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0b80bbc7ef31fc02c29ed62a25dd00fc	Walking away from an FHA loan	[ { "docid": "9d0d0ed7b33202c9137a9b469d8bf1cf", "text": "According to the Trulia reference on the issue, New York is a recourse state. Recourse means that the lender can go after you for the difference between the foreclosure discharge amount (in New York - the higher of the FMV or the actual sale price) and the debt balance. That includes garnishing your wages, seizing your assets, and any other method of collecting the judgement. The relevant law is in the New York Consolidated Laws - RPA Article 13. The option you're talking about is the option any lender has anywhere - not to sue you for the difference (provision 3 of the paragraph): If no motion for a deficiency judgment shall be made as herein prescribed the proceeds of the sale regardless of amount shall be deemed to be in full satisfaction of the mortgage debt and no right to recover any deficiency in any action or proceeding shall exist. So if during the foreclosure they didn't sue you for the difference - they cannot change their mind after that. If you're not sure you can repay the loan - you should probably walk away from the deal.", "title": "" }, { "docid": "69680bbfebdbbdb0d36fc00477a04d01", "text": "Nearly every state in the US is full-recourse. If one doesn't seek bankruptcy protection, creditors can seek judgement, and collect assets. Foreclosures frequently sell for approximately half the market price. Considering unemployment risk, homes can be risky. A far better way to accumulate wealth is with equities (stocks). However, the risk converts from insolvency to liquidation since during times of high unemployment, equities are also cheap, causing any liquidation used to fund current expenses to be potentially ruinous.", "title": "" }, { "docid": "331c6c280e5a0c64549ac6d0212cb618", "text": "\"One additional penalty is you will be put on the CAIVRS (\"\"cavers\"\") for your default on the FHA mortgage which will preclude you from FHA financing in the future. When purchasing the multifamily unit it is an FHA requirement that you occupy one of the units. Lastly, I would advise against FHA due to elevated costs. Conventional options have 95% financing options, and don't have mortgage insurance that lasts forever, like FHA does.\"", "title": "" } ]	[ { "docid": "bb65af7be3ce30209c971bb477b6a2ba", "text": "The fact that a lawsuit has been filed is not ipso facto evidence of wrongdoing. BoA has a lot of ugliness yet un-accounted-for, but escrowing insurance and taxes is 100% standard practice, to the point where you cannot get a conventional mortgage that doesn't escrow that stuff. NO bank will give or carry a conventional home-loan without escrowing taxes and insurance. If you have a conventional mortgage, your insurance and tax payments are made by the mortgager whether or not you pay, because the bank doesn't want the house (their collateral) repo'd or destroyed due to lack of a $100 insurance/tax payment. To the point, no bank in 2011 wants more foreclosed homes on their books. Banks lose money in foreclosure. The thesis that BoA conspired to get a bigger portfolio of underwater homes defies sanity. Just because BoA robbed a liquor store doesn't mean that they also molested children and killed JFK. There might be a colossal paperwork snafu here that BoA has to make right, but that can be unwound. But the narrative that BoA was gaming the paperwork to get a higher ratio of foreclosures on their books doesn't make sense.", "title": "" }, { "docid": "66002fb9387b1f794929de8adce812a2", "text": "\"This summer I used a loan from my 401(k) to help pay for the down payment of a new house. We planned on selling a Condo a few months later, so we only needed the loan for a short period but wanted to keep monthly payments low since we would be paying two mortgages for a few months. I also felt like the market might take a dip in the future, so I liked the idea of trying to cash out high and buy back low (spoiler alert: this didn't happen). So in July 2017 I withdrew $17,000 from my account (Technically $16,850.00 principal and $150 processing fee) at an effective 4.19% APR (4% rate and then the fee), with 240 scheduled payments of $86.00 (2 per month for 10 years). Over the lifetime of the loan the total finance charge was $3,790, but that money would be paid back into my account. I was happy with the terms, and it helped tide things over until the condo was sold a few months later. But then I decided to change jobs, and ended up having to pay back the loan ~20 weeks after it was issued (using the proceeds from the sale of the condo). During this time the market had done well, so when I paid back the funds the net difference in shares that I now owned (including shares purchased with the interest payments) was $538.25 less than today's value of the original count of shares that were sold to fund the loan. Combined with the $150 fee, the overall \"\"cost\"\" of the 20 week loan was about 4.05%. That isn't the interest rate (interest was paid back to my account balance), but the value lost due to the principal having been withdrawn. On paper, my account would be worth that much more if I hadn't withdrawn the money. Now if you extrapolate the current market return into 52 weeks, you can think of that loan having an APR \"\"cost\"\" of around 10.5% (Probably not valid for a multi year calculation, but seems accurate for a 12 month projection). Again, that is not interest paid back to the account, but instead the value lost due to the money not being in the account. Sure, the market could take a dip and I may be able to buy the shares back at a reduced cost, but that would require keeping sizable liquid assets around and trying to time the market. It also is not something you can really schedule very well, as the loan took 6 days to fund (not including another week of clarifying questions back/forth before that) and 10 day to repay (from the time I initiated the paperwork to when the check was cashed and shares repurchased). So in my experience, the true cost of the loan greatly depends on how the market does, and if you have the ability to pay back the loan it probably is worth doing so. Especially since you may be forced to do so at any time if you change jobs or your employment is terminated.\"", "title": "" }, { "docid": "520828c07ea027998e5d672ff226aeff", "text": "\"I highly recommend you read the \"\"related\"\" posted linked to the right. Once you have the loan a year, in good standing, and have paid the mortgage to 80% LTV, you can request removal of PMI. But the bank can charge you for an appraisal, and if the house dropped even a few percent in value, you might need to put up more money.\"", "title": "" }, { "docid": "a6e78d648403a607c83fb538ac0fd1d7", "text": "I have recently been the lender to a couple people. It was substantially less money (~$3k), but I was trusting their good faith to pay me back. As a lender, I will never do it again. Reasons, Overall, not worth it.", "title": "" }, { "docid": "bd157acb0e9dec2b7b4343d6a0a95b9d", "text": "Maybe you know something I don't, but as far as I'm aware, you can't get rid of it. Student loans are with you for life. You will be sent to collections, but it doesn't disappear after 7 years. Settlements are incredibly rare unless your loan is ballooning... in which case, a settlement doesn't change all that much. You will lose tax benefits, the government will garnish 15% of your wages, and you will be a debt slave until it's paid off. Defaulting on student loans is much, much more painful than defaulting on private loans. The only exception to this is if you've made 120 months of repayments while employed at a qualifying non-profit or governmental organization. And even then, it only applies to federal loans and there are exceptions (better not refinance or the clock resets, for example). Also, if you default, you will no longer be eligible. Private student loans have no escape hatch and are equally unforgiving. Thank your elected representatives.", "title": "" }, { "docid": "464c9b92963363ecd1df7012855d3cf6", "text": "If the homeowner knows the situation is hopeless, and the end result will be the loss of the home, jumping to the end result can be helpful. It is quicker, they don't spend as much time fighting a losing battle. Deed in Lieu of foreclosure is not so great for the borrower if the bank goes after them for the rest of the money owed. There can also be tax implications if the debt is forgiven. Though these issues also exist when the drawn out foreclosure option is done. For the bank. The longer the process the more the house deteriorates. The borrower may stop maintenance and may even vandalize the house. Getting their lock on the door quickly is important to them. They protect it, clean it, and prep it for sale right away. They also save on lawyer fees. They know that the moment they start the foreclosure process all money from the borrower stops, this can save thousands in carrying costs. One issue will be how the accounting losses will be divided among the servicing company, and the investors. If the servicing company will make more money from the longer process they may not push for the quick settlement. If the opposite is true, they will be quickly on board. For the new buyer, the issue with either foreclosure is that the longer process can result in greater hidden and visible damage. The heat pump may work, but the disgruntled homeowner stopped changing the filters the last six months. They may have also removed and damaged things on the way out. Other than that I don't see a big difference. Because the bank had lower costs involved in the foreclosure they might settle for a lower purchase price, but that might be hard to know.", "title": "" }, { "docid": "c3b9c2aa52af36e1cad740ee14f64992", "text": "\"Interestingly enough, \"\"strategic default\"\" seems to be more common than one might think in California and there is actually a lot of information available on it, to include a calculator that breaks down the numbers for you (although affiliated with a law office). Speaking from a purely financial standpoint, walking away only makes sense if it puts you in a better financial position than you were before while you had the mortgage. If you look at the downsides of walking away: The issues with the credit rating are will known but you need to take into account any open lines of credit you currently have as well as any need you might have to open a line of credit in the future. If you currently have credit cards, will the rates go up after the hit? On the housing side of things, you mortgage payment is currently a known quantity that will not change for the duration of the mortgage unless you do something to change it. However, it is fairly rare for rents to not change between years and if you want an apartment or house similar to what you currently have, you might find that the rent will fluctuate quite a bit between years and in the long run the rent might run higher than your current mortgage payment. Likewise, in the shorter term, if the landlord runs a credit check they might adjust what the rent is (or deny you the apartment) on the basis of the black mark on your history for reasons that other have mentioned. Another item to take into account is if you need to get a job in the future. Depending upon what you do for a living this might be a non-issue; however, if you are in a position of trust, walking away from a mortgage payment will reflect negatively upon your character unless you have a very good reason for it. This can lead to a loss of employment opportunities. Next, if you walk away from the mortgage you are walking away from the current value of the home and any future value that the home might have. If you like where you are living and aren't planning on moving to another part of the country, you are gambling that the market will not recover or that you would reach parity with what you owe by the time you need to sell the house. If you do plan on staying where you are and the house is in good repair, then in the long run you might be giving up quite a bit of money by walking away. These are a lot of factors to take into account though so its really hard to say one way or another if a strategic default is a good idea. In the long run you might come out ahead but knowing when that date is can be difficult to calculate. Likewise, in the long run it might adversely affect you and you might come to regret the decision. If the payments themselves are a bit too high, perhaps you can refinance or negotiate with the bank for a lower payment? If you get a better rate but keep your monthly payments the same then you might reach parity with the mortgage much faster which would also be to your advantage.\"", "title": "" }, { "docid": "3937c9a5cc05445f0d86e3c2158e016c", "text": "You could walk away from your mortgage. When you signed the mortgage you and the bank agreed that if you stopped making payments the bank would get the house. Give them the house. Of course this would be a huge hit to your credit score and you would probably not be able to obtain another mortgage at a decent rate for at least 7 years. You may have trouble obtaining other financing as well (i.e. auto loans). If you plan on moving to an apartment and don't need to finance car purchases this may be OK.", "title": "" }, { "docid": "fd5609bb27cf8730ce7d33454f9284f8", "text": "If you're planning to walk away from the house - don't invest any more money in it. Just be aware of the consequences. It may be worth considering a short sale if both the lenders will agree to erase the debt. If you're going to keep the house, then the fact that you're underwater now is irrelevant, and you should do your best to reduce the burden by paying off the higher rate loan. But, I personally think that accumulating enough cash to make you comfortable in case of a job loss for several months is a higher priority.", "title": "" }, { "docid": "028fcc6ae27f514d32d83e49aaf40a33", "text": "The only problem that I see is that by not giving the 20% right away, you might need to pay PMI for a few months. In addition, in the case of conventional loans, I heard that banks will not remove the PMI after reaching 80% LTV without doing an appraisal. In order to be removed automatically, you need to reach 78% LTV. Finally, I think you can get a better interest by giving 20% down, and you can get a conventional loan instead of a FHA loan, which offers the option to avoid the PMI altogether (on FHA, you have two PMIs: one upfront and one monthly, and the monthly one is for the life of the loan if you give less than 10%).", "title": "" }, { "docid": "6e0f5a5bd8fcf16434ed72e82e14daf0", "text": "Consider that the bank of course makes money on the money in your escrow. It is nothing but a free loan you give the bank, and the official reasons why they want it are mostly BS - they want your free loan, nothing else. As a consequence, to let you out of it, they want the money they now cannot make on your money upfront, in form of a 'fee'. That explains the amount; it is right their expected loss by letting you out. Unfortunately, knowing this doesn't change your options. Either way, you will have to pay that money; either as a one-time fee, or as a continuing loss of interest. As others mentioned, you cannot calculate with 29 years, as chances are the mortgage will end earlier - by refinancing or sale. Then you are back to square one with another mandatory escrow; so paying the fee is probably not a good idea. If you are an interesting borrower for other banks, you might be able to refinance with no escrow; you can always try to negotiate this and make it a part of the contract. If they want your business, they might agree to that.", "title": "" }, { "docid": "cbd9dfe952f74b25dbcfbe52b673e532", "text": "\"A day or so later I get an email from the mattress company where the rep informs me that they will need to issue me a paper check for the full amount and that I would have to contact Affirm to stop charging me. To which I rapidly answered \"\"Please confirm that with Affirm prior to mailing anything out. On my end the loan was cancelled.\"\" To which the rep replied \"\"confirmed. It has been cancelled.\"\" I think your communication could have been more explicit mentioning that not only was the loan cancelled, you got your initial payments. You have not paid for the mattress. The refund if any should go to Affirm. The Rep has only confirmed that loan has been cancelled. at what point, if any, am i free to use this money? I was planning to just let it sit there until the shoe drops and just returning. But for how long is too long? Sooner or later the error would get realized and you would have to pay this back.\"", "title": "" }, { "docid": "ea86135aefc19f735f834aa9cfa4eac0", "text": "\"Pre-edit, Pete mentioned that he feels real estate agents would (a) like you to buy as much house as you afford, and (b) would love to show you three houses and have you choose one. As a real estate agent myself, I believe his warnings were understated. As with any industry, there are good and bad people. Agents are paid to move houses. If the median US home is under $200K, and commissions average say 5%, the $10,000 to be gained is split between the buyer brokerage and selling agent. The $5000 to each is then shared with 'the house.' So, this sale would net me $2500, gross. Move one a week, and the income is great, one per month, not so much. Tire kickers will waste an agent's time for a potential decision to wait another year and continue renting. Their obligation is to tell you the truth, but not to offer financial advice. Remember the mortgage crisis? It seems the banks and brokers aren't watching out for you either. They will tell you what they'll lend you, but not what you can afford. These numbers are worlds apart. I strongly recommend a 20% downpayment. The FHA PMI calculator shows that a 90% LTV (i.e. a 10% downpayment) for a $100K house will cost you $1200/yr in PMI. Think about this. For the $10,000 that you didn't put down, you are paying an extra $1200 each year. This is on top of the interest, so even at 5%, that last $10,000 is costing nearly 17%. If you can't raise that $10K (or whatever 10% is on that house) in cheaper funds, you should hold off. Using the 401(k) loan for this purpose is appropriate, yet emotionally charged. As if suck loans are written by the devil himself. \"\"Buy the biggest house you can\"\"? No. I have a better idea. Buy the smallest place you can tolerate. I have a living room (in addition to family room) that has been used 3 times in 20 years. A dining room we actually use. Twice per year. When your house is 50% too big, you pay 50% more property tax, more utility bills, and more maintenance. Closing costs, commission, etc, isn't cheap, but the lifetime cost of living in a too-big house is a money pit.\"", "title": "" }, { "docid": "8a5bb0e9b47404b931db4000eeea9f93", "text": "It's sad. My mother lost her job after a brutal divorce. BOA bought up Countrywide, then when my mother pleaded for assistance BOA said they could not help her unless she was behind/in default of her mortgage. She tried to do a deed-in-lieu with a lawyer and BOA refused to accept the deed-in-lieu many times. Then BOA sold her mortgage to Green Tree (?) and they refused her deed-in-lieu as well. This went on for over 2 years and they foreclosed on the house. I told my mother to sue because they should have accepted her deed-in-lieu because it was approved by the court in her bankruptcy but she was tired of trying to save her house that she just walked away. 6 months after she left and moved in with my sister Green Tree called her offering a refinance at a lower rate and a mortgage payment that was less than a typical car payment. Now 5 years later my mom is just going to pay cash for her house and never do a mortgage again.", "title": "" }, { "docid": "cf8ba571bcf9309ddcfadb55f28033eb", "text": "Once you hit 22% equity against the original value of the home, they have to cancel the PMI. No other factors come into play. See this nice overview. Before that, at the 20% equity mark, it's a negotiating situation. If the value of the house goes down, that's a strong point in their favour. But you have excellent history, that's strong in your favour.", "title": "" } ]	fiqa
9e418793302ecb1048cbf7622d0a2754	What impact does trading in a car have on your credit score?	[ { "docid": "9f434ca749d0d39db78849b606b457e7", "text": "Paying off your loan in full will most likely not help your credit score, and could potentially even hurt it. Because car loans are installment loans (and thus differ from consumer credit), lenders really only like seeing that you responsibly pay off your loans on time. They don't really care if you pay it off early--lenders like seeing open lines of credit as long as you manage them well. The hard inquiry will simply lower your credit score a few points for up to two years. So, from a credit score perspective, you're really not going to help yourself in this scenario (although it's not like you're going to be plummeting yourself either).", "title": "" } ]	[ { "docid": "2b5ce47533be35a241aa99f1f4f8fec9", "text": "No. Credit scores are primarily built by doing the following: To build credit, get a few major credit cards and a couple of store cards. Use one of them to make routine purchases like gas and groceries. Pay them on time every month. You're good to go. I would hate to sell stocks to pay off a loan -- try finding a better loan. If you financed through the dealer, try joining a credit union and see if you can get a better rate.", "title": "" }, { "docid": "78c7b2bf71f314407d951a11d5e096fb", "text": "\"It's possible the $16,000 was for more than the car. Perhaps extras were added on at purchase time; or perhaps they were folded into the retail price of the car. Here's an example. 2014: I'm ready to buy. My 3-year-old trade-in originally cost $15,000, and I financed it for 6 years and still owe $6500. It has lots of miles and excess wear, so fair blue-book is $4500. I'm \"\"upside down\"\" by $2000, meaning I'd have to pay $2000 cash just to walk away from the car. I'll never have that, because I'm not a saver. So how can we get you in a new car today? Dealer says \"\"If you pay the full $15,000 retail price plus $1000 of worthless dealer add-ons like wax undercoat (instead of the common discounted $14,000 price), I'll eat your $2000 loss on the trade.\"\" All gets folded into my new car financing. It's magic! (actually it's called rollover.) 2017: I'm getting itchy to trade up, and doggone it, I'm upside down on this car. Why does this keep happening to me? In this case, it's rollover and other add-ons, combined with too-long car loans (6 year), combined with excessive mileage and wear on the vehicle.\"", "title": "" }, { "docid": "0158d90036d675c31f5634bff5202605", "text": "Regardless of how it exactly impacts the credit score, the question is does it help improve your credit situation? If the score does go up, but it goes up slowly that was a lot of effort to retard credit score growth. Learning to use a credit card wisely will help you become more financially mature. Start to use the card for a class of purchases: groceries, gas, restaurants. Pick one that won't overwhelm your finances if you lose track of the exact amount you have been charging. You can also use it to pay some utilities or other monthly expenses automatically. As you use the card more often, and you don't overuse it, the credit card company will generally raise your credit limit. This will then help you because that will drop your utilization ratio. Just repeat the process by adding another class of charges to you credit card usage. This expanded use of credit will in the long run help your score. The online systems allow you to see every day what your balance is, thus minimizing surprises.", "title": "" }, { "docid": "f95bc581a3d4e6fe834469a1a551bbe3", "text": "\"It is a legitimate practice. The dealers do get the loan money \"\"up front\"\" because they're not holding the loan themselves; they promptly sell it to someone else or (more commonly) just act as salesmen for a lending institution and take their profit as commission or origination fees. The combined deal is often not a good choice for the consumer, though. Remember that the dealer's goal is to close a sale with maximum profit. If they're offering to drop the price $2k, they either didn't expect to actually get that price in the first place, or expect at least $2k of profit from the loan, or some combination of these. Standard advice is to negotiate price, loan, and trade-in separately. First get the dealer's best price on the car, compare it to other dealer and other cars, and walk away if you don't like their offer. Repeat for the loan, checking the dealer's offer against banks/credit unions available to you. If you have an older car to unload, get quotes for it and consider whether you might do better selling it yourself. ========= Standard unsolicited plug for Consumef Reports' \"\"car facts\"\" service, if you're buying a new car (which isn't usually the best option; late-model used is generally a better value). For a small fee, they can tell you what the dealer's real cost of a car is, after all the hidden incentives and rebates. That lets you negotiate directly on how much profit they need on this sale... and focuses their attention on the fact that the time they spend haggling with you is time they could be using to sell the next one. Simply walking into the dealer with this printout in your hand cuts out a lot of nonsense. The one time I bought new, I basically walked in and said \"\"It's the end of the model year. I'll give you $500 profit to take one of those off your hands before the new ones come in, if you've got one configured the way I want it.\"\" Closed the deal on the spot; the only concession I had to make was on color. It doesn't always work; some salesmen are idiots. In that case you walk away and try another dealer. (I am not affiliated in any way with CU or the automotive or lending industries, except as customer. And, yes, this touch keyboard is typo-prone.)\"", "title": "" }, { "docid": "e3c30faa6ac6413950fd269befe2b073", "text": "Absolutely do not pay off the car if you aren't planning to keep it. The amount of equity that you have from a trade in vehicle will always be a variable when negotiating a new car purchase. By applying cash (a hard asset) to increase your equity, you are trading a fixed amount for an unknown, variable amount. You are also moving from a position of more certainty for a position of less certainty. You gain nothing by paying off the car, whereas the dealer can negotiate away a larger piece of the equity in the vehicle.", "title": "" }, { "docid": "4e06efe68d1148e56aec06819ef59e0a", "text": "The amount you are earning in the savings account is insignificant, since you would only have the money in the account for 1 month after purchasing the car. The instant 1.5% cashback (or travel mile reward), on the other hand, can be significant. However, it is not normal for a car dealership to allow you to put $16k on a credit card. The reason is that the fees that the dealer has to pay to process your credit card would be too burdensome. Car dealers have a much smaller profit margin on their sales than a typical retail store, so if the dealer has to pay 3 or 4% of the sales price in credit card fees, it just eats up too much of their profit. If the dealer does allow you to put the entire purchase price on a credit card, be aware that they have already factored in their processing fees into the price. You might be able to get a better than 1.5% discount by offering to pay with cash instead.", "title": "" }, { "docid": "9fdc4efbcfddc3f31cecd99cf187ecf3", "text": "The fluctuation of interest rates during the next year could easily dwarf the savings this attempt to improve your credit score will have; or the reverse is true. Will the loan improve your score enough to make a difference? It will not change the number of months old your oldest account is. It will increase the breadth of your accounts. Applying for the car loan will result in a short term decrease in the score because of the hard pull. The total impact will be harder to predict. A few points either way will generally not have an impact on your rate. You will also notice the two cores in your question differ by more than 30 points. You can't control which number the lender will use. You also have to realize the number differs every day depending on when they pull it that month. The addition of a car loan, assuming you still have the loan when you buy the house, will not have a major impact on your ability to get afford the home mortgage. The bank cares about two numbers regarding monthly payments: the amount of your mortgage including principal, interest, taxes and insurance; and the amount of all other debt payments: car loan, school loans, credit cards. The PITI number should be no more than 28%-33% of your monthly income; the other payments no more than 10%. If the auto loan payments fit in the 10% window, then the amount of money you can spend each month on the mortgage will not be impacted. If it is too large, then they will want to see a smaller amount of your income to go to PITI. If you buy the car, either by cash or by loan, after you apply for the mortgage they will be concerned because you are impacting directly numbers they are using to evaluate your financial health. I have experienced a delay because the buyer bought a car the week before closing. The biggest impact on your ability to get the loan is the greater than 20% down payment, Assuming you can still do that if you pay cash for the car. Don't deplete your savings to get to the 50% down payment level. Keep money for closing costs, moving expenses, furnishing, plus other emergencies. Make it clear that you can easily cover the 20% level, and are willing to go higher to make the loan numbers work.", "title": "" }, { "docid": "93cfc7f27a3b137773cb171345b602eb", "text": "I doubt it. If you have a good track record with your car loan, that will count for a lot more than the fact that you don't have it anymore. When you look for a house, your debt load will be lower without the car loan, which may help you get the mortgage you want. Just keep paying your credit card bills on time and your credit rating will improve month by month.", "title": "" }, { "docid": "6ea3b8af7a6b041764f60802ed30c0f8", "text": "Is it really worth the interest you'd pay over a year for a relatively minor and temporary bump to your credit score? I mean, you just bought a car so I'm assuming you probably aren't looking for another loan in the near future.", "title": "" }, { "docid": "bc39ebc96f26ede3ea62f4829612c593", "text": "\"Generally it is not recommended that you do anything potentially short-term deleterious to your credit during the process of seeking a mortgage loan - such as opening a new account, closing old accounts, running up balances, or otherwise applying for any kind of loan (people often get carried away and apply for loans to cover furniture and appliances for the new home they haven't bought yet). You are usually OK to do things that have at least a short-term positive effect, like paying down debt. But refinancing - which would require applying for a non-home loan - is exactly the sort of hard-pull that can drop your credit rating. It is not generally advised. The exception to this is would be if you have an especially unusual situation with an existing loan (like your car), that is causing a deal-breaking situation with your home loan. This would for example be having a car payment so high that it violates maximum Debt-to-Income ratios (DTI). If your monthly debt payments are more than 43% of your monthly income, for instance, you will generally be unable to obtain a \"\"qualified mortgage\"\", and over 28-36% will disqualify you from some lenders and low-cost mortgage options. The reason this is unusual is that you would have to have a bizarrely terrible existing loan, which could somehow be refinanced without increasing your debt while simultaneously providing a monthly savings so dramatic that it would shift your DTI from \"\"unacceptable\"\" to \"\"acceptable\"\". It's possible, but most simple consumer loan refis just don't give that kind of savings. In most cases you should just \"\"sit tight\"\" and avoid any new loans or refinances while you seek a home purchase. If you want to be sure, you'll need to figure out your DTI ratio (which I recommend anyway) and see where you would be before and after a car refinance. If this would produce a big swing, maybe talk with some mortgage loan professionals who are familiar with lending criteria and ask for their opinion as to whether the change would be worth it. 9 times out of 10, you should wait until after your loan is closed and the home is yours before you try to refinance your car. However I would only warn you that if you think your house + car payment is too much for you to comfortably afford, I'd strongly recommend you seriously reconsider your budget, current car ownership, and house purchasing plans. You might find that after the house purchase the car refi isn't available either, or fine print means it wouldn't provide the savings you thought it would. Don't buy now hoping an uncertain cost-saving measure will work out later.\"", "title": "" }, { "docid": "846896e5f9c9e12678aa7d4b49272755", "text": "Credit scores have a huge financial impact on consumers, even though most people don’t know how they are calculated or which bad habits may be driving theirs down. Your credit score is a number on a scale of 300 to 900 that can affect all of your financial decisions, from shopping for groceries to applying for a mortgage. Read on to find out why a good credit rating is so important. 4 Things to Know About Your Credit Score Why it’s important. Throughout your life, you will probably rely on your credit to acquire the items that you want and need but can’t necessarily pay cash for. Each time you buy something on credit, merchants are taking a gamble on you; the bet is", "title": "" }, { "docid": "b3308e4c8f1bb1711105dc3cb749bb0b", "text": "Here's my take: 1) Having a car loan and paying it on time helps build credit. Not as much as having credit cards (and keeping them paid or carrying balance just enough to be reported and then paying it), but it counts. 2) Can't you set in your bank, not the lender, something to pay the car automagically for you? Then you will be paying it on time without having to think on it. 3) As others said, do read the fine print.", "title": "" }, { "docid": "8cc41e5f9dfa3cd2344fc7977f6f5230", "text": "There are several factors here. Firstly, there's opportunity cost, i.e. what you would get with the money elsewhere. If you have higher interest opportunities (investing, paying down debt) elsewhere, you could be paying that down instead. There's also domino effects: by reducing your liquid savings to or below the minimum, you can't move any of it into tax advantaged retirement accounts earning higher interest. Then there's the insurance costs. You are required to buy extra insurance to protect your lender. You should factor in the extra insurance you would buy vs the insurance required. Given that you can buy the car yourself, catastrophic insurance may not be necessary, or you may prefer a higher deductible than your lender will allow. If you're not sufficiently capitalized, you may need gap insurance to cover when your car depreciates faster than your loan is paid down. A 30 percent payment should be enough to not need it though. Finally, there's some value in having options. If you have the loan and the cash, you can likely pay it off without penalty. But it will be harder to get the loan if you don't finance it. Maybe you can take out a loan against the car later, but I haven't looked into the fees that might incur. If it's any help, I'm in the last stretch of a 3 year car loan. At the time paying in cash wasn't an option, and having done it I recognize that it's more complicated than it seems.", "title": "" }, { "docid": "8925ab0df8b02394d0ed93e6f18cffd6", "text": "I have a few debts in collection. I do not care, I make very good money now, but I prefer to spend it on nice cars instead. In US after 7 years they do not affect your credit score. On the contrary, if you pay them they can ding your credit. That's what Susie Orman show says as well -- there is absolutely no point paying a debt that is more than 7 years old.", "title": "" }, { "docid": "badf3c449404b6371b976778d8326a42", "text": "You should not seek a kind of debt just for it's appearance on your credit report. If you don't need an auto loan don't get an auto loan. Getting a credit card for the purpose of building credit is a little bit of a different animal because you can use a credit card such that you never pay any interest or fees. With a loan, you will pay interest. Altering your score by paying interest doesn't provide you with a net benefit. With that said, depending on the auto loan rate you may want to accept the loan just to fee up your capital. Some promotional rates are so low you may even make money leaving the cash in a regular savings account. But don't let your credit score wag the dog.", "title": "" } ]	fiqa
c4088325a705975503636b4e430c8210	Transfer car loan for better interest rate	[ { "docid": "f7c3764a2d481ea96cc97e9e0968a1dd", "text": "\"Yes, it is possible for you to refinance your existing auto loan, and so long as you can get the loan on more favorable terms (e.g.: lower interest rate), it is absolutely a smart thing to do. In fact, you would be well advised to do so as soon as possible if the car was a new car, if you refinance a NEW car soon enough you will likely still be able to get new car interest rates. Even if it is a pre-owned vehicle you shouldn't wait too long, since your car will only depreciate in value. You will almost certainly get more favorable terms from any bank or credit union directly then you would when you go through the dealership, because the dealership is allowed to mark-up your interest rate several percentage points as profit for themselves. Your best bet would be to go to a local credit union, their rates tend to be most competitive since they are \"\"owned\"\" by their members.\"", "title": "" }, { "docid": "dc5d2f7ab87c363b8359dcfbff796599", "text": "The key word you are looking for is that you want to refinance the loan at a lower rate. Tell banks that and ask what they can offer you.", "title": "" } ]	[ { "docid": "1ca1a96723557f66a88d1d0e6fb6b2c9", "text": "\"My husband made a similar car loan decision when he was younger and didn't have an established credit history / favourable credit rating. As a result, he ended up paying triple what the car was worth, because of the interest. When we consolidated our finances, this ugly loan was first on our list of priorities to change, convert, eliminate, but unfortunately, in our case, the terms of the loan were such that only the lender benefited. There was no incentive to pay off the loan early, in fact, we would have to have paid all the future interest at once, without saving a penny. So check the terms of your loan - hopefully you're better off than we were. In our case, the only upside we could figure was the lesson of \"\"live and learn\"\"!\"", "title": "" }, { "docid": "ba52e2de758b83fa4bbace296bc92660", "text": "\"Yikes! Not always is this the case... For example, you purchased a new car with an interest rate of 5-6%or even higher... Why pay that much interest throughout the loan. Sometimes trading in the vehicle at a lower rate will get you a lower or sometimes the same payment even with an upgraded (newer/safer technology) design. The trade off? When going from New to New, the car may depreciate faster than what you would save from the interest savings on a new loan. Sometimes the tactics used to get you back to the dealership could be a little harsh, but if you do your research long before you inquire, you may come out on the winning end. Look at what you're paying in interest and consider it a \"\"re-finance\"\" of your car but taking advantage of the manufacturer's low apr special to off-set the costs.\"", "title": "" }, { "docid": "54ff7be3cbc140d26c83c4f48e2e21e1", "text": "Can you reduce your interest rate? Talk to the lender. Maybe. Probably not. The rate reflects their perception of how much of a risk they're taking with the loan. But if all you're borrowing is $2000, the savings that you might get out of any adjustment to the rate is not going to be all that significant. Sure, it would be nice, but it's not going to be enough to make or break your decision to buy this car. The big savings will be that you're paying interest on a much smaller loan, which means you can reduce your payments and/or pay it off more quickly. REMINDER: NEVER TALK TO AN AUTO DEALER ABOUT FINANCING UNTIL AFTER THE PRICE OF THE CAR HAS BEEN NAILED DOWN -- otherwise they will raise the purchase price to cover the cost of offering you an apparently cheap loan.", "title": "" }, { "docid": "1466443fbfb06e3d1f6080caa767b77e", "text": "Some places banks/Credit Unions will allow you to refinance a auto loan. My credit Union only does this if the original loan was with another lender. They will send the money to the old lender, then give you a loan under the new terms. They are trying to get your business, not necessarily looking for a way make less money for themselves. You will have to see how much you will save. Which will be based on the delta of the length of the loan or the change in interest rate, or both. My Credit Union has a calculator to show you the numbers based on keeping the size of the payments the same, or keeping the number of payments the same. Make sure you understand any limitations regarding the refinance based on the age of the car, and if you are underwater.", "title": "" }, { "docid": "29c366b66bc9ac78b881ee6be8d430e3", "text": "That interest rate (13%) is steep, and the balloon payment will have him paying more interest longer. Investing the difference is a risky proposition because past performance of an investment is no guarantee of future performance. Is taking that risk worth netting 2%? Not for me, but you must answer that last question for yourself. To your edit: How disruptive would losing the car and/or getting negative marks on your credit be? If you can quantify that in dollars then you have your answer.", "title": "" }, { "docid": "a8749a180a0d266d8ec2a05865e9af19", "text": "\"The real answer is to talk to the bank. In the case of the last car loan I got, the answer is \"\"no\"\". When I asked them about rates, they gave me a printed sheet that listed the loan rates they offered based on how old the car was, period. I forget the exact numbers but it was like: New car: 4%, 1 year old: 4.5%, 2-3 years old 5%, etc. I suspect that at most banks these days, it's not up to the loan officer to come up with what he considers reasonable terms for a loan based on whatever factors you may bring up and he agrees are relevant. The bank is going to have a set policy, under these conditions, this is the rate, and that's what you get. So if the bank includes the size of the down payment in their calculations, then yes, it will be relevant. If they don't, than it won't. The thing to do would be to ask your bank. If you're only borrowing $2000, and you've managed to save up $11,000, I'd guess you can pay off the $2,000 pretty quickly. So as Keshlam says, the interest rate probably isn't all that important. If you can pay it off in a year, then the difference between 5% and 1% is only $80. If you're buying a $13,000 car, I can't imagine you're going to agonize over $80. BTW I've bought two cars in the last few years with about half the cost in cash and putting the rest on my credit card. (One for me and one for my daughter.) Then I paid off the credit card in a couple of months. Sure, the interest rate on a credit card is much higher than a car loan, but as it was only for a few months, it made very little real difference, and it took zero effort to arrange the loan and gave me total flexibility in the repayment schedule. Credit card companies often offer convenience checks where you pay like 3% or so transaction fee and then 0% interest for a year or more, so it would just cost the 3% up front fee.\"", "title": "" }, { "docid": "d2aa9ba776cab68fb9f0bd1333bbea3b", "text": "\"You can find out the most money they will loan you for a car loan when you approach your current bank/credit union. They should be willing to layout options based on your income, and credit history. You then have to decide if those terms work for you. There are several dangers with getting loan estimates, they may be willing to lend you more than you can actually handle. They think you can afford it, but maybe you can't. They may also have a loan with a longer term, which does bring the monthly cost down, but exposes you to being upside down on the loan. You then use this a a data point when looking at other lenders. The last place you look is the auto dealer. They will be trying to pressure you on both the loan and the price, that is not the time to do doing complex mental calculations. The Suntrust web page was interesting, it included the quote: The lowest rate in each range is for LightStream's unsecured auto loan product and requires that you have an excellent credit profile. It also induced the example the rate of 2.19% - 4.24% for a 24 to 36 month loan of $10,000 to $24,999 for a used car purchased from a dealer. Also note that my local credit union has a new/used loan at 1.49%, but you have to be a member. Sunstrust seems to be in the minority. In general a loan for X$ and y months will have a lower rate if it is secured with collateral. But Suntrust is offering unsecured loans (i.e. no collateral) at a low rate. The big benefit for their product is that you get the cash today. You can get the cash before you know what you want to buy. You get the cash before you have negotiated with the dealer. That makes that step easier. Now will they in the near future ask for proof you bought a car with the money? no idea. If you went to the same web page and wanted a debt consolidation loan the rate for the same $ range and the same months is: 5.49% - 11.24% the quote now changes to: The lowest rate in each range requires that you have an excellent credit profile. I have no idea what rate they will actually approve you for. It is possible that if you don't have excellent credit the rate rises quickly, but 4.24% for the worst auto loan is better than 5.49% for the best debt consolidation. Excellent Credit Given the unique nature of each individual’s credit situation, LightStream believes there is no single definition for \"\"excellent credit\"\". However, we find individuals with excellent credit usually share the following characteristics: Finally, it should be noted again that each individual situation is different and that we make our credit judgment based on the specific facts of that situation. Ultimately our determination of excellent credit is based on whether we conclude that there is a very high likelihood that our loan will be repaid in a full and timely manner. All the rates mentioned in this answer are from 15 July 2017.\"", "title": "" }, { "docid": "8fb4ed771f66e236487e2f709666e10e", "text": "Just call your credit union and ask if they will let you refinance at the lower rate. If they won't, then just increase your payment every month so that your car is paid off early (in 36 months instead of 60). You won't get the lower rate, but since your loan will be paid early, you'll be saving interest anyway.", "title": "" }, { "docid": "e95591e12f9841befb74793226d7dc3a", "text": "Sometimes there are credit cards that offer a (promotional) 0% APR on transfers with no transfer fees. It can be a good option to move the money to one of these if you're disciplined enough to keep hacking away at the debt before the APR jumps.", "title": "" }, { "docid": "1109a029b9265828ac0b300a07184763", "text": "\"This is \"\"incentive financing\"\". Simply put, the car company isn't in the business of making money by buying government bonds. They're in the business of making money by selling cars. If you are \"\"qualified\"\" from a credit standpoint, and want to buy a $20k car on any given Sunday, you'll typically be offered a loan of between 6% and 9%. Let's say this loan is for three years and you can offer $4000 down payment and/or trade. The required monthly payment on the remaining $16k at the high end of 9% is $508.80, which over 3 years means you'll pay $2,316.64 in interest. Now, that may sound like a good chunk of change, and for the ordinary individual, it is, possibly enough that you decide not to buy today. Now, let's say, all other things being equal, that the company is offering 0.9% incentive financing. Same price, same down payment, same loan term. Your payments over 3 years decrease to $450.64, and over the same loan term you would only pay $222.97 in interest. You save over $2,093.67 in interest over three years, which for you is again a decent chunk of change. Theoretically, the car company's losing that same $2,093.67 in interest by offering this deal, and depending on how it's getting the money it lends you (most financial companies are middlemen, getting money from bond-buying investors who expect a rate of return), that could be a real loss and not just opportunity cost. But, that incentive got you to walk in their door, and not their competitor's. It helped convince you to buy the $20,000 car. The gross margin on that car (price minus direct costs) is typically 20% for the dealer, plus another 20% for the manufacturer, so by giving up the $2,000 on the financing side, the dealer and manufacturer just earned themselves 4 times that much. On top of that, by buying that car, you're committing to buy the parts for the car, a side business with even higher margins, of which the car company gets a pretty big chunk. You may even be required to use dealer service while the car's under warranty in order to keep the warranty valid, another cha-ching. When you get right down to it, the loss from the incentive financing is drowned in the gross profits they make from selling the car to you. Now, in reality, it's a fine balance. The percentages I mentioned are gross margins (EBITDASG&A - Earnings Before Interest, Taxes, Depreciation, Amortization, Sales, General and Administrative costs; basically, just revenue minus direct cost of goods sold). Add in all these side costs and you get a net margin of only about 3.5% of revenue, so your $20k car purchase may only make the car company's stakeholders $700 on the sale, plus slightly higher net margins on parts and service over the life of the car. Because incentive financing is typically only offered through the company's own financing subsidiary, the loss isn't in the form of a cost paid, but simply a revenue not realized, but it can still move a car company from net positive to net negative earnings if the program is too successful. This is why not everyone does it, and not all at the same time; if you're selling enough cars without it, why give away money? Typically, these incentives are offered for two reasons; to clear out old cars or excess inventory, or to maintain ground against a competitor's stronger sales numbers. Keeping cars on a lot ready to sell is expensive, and so is not having your brand driving around on the street turning heads and imprinting their name on the minds of potential customers.\"", "title": "" }, { "docid": "374f98708af43b789ea27528fbcb43e0", "text": "\"I think the risk involved with the \"\"fund gaining a larger rate of return\"\" is probably priced in. Why would the bank take the risk on you with a car loan when it could put it in the same fund you're talking about and make more money?\"", "title": "" }, { "docid": "1dbbd5514b243927ca57f2e225547cd7", "text": "Anytime you borrow money at that rate, you are getting ripped off. One way to rectify this situation is to pay the car off as soon as possible. You can probably get a second job that makes $1000 per month. If so you will be done in 4 months. Do that and you will pay less than $300 in interest. It is a small price to pay for an important lesson. While you can save some money refinancing, working and paying the loan off is, in my opinion a better option. Even if you can get the rate down to 12%, you are still giving too much money to banks.", "title": "" }, { "docid": "afcc0a968d643cff64bd0cfd4ba171b7", "text": "I don't know what rates are available to you now, but yes, if you can refinance your car at a better rate with no hidden fees, you might save some money in interest. However, there are a couple of watchouts: Your original loan was a 6 year loan, and you have 5 years remaining. If you refinance your car with a new 6 year loan, you will be paying on your car for 7 years total, and you will end up paying more interest even though your interest rate might have gone down. Make sure that your new loan, in addition to having a lower rate than the old loan, does not have a longer term than what you have remaining on the original loan. Make sure there aren't any hidden fees or closing costs with the new loan. If there are, you might be paying your interest savings back to the bank in fees. If your goal is to save money in interest, consider paying off your loan early. Scrape together extra money every month and send it in, making sure that it is applied to the principal of your loan. This will shorten your loan and save you money on interest, and can be much more significant than refinancing. After your loan is paid off, continue saving the amount you were spending on your car payment, so you can pay cash for your next car and save even more.", "title": "" }, { "docid": "9dde985625769ca6e58e3689b8cde07a", "text": "This is what your car loan would look like if you paid it off in 14 months at the existing 2.94% rate: You'll pay a total of about $277 in interest. If you do a balance transfer of the $10,000 at 3% it'll cost you $300 up front, and your payment on the remaining $5,000 will be $363.74 to pay it off in the 14 month period. Your total monthly payment will be $1,099.45; $5,000 amortized at 2.94% for 14 months plus $10,300 divided by 14. ($363.74 + 735.71). Your interest will be about $392, $300 from the balance transfer and $92 from the remaining $5,000 on the car loan at 2.94%. Even if your lender doesn't credit your additional payment to principal and instead simply credits future payments, you'd still be done in 15 months with a total interest expense of about $447. So this additional administration and additional loan will save you maybe about $55 over 14 or 15 months.", "title": "" }, { "docid": "e136cafcae837d65d87c1e9fd27b5988", "text": "You can negotiate a no penalty for early payment loan with dealerships sometimes. Dealerships will often give you a better price on the car when you finance through them vs paying cash, so you negotiate in a 48 month finance, after you've settled on the price THEN you negotiate the no penalty for early payment point. They'll be less likely to try to raise the price after you've already come to an agreement. My dad has SAID he does this when buying cars, but that could just be hearsay and bravado. Has said he will negotiate on the basis of a long term lease, nail down a price then throw that clause in, then pay the car off in the first payment. Disclaimer: it's...um not a great way to do business though if you plan to purchase a new car every 2-3 years from the same dealer. Do it once and you'll have a note in their CRM not to either a) offer price reductions for financing or b) offer no penalty early payment financing.", "title": "" } ]	fiqa
