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Dipto084

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fiqa

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[ "57526", "585889", "482121" ]

[ "\"Yes, this is restricted by law. In plain language, you can find it on the IRS website (under the heading \"\"When Can a Retirement Plan Distribute Benefits?\"\"): 401(k), profit-sharing, and stock bonus plans Employee elective deferrals (and earnings, except in a hardship distribution) -- the plan may permit a distribution when you: •terminate employment (by death, disability, retirement or other severance from employment); •reach age 59½; or •suffer a hardship. Employer profit-sharing or matching contributions -- the plan may permit a distribution of your vested accrued benefit when you: •terminate employment (by death, disability, retirement or other severance from employment); •reach the age specified in the plan (any age); or •suffer a hardship or experience another event specified in the plan. Form of benefit - the plan may pay benefits in a single lump-sum payment as well as offer other options, including payments over a set period of time (such as 5 or 10 years) or a purchased annuity with monthly lifetime payments. Source: https://www.irs.gov/retirement-plans/plan-participant-employee/when-can-a-retirement-plan-distribute-benefits If you want to actually see it in the law, check out 26 USC 401(k)(2)(B)(i), which lists the circumstances under which a distribution can be made. You can get the full text, for example, here: https://www.law.cornell.edu/uscode/text/26/401 I'm not sure what to say about the practice of the company that you mentioned in your question. Maybe the law was different then?\"", "You're going to find a lot of conflicting or vague answers on the internet because there are a lot of plan design elements that are set by the plan sponsor (employer). There are laws that mandate certain elements and dictate certain requirements of plan sponsors, many of these laws are related to record keeping and fiduciary duty. There is a lot of latitude for plan sponsors to allow or restrict employee actions even if there is no law against that activity. There are different rules mandated for employee pre-tax contributions, employee post-tax contributions, and employer contributions. You have more flexibility with regard to the employer contributions and any post tax contributions you may have made; your plan may allow an in-service distribution of those two items before you reach age 59.5. While your HR department (like most -all- HR departments) is not staffed with ERISA attorneys and CPAs it is your HR department and applicable plan documents that will lay out what an employee is permitted to do under the plan.", "\"I don't think there's a rule -- (I can't comment) but Brick cited IRS rules...but IMO Brick missed one thing -- @ashur668 is not looking for a distribution, but is looking for a rollover. My best guess: that this part of the ruleset is not well defined, and your (and my) employer have chosen to interpret any withdrawl as a \"\"distribution\"\", even if better characterized a rollover. A few months ago, I went so far as to explore if I could use a loophole -- my company had just gone through a merger; I was hoping I could rollover some or maybe all of my 401k to my IRA (I remember now, it would have been everything before starting roth 401k contributions). My company asserted this was not permitted, and further asserted that the rumors I had heard were mistaken that when we went through a company spin-off a few years before, that nobody under 59 1/2 was permitted to roll over. I did a quick search and found IRS topic 413 As far as I can tell, this topic is silent on the matter at hand. Topic 413 referred me to IRS Publication 575, where I started looking at the section on rollovers. I read some of it then got bored. Note that we're one step removed -- we are reading IRS publications and interpretations of IRS rules. I don't know that anybody here has read the actual tax law. There may be something in there that prevents companies from rolling over before 59 1/2 that is not well codified in IRS publications.\"" ]

[ "330729", "244813" ]

[ "Any ETF has expenses, including fees, and those are taken out of the assets of the fund as spelled out in the prospectus. Typically a fund has dividend income from its holdings, and it deducts the expenses from the that income, and only the net dividend is passed through to the ETF holder. In the case of QQQ, it certainly will have dividend income as it approximates a large stock index. The prospectus shows that it will adjust daily the reported Net Asset Value (NAV) to reflect accrued expenses, and the cash to pay them will come from the dividend cash. (If the dividend does not cover the expenses, the NAV will decline away from the modeled index.) Note that the NAV is not the ETF price found on the exchange, but is the underlying value. The price tends to track the NAV fairly closely, both because investors don't want to overpay for an ETF or get less than it is worth, and also because large institutions may buy or redeem a large block of shares (to profit) when the price is out of line. This will bring the price closer to that of the underlying asset (e.g. the NASDAQ 100 for QQQ) which is reflected by the NAV.", "\"It depends. Dividends and fees are usually unrelated. If the ETF holds a lot of stocks which pay significant dividends (e.g. an S&P500 index fund) these will probably cover the cost of the fees pretty readily. If the ETF holds a lot of stocks which do not pay significant dividends (e.g. growth stocks) there may not be any dividends - though hopefully there will be capital appreciation. Some ETFs don't contain stocks at all, but rather some other instruments (e.g. commodity-trust ETFs which hold precious metals like gold and silver, or daily-leveraged ETFs which hold options). In those cases there will never be any dividends. And depending on the performance of the market, the capital appreciation may or may not cover the expenses of the fund, either. If you look up QQQ's financials, you'll find it most recently paid out a dividend at an annualized rate of 0.71%. Its expense ratio is 0.20%. So the dividends more than cover its expense ratio. You could also ask \"\"why would I care?\"\" because unless you're doing some pretty-darned-specific tax-related modeling, it doesn't matter much whether the ETF covers its expense ratio via dividends or whether it comes out of capital gains. You should probably be more concerned with overall returns (for QQQ in the most recent year, 8.50% - which easily eclipses the dividends.)\"" ]

[ "285238", "447850", "324297", "203803" ]

[ "Yes, if your IRR is 5% per annum after three years then the total return (I prefer total rather than your use of actual) over those three years is 15.76%. Note that if you have other cashflows in and out, it gets a bit more complicated (e.g. using the XIRR function in Excel), but the idea is to find an effective annual percentage return that you're getting for your money.", "IRR is not subjective, this is a response to @Laythesmack, to his remark that IRR is subjective. Not that I feel a need to defend my position, but rather, I'm going to explain his. My company offered stock at a 15% discount. We would have money withheld from pay, and twice per year buy at that discount. Coworkers said it was a 15% gain. I offered some math. I started by saying that 100/85 was 17.6%, and that was in fact, the gain. But, the funds were held by the company for an average of 3 months, not 6, so that gain occurred in 3 months and I did the math 1.176^4 and resulted in 91.5% annual return. This is IRR. It's not that it's subjective, but it assumes the funds continue to be invested fully during the time. In our case the 91.5% was real in one sense, yet no one doubled their money in just over a year. Was the 91% useless? Not quite. It simply meant to me that coworkers who didn't participate were overlooking the fact that if they borrowed money at a reasonable rate, they'd exceed that rate, especially for the fact that credit lines are charged day to day. Even if they borrowed that money on a credit card, they'd come out ahead. IRR is a metric. It has no emotion, no personality, no goals. It's a number we can calculate. It's up to you to use it correctly.", "Yes, assuming that your cash flow is constantly of size 5 and initial investment is 100, the following applies: IRR of 5% over 3 years: Value of CashFlows: 4.7619 + 4.5351 + 4.3192 = 13.6162 NPV: 100 - 13.6162 = 86.3838 Continuous compounding: 86.3838 * (1.05^3) = 100", "IRR is subjective, if you could provide another metric instead of the IRR; then this would make sense. You can't spend IRR. For example, you purchase a property with a down payment; and the property provides cash-flow; you could show that your internal rate of return is 35%, but your actual rate of importance could be the RoR, or Cap Rate. I feel that IRR is very subjective. IRR is hardly looked at top MBA programs. It's studied, but other metrics are used, such as ROI, ROR, etc. IRR should be a tool that you visually compare to another metric. IRR can be very misleading, for example it's like the cash on cash return on an investment." ]

[ "162916", "557201" ]

[ "In the absence of a country designation where the mutual fund is registered, the question cannot be fully answered. For US mutual funds, the N.A.V per share is calculated each day after the close of the stock exchanges and all purchase and redemption requests received that day are transacted at this share price. So, the price of the mutual fund shares for April 2016 is not enough information: you need to specify the date more accurately. Your calculation of what you get from the mutual fund is incorrect because in the US, declared mutual fund dividends are net of the expense ratio. If the declared dividend is US$ 0.0451 per share, you get a cash payout of US$ 0.0451 for each share that you own: the expense ratio has already been subtracted before the declared dividend is calculated. The N.A.V. price of the mutual fund also falls by the amount of the per-share dividend (assuming that the price of all the fund assets (e.g. shares of stocks, bonds etc) does not change that day). Thus. if you have opted to re-invest your dividend in the same fund, your holding has the same value as before, but you own more shares of the mutual fund (which have a lower price per share). For exchange-traded funds, the rules are slightly different. In other jurisdictions, the rules might be different too.", "So if someone would invest 14000 credits on 1st April 2016, he'd get monthly dividend = ((14000 ÷ 14) × 0.0451) × (1 - 1.42 ÷ 100) = 44.459 credits, right? One would get ((14000 ÷ 14) × 0.0451) = 45.1 is what you would get. The expenses are not to be factored. Generally if a scheme has less expense ratio, the yield is more. i.e. this has already got factored in 0.0451. If the expense ratio was less, this would have been 0.05 if expense ration would have been more it would have been 0.040. Can I then consider the bank deposit earning a higher income per month than the mutual fund scheme? As the MIP as classified as Hybrid funds as they invest around 30% in equities, there is no tax on the income. More so if there is a lock-in of 3 years. In Bank FD, there would be tax applicable as per tax brackets." ]

[ "41356", "107564" ]

[ "Deposit it in a business savings account. The following below show you some options you can choose from. Next you can invest it in the market i.e. shares, bonds etc. If you have a more risky side, can go for peer to peer lending. If you are feeling really lucky and want to invest in the long term, then buy a property as a buy-to-let landlord. There are loads of options, you only need to explore.", "I found some UK personal accounts offer up to 3% interest (no names here, but it is well known bank with red logo). You can take out directors loan from your company, put the cash into that personal account and earn interest. Just don't forget to return this loan before end of financial year, so this interest does not become your dividends." ]

[ "466315", "189761" ]

[ "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.", "Imagine a $1,000 face value bond paying 10% interest semi-annually. That means every 6 months there is $50 being paid. Now, if the price of that bond doubled to $2,000, what is the yield? It is still paying $50 every 6 months but now sports a 5% yield as the price went up a great deal. Similarly, if the price of the bond was cut in half to $500, now it is yielding 20% because it is still paying out the $50 every 6 months. The dollar figure is fixed. What percentage of the price it is can vary and that is why there is the inverse relationship between prices and yields. Note that the length of the bond isn't mentioned here where while usually longer bonds will have higher yields, there can be inverted yield curves as well as calls on some bonds. Also, inflation-indexed and convertible bonds could have different calculations used as principal adjustments or possible conversion to stock can change a perception on the overall return." ]

[ "509795" ]

[ "Auto-correlation is a statistical concept for measuring repeating patterns in series. In stocks it is of particular interest as if future prices can be reliably guessed from past prices a lot of money could be made. Note, even in cases where auto-correlations are high and persistent (near 1) there is still some possibility that the next time period would be down even if the previous period was up. Now the important part here is that high and persistent auto-correlation also means once the price falls the next period the price is also more likely to fall! Once one period was down the next period is more likely to be down so the price does not need to go to infinity. Instead, it generally would display up and down trends. Now, the key word above for investing is persistence. For stocks, auto-correlations are, at best, weakly persistent at reasonable time scales. So, even if a stock was highly auto-correlated during a previous period it is tough to make consistent money off of trading on these past trending patterns. This does not mean some people don't try..." ]

[ "164044", "15631", "418235" ]

[ "\"Assuming no constraints on how much you can move (or how frequently) into and out of your offset mortgage account, the question becomes one of what rate of return you expect from your long-term savings/emergency cash fund. The rate you are getting from the offset mortgage account is known; since it reduces the principal amount owing and thus reduces interest charges, the return is the mortgage rate (though I would not be surprised if the offset mortgage account contract has bells and whistles reducing the effective rate, saying something like 3 pounds reduction of principal for every 5 pounds you put in). So, as a movie character once said, \"\"Do you feel lucky today?\"\" If so, move money from your offset mortgage account to savings, and earn more. If not, move money in the opposite direction. A \"\"guaranteed\"\" 2% return on the offset mortgage account might be better than taking a risk on the vagaries of the stock market, and even the possibility of loss in your long term savings account.\"", "I think the key thing is flexibility - the money is not tied in with the offset mortgage. If you find a better investment, you can always take some of it out and put it towards that instead. Once it matures, if there is nothing good to reinvest in, then it can go back into the offset mortgage. Once you have had money in the offset account, even if you take it out, you have already (irreversibly) saved money on your mortgage. Right now you would be pressed to find an instant access ISA with a rate higher than 1.5%, so if you need immediate access, then the offset account seems good. On the other hand, for retirement, you might be saving longer term, and then you can get an ISA rate of 3%, currently, which may be better for a part of the money (or perhaps the upcoming Lifetime ISA with 25% yearly bonus may make sense for part of the money), if you do not need easy access to all of it. As Dilip says, this assumes you want safe investments.", "The way offset mortgages work, you are keeping savings in an account effectively earning the rate of the mortgage. You have the ability to leave it, paying the mortgage off early, or borrowing back, any time." ]

[ "421688" ]

[ "It's not enough just to check if your order doesn't exceed 10% of the 20 day average volume. I'll quote from my last answer about NSCC illiquid charges: You may still be assessed a fee for trading OTC stocks even if your account doesn't meet the criteria because these restrictions are applied at the level of the clearing firm, not the individual client. This means that if other investors with your broker, or even at another broker that happens to use the same clearing firm, purchase more than 5 million shares in an individual OTC stock at the same time, all of your accounts may face fees, even though individually, you don't exceed the limits. The NSCC issues a charge to the clearing firm if in aggregate, their orders exceed the limits, and the clearing firm usually passes these charges on to the broker(s) that placed the orders. Your broker may or may not pass the charges through to you; they may simply charge you significantly higher commissions for trading OTC securities and use those to cover the charges. Since checking how the volume of your orders compares to the average past volume, ask your broker about their policies on trading OTC stocks. They may tell you that you won't face illiquid charges because the higher cost of commissions covers these, or they may give you specifics on how to verify that your orders won't incur such charges. Only your broker can answer this with certainty." ]

[ "111451", "519941", "259440", "145816" ]

[ "Currency hedge means that you are somewhat protected from movements in currency as your investment is in gold not currency. So this then becomes less speculative and concentrates more on your intended investment. EDIT The purpose of the GBSE ETF is aimed for investors living in Europe wanting to invest in USD Gold and not be effected by movements in the EUR/USD. The GBSE ETF aims to hedge against the effects of the currency movements in the EUR/USD and more closely track the USD Gold price. The 3 charts below demonstrate this over the past 5 years. So as is demonstrated the performance of the GBSE ETF closely matches the performance of the USD Gold price rather than the EUR Gold price, meaning someone in Europe can invest in the fund and get the appropriate similar performance as investing directly into the USD Gold without being affected by currency exchange when changing back to EUR. This is by no way speculative as the OP suggests but is in fact serving the purpose as per the ETF details.", "\"The risk of any investment is measured by its incremental effect on the volatility of your overall personal wealth, including your other investments. The usual example is that adding a volatile stock to your portfolio may actually reduce the risk of your portfolio if it is negatively correlated with the other stuff in your portfolio. Common measures of risk, such as beta, assume that you have whole-market diversified portfolio. In the case of an investment that may or may not be hedged against currency movements, we can't say whether the hedge adds or removes risk for you without knowing what else is in your portfolio. If you are an EU citizen with nominally delimited savings or otherwise stand to lose buying power if the Euro depreciates relative to the dollar, than the \"\"hedged\"\" ETF is less risky than the \"\"unhedged\"\" version. On the other hand, if your background risk is such that you benefit from that depreciation, then the reverse is true. \"\"Hedging\"\" means reducing the risk already present in your portfolio. In this case it does not refer to reducing the individual volatility of the ETF. It may or may not do that but individual asset volatility and risk are two very different things.\"", "\"Overall, since gold has value in any currency (and is sort of the ultimate reserve currency), why would anyone want to currency hedge it? Because gold is (mostly) priced in USD. You currency hedge it to avoid currency risk and be exposed to only the price risk of Gold in USD. Hedging it doesn't mean \"\"less speculative\"\". It just means you won't take currency risk. EDIT: Responding to OP's questions in comment what happens if the USD drops in value versus other major currencies? Do you think that the gold price in USD would not be affected by this drop in dollar value? Use the ETF $GLD as a proxy of gold price in USD, the correlation between weekly returns of $GLD and US dollar index (measured by major world currencies) since the ETF's inception is around -47%. What this says is that gold may or may not be affected by USD movement. It's certainly not a one-way movement. There are times where both USD and gold rise and fall simultaneously. Isn't a drop in dollar value fundamentally currency risk? Per Investopedia, currency risk arises from the change in price of one currency in relation to another. In this context, it's referring to the EUR/USD movement. The bottom line is that, if gold price in dollar goes up 2%, this ETF gives the European investor a way to bring home that 2% (or as close to that as possible).\"", "I will just try to come up with a totally made up example, that should explain the dynamics of the hedge. Consider this (completely made up) relationship between USD, EUR and Gold: Now lets say you are a european wanting to by 20 grams of Gold with EUR. Equally lets say some american by 20 grams of Gold with USD. Their investment will have the following values: See how the europeans return is -15.0% while the american only has a -9.4% return? Now lets consider that the european are aware that his currency may be against him with this investment, so he decides to hedge his currency. He now enters a currency-swap contract with another person who has the opposite view, locking in his EUR/USD at t2 to be the same as at t0. He now goes ahead and buys gold in USD, knowing that he needs to convert it to EUR in the end - but he has fixed his interestrate, so that doesn't worry him. Now let's take a look at the investment: See how the european now suddenly has the same return as the American of -9.4% instead of -15.0% ? It is hard in real life to create a perfect hedge, therefore you will most often see that the are not totally the same, as per Victors answer - but they do come rather close." ]

[ "335357", "214174", "511760" ]

[ "Your question indicates confusion regarding what an Individual Retirement Account (whether Roth or Traditional) is vs. the S&P 500, which is nothing but a list of stocks. IOW, it's perfectly reasonable to open a Roth IRA, put your $3000 in it, and then use that money to buy a mutual fund or ETF which tracks the S&P 500. In fact, it's ridiculously common... :)", "\"A Roth IRA is simply a tax-sheltered account that you deposit funds into, and then invest however you choose (within the limits of the firm you deposit the funds with). For example, you could open a Roth IRA account with Vanguard. You could then invest the $3000 by purchasing shares of VOO, which tracks the S&P 500 index and has a very low expense ratio (0.04 as of last time I checked). Fidelity has a similar option, or Schwab, or whatever brokerage firm you prefer. IRAs are basically just normal investment accounts, except they don't owe taxes until you withdraw them (and Roth don't even owe them then, though you paid taxes on the funds you deposit). They have some limitations regarding options trading and such, but if you're a novice investor just looking to do basic investments, you'll not notice. Then, your IRA would go up or down in value as the market went up or down in value. You do have some restrictions on when you can withdraw the funds; Roth IRA has fewer than a normal IRA, as you can withdraw the capital (the amount you deposited) without penalty, but the profits cannot be withdrawn until you're retirement age (I won't put an actual year, as I suspect that actual year will change by the time you're that old; but think 60s). The reason not to invest in an IRA is if you plan on using the money in the near future - even as an \"\"emergency fund\"\". You should have some money that is not invested aggressively, that is in something very safe and very accessible, for your emergency fund; and if you plan to buy a house or whatever with the funds, don't start an IRA. But if this is truly money you want to save for retirement, that's the best place to start. **Note, this is not investment advice, and you should do your own homework prior to making any investment. You can lose some or all of the value of your account while investing.\"", "Anytime you invest in stocks, you do that inside an investment account - such as the type you might open at ETrade, Vanguard, Fidelity or Charles Schwab. Once you have the account and fund it, you can tell the system to invest some/all of your money in When you open your investment account, their first question will be whether this is a cash account, traditional IRA, or Roth IRA. The broker must report this to the IRS because the tax treatment is very different." ]

[ "387338", "119700", "329757", "590523" ]

[ "With a Roth IRA, you can withdraw the contributions at any time without penalty as long as you don't withdraw the earnings/interest. There are some circumstances where you can withdraw the earnings such as disability (and maybe first home). Also, the Roth IRA doesn't need to go through your employer and I wouldn't do it through your employer. I have mine setup through Fidelity though I'm not sure if they have any guaranteed 3% return unless it was a CD. All of mine is in stocks. Your wife could also setup a Roth IRA so over 2 years, you could contribute $20,000. If I was you, I would just max out any 403-b matches (which you surely are at 25% of gross income) and then save my down payment money in a normal money market/savings account. You are doing good contributing almost 25% to the 403-b. There are also some income limitations on Roth IRAs. I believe for a married couple, it is $160k.", "If you are going to be buying a house in 1-2 years, I would be putting my money into a short term holding area like a high interest (which isn't that high right now) or a CD (also low interest) because of your near-term need. I wouldn't use the Roth option for your down payment money. If you invest in something volatile (and stocks/mutual funds are very volatile in a 1-2 year term) I would consider it too risky for your need and time frame.", "First, look at the local housing market, and the price to rent ratios. If you are comfortable that a house can be had for near to the cost of renting, and are not still dropping is price, then focus on the down-payment. I don't imagine housing prices to start picking up any time soon, so you don't be too rushed. If you feel like you have a longer time to save before you want to buy, I would focus as much money as I can into a retirement account while still saving for a down payment. Since you are young, you really want your retirement accounts working for you as soon as possible. You should not be investing in 3% stable funds, but the stock market index funds. Retirement is for 40 years in the future. Using funds for a down-payment from a retirement account should be a last resort. Remember this money is to provide you security later in life, not to get you into a house. When you take out money and put it into a house, it will not be appreciating nearly as fast. It is easy to say you will save later, but the money you save early in life will make up 50% or more of your funds when you retire. That is why it is critical to save for retirement as soon as possible.", "Lets do the math (assuming a lot of stuff, like your interest rates and that you make the contribution at the beginning of the year, also your tax bracket at the withdrawal time frame.) 1.) Beginning of year 1 Roth Option $5k contribution Non Roth Option $5k contribution 2.) Beginning of year 2 Roth Option $5000 + $150 interest + 5K contribution = $10150 Non Roth Option $5000 + $75 interest + 5K contribution = $10075 3.) End of year 2 Buy a house! yay! Roth Option---before withdrawal account value = 10150+10150*.03=10454.5 after withdrawl (assuming 38% tax on earnings withdrawal (10%penalty + 28% income tax estimate.) = 10327.17 Non Roth Option = 10 226.125 So you are talking about a significant amount of paperwork to either 1.) Net yourself $100 toward the purchase 2.) Cost yourself $226 on the purchase but have $454.50 in your roth ira. I am not sure I would do that, but it might be worth it." ]

