocks, funds, etc). A typical investment is the purchase of stocks, bonds, and/or funds containing either or both. Stocks may pay dividends and bonds pay yields. Transactions of these things trigger capital gains (or losses). This happens if you sell or if the fund manager sells pieces of the fund to buy something in its place (i.e. transactions happen without your decision and high turnover can result in huge capital gains). In a taxable account you will pay taxes on dividends and capital gains. In an IRA you don't ever pay taxes on dividends and capital gains. Over the life of the IRA (30+ years) this can be a huge ton of savings. A traditional IRA is funded with pre-tax money and you only pay tax on the withdrawal. Therefore you get more money upfront to invest and more money compounds into greater amounts faster. A Roth IRA you fund with after-tax dollars, but your withdrawals are tax free. Traditional versus Roth comparison calculator. Here are a bunch more IRA and 401k calculators. Take a look at the IRA tax savings for various amounts compared to the same money in a taxable account. Compounding over time will make you rich and there's your reason for starting young. Increases in the value of gold and silver will never touch compounded gains. So tax savings are a huge reason to stash your money in an IRA. You trade liquidity (having to wait until age 59.5) for a heck of a lot more money. Though isn't it nice to be assured that you will have money when you retire? If you aren't going to earn it then, you'll have to earn it now. If you are going to earn it now, you may as well put it in a place that earns you even more. A traditional IRA has penalties for withdrawing before retirement age. With a Roth you can withdraw the principal at anytime without penalty as long as the account has been open 5 years. A traditional IRA requires you take out a certain amount once you reach retirement. A Roth doesn't, which means you can leave money in the account to grow even more. A Roth can be passed on to a spouse after death, and after the spouse's death onto another beneficiary. more on IRA Required Minimum Distributions.\"" } ]

[ { "docid": "592680", "title": "", "text": "I'll offer another answer, using different figures. Let's assume 6% is the rate of return you can expect. You are age 25, and plan to retire at age 65. If you have $0 and want $1M at retirement, you will need to put away $524.20/month, or $6,290.40/year, which is 15% of $41,936. So $41,936 is what you'd need to make per year in order to get to your target. You can calculate your own figures with a financial calculator: 480 months as your term (or, adjust this to your time horizon in months), .486755% as your interest (or, take your assumed interest rate + 1 to the 1/12th power and subtract 1 to convert to a monthly interest rate), 0 as your PV, and $1M as your FV; then solve for PMT." } ]

[ { "docid": "599757", "title": "", "text": "What is the goal of the money? If it is to use in the short term, like savings for a car or college, then stick it in the bank and use it for that purpose. If you really want this money to mean something, then in my opinion you have only one choice: Open a ROTH IRA with something like Vanguard or Fidelity and invest in an index fund. Then do something that will be very difficult: Don't touch it. By the time you are 65, it will grow to about 60,000. However, assuming a 20% tax bracket, the value of that money is really more like 75,000. Clearly this will not make or break you either way. The way you live the rest of your life will have far more of an impact. It will get you started on the right path. BTW this is advice I gave my son who is about your age, and does not earn a ton of money as a state trooper. Half of his overtime pay goes into a ROTH. If he lives the rest of his life like he does now, he will be a wealthy man despite making an average income. No debt, and investing a decent portion of his pay." }, { "docid": "10440", "title": "", "text": "I see a lot of answers calculcating with incomes that are much higher than yours, here is something for your situation: If you would keep your current income for the rest of your life, here is approximately how things would turn out after 40 years: All interest is calculated relative to the amount in your portfolio. Therefore, lets start with 1 dollar for 40 years: With your current income, 15% would be 82.5 dollar. At 12% this would over 40 years get you almost 1 million dollar. I would call a required return of more than 12% not 'likely'. The good news, is that your income will likely increase, and especially if this happens fast things will start to look up. The bad news is, that your current salary is quite low. So, it basically means that you need to make some big jumps in the next few years in order to make this scenario likely. If you can quickly move your salary towards ranges that are more common in the US, then 15% of your income can build up to a million before you retire. However, if you just follow gradual growth, you would need to get quite lucky to reach a million. Note that even if reaching a million appears unlikely, it is probably still a good idea to save!" }, { "docid": "323873", "title": "", "text": "Just to punch it in, my friend owns bars/restaurants and is a multi millionaire at the age of 29. His career choice wasn't corporate ladder, but entrepreneur. I'm investing his wealth and he is giving me a generous deal, I'm starting my own investment firm and having him as a client is the only client I need to be potentially a millionaire as well too. Don't pigeonhole yourself like everyone else does, but also know what you are capable of. Some people just aren't made to be their own boss as much as they say they could so it takes a bit of swallowing your pride and moving along to your best pathway. I could no way ever work for someone else so I swallowed my pride in a way and went my own path by saying bye to the corporate world. Some people think this is the ultimate goal, but I would relinquish potentially moving up that ladder and having that sort of prestige etc." }, { "docid": "561636", "title": "", "text": "You're misunderstanding the concept of retirement savings. IRA distributions are taxed, in their entirety, as ordinary income. If you withdraw before the retirement age, additional 10% penalty is added. Investment income has preferential treatment - long term capital gains and qualified dividends are taxed at lower rates than ordinary income. However, IRA contributions are tax deductible. I.e.: you don't pay taxes on the amounts contributed to the IRA when you earned the money, only when you withdraw. In the mean time, the money is growing, tax free, based on your investments. Anything inside the IRA is tax free, including dividends, distributions (from funds to your IRA, not from IRA to you), capital gains, etc. This is very powerful, when taking into account the compounding effect of reinvesting your dividends/sale proceeds without taking a chunk out for taxes. Consider you make an investment in a fund that appreciated 100% in half a year. You cash out to reinvest in something less volatile to lock the gains. In a regular account - you pay taxes when you sell, based on your brackets. In the IRA you reinvest all of your sale proceeds. That would be ~25-35% more of the gains to reinvest and continue working for you! However, if you decide to withdraw - you pay ordinary rate taxes on the whole amount. If you would invest in a single fund for 30 years in a regular account - you'd pay 20% capital gains tax (on the appreciation, not the dividends). In the IRA, if you invest in the same fund for the same period - you'll pay your ordinary income rates. However, the benefit of reinvesting dividends tax-free softens the blow somewhat, but that's much harder to quantify. Bottom line: if you want to plan for retirement - plan for retirment. Otherwise - IRA is not an investment vehicle. Also consider Roth IRA/conversions. Roth IRA has the benefit of tax free distributions at retirement. If your current tax bracket is at 20%, for example, contributing $5K to Roth IRA instead of a traditional will cost you $1K of taxes now, but will save you all the taxes during the retirement (for the distributions from the Roth IRA). It may be very much worth your while, especially if you can contribute directly to Roth IRA (there are some income limitations and phaseouts). You can withdraw contributions (but not earnings) from Roth IRA - something you cannot do with a traditional IRA." }, { "docid": "387030", "title": "", "text": "While the other answers are good, I wanted to expand a little on why I feel a ROTH is a bad way to go unless you are young. First, let's pretend you have a 25% tax rate. And your investments will go up 5% per year for 10 years. You contribute 6% of income for one year. You can do a traditional or a roth 401k/IRA. Here's the math: Traditional: 6% of income invested. Grows at 5% for 10 years. Taxed at 25% on withdrawl. = (Income * 6%) * (1.05 ^ 10) * (100% - 25%) = (Income * 6%) * 1.63 * .75 = 7.33% of your original income - but this is after taxes ROTH: Taxes taken out of income. Then 6% of that goes into the fund(s). Still grows at 5% for 10 years. Not taxed at withdrawl. = (Income * (100% - 25%) * 6%) * (1.05 ^ 10) = (Income * 75% * 6%) * 1.63 = 7.33% of your original income - again this is after taxes. Look familiar? They are the same. It's the simple transitive property of mathematics. So why do a traditional vs. a ROTH? The reason is that your tax bracket changes. This changes because your income changes. Say when you retire you plan to have your home or vehicle paid for. You expect to be able to live on $50,000 per year. This means when you make MORE than $50,000 you should do a traditional plan and when you make less than this you should do a ROTH plan. Example: You make $100,000 and your upper bracket is now 30%. You save 30% by doing a traditional and then pay back 10, 20, and 30% as you withdraw a salary of $50,000. Traditional = better. Example: You make $30,000 annually. Your upper bracket is 20%. You pay 20% on a roth. Then you withdraw funds to get to $50,000 anually and never pay the higher bracket. Roth = better. ROTH advocates typically bring up tax rates. Of course they will go up they insist. So you always should do a ROTH. Not so fast. Taxes have gone down in recent years (No one please start a political debate with me. Some went up, some went down, but overall, federal income rates dropped). Even if taxes rose 5%, a traditional will still be better than a ROTH in many cases." }, { "docid": "310780", "title": "", "text": "\"I'm an American so I don't claim to know anything about Scottish tax law. But just based on what you say above: First, think about how it would work if there were no taxes. If you make a payment against the mortgage, you save 5% in interest. If you put money into a retirement account, you make whatever the profits are on the investment. If that amount comes to more than 5%, then you are better of investing in the retirement account. If it's less than 5%, you are better off paying off the mortgage. As most investments pay significantly better than 5%, this is the superior strategy. On the other hand, apparently you are paying a variable-rate mortgage, but still, mortgage rates are relatively stable. Investment returns vary all over the place and can be negative. So if you are very cautious, that's a reason to pay off the mortgage rather than invest. The younger you are, the less of a concern this should be, as in the long term, investments pretty much always recover lost ground. If you were planning to retire next year I'd have very different advice than if you are planning to retire in 30 years. But sadly, you do have to pay taxes, and that needs to be factored in. So you say that you would have to pay 25% dividend tax on any money you used to pay the mortgage. But the effective tax rate on the retirement money is 15%. So in effect money put against the mortgage pays a 25% tax, and so effectively generates only 5% * .75 = 3.75%. But money invested in the retirement plan pays only 15% tax, and so if the investment returns 3.75% / .85 = 4.4% it would give the same effective return. So if you can invest in something that gives returns of at least 4.4% per year, you're better off putting into the retirement plan than paying off the mortgage. There may be other Scottish tax implications I don't know about. As to \"\"Substantially less paperwork\"\", I have no idea how much paperwork is involved in putting money into a retirement account in Scotland. Here in the U.S., you basically call a financial management company of one sort or another and say \"\"hey, I want to open a retirement account with your company\"\", and they'll prepare most of the forms for you and you just sign them. It could be done with half an hour of your time. Of course the more you research different investment options, etc, the more time it will take. \"\"More flexible e.g. if I want to retire early\"\" If there are restrictions on when you can withdraw money from a retirement account and receive that 25% freebie you mentioned, yes, this could be a factor. Again, I don't know Scottish tax law, there may be other considerations. Here in the U.S., there's a 10% tax penalty if you withdraw money from a retirement account before the legal retirement age. Realistically that's a minor issue, if you have money in there for several years the tax benefits will be more than 10%. But yeah, it would be stupid to put money in in December and then take it out the following January and have to pay the 10% penalty. \"\"Doesn't incur the risk that the government will change the pension rules between now and when I retire\"\" Maybe. But then laws might change in your favor, too. And as you indicated that your mortgage interest rate could change, there could be risk on that side too. That all comes down to what you think the risks are all around.\"" }, { "docid": "374803", "title": "", "text": "See Started new job. Rollover previous employer 401k to new 401k, IRA or Roth IRA? for a start. Kevin, the discussion is far more complex than you might think. Say your account grows by X, (pretend it's 10 if you wish) and your tax rate is Y (25%?). If you take the initial sum, tax it at Y, but then grow it X, the result is identical to doing it in the reverse order. So $1000 to start can grow to $10,000, then after tax, $7500. Or $1000 taxed to $750, then grow to $7500. For pretax deposits, the key is that you deposit those contributions at your marginal rate, i.e. the rate you'd pay on the last $X taxed. But withdrawals start at zero. In the perfect scenario, you will save 25-28% tax on deposits, but at retirement, enjoy taxation at 0%,10%,15% for a large portion or all of the withdrawals. (Note, others can suggest rates will rise, and they may be right. My answer is based on the current tax structure.) A new earner, at 10 or 15% may be better off starting with Roth, and as they earn their way to 25% or higher slide over to pre-tax deposits. My 14 year old baby sits, and makes enough to fund a Roth, but pays no tax as she earns less than her own standard deduction for what that's worth." }, { "docid": "216365", "title": "", "text": "At 22 years old, you can afford to be invested 100% in the stock market. Like many others, I recommend that you consider low cost index funds if those are available in your 401(k) plan. Since your 401(k) contributions are usually made with each paycheck this gives you the added benefit of dollar cost averaging throughout your career. There used to be a common rule that you should put 100 minus your age as the percentage invested in the stock market and the rest in bonds, but with interest rates being so low, bonds have underperformed, so many experts now recommend 110 or even 120 minus your age for stocks percentage. My recommendation is that you wait until you are 40 and then move 25% into bonds, then increase it to 40% at 55 years old. At 65 I would jump to a 50-50 stock/bonds mix and when you start taking distributions I would move to a stable-value income portfolio. I also recommend that you roll your funds into a Vanguard IRA when you change jobs so that you take advantage of their low management fee index mutual funds (that have no fees for trading). You can pick whatever mix feels best for you, but at your age I would suggest a 50-50 mix between the S&P 500 (large cap) and the Russell 2000 (small cap). Those with quarterly rebalancing will put you a little ahead of the market with very little effort." }, { "docid": "3059", "title": "", "text": "Too long for a comment - It's great that you are saving to the match on the 401(k). Does your company offer a Roth 401(k)? If so, you might consider that, instead. From the numbers you offered, you are likely in the 15% bracket now, but will find you move to 25% in years to come. The 2014 tax rates are out and how the 15% bracket ending at $36,900. (Over $47,000 gross income). I'd rather see you pay tax at 15% now, and use pre-tax accounts as your income rises. If the Roth is available." }, { "docid": "502150", "title": "", "text": "\"The biggest and primary question is how much money you want to live on within retirement. The lower this is, the more options you have available. You will find that while initially complex, it doesn't take much planning to take complete advantage of the tax system if you are intending to retire early. Are there any other investment accounts that are geared towards retirement or long term investing and have some perk associated with them (tax deferred, tax exempt) but do not have an age restriction when money can be withdrawn? I'm going to answer this with some potential alternatives. The US tax system currently is great for people wanting to early retire. If you can save significant money you can optimize your taxes so much over your lifetime! If you retire early and have money invested in a Roth IRA or a traditional 401k, that money can't be touched without penalty until you're 55/59. (Let's ignore Roth contributions that can technically be withdrawn) Ok, the 401k myth. The \"\"I'm hosed if I put money into it since it's stuck\"\" perspective isn't true for a variety of reasons. If you retire early you get a long amount of time to take advantage of retirement accounts. One way is to primarily contribute to pretax 401k during working years. After retiring, begin converting this at a very low tax rate. You can convert money in a traditional IRA whenever you want to be Roth. You just pay your marginal tax rate which.... for an early retiree might be 0%. Then after 5 years - you now have a chunk of principle that has become Roth principle - and can be withdrawn whenever. Let's imagine you retire at 40 with 100k in your 401k (pretax). For 5 years, you convert $20k (assuming married). Because we get $20k between exemptions/deduction it means you pay $0 taxes every year while converting $20k of your pretax IRA to Roth. Or if you have kids, even more. After 5 years you now can withdraw that 20k/year 100% tax free since it has become principle. This is only a good idea when you are retired early because you are able to fill up all your \"\"free\"\" income for tax conversions. When you are working you would be paying your marginal rate. But your marginal rate in retirement is... 0%. Related thread on a forum you might enjoy. This is sometimes called a Roth pipeline. Basically: assuming you have no income while retired early you can fairly simply convert traditional IRA money into Roth principle. This is then accessible to you well before the 55/59 age but you get the full benefit of the pretax money. But let's pretend you don't want to do that. You need the money (and tax benefit!) now! How beneficial is it to do traditional 401ks? Imagine you live in a state/city where you are paying 25% marginal tax rate. If your expected marginal rate in your early retirement is 10-15% you are still better off putting money into your 401k and just paying the 10% penalty on an early withdrawal. In many cases, for high earners, this can actually still be a tax benefit overall. The point is this: just because you have to \"\"work\"\" to get money out of a 401k early does NOT mean you lose the tax benefits of it. In fact, current tax code really does let an early retiree have their cake and eat it too when it comes to the Roth/traditional 401k/IRA question. Are you limited to a generic taxable brokerage account? Currently, a huge perk for those with small incomes is that long term capital gains are taxed based on your current federal tax bracket. If your federal marginal rate is 15% or less you will pay nothing for long term capital gains, until this income pushes you into the 25% federal bracket. This might change, but right now means you can capture many capital gains without paying taxes on them. This is huge for early retirees who can manipulate income. You can have significant \"\"income\"\" and not pay taxes on it. You can also stack this with before mentioned Roth conversions. Convert traditional IRA money until you would begin owing any federal taxes, then capture long term capital gains until you would pay tax on those. Combined this can represent a huge amount of money per year. So littleadv mentioned HSAs but.. for an early retiree they can be ridiculously good. What this means is you can invest the maximum into your HSA for 10 years, let it grow 100% tax free, and save all your medical receipts/etc. Then in 10 years start withdrawing that money. While it sucks healthcare costs so much in America, you might as well take advantage of the tax opportunities to make it suck slightly less. There are many online communities dedicated to learning and optimizing their lives in order to achieve early retirement. The question you are asking can be answered superficially in the above, but for a comprehensive plan you might want other resources. Some you might enjoy:\"" }, { "docid": "475397", "title": "", "text": "There is no advantage to using one type of account or the other if you are in the same tax bracket at retirement that you are in during your working years. However, for tax planning reasons, it is good to have some money in both a Roth and a traditional IRA plan. JoeTaxpayer has often advocated a good rule of thumb to use a Roth when your tax bracket is 15% or lower, and use a traditional account when in the 25% bracket or above. The reason for this rule of thumb is that you are less likely to be in the higher tax bracket when you are living off retirement savings unless you put away an awful lot of money between now and then. If you are making enough money to be paying a 25% marginal rate on some of the money you would be putting away for retirement, then by all means, put all of that money in a traditional 401k. If after contributing that portion of your savings taxed at the higher rate, you still have money to put away for retirement, put the rest in a Roth and pay the 15% taxes on it. When you are younger, it is likely that you are making less than you will a few years hence, and it is also likely that a larger portion of your income will be paying tax deductible interest on a mortgage. If those are true for you, then by all means, use the Roth. That was true of me when I was single and just getting started. When you do finally retire, it is possible that the tax brackets will be increased to match inflation, and if so, then there is no benefit to having tax free money at retirement vs. paying taxes on deferred accounts, but there is also usually more flexibility in when to spend money. You may find that you have a year where you have to spend a lot, so it is good to be able to pull money out without it increasing your marginal rate for that year, and other years where you spend relatively smaller amounts, and you can withdraw taxable money and pay a lower rate on that money. No one knows what the tax code will look like in 40 years, but having some money in each type of account will give you flexibility to minimize your tax bill at retirement." }, { "docid": "559556", "title": "", "text": "\"It's called disposable income for a reason. It's what's left after obligations, whatever bills you have, and saving. Saving half one's income is pretty much at one end of the spectrum, very few can afford this. The combination of high savings and low actual spending will enable you to retire very early if you wish. Saving 'only' 15% might actually be out of your comfort zone, maybe 25% will keep you happy. What remains is yours to spend on what you wish, whatever makes you happy. There was a time I joked \"\"I spent most of my money on women and beer. The rest, I wasted.\"\" Now, I don't mind travel, but it's not my passion. If traveling the world is yours, do it. Enjoy every minute of it.\"" }, { "docid": "426461", "title": "", "text": "\"Between \"\"fresh out of college\"\" and \"\"I have no debts, and a support system in place which because of which I can take higher risks.\"\" I would put every penny I could afford in the riskiest investment platform I was willing to. Holding onto money in a bank account is likely to cost you %1-%2 a year depending on what interest rates are and what inflation looks like. Money invested in a market could loose it all for you or you could become an overnight millionaire. Loosing it all would suck but you are young you will bounce back. Losing it slowly to inflation is just silly when you are young. If there is something you know you have to do in the next few years start to save for it but otherwise use the fact that you are young and have a safety net to try to make money.\"" }, { "docid": "162592", "title": "", "text": "Using the default values for age and retirement and only making the changes you specified in the question. assumed ROR: 6%, current tax rate: 25%, retirement tax rate: 15%, married, have an employer retirement plan. The results from the two calculators are: Traditional IRA: 631,341 IRA before taxes 536,640 IRA after taxes. Roth IRA: 631,341 Roth IRA 450,207 Taxable Savings where: Total taxable savings The total amount you would have accumulated by retirement in a taxable savings account. your question: The (Traditional) IRA After Taxes value is 6.3% higher than the (Roth) Taxable Savings amount. (Both had an equal gross amount.) Does that mean I should put my money in a tIRA instead of a Roth? My percentages don't match your percentages because you didn't specify the numbers you used. In any case the 450K number shows you what you would have if the money was not invested in an IRA or 401K. To decide between a Roth and a traditional IRA ignore the taxable savings number, that only shows what happens if you decide not not use a retirement account." }, { "docid": "111350", "title": "", "text": "If you want to 'offset' current (2016) income, only deductible contribution to a traditional IRA does that. You can make nondeductible contributions to a trad IRA, and there are cases where that makes sense for the future and cases where it doesn't, but it doesn't give you a deduction now. Similarly a Roth IRA has possible advantages and disadvantages, but it does not have a deduction now. Currently he maximum is $5500 per person ($6500 if over age 50, but you aren't) which with two accounts (barely) covers your $10k. To be eligible to make this deductible traditional contribution, you must have earned income (employment or self-employment, but NOT the distribution from another IRA) at least the amount you want to contribute NOT have combined income (specifically MAGI, Modified Adjusted Gross Income) exceeding the phaseout limit (starts at $96,000 for married-joint) IF you were covered during the year (either you or your spouse) by an employer retirement plan (look at box 13 on your W-2's). With whom. Pretty much any bank, brokerage, or mutual fund family can handle IRAs. (To be technical, the bank's holding company will have an investment arm -- to you it will usually look like one operation with one name and logo, one office, one customer service department, one website etc, but the investment part must be legally separate from the insured banking part so you may notice a different name on your legal and tax forms.) If you are satisified with the custodian of the inherited IRA you already have, you might just stay with them -- they may not need as much paperwork, you don't need to meet and get comfortable with new people, you don't need to learn a new website. But if they sold you an annuity at your age -- as opposed to you inheriting an already annuitized IRA -- I'd want a lot of details before trusting they are acting in your best interests; most annuities sold to IRA holders are poor deals. In what. Since you want only moderate risk at least to start, and also since you are starting with a relatively small amount where minimum investments, expenses and fees can make more of an impact on your results, I would go with one or a few broad (= lower risk) index (= lower cost) fund(s). Every major fund familly also offers at least a few 'balanced' funds which give you a mixture of stocks and bonds, and sometimes some 'alternatives', in one fund. Remember this is not committing you forever; any reasonable custodian will allow you to move or spread to more-adventurous (but not wild and crazy) investments, which may be better for you in future years when you have some more money in the account and some more time to ponder your goals and options and comfort level." }, { "docid": "439249", "title": "", "text": "\"With no match, the traditional 401(k) for someone otherwise in the 15% bracket makes little sense. I'd suggest contributing just enough if you were in the 25% bracket to be in the taxable 15% but no more. Use a Roth IRA if you are saving more than that. I'm adding this based on OP's statement that the fees on the 401(k) range .8-1.4%. I wrote an article Are you 401(k)o’ed? in which I discuss how fees of this range negate the benefit of the mantra \"\"save at 25% to withdraw at 15%\"\" and if one were in the 15% bracket to start, this level off fee will cost you money in no time at all. The people advising you to max out the 401(k) first, given the rest of your situation and that of the account, are misguided. I'd given them the benefit of the doubt and assume they don't have all the details. And with all due respect to the other posters here, everyone of them a bright, valued colleague, your answers should be addressed to the OP's exact situation. 15% bracket, no match, high fees. I suspect some of answers will change on reviewing this.\"" }, { "docid": "358371", "title": "", "text": "\"Welcome to the 'what should otherwise be a simple choice turns into a huge analysis' debate. If the choice were actually simple, we've have one 'golden answer' here and close others as duplicate. But, new questions continue to bring up different scenarios that impact the choice. 