3ed7b94484ff3a67572aa6441fdb9bdd	What's the best online tool that can track my entire portfolio including gains/losses?	[ { "docid": "38bdbd4c2225ed3344f2d36eb24aa6d8", "text": "You can use a tool like WikiInvest the advantage being it can pull data from most brokerages and you don't have to enter them manually. I do not know how well it handles dividends though.", "title": "" }, { "docid": "94c2b0c5d718b73fc598879131d2e8ee", "text": "\"Mint.com does this quite well. The graph views of your budgets, investments, debts, and other aspects of your financial life can be shown in gestalt, or on a per-account basis (at least, it does for me). See the investment \"\"how it works\"\" page for more information. \"\"Find out whether you're beating the market–or it's beating you. Compare your portfolio to market benchmarks, and instantly see your asset allocation across all your investment accounts: 401k, mutual funds, brokerage accounts, even IRAs.\"\"\"", "title": "" }, { "docid": "20f359098fd69ea33661b6f8f5533514", "text": "Google Portfolio does the job: https://www.google.com/finance/portfolio You can add transaction data, view fundamentals and much more.", "title": "" } ]	[ { "docid": "a5d349fd25625befc14104455f8caec1", "text": "I have ScottradeElite on my desktop. I have played around with it but no longer use it. The transactions that I make through Scottrade are more dependent on my goals for the securities than what the market is doing at the moment. Keep in mind that there will always be others out there with better access to price changes than you. They also will have better hardware. We cannot beat them at their game.", "title": "" }, { "docid": "8c755610386012c509020b65c42c3891", "text": "\"Yes, there is a very good Return vs Risk graph put out at riskgrades.com. Look at it soon, because it will be unavailable after 6-30-11. The RA (return analysis) graph is what I think you are looking for. The first graph shown is an \"\"Average Return\"\", which I was told was for a 3 year period. Three period returns of 3, 6 and 12 months, are also available. You can specify the ticker symbols of funds or stocks you want a display of. For funds, the return includes price and distributions (total return), but only price movement for stocks - per site webmaster. I've used the graphs for a few years, since Forbes identified it as a \"\"Best of the Web\"\" site. Initially, I found numerous problems with some of the data and was able to work with the webmaster to correct them. Lately though, they have NOT been correcting problems that I bring to their attention. For example, try the symbols MUTHX, EDITX, AWSHX and you'll see that the Risk Grades on the graphs are seriously in error, and compress the graph results and cause overwriting and poor readability. If anyone knows of a similar product, I'd like to know about it. Thanks, George\"", "title": "" }, { "docid": "58508326ca40b024e9d896173d8c4094", "text": "Take a look at this: http://code.google.com/p/stock-portfolio-manager/ It is an open source project aimed to manage your stock portfolio.", "title": "" }, { "docid": "9b303954acf188426116b459d9b2a890", "text": "\"Back-testing itself is flawed. \"\"Past performance is no guarantee of future results\"\" is an important lesson to understand. Market strategies of one kind or another work until they don't. Edited in -- AssetPlay.net provides a tool that's halfway to what you are looking for. It only goes back to 1972, however. Just to try it, I compared 100% S&P to a 60/40 blend of S&P with 5 yr t-bills (a misnamed asset, 5 yr treasuries are 'notes' not 'bills') I found the mix actually had a better return with lower volatility. Now, can I count on that to work moving forward? Rates fell during most of this entire period so bonds/notes both looked pretty good. This is my point regarding the backtest concept. GeniusTrader appears more sophisticated, but command line work on PCs is beyond me. It may be worth a look for you, JP. ETF Replay appears to be another backtest tool. It has its drawbacks, however, (ETFs only)\"", "title": "" }, { "docid": "baeda48ad38b88a95a6cbfd626419096", "text": "I've looked into Thinkorswim; my father uses it. Although better than eTrade, it wasn't quite what I was looking for. Interactive Brokers is a name I had heard a long time ago but forgotten. Thank you for that, it seems to be just what I need.", "title": "" }, { "docid": "3dccc75bc4b29bf2cb80a8c9dff15b95", "text": "\"My answer is Microsoft Excel. Google \"\"VBA for dummies\"\" (seriously) and find out if your brokerage offers an 'API'. With a brief understanding of coding you can get a spreadsheet that is live connected to your brokers data stream. Say you have a spreadsheet with the 1990 value of each in the first two columns (cells a1 and b1). Maybe this formula could be the third column, it'll tell you how much to buy or sell to rebalance them. then to iterate the rebalance, set both a2 and b2 to =C1 and drag the formula through row 25, one row for each year. It'll probably be a little more work than that, but you get the idea.\"", "title": "" }, { "docid": "dc791ff7f4a2e648915913f2f2bc62ae", "text": "Yup. What I wanted to know was where they are pulling it up from. Have casually used Google finance for personal investments, but they suck at corp actions. Not sure if they provide free APIs, but that would probably suck too! :D", "title": "" }, { "docid": "77910cb1a35f144cf084c07e12dd9ba9", "text": "I am mostly interested in day to day records, and would like the data to contain information such as dividend payouts, and other parameters commonly available, such as on : http://finviz.com/screener.ashx ... but the kind of queries you can do is limited. For instance you can only go back two years.", "title": "" }, { "docid": "101a9c97a94a00238daeb111a94202b4", "text": "\"You don't need to use a real stock like GLD. You can just create a \"\"stock\"\" called something like \"\"1 oz Gold\"\" and buy and sell them as if they were shares. It won't auto-update the price like GLD, but that's not a big deal to update manually once a month or so. I prefer to have accurate data that is correct at a particular point in time to having data that is 2-3% off, or that requires entering the ounces as 10x reality. YMMV. This is very similar to how you track US Savings Bonds in Quicken (and might be described in the help under that topic.)\"", "title": "" }, { "docid": "0c504887992c7acc59ad707ecd200e98", "text": "I use the following method. For each stock I hold long term, I have an individual table which records dates, purchases, sales, returns of cash, dividends, and way at the bottom, current value of the holding. Since I am not taking the income, and reinvesting across the portfolio, and XIRR won't take that into account, I build an additional column where I 'gross up' the future value up to today() of that dividend by the portfolio average yield at the date the dividend is received. The grossing up formula is divi(1+portfolio average return%)^((today-dividend date-suitable delay to reinvest)/365.25) This is equivalent to a complex XMIRR computation but much simpler, and produces very accurate views of return. The 'weighted combined' XIRR calculated across all holdings then agrees very nearly with the overall portfolio XIRR. I have done this for very along time. TR1933 Yes, 1933 is my year of birth and still re investing divis!", "title": "" }, { "docid": "ec01e6ad07bd6f63d716dde54886fb4c", "text": "\"My broker (thinkorswim) offers this from the platform's trade tab. I believe this feature isn't crippled in the PaperMoney version which is effectively a \"\"free online service.\"\"\"", "title": "" }, { "docid": "500aba91d79281094dbadba775df5b7a", "text": "I'm using iBank on my Mac here and that definitely supports different currencies and is also supposed to be able to track investments (I haven't used it to track investments yet, hence the 'supposed to' caveat).", "title": "" }, { "docid": "3ffd7588e47bdcfbf842058ec577af8f", "text": "\"Answering this question is weird, because it is not really precise in what you mean. Do you want all stocks in the US? Do you want a selection of stocks according to parameters? Do you just want a cool looking graph? However, your possible misuse of the word derivative piqued my interest. Your reference to gold and silver seems to indicate that you do not know what a derivative actually is. Or what it would do in a portfolio. The straightforward way to \"\"see\"\" an efficient frontier is to do the following. For a set of stocks (in this case six \"\"randomly\"\" selected ones): library(quantmod) library(fPortfolio) library(PerformanceAnalytics) getSymbols(c(\"\"STZ\"\", \"\"RAI\"\", \"\"AMZN\"\", \"\"MSFT\"\", \"\"TWX\"\", \"\"RHT\"\"), from = \"\"2012-06-01\"\", to = \"\"2017-06-01\"\") returns <- NULL tickerlist <- c(\"\"STZ\"\", \"\"RAI\"\", \"\"AMZN\"\", \"\"MSFT\"\", \"\"TWX\"\", \"\"RHT\"\") for (ticker in tickerlist){ returns <- cbind(returns, monthlyReturn(Ad(eval(as.symbol(ticker))))) } colnames(returns) <- tickerlist returns <- as.timeSeries(returns) frontier <- portfolioFrontier(returns) png(\"\"frontier.png\"\", width = 800, height = 600) plot(frontier, which = \"\"all\"\") dev.off() minvariancePortfolio(returns, constraints = \"\"LongOnly\"\") Portfolio Weights: STZ RAI AMZN MSFT TWX RHT 0.1140 0.3912 0.0000 0.1421 0.1476 0.2051 Covariance Risk Budgets: STZ RAI AMZN MSFT TWX RHT 0.1140 0.3912 0.0000 0.1421 0.1476 0.2051 Target Returns and Risks: mean Cov CVaR VaR 0.0232 0.0354 0.0455 0.0360 https://imgur.com/QIxDdEI The minimum variance portfolio of these six assets has a mean return is 0.0232 and variance is 0.0360. AMZN does not get any weight in the portfolio. It kind of means that the other assets span it and it does not provide any additional diversification benefit. Let us add two ETFs that track gold and silver to the mix, and see how little difference it makes: getSymbols(c(\"\"GLD\"\", \"\"SLV\"\"), from = \"\"2012-06-01\"\", to = \"\"2017-06-01\"\") returns <- NULL tickerlist <- c(\"\"STZ\"\", \"\"RAI\"\", \"\"AMZN\"\", \"\"MSFT\"\", \"\"TWX\"\", \"\"RHT\"\", \"\"GLD\"\", \"\"SLV\"\") for (ticker in tickerlist){ returns <- cbind(returns, monthlyReturn(Ad(eval(as.symbol(ticker))))) } colnames(returns) <- tickerlist returns <- as.timeSeries(returns) frontier <- portfolioFrontier(returns) png(\"\"weights.png\"\", width = 800, height = 600) weightsPlot(frontier) dev.off() # Optimal weights out <- minvariancePortfolio(returns, constraints = \"\"LongOnly\"\") wghts <- getWeights(out) portret1 <- returns%%wghts portret1 <- cbind(monthprc, portret1)[,3] colnames(portret1) <- \"\"Optimal portfolio\"\" # Equal weights wghts <- rep(1/8, 8) portret2 <- returns%%wghts portret2 <- cbind(monthprc, portret2)[,3] colnames(portret2) <- \"\"Equal weights portfolio\"\" png(\"\"performance_both.png\"\", width = 800, height = 600) par(mfrow=c(2,2)) chart.CumReturns(portret1, ylim = c(0, 2)) chart.CumReturns(portret2, ylim = c(0, 2)) chart.Drawdown(portret1, main = \"\"Drawdown\"\", ylim = c(-0.06, 0)) chart.Drawdown(portret2, main = \"\"Drawdown\"\", ylim = c(-0.06, 0)) dev.off() https://imgur.com/sBHGz7s Adding gold changes the minimum variance mean return to 0.0116 and the variance stays about the same 0.0332. You can see how the weights change at different return and variance profiles in the picture. The takeaway is that adding gold decreases the return but does not do a lot for the risk of the portfolio. You also notice that silver does not get included in the minimum variance efficient portfolio (and neither does AMZN). https://imgur.com/rXPbXau We can also compare the optimal weights to an equally weighted portfolio and see that the latter would have performed better but had much larger drawdowns. Which is because it has a higher volatility, which might be undesirable. --- Everything below here is false, but illustrative. So what about the derivative part? Let us assume you bought an out of the money call option with a strike of 50 on MSFT at the beginning of the time series and held it to the end. We need to decide on the the annualized cost-of-carry rate, the annualized rate of interest, the time to maturity is measured in years, the annualized volatility of the underlying security is proxied by the historical volatility. library(fOptions) monthprc <- Ad(MSFT)[endpoints(MSFT, \"\"months\"\")] T <- length(monthprc) # 60 months, 5 years vol <- sd(returns$MSFT)sqrt(12) # annualized volatility optprc <- matrix(NA, 60, 1) for (t in 1:60) { s <- as.numeric(monthprc[t]) optval <- GBSOption(TypeFlag = \"\"c\"\", S = s, X = 50, Time = (T - t) / 12, r = 0.001, b = 0.001, sigma = vol) optprc[t] <- optval@price } monthprc <- cbind(monthprc, optprc) colnames(monthprc) <- c(\"\"MSFT\"\", \"\"MSFTCall50\"\") MSFTCall50rets <- monthlyReturn(monthprc[,2]) colnames(MSFTCall50rets) <- \"\"MSFTCall50rets\"\" returns <- merge(returns, MSFTCall50rets) wghts <- rep(1/9, 9) portret3 <- returns%*%wghts portret3 <- cbind(monthprc, portret3)[,3] colnames(portret3) <- \"\"Equal weights derivative portfolio\"\" png(\"\"performance_deriv.png\"\", width = 800, height = 600) par(mfrow=c(2,2)) chart.CumReturns(portret2, ylim = c(0, 4.5)) chart.CumReturns(portret3, ylim = c(0, 4.5)) chart.Drawdown(portret2, main = \"\"Drawdown\"\", ylim = c(-0.09, 0)) chart.Drawdown(portret3, main = \"\"Drawdown\"\", ylim = c(-0.09, 0)) dev.off() https://imgur.com/SZ1xrYx Even though we have a massively profitable instrument in the derivative. The portfolio analysis does not include it because of the high volatility. However, if we just use equal weighting and essentially take a massive position in the out of the money call (which would not be possible in real life), we get huge drawdowns and volatility, but the returns are almost two fold. But nobody will sell you a five year call. Others can correct any mistakes or misunderstandings in the above. It hopefully gives a starting point. Read more at: https://en.wikipedia.org/wiki/Modern_portfolio_theory https://en.wikipedia.org/wiki/Option_(finance) The imgur album: https://imgur.com/a/LoBEY\"", "title": "" }, { "docid": "cce033f385da61f67b0c492443451b1d", "text": "\"It's easy for me to look at an IRA, no deposits or withdrawal in a year, and compare the return to some index. Once you start adding transactions, not so easy. Here's a method that answers your goal as closely as I can offer: SPY goes back to 1993. It's the most quoted EFT that replicates the S&P 500, and you specifically asked to compare how the investment would have gone if you were in such a fund. This is an important distinction, as I don't have to adjust for its .09% expense, as you would have been subject to it in this fund. Simply go to Yahoo, and start with the historical prices. Easy to do this on a spreadsheet. I'll assume you can find all your purchases inc dates & dollars invested. Look these up and treat those dollars as purchases of SPY. Once the list is done, go back and look up the dividends, issues quarterly, and on the dividend date, add the shares it would purchase based on that day's price. Of course, any withdrawals get accounted for the same way, take out the number of SPY shares it would have bought. Remember to include the commission on SPY, whatever your broker charges. If I've missed something, I'm sure we'll see someone point that out, I'd be happy to edit that in, to make this wiki-worthy. Edit - due to the nature of comments and the inability to edit, I'm adding this here. Perhaps I'm reading the question too pedantically, perhaps not. I'm reading it as \"\"if instead of doing whatever I did, I invested in an S&P index fund, how would I have performed?\"\" To measure one's return against a benchmark, the mechanics of the benchmarks calculation are not needed. In a comment I offer an example - if there were an ETF based on some type of black-box investing for which the investments were not disclosed at all, only day's end pricing, my answer above still applies exactly. The validity of such comparisons is a different question, but the fact that the formulation of the EFT doesn't come into play remains. In my comment below which I removed I hypothesized an ETF name, not intending it to come off as sarcastic. For the record, if one wishes to start JoesETF, I'm ok with it.\"", "title": "" }, { "docid": "44e7a7cb513b863434091609d159ded7", "text": "I'm responsible for all our hedging. Since we sell the energy to end users we do mostly fixed buys, swaps and calls. I'm a excel guru and dabble a little in SQL. we have Crystal Ball as well but i have no idea how to use it. I guess I'm trying to figure out if there is a tool that people use to help me analyze the spreads. or perhaps some reading material to help me through this. This is what i've been working towards for so long and i really don't want to fuck this up", "title": "" } ]	fiqa
bb6b5fb030b372f6b5078bed43a813b2	Multiple hard inquiry for a single loan from car dealer?	[ { "docid": "7f63a2ebb0d599a7f156513c061b8228", "text": "\"(I'm a bit surprised that nobody talked about the impact of multiple inquiries on a loan, since OP is concerned with credit building. Probably an answer as opposed to a comment is justified.) Yes. In fact when you shop for auto loan you are expected to have your credit score/report be pulled by different banks, credit unions, and/or the financing arm of the car manufacturer or the dealership, so that you can hopefully get the best rate possible. This is especially true if the dealer is requesting quotes on rates on your behalf, as they would probably use a batch process to send out applications to multiple financial institutions all at once. Yes, and a bit unusual - CALVERT TOYO (your dealer) pulled your report twice on the same day. Presumably they are not getting any new information on the second pull. Maybe a fat finger? Regardless, you should not worry about this too much (to be explained below). I would say \"\"don't bother\"\". The idea behind hard inquiries lowering credit score is that lenders see the number of hard inquiries as your desire for credit. Too high a number is often viewed as either \"\"desperate for credit\"\" or \"\"unable to qualify for credit\"\". But as explained above, it is very common for a person to request quotes for multiple financial institutions and thus to have multiple hard inquiries in a short period of time when shopping for loans. To account for that, the credit bureau's model would usually combine hard inquiries for a same type of loan (auto, mortgage, etc.) within 30 days. Hence a person sending quote request to 3 banks won't be rated higher for credit than if he were to request quotes from 5 banks. Therefore in your case your credit profile is not going to be different if you had been pulled just once. my credit score goes down for 15 points I'm assuming you are talking about the credit score provided by Credit Karma. The score CK provided is FAKO. The score lenders care about is FICO. They are well correlated but still different. Google these two terms and you should be able to figure out the difference quickly. You can also refer to my answer to a different question here: Equifax credit score discrepancy in 1 month, why?\"", "title": "" }, { "docid": "9654bea102f4b7d56d91111f737d8cde", "text": "Each goes to a different agency. Yes, it is normal that the lender queries more than one agency.", "title": "" }, { "docid": "6a82a58202ec394a50a1b5aa8ce2f7f3", "text": "This is normal with the dealer's financing. To add more details to littleadv's answer, what happens is when you get the financing through the dealer, at first, they will try to do the loan on your behalf with local banks in your area. This is why you see several hard inquiries; one from each back. If none of these banks wants to take the loan, then dealer's financing entity will take the loan. This was my exact experience with Hyundai. In addition, don't get surprise if you start receiving letters saying that your loan was rejected. The dealer will send the loan requests simultaneously, and some of the banks might deny the loan. This also happened to me, and I have been owning my car for around a year. Still, make sure that the letters matches with the credit inquiries.", "title": "" } ]	[ { "docid": "9874f6737c29c6ccdcf50be800ba0095", "text": "You need to do the maths exactly. The cost of buying a car in cash and using a loan is not the same. The dealership will often get paid a significant amount of money if you get a loan through them. On the other hand, they may have a hold over you if you need their loan (no cash, and the bank won't give you money). One strategy is that while you discuss the price with the dealer, you indicate that you are going to get a loan through them. And then when you've got the best price for the car, that's when you tell them it's cash. Remember that the car dealer will do what's best for their finances without any consideration of what's good for you, so you are perfectly in your rights to do the same to them.", "title": "" }, { "docid": "230bf99815c0f1b4b3d8aea5c08f2c0f", "text": "The car dealership doesn't care where you get the cash; they care about it becoming their money immediately and with no risk or complications. Any loan or other arrangements you make to raise the cash is Your Problem, not theirs, unless you arrange the loan through them.", "title": "" }, { "docid": "1add9a666c8b481d0ddcca7928f6e38c", "text": "\"Were you just offered a car loan for 1.4%, or did you sign for a car loan for 1.4%? If you signed, it's too late. If you didn't sign: You should realise that your car loan isn't really 1.4%. Nobody will give you a car loan for less than a mortgage loan. What really happened is that you gave up your chance to get a rebate on the car purchase. A car worth $18,000 will have a price tag of $20,000. You can buy it for cash and haggle the dealer down to $18,000, or you can take that \"\"cheap\"\" 1.4% loan and pay $20,000 for the car. So if at all possible, you would try to get a cheap loan from your bank, possibly through your mortgage, so you can buy the car without taking a loan from the car dealer.\"", "title": "" }, { "docid": "b10a6a9f11ddd5e980624a5df4c0c0f8", "text": "Car dealers as well as boat dealers, RV dealers, maybe farm vehicle dealers and other asset types make deals with banks and finance companies to they can make loans to buyers. They may be paying the interest to the finance companies so they can offer a 0% loan to the retail customer for all or part of the loan term. Neither the finance company nor the dealer wants to make such loans to people who are likely to default. Such customers will not be offered this kind of financing. But remember too that these loans are secured by the asset - the car - which is also insured. But the dealer or the finance company holds that asset as collateral that they can seize to repay the loan. So the finance company gets paid off and the dealer keeps the profit he made selling the car. So these loans are designed to ensure the dealer nor the finance company looses much. These are called asset finance loans because there is always an asset (the car) to use as collateral.", "title": "" }, { "docid": "58543b29e1af5f251960eed3c0cb0e77", "text": "On the surface this sounds ridiculous, which makes me suspect that there might be something that the dealer intends to cling on to; otherwise it sounds like the dealer should be ashamed to even call your son about its own incompetence. I'd recommend politely refusing the request since said mistake didn't happen on your end, and wait to see if the dealer comes back with some sort of argument.", "title": "" }, { "docid": "8811d8cab56c747f24cd117c28f2fca7", "text": "\"Those two hard inquiries will only count as one on your score because you applied for the two cards immediately one after the other. Credit bureaus see this as just credit card shopping, so will hit your score only once as a single hard inquiry. If you had applied for these two cards days apart, then your score would have been hit with two hard inquiries. Find more details here, specifically under the \"\"What to know about rate shopping\"\" section.\"", "title": "" }, { "docid": "d2aa9ba776cab68fb9f0bd1333bbea3b", "text": "\"You can find out the most money they will loan you for a car loan when you approach your current bank/credit union. They should be willing to layout options based on your income, and credit history. You then have to decide if those terms work for you. There are several dangers with getting loan estimates, they may be willing to lend you more than you can actually handle. They think you can afford it, but maybe you can't. They may also have a loan with a longer term, which does bring the monthly cost down, but exposes you to being upside down on the loan. You then use this a a data point when looking at other lenders. The last place you look is the auto dealer. They will be trying to pressure you on both the loan and the price, that is not the time to do doing complex mental calculations. The Suntrust web page was interesting, it included the quote: The lowest rate in each range is for LightStream's unsecured auto loan product and requires that you have an excellent credit profile. It also induced the example the rate of 2.19% - 4.24% for a 24 to 36 month loan of $10,000 to $24,999 for a used car purchased from a dealer. Also note that my local credit union has a new/used loan at 1.49%, but you have to be a member. Sunstrust seems to be in the minority. In general a loan for X$ and y months will have a lower rate if it is secured with collateral. But Suntrust is offering unsecured loans (i.e. no collateral) at a low rate. The big benefit for their product is that you get the cash today. You can get the cash before you know what you want to buy. You get the cash before you have negotiated with the dealer. That makes that step easier. Now will they in the near future ask for proof you bought a car with the money? no idea. If you went to the same web page and wanted a debt consolidation loan the rate for the same $ range and the same months is: 5.49% - 11.24% the quote now changes to: The lowest rate in each range requires that you have an excellent credit profile. I have no idea what rate they will actually approve you for. It is possible that if you don't have excellent credit the rate rises quickly, but 4.24% for the worst auto loan is better than 5.49% for the best debt consolidation. Excellent Credit Given the unique nature of each individual’s credit situation, LightStream believes there is no single definition for \"\"excellent credit\"\". However, we find individuals with excellent credit usually share the following characteristics: Finally, it should be noted again that each individual situation is different and that we make our credit judgment based on the specific facts of that situation. Ultimately our determination of excellent credit is based on whether we conclude that there is a very high likelihood that our loan will be repaid in a full and timely manner. All the rates mentioned in this answer are from 15 July 2017.\"", "title": "" }, { "docid": "beb3f083af599d46d40746bcc6f23dda", "text": "\"I think everything in your case is just simply missing one important rule of how credit works. Essentially, your MIL cannot get a loan. You can. You are making her a large loan that she cannot get for herself. That is all. That is the essence of what this deal is. It is not without interest - she makes a financial contribution toward your son, you get the deal in 2 years assuming she doesn't default (she will), etc. Imagine it this way: you are sitting in the dealership with the dealer and your MIL. She wants a loan to pay for the car. The dealership says, \"\"you are way not credit worthy.\"\" So your MIL says, \"\"why doesn't my son-in-law take out the loan instead?\"\" Now the dealership says, sure, that's fine. From the dealer's standpoint, every other part of your arrangement is irrelevant - boring, even. The only magic trick is in who takes the loan out, no other difference. You're letting your MIL pull a car out of her sleeve like a magician, and in taking the deal you're believing her. This sentence: I am pretty sure that the ex-MIL will not let me down (I've loaned her large sums of money before and she always promptly repaid). is everything. You're making a rather large bet that the things that can go wrong in two years - including any situation involving your wife's welfare - are rather miniscule. And furthermore, that the few times she's paid you back - that did NOT convince banks and dealer she is more creditworthy - justifies her good creditworthiness. Is the interest worth it? Do you really believe that your MIL needs to wring a car out of you before she would consider contributing to her grandson's well-being (which is, essentially, the interest)? But wait, it's NOT everything. Her daughter (my ex-wife) would drive it for 2 years and then turn the car over to our son. Even if your MIL is creditworthy, the woman you described as follows: Her daughter, though, is a loose cannon. Will be holding and returning the collateral in this deal. Things she can do include: So I'm arguing two points: Obviously my opinion on this is clear. I hope I did a decent job of explaining where the components of this deal (credit, interest, collateral) play out in the eyes of a dealer or bank, and get lost in the mechanics of the rules you worked out with your family.\"", "title": "" }, { "docid": "78c7b2bf71f314407d951a11d5e096fb", "text": "\"It's possible the $16,000 was for more than the car. Perhaps extras were added on at purchase time; or perhaps they were folded into the retail price of the car. Here's an example. 2014: I'm ready to buy. My 3-year-old trade-in originally cost $15,000, and I financed it for 6 years and still owe $6500. It has lots of miles and excess wear, so fair blue-book is $4500. I'm \"\"upside down\"\" by $2000, meaning I'd have to pay $2000 cash just to walk away from the car. I'll never have that, because I'm not a saver. So how can we get you in a new car today? Dealer says \"\"If you pay the full $15,000 retail price plus $1000 of worthless dealer add-ons like wax undercoat (instead of the common discounted $14,000 price), I'll eat your $2000 loss on the trade.\"\" All gets folded into my new car financing. It's magic! (actually it's called rollover.) 2017: I'm getting itchy to trade up, and doggone it, I'm upside down on this car. Why does this keep happening to me? In this case, it's rollover and other add-ons, combined with too-long car loans (6 year), combined with excessive mileage and wear on the vehicle.\"", "title": "" }, { "docid": "c9ce1b041cc3e4f4463bf2f83a21f155", "text": "In the U.S., most car dealers provide lease financing through one company (usually a subsidiary of the auto manufacturer). Whereas they provide loan financing through a variety of companies, some of whom offer very high interest rate loans and sell the loans as collateralized debt obligations (CDOs). Have you checked whether Chase or First Tech Credit Union offers a suitable car lease?", "title": "" }, { "docid": "4c0ad5c834bc207b3f756d7ce3c6ed65", "text": "\"You won't be able to sell the car with a lien outstanding on it, and whoever the lender is, they're almost certain to have a lien on the car. You would have to pay the car off first and obtain a clear title, then you could sell it. When you took out the loan, did you not receive a copy of the finance contract? I can't imagine you would have taken on a loan without signing paperwork and receiving your own copy at the time. If the company you're dealing with is the lender, they are obligated by law to furnish you with a copy of the finance contract (all part of \"\"truth in lending\"\" laws) upon request. It sounds to me like they know they're charging you an illegally high (called \"\"usury\"\") interest rate, and if you have a copy of the contract then you would have proof of it. They'll do everything they can to prevent you from obtaining it, unless you have some help. I would start by filing a complaint with the Better Business Bureau, because if they want to keep their reputation intact then they'll have to respond to your complaint. I would also contact the state consumer protection bureau (and/or the attorney general's office) in your state and ask them to look into the matter, and I would see if there are any local consumer watchdogs (local television stations are a good source for this) who can contact the lender on your behalf. Knowing they have so many people looking into this could bring enough pressure for them to give you what you're asking for and be more cooperative with you. As has been pointed out, keep a good, detailed written record of all your contacts with the lender and, as also pointed out, start limiting your contacts to written letters (certified, return receipt requested) so that you have documentation of your efforts. Companies like this succeed only because they prey on the fact many people either don't know their rights or are too intimidated to assert them. Don't let these guys bully you, and don't take \"\"no\"\" for an answer until you get what you're after. Another option might be to talk to a credit union or a bank (if you have decent credit) about taking out a loan with them to pay off the car so you can get this finance company out of your life.\"", "title": "" }, { "docid": "67525a00d56b3e4c7396761c4f96f362", "text": "Either approach will put a strain on your friendship, unless you are willing to treat it as a gift which may or may not be returned rather than a loan. I agree that paying it direct to the dealer (or giving her a check that is made out to the dealer) avoids the risk of the money getting sidetracked.", "title": "" }, { "docid": "254c020807418d441f950c780a5fdfb7", "text": "The loan agent surely knows that having a combination of loans greater than the value of the property (less some margin) is illegal, but also impossible. Your first mortgage, mechanic's liens, tax liens, and so forth are a matter of public record. In most states the records can be viewed online, by anyone, for free. The title search prerequisite for getting the second mortgage looks beyond the low hanging fruit for things like aborigines claims for parcels of land that include your property. The loan agent is trying to sell you a home equity line of credit. Almost everyone gets one after building up some equity. There's often no closing cost and it's not necessary to ever use it. Keep it for emergencies.", "title": "" }, { "docid": "79febff37005fe840f1be5912c0f914c", "text": "\"You say Also I have been the only one with an income in our household for last 15 years, so for most of our marriage any debts have been in my name. She has a credit card (opened in 1999) that she has not used for years and she is also a secondary card holder on an American Express card and a MasterCard that are both in my name (she has not used the cards as we try to keep them only for emergencies). This would seem to indicate that the dealer is correct. Your wife has no credit history. You say that you paid off her student loans some years back. If \"\"some years\"\" was more than seven, then they have dropped off her credit report. If that's the most recent credit activity, then she effectively has none. Even if you get past that, note that she also doesn't have any income, which makes her a lousy co-signer. There's no real circumstance where you couldn't pay for the car but she could based on the historical data. She would have to get a job first. Since they had no information on her whatsoever, they probably didn't even get to that.\"", "title": "" }, { "docid": "632a0ece15cf3dadbd5fe45fd5f93376", "text": "You have a few options and sometimes challenges help us improve our situation. First, you can not borrow to buy a car. Reducing the massive depreciation that cars undergo will help you be wealthier. It is hard to find a good use car that you can buy for cash, but it will play out best for your finances in the long run. If your heart is set on borrowing, I would encourage you to go to the bank/credit union where you have your checking account. They will see your history of deposits and may grant you a loan based on that. Also you are likely to get a better deal from the bank than from the car dealer. Thirdly, you can simply go to your employer's HR department and ask them. Surely someone has applied for a loan during the company's history. What did they do for them?", "title": "" } ]	fiqa
bf8b8051b68732f942016e4d1cef73f3	I can't produce a title for a vehicle I just traded	[ { "docid": "ccaf4e379ae155f8f1ddd2d94784a9e7", "text": "The old truck is collateral for a loan. The place that made the loan expects that if you can't pay they can repossess that old truck. If you sell it they can't repossess it. The dealer needs clean title to be able to buy the truck from you, so they can fix up the truck and sell it to somebody else. I am assuming the the lender has filed paperwork with the state to show their lien on the title. Your options are three: As to option 2: If the deal still makes sense the new car dealer can send the $9,000 to the lender that you forgot about. That will of course increase the amount of money you have to borrow. You will also run into the problem that this loan that you forgot to mention on your credit application may cause them to rethink the decision to loan you the money.", "title": "" }, { "docid": "813d265b6ff1493bf509136ff753c95f", "text": "\"If your fiancée took a title loan out on your truck you won't be able to trade it in for another vehicle until you pay the loan. The dealer will likely take your \"\"slightly newer\"\" truck back because you won't be able to produce the title for the trade until the other debt is settled. Title loans are a terrible idea. You should probably try to pay that loan off as quickly as possible regardless, because interest rates are terrible on these loans. I will update this answer if you add details about the circumstances of the current loan on your truck.\"", "title": "" } ]	[ { "docid": "98a515cbd0567da8e4039af7b5522f27", "text": "That's tricky, actually. First, as the section 1015 that you've referred to in your other question says - you take the lowest of the fair market value or the actual donor basis. Why is it important? Consider these examples: So, if the relative bought you a brand new car and you're the first title holder (i.e.: the relative paid, but the car was registered directly to you) - you can argue that the basis is the actual money paid. In essence you got a money gift that you used to purchase the car. If however the relative bought the car, took the title, and then drove it 5 miles to your house and signed the title over to you - the IRS can argue that the car basis is the FMV, which is lower because it is now a used car that you got. You're the second owner. That may be a significant difference, just by driving off the lot, the car can lose 10-15% of its value. If you got a car that's used, and the donor gives it to you - your basis is the fair market value (unless its higher than the donor's basis - in which case you get the donor's basis). You always get the lowest basis for losses (and depreciation is akin to a loss). Now consider the situation when your relative is a business owner and used the car for business. He didn't take the depreciation, but he was entitled to. IRS can argue that the fact that he didn't take is irrelevant and reduce the donor's basis by the allowable depreciation. That may bring your loss basis to below the FMV. I suggest you take it to a tax professional licensed in your state who will check all the facts and circumstances of your situation. Your relative might be slapped with a gift tax as well, if the car FMV is above certain amount (currently the exemption is $14000).", "title": "" }, { "docid": "1cf24b5d8cfb72fb8f040d7974afa9d5", "text": "I have sold cars before to individuals and always just received cash. I would think as long as the amount is less than $10,000.00 and the buyer is serious they will get there with the cash. Of course there is no possible way to guarantee the cash will not be counterfeit.", "title": "" }, { "docid": "168704f710afdf153cf1d910d90c06eb", "text": "\"You can greatly reduce the risk if you can line up a buyer prior to purchasing the car. That kind of thing is common in business, one example is drop shipping. Also there are sales companies that specialize in these kinds of things bringing manufacturers of goods together with customers. The sales companies never take delivery of the product, just a commission on the sales. From this the manufacturers are served as they have gained a customer for their goods. The buying company is served as they can make a \"\"better\"\" end product. The two parties may have not been brought together had it not been for the sales company so on some level both are happy to pay for the service. Can you find market inequalities and profit from them? Sure. I missed a great opportunity recently. I purchased a name brand shirt from a discount store for $20. Those shirts typically sell on ebay for $80. I should have cleaned out that store's inventory, and I bet someone else did as by the time I went back they were gone. That kind of thing was almost risk-less because if the shirts did not sell, I could simply return them for the full purchase price. That and I can afford to buy a few hundred dollars worth of shirts. Can you afford to float 45K CDN? What if it takes a year to sell the car? What if the economy goes sour and you are left \"\"holding the bag\"\"? Why are not car dealers doing exactly what you propose? Here in the US this type of thing is called \"\"horse trading\"\" and is very common. I've both lost and made money on these kind of deals. I would never put a significant amount of my net worth at risk.\"", "title": "" }, { "docid": "f3dd78e6bce8c60aef62179c00fa8a76", "text": "I'm a little confused by your question to be honest. It sounds like you haven't sold it to him, but you have a verbal arrangement for him to use the car like it's his. I'm going to assume that's the case for this answer. This is incredibly risky. If you've got the car on credit and he stops paying, or you guys break up... you will be liable for continuing to make payments! If the loan is in your name, it's your responsibility. Edited. The credit is yours. If he decides to stop paying, you're a little stuck.", "title": "" }, { "docid": "2a44e8cbf7e4a965cdc2a692b9e07023", "text": "\"As others have said, if the dealer accepted payment and signed over ownership of the vehicle, that's a completed transaction. While there may or may not be a \"\"cooling-off period\"\" in your local laws, those protect the purchaser, not (as far as I know) the seller. The auto dealer could have avoided this by selling for a fixed price. Instead, they chose to negotiate every sale. Having done so, it's entirely their responsibility to check that they are happy with their final agreement. Failing to do so is going to cost someone their commission on the sale, but that's not the buyer's responsibility. They certainly wouldn't let you off the hook if the final price was higher than you had previously agreed to. He who lives by the fine print shall die by the fine print. This is one of the reasons there is huge turnover in auto sales staff; few of them are really good at the job. If you want to be kind to the guy you could give him the chance to sell you something else. Or perhaps even offer him a $100 tip. But assuming the description is correct, and assuming local law doesn't say otherwise (if in any doubt, ask a lawyer!!!), I don't think you have any remaining obligation toward them On the other hand, depending on how they react to this statement, you might want to avoid their service department, just in case someone is unreasonably stupid and tries to make up the difference that was.\"", "title": "" }, { "docid": "2c91d469adaf30cb4392e92342f5ad50", "text": "\"Unfortunately, it's not unusual enough. If you're looking for a popular car and the dealer wants to make sure they aren't holding onto inventory without a guarantee for sale, then it's a not completely unreasonable request. You'll want to make sure that the deposit is on credit card, not cash or check, so you can dispute if an issue arises. Really though, most dealers don't do this, requiring a deposit, pre sale is usually one of those hardball negotiating tactics where the dealer wrangles you into a deal, even if they don't have a good deal to make. Dealers may tell you that you can't get your deposit back, even if they don't have the car you agreed on or the deal they agreed to. You do have a right for your deposit back if you haven't completed the transaction, but it can be difficult if they don't want to give you your money back. The dealer doesn't ever \"\"not know if they have that specific vehicle in stock\"\". The dealer keeps comprehensive searchable records for every vehicle, it's good for sales and it's required for tax records. Even when they didn't use computers for all this, the entire inventory is a log book or phone call away. In my opinion, I would never exchange anything with the dealer without a car actually attached to the deal. I'd put down a deposit on a car transfer if I were handed a VIN and verified that it had all the exact options that we agreed upon, and even then I'd be very cautious about the condition.\"", "title": "" }, { "docid": "5b2e1f0f7bd0926fa89271b2305f03c8", "text": "Draft up a promissory notes. Have a lawyer do it use one of those online contract places if you have simple needs. Your promissory note need to cover Be specific. There are probably a lot more items that can be included, and if a quick internet search is any indication it gets deep fast. http://lmbtfy.com/?q=car+sale+promissory+note (Like @LittleAdv says) Head to your DMV with the title and the promissory note. The title is signed over to you and held by the DMV. When you pay up, the seller informs the DMV and they send you the title. If you don't pay up, the seller can legally repossess the car. All butts are covered. Pay the note as agreed. When you are all paid up, your friend notifies the DMV who then mail you the title. Your butt is covered because your name is on the car, you can insure it and nobody can take it from you (legally) if you are paying the note as agreed. Your pal's butt is covered because if you stop paying half way through, he can keep whatever you have paid him and get his car back.", "title": "" }, { "docid": "88ddcb0c6858f21c6a4571c616e9ba94", "text": "\"When I have stock at my brokerage account, the title is in street name - the brokerage's name and the quantity I own is on the books of the brokerage (insured by SIPC, etc). The brokerage loans \"\"my\"\" shares to a short seller and is happy to facilitate trades in both directions for commissions (it's a nice trick to get other parties to hold the inventory while you reap income from the churn); by selecting the account I have I don't get to choose to not loan out the shares.\"", "title": "" }, { "docid": "0e56536646a6bb78b874992c3447e0b7", "text": "Thanks for your reply. I’m not familiar with the term “Held-For-Trading Security”. My securities are generally held as collateral against my shorts. To clarify, I am just trying to track the “money in” and “money out” entries in my account for the shorts I write. The transaction is relatively straight forward, except there is a ton of information attached! In simple terms, for the ticker CSR and short contract CSRUQ8, the relevant entries look something like this: There are no entries for expiries. I need to ensure that funds are available for future margin calls and assignments. The sale side using covered calls is as involved.", "title": "" }, { "docid": "58543b29e1af5f251960eed3c0cb0e77", "text": "On the surface this sounds ridiculous, which makes me suspect that there might be something that the dealer intends to cling on to; otherwise it sounds like the dealer should be ashamed to even call your son about its own incompetence. I'd recommend politely refusing the request since said mistake didn't happen on your end, and wait to see if the dealer comes back with some sort of argument.", "title": "" }, { "docid": "be4904f4285c1e302cbb7256d8baa7e9", "text": "\"Strangely enough, you have a wash sale, but, for the fact that you sold the shares and then more than 30 days passed, you can take the loss. I mistakenly used the phrase \"\"and ended the year with no shared of the stock\"\" elsewhere, and was corrected, as one can sell at a loss up to 12/31, and have until the end of January to create a wash condition. In your case, the facts in June combined with you ending the year with no shares removes any doubt, a wash sale, but one that's fully closed out. Note - while Vicky's answer is correct, it should go on to say that once the stock is not owned for 30 days, the wash sale loss is permitted.\"", "title": "" }, { "docid": "93b4633bc4b31002b95efa381173b0bd", "text": "Ordinarily a cosigner does not appear on the car's title (thus, no ownership at all in the vehicle), but they are guaranteeing payment of the loan if the primary borrower does not make the payment. You have essentially two options: Stop making payments for him. If he does not make them, the car will be repossessed and the default will appear on both his and your credit. You will have a credit ding to live with, but he will to and he won't have the car. Continue to make payments if he does not, to preserve your credit, and sue him for the money you have paid. In your suit you could request repayment of the money or have him sign over the title (ownership) to you, if you would be happy with either option. I suspect that he will object to both, so the judge is going to have to decide if he finds your case has merit. If you go with option 1 and he picks up the payments so the car isn't repossessed, you can then still take option 2 to recover the money you have paid. Be prepared to provide documentation to the court of the payments you have made (bank statements showing the out-go, or other form of evidence you made the payment - the finance company's statements aren't going to show who made them).", "title": "" }, { "docid": "9e750f0e4742820944816ee5fc7cc817", "text": "Break the transactions into parts. Go to your bank or credit union and get a loan commitment. When applying for loan get the maximum amount they will let you borrow assuming that you will no longer own the first car. Take the car to a dealer and get a written estimate for selling the car. Pick one that gives you an estimate that is good for a week or ten days. You now know a data point for the trade-in value. Finally go to the dealer where you will buy the replacement car. Negotiate the price, tell them you don't need financing and you will not be trading in the car. Get all you can regarding rebates and other special incentives. Once you have a solid in writing commitment, then ask about financing and trade in. If they beat the numbers you have regarding interest rate and trade-in value accept those parts of the deal. But don't let them change anything else. If you keep the bank financing the dealer will usually give you a couple of days to get a check. If you decide to ell the car to the first dealer do so as soon as you pick up the replacement car. If you try to start with the dealer you are buying the car from they will keep adjusting the rate, length of loan, trade-in value, and price until you have no idea if you are getting a good deal.", "title": "" }, { "docid": "bf3c52ae294bd1bbf9893e00073baa4d", "text": "Securities or quite a few negotiable instruments can change title of ownership without any issue. Many at times the owner ship in implicit if you are holding a certain instrument. So for example in Stock its a fractional ownership in a company, this ownership transfers to the buyer from the seller without requiring any permission from the company. In case of say Loans, One cannot transfer the loan to some one else without the Banks permission.", "title": "" }, { "docid": "3ba8485a9a1a51d71b7d8c8b919e434f", "text": "A Standby Letter of Credit was required by a company in UAE to import Gold Dust from a supplier in South Africa, but they do not have enough cash flow to obtain the Standby LC from their Bank. They found Bronze Wing Trading & availed their required SBLC MT760 without any Financial Collateral.", "title": "" } ]	fiqa
87600a1aff476b599c93fd48309ffbb4	Evaluating an endowment policy for its fairness against other tax saving options in India such as PPF, EPF and even FDs	[ { "docid": "b8a3b2671830f2a8002f9dfbe2dd4b08", "text": "Or am missing something? Yes. The rate of 8.53 is illustration. There is no guarantee that the rate will be applicable. My yearly premium is Rs. 26289. On this amount I will save tax of Rs. 7887. So net premium is Rs. 18402. The other way to look at this is invest Rs 26289 [or actually less of Eq Term Deposit premium]. If you invest into Eq Term Deposit [lock-in for 6 years] with tax benefits, your numbers are going to be very different and definitely better than LIC returns. Edits:", "title": "" } ]	[ { "docid": "2c163002346e1c9b0d7922bbf4de10d4", "text": "I wrote about this a while back: http://blog.investraction.com/2006/10/mutual-funds-dividend-option-or-growth.html In short: Growth options of a mutual fund scheme don't pay out any money, they reinvest the dividend they receive. Dividend options pay out some money, at different intervals, based on the surplus they accumulate. In India, the options have very similar underlying portfolios, so HDFC Equity Fund (Growth) and HDFC Equity Fund (dividend) will have the same percentage allocation to each stock. Update: I also have a video you might want to see on the subject: http://www.youtube.com/watch?v=Bx8QtnccfZk", "title": "" }, { "docid": "76b55af2775772c8110da4c1f45acab8", "text": "Yeah, the VAT adds more fairness between who gets the taxes, but is only offset by it being more complicated and needing more bureaucracy. I think it's an interesting idea. If I were a policy analyst I'd like to see what costs are vs. benefit.", "title": "" }, { "docid": "2fd395e5610ec14ea4a6adbca57d1f7a", "text": "My understanding is that EWU (and EWUS) are both traded on US stock markets (NYSE & BATS), and as such these are not classified as PFIC. However, they do contain PFICs, so iShares takes the responsibility of handling the PFICs they contain and make adjustments in December. This contains the information about the adjustments made in 2016. https://www.ishares.com/us/literature/tax-information/pfic-2016.pdf On page 106 of the statement of the summary information they describe how they handle paying the necessary tax as an expense of the fund. https://www.ishares.com/us/library/stream-document?stream=reg&product=WEBXGBP&shareClass=NA&documentId=925898~926077~926112~1180071~1242912&iframeUrlOverride=%2Fus%2Fliterature%2Fsai%2Fsai-ishares-trust-8-31.pdf (I'm not a tax professional)", "title": "" }, { "docid": "3a7a6ec1313cb73c04f7e0e1ba797cb9", "text": "House rent allowance:7500 House Rent can be tax free to the extent [less of] Medical allowance : 800 Can be tax free, if you provide medical bills. Conveyance Allowance : 1250 Is tax free. Apart from this, if you invest in any of the tax saving instruments, i.e. Specified Fixed Deposits, NSC, PPF, EPF, Tution Fees, ELSS, Home Loan Principal etc, you can get upto Rs 150,000 deductions. Additional Rs 50,000 if you invest into NPS. If you have a home loan, upto Rs 200,000 in interest can be deducted. So essentially if you invest rightly you need not pay any tax on the current salary, apart from the Rs 200 professional tax deducted.", "title": "" }, { "docid": "82e4a219be65afcddb94527e7ceb52fb", "text": "\"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\"\"?\"", "title": "" }, { "docid": "141996ecd5b6a61868abb87b8a3326de", "text": "In my experiences most hedge funds won't have a benchmark in their mandate and are evaluated based upon absolute returns. Their benchmarks are generally cash + x basis points. So, no attribution and no IR. No experience at all with CTA's though, so not sure how things are there.", "title": "" }, { "docid": "f788ea32d519c84f38d354dad6476fe4", "text": "\"Highly Compensated Employee Rules Aim to Make 401k's Fair would be the piece that I suspect you are missing here. I remember hearing of this rule when I worked in the US and can understand why it exists. A key quote from the article: You wouldn't think the prospect of getting money from an employer would be nerve-wracking. But those jittery co-workers are highly compensated employees (HCEs) concerned that they will receive a refund of excess 401k contributions because their plan failed its discrimination test. A refund means they will owe more income tax for the current tax year. Geersk (a pseudonym), who is also an HCE, is in information services and manages the computers that process his firm's 401k plan. 401(k) - Wikipedia reference on this: To help ensure that companies extend their 401(k) plans to low-paid employees, an IRS rule limits the maximum deferral by the company's \"\"highly compensated\"\" employees, based on the average deferral by the company's non-highly compensated employees. If the less compensated employees are allowed to save more for retirement, then the executives are allowed to save more for retirement. This provision is enforced via \"\"non-discrimination testing\"\". Non-discrimination testing takes the deferral rates of \"\"highly compensated employees\"\" (HCEs) and compares them to non-highly compensated employees (NHCEs). An HCE in 2008 is defined as an employee with compensation of greater than $100,000 in 2007 or an employee that owned more than 5% of the business at any time during the year or the preceding year.[13] In addition to the $100,000 limit for determining HCEs, employers can elect to limit the top-paid group of employees to the top 20% of employees ranked by compensation.[13] That is for plans whose first day of the plan year is in calendar year 2007, we look to each employee's prior year gross compensation (also known as 'Medicare wages') and those who earned more than $100,000 are HCEs. Most testing done now in 2009 will be for the 2008 plan year and compare employees' 2007 plan year gross compensation to the $100,000 threshold for 2007 to determine who is HCE and who is a NHCE. The threshold was $110,000 in 2010 and it did not change for 2011. The average deferral percentage (ADP) of all HCEs, as a group, can be no more than 2 percentage points greater (or 125% of, whichever is more) than the NHCEs, as a group. This is known as the ADP test. When a plan fails the ADP test, it essentially has two options to come into compliance. It can have a return of excess done to the HCEs to bring their ADP to a lower, passing, level. Or it can process a \"\"qualified non-elective contribution\"\" (QNEC) to some or all of the NHCEs to raise their ADP to a passing level. The return of excess requires the plan to send a taxable distribution to the HCEs (or reclassify regular contributions as catch-up contributions subject to the annual catch-up limit for those HCEs over 50) by March 15 of the year following the failed test. A QNEC must be an immediately vested contribution. The annual contribution percentage (ACP) test is similarly performed but also includes employer matching and employee after-tax contributions. ACPs do not use the simple 2% threshold, and include other provisions which can allow the plan to \"\"shift\"\" excess passing rates from the ADP over to the ACP. A failed ACP test is likewise addressed through return of excess, or a QNEC or qualified match (QMAC). There are a number of \"\"safe harbor\"\" provisions that can allow a company to be exempted from the ADP test. This includes making a \"\"safe harbor\"\" employer contribution to employees' accounts. Safe harbor contributions can take the form of a match (generally totaling 4% of pay) or a non-elective profit sharing (totaling 3% of pay). Safe harbor 401(k) contributions must be 100% vested at all times with immediate eligibility for employees. There are other administrative requirements within the safe harbor, such as requiring the employer to notify all eligible employees of the opportunity to participate in the plan, and restricting the employer from suspending participants for any reason other than due to a hardship withdrawal.\"", "title": "" }, { "docid": "2102f925b4367dbf70ccd460f89ec49d", "text": "In the US the best way to solve the problem, IMHO, would be via a trust. Talk to a properly licensed trust/estate attorney and a tax adviser (EA/CPA licensed in your State). Using intermediary who's not a 501(c) organization may pose income tax issues to that intermediary as providing support to the needy is not a valid business expense. It may also pose gift tax issues, since the aggregate amounts may exceed the statutory exemption limits. Using a (non-revokable) trust you can avoid these issues, but others may come up (such as what to do with the trust income or undistributed moneys). Talk to the advisers about how to avoid them.", "title": "" }, { "docid": "a26f268a3b92b1128046db601adf0aeb", "text": "I believe you are talking about Public Provident Fund and National Savings Certificate schemes in India. PPF -> Deposit money -> If you want to take a loan after 3 years, you can take out 25% of the balance in your PPF account. NSC -> Money locked for 6 years and can only be encashed after 3 years, you cancel your deposit and encash all your money. Money is safe in both cases, because they are secured by the Indian government. But interest(8.75% at present for both in 2014-15 financial year) is compunded anually for PPF, but half yearly for NSC. So you get a higher interest rate in case of NSC. So if you can lock in your money, without any need for withdrawls, choose a NSC for higher returns. Tax rebate wise, both are same.", "title": "" }, { "docid": "b9e300e15d7fc0259b17bb812af02b9a", "text": "IRS Pub 561 says you have to use fair market value. You cannot simply use a depreciated value. You should attempt to determine what people normally pay for comparable items, and be prepared to defend your determination with evidence in the event of an audit.", "title": "" }, { "docid": "9c69713d90bd91bd6142580bd765e223", "text": "I would point this out to the committee or other entity in charge of handling this at work. They do have a fiduciary responsibility for the participant's money and should take anything reasonable seriously. The flip side to this is 95% of participants -- especially participants under 35 or so -- really pay next to no attention to this stuff. We consider it a victory to get people to pony up the matching contributions. Active participation in investment would blow our minds.", "title": "" }, { "docid": "0916ad38964a1bc54e7b332c0fc8eedc", "text": "If ordinary income tax rates and contribution rates to tax-advantaged retirement accounts are held constant, It's net negative to the extent that the average retirement account return exceeds the risk-free rate. Rather than pushing money into Roth accounts, the government could leave traditional 401(k)s unchanged, borrow the difference in up-front tax revenue that it's foregoing by doing so, and repay that debt as the tax revenue from traditional 401(k) disbursements comes in. Net of interest on the additional debt, the latter strategy would increase the government's total tax revenue by an amount proportional to the average excess return of the affected retirement accounts, with essentially no downside (other than messaging) relative to the strategy that's being proposed. Of course, in reality it's likely that retirement savings rates would decline as a result of the change, so that would partially offset the overall reduction in tax revenue. However, the downsides of reduced retirement savings rates arguably far outweigh that benefit. (That's why tax-advantaged retirement accounts exist in the first place.)", "title": "" }, { "docid": "0f370bf139ba17fef15ce4b63eea3f6f", "text": "Read this. https://www.irs.gov/retirement-plans/one-participant-401k-plans The example makes it very clear.", "title": "" }, { "docid": "2d7c1306a096acc1774eea91eaa277ca", "text": "Sorry, you cannot transfer EPF into PPF. The investments in PPF are limited to 150,000 per year. Withdrawal is in 7th year, i.e. After completion of 6 financial years. 50% of the Balance of 4th year can be withdrawn. 2.Withdraw the money and find a new form of investment. This is definitely possible. A lump sum investment into NPS [New Pension Scheme] or various Retirement schemes, or equity / real estate etc Is there any other 3rd solution for this situation? Keep the money AS-IS as the money will still continue to grow. The interest is stop getting accrued after 3 years of NO contribution. Within 36 months if an account will not get any deposit then it will be considered as dormant/inactive account. So you can wait for sometime before you decide to withdraw.", "title": "" }, { "docid": "a519077e8b48ef99b0d20e77a981deb0", "text": "Thank you fgunthar. I was not aware of ILWs, but I agree - this is also the closest thing I've found. As for starting a fund, I'm unfortunately nowhere near that point. But, my curiosity seems to inevitably lead me to obscure areas like ILWs.", "title": "" } ]	fiqa