[ "556163", "48952", "274392", "67472" ]

[ "Markets tend to go up over time, so most things you could buy would make money. A benchmark is meant to represent the market as a whole (or a subset that is relevant to what you are trading), so you can tell if your specific choices helped or hurt your return. As an example, say you pick two financial stocks, Citi and Goldman. They get you a return of 10% for the year, so you think you made good choices. But if the financial sector as a whole had a return of 20%, your choices weren't actually that great.", "Yes an index is by definition any arbitrary selection. In general, to measure performance there are 2 ways: By absolute return - meaning you want a positive return at all times ie. 10% is good. -1% is bad. By relative return - this means beating the benchmark. For example, if the benchmark returns -20% and your portfolio returns -10%, then it has delivered +10% relative returns as compared to the benchmark.", "Some years your portfolio may perform better than the benchmark, and some years it may be the other way around. Without a benchmark you will never know. And by the way if you choose poorly, you will never beat the benchmark. If the benchmark goes up 20% but your fund/investment only went up 3% you did make money, but you might want to reevaluate your strategy.", "One reason it matters whether or not you're beating the S&P 500 (or the Wilshire 5000, or whatever benchmark you choose to use) is to determine whether or not you'd be better off investing in an index fund (or some other investment vehicle) instead of pursuing whatever your current investment strategy happens to be. Even if your investment strategy makes money, earning what the S&P 500 has averaged over multiple decades (around 10%) with an index fund means a lot more money than a 5% return with an actively managed portfolio (especially when you consider factors like compound interest and inflation). I use the S&P 500 as one of my criteria for judging how well (or poorly) my financial adviser is doing for me. If his recommendations (or trading activity on my behalf, if authorized) are inferior to the S&P 500, for too long, then I have a basis to discontinue the relationship. Check out this Wikipedia entry on stock market indices. There are legitimate criticisms, but on the whole I think they are useful. As an aside, the reason I point to index funds specifically is that they are the one of the lowest-cost, fire-and-forget investment strategies around. If you compare the return of the S&P 500 index over multiple decades with most actively managed mutual funds, the S&P 500 index comes out ahead." ]

[ "256881", "526235" ]

[ "They're not negotiating trade rates for you, you set the trade rates in your order. What they might have is a slightly slower system, delivering your orders a second later than the competition would. If that's critical to you then you should look at that, otherwise look at their fees, customer support and research aids because that's where the broker value is.", "\"Always use limit orders never market orders. Period. Do that and you will always pay what you said you would when the transaction goes through. Whichever broker you use is not going to \"\"negotiate\"\" for the best price on your trade if you choose a market order. Their job is to fill that order so they will always buy it for more than market and sell it for less to ensure the order goes through. It is not even a factor when choosing between TradeKing and Scottrade. I use Trade King and my friend uses ScottTrade. Besides the transaction fee (TK is a few $$ cheaper), the only other things to consider are the tools and research (and customer service if you need it) that each site offers. I went with TK and the lower transaction fee since tools and research can be had from other sources. I basically only use it when I want to make a trade since I don't find the tools particularly useful and I never take an analyst's opinion of a stock at face value anyway since everybody always has their own agenda.\"" ]

[ "243949" ]

[ "There are a few different ways to organize this, but mostly I think you need to talk to a lawyer. The 50/50 split thing should be in writing along with a bunch of other issues. You could have one of you doing a sole proprietorship where the other person is a contractor that receives half of all revenues/profits. The person that owns the sole proprietorship may be entitled to deduct certain costs of running the entity. The other person would then be 1099'd his share of revenues. You could set up a partnership, again legal paperwork is necessary. You could also setup an S-Corp, where each of you is a 50% owner. You could also setup an LLC that is organized as any of the above. I would only do this if you can self fund some additional tax preparation costs. Figure about $600/year at a minimum. There are a lot of options with a sole proprietorship being the easiest. Your first step on the new venture would be to apply for an EIN (free), and then opening a business bank account. Good luck." ]

[ "115197" ]

[ "When calculating the NPV, is there anything I need to do in between the project start date outlay (Nov 2017), and the first cash inflow (July 2019). Do I need to discount the cashflow to the present, and if so, how? Yes, you need to discount every cash flow to the present time, not just the first one. When discounting cash flows, the appropriate discount rate needs to represent the opportunity cost of the initial cash outlay. Meaning if you were to use that money for something else, what rate of return would you expect? You could be safe and assume only a risk-free return (like 2-3%) or use the average rate of return of other investments (e.g. 10-15%). Another common approach is to use your cost of capital if you're raising funds for the project, or would instead have use the funds to pay off existing debt. Once you find a relevant discount rate, then just discount each cash flow by dividing them by e^rt, where r is the annualized discount rate (e.g. 0.10 for 10%) and t is the decimal number of years between now and the cash flow (e.g. 1.5 for 18 months)" ]

[ "277645" ]

[ "If the company is non-public, your hands are tied. Most startups have a Stock Option Plan with specific rules on the shares. In almost all cases, they have a Transferability clause preventing transfers of options and shares unless approved by the company (who would almost always say no). Additionally, they usually have a Right of First Refusal (ROFR), which states that if shares are going to be transferred, the company gets the chance to buy it first. In your case, the company may argue your friend would sell you the shares for free and the company would exercise their ROFR and buy back the shares for free. There is not much you can do in this case. You may be able to write up a contract between your friend and you, but it would be costly and possibly not worth the effort. You may be better off asking for a lump sum or some other sort of compensation. Additionally, your friend might want to be careful with this idea. You could potentially gain access to sensitive company tools/documents which could get them in a lot of trouble." ]

[ "179986", "124395" ]

[ "may result in more taxes when Fund shares are held in a taxable account. When the fund manager decides to sell shares of a stock, and those shares have grown in value, that growth is a capital gain. If that fund is part of a taxable account then the investors in the fund will have to declare that income/gain on their tax forms. That could require the investors to have to pay taxes on those gains. Of course if the investors are holding the fund shares in a IRA or 401K then there are no taxes due in the near term. A higher portfolio turnover rate may indicate higher transaction costs... ...These costs, which are not reflected in annual fund operating expenses or in the previous expense examples, reduce the Fund’s performance. The annual fund operating expenses are the expenses that they can assume will happen every year. They include salaries, the cost of producing statements, paperwork required by the government, research... It doesn't include transaction costs. Which they can't estimate what they will be in advance. If the fund invests in a particular segment of the market, and there is a disruption in that segment, they may need to make many new investments. If on the other hand last year they made great choices the turnover may be small this year. During the most recent fiscal year, the Fund’s portfolio turnover rate was 3% of the average value of its portfolio. That may be your best indicator.", "\"As Kurt Vonnegut said, the way to make money is to be there when large amounts of money are changing hands and take a little for yourself; they'll never notice. That's what transaction costs are: when a fund buys or sells stocks a bit of the money goes to the folks who handle the transaction. When you personally buy or sell stocks a bit of the money goes to the broker in the form of a fee. (and, no, no fee brokers don't work for free; they just hide the fee by not getting you the best possible price). So frequent transactions (i.e., higher portfolio turnover) mean that those little bits of money are going to the intermediaries more often. That's what \"\"higher transaction costs\"\" refers to -- the costs are higher than in a fund that buys and sells less often. In short, those higher transaction costs are a consequence of higher turnover; nothing nefarious there.\"" ]

[ "111512", "583283", "16278", "229623", "412079", "492423", "45029", "326851", "227549" ]

[ "You're not clueless at all. You don't mention that you have any debt, but if you have consumer debt, you might want to consider accelerating your payments on those debts unless you're already doing so. You and your wife have a baby on the way. They're an absolute joy (we have a 7-year-old), but they're also a financial strain. If I were in your shoes knowing what I know about your situation, I'd think carefully and go slowly with any investing until after you adjust to a larger family. That way you run less risk of having a sizable investment tank when you really need the money for your new baby. Continue to learn about investing. There's no reason to rush into something you're not comfortable with. If your goal is for a down payment on a house, then continue towards that. Cash is just fine for that. Shop around for a good house from someone who really needs to sell.", "@mbhunter and @JoeTaxpayer have given good advice. Were I in your situation, the only thing I might do differently is put whatever amount of cash not needed for emergencies in a money market fund with check-writing privileges and/or a debit card. The rate on the account has at least some chance of preserving the value of your principal, and it will be easier to put your money into investments as soon as you're ready. This sort of account is offered by any number of brokerages and financial companies, so pick one you trust and start there.", "I have questions for you - As the others have stated, now really isn't the time to do anything to turn short term liquidity into long term investments. I'll contradict that only for matched 401(k) deposits. The answers to these questions will prompt more/better responses.", "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.", "\"Just my 2 cents, I read on the book, The WSJ Financial Guidebook for New Parents, that \"\"the average family spends between $11k and $16k raising their child during his first year\"\". So it might be better for you to make a budget including that cost, then decide how much money you feel safe to invest.\"", "This advice will be too specific, but... With the non-retirement funds, start by paying off the car loan if it's more than ~3% interest rate. The remainder: looks like a good emergency fund. If you don't have one of those yet, you do now. Store it in the best interest-bearing savings account you can find (probably accessible by online banking). If you wish to grow your emergency fund beyond $14-20,000 you might also consider some bonds, to boost your returns and add a little risk (but not nearly as much risk as stocks). With the Roth IRA - first of all, toss the precious metals. Precious metals are a crisis hedge and an advanced speculative instrument, not a beginner's investment strategy for 40% of the portfolio. You're either going to use this money for retirement, or your down payment fund. If it's retirement: you're 28; even with a kid on the way, you can afford to take risks in the retirement portfolio. Put it in either a targe-date fund or a series of index funds with an asset allocation suggested by an asset-allocation-suggestion calculator. You should probably have north of 80% stocks if it's money for retirement. If you're starting a down-payment fund, or want to save for something similar, or if you want to treat the IRA money like it's a down-payment fund, either use one of these Vanguard LifeStrategy funds or something that's structured to do the same sort of thing. I'm throwing Vanguard links at you because they have the funds with the low expense ratios. You can use Vanguard at your discretion if it's all an IRA (and not a 401(k)). Feel free to use an alternative, but watch the expense ratios lest they consume up to half your returns.", "My advice to you is not to take any advice from anyone when it comes to investing, especially when you don't know much about what you are investing in. mbhunter is correct, take your time to learn about what you want to invest in. If your goal at the moment is short term don't invest in stocks unless you really know what you are doing. Put your money where you can get the highest interest rate, continue saving and do a lot of research on the house you wish to buy. Even if you are not ready to buy a house yet, start looking so that by the time you are ready to buy, you know how much the house is really worth. Before buying our house we spent about 7 months looking and researching and looked at more than 100 houses.", "Another thought: Higher education in the US is frightfully expensive with the sticker price for a 4-year undergraduate degree at a decent private college us sitting at around $250,000 and rising fast. Consider starting a 529 savings plan especially if you planning on more kids.", "I don't agree with others regarding paying off debt ASAP. You only have auto loan and auto loans are actually good for your credit score. With a mere $6k balance, it is not like you are going to have a problem paying off the loan. Not only that you will build your credit score and this will come in handy when you are purchasing a home. With the Federal Reserve setting the interest rate at 0% until 2015, I can't understand why people would pay off anything ASAP. As long as you don't have revolving credit card balances, you are in the clear. I don't know your salary nor how big your porfolio is but I would save 5 months expense in cash and dump the rest in precious metals. Holding cash is the worst thing you could be doing (unless you predict a deflation). You said you already have 40% in precious metals. You are already way ahead of other 95% of Americans by protecting your purchasing power. Follow your gut. The stormg is coming and it's not going to get any better." ]

[ "579244" ]

[ "Traditionally, dealers and broker-dealers were in contact with the actual producers of a product or issuers of a security, selling it at the exchange on their behalf. Consumers would traditionally be on the buy side, of course. These days, anyone can enter the market on either side. Even if you don't hold the security or product, you could sell it, and take on the risk of having to stock up on it by the delivery date in exchange for cash or other securities. On the other side, if you can't hold the product or security you could still buy it, taking on the risk of having to dispose of it somehow by delivery in exchange for cash or other securities. In either case you (the sell-side) take on risk and provide products/securities/cash. This is most commonly known as market making. Modern literature coins the terms liquidity taker (buy-side) and liquidity provider (sell-side). Even more accurately, risk management literature would use the terms risk-taker (sell-side) and risk spreader or risk reducer (buy side). This is quite illustrative in modern abstract markets. Take a market that allows for no offsetting or hedging because the product in question is abstract or theoretical, e.g. weather trading, volatility trading, inflation trading, etc. There's always one party trying to eliminate dependence on or correlation to the product (the risk reducer, buy-side) and the counterparty taking on their risk (sell-side)." ]

[ "475410" ]

[ "You can always take deduction for foreign tax paid on Schedule A, or calculate foreign tax credit using form 1116. Credit is usually more beneficial, but in some cases you will be better of with a deduction. However, in very specific cases, you can claim the credit directly on your 1040 without using the form 1116. Look at the 1040 instructions for line 47: Exception. You do not have to complete Form 1116 to take this credit if all of the following apply. All of your foreign source gross income was from interest and dividends and all of that income and the foreign tax paid on it were reported to you on Form 1099-INT, Form 1099-DIV, or Schedule K-1 (or substitute statement). The total of your foreign taxes was not more than $300 (not more than $600 if married filing jointly). You held the stock or bonds on which the dividends or interest were paid for at least 16 days and were not obligated to pay these amounts to someone else. You are not filing Form 4563 or excluding income from sources within Puerto Rico. All of your foreign taxes were: Legally owed and not eligible for a refund or reduced tax rate under a tax treaty, and Paid to countries that are recognized by the United States and do not support terrorism. For more details on these requirements, see the Instructions for Form 1116." ]

[ "289466" ]

[ "\"I expect that data may be copyright. Data that's published (e.g. on a newsfeed or web site) is subject to terms of use. Standard & Poor's web site says, about the Shiller indexes, Who do I contact at S&P to license my use of these indices? Questions regarding licensing the S&P/Case-Shiller Home Price Indices can be addressed to: Bo Chung Managing Director [email protected], +1.212.438.3519 As for 'recording' the information yourself, that may depend on how and where (e.g. from what source) you're recording it. If for example you tried to record prices from the Canadian MLS (Realtor's) network, they too have their own terms of use on the data they publish. Copyright laws vary from country to country (and terms of use certainly vary): for example see http://en.wikipedia.org/wiki/Feist_v._Rural which is case law about copyrighting a phone directory in the USA, and contrast that with http://en.wikipedia.org/wiki/Database_right which is European legislation. So who owns data if it is determined by free market? I guess that \"\"determined by free market\"\" means that buyers and sellers are publishing their offers-to-buy and their offers-to-sell, and I guess that the publisher (e.g. the stock exchange) has 'terms of use' about the data (the offers) that they're publishing.\"" ]

[ "548329", "256467" ]

[ "\"So you've already considered relocation. Here are a few additional things to consider with respect to negotiating a signing bonus (if any): Would you be leaving a position where you are eligible for an upcoming bonus, profit-share, or other special incentive payout, such as a stock option or RSU vesting date? A signing bonus can help offset the opportunity cost of leaving a previous job when an incentive payout date is near. At the new company, would you be required to wait some pre-defined period to be eligible to participate in the pension or retirement savings plan with employer basic or matching contributions? If you were receiving ongoing employer contributions in your previous company's plan and would need to wait, say, six months before participating in the new company's plan, a signing bonus can offset lost employer contributions in the interim. Consider funding your own IRA in that time. Would you be required to give up something else of value to you that your previous employer was providing, such as an expensive laptop, that is not expected to otherwise be replaced by the new company? Whether they offer a signing bonus and how much you can expect to negotiate is based on a lot of factors and you'll need to \"\"play it by ear.\"\" Remember what bonus means: \"\"A payment or gift added to what is usual or expected, in particular.\"\" Remember also that a signing bonus is a one time thing. In general, it's more important to consider the overall ongoing compensation package – salary and incentive plans, vacation, retirement benefits, health benefits, etc. – and whether those meet your long-term needs.\"", "\"Signing bonuses are probably the most variable of all, as there is a general understanding that more personal factors are taken into account. As a result, HR isn't under a huge obligation to explain away the differences. In comparison, for salary there's the wide expectation that same job = same pay. Since there's so variable, but also fairly rare, \"\"budget\"\" isn't a main concern for many HR departments. And they certainly won't have a finely grained budget breakdown. \"\"This year we'll pay $250.000 for headhunters, $50000 for relocation payments, $100,000 for pension transfers, $150.000 for stock option losses...\"\". It's generally tossed on one big heap, \"\"cost of hiring\"\". So, what can you ask for? That's really a market question. What's your value to the company? How much of that is already reflected in salary and other benefits? The main downside to signing bonuses is that a company won't know how long you'd stay. Your value to the company is probably your monthly work. Therefore they cannot amortize that bonus over a fixed amount of months. What if you leave after 3 months? For that reason, a \"\"conditional\"\" signing bonus is a reasonable offer from your side. E.g. ask for one month salary, conditional on you staying for 24 months, and otherwise you'll repay them from your last salary.\"" ]

[ "406711" ]

[ "No, SPDR ETFs are not a good fit for a novice investor with a low level of financial literacy. In fact, there is no investment that is safe for an absolute beginner, not even a savings account. (An absolute beginner could easily overdraw his savings account, leading to fees and collections.) I would say that an investment becomes a good fit for an investor as soon as said investor understands how the investment works. A savings account at a bank or credit union is fairly easy to understand and is therefore a suitable place to hold money after a few hours to a day of research. (Even after 0 hours of research, however, a savings account is still better than a sock drawer.) Money market accounts (through a bank), certificates of deposit (through a bank), and money market mutual funds (through a mutual fund provider) are probably the next easiest thing to understand. This could take a few hours to a few weeks of research depending on the learner. Equities, corporate bonds, and government bonds are another step up in complexity, and could take weeks or months of schooling to understand well enough to try. Equity or bond mutual funds -- or the ETF versions of those, which is what you asked about -- are another level after that. Also important to understand along the way are the financial institutions and market infrastructure that exist to provide these products: banks, credit unions, public corporations, brokerages, stock exchanges, bond exchanges, mutual fund providers, ETF providers, etc." ]

[ "341235", "370756", "8261" ]

[ "This is called currency speculation, and it's one of the more risky forms of investing. Unless you have a crystal ball that tells you the Euro will move up (or down) relative to the Dollar, it's purely speculation, even if it seems like it's on an upswing. You have to remember that the people who are speculating (professionally) on currency are the reason that the amount changed, and it's because something caused them to believe the correct value is the current one - not another value in one direction or the other. This is not to say people don't make money on currency speculation; but unless you're a professional investor, who has a very good understanding of why currencies move one way or the other, or know someone who is (and gives free advice!), it's not a particularly good idea to engage in it - while stock trading is typically win-win, currency speculation is always zero-sum. That said, you could hedge your funds at this point (or any other) by keeping some money in both accounts - that is often safer than having all in one or the other, as you will tend to break even when one falls against the other, and not suffer significant losses if one or the other has a major downturn.", "Remember that converting from EU to USD and the other way around always costs you money, at least 0.5% per conversion. Additionally, savings accounts in EU and USA have different yields, you may want to compare which country offers you the best yields and move your money to the highest yielding account.", "\"I would make this a comment but I am not allowed apparently. Unless your continent blows up, you'll never lost all your money. Google \"\"EUR USD\"\" if you want news stories or graphs on this topic. If you're rooting for your 10k USD (but not your neighbors), you want that graph to trend downward.\"" ]

[ "84870" ]

[ "My interpretation of that sentence is that you can't do the buying/selling of shares outright (sans margin) because of the massive quantity of shares he's talking about. So you have to use margin to buy the stocks. However, because in order to make significant money with this sort of strategy you probably need to be working dozens of stocks at the same time, you need to be familiar with portfolio margin. Since your broker does not calculate margin calls based on individual stocks, but rather on the value of your whole portfolio, you should have experience handling margin not just on individual stock movements but also on overall portfolio movements. For example, if 10% (by value) of the stocks you're targeting tend to have a correlation of -0.8 with the price of oil you should probably target another 10% (by value) in stocks that tend to have a correlation of +0.8 with the price of oil. And so on and so forth. That way your portfolio can weather big (or even small) changes in market conditions that would cause a margin call on a novice investor's portfolio." ]

[ "4933" ]

[ "There are quite a few reasons that a company may choose to pay dividends rather than hold cash [increasing the share value]. Of couse there are equally other set of reasons why a company may not want to give dividends and hold on to cash. Related question here Please explain the relationship between dividend amount, stock price, and option value?" ]

[ "516607", "422051", "253268" ]

[ "\"Rebalancing has been studied empirically quite a bit, but not particularly carefully and actually turns out to be very hard to study well. The main problem is that you don't know until afterward if your target weights were optimal so a bad rebalancing program might give better performance if it strayed closer to optimal weights even if it didn't do an efficient job of keeping near the target weights. In your particular case either method might be preferred depending on a number of things: You can see why there isn't a generally correct answer to your question and the results of empirical studies might very wildly depending on the mix of assets and risk tolerance. Still if your portfolio is not too complicated you can estimate the costs of the two methods without too much trouble and figure out if it is worthwhile to you. EDIT In Response to Comment Below: Your example gets at what makes rebalancing so hard empirically but also generally pretty easy in practice. If you were to target 75% Equity (25% bonds?) and look at returns only for 30 years the \"\"best\"\" rebalancing method would be to never rebalance and just let 75% equity go to near 100% as equity has better long term returns. This happens when you look only at returns as the final number and don't take into account the change in risk in your portfolio. In practice, most people that are still adding (or subtracting in retirement) to a retirement portfolio are adding (removing) a significant amount compared to the total amount in their portfolio. In the case you discribe, it is cheaper (massively cheaper in the presence of load fees) just to use new capital to trade toward your target, keeping your risk profile. New money should be large enough to keep you near enough your target. If you just estimate the trading costs/fees in both cases I think you'll see just how large the difference is between the two methods this will dwarf any small differences in return over the long run even if you can't trade back all the way to your target.\"", "Yes, rebalancing with new money avoids capital gains taxes and loads (although if you're financially literate enough to be thinking about rebalancing techniques, I'm surprised to hear that you're invested in funds with loads). On the other hand, if it's taking you years to rebalance, then: (a) you are not rebalancing anywhere near frequently enough. Rebalancing should be something you do every 6 months or 1 year, such that it would take only a few weeks or maybe a month of new investment to get back in balance. (b) you will be out-of-balance for quite a long time, while the whole point of the theory of rebalancing is to always be mathematically prepared for swings in the market. Any time spent out of balance represents that much more risk that an unexpected market move can seriously hurt your portfolio. You should weigh the time it will take you to rebalance the long way (i.e. the risk cost of not rebalancing immediately) vs. the taxes and fees involved in rebalancing quickly. If you had said that it would take you only a couple weeks or a month to rebalance the long way, I would say that the long way is fine. But the prospect of spending years without a balanced portfolio seems far more costly to me than any expenses you might incur rebalancing quickly. Since it's almost the end of the calendar year, have you considered doing two quick rebalances, one this year, and another in January? That way half of the tax consequences would happen in April, and the other half not until the next April, giving you plenty of time to scrounge up the money. Also, even if you have no capital losses this year with which to offset some of your expected capital gains, you would have all of next year to harvest some losses against next year's half of the rebalancing gains.", "There will quickly come a time when buying to rebalance is impractical. Consider, you save 10%, and at some point, you have 5x your income saved. (you earn $50K and have accumulated $250K). A simple allocation, 50/50, so $125K stock, $125K bonds. Now, in a year the market is up much over 4%, your $5K deposit will not be enough to balance. Earlier on, the method may work just fine, later on, not so much. Edit - The above is an example, to show that there will come a time when deposits are not enough to rebalance. The above single year produces a 52/48 split, and the rebalance deposits more than 2 years. If the market continues to rise a reasonable amount, 2 years later you are even more out of balance, perhaps 56/44. I chose reasonable numbers as a starting point, just 5X income saved, and a 10% annual deposit. In the end, you can waive off any divergence from your target. That's your choice." ]