4 years ago, I wrote an article in which I discussed The Density of Your IRA. In that article, I acknowledge that, with no other tax favored savings, you can pack more value into the Roth. In hindsight, I failed to add some key points. First, let's go back to what I'd describe as my main thesis: A retired couple hits the top of the 15% bracket with an income of $96,700. (I include just the standard deduction and exemptions.) The tax on this gross sum is $10,452.50 for an 'average' rate of 10.8%. The tax, paid or avoided, upon deposit, is one's marginal rate. But, at retirement, the withdrawals first go through the zero bracket (i.e. the STD deduction and exemptions), then 10%, then 15%. The above is the simplest snapshot. I am retired, and our return this year included Sch A, itemized deductions. Property tax, mort interest, insurance, donations added up fast, and from a gross income (IRA withdrawal) well into the 25% bracket, the effective/average rate was reported as 7.3%. If we had saved in Roth accounts, it would have been subject to 25%. I'd suggest that it's this phenomenon, the \"\"save at marginal 25%, but withdraw at average sub-11%\"\" effect that account for much of the resulting tax savings that the IRA provides. The way you are asking this, you've been focusing on one aspect, I believe. The 'density' issue. That assumes the investor has no 401(k) option. If I were building a spreadsheet to address this, I'd be sure to consider the fact that in a taxable account, long term gains are taxed at 15% for higher earners (I take the liberty to ignore that wealthier taxpayers will pay a maximum 20% tax on long-term capital gains. This higher rate applies when your adjusted gross income falls into the top 39.6% tax bracket.) And those in the 10 or 15% bracket pay 0%. With median household income at $56K in 2016, and the 15% bracket top at $76K, this suggests that most people (gov data shows $75K is 80th percentile) have an effective unlimited Roth. So long as they invest in a way that avoids short term gains, they can rebalance often enough to realize LT gains and pay zero tax. It's likely the $80K+ earner does have access to a 401(k) or other higher deposit account. If they don't, I'd still favor pretax IRAs, with $11K for the couple still 10% or so of their earnings. It would be a shame to lose that zero bracket of that first $20K withdrawal at retirement. Again working backwards, the $78K withdrawal would take nearly $2M in pretax savings to generate. All in today's dollars.\"" }, { "docid": "512096", "title": "", "text": "\"(Congratulations on the little one on the way.) I'd recommend saving outside of tax-advantaged accounts. Pay your taxes and be done with them. I'd recommend putting your old-age fund first before shelling out a lot of money for college. I'd recommend not shelling out a lot of money for college. Ideally, none. There are ways today to get a four-year degree for $15,000. Not $15,000 per year. $15,000 total. Check here. (This isn't an affiliate link.) They can pay for this themselves! I'd recommend making sure you hold the hammer. Don't let them party on your nickel. I'd recommend teaching your kids to \"\"fish\"\" as soon as possible. Help them start a business. They could be millionaires by the time they're teenagers. Then they can make their own money. You won't have to give them a dime.\"" }, { "docid": "353081", "title": "", "text": "\"With 40% of your take-home available, you have a golden opportunity here. Actually two, and the second builds out easily from the first. Golden Opportunity # 1: Layoff Immunity Ok, not really immunity. Most people don't think of themselves getting laid off, and don't prepare. Of course it may not happen to you, but it can. It's happened to me twice. The layoff itself is an emotional burden (getting rejected is hard), but then you're suddenly faced with a gut-wrenching, \"\"how am I gonna pay the rent????\"\" If you have no savings, it's terrifying. Put yourself in that spot. Imagine that tomorrow, you're out of a job. For how many months could you pay your expenses with the money you have? Three months? One? Not even that? How about shooting for 12 months? It's really, really comforting to be able to say: \"\"I don't have to worry about it for a year\"\". 12 months saved up gives you emotional and financial stability, and it gives you options -- you don't have to take the first job that comes along. Now, saving 12 months of expenses is huge. But, you're in the wonderful spot where you can save 40% of your income. It would only take 2.5 years to save up a year's worth of income! But, actually, it's better than that. Because your 12-month Layoff Immunity fund doesn't have to include the amount for retirement, or taxes, or that 40% we're talking about. Your expenses are less than 60% of take-home -- you'd only need 12 months of that. So, you could have a fully funded 12-Month Layoff Immunity Fund only in a year and a half! Golden Opportunity #2: Freedom Fund Do you like your Job? Would you still do it, if you didn't need the money? If so, great. But if not, why not get yourself into a position where you don't need it? That is, build up enough money from saving and investing to where you can pay your expenses - forever - from your investments. The number to keep in mind is 25. Figure out your annual expenses, and multiply it by 25. That's the amount you'd need to never need a job again. (That works out to a 4% withdrawal rate, adjusting for inflation every year, with a low risk of running out of money. It's a rule of thumb, but smart people doing a lot of math worked it out.) Here you keep saving and investing that 40% in solid mutual funds in a regular, taxable account. Between your savings and the compounding returns off the investments, you could easily have a fully funded \"\"Freedom Fund\"\" by the time you're 50. In fact, by 45 isn't unreasonable. It could be even better. If you live in that high-rent area because of the job, and wouldn't mind living were the rents are lower once you quit, your target amount would be lower. Between that, working dedicatedly toward this goal, and maybe a little luck, you might even be able to do this by age 40. Final Thoughts There are other things you could put that money toward, like a house, of course. The key take-away here, is to save it, and invest it. You're in a unique position of being able to do that with 40% of your income. That's fabulous! But don't think it's the norm. Most people can't save that much, and, once you lose the ability to save that much, it's very difficult to get it back. Expenses creep in, lifestyle \"\"wants\"\" become \"\"needs\"\", and so on. If you get into the habit of spending it, it's very difficult to shrink your lifestyle back down - down to what right now you're perfectly comfortable with. So, spend some time figuring out what you want out of life -- and in the mean time, sock that 40% away.\"" } ]

[ { "docid": "10440", "title": "", "text": "I see a lot of answers calculcating with incomes that are much higher than yours, here is something for your situation: If you would keep your current income for the rest of your life, here is approximately how things would turn out after 40 years: All interest is calculated relative to the amount in your portfolio. Therefore, lets start with 1 dollar for 40 years: With your current income, 15% would be 82.5 dollar. At 12% this would over 40 years get you almost 1 million dollar. I would call a required return of more than 12% not 'likely'. The good news, is that your income will likely increase, and especially if this happens fast things will start to look up. The bad news is, that your current salary is quite low. So, it basically means that you need to make some big jumps in the next few years in order to make this scenario likely. If you can quickly move your salary towards ranges that are more common in the US, then 15% of your income can build up to a million before you retire. However, if you just follow gradual growth, you would need to get quite lucky to reach a million. Note that even if reaching a million appears unlikely, it is probably still a good idea to save!" } ]

[ { "docid": "351926", "title": "", "text": "Keep in mind your household income is in the top 20%, which does not translate to wealth. Given a healthy income, and no debt, other then a small house payment, you probably have a decent amount of free cash flow. This could easily be used to buy a car on time… which a lot of people do. Congratulations on being different. Having said that, living as you do, you will likely be wealthier than your income suggests. If you invested the amount you saved on car payments for an average car you can become a muli-millionaire. Doing that alone can put you in the top 10% of the wealthiest in this nation. Keep in mind 76% of Americans live paycheck-to-paycheck, so there is a sizable portion of the population that make more than you do, yet one costly emergency can cause them to spiral into significant financial difficulty. News flash: Emergencies happen. If I am not being clear, you are living wisely! I would recommend reading The Millionaire Next Door and The Millionaire Mind. You will understand that not following the whims of advertisers is good for your bottom line and that it is good to be different from the general population. One of my favorite stories from the author is these yuppies hires the author to find them rich people to sell their products. The author gets the rich people by offering them cash, albeit a relatively small amount considering their wealth (about $200) and lunch. The yuppies complain that the guys don’t “look rich” as there are no fancy suits or Rolex watches. One of the rich guys likes the pitch so much in inquires on how he can buy the company. There are a lot of lessons in that short anecdote." }, { "docid": "287991", "title": "", "text": "I have about $1K in savings, and have been told that you should get into investment and saving for retirement early. I make around $200 per week, which about $150 goes into savings. That's $10k per year. The general rule of thumb is that you should have six months income as an emergency fund. So your savings should be around $5k. Build that first. Some argue that the standard should be six months of living expenses rather than income. Personally, I think that this example is exactly why it is income rather than living expenses. Six months of living expenses in this case would only be $1250, which won't pay for much. And note that living expenses can only be calculated after the fact. If your estimate of $50 a week is overly optimistic, you might not notice for months (until some large living expense pops up). Another problem with using living expenses as the measure is that if you hold down your living expenses to maximize your savings, this helps both measures. Then you hit your savings target, and your living expenses increase. So you need more savings. By contrast, if your income increases but your living expenses do not, you still need more savings but you can also save more money. Doesn't really change the basic analysis though. Either way you have an emergency savings target that you should hit before starting your retirement savings. If you save $150 per week, then you should have around $4k in savings at the beginning of next year. That's still low for an emergency fund by the income standard. So you probably shouldn't invest next year. With a living expenses standard, you could have $6250 in savings by April 15th (deadline for an IRA contribution that appears in the previous tax year). That's $5000 more than the $1250 emergency fund, so you could afford an IRA (probably a Roth) that year. If you save $7500 next year and start with $4k in savings (under the income standard for emergency savings), that would leave you with $11,500. Take $5500 of that and invest in an IRA, probably a Roth. After that, you could make a $100 deposit per week for the next year. Or just wait until the end. If you invested in an IRA the previous year because you decided use the living expenses standard, you would only have $6500 at the end of the year. If you wait until you have $6750, you could max out your IRA contribution. At that point, your excess income for each year would be larger than the maximum IRA contribution, so you could max it out until your circumstances change. If you don't actually save $3k this year and $7500 next year, don't sweat it. A college education is enough of an investment at your age. Do that first, then emergency savings, then retirement. That will flip around once you get a better paying, long term job. Then you should include retirement savings as an expected cost. So you'd pay the minimum required for your education loans and other required living expenses, then dedicate an amount for retirement savings, then build your emergency savings, then pay off your education loans (above the minimum payment). This is where it can pay to use the more aggressive living expenses standard, as that allows you to pay off your education loans faster. I would invest retirement savings in a nice, diversified index fund (or two since maintaining the correct stock/bond mix of 70%-75% stocks is less risky than investing in just bonds much less just stocks). Investing in individual stocks is something you should do with excess money that you can afford to lose. Secure your retirement first. Then stock investments are gravy if they pan out. If they don't, you're still all right. But if they do, you can make bigger decisions, e.g. buying a house. Realize that buying individual stocks is about more than just buying an app. You have to both check the fundamentals (which the app can help you do) and find other reasons to buy a stock. If you rely on an app, then you're essentially joining everyone else using that app. You'll make the same profit as everyone else, which won't be much because you all share the profit opportunities with the app's system. If you want to use someone else's system, stick with mutual funds. The app system is actually more dangerous in the long term. Early in the app's life cycle, its system can produce positive returns because a small number of people are sharing the benefits of that system. As more people adopt it though, the total possible returns stay the same. At some point, users saturate the app. All the possible returns are realized. Then users are competing with each other for returns. The per user returns will shrink as usage grows. If you have your own system, then you are competing with fewer people for the returns from it. Share the fundamental analysis, but pick your stocks based on other criteria. Fundamental analysis will tell you if a stock is overvalued. The other criteria will tell you which undervalued stock to buy." }, { "docid": "475397", "title": "", "text": "There is no advantage to using one type of account or the other if you are in the same tax bracket at retirement that you are in during your working years. However, for tax planning reasons, it is good to have some money in both a Roth and a traditional IRA plan. JoeTaxpayer has often advocated a good rule of thumb to use a Roth when your tax bracket is 15% or lower, and use a traditional account when in the 25% bracket or above. The reason for this rule of thumb is that you are less likely to be in the higher tax bracket when you are living off retirement savings unless you put away an awful lot of money between now and then. If you are making enough money to be paying a 25% marginal rate on some of the money you would be putting away for retirement, then by all means, put all of that money in a traditional 401k. If after contributing that portion of your savings taxed at the higher rate, you still have money to put away for retirement, put the rest in a Roth and pay the 15% taxes on it. When you are younger, it is likely that you are making less than you will a few years hence, and it is also likely that a larger portion of your income will be paying tax deductible interest on a mortgage. If those are true for you, then by all means, use the Roth. That was true of me when I was single and just getting started. When you do finally retire, it is possible that the tax brackets will be increased to match inflation, and if so, then there is no benefit to having tax free money at retirement vs. paying taxes on deferred accounts, but there is also usually more flexibility in when to spend money. You may find that you have a year where you have to spend a lot, so it is good to be able to pull money out without it increasing your marginal rate for that year, and other years where you spend relatively smaller amounts, and you can withdraw taxable money and pay a lower rate on that money. No one knows what the tax code will look like in 40 years, but having some money in each type of account will give you flexibility to minimize your tax bill at retirement." }, { "docid": "554833", "title": "", "text": "Pete, 25 years of inflation looks like 100% to me with back of napkin math. $220K will feel like $110K. In today's dollars, can you live on $110K? (Plus whatever Social Security you'll get)? My concern from what you wrote, if I'm reading it correctly, is that you have this great income, but relatively low savings until now. From the recent question Building financial independence I offered a guide to savings as it compares to income. Even shifted 5 years for a later start, and scaled for a 70-75% replacement ratio, you should be at 2X (or $440K) by now. That's not a criticism, but an observation that you've been spending at a nice clip so far. The result is less saving, of course, but also a need for a higher replacement ratio. Last, a 10% return for the next 25 years may be optimistic. I'm not forecasting doom or gloom, just a more reasonable rate of return, and wouldn't plan to see higher than 7-8% for purposes of planning. If I am wrong, (and if so, we can both laugh all the way to the bank) you can always scale back savings in 10-15 years. Or retire earlier. Note: Pete's question asks about a 40 year old working till 65, but the comment below has him 48 and planning to work until 62. 14 years of $45K deposits total less than $700K. Even at 10%, it wouldn't grow to much more than $2M, let alone $5M." }, { "docid": "80844", "title": "", "text": "After looking at your profile, I see your age...28. Still a baby. At your age, and given your profession, there really is no need to build investment income. You are still working and should be working for many years. If I was you, I'd be looking to do a few different things: Eliminating debt reduces risk, and also reduces the need for future income. Saving for, and purchasing a home essentially freezes rent increases. If home prices double in your area, in theory, so should rent prices. If you own a home you might see some increases in taxes and insurance rates, but they are minor in comparison. This also reduces the need for future income. Owning real estate is a great way to build residual income, however, there is a lot of risk and even if you employ a management company there is a lot more hands on work and risk. Easier then that you can build an after tax investment portfolio. You can start off with mutual funds for diversification purposes and only after you have built a sizable portfolio should (if ever) make the transition to individual stocks. Some people might suggest DRIPs, but given the rate at which you are investing I would suggest the pain of such accounts is more hassle then it is worth." }, { "docid": "231662", "title": "", "text": "\"Before anything, I see that no one mentioned the one thing about 401(k) accounts that's just shy of magic - The matching deposit. In 2015, 42% of companies offered a dollar for dollar match on deposits. Can't beat that. (Note - to respond to Xalorous' comment, the $18K OP deposits can be nearly any percent of his income. The typical match is 'up to' 6% of gross income. If that's the case, the 401(k) deposits are doubled. But say he makes $100K. The $18K deposit will see a $6K match. This adds a layer of complexity to the answer that I preferred to avoid, as I show with no match at all, and no change in tax brackets, the deferral alone shows value to the investor.) On to the main answer - Let's pull out a spreadsheet - We start with $10,000, and assume the 25% bracket. This gives a choice of $10,000 in the 401(k) or $7500 in the taxable account. Next, let 20 years pass, with 10% return each year. The 401(k) sees the full 10% and after 20 years, $67K. The taxable account owner waits to get the 15% cap gain rate and adjusts portfolio, thus seeing an 8.5% return each year and carrying no ongoing gains. After 20 years of 8.5% returns, he has $38K net. The 401(k) owner on withdrawal pays the 25% tax and has $50K, still more than 25% more money that the taxable account. Because transactions within the account were all tax deferred. EDIT - With respect to davmp's comment, I'll offer the other extreme - In his comment, he (rightly) objected that I chose to trade every year, although I did assign the long term 15% cap gain rate, he felt the annual trade was my attempt to game the analysis. Above, I offer his extreme case, a 10% return each year, no trade, no dividend. Just a cap gain at the end. The 401(k) still wins. I also left the tax (on the 401(k)) at withdrawal at 25%, when in fact, much, if not all will be taxed at 15% or lower, which would put the net at $57K or 30% above the taxable account final withdrawal. The next issue I'd bring up is that the 401(k) is taken out at the top (marginal) tax rate, e.g. a single filer with taxable income over $37,650 (in 2016) would save 25% on that 401(k) deduction. Of course if the deduction pulls you under that line, I'd go Roth or taxable. But, withdrawals start at zero. Today, a single retiree has a standard deduction ($4050) and exemption ($6300) for a total $10,350 \"\"zero bracket\"\" with the next $9275 taxed at 10%. This points to needing $500K in pre tax accounts before withdrawals each year would get you past the 10% bracket. (This comes from the suggestion of using 4% as an annual withdrawal rate). Last - the tax discussion has 2 major points in time, deposit and withdrawal, of course. But, the answers here all ignore all the time in between. In between, you see that for any number of reasons, you'll drop from the 25% bracket to 15% that year. That's the time to convert a bit of money to Roth and 'top off' the 15% bracket. It can happen due to job loss, marriage with new spouse either not working or having lower income, new baby, house purchase, etc. Or in-between, a disability put you out of work. That permits you to take money out with no penalty, and little chance of paying even the 25% that you paid going in. This, from personal experience with a family member, funded a 401(k) with 28% money. Then divorced and disabled, able to take the $10K/yr to supplement worker's comp (non taxed) income.\"" }, { "docid": "184243", "title": "", "text": "A person who always saves and appropriately invests 20% of their income can expect to have a secure retirement. If you start early enough, you don't need anything close to 20%. Now, there are many good reasons to save for things other than just retirement, of course. You say that you can save 80% of your income, and you expect most people could save at least 50% without problems. That's just unrealistic for most people. Taxes, rent (or mortgage payments), utilities, food, and other such mandatory expenses take far more than 50% of your income. Most people simply don't have the ability to save (or invest) 50% of their income. Or even 25% of their income." }, { "docid": "434972", "title": "", "text": "They start at six figures with just a bachelor's, and their raises tend to be pretty substantial. Many of them will earn more than $200k before they are age 30. Basically, if they were to live relatively normal lifestyles (many do not), save and invest most of their earnings, then they should be able to become a millionaire at around age 30 while just following their career path, without taking big risks such as starting a business." }, { "docid": "84642", "title": "", "text": "\"Having worked for a financial company for years, my advice is to stay away from all the \"\"Freedom Funds\"\" offered. They're a new way for Fidelity to justify charging a higher management fee on those particular funds. That extra 1% or so a year is great for making the company money; it will kill your rate of return over the next 25+ years you're putting money into your retirement account. All these funds do is change the percentage of your funds in stocks vs. more fixed investments (bonds, etc.) so you have a higher percentage in stocks while you're young and slowly move the percentage more towards fixed as you get older. If you take a few hours every 5 years to re-balance your portfolio and just slowly shift more money towards fixed investments, you'll achieve the same thing WITHOUT the extra annual fee. So how much difference are we talking here? Let's do a quick example. Based on your salary of $70k and a 4% match by your company, you'll have $5,600 a year to put in your 401(k) (your 4% plus matched 4%). I'll also assume an 8% annual return for both funds. Here is what that 1% extra service charge will cost you: Fund with a 1% service charge: Annual Fee Paid Year 1 - $60.00 Annual Fee Paid Year 25 (assuming 8% growth in assets) - $301.00 Total Fees Year 1 through 25: $3,782 Fund with a 2% service charge: Annual Fee Paid Year 1 - $121.00 Annual Fee Paid Year 25 (assuming 8% growth in assets) - $472.00 Total Fees Year 1 through 25: $6,489 That's a total of $2,707 in extra fees over 25 years on just the investment you make this year! Next year if you invest the same amount in your 401k that will be another $2,707 paid over 25 years to the management company. This pattern repeats EACH year you pay the higher management fee. Trust me, if you invest that money in stock instead of paying it as fees, you'll have a whole lot more money saved when it's time to retire. My advice, pick a percentage you're comfortable with in stocks at your age, maybe 85 - 90%, and pick the stock funds with the lowest management fees (the remaining 10 - 15% should go into a fixed fund). Make sure you pick at least some of your stock money, I do 20 - 25%, and select a diverse (lots of different countries) international fund. For any retirement money you plan to save above the 4% getting matched by your company, set up a Roth IRA. That will give you the freedom to invest in any stocks or funds you want. Find some low-cost index funds (such as VTI for stocks, and BND for bonds) and put your money in those. Invest the same amount every month, automatically, and your cost average will work itself out through up markets and down. Good luck!\"" }, { "docid": "286017", "title": "", "text": "You don't start out buying a shopping mall, you have to work up to it. You can start with any amount and work up to a larger amount. For me, I saved 30% of my salary(net), investing in stocks for 8 years. It was tough to live on less, but I had a goal to buy passive income. I put down this money to buy 3 houses, putting 35% down and maintaining enough cash to make 5 years of payments. I rented out the houses making a cap of 15%. The cap is the net payment per year / cost of the property, where the net accounts for taxes and repairs. I did not spend any of the profits, but I did start saving less salary. After 5 years of appreciation, mortgage payments and rental profit, I sold one house to get a loan for a convenience store. Buildings go on the market all the time, it takes 14 years to directly recoup an investment at a 7% cap, which is the average for a commercial property sale. Many people cash out for this reason, it's slow, but steady growth, though the earnings on property appreciation is a nice bonus. Owning real estate is a long term game, after a long time of earning, you can reinvest, but it comes with the risk of bad or no tenants. You can start both slower and smaller, just make sure you're picking up assets, not liabilities. Like investing in cars is generally bad unless you are sure it will appreciate." }, { "docid": "81343", "title": "", "text": "\"I disagree with the selected answer. There's no one rule of thumb and certainly not simple ones like \"\"20 cents of every dollar if you're 35\"\". You've made a good start by making a budget of your expected expenses. If you read the Mr. Money Mustache blogpost titled The Shockingly Simple Math Behind Early Retirement, you will understand that it is usually a mistake to think of your expenses as a fixed percentage of your income. In most cases, it makes more sense to keep your expenses as low as possible, regardless of your actual income. In the financial independence community, it is a common principle that one typically needs 25-30 times one's annual spending to have enough money to sustain oneself forever off the investment returns that those savings generate (this is based on the assumption of a 7% average annual return, 4% after inflation). So the real answer to your question is this: UPDATE Keats brought to my attention that this formula doesn't work that well when the savings rates are low (20% range). This is because it assumes that money you save earns no returns for the entire period that you are saving. This is obviously not true; investment returns should also count toward your 25-times annual spending goal. For that reason, it's probably better to refer to the blog post that I linked to in the answer above for precise calculations. That's where I got the \"\"37 years at 20% savings rate\"\" figure from. Depending on how large and small x and y are, you could have enough saved up to retire in 7 years (at a 75% savings rate), 17 years (at a 50% savings rate), or 37 years! (at the suggested 20% savings rate for 35-year olds). As you go through life, your expenses may increase (eg. starting a family, starting a new business, unexpected health event etc) or decrease (kid wins full scholarship to college). So could your income. However, in general, you should negotiate the highest salary possible (if you are salaried), use the 25x rule, and consider your life and career goals to decide how much you want to save. And stop thinking of expenses as a percentage of income.