7451bbdc6ec511a80dc147f8e8c1e3ce	I would like to publicly share the details of my investment portfolio. What websites add value in this regard?	[ { "docid": "4cf75cc35ece65ec6ebd8065d546b909", "text": "This is going to be a bit of a shameless plug, but I've build a portfolio tracking website to track your portfolio and be able to share it (in read-only mode) as well. It is at http://frano.carelessmusings.com and currently in beta. Most portfolio trackers are behind a login wall and thus will lack the sharing function you are looking for. Examples of these are: Yahoo Finance, Google Finance, Reuters Portfolios, MorningStart Portfolios, and many others. Another very quick and easy solution (if you are not trading too often) is a shared google docs spreadsheet. Gdocs has integration with google finance and can retrieve prices for stocks by symbol. A spreadsheet can contain the following: Symbol, Quantity, Avg. Buy Price, Price, P/L, P/L% and so on. The current price and P/L data can be functions that use the google finance API. Hope this helps, and if you check out my site please let me know what you think and what I could change.", "title": "" } ]	[ { "docid": "ef25a6623be4b8f0fea3b10714130202", "text": "Have a look at: Diversify Portfolio. The site provides various tools all focused on correlation, diversification and portfolio construction. You can scan through every stock and ETF listed on the NASDAQ and NYSE to find any kind of correlation you're looking for. You can also create a portfolio and then analyze all the correlations within it, or search for specific stocks that can be added to the portfolio based on correlation and various other factors.", "title": "" }, { "docid": "c783ef9f0ca268bb0df24e9258cb74e7", "text": "\"The list of the public companies is available on the regulatory agencies' sites usually (for example, in the US, you can look at SEC filings). Otherwise, you can check the stock exchange listings, which show all the public companies traded on that exchange. The shareholders, on the other hand, are normally not listed and not published. You'll have to ask the company, and it probably won't tell you (and won't even know them all as many shares are held in the \"\"street name\"\" of the broker).\"", "title": "" }, { "docid": "db80ee9cc1f82f76ee6adc6bc300bb4f", "text": "\"Yes, Interactive Brokers is a good source for live data feeds and they have an API which is used to programmatically access the feeds, you will have to pay for data feeds from the individual data sources though. The stock exchanges have a very high price for their data and this has stifled innovation in the financial sector for several decades in the united states. But at the same time, it has inflated the value and mystique of \"\"quants\"\" doing simple algorithms \"\"that execute within milliseconds\"\" for banks and funds. Also RIZM has live feeds, it is a younger service than other exchanges but helps people tap into any online broker's feeds and let you trade your custom algorithms that way, that is their goal.\"", "title": "" }, { "docid": "363c2829224280e5295cefae7404911e", "text": "In the US, illegal. Giving free investment advice (opinions) is really hard to get arrested for. Might lose you a friend, but nothing that would get cross-wise with the Securities and Exchange Commission. That said, I would never put those opinions in writing.", "title": "" }, { "docid": "e8050a204949864b98ceb2a99091d727", "text": "Hey Sheehan, I believe Schwab provides this info. None of the online free portfolio managers I know of gives you this info. The now defunct MS Money used to have this. The best thing to do is to use a spreadsheet. Or you could use the one I use. http://www.moneycone.com/did-you-beat-the-market-mr-investor/ . (disclaimer: that's my blog)", "title": "" }, { "docid": "42a6227caae2ab12663e34c5bcc7f38b", "text": "Check out WorldCap.org. They provide fundamental data for Hong Kong stocks in combination with an iPad app. Disclosure: I am affiliated with WorldCap.", "title": "" }, { "docid": "46651b3b3476d6ee2c361efaaa80b1bb", "text": "It's difficult to compile free information because the large providers are not yet permitted to provide bulk data downloads by their sources. As better advertising revenue arrangements that mimic youtube become more prevalent, this will assuredly change, based upon the trend. The data is available at money.msn.com. Here's an example for ASX:TSE. You can compare that to shares outstanding here. They've been improving the site incrementally over time and have recently added extensive non-US data. Non-US listings weren't available until about 5 years ago. I haven't used their screener for some years because I've built my own custom tools, but I will tell you that with a little PHP knowledge, you can build a custom screener with just a few pages of code; besides, it wouldn't surprise me if their screener has increased in power. It may have the filter you seek already conveniently prepared. Based upon the trend, one day bulk data downloads will be available much like how they are for US equities on finviz.com. To do your part to hasten that wonderful day, I recommend turning off your adblocker on money.msn and clicking on a worthy advertisement. With enough revenue, a data provider may finally be seduced into entering into better arrangements. I'd much rather prefer downloading in bulk unadulterated than maintain a custom screener. money.msn has been my go to site for mult-year financials for more than a decade. They even provide limited 10-year data which also has been expanded slowly over the years.", "title": "" }, { "docid": "6ab77689a3736559dc6bcc1147836b43", "text": "Please use the sharing tools found via the email icon at the top of articles. Copying articles to share with others is a breach of FT.com T&Cs and Copyright Policy. Email licensing@ft.com to buy additional rights. Subscribers may share up to 10 or 20 articles per month using the gift article service. More information can be found at https://www.ft.com/tour. https://www.ft.com/content/23ab8a02-5787-11e7-80b6-9bfa4c1f83d2?mhq5j=e1 By continuing to use this site you consent to the use of cookies on your device as described in our cookie policy unless you have disabled them. You can change your cookie settings at any time but parts of our site will not function correctly without them. Dismiss cookie message Accessibility helpSkip to navigationSkip to contentSkip to footer Financial Times MYFT HOME WORLD UK COMPANIES MARKETS OPINION WORK & CAREERS LIFE & ARTS Portfolio My Account HOME WORLD UK COMPANIES MARKETS OPINION WORK & CAREERS LIFE & ARTS MYFT Bank stress tests Add to myFT US banks pass first round of annual stress tests Clean bill of health from Federal Reserve opens door to increased shareholder payouts Read next Week in Review Week in Review, July 1 © AFP Share on Twitter (opens new window) Share on Facebook (opens new window) Share on LinkedIn (opens new window) Email4 Save JUNE 22, 2017 by: Alistair Gray and Ben McLannahan in New York and Barney Jopson in Washington US banks have big enough capital buffers to keep trading through an economic meltdown, regulators said on Thursday, in a finding that improves their chances of boosting payouts to shareholders. In the first round of this year’s stress tests, the Federal Reserve probed how 34 banks would fare in a financial and economic slump in which the unemployment rate doubles and the stock market loses half its value. The central bank calculated that the banking sector would endure $493bn in losses in the simulated downturn. Yet officials concluded that the banks would emerge from the crash “well capitalised”, with cushions of shareholder funding still above the Fed’s minimum required levels. The largely upbeat results augur well for US banks as the Fed prepares to unveil the results of the tests’ second round next week, when investors will learn how much capital they can return through dividends and share buybacks. However, the figures released on Thursday do not foretell what the Fed will say about payouts, not least because regulators can approve or block US banks’ capital plans on qualitative as well as quantitative grounds. Lex Bank stress tests: chilled The once-vital check on the industry’s health is outliving its usefulness UBS analysts estimate that the four biggest by assets — JPMorgan, Bank of America, Citigroup and Wells Fargo — will be able to return a net $59.8bn this year, rising to $72.3bn in 2018. Citi and Morgan Stanley could be among about a dozen banks that will make requests to return more than 100 per cent of their annual earnings to shareholders, according to Goldman Sachs analysts. Despite the positive stress test results, not all investors would be comfortable with such a bonanza. Bill Hines, a fixed-income investment manager at Aberdeen Asset Management in Philadelphia, said the prospect of payouts in excess of profits “does scare us a little bit”. “If the safety blanket is pulled away . . . that may come to the detriment of capital and safety.” Across-the-board passes for the stress-test are “a good thing,” he said, as it shows that banks have rebuilt capital levels substantially since the crisis. “But from a creditor’s standpoint you don’t want to see all the profits go out the door.” While banks have already told the Fed what they propose to do on dividends and buybacks, they are now able to make more conservative payout plans if, based on the first-round results, they think it will reject them in the second round. Related article Regulators back Trump on looser financial rules Officials endorse Volcker rule revamp and bank relief from burden of ‘stress tests’ The regulator’s simulated downturn lasts for nine quarters. Banks’ overall loan losses and declines in capital under the worst crisis scenario were smaller than in last year’s stress tests, Fed officials said. Still, the test found that some banks would come close to breaching regulatory minimums during the meltdown on some metrics. For instance, Morgan Stanley’s “supplementary leverage ratio” — a new measure of financial strength that takes effect in 2018 — would drop as low as 3.8 per cent compared with a required level of 3 per cent. The results also drew attention to banks’ exposure to credit card lending. The Fed found banks would suffer the biggest losses in their card portfolios in the hypothetical crisis. Fed officials said that partly reflected a rapid expansion in the size of banks’ credit card assets and rising delinquency rates in the real world. Copyright The Financial Times Limited 2017. All rights reserved. You may share using our article tools. Please don't copy articles from FT.com and redistribute by email or post to the web. Share on Twitter (opens new window) Share on Facebook (opens new window) Share on LinkedIn (opens new window) Email4 Save Latest on Bank stress tests Week in Review Week in Review, July 1 Fed stress tests give $1.6bn boost to Buffett Fed gives nod to ‘payout party time’ for banks Lex US banks: feeling special Premium Stress tests clear big US banks for $100bn payout Read latest Week in Review Week in Review, July 1 Latest on Bank stress tests Add to myFT Week in Review Week in Review, July 1 US banks pass test; Google, Takata, Fox and M&A also in the news Banks Fed stress tests give $1.6bn boost to Buffett Investor is one of the largest holders of US bank stocks and will reap big dividends Analysis Bank stress tests Fed gives nod to ‘payout party time’ for banks Buybacks and dividends set to soar after industry passes latest stress test Latest in Banks Add to myFT Central Banks BoE successfully tests new payment method ‘Interledger’ programme synchronises transactions between two central banks 3 HOURS AGO US banks US consumers set to be given power to sue banks Financial institutions express fury at CFPB proposal that could spur class actions UK banks BoE warns UK banks on accounting practices PRA chief Sam Woods says lenders should ‘expect questions’ on balance sheet trickery Follow the topics mentioned in this article JPMorgan Chase & Co. Add to myFT Companies Add to myFT Banks Add to myFT Wells Fargo Add to myFT Citigroup, Inc. Add to myFT Follow the authors of this article Barney Jopson Add to myFT Alistair Gray Add to myFT Take a tour of myFT Support View Site Tips Feedback Help Centre About Us Accessibility Legal & Privacy Terms & Conditions Privacy Cookies Copyright Slavery Statement Services FT Live Share News Tips Securely Individual Subscriptions Group Subscriptions Republishing Contracts & Tenders Analysts Research Executive Job Search Advertise with the FT Follow the FT on Twitter Ebooks UK Secondary Schools Tools Portfolio Today's Newspaper (ePaper) Alerts Hub Lexicon MBA Rankings Economic Calendar News feed Newsletters Currency Converter More from the FT Group Markets data delayed by at least 15 minutes. © THE FINANCIAL TIMES LTD 2017. FT and ‘Financial Times’ are trademarks of The Financial Times Ltd. The Financial Times and its journalism are subject to a self-regulation regime under the FT Editorial Code of Practice. CloseFinancial Times UK Edition Switch to International Edition Top sections Home World Show more World links UK Show more UK links Companies Show more Companies links Markets Show more Markets links Opinion Show more Opinion links Work & Careers Show more Work & Careers links Life & Arts Show more Life & Arts links Personal Finance Show more Personal Finance links Science Special Reports FT recommends Lex Alphaville EM Squared Lunch with the FT Video Podcasts Blogs News feed Newsletters myFT Portfolio Today's Newspaper (ePaper) Crossword Help Centre My Account Sign Out", "title": "" }, { "docid": "e853758f05e570fe21d8ba61816753d6", "text": "Yes, there are plenty of sites that will do this for you. Yahoo, and MarketWatch are a few that come to mind first. I'm sure you could find plenty of others.", "title": "" }, { "docid": "709ae6352aeb35795ce0ef2387bba088", "text": "As a solo-investor I'm not sure how I'd prove that. Showing statements? Sorry, not out of privacy but out of embarrassment. I've made quite a few mistake of investing in companies against market sentiment that proved to be god awful right, and god awful wrong for me. I'm hoping for a helluva rebound in the 10's", "title": "" }, { "docid": "61231aff72e9c22612339590683fd1d6", "text": "Google 'information ratio'. It is better suited to what you want than the Sharpe or Sortino ratios because it only evaluates the excess return you get from your investment, ie. return from your investment minus the return from a benchmark investment. The benchmark here could be an index like the S&P500.", "title": "" }, { "docid": "80cd38443246f7d211761deb6020b2fc", "text": "\"I've just recently launched an open source wealth management platform - wealthbot.io ... \"\"Webo\"\" is mostly targeted at RIA's to help the manage multiple portfolios, etc. Take a look at the demo at demo.wealthbot.io, you'll also find links to github, etc. there. It's a rather involved project, but if you are looking for use cases of rebalancing, portfolio accounting, custodian integration, tax loss harvesting, and many other features available at some of the popular robo-advisors, you might find it interesting.\"", "title": "" }, { "docid": "4ea38d521dc9ddf679ca1260bc44b9d4", "text": "You mean sites like prosper.com? I see that they are growing but is this really substainable when the novely wears off? Also I find the low volatility claim interesting since I thought low vol portfolios would be a hard sell. How have you experienced this?", "title": "" }, { "docid": "364a2c6a6b09a7ef1e8b5460a85ef642", "text": "The recommended way to track TSP funds in online portfolio tools is to track the underlying index and know that the results are pretty close. Not a perfect solution: :( Source including suggested ETFs: http://finance.yahoo.com/news/breaking-down-tsp-investment-funds-194600393.html Related, but not exactly what you are looking for, Personal Capital will track your TSP holdings: http://themilitarywallet.com/manage-thrift-savings-plan/", "title": "" }, { "docid": "21ad8c178fcaf9a290e700ecbcbab79c", "text": "I have no idea if Wikivest can handle options, but I've been pretty satisfied with it as a portfolio visualization tool. It links automatically with many brokerage accounts, and has breakdowns by both portfolio and individual investment levels.", "title": "" } ]	fiqa
f160962c75c7bea395abcef6f549a8a4	At what damage amount should I pursue a homeowner's insurance claim?	[ { "docid": "8a17df624ad765d012a1cb5b21b929ef", "text": "Some builders -- if given the first chance to deal with the problem, instead of being presented with a bill after the fact -- will fix the problem at no charge to the homeowner. Good faith matters. My house was built by such a builder. If I have a problem that I am competent enough to diagnose and fix, I fix it myself, at my cost. If I have a problem that that I cannot diagnose and fix myself, but that I think the builder (or his subcontractor) is competent enough to diagnose and/or fix, I contact the builder (or subcontractor directly). I am willing to pay for the diagnosis and/or fix, especially if it is an aging or wear-and-tear issue, or the logical consequence of a cost-saving measure that I voluntarily chose when the house was being designed. If the problem is a plumbing problem, I contact my preferred plumber for a diagnosis and/or repair. I pay for my preferred plumber's work. On two occasions, my preferred plumber was unable to fix the problem. Both problems turned out to be installation (or testing) errors related to work done specifically for building inspections. In both cases, I paid for my preferred plumber's diagnosis, and the builder (and/or his subcontractor) fixed the problem at no additional cost to me. The diagnosis and repair work that you describe seems like a similar situation to me. (In fact, I had my builder's subcontractor replace a few prematurely damaged shingles on my roof. This repair prevented a roof leak. I noticed the problem while trimming a tree back from the roof. The shingles were damaged because the building permit implied that the tree could not be trimmed back. I'm spotting a pattern with these problems…) In my opinion, the alleged problem with the roof pitch seems like a design flaw that should have been obvious at the time you chose the house design. I expect that any corrections of this design flaw will need to come out of your remodelling budget. In the absence of further details, I doubt that either the builder or the homeowners' insurance company is responsible for it. Some builders make a point of minimizing the warranty work they pay for, regardless of its effect on the builder's reputation. I do not know which kind of builder you have. The lawyer has probably told you whether the relevant statutes of limitations have lapsed. (The statutes of limitations vary from state-to-state, and vary depending on the alleged tort.) Starting a lawsuit is likely to further damage your relationship with your builder. Homeowners' insurance companies now share the number of claims that have been made historically at each property address. Most insurance companies now use this cumulative number of claims when setting rates, even if the claim(s) were made against a different insurance company, or by a different homeowner. I do not know whether any insurance companies ignore claims older than a certain number of years, or ignore the first claim.", "title": "" } ]	[ { "docid": "59b95e58c37fdc1cfd69882241584d5b", "text": "The key question is whether this number includes taxes and insurance. When you get a mortgage in the U.S., the bank wants to be sure that you are paying your property taxes and that you have homeowners insurance. The mortgage is guaranteed by a lien on the house -- if you don't pay, the bank can take your house -- and the bank doesn't want to find out that your house burned down and you didn't bother to get insurance so now they have nothing. So for most mortgages, the bank collects money from the borrower for the taxes and insurance, and then they pay these things. This can also be convenient for the borrower as you are then paying a fixed amount every month rather than being hit with sizeable tax and insurance bills two or three times a year. So to run the numbers: As others point out, mortgage rates in the US today are running 3% to 4%. I just found something that said the average rate today is 3.6%. At that rate, your actual mortgage payment should be about $1,364. Say $1,400 as we're taking approximate numbers. So if the $2,000 per month does NOT include taxes and insurance, it's a bad deal. If it does, then not so bad. You don't say where you live. But in my home town, property taxes on a $300,000 house would be about $4,500 per year. Insurance is probably another $1000 a year. And if you have to get PMI, add another 1/2% to 3/4%, or $1500 to $2250 per year. Add those up and divide by 12 and you get about $600. Note my numbers here are all highly approximate, will vary widely depending on where the house is, so this is just a general ballpark. $1400 + $600 = $2000, just what you were quoted. So if the number is PITI -- principle, interest, taxes, and insurance -- it's about what I'd expect.", "title": "" }, { "docid": "4343d69b98c82e18a62d67a5bf7d42d0", "text": "This shows the impact of the inquiries. It's from Credit Karma, and reflects my inquiries over the past two years. In my case, I refinanced 2 properties and the hit is after this fact, so my score at 766 is lower than when approved. You can go to Credit Karma and see how your score was impacted. If in fact the first inquiry did this, you have cause for action. In court, you get more attention by having sufficient specific data to support your claim, including your exact damages.", "title": "" }, { "docid": "f000814393145523bb955e8c305cd035", "text": "\"I've never heard of rent quoted per week. Are you in the US? In general, after the down payment, one would hope to take the rent, and be able to pay the mortgage, tax, insurance, and then have enough left each year to at least have a bit of emergency money for repairs. If one can start by actually pocketing more than this each year, that's ideal, but to start with a rental, and only make money \"\"after taxes\"\" is cutting it too close in my opinion. The 19 to 1 \"\"P/E\"\" appears too high, when I followed such things I recall 12 or under being the target. Of course rates were higher, and that number rises with very low rates. In your example, a $320K mortgage at 4% is $1527/mo. $400/wk does not cut it.\"", "title": "" }, { "docid": "619411647736891896ac3c26e0bed10c", "text": "\"This article has a section titled \"\"Do you need an umbrella policy to cover your personal liability risks?\"\" that says: If you have young children, for example, you might need a policy because they have lots of friends. These little tikes might get into some mischief and hurt themselves at your home. If so, you’re at risk of being sued. Do you have people over often? Do you drive like a maniac or a Parisian? Do you have firearms on your premises? Do you have gardeners and housekeepers on the grounds? All these are reasons why you might want to own an umbrella policy. Although many people in the US are homeowners, parents, drivers, etc., not everyone falls into these categories. For some people, as low as the premiums for such a policy might be, the expected cost outweighs the expected benefit. The cost of a lawsuit may be extremely high, but someone may feel that the chance of a lawsuit being filed against them is low enough to be safely ignored and not worth insuring against. I'm probably not a great example, but I'll use my own situation anyway. Even though a liability policy probably wouldn't cost me too much, I'm almost certain that I wouldn't derive any benefit from it. I live alone without children (or firearms, pet tigers, gardeners, etc.) in a 520 sq. ft. apartment, so the probability that something bad would happen to someone on the small bit of property that I rent and that they would file a sizable lawsuit against me is small enough that I choose to ignore it.\"", "title": "" }, { "docid": "e693ba7ba545591de418e7572e360c4b", "text": "There are several aspects to this but at a high level it boils down to A lot goes in to insurance rating and risk projecting. You can't adjust a single variable and expect a proportional change in your premium, 7,000 miles per year just won't be 70% of the cost of 10,000 miles per year, because there are a lot of other things in play as well. To further address premium adjustments. Consider this: Even if your liability coverage did scale with perfect correlation to your mileage (using the same 70% from above, 7,000 miles per year versus 10,000 miles per year) then your premium composition is: $200 to $170 is 15%. No change will have a direct linear correlation to your total premium because there are different component pieces of the total premium. Fixed costs may be built in to the amounts for other component pieces of the premium, for example maybe no line of coverage ever has a cost below $X. Obviously these numbers are all made up Additionally, and also less considered is the fact that your liability also scales because of a lot of factors that have nothing to do with you. It might be the other cars that are on the road, it might be that more densely populated areas have more fender benders. For example if you live in Beverly Hills you have a much higher likelihood of accidentally bumping a $70-$80-$90-$100k+ car than you do in say, rural Wisconsin. If your zip code is gentrifying and everyone starts buying Mercedes, your liability coverage increases. You can not adjust one single variable and decide that you are lower risk than all insurers think you are. If you shop this coverage and all insurers are within a nominal margin of pricing for the same coverage levels, there isn't much to argue with; you are simply riskier than you think you are and the variable you are focused on is not as meaningful as you think it is.", "title": "" }, { "docid": "be816d3b043c56037b73e0fd3e97e7a6", "text": "There are two scenarios that I see. You have a mortgage on the property. Generally the insurance company sends the funds to the lender, who then releases the funds to you as you make the repairs. They do it this way because if you never make the repairs the value of the collateral is decreased, and the lender wants to protect their investment. There is no mortgage. You will get the funds directly, and the insurance company will not force you to make the repairs especially if the repairs are cosmetic in nature. In either case if you don't fix the cause of the leak, and make repairs to the site around the leak, you will run into a problem in the future if the leak continues, or the rot and mold continues to spread. If you file a future claim they are likely to ask for proof of the original repair. If you didn't make it, they are likely to deny the second claim. They will say the cause is the original incident and if you had made the repair, the second incident wouldn't have happened. They are likely to drop you at that point. If you try to sell the house you will have to disclose the original leak, and the potential buyers will want you to make the repairs. Any mold or rot spotted by the home inspector will be a big issue for them. It is also likely to be an item that they will be advised to demand that you get a legitimate company to make the repair before the deal can move forward, and won't negotiate a lower price or a credit for $x so they can get the repair done. Some will just cancel the deal based on the inspection report.", "title": "" }, { "docid": "ec14b01f26939b3b715582b7563c1223", "text": "\"You're asking for opinions here, because it's a matter of how you look at it. I'll give it a shot anyway. For insurance purposes - there's a clear answer: you insure based on how much it would cost you to replace it. For some reason, you're considering as a possibility negotiating with the insurance company about that, but I've never heard of insuring something at a \"\"possible sales value\"\" unless you're talking about a one of a kind thing, or a particularly valuable artifact: art, jewelry, etc. That it would be appraised and insured based on the appraised value. Besides, most of the stuff usually loses value once you bought it, not gains, so insuring per replacement costs makes more sense because it costs more. As to your estimations of your own net worth to yourself - its up to you. I would say that something only worth what people would pay for it. So if you have a car that you just bought brand new, replacing it would cost you $X, but you can only sell it for $X-10%, because it depreciated by at least 10% once you've driven it off the dealer's lot. So I would estimate your worth as $X-10% based on the car, not $X, because although you spent $X on it - you can never recover it if you sell it, so you can't claim to have it as your \"\"net worth\"\".\"", "title": "" }, { "docid": "04bc805196ec9d5c53756e8d38c4f3a9", "text": "\"Your best option right now is to get a lawyer, file suit against your insurance for the full amount (total shown on the collections from the provider, without discounts) plus \"\"damages\"\". Include in the damages the cost of your lawyer, time spent resolving this, and any other expenses you have incurred thus far in dealing with this. Your lawyer will be able to give you guidance here. I think you'll find that the insurance company changes their tune once they are served papers.\"", "title": "" }, { "docid": "0d6d46e206cf7311f37569578369175a", "text": "Be prepared to drive another 500 km to prove your claim. If you file your claims, normally you should claim interest at the bank rate on savings bank accounts. However, in most such situations, the rate is specified in the law. If not, your claim will not be entertained in a normal way. You may to file a suit for recovery of interest. Keep us posted on your progress.", "title": "" }, { "docid": "584d4fc1a1307f5a2858d74f936892f4", "text": "And he has to pay for it every home repair and every month the property sets empty. His loss each month is not $250, but probably closer to $500. In generally you need to clear at least $200 ABOVE PTI (principle, taxes and interest) to cover repair and the like to property. From your post, it sounds like your dad was forced into the land-lord business by the recession. Unless he plans to hold the property until its rental value has increased by $500 a month, he should consider selling it and writing-off the loss. Losing money bit by bit on a house isn't a tax write-off event. Selling a property for less than you bought it for generally is. FYI, I got the $500/month loss by assuming that repairs/emptiness/etc will cost you about $200 a month, and added $50 for your dad's time managing the property.", "title": "" }, { "docid": "9898784d2a734bcb80dcf5e954f19d2c", "text": "\"I decline politely. The cost of the insurance policy has two components: The actual cost of a likely repair + profit. If I set aside the cost of a likely repair myself, then I get to keep the profit. If the item doesn't break, I get to keep the \"\"repair\"\" money too :)\"", "title": "" }, { "docid": "9af55094839c6d10fccdf320dad52f9c", "text": "Another vote for a bigger downpayment, for the reasons Benjamin mentions. Also, from experience, I would save up at least a small pile as a separate house emergency fund because you will find things that are wrong and/or that got bodged by the previous owner and it's probably not going to last past the first few months of home ownership. In my case, the home inspector missed - amongst other things - that the shower on the 2nd floor was leaking both into the adjoining bedroom and the living room below. That added a little unexpected expenditure as you might guess.", "title": "" }, { "docid": "cf81a4ba6b9b12171f818ca09c08f24a", "text": "Yes. As a general case, insurance proceeds are repaying you for the damage that you have already incurred, not specifically for fixing anything. Since you have the legal right to sell the house as-is, without fixing it up at all, then you have the legal right to spend the insurance proceeds how you see fit. You can upgrade, downgrade, alter or replace your deck in any reasonable way... or do nothing. You should call your agent and make sure that there is nothing unusual in your policy, but this kind of homeowner decision - what materials or methods to fix damage to a home... is very normal and unremarkable, so your agent will probably reassure you and end the conversation without a second's thought.", "title": "" }, { "docid": "af52cfcb915053566f367e38d37bb78e", "text": "I believe your statement is mostly correct: ...all the expert recommendations are based on an inflexible conventional wisdom that presumes that all renters are relatively resource-poor. When you purchase a $50 electronic item at the store and are offered an extended warranty for $3, most people turn it down, not only because they don't think it's worth it, but also because in the event that the item fails between say years 1 and 3, they don't worry enough about that $50 to care if they have to buy a new one, or live without it. The percentage of your net worth also matters. For example, if you had an entire loss tomorrow, you'd be out $20K if you needed to re-purchase your possessions. (30K minus 10K in current coverage.) $20K is approximately 1/44 or 2.3% of your net worth. If a catastrophe occurs and you only lose 2.3% of your net worth, some might consider that lucky, so from that point of view it isn't really a big deal. But on the flip side, if the extra insurance only costs you $50 more per year, you may not even notice that dent in your net worth either. I think for most people, the value of items in their home may be their net worth, or at least a much larger percentage of it, in which case the insurance makes more sense. For someone in your position, it probably doesn't make much difference either way. If you had $300K in valuables in your house, perhaps your point of view would be different.", "title": "" }, { "docid": "c0b00a2a18d414c339b276f55666b579", "text": "Ben Miller offers you sounds advice. However, if it comes down to it I would reach out to a lawyer to negotiate this for you. If what you are presenting is true then you could easily sue them for the damages incurred. I have been in a similar situation and unfortunately using the lawyers is what was required to get the solution resolved. Based on my previous experience a simple letter from a local lawyer office would get this dropped pretty quick and should cost you around $150. Best of luck!", "title": "" } ]	fiqa
8194a78bf1b4ca28d1399cb3a7737172	Good way to record currency conversion transactions in personal accounting software?	[ { "docid": "8568a818f3a0c4a7473017be99a53d48", "text": "\"I found an answer by Peter Selinger, in two articles, Tutorial on multiple currency accounting (June 2005, Jan 2011) and the accompanying Multiple currency accounting in GnuCash (June 2005, Feb 2007). Selinger embraces the currency neutrality I'm after. His method uses \"\"[a]n account that is denominated as a difference of multiple currencies... known as a currency trading account.\"\" Currency trading accounts show the gain or loss based on exchange rates at any moment. Apparently GnuCash 2.3.9 added support for multi-currency accounting. I haven't tried this myself. This feature is not enabled by default, and must be turned on explicity. To do so, check \"\"Use Trading Accounts\"\" under File -> Properties -> Accounts. This must be done on a per-file basis. Thanks to Mike Alexander, who implemented this feature in 2007, and worked for over 3 years to convince the GnuCash developers to include it. Older versions of GnuCash, such as 1.8.11, apparently had a feature called \"\"Currency Trading Accounts\"\", but they behaved differently than Selinger's method.\"", "title": "" }, { "docid": "ca5d202b93c164af5f61d58a5cd0aa01", "text": "Here's what the GnuCash documentation, 10.5 Tracking Currency Investments (How-To) has to say about bookkeeping for currency exchanges. Essentially, treat all currency conversions in a similar way to investment transactions. In addition to asset accounts to represent holdings in Currency A and Currency B, have an foreign exchange expenses account and a capital gains/losses account (for each currency, I would imagine). Represent each foreign exchange purchase as a three-way split: source currency debit, foreign exchange fee debit, and destination currency credit. Represent each foreign exchange sale as a five-way split: in addition to the receiving currency asset and the exchange fee expense, list the transaction profit in a capital gains account and have two splits against the asset account of the transaction being sold. My problems with this are: I don't know how the profit on a currency sale is calculated (since the amount need not be related to any counterpart currency purchase), and it seems asymmetrical. I'd welcome an answer that clarifies what the GnuCash documentation is trying to say in section 10.5.", "title": "" } ]	[ { "docid": "ea5c5652e7b5488b676fca707598ad9b", "text": "This started as a comment but then really go too long so I am posting an answer: @yarun, I am also using GnuCash just like you as a non-accountant. But I think it really pays off to get to know more about accounting via GnuCash; it is so useful and you learn a lot about this hundreds of years old double entry system that all accountants know. So start learning about 5 main accounts and debits and credits, imho. It is far easier than one can think. Now the answer: even without balancing amounts exactly program is very useful as you still can track your monthly outgoings very well. Just make/adjust some reports and save their configurations (so you can re-run quickly when new data comes in) after you have classified your transactions properly. If I still did not know what some transactions were (happens a lot at first import) - I just put them under Expenses:Unaccounted Expenses - thus you will be able to see how much money went who knows where. If later you learn what those transactions were - you still can move them to the right account and you will be pleased that your reports show less unaccounted money. How many transactions to import at first - for me half a year or a year is quite enough; once you start tracking regularly you accumulate more date and this becomes a non-issue. Reflecting that personal finance is more about behaviour than maths and that it is more for the future where your overview of money is useful. Gnucash wil learn from import to import what transactions go where - so you could import say 1 or 3 month intervals to start with instead of a while year. No matter what - I still glance at every transaction on import and still sometimes petrol expense lands in grocery (because of the same seller). But to spot things like that you use reports and if one month is abnormal you can drill down to transactions and learn/correct things. Note that reports are easy to modify and you can save the report configurations with names you can remember. They are saved on the machine you do the accounting - not within the gnucash file. So if you open the file (or mysql database) on another computer you will miss your custom reports. You can transfer them, but it is a bit fiddly. Hence it makes sense to use gnucash on your laptop as that you probably will have around most often. Once you start entering transactions into GnuCash on the day or the week you incur the expense, you are getting more control and it is perhaps then you would need the balance to match the bank's balance. Then you can adjust the Equity:Opening Balances to manipulate the starting sums so that current balances match those of your bank. This is easy. When you have entered transactions proactively (on the day or the week) and then later do an import from bank statement the transactions are matched automatically and then they are said to be reconciled (i.e. your manual entry gets matched by the entry from your statement.) So for beginning it is something like that. If any questions, feel free to ask. IMHO this is a process rather a one-off thing; I began once - got bored, but started again and now I find it immensely useful.", "title": "" }, { "docid": "c7eaa130ef48b436d0261060eaf23c20", "text": "If you're audited routinely you probably have an accountant to get this straight. It's not something that I would be too worried about as it is purely journal-entry issue, there's no problem with the actual money. Mistakes happen. I'd suggest converting the currency, taking loss/gain on the conversion as a capital loss/gain, and credit the correct currency to the correct account. If GnuCash causes problems - just record it in the EUR equivalent, putting in notes the actual SGD value. Note that I'm not an accountant and this is not a professional advice.", "title": "" }, { "docid": "7aed4fdea82e42dc1c111d0e275f97b8", "text": "I’m going to answer this because: Accounting books only reflect the dollar value of inventories. Which means if you look at the balance sheet of McDonalds, you will not see how many bags of French fries are remaining at their storage facility, you will only see the total value at cost basis. Your requirement for noting the number of shares purchased is not part of the double entry accounting system. When you transfer $10000 from bank to broker, the entries would be: The bank’s name and the broker’s name will not appear on the balance sheet. When you purchase 50 shares at $40 per share, the accounting system does not care about the number of shares or the price. All it cares is the $2000 total cost and the commission of $10. You have two choices, either place $10 to an expense account, or incorporate it into the total cost (making it $2010). The entries for the second method would be: Now your balance sheet would reflect: What happens if the price increases from $40 per share to $50 per share tomorrow? Do nothing. Your balance sheet will show the cost of $2010 until the shares are sold or the accounting period ends. It will not show the market value of $2500. Instead, the Portfolio Tracker would show $2500. The most basic tracker is https://www.google.com/finance/portfolio . Later if you finally sell the shares at $50 per share with $10 commission: Again, the number of shares will not be reflected anywhere in the accounting system. Only the total proceeds from the sale matters.", "title": "" }, { "docid": "77d21de280c5002caced348149bc390e", "text": "\"QUICK ANSWER What @Mike Haskel wrote is generally correct that the indirect method for cash flow statement reporting, which most US companies use, can sometimes produce different results that don't clearly reconcile with balance sheet shifts. With regards to accounts receivables, this is especially so when there is a major increase or decrease in the company's allowances for doubtful accounts. In this case, there is more to the company's balance sheet and cash flow statements differences per its accounts receivables than its allowances for doubtful accounts seems responsible for. As explained below, the difference, $1.25bn, is likely owing more to currency shifts and how they are accounted for than to other factors. = = = = = = = = = = DIRTY DETAILS Microsoft Corp. generally sells to high-quality / high-credit buyers; mostly PC, server and other devices manufacturers and licensees. It hence made doubtful accounts provisions of $16mn for its $86,833mn (0.018%) of 2014 sales and wrote off $51mn of its carrying balance during the year. Its accounting for \"\"Other comprehensive income\"\" captures the primary differences of many accounts; specifically in this case, the \"\"foreign currency translation\"\" figure that comprises many balance sheet accounts and net out against shareholders' equity (i.e. those assets and liabilities bypass the income statement). The footnotes include this explanation: Assets and liabilities recorded in foreign currencies are translated at the exchange rate on the balance sheet date. Revenue and expenses are translated at average rates of exchange prevailing during the year. Translation adjustments resulting from this process are recorded to other comprehensive income (“OCI”) What all this means is that those two balance sheet figures are computed by translating all the accounts with foreign currency balances (in this case, accounts receivables) into the reporting currency, US dollars (USD), at the date of the balance sheets, June 30 of the years 2013 and 2014. The change in accounts receivables cash flow figure is computed by first determining the average exchange rates for all the currencies it uses to conduct business and applying them respectively to the changes in each non-USD accounts receivables during the periods. For this reason, almost all multinational companies that report using indirect cash flow statements will have discrepancies between the changes in their reported working capital changes during a period and the dates of their balance sheet and it's usually because of currency shifts during the period.\"", "title": "" }, { "docid": "97793b3a30e5346c88a4c290d48d8e81", "text": "\"That's Imbalance-USD (or whatever your default currency is). This is the default \"\"uncategorized\"\" account. My question is, is it possible to get the \"\"unbalanced\"\" account to zero and eliminate it? Yes, it's possible to get this down to zero, and in fact desirable. Any transactions in there should be reviewed and fixed. You can delete it once you've emptied it, but it will be recreated the next time an unbalanced transaction is entered. Ideally, I figure it should autohide unless there's something in it, but it's a minor annoyance. Presumably you've imported a lot of data into what's known as a transaction account like checking, and it's all going to Imbalance, because it's double entry and it has to go somewhere. Open up the checking account and you'll see they're all going to Imbalance. You'll need to start creating expense, liability and income accounts to direct these into. Once you've got your history all classified, data entry will be easier. Autocomplete will suggest transactions, and online transaction pull will try to guess which account a given transaction should match with based on that data.\"", "title": "" }, { "docid": "668cecf9dd78bc8eeb8ac981a1655342", "text": "Take a look at http://en.wikipedia.org/wiki/Comparison_of_accounting_software, in particular the rows with a market focus of 'personal'. This is probably one of the more complete lists available, and shows if they are web-based (like Mint) or standalone (like Quicken or Microsoft Money).", "title": "" }, { "docid": "c1f72824ef2b3072f154a0d2fa565ef4", "text": "Depending on what software you use. It has to be reported as a foreign income and you can claim foreign tax paid as a foreign tax credit.", "title": "" }, { "docid": "db751b9cc469f547550a323044b23d8e", "text": "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.", "title": "" }, { "docid": "93651496bbc8ad51ee18fb100f61dfbc", "text": "I used to use Quicken, but support for that has been suspended in the UK. I had started using Mvelopes, but support for that was suspended as well! What I use now is an IPhone app called IXpenseit to track my spending.", "title": "" }, { "docid": "b5ac2c4ff3c5d1c545838bec51ac3bb8", "text": "\"Other responses have focused on getting you software to use, but I'd like to attempt your literal question: how are such transactions managed in systems that handle them? I will answer for \"\"double entry\"\" bookkeeping software such as Quicken or GnuCash (my choice). (Disclaimer: I Am Not An Accountant and accountants will probably find error in my terminology.) Your credit card is a liability to you, and is tracked using a liability account (as opposed to an asset account, such as your bank accounts or cash in your pocket). A liability account is just like an asset except that it is subtracted from rather than added to your total assets (or, from another perspective, its balance is normally negative; the mathematics works out identically). When you make a purchase using your credit card, the transaction you record transfers money from the liability account (increasing the liability) to the expense account for your classification of the expense. When you make a payment on your credit card, the transaction you record transfers money from your checking account (for example) to the credit card account, reducing the liability. Whatever software you choose for tracking your money, I strongly recommend choosing something that is sufficiently powerful to handle representing this as I have described (transfers between accounts as the normal mode of operation, not simply lone increases/decreases of asset accounts).\"", "title": "" }, { "docid": "1f08ad36b6bbbb7fc99e5aa9a06f0376", "text": "\"I'm no accountant, but I think the way I'd want to approach this kind of thing in Gnucash would be to track it as an Asset, since it is. It sounds like your actual concern is that your tracked asset value isn't reflecting its current \"\"market\"\" value. Presumably because it's risky it's also illiquid, so you're not sure how much value it should have on your books. Your approach suggested here of having it as just as expense gives it a 0 value as an asset, but without tracking that there's something that you own. The two main approaches to tracking an investment in Gnucash are: Of course, both of these approaches do assume that you have some notion of your investment's \"\"current value\"\", which is what you're tracking. As the section on Estimating Valuation of the concepts guide says of valuing illiquid assets, \"\"There is no hard rule on this, and in fact different accountants may prefer to do this differently.\"\" If you really think that the investment isn't worth anything at the moment, then I suppose you should track it at 0, but presumably you think it's worth something or you wouldn't have bought it, right? Even if it's just for your personal records, part of a regular (maybe annual?) review of your investments should include coming up with what you currently value that investment at (perhaps your best guess of what you could sell it for, assuming that you could find a willing buyer), and updating your records accordingly. Of course, if you need a valuation for a bank or for tax purposes or the like, they have more specific rules about how they are tracking what things are worth, but presumably you're trying to track your personal assets for your own reasons to get a handle on what you currently own. So, do that! Take the time to get a handle on the worth of what you currently own. And don't worry about getting the value wrong, just take your best guess, since you can always update it later when you learn new information about what your investment is worth.\"", "title": "" }, { "docid": "5fc6ec273abd1bf196aef714bfe04e1d", "text": "A pencil and a small notepad really work here, but if you have a smartphone then some way of using it makes sense as well. Try: Transcribe all of these onto a better record at the end of each day. Also record the amount of money in your wallet/purse/pocket every day, and check to see if the amounts you've recorded add up to the amount you've spent. It'll be easier to remember that newspaper you bought at the end of the day, rather than a week later. Or just record the difference as 'miscellaneous'.", "title": "" }, { "docid": "0c509b1b72a4cbf876193786938eb9a1", "text": "Use one journal entry, and split the expenses into the appropriate accounts. This can happen even if you never mix business and personal on the same receipt: say you order office supplies (which where I live are immediately deductible as an expense) and software or hardware (which must be depreciated because they are assets) on the same order. We have an account called Proprietors Loan which represents money the company is lending to the humans who own it, or that the humans are lending to the company. Were I to pay for my personal lunch on a business credit card, it would go through that account, increasing the amount the company has lent me or decreasing the amount I have lent it. Similarly if I made a business purchase with a personal card it would go through that account in the other direction. Where I live, I can lend my company all the money I want any time, but if the company lends me money there can't be an outstanding balance over the corporate year end. If you make two credit card entries of 5 and 10 when you go to reconcile your accounts it will be harder because you'll have to realize they together match the single 15 line on your statement. Making a single entry (your A option) will make reconciling your statement much easier. And that way, you'll probably reconcile your statements, which is vital to knowing you actually recorded everything.", "title": "" }, { "docid": "ccde069c7755ed62ee56a93b5a2fb5fd", "text": "I would suggest that you try ClearCheckbook. It is kind of like Mint, but you can add and remove things (graphs, features, modules) to make it as simple or diverse as you need it to be. It should be a workable solution for simply tracking both income and expenses, yet it will also provide extra features as needed. There is a free option as well as a paid option with added features. I have not used ClearCheckbook before, but according to their features page it looks like you may have to upgrade to the paid option if you want to have complete tagging/custom field flexibility.", "title": "" }, { "docid": "ed34d0cc8acae6af2b075ae12dcce9de", "text": "I agree with all of the answers, but knowing the amount of money saved will give new ideas to use this money to help develope new concepts that will help humanity.", "title": "" } ]	fiqa