[ "147981", "440091", "263912" ]

[ "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.", "Companies typically release their earnings before the market opens, and then later host an analyst/investor conference call to discuss the results. Here's a link to an interesting article abstract on the subject: Disclosure Rules For Earnings Releases And Calls | Bowne Digest. Excerpt: In the aftermath of the Sarbanes-Oxley Act, the SEC changed regulations to bring quarterly earnings announcements in line with the generally heightened sensitivity to adequate disclosure. New regulations required that issuers file or furnish their earnings press releases on Form 8-K and conduct any related oral presentations promptly thereafter, to avoid a second 8-K. [...] Sample from a news release by The Coca Cola Company: ATLANTA, September 30, 2009 - The Coca-Cola Company will release third quarter and year-to-date 2009 financial results on Tuesday, October 20, before the stock market opens. The Company will host an investor conference call at 9:30 a.m. ( EDT ), on October 20. [...] Sample from a news release by Apple, Inc.: CUPERTINO, California—January 21, 2009—Apple® today announced financial results for its fiscal 2009 first quarter ended December 27, 2008. The Company posted record revenue of [...] Apple will provide live streaming of its Q1 2009 financial results conference call utilizing QuickTime®, Apple’s standards-based technology for live and on-demand audio and video streaming. The live webcast will begin at [...]", "Companies release their earnings reports over news agencies like Reuters, Dow Jones and Bloomberg before putting them on their website (which usually occurs a few minutes after the official dissemination of the report). This is because they have to make sure that all investors get the news at the same time (which is kind of guaranteed when official news channels are used). The conference call is usually a few hours after the earnings report release to discuss the results with analysts and investors." ]

[ "179520", "382568" ]

[ "Your question is unanswerable as you haven't provided enough information. I.e. If those shares cost $1000 and you have $50000 ( or any number above $1000) of cash available in the account then you can't possibly free ride. I think your understanding of the free ride rule is incorrect. Basically what this rule is stating is that you have to have the cash when the trade is placed in order to settle the trade. Otherwise you are taking on margin (which you can't do in a cash account). So at order entry you have to have the cash to cover the purchase so it's able to be settled. If you do, no problem and you can sell that stock before trade settlement. There is no law that says you have to hold it past trade settlement. However, you cannot spend the same dollar more than once before it settles. This site does a good job explaining this more throughly with examples: http://www.invest-faq.com/articles/trade-day-free-ride.html", "\"You should check with your broker for details, but you can generally specify which \"\"lot\"\" you are selling. where I've seen it, that's done by concurrently sending a \"\"letter of instruction\"\" documenting your choice of lot concurrent with the sale, but different brokers may handle this differently. I would think this should work for the case that you describe. (In addition, the default rule used by your broker is \"\"probably\"\" first-in-first-out, which will do what you want here.) Note that this may come into play even in a margin account to the extent that you might want to specify a lot in order to obtain (or set yourself up for later benefit of) favorable tax treatment under the long-term capital gains rules\"" ]

[ "128676", "124900" ]

[ "EFA must be bought and sold in US dollars. XIN allows people to buy and sell EFA in Canadian dollars without exposing their investment to unpredictable swings in the USD/CAD ratio. This is what's known as a currency-hedged instrument. Now, why the chart sums up to over 100% is anyone's guess. Presumably it's the result of a couple hundred rounding errors from all the components. If you view their most recent report, it also sums up to over 100%, but at least the EFA component is (sensibly) under 100%. P.S. I'm not seeing where it says there's only one holding. There's the primary holding, plus over 100 other cash holdings to effect the currency-hedging.", "\"On BlackRock's XIN page under Key Facts it says the number of holdings as 1. Looking at the top 10 holdings shows EFA as the number 1 holding with a 101% weighting. XIN is \"\"iShares MSCI EAFE Index ETF (CAD-Hedged)\"\", so it takes the underlying component and hedges it to CAD. The underlying component is an ETF itself, EFA, so they only need to hold that one component (since that is the MSCI EAFE Index ETF). How is it possible to hold over 100%? Take a look at the full list of holdings. While EFA is the only underlying security (e.g. ETF, Stock, Bond, et.c), the remaining holdings (looks to be 133 remaining holdings) are cash positions. Some of those positions are negative for hedge purposes. Because of this, the total value of the portfolio is less than the position of EFA itself (since total value is EFA plus a bunch of negative entries); because the total value is less than EFA itself, EFA has a > 100% weighting.\"" ]

[ "582697", "24846" ]

[ "This depends on the terms and conditions of your IRA account, and those of the investments you have chosen. In general, you are better off investing as quickly as is feasible given those terms. Money in your cash account doesn't earn much of a return, so the quicker you get money into something earning a return, the better. However, pay attention to the fees and costs associated with investing. If there is a per-transaction fee, you may want to consolidate, as it may be more efficient to do so - after all, if you contribute $500 at a shot, and it costs you $5 to make a trade, you're paying 1% off the top to make that trade if you make 11 of them, versus 0.1% to make 1, so the question is do you earn that 1% back over the course of the six months? That will depend on what you are investing in. More than likely you're going to earn more than 1% over the course of the six months, so it's probably worth investing it in pieces still in that situation, but if the transaction cost is higher, or the time differential lower, you may have a less clear-cut answer. I invest at Vanguard in their funds and have no transaction fees, so I have a more obvious answer (invest as soon as possible). You also need to consider whether you have minimums to pay attention to - maybe your investment is something you can only buy whole shares of, for example, or you might have a much higher fee if you make small transactions. In that case, you should wait until you have the minimum to make that transaction if the fee is more than the return you'll get. So the answer is - make the transactions as early as you can, subject to considering the fees you will pay for making them.", "\"If you are like most people, your timing is kind of awful. What I mean by most, is all. Psychologically we have strong tendencies to buy when the market is high and avoid buying when it is low. One of the easiest to implement strategies to avoid this is Dollar Cost Averaging. In most cases you are far better off making small investments regularly. Having said that, you may need to \"\"save\"\" a bit in order to make subsequent investments because of minimums. For me there is also a positive psychological effect of putting money to work sooner and more often. I find it enjoyable to purchase shares of a mutual fund or stock and the days that I do so are a bit better than the others. An added benefit to doing regular investing is to have them be automated. Many wealthy people describe this as a key to success as they can focused on the business of earning money in their chosen profession as opposed to investing money they have already earned. Additionally the author of I will Teach You to be Rich cites this as a easy, free, and key step in building wealth.\"" ]

[ "502267" ]

[ "\"I don't believe it makes a difference at the federal level -- if you file taxes jointly, gains, losses, and dividends appear on the joint tax account. If you file separately, I assume the tax implications only appear on the owner's tax return. Then the benefits might outweigh the costs, but only if you correctly predict market behavior and the behavior of your positions. For example, lets say you lose 30k in the market in one year, and your spouse makes 30k. If you're filing jointly, the loss washes out the gain, and you have no net taxes on the investment. If you're filing separately, you can claim 3k in loss (the remaining 27k in loss is banked to future tax years), but your spouse pays taxes on 30k in gain. Where things get more interesting is at the state level. I live in a \"\"community property state,\"\" where it doesn't matter whether you have separate accounts or not. If I use \"\"community money\"\" to purchase a stock and make a million bucks, that million bucks is shared by the two of us, whether the account is in my name our in our name. income during the marriage is considered community property. However property you bring into the marriage is not. And inheritances are not community property -- until co-mingled. Not sure how it works in other states. I grew up in what's called an \"\"equitable property state.\"\"\"" ]

[ "203232" ]

[ "If you had a retirement plan at any time in 2013 you are considered covered by an plan. Are You Covered by an Employer's Retirement Plan? You’re covered by an employer retirement plan for a tax year if your employer (or your spouse’s employer) has a: Defined contribution plan (profit-sharing, 401(k), stock bonus and money purchase pension plan) and any contributions or forfeitures were allocated to your account for the plan year ending with or within the tax year; IRA-based plan (SEP, SARSEP or SIMPLE IRA plan) and you had an amount contributed to your IRA for the plan year that ends with or within the tax year; or Defined benefit plan (pension plan that pays a retirement benefit spelled out in the plan) and you are eligible to participate for the plan year ending with or within the tax year. Box 13 on the Form W-2 you receive from your employer should contain a check in the “Retirement plan” box if you are covered. If you are still not certain, check with your (or your spouse’s) employer. The limits on the amount you can deduct don’t affect the amount you can contribute. However, you can never deduct more than you actually contribute. Additional Resources: Publication 590, Individual Retirement Arrangements (IRAs)" ]

[ "151946", "362281", "445549" ]

[ "\"Legally speaking, when you convert that bit-coin onto something else, the Israeli Tax Authority will look into the value of that something else, compare it to the original value of the previous something else you used to buy bit-coins (USD, in your example), and charge you capital gain taxes for the difference. According to the Israeli law you're supposed to pay taxes when selling (converting the bit-coin to something else), and since you're not using any formal bank or stock broker which will automatically deduct the taxes, you have to pay the taxes yourself. By not doing so you're committing a tax fraud. The real question you're asking is whether they'll come after you. Well, that depends on the amounts. They might. Pay attention: there's no statute of limitation for tax fraud in Israel. They may come after you in 50 years from now. Another thing to keep in mind: if you used bit-coins to buy something (services or products of any kind), you probably didn't pay the VAT (מע\"\"מ) - which is another case of tax fraud on your behalf. PS: I'm not a lawyer or accountant, so get a professional advice, but I have been dealing with the Tax Authority in Israel, so I've got a pretty good idea of what the rules are.\"", "I don't know how taxes work in Israel, but I imagine it is relatively similar to taxes in the US. In the US you need to pay taxes on investment earnings when you sell them or in this case trade them for something of value. The amount that would typically would be taxed on would be the difference between how much you paid for the currency and the value of the item you traded it for. In theory there shouldn't be any difference in trading bitcoins versus dollars or euros. Reality is that they are rather weird and I don't know what category they would fall into. Are they a currency or a collectors item? I think this is all rather hypothetical because there is no way for any government to track digital currencies and any taxes paid would be based on the honor system. I am not an account and the preceding was not tax advice...", "I guess Bitcoin are not that popular yet and hence there are no specific regulations. If currently it gets debated, it would be treated more like a Pre-Paid card or your Paypal account. As you have already paid taxes on the $$ you used to buy the Bitcoins there is no tax obligation as long as you keep using it to buy something else. The other way to look at it is as a commodity. If you have purchased a commodity and it has appreciated in value in future you may be liable to pay tax on the appreciated value. Think of it as a if you bought a house with the $$ and sold it later. Once more serious trade starts happening, the governments around the world would bring in regulations. Till then there is nothing to worry about." ]

[ "303525", "26407" ]

[ "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.", "\"I've been down the consolidation route too (of a handful of DC pensions; the DB ones I've not touched, and you would indeed need advice to move those around). What you should be comparing against is: what's the cheapest possible thing you could be doing? Monevators' online platform list will give you an idea of SIPP costs (if your pot is big enough and you're a buy-and-hold person, ATS' flat-fee model means costs can become arbitrarily close to zero percent), and if you're happy to be invested in something like Vanguard Lifestrategy, Target Retirement or vanilla index trackers then charges on those will be something like 0.1%-0.4%. Savings of 0.5-1.0% per year add up over pension saving timescales, but only you can decide whether whatever extra the adviser is offering vs. a more DIY approach is worth it for you. Are you absolutely sure that 0.75% pa fee isn't on top of whatever charges are built into the funds he'll invest you in? For the £1000 fee, advisers claim to have high costs per customer because of \"\"regulatory burdens\"\"; this is why there's talk of an \"\"advice gap\"\" these days: if you only have a small sum to invest, the fixed costs of advice become intolerable. IMHO, nutmeg are still quite expensive for what they offer too (although still probably cheaper than any \"\"advised\"\" route).\"" ]

[ "445635", "494939", "235015" ]

[ "This would be a nice Raspberry Pi project for Mathematica, which comes bundled free on the Raspbian OS. You can program it up and leave it running. It's not expensive and doesn't use much power. A program to monitor stock prices or volume could be written as simply as :- This checks the volume of trades of Oct 2014 US crude oil futures every 30 seconds and sends an email if the volume jumps by more than 100. The financial data in this example is curated from Yahoo. If specific data is not available or not updated frequently enough, if you can find an alternative online data source it's usually possible read the data in. For example, this is apparently real-time data :- {Crude Oil, 92.79, -0.67, -0.71%} After leaving the above program running while writing this the volume of trades has risen like so :- Edit I just set this running on a Raspberry Pi. I had to use gmail for the email setup as described in this post: Configuring Mathematica to send email from a notebook. Anyway, it's working. Hope I don't get inundated with emails. ;-)", "TdAmeritrade offers this service for free using 3rd party company markit. From markit's site, below is their guarantee. http://www.markit.com/product/markit-on-demand Markit On Demand delivers an average of two million alerts per day through various technology platforms and via multiple channels, including email, instant messages, wireless, RSS and Facebook. Investors can subscribe to their alerts of choice, and Markit On Demand guarantees that they will receive an alert within five minutes of the event trigger for all price and volume alerts", "\"Real-time equity (or any other market) data is not available for free anywhere in the US. It is always delayed by 10-15 minutes. On the other hand, online brokers who target the \"\"day trader\"\" (Interactive Brokers, TD Ameritrade, etc.) offer much closer to real-time data AND feature all the tools/alerts/charts/etc. you could ever possibly dream of. I bet the type of alert you're asking for is available with just a couple of clicks on one of these brokers' platforms. Of course, accounts with these online brokers are not free; you must pay for these sophisticated tools and fast market access. Another down side is that the data feeds sent to you by even the most sophisticated online broker are still delayed by tens of seconds compared to the data feeds used by big banks and professional investors. Not to mention that the investment arm of the broker you use will be making its own trades based on the data feeds before relaying them on to you. So this begs the question: why do you need real-time information? Are you trying to \"\"day trade\"\" -- i.e. profit from minute-to-minute fluctuations in the stock market? (I can't in good conscience recommend that, but best of luck to you.) If on the other hand you don't truly need \"\"real-time\"\" data for your application, then I support @ChrisDegnen's approach -- use public data feeds and write your own software. You probably will not find any free tools for the sort of alerting you're looking for because most folks who want these types of alerts also need faster feeds and are therefore already using an online broker's tools.\"" ]

[ "110674", "137901" ]

[ "Reversing your math, I am assuming you have $312K to work with. In that case, I would simply shop around your local banks and/or credit unions and have them compete for your money and you might be quite surprised how much they are willing to pay. A couple of months ago, you would be able to get about 4.25% from Israel Bonds in Canada on 5 years term (the Jubilee product, with minimum investment of $25K). It's a bit lower now, but you should still be able to get very good rates if you shop around tier-2 banks or credit unions (who are more hungry for capital than the well-funded tier-1 banks). Or you could look at preferred shares of a large corporation. They are different from common shares in the sense they are priced according to the payout rate (i.e. people buy it for the dividend). A quick screen from your favorite stock exchange ought to find you a few options. Another option is commercial bonds. You should be able to get that kind of return from investment grade (BBB- and higher) bonds on large corporations these days. I just did a quick glance at MarketWatch's Bond section (http://cxa.marketwatch.com/finra/BondCenter/Default.aspx) and found AAA grade bonds that will yield > 5%. You will need to investigate their underlying fundamentals, coupon rate and etc before investing (second thought, grab a introduction to bonds book from Chapters first). Hope these helps.", "If you're in the USA and looking to retire in 10 years, pay your Social Security taxes? :P Just kidding. Do a search for Fixed Rate Annuities." ]

[ "356819", "39436" ]

[ "Suppose that the ETF is currently at a price of $100. Suppose that the next day it moves up 10% (to a price of $110) and the following day it moves down 5% (to a price of $104.5). Over these two days the ETF has had a net gain of 4.5% from its original price. The inverse ETF reverses the daily gains/losses of the base ETF. Suppose for simplicity that the inverse ETF also starts out at a price of $100. So on the first day it goes down 10% (to $90) and on the second day it goes up 5% (to $94.5). Thus over the two days the inverse ETF has had a net loss of 5.5%. The specific dollar amounts do not matter here. The result is that the ETF winds up at 110%*95% = 104.5% of its original price and the inverse ETF is at 90%*105% = 94.5% of its original price. A similar example is given here. As suggested by your quote, this is due to compounding. A gain of X% followed by a loss of Y% (compounded on the gain) is not in general the same as a loss of X% followed by a gain of Y% (compounded on the loss). Or, more simply put, if something loses 10% of its value and then gains 10% of its new value, it will not return to its original value, because the 10% it gained was 10% of its decreased value, so it's not enough to bring it all the way back up. Likewise if it gains 10% and then loses 10%, it will go slightly below its original value (since it lost 10% of its newly increased value).", "\"The most fundamental answer is that when you short a stock (or an ETF), you short a specific number of shares on a specific day, and you probably don't adjust this much as the price wobbles goes up and down. But an inverse fund is not tied to a specific start date, like your own transaction is. It adjusts on an ongoing basis to maintain its full specified leverage at all times. If the underlying index goes up, it has to effectively \"\"buy in\"\" because its collateral is no longer sufficient to support its open position. On the other hand, if the underlying index goes down, that frees up collateral which is used to effectively short-sell more of the underlying. So by design it will buy high and sell low, and so any volatility will pump money out of the fund. I say \"\"effectively\"\" because inverse funds use derivatives and contracts, rather than actually shorting the underlying security. Which brings up the less fundamental issue. These derivatives and contracts are relatively opaque; the counter-parties are in it for their own benefit, not yours; and the people who run the fund get their expenses regardless of how you do, and they are hard for you to monitor. This is a hazardous combination.\"" ]

[ "391515" ]

[ "\"Note that the series you are showing is the historical spot index (what you would pay to be long the index today), not the history of the futures quotes. It's like looking at the current price of a stock or commodity (like oil) versus the futures price. The prompt futures quote will be different that the spot quote. If you graphed the history of the prompt future you might notice the discontinuity more. How do you determine when to roll from one contract to the other? Many data providers will give you a time series for the \"\"prompt\"\" contract history, which will automatically roll to the next expiring contract for you. Some even provide 2nd prompt, etc. time series. If that is not available, you'd have to query multiple futures contracts and interleave them based on the expiry rules, which should be publicly available. Also is there not a price difference from the contract which is expiring and the one that is being rolled forward to? Yes, since the time to delivery is extended by ~30 days when you roll to the next contract. but yet there are no sudden price discontinuities in the charts. Well, there are, but it could be indistinguishable from the normal volatility of the time series.\"" ]

[ "272851", "502754", "60290", "361510" ]

[ "No, absolutely not. Income tax rates are marginal. The tax bracket's higher tax rate only applies to extra dollars over the threshold, not to dollars below it. The normal income tax does not have any cliffs where one extra dollar of income will cost more than one dollar in extra taxes. Moreover, you are ignoring the personal exemption and standard deduction. A gross salary of $72,000 is not the same as taxable income of $72,000. The deduction will generally be $12,200 and the exemptions will be $3,900 for you, your spouse, and any kids. So married-filing-jointly with the standard deduction will get an automatic $20,000 off of adjusted gross income when counting taxable income. So the appropriate taxable income is actually going to be more like $52,000. Note that getting your compensation package reshuffled may result in different tax treatment. But simply taking a smaller salary (rather than taking some compensation as stock options, health insurance, or fringe benefits), is not a money-saving move. Never do it.", "No. In a marginal tax system, only additional dollars that push you into a higher bracket are taxed at that higher rate. If you would pay 15% on $73800, then when you earn over $73800, you will still only pay 15% of the $73800, plus 25% of the extra amount over $73800. As far as a marginal income tax affects things, you cannot decrease your net income by increasing your salary. (There can be other potential reasons to keep your income down besides income taxes, as asked in this question, but as the answer there suggests, these often aren't great reasons either.) As far as I know, every income tax system that has differing tax rates works this way. That is, I'm not aware of any country with an income tax system where you can decrease your net earnings by moving into a higher bracket.", "\"I think Feral Oink said it well here when someone asked if they should negotiate for additional benefits in lieu of a portion of salary. \"\"You never want to take a lower salary, especially not in exchange for something that is conditional e.g. benefits. Your salary is the only thing that is guaranteed as a condition of employment. Other things can be changed by the employer at a future point in time.\"\" Does it make sense to take a lower salary so I can still contribute to a Roth IRA?\"", "If your employer offers a 401k retirement plan then you can contribute a portion of your salary to your retirement and that will lower your effective income to remain in the 15% bracket (although as others have pointed out, only the dollars that exceed the 15% bracket will be taxed at the higher rate anyway). AND if your employer offers any kind of 401k matching contribution, that's effectively a pay-raise or 100% return on investment (depending on how you prefer to look at it)." ]

[ "428141", "437875", "456474", "469141", "189754" ]