\"" }, { "docid": "453639", "title": "", "text": "(All for US.) Yes you (will) have a realized long-term capital gain, which is taxable. Long-term gains (including those distributed by a mutual fund or other RIC, and also 'qualified' dividends, both not relevant here) are taxed at lower rates than 'ordinary' income but are still bracketed almost (not quite) like ordinary income, not always 15%. Specifically if your ordinary taxable income (after deductions and exemptions, equivalent to line 43 minus LTCG/QD) 'ends' in the 25% to 33% brackets, your LTCG/QD income is taxed at 15% unless the total of ordinary+preferred reaches the top of those brackets, then any remainder at 20%. These brackets depend on your filing status and are adjusted yearly for inflation, for 2016 they are: * single 37,650 to 413,350 * married-joint or widow(er) 75,300 to 413,350 * head-of-household 50,400 to 441,000 (special) * married-separate 37,650 to 206,675 which I'd guess covers at least the middle three quintiles of the earning/taxpaying population. OTOH if your ordinary income ends below the 25% bracket, your LTCG/QD income that 'fits' in the lower bracket(s) is taxed at 0% (not at all) and only the portion that would be in the ordinary 25%-and-up brackets is taxed at 15%. IF your ordinary taxable income this year was below those brackets, or you expect next year it will be (possibly due to status/exemption/deduction changes as well as income change), then if all else is equal you are better off realizing the stock gain in the year(s) where some (or more) of it fits in the 0% bracket. If you're over about $400k a similar calculation applies, but you can afford more reliable advice than potential dogs on the Internet. (update) Near dupe found: see also How are long-term capital gains taxed if the gain pushes income into a new tax bracket? Also, a warning on estimated payments: in general you are required to pay most of your income tax liability during the year (not wait until April 15); if you underpay by more than 10% or $1000 (whichever is larger) you usually owe a penalty, computed on Form 2210 whose name(?) is frequently and roundly cursed. For most people, whose income is (mostly) from a job, this is handled by payroll withholding which normally comes out close enough to your liability. If you have other income, like investments (as here) or self-employment or pension/retirement/disability/etc, you are supposed to either make estimated payments each 'quarter' (the IRS' quarters are shifted slightly from everyone else's), or increase your withholding, or a combination. For a large income 'lump' in December that wasn't planned in advance, it won't be practical to adjust withholding. However, if this is the only year increased, there is a safe harbor: if your withholding this year (2016) is enough to pay last year's tax (2015) -- which for most people it is, unless you got a pay cut this year, or a (filed) status change like marrying or having a child -- you get until next April 15 (or next business day -- in 2017 it is actually April 18) to pay the additional amount of this year's tax (2016) without underpayment penalty. However, if you split the gain so that both 2016 and 2017 have income and (thus) taxes higher than normal for you, you will need to make estimated payment(s) and/or increase withholding for 2017. PS: congratulations on your gain -- and on the patience to hold anything for 10 years!" }, { "docid": "426461", "title": "", "text": "\"Between \"\"fresh out of college\"\" and \"\"I have no debts, and a support system in place which because of which I can take higher risks.\"\" I would put every penny I could afford in the riskiest investment platform I was willing to. Holding onto money in a bank account is likely to cost you %1-%2 a year depending on what interest rates are and what inflation looks like. Money invested in a market could loose it all for you or you could become an overnight millionaire. Loosing it all would suck but you are young you will bounce back. Losing it slowly to inflation is just silly when you are young. If there is something you know you have to do in the next few years start to save for it but otherwise use the fact that you are young and have a safety net to try to make money.\"" }, { "docid": "68872", "title": "", "text": "\"Note - this is a complicated topic. I've read the rules multiple times and I'm still not sure I understand them perfectly. So please take this with a pinch of salt and read the rules for yourself. The time(s) at which a test is done against the LTA are known as a \"\"Benefit Crystallization Event\"\" (BCE). There are 13 of these (!) - they're numbered 1-9 with the addition of some extras numbered 5A-D. However, the most important ones for those with defined contribution pensions are: Broadly, the idea is that a BCE occurs when you start taking money out of your pension, and when you reach age 75. Each time one happens, the amount you are taking out (\"\"crystallizing\"\") gets compared against the LTA and a certain percentage of your LTA gets designated as being used. Crystallising doesn't necessarily mean you actually receive the money immediately, just that some of your money is switched into a mode where you can start receiving it in different ways. The rules are designed to avoid double counting, so broadly anything that was taken off your LTA won't be taken off a second time. The cumulative use of your LTA is tracked as a percentage rather than an absolute amount, to take account of any changes in the LTA between the different times you crystallise money. For example if you crystallise £100K when the LTA is £1mn, that's 10% of your LTA gone. If later on the LTA has risen to £1.1mn and you take out £110K, that's another 10%. Once you hit 100%, you start paying a LTA charge on any excess. The really simple path here is if you just get an annuity with your entire pot, before hitting age 75 (and you don't make any further pension contributions after). Then only BCE 4 applies: your pension pot, all of which is being used to buy the annuity, is compared with the LTA. After this point your entire pension pot is considered to be crystallized, so no more BCEs will apply - the tests at age 75 only apply if you still have money that you haven't taken out or used to buy an annuity. The annuity payments themselves will be subject to income tax at your normal rate at the time you receive them, i.e. 0%, 20%, 40% or 45% depending on how much other income you have. In reality most people would want to take 25% of their pot as a lump sum at the same time as buying an annuity, given that it's tax-free if you're under the LTA. At this point BCE 6 applies in addition to BCE 4, but again the overall effect of the test is pretty simple, look at the total pension pot (lump sum + cost of annuity), and if it's under the LTA you're fine. Again, at this point no more BCEs will apply as all the money is considered to have been fully distributed. If you only use part of the money for an annuity/lump sum, then only that part of the money is compared against the LTA, and the rest stays in your pension and will be compared later. The 25% limit for a tax-free lump sum applies to the total you are taking out at that point: if you have £200K and are taking out £100K, you can take out £25K as a tax-free lump sum and use £75K for the annuity. The other £100K stays in your pension. Many people see annuity rates as very low and will want to take on more risk (and reward) by using \"\"Drawdown\"\" for at least part of their pension. Essentially, you can designate part of your pension for drawdown, and at that point BCE 1 applies to the money you designate. Once designated, you can start drawing the money out as income, which will be taxed at your normal income tax rate at the time you receive it. Again, you can take 25% as a lump sum at this point which will be subject to BCE 6. There's also an alternative route where you put everything into \"\"flexi-access drawdown\"\" without taking any lump sum immediately, and then as you actually withdraw income, 25% is tax-free and the rest is taxed as income. The overall effect is the same, but it gives you more control over when you get the tax-free bit. However, because with drawdown you can actually leave the money in your pension and growing tax-free, there's a further test against the LTA at age 75 under BCE 5A. To avoid double-counting (\"\"prevention of overlap\"\"), the amount left in the drawdown fund at that point is reduced by whatever was previously tested against BCE 1. So if you put £150K into drawdown initially, and it's grown to £200K by age 75, then another £50K will crystallise under BCE 5A. I think that if you put £150K into drawdown initially and it grows by £50K, but you take that out as income so that only £150K (or less) remains at age 75, then the amount crystallising under BCE 5A is nil. Also, when money is in drawdown, you can choose to use it to buy an annuity. BCE 4 is applied at this point (if before age 75), but as with BCE 5A, this is reduced by anything that was previously crystallised under BCE 1. If you only use some of it to buy an annuity, the reduction is pro-rataed, e.g. if you started out with £150K moved into drawdown, and later it has grown to £200K and you use £100K to buy an annuity, then the reduction is £75K so £25K is considered to have crystallised under BCE 4. Once you reach age 75, as well as any money that's still in drawdown, anything you haven't yet crystallised at all gets tested against the LTA under BCE 5B. Broadly, once you go over the LTA, the charges are simple: There's never any explanation given for these two rates, but I think it's all based on trying to at least cancel out the benefit you got from using your pension, on the assumption that: So with the 25% charge + 20% income tax, if you take out £100, you'll end up with £75 gross income, so £60 net income - just the same as if you'd originally paid 40% tax. (This ignores the effect of investment growth, but if you would have saved the £60 in an ISA, the end result is the same: if you had growth of say 50% over the time the money was in your pension, it'll be the same effect if you had £100 growing to £150 and now received 60% of it, or if you had £60 growing to £90 untaxed in an ISA.) The 55% lump sum charge is in case you are paying 40% tax when you take it out, to make sure that it's not a more attractive option than the 25%+income tax: if you have £100, either you get £45 tax free via a lump sum, or you get £75 gross and hence £45 net. I haven't covered lots of cases here: defined benefit pensions. Roughly, when you start receiving the pension, 20x the initial income from the pension is deemed to crystallise under BCE 2 and any lump sum you receive crystallises under BCE 6. In the former case, you could end up having to pay the LTA charge with money you haven't actually got yet, and you can ask the pension administrator to instead reduce your pension to pay it. However, there are lots of special cases for defined benefit pensions, mostly for historical reasons, so you should make sure you check with your pension administrator about this. if you die before age 75, at which point the LTA test is applied via either BCE 5C/5D, or BCE 7. After paying the LTA charge if any, your dependents or whoever else you leave it to gets the remainder tax-free. transferring overseas (BCE 8). \"\"scheme pensions\"\" under BCE 2 and BCE 3 (I think these are relatively uncommon) some corner cases covered by regulations (BCE 9)\"" }, { "docid": "353081", "title": "", "text": "\"With 40% of your take-home available, you have a golden opportunity here. Actually two, and the second builds out easily from the first. Golden Opportunity # 1: Layoff Immunity Ok, not really immunity. Most people don't think of themselves getting laid off, and don't prepare. Of course it may not happen to you, but it can. It's happened to me twice. The layoff itself is an emotional burden (getting rejected is hard), but then you're suddenly faced with a gut-wrenching, \"\"how am I gonna pay the rent????\"\" If you have no savings, it's terrifying. Put yourself in that spot. Imagine that tomorrow, you're out of a job. For how many months could you pay your expenses with the money you have? Three months? One? Not even that? How about shooting for 12 months? It's really, really comforting to be able to say: \"\"I don't have to worry about it for a year\"\". 12 months saved up gives you emotional and financial stability, and it gives you options -- you don't have to take the first job that comes along. Now, saving 12 months of expenses is huge. But, you're in the wonderful spot where you can save 40% of your income. It would only take 2.5 years to save up a year's worth of income! But, actually, it's better than that. Because your 12-month Layoff Immunity fund doesn't have to include the amount for retirement, or taxes, or that 40% we're talking about. Your expenses are less than 60% of take-home -- you'd only need 12 months of that. So, you could have a fully funded 12-Month Layoff Immunity Fund only in a year and a half! Golden Opportunity #2: Freedom Fund Do you like your Job? Would you still do it, if you didn't need the money? If so, great. But if not, why not get yourself into a position where you don't need it? That is, build up enough money from saving and investing to where you can pay your expenses - forever - from your investments. The number to keep in mind is 25. Figure out your annual expenses, and multiply it by 25. That's the amount you'd need to never need a job again. (That works out to a 4% withdrawal rate, adjusting for inflation every year, with a low risk of running out of money. It's a rule of thumb, but smart people doing a lot of math worked it out.) Here you keep saving and investing that 40% in solid mutual funds in a regular, taxable account. Between your savings and the compounding returns off the investments, you could easily have a fully funded \"\"Freedom Fund\"\" by the time you're 50. In fact, by 45 isn't unreasonable. It could be even better. If you live in that high-rent area because of the job, and wouldn't mind living were the rents are lower once you quit, your target amount would be lower. Between that, working dedicatedly toward this goal, and maybe a little luck, you might even be able to do this by age 40. Final Thoughts There are other things you could put that money toward, like a house, of course. The key take-away here, is to save it, and invest it. You're in a unique position of being able to do that with 40% of your income. That's fabulous! But don't think it's the norm. Most people can't save that much, and, once you lose the ability to save that much, it's very difficult to get it back. Expenses creep in, lifestyle \"\"wants\"\" become \"\"needs\"\", and so on. If you get into the habit of spending it, it's very difficult to shrink your lifestyle back down - down to what right now you're perfectly comfortable with. So, spend some time figuring out what you want out of life -- and in the mean time, sock that 40% away.\"" }, { "docid": "502150", "title": "", "text": "\"The biggest and primary question is how much money you want to live on within retirement. The lower this is, the more options you have available. You will find that while initially complex, it doesn't take much planning to take complete advantage of the tax system if you are intending to retire early. Are there any other investment accounts that are geared towards retirement or long term investing and have some perk associated with them (tax deferred, tax exempt) but do not have an age restriction when money can be withdrawn? I'm going to answer this with some potential alternatives. The US tax system currently is great for people wanting to early retire. If you can save significant money you can optimize your taxes so much over your lifetime! If you retire early and have money invested in a Roth IRA or a traditional 401k, that money can't be touched without penalty until you're 55/59. (Let's ignore Roth contributions that can technically be withdrawn) Ok, the 401k myth. The \"\"I'm hosed if I put money into it since it's stuck\"\" perspective isn't true for a variety of reasons. If you retire early you get a long amount of time to take advantage of retirement accounts. One way is to primarily contribute to pretax 401k during working years. After retiring, begin converting this at a very low tax rate. You can convert money in a traditional IRA whenever you want to be Roth. You just pay your marginal tax rate which.... for an early retiree might be 0%. Then after 5 years - you now have a chunk of principle that has become Roth principle - and can be withdrawn whenever. Let's imagine you retire at 40 with 100k in your 401k (pretax). For 5 years, you convert $20k (assuming married). Because we get $20k between exemptions/deduction it means you pay $0 taxes every year while converting $20k of your pretax IRA to Roth. Or if you have kids, even more. After 5 years you now can withdraw that 20k/year 100% tax free since it has become principle. This is only a good idea when you are retired early because you are able to fill up all your \"\"free\"\" income for tax conversions. When you are working you would be paying your marginal rate. But your marginal rate in retirement is... 0%. Related thread on a forum you might enjoy. This is sometimes called a Roth pipeline. Basically: assuming you have no income while retired early you can fairly simply convert traditional IRA money into Roth principle. This is then accessible to you well before the 55/59 age but you get the full benefit of the pretax money. But let's pretend you don't want to do that. You need the money (and tax benefit!) now! How beneficial is it to do traditional 401ks? Imagine you live in a state/city where you are paying 25% marginal tax rate. If your expected marginal rate in your early retirement is 10-15% you are still better off putting money into your 401k and just paying the 10% penalty on an early withdrawal. In many cases, for high earners, this can actually still be a tax benefit overall. The point is this: just because you have to \"\"work\"\" to get money out of a 401k early does NOT mean you lose the tax benefits of it. In fact, current tax code really does let an early retiree have their cake and eat it too when it comes to the Roth/traditional 401k/IRA question. Are you limited to a generic taxable brokerage account? Currently, a huge perk for those with small incomes is that long term capital gains are taxed based on your current federal tax bracket. If your federal marginal rate is 15% or less you will pay nothing for long term capital gains, until this income pushes you into the 25% federal bracket. This might change, but right now means you can capture many capital gains without paying taxes on them. This is huge for early retirees who can manipulate income. You can have significant \"\"income\"\" and not pay taxes on it. You can also stack this with before mentioned Roth conversions. Convert traditional IRA money until you would begin owing any federal taxes, then capture long term capital gains until you would pay tax on those. Combined this can represent a huge amount of money per year. So littleadv mentioned HSAs but.. for an early retiree they can be ridiculously good. What this means is you can invest the maximum into your HSA for 10 years, let it grow 100% tax free, and save all your medical receipts/etc. Then in 10 years start withdrawing that money. While it sucks healthcare costs so much in America, you might as well take advantage of the tax opportunities to make it suck slightly less. There are many online communities dedicated to learning and optimizing their lives in order to achieve early retirement. The question you are asking can be answered superficially in the above, but for a comprehensive plan you might want other resources. Some you might enjoy:\"" }, { "docid": "534988", "title": "", "text": "\"Given that a poor person probably has much less to invest, how can odds be in their favor? To add to Lan's great answer, if one is \"\"poor\"\" because they don't have enough income to build wealth (invest), then there are only two ways to change the situation - earn more or spend less. Neither are easy but both are usually possible. One can take on side jobs, look for a better-paying career, etc. Cutting spending can also be hard but is generally easier than adding income. In general, wealth building is more about what you do with your income than about how much you make. Obviously the more you make, the easier it is, but just about anyone can build wealth if they spend less than they make. Once your NET income is high enough that you have investible income, THEN you can start building wealth. Unfortunately many people have piles of debts to clean up before they are able to get to that point. What could a small guy with $100 do to make himself not poor anymore, right? Just having $100 is not going to make you \"\"rich\"\". There is a practical limit to how much return you can make short of high-risk activities like gambling, lottery tickets, etc. (I have actually seen this as a justification for playing the lottery, which I disagree with but is an interesting point). If you just invest $100 at 25% per year (for illustration - traditional investments typically only make 10-12% on average), in 10 years you'll have about $931. If instead you invest $100 per month at 12% annualized, in 10 years you'll have over $23,000. Not that $23,000 makes you rich - the point is that regularly saving money is much more powerful than having money to start with.\"" }, { "docid": "67276", "title": "", "text": "\"Your real question, \"\"why is this not discussed more?\"\" is intriguing. I think the media are doing a better job bringing these things into the topics they like to ponder, just not enough, yet. You actually produced the answer to How are long-term capital gains taxed if the gain pushes income into a new tax bracket? so you understand how it works. I am a fan of bracket topping. e.g. A young couple should try to top off their 15% bracket by staying with Roth but then using pretax IRA/401(k) to not creep into 25% bracket. For this discussion, 2013 numbers, a blank return (i.e. no schedule A, no other income) shows a couple with a gross $92,500 being at the 15%/25% line. It happens that $20K is exactly the sum of their standard deduction, and 2 exemptions. The last clean Distribution of Income Data is from 2006, but since wages haven't exploded and inflation has been low, it's fair to say that from the $92,000 representing the top 20% of earners, it won't have many more than top 25% today. So, yes, this is a great opportunity for most people. Any married couple with under that $92,500 figure can use this strategy to exploit your observation, and step up their basis each year. To littleadv objection - I imagine an older couple grossing $75K, by selling stock with $10K in LT gains just getting rid of the potential 15% bill at retirement. No trading cost if a mutual fund, just $20 or so if stocks. The more important point, not yet mentioned - even in a low cost 401(k), a lifetime of savings results in all gains being turned in ordinary income. And the case is strong for 'deposit to the match but no no more' as this strategy would let 2/3 of us pay zero on those gains. (To try to address the rest of your questions a bit - the strategy applies to a small sliver of people. 25% have income too high, the bottom 50% or so, have virtually no savings. Much of the 25% that remain have savings in tax sheltered accounts. With the 2013 401(k) limit of $17,500, a 40 year old couple can save $35,000. This easily suck in most of one's long term retirement savings. We can discuss demographics all day, but I think this addresses your question.) If you add any comments, I'll probably address them via edits, avoiding a long dialog below.\"" }, { "docid": "454333", "title": "", "text": "If you're in the 25% tax bracket, then you probably shouldn't be doing a Roth conversion right now. You'd prefer to do Roth conversions when you can do so at a 15% rate. You could contribute some of your current annual contributions to Roth directly, but even that isn't a great idea except to diversify your holdings. Odds are you won't be paying 25% average tax rate on your retirement, unless you're doing very well in your retirement account. Odds are you'll be somewhere around 15%. Converting at a 15% rate therefore is fine; basically, you'll have something like this, based on some assumptions (I'm making up dollars, brackets, etc.; obviously these will change): Doing this, you pay 0-15% tax on up to 75k, then pay 0 tax after that on the Roth (which you paid 15% tax on already). Therefore, you don't end up paying more than 15% on any single dollar, and you pay less on the total sum. But you also don't really want to be paying 25% on any of it, since that won't really help you out any and could hurt you (will hurt you, if you end up getting some of that 15% bracket income from the Roth). If you're in the 25% bracket now, then you probably are better off just keeping everything in regular IRA (unless you're expecting to be in the 28% bracket after retirement?). Putting some in Roth isn't a terrible idea, just for diversification's sake, but it's probably going to cost you money unless tax rates rise dramatically (which they certainly could, though not as likely to rise on the 'middle class' 0-100k range). They'd have to double for you to be worse off this way. And finally: do not ever withdraw from the 401k to pay taxes on a conversion. You're subject to a 10% penalty for doing that (as it's an early withdrawal) and also have to pay taxes on that withdrawal. Ick. For more information about when Roth makes sense, read site moderator JoeTaxpayer's Blog article on the subject, which explains this in great detail." } ]

[ { "docid": "127263", "title": "", "text": "The article links to William Bernstein’s plan that he outlined for Business Insider, which says: Modelling this investment strategy Picking three funds from Google and running some numbers. The international stock index only goes back to April 29th 1996, so a run of 21 years was modelled. Based on 15% of a salary of $550 per month with various annual raises: Broadly speaking, this investment doubles the value of the contributions over two decades. Note: Rebalancing fees are not included in the simulation. Below is the code used to run the simulation. If you have Mathematica you can try with different funds. Notice above how the bond index (VBMFX) preserves value during the 2008 crash. This illustrates the rationale for diversifying across different fund types." } ]

[ { "docid": "337561", "title": "", "text": "\"The only time to stop saving money for retirement is when you have enough money to retire tomorrow. Not all of your \"\"retirement savings\"\" need to be in a 401k, it is just better if you can. Be sure to get as much as you can from the employer matching program. Unfortunately some employer matching programs discourage you from putting in too much. I've been able to max out the 401k contribution a number of times, which helps. Remember: you are likely to live to 100, so you better save enough to live that long. I don't trust social security to be there. I recommend saving so that you end up with \"\"enough to be comfortable\"\" -- this is usually about 25x your current income - PLUS inflation between now and when you plan to retire (age 62 is a good target). It is worth knowing your \"\"retirement savings number\"\". If you are making $100K per year now, you need to target $2.5M - PLUS allowance for inflation between now and when you plan to retire. This usually means you need to also arrange to make more money as well as save as much as you can and to use passive investing. Finance advisors are not worth it if you have less than $1M to invest.\"" }, { "docid": "426461", "title": "", "text": "\"Between \"\"fresh out of college\"\" and \"\"I have no debts, and a support system in place which because of which I can take higher risks.\"\" I would put every penny I could afford in the riskiest investment platform I was willing to. Holding onto money in a bank account is likely to cost you %1-%2 a year depending on what interest rates are and what inflation looks like. Money invested in a market could loose it all for you or you could become an overnight millionaire. Loosing it all would suck but you are young you will bounce back. Losing it slowly to inflation is just silly when you are young. If there is something you know you have to do in the next few years start to save for it but otherwise use the fact that you are young and have a safety net to try to make money.\"" }, { "docid": "80844", "title": "", "text": "After looking at your profile, I see your age...28. Still a baby. At your age, and given your profession, there really is no need to build investment income. You are still working and should be working for many years. If I was you, I'd be looking to do a few different things: Eliminating debt reduces risk, and also reduces the need for future income. Saving for, and purchasing a home essentially freezes rent increases. If home prices double in your area, in theory, so should rent prices. If you own a home you might see some increases in taxes and insurance rates, but they are minor in comparison. This also reduces the need for future income. Owning real estate is a great way to build residual income, however, there is a lot of risk and even if you employ a management company there is a lot more hands on work and risk. Easier then that you can build an after tax investment portfolio. You can start off with mutual funds for diversification purposes and only after you have built a sizable portfolio should (if ever) make the transition to individual stocks. Some people might suggest DRIPs, but given the rate at which you are investing I would suggest the pain of such accounts is more hassle then it is worth." }, { "docid": "423083", "title": "", "text": "\"I get the sense that this is a \"\"the world is unfair; there's no way I can succeed\"\" question, so let's back up a few steps. Income is the starting point to all of this. That could be a job (or jobs), or running your own business. From there, you can do four things with your income: Obviously Spend and Give do not provide a monetary return - they give a return in other ways, such as quality of life, helping others, etc. Save gives you reserves for future expenses, but it does not provide growth. So that just leaves Invest. You seem to be focused on stock market investments, which you are right, take a very long time to grow, although you can get returns of up to 12% depending on how much volatility you're willing to absorb. But there are other ways to invest. You can invest in yourself by getting a degree or other training to improve your income. You can invest by starting a business, which can dramatically increase your income (in fact, this is the most common path to \"\"millionaire\"\" in the US, and probably in other free markets). You can invest by growing your own existing business. You can invest in someone else's business. You can invest in real estate, that can provide both value appreciation and rental income. So yes, \"\"investment\"\" is a key aspect of wealth building, but it is not limited to just stock market investment. You can also look at reducing expenses in order to have more money to invest. Also keep in mind that investment with higher returns come with higher risk (both in terms of volatility and risk of complete loss), and that borrowing money to invest is almost always unwise, since the interest paid directly reduces the return without reducing the risk.\"" }, { "docid": "352178", "title": "", "text": "\"that would deprive me of the rental income from the property. Yes, but you'd gain by not paying the interest on your other mortgage. So your net loss (or gain) is the rental income minus the interest you're paying on your home. From a cash flow perspective, you'd gain the difference between the rental income and your total payment. Any excess proceeds from selling the flat and paying off the mortgage could be saved and use later to buy another rental for \"\"retirement income\"\". Or just invest in a retirement account and leave it alone. Selling the flat also gets rid of any extra time spent managing the property. If you keep the flat, you'll need a mortgage of 105K to 150K plus closing costs depending on the cost of the house you buy, so your mortgage payment will increase by 25%-100%. My fist choice would be to sell the flat and buy your new house debt-free (or with a very small mortgage). You're only making 6% on it, and your mortgage payment is going to be higher since you'll need to borrow about 160k if you want to keep the flat and buy a $450K house, so you're no longer cash-flow neutral. Then start saving like mad for a different rental property, or in non-real estate retirement investments.