f0612cfaf8cfbafca476ba51d1d42915	Should I use a TSP loan?	[ { "docid": "a18872eb383c3f4a1921c01e55538b4c", "text": "\"I don't have experience with TSP in particular, but they look to be roughly the same as 401(k) loans. If the \"\"G Fund rate\"\" is equal to the yield of government bonds, then your main risk is the risk that yields increase, which means the interest you're paying is less than what you would have earned on the investments. Here are some other things to consider: For any car loan, I would borrow as little as possible with as short a term as possible. To me, the interest savings and additional risks from borrowing from your retirement isn't worth it.\"", "title": "" }, { "docid": "1b18ebf162c506027217e7bf9b98aa95", "text": "Never borrow money to purchase a depreciating asset. Especially don't borrow money that has penalties attached.", "title": "" } ]	[ { "docid": "6216c82a3e886b3a0bbedc9202cbea4a", "text": "\"I experimented with Lending Club, lending a small amount of money in early 2008. (Nice timing right - the recession was December 2007 to June 2009.) I have a few loans still outstanding, but most have prepaid or defaulted by now. I did not reinvest as payments came in. Based on my experience, one \"\"catch\"\" is lack of liquidity. It's like buying individual bonds rather than a mutual fund. Your money is NOT just tied up for the 3-year loan term, because to get good returns you have to keep reinvesting as people pay off their loans. So you always have some just-reinvested money with the full 3 year term left, and that's how long it would take to get all your money back out. You can't just cash out when you feel like it. They have a trading platform (which I did not try out) if you want your money sooner, but I would guess the spreads are wide and you have to take a hit when you sell loans. Again though I did not try the trading platform. On the upside, the yields did seem fine. I got 19 eventual defaults from 81 loans, but many of the borrowers made a number of payments before defaulting so only part of the money was lost. The lower credit ratings default more often obviously, only one of 19 defaults had the top credit score. (I tried investing across a range of credit ratings.) The interest rates appear to cover the risk of default, at least on average. You can of course have varying luck. I made only a slight profit over the 3 years, but I did not reinvest after the first couple months, and it was during a recession. So the claimed yields look plausible to me if you reinvest. They do get people's credit scores, report nonpayment on people's credit reports, and even send people to collections. Seems like borrowers have a reason to pay the bill. In 2008 I think this was a difference compared to the other peer lending sites, but I don't know if that's still true. Anyway, for what it's worth the site seemed to work fine and \"\"as advertised\"\" for me. I probably will not invest more money there for a couple reasons: However as best I could tell from my experiment, it is a perfectly reasonable place to put a portion of your portfolio you might otherwise invest in something like high-yield bonds or some other sub-investment-grade fixed income. Update: here's a useful NY Times article: http://www.nytimes.com/2011/02/05/your-money/05money.html\"", "title": "" }, { "docid": "4e6b3c3d49316238ac8a589d1dd171d9", "text": "\"The problem here can be boiled down to that fact you are attempting to obtain a loan without collateral. There are times it can be done, but you have to have a really good relationship with a banker. Your question suggests that avenue has been exhausted. You are looking for an investor, but you are offering something very speculative. Suppose an investor gives you 20K, what recourse does he have if you do not pay the terms of the loan? From what income will this be paid from? What event will trigger the capability to make a balloon payment? Now if you can find a really handy guy that really needs a place to live could you swap rent for repairs? Maybe. Perhaps you buy the materials, and he does the roof in exchange for 6 months worth of rent or whatever. If you approached me with this \"\"investment\"\", the thing that would raise a red flag is why don't you have 20K to do this yourself? If you don't how will you be able to make payments? For example of the items you mentioned: That is a weekend worth of work and some pretty inexpensive materials. Why does money need to be borrowed for this? A weekend worth of demo, and $500 worth of material and another weekend to build something serviceable for a rental. Why does money need to be borrowed for this? 2K? Why does money need to be borrowed for this? This can be expensive, but most roofing companies offer financing. Also doing some of the work yourself can save a ton of money. Demoing an old roof is typically about 1/3 of the roofing cost and is technically simple, but physically difficult. So besides the new roof, you could have a lot of your list solved for less than 3K and three weekends worth of work. You are attempting to change this into a rental, not the Taj Mahal.\"", "title": "" }, { "docid": "005db9a6ec7f3421984f8cbc462239c8", "text": "\"My biggest concern with this plan is that there's no going back should you decide that it is not going to work, either due to the strain on the relationship or for some other reason. If you were borrowing from a relative in place of a mortgage or a car loan, you can always refinance, and might just pay a little more interest or closing costs from a bank. Student loans are effectively unsecured, so your only option for a \"\"refinance\"\" would be to get a personal, unsecured loan (or borrow against existing collateral if you have it). You are going to have a tough time getting another 50k unsecured personal loan at anywhere near student-loan rates. The other negative aspects (overall risk of borrowing from family, loss of possible tax deduction) make this plan a no-go for me. (I'm NOT saying that it's always a good idea to borrow from family for homes or cars, only that there's at least an exit plan should you both decide it was a bad idea).\"", "title": "" }, { "docid": "d017040c94172cb755166031ca073f4d", "text": "I've been a P2P Lending investor for ~18 months now with Lending Club with no complaints. Money wise, I'm making a 15.6% NAR w/ ~270 notes. I've had a few late payers, and one couple (oddly enough in both are in law enforcement) declare Ch.13 Bankruptcy, but b/c I've invested as little money as possible into each note ($25/note), my diversification helps reduce volatility and risk to capital. Having tough underwriting standards is very important, but I think it all comes down to loaning only to those you think will pay you back, not someone with a sob story or a long history of defaults. That might sound like a no-brainer, but if you're a bit of a cynic and have really tough screening criteria, it's possible to lower your default rate if you're patient and deploy your money slowly over time. At least, my returns and default rate of zero would imply it's possible so far. I blog about it quite a bit, so if anyone wants to check out my Lending Club investments thus far, please check it out. (Apologies if this is considered spam since I'm a new member of the site, but thought it relevant to the discussion.)", "title": "" }, { "docid": "277d80fd228820ac4ab713d9f9397aa7", "text": "Nope. If there is no prepayment penalty go for it. Find another credit source to use (like a credit card you pay off every month) if you want to get a long history. Saving money on interest is more important to me than minutia in a credit score.", "title": "" }, { "docid": "c23a1e24ab98e5bdc93c4eaa97a24cd2", "text": "It may or may not be a good idea to borrow money from your family; there are many factors to consider here, not the least of which is what you would do if you got in serious financial trouble and couldn't make your scheduled payments on the loan. Would you arrange with them to sell the property ASAP? Or could they easily manage for a few months without your scheduled payments if it were necessary? A good rule of thumb that some people follow when lending to family is this: don't do it unless you're 100% OK with the possibility that they might not pay you back at all. That said, your question was about credit scores specifically. Having a mortgage and making on-time payments would factor into your score, but not significantly more heavily than having revolving credit (eg a credit card) and making on time payments, or having a car loan or installment loan and making on time payments. I bought my house in 2011, and after years of paying the mortgage on time my credit score hasn't changed at all. MyFico has a breakdown of factors affecting your credit score here: http://www.myfico.com/crediteducation/whatsinyourscore.aspx. The most significant are a history of on-time payments, low revolving credit utilization (carrying a $4900 balance on a card with a $5000 limit is bad, carrying a $10 balance on the same card is good), and overall length of your credit history. As to credit mix, they have this to say: Types of credit in use Credit mix determines 10% of my FICO Score The FICO® Score will consider your mix of credit cards, retail accounts, installment loans, finance company accounts and mortgage loans. It's not necessary to have one of each, and it's not a good idea to open credit accounts you don’t intend to use. The credit mix usually won’t be a key factor in determining your FICO Score—but it will be more important if your credit report does not have a lot of other information on which to base a score. Have credit cards – but manage them responsibly Having credit cards and installment loans with a good payment history will raise your FICO Score. People with no credit cards tend to be viewed as a higher risk than people who have managed credit cards responsibly.", "title": "" }, { "docid": "31b635917f55546f1a1adadfd49cbb96", "text": "Very smart. Let other people pay you interest. Don't pay other people interest. And, yes, I know it's possible to borrow money from one place and lend it to another place at a slightly higher rate, but why bother.", "title": "" }, { "docid": "fdc4fb5e150939da5af1384a61a75eeb", "text": "On the face, this appears a sound method to manage long run cumulative interest, but there are some caveats. Maxing out credit cards will destroy your credit rating. You will receive no more reasonable offers for credit, only shady ones. Though your credit rating will rise the moment you bring the balance back down to 10%, even with high income, it's easy to overshoot the 8 months, and then a high interest rate kicks in because of the low credit rating. Further, maxing out credit cards will encourage credit card lenders to begin cutting limits and at worse demand early payment. Now, after month 6 hits, your financial payment obligations skyrocket. A sudden jolt is never easy to manage. This will increase risk of missing a payment, a disaster for such hair line financing. In short, the probability of decimating your financial structure is high for very little benefit. If you are confident that you can pay off $4,000 in 8 months then simply apply those payments to the student loan directly, cutting out the middle man. Your creditors will be pleased to see your total liabilities fall at a high rate while your utilization remains small, encouraging them to offer you more credit and lower rates. The ideal credit card utilization rate is 10%, so it would be wise to use that portion to repay the student loans. Building up credit will allow you to use the credit as an auxiliary cushion when financial disaster strikes. Keeping an excellent credit rating will allow you to finance the largest home possible for your money. Every percentage point of mortgage interest can mean the difference between a million USD home and a $750,000 one.", "title": "" }, { "docid": "4414e027b470e0bbfd52df49d5900c61", "text": "I would advise against this, answering only the first part of question #1. Borrowing and lending money among friends and family members can often ruin relationships. While it can sometimes be done successfully, this is most likely not the case. All parties involved have to approach this uniquely in order for it to work. This would include your son's future significant other. Obviously you have done very well financially, congratulations. Your view for your son might be for him to pay you off ASAP: Even after becoming a doctor, continue to live like a student until the loan is paid off. His view might be more conventional; get the car and house and pay off my loans before I am 50. He may start with your view, but two years in he marries a woman that pressures him to be more conventional. My advice would be to give if you can afford to, but if not, do not lend. If you decide to lend then come up with a very clear agreement on the repayment schedule and consequences of non-payment. You may want to see a lawyer. For the rest of it, interest payments received are taxable.", "title": "" }, { "docid": "cacbf15c1501c1e2613816daf5294bfc", "text": "Possible? Sure. The question is where do you plan on going to get the money and how well can you shop around to find the best rate for the loan. Banks and credit unions would be one option but I'd be curious as to how well do you know the various routes you could take.", "title": "" }, { "docid": "75b58792cfda66919ddd3a60a4a8607c", "text": "\"I have personally invested $5,000 in a YieldStreet offering (a loan being used by a company looking to expand a ridesharing fleet), and would certainly recommend taking a closer look if they fit your investment goals and risk profile. (Here's a more detailed review I wrote on my website.) YieldStreet is among a growing crop of companies launched as a result of legislative and regulatory changes that began with the JOBS Act in 2012 (that's a summary from my website that I wrote after my own efforts to parse the new rules) but didn't fully go into effect until last year. Most of them are in Real Estate or Angel/Venture, so YieldStreet is clearly looking to carve out a niche by assembling a rather diverse collection of offerings (including Real Estate, but also other many other categories). Unlike angel/venture platforms (and more like the Real Estate platforms), YieldStreet only offers secured (asset-backed) investments, so in theory there's less risk of loss of principal (though in practice, these platforms haven't been through a serious stress test). So far I've stuck with relatively short-term investments on the debt crowdfunding platforms (including YieldStreet), and at least for the one I chose, it includes monthly payments of both principal and interest, so you're \"\"taking money off the table\"\" right away (though presumably then are faced with how to redeploy, which is another matter altogether!) My advice is to start small while you acclimate to the various platforms and investment options. I know I was overwhelmed when I first decided to try one out, and the way I got over that was to decide on the maximum I was willing to lose entirely, and then focus on finding the first opportunity that looked reasonable and would maximize what I could learn (in my case it was a $1,000 in a fix-and-flip loan deal via PeerStreet).\"", "title": "" }, { "docid": "47f0744bd2c47de916f8b1cc7484f38b", "text": "As most people said, family loans are dangerous to the relationship. The lender should not lend more than they are willing to forgive, and the borrower should not borrow more than they are very certain they can repay. I would suggest a few things to consider: Anecdote: I borrowed some money from my grandfather when I graduated from college to help with cash flow for an apartment, vehicle, etc. It was about 5% of my starting annual salary and I paid it back quickly and with interest.", "title": "" }, { "docid": "8a32ff455ef9ede9b3f4850281372c9a", "text": "The answer to your question depends on your answer to this question: Would you be willing to take out a loan at that interest rate and invest that money straight into stocks? That's basically what you're planning to do. You leverage your stock investment, which is a valid and often used way to improve returns. Better returns ALWAYS come with more risk. Depending on your location there might be a tax advantage to a mortage, which you can take into account.", "title": "" }, { "docid": "f5f3811c84e5e74a6e214a26c56bc648", "text": "If you're able to pop this data into excel you can quickly calculate the solution. Every one of these problems boils down to 'Interest Rate', 'Term', 'Payment', 'Present Value', and 'Future Value' (FV will typically be zero). Excel has a formula to calculate any of these components based off of the other inputs. In this case, the given information is: Interest Rate: 7.56% Term: 36 Months Monthly PMT: $350 Present Value: ? You can use the =PV() formula and input the other known values. One caveat is that you'll need to adjust the interest rate to account for the monthly compounding. So, the formula would be =PV(.0063,36,-350). This gives a result of $11,242, which is the amount you'd be able to borrow. [All of these can also be solved on the TI-84+, but I don't have my old calculator on me to walk through the steps] To calculate the total interest paid, you would then find out how much you'll be paying over the life of the loan. If your monthly payment is $350 for 36 months, the total amount you'd pay is $12,600 ($350*36). Subtract the $11,242 calculated in step one, and you are left with $1,358 worth of interest. Hope that makes sense. Let me know if you want me to go over any of the steps in more detail. As a former finance student, I would highly recommend locking down the TVM functions, as they will pop up quite often throughout your schooling/career. Best of luck!", "title": "" }, { "docid": "a953c1a23c9a9259f46c6203ba7ebd36", "text": "I don't know much about how student loans work, so there might be some caveats (e.g. does the interest rate stay constant, do you get a discount if you pay off early etc.). Ignoring those caveats: The interest on you student loan looks quite small. Depends a bit where you are in the world, but it seems very likely that you can get more interest than that on a 100% guaranteed investment form, e.g. term bank deposits. So, it seems a no-brainer to not pay back you student loan and invest the money securely for a higher interest rate instead. Similar situation when you think about taking the money as a down-payment for a house. More factors come into play here:", "title": "" } ]	fiqa
27253fa8c490e4169293c75b960b659c	Should I take a personal loan for my postgraduate studies?	[ { "docid": "b5c16b0ba57bfd6826ff48f0d965725e", "text": "If you are eligible for FEE-HELP then this is by far the cheapest way of financing higher education in Australia.", "title": "" }, { "docid": "89f1ade5a5d1facb184bb496ca30acfd", "text": "I would not take this personal loan. Let's look closer at your options. Currently, you are paying $1100 a month in rent, and you have all the money saved up that you need to be able to pay cash for school. That's a good position to be in. You are proposing to take out a loan and buy an apartment. Between your new mortgage and your new personal loan payment, you'll be paying $1500 a month, and that is before you pay for the extra expenses involved in owning, such as property taxes, insurance, etc. Yes, you'll be gaining some equity in an apartment, but in the short term over the next two years, you'll be spending more money, and in the first two years of a 30 year mortgage, almost all of your payment is interest anyway. In two years from now, you'll have a master's degree and hopefully be able to make more income. Will you want to get a new job? Will you be moving to a new city? Maybe, maybe not. By refraining from purchasing the apartment now, you are able to save up more cash over the next two years and you won't have an apartment tying you down. With the money you save by not taking the personal loan, you'll have enough cash for a down payment for an apartment wherever your new master's degree takes you.", "title": "" }, { "docid": "57f49375edc6630c93e584cdd1b96b07", "text": "As mentioned in the comments, there are costs associated with owning & living in an apartment. First you have to pay maintenance charges on a monthly basis and perhaps also property tax. Find out the overall outgoings when you live in that apartment & add the EMI payments to the bank, it should not be way higher than your current rent. As an advantage you are getting an asset when you buy an apartment & rent is a complete loss, ast least financial terms. So, real estate is in general a good idea over paying rent. As for the loan part, personal loans are by far the most expensive of loans as they are in general unsecured loans (but do check with your bank). One way is to try and get a student loan, which should be cheaper. If you can borrow from family that is the best option, you could return the money with perhaps bank fixed deposit rates, it is better to pay family interest than bank. If none of the options are workable, then personal loan is something you need to look at with a clear goal to pay it off as soon as possible and try to take it in stages, as an when you require it and if possible avoid taking all the 15,000/- at once.", "title": "" }, { "docid": "f167e9195270c46a1c2ae9acdf9247e6", "text": "I would delay purchase of a condo or apartment until you have at a minimum, 6 months of living expenses including mortgage set aside in other investments that could be liquidated. If you lost your source of income though disability or layoff or an unexpected termination of a grant, you need to have that cushion or a significant other whose salary can sustain payments. You could lose a lot if you either cannot make the payments and/or the value to the apartment dips greatly. Many folks in the recent housing bubble and Great Recession learned this the hard way. Many lost their entire investment by not being able to make payments AND seeing their house lose 1/3 of its value.", "title": "" } ]	[ { "docid": "83266596284f73cb8a10197cbc46f3f0", "text": "Fantastic question to be asking at the age of 22! A very wise man suggested to me the following with regard to your net income I've purposely not included saving a sum of money for a house deposit, as this is very much cultural and lots of EU countries have a low rate of home ownership. On the education versus entrepreneur question. I don't think these are mutually exclusive. I am a big advocate of education (I have a B.Eng) but have following working in the real world for a number of years have started an IT business in data analytics. My business partner and I saw a gap in the market and have exploited it. I continue to educate myself now in short courses on running business, data analytics and investment. My business partner did things the otherway around, starting the company first, then getting an M.Sc. Other posters have suggested that investing your money personally is a bad idea. I think it is a very good idea to take control of your own destiny and choose how you will invest your money. I would say similarly that giving your money to someone else who will sometimes lose you money and will charge you for the privilege is a bad idea. Also putting your money in a box under your bed or in the bank and receive interest that is less than inflation are bad ideas. You need to choose where to invest your money otherwise you will gain no advantage from the savings and inflation will erode your buying power. I would suggest that you educate yourself in the investment options that are available to you and those that suit you personality and life circumstances. Here are some notes on learning about stock market trading/investing if you choose to take that direction along with some books for self learning.", "title": "" }, { "docid": "3dd66282abc2576d2df51f5815fca851", "text": "\"You are not \"\"the economy\"\". The economy is just the aggregate of what is going on with everyone else. You should make the decision based on your own situation now and projected into the future as best you can. Loan rates ARE at historical lows, so it is a great time to take a loan if you actually need one for some reason. However, I wouldn't go looking for a loan just because the rates are low for the same reason it doesn't make sense to buy maternity clothes if you are a single guy just because they are on sale.\"", "title": "" }, { "docid": "cb01b43af8a14be26c06ee2123239bbd", "text": "I'm surprised no one has picked up on this, but the student loan is an exception to the rule. It's inflation bound (for now), you only have to pay it back as a percentage of your salary if you earn over £15k (11% on any amount over that I believe), you don't have to pay it if you lose your job, and it doesn't affect your ability to get credit (except that your repayments will be taken into account). My advice, which is slightly different to the above, is: if you have any shares that have lost more than 10% since you bought them and aren't currently recovering, sell them and pay off your debts with those. The rest is down to you - are they making more than 10% a year? If they are, don't sell them. If your dividends are covering your payments, carry on as you are. Otherwise it's down to you.", "title": "" }, { "docid": "64f70c6501c986eba6ec4638f27efbcb", "text": "\"While I haven't experienced being \"\"grad student poor\"\" myself (I went to grad school at night and worked full-time), I would shoot for 10-20% per month ($150-$300). This depends of course on how much you currently have in savings. If it isn't much, you might want to attempt a higher savings percentage (30-40%). If you can move to a less-expensive place, do that as soon as you can. It's your largest expense; any place you can spend less on than $900 creates instance savings without having to sacrifice what you categorize as living expenses.\"", "title": "" }, { "docid": "c138391e73776ca0eda4e01fa2c3c5ac", "text": "\"No you should not borrow money at 44.9%. I would recommend not borrowing money except for a home with a healthy deposit (called down payment outside UK). in December 2016, i had financial crisis So that was like 12 days ago. You make it sound like the crisis was a total random event, that you did nothing to cause it. Financial crises are rarely without fault. Common causes are failure to understand risk, borrowing too much, insuring too little, improper maintenance, improper reserves, improper planning, etc... Taking a good step or two back and really understanding the cause of your financial crisis and how it could be avoided in the future is very useful. Talk to someone who is actually wealthy about how you could have behaved differently to avoid the \"\"crisis\"\". There are some small set of crises that are no fault of your own. However in those cases the recipe to recovery is patience. Attempting to recover in 12 days is a recipe for further disaster. Your willingness to consider borrowing at 44% suggests this crisis was self-inflicted. It also indicates you need a whole lot more education in personal finance. This is reinforced by your insatiable desire for a high credit score. Credit score is no indication of wealth, and is meaningless until you desire to borrow money. From what I read, you should not be borrowing money. When the time comes for you to buy a home with a mortgage, its fairly easy to have a high enough credit score to borrow at a good rate. You get there by paying your bills on time and having a sufficient deposit. Don't chase a high credit score at the expense of building real wealth.\"", "title": "" }, { "docid": "20dea3b2e4cbbd789235606ea60ee020", "text": "At your age, the only place you are going to get a loan is from relatives. If you can't... Go to next year's conference. Missing it this year might feel like a disaster, but it really, really isn't.", "title": "" }, { "docid": "fe73ab1c09979528e333f386a0bfffa7", "text": "most of the people who lurk in money.se will probably tell you to spend as little as possible on a car, but that is a really personal decision. since you live with your parents, you can probably afford to waste a lot of money on a car. on the other hand, you already have a large income so you don't really have the normal graduate excuses for deferring student loans and retirement savings. for the sake of other people in a less comfortable position, here is a more general algorithm for making the decision:", "title": "" }, { "docid": "183c98ad45a853091bb8f205000035a3", "text": "You should pay for school with cash. If you take out a loan, you are not really saving money; you are borrowing money. I do not think you will come out ahead borrowing a down payment at student loan rates.", "title": "" }, { "docid": "32c41f3ceddd2b15e339c306af49cfd8", "text": "In USA, if you take a personal loan, you will probably get rates between 8-19%. It is better that you take a loan in India, as home loan rates are about 10.25%(10.15% is the lowest offered by SBI). This might not be part of the answer, but it is safer to hold USD than Indian rupees as India is inflating so much that the value of the rupee is always going lower(See 1970 when you could buy 1 dollar for 7 rupees). There might be price fluctuations where the rupee gains against the dollar, but in the long run, I think the dollar has much more value(Just a personal opinion). And since you are taking a home loan, I am assuming it will be somewhere between 10-20 years. So, you would actually save a lot more on the depreciating rupee, than you would pay interest. Yes, if you can get a home loan in USA at around 4%, it would definitely be worth considering, but I doubt they will do that since they would not know the actual value of the property. Coming to answer your question, getting a personal loan for 75k without keeping any security is highly unlikely. What you can do since you have a good credit score, is get a line of credit for 20-25k as a backup, and use that money to pay your EMI only when absolutely required. That way, you build your credit in the United States, and have a backup for around 2 years in India in case you fail to pay up. Moreover, Line of credits charge you interest only on the amount, you use. Cheers!", "title": "" }, { "docid": "c0613c4e8eee7e2e09fa10276b13c66a", "text": "It depends. If cost of tuition + income forgone during studying years is less than your lifelong discounted incremental cash flows you receive thanks to your education, then it is not worth it. If your studies are, say, 150K, and you forego another 60K/y during 4 years of university, you will need to make roughly 39K *more* per year until you retire than you otherwise would have, or more, for your degree to be worth it. I don't see that as very realistic scenario for 90% of the people who get degrees. Obviously cheaper/more expensive degrees, different discount rate assumptions, and different salaries before/during/after university are different from person to person. That's why everyone has to make their own calculation and then decide whether or not to make such a risky investment in themselves.", "title": "" }, { "docid": "69100a1275675a01cd3378b1156f262a", "text": "Does that justify the purpose? That is for individual Banks to decide. No bank would pay for daily expenditure if you are saying primary salary you are spending on eduction. So your declaration is right. You are looking at funding your eduction via loan and you are earning enough for living and paying of the loan. I noticed that a lot of lenders do not lend to applicants whose purpose is to finance the tuition for post-secondary education This could be because the lenders have seen larger percentage defaults when people opt for such loans. It could be due to mix of factors like the the drag this would cause to an individual who may not benefit enough in terms of higher salary to repay the loan, or moves out of country getting a better job. If it is education loan, have you looked at getting scholarships or student loans.", "title": "" }, { "docid": "1f22df4ad20c173484ea9d80aa08c158", "text": "Could you perhaps expand on your reasoning behind wanting to take a loan in the first place? Why would you even consider taking a loan for as much as £7,500 (or even much less) if you aren't planning on buying / investing in anything in particular, and you're not in a bad financial situation? If your account never drops below a hundred or two pounds, why would you need to loan money? Just get yourself a credit card, for those times when you might find yourself without money for a short while. But really, it sounds to me like you should be able to set aside a small sum of money every month and create your own savings buffer to cover these situations.", "title": "" }, { "docid": "0a650c6cb599a5da5b1517644cefd71c", "text": "It's not a question with a single right answer. Other answers have addressed some aspects, my case may provide some guidance as to one way of looking at some of the issues. When I had student loans, the interest rate was RPI¹ and I could get more than that as the return on a savings account. At the time I could get a whole year's worth of loan at the start of the year, save it, and draw from the savings, partly because I had a little working capital saved already. Importantly in my case, the loans were use-it-or-lose-it: if I didn't take the loan out by about halfway through each academic year, it was no longer available to me. The difference in interest rates was probably similar to what you can get with a careful choice of savings account and 0% on the loan (I did this in the 90s when interest rates were higher). Over a four year degree the interest I earned this way added up to no more than about £100, which went someway towards offsetting the fact I would be paying interest after graduation. If you can clear the loan before you pay any interest it would give you a return, but a small one that could easily be eroded by rate changes or errors on your part (like not keeping on top of the paperwork). It still may be beneficial to take out the loans depending on your capital needs -- in my case it made buying a house after graduating much easier, as we still had money for the deposit (downpayment) and student loan rates were much lower than mortgage rates (100% mortgages were also available then, but expensive). ¹ RPI stands for retail price index, a measure of inflation.", "title": "" }, { "docid": "41fdc304172ec2f72ca589e47eb4acf4", "text": "I think most people have already answered this one pretty well. (It's usually worth it, as long as you pay it off before the interest kicks in, and you don't get hit with any fees.) I just wanted to add one thing that no one else has pointed out: Applying for the loan usually counts as a hard pull on your credit history. It also changes your Debt-to-income ratio (DTI). This can negatively impact your credit score. Usually, the credit score impact for these (relatively) small loans isn't that much. And your score will rebound over time. However, if it makes your score drop below a certain threshold, (e.g. FICO dips below 700), it could trip you up if you are also applying for other sources of credit in the immediate future. Not a big deal, but it is something to keep in mind.", "title": "" }, { "docid": "a29b0792cd39ac89b4fa096127c4a585", "text": "When is the right time to buy a new/emerging technology? When it's trading at a discount that allows you to make your money back and then some. The way you presented it, it is of course impossible to say. You have to look at exactly how much cheaper and efficient it will be, and how long that will take. Time too has a cost, and being invested has opportunity cost, so the returns must not only arrive in expected quantity but also arrive on time. Since you tagged this investing, you should look at the financial forecasts of the business, likely future price trajectories, growth opportunity and so on, and buy if you expect a return commensurate with the risk, and if the risk is tolerable to you. If you are new to investment, I would say avoid Musk, there's too much hype and speculation and their valuations are off the charts. You can't make any sensible analysis with so much emotion running wild. Find a more obscure, boring company that has a sound business plan and a good product you think is worth a try. If you read about it on mainstream news every day you can be sure it's sucker bait. Also, my impression that these panels are actually really expensive and have a snowball's chance in Arizona (heh) in a free market. Recently the market has been manipulated through green energy subsidies of a government with a strong environmentalist voter base. This has recently changed, in case you haven't heard. So the future of solar panels is looking a bit uncertain. I am thinking about buying solar panels for my roof. That's not an investment question, it's a shopping question. Do you actually need a new roof? If no, I'd say don't bother. Last I checked the payoff is very small and it takes over a decade to break even, unless you live in a desert next to the Mexican border. Many places never break even. Electricity is cheap in the United States. If you need a new roof anyway, I suppose look at the difference. If it's about the same you might as well, although it's guaranteed to be more hassle for you with the panels. Waiting makes no sense if you need a new roof, because who knows how long that will take and you need a roof now. If a solar roof appeals to you and you would enjoy having one for the price available, go ahead and get one. Don't do it for the money because there's just too much uncertainty there, and it doesn't scale at all. If you do end up making money, good for you, but that's just a small, unexpected bonus on top of the utility of the product itself.", "title": "" } ]	fiqa
7c6dc3af3c15c3dd3edf23625fd8888f	In Canada, are options available to subsidize conversion of a house into an energy efficient house?	[ { "docid": "02b3b967cf92a1763bd2de0667003e6b", "text": "There may be more, but a good starting point would be the ecoENERGY Retrofit Grants and Incentives. Natural Resources Canada's ecoENERGY Retrofit program provides financial support to implement energy-saving projects. There are different application processes for homes, commercial and institutional buildings and industrial facilities. Together we can reduce energy-related greenhouse gases and air pollution, leading to a cleaner environment for Canada. Also, there was a temporary home renovation tax credit about a year back, but that no longer exists and nothing has replaced it yet.", "title": "" } ]	[ { "docid": "f4a76c018283f7c0fa30c6b4ddcd5f00", "text": "\"Assuming \"\"take advantage\"\" means continue to build wealth, as opposed to blow it all on a fancy holiday... Downgrade As you already note, you could downgrade/downsize. This could happen via moving to a smaller house in the same area, or moving to an area where the cost of buying is less. HELOC Take out a Home Equity Line of Credit. You could use the line of credit to do home improvements further boosting the asset value (forced appreciation, assuming the appreciation to date is simply market based). Caution is required if the house has already appreciated \"\"considerably\"\" - you want to keep the home value within tolerance levels for the area. (Best not to have the only $300K house on a street of $190K-ers...) Home Equity Loan Assuming you have built up equity in the house, you could leverage that equity to purchase another property. For most people this would form part of the jigsaw for getting the financing to purchase again.\"", "title": "" }, { "docid": "43f49166cd5d96efbe0bc4b3264f732e", "text": "Hmmm. I hadn't considered that energy usage would be considered confidential. How about asking a nearby neighbor to share their next bill. If it's higher or lower than yours, just scale the history up or down accordingly. Other than that, the utility company might offer its own level billing plan where they handle the estimate and offer you the same payment each month.", "title": "" }, { "docid": "b19fafc7d6faf2d0fb654b77ef3d6e83", "text": "Solar water heaters are definitely questionable in the Northeast -- the season when you most need them is also the season when they are least effective. Solar electric isn't a huge moneymaker, but with rebates on installation and carbon-reduction credits (SRECs) -- and a group purchase discount if you can get one, either at a town level or through organizations like One Block Off The Grid -- it can definitely turn a profit. Early estimate was that my setup would pay its initial costs back in 4 years, and the panels are generally considered to be good for a decade before the cells have degraded enough that the panels should be replaced. I haven't had a negative electric bill yet, but I've gotten close, and my setup is a relatively small one (eight panels facing SSE on a 45-degree roof). Admittedly I've also been working to reduce electricity use; I don't think I have an incandescent bulb left in the house.", "title": "" }, { "docid": "7621f87330797bec2bb8ecc8fa2a2134", "text": "Having lived in both places, I have to say you can find a higher income in the US for the same job and can live in a small town versus having to live in a big city in Canada to find decent salaries. For similar sized cities, the cost of housing is significantly lower in the US than Canada. That is your biggest factor in cost of living. If you are thinking of NYC or San Francisco, there are no comparable size cities in Canada and you would probably be better off in Canada. My tax preparer was amazed at how much I paid in Capital Gains taxes when I left Canada. Maybe it is different now but I doubt it. The biggest free lunch in the US is a generous capital gains exemption when you sell your primary residence without any lifetime cap or cap on the number of times you can do it. There are rules on how long you have to live in it before selling. For investment real estate, all expenses are deductible in addition to fictional depreciation so with a mortgage you can have positive cash flow and pay no income tax. You can keep doing tax deferred exchanges into bigger and bigger rentals. When you are close to retirement, you can exchange into your ultimate beach home, rent it out a few years, then convert to a primary residence.", "title": "" }, { "docid": "19a5c1b6cfacdb7b8407acfbf381879d", "text": "I know that both Lowes and Home Depot (in Canada at least) will offer a 6 month deferred interest payment on all purchases over a certain dollar amount (IIRC, $500+), and sometimes run product specific 1 year deferred interest specials. This is a very effective way of financing renovations. Details: You've probably seen deferred interest -- It's very commonly used in furniture sales (No money down!!! No interest!!! Do not pay for 1 full year!!!) (Personally, I think it's a plot by the exclamation point manufacturers) It works like this: Typically, I manage these types of purchases by dividing the principal by 6, and then adding 5%, and paying that amount each month. Pay close attention to the end date, because you do not want to pay 22% interest on the entire amount. This also requires that you watch your card balance carefully. All payments are usually put to current purchases (i.e. those not under a plan) first, before they are applied to the plan balance. So if you are paying 250 a month on the new floor, and run up another $150 on paint, You need to pay the entire new balance, and then the $250 floor payment in order for it to be applied correctly. Also <shameless plug> http://diy.stackexchange.com </shameless plug> Consider doing it yourself.", "title": "" }, { "docid": "7dac3bea905e716cc1763cc0cedb785b", "text": "I could be wrong, but I doubt you're going to be able to roll the current mortgage into a new one. The problem is that the bank is going to require that the new loan is fully collateralized by the new house. So the only way that you can ensure that is if you can construct the house cheaply enough that the difference between the construction cost and the end market value is enough to cover the current loan AND keep the loan-to-value (LTV) low enough that the bank is secured. So say you currently owe $40k on your mortgage, and you want to build a house that will be worth $200k. In order to avoid PMI, you're going to have to have an LTV of 80% or less, which means that you can spend no more than $160k to build the house. If you want to roll the existing loan in, now you have to build for less than $120k, and there's no way that you can build a $200k house for $120k unless you live in an area with very high land value and hire the builders directly (and even then it may not be possible). Otherwise you're going to have to make up the difference in cash. When you tear down a house, you are essentially throwing away the value of the house - when you have a mortgage on the house, you throw away that value plus you still owe the money, which is a difficult hole to climb out of. A better solution might be to try and sell the house as-is, perhaps to someone else who can tear down the house and rebuild with cash. If that is not a viable option (or you don't want to move) then you might consider a home equity loan to renovate parts of the house, provided that they increase the market value enough to justify the cost (e.g. modernize the kitchen, add on a room, remodel bathrooms, etc. So it all depends on what the house is worth today as-is, how much it will cost you to rebuild, and what the value of the new house will be.", "title": "" }, { "docid": "b1e85d77351e39748acab3932a4c949f", "text": "I wish this was the case in Canada. I lost about 60k on my home in one year and have to sell now to move for work. In the US I could simply default and the bank takes the loss. In Canada if I default, CMHC pays the bank, then I'm sued by CMHC and stuck with the bad debt. Simply put - here the onus of repayment is on the lender, not the lending institution. It sounds good until you are the one looking at losing your shirt.", "title": "" }, { "docid": "3983513fbc5f18c664780eedeaa65c5e", "text": "You don't understand how global warming works and where most emissions sources come from (hint: transportation is a huge one). Never mind local air quality. Neither of these things mean we must live devoid of petroleum products. Just that we don't need to burn it and live with the exhaust it creates and the consequences that arise from it. But yes, wind and solar are already becoming the cheapest forms of electricity available. The price point for renewables no longer requires heavy subsidies and is now becoming cost competitive.", "title": "" }, { "docid": "6cb0b3cd7e595db96e28829e3958e946", "text": "No, look: Say a company needs to get $100 per solar panel to make a profit. But a consumer only wants to pay $80 for a solar panel, otherwise it isn't worth it. So, we have two options: 1. We offer a tax reduction to the consumer of $20. They now pay $100 for the solar panel, and get $20 back. The customer has now effectively paid $80 and the company has got $100. Or, 2. We give the company a subsidy for $20 per panel. They now sell the solar panel for $80, then get $20 in subsidy. The customer has now paid $80 and the company has got $100. You're against the 2nd option, in favour of the first. Have I understood you correctly?", "title": "" }, { "docid": "23f97e1fd4e6b6eb4fd2787b1b46e3d0", "text": "The new mortgage qualification rules were introduced to cool a hot Canadian housing real estate market. The rules are a pre-emptive measure intended to avoid a bubble (and later crash) in real estate. The government wants to make sure anybody buying a house can handle higher interest rates. Those rates, currently at record lows, are expected to go up later this year and into the future. The tighter mortgage rules include: Borrowers will need to qualify against a minimum standard 5-year fixed rate mortgage, even if they'll contract their mortgage at a lower or variable rate. Previously, the 3-year fixed rate mortgage was used as the minimum qualification standard. The amount a homeowner can borrow in a refinanced mortgage drops to 90% of the home value, down from 95% of the home value. A home is not meant to be an ATM machine. Anybody wanting to borrow to buy an investment property – i.e. a property that won't be their principal residence – will need a 20% downpayment instead of a 5% downpayment. The new rules go into effect April 19th, 2010. However, according to the backgrounder (see below): Exceptions would be allowed after April 19 where they are needed to satisfy a binding purchase and sale, financing, or refinancing agreement entered into before April 19, 2010. Definitive information about the new rules can be found at the Department of Finance of Canada. Specifically, refer to: Some additional news media sources:", "title": "" }, { "docid": "720eff3e3946efddd985444006d567dd", "text": "You don't mention where you live, but in the US, zoning laws, building codes, and insurance rules, would make this difficult if not impossible. People do convert shipping containers into housing, but they have to be modified to conform with local rules for habitability. This makes them more expensive then say, a trailer or a mobile home.", "title": "" }, { "docid": "5334ecb10e7edc640226aeaf0b65475b", "text": "\"I'm a little confused on the use of the property today. Is this place going to be a personal residence for you for now and become a rental later (after the mortgage is paid off)? It does make a difference. If you can buy the house and a 100% LTV loan would cost less than 125% of comparable rent ... then buy the house, put as little of your own cash into it as possible and stretch the terms as long as possible. Scott W is correct on a number of counts. The \"\"cost\"\" of the mortgage is the after tax cost of the payments and when that money is put to work in a well-managed portfolio, it should do better over the long haul. Don't try for big gains because doing so adds to the risk that you'll end up worse off. If you borrow money at an after-tax cost of 4% and make 6% after taxes ... you end up ahead and build wealth. A vast majority of the wealthiest people use this arbitrage to continue to build wealth. They have plenty of money to pay off mortgages, but choose not to. $200,000 at 2% is an extra $4000 per year. Compounded at a 7% rate ... it adds up to $180k after 20 years ... not exactly chump change. Money in an investment account is accessible when you need it. Money in home equity is not, has a zero rate of return (before inflation) and is not accessible except through another loan at the bank's whim. If you lose your job and your home is close to paid off but isn't yet, you could have a serious liquidity issue. NOW ... if a 100% mortgage would cost MORE than 125% of comparable rent, then there should be no deal. You are looking at a crappy investment. It is cheaper and better just to rent. I don't care if prices are going up right now. Prices move around. Just because Canada hasn't seen the value drops like in the US so far doesn't mean it can't happen in the future. If comparable rents don't validate the price with a good margin for profit for an investor, then prices are frothy and cannot be trusted and you should lower your monthly costs by renting rather than buying. That $350 per month you could save in \"\"rent\"\" adds up just as much as the $4000 per year in arbitrage. For rentals, you should only pull the trigger when you can do the purchase without leverage and STILL get a 10% CAP rate or higher (rate of return after taxes, insurance and other fixed costs). That way if the rental rates drop (and again that is quite possible), you would lose some of your profit but not all of it. If you leverage the property, there is a high probability that you could wind up losing money as rents fall and you have to cover the mortgage out of nonexistent cash flow. I know somebody is going to say, \"\"But John, 10% CAP on rental real estate? That's just not possible around here.\"\" That may be the case. It IS possible somewhere. I have clients buying property in Arizona, New Mexico, Alberta, Michigan and even California who are finding 10% CAP rate properties. They do exist. They just aren't everywhere. If you want to add leverage to the rental picture to improve the return, then do so understanding the risks. He who lives by the leverage sword, dies by the leverage sword. Down here in the US, the real estate market is littered with corpses of people who thought they could handle that leverage sword. It is a gory, ugly mess.\"", "title": "" }, { "docid": "c30339f0f419ddd40bbf35748e5cd9b0", "text": "\"Let's look at basics. Your 340K mortgage amortized over 25 years at 3.5% is going to cost you $1700 in payments - almost exactly your rent. You won't be paying out less. You will in fact be paying out more, because you are now liable for more insurance, and any repairs will have to be paid for by you, not the landlord. So don't do this to save money. Figures from here. Don't forget that it is extremely likely that interest rates will go up in the next few years. 7% is not unlikely. Can you afford it if your payments double? You can get a fixed rate mortgage, but they are going to cost you much more than 3.5% for more than a couple of years. Don't be fooled by the 'pay yourself' argument for getting a mortgage. in the first few years almost all of your payments is interest, not paying down the principal. You are just switching from paying a landlord to paying a bank. There are huge advantages to waiting until you have a good down payment before buying a house. People with a big down payment get better interest rates, and don't need to pay as much CMHC insurance. You will be less at risk if the price of your house drops. Also ask yourself if you are sure you will be in your house for five years - if not, even real estate agents would usually admit you shouldn't buy. The truck payment shouldn't be an issue, as long as you are sure you can service both truck and mortgage payments. Nor is $600 in credit card debt significant in the big scheme. I would probably put any spare cash towards a down payment. It reduces your interest rate (possibly), some expenses with regard to your mortgage, and your risk if you have to sell and your house value has dropped. You might like to look at the government of Canada website \"\"Rent or buy\"\". It's down right now so I can't give you a link. I'll edit it in when it's back up. EDIT:Turns out it's offline for 'updating'. Here's the link.\"", "title": "" }, { "docid": "05cd46be385369599415155435befba7", "text": "Thanks for the feedback obelus, The cost is $20,000 to 50,000 sqft. Ya I am just looking for a rough idea of what a similar newer building is costing I figured what we are paying is really high as the building is extremely old and designated as a heritage site so we can't just knock it down. Beautiful building just not very efficient. The newer building is the route I think we are gonna end up going not sure what we can do with the current building as not too many options for resale. We can't adjust the lease rates to compensate for the cost as the tenants are all seniors and it is an integrated care home. A change to apartments would prove difficult as there are no kitchens in 90% of the suites. We are currently paying approximately $0.40 psf a month to heat (All electric) and the estimate for the new building is $0.1425 psf (Geothermal) so it is a pretty huge impact in comparison if it is possible but I haven't heard of a real building actually costing that little before. Thanks for the suggestion for the IR I think I am gonna get some one in after the holidays to do a inspection to see if there is any short term fixes we can do with our system.", "title": "" }, { "docid": "17be3095b0ff8910979116994f080aa3", "text": "In that case, forget this whole pot shop and look into buying some REITs (Real estate investment trusts). Or invest in QCLN, a ETF that invests in companies that produce and distribute green energy. You're looking for a get rich quick scheme, not a solid investment. You don't even have any money. You can't afford to lose $92,000 when you have $0.", "title": "" } ]	fiqa