[ "You don't really have a lot of money, and that isn't a criticism as much as that you are limited to diversification. For example, I would estimate you can only have one or two stocks for a buy-write scheme. Secondly you may be only to buy one fund with a high minimum investment, and a second fund with a smaller minimum investment. Thirdly there is not a whole lot of money to make a large difference. One options might be to look at iShares since your are with Fidelity. Trading those are commission free and the minimum investment is one share. They offer many sector funds. Since you were in a CD ladder you might be looking for stability of principle. If so you can look at USMV and PFF. If you can tolerate a little more volatility DGRO. Having said that you seem interested in doing some buy-writes. Why not mix and match? Pick a stock, like INTC (for example not a recommendation), and buy-write with half the money and some combination of iShares for the rest.", "An index fund is inherently diversified across its index -- no one stock will either make or break the results. In that case it's a matter of picking the index(es) you want to put the money into. ETFs do permit smaller initial purchases, which would let you do a reasonable mix of sectors. (That seems to be the one advantage of ETFs over traditional funds...?)", "\"You may want to look into robo-investors like Wealthfront and Betterment. There are many others, just search for \"\"robo investor\"\".\"", "When you are starting out using a balanced fund can be quite advantageous. A balanced fund is represents a diversified portfolio in single fund. The primary advantage of using a balanced fund is that with it being a single fund it is easier to meet the initial investment minimum. Later once you have enough to transition to a portfolio of diversified funds you would sell the fund and buy the portfolio. With a custom portfolio, you will be better able to target your risk level and you might also be able to use lower cost funds. The other item to check is do any of the funds that you might be interested in for the diversified portfolio have lower initial investment option if you can commit to adding money on a specified basis (assuming that you are able to). Also there might be an ETF version of a mutual fund and for those the initial investment amount is just the share price. The one thing to be aware of is make sure that you can buy enough shares that you can rebalance (holding a single share makes it hard to sell some gain when rebalancing). I would stay away from individual stocks until you have a much larger portfolio, assuming that you want to invest with a diversified portfolio. The reason being that it takes a lot more money to create a diversified portfolio out of individual stocks since you have to buy whole shares. With a mutual fund or ETF, your underlying ownership of can be fractional with no issue as each fund share is going to map into a fraction of the various companies held and with mutual funds you can buy fractional shares of the fund itself.", "" ]

[ "100021", "529958", "26095", "460946", "258975" ]

[ "\"The difference between an American and European option is that the American option can be exercised at any time, whereas the European option can be liquidated only on the settlement date. The American option is \"\"continuous time\"\" instrument, while the European option is a \"\"point in time\"\" instrument. Black Scholes applies to the latter, European, option. Under \"\"certain\"\" (but by no means all) circumstances, the two are close enough to be regarded as substitutes. One of their disciples, Robert Merton, \"\"tweaked\"\" it to describe American options. There are debates about this, and other tweaks, years later.\"", "\"Black-Scholes is \"\"close enough\"\" for American options since there aren't usually reasons to exercise early, so the ability to do so doesn't matter. Which is good since it's tough to model mathematically, I've read. Early exercise would usually be caused by a weird mispricing for some technical / market-action reason where the theoretical option valuations are messed up. If you sell a call that's far in the money and don't get any time value (after the spread), for example, you probably sold the call to an arbitrageur who's just going to exercise it. But unusual stuff like this doesn't change the big picture much.\"", "\"A minor tangent. One can claim the S&P has a mean return of say 10%, and standard deviation of say 14% or so, but when you run with that, you find that the actual returns aren't such a great fit to the standard bell curve. Market anomalies producing the \"\"100-year flood\"\" far more often than predicted over even a 20 year period. This just means that the model doesn't reflect reality at the tails, even if the +/- 2 standard deviations look pretty. This goes for the Black-Sholes (I almost abbreviated it to initials, then thought better, I actually like the model) as well. The distinction between American and European is small enough that the precision of the model is wider than the difference of these two option styles. I believe if you look at the model and actual pricing, you can determine the volatility of a given stock by using prices around the strike price, but when you then model the well out of money options, you often find the market creating its own valuation.\"", "Just a few observations within the Black-Scholes framework: Next, you can now use the Black-Scholes framework (stock price is a Geometric Brownian Motion, no transaction costs, single interest rate, etc. etc.) and numerical methods (such as a PDE solver) to price American style options numerically, but not with a simple closed form formula (though there are closed-form approximations).", "as no advantage from exerting American call option early,we can use Black schole formula to evaluate the option.However, American put option is more likely to be exercised early which mean Black schole does not apply for this style of option" ]

[ "218772", "393963", "310826", "316190", "12332", "428902", "524678", "468742", "545795", "123103", "75524", "592169", "175055" ]

[ "For a while I tried shopping multiple grocery stores, checking fliers each week from three different stores and then making the trip to all three stores to save ten cents on each item. After a couple months, I decided it just wasn't worth it. So, I picked my favorite store. I shop once a week, after reviewing the flier and making a list. I clip coupons and try to only buy what's on my list. (I confess that coupons sometimes get me to buy a brand or item I wouldn't have otherwise... it's my weakness!) The biggest place that we save money though, is by paying attention to meat prices. I know that chicken and pork go on sale for $1.99/lb every 4 to 6 weeks at my grocery store. When it does, I buy a enough to last until the next sale, and freeze it in single-meal portions. Steak and fish are special treats, but on the rare occasion that they're less than $4/lb, I'll buy those. We also try to limit our meat consumption to every-other-day. It's not worth it for me to obsess over the price of ketchup that I buy twice a year, but on expensive items like meat, and items we use daily, I become familiar with their regular prices and sale prices, and buy extra when it's on sale. If, like me, you don't have room in your brain to keep track of the prices of everything, stick with the things you spend the most on, either because they're expensive, or you buy a lot.", "Probably my biggest cost saving is to make my own sandwiches for lunch. I take this one step further by buying joints of meat to roast and slice for the filling. This not only tastes better but is quite a bit cheaper. For example today I roasted a 5 kg ham (about 11 lbs), it cost me £16 to buy (around $25), but I've sliced it, wrapped the slices in foil and frozen them. I've made around 20 packs, each pack has enough ham for sandwiches for me and my wife for a day. I also do this with beef, chicken and turkey and just get a pack of whatever we fancy out of the freezer the night before so it's defrosted enough to make sandwiches in the morning.", "Definitely don't grocery shop when you're hungry. Also, watch for sales, and then buy in bulk and freeze it.", "Also make a menu and make a shopping list from that. It will help you control how much you buy, and help to enforce only buying what you need. You don't need to limit your menu, but buying what you need in appropriate quantities will help. Don't forget to add snacking and desserts to your menu.", "Check out the bulk stores like BJs, Sam's Club or whatever else is available to you. You can definitely save money shopping there but you also need to keep your wits about you as well. Example, if you're buying in bulk only to let food go to waste, obviously that's not good either...", "Cooking cheaply is time consuming. We cook cheaply, but we take more time to do it. May be hard for a busy family. If you cook everything from scratch, it's usually a lot cheaper. Also pre-planning meals helps. If you can coordinate your ingredients, you can save money. Saving money takes time and practice. I find that when we're rushed, we waste a lot more food than when we properly take the time required.", "Set aside the amount of grocery money you want to spend in a week in cash. Then buy groceries only from this money. The first week make it a generous amount so you don't get rediculous and give up. And stick to it when you are out of money (make sure you have some canned goods or something around if you run out of money a day short). And do not shop when you are hungry.", "All excellent answers. Scott W. already mentioned to look out for sales and many other answers are ways to be smart with portions: don't overbuy, or be smart with bulk buys. But, I'm surprised nobody mentioned one of the things I'd consider obvious about saving money on groceries: coupons! Coupons can save cash. We'll sometimes use coupons for brands we'd be buying anyway, or other comparably-priced brands that we're willing to try. The thing to be careful of with coupons is when the manufacturer is attempting to up-sell you to a premium brand, or trying to get you to buy a product you'd never have bought anyway. Anyway, we especially like the coupons that Costco sends in the mail once in a while, or those they hand out at the warehouse entrance. What better way to save than to: All the better if the items aren't perishable. When we have the space and those grocery savings stars are all in alignment, we load up on such items as paper towels, oatmeal/cereal bars, soap, etc.", "If you are willing to use one main credit card for shopping, use a grocery points rewards card like PC Financial Mastercard. Pay for the groceries using the card to earn points and use those points to reduce costs. The only limitation is that you must shop at Loblaws, Superstore, No Frills, Zehrs, Fortinos. It works out to $1 = 10 points and 20,000 points = $20. So that works out to spend $1 to earn back $0.01.", "This may not help with the overall grocery issue, but I find that there are items that I can do without the name brand version of. A handy rule-of-thumb is to start with the least-expensive brand and work your way up, until you find one that your family likes. For instance, I've learned I can do without French's mustard in favour of no-name, but there's no way I can live without Kraft peanut butter.", "\"Keep a notebook. (or spreadsheet, etc. whatever works) Start to track what things cost as few can really commit this all to memory. You'll start to find the regular sale prices and the timing of them at your supermarkets. I can't even tell you the regular price of chicken breasts, I just know the sale is $1.79-1.99/lb, and I buy enough to freeze to never pay full price. The non-perishables are easy as you don't have to worry about spoilage. Soap you catch on sale+coupon for less than half price is worth buying to the limit, and putting in a closet. Ex Dove soap (as the husband, I'm not about to make an issue of a brand preference. This product is good for the mrs skin in winter) - reg price $1.49. CVS had a whacky deal that offered a rebate on Dove purchase of $20, and in the end, I paid $10 for 40 bars of soap. 2 yrs worth, but 1/6 the price. This type of strategy can raise your spending in the first month or two, but then you find you have the high runners \"\"in stock\"\" and as you use products from the pantry or freezer, your spending drops quite a bit. If this concept seems overwhelming, start with the top X items you buy. As stated, the one a year purchases save you far less than the things you buy weekly/monthly.\"", "\"Please stay away from snakes. Don't use a credit card to buy your food. Those credit companies will eat you alive. Those are reward points they're giving you. It's like the casino giving you a free $50 to start out with. They designed the game. They are going to win. As for groceries, if you are a coupon clipper, check out thegrocerygame.com: \"\"Teri's List is a weekly publication of the lowest-priced products at your supermarket or drugstore matched with manufacturers' coupons and specials - advertised and unadvertised. Teri does all the hard work and research, and presents it to you in a straightforward format. Log in each week and print your list!\"\" Nathon HouseholdBudgetNerd.com Family Budgets for Both of Us\"", "You may use an app called Flipp (or one that serves your area) to check fliers while in the store. If your preferred store has a price match policy, this can save you a few bucks every trip. Just look up at the app what you are buying and price match it over the cashier. It may or may not work on your store, always ask first. Try to learn some of the products you always buy regular prices. That way you can tell a real special from a fake one, like I write here about the 2/$5 specials. Buy generic brands for things you don't care that much, like bleach and other cleaning products that does not have a real quality difference from the branded ones. Try different cheaper brands until you find one that is ok for you. There are lots of ways to save money on groceries, you just need the will to do so ;) Good luck!" ]

[ "257187", "213168" ]

[ "\"Sometimes 403b's contain annuities or other insurance related instruments. I know that in many New York schools the local teacher unions administer the 403b plan, and sometimes choose proprietary investments like variable annuities or other insurance products. In New York the Attorney General sued and settled with the state teacher's union for their endorsement of a high cost ING 403b plan -- I believe the maintenance fees were in excess of 3%/year! In a tax deferred plan like a 401k, 403b or 457 plan, the low risk \"\"insurance fund\"\" is generally a GIC \"\"Guaranteed Investment Contract\"\". A GIC (aka \"\"Stable Value Fund\"\") is sort of cross between a CD and a Money Market fund. It's used by insurance companies to raise short term capital. GICs usually yield a premium versus a money market and are a safe investment. If your wife is in a 403b with annuities or other life-insurance tie ins other than GICs, make sure that you understand the fee structure and ask lots of questions.\"", "\"What is a 403b? A 403(b) plan is a tax-advantaged retirement savings plan available for public education organizations, some non-profit employers (only US Tax Code 501(c)(3) organizations), cooperative hospital service organizations and self-employed ministers in the United States. Kind of a rare thing. A bit more here: http://www.sec.gov/investor/pubs/teacheroptions.htm under investment options Equity Indexed Annuities are a special type of contract between you and an insurance company. During the accumulation period — when you make either a lump sum payment or a series of payments — the insurance company credits you with a return that is based on changes in an equity index, such as the S&P 500 Composite Stock Price Index. The insurance company typically guarantees a minimum return. Guaranteed minimum return rates vary. After the accumulation period, the insurance company will make periodic payments to you under the terms of your contract, unless you choose to receive your contract value in a lump sum. For more information, please see our \"\"Fast Answer\"\" on Equity Indexed Annuities, and read FINRA's investor alert entitled Equity-Indexed Annuitiies — A Complex Choice. So perhaps \"\"equity indexed annuities\"\" is the more correct thing to search for and not \"\"insurance funds\"\"?\"" ]

[ "295407" ]

[ "\"The IRS W-8BEN form (PDF link), titled \"\"Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding\"\", certifies that you are not an American for tax purposes, so they won't withhold tax on your U.S. income. You're also to use W-8BEN to identify your country of residence and corresponding tax identification number for tax treaty purposes. For instance, if you live in the U.K., which has a tax treaty with the U.S., your W-8BEN would indicate to the U.S. that you are not an American, and that your U.S. income is to be taxed by the U.K. instead of tax withheld in the U.S. I've filled in that form a couple of times when opening stock trading accounts here in Canada. It was requested by the broker because in all likelihood I'd end up purchasing U.S.-listed stocks that would pay dividends. The W-8BEN is needed in order to reduce the U.S. withholding taxes on those dividends. So I would say that the ad revenue provider is requesting you file one so they don't need to withhold full U.S. taxes on your ad revenue. Detailed instructions on the W-8BEN form are also available from the IRS: Instruction W-8BEN (PDF link). On the subject of ad revenue, Google also has some information about W8-BEN: Why can't I submit a W8-BEN form as an individual?\"" ]

[ "69680", "429978", "223382", "368953" ]

[ "Can't tell you where to go for a good policy, but I can tell you that most brokers make a hefty commission out of your payments for at least a year before you even start funding the tax sheltered investment account that you're trying to buy under the umbrella of life insurance. You'll have to do a lot of homework to hunt down a reputable discount broker or a direct policy purchase from the insurance company. Life insurance requires insurable need. The description is vague enough, that you can probably still get the account despite being a single male with no apparent heirs to benefit, but it raises the question of why you are buying the insurance. Whole life policies require you to maintain a certain ratio of investment to premium payment and you will likely never be able access all of the money in the account for your own personal usage. Compare several policies from several brokers and companies. Read all the critical sources you can about the pitfalls and dangers of commissions, fees and taxes eating the benefits of your account. Verify that the insurance company you buy the policy from is financially stable after the market crash. You are paying a commission to pool your money into their investment fund, and if your insurer goes under, you'll have to get a portion of your money (possibly only the principle) back from the state insurance commissioner. Some companies sold pretty generous policies during the bubble and have cut their offerings way down without fixing their marketing literature and rosy promises. Finally, let us know what you find. It never hurts to see hard numbers and to run multiple eyes over the legalese in these contracts.", "\"Keep in mind that the only advantage that using a tax favored account gives you is tax-free growth of the cash value of the policy. This \"\"Infinite Banking\"\" spin isn't some sort of new revolution in money management, its just a repackaging of techniques that people have been using for years to manage tax liability with some breathless marketing spiel. Before you jump in, compute the following: Now comes the hard part: Life insurance is sold, never bought. The guy pushing this does seminars at hotels sponsored by life insurance agents. The purpose of the program is to generate sales of insurance. Be wary. If you actually have the significant amounts of money required to capitalize this, there are much better ways to get an income stream from that money -- you need a good financial advisor. And if you have a huge tax liability and a scheme like this somehow makes sense, find someone who does it for a living in your state who isn't a crook.\"", "\"Why would you give them the money and borrow it back? If you didn't give it to them in the first place you wouldn't need to borrow! It makes no sense at all. It USED to have a different use--as a tax dodge. You would buy \"\"life insurance\"\" for a low amount of coverage and way overfund it. Let the money grow and in your later years you would \"\"borrow\"\" against the extra value you had built up in the policy. Since this was a loan rather than a payout it wasn't income. When you died the tax liability went poof. Thus so long as what you had to pay in life insurance + the inefficiency of the insurance company was less than the tax rate it was a good deal. Congress closed this loophole a long time ago by prohibiting too great overfunding.\"", "\"There are a lot of false claims around the internet about this concept - the fact of the matter is you are giving yourself the ability to have money in a tax favored environment with consistent, steady growth as well as the ability to access it whenever you want. Compare this to a 401k plan for example....money is completely at risk, you can't touch it, and you're penalized if you don't follow the government's rules. As far as commissions to the agent - an agent will cut his commission in half by selling you an \"\"infinite banking\"\" style policy as opposed to a traditional whole life policy. @duffbeer703 clearly doesn't understand life insurance in the slightest when he says that the first three years of your premium payements will go to the agents pocket. And as usual offers no alternative except \"\"pick some high yielding dividen stocks and MLPs\"\" - Someone needs to wake up from the Dave Ramsey coma and realize that there is no such thing as a 12% mutual fund....do your research on the stock market (crestmont research). don't just listen to dave ramseys disciples who still thinking getting 12-15% year in and year out is possible. It's frustrating to listen to people who are so uneducated on the subject - remember the internet has turned everyone into \"\"experts\"\" if you want real advice talk to a legitimate expert that understands life insurance and how it actually works.\"" ]

[ "310218", "570117", "512458", "249097" ]

[ "\"If the stock market dropped 30%-40% next month, providing you with a rare opportunity to buy stocks at a deep discount, wouldn't you want to have some of your assets in investments other than stocks? If you don't otherwise have piles of new cash to throw into the market when it significantly tanks, then having some of your portfolio invested elsewhere will enable you to back up the proverbial truck and load up on more stocks while they are on sale. I'm not advocating active market timing. Rather, the way that long-term investors capitalize on such opportunities is by choosing a portfolio asset allocation that includes some percentage of safer assets (e.g. cash, short term bonds, etc.), permitting the investor to rebalance the portfolio periodically back to target allocations (e.g. 80% stocks, 20% bonds.) When rebalancing would have you buy stocks, it's usually because they are on sale. Similarly, when rebalancing would have you sell stocks, it's usually because they are overpriced. So, don't consider \"\"safer investments\"\" strictly as a way to reduce your risk. Rather, they can give you the means to take advantage of market drops, rather than just riding it out when you are already 100% invested in stocks. I could say a lot more about diversification and risk reduction, but there are plenty of other great questions on the site that you can look through instead.\"", "The benefit of the 401K and IRAs are that reallocating and re balancing are easy. They don't want you to move the funds every day, but you are not locked in to your current allocations. The fact that you mentioned in a comment that you also have a Roth IRA means that you should look at all retirements as a whole. Look at what options you have in the 401K and also what options you have with the IRA. Then determine the overall allocation between bonds, stocks, international, REIT, etc. Then use the mix of funds in the IRA and 401K to meet that goal. Asking if the 401K should be small and mid cap only can't be answered without knowing not just your risk tolerances but the total money in the 401K and IRA. Pick an allocation, map the available funds to that allocation. Rebalance every year. But review the allocation in a few years or after a life event such as: change of job, getting married, having kids, or buying a house.", "\"Can you easily stomach the risk of higher volatility that could come with smaller stocks? How certain are you that the funds wouldn't have any asset bloat that could cause them to become large-cap funds for holding to their winners? If having your 401(k) balance get chopped in half over a year doesn't give you any pause or hesitation, then you have greater risk tolerance than a lot of people but this is one of those things where living through it could be interesting. While I wouldn't be against the advice, I would consider caution on whether or not the next 40 years will be exactly like the averages of the past or not. In response to the comments: You didn't state the funds so I how I do know you meant index funds specifically? Look at \"\"Fidelity Low-Priced Stock\"\" for a fund that has bloated up in a sense. Could this happen with small-cap funds? Possibly but this is something to note. If you are just starting to invest now, it is easy to say, \"\"I'll stay the course,\"\" and then when things get choppy you may not be as strong as you thought. This is just a warning as I'm not sure you get my meaning here. Imagine that some women may think when having a child, \"\"I don't need any drugs,\"\" and then the pain comes and an epidural is demanded because of the different between the hypothetical and the real version. While you may think, \"\"I'll just turn the cheek if you punch me,\"\" if I actually just did it out of the blue, how sure are you of not swearing at me for doing it? Really stop and think about this for a moment rather than give an answer that may or may not what you'd really do when the fecal matter hits the oscillator. Couldn't you just look at what stocks did the best in the last 10 years and just buy those companies? Think carefully about what strategy are you using and why or else you could get tossed around as more than a few things were supposed to be the \"\"sure thing\"\" that turned out to be incorrect like the Dream Team of Long-term Capital Management, the banks that were too big to fail, the Japanese taking over in the late 1980s, etc. There are more than a few times where things started looking one way and ended up quite differently though I wonder if you are aware of this performance chasing that some will do.\"", "Your initial premise (mid-cap and small-cap company stocks have outperformed the market) is partially correct - they have, over many 40 yr periods, provided higher returns than large caps (or bond funds). The important thing to consider here is that risk adjusted, the returns from a diversified portfolio are far more robust - with proper asset allocation you and expect high returns and reduce your risk simultaneously. Imagine this scenario - you decide to stick to small / mid caps for 10 - 15 yrs and move into a more diversified portfolio then. Had you made that decision during a sustained period of poor small cap performance (late 80s or the 40's) you would have lost a boatload of return, as those were periods were small / mids underperformed the market as a whole, and large caps in particular. As an example, from 1946 to 1958 large caps outperformed small every single year. If 2016 were to be the first year of a similar trend, you've done yourself a major disservice. Since the dot com crash small /mids have outperformed for sure, pretty much every year - but that doesn't mean that they will continue to do so. The reason asset allocation exists is precisely this - over a 40 yr period, no single asset class outperforms a diversified portfolio. If you attempt to time the market, even if you do so with a multi-decade time horizon in mind, there a good chance that you will do more poorly." ]

[ "395506", "279169", "41472" ]