\"" }, { "docid": "454333", "title": "", "text": "If you're in the 25% tax bracket, then you probably shouldn't be doing a Roth conversion right now. You'd prefer to do Roth conversions when you can do so at a 15% rate. You could contribute some of your current annual contributions to Roth directly, but even that isn't a great idea except to diversify your holdings. Odds are you won't be paying 25% average tax rate on your retirement, unless you're doing very well in your retirement account. Odds are you'll be somewhere around 15%. Converting at a 15% rate therefore is fine; basically, you'll have something like this, based on some assumptions (I'm making up dollars, brackets, etc.; obviously these will change): Doing this, you pay 0-15% tax on up to 75k, then pay 0 tax after that on the Roth (which you paid 15% tax on already). Therefore, you don't end up paying more than 15% on any single dollar, and you pay less on the total sum. But you also don't really want to be paying 25% on any of it, since that won't really help you out any and could hurt you (will hurt you, if you end up getting some of that 15% bracket income from the Roth). If you're in the 25% bracket now, then you probably are better off just keeping everything in regular IRA (unless you're expecting to be in the 28% bracket after retirement?). Putting some in Roth isn't a terrible idea, just for diversification's sake, but it's probably going to cost you money unless tax rates rise dramatically (which they certainly could, though not as likely to rise on the 'middle class' 0-100k range). They'd have to double for you to be worse off this way. And finally: do not ever withdraw from the 401k to pay taxes on a conversion. You're subject to a 10% penalty for doing that (as it's an early withdrawal) and also have to pay taxes on that withdrawal. Ick. For more information about when Roth makes sense, read site moderator JoeTaxpayer's Blog article on the subject, which explains this in great detail." }, { "docid": "502150", "title": "", "text": "\"The biggest and primary question is how much money you want to live on within retirement. The lower this is, the more options you have available. You will find that while initially complex, it doesn't take much planning to take complete advantage of the tax system if you are intending to retire early. Are there any other investment accounts that are geared towards retirement or long term investing and have some perk associated with them (tax deferred, tax exempt) but do not have an age restriction when money can be withdrawn? I'm going to answer this with some potential alternatives. The US tax system currently is great for people wanting to early retire. If you can save significant money you can optimize your taxes so much over your lifetime! If you retire early and have money invested in a Roth IRA or a traditional 401k, that money can't be touched without penalty until you're 55/59. (Let's ignore Roth contributions that can technically be withdrawn) Ok, the 401k myth. The \"\"I'm hosed if I put money into it since it's stuck\"\" perspective isn't true for a variety of reasons. If you retire early you get a long amount of time to take advantage of retirement accounts. One way is to primarily contribute to pretax 401k during working years. After retiring, begin converting this at a very low tax rate. You can convert money in a traditional IRA whenever you want to be Roth. You just pay your marginal tax rate which.... for an early retiree might be 0%. Then after 5 years - you now have a chunk of principle that has become Roth principle - and can be withdrawn whenever. Let's imagine you retire at 40 with 100k in your 401k (pretax). For 5 years, you convert $20k (assuming married). Because we get $20k between exemptions/deduction it means you pay $0 taxes every year while converting $20k of your pretax IRA to Roth. Or if you have kids, even more. After 5 years you now can withdraw that 20k/year 100% tax free since it has become principle. This is only a good idea when you are retired early because you are able to fill up all your \"\"free\"\" income for tax conversions. When you are working you would be paying your marginal rate. But your marginal rate in retirement is... 0%. Related thread on a forum you might enjoy. This is sometimes called a Roth pipeline. Basically: assuming you have no income while retired early you can fairly simply convert traditional IRA money into Roth principle. This is then accessible to you well before the 55/59 age but you get the full benefit of the pretax money. But let's pretend you don't want to do that. You need the money (and tax benefit!) now! How beneficial is it to do traditional 401ks? Imagine you live in a state/city where you are paying 25% marginal tax rate. If your expected marginal rate in your early retirement is 10-15% you are still better off putting money into your 401k and just paying the 10% penalty on an early withdrawal. In many cases, for high earners, this can actually still be a tax benefit overall. The point is this: just because you have to \"\"work\"\" to get money out of a 401k early does NOT mean you lose the tax benefits of it. In fact, current tax code really does let an early retiree have their cake and eat it too when it comes to the Roth/traditional 401k/IRA question. Are you limited to a generic taxable brokerage account? Currently, a huge perk for those with small incomes is that long term capital gains are taxed based on your current federal tax bracket. If your federal marginal rate is 15% or less you will pay nothing for long term capital gains, until this income pushes you into the 25% federal bracket. This might change, but right now means you can capture many capital gains without paying taxes on them. This is huge for early retirees who can manipulate income. You can have significant \"\"income\"\" and not pay taxes on it. You can also stack this with before mentioned Roth conversions. Convert traditional IRA money until you would begin owing any federal taxes, then capture long term capital gains until you would pay tax on those. Combined this can represent a huge amount of money per year. So littleadv mentioned HSAs but.. for an early retiree they can be ridiculously good. What this means is you can invest the maximum into your HSA for 10 years, let it grow 100% tax free, and save all your medical receipts/etc. Then in 10 years start withdrawing that money. While it sucks healthcare costs so much in America, you might as well take advantage of the tax opportunities to make it suck slightly less. There are many online communities dedicated to learning and optimizing their lives in order to achieve early retirement. The question you are asking can be answered superficially in the above, but for a comprehensive plan you might want other resources. Some you might enjoy:\"" }, { "docid": "3059", "title": "", "text": "Too long for a comment - It's great that you are saving to the match on the 401(k). Does your company offer a Roth 401(k)? If so, you might consider that, instead. From the numbers you offered, you are likely in the 15% bracket now, but will find you move to 25% in years to come. The 2014 tax rates are out and how the 15% bracket ending at $36,900. (Over $47,000 gross income). I'd rather see you pay tax at 15% now, and use pre-tax accounts as your income rises. If the Roth is available." }, { "docid": "287991", "title": "", "text": "I have about $1K in savings, and have been told that you should get into investment and saving for retirement early. I make around $200 per week, which about $150 goes into savings. That's $10k per year. The general rule of thumb is that you should have six months income as an emergency fund. So your savings should be around $5k. Build that first. Some argue that the standard should be six months of living expenses rather than income. Personally, I think that this example is exactly why it is income rather than living expenses. Six months of living expenses in this case would only be $1250, which won't pay for much. And note that living expenses can only be calculated after the fact. If your estimate of $50 a week is overly optimistic, you might not notice for months (until some large living expense pops up). Another problem with using living expenses as the measure is that if you hold down your living expenses to maximize your savings, this helps both measures. Then you hit your savings target, and your living expenses increase. So you need more savings. By contrast, if your income increases but your living expenses do not, you still need more savings but you can also save more money. Doesn't really change the basic analysis though. Either way you have an emergency savings target that you should hit before starting your retirement savings. If you save $150 per week, then you should have around $4k in savings at the beginning of next year. That's still low for an emergency fund by the income standard. So you probably shouldn't invest next year. With a living expenses standard, you could have $6250 in savings by April 15th (deadline for an IRA contribution that appears in the previous tax year). That's $5000 more than the $1250 emergency fund, so you could afford an IRA (probably a Roth) that year. If you save $7500 next year and start with $4k in savings (under the income standard for emergency savings), that would leave you with $11,500. Take $5500 of that and invest in an IRA, probably a Roth. After that, you could make a $100 deposit per week for the next year. Or just wait until the end. If you invested in an IRA the previous year because you decided use the living expenses standard, you would only have $6500 at the end of the year. If you wait until you have $6750, you could max out your IRA contribution. At that point, your excess income for each year would be larger than the maximum IRA contribution, so you could max it out until your circumstances change. If you don't actually save $3k this year and $7500 next year, don't sweat it. A college education is enough of an investment at your age. Do that first, then emergency savings, then retirement. That will flip around once you get a better paying, long term job. Then you should include retirement savings as an expected cost. So you'd pay the minimum required for your education loans and other required living expenses, then dedicate an amount for retirement savings, then build your emergency savings, then pay off your education loans (above the minimum payment). This is where it can pay to use the more aggressive living expenses standard, as that allows you to pay off your education loans faster. I would invest retirement savings in a nice, diversified index fund (or two since maintaining the correct stock/bond mix of 70%-75% stocks is less risky than investing in just bonds much less just stocks). Investing in individual stocks is something you should do with excess money that you can afford to lose. Secure your retirement first. Then stock investments are gravy if they pan out. If they don't, you're still all right. But if they do, you can make bigger decisions, e.g. buying a house. Realize that buying individual stocks is about more than just buying an app. You have to both check the fundamentals (which the app can help you do) and find other reasons to buy a stock. If you rely on an app, then you're essentially joining everyone else using that app. You'll make the same profit as everyone else, which won't be much because you all share the profit opportunities with the app's system. If you want to use someone else's system, stick with mutual funds. The app system is actually more dangerous in the long term. Early in the app's life cycle, its system can produce positive returns because a small number of people are sharing the benefits of that system. As more people adopt it though, the total possible returns stay the same. At some point, users saturate the app. All the possible returns are realized. Then users are competing with each other for returns. The per user returns will shrink as usage grows. If you have your own system, then you are competing with fewer people for the returns from it. Share the fundamental analysis, but pick your stocks based on other criteria. Fundamental analysis will tell you if a stock is overvalued. The other criteria will tell you which undervalued stock to buy." }, { "docid": "534988", "title": "", "text": "\"Given that a poor person probably has much less to invest, how can odds be in their favor? To add to Lan's great answer, if one is \"\"poor\"\" because they don't have enough income to build wealth (invest), then there are only two ways to change the situation - earn more or spend less. Neither are easy but both are usually possible. One can take on side jobs, look for a better-paying career, etc. Cutting spending can also be hard but is generally easier than adding income. In general, wealth building is more about what you do with your income than about how much you make. Obviously the more you make, the easier it is, but just about anyone can build wealth if they spend less than they make. Once your NET income is high enough that you have investible income, THEN you can start building wealth. Unfortunately many people have piles of debts to clean up before they are able to get to that point. What could a small guy with $100 do to make himself not poor anymore, right? Just having $100 is not going to make you \"\"rich\"\". There is a practical limit to how much return you can make short of high-risk activities like gambling, lottery tickets, etc. (I have actually seen this as a justification for playing the lottery, which I disagree with but is an interesting point). If you just invest $100 at 25% per year (for illustration - traditional investments typically only make 10-12% on average), in 10 years you'll have about $931. If instead you invest $100 per month at 12% annualized, in 10 years you'll have over $23,000. Not that $23,000 makes you rich - the point is that regularly saving money is much more powerful than having money to start with.\"" }, { "docid": "178001", "title": "", "text": "\"I don't think you should mix the two notions. Not starting out with at least. It takes so much money, time and expertise to invest for income that, starting out at least, you should view it as a goal, not a starting point. Save your money in the lowest cost investments you can find. If you are like me, you can't pick a stock from a bond, so put your money into a target retirement fund. Let the experts manage the risk and portfolio. Start early and save often! At only 35 you have lots of time. Perhaps you are really into finance, in which case you might somebody manage your own portfolio. Great, but for now, let an expert do the heavy lifting. You are an app developer. Your best bet to increase your income stream with via your knowledge and expertise. While you are still so young, you should use labor to make money, and then save that money for retirement. I am going to make an assumption that where you are will software development means you can become a great developer long before you can become a great financier. Play to your strengths. I am also afraid you are over estimating how comfortable you are with risk. Any \"\"investment\"\" that has the kinds of returns you are looking for is going to be wildly risky. I would say those types of opportunities are more \"\"speculation\"\" rather than \"\"investments.\"\" There isn't necessarily anything wrong with speculations, but know the difference in risk. Are you really willing to gamble your retirement?\"" }, { "docid": "184243", "title": "", "text": "A person who always saves and appropriately invests 20% of their income can expect to have a secure retirement. If you start early enough, you don't need anything close to 20%. Now, there are many good reasons to save for things other than just retirement, of course. You say that you can save 80% of your income, and you expect most people could save at least 50% without problems. That's just unrealistic for most people. Taxes, rent (or mortgage payments), utilities, food, and other such mandatory expenses take far more than 50% of your income. Most people simply don't have the ability to save (or invest) 50% of their income. Or even 25% of their income." }, { "docid": "374803", "title": "", "text": "See Started new job. Rollover previous employer 401k to new 401k, IRA or Roth IRA? for a start. Kevin, the discussion is far more complex than you might think. Say your account grows by X, (pretend it's 10 if you wish) and your tax rate is Y (25%?). If you take the initial sum, tax it at Y, but then grow it X, the result is identical to doing it in the reverse order. So $1000 to start can grow to $10,000, then after tax, $7500. Or $1000 taxed to $750, then grow to $7500. For pretax deposits, the key is that you deposit those contributions at your marginal rate, i.e. the rate you'd pay on the last $X taxed. But withdrawals start at zero. In the perfect scenario, you will save 25-28% tax on deposits, but at retirement, enjoy taxation at 0%,10%,15% for a large portion or all of the withdrawals. (Note, others can suggest rates will rise, and they may be right. My answer is based on the current tax structure.) A new earner, at 10 or 15% may be better off starting with Roth, and as they earn their way to 25% or higher slide over to pre-tax deposits. My 14 year old baby sits, and makes enough to fund a Roth, but pays no tax as she earns less than her own standard deduction for what that's worth." }, { "docid": "587727", "title": "", "text": "\"IRAs have huge tax-advantages. You'll pay taxes when you liquidate gold and silver. While volatile, \"\"the stock market has never produced a loss during any rolling 15-year period (1926-2009)\"\" [PDF]. This is perhaps the most convincing article for retirement accounts over at I Will Teach You To Be Rich. An IRA is just a container for your money and you may invest the money however you like (cash, stocks, funds, etc). A typical investment is the purchase of stocks, bonds, and/or funds containing either or both. Stocks may pay dividends and bonds pay yields. Transactions of these things trigger capital gains (or losses). This happens if you sell or if the fund manager sells pieces of the fund to buy something in its place (i.e. transactions happen without your decision and high turnover can result in huge capital gains). In a taxable account you will pay taxes on dividends and capital gains. In an IRA you don't ever pay taxes on dividends and capital gains. Over the life of the IRA (30+ years) this can be a huge ton of savings. A traditional IRA is funded with pre-tax money and you only pay tax on the withdrawal. Therefore you get more money upfront to invest and more money compounds into greater amounts faster. A Roth IRA you fund with after-tax dollars, but your withdrawals are tax free. Traditional versus Roth comparison calculator. Here are a bunch more IRA and 401k calculators. Take a look at the IRA tax savings for various amounts compared to the same money in a taxable account. Compounding over time will make you rich and there's your reason for starting young. Increases in the value of gold and silver will never touch compounded gains. So tax savings are a huge reason to stash your money in an IRA. You trade liquidity (having to wait until age 59.5) for a heck of a lot more money. Though isn't it nice to be assured that you will have money when you retire? If you aren't going to earn it then, you'll have to earn it now. If you are going to earn it now, you may as well put it in a place that earns you even more. A traditional IRA has penalties for withdrawing before retirement age. With a Roth you can withdraw the principal at anytime without penalty as long as the account has been open 5 years. A traditional IRA requires you take out a certain amount once you reach retirement. A Roth doesn't, which means you can leave money in the account to grow even more. A Roth can be passed on to a spouse after death, and after the spouse's death onto another beneficiary. more on IRA Required Minimum Distributions.\"" }, { "docid": "586626", "title": "", "text": "You mention only two debts, mortgage and student loan, but you mention $19K in savings, which suggests that you are a saver, and likely do not have other debts. You did not mention your (net) income and expenses (income statement), but since you have substantial savings, you likely live within your means (income > expenses). Since you mention $38K in retirement, we might conclude you are regularly saving for retirement (are you saving 10% toward retirement)? You did not mention any medical condition or other debts, that might require a large savings, so I would suggest having 6 months savings ($2.5K x 6 = $15K) but should your net expenses be less, you might reduce this ($2K x 6 = $12K). You do not mention any investment you might want to make, but since you did not mention any candidate investments, we can assume you have no (specific) investments you find particularly attractive. You did not mention anything you were saving to purchase that you might want to purchase. You have combined $19K + $50K = $69K savings, and $15K would be a comfortable emergency savings, leaving $54K you could use to reduce mortgage or student loan debt. The mortgage debt interest @4.5%, is higher, so paying that debt off would be like earning 4.5% guaranteed return on your money, tax-free. At your income, your marginal tax rate is low enough that the mortgage interest deduction (if you do itemize) would not reduce this return much (15% if you itemize). The student loan debt interest @2.8%, would be like earning 2.8% guaranteed return on your money, tax-free. Clearly the higher return on your 'investment' in paying off debt would be reducing your mortgage balance (over 50% higher return on investment, compared to the student loan debt). You did not mention any circumstance that might cause the student loan rate to increase, the mortgage rate to increase, nor did you mention any difficulty making both the mortgage and student loan payments, the amounts of either payment, nor the number of years remaining to pay on either. Should you need (or desire) to reduce your payments, you could choose to payoff the student loan to eliminate one payment, and thus decrease your expenses. Or you could choose to pay down the mortgage, and refinance (or refactor) the mortgage to obtain a smaller payment. Another strategy (assuming you have had your house for 5-7 years), might be to pay the mortgage down enough to refinance into a 15 year loan, and (assuming you have a good credit score) obtain a lower (3%) rate. But I am going to suggest you consider a blended approach. Combine the Dave Ramsey Debt Snowball approach with the reduce the interest rate approach. Take the $54K ($57K?) available (after reserving 6 months emergency fund), and split between both. You pay your mortgage down by $27K and your student loan debt down by $27K. Your blended return on investment is (2.8+4.5)/2 = 3.65%, and you have the following Balance Sheet: Assets: Debts: The next steps would be to, There are two great reasons for paying off the student loan debt. One is the Dave Ramsey Debt Snowball approach which is that this is the smaller debt, and thus represents a psychological win, and the other is that student loan debt has special treatment even in bankruptcy." }, { "docid": "438778", "title": "", "text": "Craig touched on it, but let me expand on the point. Deposits, by definition, are withheld at your marginal rate. And since you can choose Roth vs Traditional right till filing time, you know with certainty the rate you are at each year. Absent any other retirement income, i.e. no pension, and absent an incredibly major change to our tax code, I know your starting rate, zero. The first $10K or so per person is part of their standard deduction and exemption. For a couple, the next $18k is taxed at 10%, and so on. Let me stop here to expand this important point. This is $38,000 for the couple, and the tax on it is less than $1900. 5%. There is no 5% bracket of course. It's the first $20K with zero tax, and that first $18,000 taxed at 10%. That $38,000 takes nearly $1M in pretax accounts to offer as an annual withdrawal. The 15% bracket starts after this, and applies to the next $57K of withdrawals each year. Over $95K in gross withdrawals of pretax money, and you still aren't in the 25% bracket. This is why 100% in traditional, or 100% in Roth aren't either ideal. I continue to offer the example I consider more optimizing - using Roth for income that would otherwise be taxed at 15%, but going pretax when you hit 25%. Then at retirement, you withdraw enough traditional to just stay at 10 or 15% and Roth for the rest. It would be a shame to retire 100% Roth and realize you paid 25% but now have no income to use up those lower brackets. Oddly, time value of money isn't part of my analysis. It makes no difference. And note, the exact numbers do change a bit each year for inflation. There's a also a good chance the exemptions goes away in favor of a huge increased standard deduction." }, { "docid": "559556", "title": "", "text": "\"It's called disposable income for a reason. It's what's left after obligations, whatever bills you have, and saving. Saving half one's income is pretty much at one end of the spectrum, very few can afford this. The combination of high savings and low actual spending will enable you to retire very early if you wish. Saving 'only' 15% might actually be out of your comfort zone, maybe 25% will keep you happy. What remains is yours to spend on what you wish, whatever makes you happy. There was a time I joked \"\"I spent most of my money on women and beer. The rest, I wasted.\"\" Now, I don't mind travel, but it's not my passion. If traveling the world is yours, do it. Enjoy every minute of it.\"" }, { "docid": "323873", "title": "", "text": "Just to punch it in, my friend owns bars/restaurants and is a multi millionaire at the age of 29. His career choice wasn't corporate ladder, but entrepreneur. I'm investing his wealth and he is giving me a generous deal, I'm starting my own investment firm and having him as a client is the only client I need to be potentially a millionaire as well too. Don't pigeonhole yourself like everyone else does, but also know what you are capable of. Some people just aren't made to be their own boss as much as they say they could so it takes a bit of swallowing your pride and moving along to your best pathway. I could no way ever work for someone else so I swallowed my pride in a way and went my own path by saying bye to the corporate world. Some people think this is the ultimate goal, but I would relinquish potentially moving up that ladder and having that sort of prestige etc." }, { "docid": "111350", "title": "", "text": "If you want to 'offset' current (2016) income, only deductible contribution to a traditional IRA does that. You can make nondeductible contributions to a trad IRA, and there are cases where that makes sense for the future and cases where it doesn't, but it doesn't give you a deduction now. Similarly a Roth IRA has possible advantages and disadvantages, but it does not have a deduction now. Currently he maximum is $5500 per person ($6500 if over age 50, but you aren't) which with two accounts (barely) covers your $10k. To be eligible to make this deductible traditional contribution, you must have earned income (employment or self-employment, but NOT the distribution from another IRA) at least the amount you want to contribute NOT have combined income (specifically MAGI, Modified Adjusted Gross Income) exceeding the phaseout limit (starts at $96,000 for married-joint) IF you were covered during the year (either you or your spouse) by an employer retirement plan (look at box 13 on your W-2's). With whom. Pretty much any bank, brokerage, or mutual fund family can handle IRAs. (To be technical, the bank's holding company will have an investment arm -- to you it will usually look like one operation with one name and logo, one office, one customer service department, one website etc, but the investment part must be legally separate from the insured banking part so you may notice a different name on your legal and tax forms.) If you are satisified with the custodian of the inherited IRA you already have, you might just stay with them -- they may not need as much paperwork, you don't need to meet and get comfortable with new people, you don't need to learn a new website. But if they sold you an annuity at your age -- as opposed to you inheriting an already annuitized IRA -- I'd want a lot of details before trusting they are acting in your best interests; most annuities sold to IRA holders are poor deals. In what. Since you want only moderate risk at least to start, and also since you are starting with a relatively small amount where minimum investments, expenses and fees can make more of an impact on your results, I would go with one or a few broad (= lower risk) index (= lower cost) fund(s). Every major fund familly also offers at least a few 'balanced' funds which give you a mixture of stocks and bonds, and sometimes some 'alternatives', in one fund. Remember this is not committing you forever; any reasonable custodian will allow you to move or spread to more-adventurous (but not wild and crazy) investments, which may be better for you in future years when you have some more money in the account and some more time to ponder your goals and options and comfort level." } ]

[ { "docid": "332373", "title": "", "text": "As others have shown, if you assume that you can get 6% and you invest 15% of a reasonable US salary then you can hit 1 million by the time you retire. If you invest in property in a market like the UK (where I come from...) then insane house price inflation will do it for you as well. In 1968 my parents bought a house for £8000. They had a mortgage on it for about 75% of the value. They don't live there but that house is now valued at about £750,000. Okay, that's close to 60 years, but with a 55 year working life that's not so unreasonable. If you assume the property market (or the shares market) can go on rising forever... then invest in as much property as you can with your 15% as mortgage payments... and watch the million roll in. Of course, you've also got rent on your property portfolio as well in the intervening years. However, take the long view. Inflation will hit what a million is worth. In 1968, a million was a ridiculously huge amount of money. Now it's 'Pah, so what, real rich people have billions'. You'll get your million and it will not be enough to retire comfortably on! In 1968 my parents salaries as skilled people were about £2000 a year... equivalent jobs now pay closer to £50,000... 25x salary inflation in the time. Do that again, skilled professional salary in 60 years of £125000 a year... so your million is actually 4 years salary. Not being relentlessly negative... just suggesting that a financial target like 'own a million (dollars)' isn't a good strategy. 'Own something that yields a decent amount of money' is a better one." } ]