4dc344e8179f93083e8a884d7b0f2a3a	Is it beneficial to my credit score if I close my youngest credit lines while preserving my current credit utilization rate?	[ { "docid": "6d9b3337e729789a861beafbf9167475", "text": "\"I wrote How Old is Your Credit Card? some time ago. The answer is yes, this helps the credit score, but this factor, age of accounts, is pretty minimal. Grabbing deals, as you did, I'm actually down to a \"\"C\"\" for this part of my score, but still maintain a 770 score.\"", "title": "" }, { "docid": "b7ebf0118a25197053642a73d8a221f2", "text": "Credit Score is rather misleading, each provider of credit uses their own system to decide if they wish to lend to you. They will also not tell you how the combine all the factoring together. Closing unused account is good, as it reduced the risk of identity theft and you have less paperwork to deal with. It looks good if a company that knows you will agrees to give you more credit, as clearly they think you are a good risk. Having more total credit allowed on account is bad, as you may use it and not be able to pay all your bills. Using all your credit is bad, as it looks like you are not in control. Using a “pay day lender” is VERY bad, as only people that are out of control do so. Credit cards should be used for short term credit paying them off in full most months, but it is OK to take advantage of some interest free credit.", "title": "" } ]	[ { "docid": "b1ec5b1cd6585ec8dbb45a4727ef590f", "text": "First, before we talk about anything having to do with the credit score, we need the disclaimer that the exact credit score formulas are proprietary secrets that have not been revealed. Therefore, all we have to go on are broad generalities that FICO has given us. That having been said, the credit card debt utilization portion of your score generally has at least two components: an overall utilization, and a per-card utilization. Your overall utilization is taken by adding up all your credit card debt and all your credit limits and dividing. Using your numbers above, you are sitting at about 95%. The per-card utilization is the individual utilization of each card. Your five cards range in utilization from 69% to 100%. Paying one card over another has no affect on your overall utilization, but obviously will change the per-card utilization of the one you pay first. So, to your question: Is it better on the credit score to have one low-util card and one high-util card, or to have two medium-util cards? I haven't read anything that definitively answers this question. Here is my advice to you: The big problem you have is the debt, not the credit score. Your credit card debt should be treated like an emergency that needs to be taken care of as quickly as you possibly can. Instead of trying to optimize your credit score, you should be trying to minimize the number of days until all of your credit cards are completely paid off. The credit score will take care of itself once you get your financial situation back on track. There is debate about the order in which one should pay off their debts, but the fact of the matter is that the order is not as significant as the intensity at which you pay them all off. Dedicate yourself to getting rid of the debts as fast as possible, and it won't matter much which order they get paid off in. Finally, to answer your question, I recommend that you attack the card debt one at a time instead of trying to pay them off evenly. Not because it will optimize your credit score, but because it will help you focus your debt-reduction energy as you work on resolving your debt emergency. Fortunately, the credit utilization portion of the credit score has no history, so once you pay all of these off, the utilization portion of your score will get better immediately, and the path you took to get there will be irrelevant. After the credit cards are completely paid off, and you have resolved never to spend money that you don't have again, it is time to work on the student loans....", "title": "" }, { "docid": "c80ca8f9dc887b28b5771edef88368c4", "text": "\"Here's my crude reasoning: Let's say you have just one recently acquired credit card with a $5000 limit. The company that issued the credit card set the $5000 limit based on however they assessed your risk. Now if you're using a significant portion of of the $5000 limit, it means (at least for them) that you are stretching your wallet. Even if you've been paying monthly consistently and since you are heavily using your limit, it also means that if you lose your primary source of money for even one month, (income etc.), then your risk to the lender increases sharply. Had you been making more money (compared to this $5000 limit) then either you'd have used less % of your available credit or you would've gotten your limits raised by asking your bank to re-evaluate your risk and increase the limit. Also your statement \"\"Why is a US credit score based on credit utilization?\"\" is slightly incorrect. As per FICO, Credit utilization has 35% weight while your payment history has a weight of 35% http://www.creditcards.com/credit-card-news/help/5-parts-components-fico-credit-score-6000.php To sum it up, we can debate if the weight for credit utilization should be higher or lower but unfortunately as others have pointed out, these scores are meant to help lenders not consumers. So whether we like it or not, the secret algorithms to calculate the scores and the actual weights (variables and rules) they use are completely out of our hands.\"", "title": "" }, { "docid": "6ec5bf02eb05a8458978817549471a9f", "text": "\"When I was in high school, my mom got me a joint credit account with both of our names on it for exactly this reason. Well, that, and to have in case I found myself in some sort emergency, but it was mostly to build credit history. That account is still on my credit report (it's my oldest by a few years), and looking at the age of it, I was 17 at the time we opened it (and I think my younger sister got one around the same time). In my case, I now have an \"\"excellent\"\" credit score and my weakest area is the age of my accounts, so having that old account definitely helps me. I don't think I've really taken advantage of it, and I'm not sure if I'd really be worse off if my mom hadn't done that, but it certainly hasn't hurt. And I plan on buying a house in the next year or so, so having anything to bump up the credit score seems like a good thing.\"", "title": "" }, { "docid": "3654c49e93418a601245e84ca431ad22", "text": "How will going from 75% Credit Utilization to 0% Credit Utilization affect my credit score? might answer your question if US based. In the US, what counts is what shows on the bill. I've run $20K through a card with a $10K limit, but still ended the month under $2K by making extra payments. As long as you stay ahead of the limit by making mid-cycle payments, I see no issue with this strategy. If you keep running $30K/mo through a card with a $10K limit, the bank will eventually catch this and raise your limit as you will have proven you are more credit worthy.", "title": "" }, { "docid": "be3ebb9a653b7bd6e4acc2702bbd01c0", "text": "Nobody outside of the credit scoring agencies know exactly what goes into the scoring formula. That said, I don't think there is any evidence that keeping a fixed loan (car or mortgage) open is necessary to keep its effect on your score. It doesn't improve your utilization ratio like an open revolving credit line would. And depending on the exact details of how your specific lender reports the loan, it might appear detrimental to your debt-to-income ratio. I would simply pay it off.", "title": "" }, { "docid": "e4fc4ac4f7ca3ecb88f84aba4ae15a19", "text": "Most credit cards will allow you to pick the closing date. In fact almost every bill with the exception of utilities that collected usage by reading a meter at the house will either let you pick the closing date each month, or at least have several to pick from. They won't let you pick the length, but they will let you pick the day of the month. When I worked a job that paid once a month. I wanted all my bills due early in the month: get paid, pay bill, know how much I have left. When I went back to every other week spreading them out made more sense. No credit card had a problem with this. The transitional cycle was not the correct length, but after that it was fine. As Dheer pointed out extending the cycle to 90 days would involve them extending credit for much longer than they would be comfortable. Also the goal of keeping utilization under 30% would be very difficult, you would have to keep your spending per month to less than 10% of your credit limit. Some people have trouble not falling behind on credit card bills, having to set aside the money to pay the bill every 90 day may be way to tough for many people.", "title": "" }, { "docid": "59f95209b0e06624011debe520328886", "text": "Closed accounts are used when calculating Average Age of Accounts (AAoA) by FICO. They will drop off your report 7 years after their closure, at which time your AAoA will decrease and most likely lower your credit score. Keeping your oldest card with an annual fee (AF) is a tough question. Since the exact calculations are a secret, it's hard to quantify the value of that card. Keep in mind that if you do decide to close it now (or right before the next AF) it will continue to count for the next 7 years. What you can do is the following: Assume you won't be applying for any new cards in the next 7 years. Look at all your current accounts and calculate the AAoA of all of them that would still be on your report 7 years from now. Calculate it with and without your oldest card. The difference will show you the effect closing the card today will have. There is a potential way to raise your AAoA depending on if you have an AMEX card. AMEX reports all accounts as being open from your original 'member since' date. If your oldest AMEX (ever, not necessarily still open) is older than your AAoA, opening a new AMEX will actually raise your average. age of accounts is 15% of your score. note that some websites that calculate your AAoA for you (like creditkarma) don't count closed accounts, but since FICO does the age those websites generate should be ignored.", "title": "" }, { "docid": "05566dc1f7eabf546c872438675b8ce9", "text": "I too was very confused when I tried to be tricky and paid down my balance BEFORE the bill date. I thought this would be a great thing because it would show my utilization near zero percent. The opposite happen, it dropped my credit score from 762 to 708. Here is the best example I can come up with when it comes to utilization. Lets pretend you are an insurance company and you trying to figure out who are the best risk drivers. The people that drive 10% of the day are a better risk than the people that drive 50% of the day. The people that drive 50% of the day are a better risk than the people that drive 90% of the day. Here is the rub when people drive 0%. When you look at the people at 0% they appear to be walking, busing or flying. What they are NOT doing is driving. Since they are not driving (using Credit) they are viewed as POOR drivers since they are not keeping up on their driving skills. (Paying bills, watching how they spend, and managing their debt). So, now before the billing date I pay down my balance to something between 5 to 10% of my utilization. After the bill is issued, I pay it off in FULL. ( I am not going to PAY these crazy interest rates). What shows up on my credit report is a person that is driving his credit between 5 and 10% utilization. It shows I know I how to manage my revolving accounts. I know it's dumb, you would think they reward people that have zero debt, I don't hate banks I hate the game. ( I do love me some reward points =))", "title": "" }, { "docid": "c39644834b92aa943e87d1ec90e0826b", "text": "You don't need to use an open line of credit to help your credit score. You didn't ask this, but another option is to not cut up the card and keep the account open, even if you don't use it. I mention this because sometimes when you are calling in or setting up an online account to service the card, you may need to have the expiration date and CVV code on hand. This has burned me a few times as I had to hunt around for a card I rarely ever use. That being said, if you are worried that you might use the card if you know it's there, then sure, cut it up.", "title": "" }, { "docid": "487342b59ecd1739ead28cebd4f8eefb", "text": "Credit scores are designed to reflect your ability to make payments on time. As long as you're not closing your old credit card account, you will only see a minimal impact on your score. See estimated credit score breakdowns below:", "title": "" }, { "docid": "c266d9796adb77a13575342646c77fc7", "text": "This very much depends how you use that second line of credit and what your current credit is. There are of course many more combinations buy you can probably infer the impact based on these cases. Your credit score is based on your likely hood of being profitable to a creditor should they issue you credit. This is based on your history of your ability to manage your credit. Having more credit and managing it well shows that you have a history of being responsible with greater sums of money available. If you use the card responsibly now then you are more likely to continue that trend than someone with a history of irresponsibility. Having a line but not using it is not a good thing. It costs the creditor money for you to have an account. If you never use that account then you are not showing that you can use the account responsibly so if you are just going to throw the card in a safe and never access it then you are better off not getting the card in the first place.", "title": "" }, { "docid": "33017be05955f80f7df293a5ded9155c", "text": "\"You should never close a credit card account unless it has an annual fee or you are overspending on it. Open lines of credit - even un-utilized ones - have a positive effect on your credit score. First of all, they increase your total credit which helps your score. Second of all, they are always \"\"paid on-time\"\" which is another benefit. Finally, they increase the length of your credit history. You can keep unused credit cards forever in your drawer. They are rarely closed due to inactivity and cost you nothing. However, if your card has an annual fee, you should close it. The potential loss to your credit score is unlikely to offset the annual fee.\"", "title": "" }, { "docid": "8630f5c40a3b7606a87642027ce64970", "text": "In your specific case, I would leave them open unless you have a specific reason for wanting to close them - particularly, unless you feel closing them is necessary for you to not misuse them. The impact on the credit score is not why I say this, though. Much more important are the two competing real factors: My suggestion would be to take the cards and put them in your file cabinet, or whatever would cause you to not use them. In fact, you could even cut them up but not close the accounts - I had an account open that I didn't possess a physical card for several years for and didn't use at all, and it stayed open (though it's not guaranteed they'll keep it open for you if you never use it). In an emergency you could then ask them to send you a new copy of the card very easily. But, keep them, just in case you need them. Once you have paid off your balances on your balance-carrying cards, then you should consider closing some of them. Keep enough to be able to live for ~4-6 months (a similar amount to the ideal rainy day fund in savings, basically) and then close others, particularly if you can do so in a way that keeps your average account age reasonably stable.", "title": "" }, { "docid": "ada9b365d608336a462040cce275f6ab", "text": "The old underwriting standards were 28% home debt to income ratio and 33% consumer debt to income ratio. Consumer debt is calculated based on minimum payments. Now, most models are revised upwards... I believe 33/38 is more common today. As long as you are current on the accounts, closing credit or store revolving accounts will have little or no bearing. Just leave them dormant... there is no positive result from closing accounts that have no balance. Having low or no balances has NO negative impact on your credit score. Low balances are NOT red flags to lenders. Period. Here's a quote from Fair Issac: It's just not true that you can have too much available credit. That by itself is never a negative with the score. Sometimes the things you do to get too much can be a problem, such as opening a bunch of new accounts, but for the most part, that's just kind of an old wives' tale. The major drivers of credit scoring are: To improve your prospects for getting a mortgage, you should be reducing your spending and focusing 60/40 on saving for a down payment and paying down that $15k credit card, respectively. Having cash for a down payment is critical to your buying power, as zero-down loans aren't widely available in 2011, and a large downpayment will allow you to eliminate or reduce the time you are paying PMI. PMI reduces your buying power, and is a big waste of money.", "title": "" }, { "docid": "8ea2160b4af6fd3438b8a6b916d1322d", "text": "There is a subprime loaning bubble in the auto loan sector which is growing; while it's not in the $1 trillion range or as hidden as the real estate one was, it could cause issues down the road if it continues. The use of derivatives or specifically, CDS, is continuing for other suspect investments. It was used about 4 years ago to help hide Greece's sovereign default and like in 2008, it allowed the bad debt to be hidden and thrive to dangerous levels. The use isn't widespread and limited to several firms so far, but its return as an instrument of choice so soon after the financial crisis is a little worrying that it may be a cyclical crisis.", "title": "" } ]	fiqa
d9fee9967835540d580f3c4d29928bde	Calculate a weekly payment on a loan when payment is a month away	[ { "docid": "15457f6e3728fd7f9ee203c28a946c37", "text": "Using the standard loan formula with 21% APR nominal, compounded weekly. Calculate an adjusted loan start value by adding 31 - 7 = 24 extra days of daily interest (by converting the nominal compounded weekly rate to a daily rate). For details see Converting between compounding frequencies Applying the standard formula r (pv)/(1 - (1 + r)^-n) = 189.80 So every weekly payment will be 189.80 Alternatively Directly arriving at the same result by using the loan formula described here, The extension x is 31 - 7 = 24 daily fractions of an average week (where 7 daily fractions of an average week equal one average week). As before, the weekly payment will be 189.80 Both methods are effectively the same calculation.", "title": "" }, { "docid": "b2ca60e1f757516b41e9fd67b5707998", "text": "At time = 0, no interest has accrued. That's normal. And the first payment is due after a month, when there's a month's interest and a bit of principal due. Note - I missed weekly payments. You'd have to account for this manually, add a month's interest, then calculate based on weekly payments.", "title": "" }, { "docid": "d8daa76dbdb645d5b8cf76a415051d09", "text": "\"You'd have to look at the terms of the loan to be sure, but if the interest compounds weekly then you'd have to calculate the effect of 3 compounding periods, then compute for weekly payments. The balance after 3 weeks would be: Using Excel's PMT function for that principal balance, I get a weekly payment of $189.48. If the interest doesn't compound, the principal balance will be about $8888.37 and the weekly payment would be $189.85. Note, however, that the terms of the loan could be completely customized, so you'd need to be sure that the payment and the amortization schedule make sense to you before you agree to the loan. Since the interest is very high, I suspect this is a \"\"no credit needed\"\" car loan which are notorious for unfavorable (to the borrower) terms.\"", "title": "" } ]	[ { "docid": "557a6cad91cdbb47585518cd2448d807", "text": "If they short the contract, that means, in 5 months, they will owe if the price goes up (receive if the price goes down) the difference between the price they sold the future at, and the 3-month Eurodollar interbank rate, times the value of the contract, times 5. If they're long, they receive if the price goes up (owe if the price goes down), but otherwise unchanged. Cash settlement means they don't actually need to make/receive a three month loan to settle the future, if they held it to expiration - they just pay or receive the difference. This way, there's no credit risk beyond the clearinghouse. The final settlement price of an expiring three-month Eurodollar futures (GE) contract is equal to 100 minus the three-month Eurodollar interbank time deposit rate.", "title": "" }, { "docid": "798cff6a3a52fef325e5808244302d46", "text": "Reading Great Lakes' page How Payments Are Applied, I think you are probably correct about how the payments are applied: Interest first, minimum on each loan next, then any extra is applied to the highest interest loan. If I were you, I would make one payment a month, and I would make that payment as large as I possibly could. Trying to make more than one payment in a month is too complicated (and you aren't sure exactly how those payments get credited), and saving up for a big payment every few months is pointless and will cost you interest.", "title": "" }, { "docid": "4bd07322012f097a21bf63a11cc85067", "text": "Since the compounding period and payment period differs (Compounded Daily vs Paid Monthly), you need to find the effective interest rate for one payment period (month). This means that each month you pay 0.33387092772% of the outstanding principal as interest. Then use this formula to find the number of months: Where PV = 21750, Pmt = 220, i = 0.0033387092772 That gives 120 Months. Depending on the day count convention, (30/360 or 30.416/365 or Actual/Actual), the answer may differ slightly. Using Financial Calculator gives extremely similar answer. The total cash paid in the entire course of the loan is 120 x $220 = $26,400", "title": "" }, { "docid": "354869e879f074d72e1abac7d1351121", "text": "A payment of $224 at 7.2% interest will pay off a $33000 mortgage in 30 years. Unfortunately, I'm on cold medicine so guessing was the only way I got to the answer, but I guessed right on the first try :). However, if you like algebra: The following formula is used to calculate the fixed monthly payment (P) required to fully amortize a loan of L dollars over a term of n months at a monthly interest rate of c. [If the quoted rate is 6%, for example, c is .06/12 or .005]. P = L[c(1 + c)n]/[(1 + c)n - 1]", "title": "" }, { "docid": "b394fb12247f8f51b41e8ffda1d19a02", "text": "You need the Present Value, not Future Value formula for this. The loan amount or 1000 is paid/received now (not in the future). The formula is $ PMT = PV (r/n)(1+r/n)^{nt} / [(1+r/n)^{nt} - 1] $ See for example http://www.calculatorsoup.com/calculators/financial/loan-calculator.php With PV = 1000, r=0.07, n=12, t=3 we get PMT = 30.877 per month", "title": "" }, { "docid": "224a2b8fb722f75d47bbb68da882e4f8", "text": "With the $2000 downpayment and interest rate of 11.5% nominal compounded monthly the monthly payments would be $970.49 As you state, that is a monthly rate of 0.9583% Edit With the new information, taking the standard loan equation where Let Now setting s = 98000, with d = 990.291 solve for r", "title": "" }, { "docid": "3ebe277b33ff978605066cd87d13683e", "text": "\"I feel that getting money sooner than later is always advantageous. If I offered you the choice between getting: Which option would you take? I would take the last option. And for the same reason, from a purely-numbers point of view, I would argue that getting paid biweekly is preferable (assuming the the annual salary is pro-rated fairly, and barring any compulsive spending habits). Your calculations suggest to me that they are trying to answer the question, \"\"Looking at a single year or month (or some other fixed amount of time) in a vacuum, is there any financial benefit to being paid bi-weekly over monthly?\"\". The analysis seems to be focusing on comparing the two pay schedules on a month-by-month basis, noting when one is paid bi-weekly, some months you get paid more times than the other. However, one could also compare the two pay schedules on a fortnight-by-fortnight basis, and note that when one is paid monthly, many fortnights you don't get paid at all, and some you get paid a lot. Or one could compare the two pay schedules on an hour-by-hour basis, too. But in the long run, the money adds up to be the same amount. I prefer getting it as soon as I can.\"", "title": "" }, { "docid": "f595b1e50b0683b20aa07a69001c969c", "text": "\"One way to think of the typical fixed rate mortgage, is that you can calculate the balance at the end of the month. Add a month's interest (rate times balance, then divide by 12) then subtract your payment. The principal is now a bit less, and there's a snowball effect that continues to drop the principal more each month. Even though some might object to my use of the word \"\"compounding,\"\" a prepayment has that effect. e.g. you have a 5% mortgage, and pay $100 extra principal. If you did nothing else, 5% compounded over 28 years is about 4X. So, if you did this early on, it would reduce the last payment by about $400. Obviously, there are calculators and spreadsheets that can give the exact numbers. I don't know the rules for car loans, but one would actually expect them to work similarly, and no, you are not crazy to expect that. Just the opposite.\"", "title": "" }, { "docid": "1f44a13c0f9aa05b0b154df9f73321d6", "text": "The formula you need is: M = (r * PV) / (1 - ((1+r)^(-n))) M = monthly payment ($350) r = interest per period (7.56% / 12) = 0.63% n = number of periods (36 months) PV = present value, or here, your max loan amount given M Therefore: $350 = (0.63% * PV) / (1 - ((1+0.63%)^(-36))) The denominator on the right ends up equal to ~ 0.2025 when you do the math in your calculator. Carry that over to the by multiplying both sides of the equation by 0.2025 This results in $70.82 = 0.63% * PV Divide $70.82 by 0.63% to get PV = $11,242 (roughly). Hope this helps explain it algebraically!!", "title": "" }, { "docid": "8fe95ac44f4d7345a6a9bf5df235d0e2", "text": "One option is to try to get a month ahead on your mortgage payments. Rather than using the current month's rent to pay the current month's mortgage payments, try to use the previous month's rent to pay the current month's mortgage payments. This should allow you to pay on time rather than late but not unacceptably late.", "title": "" }, { "docid": "0728c771610b8d73857743160db5d244", "text": "This is of course using 'new math'. Namely, if I lend you $100 and you keep it for a month, I've lent you $100. In fact, if I loan you $100 for a year I've loaned you $100. But if I lend you $100 overnight, you pay me back in the morning, I lend you $100 overnight, you pay me back in the morning and we repeat that for a month, I've supposedly lent you $3,000. That's some interesting math for sure.", "title": "" }, { "docid": "fb27c66a35cc55960c02af798c2cf7b9", "text": "\"You'd have to check the terms of your contract. On most installment loans, I think, they calculate interest monthly, not daily. That is, if you make 3 payments of $96 over the course of the month instead of one payment of $288 at the end of the month (but before the due date), it makes absolutely zero difference to their interest calculation. They just total up your payments for the month. That's how my mortgage works and how some past loans I've had worked. All you'd accomplish is to cost yourself some time, postage if you're mailing payments, and waste the bank's time processing multiple payments. If the loan allows you to make pre-payments -- which I think most loans today do -- then what DOES work is to make an extra payment or an overpayment. If you have a few hundred extra dollars, make an extra payment. This reduces your principle and reduces the amount of interest you pay every month for the remainder of the loan. And if you're paying $1 less in interest, then that extra dollar goes against principle, which further reduces the amount you pay in interest the next month. This snowballs and can save you a lot in the long run. Better still, instead of paying $288 each month, pay, say, $300. Then every month you're nibbling away at the principle faster and faster. For example, I calculate that if you're paying $288 per month, you'll pay the loan off in 72 months and pay a total of $6062 in interest. Pay $300 per month and you'll pay it off in 67 months with a total of $6031 interest. Okay, not a huge deal. Pay $350 per month and you pay it off in 55 months with $5449 interest. (I just did quick calculations with a spreadsheet, not accurate to the penny, but close enough for comparison.) PS This is different from \"\"revolving credit\"\", like credit cards, where interest is calculated on the \"\"average daily balance\"\". With a credit card, making multiple payments would indeed reduce your interest. But not by much. If you pay $100 every 10 days instead of $300 at the end, then you're saving the interest on 20 days x $100 + 10 days x $100, so 12.5% = 0.03% per day, so 0.03% x ($2000+$1000) = 90 cents. If you're mailing your payments, the postage is 49 cents x 2 extra payments = 98 cents. You're losing 8 cents per month by doing this.\"", "title": "" }, { "docid": "f0938f9cb1ddcfe644e0c4bc217a2a3b", "text": "Not that I doubted everyone's assumption but I wanted to see the math so I did some spreadsheet hacking. I assumed a monthly payments for 30 years which left us with total payments of 483.89. I then assumed we'd pay an extra $200/month in one of two scenarios. Scenario 1 we just paid that $200 directly to the lender. In scenario 2 we set the extra $200 aside every month until we were able to pay off the $10k at 7%. I assumed that the minimum payments were allocated proportionately and the overpayments were allocated evenly. That meant we paid off loan 5 at about month 77, loan 4 in month 88, loan 3 in month 120, loan 2 in month 165, and loan 1 in month 170. Getting over to scenario 2 where we pay $483.89 to lender and save $200 separately. In month 48 we've saved $9600 relative to the principle remaining in loan 3 of $9547. We pay that off and we're left with loan 1,2,4,5 with a combined principle of about $60930. At this point we are now going to make payments of 683.89 instead of saving towards principle. Now our weighted average interest rate is 6.800% instead of 6.824%. We can calculate the number of payments left given a principle of 60930, interest of 6.8%, and payment of 683.89 to be 124.4 months left for a total of 172.4 months Conclusion: Scenario 1 pays off the debt 3 months sooner with the same monthly expenditure as scenario 2.", "title": "" }, { "docid": "b3666af20f9bb3570574b277a7faccb3", "text": "Unless you are getting the loan from a loan shark, it is the most common case that each payment is applied to the interest accrued to date and the rest is applied towards reducing the principal. So, assuming that fortnightly means 26 equally-spaced payments during the year, the interest accrued at the end of the first fortnight is $660,000 x (0.0575/26) = $1459.62 and so the principal is reduced by $2299.61 - $1459.62 = $839.99 For the next payment, the principal still owing at the beginning of that fortnight will be $660,000-$839.99 = $659,160.01 and the interest accrued will be $659,160.01 x (0.0575/26) = $1457.76 and so slightly more of the principal will be reduced than the $839.99 of the previous payment. Lather, rinse, repeat until the loan is paid off which should occur at the end of 17.5 years (or after 455 biweekly payments). If the loan rate changes during this time (since you say that this is a variable-rate loan), the numbers quoted above will change too. And no, it is not the case that just %5.75 of the $2300 is interest, and the rest comes off the principle (sic)? Interest is computed on the principal amount still owed ($660,000 for starters and then decreasing fortnightly). not the loan payment amount. Edit After playing around with a spreadsheet a bit, I found that if payments are made every two weeks (14 days apart) rather than 26 equally spaced payments in one year as I used above, interest accrues at the rate of 5.75 x (14/365)% for the 14 days rather than at the rate of (5.75/26)% for the time between payments as I used above each 14 days, $2299.56 is paid as the biweekly mortgage payment instead of the $2299.61 stated by the OP, then 455 payments (slightly less than 17.5 calendar years when leap years are taken into account) will pay off the loan. In fact, that 455-th payment should be reduced by 65 cents. In view of rounding of fractional cents and the like, I doubt that it would be possible to have the last equal payment reduce the balance to exactly 0.", "title": "" }, { "docid": "0b94911436e766d7e927bbe443605fb5", "text": "tl;dr: Be patient, money is probably sitting somewhere, and it will eventually be credited back to your account. I had a similar problem about 10 years ago. I sent an international wire transfer, from my own bank account in Germany to my bank account in Central America. I had done this before, and there had been no issues, but in this case, even though all the information was correct, the bank rejected the wire because it was above $10K, and in that case, the bank needs written proof from the owner of the receiving account (me) , and so didn't know where the funds were coming from. I had to call the local Sparkasse bank in Germany, as well as an intermediary bank in London to sort it all out, and in total, had to wait about 3-4 weeks to get the money back in my Sparkasse bank account. At one point I thought I may never see that money back, especially since there was an intermediary bank to deal with, but it all worked out in the end.", "title": "" } ]	fiqa
d4be236f4e39167ee2391bf373dca813	Do I have to repay the First-Time Homebuyers tax credit if I refinance?	[ { "docid": "4358862e30f60df862722f91cef19815", "text": "The Homebuyers Tax Credit was unrelated to whether or not a mortgage was part of the purchase. You will have no issue with this credit if you refinance.", "title": "" }, { "docid": "049447e698bc3a74b9f5938b8d8f921e", "text": "No. As long as you live in the house for 3 years, it's yours to keep. Financing has nothing to do with that.", "title": "" } ]	[ { "docid": "f5d03797d7499736c830449098a393c1", "text": "\"Is all interest on a first time home deductible on taxes? What does that even mean? If I pay $14,000 in taxes will My taxes be $14,000 less. Will my taxable income by that much less? If you use the standard deduction in the US (assuming United States), you will have 0 benefit from a mortgage. If you itemize deductions, then your interest paid (not principal) and your property tax paid is deductible and reduces your income for tax purposes. If your marginal tax rate is 25% and you pay $10000 in interest and property tax, then when you file your taxes, you'll owe (or get a refund) of $2500 (marginal tax rate * (amount of interest + property tax)). I have heard the term \"\"The equity on your home is like a bank\"\". What does that mean? I suppose I could borrow using the equity in my home as collateral? If you pay an extra $500 to your mortgage, then your equity in your house goes up by $500 as well. When you pay down the principal by $500 on a car loan (depreciating asset) you end up with less than $500 in value in the car because the car's value is going down. When you do the same in an appreciating asset, you still have that money available to you though you either need to sell or get a loan to use that money. Are there any other general benefits that would drive me from paying $800 in rent, to owning a house? There are several other benefits. These are a few of the positives, but know that there are many negatives to home ownership and the cost of real estate transactions usually dictate that buying doesn't make sense until you want to stay put for 5-7 years. A shorter duration than that usually are better served by renting. The amount of maintenance on a house you own is almost always under estimated by new home owners.\"", "title": "" }, { "docid": "97346439b9bda6cb87eaf6f87a228137", "text": "Keep in mind that lenders will consider the terms of any loans you have when determining your ability to pay back the mortgage. They'll want to see paperwork, or if you claim it is a gift they will require a letter to that effect from your relative. Obviously, this could effect your ability to qualify for a loan.", "title": "" }, { "docid": "f1f1690e97d60a6dcbc7d05e5578b1c4", "text": "In my county one can pay your taxes up front, or pay a fee and then pay in 2 installments. I caught countrywide mortgages paying the fee (from my escrow account) then paying the 2 installments so that they could keep the interest over the 6 months. After that I've always insisted on not having an escrow account.", "title": "" }, { "docid": "2c1b9a33fd7245abb4e859e9da10396b", "text": "You're partially correct, at least in my understanding of this. Yes, the tax credit can be carried forward to future years, but since it is non-refundable it will reduce your tax liability solely. Depending on your tax situation this may result in a bigger refund or it may not. In an example, If you've had $3K withheld from your paycheck toward your income tax and this is also an accurate reflection if your tax liability then taking the NRTC would reduce your tax liability enabling you to be eligible for a refund (due to having already pre-paid more tax than you're liable for).", "title": "" }, { "docid": "0dc497d277202eaf06f2613555187913", "text": "\"I read the linked article as gef05 did, it states that the bank must stop charging PMI. But. My understanding is different. I understood that the requirement to remove PMI at sub 80 loan to value only occurred after the natural amortization time had passed. For example, you buy a $100K home, you will be at 80% LTV the day you owe 80K. This date can be calculated at the closing as you know your numbers by then. There's nothing stopping you from asking the bank to stop charging PMI sooner, but I believe they already have an end date in mind. Besides the appraisal request, what exactly did they give as the reason they won't cancel PMI? Edit - I just re-read the link. The line \"\"you show that the value of the property hasn't gone down\"\" makes the bank's appraisal request reasonable, IMHO.\"", "title": "" }, { "docid": "252746493a0e4309e5f8a4c89e7e6467", "text": "I'll preface this with saying that I'm not a finance or real estate professional, this is just how I understand the situation and what I'm doing: We just got a 30year/FHA mortgage, there's no prepayment penalty, and no fees associated with paying it biweekly. In fact (Wells Fargo), while the payments get withdrawn biweekly, they don't actually post to the mortgage until there's enough for a full payment. So essentially here are the benefits I'm realizing:", "title": "" }, { "docid": "642b2e4f9c3ead1b07d1a182c3669717", "text": "You would need to check the original mortgage papers you signed with the originators. Chances are you agreed to allow the mortgage to be sold and serviced by other parties. Refinancing would also put you in the same boat unless you got them to take that clause out of the mortgage/refinance papers. Also, chances are most small banks and originators simply can not keep mortgages on their books. There are also third parties that service loans too that do not actually own the mortgages as well. This is another party that could be involved out of many in your mortgage. I would also not worry about 127/139 complaints out of 1,100,000 loans. Most probably were underwater on their mortgage but I am sure a few are legitimate complaints. Banks make mistakes (I know right!). Anyway, good luck and let me know if you find out anything different.", "title": "" }, { "docid": "bd6b93b94758ae5990326a55b01b59f4", "text": "When evaluating a refinance, you need to figure out the payback time. Refinancing costs money in closing costs. The payback time is the time it takes to recover the closing costs with the amount of money you are saving in interest. For example, if the closing costs are $2,000, your payback time is 2 years if it takes 2 years to save that amount in interest with the new interest rate vs. the old one. To estimate this, look at the difference in interest rate between your mortgage and the new one, and your mortgage balance. For example, let's say that you have $100,000 left on your mortgage, and the new rate is 1% lower than your current rate. In one year, you will save roughly $1,000 in interest. If your closing costs are $2,000, then your payback time is somewhere around 2 years. If you plan on staying in this house longer than the payback time, then it is beneficial to refinance. There are mortgage refinance calculators online that will calculate payback time more precisely. One thing to watch out for: when you refinance, if you expand the term of your mortgage, you might end up paying more interest over the long term, even though your rate is less and your monthly payment is less. For example, let's say you currently have 8 years left on a 15-year mortgage. If you refinance to a new 15-year mortgage, your monthly payment will go down, but if you only pay the new minimum payment for the next 15 years, you could end up paying more in interest than if you had just continued with your old mortgage for the next 8 years. To avoid this, refinance to a new mortgage with a term close to what you have left on your current mortgage. If you can't do that, continue paying whatever your current monthly payment is after you refinance, and you'll pay your new mortgage early and save on interest.", "title": "" }, { "docid": "3e5be56b599f442654446f850300611c", "text": "Paying extra principal is not a complicated decision. You have a rate, say 5%. And you have an after tax rate, say, 3.75% (if you are in the 25% bracket and it's all deductible) Are you happy to get a 3.75% after tax return? If you have a retirement plan, and are not getting the full company match, that would be the first priority. If you have other debt, say a 10% credit card, that's the next priority. Is the sale soon? If so, I'd imagine you'd prefer to stay liquid, to have the next down payment ready without needing to rent in between.", "title": "" }, { "docid": "219cfa127699ad13a47fe803945b790c", "text": "\"I'm a \"\"new\"\" (last 2 years) homeowner. For me, at least, benefits of owning far outweigh renting. $8000 tax credit for the first time homebuyer, a massive deduction every year for your tax return, the option to rent out rooms to offset the large majority of my mortgage payment, and the real estate trend indicating that the value of my house should increase over time. I think that if one has the means to buy in the current environment rather than renting, they certainly should. You get no return on your money if you rent.\"", "title": "" }, { "docid": "8dfd8f9551cb41ca84b421e899594d2c", "text": "Our mortgage provider actually took the initiative to send us a refinance package with no closing costs to us and nothing added to the note; took us from a 30-year-fixed ~6.5% note to a 15-year-fixed ~5% note, and dropped the monthly payment in the process. You might talk to your existing lender to see if they would do something like that for you; it gives them a chance to keep your business, and it cuts your costs.", "title": "" }, { "docid": "5866224a35f6fa88ea495093b70dd815", "text": "In a lot of cases, the bank has already made their money. Shortly after you get your mortgage is sold to investors though the bank is still servicing it for a fee. Therefore, if you refinance, they get to sell it again.", "title": "" }, { "docid": "54b70047a1441f552c304ac3674a6f53", "text": "\"It can be a good thing for the bank to refinance your loan for you - since you will be keeping the loan at that particular institution. This gives them more time to enjoy the free money you pay them in interest for the remaining life of the loan. Banks that offer \"\"No closing costs\"\" are betting that mortgage payers will move their mortgage to get the lower interest rates - and whomever holds the loan, gets the interest payments.\"", "title": "" }, { "docid": "5c921d6803aab49c56193734f008ace1", "text": ">OK, great, where do I apply for my refund? An odd question, but I'll answer it if you really don't know. Tax credits will only likely be a refund if you pay too much tax during the year, otherwise they will be reductions in your yearly tax bill. In most countries, tax credits are awarded when paying taxes. Assuming you are from the United States, that would likely be in April on your individual income tax form. Tax credits can be earned for doing anything the government deems desirable or worthy of exception. Examples include buying a first house, having children, starting or running a business, paying tuition, adopting a child, caring for an elderly or disabled person, earning money overseas, paying certain types of medical insurance, and being married in addition to purchasing a zero emission or low emission vehicle.", "title": "" }, { "docid": "1d70c66d71539d742252756e37426e4d", "text": "If you took advantage of options like a home buyers plan (HBP) you definitely need to file since you must designate how much of the plan to repay. Your employer does not know about what you do with your money so cannot take this into account for the withheld taxes. If you do not report repayment of the HBP it will be treated as a withdrawal from your RRSP i.e. additional income for that tax year.", "title": "" } ]	fiqa
9a924e606ef37d4b1d108ae9b4209d8f	I co-signed a car but i am listed as the primary account holder for the loan	[ { "docid": "ed3a04403eb605af7ed68d5a4c79621c", "text": "The buyer can get another cosigner or you can sell the car to pay off the loan. These are your only options if financing cannot be obtained independently.", "title": "" }, { "docid": "654174b5239db25f62a839b71216c9ba", "text": "\"First of all you do not \"\"co-sign a car\"\". I assume what you mean by this is that you co-signed a loan, and the money was used to buy a car. Once you signed that loan YOU OWED THE MONEY. Once a loan exists, it exists, and you will owe the money until the loan is paid. If you do not want to owe the money, then you need to pay back the money you borrowed. You may not think \"\"you\"\" borrowed the money because the car went to someone else. THE BANK AND THE COURTS DO NOT CARE. All they care about is that YOU signed the loan, so as far as they are concerned YOU owe the money and you owe ALL of the money to the bank, and the only way to change that is to pay the money back.\"", "title": "" } ]	[ { "docid": "7ba1aa8230b37c2401e3c92abe036ee2", "text": "\"Your arrangements with the bank are irrelevant. Whoever is named on the title of the vehicle owns it. If she is the \"\"primary\"\", then I assume her name is on the title, therefore she owns the car. If you drive off with the car and it is titled in her name, she can report it stolen and have you arrested for grand theft auto unless you have a dated and signed permission in writing from her to use the car. Point #2: If a car loan was involved, then you didn't \"\"purchase\"\" the car, the bank did. If you want to gain ownership of the car, then you need to have her name removed from the title and have yours put in its place. Since the bank has possession of the title, this will require the cooperation of both your girlfriend and the bank.\"", "title": "" }, { "docid": "fc70fc22cffbad20451f3ac917be04db", "text": "There is a difference between an owner and a signer. An owner is the legal owner of the funds. A signer has access to withdraw the funds. In most cases, when a new personal account is opened the name is added as an owner&signer. However, that is not always the case. A person could be an owner, but not a signer, in a custodial arrangement. For example, a minor child may be an owner only on their account with a custodial parent listed as a signer. The minor could not withdraw from the account. A person could be a signer, but not an owner, in a business or estate/trust account. The business or estate would be the owner with individuals listed as signers only. The business employees do not own the funds, they are only allowed to withdraw and disburse the funds on behalf of the company. The creditor can only garnish/withhold funds that are owned by the indebted. If the second person on the account is only a signer, those funds cannot be withheld as part of a judgment against the second person (they don't own those funds). However, simply titling the second person as a signer only is not sufficient. If you share access with the second person and allow them to spend the money for their own benefit, they are no longer just a signer. They have become an owner because you are sharing your funds with them. Think of the business relationship as an example. The employee is a signer so they can withdraw funds and pay business expenses, like the electric bill. If the employee withdrew funds and bought herself a new dress, she is stealing because she does not own those funds. If the second person on the account buys things for themselves, or transfers some of the money into their own account, they are demonstrating that more than a signer-only relationship exists. A true signer-only relationship is where the individual can only withdraw funds on the owner's behalf. For example, the owner is out of town and needs a bill paid, the signer can write a check and pay the bill for the owner. A limited power of attorney may be worth looking into. With a limited POA, the owner can define the scope and expiration of the power of attorney. With this arrangement, the second person becomes an executor of the owner under certain circumstances. For example, you could write a power of attorney that states something like: John Smith is hereby granted the limited power to withdraw funds from account 1234, on deposit at Anytown Bank, for the purpose of paying debts and obligations and otherwise maintain my estate in the event of my incapacitation or inability to attend to my own affairs. This Power of Attorney shall expire on it's fifth anniversary unless renewed. If the person you have granted the power of attorney abuses their access, you could sue them and you would only have to demonstrate that they overstepped the scope of their power.", "title": "" }, { "docid": "887b6da259f747c3ebaa6117d49b4758", "text": "Not sure if it is the same in the States as it is here in the UK (or possibly even depends on the lender) but if you have any amount outstanding on the loan then you wouldn't own the vehicle, the loan company would. This often offers extra protection if something goes wrong with the vehicle - a loan company talking to the manufacturer to get it resolved carries more weight than an individual. The laon company will have an army of lawyers (should it get that far) and a lot more resources to deal with anything, they may also throw in a courtesy car etc.", "title": "" }, { "docid": "5fa642b6d1699325bda825d5440788e0", "text": "Make sure I am reading this correctly. You signed the car over to you BF, he took a loan against it and gave you the money? If so, you sold him the car and any use you have had of it since was at his consent. Outside of a written contract saying otherwise (and possibly even with one) it is now his car to do with as he pleases. It sucks that things are not working out in the manner you intended at the time, but that is the reality of the situation.", "title": "" }, { "docid": "acb816344bd11b198f25109dc751d108", "text": "Re (1), I don't think it makes any difference. What does make a difference is the presence of your signature on the loan documents, unfortunately. And even if your ex-business partner didn't include the LoC in his bankruptcy, if he or his company don't have any money the bank is still going to come after you.", "title": "" }, { "docid": "93b4633bc4b31002b95efa381173b0bd", "text": "Ordinarily a cosigner does not appear on the car's title (thus, no ownership at all in the vehicle), but they are guaranteeing payment of the loan if the primary borrower does not make the payment. You have essentially two options: Stop making payments for him. If he does not make them, the car will be repossessed and the default will appear on both his and your credit. You will have a credit ding to live with, but he will to and he won't have the car. Continue to make payments if he does not, to preserve your credit, and sue him for the money you have paid. In your suit you could request repayment of the money or have him sign over the title (ownership) to you, if you would be happy with either option. I suspect that he will object to both, so the judge is going to have to decide if he finds your case has merit. If you go with option 1 and he picks up the payments so the car isn't repossessed, you can then still take option 2 to recover the money you have paid. Be prepared to provide documentation to the court of the payments you have made (bank statements showing the out-go, or other form of evidence you made the payment - the finance company's statements aren't going to show who made them).", "title": "" }, { "docid": "c6a6d74cd53d39bcc7907a768865a60e", "text": "Go to your local bank or credit union before talking to a dealership. Ask them if putting both names on the loan makes a difference regarding rates and maximum loan you qualify for. Ask them to run the loan application both ways. Having both names on the loan helps build the credit of the spouse that has a lower score. You may find that both incomes are needed for a car loan if the couple has a mortgage or other joint obligations. The lender will treat the entire mortgage payment or rent payment as a liability against the person applying for the loan, they won't split the housing payment in half if only one name will be on the car loan. Therefore sometimes the 2nd persons income is needed even if their credit is not as good. That additional income without a significant increase in liabilities can make a huge difference regarding the loan they can qualify for. Once the car is in your possession, it doesn't matter who drives it. In general the insurance company will put both spouses as authorized drivers. Note: it is almost always better to ask your bank or credit union about a car loan before going to the dealership. That gives you a solid data point regarding a loan, and removes a major complexity to the negotiations at the dealership.", "title": "" }, { "docid": "e8e6c38c95e169f5d01c19699cb2e6f0", "text": "Update: here is a message the seller just sent me. Does this make sense? I spoke with my bank again and they explained it a little better for me. I guess how it works is they will print out something for you that is called an affidavit in lieu of title that states they are no longer the lein holder and to release it to you. You then take that to the dol and they get it put in your name. He says that's how they do it all the time. When we get to the bank, the teller just verifies the check and I deposit it and they release the funds to pay off the account and that's when you would get the paperwork. You would be there for the whole process so nothing is sketchy. Sorry it's such a pain, I didn't understand how that worked. We've never sold a car with a loan on it before.", "title": "" }, { "docid": "6654e2df896eda68dbf3c8da9c17bbfb", "text": "I've done this, though with a loan company rather than a bank. We agreed on price, drove to the loan company's office (the seller having notified them in advance), I gave them the money, got the title, and they gave the balance to the seller. Important point is that you get the signed-off title from the lienholder.", "title": "" }, { "docid": "1cee712904c22253683819c081aae7fc", "text": "I've been an F&I Manager at a new car dealership for over ten years, and I can tell you this with absolute certainty, your deal is final. There is no legal obligation for you whatsoever. I see this post is a few weeks old so I am sure by now you already know this to be true, but for future reference in case someone in a similar situation comes across this thread, they too will know. This is a completely different situation to the ones referenced earlier in the comments on being called by the dealer to return the vehicle due to the bank not buying the loan. That only pertains to customers who finance, the dealer is protected there because on isolated occasions, which the dealer hates as much as the customer, trust me, you are approved on contingency that the financing bank will approve your loan. That is an educated guess the finance manager makes based on credit history and past experience with the bank, which he is usually correct on. However there are times, especially late afternoon on Fridays when banks are preparing to close for the weekend the loan officer may not be able to approve you before closing time, in which case the dealer allows you to take the vehicle home until business is back up and running the following Monday. He does this mostly to give you sense of ownership, so you don't go down the street to the next dealership and go home in one of their vehicles. However, there are those few instances for whatever reason the bank decides your credit just isn't strong enough for the rate agreed upon, so the dealer will try everything he can to either change to a different lender, or sell the loan at a higher rate which he has to get you to agree upon. If neither of those two things work, he will request that you return the car. Between the time you sign and the moment a lender agrees to purchase your contract the dealer is the lien holder, and has legal rights to repossession, in all 50 states. Not to mention you will sign a contingency contract before leaving that states you are not yet the owner of the car, probably not in so many simple words though, but it will certainly be in there before they let you take a car before the finalizing contract is signed. Now as far as the situation of the OP, you purchased your car for cash, all documents signed, the car is yours, plain and simple. It doesn't matter what state you are in, if he's cashed the check, whatever. The buyer and seller both signed all documents stating a free and clear transaction. Your business is done in the eyes of the law. Most likely the salesman or finance manager who signed paperwork with you, noticed the error and was hoping to recoup the losses from a young novice buyer. Regardless of the situation, it is extremely unprofessional, and clearly shows that this person is very inexperienced and reflects poorly on management as well for not doing a better job of training their employees. When I started out, I found myself in somewhat similar situations, both times I offered to pay the difference of my mistake, or deduct it from my part of the sale. The General Manager didn't take me up on my offer. He just told me we all make mistakes and to just learn from it. Had I been so unprofessional to call the customer and try to renegotiate terms, I would have without a doubt been fired on the spot.", "title": "" }, { "docid": "fc8673c9c96f25059fcf3f3becd6bc98", "text": "\"Depending on how you view the loan, it could either be considered an Asset or a Liability. Since you are not charging interest, it might seem more intuitive to create an \"\"Assets:Cash Loan\"\" account, and transfer money to & from it (when you receive payments) like you would with a bank account. Personally, I prefer to think of all loans as liabilities. Whether it's a debt which you owe someone, or a balance which someone else owes you, since it's an 'unsettled' amount I file it under \"\"Liabilities:Loan\"\". Either way, you record the initial balance as a debit from your bank, and then record payments as credits back to your primary account. The only way that income or expenses ever gets involved would be if you charged interest (income) or if you forgave some or all of the loan (expense) at some point in the future.\"", "title": "" }, { "docid": "e50b5bb1e442c035db4970ad52e0f7bb", "text": "Yes, but then either of you will need the other's permission to sell the car. I strongly recommend you get an agreement on that point, in writing, and possibly reviewed by a lawyer, before entering into this kind of relationship. (See past discussions of car titles and loan cosigners for some examples of how and why this can go wrong.) When doung business with friends, treating it as a serious business transaction is the best way to avoid ruining the friendship.", "title": "" }, { "docid": "b86c2b9dda3a99e37f02df0eeb65d867", "text": "I believe that your son will need to get a new loan for the car in his name only and use the proceeds of that loan to pay off the one you co-signed on. The only way that will happen is if he can find a lender willing to loan him the money based on his credit only. From the current lender's perspective, if your son isn't a good credit risk, then why would they let someone out of the loan who might be able to pay if your son defaults? If he is a good credit risk, then they, or someone else, should be willing to lend to him without you as co-signer. Also, as Dilip Sarwate mentioned, you might have to do something with the title, depending on whose name it is in.", "title": "" }, { "docid": "55424864462f469b1beffbe1d39f8ba0", "text": "\"It all comes down to how the loan itself is structured and reported - the exact details of how they run the loan paperwork, and how/if they report the activity on the loan to one of the credit bureaus (and which one they report to). It can go generally one of three ways: A) The loan company reports the status to a credit reporting agency on behalf of both the initiating borrower and the cosigner. In this scenario, both individuals get a new account on their credit report. Initially this will generally drop related credit scores somewhat (it's a \"\"hard pull\"\", new account with zero history, and increased debt), but over time this can have a positive effect on both people's credit rating. This is the typical scenario one might logically expect to be the norm, and it effects both parties credit just as if they were a sole signor for the loan. And as always, if the loan is not paid properly it will negatively effect both people's credit, and the owner of the loan can choose to come after either or both parties in whatever order they want. B) The loan company just runs the loan with one person, and only reports to a credit agency on one of you (probably the co-signor), leaving the other as just a backup. If you aren't paying close attention they may even arrange it where the initial party wanting to take the loan isn't even on most of the paperwork. This let the person trying to run the loan get something accepted that might not have been otherwise, or save some time, or was just an error. In this case it will have no effect on Person A's credit. We've had a number of question like this, and this isn't really a rare occurrence. Never assume people selling you things are necessarily accurate or honest - always verify. C) The loan company just doesn't report the loan at all to a credit agency, or does so incorrectly. They are under no obligation to report to credit agencies, it's strictly up to them. If you don't pay then they can report it as something \"\"in collections\"\". This isn't the typical way of doing business for most places, but some businesses still operate this way, including some places that advertise how doing business with them (paying them grossly inflated interest rates) will \"\"help build your credit\"\". Most advertising fraud goes unpunished. Note: Under all of the above scenarios, the loan can only effect the credit rating attached to the bureau it is reported to. If the loan is reported to Equifax, it will not help you with a TransUnion or Experian rating at all. Some loans report to multiple credit bureaus, but many don't bother, and credit bureaus don't automatically copy each other. It's important to remember that there isn't so much a thing as a singular \"\"consumer credit rating\"\", as there are \"\"consumer credit ratings\"\" - 3 of them, for most purposes, and they can vary widely depending on your reported histories. Also, if it is only a short-term loan of 3-6 months then it is unlikely to have a powerful impact on anyone's credit rating. Credit scores are formulas calibrated to care about long-term behavior, where 3 years of perfect credit history is still considered a short period of time and you will be deemed to have a significant risk of default without more data. So don't expect to qualify for a prime-rate mortgage because of a car loan that was paid off in a few months; it might be enough to give you a score if you don't have one, but don't expect much more. As always, please remember that taking out a loan just to improve credit is almost always a terrible idea. Unless you have a very specific reason with a carefully researched and well-vetted plan that means that it's very important you build credit in this specific way, you should generally focus on establishing credit in ways that don't actually cost you any money at all. Look for no fee credit cards that you pay in full each month, even if you have to start with credit-building secured card plans, and switch to cash-value no-fee rewards cards for a 1-3% if you operate your financial life in a way that this doesn't end up manipulating your purchasing decisions to cost you money. Words to the wise: \"\"Don't let the credit score tail wag the personal financial dog!\"\"\"", "title": "" }, { "docid": "a8d3723c9efcbb61d7eed84a2e6893c2", "text": "\"Having dealt with with Social Security, state agencies, and banks more than I'd care to, I would urge you to do the following: 1) Get a 100% clear answer on whether or not you are listed as \"\"joint\"\" or \"\"authorized user/signer\"\" for an account. This will probably require a call to the bank, but for less than an hour of you and your friend's time you will save yourself a whole lot of hassle. The difference is like this: if you worked at a business that added you as an authorized user for a credit or debit card, this would allow you to use the card to buy things. But that doesn't make the money in the bank yours! On the other hand if you are listed as \"\"joint\"\", this regards ownership, and it could become tricky to establish whether its your money or not to any governmental satisfaction. 2) You are completely correct in being honest with the agency, but that's not enough - if you don't know what the facts are, you can't really be honest with them. If the form is unclear it's ok to ask, \"\"on having a bank account, does being listed as an authorized user on someone else's account count if it isn't my money or bank account?\"\" But if you are listed as holding the account jointly, that changes the question to: \"\"I am listed as joint on someone else's checking account, but it isn't my money - how is that considered?\"\" To Social Security it might mean generating an extra form, or it might mean you need to have the status on the account changed, or they might not care. But if you don't get the facts first, they won't give you the right answers or help you need. And from personal experience, it's a heck of a lot easier to get a straight and clear answer from a bank than it is from a federal government agency. Have the facts with you when you contact them and you'll be ok - but trust me, you don't want them guessing!\"", "title": "" } ]	fiqa