[ "No, at least not noticeably so. The majority of what HFT does is to take advantage of the fact that there is a spread between buy and sell orders on the exchange, and to instantly fill both orders, gaining relatively risk-free profit from some inherent inefficiencies in how the market prices stocks. The end result is that intraday trading of the non-HFT nature, as well as speculative short-term trading will be less profitable, since HFT will cause the buy/sell spread to be closer than it would otherwise be. Buying and holding will be (largely) unaffected since the spread that HFT takes advantage of is miniscule compared to the gains a stock will experience over time. For example, when you go to buy shares intending to hold them for a long time, the HFT might cost you say, 1 to 2 cents per share. When you go to sell the share, HFT might cost you the same again. But, if you held it for a long time, the share might have doubled or tripled in value over the time you held it, so the overall effect of that 2-4 cents per share lost from HFT is negligible. However, since the HFT is doing this millions of times per day, that 1 cent (or more commonly a fraction of a cent) adds up to HFTs making millions. Individually it doesn't affect anyone that much, but collectively it represents a huge loss of value, and whether this is acceptable or not is still a subject of much debate!", "I disagree strongly with the other two answers posted thus far. HFT are not just liquidity providers (in fact that claim is completely bogus, considering liquidity evaporates whenever the market is falling). HFT are not just scalping for pennies, they are also trading based on trends and news releases. So you end up having imperfect algorithms, not humans, deciding the price of almost every security being traded. These algorithms data mine for news releases or they look for and make correlations, even when none exist. The result is that every asset traded using HFT is mispriced. This happens in a variety of ways. Algos will react to the same news event if it has multiple sources (Ive seen stocks soar when week old news was re-released), algos will react to fake news posted on Twitter, and algos will correlate S&P to other indexes such as VIX or currencies. About 2 years ago the S&P was strongly correlated with EURJPY. In other words, the American stock market was completely dependent on the exchange rate of two currencies on completely different continents. In other words, no one knows the true value of stocks anymore because the free market hasnt existed in over 5 years.", "\"Not really. High frequency traders affect mainly short term investors. If everyone invested long-term and traded infrequently, there would be no high frequency trading. For a long term investor, you by at X, hold for several years, and sell at Y. At worst, high frequency trading may affect \"\"X\"\" and \"\"Y\"\" by a few pennies (and the changes may cancel out). For a long term trader that doesn't amount to a \"\"hill of beans\"\" It is other frequent traders that will feel the loss of those \"\"pennies.\"\"\"" ]

[ "196001" ]

[ "Yes, you've got it right. The change in price is less meaningful as the instrument is further from the price of the underlying. As the delta moves less, the gamma is much less. Gamma is to delta as acceleration is to speed. Speed is movement relative to X, and acceleration is rate of change in speed. Delta is movement relative to S, and gamma is the rate of change in delta. Delta changes quickly when it is around the money, which is another way of saying gamma is higher. Delta is the change of the option price relative to the change in stock price. If the strike price is near the market price, then the odds of being in or out of the money could appear to be changing very quickly - even going back and forth repeatedly. Gamma is the rate of change of the delta, so these sudden lurches in pricing are by definition the gamma. This is to some extent a little mundane and even obvious. But it's a useful heuristic for analyzing prices and movement, as well as for focusing analyst attention on different pricing aspects. You've got it right. If delta is constant (zero 'speed' for the change in price) then gamma is zero (zero 'acceleration')." ]

[ "16846" ]

[ "On average, the market will be down 1 year out of 4. 26 of the last 100 years on the S&P were negative. The Roth conversion offers a unique opportunity to convert early in the year, and decide at tax time next year whether you are happy with the result. Of course, if your fund or stock is up, you are likely better off, paying the $1250 tax on the $5000 conversion that's now worth $6000 or more. If it's down, you can recharacterize. The volatility of the market helps makes this process more attractive. If my converted shares dropped quite a bit, the recharacterization is far more desirable than a small drop or no drop at all. Of course we don't wish for that drop, any more than we wish for our house to burn down to make our insurance pay off. To be clear, you'll benefit from a conversion she the market goes up. The downturn only lets you reverse the bad move." ]

[ "369266" ]

[ "A stock, bond or ETF is basically a commodity. Where you bought it does not really matter, and it has a value in USD only inasmuch as there is a current market price quoted at an American exchange. But nothing prevents you from turning around and selling it on a European exchange where it is also listed for an equivalent amount of EUR (arbitrage activities of investment banks ensure that the price will be equivalent in regard to the current exchange rate). In fact, this can be used as a cheap form of currency conversion. For blue chips at least this is trivial; exotic securities might not be listed in Europe. All you need is a broker who allows you to trade on European exchanges and hold an account denominated in EUR. If necessary, transfer your securities to a broker who does, which should not cost more than a nominal fee. Mutual funds are a different beast though; it might be possible to sell shares on an exchange anyway, or sell them back to the issuer for EUR. It depends. In any case, however, transferring 7 figure sums internationally can trigger all kinds of tax events and money laundering investigations. You really need to hire a financial advisor who has international investment experience for this kind of thing, not ask a web forum!" ]

[ "464277", "437126", "52274", "223870", "47985" ]

[ "\"Let me start by giving you a snippet of a report that will floor you. Beat the market? Investors lag the market by so much that many call the industry a scam. This is the 2015 year end data from a report titled Quantitive Analysis of Investor Behavior by a firm, Dalbar. It boggles the mind that the disparity could be this bad. A mix of stocks and bonds over 30 years should average 8.5% or so. Take out fees, and even 7.5% would be the result I expect. The average investor return was less than half of this. Jack Bogle, founder of Vanguard, and considered the father of the index fund, was ridiculed. A pamphlet I got from Vanguard decades ago quoted fund managers as saying that \"\"indexing is a path to mediocrity.\"\" Fortunately, I was a numbers guy, read all I could that Jack wrote and got most of that 10.35%, less .05, down to .02% over the years. To answer the question: psychology. People are easily scammed as they want to believe they can beat the market. Or that they'll somehow find a fund that does it for them. I'm tempted to say ignorance or some other hint at lack of intelligence, but that would be unfair to the professionals, all of which were scammed by Madoff. Individual funds may not be scams, but investors are partly to blame, buy high, sell low, and you get the results above, I dare say, an investor claiming to use index funds might not fare much better than the 3.66% 30 year return above, if they follow that path, buying high, selling low. Edit - I am adding this line to be clear - My conclusion, if any, is that the huge disparity cannot be attributed to management, a 6.7% lag from the S&P return to what the average investor sees likely comes from bad trading. To the comments by Dave, we have a manager that consistently beats the market over any 2-3 year period. You have been with him 30 years and are clearly smiling about your relationship and investing decision. Yet, he still has flows in and out. People buy at the top when reading how good he is, and selling right after a 30% drop even when he actually beat by dropping just 22%. By getting in and out, he has a set of clients with a 30 year record of 6% returns, while you have just over 11%. This paragraph speaks to the behavior of the investor, not managed vs indexed.\"", "The market is efficient, but it is not perfectly efficient. There are entities out there that consistently, legitimately, and significantly outperform the market because of asymmetric information (not necessarily insider trading) and their competitive advantage (access to data and proprietary, highly sophisticated models)*. I say this despite most hedge funds performing worse than their respective benchmarks. For most people (even very smart people) it makes a lot of sense to invest in index funds with a reasonable asset allocation (based on desired volatility, tax situation, rebalancing methods etc.). * The usual example that is cited is RT's Medallion Fund because it has enjoyed quite dramatic returns. Other groups that have been successful include Citadel and Soros Fund Management.", "Perhaps someone has an investment objective different than following the market. If one is investing in stocks with an intent on getting dividend income then there may be other options that make more sense than owning the whole market. Secondly, there is Slice and Dice where one may try to find a more optimal investment idea by using a combination of indices and so one may choose to invest 25% into each of large-cap value, large-cap growth, small-cap value and small-cap growth with an intent to pick up benefits that have been seen since 1927 looking at Fama and French's work.", "Most of it is probably due to ignorance and disbelief. A few years ago, I started doing week-long trades with my IRA. For a while I would make money each time, and over the first year I had about a 20% rate of return. If you asked me if I thought I was smarter than other people in the market, I would've told you no - I just spent more time, and most people accepted a small financial penalty for not having to spend the time directly managing their portfolio. Then I made a few poor choices, and all my previous earnings disappeared quickly. In the short term, yeah, things were great, but that didn't extrapolate out. So now that I'm a few years into investing, I'm almost entirely in index funds.", "\"Index funds do leech a \"\"free ride\"\" on the coattails of active traders. Consider what would happen if literally everyone bought index funds. For a company there would be no motivation to excel. Get listed; all the index funds are forced to buy your stock; now sit on your derriere playing Freecell, or otherwise scam/loot the company. Go bankrupt. Rinse wash repeat. This \"\"who cares who John Galt is\"\" philosophy would kill the economy dead. Somebody has to actually buy stocks based on research, analysis and value. Company managers need to actively fear, respect and court those people. They don't need to be mutual-fund managers, but they do need to be somebody. Maybe activist investors like Warren Buffett will suffice. Maybe retirement fund or endowment managers like CalPERS or Harvard can do this. Better be somebody! I'm all for index funds... Just saying only a fraction of the market's capital can be in index funds before it starts into a tragedy of the commons.\"" ]

[ "349181", "64881" ]

[ "The most important filings are: Form 10-K, which is the annual report required by the U.S. Securities and Exchange Commission (SEC) and Form 10-Q, for the interim quarters.", "There are a whole host of types of filings. Some of them are only relevant to companies that are publicly traded, and other types are general to just registered corps in general. ... and many more: http://reportstream.io/explore/has-form Overall, reading SEC filings is hard, and for some, the explanations of those filings is worth paying for. Source: I am currently trying to build a product that solves this problem." ]

[ "478509", "83860" ]

[ "Adding international bonds to an individual investor's portfolio is a controversial subject. On top of the standard risks of bonds you are adding country specific risk, currency risk and diversifying your individual company risk. In theory many of these risks should be rewarded but the data are noisy at best and adding risk like developed currency risk may not be rewarded at all. Also, most of the risk and diversification mentioned above are already added by international stocks. Depending on your home country adding international or emerging market stock etfs only add a few extra bps of fees while international bond etfs can add 30-100bps of fees over their domestic versions. This is a fairly high bar for adding this type of diversification. US bonds for foreign investors are a possible exception to the high fees though the government's bonds yield little. If your home currency (or currency union) does not have a deep bond market and/or bonds make up most of your portfolio it is probably worth diversifying a chunk of your bond exposure internationally. Otherwise, you can get most of the diversification much more cheaply by just using international stocks.", "The Vanguard Emerging Market Bond Index has a SEC yield of 4.62%, an expense ratio of 0.34%, a purchase fee of 0.75%, and an average duration of 6.7 years. The Vanguard Emerging Market Bond Index only invests in US Dollar denominated securities, so it is not exposed to currency risk. The US Intermediate Term Bond Index Fund has a SEC yield of 2.59%, an expense ratio of 0.1% and an average duration of 6.5 years. So after expenses, the emerging market bond fund gives you 1.04% of extra yield (more in subsequent years as the purchase fee is only paid once). Here are the results of a study by Vanguard: Based on our findings, we believe that most investors should consider adding [currency risked] hedged foreign bonds to their existing diversified portfolios. I think a globally diversified bond portfolio results in a portfolio that's more diversified." ]

[ "383162", "417407" ]

[ "\"EDIT: It was System Disruption or Malfunctions August 24, 2015 2:12 PM EDT Pursuant to Rule 11890(b) NASDAQ, on its own motion, in conjunction with BATS, and FINRA has determined to cancel all trades in security Blackrock Capital Investment. (Nasdaq: BKCC) at or below $5.86 that were executed in NASDAQ between 09:38:00 and 09:46:00 ET. This decision cannot be appealed. NASDAQ will be canceling trades on the participants behalf. A person on Reddit claimed that he was the buyer. He used Robinhood, a $0 commission broker and start-up. The canceled trades are reflected on CTA/UTP and the current charts will differ from the one posted below. It is an undesired effect of the 5-minute Trading Halt. It is not \"\"within 1 hour of opening, BKCC traded between $0.97 and $9.5\"\". Those trades only occurred for a few seconds on two occasions. One possible reason is that when the trading halt ended, there was a lot of Market Order to sell accumulated. Refer to the following chart, where each candle represents a 10 second period. As you can see, the low prices did not \"\"sustain\"\" for hours. And the published halts.\"", "\"As you know, the market is in turmoil today. At this moment, 11:45 am, the S&P is down 2.3%, 45 points. But, premarket, it was down 100 points. Now, premarket, I heard Jim Cramer say, \"\"today is not the day to use market orders.\"\" Yes, on Mad Money, he seems a bit eccentric, but he does offer some wise advice at times. In my opinion, your stock had some people that did just that. A market order. And, regardless of the fundamentals of this company, buyers had no orders to buy. Except a couple wise guys (in both senses) that put in buys at crazy prices. And they filled. With an Apple, trading around $100, the book probably has millions of shares on order with a buy at $80 or higher. Just an example. I'd bet there were a number of stocks that had the profile of yours, i.e. a chart reflecting trades similar to a flash crash. There are some traders smiling ear to ear, and some crying in their beer. (Note - I use the phrase \"\"in my opinion.\"\" This is the only explanation I can imagine. Occam's Razor.)\"" ]

[ "541856", "300214", "560928" ]

[ "Is there anything here I should be deathly concerned about? I don't see anything you should be deathly concerned about unless your career outlook is very poor and you are making minimum wage. If that is the case you may struggle for the next 10 years. Are these rates considered super high or manageable? The rates for the federal loans are around twice as high as your private loans but that is the going rate and there is nothing you can do about it now. 6.5% isn't bad on what is essentially a personal loan. 2-3% are very manageable assuming you pay them and don't let the interest build up. What is a good mode of attack here? I am by no means a financial adviser and don't know the rest of your financial situation, but the most general advice I can give you is pay down your highest interest rate loans first and always try to pay more than the minimum. In your case, I would put as much as you reasonably can towards the federal loans because that will save you money in the long run. What are the main takeaways I should understand about these loans? The main takeaway is that these are student loans and they cannot be discharged if you were to ever declare bankruptcy. Pay them off but don't be too concerned about them. If you do apply for loans in the future, most lenders won't be too concerned about student loans assuming you are paying them on time and especially if you are paying more than the minimum payment. What are the payoff dates for the other loans? The payoff dates for the other loans are a little hard to easily calculate, but it appears they all have different payoff dates between 8 and 12 years from now. This part might be easier for someone who is better at financial calculations than me. Why do my Citi loans have a higher balance than the original payoff amounts? Your citi loans have a higher balance probably because you have not payed anything towards them yet so the interest has been accruing since you got them.", "The 5% to 6.5% loan rates are a bit high. You'll probably want to pay those off first, and make it one of your priorities as soon as you have a 6-month savings fund. This should probably take precedence over savings for retirement, unless you're giving up a 401(k) match. Pay extra on the highest-interest loan until it's all paid off, then switch to the next one down, and accelerate the payoff as much as you can. If you're looking at a loan at 6% and a payoff date in 8 years or so (2020), am extra dollar paid now will save you ~$0.60. Not a bad return in general, and an excellent return for something that's zero-risk. The other loans, at 2-3%, are different. An extra dollar paid now on a 2% loan will save you $0.17 over 8 years. That's a pretty mediocre return. If you have a good, stable job and good job prospects, and a decent family support network, and few commitments like children and mortgages, and a low cost of living... generally, the things that help you have a high tolerance for risk... then you should consider investing your money in the stock market instead of paying off these loans any earlier than you need to. (Broad index funds and the like, not individual stocks).", "Is there anything here I should be deathly concerned about? A concern I see is the variable rate loans. Do you understand the maximum rate they can get to? At this time those rates are low, but if you are going to put funds against the highest rate loan, make sure the order doesn't change without you noticing it. What is a good mode of attack here? The best mode of attack is to pay off the one with the highest rate first by paying more than the minimum. When that is done roll over the money you were paying for that loan to the next highest. Note if a loan balance get to be very low, you can put extra funds against this low balance loan to be done with it. Investigate loan forgiveness programs. The federal government has loan forgiveness programs for certain job positions, if you work for them for a number of years. Some employers also have these programs. What are the payoff dates for the other loans? My inexact calculations put a bunch in about 2020 but some as late as 2030. You may need to talk to your lender. They might have a calculator on their website. Why do my Citi loans have a higher balance than the original payoff amounts? Some loans are subsidized by the federal government. This covers the interest while the student is still in school. Non-subsidized federal loans and private loans don't have this feature, so their balance can grow while the student is in school." ]

[ "226102", "144181", "114886" ]

[ "Central banks don't generally post exchange rates with other currencies, as they are not determined by central banks but by the currency markets. You need a source for live exchange rate data (for example www.xe.com), and you need to calculate the prices in other currencies dynamically as they are displayed -- they will be changing continually, from minute to minute.", "For manual conversion you can use many sites, starting from google (type 30 USD in yuan) to sites like xe.com mentioned here. For programmatic conversion, you could use Google Calculator API or many other currency exchange APIs that are available. Beware however that if you do it on the real site, the exchange rate is different from actual rates used by banks and payment processing companies - while they use market-based rates, they usually charge some premium on currency conversion, meaning that if you have something for 30 dollars, according to current rate it may bet 198 yuan, but if he uses a credit card for purchase, it may cost him, for example, 204 yuan. You should be very careful about making difference between snapshot market rates and actual rates used in specific transaction.", "You probably can get away with only updating the exchange rates once a day and specify that any prices quoted in units other than your home currency are estimates only. If you're planning to accept more than one currency as payment, I'd (a) see about whatever regulations there are for doing so, and (b) build in a nice spread for yourself if you're allowed to, since it is a service you're providing to your customers. If you Google currency converter the first result is just that: a currency converter." ]

[ "427842", "274987" ]

[ "There are hundreds of entities which offer mutual funds - too many to adequately address here. If you need to pick one, just go with Vanguard for the low low low fees. Yes, this is important. A typical expense ratio of 1% may not sound like much until you realize that the annualized real rate of return on the stock market - after inflation - is about 4%... so the fund eats a quarter of your earnings. (Vanguard's typical expense ratios are closer to 0.1-0.2%). If your company offers a tax-deferred retirement account such as a 401(k), you'll probably find it advantageous to use whatever funds that plan offers just to get the tax advantage, and roll over the account to a cheaper provider when you change employers. You can also buy mutual funds and exchange-traded funds (ETFs) through most brokerages. E*Trade has a nice mutual fund screener, with over 6700 mutual funds and 1180 ETFs. Charles Schwab has one you can browse without even having an account.", "I personally like Schwab. Great service, low fees, wide variety of fund are available at no fee. TD Ameritrade is good too." ]

[ "458960", "377364", "334191", "92861" ]

[ "\"Do you still enjoy living in your home? Can you afford the mortgage payments? Is there a reason for you to move, such as a relocation for work, or your third kid is on the way and your current house is already crowded with two? Those questions are more important than \"\"Is my home worth more than what I owe on it\"\". Ultimately, it's your home. You probably chose it for more than just its price, and those qualities should still make it valuable to you in some way beyond the monetary value which goes up and down with the market. You have a few options:\"", "That's easy, keep making the payments and go on with life. The number that matters more than loan/market value is loan/equity. As long as you can sell it for enough to pay the balance on your loan you should be okay. Not saying it doesn't suck, but financially you are fine. If you owe more than the house is worth, I'd suggest paying it down as quickly as possible to fix that ratio to reduce your financial risk in case you lose your source of income. Personally, I think it is pretty slimy for people to walk away from house notes or try to short sell them when they can afford to continue payments just because the market value of the house fell. How would you feel if, when house prices were skyrocketing, the bank canceled your loan and repossessed your house because they could resell it for more money? (not that they could realistically, just speaking hypothetically.)", "\"I will echo the others; your home should be worth more to you than its market value. It is YOUR HOME. It's where you come home every day to your wife and kids, where you build a life. Yes it's an investment, but it's not like a stock or bond that you hold for a little while and then cash out for the profit. The one time you should be worried about being \"\"upside-down\"\" on your mortgage is if you're getting out. If you're moving to a new job at a new company in a new city, you have to make good on the remaining loan balance, and that won't all be from the sale of the house. Unless you're at that point however, if you can afford making the payments and have no reason to move or to cash in equity (of which you have none), then just keep making the payments. Hey, it's better than rent; you'll never see rent money again, while even if you're underwater, you're making headway with each payment.\"", "Step back and take a deep breath. Pay your mortgage. repeat 1 and 2 monthly until equity > mortgage." ]

[ "79375", "52589" ]

[ "The presence of the 401K option means that your ability to contribute to an IRA will be limited, it doesn't matter if you contribute to the 401K or not. Unless your company allows you to roll over 401K money into an IRA while you are still an employee, your money in the 401K will remain there. Many 401K programs offer not just stock mutual funds, but bond mutual funds, and international funds. Many also have target date funds. You will have to look at the paperwork for the funds to determine if any of them meet your definition of low expense. Because any money you have in those 401K funds is going to remain in the 401K, you still need to look at your options and make the best choice. Very few companies allow employees to invest in individual stocks, but some do. You can ask your employer to research other options for the 401K. The are contracting with a investment company to make the plan. They may be able to switch to a different package from the same company or may need to switch companies. How much it will cost them is unknown. You will have to understand when their current contract is up for renewal. If you feel their current plan is poor, it may be making hiring new employees difficult, or ti may lead to some employees to leave in search of better options. It may also be a factor in the number of employees contributing and how much they contribute.", "See if any of the funds they offer are index funds, which will generally have MUCH lower fees and which seem to perform as well as any of the actively managed funds in the same categories." ]

[ "201275" ]

[ "I don't know much about paypal or bitcoin, but I can provide a little information on BTC(Paypal I thought was just a service for moving real currency). BTC has an exchange, in which the price of a bitcoin goes up and down. You can invest in to it much like you would invest in the stock market. You can also invest in equipment to mine bitcoins, if you feel like that is worthwhile. It takes quite a bit of research and quite a bit of knowledge. If you are looking to provide loans with interest, I would look into P2P lending. Depending on where you live, you can buy portions of loans, and receive monthly payments with the similiar risk that credit card companies take on(Unsecured debt that can be cleared in bankruptcy). I've thrown a small investment into P2P lending and it has had average returns, although I don't feel like my investment strategy was optimal(took on too many high risk notes, a large portion of which defaulted). I've been doing it for about 8 months, and I've seen an APY of roughly 9%, which again I think is sub-optimal. I think with better investment strategy you could see closer to 12-15%, which could swing heavily with economic downturn. It's hard to say." ]

[ "437907" ]

[ "The dividend tax credit is not applicable to foreign dividend income, so you would be taxed fully on every dollar of that income. When you sell a stock, there will be a capital gain or capital loss depending on if it gained or lost value, after accounting for the Adjusted Cost Base. You only pay income tax on half of the amount earned through capital gains, and if you have losses, you can use them to offset other investments that had capital gains (or carry forward to offset gains in the future). The dividends from US stocks are subject to a 15% withholding tax that gets paid to the IRS automatically when the dividends are issued. If the stocks are held in an RRSP, they are exempt from the withholding tax. If held in a non-registered account, you can be reimbursed for the tax by claiming the foreign tax credit that you linked to. If held in a TFSA or RESP, the withholding tax cannot be recovered. Also, if you are not directly holding the stocks, and instead buy a mutual fund or ETF that directly holds the stocks, then the RRSP exemption no longer applies, but the foreign tax credit is still claimable for a non-registered account. If the mutual fund or ETF does not directly hold stocks, and instead holds one or more ETFs, there is no way to recover the withholding tax in any type of account." ]