[ { "docid": "439249", "title": "", "text": "\"With no match, the traditional 401(k) for someone otherwise in the 15% bracket makes little sense. I'd suggest contributing just enough if you were in the 25% bracket to be in the taxable 15% but no more. Use a Roth IRA if you are saving more than that. I'm adding this based on OP's statement that the fees on the 401(k) range .8-1.4%. I wrote an article Are you 401(k)o’ed? in which I discuss how fees of this range negate the benefit of the mantra \"\"save at 25% to withdraw at 15%\"\" and if one were in the 15% bracket to start, this level off fee will cost you money in no time at all. The people advising you to max out the 401(k) first, given the rest of your situation and that of the account, are misguided. I'd given them the benefit of the doubt and assume they don't have all the details. And with all due respect to the other posters here, everyone of them a bright, valued colleague, your answers should be addressed to the OP's exact situation. 15% bracket, no match, high fees. I suspect some of answers will change on reviewing this.\"" }, { "docid": "315834", "title": "", "text": "Gail Vaz-Oxlade has a budget calculator here that shows how much of your monthly net income should be allocated where. She recommends 35% for housing, 15% for transportation, 25% for life, 15% for debt repayment, and 10% for savings. Some people spend more then they make and her budget sheet helps get things under control for those people. For someone like yourself who seems to have things under control, this budget sheet can be a guideline for you. Play with the percentages if you like, and keep your spending under 100%." }, { "docid": "438778", "title": "", "text": "Craig touched on it, but let me expand on the point. Deposits, by definition, are withheld at your marginal rate. And since you can choose Roth vs Traditional right till filing time, you know with certainty the rate you are at each year. Absent any other retirement income, i.e. no pension, and absent an incredibly major change to our tax code, I know your starting rate, zero. The first $10K or so per person is part of their standard deduction and exemption. For a couple, the next $18k is taxed at 10%, and so on. Let me stop here to expand this important point. This is $38,000 for the couple, and the tax on it is less than $1900. 5%. There is no 5% bracket of course. It's the first $20K with zero tax, and that first $18,000 taxed at 10%. That $38,000 takes nearly $1M in pretax accounts to offer as an annual withdrawal. The 15% bracket starts after this, and applies to the next $57K of withdrawals each year. Over $95K in gross withdrawals of pretax money, and you still aren't in the 25% bracket. This is why 100% in traditional, or 100% in Roth aren't either ideal. I continue to offer the example I consider more optimizing - using Roth for income that would otherwise be taxed at 15%, but going pretax when you hit 25%. Then at retirement, you withdraw enough traditional to just stay at 10 or 15% and Roth for the rest. It would be a shame to retire 100% Roth and realize you paid 25% but now have no income to use up those lower brackets. Oddly, time value of money isn't part of my analysis. It makes no difference. And note, the exact numbers do change a bit each year for inflation. There's a also a good chance the exemptions goes away in favor of a huge increased standard deduction." }, { "docid": "351926", "title": "", "text": "Keep in mind your household income is in the top 20%, which does not translate to wealth. Given a healthy income, and no debt, other then a small house payment, you probably have a decent amount of free cash flow. This could easily be used to buy a car on time… which a lot of people do. Congratulations on being different. Having said that, living as you do, you will likely be wealthier than your income suggests. If you invested the amount you saved on car payments for an average car you can become a muli-millionaire. Doing that alone can put you in the top 10% of the wealthiest in this nation. Keep in mind 76% of Americans live paycheck-to-paycheck, so there is a sizable portion of the population that make more than you do, yet one costly emergency can cause them to spiral into significant financial difficulty. News flash: Emergencies happen. If I am not being clear, you are living wisely! I would recommend reading The Millionaire Next Door and The Millionaire Mind. You will understand that not following the whims of advertisers is good for your bottom line and that it is good to be different from the general population. One of my favorite stories from the author is these yuppies hires the author to find them rich people to sell their products. The author gets the rich people by offering them cash, albeit a relatively small amount considering their wealth (about $200) and lunch. The yuppies complain that the guys don’t “look rich” as there are no fancy suits or Rolex watches. One of the rich guys likes the pitch so much in inquires on how he can buy the company. There are a lot of lessons in that short anecdote." }, { "docid": "554833", "title": "", "text": "Pete, 25 years of inflation looks like 100% to me with back of napkin math. $220K will feel like $110K. In today's dollars, can you live on $110K? (Plus whatever Social Security you'll get)? My concern from what you wrote, if I'm reading it correctly, is that you have this great income, but relatively low savings until now. From the recent question Building financial independence I offered a guide to savings as it compares to income. Even shifted 5 years for a later start, and scaled for a 70-75% replacement ratio, you should be at 2X (or $440K) by now. That's not a criticism, but an observation that you've been spending at a nice clip so far. The result is less saving, of course, but also a need for a higher replacement ratio. Last, a 10% return for the next 25 years may be optimistic. I'm not forecasting doom or gloom, just a more reasonable rate of return, and wouldn't plan to see higher than 7-8% for purposes of planning. If I am wrong, (and if so, we can both laugh all the way to the bank) you can always scale back savings in 10-15 years. Or retire earlier. Note: Pete's question asks about a 40 year old working till 65, but the comment below has him 48 and planning to work until 62. 14 years of $45K deposits total less than $700K. Even at 10%, it wouldn't grow to much more than $2M, let alone $5M." }, { "docid": "81343", "title": "", "text": "\"I disagree with the selected answer. There's no one rule of thumb and certainly not simple ones like \"\"20 cents of every dollar if you're 35\"\". You've made a good start by making a budget of your expected expenses. If you read the Mr. Money Mustache blogpost titled The Shockingly Simple Math Behind Early Retirement, you will understand that it is usually a mistake to think of your expenses as a fixed percentage of your income. In most cases, it makes more sense to keep your expenses as low as possible, regardless of your actual income. In the financial independence community, it is a common principle that one typically needs 25-30 times one's annual spending to have enough money to sustain oneself forever off the investment returns that those savings generate (this is based on the assumption of a 7% average annual return, 4% after inflation). So the real answer to your question is this: UPDATE Keats brought to my attention that this formula doesn't work that well when the savings rates are low (20% range). This is because it assumes that money you save earns no returns for the entire period that you are saving. This is obviously not true; investment returns should also count toward your 25-times annual spending goal. For that reason, it's probably better to refer to the blog post that I linked to in the answer above for precise calculations. That's where I got the \"\"37 years at 20% savings rate\"\" figure from. Depending on how large and small x and y are, you could have enough saved up to retire in 7 years (at a 75% savings rate), 17 years (at a 50% savings rate), or 37 years! (at the suggested 20% savings rate for 35-year olds). As you go through life, your expenses may increase (eg. starting a family, starting a new business, unexpected health event etc) or decrease (kid wins full scholarship to college). So could your income. However, in general, you should negotiate the highest salary possible (if you are salaried), use the 25x rule, and consider your life and career goals to decide how much you want to save. And stop thinking of expenses as a percentage of income.\"" }, { "docid": "52080", "title": "", "text": "\"This may be more of a comment than an answer, but it's too long for a comment. Perhaps the Stackexchange Gods will forgive my impudence. That said: Even with the tax penalties, it can be to your advantage to put money into a \"\"retirement\"\" account and withdraw it before retirement. The trick is: Is the amount of the tax penalty more than the benefit of untaxed compound growth? For example, just to make up some numbers: Suppose you have $1000 of gross income to invest. You are considering whether to invest in an ordinary, non-tax favored account, or a classic IRA. Either way you will get 10% returns. Your tax rate, both when you put the money in and when you take it out, is 15%. There is a 10% tax penalty for early withdrawal. With an ordinary account you will pay 15% tax off the top, so you are only investing $850. Then each year 15% of your returns are paid in taxes, so your net return is 8.5%. But when you withdraw the money there are no additional taxes. With an IRA you do not pay any taxes up front, so you can invest the entire $1000. You collect 10% each year with no taxes. When you withdraw, you pay 15% plus the 10% penalty equals 25%. So after 5 years, the ordinary account would yield $850 x 1.085^5 = $1504. The IRA would yield $1000 x 1.1^5 x 0.75 = $1208. The tax penalty hurts. You are better to use the ordinary account. But if you could leave your money in for 25 years, then the ordinary account would yield $850 x 1.085^25 = $7687. The IRA would yield $1000 x 1.1^25 x 0.75 = $8126. The IRA, even with the tax penalty, is better. Of course my numbers are just made up. What your tax bracket is, what returns you get, and how long you think you might leave the money in the investment, all vary.\"" }, { "docid": "286017", "title": "", "text": "You don't start out buying a shopping mall, you have to work up to it. You can start with any amount and work up to a larger amount. For me, I saved 30% of my salary(net), investing in stocks for 8 years. It was tough to live on less, but I had a goal to buy passive income. I put down this money to buy 3 houses, putting 35% down and maintaining enough cash to make 5 years of payments. I rented out the houses making a cap of 15%. The cap is the net payment per year / cost of the property, where the net accounts for taxes and repairs. I did not spend any of the profits, but I did start saving less salary. After 5 years of appreciation, mortgage payments and rental profit, I sold one house to get a loan for a convenience store. Buildings go on the market all the time, it takes 14 years to directly recoup an investment at a 7% cap, which is the average for a commercial property sale. Many people cash out for this reason, it's slow, but steady growth, though the earnings on property appreciation is a nice bonus. Owning real estate is a long term game, after a long time of earning, you can reinvest, but it comes with the risk of bad or no tenants. You can start both slower and smaller, just make sure you're picking up assets, not liabilities. Like investing in cars is generally bad unless you are sure it will appreciate." }, { "docid": "260677", "title": "", "text": "Hopefully this $1000 is just a start, and not the last investment you will ever make. Assuming that, there are a couple of big questions to consider: One: What are you saving for? Are you thinking that this is for retirement 40 or 50 years from now, or something much sooner, like buying a car or a house? You didn't say where you live. In the U.S., if you put money into an IRA or a 401k or some other account that the government classes as a retirement account, you don't pay taxes on the profits from the investment, only on the original principal. If you leave the money invested for a long period of time, the profits can be many times the original investment, so this makes a huge difference. Like suppose that you pay 15% of your income in state and local taxes. And suppose you invest your $1000 in something that gives a 7% annual return and leave it there for 40 years. (Of course I'm just making up numbers for an example, but I think these are in a plausible range. And I'm ignoring the difference between regular income tax and capital gains tax, etc etc. It doesn't change the point.) If you put the money in a classic IRA, you pay 0% taxes the year you open the account, so you have your full $1000, figure that compound interest for 40 years, you'll end up with -- crunch crunch crunch the numbers -- $14,974. Then you pay 15% when you take it leaving you with $12,728. (The end result with a Roth IRA is exactly the same. Feel free to crunch those numbers.) But now suppose you invest in a no-retirement account so you have to pay taxes every year. Your original investment is only $850 because you have to pay tax on that, and your effective return is only 5.95% because you have to pay 15% of the 7%. So after 40 years you have -- crunch crunch -- $10,093. Quite a difference. But if you put money in a retirement account and then take it out before you retire, you pay substantial penalties. I think it's 20%. If you plan to take the money out after a year or two, that would really hurt. Two: How much risk are you willing to take? The reality of investment is that, almost always, the more risk you take, the bigger the potential returns, and vice versa. Investments that are very safe tend to have very low returns. As you're young, if you're saving for retirement, you can probably afford a fairly high amount of risk. If you lose a lot of money this year, odds are you'll get it back over the next few years, or at least be able to put more money into investments to make up for it. If you're 64 and planning to retire next year, you want to take very low-risk investments. In general, investing in government bonds is very safe but has very low returns. Corporate bonds are less safe but offer higher returns. Stocks are a little more. Of course different companies have different levels of risk: new start-ups tend to be very risky, but can give huge returns. Commodities are much higher risk. Buying on margin or selling short are ways to really leverage your money, but you could end up losing more than you invested. Mutual funds are a relatively safe way to invest in stocks and bonds because they spread your risk over many companies. Three: How much effort are you willing to put into managing your investments? How much do you know about the stock market and the commodities market and international finance and so on, and how much are you willing to learn? If your answer is that you know a lot about these things or are willing to dive in and learn a lot, that you can invest in individual stocks, bonds, commodities, etc. If your answer is that you really don't know much about all this, then it makes a lot of sense to just put your money into a mutual fund and let the people who manage the fund do all the work." }, { "docid": "67625", "title": "", "text": "It appears your company is offering roughly a 25% discount on its shares. I start there as a basis to give you a perspective on what the 30% matching offer means to you in terms of value. Since you are asking for things to consider not whether to do it, below are a few considerations (there may be others) in general you should think about your sources of income. if this company is your only source of income, it is more prudent to make your investment in their shares a smaller portion of your overall investment/savings strategy. what is the holding period for the shares you purchase. some companies institute a holding period or hold duration which restricts when you can sell the shares. Generally, the shorter the duration period the less risk there is for you. So if you can buy the shares and immediately sell the shares that represents the least amount of relative risk. what are the tax implications for shares offered at such a discount. this may be something you will need to consult a tax adviser to get a better understanding. your company should also be able to provide a reasonable interpretation of the tax consequences for the offering as well. is the stock you are buying liquid. liquid, in this case, is just a fancy term for asking how many shares trade in a public market daily. if it is a very liquid stock you can have some confidence that you may be able to sell out of your shares when you need. personally, i would review the company's financial statements and public statements to investors to get a better understanding of their competitive positioning, market size and prospects for profitability and growth. given you are a novice at this it may be good idea to solicit the opinion of your colleagues at work and others who have insight on the financial performance of the company. you should consider other investment options as well. since this seems to be your first foray into investing you should consider diversifying your savings into a few investments areas (such as big market indices which typically should be less volatile). last, there is always the chance that your company could fail. Companies like Enron, Lehman Brothers and many others that were much smaller than those two examples have failed in the past. only you can gauge your tolerance for risk. As a young investor, the best place to start is to use index funds which track a broader universe of stocks or bonds as the first step in building an investment portfolio. once you own a good set of index funds you can diversify with smaller investments." }, { "docid": "109982", "title": "", "text": "Something that's come up in comments and been alluded to in answers, but not explicit as far as I can tell: Even if your marginal tax rate now were equal to your marginal tax rate in retirement, or even lower, a traditional IRA may have advantages. That's because it's your effective tax rate that matters on withdrawls. (Based on TY 2014, single person, but applies at higher numbers for other arrangements): You pay 0 taxes on the first $6200 of income, and then pay 10% on the next $9075, then 15% on $27825, then 25% on the total amount over that up to $89530, etc. As such, even if your marginal rate is 25% (say you earn $80k), your effective rate is much less: for example, $80k income, you pay taxes on $73800. That ends up being $14,600, for an effective rate in total of 17.9%. Let's say you had the same salary, $80k, from 20 to 65, and for 45 years saved up 10k a year, plus earned enough returns to pay you out $80k a year in retirement. In a Roth, you pay 25% on all $10k. In a traditional, you save that $2500 a year (because it comes off the top, the amount over $36900), and then pay 17.9% during retirement (your effective tax rate, because it's the amount in total that matters). So for Roth you had 7500*(returns), while for Traditional the correct amount isn't 10k*(returns)*0.75, but 10k*(returns)*0.821. You make the difference between .75 and .82 back even with the identical income. [Of course, if your $10k would take you down a marginal bracket, then it also has an 'effective' tax rate of something between the two rates.] Thus, Roth makes sense if you expect your effective tax rate to be higher in retirement than it is now. This is very possible, still, because for people like me with a mortgage, high property taxes, two kids, and student loans, my marginal tax rate is pretty low - even with a reasonably nice salary I still pay 15% on the stuff that's heading into my IRA. (Sadly, my employer has only a traditional 401k, but they also contribute to it without requiring a match so I won't complain too much.) Since I expect my eventual tax rate to be in that 18-20% at a minimum, I'd benefit from a Roth IRA right now. This matters more for people in the middle brackets - earning high 5 figure salaries as individuals or low 6 figure as a couple - because the big difference is relevant when a large percentage of your income is in the 15% and below brackets. If you're earning $200k, then so much of your income is taxed at 28-33% it doesn't make nearly as much of a difference, and odds are you can play various tricks when you're retiring to avoid having as high of a tax rate." }, { "docid": "3059", "title": "", "text": "Too long for a comment - It's great that you are saving to the match on the 401(k). Does your company offer a Roth 401(k)? If so, you might consider that, instead. From the numbers you offered, you are likely in the 15% bracket now, but will find you move to 25% in years to come. The 2014 tax rates are out and how the 15% bracket ending at $36,900. (Over $47,000 gross income). I'd rather see you pay tax at 15% now, and use pre-tax accounts as your income rises. If the Roth is available." }, { "docid": "475397", "title": "", "text": "There is no advantage to using one type of account or the other if you are in the same tax bracket at retirement that you are in during your working years. However, for tax planning reasons, it is good to have some money in both a Roth and a traditional IRA plan. JoeTaxpayer has often advocated a good rule of thumb to use a Roth when your tax bracket is 15% or lower, and use a traditional account when in the 25% bracket or above. The reason for this rule of thumb is that you are less likely to be in the higher tax bracket when you are living off retirement savings unless you put away an awful lot of money between now and then. If you are making enough money to be paying a 25% marginal rate on some of the money you would be putting away for retirement, then by all means, put all of that money in a traditional 401k. If after contributing that portion of your savings taxed at the higher rate, you still have money to put away for retirement, put the rest in a Roth and pay the 15% taxes on it. When you are younger, it is likely that you are making less than you will a few years hence, and it is also likely that a larger portion of your income will be paying tax deductible interest on a mortgage. If those are true for you, then by all means, use the Roth. That was true of me when I was single and just getting started. When you do finally retire, it is possible that the tax brackets will be increased to match inflation, and if so, then there is no benefit to having tax free money at retirement vs. paying taxes on deferred accounts, but there is also usually more flexibility in when to spend money. You may find that you have a year where you have to spend a lot, so it is good to be able to pull money out without it increasing your marginal rate for that year, and other years where you spend relatively smaller amounts, and you can withdraw taxable money and pay a lower rate on that money. No one knows what the tax code will look like in 40 years, but having some money in each type of account will give you flexibility to minimize your tax bill at retirement." }, { "docid": "223872", "title": "", "text": "Lets imagine two scenarios: 1) You make 10.4k (40% of total income) yearly contributions to a savings account that earns 1% interest for 10 years. In this scenario, you put in 104k and earned 5.89k in interest, for a total of 109.9k. 2) You make the same 10.4k yearly contribution to an index fund that earns 7% on average for 10 years. In this scenario you put in the same 104k, but earned 49.7k in interest*, for a total of 153.7k. The main advantage is option 1) has more liquidity -- you can get the money out faster. Option 2) requires time to divest any stocks / bonds. So you need enough savings to get you through that divestment period. Imagine another two scenarios where you stop earning income: 1-b) You stop working and have only your 109.9k principal amount in a 1% savings account. If you withdraw 15.6k yearly for your current cost of living, you will run through your savings in 7 years. 2-b) You stop working and have only 20k (2 years of savings) in savings that earns 1% with 153.7k in stocks that earns 7%. If you withdraw your cost of living currently at 15.6k, you will run through your investments in 15 years and your savings in 2 years, for a total of 17 years. The two years of income in savings is extremely generous for how long it starts the divestment process. In summary, invest your money. It wasn't specified what currency we are talking about, but you can easily find access to an investment company no matter where you are in the world. Keep a small amount for a rainy day." }, { "docid": "86304", "title": "", "text": "\"Your question is very broad. Whole books can and have been written on this topic. The right place to start is for you and your wife to sit down together and figure out your goals. Where do you want to be in 5 years, 25 years, 50 years? To quote Yogi Berra \"\"If you don't know where you are going, you'll end up someplace else.\"\" Let's go backwards. 50 Years I'm guessing the answer is \"\"retired, living comfortably and not having to worry about money\"\". You say you work an unskilled government job. Does that job have a pension program? How about other retirement savings options? Will the pension be enough or do you need to start putting money into the other retirement savings options? Career wise, do you want to be working as in unskilled government jobs until you retire, or do you want to retire from something else? If so, how do you get there? Your goals here will affect both your 25 year plan and your 5 year plan. Finally, as you plan for death, which will happen eventually. What do you want to leave for your children? Likely the pension will not be transferred to your children, so if you want to leave them something, you need to start planning ahead. 25 Years At this stage in your life, you are likely talking, college for the children and possibly your wife back at work (could happen much earlier than this, e.g., when the kids are all in school). What do you want for your children in college? Do you want them to have the opportunity to go without having to take on debt? What savings options are there for your children's college? Also, likely with all your children out of the house at college, what do you and your wife want to do? Travel? Give to charity? Own your own home? 5 Years You mention having children and your wife staying at home with them. Can your family live on just your income? Can you do that and still achieve your 50 and 25 year goals? If not, further education or training on your part may be needed. Are you in debt? Would you like to be out of debt in the next 5-10 years? I know I've raised more questions than answers. This is due mostly to the nature of the question you've asked. It is very personal, and I don't know you. What I find most useful is to look at where I want to be in the near, mid and long term and then start to build a plan for how I get there. If you have older friends or family who are where you want to be when you reach their age, talk to them. Ask them how they got there. Also, there are tons of resources out there to help you. I won't suggest any specific books, but look around at the local library or look online. Read reviews of personal finance books. Read many and see how they can give you the advice you need to reach your specific goals. Good luck!\"" }, { "docid": "181179", "title": "", "text": "\"This is the best tl;dr I could make, [original](https://www.nytimes.com/2017/09/16/business/economy/bump-in-us-incomes-doesnt-erase-50-years-of-pain.html) reduced by 91%. (I'm a bot) ***** &gt; Starting with 1957, the team looked at actual earnings during the prime working years - the ages of 25 to 55. &gt; The result was that a 25-year-old man who entered the work force in 1967 and worked for the next three decades earned as much as $250,000 more, after taking inflation into account, than a man who had the same type of career but was 15 years younger. &gt; Most younger men ended up with less because they started out earning less than their counterparts in previous years, and saw little growth in their early years. ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/70q0gc/bump_in_us_incomes_doesnt_erase_50_years_of_pain/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ \"\"Version 1.65, ~211729 tl;drs so far.\"\") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr \"\"PM's and comments are monitored, constructive feedback is welcome.\"\") | *Top* *keywords*: **work**^#1 **income**^#2 **men**^#3 **earned**^#4 **more**^#5\"" }, { "docid": "339553", "title": "", "text": "\"An investment in knowledge always pays the best interest, as Ben Franklin said. However, this is not a question I can answer for you, as it depends on the opportunities that are specifically available to you as an individual. Sometimes opportunities will knock on your door and you can take advantage, other times you have to create that door to allow opportunities to knock. Maybe you have a friend that is opening a side business, maybe there is a class you can get into at a trivial cost. What I suggest is to start investing just to get into the habit of it, not so much for the returns. Before you do, however, any financial advisor will advise you to begin with a emergency fund, worth about 3-6 months of your expenses for that time. I wanted to hit the ground running and start investing in stocks, but first things first I guess. \"\"Millionaire Next Door\"\" will help you get into a saving mindset, \"\"I will teach you to be rich\"\" is ok, plenty of other books. My advice is keep doing what you're doing, learn to start saving, and once you have obtained an emergency fund of the amount of your choosing, start looking to invest in Index Funds or ETFs through any platform that has LOW FEES!! I use Betterment, but Vanguard is good too, as they allow you to get your feet wet and it's passive. Hope this helps.