6c79828004f19f94f1003bc63a21adfb	Where to find site with earnings calendar?	[ { "docid": "f399e7e9098c6bbad3d22e8ddc292eba", "text": "Google finance will allow you to import earnings report dates directly to your Google calendar. See screenshot with calendar import button circled in red below.", "title": "" } ]	[ { "docid": "9b42ee8b333f4eda0048aaa07d6c5a1c", "text": "Edgar Online is the SEC's reporting repository where public companies post their forms, these forms contain financial data Stock screeners allow you to compare many companies based on many financial metrics. Many sites have them, Google Finance has one with a decent amount of utility", "title": "" }, { "docid": "41d3a9dacac7a4016af8e209ec7fe579", "text": "Yahoo finance does in fact have futures quotes. But I've found them difficult to search for because you also have to know the expiration codes for the contract to find them. S&P 500 Emini quote for June 2012", "title": "" }, { "docid": "ebd7b8b4d4c3a2ee667131466eae36f4", "text": "I second @DumbCoder, every company seems to have its own way of displaying the next dividend date and the actual dividend. I keep track of this information and try my best to make it available for free through my little iphone web app here http://divies.nazabe.com", "title": "" }, { "docid": "f23b2797867eb8b76bf95504624c9fbc", "text": "\"A Bloomberg terminal connected to Excel provides the value correcting splits, dividends, etc. Problem is it cost around $25,000. Another one which is free and I think that takes care of corporate action is \"\"quandl.com\"\". See an example here.\"", "title": "" }, { "docid": "9f5a172bfd2cf8beccadbe49b2bfc359", "text": "You can access financial statements contained within 10K and 10Q filings using Last10K.com's mobile app: Last10K.com/mobile Disclosure: I work for Last10K.com", "title": "" }, { "docid": "1215709f7759651dfa4fa316b87bc917", "text": "The websites of the most publicly traded companies publish their quarterly and annual financials. Check the investor relations sections out at the ones you want to look at.", "title": "" }, { "docid": "66c2e069c3503182b76c10aac73e22e5", "text": "Thanks to the other answers, I now know what to google for. Frankfurt Stock Exchange: http://en.boerse-frankfurt.de/equities/newissues London Stock Exchange: http://www.londonstockexchange.com/statistics/new-issues-further-issues/new-issues-further-issues.htm", "title": "" }, { "docid": "2c77381fb773ed6ce8484d1c26dc4212", "text": "\"There are tonnes, and tonnes of things out there, but you have to be careful what you search for. Be specific about what you want. If you search for \"\"time sheet\"\" for example, you'll just get a bucket of stuff having to do with stylesheets, because there's more of that around. The most common type of small tool for tracking time is usually a timer-type thing that runs as a widget, gadget, or System Tray tool. You have to click it on, then off again, and the nice ones produce a usable output file. CSV, or XLS, or some such. There are tools that track what documents you have open, when you opened them, and when you closed them, and you can sort it out from there. They're a bit resource-heavy, so be careful if you have a low power system. Quickbooks has a little utility that will make file which can be imported into your accounting. Quickbooks is NOT for the average business person. You almost have to be a bookkeeper to get the most out of it. On the other hand, you can have a bookkeeper set it up for you, and at the end of the year your taxes are a one button affair. For Windows software I like to use the site snapfiles.com. It's always been reliable, the rating systems are pretty accurate, they mostly maintain their own copies of the software, they test for viruses, and the let you specify a \"\"freeware only\"\" search ;-) For Mac software I like versiontracker.com. If you're a massive freeware user, like me, sign up for an account, so you can receive alerts regarding updates, and such. Currently I do most of my computer-based organization on a Mac with piece of software by CircusPonies.com called NoteBook. There's a command to insert the time, date, or both, and I just use that when I have a need to record elapsed time. I have even run across (and I forget the name) a piece of software for tracking time on Windows, which had multiple timers which you could set so either they were allowed to run concurrently (lawyers), or only one would run at a time. Anyway… Personally I think freeware is fun, but be careful. It's still the wild frickin west out there. If you don't trust the site you're downloading from, scan it with your anti-virus software before you install it, create a Restore Point, do a full, offsite backup of all your hard drives, unplug your computer from the Internet, send your wife to her mother's, lock the kids in the basement, cross your fingers, and phone the local bishop for a dispensation (http://en.wikipedia.org/wiki/Dispensation_(Catholic_Church)).\"", "title": "" }, { "docid": "fe41bd844ccdd880ae9b1f59abe82487", "text": "\"Google Finance certainly has data for Tokyo Stock Exchange (called TYO on Google) listings. You could create a \"\"portfolio\"\" consisting of the stocks you care about and then visit it once per day (or write a script to do so).\"", "title": "" }, { "docid": "3e1635a637bbb1a5c4363476bdfa51e1", "text": "\"For US equities, Edgar Online is where companies post their government filings to the SEC. On Google Finance, you would look at the \"\"SEC filings\"\" link on the page, and then find their 10K and 10Q documents, where that information is listed and already calculated. Many companies also have these same documents posted on their Investor Relations web pages.\"", "title": "" }, { "docid": "f23a77c2c5432db5c7cf786f6e890560", "text": "I find this site to be really poor for the virtual play portion, especially the options league. After you place a trade, you can't tell what you actually traded. The columns for Exp and type are blank. I have had better luck with OptionsXpress virtual trader. Although they have recently changed their criteria for a non funded accounts and will only keep them active for 90 days. I know the cboe has a paper trading platform but I haven't tried it out yet.", "title": "" }, { "docid": "47d2401e8c9dcd835a24ea517a73bda6", "text": "I've seen this tool. I'm just having a hard time finding where I can just get a list of all the companies. For example, you can get up to 100 results at a time, if I just search latest filings for 10-K. This isn't really an efficient way to go about what I want.", "title": "" }, { "docid": "37837d478e342d10d0f293af36a70417", "text": "FreeStockCharts.com keeps some intra-day trading history. You have to create an account to look up individual stocks. Once you create a free account you can get intra-day trading history for the last month (Hourly for past month, 15 minutes for past week, 1 minute for past day). Going back past one month and it only keeps daily close history. Here is Family Dollary's (FDO) hourly intra-day chart for the past month:", "title": "" }, { "docid": "0790763ce1214e0a9fa81798f3e2e128", "text": "I've used BigCharts (now owned by MarketWatch.com) for a while and really like them. Their tools to annotate charts are great.", "title": "" }, { "docid": "dc791ff7f4a2e648915913f2f2bc62ae", "text": "Yup. What I wanted to know was where they are pulling it up from. Have casually used Google finance for personal investments, but they suck at corp actions. Not sure if they provide free APIs, but that would probably suck too! :D", "title": "" } ]	fiqa
a0793cfdf3a6b4c18bf09bc41258e1ed	best free web app or tools to track one's cash flow	[ { "docid": "c55c405c834c45e2dcf101bef19613ad", "text": "The answer to this question can be found in the related question Is there any online personal finance software without online banking?", "title": "" } ]	[ { "docid": "1094d051d0888469d5c8772a8afb6621", "text": "Best Linux software is PostBooks. It is full double entry, but there is definitely a learning curve. For platform-agnostic, my favorite is Xero, which is web-based. It is full double entry balance sheet, the bank reconciliation is a pleasure to use, and they are coming out with a US version this summer. Easy to use and does everything I need.", "title": "" }, { "docid": "ee602225d2e10325a5f42a0183339c07", "text": "Use software that calculates your net worth and track it over time. I track my personal finances in Mint, and I love checking my net worth every week. It's turned into a kind of competition with myself... It's like keeping track of how fast you run a 5k, or how many pounds of weight you've lost. It helps you determine if you are making progress, and if you, it's positive reinforcement that you are doing the right things.", "title": "" }, { "docid": "eaa2180e94ca419c10d2db37381389b7", "text": "I'm not directly affiliated with the company (I work for one of the add-on partners) but I can wholeheartedly recommend Xero for both personal and business finances. Their basis is to make accounting simple and clean, without sacrificing any of the power behind having the figures there in the first place.", "title": "" }, { "docid": "20f359098fd69ea33661b6f8f5533514", "text": "Google Portfolio does the job: https://www.google.com/finance/portfolio You can add transaction data, view fundamentals and much more.", "title": "" }, { "docid": "47cf0707e02039390b6ba21008155a19", "text": "This is what I used during my MBA. My biggest complaint is that it is not a database for analytic (it pulls from a database). I hear think or swim has the capability to extract data and offers a free version - anyone know if that is true?", "title": "" }, { "docid": "a931863acc83ad4edff1752ec43df94f", "text": "www.earnings.com is helpful thinkorswim's thinkDesktop platform has a lot of earnings information tied with flags on their charts they are free.", "title": "" }, { "docid": "cff3f36f2120e361ca04e52d14060b0a", "text": "Mint.com does a pretty good job at this, for a free service, but it's mostly for personal finance. It looks at all of your transactions and tries to categorize them, and also allows you to create your own categories and filters. For example, when I started using it, it imported the last three months of my transactions and detected all of my 'coffee house' transactions. This is how I learned that I was spending about $90 a month going to Starbucks, rather than the $30 I had estimated. I know it's not a 'system' like an accounting outfit might use, but most accounting offices I've worked with have had their own home-brewed system.", "title": "" }, { "docid": "47d2401e8c9dcd835a24ea517a73bda6", "text": "I've seen this tool. I'm just having a hard time finding where I can just get a list of all the companies. For example, you can get up to 100 results at a time, if I just search latest filings for 10-K. This isn't really an efficient way to go about what I want.", "title": "" }, { "docid": "929cc868870e45ef33de54abb9d7320c", "text": "\"I've tried Mint, and I've tried Quicken. Now, I think Quicken is an annoying, crashy little piece of software, but it is also quite capable; overall I think it has the features you want. You can enter your bills, broken down by category, in advance. You can enter your paychecks, broken down by category (gross income, federal income tax, state income tax, social security, SDI, transfers to tax-protected 401(k) account, etc) in advance. You can enter in your stock trades and it can tell you how much you'll need to end up paying in capital gains taxes. You can even enter in your stock option vesting schedule in advance (it's a royal pain because you can't go back and change anything without deleting everything, but you can do it). It'll forecast your bank account balance in all of your bank accounts in advance with a shiny chart. It'll even model your loans, if you set it up right. I didn't do too much with the \"\"budgeting\"\" tools per se, but the account-balances-daily features sound like the closest thing to what you're looking for that's likely to exist. The only thing that's a trifle tricky is that transfers from one account to another may take multiple days (hello, ACH) and you'll have to decide whether to record them at departure or arrival.\"", "title": "" }, { "docid": "000a4e01345164ec5682c16d5afc672b", "text": "The best thing for you to do will be to start using the Cash Flow report instead of the Income and Expense report. Go to Reports -> Income and Expense -> Cash Flow Once the report is open, open the edit window and open the Accounts tab. There, choose your various cash accounts (checking, saving, etc.). In the General tab, choose the reporting period. (And then save the report settings so you don't need to go hunting for your cash accounts each time.) GnuCash will display for you all the inflows and outflows of money, which appears to be what you really want. Though GnuCash doesn't present the Cash Flow in a way that matches United States accounting rules (with sections for operating, investing, and financial cash flows separated), it is certainly fine for your personal use. If you want the total payment to show up as one line on the Cash Flow report, you will need to book the accrual of interest and the payment to the mortgage bank as two separate entries. Normal entry for mortgage payments (which shows up as a line for mortgage and a line for interest on your Cash Flow): Pair of entries to make full mortgage payment show up as one line on Cash Flow: Entry #1: Interest accrual Entry #2: Full mortgage payment (Tested in GnuCash 2.6.1)", "title": "" }, { "docid": "8b088aeb9b88b75ac0662056b413f7c7", "text": "I like to put money I am going to spend in my Quicken register (similar to Money in my limited experience) and that is the big ticket feature missing from mint.com. Mint.com can only tell you what you did, or in a very general sense what you plan to do. As a register, mint.com is flexible enough for me to categorize my transactions. As a planning / budgeting tool mint.com is very simple and fast to get going, but lacks the depth of a budget I want to manage every week. Mint.com also tracks my investments, but I freely admit my investment management is nothing more than putting money into the same accounts. I bother with investment tracking other than looking to see it isn't zero. I say try mint.com. Mint.com has a place to totally delete your account.", "title": "" }, { "docid": "94ddf1032cb45bb5c777b866ae873592", "text": "\"I found your post while searching for this same exact problem. Found the answer on a different forum about a different topic, but what you want is a Cash Flow report. Go to Reports>Income & Expenses>Cash Flow - then in Options, select the asset accounts you'd like to run the report for (\"\"Calle's Checking\"\" or whatever) and the time period. It will show you a list of all the accounts (expense and others) with transactions effecting that asset. You can probably refine this further to show only expenses, but I found it useful to have all of it listed. Not the prettiest report, but it'll get your there.\"", "title": "" }, { "docid": "d806870dd32858170d30a0ef2ed45e93", "text": "MoneyDance Is the way to go. I've been using it for years and it works well. It keeps getting better, and best of all, it's completely cross platform! Mac, Windows and linux!", "title": "" }, { "docid": "0e4b08d2324e9ae8352ba159dbe915f8", "text": "SavingsMap is a web-based personal finance forecasting tool that requires no bank account or personal information other than an email address. As founder of SavingsMap, our goal is to forecast future cash flows based on your current budget, while using strategies to minimize US tax obligations and taking into account expected major life events.", "title": "" }, { "docid": "1ca480847c8abfafbf8136bc97e2d5e0", "text": "I would investigate mint.com further. Plenty of people have written off using them because Intuit purchased them, but that seems like cutting of your nose to spite your face. I think mint.com is worth it for its Trends functionality alone, not to mention its automatic categorization of your purchases, reminders when bills are due, notifications of increased credit card interest rates, and overdraft notices. I don't think mint.com schedules bills & deposits, but it tracks stocks & mutual fund investments and compares your portfolio returns against Dow Jones, S&P 500, or NASDAQ if you wish. I'm not sure I see the advantage of manual transaction entry, but you can add cash or check transactions manually. As I mentioned earlier, automated categorization is a great feature. In addition, you can tag certain transactions as reimbursable or tax-related. If the primary feature you're interested in is stock quotes, maybe something like Yahoo Finance or Google Finance will be enough.", "title": "" } ]	fiqa
1a8ab46ff75ca3351ad17f2a25189956	Book or web site resources for an absolute beginner to learn about stocks and investing?	[ { "docid": "a06e5c925c92154d705db524fe9cb372", "text": "The Motley Fool's How to Invest How To Invest Benjamin Graham's The Intelligent Investor The Intelligent Investor If you like The Intelligent Investor then try Benjamin's Security Analysis. But that one is not a beginner book.", "title": "" }, { "docid": "9268699a8e454c4bfa37870d0f661398", "text": "If you just want to save for retirement, start with a financial planning book, like this one: http://www.amazon.com/Smart-Simple-Financial-Strategies-People/dp/0743269942 and here's my editorial on the investing part: http://blog.ometer.com/2010/11/10/take-risks-in-life-for-savings-choose-a-balanced-fund/ If you're thinking of spending time stock-picking or trading for fun, then there are lots of options. Web site: Morningstar Premium (http://morningstar.com) has very good information. They analyze almost all large-cap stocks and some small caps too, plus mutual funds and ETFs, and have some good general information articles. It doesn't have the sales-pitch hot-blooded tone of most other sites. Morningstar analyzes companies from a value investing point of view which is probably what you want unless you're day trading. Also they analyze funds, which are probably the most practical investment. Books: If you want to be competent (in the sense that a professional investor trying to beat the market or control risk vs. the market would be) then I thought the CFA curriculum was pretty good: However, this will quickly teach you how much is involved in being competent. The level 1 curriculum when I did it was 6 or 7 thick textbooks, equivalent to probably a college semester courseload. I didn't do level 2 or 3. I don't think level 1 was enough to become competent, it's just enough to learn what you don't know. The actual CFA charter requires all three levels and years of work experience. If you more want to dabble, then Benjamin Graham's The Intelligent Investor certainly isn't a bad place to start, but you'd also want to read some efficient markets stuff (Random Walk Down Wall Street, or something by Bogle, or The Intelligent Asset Allocator http://www.amazon.com/Intelligent-Asset-Allocator-Portfolio-Maximize/dp/0071362363, are some options). It wouldn't be bad to just read a textbook like http://www.amazon.com/Investments-Irwin-Finance-Zvi-Bodie/dp/0256146381 which would be the much-abridged version of the CFA level 1 stuff. If you're into day trading / charting, then I don't know much about that at all, some of the other answers may have some ideas. I've never been able to find info on this that didn't seem like it had a sketchy sales pitch kind of vibe. Honestly in a world of high-frequency trading computers I'm skeptical this is something to get into. Unless you want to program HFT computers: http://howtohft.wordpress.com/", "title": "" }, { "docid": "7008b550403bc155de22a04bc7a30bb3", "text": "\"There is only one book worth reading in my opinion: One Up on Wall Street. It's short and no other book even comes close to it for honesty, correctness and good sense. Also, it is written by the second most successful investor of all time, Peter Lynch. The Intelligent Investor has some good technical content, but the book is dated and a lot of it is irrelevant to the modern investment environment. When I was younger I used to ready books like this and when a friend of mine asked for investment advice. I said \"\"Look at stocks with a PE ratio of 5-10\"\". A few days later he comes back to me and says \"\"There are none\"\". Right. That pretty much sums up the problem with the I.I. Graham himself in interviews during the 1970s said that his book was obsolete and he no longer recommended those methods.\"", "title": "" }, { "docid": "22af96183990e99ea272e24693ee0fa9", "text": "The Winning Investor http://winninginvestor.quickanddirtytips.com/ This is a blog and a podcast. Load a bunch of these onto your iPod and start listening. Stikky Stock Charts http://www.amazon.com/Stikky-Stock-Charts-professionals-smart/dp/1932974008 This is a beginner's guide on how to read charts. Lots of charts, not too many words.", "title": "" }, { "docid": "0b63109af1da36960a00830ab8c58c94", "text": "Los Angeles Times Investing 101 http://www.latimes.com/business/la-moneylib,0,3098409.htmlstory Clark Howard's Investing Guide http://www.clarkhoward.com/news/clark-howard/personal-finance-credit/clarks-investment-guide/nFZK/", "title": "" } ]	[ { "docid": "7dad2954cd0f1d2bdec3fb269c948ed4", "text": "Books are a great place to start, Jason Kelly's The Neatest Little Guide to Stock Market Investing will give you a broad foundation of the stock & bond market.", "title": "" }, { "docid": "7ab5e1c25f0ae028667ac6fd6f605c2b", "text": "Those are some very broad questions and I don't think I can answer them completely, but I will add what I can. Barron's Finance and Investment Handbook is the best reference book I have found. It provides a basic description/definition for every type of investment available. It covers stocks, preferred stocks, various forms of bonds as well as mortgage pools and other exotic instruments. It has a comprehensive dictionary of finance terms as well. I would definitely recommend getting it. The question about how people invest today is a huge one. There are people who simply put a monthly amount into a mutual fund and simply do that until retirement on one side and professional day traders who move in and out of stocks or commodities on a daily basis on the other.", "title": "" }, { "docid": "18fdf9e3dfc67a60abdd1702ae7f00b6", "text": "Start at Investopedia. Get basic clarification on all financial terms and in some cases in detail. But get a book. One recommendation would be Hull. It is a basic book, but quite informative. Likewise you can get loads of material targeted at programmers. Wilmott's Forum is a fine place to find coders as well as finance guys.", "title": "" }, { "docid": "3f4d2782016a99449f0364ecead401b2", "text": "https://www.google.ca/amp/s/amp.businessinsider.com/most-important-finance-books-2017-1 Bloomberg, finacial times, chat with traders, calculated risk, reuters, wsj, cnbc(sucks), bnn (if canadian) Audio books on youtube helped me read a lot of finance books in a short amount of time, listen while working out. One thing that helped me stand out at my student terms (4th year here) was learning outside of the classroom and joining an investment club. Learning programming can help if thats a strength, but its really not needed and it can waste time if yoi wont reach a point to build tools. Other than that at 18 you have more direction than i did, good luck!", "title": "" }, { "docid": "008d38f36cb1fbdd6598ba45df4674a4", "text": "I would recommend reading Intelligent Investor first. It was written slightly more recently (1949) than Security Analysis (1934). More important is that a recently revised edition* of Intelligent Investor was published. The preface and appendix were written by Warren Buffett. Intelligent Investor is more practical as an introduction for a novice. You may decide not to read Security Analysis at all, as it seems more like an academic text or professional's guide i.e. for accounting. Benjamin Graham's Intelligent Investor remains relevant. It is used, successfully, as a guide for value investing, despite the hysteria of market sentiment and day-to-day variations, even extreme volatility. For example, I just read a nice article about applying the value investing principles extolled in Intelligent Investor a few weeks ago. It was written in the context of current markets, which is amazing, to be so applicable, despite the passage of decades. For reference, you might want to glance at this book review (published in March 2010!) of the original 1934 edition of Security Analysis. * The URL links to a one-paragraph summary by U.S. News & World Report. It does not link to a book sales website!", "title": "" }, { "docid": "e115213cea0d6d0665e16da2d9d06d79", "text": "I'd go to specialist community web sites such as The Motley Fool and read their investing articles, and their forums, and everything. You cannot get enough information and advice to get going, as it is really easy to think investing is easy and returns are guaranteed. A lot of people found that out in 2008 and 2000! For example, they have a 'beginners portfolio' that will teach you the very basics of investing (though not necessarily what to invest in)", "title": "" }, { "docid": "164f357b28487a92dd220457fa1bda24", "text": "\"I tell you how I started as an investor: read the writings of probably the best investor of the history and become familiarized with it: Warren Buffett. I highly recommend \"\"The Essays of Warren Buffett\"\", where he provides a wise insight on how a company generates value, and his investment philosophy. You won't regret it! And also, specially in finance, don't follow the advice from people that you don't know, like me.\"", "title": "" }, { "docid": "8a9e85fef9a7ce8d96c6130af5e3c8ef", "text": "If you're looking to invest using stocks and shares, I recommend you set up an account at something like Google Finance - it is free and user-friendly with lots of online help. You can set up some 'virtual cash' and put it into a number of stocks which it'll track for you. Review your progress and close some positions and open others as often as you want, but remember to enter some figure for the cost of the transaction, say $19.95 for a trade, to discourage you from high-frequency trading. Take it as seriously as you want - if you stick to your original cash input, you'll see real results. If you throw in more virtual cash than you could in real life, it'll muddle the outcome. After some evaluation period, say 3 months, look back at your progress. You will learn a tremendous amount from doing this and don't need to have read any books or spent any money to get started. Knowing which stocks to pick and when to buy or sell is much more subtle - see other answers for suggestions.", "title": "" }, { "docid": "bc6465a444d8872f0a0363390dbde207", "text": "\"Good ones, no there are not. Go to a bookstore and pick up a copy of \"\"The Intelligent Investor.\"\" It was last published in 1972 and is still in print and will teach you everything you need to know. If you have accounting skills, pick up a copy of \"\"Security Analysis\"\" by Benjamin Graham. The 1943 version was just released again with a 2008 copyright and there is a 1987 version primarily edited by Cottle (I think). The 1943 book is better if you are comfortable with accounting and the 1987 version is better if you are not comfortable and feel you need more direction. I know recent would seem better, but the fact that there was a heavy demand in 2008 to reprint a 1943 book tells you how good it is. I think it is in its 13th printing since 2008. The same is true for the 72 and 87 book. Please don't use internet tutorials. If you do want to use Internet tutorials, then please just write me a check now for all your money. It will save me effort from having to take it from you penny by penny because you followed bad advice and lost money. Someone has to capture other people's mistakes. Please go out and make money instead. Prudence is the mother of all virtues.\"", "title": "" }, { "docid": "7739215dc5ad176dd502605902b72e7a", "text": "As a follow-up, I ended up buying: * Financial Modeling and Valuation: A Practical Guide to Investment Banking and Private Equity (Pignataro, Paul; Hardcover) * Mergers, Acquisitions, Divestitures, and Other Restructurings, + Website (Pignataro, Paul; Hardcover) * The Essential CFO: A Corporate Finance Playbook (Nolop, Bruce P.; Paperback)", "title": "" }, { "docid": "a978da7bde624c5d93998b4f2d709006", "text": "Try wallstreetsurvivor.com It gives you $100k of pretend money when you sign up, using which you can take various courses on the website. It will teach you how to buy/sell stocks and build your portfolio. I am not sure if they do have Options Trading specifically, but their course line up is great!", "title": "" }, { "docid": "699745e7c7937d1720f0f1a34cb89933", "text": "Hi guys, This is an app I've been working on over the summer. It's my belief that a lot of people want to learn about the stock market but in the end can't because they're turned off by long walls of text you get when you Google about them/read a textbook. I know there are other simplified solutions out there but they're not widely adopted yet and I don't think there are any (?) that were made app first. Anyway, check it out if you can. Appreciate all feedback/comments.", "title": "" }, { "docid": "691d30be5ea3ac2d0d01dfe13974d43d", "text": "For economics I recommend mises or these videos to get you started. For daily critical analysis of financial markets, keynesian government policies, and other interesting reading I recommend zerohedge. I've learned more about financial markets and government regulations by reading the comments section on zerohedge articles than anywhere else on the internet. The comment section is very raw (i.e. lots of fucking cursing) but there are some jewels of information in there. For daily critical thinking I suggest lewrockwell.", "title": "" }, { "docid": "012987ba2771a182c17825ec9343c062", "text": "I’ll start with what worked for me, to get me hooked. This list is by no means exhaustive. One Up On Wall Street by Peter Lynch discusses competitive advantages and staying close to the story of a business. Explores the concept of ‘buy what you know’. He has also written Beating the Street. The Drunkard’s Walk: How Randomness Rules Our Lives by Leonard Mlodinow is not dissimilar to A Random Walk Down Wall Street, but I preferred this book as it explores the concepts of randomness and survivors bias. Against the Gods by Peter Bernstein is a dense book, but in my opinion is the definitive text on the development of numbers, probability theory, and risk management. I absolutely love this book. The Most Important Thing by Howard Marks is immensely readable, enjoyable, and looks at value investing for the long run. Howard Marks has been a macro behavioural investor before behavioural investing was a thing. Speaking of behavioural biases, Thinking, Fast and Slow by Daniel Kahneman is a spectacular look at how your brain’s quick-trigger responses can often be wrong. On the subject of behaviour and biases, Influence: The Psychology of Persuasion by Robert Cialdini is another topic-defining book More books by long term veteran professional investment managers that should be enjoyed: - The Little Book That (Still) Beats the Market by Joel Greenblatt - Beat the Crowd by Ken Fisher - Big Money Thinks Small by Joel Tillinghast - Common Stocks and Uncommon Profits by Philip A. Fisher - The Little Book of Behavioural Investing by James Montier - Margin of Safety by Seth Klarman And I’ll be banned from this forum without mentioning The Intelligent Investor by Benjamin Graham. As per some other comments, my personal opinion is that books that describe events or periods of time like Liars’ Poker [80s Junk Bonds], The Big Short [Financial Crisis], When Genius Failed [the LTCM collapse, excellent read by Rogers Lowenstein], All The Devils Are Here [by McLean and Nocera, another Financial Crisis book, much better than Lewis’s, IMO] are all educational and quite entertaining, but don’t honestly have much to do with the actual nuts and bolts of the real financial industry. Enjoy!", "title": "" }, { "docid": "1064fdecc92155663d3b8808178a2388", "text": "\"First off, monozok is right, at the end of the day, you should not accept what anyone says to do without your money - take their suggestions as directions to research and decide for yourself. I also do not think what you have is too little to invest, but that depends on how liquid you need to be. Often in order to make a small amount of money grow via investments, you have to be willing to take all the investment profits from that principle and reinvest it. Thus, can you see how your investment ability is governed by the time you plan to spend without that money? They mantra that I have heard from many people is that the longer you are able to wait, the more 'risk' you can take. As someone who is about the same age as you (I'm 24) I can't exactly say yet that what I have done is sure fire for the long term, but I suggest you adopt a few principles: 1) Go read \"\"A Random Walk Down Wall Street\"\" by Burton G. Malkiel. A key point for you might be that you can do better than most of these professional investors for hire simply by putting more money in a well selected index fund. For example, Vanguard is a nice online service to buy indexes through, but they may require a minimum. 2) Since you are young, if you go into any firm, bank, or \"\"financial planner,\"\" they will just think you are naive and try to get you to buy whatever is best for them (one of their mutual funds, money market accounts, annuities, some flashy cd). Don't. You can do better on your own and while it might be tempting because these options look more secure or well managed, most of the time you will barely make above inflation, and you will not have learned very much. 3) One exciting thin you should start learning now is about algorithmic trading because it is cool and super efficient. quantopian.com is a good platform for this. It is a fun community and it is also free. 4) One of the best ways I have found to watch the stock market is actually through a stock game app on my phone that has realtime stock price feed. Seeking Alpha has a good mobile app interface and it also connects you to news that has to do with the companies you are interested in.\"", "title": "" } ]	fiqa
6f2b9bdbc2a483dcbbb5d8045a88a7f3	Where can I find the nominal price of a stock prior a split into multiple companies?	[ { "docid": "46107768afe2203cb02edd2da483f598", "text": "When Hewlett Packard split they changed their name to HP Inc. and spun off Hewlett Packard Enterprise as a new corporation. This means HP Inc. has the same stock history and ticker (HPQ) as Hewlett Packard did so that's the one you want to search for. As you noticed this also means it's impossible to search for old Hewlett Packard's stock performance alone. One free service that seems to show the unadjusted historical stock price of HPQ is Google finance: https://www.google.com/finance?q=NYSE%3AHPQ", "title": "" }, { "docid": "2f1721cc48ab6a1e9bf96c676aaed666", "text": "Yahoo Finance provides the proper closing price. HP's historical data around the split date can be found here. The open, high and low of the day are wrong prior the split, but the closing price is right and for HP, it was $26.96 USD. The next day the closing price was $13.83 USD.", "title": "" } ]	[ { "docid": "4f86a8a4bb3fa8d170e7d2cb5f67b104", "text": "Thanks for your thorough reply. Basically, I found a case study in one of my old finance workbooks from school and am trying to complete it. So it's not entirely complicated in the sense of a full LBO or merger model. That being said, the information that they provide is Year 1 EBITDA for TargetCo and BuyerCo and a Pro-Forma EBITDA for the consolidated company @ Year 1 and Year 4 (expected IPO). I was able to get the Pre-Money and Post-Money values and the Liquidation values (year 4 IPO), as well as the number of shares. I can use EBITDA to get EPS (ebitda/share in this case) for both consolidated and stand-alone @ Year 1, but can only get EPS for consolidated for all other years. Given the information provided. One of the questions I have is do I do anything with my liquidation values for an accretion/dilution analysis or is it all EPS?", "title": "" }, { "docid": "3ed36d63a9b925c315ab217b16467959", "text": "Have you looked at what is in that book value? Are the assets easily liquidated to get that value or could there be trouble getting the fair market value as some assets may not be as easy to sell as you may think. The Motley Fool a few weeks ago noted a book value of $10 per share. I could wonder what is behind that which could be mispriced as some things may have fallen in value that aren't in updated financials yet. Another point from that link: After suffering through the last few months of constant cries from naysayers about the company’s impending bankruptcy, shareholders of Penn West Petroleum Ltd. (TSX:PWT)(NYSE:PWE) can finally look toward the future with a little optimism. Thus, I'd be inclined to double check what is on the company books.", "title": "" }, { "docid": "eeebccfd8c6527653932d31d4e087b9a", "text": "Since you asked about Apple, and I happen to have two positions - This is what happened. I was long the $500, short the $600, in effect, betting Apple would recover from its drop from $700 down to $450 or so. Friday, my target was to hope that Apple remain above $600, but not really caring how much it went over. Now, post split, the magic number is $85.71. My account shows the adjusted option pricing, but doesn't yet show AAPL's new price.", "title": "" }, { "docid": "3905d2c2904e354193891754dc85ccd1", "text": "It will be similar to what you have said -- the options price will adjust accordingly following a stock split - Here's a good reference on different scenarios - Splits, Mergers, Spinoffs & Bankruptcies also if you have time to read Characteristics & Risks of Standardized Options", "title": "" }, { "docid": "16b3af99339f2f92b430b82684535adb", "text": "\"Such data is typically only available from paid sources due to the amount of research involved in determining the identity of delisted securities, surviving entities in merger scenarios, company name changes, symbol changes, listing venue changes, research of all capital events such as splits, and to ensure that the data coverage is complete. Many stocks that are delisted from a major exchange due to financial difficulties are still publicly tradeable companies with their continuing to trade as \"\"OTC\"\" shares. Some large companies even have periods where they traded for a period of their history as OTC. This happened to NYSE:NAV (Navistar) from Feb 2007 to July 2008, where they were delisted due to accounting statement inaccuracies and auditor difficulties. In the case of Macromedia, it was listed on NASDAQ 13 Dec 1993 and had its final day of trading on 2 Dec 2005. It had one stock split (2:1) with ex-date of 16 Oct 1995 and no dividends were ever paid. Other companies are harder to find. For example, the bankrupt General Motors (was NYSE:GM) became Motoros Liquidation Corp (OTC:MTLQQ) and traded that way for almost 21 months before finally delisting. In mergers, there are in two (or more) entities - one surviving entity and one (or more) delisted entity. In demergers/spinoffs there are two (or more) entities - one that continues the capital structure of the original company and the other newly formed spun-off entity. Just using the names of the companies is no indication of its history. For example, due to monopoly considerations, AT&T were forced to spinoff multiple companies in 1984 and effectively became 75% smaller. One of the companies they spunoff was Southwestern Bell Corporation, which became SBC Communications in 1995. In 2005 SBC took over its former parent company and immediately changed its name to AT&T. So now we have two AT&Ts - one that was delisted in 2005 and another that exists to this day. Disclosure: I am a co-owner of Norgate Data (Premium Data), a data vendor in this area.\"", "title": "" }, { "docid": "0c9e754e3769d7ad1a16dbc3e6c90ba5", "text": "It seems like you want to compare the company's values not necessarily the stock price. Why not get the total outstanding shares and the stock price, generate the market cap. Then you could compare changes to market cap rather than just share price.", "title": "" }, { "docid": "3d58f98963f60b0132ca92e895b7293a", "text": "\"Wouldn't this be part of your investing strategy to know what price is considered a \"\"good\"\" price for the stock? If you are going to invest in company ABC, shouldn't you have some idea of whether the stock price of $30, $60, or $100 is the bargain price you want? I'd consider this part of the due diligence if you are picking individual stocks. Mutual funds can be a bit different in automatically doing fractional shares and not quite as easy to analyze as a company's financials in a sense. I'm more concerned with the fact that you don't seem to have a good idea of what the price is that you are willing to buy the stock so that you take advantage of the volatility of the market. ETFs would be similar to mutual funds in some ways though I'd probably consider the question that may be worth considering here is how much do you want to optimize the price you pay versus adding $x to your position each time. I'd probably consider estimating a ballpark and then setting the limit price somewhere within that. I wouldn't necessarily set it to the maximum price you'd be willing to pay unless you are trying to ride a \"\"hot\"\" ETF using some kind of momentum strategy. The downside of a momentum strategy is that it can take a while to work out the kinks and I don't use one though I do remember a columnist from MSN Money that did that kind of trading regularly.\"", "title": "" }, { "docid": "5db2500544c713428b4b849702c8e351", "text": "In order to see whether you can buy or sell some given quantity of a stock at the current bid price, you need a counterparty (a buyer) who is willing to buy the number of stocks you are wishing to offload. To see whether such a counterparty exists, you can look at the stock's order book, or level two feed. The order book shows all the people who have placed buy or sell orders, the price they are willing to pay, and the quantity they demand at that price. Here is the order book from earlier this morning for the British pharmaceutical company, GlaxoSmithKline PLC. Let's start by looking at the left-hand blue part of the book, beneath the yellow strip. This is called the Buy side. The book is sorted with the highest price at the top, because this is the best price that a seller can presently obtain. If several buyers bid at the same price, then the oldest entry on the book takes precedence. You can see we have five buyers each willing to pay 1543.0 p (that's 1543 British pence, or £15.43) per share. Therefore the current bid price for this instrument is 1543.0. The first buyer wants 175 shares, the next, 300, and so on. The total volume that is demanded at 1543.0p is 2435 shares. This information is summarized on the yellow strip: 5 buyers, total volume of 2435, at 1543.0. These are all buyers who want to buy right now and the exchange will make the trade happen immediately if you put in a sell order for 1543.0 p or less. If you want to sell 2435 shares or fewer, you are good to go. The important thing to note is that once you sell these bidders a total of 2435 shares, then their orders are fulfilled and they will be removed from the order book. At this point, the next bidder is promoted up the book; but his price is 1542.5, 0.5 p lower than before. Absent any further changes to the order book, the bid price will decrease to 1542.5 p. This makes sense because you are selling a lot of shares so you'd expect the market price to be depressed. This information will be disseminated to the level one feed and the level one graph of the stock price will be updated. Thus if you have more than 2435 shares to sell, you cannot expect to execute your order at the bid price in one go. Of course, the more shares you are trying to get rid of, the further down the buy side you will have to go. In reality for a highly liquid stock as this, the order book receives many amendments per second and it is unlikely that your trade would make much difference. On the right hand side of the display you can see the recent trades: these are the times the trades were done (or notified to the exchange), the price of the trade, the volume and the trade type (AT means automatic trade). GlaxoSmithKline is a highly liquid stock with many willing buyers and sellers. But some stocks are less liquid. In order to enable traders to find a counterparty at short notice, exchanges often require less liquid stocks to have market makers. A market maker places buy and sell orders simultaneously, with a spread between the two prices so that they can profit from each transaction. For instance Diurnal Group PLC has had no trades today and no quotes. It has a more complicated order book, enabling both ordinary buyers and sellers to list if they wish, but market makers are separated out at the top. Here you can see that three market makers are providing liquidity on this stock, Peel Hunt (PEEL), Numis (NUMS) and Winterflood (WINS). They have a very unpalatable spread of over 5% between their bid and offer prices. Further in each case the sum total that they are willing to trade is 3000 shares. If you have more than three thousand Dirunal Group shares to sell, you would have to wait for the market makers to come back with a new quote after you'd sold the first 3000.", "title": "" }, { "docid": "ff68b09fef2ab83c41d8cf7759d12c2c", "text": "The point of that question is to test if the user can connect shares and stock price. However, that being said yeah, you're right. Probably gives off the impression that it's a bit elementary. I'll look into changing it asap.", "title": "" }, { "docid": "5949539198c871c182c0da1bb78ce5e5", "text": "I'm going to guess that you found this because of a stock screener. This company went through a 1:20 reverse split on June 30, so every 20 shares outstanding became a single share. Where before you had 20 shares worth $100 you now have 1 share worth $100, the value of the company doesn't change because of a split. This company was never trading for $30+ per share. Reverse splits are typical of a floundering company trading on an exchange that has a minimum share price requirement. While reverse splits don't change the value of the company, just the number of shares outstanding and the price per share, no healthy company performs a reverse split. Reverse splits are generally a massive signal to jump ship... The company seems to be trading for $1 right now, why the value fell from a pre-split $1.65 ($33/20) to $1 is anyone's guess; how the company ever got to $1.65 is also anyone's guess. But looking at the most recent 10-Q there are numerous causes for concern: Note 2. Capital Stock On March 6, 2017, the Company issued as compensation for services provided a total of 650,000 common shares with a fair value of $390,000 to a third party. The fair value of the shares was based on the price quoted on the OTC pink sheets on the grant date. this indicates a share price of $0.60 ($390,000/650,000) as of 3/6/2017, just to reinforce that the google price chart doesn't show the true past but a past adjusted for the split Results of Operations The three months ended March 31, 2017 compared to the three months ended March 31, 2016 For the three months ended March 31, 2017 compared to the three months ended March 31, 2016, total revenues were $0 and $0, respectively, and net losses from operations were $414,663 and $26,260, respectively. The net losses were attributable to costs attributable to operating as a public company, in particular, common stock with a valuation of $390,000 that was issued to an investor relations firm in the first quarter of 2017. Going Concern As of March 31, 2017, there is substantial doubt regarding our ability to continue as a going concern as we have not generated sufficient cash flow to fund our proposed business. We have suffered recurring losses from operations since our inception. In addition, we have yet to generate an internal cash flow from our business operations or successfully raised the financing required to develop our proposed business. As a result of these and other factors, our independent auditor has expressed substantial doubt about our ability to continue as a going concern. Liquidity and Capital Resources We had no cash as of the date of March 31, 2017. Additionally, since there is no balance sheet in the last 10-Q (another bad sign), the last annual report 10-K has this balance sheet: So the company: So why did the stock value plummet? It's anyones' guess but there is no shortage of ways to justify it. In fact, it's reasonable to ask how is this company still worth $3mm ($1 * 3mm shares outstanding)...", "title": "" }, { "docid": "fa2aae462316eb64f23cb448a361783e", "text": "I found the answer. It was the Stock Ticker that I was looking for. So, if I understand correctly the price at certain moment is the price of the latest sale and can be used to get a global picture of what certain stock is worth at that certain instant.", "title": "" }, { "docid": "fb4662dbbb78fcfdf7d4f2c5a9341614", "text": "Are you sure you're not just looking at prices that are adjusted for the split, e.g. Yahoo? For example, Gilead Sciences (GILD) split a few months ago, but if you look at a price chart, there isn't an interruption even though the split is clearly marked. (Look in the past six months; it split in January). However, you could also simply be watching companies that happen to not split, for a variety of reasons. This isn't a criticism, but rather just a consequence of whatever stocks you happen to be watching. However, a quick search for information on stock splits yields a few articles (mainly from the Motley Fool) that argue that fewer companies are performing stock splits in recent years; the articles mainly talk about tech companies, and they make the argument that even though the shares in Google and Apple have a high stock price: Google and Apple aren't all that expensive by traditional valuation metrics. Google trades at just 15 times next year's projected profitability. Apple fetches a mere 13 times fiscal 2012's bottom-line estimates. These articles are a bit dated in terms of the stock prices, but the rationale is probably still good. Similar logic could apply for other companies; for example, since May 2009, Panera's stock price has climbed by almost a factor of 4 without splitting. The articles also make the point that stock splits were traditionally seen as bullish signs because: Companies splitting to bring their share prices back down to more accessible levels were optimistic in building those sand castles back up. One could make a fair argument that the overall economic climate isn't as bullish as it used to be, although I would only be convinced that this was affecting stock splits if data could be gathered and tested. A stock split can also raise the price of a stock because if small investors feel the stock is suddenly more accessible to them, they purchase more of it and might therefore drive up the price. (See the Investopedia article on stock splits for more information). Companies might not see the necessity in doing this because their stock price isn't high enough to warrant a split or because the price isn't high enough to outprice smaller investors. One interesting point to make, however, is that even though stock splits can drive small investors to buy more of the stock, this isn't always a gain for the company because professional investors (firms, institutions, etc.) have a tendency to sell after a split. The paper is a bit old, but it's still a very neat read. It's possible that more and more companies no longer see any advantage to splitting because it might not affect their stock price in the long run, and arguably could even hurt it. Considering that large/professional investors likely hold a higher percentage of a company's shares than smaller investors, if a stock split triggers a wave of selling by the former, the increasing propensity to buy of the latter may not be enough to offset the decline in price. Note: My answer only refers to standard stock splits; the reasons above may not apply to a decrease in the number of reverse stock splits (which may not be a phenomenon; I don't know).", "title": "" }, { "docid": "3877c57cc08994391fb855b9a0d73018", "text": "Lets pretend that TELSA decided to split its stock 10 shares for 1. Now the stock is $35 dollars- would that make you happy? You dont have any idea how companies are valued. Berkshire Hathaway Inc. Class A NYSE: BRK.A - Oct 31, 12:58 PM EDT 280,210.00 USD", "title": "" }, { "docid": "5b9bddfbc13053744ab668020e549954", "text": "Yes that is the case for the public company approach, but I was referring to the transaction approach: Firm A and Firm B both have $100 in EBITDA. Firm A has $50 in cash, Firm B has $100 in cash. Firm A sells for $500, Firm B sells for $600. If we didn't subtract cash before calculating the multiple: Firm A: 5x Firm B: 6x If we DO subtract cash before calculating the multiple: Firm A: 4.5x Firm B: 5x So yea, subtracting cash does skew the multiple.", "title": "" }, { "docid": "58d1faa2f4156ea3d559119dac018463", "text": "Moody's is now Mergent Online. It's no longer being printed, and must be accessed digitally. In order to browse the database, check with your local public library or university to see if you can get access. (A University will probably require you to visit for access). Another good tool is Value Line Reports. They are printed information sheets on public companies that are updated regularly, and are convenient for browsing and for comparing securities. Again, check your local libraries. A lot of the public information you may be looking for can be found on Yahoo Finance, for free, from home. Yahoo finance, will give financial information, ratios, news, filings, analysis, all in one place.", "title": "" } ]	fiqa