[ "427629", "498597", "147282", "368124" ]

[ "In general, the goal of an S&P 500 index fund is to replicate the performance of the S&P 500 Index. To do this, the fund will buy the same stocks in the same proportions as the weighting of the Index. The S&P 500 Index is free-float capitalization weighted. This means that the higher capitalization stocks (based on publicly traded shares only) are more heavily weighted and factor into the Index value more heavily than the smaller capitalization stocks, or the stocks that have a smaller publicly traded value. For example, companies like Apple, ExxonMobil, and Microsoft have a much larger weight in the index value than smaller companies. Alternatively, there are some S&P index funds that are equal-weighted. In these funds, the managers have chosen to purchase all 500 of the stocks in the index, but in equal proportions instead of the weighted proportions of the index. These equal-weighted funds will not as closely match the index price as the traditionally weighted index funds. Instead, they might do better or worse than the index, depending on how the individual stocks do. You'll need to look at the prospectus of the index funds you are interested in to see which approach the fund is taking.", "An index fund is just copying the definition of an index. The group that defines the index determines how to weight the different parts of the index. The index fund just makes sure they invest the same way the index creator wants. Think of a non-investment scenario. A teacher can grade tests, quizzes, homework, in-class assignments, research papers. They decide how much weight to give each category and how much weight to give each part of each category. when a student wants to see how they are doing they take the information in the syllabus, and generate a few formulas in a spreadsheet to calculate their current grade. They can also calculate what they need to get on the final exam to get the grade they want.", "Yes, it depends on the fund it's trying to mirror. The ETF for the S&P that's best known (in my opinion) is SPY and you see the breakdown of its holdings. Clearly, it's not an equal weighted index.", "\"Note that an index fund may not be able to precisely mirror the index it's tracking. If enough many people invest enough money into funds based on that index, there may not always be sufficient shares available of every stock included in the index for the fund to both accept additional investment and track the index precisely. This is one of the places where the details of one index fund may differ from another even when they're following the same index. IDEALLY they ought to deliver the same returns, but in practical terms they're going to diverge a bit. (Personally, as long as I'm getting \"\"market rate of return\"\" or better on average across all my funds, at a risk I'm comfortable with, I honestly don't care enough to try to optimize it further. Pick a distribution based on some stochastic modelling tools, rebalance periodically to maintain that distribution, and otherwise ignore it. That's very much to the taste of someone like me who wants the savings to work for him rather than vice versa.)\"" ]

[ "446629" ]

[ "Algorithmic trading essentially banks on the fact that a price will fluctuate in tiny amounts over short periods of time, meaning the volatility is high in that given time frame. As the time frame increases the efficiency of algorithmic trading decreases and proper investment strategies such as due diligence, stock screening, and technical analysis become the more efficient methods. Algorithms become less effective as the time frame increases due to the smoothing effect of volatility over time. Writing an algorithm that could predict future long-term prices would be an impossible feat because as the time frame is scaled up there are far less price fluctuations and trends (volatility smooths out) and so there is little to no benchmark for the formulas. An algorithm simply wouldn't make sense for a long-term position. A computer can't predict, say, the next quarter, an ousted CEO, a buyout, or anything else that could effect the price of the security, never mind the psychology behind it all. Vice versa, researching a company's fundamentals just to bank on a 0.25% daily swing would not be efficient. Tax advantages or not, it is the most efficient methods that are preferred for a given time-scale of trading." ]

[ "88947", "45190" ]

[ "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.", "\"A mutual fund could make two different kinds of distributions to you: Capital gains: When the fund liquidates positions that it holds, it may realize a gain if it sells the assets for a greater price than the fund purchased them for. As an example, for an index fund, assets may get liquidated if the underlying index changes in composition, thus requiring the manager to sell some stocks and purchase others. Mutual funds are required to distribute most of their income that they generate in this way back to its shareholders; many often do this near the end of the calendar year. When you receive the distribution, the gains will be categorized as either short-term (the asset was held for less than one year) or long-term (vice versa). Based upon the holding period, the gain is taxed differently. Currently in the United States, long-term capital gains are only taxed at 15%, regardless of your income tax bracket (you only pay the capital gains tax, not the income tax). Short-term capital gains are treated as ordinary income, so you will pay your (probably higher) tax rate on any cash that you are given by your mutual fund. You may also be subject to capital gains taxes when you decide to sell your holdings in the fund. Any profit that you made based on the difference between your purchase and sale price is treated as a capital gain. Based upon the period of time that you held the mutual fund shares, it is categorized as a short- or long-term gain and is taxed accordingly in the tax year that you sell the shares. Dividends: Many companies pay dividends to their stockholders as a way of returning a portion of their profits to their collective owners. When you invest in a mutual fund that owns dividend-paying stocks, the fund is the \"\"owner\"\" that receives the dividend payments. As with capital gains, mutual funds will redistribute these dividends to you periodically, often quarterly or annually. The main difference with dividends is that they are always taxed as ordinary income, no matter how long you (or the fund) have held the asset. I'm not aware of Texas state tax laws, so I can't comment on your other question.\"" ]

[ "492503" ]

[ "I will assume that you are not asking in the context of high frequency trading, as this is Personal Finance Stack Exchange. It is completely acceptable to trade odd lots for retail brokerage customers. The odd lot description that you provided in your link, from Interactive Brokers is correct. But even in that context, it says, regarding the acceptability of odd lots to stock exchanges: The exception is that odd lots can be routed to NYSE/ARCA/AMEX, but only as part of a basket order or as a market-on-close (MOC) order. Google GOOG is traded on the NASDAQ. Everything on the NASDAQ is electronic, and always has been. You will have no problem selling or buying less than 100 shares of Google. There is also an issue of higher commissions with odd lots: While trading commissions for odd lots may still be higher than for standard lots on a percentage basis, the popularity of online trading platforms and the consequent plunge in brokerage commissions means that it is no longer as difficult or expensive for investors to dispose of odd lots as it used to be in the past. Notice what it says about online trading making it easier, not more difficult, to trade odd lots." ]

[ "416767" ]

[ "\"The Indian regulator (SEBI) has banned trading in 300 shell companies that it views as being \"\"Shady\"\", including VB Industries. According to Money Control (.com): all these shady companies have started to rally and there was a complaint to SEBI that investors are getting SMSs from various brokerage firms to invest in them This suggests evidence of \"\"pump and dump\"\" style stock promotion. On the plus side, the SEBI will permit trading in these securities once a month : Trading in these securities shall be permitted once a month (First Monday of the month). Further, any upward price movement in these securities shall not be permitted beyond the last traded price and additional surveillance deposit of 200 percent of trade value shall be collected form the Buyers which shall be retained with Exchanges for a period of five months. This will give you an opportunity to exit your position, however, finding a buyer may be a problem and because of the severe restrictions placed on trading, any bid prices in the market are going to be a fraction of the last trade price.\"" ]

[ "211525", "111350", "299690" ]

[ "First, a Roth is funded with post tax money. The Roth IRA deposit will not offset any tax obligation you might have. The IRA is not an investment, it's an account with a specific set of tax rules that apply to it. If you don't have a brokerage account, I'd suggest you consider a broker that has an office nearby. Schwab, Fidelity, Vanguard are 3 that I happen to have relationships with. Once the funds are deposited, you need to choose how to invest for the long term. The fact that I'd choose the lowest cost S&P ETF or mutual fund doesn't mean that's the ideal investment for you. You need to continue to do research to find the exact investment that matches your risk profile. By way of example, up until a few years ago, my wife and I were nearly 100% invested in stocks, mostly the S&P 500. When we retired, four years ago, I shifted a bit to be more conservative, closer to 80% stock 20% cash.", "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.", "\"As other people have indicated, traditional IRAs are tax deductable for a particular year. Please note, though, that traditional IRAs are tax deferred (not tax-free) accounts, meaning that you'll have to pay taxes on any money you take out later regardless of why you're making the withdrawal. (A lot of people mistakenly call them tax free, which they're not). There is no such thing as a \"\"tax-free\"\" retirement account. Really, in terms of Roth vs. Traditional IRAs, it's \"\"pay now or pay later.\"\" With the exception of special circumstances like this, I recommend investing exclusively in Roth IRAs for money that you expect to grow much (or that you expect to produce substantial income over time). Just to add a few thoughts on what to actually invest in once you open your IRA, I strongly agree with the advice that you invest mostly in low-cost mutual funds or index funds. The advantage of an open-ended mutual fund is that it's easier to purchase them in odd increments and you may be able to avoid at least some purchase fees, whereas with an ETF you have to buy in multiples of that day's asking price. For example, if you were investing $500 and the ETF costs $200 per share, you could only purchase 2 shares, leaving $100 uninvested (minus whatever fee your broker charged for the purchase). The advantage of an ETF is that it's easy to buy or sell quickly. Usually, when you add money to a mutual fund, it'll take a few days for it to hit your account, and when you want to sell it'll similarly take a few days for you to get your money; when I buy an ETF the transaction can occur almost instantly. The fees can also be lower (if the ETF is just a passive index fund). Also, there's a risk with open-ended mutual funds that if too many people pull money out at once the managers could be forced to sell stocks at an unfavorable price.\"" ]

[ "418708", "41766", "477424", "231796" ]

[ "\"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.\"", "It may become difficult to rent a car or a hotel room. It may affect your ability to get a job. Some employers now check credit reports and disqualify candidates with a poor credit report. It may affect your ability to get a security clearance or professional bonding. It may affect your ability to find housing. Many landlords check credit reports. You may be harassed morning, noon, and night by collection agencies. This can be theoretically solved by declaring bankruptcy, but the bankruptcy court may force the sale of some of your assets to make payments towards your debt.", "I should apply for everything I can on the same day, get approved for as many as I can First it may not sound as easy. You may hardly get 2-3 cards and not dozens. Even if you submit the applications the same day; If you still plan this and somehow get too many cards, and draw huge debt, then the Banks can take this seriously and file court case. If Banks are able to establish the intent; this can get constituted as fraud and liable for criminal proceedings. So in short if someone has the money and don't want to pay; the court can attach the wage or other assets and make the person pay. If the intent was fraud one can even be sent to jail.", "The U.S. bankruptcy laws no longer make it simple to discharge credit card debt, so you can't simply run up a massive tab on credit cards and then just walk away from them anymore. That used to be the case, but that particular loophole no longer exists the way it once did. Further, you could face fraud charges if it can be proven you acted deliberately with the intent to commit fraud. Finally, you won't be able to rack up a ton of new cards as quickly as you might think, so your ability to amass enough to make your plan worth the risk is not as great as you seem to believe. As a closing note, don't do it. All you do is make it more expensive for the rest of us to carry credit cards. After all, the banks aren't going to eat the losses. They'll just pass them along in the form of higher fees and rates to the rest of us." ]

[ "544553", "499323" ]

[ "My simplest approach is to suggest that people go Roth when in the 15% bracket, and use pre-tax to avoid 25%. I outlined that strategy in my article The 15% solution. The monkey wrench that gets thrown in to this is the distortion of the other smooth marginal tax curve caused by the taxation of social security. For those who can afford to, it makes the case to lean toward Roth as much as possible. I'd suggest always depositing pretax, and using conversions to better control the process. Two major benefits to this. It's less a question of too late than of what strategy to use.", "Years before retirement isn't related at all to the Pretax IRA/Roth IRA decision, except insomuch as income typically trends up over time for most people. If tax rates were constant (both at income levels and over time!), Roth and Pretax would be identical. Say you designate 100k for contribution, 20% tax rate. 80k contributed in Roth vs. 100k contributed in Pretax, then 20% tax rate on withdrawal, ends up with the same amount in your bank account after withdrawal - you're just moving the 20% tax grab from one time to another. If you choose Roth, it's either because you like some of the flexibility (like taking out contributions after 5 years), or because you are currently paying a lower marginal rate than you expect you will be in the future - either because you aren't making all that much this year, or because you are expecting rates to rise due to political changes in our society. Best is likely a diversified approach - some of your money pretax, some posttax. At least some should be in a pretax IRA, because you get some tax-free money each year thanks to the personal exemption. If you're working off of 100% post-tax, you are paying more tax than you ought unless you're getting enough Social Security to cover the whole 0% bucket (and probably the 10% bucket, also). So for example, you're thinking you want 70k a year. Assuming single and ignoring social security (as it's a very complicated issue - Joe Taxpayer has a nice blog article regarding it that he links to in his answer), you get $10k or so tax-free, then another $9k or so at 10% - almost certainly lower than what you pay now. So you could aim to get $19k out of your pre-tax IRA, then, and 51k out of your post-tax IRA, meaning you only pay $900 in taxes on your income. Of course, if you're in the 25% bucket now, you may want to use more pretax, since you could then take that out - all the way to around $50k (standard exemption + $40k or so point where 25% hits). But on the other hand, Social Security would probably change that equation back to using primarily Roth if you're getting a decent Social Security check." ]

[ "277607", "476923" ]

[ "In general, things to look for are: Things to look out for: I'd recommend two places: I'd recommend reading up on HSA's in this related question here.", "\"The account I have found that works best as a HSA is Alliant Credit Union. They have fee-free HSA (no fees for almost all types of transactions or monthly fees) and a fairly decent online banking website. I've been with them for about 5 years now without trouble. FYI - They are a credit union not a bank so you do have to make a small $10 donation to one of their charities to become \"\"eligible\"\" for opening the account.\"" ]

[ "55052", "435025", "142153", "245531", "228034", "51311", "547573", "95371" ]

[ "\"It's an effective way to achieve market segmentation without having to ask your customers how rich they are, and you get the benefit of finding out additional information like their address, email etc. The principle is similar to coupons on cereal boxes, anybody can get the rebate/discount if they go to the effort, but people who are cash rich/time poor are less likely to do so than those that really need the money. Joel Spolsky wrote about this and various other pricing mechanisms a while back, I like to reference the article every few weeks. It's well worth a read. Now, if you're retired and living off of social security, $7 an hour sounds pretty good, so you do it, but if you're a stock analyst at Merrill Lynch getting paid $12,000,000 a year to say nice things about piece-of-junk Internet companies, working for $7 an hour is a joke, and you're not going to clip coupons. Heck, in one hour you could issue \"\"buy\"\" recommendations on ten piece-of-junk Internet companies! So coupons are a way for consumer products companies to charge two different prices and effectively segment their market into two. Mail-in rebates are pretty much the same as coupons, with some other twists like the fact that they reveal your address, so you can be direct marketed to in the future.\"", "I've had positive experiences and negative ones. One key is to be sure you have followed ALL of the instructions. Once I forgot a small piece of information and lost out on $40. I was not happy. A few weeks ago I got a rebate for $50 from Staples, and it couldn't have been simpler. Stick with big companies and make sure you do everything on time. Companies use rebates because they know some people will forget, mess up, or not use the rebate. They make a ton of money off of unused rebates.", "\"Unfortunately too many companies view a Mail in rebate as an unwelcome cost instead of as a customer interaction issue, and it gives the company a bad reputation when someone gets stiffed on the mail in rebate, and it also has basically ruined the concept to a large degree. Many people will simply regard the rebate as worthless and evaluate the product based on the full price - killing what the company wanted to get out of it (Rich Seller hit the nail on the head), which is why you see \"\"instant rebates\"\" etc.\"", "Chiming in with other answers that incriminate market segmentation attempts, I would like to offer this Seth Godin video where (among other things) he speaks about breakage, the art of making coupon redemption so difficult that most people get it wrong and do not redeem them. Oh, and when comparing/deciding which/whether to buy, I always use the up-front price. Don't want to encourage the wrong behavior.", "Rebates are a great way to give discounts to customers who are cost sensitive. A long time ago, I worked for a retailer that extensively used rebates as a marketing tool. From my point of view, about 90% of the complaints that I investigated were a result of people not following directions. Biggest single thing was not sending original documentation when it was called for.", "There are many reasons, some already covered by other answers. I have a blog post on the issue here, and I'll summarize:", "Some notable percentage of buyers won't even try to do the rebate, or will forget - so it's a [relatively] cheap incentive to the consumer than most will miss out on.", "Not so much a scam, if you fill the required paperwork and actually take time to mail it in assuming it's done correctly; you will get your money. That being said, having a mail-in rebate program is usually a win-win for the seller. While they may have to pay a small fee to a third party who handles the rebate almost always this influences a potential buyer to choose a specific product over the alternative. The seller knows very well that very few people will actually go through with it. And yes, they do often make the process needlessly complicated and long as a deterrent. Plus, let's be real, no one likes sending out physical letters anymore. From a marketing standpoint the mail-in rebate is a brilliant idea. However, it's usually more of an annoyance for the consumer." ]

[ "408362", "581418" ]

[ "\"I've got £476,000 but the maximum house price is £450,000. What happens to the £26,000. Does it stay there with ~6% interest (and no bonus of course), and would be available when I retire at around 75 (there would be about £106,000 by then)? Yes, anything you don't withdraw for your house purchase stays in the Lifetime ISA and keeps growing there. Also you do keep the bonus on it, which was paid at the time you subscribed, unless you make a withdrawal before age 60. After age 60 you can withdraw and keep the bonus. Note that you need to be buying with a mortgage to be allowed to use the lifetime ISA money (without penalty). This is mentioned on the gov.uk website as well as in the actual regulations that establish lifetime ISAs (search for \"\"first time residential purchase\"\" and look at clause (6)). That would mean you'd need to withdraw even less than the £450K and artificially borrow the rest. All that said, I suspect the £450K limit would be raised by 2049, given inflation. Can I buy a house and \"\"quickly\"\" sell it again, to simply access the money, The regulations say that on completion of the purchase, you must \"\"occupy the land as their only or main residence\"\" (there are a few exceptions, such as if it's still being built, or if you are at the time posted abroad by the government, but essentially you have to move in as soon as possible). There's no time limit stated in the regulations, so in theory you could move in and then sell quite fast, but personally I'd be nervous about this being seen as not genuinely intending it to be my main residence. In theory you could be prosecuted for fraud if you claimed a valid withdrawal when it wasn't, though given the wording of the regulations it looks like you'd be complying with the letter of the law.\"", "Your first home can be up to £450,000 today. But that figure is unlikely to stay the same over 40 years. The government would need to raise it in line with inflation otherwise in 40 years you won't be able to buy quite so much with it. If inflation averages 2% over your 40 year investment period say, £450,000 would buy you roughly what £200,000 would today. Higher rates of inflation will reduce your purchasing power even faster. You pay stamp duty on a house. For a house worth £450,000 that would be around £12,500. There are also estate agent's fees (typically 1-2% of the purchase price, although you might be able to do better) and legal fees. If you sell quickly you'd only be able to access the balance of the money less all those taxes and fees. That's quite a bit of your bonus lost so why did you tie your money up in a LISA for all those years instead of investing in the stock market directly? One other thing to note is that you buy a LISA from your post tax income. You pay into a pension using your pre-tax income so if you're investing for your retirement then a pension will start with a 20% bonus if you're a lower rate taxpayer and a whopping 40% bonus if you're a higher rate taxpayer. If you're a higher rate taxpayer a pension is much better value." ]

[ "19433" ]

[ "I believe your question is based on a false premise. First, no broker, that I know of, provides an RRSP account that is a margin account. RRSP accounts follow cash settlement rules. If you don't have the cash available, you can't buy a stock. You can't borrow money from your broker within your RRSP. If you want to borrow money to invest in your RRSP, you must borrow outside from another source, and make a contribution to your RRSP. And, if you do this, the loan interest is not considered tax deductible. In order for investment loan interest to be tax deductible, you'd need to invest outside of a registered type of account, e.g. using a regular non-tax-sheltered account. Even then, what you can deduct may be limited. Refer to CRA - Line 221 - Carrying charges and interest expenses: You can claim the following carrying charges and interest [...] [...] You cannot deduct on line 221 any of the following amounts:" ]

[ "516833", "162616", "10324", "486159" ]

[ "\"I'm smart enough to know that the answer to your questions is 'no'. There is no arbitrage scenario where you can trade currencies and be guaranteed a return. If there were, the thousands of PhD's and quants at hedge funds like DEShaw and Bridgewater would have already figured it out. You're basically trying to come up with a scenario that is risk free yet yields you better than market interest rates. Impossible. I'm not smart enough to know why, but my guess is that your statement \"\"I only need $2k margin\"\" is incorrect. You only need $2k as capital, but you are 'borrowing' on margin the other 98k and you'll need to pay interest on that borrowed amount, every day. You also run the risk of your investment turning sour and the trading firm requiring a higher margin.\"", "No free lunch You cannot receive risk-free interest on more money than you actually put down. The construct you are proposing is called 'Carry Trade', and will yield you the interest-difference in exchange for assuming currency risk. Negative expectation In the long run one would expect the higher-yielding currency to devalue faster, at a rate that exactly negates the difference in interest. Net profit is therefore zero in the long run. Now factor in the premium that a (forex) broker charges, and now you may expect losses the size of which depends on the leverage chosen. If there was any way that this could reliably produce a profit even without friction (i.e. roll-over, transaction costs, spread), quants would have already arbitraged it away. Intransparancy Additionaly, in my experience true long-term roll-over costs in relation to interest are a lot harder to compute than, for example, the cost of a stock transaction. This makes the whole deal very intransparant. As to the idea of artificially constructing a USD/USD pair: I regret to tell you that such a construct is not possible. For further info, see this question on Carry Trade: Why does Currency Carry Trade work?", "I work at a FOREX broker, and can tell you that what you want to do is NOT possible. If someone is telling you it is, they're lying. You could (in theory) make money from the SWAP (the interest you speak of is called SWAP) if you go both short and long on the same currency, but there are various reasons why this never works. Furthermore, I don't know of any brokers that are paying positive SWAP (the interest you speak of is called SWAP) on any currency right now.", "Now, is there any clever way to combine FOREX transactions so that you receive the US interest on $100K instead of the $2K you deposited as margin? Yes, absolutely. But think about it -- why would the interest rates be different? Imagine you're making two loans, one for 10,000 USD and one for 10,000 CHF, and you're going to charge a different interest rate on the two loans. Why would you do that? There is really only one reason -- you would charge more interest for the currency that you think is less likely to hold its value such that the expected value of the money you are repaid is the same. In other words, currencies pay a higher interest when their value is expected to go down and currencies pay a lower interest when their value is expected to go up. So yes, you could do this. But the profits you make in interest would have to equal the expected loss you would take in the devaluation of the currency. People will only offer you these interest rates if they think the loss will exceed the profit. Unless you know better than them, you will take a loss." ]

[ "8950", "431775", "522874" ]