\"" }, { "docid": "68872", "title": "", "text": "\"Note - this is a complicated topic. I've read the rules multiple times and I'm still not sure I understand them perfectly. So please take this with a pinch of salt and read the rules for yourself. The time(s) at which a test is done against the LTA are known as a \"\"Benefit Crystallization Event\"\" (BCE). There are 13 of these (!) - they're numbered 1-9 with the addition of some extras numbered 5A-D. However, the most important ones for those with defined contribution pensions are: Broadly, the idea is that a BCE occurs when you start taking money out of your pension, and when you reach age 75. Each time one happens, the amount you are taking out (\"\"crystallizing\"\") gets compared against the LTA and a certain percentage of your LTA gets designated as being used. Crystallising doesn't necessarily mean you actually receive the money immediately, just that some of your money is switched into a mode where you can start receiving it in different ways. The rules are designed to avoid double counting, so broadly anything that was taken off your LTA won't be taken off a second time. The cumulative use of your LTA is tracked as a percentage rather than an absolute amount, to take account of any changes in the LTA between the different times you crystallise money. For example if you crystallise £100K when the LTA is £1mn, that's 10% of your LTA gone. If later on the LTA has risen to £1.1mn and you take out £110K, that's another 10%. Once you hit 100%, you start paying a LTA charge on any excess. The really simple path here is if you just get an annuity with your entire pot, before hitting age 75 (and you don't make any further pension contributions after). Then only BCE 4 applies: your pension pot, all of which is being used to buy the annuity, is compared with the LTA. After this point your entire pension pot is considered to be crystallized, so no more BCEs will apply - the tests at age 75 only apply if you still have money that you haven't taken out or used to buy an annuity. The annuity payments themselves will be subject to income tax at your normal rate at the time you receive them, i.e. 0%, 20%, 40% or 45% depending on how much other income you have. In reality most people would want to take 25% of their pot as a lump sum at the same time as buying an annuity, given that it's tax-free if you're under the LTA. At this point BCE 6 applies in addition to BCE 4, but again the overall effect of the test is pretty simple, look at the total pension pot (lump sum + cost of annuity), and if it's under the LTA you're fine. Again, at this point no more BCEs will apply as all the money is considered to have been fully distributed. If you only use part of the money for an annuity/lump sum, then only that part of the money is compared against the LTA, and the rest stays in your pension and will be compared later. The 25% limit for a tax-free lump sum applies to the total you are taking out at that point: if you have £200K and are taking out £100K, you can take out £25K as a tax-free lump sum and use £75K for the annuity. The other £100K stays in your pension. Many people see annuity rates as very low and will want to take on more risk (and reward) by using \"\"Drawdown\"\" for at least part of their pension. Essentially, you can designate part of your pension for drawdown, and at that point BCE 1 applies to the money you designate. Once designated, you can start drawing the money out as income, which will be taxed at your normal income tax rate at the time you receive it. Again, you can take 25% as a lump sum at this point which will be subject to BCE 6. There's also an alternative route where you put everything into \"\"flexi-access drawdown\"\" without taking any lump sum immediately, and then as you actually withdraw income, 25% is tax-free and the rest is taxed as income. The overall effect is the same, but it gives you more control over when you get the tax-free bit. However, because with drawdown you can actually leave the money in your pension and growing tax-free, there's a further test against the LTA at age 75 under BCE 5A. To avoid double-counting (\"\"prevention of overlap\"\"), the amount left in the drawdown fund at that point is reduced by whatever was previously tested against BCE 1. So if you put £150K into drawdown initially, and it's grown to £200K by age 75, then another £50K will crystallise under BCE 5A. I think that if you put £150K into drawdown initially and it grows by £50K, but you take that out as income so that only £150K (or less) remains at age 75, then the amount crystallising under BCE 5A is nil. Also, when money is in drawdown, you can choose to use it to buy an annuity. BCE 4 is applied at this point (if before age 75), but as with BCE 5A, this is reduced by anything that was previously crystallised under BCE 1. If you only use some of it to buy an annuity, the reduction is pro-rataed, e.g. if you started out with £150K moved into drawdown, and later it has grown to £200K and you use £100K to buy an annuity, then the reduction is £75K so £25K is considered to have crystallised under BCE 4. Once you reach age 75, as well as any money that's still in drawdown, anything you haven't yet crystallised at all gets tested against the LTA under BCE 5B. Broadly, once you go over the LTA, the charges are simple: There's never any explanation given for these two rates, but I think it's all based on trying to at least cancel out the benefit you got from using your pension, on the assumption that: So with the 25% charge + 20% income tax, if you take out £100, you'll end up with £75 gross income, so £60 net income - just the same as if you'd originally paid 40% tax. (This ignores the effect of investment growth, but if you would have saved the £60 in an ISA, the end result is the same: if you had growth of say 50% over the time the money was in your pension, it'll be the same effect if you had £100 growing to £150 and now received 60% of it, or if you had £60 growing to £90 untaxed in an ISA.) The 55% lump sum charge is in case you are paying 40% tax when you take it out, to make sure that it's not a more attractive option than the 25%+income tax: if you have £100, either you get £45 tax free via a lump sum, or you get £75 gross and hence £45 net. I haven't covered lots of cases here: defined benefit pensions. Roughly, when you start receiving the pension, 20x the initial income from the pension is deemed to crystallise under BCE 2 and any lump sum you receive crystallises under BCE 6. In the former case, you could end up having to pay the LTA charge with money you haven't actually got yet, and you can ask the pension administrator to instead reduce your pension to pay it. However, there are lots of special cases for defined benefit pensions, mostly for historical reasons, so you should make sure you check with your pension administrator about this. if you die before age 75, at which point the LTA test is applied via either BCE 5C/5D, or BCE 7. After paying the LTA charge if any, your dependents or whoever else you leave it to gets the remainder tax-free. transferring overseas (BCE 8). \"\"scheme pensions\"\" under BCE 2 and BCE 3 (I think these are relatively uncommon) some corner cases covered by regulations (BCE 9)\"" }, { "docid": "111350", "title": "", "text": "If you want to 'offset' current (2016) income, only deductible contribution to a traditional IRA does that. You can make nondeductible contributions to a trad IRA, and there are cases where that makes sense for the future and cases where it doesn't, but it doesn't give you a deduction now. Similarly a Roth IRA has possible advantages and disadvantages, but it does not have a deduction now. Currently he maximum is $5500 per person ($6500 if over age 50, but you aren't) which with two accounts (barely) covers your $10k. To be eligible to make this deductible traditional contribution, you must have earned income (employment or self-employment, but NOT the distribution from another IRA) at least the amount you want to contribute NOT have combined income (specifically MAGI, Modified Adjusted Gross Income) exceeding the phaseout limit (starts at $96,000 for married-joint) IF you were covered during the year (either you or your spouse) by an employer retirement plan (look at box 13 on your W-2's). With whom. Pretty much any bank, brokerage, or mutual fund family can handle IRAs. (To be technical, the bank's holding company will have an investment arm -- to you it will usually look like one operation with one name and logo, one office, one customer service department, one website etc, but the investment part must be legally separate from the insured banking part so you may notice a different name on your legal and tax forms.) If you are satisified with the custodian of the inherited IRA you already have, you might just stay with them -- they may not need as much paperwork, you don't need to meet and get comfortable with new people, you don't need to learn a new website. But if they sold you an annuity at your age -- as opposed to you inheriting an already annuitized IRA -- I'd want a lot of details before trusting they are acting in your best interests; most annuities sold to IRA holders are poor deals. In what. Since you want only moderate risk at least to start, and also since you are starting with a relatively small amount where minimum investments, expenses and fees can make more of an impact on your results, I would go with one or a few broad (= lower risk) index (= lower cost) fund(s). Every major fund familly also offers at least a few 'balanced' funds which give you a mixture of stocks and bonds, and sometimes some 'alternatives', in one fund. Remember this is not committing you forever; any reasonable custodian will allow you to move or spread to more-adventurous (but not wild and crazy) investments, which may be better for you in future years when you have some more money in the account and some more time to ponder your goals and options and comfort level." } ]

[ { "docid": "220127", "title": "", "text": "\"Other people have already demonstrated the effect of compound interest to the question. I'd like to add a totally different perspective. Note that the article says if you can follow this simple recipe throughout your working career, you will almost certainly beat out most professional investors [...] you'll likely accumulate enough savings to retire comfortably. (the latter point may be the more practical mark than the somewhat arbitrary million (rupees? dollars?) My point here is that the group of people who do put away a substantial fraction of their (lower) early wages and keep them invested for decades show (at least) two traits that will make a very substantial difference to the average (western) person. They may be correlated, though: people who are not tempted or able to resist the temptation to spend (almost) their whole income may be more likely to not touch their savings or investments. (In my country, people like to see themselves as \"\"world champions in savings\"\", but if you talk to people you find that many people talk about saving for the next holidays [as opposed to saving for retirement].) Also, if you get going this way long before you are able to retire you reach a relative level of independence that can give you a much better position in wage negotiations as you do not need to take the first badly paid job that comes along in order to survive but can afford to wait and look and negotiate for a better job. Psychologically, it also seems to be easier to consistently keep the increase in your spending below the increase of your income than to reduce spending once you overspent. There are studies around that find homeowners on average substantially more wealthy than people who keep living in rental appartments (I'm mostly talking Germany, were renting is normal and does not imply poverty - but similar findings have also been described for the US) even though someone who'd take the additional money the homeowner put into their home over the rent and invested in other ways would have yielded more value than the home. The difference is largely attributed to the fact that buying and downpaying a home enforces low spending and saving, and it is found that after some decades of downpayment homeowners often go on to spend less than their socio-economic peers who rent. The group that is described in this question is one that does not even need the mental help of enforcing the savings. In addition, if this is not about the fixed million but about reaching a level of wealth that allows you to retire: people who have practised moderate spending habits as adults for decades are typically also much better able to get along with less in retirement than others who did went with a high consumption lifestyle instead (e.g. the homeowners again). My estimate is that these effects compound in a way that is much more important than the \"\"usual\"\" compounding effect of interest - and even more if you look at interest vs. inflation, i.e. the buying power of your investment for everyday life. Note that they also cause the group in question to be more resilient in case of a market crash than the average person with about no savings (note that market crashes lead to increased risk of job loss). Slightly off topic: I do not know enough how difficult saving 50 USD out of 50 USD in Pakistan is - and thus cannot comment whether the savings effort called for in the paper is equivalent/higher/lower than what you achieve. I find that trying to keep to student life (i.e. spending that is within the means of a student) for the first professional years can help kick-starting a nest egg (European experience - again, not sure whether applicable in Pakistan).\"" } ]

[ { "docid": "418864", "title": "", "text": "\"Keep in mind, there are too many variables to address in a single post. I could (and might) write a full book on the topic. One simple way to comprehend your perceived observation. In the 25% bracket, you have $1000 of income and two choices. Net out $750, and deposit to Roth, or deposit the full $1000 to the traditional IRA or 401(k). Sufficient time passes for the investment to grow 10 fold. For what it's worth, 8% at 30 years will do that. The Roth is now worth $7500 tax free. The traditional 401(k) is worth $10000 but subject to tax. At 25%, we're at the same $7500. For those looking to invest more than a gross $18,000, the Roth flavor is an effective $24,000, as post tax, this is $18,000. I wrote a bit more on this in the whimsically titled The Density of Your IRA. This is really a top 10%er issue, as it takes quite a bit of income for the $23,000 combined IRA and 401(k) limits to be a problem. In my writing, the larger case to be made is for taking advantage of the tax rate difference between the time of deposit and withdrawal. A look at the 2016 tax rates is in order. Let's stick with 25% while working. Now, at retirement, but before social security, as that's another story, the couple has $20,600 in standard deduction and exemption, and both the 10 and 15% brackets to enjoy. Ignoring any other deductions, potential credits, etc, let's look at a gross $80,000 withdrawal. The numbers happen to work out to an average 10%, with the couple being in a marginal 15% bracket. A full 25% or $20,000 tax would be the break-even to the \"\"same bracket in/out\"\" analysis, so this produces a $12,000 benefit. This issue is often treated as if there were 2 points in time, the deposit, and the withdrawal. For most people, that may be the case. Keep in mind, current law allows a conversion to Roth any time in between. This gives an opportunity to make a deposit while in the 25% bracket, and convert in any year the marginal rate drops back to 15% for whatever reason. Last - I can't ignore the Social Security problem. Simply put, when half of your Social Security benefits plus other income exceed $25,000 ($32,000 if married filing joint) your benefits start to become taxable, until 85% of your benefits are fully taxed. This issue is worthy of multiple posts by itself. It's not a deal killer, just another point to consider. A very high income earner might be beyond these levels already, in which case the point is moot. A low income earner, not impacted at all. It's those who are in the range to navigate this that would benefit to take advantage of the scenario I presented above and spend down pre-tax accounts, while planning to use the Roths when Social Security starts. This should make it clear - it's not all or none. Those retiring with $2M in 100% pretax, or $1.5M 100% in Roth have both missed the chance to have the optimal mix.\"" }, { "docid": "109982", "title": "", "text": "Something that's come up in comments and been alluded to in answers, but not explicit as far as I can tell: Even if your marginal tax rate now were equal to your marginal tax rate in retirement, or even lower, a traditional IRA may have advantages. That's because it's your effective tax rate that matters on withdrawls. (Based on TY 2014, single person, but applies at higher numbers for other arrangements): You pay 0 taxes on the first $6200 of income, and then pay 10% on the next $9075, then 15% on $27825, then 25% on the total amount over that up to $89530, etc. As such, even if your marginal rate is 25% (say you earn $80k), your effective rate is much less: for example, $80k income, you pay taxes on $73800. That ends up being $14,600, for an effective rate in total of 17.9%. Let's say you had the same salary, $80k, from 20 to 65, and for 45 years saved up 10k a year, plus earned enough returns to pay you out $80k a year in retirement. In a Roth, you pay 25% on all $10k. In a traditional, you save that $2500 a year (because it comes off the top, the amount over $36900), and then pay 17.9% during retirement (your effective tax rate, because it's the amount in total that matters). So for Roth you had 7500*(returns), while for Traditional the correct amount isn't 10k*(returns)*0.75, but 10k*(returns)*0.821. You make the difference between .75 and .82 back even with the identical income. [Of course, if your $10k would take you down a marginal bracket, then it also has an 'effective' tax rate of something between the two rates.] Thus, Roth makes sense if you expect your effective tax rate to be higher in retirement than it is now. This is very possible, still, because for people like me with a mortgage, high property taxes, two kids, and student loans, my marginal tax rate is pretty low - even with a reasonably nice salary I still pay 15% on the stuff that's heading into my IRA. (Sadly, my employer has only a traditional 401k, but they also contribute to it without requiring a match so I won't complain too much.) Since I expect my eventual tax rate to be in that 18-20% at a minimum, I'd benefit from a Roth IRA right now. This matters more for people in the middle brackets - earning high 5 figure salaries as individuals or low 6 figure as a couple - because the big difference is relevant when a large percentage of your income is in the 15% and below brackets. If you're earning $200k, then so much of your income is taxed at 28-33% it doesn't make nearly as much of a difference, and odds are you can play various tricks when you're retiring to avoid having as high of a tax rate." }, { "docid": "438778", "title": "", "text": "Craig touched on it, but let me expand on the point. Deposits, by definition, are withheld at your marginal rate. And since you can choose Roth vs Traditional right till filing time, you know with certainty the rate you are at each year. Absent any other retirement income, i.e. no pension, and absent an incredibly major change to our tax code, I know your starting rate, zero. The first $10K or so per person is part of their standard deduction and exemption. For a couple, the next $18k is taxed at 10%, and so on. Let me stop here to expand this important point. This is $38,000 for the couple, and the tax on it is less than $1900. 5%. There is no 5% bracket of course. It's the first $20K with zero tax, and that first $18,000 taxed at 10%. That $38,000 takes nearly $1M in pretax accounts to offer as an annual withdrawal. The 15% bracket starts after this, and applies to the next $57K of withdrawals each year. Over $95K in gross withdrawals of pretax money, and you still aren't in the 25% bracket. This is why 100% in traditional, or 100% in Roth aren't either ideal. I continue to offer the example I consider more optimizing - using Roth for income that would otherwise be taxed at 15%, but going pretax when you hit 25%. Then at retirement, you withdraw enough traditional to just stay at 10 or 15% and Roth for the rest. It would be a shame to retire 100% Roth and realize you paid 25% but now have no income to use up those lower brackets. Oddly, time value of money isn't part of my analysis. It makes no difference. And note, the exact numbers do change a bit each year for inflation. There's a also a good chance the exemptions goes away in favor of a huge increased standard deduction." }, { "docid": "315834", "title": "", "text": "Gail Vaz-Oxlade has a budget calculator here that shows how much of your monthly net income should be allocated where. She recommends 35% for housing, 15% for transportation, 25% for life, 15% for debt repayment, and 10% for savings. Some people spend more then they make and her budget sheet helps get things under control for those people. For someone like yourself who seems to have things under control, this budget sheet can be a guideline for you. Play with the percentages if you like, and keep your spending under 100%." }, { "docid": "111350", "title": "", "text": "If you want to 'offset' current (2016) income, only deductible contribution to a traditional IRA does that. You can make nondeductible contributions to a trad IRA, and there are cases where that makes sense for the future and cases where it doesn't, but it doesn't give you a deduction now. Similarly a Roth IRA has possible advantages and disadvantages, but it does not have a deduction now. Currently he maximum is $5500 per person ($6500 if over age 50, but you aren't) which with two accounts (barely) covers your $10k. To be eligible to make this deductible traditional contribution, you must have earned income (employment or self-employment, but NOT the distribution from another IRA) at least the amount you want to contribute NOT have combined income (specifically MAGI, Modified Adjusted Gross Income) exceeding the phaseout limit (starts at $96,000 for married-joint) IF you were covered during the year (either you or your spouse) by an employer retirement plan (look at box 13 on your W-2's). With whom. Pretty much any bank, brokerage, or mutual fund family can handle IRAs. (To be technical, the bank's holding company will have an investment arm -- to you it will usually look like one operation with one name and logo, one office, one customer service department, one website etc, but the investment part must be legally separate from the insured banking part so you may notice a different name on your legal and tax forms.) If you are satisified with the custodian of the inherited IRA you already have, you might just stay with them -- they may not need as much paperwork, you don't need to meet and get comfortable with new people, you don't need to learn a new website. But if they sold you an annuity at your age -- as opposed to you inheriting an already annuitized IRA -- I'd want a lot of details before trusting they are acting in your best interests; most annuities sold to IRA holders are poor deals. In what. Since you want only moderate risk at least to start, and also since you are starting with a relatively small amount where minimum investments, expenses and fees can make more of an impact on your results, I would go with one or a few broad (= lower risk) index (= lower cost) fund(s). Every major fund familly also offers at least a few 'balanced' funds which give you a mixture of stocks and bonds, and sometimes some 'alternatives', in one fund. Remember this is not committing you forever; any reasonable custodian will allow you to move or spread to more-adventurous (but not wild and crazy) investments, which may be better for you in future years when you have some more money in the account and some more time to ponder your goals and options and comfort level." }, { "docid": "216365", "title": "", "text": "At 22 years old, you can afford to be invested 100% in the stock market. Like many others, I recommend that you consider low cost index funds if those are available in your 401(k) plan. Since your 401(k) contributions are usually made with each paycheck this gives you the added benefit of dollar cost averaging throughout your career. There used to be a common rule that you should put 100 minus your age as the percentage invested in the stock market and the rest in bonds, but with interest rates being so low, bonds have underperformed, so many experts now recommend 110 or even 120 minus your age for stocks percentage. My recommendation is that you wait until you are 40 and then move 25% into bonds, then increase it to 40% at 55 years old. At 65 I would jump to a 50-50 stock/bonds mix and when you start taking distributions I would move to a stable-value income portfolio. I also recommend that you roll your funds into a Vanguard IRA when you change jobs so that you take advantage of their low management fee index mutual funds (that have no fees for trading). You can pick whatever mix feels best for you, but at your age I would suggest a 50-50 mix between the S&P 500 (large cap) and the Russell 2000 (small cap). Those with quarterly rebalancing will put you a little ahead of the market with very little effort." }, { "docid": "80844", "title": "", "text": "After looking at your profile, I see your age...28. Still a baby. At your age, and given your profession, there really is no need to build investment income. You are still working and should be working for many years. If I was you, I'd be looking to do a few different things: Eliminating debt reduces risk, and also reduces the need for future income. Saving for, and purchasing a home essentially freezes rent increases. If home prices double in your area, in theory, so should rent prices. If you own a home you might see some increases in taxes and insurance rates, but they are minor in comparison. This also reduces the need for future income. Owning real estate is a great way to build residual income, however, there is a lot of risk and even if you employ a management company there is a lot more hands on work and risk. Easier then that you can build an after tax investment portfolio. You can start off with mutual funds for diversification purposes and only after you have built a sizable portfolio should (if ever) make the transition to individual stocks. Some people might suggest DRIPs, but given the rate at which you are investing I would suggest the pain of such accounts is more hassle then it is worth." }, { "docid": "287991", "title": "", "text": "I have about $1K in savings, and have been told that you should get into investment and saving for retirement early. I make around $200 per week, which about $150 goes into savings. That's $10k per year. The general rule of thumb is that you should have six months income as an emergency fund. So your savings should be around $5k. Build that first. Some argue that the standard should be six months of living expenses rather than income. Personally, I think that this example is exactly why it is income rather than living expenses. Six months of living expenses in this case would only be $1250, which won't pay for much. And note that living expenses can only be calculated after the fact. If your estimate of $50 a week is overly optimistic, you might not notice for months (until some large living expense pops up). Another problem with using living expenses as the measure is that if you hold down your living expenses to maximize your savings, this helps both measures. Then you hit your savings target, and your living expenses increase. So you need more savings. By contrast, if your income increases but your living expenses do not, you still need more savings but you can also save more money. Doesn't really change the basic analysis though. Either way you have an emergency savings target that you should hit before starting your retirement savings. If you save $150 per week, then you should have around $4k in savings at the beginning of next year. That's still low for an emergency fund by the income standard. So you probably shouldn't invest next year. With a living expenses standard, you could have $6250 in savings by April 15th (deadline for an IRA contribution that appears in the previous tax year). That's $5000 more than the $1250 emergency fund, so you could afford an IRA (probably a Roth) that year. If you save $7500 next year and start with $4k in savings (under the income standard for emergency savings), that would leave you with $11,500. Take $5500 of that and invest in an IRA, probably a Roth. After that, you could make a $100 deposit per week for the next year. Or just wait until the end. If you invested in an IRA the previous year because you decided use the living expenses standard, you would only have $6500 at the end of the year. If you wait until you have $6750, you could max out your IRA contribution. At that point, your excess income for each year would be larger than the maximum IRA contribution, so you could max it out until your circumstances change. If you don't actually save $3k this year and $7500 next year, don't sweat it. A college education is enough of an investment at your age. Do that first, then emergency savings, then retirement. That will flip around once you get a better paying, long term job. Then you should include retirement savings as an expected cost. So you'd pay the minimum required for your education loans and other required living expenses, then dedicate an amount for retirement savings, then build your emergency savings, then pay off your education loans (above the minimum payment). This is where it can pay to use the more aggressive living expenses standard, as that allows you to pay off your education loans faster. I would invest retirement savings in a nice, diversified index fund (or two since maintaining the correct stock/bond mix of 70%-75% stocks is less risky than investing in just bonds much less just stocks). Investing in individual stocks is something you should do with excess money that you can afford to lose. Secure your retirement first. Then stock investments are gravy if they pan out. If they don't, you're still all right. But if they do, you can make bigger decisions, e.g. buying a house. Realize that buying individual stocks is about more than just buying an app. You have to both check the fundamentals (which the app can help you do) and find other reasons to buy a stock. If you rely on an app, then you're essentially joining everyone else using that app. You'll make the same profit as everyone else, which won't be much because you all share the profit opportunities with the app's system. If you want to use someone else's system, stick with mutual funds. The app system is actually more dangerous in the long term. Early in the app's life cycle, its system can produce positive returns because a small number of people are sharing the benefits of that system. As more people adopt it though, the total possible returns stay the same. At some point, users saturate the app. All the possible returns are realized. Then users are competing with each other for returns. The per user returns will shrink as usage grows. If you have your own system, then you are competing with fewer people for the returns from it. Share the fundamental analysis, but pick your stocks based on other criteria. Fundamental analysis will tell you if a stock is overvalued. The other criteria will tell you which undervalued stock to buy." }, { "docid": "181179", "title": "", "text": "\"This is the best tl;dr I could make, [original](https://www.nytimes.com/2017/09/16/business/economy/bump-in-us-incomes-doesnt-erase-50-years-of-pain.html) reduced by 91%. (I'm a bot) ***** &gt; Starting with 1957, the team looked at actual earnings during the prime working years - the ages of 25 to 55. &gt; The result was that a 25-year-old man who entered the work force in 1967 and worked for the next three decades earned as much as $250,000 more, after taking inflation into account, than a man who had the same type of career but was 15 years younger. &gt; Most younger men ended up with less because they started out earning less than their counterparts in previous years, and saw little growth in their early years. ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/70q0gc/bump_in_us_incomes_doesnt_erase_50_years_of_pain/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ \"\"Version 1.65, ~211729 tl;drs so far.