1f24c06b30ebf391f6f565f02cd4f3c3	What is the best use of “spare” money?	[ { "docid": "d41d8cd98f00b204e9800998ecf8427e", "text": "", "title": "" }, { "docid": "d636f7f7ecf7b891f7c3dac59f4a737c", "text": "Congratulations! You're making enough money to invest. There are two easy places to start: I recommend against savings accounts because they will quite safely lose your money: the inflation rate is usually higher than the interest rate on a savings account. You may have twice as much money after 50 years, but if everything costs four times as much, then you've lost buying power. If, in the course of learning about investing, you'd like to try buying individual stocks, do it only with money you wouldn't mind losing. Index funds will go down slightly if one of the companies in that index fails entirely, but the stock of a failed company is worthless.", "title": "" }, { "docid": "bd46514c70ab8b5eb92be9dea2566c09", "text": "\"With 40% of your take-home available, you have a golden opportunity here. Actually two, and the second builds out easily from the first. Golden Opportunity # 1: Layoff Immunity Ok, not really immunity. Most people don't think of themselves getting laid off, and don't prepare. Of course it may not happen to you, but it can. It's happened to me twice. The layoff itself is an emotional burden (getting rejected is hard), but then you're suddenly faced with a gut-wrenching, \"\"how am I gonna pay the rent????\"\" If you have no savings, it's terrifying. Put yourself in that spot. Imagine that tomorrow, you're out of a job. For how many months could you pay your expenses with the money you have? Three months? One? Not even that? How about shooting for 12 months? It's really, really comforting to be able to say: \"\"I don't have to worry about it for a year\"\". 12 months saved up gives you emotional and financial stability, and it gives you options -- you don't have to take the first job that comes along. Now, saving 12 months of expenses is huge. But, you're in the wonderful spot where you can save 40% of your income. It would only take 2.5 years to save up a year's worth of income! But, actually, it's better than that. Because your 12-month Layoff Immunity fund doesn't have to include the amount for retirement, or taxes, or that 40% we're talking about. Your expenses are less than 60% of take-home -- you'd only need 12 months of that. So, you could have a fully funded 12-Month Layoff Immunity Fund only in a year and a half! Golden Opportunity #2: Freedom Fund Do you like your Job? Would you still do it, if you didn't need the money? If so, great. But if not, why not get yourself into a position where you don't need it? That is, build up enough money from saving and investing to where you can pay your expenses - forever - from your investments. The number to keep in mind is 25. Figure out your annual expenses, and multiply it by 25. That's the amount you'd need to never need a job again. (That works out to a 4% withdrawal rate, adjusting for inflation every year, with a low risk of running out of money. It's a rule of thumb, but smart people doing a lot of math worked it out.) Here you keep saving and investing that 40% in solid mutual funds in a regular, taxable account. Between your savings and the compounding returns off the investments, you could easily have a fully funded \"\"Freedom Fund\"\" by the time you're 50. In fact, by 45 isn't unreasonable. It could be even better. If you live in that high-rent area because of the job, and wouldn't mind living were the rents are lower once you quit, your target amount would be lower. Between that, working dedicatedly toward this goal, and maybe a little luck, you might even be able to do this by age 40. Final Thoughts There are other things you could put that money toward, like a house, of course. The key take-away here, is to save it, and invest it. You're in a unique position of being able to do that with 40% of your income. That's fabulous! But don't think it's the norm. Most people can't save that much, and, once you lose the ability to save that much, it's very difficult to get it back. Expenses creep in, lifestyle \"\"wants\"\" become \"\"needs\"\", and so on. If you get into the habit of spending it, it's very difficult to shrink your lifestyle back down - down to what right now you're perfectly comfortable with. So, spend some time figuring out what you want out of life -- and in the mean time, sock that 40% away.\"", "title": "" }, { "docid": "7e33d6cc87fcb2c47d6eb1a0b9675d66", "text": "You may also want to consider short term, low risk investments. Rolling Certificate of Deposits can be good for this. They don't grow like an Index Fund but there's 0 risk and they will grow faster than your bank. For my bank as an example today's rates on my Money Market is 0.10% APY while the lowest CD (90 days) is 0.20% APY with a 5 year going up to 0.90% APY. It's not substantial by any stretch but its secure and the money would just be sitting in my bank otherwise. For more information look at: What is CD laddering and what are its pros and cons?", "title": "" }, { "docid": "b1c24e36f701c54d0d64e560d2838b03", "text": "\"There's a hellova lot to be said for investing in real estate (simple residential real estate), even though it's grandma's advice. The two critical elements are 1) it's the only realistic way for a civilian to get leverage. this is why it almost always blows away \"\"tinkering in the stock markets\"\" in the 10-year frame. 2) but perhaps more importantly - it's a really \"\"enforced\"\" saving plan. you just have to pay it off every month. There are other huge advantages like, it's the best possible equity for a civilian, so you can get loans in the future to start your dotcom, etc. Try to buy yourself a very modest little flat (perhaps to rent out?) or even something like a garage or storeroom. Real estate can crash, but it's very unlikely; it only happens in end of the world situations where it won't matter anyway. When real estate drops say 30% everyone yells about that being a \"\"crash\"\" - I've never, ever owned a stock that hasn't had 30% down times. Food for thought!\"", "title": "" }, { "docid": "1d6f220dd1677d35b3bed386d664808f", "text": "Investing in mutual funds, ETF, etc. won't build a large pool of money. Be an active investor if your nature aligns. For e.g. Invest in buying out a commercial space (on bank finance) like a office space and then rent it out. That would give you better return than a savings account. In few years time, you may be able to pay back your financing and then the total return is your net return. Look for options like this for a multiple growth in your worth.", "title": "" } ]	[ { "docid": "435c3470e17746d6233f856852a9e7d9", "text": "After retirement nobody want to get low on cash. So, the best way to stay safe is to make some investments. Compare the saving with regular expenses and invest the rest. You can put some money in short-term reserves such as bank accounts, market funds, and deposit certificates. You will not be able to make much money on it but, it will ensure the financing of at least two to three years. There’s no need to take the money out from stocks but, if the stocks are doing good and there is a possibility that there will be no further profits then you can think of taking them out otherwise leave it alone.", "title": "" }, { "docid": "bb592fe2d1053d02c5d2d66161179cb3", "text": "\"US currency, today, can be used for useful things like selling a car, but there's nothing stopping you for trading it for something else. On edit; I've been thinking about this, and I think that the problem is that currency exists as a. edium to pay taxes. The usefulness of it for non-governmental transactions is a secondary benefit. However, without them full faith and credit ofma government somewhere the currency would be worthless. For example, see Zimbbwean currency or any non-convertible currency. *extra edit--altogether too many \"\"m's.\"\"\"", "title": "" }, { "docid": "ffdf27fb9f7077c4a6d7ea0ba512f87f", "text": "Three ideas: PayPal is probably the best/cheapest way to transfer small/medium amounts of money overseas.", "title": "" }, { "docid": "46ef1c349a7e585f5f3bd1e59c73d059", "text": "Here's how I think about money. There are only 3 categories / contexts (buckets) that my earned money falls into. Savings is my emergency fund. I keep 6 months of total expenses (expenses are anything in the consumption bucket). You can be as detailed as you want with this area but I tend to leave a fudge factor. In other words, if I estimate that I spend approximately $3,000 a month in consumption dollars then I'll save $3,500 times 6 in the bank. This money needs to be liquid. Some people use a HELOC, other people use their ROTH contributions. In any case, you need to put this money some place you can get access to it in case you go from accumulation (income exceed expenses) to decumulation mode (expenses exceed income). This money is distinct from consumption which I will cover in paragraph three. Investments are stocks, bonds, income producing real estate, small businesses, etc. These dollars require a strategy. The strategy can include some form of asset allocation but more importantly a timeline. These are the dollars that are working for you. Each dollar placed here will multiply over time. Once you put a dollar here it shouldn't be taken out unless there is some sort of catastrophe that your savings can't handle or your timeline has been achieved. Notice that rental real estate is included so liquidating stocks to purchase rental real estate is NOT considered removing investment dollars. Just reallocating based on your asset allocation. This bucket includes 401k's, IRAs, all tax-sheltered accounts, non-sheltered brokerage accounts, and rental real estate. In general your primary residence is not included in this bucket. Some people include the equity of their primary residence in the investment column but it can complicate the equation and I prefer to leave it out. The consumption bucket is the most important bucket and the one you spend the most time with. It requires a budget. This includes your $5 magazine and your $200 bottle of wine. Anything in this bucket is gone. You can recover a portion of it by selling it on ebay for $3 (these are earned dollars) but the original $5 is still considered spent. The reason your thought process in this area is distinct from the other two, the decisions made in this area will have the biggest impact on your personal finances. Warren Buffett was famous for skimping on haircuts because they are worth thousands of dollars down the road if they are invested instead. Remember this is a zero-sum game so every $1 not consumed is placed in one of the other buckets. Once your savings bucket is full every dollar not consumed is sent to investments. Remember to include everything that does not fit in the other two buckets. Most people forget their car insurance, life insurance, tax bill at the end of the year, accountant bill, etc. In conclusion, there are three buckets. Savings, which serve as your emergency bucket. This money should not be touched unless you switch from accumulation to decumulation. Investments, which are your dollars that are working for you over time. They require a strategy and a timeline. Consumption, which are your monthly expenses. These dollars keep you alive and contribute to your enjoyment. This is a short explanation of my use of money. It can get as complicated and detailed as you want it to be but as long as you tag your dollars correctly you'll be okay IMHO. HTH.", "title": "" }, { "docid": "26939aa6eeca2b834916babe29f760bf", "text": "At this stage of the game your best investment is yourself. Rather than putting it in stocks, use any spare money you have to get yourself the best education you can. See if you can drop that part-time job and give yourself more time to study. Or maybe you can go to a better, more expensive college. Or maybe college will give you some opportunity to travel and learn more that way. You don't want to exclude yourself from those opportunities by not having enough spare cash. So in short, spend what you need to get yourself the best education you can, and keep any spare money you have somewhere you can use it to take advantage of any opportunities that come your way.", "title": "" }, { "docid": "ca6173c58c16201cc1774fe3a875ea43", "text": "\"I have been trying to find information about how banks \"\"create\"\" money by giving out loans while only having a portion of the money to lend. And any broader implications this may have (ie, all new money is debt?). And the implications of the the government increasing or decreasing the required reserve amount. I hope I explained that in a coherent way. BTW, I love the investopedia videos. If you can in any way emulate that technique, it should be a hit. good luck.\"", "title": "" }, { "docid": "e155a7538f8822b59bcea7d7e2f5090d", "text": "In addition to what others have said, I think it is important to consider that government retirement assistance (whatever it is called in each instance) is basically a promise that can be revoked. I talked to a retired friend of mine just yesterday and we got onto that subject; she mentioned that when she was young, the promise was for 90% of one's pay, paid by the government after retiring. It is very different today. Yes, you can gamble that you won't need the saved money, and thus decide not to save anything. What then if you do end up needing the money you did not set aside, but rather spent? You are just now graduating college, and assuming of course that you get a decently-paying job, are likely going to have loads more money than you are used to. If you make an agreement with yourself to set aside even just 10-15% of the difference in income right from the start, that is going to grow into a pretty sizable nest egg by the time you approach retirement age. Then, you will have the option of continuing to work (maybe part-time) or quitting in a way you would not have had otherwise. Now I'm going to pull numbers out of thin air, but suppose that you currently have $1000/month net, before expenses, and can get a job that pays $1800/month net starting out. 10-15% of the difference means you'll be saving around $100/month for retirement. In 35 years, assuming no return on investment (pessimistic, but works if returns match inflation) and no pay rises, that will still be over $40K. That's somewhere on the order of $150/month added to your retirement income for 25 years. Multiply with whatever inflation rate you think is likely if you prefer nominal values. It becomes even more noticable if you save a significant fraction of the additional pay; if you save 1/3 of the additional money (note that you still effectively get a 50% raise compared to what you have been living on before), that gives you a net income of $1500/month instead of $1800 ($500/month more rather than $800/month more) which grows into about $110K in 35 years assuming no return on investment. Nearly $400 per month for 25 years. $100 per week is hardly chump change in retirement, and it is still quite realistic for most people to save 30% of the money they did not have before.", "title": "" }, { "docid": "eb6cf381a81bcc5bf1f0ada803b42b6f", "text": "Gold and silver are for after the crisis, not during. Gold and silver are far more likely to be able to be exchanged for things you need, since they are rare, easily divided, etc. Getting land away from where the crap is happening is also good, but it's more than that. Say you have land somewhere. How will the locals view you if you move there to hunker down only when things go bad? They won't really trust you, and you'll inherit a new set of problems. Building relationships in an off-the-beaten-path area requires a time investment. Investing in lifestyle in general is good. Lifestyle isn't just toys, but it's privacy, peace of mind, relationships with people with whom you can barter skills, as well as the skills you might think you'd need to do more than just get by in whatever scenario you envision. For the immediate crisis, you'd better have the things you'll need for a few months. Stores probably won't be supplied on any regular basis, and the shelves will be bare. Trying to use gold or silver during the crisis just makes you a target for theft. With regard to food, it's best to get acclimated to a diet of what you'd have on hand. If you get freeze-dried food, eat it now, so that it's not a shock to your system when you have to eat it. (Can you tell I've been thinking about this? :) )", "title": "" }, { "docid": "8cc00e61174d102fff008e8fa1aad7fa", "text": "\"For a two year time frame, a good insured savings account or a low-cost short-term government bond fund is most likely the way I would go. Depending on the specific amount, it may also be reasonable to look into directly buying government bonds. The reason for this is simply that in such a short time period, the stock market can be extremely volatile. Imagine if you had gone all in with the money on the stock market in, say, 2007, intending to withdraw the money after two years. Take a broad stock market index of your choice and see how much you'd have got back, and consider if you'd have felt comfortable sticking to your plan for the duration. Since you would likely be focused more on preservation of capital than returns during such a relatively short period, the risk of the stock market making a major (or even relatively minor) downturn in the interim would (should) be a bigger consideration than the possibility of a higher return. The \"\"return of capital, not return on capital\"\" rule. If the stock market falls by 10%, it must go up by 11% to break even. If it falls by 25%, it must go up by 33% to break even. If you are looking at a slightly longer time period, such as the example five years, then you might want to add some stocks to the mix for the possibility of a higher return. Still, however, since you have a specific goal in mind that is still reasonably close in time, I would likely keep a large fraction of the money in interest-bearing holdings (bank account, bonds, bond funds) rather than in the stock market. A good compromise may be medium-to-high-yield corporate bonds. It shouldn't be too difficult to find such bond funds that can return a few percentage points above risk-free interest, if you can live with the price volatility. Over time and as you get closer to actually needing the money, shift the holdings to lower-risk holdings to secure the capital amount. Yes, short-term government bonds tend to have dismal returns, particularly currently. (It's pretty much either that, or the country is just about bankrupt already, which means that the risk of default is quite high which is reflected in the interest premiums demanded by investors.) But the risk in most countries' short-term government bonds is also very much limited. And generally, when you are looking at using the money for a specific purpose within a defined (and relatively short) time frame, you want to reduce risk, even if that comes with the price tag of a slightly lower return. And, as always, never put all your eggs in one basket. A combination of government bonds from various countries may be appropriate, just as you should diversify between different stocks in a well-balanced portfolio. Make sure to check the limits on how much money is insured in a single account, for a single individual, in a single institution and for a household - you don't want to chase high interest bank accounts only to be burned by something like that if the institution goes bankrupt. Generally, the sooner you expect to need the money, the less risk you should take, even if that means a lower return on capital. And the risk progression (ignoring currency effects, which affects all of these equally) is roughly short-term government bonds, long-term government bonds or regular corporate bonds, high-yield corporate bonds, stock market large cap, stock market mid and low cap. Yes, there are exceptions, but that's a resonable rule of thumb.\"", "title": "" }, { "docid": "90a3c2df6bd596f6abcd66c5ada17777", "text": "I'd put as much of it as possible into an ISA that pays a decent amount of interest so you get the benefit of the money accruing interest tax free. For the rest, I'd shop around for notice accounts, but would also keep an eye out for no-notice accounts. The latter might be beneficial if you expect interest rates to rise and are willing to shop around and move the money into accounts paying better interest every few months. Just make sure you're also factoring in the loss of interest when moving the money. You could look into fixed term savings bonds but I don't think they currently pay enough to make it worthwhile locking away your money.", "title": "" }, { "docid": "19db6fb40b0e627a0ddfc56aeb1268a1", "text": "\"I would be more than happy to find a good use for your money. ;-) Well, you have a bunch of money far in excess of your regular expenses. The standard things are usually: If you are very confused, it's probably worth spending some of your windfall to hire professional help. It beats you groping in the dark and possibly doing something stupid. But as you've seen, not all \"\"professionals\"\" are equal, and finding a good one is another can of worms. If you can find a good one, it's probably worth it. Even better would be for you to take the time and thoroughly educate yourself about investment (by reading books), and then make a knowledgeable decision. Being a casual investor (ie. not full time trader) you will likely arrive, like many do, at a portfolio that is mostly a mix of S&P ETFs and high grade (eg. govt and AAA corporate) bonds, with a small part (5% or so) in individual stock and other more complicated securities. A good financial advisor will likely recommend something similar (I've had good luck with the one at my credit union), and can guide you through the details and technicalities of it all. A word of caution: Since you remark about your car and house, be careful about upgrading your lifestyle. Business is good now and you can afford nicer things, but maybe next year it's not so good. What if you are by then too used to the high life to give it up, and end up under mountains of debt? Humans are naturally optimistic, but be wary of this tendency when making assumptions about what you will be able to afford in the future. That said, if you really have no idea, hey, take a nice vacation, get an art tutor for the kids, spend it (well, ideally not all of it) on something you won't regret. Investments are fickle, any asset can crash tomorrow and ruin your day. But often experiences are easier to judge, and less likely to lose value over time.\"", "title": "" }, { "docid": "4c372ebe4d33144e8b380f5ce9052c02", "text": "My approach won't work for everyone, but I keep a longer list of things I want in my head, preferably including higher value items. I then look at the cost of an item vs the amount of benefit it gets me (either enjoyment or ability to make more money or both). If I only had a few things I wanted, it would be easy to buy them even if the payback wasn't that great, but because I have a large list of things I'd like to be able to do, it's easier to play the comparison game in my head. Do I want this $50 thing now that will only give me a little bit of enjoyment and no income, or would I rather be able to get that $3000 digital cinema camera that I would enjoy having and could work on projects with and actually make money off of? (This is a RL example that I actually just bought last week after making sure I had solid leads on enough projects to pay myself back over time.) For me, it is much easier to compare with an alternative thing I'd enjoy, particularly since I enjoy hobbies that can pay for themselves, which is really the situation this strategy works best in. It might not work for everyone, but hobbies that pay for themselves can take many different forms. Mine tends to be very direct (get A/V tool, do projects that pay money), but it can also be indirect (get sports stuff, save on gym membership over time). If you can get things onto your list that can save you money in the long run, then this strategy can work pretty well, if not, you'll still have the overall saving problem, just with a longer wish list. That said, if you are good about saving already and simply want to make better use of your disposable income, then having a longer list may also work to let you seek out better deals for you. If you have funds that you know you can healthily spend on enjoyment, it is going to be difficult to choose nothing over something that gives enjoyment, even if it isn't a great return on the money. If you have alternatives that would give you better value, then it's easier to avoid the low value option.", "title": "" }, { "docid": "4ce65f07e88658faf0065537c90bf6ae", "text": "Here are some options: Park your money in a bank that works best for you.", "title": "" }, { "docid": "d810d2b0597dfe42dca0e0ea09f600cb", "text": "\"Aside from the calculations of \"\"how much you save through reducing interest\"\", you have two different types of loan here. The house that is mortgaged is not a wasting asset. You can reasonably expect that in 2045 it will have retained its worth measured in \"\"houses\"\", against the other houses in the same neighbourhood. In money terms, it is likely to be worth more than its current value, if only because of inflation. To judge the real cost or benefit of the mortgage, you need to consider those factors. You didn't say whether the 3.625% is a fixed or variable rate, but you also need to consider how the rate might compare with inflation in the long term. If you have a fixed rate mortgage and inflation rises above 3.625% in future, you are making money from the loan in the long term, not losing what you pay in interest. On the other hand, your car is a wasting asset, and your car loans are just a way of \"\"paying by installments\"\" over the life of the car. If there are no penalties for early repayment, the obvious choice there is to pay off the highest interest rates first. You might also want to consider what happens if you need to \"\"get the $11,000 back\"\" to use for some other (unplanned, or emergency) purpose. If you pay it into your mortgage now, there is no easy way to get it back before 2045. On the other hand, if you pay down your car loans, most likely you now have a car that is worth more than the loans on it. In an emergency, you could sell the car and recover at least some of the $11,000. Of course you should keep enough cash available to cover \"\"normal emergencies\"\" without having to take this sort of action, but \"\"abnormal emergencies\"\" do sometimes happen!\"", "title": "" }, { "docid": "fbc902b2e8751c0e08faf3c047029915", "text": "\"As the others said, you're doing everything right. So, at this it's not a matter of what you should do, it's a matter of what do you want to do? What would make you the happiest? So, what would you like to do most with that extra money? The point is, since you're already doing everything right with the rest of your money, there's really nothing you can do that's wrong with this money. Except using it on something that increases your monthly expenses, like a down payment on a car. In fact, there's no reason you have to do anything \"\"sensible\"\" with this money at all. You could blow it at nightclubs if you wanted to, and that would be perfectly ok. In fact, since you've got everything else covered, why not \"\"invest\"\" it in making some memories? How about vacations to exotic and rugged places, while you're still young enough to enjoy them?\"", "title": "" } ]	fiqa
8086a90262af5bbccebc39bcdeec11e0	Buying a house for a shorter term	[ { "docid": "baf6bf103513a003d4de7541b9132592", "text": "To answer your question, you need to ask yourself Common transaction costs can be really hard to compensate in a single year. It can include house inspections, closing costs, agents commissions, etc---all together, it can be up to 6-10% of the value of your house. This is a difficult goal to beat in a year, and your margin for miscalculations and market fluctuations is very low. In brief, you can be screwed big time. To make a profit in a year, you need to reduce transaction costs to the minimum: Avoid agents, inspectors, mortgage brokers, etc, which can pay you back with an interesting surprise. Bottom line, it can make sense to buy a house for a year, only if you can reduce all the related transaction costs by doing them yourself. If there are many houses in the market for sale, I would try to convince someone to lease the house for a year in the best terms possible (and maybe even try to sub-lease some of the rooms), or also rent-to-own the house. That way you avoid the transaction costs upfront, and would make more financial sense for a non real estate guru.", "title": "" }, { "docid": "c02bdf6aeb4bfdfa3d5984e2b27f6d83", "text": "If there are a lot of houses for sale, can you be sure that in a year or two you can sell yours? How long does the average house in that area stay on the market before it is sold? What percentage of houses never get sold? If it can't be sold due to the crowded market you will be forced to rent the house. The question for you then is how much rental income can you get? Compare the rental income to your monthly cost of owning, and managing the house. One benefit to buying a house in a market that is easy to rent a house would be if you are forced to move quickly, then you aren't stuck being 3 months into a 12 month lease. Keep in mind that markets can change rather dramatically in just a few years. Housing costs were flat for much of the 90's, then rocketed up in the first half of the last decade, and after a big drop, they are one a slow climb back up. But the actual path they are on depends on the part of the US you are in. The rule of thumb in the past was based on the fact that over a few years the price would rise enough overcome the closing costs on the two transactions. Unfortunately the slow growth in the 90's meant that many had to bring checks to closing because the equity gained wasn't enough to overcome the closing costs due to low down payment loans. The fast growth period meant that people got into exotic loans to maximize the potential income when prices were going up 10-20% a year. When prices dropped some found that they bought houses they couldn't afford, but couldn't sell to break even on the transaction. They were stuck and had to default on the mortgage. In fact I have never seen a time frame when the rule of thumb ever applied.", "title": "" }, { "docid": "a788530bc453279d6cb30eacfdb56dc7", "text": "There are two main factors at play to consider. Also, realize that no advice is universal. You need to evaluate your exact situation and do what is best for you.", "title": "" }, { "docid": "78b34ddb0cc670476868575472df6541", "text": "When on this topic, you'll often hear general rules of thumb. And, similar to the 'only buy stocks if you plan to hold more than X years' there are going to be periods where if you buy at a bottom right before the market turns up, you might be ahead just months after you buy. I'd say that if you buy right, below market, you're ahead the day you close. Edit - I maintain, and have Schiller providing supporting data) that real estate goes up with inflation in the long term, no more, no less. If the rise were perfectly smooth, correlated 100% month to month, you'd find it would take X years to break even to the costs of buying, commission and closing costs. If we call that cost about 8%, and inflation averages 3, it points to a 3 year holding period to break even. But, since real estate rises and falls in the short term, there are periods longer than 4 years where real estate lags, and very short periods where it rises faster than the costs involved. The buy vs rent is a layer right on top of this. If you happen upon a time when the rental market is tight, you may buy, see the house decline 10% in value, and when the math is done, actually be ahead of the guy that rented.", "title": "" } ]	[ { "docid": "0d29769d517e99e0482e50bf6f7b4db8", "text": "I sold my house and had been in the market looking for a replacement house for over 6 months after I sold it. I found someone willing to give me a short term, 3 month lease, with a month to month after that, at an equitable rate, as renters were scarcer than buyers.By the time I found a house, there were bidding wars as surplus had declined (can be caused seasonally), and it was quite difficult to get my new house. However, appraisers help this to a degree because whatever the seller wants, is not necessarily what they get, even if you offer it. I offered $10k over asking just to get picked out of the large group bidding on the house. Once the appraisal came in at $10k below my offer, I was able to buy the house at what I expected. Of course I had to be prepared if it came in higher, but I did my homework and knew pretty much what the house was worth. The mortgage is the same as the lease I had, the house is only 10 years' old and has a 1 year warranty on large items that could go wrong. In the 3 months I've been in the house, I have gained nearly $8k in equity....and will have a tax writeoff of about $19,000 off an income off a salary of $72,000, giving me taxable income of $53,000... making by tax liability go down about $4600. If I am claiming 0 dependents I will get back about $5,000 this year versus breaking even.", "title": "" }, { "docid": "c30339f0f419ddd40bbf35748e5cd9b0", "text": "\"Let's look at basics. Your 340K mortgage amortized over 25 years at 3.5% is going to cost you $1700 in payments - almost exactly your rent. You won't be paying out less. You will in fact be paying out more, because you are now liable for more insurance, and any repairs will have to be paid for by you, not the landlord. So don't do this to save money. Figures from here. Don't forget that it is extremely likely that interest rates will go up in the next few years. 7% is not unlikely. Can you afford it if your payments double? You can get a fixed rate mortgage, but they are going to cost you much more than 3.5% for more than a couple of years. Don't be fooled by the 'pay yourself' argument for getting a mortgage. in the first few years almost all of your payments is interest, not paying down the principal. You are just switching from paying a landlord to paying a bank. There are huge advantages to waiting until you have a good down payment before buying a house. People with a big down payment get better interest rates, and don't need to pay as much CMHC insurance. You will be less at risk if the price of your house drops. Also ask yourself if you are sure you will be in your house for five years - if not, even real estate agents would usually admit you shouldn't buy. The truck payment shouldn't be an issue, as long as you are sure you can service both truck and mortgage payments. Nor is $600 in credit card debt significant in the big scheme. I would probably put any spare cash towards a down payment. It reduces your interest rate (possibly), some expenses with regard to your mortgage, and your risk if you have to sell and your house value has dropped. You might like to look at the government of Canada website \"\"Rent or buy\"\". It's down right now so I can't give you a link. I'll edit it in when it's back up. EDIT:Turns out it's offline for 'updating'. Here's the link.\"", "title": "" }, { "docid": "0c83a16dae83b4e8deba713a10e4b6ad", "text": "You may be in a situation where buying is preferred, especially because you can enter the market in a strong position - with a 20% down payment. If you have the financial ability to assume the risk of owning, you may be better off. I would consider two things. Renting is purchasing a service. You are buying the flexibility to move with minimum hassle and the landlord is assuming the risk of owning the asset (property). They will make money on you, like any service provider. Buying is purchasing an asset. You are buying the underlying asset and assume all the risks associated with it. This is large, unforeseen maintenance, fees, taxes, depreciation, etc... Some of these risks were passed to you as a renter, but some were not. Just like purchasing $400k in stock, if you have to sell when the market is down, you lose big. You win if you can hold. Unlike a stock, real estate will eat your cash in taxes and repairs unless it is rented. If you are willing to be a long-distance landlord, this may work out. Understand that property management fees will eat into your rent income and being long-distance will give more potential for a bad tenant to ruin your property value. These and other factors (e.g. vacancy rate) will increase your risk of loss and should be considered. Some of this will be your preference, since you will spend much more time dealing with buying/selling/property management as opposed to a more clean rental situation. Is this hassle worth the savings? For many, yes; others, no. Finally, I hope this calculator can help clarify some of the financial aspects for you. http://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html?_r=0 Good Luck!", "title": "" }, { "docid": "2669fc66733ed6fbfa361a18d255cba9", "text": "Besides the long-term concern about which is cheaper, which has already been addressed by other answers, consider your risk exposure. Owning property has financial risks associated with it, just like owning stocks or bonds. The risk-related downsides of owning a home as an asset include: The risk-related upsides of owning a home as an asset include: Taking on some risk can save you (or earn you) money in the long run (that's why people buy risky stocks, after all) but consider how well you're equipped to handle that risk before you rush out to buy on a naive analysis of what's cheaper.", "title": "" }, { "docid": "d1341e48962baac52755c3d92cdd4d9c", "text": "the total principal is also dropping - you mean you're paying it down, right? All else the same, if you found a house whose payments are less than rent, and planned to stay long term, buying can make sense. But let's not forget the other costs and risks. How badly do you want to be a homeowner? Adding image from another post here: This shows that housing prices have fallen below the long term trend line and equilibrium level.", "title": "" }, { "docid": "7a16e7a60d19912d82df48675bb490c6", "text": "\"I second DJClayworth's suggestion to wait and save a larger down-payment. I'll also add: It looks like you neglected to consider CMHC insurance in your calculation. When you buy your first home with less than 20% down, the bank will require you to insure the mortgage. CMHC insurance protects the bank if you default – it does not protect you. But such insurance does make a bank feel better about lending money to people it otherwise wouldn't take a chance on. The kicker is you would be responsible for paying the CMHC insurance that's protecting the bank. The premium is usually added on to the amount borrowed, since a buyer requiring CMHC insurance doesn't, by definition, have enough money up front. The standard CMHC premium for a mortgage with 5% down, or as they would say a \"\"95% Loan-to-Value ratio\"\" is 2.75%. Refer to CMHC's table of premiums here. So, if you had a down-payment of $17,000 to borrow a remaining $323,000 from the bank to buy a $340,000 property, the money you owe the bank would be $331,883 due to the added 2.75% CMHC insurance premium. This added $8883, plus interest, obviously makes the case for buying less compelling. Then, are there other closing costs that haven't been fully considered? One more thing I ought to mention: Have you considered saving a larger down-payment by using an RRSP? There's a significant advantage doing it that way: You can save pre-tax dollars for your down-payment. When it comes time to buy, you'd take advantage of the Home Buyer's Plan (HBP) and get a tax-free loan of your own money from your RRSP. You'd have 15 years to put the money back into your RRSP. Last, after saving a larger downpayment, if you're lucky you may find houses not as expensive when you're ready to buy. I acknowledge this is a speculative statement, and there's a chance houses may actually be more expensive, but there is mounting evidence and opinion that real estate is currently over-valued in Canada. Read here, here, and here.\"", "title": "" }, { "docid": "241f4865e904c4cb490fc953274884e1", "text": "\"First off; I don't know of the nature of the interpersonal relationship between you and your roommate, and I don't really care, but I will say that your use of that term was a red flag to me, and it will be so to a bank; buying a home is a big deal that you normally do not undertake with just a \"\"friend\"\" or \"\"roommate\"\". \"\"Spouses\"\", \"\"business partners\"\", \"\"domestic partners\"\" etc are the types of people that go in together on a home purchase, not \"\"roommates\"\". Going \"\"halvsies\"\" on a house is not something that's easily contracted; you can't take out two primary mortgages for half the house's value each, because you can't split the house in half, so if one of you defaults that bank takes the house leaving both the other person and their bank in the lurch. Co-signing on one mortgage is possible but then you tie your credit histories together; if one of you can't make their half of the mortgage, both of you can be pursued for the full amount and both of you will see your credit tank. That's not as big a problem for two people joined in some other way (marriage/family ties) but for two \"\"friends\"\" there's just way too much risk involved. Second, I don't know what it's like in your market, but when I was buying my first house I learned very quickly that extended haggling is not really tolerated in the housing market. You're not bidding on some trade good the guy bought wholesale for fifty cents and is charging you $10 for; the seller MIGHT be breaking even on this thing. An offer that comes in low is more likely to be rejected outright as frivolous than to be countered. It's a fine line; if you offer a few hundred less than list the seller will think you're nitpicking and stay firm, while if you offer significantly less, the seller may be unable to accept that price because it means he no longer has the cash to close on his new home. REOs and bank-owned properties are often sold at a concrete asking price; the bank will not even respond to anything less, and usually will not even agree to eat closing costs. Even if it's for sale by owner, the owner may be in trouble on their own mortgage, and if they agree to a short sale and the bank gets wind (it's trivial to match a list of distressed mortgaged properties with the MLS listings), the bank can swoop in, foreclose the mortgage, take the property and kill the deal (they're the primary lienholder; you don't \"\"own\"\" your house until it's paid for), and then everybody loses. Third, housing prices in this economy, depending on market, are pretty depressed and have been for years; if you're selling right now, you are almost certainly losing thousands of dollars in cash and/or equity. Despite that, sellers, in listing their home, must offer an attractive price for the market, and so they are in the unenviable position of pricing based on what they can afford to lose. That again often means that even a seller who isn't a bank and isn't in mortgage trouble may still be losing thousands on the deal and is firm on the asking price to staunch the bleeding. Your agent can see the signs of a seller backed against a wall, and again in order for your offer to be considered in such a situation it has to be damn close to list. As far as your agent trying to talk you into offering the asking price, there's honestly not much in it for him to tell you to bid higher vs lower. A $10,000 change in price (which can easily make or break a deal) is only worth $300 to him either way. There is, on the other hand, a huge incentive for him to close the deal at any price that's in the ballpark: whether it's $365k or $375k, he's taking home around $11k in commission, so he's going to recommend an offer that will be seriously considered (from the previous points, that's going to be the asking price right now). The agent's exact motivations for advising you to offer list depend on the exact circumstances, typically centering around the time the house has been on the market and the offer history, which he has access to via his fellow agents and the MLS. The house may have just had a price drop that brings it below comparables, meaning the asking price is a great deal and will attract other offers, meaning you need to move fast. The house may have been offered on at a lower price which the seller is considering (not accepted not rejected), meaning an offer at list price will get you the house, again if you move fast. Or, the house may have been on the market for a while without a price drop, meaning the seller can go no lower but is desperate, again meaning an offer at list will get you the house. Here's a tip: virtually all offers include a \"\"buyer's option\"\". For a negotiated price (typically very small, like $100), from the moment the offer is accepted until a particular time thereafter (one week, two weeks, etc) you can say no at any time, for any reason. During this time period, you get a home inspection, and have a guy you trust look at the bones of the house, check the basic systems, and look for things that are wrong that will be expensive to fix. Never make an offer without this option written in. If your agent says to forego the option, fire him. If the seller wants you to strike the option clause, refuse, and that should be a HUGE red flag that you should rescind the offer entirely; the seller is likely trying to get rid of a house with serious issues and doesn't want a competent inspector telling you to lace up your running shoes. Another tip: depending on the pricepoint, the seller may be expecting to pay closing costs. Those are traditionally the buyer's responsibility along with the buyer's agent commission, but in the current economy, in the pricepoint for your market that attracts \"\"first-time homebuyers\"\", sellers are virtually expected to pay both of those buyer costs, because they're attracting buyers who can just barely scrape the down payment together. $375k in my home region (DFW) is a bit high to expect such a concession for that reason (usually those types of offers come in for homes at around the $100-$150k range here), but in the overall market conditions, you have a good chance of getting the seller to accept that concession if you pay list. But, that is usually an offer made up front, not a weapon kept in reserve, so I would have expected your agent to recommend that combined offer up front; list price and seller pays closing. If you offer at list you don't expect a counter, so you wouldn't keep closing costs as a card to play in that situation.\"", "title": "" }, { "docid": "fe42f4891bb8abe1c35dea12d56d0e78", "text": "Save up a bigger downpayment. The lender's requirement is going to be based on how much you finance, not the price of the house.", "title": "" }, { "docid": "8604c06699e97cc1cb620fd3f660efac", "text": "I don't know any clever way to do what you're describing. And, in a sense, you can see why there might not be one. A mortgage isn't just a magical way to reduce your housing expenses; it's a tradeoff in which you agree to a long-term commitment in exchange for fixed costs (or at least costs with a prearranged structure) over that long term. If you're unwilling to accept the obligation of paying for and maintaining the property over a long period, you can't really expect to reap the benefits of lowered costs. Part of the reason people say buying is better is because people often do live in the same place for a long time, in which case, if they rent, they might miss out on savings they could have had if they bought instead. If you're not going to live in the same place for a long time, buying may not actually be better for you.", "title": "" }, { "docid": "b8f73b9acadf8986c48c36572b1a410d", "text": "First consider the basic case of what you are asking: you expect to have a future obligation to pay interest, and you are concerned that the rate when you pay it, will be higher than the rate today. In the simplest case, you could theoretically hedge that risk by buying an asset which pays the market interest rate. As the interest rate rises, increasing your costs, your return on this asset would also increase. This would minimize your exposure to interest rate fluctuations. There are of course two problems with this simplified solution: (1) The reason you expect to pay interest, is because you need/want to take on debt to purchase your house. To fully offset this risk by putting all your money in an asset which bears the market interest rate, would effectively be the same as just buying your house in cash. (2) The timing of the future outflow is a bit unique: you will be locking in a rate, in 5 years, which will determine the payments for the 5 years after that. So unless you own this interest-paying asset for that whole future duration, you won't immediately benefit. You also won't need / want to buy that asset today, because the rates from today to 2022 are largely irrelevant to you - you want something that directly goes against the prevailing mortgage interest rate in 2022 precisely. So in your specific case, you could in theory consider the following solution: You could short a coupon bond, likely one with a 10 year maturity date from today. As interest rates rise, the value of the coupon bond [for it's remaining life of 5 years], which has an implied interest rate set today, will drop. Because you will have shorted an asset dropping in value, you will have a gain. You could then close your short position when you buy your house in 5 years. In theory, your gain at that moment in time, would equal the present value of the rate differential between today's low mortgage rates and tomorrow's high interest rates. There are different ways mechanically to achieve what I mention above (such as buying forward derivative contracts based on interest rates, etc.), but all methods will have a few important caveats: (1) These will not be perfect hedges against your mortgage rates, unless the product directly relates to mortgage rates. General interest rates will only be a proxy for mortgage rates. (2) There is additional risk in taking this type of position. Taking a short position / trading on a margin requires you to make ongoing payments to the broker in the event that your position loses money. Theoretically those losses would be offset by inherent gains in the future, if mortgage rates stay low / go lower, but that offset isn't in your plan for 5 years. (3) 5 years may be too long of a timeline for you to accurately time the maturity of your 'hedge' position. If you end up moving in 7 years, then changes in rates between 2022-2024 might mean you lose on both your 'hedge' position and your mortgage rates. (4) Taking on a position like this will tie up your capital - either because you are directly buying an asset you believe will offset growing interest rates, or because you are taking on a margin account for a short position (preventing you from using a margin account for other investments, to the extent you 'max out' your margin limit). I doubt any of these solutions will be desirable to an individual looking to mitigate interest rate risk, because of the additional risks it creates, but it may help you see this idea in another light.", "title": "" }, { "docid": "fc10bfbcdf1afbd969f4378266520529", "text": "First, some general advice that I think you should consider A good rule of thumb on home buying is to wait to buy until you expect to live in the same place for at least 5 years. This period of time is meant to reduce the impact of closing costs, which can be 1-5% of your total buying & selling price. If you bought and sold in the same year, for example, then you might need to pay over 5% of the value of your home to realtors & lawyers! This means that for many people, it is unwise to buy a home expecting it to be your 'starter' home, if you already are thinking about what your next (presumably bigger) home will look like. If you buy a townhouse expecting to sell it in 3 years to buy a house, you are partially gambling on the chance that increases in your townhome's value will offset the closing costs & mortgage interest paid. Increases in home value are not a sure thing. In many areas, the total costs of home ownership are about equivalent to the total costs of renting, when you factor in maintenance. I notice you don't even mention renting as an option - make sure you at least consider it, before deciding to buy! Also, don't buy a house expecting your life situation to 'make up the difference' in your budget. If you're expecting your girlfriend to move in with you in a year, that implies that you aren't living together now, and maybe haven't talked about it. Even if she says now that she would move in within a year, there's no guarantee that things work out that way. Taking on a mortgage is a commitment that you need to take on yourself; no one else will be liable for the payments. As for whether a townhouse or a detached house helps you meet your needs better, don't get caught up in terminology. There are few differences between houses & townhomes that are universal. Stereotypically townhomes are cheaper, smaller, noisier, and have condo associations with monthly fees to pay for maintenance on joint property. But that is something that differs on a case-by-case basis. Don't get tricked into buying a 1,100 sq ft house with a restrictive HOA, instead of a 1,400 sq ft free-hold townhouse, just because townhouses have a certain reputation. The only true difference between a house and a townhouse is that 1 or both of your walls are shared with a neighbor. Everything else is flexible.", "title": "" }, { "docid": "25d0c4ede5dc8fb99885e614a268157a", "text": "If you do the financing, get a large down payment and make a short loan. Do not expose yourself to risk with a 30 year note, and get some major money up front so the buyer has some skin in the game and will continue to make payments.", "title": "" }, { "docid": "97fd99a51984de3474ad8e5da3acae09", "text": "Buying a house may save you money compared with renting, depending on the area and specifics of the transaction (including the purchase price, interest rates, comparable rent, etc.). In addition, buying a house may provide you with intangibles that fit your lifestyle goals (permanence in a community, ability to renovate, pride of ownership, etc.). These factors have been discussed in other answers here and in other questions. However there is one other way I think potential home buyers should consider the financial impact of home ownership: Buying a house provides you with a natural 'hedge' against possible future changes in your cost of living. Assume the following: If these two items are true, then buying a home allows you to guarantee today that your monthly living expenses will be mostly* fixed, as long as you live in that community. In 2 years, if there is an explosion of new residents in your community and housing costs skyrocket - doesn't affect you, your mortgage payment [or if you paid cash, the lack of mortgage payment] is fixed. In 3 years, if there are 20 new apartment buildings built beside you and housing costs plummet - doesn't affect you, your mortgage payment is fixed. If you know that you want to live in a particular place 20 years from now, then buying a house in that area today may be a way of ensuring that you can afford to live there in the future. *Remember that while your mortgage payment will be fixed, other costs of home ownership will be variable. See below. You may or may not save money compared with rent over the period you live in your house, but by putting your money into a house, you have protected yourself against catastrophic rent increases. What is the cost of hedging yourself against this risk? (A) The known costs of ownership [closing costs on purchase, mortgage interest, property tax, condo fees, home insurance, etc.]; (B) The unknown costs of ownership [annual and periodic maintenance, closing costs on a future sale, etc.]; (C) The potential earnings lost on your down payment / mortgage principal payments [whether it is low-risk interest or higher risk equity]; (D) You may have reduced savings for a long period of time which would limit your ability to cover emergencies (such as medical costs, unexpected unemployment, etc.) (E) You may have a reduced ability to look for a better job based on being locked into a particular location (though I have assumed above that you want to live in a particular community for an extended period of time, that desire may change); and (F) You can't reap the benefits of a rental market that decreases in real dollars, if that happens in your market over time. In short, purchasing a home should be a lifestyle-motivated decision. It financially reduces some the fluctuation in your long-term living costs, with the trade-off of committed principal dollars and additional ownership risks including limited mobility.", "title": "" }, { "docid": "476ea35f4210276c453ccac381ef5b21", "text": "When you sell a house around between 7-10% of the sales price will go to various fees. Mostly to the agents, but also to county fees, city fees, deed tax, and possibly covering closing costs for the buyers. So if you sell a $400k house for the same price you buy, just in fees, you're out $40k. Mortgages are structured so that the frontend is very interest heavy, while at the end you're mostly paying towards principal. So for the first two years you will pay down very little of the principal. Figure around $2500 for the mortgage, and without running the numbers I bet you would pay an average for the first two years of around $1800/month in interest. $43,200. Mortgage interest is tax deductible, so you'll get some of that back. That's also $16,800 in equity you'll have on the house, so you'll get that back out when you sell. Rough numbers, I would be you lose around $50k buying the house and selling for the same price two years later. That doesn't take into account having to do any maintenance. And it assumes you can sell quickly when you want to. Renting is not throwing away money. You don't lose any money. You get a place to live in exchange. You don't build equity, sure, but you don't need to worry about maintenance and other related issues. When you're looking to be somewhere short term renting is generally the best idea.", "title": "" }, { "docid": "6d7a39e18fe7359a500344b8b5016f82", "text": "If they charge a fee to accept an item, it's reasonable to assume the item has insignificant value, so the only tax-deductible bit would be the money you donated to their charity. What you describe sounds like a fee for service, not a charitable donation. The organization should provide a fee breakdown to show what percentage (if any) of the fee is a deductible contribution. There could be some additional PA-only tax benefit, but I didn't come across anything in my brief search.", "title": "" } ]	fiqa