[ "\"First of all, never is too late to develop good habits. So, you know what you want to do and you are going about the how now... First, you should pay off any consumer debt except from mortgage which should be planned for. Prioritize your consumer debt (credit cards, consumer loans, etc) according to the interest rates, starting with the one with the highest interest and going to the one with the lowest one. Because you should make quite the investments to pay off this interest debt and still make a profit. Second, you should start saving some money. The 10% rule of thumb is a good one and for starters having aside the money you need to get by for at least 3 months is quite okay. As they say, cash is king. Now, that you actually realize the amount you can spare each month to start investing (assuming you had to do something of the aforementioned) it's time to see the risk you are comfortable taking. Different risk-taking views lead to different investing routes. So, assuming once again that you are risk averse (having a newborn baby and all) and that you want something more than just a savings account, you can start looking for things that don't require much attention (even more so if you are going on you own about it) such as low risk mutual funds, ETF (Exchange Traded Funds) and index funds to track indexes like FTSE and S&P500 (you could get an average annual return of 10-12%, just google \"\"top safe etfs\"\" for example and you could take a quick look at credible sites like forbes etc). Also, you can take a look at fixed income options such as government bonds. Last but not least, you can always get your pick at some value companies stocks (usually big companies that have proven track record, check warren buffet on this). You should look for stocks that pay dividends since you are in for the long run and not just to make a quick buck. I hope I helped a bit and as always be cautious about investing since they have some inherent risks. If you don't feel comfortable with making your own investment choices you should contact a specialist like a financial planner or advisor. No matter what the case may be on this, you should still educate yourself on this... just to get a grasp on this.\"", "In addition to the other excellent answers here, check out Mr. Money Mustache's site, it's based in the US but the basics still hold here in the UK. Another great site is the Monevator which is UK based and gives some great information on passive investing. Well done on getting to this point at your age - you've got plenty of time for the miracle of compound interest to work for you. EDIT: Once you have any existing debts paid off, take a look at passive/index investing. This could be a good way to make your £150 work for you by capturing the gains of the stock market. Invest it long-term (buy and hold) to make the most of the compound interested effect and over time that money will become something substantial - especially if you can increase payments over time as your income increases. You could also look at reducing your outgoings as recommended on the Mustache site linked above so you can increase your monthly investment amount.", "Thats a very open question, Depends on the risk you are willing to take with the money, or the length of time you are willing sit on it, or if you have a specific goal like buying a house. Some banks offer high(ish) rate savings accounts http://www.bankaccountsavings.co.uk/calculator with a switching bonus that could be a good start. (combining the nationwide flexdirect and regular saver) if you want something more long term - safe option is bonds, medium risk option is Index funds (kind of covers all 3 risks really), risky option is Stocks & shares. For these probably a S&S ISA for a tax efficient option. Also LISA or HtB ISA are worth considering if you want to buy a house in the future." ]

[ "143467", "5188" ]

[ "\"Many years ago I heard a multi-level marketing pitch that pointed out how many doctors don't get out of debt until they are well into their 50's. The selling point was that you can get rich quick, as rich as a doctor, with nothing more then a bit of elbow grease. Of course the pitch failed to mention that most doctors, buy the things doctors buy, when they get that first big job. The big house, expensive cars nerf the income that they receive and they are probably stuck with years of student loan payments. I assume that you are one of the \"\"lucky\"\" ones that have graduated college with a well paying job. By lucky I mean you concentrated on obtaining a skill for which the marketplace has a need. Why not continue to live like a college student for a few more months and pay off all of your student loans ASAP? Get rid of them like you were purging the phone number of that high maintenance girl you dated during a short time of insanity.\"", "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." ]

[ "386437", "456389" ]

[ "If the cash flow information is complete, the valuation can be determined with relative accuracy and precision. Assuming the monthly rent is correct, the annual revenue is $1,600 per year, $250/mo * 12 months - $1,400/year in taxes. Real estate is best valued as a perpetuity where P is the price, i is the income, and r is the rate of interest. Theoreticians would suggest that the best available rate of interest would be the risk free rate, a 30 year Treasury rate ~3.5%, but the competition can't get these rates, so it is probably unrealistic. Anways, aassuming no expenses, the value of the property is $1,600 / 0.035 at most, $45,714.29. This is the general formula, and it should definitely be adjusted for expenses and a more realistic interest rate. Now, with a better understanding of interest rates and expenses, this will predict the most likely market value; however, it should be known that whatever interest rate is applied to the formula will be the most likely rate of return received from the investment. A Graham-Buffett value investor would suggest using a valuation no less than 15% since to a value investor, there's no point in bidding unless if the profits can be above average, ~7.5%. With a 15% interest rate and no expenses, $1,600 / .15, is $10,666.67. On average, it is unlikely that a bid this low will be successful; nevertheless, if multiple bids are placed using this similar methodology, by the law of small numbers, it is likely to hit the lottery on at most one bid.", "\"Scenario 1: Assume that you plan to keep the parking space for the rest of your life and collect the income from the rental. You say these spaces rent for $250 per month and there are fees of $1400 per year. Are there any other costs? Like would you be responsible for the cost of repaving at some point? But assuming that's covered in the $1400, the net profit is 250 x 12 - 1400 = $1600 per year. So now the question becomes, what other things could you invest your money in, and what sort of returns do those give? If, say, you have investments in the stock market that are generating a 10% annual return and you expect that rate of return to continue indefinitely, than if you pay a price that gives you a return of less than 10%, i.e. if you pay more than $16,000, then you would be better off to put the money in the stock market. That is, you should calculate the fair price \"\"backwards\"\": What return on investment is acceptable, and then what price would I have to pay to get that ROI? Oh, you should also consider what the \"\"occupancy rate\"\" on such parking spaces is. Is there enough demand that you can realistically expect to have it rented out 100% of the time? When one renter leaves, how long does it take to find another? And do you have any information on how often renters fail to pay the rent? I own a house that I rent out and I had two tenants in a row who failed to pay the rent, and the legal process to get them evicted takes months. I don't know what it takes to \"\"evict\"\" someone from a parking space. Scenario 2: You expect to collect rent on this space for some period of time, and then someday sell it. In that case, there's an additional piece of information you need: How much can you expect to get for this property when you sell it? This is almost surely highly speculative. But you could certainly look at past pricing trends. If you see that the value of a parking space in your area has been going up by, whatever, say 4% per year for the past 20 years, it's reasonable to plan on the assumption that this trend will continue. If it's been up and down and all over the place, you could be taking a real gamble. If you pay $30,000 for it today and when the time comes to sell the best you can get is $15,000, that's not so good. But if there is some reasonable consistent average rate of growth in value, you can add this to the expected rents. Like if you can expect it to grow in value by $1000 per year, then the return on your investment is the $1600 in rent plus $1000 in capital growth equals $2600. Then again do an ROI calculation based on potential returns from other investments.\"" ]

[ "276408", "269646" ]

[ "Please consult a tax advisor. You may be voilating the FEMA [Foreign Exchange Management Act] and can land into trouble. Further what you are doing can land up into various other acts as illegal including AML. Further if there is income generated by Indian citizen in India, he is still liable to pay tax, irrespective of whether you get the funds back into India. Edit: AML is Anti Money Laundering. Your transaction is sure to raise AML triggers as it looks like converting Black Money to White in round about way. Once the triggers are raised, RBI division will investigate further to verify what you are doing. If you are able to prove that this is a valid transaction, you would be OK on AML front. How will Income Tax Know? - If they don't know does not mean you are not liable for tax. - Any suspicious transactions would get investigated and sooner or later Income Tax would know about it and can cause a serious problem. - It is irrelevant where you have kept the money, if you have earned something, its taxable. For it not to be taxable you need to conduct this business differently. Please consult a tax adviser who will advice you on the tax-ability of this type of transaction.", "I find that there are two violation of law , prima facie , if someone earns money by depositing in the online account and then not reporting it ( including in his total income for the year ) and not bringing in India. Income Tax Act violation 1. It is simply comcealment liable for penalty & prosecution under I.T.Act. 2. You should know that anyone who is resident of India as per income Tax Act and having taxable income ( gross total income exceeding exemption limit) will have to fill up the column in his/her income tax return whether Previously these column were not in the Income Tax Return. So , now anyone who is liable to file return of Income can be tried for false return if he has hiddne assets aborad. 2. FEMA violation RBI permits remittance under Liberalized Remittance Scheme. However this scheme can not be used for certain purpose . It is important to examine whether RBI prohibits use of remittance for any entity or business you have described. You can read following FAQ on RBI site Q. 30. What are the prohibited items under the Scheme? Ans. The remittance facility under the Scheme is not available for the following: i) Remittance for any purpose specifically prohibited under Schedule-I (like purchase of lottery tickets/sweep stakes, proscribed magazines, etc.) or any item restricted under Schedule II of Foreign Exchange Management (Current Account Transactions) Rules, 2000; ii) Remittance from India for margins or margin calls to overseas exchanges / overseas counter-party; iii) Remittances for purchase of FCCBs issued by Indian companies in the overseas secondary market; iv) Remittance for trading in foreign exchange abroad; v) Remittance by a resident individual for setting up a company abroad; vi) Remittances directly or indirectly to Bhutan, Nepal, Mauritius and Pakistan; vii) Remittances directly or indirectly to countries identified by the Financial Action Task Force (FATF) as “non co-operative countries and territories”, from time to time; and viii) Remittances directly or indirectly to those individuals and entities identified as posing significant risk of committing acts of terrorism as advised separately by the Reserve Bank to the banks. You will have to examine , if the remittance was NOT done for purpose not allowed by RBI under LRS . If you clear this , you can say there is no violation and your violation is restricted to I.T.Act only." ]

[ "521489" ]

[ "\"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.\"" ]

[ "476517" ]

[ "Your idea is a good one, but, as usual, the devil is in the details, and implementation might not be as easy as you think. The comments on the question have pointed out your Steps 2 and 4 are not necessarily the best way of doing things, and that perhaps keeping the principal amount invested in the same fund instead of taking it all out and re-investing it in a similar, but different, fund might be better. The other points for you to consider are as follows. How do you identify which of the thousands of conventional mutual funds and ETFs is the average-risk / high-gain mutual fund into which you will place your initial investment? Broadly speaking, most actively managed mutual fund with average risk are likely to give you less-than-average gains over long periods of time. The unfortunate truth, to which many pay only Lipper service, is that X% of actively managed mutual funds in a specific category failed to beat the average gain of all funds in that category, or the corresponding index, e.g. S&P 500 Index for large-stock mutual funds, over the past N years, where X is generally between 70 and 100, and N is 5, 10, 15 etc. Indeed, one of the arguments in favor of investing in a very low-cost index fund is that you are effectively guaranteed the average gain (or loss :-(, don't forget the possibility of loss). This, of course, is also the argument used against investing in index funds. Why invest in boring index funds and settle for average gains (at essentially no risk of not getting the average performance: average performance is close to guaranteed) when you can get much more out of your investments by investing in a fund that is among the (100-X)% funds that had better than average returns? The difficulty is that which funds are X-rated and which non-X-rated (i.e. rated G = good or PG = pretty good), is known only in hindsight whereas what you need is foresight. As everyone will tell you, past performance does not guarantee future results. As someone (John Bogle?) said, when you invest in a mutual fund, you are in the position of a rower in rowboat: you can see where you have been but not where you are going. In summary, implementation of your strategy needs a good crystal ball to look into the future. There is no such things as a guaranteed bond fund. They also have risks though not necessarily the same as in a stock mutual fund. You need to have a Plan B in mind in case your chosen mutual fund takes a longer time than expected to return the 10% gain that you want to use to trigger profit-taking and investment of the gain into a low-risk bond fund, and also maybe a Plan C in case the vagaries of the market cause your chosen mutual fund to have negative return for some time. What is the exit strategy?" ]

[ "93828" ]

[ "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." ]

[ "446628" ]

[ "Does this technically mean that she has to pay AMT on $400,000? Yes. Well, not exactly 400,000. She paid $1 per share, so 390,000. And if so, is %28 the AMT for this sum? (0.28 * $400,000 = $112,000)? Or does she have to include her salary on top of that before calculating AMT? (Suppose in the fake example that her salary is $100,000 after 401k). All her income is included in calculating the AMT, minus the AMT exemption amount. The difference between the regular calculated tax and the calculated AMT is then added to the regular tax. Note that some deductions allowed for the regular calculation are not allowed for the AMT calculation. How does California state tax come into play for this? California has its own AMT rules, and in California any stock option exercise is subject to AMT, unless you sell the stock in the same year. Here's a nice and easy to understand write up on the issue from the FTB. When would she have to pay the taxes for this huge AMT? Tax is due when income is received (i.e.: when you exercise the options). However, most people don't actually pay the tax then, but rather discover the huge tax liability when they prepare to submit their tax return on April 15th. To avoid that, I'd suggest trying to estimate the tax and adjust your withholding using form W4 so that by the end of the year you have enough withheld. Suppose in the worst case, the company goes completely under. Does she get her massive amounts of tax back? Or if it's tax credit, where can I find more info on this? That would be capital loss, and only up to $3K a year of capital loss can be deducted from the general income. So it will continue offsetting other capital gains or being deducted $3K a year until it all clears out. Is there any way to avoid this tax? (Can she file an 83b election?) You asked and answered. Yes, filing 83(b) election is the way to go to avoid this situation. This should be done within 30 days of the grant, and submitted to the IRS, and a copy attached to the tax return of the grant year. However, if you're considering exercise - that ship has likely sailed a long time ago. Any advice for Little Susie on how she can even afford to pay that much tax on something she can't even sell anytime soon? Don't exercise the options? Should she take out a loan? (e.g. I've heard that in the extreme case, you can find angel investors who are willing to pay all your taxes/strike price, but want 50% of your equity? I've also heard that you can sell your illiquid shares on SecondMarket?) Is she likely to get audited by IRS for pulling something like this? You can take a loan secured by shares you own, there's nothing illegal in it. If you transfer your shares - the IRS only cares about the taxes being paid, however that may be illegal depending on the terms and the conditions of the grant. You'll need to talk to a lawyer about your situation. I suggest talking to a licensed tax adviser (EA/CPA licensed in your State) about the specifics concerning your situation." ]

[ "372884" ]

[ "\"You need to get the current tax software, the 2013 filing software is out already, even though it needs to update itself before filing, as the final forms aren't ready yet. Then you will look carefully at Schedule E to understand what gets written off. I see you are looking at the $2200 rent vs your own rent of $2100, but of course, the tax form doesn't care about your rent. You offset the expenses of that house against the income. The expenses are the usual suspects, mortgage interest, property tax, repairs, etc. But there's one big thing new landlords are prone to forgetting. Depreciation. It's not optional. Say the house cost you $400K. This is your basis. You need to separate the value of land which is not depreciated. For a condo with no land it can be as little as 10%, when we bought our house, for insurance purposes, the land was nearly 40% of the full value. Say you do the research and decide 30% (for land), then 70% = $280K. Depreciation is taken each year over a 27.5 year period, or just over $10,000 per year. (Note, the forms will help you get your year 1 number, as you didn't have a full year.) This depreciation helps with your cash flow during the year (as you should do the math, and if you keep the house, adjust your W4 withholdings for 2014, that lump sum you'll get in April won't pay the bills each month) but is 'recaptured' on sale. At some point in the future, you may save enough to buy a house where you wish to live, but need to sell the rental. Consider a 1031 Exchange. It's a way to sell a rental and buy a new one without triggering a taxable event. What I don't know is how long the new house must be a rental before the IRS would then allow you to move in. The same way you turned your home into a rental, a rental can be turned back to a primary residence. I just doubt you can do it right after the purchase. As fellow member @littleadv would advise, \"\"get professional advice.\"\" And he's right. I've just offered what you might consider. The first year tax return with that Schedule E is the toughest as it's brand new. The next year is simple in comparison. The question of selling immediately is tough. Only you can decide whether the risk of keeping it is too great. You're saying you don't have the money to cover two month's vacancy. That scares me. I'd focus on beefing up the emergency account. And securing a credit line. You mentioned the tax savings. My opinion is that for any investment,the tax tail should never wag the investing dog. Buy or sell a stock based on the stock, not the potential tax bill for the sale. In your situation, the rent and expenses will cancel each other, and the depreciation is a short term loan, from a tax perspective. If you sold today, what do you net? If you analyzed the numbers now, what is your true income from the property each year? Is that return worth it? A good property will provide cash flow, principal reduction each year, and normal increase in value. This takes a bit of careful looking at the numbers. You might feel you're just breaking even, but if the principal is $12K less after a year, that's something you shouldn't ignore. On the other hand, an exact 'break-even' with little equity at stake offered you a leveraged property where any gains are a magnified percentage of what you have at risk. Last - welcome to Money.SE - consider adding some more details to your profile.\"" ]

[ "384064", "61264", "337341" ]

[ "\"So you are off to a really good start. Congratulations on being debt free and having a nice income. Being an IT contractor can be financially rewarding, but also have some risks to it much like investing. With your disposable income I would not shy away from investing in further training through sites like PluralSite or CodeSchool to improve weak skills. They are not terribly expensive for a person in your situation. If you were loaded down with debt and payments, the story would be different. Having an emergency fund will help you be a good IT contractor as it adds stability to your life. I would keep £10K or so in a boring savings account. Think of it not as an investment, but as insurance against life's woes. Having such a fund allows you to go after a high paying job you might fail at, or invest with impunity. I would encourage you to take an intermediary step: Moving out on your own. I would encourage renting before buying even if it is just a room in someone else's home. I would try to be out of the house in less than 3 months. Being on your own helps you mature in ways that can only be accomplished by being on your own. It will also reduce the culture shock of buying your own home or entering into an adult relationship. I would put a minimum of £300/month in growth stock mutual funds. Keeping this around 15% of your income is a good metric. If available you may want to put this in tax favored retirement accounts. (Sorry but I am woefully ignorant of UK retirement savings). This becomes your retire at 60 fund. (Starting now, you can retire well before 68.) For now stick to an index fund, and once it gets to 25K, you may want to look to diversify. For the rest of your disposable income I'd invest in something safe and secure. The amount of your disposable income will change, presumably, as you will have additional expenses for rent and food. This will become your buy a house fund. This is something that should be safe and secure. Something like a bond fund, money market, dividend producing stocks, or preferred stocks. I am currently doing something like this and have 50% in a savings account, 25% in a \"\"Blue chip index fund\"\", and 25% in a preferred stock fund. This way you have some decent stability of principle while also having some ability to grow. Once you have that built up to about 12K and you feel comfortable you can start shopping for a house. You may want to be at the high end of your area, so you should try and save at least 10%; or, you may want to be really weird and save the whole thing and buy your house for cash. If you are still single you may want to rent a room or two so your home can generate income. Here in the US there can be other ways to generate income from your property. One example is a home that has a separate area (and room) to park a boat. A boat owner will pay some decent money to have a place to park their boat and there is very little impact to the owner. Be creative and perhaps find a way where a potential property could also produce income. Good luck, check back in with progress and further questions! Edit: After some reading, ISA seem like a really good deal.\"", "There are a number of UK banks that offer what passes for reasonable interest on an amount of cash held in their current accounts. I would suggest that you look into these. In the UK the first £1000 of bank or building society interest is paid tax-free for basic rate taxpayers (£500 for higher rate tax-payers) so if your interest income is below these levels then there is no point in investing in a cash ISA as the interest rate is often lower. At the moment Santander-123 bank account pays 1.5% on up to £20000 and Nationwide do 5% on up to £2500. A good source if information on the latest deals is Martin Lewis' Moneysaving Expert Website", "I recommend investing in precious metals like gold, considering the economic cycle we're in now. Government bonds are subject to possible default and government money historically tends to crumble in value, whereas gold and the metals tend to rise in value with the commodies. Stocks tend to do well, but right now most of them are a bit overvalued and they're very closely tied to overvalued currencies and unstable governments with lots of debt. I would stick to gold right now, if you're planning on investing for more than a month or so." ]

[ "374225", "96021", "268731" ]

[ "\"First of all, it's great you're now taking full advantage of your employer match – i.e. free money. Next, on the question of the use of a life cycle / target date fund as a \"\"hedge\"\": Life cycle funds were introduced for hands-off, one-stop-shopping investors who don't like a hassle or don't understand. Such funds are gaining in popularity: employers can use them as a default choice for automatic enrollment, which results in more participation in retirement savings plans than if employees had to opt-in. I think life cycle funds are a good innovation for that reason. But, the added service and convenience typically comes with higher fees. If you are going to be hands-off, make sure you're cost-conscious: Fees can devastate a portfolio's performance. In your case, it sounds like you are willing to do some work for your portfolio. If you are confident that you've chosen a good equity glide path – that is, the initial and final stock/bond allocations and the rebalancing plan to get from one to the other – then you're not going to benefit much by having a life cycle fund in your portfolio duplicating your own effort with inferior components. (I assume you are selecting great low-cost, liquid index funds for your own strategy!) Life cycle are neat, but replicating them isn't rocket science. However, I see a few cases in which life cycle funds may still be useful even if one has made a decision to be more involved in portfolio construction: Similar to your case: You have a company savings plan that you're taking advantage of because of a matching contribution. Chances are your company plan doesn't offer a wide variety of funds. Since a life cycle fund is available, it can be a good choice for that account. But make sure fees aren't out of hand. If much lower-cost equity and bond funds are available, consider them instead. Let's say you had another smaller account that you were unable to consolidate into your main account. (e.g. a Traditional IRA vs. your Roth, and you didn't necessarily want to convert it.) Even if that account had access to a wide variety of funds, it still might not be worth the added hassle or trading costs of owning and rebalancing multiple funds inside the smaller account. There, perhaps, the life cycle fund can help you out, while you use your own strategy in your main account. Finally, let's assume you had a single main account and you buy partially into the idea of a life cycle fund and you find a great one with low fees. Except: you want a bit of something else in your portfolio not provided by the life cycle fund, e.g. some more emerging markets, international, or commodity stock exposure. (Is this one reason you're doing it yourself?) In that case, where the life cycle fund doesn't quite have everything you want, you could still use it for the bulk of the portfolio (e.g. 85-95%) and then select one or two specific additional ETFs to complement it. Just make sure you factor in those additional components into the overall equity weighting and adjust your life cycle fund choice accordingly (e.g. perhaps go more conservative in the life cycle, to compensate.) I hope that helps! Additional References:\"", "I choose lifecycle funds because I am placing faith (perhaps foolishly) that a full time fund manager knows better what to pick than I. The same reason I go with mutual funds in general apply to to why I also have the lifecycle funds. Presently my diversification strategy is really just index funds and lifecycle funds. The radio advice guy Clark Howard often promotes them. http://www.wacotrib.com/none/content/shared/money/stories/clark/0601/060425money.html (I count in the intimidated group)", "I like that you are hedging ONLY the Roth IRA - more than likely you will not touch that until retirement. Looking at fees, I noticed Vanguard Target retirement funds are .17% - 0.19% expense ratios, versus 0.04 - 0.14% for their Small/Mid/Large cap stocks." ]