\"\") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr \"\"PM's and comments are monitored, constructive feedback is welcome.\"\") | *Top* *keywords*: **work**^#1 **income**^#2 **men**^#3 **earned**^#4 **more**^#5\"" }, { "docid": "561636", "title": "", "text": "You're misunderstanding the concept of retirement savings. IRA distributions are taxed, in their entirety, as ordinary income. If you withdraw before the retirement age, additional 10% penalty is added. Investment income has preferential treatment - long term capital gains and qualified dividends are taxed at lower rates than ordinary income. However, IRA contributions are tax deductible. I.e.: you don't pay taxes on the amounts contributed to the IRA when you earned the money, only when you withdraw. In the mean time, the money is growing, tax free, based on your investments. Anything inside the IRA is tax free, including dividends, distributions (from funds to your IRA, not from IRA to you), capital gains, etc. This is very powerful, when taking into account the compounding effect of reinvesting your dividends/sale proceeds without taking a chunk out for taxes. Consider you make an investment in a fund that appreciated 100% in half a year. You cash out to reinvest in something less volatile to lock the gains. In a regular account - you pay taxes when you sell, based on your brackets. In the IRA you reinvest all of your sale proceeds. That would be ~25-35% more of the gains to reinvest and continue working for you! However, if you decide to withdraw - you pay ordinary rate taxes on the whole amount. If you would invest in a single fund for 30 years in a regular account - you'd pay 20% capital gains tax (on the appreciation, not the dividends). In the IRA, if you invest in the same fund for the same period - you'll pay your ordinary income rates. However, the benefit of reinvesting dividends tax-free softens the blow somewhat, but that's much harder to quantify. Bottom line: if you want to plan for retirement - plan for retirment. Otherwise - IRA is not an investment vehicle. Also consider Roth IRA/conversions. Roth IRA has the benefit of tax free distributions at retirement. If your current tax bracket is at 20%, for example, contributing $5K to Roth IRA instead of a traditional will cost you $1K of taxes now, but will save you all the taxes during the retirement (for the distributions from the Roth IRA). It may be very much worth your while, especially if you can contribute directly to Roth IRA (there are some income limitations and phaseouts). You can withdraw contributions (but not earnings) from Roth IRA - something you cannot do with a traditional IRA." }, { "docid": "83623", "title": "", "text": "The range is fine. It's ~ 1-2X your annual income. First, and foremost - your comment on the 401(k), not knowing the fees, is a red flag to me. The difference between low cost options (say sub .25%) and the high fees (over .75%) has a huge impact to your long term savings, and on the advice I'd give regarding maximizing the deposits. At 26, you and your wife have about 20% of your income as savings. This is on the low side, in my opinion, but others suggest a year's salary by age 35 which implies you're not too far behind. Given your income, you are most likely in the 25% federal bracket. I'd like you to research your 401(k) expenses, and if they are reasonable, maximise the deposit. If your wife has no 401(k) at work, she can deposit to an IRA, pre-tax. It's wise to keep 6 months of expenses as liquid cash (or short term CDs) as an emergency fund in case of such things as a job layoff. They say to expect a month of job hunting for each $10K you make, so having even a year to find a new job isn't unheard of. One thing to consider is to simply kill the mortgage. Before suggesting this, I'd ask what your risk tolerance is? If you took $100K and put it right into the S&P, would you worry every time you heard the market was down today? Or would you happily leave it there for the next 40 years? If you prefer safety, or at least less risk, paying off the mortgage will free up the monthly payment, and let you dollar cost average into the new investments over time. You'll have the experience of seeing your money grow and learn to withstand the volatility. The car loan is a low rate, if you prefer to keep the mortgage for now, paying the car loan is still a guaranteed 3%, vs the near 0% the bank will give you." }, { "docid": "86304", "title": "", "text": "\"Your question is very broad. Whole books can and have been written on this topic. The right place to start is for you and your wife to sit down together and figure out your goals. Where do you want to be in 5 years, 25 years, 50 years? To quote Yogi Berra \"\"If you don't know where you are going, you'll end up someplace else.\"\" Let's go backwards. 50 Years I'm guessing the answer is \"\"retired, living comfortably and not having to worry about money\"\". You say you work an unskilled government job. Does that job have a pension program? How about other retirement savings options? Will the pension be enough or do you need to start putting money into the other retirement savings options? Career wise, do you want to be working as in unskilled government jobs until you retire, or do you want to retire from something else? If so, how do you get there? Your goals here will affect both your 25 year plan and your 5 year plan. Finally, as you plan for death, which will happen eventually. What do you want to leave for your children? Likely the pension will not be transferred to your children, so if you want to leave them something, you need to start planning ahead. 25 Years At this stage in your life, you are likely talking, college for the children and possibly your wife back at work (could happen much earlier than this, e.g., when the kids are all in school). What do you want for your children in college? Do you want them to have the opportunity to go without having to take on debt? What savings options are there for your children's college? Also, likely with all your children out of the house at college, what do you and your wife want to do? Travel? Give to charity? Own your own home? 5 Years You mention having children and your wife staying at home with them. Can your family live on just your income? Can you do that and still achieve your 50 and 25 year goals? If not, further education or training on your part may be needed. Are you in debt? Would you like to be out of debt in the next 5-10 years? I know I've raised more questions than answers. This is due mostly to the nature of the question you've asked. It is very personal, and I don't know you. What I find most useful is to look at where I want to be in the near, mid and long term and then start to build a plan for how I get there. If you have older friends or family who are where you want to be when you reach their age, talk to them. Ask them how they got there. Also, there are tons of resources out there to help you. I won't suggest any specific books, but look around at the local library or look online. Read reviews of personal finance books. Read many and see how they can give you the advice you need to reach your specific goals. Good luck!\"" }, { "docid": "559556", "title": "", "text": "\"It's called disposable income for a reason. It's what's left after obligations, whatever bills you have, and saving. Saving half one's income is pretty much at one end of the spectrum, very few can afford this. The combination of high savings and low actual spending will enable you to retire very early if you wish. Saving 'only' 15% might actually be out of your comfort zone, maybe 25% will keep you happy. What remains is yours to spend on what you wish, whatever makes you happy. There was a time I joked \"\"I spent most of my money on women and beer. The rest, I wasted.\"\" Now, I don't mind travel, but it's not my passion. If traveling the world is yours, do it. Enjoy every minute of it.\"" }, { "docid": "421455", "title": "", "text": "\"The policy you quoted suggests you deposit 6% minimum. That $6,000 will cost you $4,500 due to the tax effect, yet after the match, you'll have $9,000 in the account. Taxable on withdrawal, but a great boost to the account. The question of where is less clear. There must be more than the 2 choices you mention. Most plans have 'too many' choices. This segues into my focus on expenses. A few years back, PBS Frontline aired a program titled The Retirement Gamble, in which fund expenses were discussed, with a focus on how an extra 1% in expenses will wipe out an extra 1/3 of your wealth in a 40 year period. Very simple to illustrate this - go to a calculator and enter .99 raised to the power of 40. .669 is the result. My 401(k) has an expense of .02% (that's 1/50 of 1%) .9998 raised to the same 40 gives .992, in other words, a cost of .8% over the full 40 years. My wife and I are just retired, and will have less in expenses for the rest of our lives than the average account cost for just 1 year. In your situation, the knee-jerk reaction is to tell you to maximize the 401(k) deposit at the current (2016) $18,000. That might be appropriate, but I'd suggest you look at the expense of the S&P index (sometime called Large Cap Fund, but see the prospectus) and if it's costing much more than .75%/yr, I'd go with an IRA (Roth, if you can't deduct the traditional IRA). Much of the value of the 401(k) beyond the match is the tax differential, i.e. depositing while in the 25% bracket, but withdrawing the funds at retirement, hopefully at 15%. It doesn't take long for the extra expense and the \"\"holy cow, my 401(k) just turned decades of dividends and long term cap gains into ordinary income\"\" effect to take over. Understand this now, not 30 years hence. Last - to answer your question, 'how much'? I often recommend what may seem a cliche \"\"continue to live like a student.\"\" Half the country lives on $54K or less. There's certainly a wide gray area, but in general, a person starting out will choose one of 2 paths, living just at, or even above his means, or living way below, and saving, say, 30-40% off the top. Even 30% doesn't hit the extreme saver level. If you do this, you'll find that if/when you get married, buy a house, have kids, etc. you'll still be able to save a reasonable percent of your income toward retirement. In response to your comment, what counts as retirement savings? There's a concept used as part of the budgeting process known as the envelope system. For those who have an income where there's little discretionary money left over each month, the method of putting money aside into small buckets is a great idea. In your case, say you take me up on the 30-40% challenge. 15% of it goes to a hard and fast retirement account. The rest, to savings, according to the general order of emergency fund, 6-12 months expenses, to cover a job loss, another fund for random expenses, such as new transmission (I've never needed one, but I hear they are expensive), and then the bucket towards house down payment. Keep in mind, I have no idea where you live or what a reasonable house would cost. Regardless, a 20-25% downpayment on even a $250K house is $60K. That will take some time to save up. If the housing in your area is more, bump it accordingly. If the savings starts to grow beyond any short term needs, it gets invested towards the long term, and is treated as \"\"retirement\"\" money. There is no such thing as Saving too much. When I turned 50 and was let go from a 30 year job, I wasn't unhappy that I saved too much and could call it quits that day. Had I been saving just right, I'd have been 10 years shy of my target.\"" }, { "docid": "586626", "title": "", "text": "You mention only two debts, mortgage and student loan, but you mention $19K in savings, which suggests that you are a saver, and likely do not have other debts. You did not mention your (net) income and expenses (income statement), but since you have substantial savings, you likely live within your means (income > expenses). Since you mention $38K in retirement, we might conclude you are regularly saving for retirement (are you saving 10% toward retirement)? You did not mention any medical condition or other debts, that might require a large savings, so I would suggest having 6 months savings ($2.5K x 6 = $15K) but should your net expenses be less, you might reduce this ($2K x 6 = $12K). You do not mention any investment you might want to make, but since you did not mention any candidate investments, we can assume you have no (specific) investments you find particularly attractive. You did not mention anything you were saving to purchase that you might want to purchase. You have combined $19K + $50K = $69K savings, and $15K would be a comfortable emergency savings, leaving $54K you could use to reduce mortgage or student loan debt. The mortgage debt interest @4.5%, is higher, so paying that debt off would be like earning 4.5% guaranteed return on your money, tax-free. At your income, your marginal tax rate is low enough that the mortgage interest deduction (if you do itemize) would not reduce this return much (15% if you itemize). The student loan debt interest @2.8%, would be like earning 2.8% guaranteed return on your money, tax-free. Clearly the higher return on your 'investment' in paying off debt would be reducing your mortgage balance (over 50% higher return on investment, compared to the student loan debt). You did not mention any circumstance that might cause the student loan rate to increase, the mortgage rate to increase, nor did you mention any difficulty making both the mortgage and student loan payments, the amounts of either payment, nor the number of years remaining to pay on either. Should you need (or desire) to reduce your payments, you could choose to payoff the student loan to eliminate one payment, and thus decrease your expenses. Or you could choose to pay down the mortgage, and refinance (or refactor) the mortgage to obtain a smaller payment. Another strategy (assuming you have had your house for 5-7 years), might be to pay the mortgage down enough to refinance into a 15 year loan, and (assuming you have a good credit score) obtain a lower (3%) rate. But I am going to suggest you consider a blended approach. Combine the Dave Ramsey Debt Snowball approach with the reduce the interest rate approach. Take the $54K ($57K?) available (after reserving 6 months emergency fund), and split between both. You pay your mortgage down by $27K and your student loan debt down by $27K. Your blended return on investment is (2.8+4.5)/2 = 3.65%, and you have the following Balance Sheet: Assets: Debts: The next steps would be to, There are two great reasons for paying off the student loan debt. One is the Dave Ramsey Debt Snowball approach which is that this is the smaller debt, and thus represents a psychological win, and the other is that student loan debt has special treatment even in bankruptcy." }, { "docid": "568629", "title": "", "text": "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!" }, { "docid": "587727", "title": "", "text": "\"IRAs have huge tax-advantages. You'll pay taxes when you liquidate gold and silver. While volatile, \"\"the stock market has never produced a loss during any rolling 15-year period (1926-2009)\"\" [PDF]. This is perhaps the most convincing article for retirement accounts over at I Will Teach You To Be Rich. An IRA is just a container for your money and you may invest the money however you like (cash, stocks, funds, etc). A typical investment is the purchase of stocks, bonds, and/or funds containing either or both. Stocks may pay dividends and bonds pay yields. Transactions of these things trigger capital gains (or losses). This happens if you sell or if the fund manager sells pieces of the fund to buy something in its place (i.e. transactions happen without your decision and high turnover can result in huge capital gains). In a taxable account you will pay taxes on dividends and capital gains. In an IRA you don't ever pay taxes on dividends and capital gains. Over the life of the IRA (30+ years) this can be a huge ton of savings. A traditional IRA is funded with pre-tax money and you only pay tax on the withdrawal. Therefore you get more money upfront to invest and more money compounds into greater amounts faster. A Roth IRA you fund with after-tax dollars, but your withdrawals are tax free. Traditional versus Roth comparison calculator. Here are a bunch more IRA and 401k calculators. Take a look at the IRA tax savings for various amounts compared to the same money in a taxable account. Compounding over time will make you rich and there's your reason for starting young. Increases in the value of gold and silver will never touch compounded gains. So tax savings are a huge reason to stash your money in an IRA. You trade liquidity (having to wait until age 59.5) for a heck of a lot more money. Though isn't it nice to be assured that you will have money when you retire? If you aren't going to earn it then, you'll have to earn it now. If you are going to earn it now, you may as well put it in a place that earns you even more. A traditional IRA has penalties for withdrawing before retirement age. With a Roth you can withdraw the principal at anytime without penalty as long as the account has been open 5 years. A traditional IRA requires you take out a certain amount once you reach retirement. A Roth doesn't, which means you can leave money in the account to grow even more. A Roth can be passed on to a spouse after death, and after the spouse's death onto another beneficiary. more on IRA Required Minimum Distributions.\"" }, { "docid": "475397", "title": "", "text": "There is no advantage to using one type of account or the other if you are in the same tax bracket at retirement that you are in during your working years. However, for tax planning reasons, it is good to have some money in both a Roth and a traditional IRA plan. JoeTaxpayer has often advocated a good rule of thumb to use a Roth when your tax bracket is 15% or lower, and use a traditional account when in the 25% bracket or above. The reason for this rule of thumb is that you are less likely to be in the higher tax bracket when you are living off retirement savings unless you put away an awful lot of money between now and then. If you are making enough money to be paying a 25% marginal rate on some of the money you would be putting away for retirement, then by all means, put all of that money in a traditional 401k. If after contributing that portion of your savings taxed at the higher rate, you still have money to put away for retirement, put the rest in a Roth and pay the 15% taxes on it. When you are younger, it is likely that you are making less than you will a few years hence, and it is also likely that a larger portion of your income will be paying tax deductible interest on a mortgage. If those are true for you, then by all means, use the Roth. That was true of me when I was single and just getting started. When you do finally retire, it is possible that the tax brackets will be increased to match inflation, and if so, then there is no benefit to having tax free money at retirement vs. paying taxes on deferred accounts, but there is also usually more flexibility in when to spend money. You may find that you have a year where you have to spend a lot, so it is good to be able to pull money out without it increasing your marginal rate for that year, and other years where you spend relatively smaller amounts, and you can withdraw taxable money and pay a lower rate on that money. No one knows what the tax code will look like in 40 years, but having some money in each type of account will give you flexibility to minimize your tax bill at retirement." }, { "docid": "374803", "title": "", "text": "See Started new job. Rollover previous employer 401k to new 401k, IRA or Roth IRA? for a start. Kevin, the discussion is far more complex than you might think. Say your account grows by X, (pretend it's 10 if you wish) and your tax rate is Y (25%?). If you take the initial sum, tax it at Y, but then grow it X, the result is identical to doing it in the reverse order. So $1000 to start can grow to $10,000, then after tax, $7500. Or $1000 taxed to $750, then grow to $7500. For pretax deposits, the key is that you deposit those contributions at your marginal rate, i.e. the rate you'd pay on the last $X taxed. But withdrawals start at zero. In the perfect scenario, you will save 25-28% tax on deposits, but at retirement, enjoy taxation at 0%,10%,15% for a large portion or all of the withdrawals. (Note, others can suggest rates will rise, and they may be right. My answer is based on the current tax structure.) A new earner, at 10 or 15% may be better off starting with Roth, and as they earn their way to 25% or higher slide over to pre-tax deposits. My 14 year old baby sits, and makes enough to fund a Roth, but pays no tax as she earns less than her own standard deduction for what that's worth." } ]

[ { "docid": "597880", "title": "", "text": "If by being a millionaire you mean dollar millionaire then I doubt that it is really that easy in Pakistani context. At present the exchange rate is 107 Pakistani rupees per US dollar so even with this exchange rate, to have a million US dollars means having 107 million rupees of wealth. Now with this maths in mind you can very well calculate how much possible it is for an average 25 years old Pakistani to have that much wealth. And by the time you have 107 million Pakistani rupees of wealth the exchange rate against the US dollar would have only gone up against Pakistani currency. That article which you have mentioned makes calculations in US context and dollar terms. However if you talk only in terms of your country's context then being a millionaire means having 1 million rupees of wealth and that is something which is quite achievable with your salary and within very short span of time." } ]

[ { "docid": "326948", "title": "", "text": "You have made the most important first step by starting to think about your money, well done. Firstly pay of all credit cards as quickly as you can and start to live within your means. Until you have paid of your credits cards don’t spend any money of unnecessary items, e.g. Once your credit cards are paid off you can start living a more normal life. Each time you spend money you need to ask yourself: Is this worth more to be then being able to buy a new house in a few years time? You should be able to save at least half the amount you were paying of the credit card each mouth and still leave a reasonable life, so setup a standing order at the start of the month to your saving account. Given your age you are like to get promoted and hence have increased pay or get increments for each year of service. Therefore Every time your pay goes up, set up a standing order to transfer at least half of the pay increases to a saving account. You did not have this money before, so you will not miss it when you save it. In the long term, you should be able to keep your car until it is about 15 years old, so will not have the cost of buying another car. Therefore once the car loan is over, you can save that money as well." }, { "docid": "260677", "title": "", "text": "Hopefully this $1000 is just a start, and not the last investment you will ever make. Assuming that, there are a couple of big questions to consider: One: What are you saving for? Are you thinking that this is for retirement 40 or 50 years from now, or something much sooner, like buying a car or a house? You didn't say where you live. In the U.S., if you put money into an IRA or a 401k or some other account that the government classes as a retirement account, you don't pay taxes on the profits from the investment, only on the original principal. If you leave the money invested for a long period of time, the profits can be many times the original investment, so this makes a huge difference. Like suppose that you pay 15% of your income in state and local taxes. And suppose you invest your $1000 in something that gives a 7% annual return and leave it there for 40 years. (Of course I'm just making up numbers for an example, but I think these are in a plausible range. And I'm ignoring the difference between regular income tax and capital gains tax, etc etc. It doesn't change the point.) If you put the money in a classic IRA, you pay 0% taxes the year you open the account, so you have your full $1000, figure that compound interest for 40 years, you'll end up with -- crunch crunch crunch the numbers -- $14,974. Then you pay 15% when you take it leaving you with $12,728. (The end result with a Roth IRA is exactly the same. Feel free to crunch those numbers.) But now suppose you invest in a no-retirement account so you have to pay taxes every year. Your original investment is only $850 because you have to pay tax on that, and your effective return is only 5.95% because you have to pay 15% of the 7%. So after 40 years you have -- crunch crunch -- $10,093. Quite a difference. But if you put money in a retirement account and then take it out before you retire, you pay substantial penalties. I think it's 20%. If you plan to take the money out after a year or two, that would really hurt. Two: How much risk are you willing to take? The reality of investment is that, almost always, the more risk you take, the bigger the potential returns, and vice versa. Investments that are very safe tend to have very low returns. As you're young, if you're saving for retirement, you can probably afford a fairly high amount of risk. If you lose a lot of money this year, odds are you'll get it back over the next few years, or at least be able to put more money into investments to make up for it. If you're 64 and planning to retire next year, you want to take very low-risk investments. In general, investing in government bonds is very safe but has very low returns. Corporate bonds are less safe but offer higher returns. Stocks are a little more. Of course different companies have different levels of risk: new start-ups tend to be very risky, but can give huge returns. Commodities are much higher risk. Buying on margin or selling short are ways to really leverage your money, but you could end up losing more than you invested. Mutual funds are a relatively safe way to invest in stocks and bonds because they spread your risk over many companies. Three: How much effort are you willing to put into managing your investments? How much do you know about the stock market and the commodities market and international finance and so on, and how much are you willing to learn? If your answer is that you know a lot about these things or are willing to dive in and learn a lot, that you can invest in individual stocks, bonds, commodities, etc. If your answer is that you really don't know much about all this, then it makes a lot of sense to just put your money into a mutual fund and let the people who manage the fund do all the work." }, { "docid": "425293", "title": "", "text": "\"I've never invested in penny stocks. My #1 investing rule, buy what you know and use. People get burned because they hear about the next big thing, go invest! to just end up losing everything because they have no clue in what they're investing in. From what I've found, until you have minimum of $5k to invest, put everything in a single investment. The reason for this, as others have mentioned, is that commissions eat up just about all your profits. My opinion, don't put it in a bond, returns are garbage right now - however they are \"\"safe\"\". Because this is $1000 we're talking about and not your life savings, put it in a equity like a stock to try and maximize your return. I aim for 15% returns on stocks and can generally achieve 10-15% consistently. The problem is when you get greedy and keep thinking it will go above once you're at 10-15%. Sell it. Sell it right away :) If it drops down -15% you have to be willing to accept that risk. The nice thing is that you can wait it out. I try to put a 3 month time frame on things I buy to make money. Once you start getting a more sizable chunk of money to play around with you should start to diversify. In Canada at least, once you have a trading account with a decent size investment the commissions get reduced to like $10 a trade. With your consistent 10% returns and additional savings you'll start to build up your portfolio. Keep at it and best of luck!\"" }, { "docid": "287991", "title": "", "text": "I have about $1K in savings, and have been told that you should get into investment and saving for retirement early. I make around $200 per week, which about $150 goes into savings. That's $10k per year. The general rule of thumb is that you should have six months income as an emergency fund. So your savings should be around $5k. Build that first. Some argue that the standard should be six months of living expenses rather than income. Personally, I think that this example is exactly why it is income rather than living expenses. Six months of living expenses in this case would only be $1250, which won't pay for much. And note that living expenses can only be calculated after the fact. If your estimate of $50 a week is overly optimistic, you might not notice for months (until some large living expense pops up). Another problem with using living expenses as the measure is that if you hold down your living expenses to maximize your savings, this helps both measures. Then you hit your savings target, and your living expenses increase. So you need more savings. By contrast, if your income increases but your living expenses do not, you still need more savings but you can also save more money. Doesn't really change the basic analysis though. Either way you have an emergency savings target that you should hit before starting your retirement savings. If you save $150 per week, then you should have around $4k in savings at the beginning of next year. That's still low for an emergency fund by the income standard. So you probably shouldn't invest next year. With a living expenses standard, you could have $6250 in savings by April 15th (deadline for an IRA contribution that appears in the previous tax year). That's $5000 more than the $1250 emergency fund, so you could afford an IRA (probably a Roth) that year. If you save $7500 next year and start with $4k in savings (under the income standard for emergency savings), that would leave you with $11,500. Take $5500 of that and invest in an IRA, probably a Roth. After that, you could make a $100 deposit per week for the next year. Or just wait until the end. If you invested in an IRA the previous year because you decided use the living expenses standard, you would only have $6500 at the end of the year. If you wait until you have $6750, you could max out your IRA contribution. At that point, your excess income for each year would be larger than the maximum IRA contribution, so you could max it out until your circumstances change. If you don't actually save $3k this year and $7500 next year, don't sweat it. A college education is enough of an investment at your age. Do that first, then emergency savings, then retirement. That will flip around once you get a better paying, long term job. Then you should include retirement savings as an expected cost. So you'd pay the minimum required for your education loans and other required living expenses, then dedicate an amount for retirement savings, then build your emergency savings, then pay off your education loans (above the minimum payment). This is where it can pay to use the more aggressive living expenses standard, as that allows you to pay off your education loans faster. I would invest retirement savings in a nice, diversified index fund (or two since maintaining the correct stock/bond mix of 70%-75% stocks is less risky than investing in just bonds much less just stocks). Investing in individual stocks is something you should do with excess money that you can afford to lose. Secure your retirement first. Then stock investments are gravy if they pan out. If they don't, you're still all right. But if they do, you can make bigger decisions, e.g. buying a house. Realize that buying individual stocks is about more than just buying an app. You have to both check the fundamentals (which the app can help you do) and find other reasons to buy a stock. If you rely on an app, then you're essentially joining everyone else using that app. You'll make the same profit as everyone else, which won't be much because you all share the profit opportunities with the app's system. If you want to use someone else's system, stick with mutual funds. The app system is actually more dangerous in the long term. Early in the app's life cycle, its system can produce positive returns because a small number of people are sharing the benefits of that system. As more people adopt it though, the total possible returns stay the same. At some point, users saturate the app. All the possible returns are realized. Then users are competing with each other for returns. The per user returns will shrink as usage grows. If you have your own system, then you are competing with fewer people for the returns from it. Share the fundamental analysis, but pick your stocks based on other criteria. Fundamental analysis will tell you if a stock is overvalued. The other criteria will tell you which undervalued stock to buy." }, { "docid": "223872", "title": "", "text": "Lets imagine two scenarios: 1) You make 10.4k (40% of total income) yearly contributions to a savings account that earns 1% interest for 10 years. In this scenario, you put in 104k and earned 5.89k in interest, for a total of 109.9k. 2) You make the same 10.4k yearly contribution to an index fund that earns 7% on average for 10 years. In this scenario you put in the same 104k, but earned 49.7k in interest*, for a total of 153.7k. The main advantage is option 1) has more liquidity -- you can get the money out faster. Option 2) requires time to divest any stocks / bonds. So you need enough savings to get you through that divestment period. Imagine another two scenarios where you stop earning income: 1-b) You stop working and have only your 109.9k principal amount in a 1% savings account. If you withdraw 15.6k yearly for your current cost of living, you will run through your savings in 7 years. 2-b) You stop working and have only 20k (2 years of savings) in savings that earns 1% with 153.7k in stocks that earns 7%. If you withdraw your cost of living currently at 15.6k, you will run through your investments in 15 years and your savings in 2 years, for a total of 17 years. The two years of income in savings is extremely generous for how long it starts the divestment process. In summary, invest your money. It wasn't specified what currency we are talking about, but you can easily find access to an investment company no matter where you are in the world. Keep a small amount for a rainy day." }, { "docid": "438778", "title": "", "text": "Craig touched on it, but let me expand on the point. Deposits, by definition, are withheld at your marginal rate. And since you can choose Roth vs Traditional right till filing time, you know with certainty the rate you are at each year. Absent any other retirement income, i.e. no pension, and absent an incredibly major change to our tax code, I know your starting rate, zero. The first $10K or so per person is part of their standard deduction and exemption. For a couple, the next $18k is taxed at 10%, and so on. Let me stop here to expand this important point. This is $38,000 for the couple, and the tax on it is less than $1900. 5%. There is no 5% bracket of course. It's the first $20K with zero tax, and that first $18,000 taxed at 10%. That $38,000 takes nearly $1M in pretax accounts to offer as an annual withdrawal. The 15% bracket starts after this, and applies to the next $57K of withdrawals each year. Over $95K in gross withdrawals of pretax money, and you still aren't in the 25% bracket. This is why 100% in traditional, or 100% in Roth aren't either ideal. I continue to offer the example I consider more optimizing - using Roth for income that would otherwise be taxed at 15%, but going pretax when you hit 25%. Then at retirement, you withdraw enough traditional to just stay at 10 or 15% and Roth for the rest. It would be a shame to retire 100% Roth and realize you paid 25% but now have no income to use up those lower brackets. Oddly, time value of money isn't part of my analysis. It makes no difference. And note, the exact numbers do change a bit each year for inflation. There's a also a good chance the exemptions goes away in favor of a huge increased standard deduction." }, { "docid": "423083", "title": "", "text": "\"I get the sense that this is a \"\"the world is unfair; there's no way I can succeed\"\" question, so let's back up a few steps. Income is the starting point to all of this. That could be a job (or jobs), or running your own business. From there, you can do four things with your income: Obviously Spend and Give do not provide a monetary return - they give a return in other ways, such as quality of life, helping others, etc. Save gives you reserves for future expenses, but it does not provide growth. So that just leaves Invest. You seem to be focused on stock market investments, which you are right, take a very long time to grow, although you can get returns of up to 12% depending on how much volatility you're willing to absorb. But there are other ways to invest. You can invest in yourself by getting a degree or other training to improve your income. You can invest by starting a business, which can dramatically increase your income (in fact, this is the most common path to \"\"millionaire\"\" in the US, and probably in other free markets). You can invest by growing your own existing business. You can invest in someone else's business. You can invest in real estate, that can provide both value appreciation and rental income. So yes, \"\"investment\"\" is a key aspect of wealth building, but it is not limited to just stock market investment. You can also look at reducing expenses in order to have more money to invest. Also keep in mind that investment with higher returns come with higher risk (both in terms of volatility and risk of complete loss), and that borrowing money to invest is almost always unwise, since the interest paid directly reduces the return without reducing the risk.\"" }, { "docid": "599757", "title": "", "text": "What is the goal of the money? If it is to use in the short term, like savings for a car or college, then stick it in the bank and use it for that purpose. If you really want this money to mean something, then in my opinion you have only one choice: Open a ROTH IRA with something like Vanguard or Fidelity and invest in an index fund. Then do something that will be very difficult: Don't touch it. By the time you are 65, it will grow to about 60,000. However, assuming a 20% tax bracket, the value of that money is really more like 75,000. Clearly this will not make or break you either way. The way you live the rest of your life will have far more of an impact. It will get you started on the right path. BTW this is advice I gave my son who is about your age, and does not earn a ton of money as a state trooper. Half of his overtime pay goes into a ROTH. If he lives the rest of his life like he does now, he will be a wealthy man despite making an average income. No debt, and investing a decent portion of his pay." }, { "docid": "561636", "title": "", "text": "You're misunderstanding the concept of retirement savings. IRA distributions are taxed, in their entirety, as ordinary income. If you withdraw before the retirement age, additional 10% penalty is added. Investment income has preferential treatment - long term capital gains and qualified dividends are taxed at lower rates than ordinary income. However, IRA contributions are tax deductible. I.e.: you don't pay taxes on the amounts contributed to the IRA when you earned the money, only when you withdraw. In the mean time, the money is growing, tax free, based on your investments. Anything inside the IRA is tax free, including dividends, distributions (from funds to your IRA, not from IRA to you), capital gains, etc. This is very powerful, when taking into account the compounding effect of reinvesting your dividends/sale proceeds without taking a chunk out for taxes. Consider you make an investment in a fund that appreciated 100% in half a year. You cash out to reinvest in something less volatile to lock the gains. In a regular account - you pay taxes when you sell, based on your brackets. In the IRA you reinvest all of your sale proceeds. That would be ~25-35% more of the gains to reinvest and continue working for you! However, if you decide to withdraw - you pay ordinary rate taxes on the whole amount. If you would invest in a single fund for 30 years in a regular account - you'd pay 20% capital gains tax (on the appreciation, not the dividends). In the IRA, if you invest in the same fund for the same period - you'll pay your ordinary income rates. However, the benefit of reinvesting dividends tax-free softens the blow somewhat, but that's much harder to quantify. Bottom line: if you want to plan for retirement - plan for retirment. Otherwise - IRA is not an investment vehicle. Also consider Roth IRA/conversions. Roth IRA has the benefit of tax free distributions at retirement. If your current tax bracket is at 20%, for example, contributing $5K to Roth IRA instead of a traditional will cost you $1K of taxes now, but will save you all the taxes during the retirement (for the distributions from the Roth IRA). It may be very much worth your while, especially if you can contribute directly to Roth IRA (there are some income limitations and phaseouts). You can withdraw contributions (but not earnings) from Roth IRA - something you cannot do with a traditional IRA." }, { "docid": "231662", "title": "", "text": "\"Before anything, I see that no one mentioned the one thing about 401(k) accounts that's just shy of magic - The matching deposit. In 2015, 42% of companies offered a dollar for dollar match on deposits. Can't beat that. (Note - to respond to Xalorous' comment, the $18K OP deposits can be nearly any percent of his income. The typical match is 'up to' 6% of gross income. If that's the case, the 401(k) deposits are doubled. But say he makes $100K. The $18K deposit will see a $6K match. This adds a layer of complexity to the answer that I preferred to avoid, as I show with no match at all, and no change in tax brackets, the deferral alone shows value to the investor.) On to the main answer - Let's pull out a spreadsheet - We start with $10,000, and assume the 25% bracket. This gives a choice of $10,000 in the 401(k) or $7500 in the taxable account. Next, let 20 years pass, with 10% return each year. The 401(k) sees the full 10% and after 20 years, $67K. The taxable account owner waits to get the 15% cap gain rate and adjusts portfolio, thus seeing an 8.5% return each year and carrying no ongoing gains. After 20 years of 8.5% returns, he has $38K net. The 401(k) owner on withdrawal pays the 25% tax and has $50K, still more than 25% more money that the taxable account. Because transactions within the account were all tax deferred. EDIT - With respect to davmp's comment, I'll offer the other extreme - In his comment, he (rightly) objected that I chose to trade every year, although I did assign the long term 15% cap gain rate, he felt the annual trade was my attempt to game the analysis. Above, I offer his extreme case, a 10% return each year, no trade, no dividend. Just a cap gain at the end. The 401(k) still wins. I also left the tax (on the 401(k)) at withdrawal at 25%, when in fact, much, if not all will be taxed at 15% or lower, which would put the net at $57K or 30% above the taxable account final withdrawal. The next issue I'd bring up is that the 401(k) is taken out at the top (marginal) tax rate, e.g. a single filer with taxable income over $37,650 (in 2016) would save 25% on that 401(k) deduction. Of course if the deduction pulls you under that line, I'd go Roth or taxable. But, withdrawals start at zero. Today, a single retiree has a standard deduction ($4050) and exemption ($6300) for a total $10,350 \"\"zero bracket\"\" with the next $9275 taxed at 10%. This points to needing $500K in pre tax accounts before withdrawals each year would get you past the 10% bracket. (This comes from the suggestion of using 4% as an annual withdrawal rate). Last - the tax discussion has 2 major points in time, deposit and withdrawal, of course. But, the answers here all ignore all the time in between. In between, you see that for any number of reasons, you'll drop from the 25% bracket to 15% that year. That's the time to convert a bit of money to Roth and 'top off' the 15% bracket. It can happen due to job loss, marriage with new spouse either not working or having lower income, new baby, house purchase, etc. Or in-between, a disability put you out of work. That permits you to take money out with no penalty, and little chance of paying even the 25% that you paid going in. This, from personal experience with a family member, funded a 401(k) with 28% money. Then divorced and disabled, able to take the $10K/yr to supplement worker's comp (non taxed) income.\"" }, { "docid": "374803", "title": "", "text": "See Started new job. Rollover previous employer 401k to new 401k, IRA or Roth IRA? for a start. Kevin, the discussion is far more complex than you might think. Say your account grows by X, (pretend it's 10 if you wish) and your tax rate is Y (25%?). If you take the initial sum, tax it at Y, but then grow it X, the result is identical to doing it in the reverse order. So $1000 to start can grow to $10,000, then after tax, $7500. Or $1000 taxed to $750, then grow to $7500. For pretax deposits, the key is that you deposit those contributions at your marginal rate, i.e. the rate you'd pay on the last $X taxed. But withdrawals start at zero. In the perfect scenario, you will save 25-28% tax on deposits, but at retirement, enjoy taxation at 0%,10%,15% for a large portion or all of the withdrawals. (Note, others can suggest rates will rise, and they may be right. My answer is based on the current tax structure.) A new earner, at 10 or 15% may be better off starting with Roth, and as they earn their way to 25% or higher slide over to pre-tax deposits. My 14 year old baby sits, and makes enough to fund a Roth, but pays no tax as she earns less than her own standard deduction for what that's worth." }, { "docid": "67625", "title": "", "text": "It appears your company is offering roughly a 25% discount on its shares. I start there as a basis to give you a perspective on what the 30% matching offer means to you in terms of value. Since you are asking for things to consider not whether to do it, below are a few considerations (there may be others) in general you should think about your sources of income. if this company is your only source of income, it is more prudent to make your investment in their shares a smaller portion of your overall investment/savings strategy. what is the holding period for the shares you purchase. some companies institute a holding period or hold duration which restricts when you can sell the shares. Generally, the shorter the duration period the less risk there is for you. So if you can buy the shares and immediately sell the shares that represents the least amount of relative risk. what are the tax implications for shares offered at such a discount. this may be something you will need to consult a tax adviser to get a better understanding. your company should also be able to provide a reasonable interpretation of the tax consequences for the offering as well. is the stock you are buying liquid. liquid, in this case, is just a fancy term for asking how many shares trade in a public market daily. if it is a very liquid stock you can have some confidence that you may be able to sell out of your shares when you need. personally, i would review the company's financial statements and public statements to investors to get a better understanding of their competitive positioning, market size and prospects for profitability and growth. given you are a novice at this it may be good idea to solicit the opinion of your colleagues at work and others who have insight on the financial performance of the company. you should consider other investment options as well. since this seems to be your first foray into investing you should consider diversifying your savings into a few investments areas (such as big market indices which typically should be less volatile). last, there is always the chance that your company could fail. Companies like Enron, Lehman Brothers and many others that were much smaller than those two examples have failed in the past. only you can gauge your tolerance for risk. As a young investor, the best place to start is to use index funds which track a broader universe of stocks or bonds as the first step in building an investment portfolio. once you own a good set of index funds you can diversify with smaller investments." }, { "docid": "242310", "title": "", "text": "\"Its important to note that aggression, or better yet volatility, does not necessarily offer higher returns. One can find funds that have a high beta (measure of volatility) and lower performance then stock funds with a lower beta. Additionally, to Micheal's point, better performance could be undone by higher fees. Age is unimportant when deciding the acceptable volatility. Its more important as to when the money is to be available. If there might be an immediate need, or even less than a year, then stick to a savings account. Five years, some volatility can be accepted, if 10 years or more seek to maximize rate of return. For example assume a person is near retirement age. They are expected to have 50K per year expenses. If they have 250K wrapped up in CDs and savings, and another 250K in some conservative investments, they can, and should, be \"\"aggressive\"\" with any remaining money. On the contrary a person your age that is savings for a house intends to buy one in three years. Savings for the down payment should be pretty darn conservative. Something like 75% in savings accounts, and maybe 25% in some conservative investments. As the time to buy approaches they can pull the money out of the conservative investments at a optimal time. Also you should not be investing without an emergency fund in place. Get that done first, then look to invest. If your friend does not understand these basic concepts there is no point in paying for his advice.\"" }, { "docid": "52080", "title": "", "text": "\"This may be more of a comment than an answer, but it's too long for a comment. Perhaps the Stackexchange Gods will forgive my impudence. That said: Even with the tax penalties, it can be to your advantage to put money into a \"\"retirement\"\" account and withdraw it before retirement. The trick is: Is the amount of the tax penalty more than the benefit of untaxed compound growth? For example, just to make up some numbers: Suppose you have $1000 of gross income to invest. You are considering whether to invest in an ordinary, non-tax favored account, or a classic IRA. Either way you will get 10% returns. Your tax rate, both when you put the money in and when you take it out, is 15%. There is a 10% tax penalty for early withdrawal. With an ordinary account you will pay 15% tax off the top, so you are only investing $850. Then each year 15% of your returns are paid in taxes, so your net return is 8.5%. But when you withdraw the money there are no additional taxes. With an IRA you do not pay any taxes up front, so you can invest the entire $1000. You collect 10% each year with no taxes. When you withdraw, you pay 15% plus the 10% penalty equals 25%. So after 5 years, the ordinary account would yield $850 x 1.085^5 = $1504. The IRA would yield $1000 x 1.1^5 x 0.75 = $1208. The tax penalty hurts. You are better to use the ordinary account. But if you could leave your money in for 25 years, then the ordinary account would yield $850 x 1.085^25 = $7687. The IRA would yield $1000 x 1.1^25 x 0.75 = $8126. The IRA, even with the tax penalty, is better. Of course my numbers are just made up. What your tax bracket is, what returns you get, and how long you think you might leave the money in the investment, all vary.\"" }, { "docid": "399543", "title": "", "text": "Does your employer provide a matching contribution to your 401k? If so, contribute enough to the 401k that you can fully take advantage of the 401k match (e.g. if you employer matches 3% of your income, contribute 3% of your income). It's free money, take advantage of it. Next up, max out your Roth IRA. The limit is $5000 currently a year. After maxing your Roth, revisit your 401k. You can contribute up to 16,500 per year. You savings account is a good place to keep a rainy day fund (do you have one?), but it lacks the tax advantages of a Roth IRA or 401k, so it is not really suitable for retirement savings (unless you have maxed out both your 401k and Roth IRA). Once you have take care of getting money into your 401k and Roth IRA accounts, the next step is investing it. The specific investment options available to you will vary depending on who provides your retirement account(s), so these are general guidelines. Generally, you want to invest in higher-risk, higher-return investments when you are young. This includes things like stocks and developing countries. As you get older (>30), you should look at moving some of your investments into things that less volatile. Bond funds are the usual choice. They tend to be safer than stocks (assuming you don't invest in Junk bonds), but your investment grows at a slower rate. Now this doesn't mean you immediately dump all of your stock and buy bonds. Rather, it is a gradual transition over time. As you get older and older, you gradually shift your investments to bond funds. A general rule of thumb I have seen: 100 - (YOUR AGE) = Percentage of your portfolio that should be in stocks Someone that is 30 would have 70% of their portfolio in stock, someone that is 40 would have 60% in stock, etc. As you get closer to retirement (50s-60s), you will want to start looking at investments that are more conservatie than bonds. Start to look at fixed-income and money market funds." }, { "docid": "237338", "title": "", "text": "Saving money for the future is a good thing. Whether spending those savings on a business venture makes sense, will depend on a few factors, including: (1) How much money you need that business to make [ie: will you be quitting your job and relying on the business for your sole income? Or will this just be a hobby you make some pocket change from?] (2) How much the money the business needs up front [some businesses, like simple web design consulting, might have effectively $0 in cash startup costs, where starting a franchise restaurant might cost you $500k-$1M on day 1] (3) How risky it is [the general stat is that something like 50% of all new businesses fail in their first year, and I think for restaurants that number is often given as 75%+] So sometimes investing in your own business is financially risky, and other times it is not risky. Sometimes it is a good idea, sometimes it is not. Either way, saving for a future business that you may or may not ever invest in, is still saving money. If you never end up investing in a business, you can instead use that money for retirement, or whatever other financial goals you have. So it's not the saving for a new business that is risky, it's the spending. Part of good personal financial management is making financial goals, tracking your progress to those goals, and changing them as needed. In a simpler case, many people want to own their own home - this is a common financial goal, just like early retirement, or starting your own business, or paying for your kids' college education. All those goals are helped by saving money, so your job as someone mindful of personal finances, is to prioritize those goals in accordance to what is important for you. As mentioned by Stannius in the comments below, there is one catch here: if you are saving money for a short term goal (such as starting a business in a year), then you might want to keep it in low-interest savings accounts, instead of investing in the stock market. Doing this would remove the chance that your investments fail right before you need the startup money. Of course, this means that saving for a business that you never end up starting, could earn you less investment income on your savings. This would be the risk of saving for any specific short term goal that you end up changing later on." }, { "docid": "81343", "title": "", "text": "\"I disagree with the selected answer. There's no one rule of thumb and certainly not simple ones like \"\"20 cents of every dollar if you're 35\"\". You've made a good start by making a budget of your expected expenses. If you read the Mr. Money Mustache blogpost titled The Shockingly Simple Math Behind Early Retirement, you will understand that it is usually a mistake to think of your expenses as a fixed percentage of your income. In most cases, it makes more sense to keep your expenses as low as possible, regardless of your actual income. In the financial independence community, it is a common principle that one typically needs 25-30 times one's annual spending to have enough money to sustain oneself forever off the investment returns that those savings generate (this is based on the assumption of a 7% average annual return, 4% after inflation). So the real answer to your question is this: UPDATE Keats brought to my attention that this formula doesn't work that well when the savings rates are low (20% range). This is because it assumes that money you save earns no returns for the entire period that you are saving. This is obviously not true; investment returns should also count toward your 25-times annual spending goal. For that reason, it's probably better to refer to the blog post that I linked to in the answer above for precise calculations. That's where I got the \"\"37 years at 20% savings rate\"\" figure from. Depending on how large and small x and y are, you could have enough saved up to retire in 7 years (at a 75% savings rate), 17 years (at a 50% savings rate), or 37 years! (at the suggested 20% savings rate for 35-year olds). As you go through life, your expenses may increase (eg. starting a family, starting a new business, unexpected health event etc) or decrease (kid wins full scholarship to college). So could your income. However, in general, you should negotiate the highest salary possible (if you are salaried), use the 25x rule, and consider your life and career goals to decide how much you want to save. And stop thinking of expenses as a percentage of income.\"" }, { "docid": "10440", "title": "", "text": "I see a lot of answers calculcating with incomes that are much higher than yours, here is something for your situation: If you would keep your current income for the rest of your life, here is approximately how things would turn out after 40 years: All interest is calculated relative to the amount in your portfolio. Therefore, lets start with 1 dollar for 40 years: With your current income, 15% would be 82.5 dollar. At 12% this would over 40 years get you almost 1 million dollar. I would call a required return of more than 12% not 'likely'. The good news, is that your income will likely increase, and especially if this happens fast things will start to look up. The bad news is, that your current salary is quite low. So, it basically means that you need to make some big jumps in the next few years in order to make this scenario likely. If you can quickly move your salary towards ranges that are more common in the US, then 15% of your income can build up to a million before you retire. However, if you just follow gradual growth, you would need to get quite lucky to reach a million. Note that even if reaching a million appears unlikely, it is probably still a good idea to save!" }, { "docid": "264023", "title": "", "text": "\"when you contribute to a 401k, you get to invest pre-tax money. that means part of it (e.g. 25%) is money you would otherwise have to pay in taxes (deferred money) and the rest (e.g. 75%) is money you could otherwise invest (base money). growth in the 401k is essentially tax free because the taxes on the growth of the base money are paid for by the growth in the deferred portion. that is of course assuming the same marginal tax rate both now and when you withdraw the money. if your marginal tax rate is lower in retirement than it is now, you would save even more money using a traditional 401k or ira. an alternative is to invest in a roth account (401k or ira). in which case the money goes in after tax and the growth is untaxed. this would be advantageous if you expect to have a higher marginal tax rate during retirement. moreover, it reduces tax risk, which could give you peace of mind considering u.s. marginal tax rates were over 90% in the 1940's. a roth could also be advantageous if you hit the contribution limits since the contributions are after-tax and therefore more valuable. lastly, contributions to a roth account can be withdrawn at any time tax and penalty free. however, the growth in a roth account is basically stuck there until you turn 60. unlike a traditional ira/401k where you can take early retirement with a SEPP plan. another alternative is to invest the money in a normal taxed account. the advantage of this approach is that the money is available to you whenever you need it rather than waiting until you retire. also, investment losses can be deducted from earned income (e.g. 15-25%), while gains can be taxed at the long term capital gains rate (e.g. 0-15%). the upshot being that even if you make money over the course of several years, you can actually realize negative taxes by taking gains and losses in different tax years. finally, when you decide to retire you might end up paying 0% taxes on your long term capital gains if your income is low enough (currently ~50k$/yr for a single person). the biggest limitation of this strategy is that losses are limited to 3k$ per year. also, this strategy works best when you invest in individual stocks rather than mutual funds, increasing volatility (aka risk). lastly, this makes filing your taxes more complicated since you need to report every purchase and sale and watch out for the \"\"wash sale\"\" rules. side note: you should contribute enough to get all the 401k matching your employer offers. even if you cash out the whole account when you want the money, the matching (typically 50%-200%) should exceed the 10% early withdrawal penalty.\"" } ]