[ "572396" ]

[ "\"You can charge a fee to accept checks, although I think the better solution might be to offer a small discount for early payment of your invoices. As some people here have suggested, why not add a small bit to your fees to begin with to cover your inconvenience in the case they choose to pay by check? I often will give clients a small discount of 1.5% for paying my invoices within 10 days, which does motivate some to pay sooner, depending on the client and the amount of the invoice. If you've already added a small amount to your fees in the first place then providing the discount is good public relations that doesn't actually cost you anything. You can always add a \"\"convenience fee\"\" for accepting checks, but this is a more negative approach, as though you're penalizing the client for paying by check rather than electronically. Some people do see it this way, despite any efforts you make to explain otherwise. As to your question about adding fees for accepting credit cards, be very careful! There are sometimes state or local laws on this, and you could find yourself in trouble very quickly if you run afoul of one. Here's a good article to read on the subject: Adding fees for accepting credit cards from CreditCards.com Site I hope this is helpful. Good luck!\"" ]

[ "106684" ]

[ "I'm not sure 1099-MISC is what you should expect. Equity means ownership, and in LLC context it means membership. As an LLC member, you'll get distributions and should receive a K-1 form for tax treatment, not 1099 or W2. If the CEO is talking about 1099 it means he's going to hire you as a contractor which contradicts the statement about equity allocation. That's an entirely different situation. 1) Specifically, would the 1099-MISC form be used in this case? 1099-MISC is used to describe various payments. Depending on which box is filled, the tax treatment may be as of employment income (subject to SE taxes) or passive income (royalties, rents, etc - subject to various limitations in the tax code). 3) If this is the only logical method of compensation (receiving a % of real estate sales), how would it be taxed? That would probably be a commission and taxed as employment income. I suggest to get a professional tax adviser consultation on this issue, with specific details, numbers, and kinds of deals involved. You can get gain or lose a lot of money just because you're characterized as a contractor and not LLC member or employee (each has its own benefits and disadvantages, and you have to consider them all). 4) Are there any advantages/disadvantages to acquiring and selling properties through the company as opposed to receiving a % of sales? Yes. There are advantages and there are disadvantages. For example, if you're using a corporation, you can get salary, if you're a contractor you cannot. There are a lot of issues hidden in this distinction (which I've just discussed with KeithS in this argument)." ]

[ "424247", "234979", "409959" ]

[ "\"Congratulations on a solid start. Here are my thoughts, based on your situation: Asset Classes I would recommend against a long-term savings account as an investment vehicle. While very safe, the yields will almost always be well below inflation. Since you have a long time horizon (most likely at least 30 years to retirement), you have enough time to take on more risk, as long as it's not more than you can live with. If you are looking for safer alternatives to stocks for part of your investments, you can also consider investment-grade bonds/bond funds, or even a stable value fund. Later, when you are much closer to retirement, you may also want to consider an annuity. Depending on the interest rate on your loan, you may also be able to get a better return from paying down your loan than from putting more in a savings account. I would recommend that you only keep in a savings account what you expect to need in the next few years (cushion for regular expenses, emergency fund, etc.). On Stocks Stocks are riskier but have the best chance to outperform versus inflation over the long term. I tend to favor funds over individual stocks, mostly for a few practical reasons. First, one of the goals of investing is to diversify your risk, which produces a more efficient risk/reward ratio than a group of stocks that are highly correlated. Diversification is easier to achieve via an index fund, but it is possible for a well-educated investor to stay diversified via individual stocks. Also, since most investors don't actually want to take physical possession of their shares, funds will manage the shares for you, as well as offering additional services, such as the automatic reinvestments of dividends and tax management. Asset Allocation It's very important that you are comfortable with the amount of risk you take on. Investment salespeople will prefer to sell you stocks, as they make more commission on stocks than bonds or other investments, but unless you're able to stay in the market for the long term, it's unlikely you'll be able to get the market return over the long term. Make sure to take one or more risk tolerance assessments to understand how often you're willing to accept significant losses, as well as what the optimal asset allocation is for you given the level of risk you can live with. Generally speaking, for someone with a long investment horizon and a medium risk tolerance, even the most conservative allocations will have at least 60% in stocks (total of US and international) with the rest in bonds/other, and up to 80% or even 100% for a more aggressive investor. Owning more bonds will result in a lower expected return, but will also dramatically reduce your portfolio's risk and volatility. Pension With so many companies deciding that they don't feel like keeping the promises they made to yesterday's workers or simply can't afford to, the pension is nice but like Social Security, I wouldn't bank on all of this money being there for you in the future. This is where a fee-only financial planner can really be helpful - they can run a bunch of scenarios in planning software that will show you different retirement scenarios based on a variety of assumptions (ie what if you only get 60% of the promised pension, etc). This is probably not as much of an issue if you are an equity partner, or if the company fully funds the pension in a segregated account, or if the pension is defined-contribution, but most corporate pensions are just a general promise to pay you later in the future with no real money actually set aside for that purpose, so I'd discount this in my planning somewhat. Fund/Stock Selection Generally speaking, most investment literature agrees that you're most likely to get the best risk-adjusted returns over the long term by owning the entire market rather than betting on individual winners and losers, since no one can predict the future (including professional money managers). As such, I'd recommend owning a low-cost index fund over holding specific sectors or specific companies only. Remember that even if one sector is more profitable than another, the stock prices already tend to reflect this. Concentration in IT Consultancy I am concerned that one third of your investable assets are currently in one company (the IT consultancy). It's very possible that you are right that it will continue to do well, that is not my concern. My concern is the risk you're carrying that things will not go well. Again, you are taking on risks not just over the next few years, but over the next 30 or so years until you retire, and even if it seems unlikely that this company will experience a downturn in the next few years, it's very possible that could change over a longer period of time. Please just be aware that there is a risk. One way to mitigate that risk would be to work with an advisor or a fund to structure and investment plan where you invest in a variety of sector funds, except for technology. That way, your overall portfolio, including the single company, will be closer to the market as a whole rather than over-weighted in IT/Tech. However, if this IT Consultancy happens to be the company that you work for, I would strongly recommend divesting yourself of those shares as soon as reasonably possible. In my opinion, the risk of having your salary, pension, and much of your investments tied up in the fortunes of one company would simply be a much larger risk than I'd be comfortable with. Last, make sure to keep learning so that you are making decisions that you're comfortable with. With the amount of savings you have, most investment firms will consider you a \"\"high net worth\"\" client, so make sure you are making decisions that are in your best financial interests, not theirs. Again, this is where a fee-only financial advisor may be helpful (you can find a local advisor at napfa.org). Best of luck with your decisions!\"", "There is no rule of thumb (although some may suggest there is). Everybody will have different goals, investment preferences and risk tolerances. You need to figure this out by yourself by either education yourself in the type of investments you are interested in or by engaging (and paying for) a financial advisor. You should not be taking advice from others unless it is specifically geared for your goals, investment DNA and risk tolerance. The only advice I would give you is to have a plan (whether you develop it yourself or pay a financial advisor to develop one). Also, don't have all your savings sitting in cash, as long-term you will fall behind the eight ball in real returns (allowing for inflation).", "\"RED FLAG. You should not be invested in 1 share. You should buy a diversified ETF which can have fees of 0.06% per year. This has SIGNIFICANTLY less volatility for the same statistical expectation. Left tail risk is MUCH lower (probability of gigantic losses) since losses will tend to cancel out gains in diversified portfolios. Moreover, your view that \"\"you believe these will continue\"\" is fallacious. Stocks of developed countries are efficient to the extent that retail investors cannot predict price evolution in the future. Countless academic studies show that individual investors forecast in the incorrect direction on average. I would be quite right to objectively classify you as a incorrect if you continued to hold the philosophy that owning 1 stock instead of the entire market is a superior stategy. ALL the evidence favours holding the market. In addition, do not invest in active managers. Academic evidence demonstrates that they perform worse than holding a passive market-tracking portfolio after fees, and on average (and plz don't try to select managers that you think can outperform -- you can't do this, even the best in the field can't do this). Direct answer: It depends on your investment horizon. If you do not need the money until you are 60 then you should invest in very aggressive assets with high expected return and high volatility. These assets SHOULD mainly be stocks (through ETFs or mutual funds) but could also include US-REIT or global-REIT ETFs, private equity and a handful of other asset classes (no gold, please.) ... or perhaps wealth management products which pool many retail investors' funds together and create a diversified portfolio (but I'm unconvinced that their fees are worth the added diversification). If you need the money in 2-3 years time then you should invest in safe assets -- fixed income and term deposits. Why is investment horizon so important? If you are holding to 60 years old then it doesn't matter if we have a massive financial crisis in 5 years time, since the stock market will rebound (unless it's a nuclear bomb in New York or something) and by the time you are 60 you will be laughing all the way to the bank. Gains on risky assets overtake losses in the long run such that over a 20-30 year horizon they WILL do much better than a deposit account. As you approach 45-50, you should slowly reduce your allocation to risky assets and put it in safe haven assets such as fixed income and cash. This is because your investment horizon is now SHORTER so you need a less risky portfolio so you don't have to keep working until 65/70 if the market tanks just before retirement. VERY IMPORTANT. If you may need the savings to avoid defaulting on your home loan if you lose your job or something, then the above does not apply. Decisions in these context are more vague and ambiguous.\"" ]

[ "513281", "224816", "466472" ]

[ "\"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.\"", "Littleadv has given you excellent general advice, but to my mind, the most important part of it all and the path which I will strongly recommend you follow, is the suggestion to look into a mutual fund. I would add even more strongly, go to a mutual fund company directly and make an investment with them directly instead of making the investment through a brokerage account. Pick an index fund with low expenses, e.g. there are S&P 500 index funds available with expenses that are a fraction of 1%. (However, many also require minimum investments on the order of $2500 or $3000 except for IRA accounts). At this time, your goal should be to reduce expenses as much as possible because expenses, whether they be in brokerage fees which may be directly visible to you or mutual fund expenses which are invisible to you, are what will eat away at your return far more than the difference between the returns of various investments.", "\"Most mutual funds are designed to make the investment banks that sell them money, not to make investers money. They do this by taking significant fees out. Because they make lots of money on these funds, they advertise them a lot, and give them important-sounding names, like \"\"Advanced technology global diversity long term appreciation\"\". Index funds are the exception; they attempt to mirror the performance of a specific index (such as the S&P 500 index). They generally have very low fees.\"" ]

[ "69800" ]

[ "\"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.\"" ]

[ "13885", "443094" ]

[ "You could buy shares of an Exchange-Traded Fund (ETF) based on the price of gold, like GLD, IAU, or SGOL. You can invest in this fund through almost any brokerage firm, e.g. Fidelity, Etrade, Scotttrade, TD Ameritrade, Charles Schwab, ShareBuilder, etc. Keep in mind that you'll still have to pay a commission and fees when purchasing an ETF, but it will almost certainly be less than paying the markup or storage fees of buying the physical commodity directly. An ETF trades exactly like a stock, on an exchange, with a ticker symbol as noted above. The commission will apply the same as any stock trade, and the price will reflect some fraction of an ounce of gold, for the GLD, it started as .1oz, but fees have been applied over the years, so it's a bit less. You could also invest in PHYS, which is a closed-end mutual fund that allows investors to trade their shares for 400-ounce gold bars. However, because the fund is closed-end, it may trade at a significant premium or discount compared to the actual price of gold for supply and demand reasons. Also, keep in mind that investing in gold will never be the same as depositing your money in the bank. In the United States, money stored in a bank is FDIC-insured up to $250,000, and there are several banks or financial institutions that deposit money in multiple banks to double or triple the effective insurance limit (Fidelity has an account like this, for example). If you invest in gold and the price plunges, you're left with the fair market value of that gold, not your original deposit. Yes, you're hoping the price of your gold investment will increase to at least match inflation, but you're hoping, i.e. speculating, which isn't the same as depositing your money in an insured bank account. If you want to speculate and invest in something with the hope of outpacing inflation, you're likely better off investing in a low-cost index fund of inflation-protected securities (or the S&P500, over the long term) rather than gold. Just to be clear, I'm using the laymen's definition of a speculator, which is someone who engages in risky financial transactions in an attempt to profit from short or medium term fluctuations This is similar to the definition used in some markets, e.g. futures, but in many cases, economists and places like the CFTC define speculators as anyone who doesn't have a position in the underlying security. For example, a farmer selling corn futures is a hedger, while the trading firm purchasing the contracts is a speculator. The trading firm doesn't necessarily have to be actively trading the contract in the short-run; they merely have no position in the underlying commodity.", "\"In addition to the possibility of buying gold ETFs or tradable certificates, there are also firms specializing in providing \"\"bank accounts\"\" of sorts which are denominated in units of weight of precious metal. While these usually charge some fees, they do meet your criteria of being able to buy and sell precious metals without needing to store them yourself; also, these fees are likely lower than similar storage arranged by yourself. Depending on the specifics, they may also make buying small amounts practical (buying small amounts of physical precious metals usually comes with a large mark-up over the spot price, sometimes to the tune of a 50% or so immediate loss if you buy and then immediately sell). Do note that, as pointed out by John Bensin, buying gold gets you an amount of metal, the local currency value of which will vary over time, sometimes wildly, so it is not the same thing as depositing the original amount of money in a bank account. Since 2006, the price of an ounce (about 31.1 grams) of gold has gone from under $500 US to over $1800 US to under $1100 US. Few other investment classes are anywhere near this volatile. If you are interested in this type of service, you might want to check out BitGold (not the same thing at all as Bitcoin) or GoldMoney. (I am not affiliated with either.) Make sure to do your research thoroughly as these may or may not be covered by the same regulations as regular banks, particularly if you choose a company based outside of or a storage location outside of your own country.\"" ]

[ "345091" ]

[ "You should ensure that your broker is a member of the Securities Investor Protection Corporation (SIPC). SIPC protects the cash and securities in your brokerage account much like the Federal Deposit Insurance Corporation (FDIC) protects bank deposits. Securities are protected with a limit of $500,000 USD. Cash is protected with a limit of $250,000 USD. It should be noted that SIPC does not protect investors against loss of value or bad advice. As far as having multiple brokerage accounts for security, I personally don’t think it’s necessary to have multiple accounts for that reason. Depending on account or transaction fees, it might not hurt to have multiple accounts. It can actually be beneficial to have multiple accounts so long as each account serves a purpose in your overall financial plan. For example, I have three brokerage accounts, each of which serves a specific purpose. One provides low cost stock and bond transactions, another provides superior market data, and the third provides low cost mutual fund transactions. If you’re worried about asset security, there are a few things you can do to protect yourself. I would recommend you begin by consulting a qualified financial advisor about your risk profile. You stated that a considerable portion of your total assets are in securities. Depending on your risk profile and the amount of your net worth held in securities, you might be better served by moving your money into lower risk asset classes. I’m not an attorney or a financial advisor. This is not legal advice or financial advice. You can and should consult your own attorney and financial advisor." ]

[ "438392" ]

[ "The question isn't sales but profits. Banks traditionally profit by making loans. Just as with a physical product, there are costs involved, income produced, and the difference between the two is gross profit. From there you can get net profit, and from there you can look at efficiency or profit per share or whatever other metric floats your boat. Or you can just buy index funds, get average rates of return, and not have to think about it." ]

[ "279488" ]

[ "To start, I hope you are aware that the properties' basis gets stepped up to market value on inheritance. The new basis is the start for the depreciation that must be applied each year after being placed in service as rental units. This is not optional. Upon selling the units, depreciation is recaptured whether it's taken each year or not. There is no rule of thumb for such matters. Some owners would simply collect the rent, keep a reserve for expenses or empty units, and pocket the difference. Others would refinance to take cash out and leverage to buy more property. The banker is not your friend, by the way. He is a salesman looking to get his cut. The market has had a good recent run, doubling from its lows. Right now, I'm not rushing to prepay my 3.5% mortgage sooner than it's due, nor am I looking to pull out $500K to throw into the market. Your proposal may very well work if the market sees a return higher than the mortgage rate. On the flip side I'm compelled to ask - if the market drops 40% right after you buy in, will you lose sleep? And a fellow poster (@littleadv) is whispering to me - ask a pro if the tax on a rental mortgage is still deductible when used for other purposes, e.g. a stock purchase unrelated to the properties. Last, there are those who suggest that if you want to keep investing in real estate, leverage is fine as long as the numbers work. From the scenario you described, you plan to leverage into an already pretty high (in terms of PE10) and simply magnifying your risk." ]

[ "110716", "412858" ]

[ "There are various exchanges around the world that handle spot precious metal trading; for the most part these are also the primary spot foreign exchange markets, like EBS, Thomson Reuters, Currenex (website seems to be down), etc. You can trade on these markets through brokers just like you can trade on stock markets. However, the vast majority of traders on these exchanges do not intend to hold any bullion ownership at the end of the day; they want to buy as much as they sell each day. A minority of traders do intend to hold metal positions for longer periods, but I doubt any of them intend to actually go collect bullion from the exchange. I don't think it's even possible. Really the only way to get bullion is to pay a service fee to a dealer like you mentioned. But on an exchange like the ones above you have to pay three different fees: So in the end you can't even get the spot price on the exchanges where the spot prices are determined. You might even come out ahead by going to a dealer. You should try to find a reputable dealer, and go in knowing the latest trade prices. An honest dealer will have a website showing you the current trade prices, so you know that they expect you to know the prices when you come in. For example, here's a well-known dealer in Chicago that happily shows you the spot prices from KITCO so you can decide whether their service fee is worth it or not.", "The futures market allows you to take delivery at the lowest cost. Most people don't deal in 100oz gold bars and 5000oz of 1000oz silver bars though, especially at the retail level. That said, when you are at the retail level, often times you will find reputable Internet dealers offering the lowest cost of ownership. Keep in mind brand name though when you're doing this. Reputable refiners/mints will often see higher premiums versus generic, and this does matter to some extent. Quantity and weights also matter in terms of pricing; the more you buy the lower the premium." ]

[ "86158", "441512", "2648" ]

[ "You can't pay your bills with equity in your house. Assuming you paid off the mortgage, where would the money come from that you plan to live off of? If that is your whole retirement savings I'd say do neither. Maybe an annuity (not variable) for SOME of the money, keep the rest invested in conservative investments some of it in cash for emergencies.", "\"There is no formula to answer the question. You have to balance return on investment with risk. There's also the question of whether you have any children or other heirs that you would like to leave money to. The mortgage is presumably a guaranteed thing: you know exactly how much the payments will be for the rest of the loan. I think most annuities have a fixed rate of return, but they terminate when you both die. There are annuities with a variable return, but usually with a guaranteed minimum. So if you got an annuity with a fixed 3.85% return, and you lived exactly 18 more years, then (ignoring tax implications), there'd be no practical difference between the two choices. If you lived longer than 18 years, the annuity would be better. If less, paying off the mortgage would be better. Another option to consider is doing neither, but keeping the money in the 401k or some other investment. This will usually give better than 3.85% return, and the principal will be available to leave to your heirs. The big drawback to this is risk: investments in the stock market and the like usually do better than 3 or 4%, but not always, and sometimes they lose money. Earlier I said \"\"ignoring tax implications\"\". Of course that can be a significant factor. Mortgages get special tax treatment, so the effective interest rate on a mortgage is less than the nominal rate. 401ks also get special tax treatment. So this complicates up calculations trying to compare. I can't give definitive numbers without knowing the returns you might get on an annuity and your tax situation.\"", "I am in the process of writing an article about how to maximize one's Social Security benefits, or at least, how to start the analysis. This chart, from my friends at the Social Security office shows the advantage of waiting to take your benefit. In your case, you are getting $1525 at age 62. Now, if you wait 4 years, the benefit jumps to $2033 or $508/mo more. You would get no benefit for 4 years and draw down savings by $73,200, but would get $6,096/yr more from 64 on. Put it off until 70, and you'd have $2684/mo. At some point, your husband should apply for a spousal benefit (age 66 for him is what I suggest) and collect that for 4 years before moving to his own benefit if it's higher than that. Keep in mind, your generous pensions are likely to push you into having your social security benefit taxed, and my plan, above will give you time to draw down the 401(k) to help avoid or at least reduce this." ]

[ "224672", "163333", "208907" ]

[ "\"For every buyer there is a seller. That rule refers to actual (historical) trades. It doesn't apply to \"\"wannabees.\"\" Suppose there are buyers for 2,000 shares and sellers for only 1,000 at a given price, P. Some of those buyers will raise their \"\"bid\"\" (the indication of the price they are willing to pay) above P so that the sellers of the 1000 shares will fill their orders first (\"\"sold to the highest bidder\"\"). The ones that don't do this will (probably) not get their orders filled. Suppose there are more sellers than buyers. Then some sellers will lower their \"\"offer\"\" price to attract buyers (and some sellers probably won't). At a low enough price, there will likely be a \"\"match\"\" between the total number of shares on sale, and shares on purchase orders.\"", "Yes for every order there is a buyer and seller. But overall there are multiple buyers and multiple sellers. So every trade is at a different price and this price is agreed by both buyer and seller. Related question will help you understand this better. How do exchanges match limit orders?", "That is mostly true, in most situations when there are more buy orders than sell orders (higher buy volume orders than sell volume orders), the price will generally move upwards and vice versa, when there are more sell orders than buy orders (higher sell volume orders than buy volume orders), the price will generally move downwards. Note that this does not always happen, but usually it does. You are also correct that for a trade to take place a buyer has to be matched with a seller (or the buy volume matched with the sell volume). But not all orders get executed as trades. Say there are 50 buy orders in the order book with a total volume of 100,000 shares and the highest buy order is currently at $10.00. On the other side there are only 10 sell orders in the order book with total volume of 10,000 shares and the lowest sell order is currently $10.05. At the moment there won't be a trade unless a new buyer or seller enters the market to match the opposing side, or an existing order gets amended upper or lower to match the opposing side. With more demand than supply in the order books what will be the most likely direction that this stock moves in? Most likely the price will move upwards. If a new buyer sees the price moving higher and then looks at the market depth, they would most likely place an order closer to the lowest sell order than the current highest buy order, say $10.01, to be first in line in case a market sell order is placed on the market. As new buy orders enter the market it drives the price higher and higher until the buy orders dry up." ]

[ "586455" ]

[ "I don't think so in your case. Unless the account generates so much interest income that it became reportable (I don't know the exact limit, but I think it's in the hundreds if not thousands of dollars, you might get a 1099 form if it generates over $10 of interest income, but you don't have to file taxes if your overall income is too low anyways). The US does not typically tax assets, only income. There are some states (Florida is the only one I can think of) that has odd tax treatment of intangible assets, but I doubt that would apply in your case. If this were a large enough amount, usually over $10,000, it might trigger some reporting requirements (possibly by your home country)." ]