b58bc318649ca187ca0ec6ffeff6e0d1	Why not pay in full upfront for a car?	[ { "docid": "423a0170b48b47cec078f3cb5e5bc811", "text": "In general I'd say, yeah, if you can pay cash, pay cash. If you pay cash, then by definition you pay zero interest. If you get a loan, you'll pay interest. Most people get a loan to buy a car because they don't have the cash. Possible reasons not to pay cash when you could: One: Technically you can pay cash, but if you did, you would have little or no reserve for emergencies. Like if the car costs, say, $20,000.00, and you have $20,010.00 in your bank account, then technically you could afford to pay cash, but you probably shouldn't, because you don't want to have just $10 left. What if tomorrow something comes up? Two: Arguably, you have a place to invest money that pays more than the interest on the loan. Like say you can get a car loan for, whatever the going rate is today, say 6%. And you know a place to invest your money that is very safe and almost guaranteed to pay 10%. It would make sense to borrow to buy the car, invest the cash, and then withdraw money from the investment to make the payments on the car. You'd end up 4% ahead. There are a lot of catches to that strategy, though. The biggest is that the more the investment pays, the more likely that it is risky. If you thought the investment would pay 10% but it ends up paying only 4%, then you will lose money by this strategy. Also, there's the psychological element: Many people SAY and fully INTEND to invest their money, but then find other things they want to buy and so spend it instead. If you pay cash, you're committed.", "title": "" }, { "docid": "34c0ca2bb90dd623af001de51d16eae9", "text": "Possible (unlikely) reasons: But usually, yeah, if you can pay cash, you should.", "title": "" }, { "docid": "9874f6737c29c6ccdcf50be800ba0095", "text": "You need to do the maths exactly. The cost of buying a car in cash and using a loan is not the same. The dealership will often get paid a significant amount of money if you get a loan through them. On the other hand, they may have a hold over you if you need their loan (no cash, and the bank won't give you money). One strategy is that while you discuss the price with the dealer, you indicate that you are going to get a loan through them. And then when you've got the best price for the car, that's when you tell them it's cash. Remember that the car dealer will do what's best for their finances without any consideration of what's good for you, so you are perfectly in your rights to do the same to them.", "title": "" }, { "docid": "cd7306a60bf14d01085ce39d5567c46d", "text": "Two adages come to mind. Never finance a depreciating asset. If you can't pay cash for a car, you can't afford it. If you decide you can finance at a low rate and invest at a higher one, you're leveraging your capital. The risk here is that your investment drops in value, or your cash flow stops and you are unable to continue payments and have to sell the car, or surrender it. There are fewer risks if you buy the car outright. There is one cost that is not considered though. Opportunity cost. Since you've declared transportation necessary, I'd say that opportunity cost is worth the lower risk, assuming you have enough cash left after buying a car to fund your emergency fund. Which brings me to my final point. Be sure to buy a quality used car, not a new one. Your emergency fund should be able to replace the car completely, in the case of a total loss where you are at fault and the loss is not covered by insurance. TLDR: My opinion is that it would be better to pay for a quality, efficient, basic transportation car up front than to take on a debt.", "title": "" }, { "docid": "622984b8033b727d4951db3c6a07fbe2", "text": "There many car loans at zero percent interest. Finance the car at zero percent, then take your money and invest it. If you want to be super safe buy a CD the same length as the car loan. 5 years you will get 2%. If you still want safety and a better return take up a asset allocation strategy that moves your cash to risky assets when the market is performing well, then to cash, bonds, or cds when the market under-performs. Now you have your car with a zero percent loan and you are making the return on the money instead of the car company.", "title": "" } ]	[ { "docid": "83f722d2f398117aafd522e4bfb3384e", "text": "I think you are making this more complicated that it has to be. In the end you will end up with a car that you paid X, and is worth Y. Your numbers are a bit hard to follow. Hopefully I got this right. I am no accountant, this is how I would figure the deal: The payments made are irrelevant. The downpayment is irrelevant as it is still a reduction in net worth. Your current car has a asset value of <29,500>. That should make anyone pause a bit. In order to get into this new car you will have to finance the shortfall on the current car (29,500), the price of the vehicle (45,300), the immediate depreciation (say 7,000). In the end you will have a car worth 38K and owe 82K. So you will have a asset value of <44,000>. Obviously a much worse situation. To do this car deal it would cost the person 14,500 of net worth the day the deal was done. As time marched on, it would be more as the reduction in debt is unlikely to keep up with the depreciation. Additionally the new car purchase screen shows a payment of $609/month if you bought the car with zero down. Except you don't have zero down, you have -29,500 down. Making the car payment higher, I estamate 1005/month with 3.5%@84 months. So rather than having a hit to your cash flow of $567 for 69 more months, you would have a payment of about $1000 for 84 months if you could obtain the interest rate of 3.5%. Those are the two things I would focus on is the reduction in net worth and the cash flow liability. I understand you are trying to get a feel for things, but there are two things that make this very unrealistic. The first is financing. It is unlikely that financing could be obtained with this deal and if it could this would be considered a sub-prime loan. However, perhaps a relative could finance the deal. Secondly, there is no way even a moderately financially responsible spouse would approve this deal. That is provided there were not sigificant assets, like a few million. If that is the case why not just write a check?", "title": "" }, { "docid": "1380194c0b6436ed04951838f3289501", "text": "If you have enough money to buy a car in full, that probably means you have good credit. If you have good credit, car dealerships will often offer 0% loans for either a small period of time, like 12 months, or the entire loan. Taking a 0% loan is obviously more optimal than paying the entire lump sum up front. You can take the money and invest in other things that earn you more than 0%. However, most dealerships offer a rebate OR a 0% loan. Some commenters below claim that the rebate is usually larger than the saved interest, so definitely do the math if you have that option.", "title": "" }, { "docid": "bcd026c79da30d4424b9df38978406a4", "text": "\"The question is about the dealer, right? The dealer isn't providing this financing to you, Alfa is, and they're paying the dealer that same \"\"On the Road\"\" price when you finance the purchase. So the dealer gets the same amount either way. The financing, through Alfa, means your payments go to Alfa. And they're willing to give you 3,000 towards purchase of the car at the dealer in order to motivate those who can afford payments but not full cash for the car. They end up selling more cars this way, keeping the factories busy and employees and stockholders happy along the way. At least, that's how it's supposed to work out.\"", "title": "" }, { "docid": "1cba1e58c1fe0f89a337d2bfc40c64f1", "text": "If it was me, I would outsource as much as possible with the desire to receive up front payment from financing companies for originating a loan. Why? The biggest risk to newer businesses is cash flow. The amount of work a new business owner has to do is daunting. If you can outsource some of that work it will increase your chance of success and make your life easier. Focus on selling cars. The upfront origination will help with your cash flow. If you can outsource the credit decision making and paper work you have leveraged your time and can focus on more important things.", "title": "" }, { "docid": "27a390024a12c86aad00258b2b08642a", "text": "Most of the people I know that own them are slightly older, and thus in their prime earning years, and many have paid off their homes. That can free up $1000 a month or more in monthly expenses, which would easily cover a nice luxury car payment. If you've got it, and are into cars, why not? What's the point in having the biggest tombstone in the graveyard?", "title": "" }, { "docid": "e6bf0329cade75454187b0320816ddc2", "text": "\"One part of the equation that I don't think you are considering is the loss in value of the car. What will this 30K car be worth in 84 months or even 60 months? This is dependent upon condition, but probably in the neighborhood of $8 to $10K. If one is comfortable with that level of financial loss, I doubt they are concerned with the investment value of 27K over the loan of 30K @.9%. I also think it sets a bad precedent. Many, and I used to be among them, consider a car payment a necessary evil. Once you have one, it is a difficult habit to break. Psychologically you feel richer when you drive a paid for car. Will that advantage of positive thinking lead to higher earnings? Its possible. The old testament book of proverbs gives many sound words of advice. And you probably know this but it says: \"\"...the borrower is slave to the lender\"\". In my own experience, I feel there is a transformation that is beyond physical to being debt free.\"", "title": "" }, { "docid": "927daf0565187ad69e532a058862b42f", "text": "The optimal down payment is 0% IF your interest rate is also 0%. As the interest rate increases, so does the likelihood of the better option being to pay for the car outright. Note that this is probably a binary choice. In other words, depending on the rate you will pay, you should either put 0% down, or 100% down. The interesting question is what formula should you use to determine which way to go? Obviously if you can invest at a higher return than the rate you pay on the car, you would still want to put 0% down. The same goes for inflation, and you can add these two numbers together. For example, if you estimate 2% inflation plus 1% guaranteed investment, then as long as the rate on your car is less than 3%, you would want to minimize the amount you put down. The key here is you must actually invest it. Other possible reasons to minimize the down payment would be if you have other loans with higher rates- then obviously use that money to pay down those loans before the car loan. All that being said, some dealers will give you cash back if you pay for the car outright. If you have this option, do the math and see where it lands. Most likely taking the cash back is going to be more attractive so you don't even have to hedge inflation at all. Tip: Make sure to negotiate the price of the car before you tell them how you are going to pay for it. (And during this process you can hint that you'll pay cash for it.)", "title": "" }, { "docid": "d1f1aa4fd1d65fa135ec33d4155d334c", "text": "\"You are correct to be wary. Car dealerships make money selling cars, and use many tactics and advertisements to entice you to come into their showroom. \"\"We are in desperate need of [insert your make, model, year and color]! We have several people who want that exact car you have! Come in and sell it to us and buy a new car at a great price! We'll give you so much money on your trade in!\"\" In reality, they play a shell game and have you focus on your monthly payment. By extending the loan to 4 or 5 years (or longer), they can make your monthly payment lower, sure, but the total amount paid is much higher. You're right: it's not in your best interest. Buy a car and drive it into the ground. Being free of car payments is a luxury!\"", "title": "" }, { "docid": "8d280f9654cc7e6f9132494b19bc1d4f", "text": "Not long after college in my new job I bought a used car with payments, I have never done that since. I just don't like having a car payment. I have bought every car since then with cash. You should never borrow money to buy a car There are several things that come into play when buying a car. When you are shopping with cash you tend to be more conservative with your purchases look at this Study on Credit card purchases. A Dunn & Bradstreet study found that people spend 12-18% more when using credit cards than when using cash. And McDonald's found that the average transaction rose from $4.50 to $7.00 when customers used plastic instead of cash. I would bet you if you had $27,000 dollars cash in your hand you wouldn't buy that car. You'd find a better deal, and or a cheaper car. When you finance it, it just doesn't seem to hurt as bad. Even though it's worse because now you are paying interest. A new car is just insanity unless you have a high net worth, at least seven figures. Your $27,000 car in 5 years will be worth about $6500. That's like striking a match to $340 dollars a month, you can't afford to lose that much money. Pay Cash If you lose your job, get hurt, or any number of things that can cost you money or reduce your income, it's no problem with a paid for car. They don't repo paid for cars. You have so much more flexibility when you don't have payments. You mention you have 10k in cash, and a $2000 a month positive cash flow. I would find a deal on a 8000 - 9000 car I would not buy from a dealer. Sell the car you have put that money with the positive cash flow and every other dime you can get at your student loans and any other debt you have, keep renting cheap keep the college lifestyle (broke) until you are completely out of debt. Then I would save for a house. Finally I would read this Dave Ramsey book, if I would have read this at your age, I would literally be a millionaire by now, I'm 37. Don't buy from a dealer Find a private sale car that you can get a deal on, pay less than Kelly Blue Book. Pay a little money $50 - 75 to have an automotive technician to check it out for you and get a car fax, to make sure there are no major problems. I have worked in the automotive industry for 20 + years and you rarely get a good deal from a dealer. “Everything popular is wrong.” Oscar Wilde", "title": "" }, { "docid": "d4fcfcb0038f0f3aa19f98a535bdf044", "text": "The .9% looks great, but it's not as relevant as the cost of the car itself. There are those who believe that one should never own a new car, that the first X years/miles of a car's life are the most expensive. The real question is how your budget is allocated. Is the car payment a small sliver or a large slice? How big is the housing wedge?", "title": "" }, { "docid": "f18fc365689652e6ace8938a416fef9d", "text": "\"In most cases of purchases the general advice is to save the money and then make the purchase. Paying cash for a car is recommended over paying credit for example. For a house, getting a mortgage is recommended. Says who? These rules of thumb hide the actual equations behind them; they should be understood as heuristics, not as the word of god. The Basics The basic idea is, if you pay for something upfront, you pay some fixed cost, call it X, where as with a loan you need to pay interest payments on X, say %I, as well as at least fixed payments P at timeframe T, resulting in some long term payment IX. Your Assumption To some, this obviously means upfront payments are better than interest payments, as by the time the loan is paid off, you will have paid more than X. This is a good rule of thumb (like Newtonian's equations) at low X, high %I, and moderate T, because all of that serves to make the end result IX > X. Counter Examples Are there circumstances where the opposite is true? Here's a simple but contrived one: you don't pay the full timeframe. Suppose you die, declare bankruptcy, move to another country, or any other event that reduces T in such a way that XI is less than X. This actually is a big concern for older debtors or those who contract terminal illnesses, as you can't squeeze those payments out of the dead. This is basically manipulating the whole concept. Let's try a less contrived example: suppose you can get a return higher than %I. I can currently get a loan at around %3 due to good credit, but index funds in the long run tend to pay %4-%5. Taking a loan and investing it may pay off, and would be better than waiting to have the money, even in some less than ideal markets. This is basically manipulating T to deal with IX. Even less contrived and very real world, suppose you know your cash flow will increase soon; a promotion, an inheritance, a good market return. It may be better to take the loan now, enjoy whatever product you get until that cash flows in, then pay it all off at once; the enjoyment of the product will make the slight additional interest worth it. This isn't so much manipulating any part of the equation, it's just you have different goals than the loan. Home Loan Analysis For long term mortgages, X is high, usually higher than a few years pay; it would be a large burden to save that money for most people. %I is also typically fairly low; P is directly related to %I, and the bank can't afford to raise payments too much, or people will rent instead, meaning P needs to be affordable. This does not apply in very expensive areas, which is why cities are often mostly renters. T is also extremely long; usually mortgages are for 15 or 30 years, though 10 year options are available. Even with these shorter terms, it's basically the longest term loan a human will ever take. This long term means there is plenty of time for the market to have a fluctuation and raise the investments current price above the remainder of the loan and interest accrued, allowing you to sell at a profit. As well, consider the opportunity cost; while saving money for a home, you still need a place to live. This additional cost is comparable to mortgage payments, meaning X has a hidden constant; the cost of renting. Often X + R > IX, making taking a loan a better choice than saving up. Conclusion \"\"The general advice\"\" is a good heuristic for most common human payments; we have relatively long life spans compared to most common payments, and the opportunity cost of not having most goods is relatively low. However, certain things have a high opportunity cost; if you can't talk to HR, you can't apply for jobs (phone), if you can't get to work, you can't eat (car), and if you have no where to live, it's hard to keep a job (house). For things with high opportunity costs, the interest payments are more than worth it.\"", "title": "" }, { "docid": "ee60151939fc8a15f134d44755e021c1", "text": "$27,000 for a car?! Please, don't do that to yourself! That sounds like a new-car price. If it is, you can kiss $4k-$5k of that price goodbye the moment you drive it off the lot. You'll pay the worst part of the depreciation on that vehicle. You can get a 4-5 year old Corolla (or similar import) for less than half that price, and if you take care of it, you can get easily another 100k miles out of it. Check out Dave Ramsey's video. (It's funny that the car payment he chooses as his example is the same one as yours: $475! ;) ) I don't buy his take on the 12% return on the stock market (which is fantasy in my book) but buying cars outright instead of borrowing or (gasp) leasing, and working your way up the food chain a bit with the bells/whistles/newness of your cars, is the way to go.", "title": "" }, { "docid": "097975b081d888a6335b3f57fa4f3a5c", "text": "In many (most?) cases, luxury cars are leased rather than purchased, so the payments on even an expensive car might not be as high as you'd expect. For simplicity, take a $100,000 car. If you were to buy that in cash or do a standard five-year auto loan, that would be incredibly expensive for all but the wealthiest of people. But a lease is different. When you lease a car, you are financing the car's depreciation over the lease term. So, let's suppose that you're signing up for a three-year lease. The car manufacturer will make an estimate of what that car will be worth when you bring it back in three years (this is called the residual value). If this number is $80,000, that means the lessee is only financing the $20,000 difference between the car's price and its residual value after three years - rather than the full $100,000 MSRP. At the end of the lease, he or she just turns the car back in. Luxury cars are actually especially amenable to leasing because they have excellent brand power - just because of the name on the hood, there are many people who would be happy to pay a lot for a three-year-old Mercedes or BMW. With a mid- or low-range car, the brand is not as powerful and used cars consequentially have a lower residual value (as a percentage of the MSRP) than luxury cars. So, don't look at an $80,000 luxury car and assume that the owner has paying for the entire $80,000.", "title": "" }, { "docid": "2b617a85ac8aafa6bed5a5d62f5b24ef", "text": "\"I don't think you're missing anything on the math side as far as the payments. Likewise, it may seem everyone's driving a nicer car, but I'm going to predict that's based on area and a few other factors (for instance, my used car feels like riches in a college town). The behavior of why people would pay money, especially with high interest debt, for something is a little different. To explain the behavior behind people who purchase luxury cars: for some people, a car is a purchase that they value, similar to a person valuing the clothes they wear, the house they live in, or the equipment they buy and either borrowing or paying full price on an expensive car is worth it to them. We can call it a status symbol dismissively and criticize the financial waste without realizing, \"\"Wait, this is something they value\"\" like a rare book collector likes rare books (would a rare book collector pass on borrowing money if it meant a once-in-a-lifetime rare book purchase opportunity?). Have you ever felt, \"\"Wow this is cool/awesome/amazing\"\" with something? Basically, that's how many of them feel toward these cars. As much as I'd love to say they're only doing it for status (because I'm not a car person), that's actually somewhat de-humanizing and the more I've met people like this, the more I've realized this is their \"\"thing\"\" and to them it's totally worth it (even with all the debt). I have no doubt that there's a percentage of them who truly may be misled - maybe they don't realize the full cost of borrowing money or leasing. Still, for those who don't care the full cost, that's because it's their thing. We can all agree that it's still not wise to do financially (borrow on a luxury vehicle), and it won't change that some people will do it.\"", "title": "" }, { "docid": "fe4f85b085aaa3d915721a7845363821", "text": "\"In regards to purchasing full coverage on your car even if you can afford to replace it, consider the hassle you have to deal with an accident that is not just the cost. As an example, my sister's car was stolen and wrecked. It was her problem to go recover the car on the other side of the state such that she would not be paying the storage \"\"fees\"\" imposed by the sheriff of the other county. Had she had insurance they would have taken care of it call. Another story is that I rented a car and side swiped in the parking lot by a hit and run. I was responsible for the minor damage. I started down the path of paying out of pocket because it was small enough that I did not want to submit a claim. The rental car agency started to pile on extra fees such that it was worth it to turn in a claim. My insurance company was savvy enough to be able to dispute the extra charges. After I submitted it to the insurance company I basically did nothing. They took care of everything. So, in summary, when you buy full coverage on your car, it is not just a financial decision. It is also about not having to deal with a hassle.\"", "title": "" } ]	fiqa
19cab90e66b02fc92e4acb2f77be79f5	Buying a car - advice needed	[ { "docid": "d5bd49da7dc83886ed33c5b5d84943b4", "text": "\"I would actually disagree with MrChrister on this. You can afford yourself the car in this price range paid cash. I don't know how exactly you spend your income, but from my experience, in expensive California, saving $20K a year from $70K income with $800/mo rent is feasible. Having a loan on your credit report which is paid on time and in full will definitely help you rebuilding your credit. Your calculations re the costs of the loan are based on the assumption that you're going to keep the loan for the whole period. Don't do that. See #1 - you can repay this loan much quicker than the 3 years it should originally have been. 6 months of the loan which is then paid off will do marvels to your credit report and credit score. Yes, it is going to cost you some, but in your particular case I would argue that its worth it. You're an adult now, you need credit cards, you'll need a mortgage at some point, you need to rent a place to live - all these require a good credit report. Just waiting, as MrChrister suggests, will help, but much much slower. Having said that, a seller that \"\"cannot discuss the terms over the phone\"\" is most likely a dishonest person. Once you're there and in front of him it is harder for you to verify information, resist signing papers, and negotiating.\"", "title": "" }, { "docid": "f3f2aad762151eb6ec61c7d1dc1e7383", "text": "If it costs more to fix the car than the car is worth, then those repairs are not worth it. Hit craigslist and look for another junker that runs, but is in your cash price range. Pay to get it looked at by a mechanic as a condition of sale. Use consumer reports to try and find a good model. Somebody in your position does not need a $15K car. You need a series of $2K or $4K cars that you will replace more often, but pay cash for. Car buying, especially from a dealer financed, place isn't how I would recommend building your credit back up. EDIT in response to your updates: Build your credit the smart way, by not paying interest charges. Use your lower limit card, and annually apply for more credit, which you use and pay off each and every month. Borrowing is not going to help you. Just because you can afford to make payments, doesn't automatically make payments a wise decision. You have to examine the value of the loan, not what the payments are. Shop for a good price, shop for a good rate, then purchase. The amount you can pay every month should only be a factor than can kill the deal, not allow it. Pay cash for your vehicle until you can qualify for a low cost loan from a credit union or a bank. It is a waste of money and time to pay a penalty interest rate because you want to build your credit. Time is what will heal your credit score. If you really must borrow for the purchase, you must secure a loan prior to shopping for a car. Visit a few credit unions and get pre-qualified. Once you have a pre-approved loan in place, you can let the deal try and beat your loan for a better deal. Don't make the mistake of letting the dealer do all the financing first.", "title": "" } ]	[ { "docid": "18eb4f81e1dbd0e3f013cffe592b5586", "text": "You are planning on buying a car that is 50% of your salary. Add your student debt to that and your total debt is >50% of your salary. I would suggest getting a few credit cards to build up credit, but can you manage that? Buying a 25k car with 55k salary is overspending. Get a second-hand car for 7k or so. Plus, buying a new car is not smart either, from a pricing standpoint, if you really want a new car, buy one that is 1 to 2 years old.", "title": "" }, { "docid": "a7b084a4ffebac53bd5ddbb862991b22", "text": "Yes, you are correct to go to the credit union first. Get approved for a loan first. Often, upon approval, the credit union will give you a blank check good for any amount up to the limit of the loan. When you buy the car, make it payable to the dealer, write in the amount and sign it. Enjoy the new car!", "title": "" }, { "docid": "336aa42c53d72c72b5139be22607f652", "text": "You may not have a good choice until you start that job. $2,000 is awfully low for a car, so it could be very risky. But you may not be able to get a loan until you start the new job. I would talk to a bank or credit union to get an idea of how much, if anything, you could borrow at this time. If you have a letter offering you the job that might help to get a loan. There are dealers who will finance a very cheap used car for anybody, but that kind of deal is likely to be at a very high interest rate and should be avoided. You could wind up with a debt and no car. One other possibility is to have a co-signer, such as a parent or other relative. That could make getting a car loan easy.", "title": "" }, { "docid": "715380f95aaedb38a91ca6a8d595aded", "text": "\"I do not think you are missing much. One thing you have right is low cost cars depreciate almost nothing. One thing you are missing is your satisfaction index. Driving a 200K car for 4 years requires a bit of motivation when your friends are driving new cars. Typically you need a larger goal to keep you focused. That might be saving money, getting out of debt, or obtaining an education. Buying a car from a private party, Craigslist is only one source, can save both parties money as the \"\"middle man\"\" is cut out. If you have the ability to do so, one can save a lot of money by doing your own brakes. The info is up on youtube, and I typically \"\"earn\"\" between 100-300/hour doing this work myself. Most of the time warranties do not pay off. At the core, they are insurance and insurance companies are in the business to make money. If your car is likely to need repairs a policy may be unattainable or very high in price.\"", "title": "" }, { "docid": "1866315752d623c85565b72dbfb392fd", "text": "You should never buy anything that consumes all of your savings. First you should have 6 months living expenses in a liquid account. Second you should be investing for retirement, index funds or ETFs. The longer you have money invested the better off you'll be. Pragmatically speaking you're better off getting the cheapest car that is reliable. Cars cost money, depreciation and money, every day you own them. However I get the urge to splurge. Get a loan, pay 2x the standard payment amount.", "title": "" }, { "docid": "f64b356af646c6d4ba154440a0d05462", "text": "\"I usually recommend along these lines. If you are going to drive the same car for many years, then buy. Your almost always better to buy, and then drive a car for 10 years than to lease and replace it every 2 years. If you want a new car every two years then lease. You're usually better off leasing if you're going to replace the car before the auto loan is paid off or shortly there after. Also you can get \"\"more car\"\" for the same monthly money via leasing. I honestly would advise you to either buy out your lease, or buy a barely used car. Then drive it for as long as you can. Take the extra money you would spend and spend it on an awesome vacation or something. Also, if you're only driving 15 miles a day, then get a cheap, but solid car. Again, just my advice.\"", "title": "" }, { "docid": "1259d4d740cf27053cb763d58171860c", "text": "\"Suggested way to make the decision to repair or buy: Figure out what it will cost to repair your car. (If necessary, pay a garage to evaluate it \"\"as if your daughter was interested in buying it\"\".) Then think about whether you would pay that much to buy a car just like yours but without those problems. If the answer is yes, fixing it us probably your most cost-effective choice, even if it is a big bill. If the answer is no, consider a used car, and again have the mechanic check it for any lurking horrors before committing to buy it. That avoids the \"\"proprty-line tax\"\" where a new car loses a significant percentage of its value the moment it leaves the dealership. An almost-toy car us virtually indistinguishable from a new car, costs much less, and realistically has about the same expected life span. I bought a new car once -- at about $300 over the dealer's real (as opposed to sticker) cost, since I was willing to take the one he was stuck with from the previous model year. (Thank you, Consumer Reports, for providing the dealer's cost info and making this a five-minute transaction.) If it hadn't suffered flood damage I'd probably still be driving it, and even so I sorta regret not pricing what it would have cost go completely replace the engine. If you really plan to drive it until it is completely unrepairable, you may be able to justify a new car... But realistically buying a one- or two-year-old car would have been a better choice.\"", "title": "" }, { "docid": "632a0ece15cf3dadbd5fe45fd5f93376", "text": "You have a few options and sometimes challenges help us improve our situation. First, you can not borrow to buy a car. Reducing the massive depreciation that cars undergo will help you be wealthier. It is hard to find a good use car that you can buy for cash, but it will play out best for your finances in the long run. If your heart is set on borrowing, I would encourage you to go to the bank/credit union where you have your checking account. They will see your history of deposits and may grant you a loan based on that. Also you are likely to get a better deal from the bank than from the car dealer. Thirdly, you can simply go to your employer's HR department and ask them. Surely someone has applied for a loan during the company's history. What did they do for them?", "title": "" }, { "docid": "8d3eef26be24ff71bbe382f829bf25fe", "text": "If you buy a new car, the odds that it will require repairs are fairly low, and if it does, they should be covered by the warranty. If you buy a used car, there is a fair chance that it will need some sort of repairs, and there probably is no warranty. But think about how much repairs are likely to cost. A new car these days costs like $25,000 or more. You can find reasonably decent used cars for a few thousand dollars. Say you bought a used car for $2,000. Is it likely that it will need $23,000 in repairs? No way. Even if you had to make thousands of dollars worth of repairs to the used car, it would almost certainly be cheaper than buying a new car. I've bought three used vehicles in the last few years, one for me, one for my son, and one for my daughter. I paid, let's see, I think between $4,000 and $6,000 each. We've had my son's car for about 9 months and to date had $40 in repairs. My daughter's car turned out to have a bunch of problems; I ended up putting maybe another $2,000 into it. But now she's got a car she's very happy with that cost me maybe $6,000 between purchase and repairs, still way less than a new car. My pickup had big time problems, including needing a new transmission and a new engine. I've put, hmm, maybe $7,000 into it. It's definitely debatable if it was worth replacing the engine. But even at all that, if I had bought that truck new it would have cost over $30,000. Presumably if I bought new I would have had a nicer vehicle and I could have gotten exactly the options I wanted, so I'm not entirely happy with how this one turned out, but I still saved money by buying used. Here's what I do when I buy a used car: I go into it expecting that there will be repairs. Depending on the age and condition of the car, I plan on about $1000 within the first few months, probably another $1000 stretched out over the next year or so. I plan for this both financially and emotionally. By financially I mean that I have money set aside for repairs or have available credit or one way or another have planned for it in my budget. By emotionally I mean, I have told myself that I expect there to be problems, so I don't get all upset when there are and start screaming and crying about how I was ripped off. When you buy a used car, take it for granted that there will be problems, but you're still saving money over buying new. Sure, it's painful when the repair bills hit. But if you buy a new car, you'll have a monthly loan payment EVERY MONTH. Oh, and if you have a little mechanical aptitude and can do at least some of the maintenance yourself, the savings are bigger. Bear in mind that while you are saving money, you are paying for it in uncertainty and aggravation. With a new car, you can be reasonably confidant that it will indeed start and get you to work each day. With a used car, there's a much bigger chance that it won't start or will leave you stranded. $2,000 is definitely the low end, and you say that that would leave you no reserve for repairs. I don't know where you live or what used cars prices are like in your area. Where I live, in Michigan, you can get a pretty decent used car for about $5,000. If I were you I'd at least look into whether I could get a loan for $4,000 or $5,000 to maybe get a better used car. Of course that all depends on how much money you will be making and what your other expenses are. When you're a little richer and better established, then if a shiny new car is important to you, you can do that. Me, I'm 56 years old, I've bought new cars and I've bought used cars and I've concluded that having a fancy new car just isn't something that I care about, so these days I buy used.", "title": "" }, { "docid": "1966d29814aa567791229faee1924b69", "text": "\"First and foremost, being \"\"cool\"\" stops being a thing you have to worry about once you graduate from secondary school. Nobody's really going to care what car you drive; the ones that do care aren't worth maintaining personal friendships or relationships with. The notable exception would be a sales job, requiring you to look successful to be successful, and in that case you'll need to either have a nice-looking car or buy one very quickly. Also, consider what you're buying. An E46 (which for the U.S. crowd was the previous generation of 3-series coupes and sedans) will be, at best, a 6-year-old car, and they made these as long ago as '98 which would make it 15 years old. The standard in the U.S. is to put about 10k miles (which would be about 17k km) per year on it, so you would expect even the newest E46s to have at least 100 000 km on them. At this point, even the best cars start needing increasing amounts of maintenance, and on a BMW that maintenance doesn't come cheap. Consider why a BMW would be sold. It sounds cliche, but in the U.S. at least there are three \"\"tiers\"\" of used car in the luxury class; there are the one- and two-year-olds, used by the dealer as a loaner or owned by the type of guy who buys a new car every year; they're practically new, for 30-50% off sticker, and a great deal when you find them. There are the 15-year-old (or older) cars which were used up and traded in; the majority of these end up auctioned off and cannibalized for parts with the remaining hulk sold for salvage. Then there are the in-betweens; between three and ten years old, you get a wide variety. This car could have been garaged all its life and driven to and from work and around town before its owner got a raise and decided to splurge, or its previous owner could have driven the wheels off all over the continent for work or travel. It could have a major problem that developed or was discovered after the warranty expired (and there isn't an E46 on the road that's still under warranty) which caused the owner to sell. Overall, I would wait until you have your first real job to spend real money on a car like this; the one that will actually pay the bills with enough left over for fun. When you're making 35k a year with only your own personal expenses, as long as you manage your debt well and don't get in trouble with credit, you should have no trouble buying a car like this (or even a newer one). If you are going to buy used even then, I recommend you do your homework on required maintenance for the brand and in general, what each milestone will cost you, and (based on mileage) how soon, and I would find a reputable used car dealer (which is stereotypically a contradiction in terms, but there are guys out there who aren't out to completely screw you over).\"", "title": "" }, { "docid": "509f6ff2ce216cbcf9f81b0460679e57", "text": "So you want to buy a car but have no money saved up.... That's going to be hard!! I'd suggest you get a part-time job, save up and buy a used car. Even with the minimum wage pay in the U.S., if you are in the U.S., you could save up and buy a car in less than a month. This route would be the quickest way for you to get a car but it would also teach you the responsibility of having one since it appears you have never owned a car before. Now the car will most definitely not be fancy or look like the cars that your peer's parents bought but at least it will get you from point A to point B. I'd look on Craigslist or your local neighborhood for cars that have not moved in a while or have for sale signs. Bring a mechanically inclined friend with you and contact the owner and explain them your situation. There are nice people out there that would give you deep discounts based on the fact that you are a student trying to get by. Now you have to get registration and insurance. There are many insurance companies that give discounts to students as well who have good GPAs and driving records. If you happen to get a car for a good deal, take good car of it. Once you graduate and further your career, you can resell it for a profit. I also would not suggest you get any loans for a car given your situation.", "title": "" }, { "docid": "24bbf35a8b981224717d88b6d8bfc740", "text": "Seconding @petebelford's comment: if you are looking to save money, considerr taking the middleman out of the equation and buying directly from a car's previous owner. Even after paying a mechanic to inspect it for you, this is likely to be cheaper.", "title": "" }, { "docid": "2bf62c09fe325de41096aaf3e8b4b8f3", "text": "\"Does your planning include contingencies for Can you afford the late fees, insurance increases, bad credit hits and all the other downsides when this goes bad? Why does she NEED a new car on lease? Personally? I'd go for option B) Do what it takes to have her OWN a car. Why not just have her get a car that costs IN ENTIRE the $3k that would be used for a down payment on a lease? Maybe add a bit of your own money \"\"for old times sake\"\" to the pile? Or a small loan to get to where she can get a usable, dependable car? Say, a $3-5k loan in your name that she's responsible for the payments. $3-10k can get a very dependable old car. 10 great cars for 6k or less Everyone else has been burned by her - for whatever reason. No idea what the reasons are, but she seems to be unable to pay her bills. Why would this time be any different? Your name on a car + someone who can't pay bills = a bad proposition. I would LOVE to help anyone who's been important in my life. Including MY x-wife. But I wouldn't agree to this deal unless I KNEW that I could 100% cover the costs when things go bad - because at this point, odds are they will.\"", "title": "" }, { "docid": "adb7c3eb452280c427bd24d4c008a04d", "text": "Some questions: Will you need a car after 18 months? What are you going to do then? How likely are you able to go over the mileage? Granted paying $300 per month seems somewhat attractive as a fixed cost. However lease are notorious for forcing people into making bad decisions. If your car is over miles, or there is some slight damage (even normal wear and tear), or you customize your car (such as window tint) the dealer can demand extra dollars or force you to purchase the car for more than it is actually worth. The bottom line is leasing is one of the most expensive ways to own a vehicle, and while you have a great income you have a poor net worth. So yes I would say it is somewhat irresponsible for you to own a vehicle. If I was in your shoes, I would cut my gym expenses, cut my retirement contributions to the match, and buy another used car. I understand you may have some burnout over your last car, but it is the best mathematical choice. Having said all that you have a great income and you can absorb a lot of less than efficient decisions. You will probably be okay leasing the car. I would suggest going for a longer term, or cutting something to pay off the student loans earlier. This way there is some cushion between when the lease ends and the student loan ends. This way, when lease turn in comes, you will have some room in your budget to pay some fees as you won't have your student loan payment (assuming around 1400/month) that you can then pay to the dealer.", "title": "" }, { "docid": "a7d683c5780a734f14ec78ad96c32ba6", "text": "\"If you are going to finance a used car, it is frequently best to arrange financing before you even pick out the car. The easiest way I recommend is to talk to a local credit union or two. They'll be able to tell you your interest rate and terms without having to talk to the dealer at all. Most likely, they'll be significantly better than the dealer at getting a good interest rate. As far \"\"what is a good rate?\"\", check out bankrate for average loan rates: http://www.bankrate.com/auto.aspx Today's numbers look like 2.87% is the average for a 48-month used car loan. That means if the bank comes back with something ridiculous like 9% or 10% you know they are way overcharging you. I know someone who got a first-time-buyer rate from Ford and ended up with a 19.99% rate. I could literally buy the car on my credit card and end up in a better spot. Honestly though, if you are 18 and have $5500 to put towards a car, I'd buy a $4500 car and save $1000 for repairs and maintenance. After you have the car, put $250 every month for a \"\"car payment\"\" into a savings account for your next car.\"", "title": "" } ]	fiqa
dac9fd95e05aad9e5c92833cac17e8a1	How much does a landlord pay in taxes?	[ { "docid": "ba759133d90688f4ee7fd1d2563192e1", "text": "how much taxes would I pay on my income from the rent they would pay me? The same as on any other income. California doesn't have any special taxes for rental/passive income. Bothe CA and the Federal tax laws do have special treatment, but it is for losses from rental. Income is considered unearned regular income and is taxed at regular brackets. Would I be able to deduct the cost of the mortgage from the rental income? The cost of mortgage, yes. I.e.: the interest you pay. Similarly you can deduct any other expense needed to maintain the property. This is assuming you're renting it out at FMV. If not, would I pay the ordinary income tax on that income? In particular, would I pay CA income tax on it, even though the property would be in WA? Yes. Don't know how WA taxes rental income, but since you are a California tax resident - you will definitely be taxed by California on this, as part of your worldwide income.", "title": "" }, { "docid": "36c896602ab0b1ab640cf2312e3bbe9c", "text": "I'd recommend you use an online tax calculator to see the effect it will have. To your comment with @littleadv, there's FMV, agreed, but there's also a rate below that. One that's a bit lower than FMV, but it's a discount for a tenant who will handle certain things on their own. I had an arm's length tenant, who was below FMV, I literally never met him. But, our agreement through a realtor, was that for any repairs, I was not required to arrange or meet repairmen. FMV is not a fixed number, but a bit of a range. If this is your first rental, you need to be aware of the requirement to take depreciation. Simply put, you separate your cost into land and house. The house value gets depreciated by 1/27.5 (i.e. you divide the value by 27.5 and that's taken as depreciation each year. You may break even on cash flow, the rent paying the mortgage, property tax, etc, but the depreciation might still produce a loss. This isn't optional. It flows to your tax return, and is limited to $25K/yr. Further, if your adjusted gross income is over $100K, the allowed loss is phased out over the next $50K of income. i.e. each $1000 of AGI reduces the allowed loss by $500. The losses you can't take are carried forward, until you use them to offset profit each year, or sell the property. If you offer numbers, you'll get a more detailed answer, but this is the general overview. In general, if you are paying tax, you are doing well, running a profit even after depreciation.", "title": "" }, { "docid": "ce75620806f026d3c49c678265b60c92", "text": "I use a spreadsheet for that. I provide house value, land value, closing/fix-up costs, mortgage rate and years, tax bracket, city tax rate, insurance cost, and rental income. Sections of the spreadsheet compute (in obvious ways) the values used for the following tables: First I look at monthly cash flow (earnings/costs) and here are the columns: Next section looks at changes in taxable reported income caused by the house, And this too is monthly, even though it'll be x12 when you write your 1040. The third table is shows the monthly cash flow, forgetting about maintenance and assuming you adjust your quarterlies or paycheck exemptions to come out even: Maintenance is so much of a wildcard that I don't attempt to include it. My last table looks at paper (non-cash) equity gains: I was asked how I compute some of those intermediate values. My user inputs (adjusted for each property) are: My intermediate values are:", "title": "" } ]	[ { "docid": "0b74ae43593376c509c0450f1ca4c0e7", "text": "A good quick filter to see if a property is worth looking at is if the total rent for the property for the year is equal to 10% of the price of the property. For example, if the property is valued at $400,000 then the rent collected should be $40,000 for the entire year. Which is $3,333.33 per month. If the property does not bring in at least 10% per year then it is not likely all the payments can be covered on the property. It's more likely to be sinking money into it to keep it afloat. You would be exactly right, as you have to figure in insurance, utilities, taxes, maintenance/repair, mortgage payments, (new roof, new furnace, etc), drywall, paint, etc. Also as a good rule of thumb, expect a vacancy rate of at least 10% (or 1 month) per year as a precaution. If you have money sitting around, look into Real Estate Investment Trusts. IIRC, the average dividend was north of 10% last year. That is all money that comes back to you. I'm not sure what the tax implications are in Australia, however in Canada dividends are taxed very favourably. No mortgage, property tax, tenants to find, or maintenance either.", "title": "" }, { "docid": "d8f0a7821b298099eff5e8c6d8591334", "text": "If your landlord is OK with you subletting your apartment - then that's all that the landlord has to do with that. It doesn't really matter if the landlord is a private person or a publicly trade corporation/fund. No relevance at all. As to your own reporting - you're receiving rent. That is income to you. You can deduct the portion of your expenses (including rent) attributable to the area you rent out. All this goes to your Schedule E. Any positive remainder becomes your taxable income. Any deduction must be substantiated (i.e.: you'll have to keep all the receipts for all the expenses you used for the deduction for as long as the tax year is open, which is at least the next 3 years after filing).", "title": "" }, { "docid": "0e62b9944102afc036fd4a96772aab1c", "text": "I don't think there's a conclusive answer to your question, but I have a real world example for you. I was in a similar situation for almost 6 years (I was the friend, but also the one with the highest pay). I rented a house, my name on everything. I made a separate contract with both my friend and his GF and they both rented a room from me. I looked up the total m2 of the house and divided the rent by that number. Multiplied by room sizes I knew what everyone had to pay for their personal space, I simply divided the rest by 3 to find the remainder of everyone's rent. I don't know the numbers anymore, but here's an example: house = 150 m2 room 1 = 10 m2 room 2 = 15 m2 room 3 = 25 m2 shared space = 100 m2 rent = 800,- This gives 5.33 per m2 The shared space is worth 533.33 Divided by 3 is 177.77, So the total rent for each room is: room 1 = 105.33 + 177.77 ≈ 231 room 2 = 155.33 + 177.77 ≈ 258 room 3 = 255.33 + 177.77 ≈ 311 We divided the rest of the costs (gas, power, water, etc...) evenly. This was fair in our case, because the rent was directly tied to the size of the rooms. The only thing we had left to do was give the poorest person the smallest room.", "title": "" }, { "docid": "2d20282079a06abdd2f8eaea42fc6a6c", "text": "\"My point was basically anti-capitalist: my landlord is a leech, and a rich leech who dodges their property taxes at that (did I mention my landlord is MIT?). There's no actual reason my building needs* a landlord other than \"\"because capitalism\"\" and \"\"because MIT and Harvard are always sitting there waiting to buy any property that comes onto the market in Cambridge\"\".\"", "title": "" }, { "docid": "54d9bf5d51bfb4434224944a5f19d757", "text": "4 months working from your kitchen doesn't sound like an isolated or incidental transaction. So I think that yes, that income would be taxable by NYS (and NYC/Yonkers if the kitchen is in these cities).", "title": "" }, { "docid": "78d14bc8caa8db04ea078cca3001630b", "text": "You only need to report INCOME to the IRS. Money which you are paying to a landlord on behalf of someone else is not income.", "title": "" }, { "docid": "03792a462f43c1ce0f904af9dabfad36", "text": "A basement unit would typically rent for less than similar space on a higher floor. Taxwise, you should be claiming the income, and expenses via schedule E, as if it were legal. Keep in mind, Al Capone was convicted on tax evasion not his other illegal activities. As long as you treat it as a legitimate business, a rental unit, you will be good with the IRS. The local building department will fine you if they find out.", "title": "" }, { "docid": "1a215235050247865d3e2f2c75a3b8eb", "text": "From my blog's discussion on 2017 tax rates. This is the final set of numbers. So, if you currently have, say $120K taxable income, every dollar above that starts getting taxed at 25%, until $153K, then 28%. In other words, forecast your taxes based on the day job, but then the 1099 goes on top of that.", "title": "" }, { "docid": "cefa747a26f91771c00fef1174e25926", "text": "Ok, still a high proportion, but the claim in the title is a complete fabrication, disputed by the article itself. Also keep in mind that this is a % of net income and not gross. Edit: here is a link to the actual report: https://kfcontent.blob.core.windows.net/research/707/documents/en/the-uk-tenant-survey-2017-4743.pdf I'm very skeptical about the scientific rigor of this whole thing.", "title": "" }, { "docid": "f2bc2c214b9eb7e002d1e82a7014e0c8", "text": "TL;DR: The difference is $230. Just for fun, and to illustrate how brackets work, let's look at the differences you could see from changing when you're paid based on the tax bracket information that Ben Miller provided. If you're paid $87,780 each year, then each year you'll pay $17,716 for a total of $35,432: $5,183 + $12,532 (25% of $50,130 (the amount over $37,650)) If you were paid nothing one year and then double salary ($175,560) the next, you'd pay $0 the first year and $42,193 the next: $18,558 + $23,634 (28% of $84,410 (the amount over $91,150)) So the maximum difference you'd see from shifting when you're paid is $6,761 total, $3,380 per year, or about 4% of your average annual salary. In your particular case, you'd either be paying $35,432 total, or $14,948 followed by $20,714 for $35,662 total, a difference of $230 total, $115 per year, less than 1% of average annual salary: $5,183 + $9,765 (25% of $39,060 (the amount $87,780 - $11,070 is over $37,650)) $18,558 + $2,156 (28% of $7,700 (the amount $87,780 + $11,070 is over $91,150))", "title": "" }, { "docid": "246d520eda4cc69e60ea84b164b15d03", "text": "Property taxes, at least in Canada, are levied by the municipality or city in which the property is situated. For many cities, it is a significant source of income. Part of the justification from the municipal point of view is that the land is serviced, in that it generally has city services like water, sewer, garbage collection and the like. The taxes also commonly pay for city services like libraries, fire and ambulance. The tax rates vary widely across cities, so where your dream house is located may have a large impact on your overall tax bill. Property tax is more-or-less a government imposed lien on your house. You can be foreclosed on if you are unable to pay. This is a last resort of course, but can and does happen.", "title": "" }, { "docid": "608664a3ae76a4af65782c61dae82c6a", "text": "\"It's just a rule of thumb, and so it's done from gross to make it easy. If you make $3300 a month, and spent $1000 a month on rent, you're at the limit of what you can afford. It's not like if it's 30.0001% you're screwed but if it's 29.999% everything's fine. Some rents won't include things (wifi, cable, utilities) that others do. Some locations will require you to spend more on transportation. So the real \"\"ok\"\" range is quite wide. But if you're at 60% of gross on rent, you literally cannot make that work because after deductions, you won't have any money for food. If you're at 10% of gross on rent, you probably have a lot more money left over than most people.\"", "title": "" }, { "docid": "00b414e442d21632884141ce59c4e87a", "text": "\"You will need to see a tax expert. Your edited question includes the line For the short term, we will be \"\"renting\"\" it to my wife's grandmother at a deep discount. According to the instructions for schedule E If you rented out a dwelling unit that you also used for personal purposes during the year, you may not be able to deduct all the expenses for the rental part. “Dwelling unit” (unit) means a house, apartment, condominium, or similar property. For each property listed on line 1a, report the number of days in the year each property was rented at fair rental value and the number of days of personal use. A day of personal use is any day, or part of a day, that the unit was used by: I have no idea how this will work for Schedule C.\"", "title": "" }, { "docid": "05b5668a792f490a1eda8dc402f8125e", "text": "\"DirectGov has a good overview here: http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnPropertyAndRentalIncome/DG_4017814 and answers to your specific questions here: http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnPropertyAndRentalIncome/DG_10013435 In short, you do need to declare the rental income on your tax return and will need to pay tax on it (and note that only the mortgage interest (not the full repayment) is deductible as an \"\"allowable expense\"\", see the full list of what is deductible here: http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnPropertyAndRentalIncome/DG_10014027 ).\"", "title": "" }, { "docid": "3a7a6ec1313cb73c04f7e0e1ba797cb9", "text": "House rent allowance:7500 House Rent can be tax free to the extent [less of] Medical allowance : 800 Can be tax free, if you provide medical bills. Conveyance Allowance : 1250 Is tax free. Apart from this, if you invest in any of the tax saving instruments, i.e. Specified Fixed Deposits, NSC, PPF, EPF, Tution Fees, ELSS, Home Loan Principal etc, you can get upto Rs 150,000 deductions. Additional Rs 50,000 if you invest into NPS. If you have a home loan, upto Rs 200,000 in interest can be deducted. So essentially if you invest rightly you need not pay any tax on the current salary, apart from the Rs 200 professional tax deducted.", "title": "" } ]	fiqa
f9688f8188f8b503ac35331220b1f030	Can a bank statement be submitted as a proof of investment?	[ { "docid": "cfe8e9dcb52bd41dc17b6d7e41bd1ca0", "text": "Probably not. A debit of 50K in your Bank statement does not mean that its invested into tax saving instrument. This question is best answered by the finance department of your company. Practise vary from organization to organization.", "title": "" } ]	[ { "docid": "883cafa8f5663e43e4c96d54317ed88f", "text": "Banks in certain countries are offering such facility. However I am not aware of any Bank in Hungary offering this. So apart from maintaining a higher amount in HUF, there by reducing the costs [and taking the volatility risks]; there aren't many options.", "title": "" }, { "docid": "81274911372a5638c5f3fdc2923a01e8", "text": "Yes, an investment can be made in a company before IPO. The valuation process is similar as that done for arriving at IPO or for a normal listed company. The difference may be the premium perceived for the idea in question. This would differ from one investor to other. For example, whether Facebook will be able to grow at the rate and generate enough revenues and win against competition is all a mathematical model based on projections. There are quite a few times the projection would go wrong, and quite a few times it would go correct. An individual investor cannot generally borrow from banks to invest into a company (listed or otherwise) (or for any other purpose) if he does not have any collateral that can be kept as security by the bank. An individual can get a loan only if he has sufficient collateral. The exceptions being small personal loans depending on one's credit history. The Private Equity placement arm of banks or firms in the business of private equity invest in start-up and most of the time make an educated guess based on their experience. More than half of their investments into start-ups end up as wiped out. An occasional one or two companies are ones that they make a windfall gain on.", "title": "" }, { "docid": "0c41ae0b3760a3df1db01624405faaab", "text": "There's a bit of truth to that, except in reality when you ask for business loan the bank most definitely looks at the background of the owners (assuming it's a small business). You might have some luck fooling investors as a way to get some capital, but that's doubtful as well if you have a history of starting companies that later fail.", "title": "" }, { "docid": "dba4f638e967cf689e1b735cc9daed10", "text": "No, it would not show up on the income statement as it isn't income. It would show up in the cash flow statement as a result of financing activities.", "title": "" }, { "docid": "584e97bf18950c72068556fa29320d5b", "text": "You are not missing something basic. Putting money in the bank will cost you in terms of purchasing power. The same thing has been true in the US and other places for a long time now. The real interest rate is negative--there is too much aggregate wealth being saved compared to the number of profitable lending opportunities. That means any truly risk-free investment will not make as much money as you will lose to inflation. If the real interest rate appears to be positive in your home country it means one of the following is happening: Capital controls or other barriers are preventing foreigners from investing in your home country, keeping the interest rate there artificially high Expected inflation is not being measured very accurately in your home country Inflation is variable and unpredictable in your home country, so investors are demanding high interest rates to compensate for inflation risk. In other words, bank accounts are not risk-free in your home country. If you find any securities that are beating inflation, you can bet they are taking on risk. Investing in risky securities is fine, but just understand that it's not a substitute for a risk-free bank account. Part of every interest rate is compensation for the time-value-of-money and the rest is compensation for risk. At present, the global time-value-of-money is negative.", "title": "" }, { "docid": "b81f264b75ed4b2f443dd090e38ece66", "text": "Every listed company needs to maintain book of accounts, when you are investing in companies you would have to look at what is stated in the books and along with other info decide to invest in it.", "title": "" }, { "docid": "dc95981f0c9cdf734451c8280615c376", "text": "The business and investment would be shown on separate parts of the tax return. (An exception to this is where an investment is related and part of your business, such as futures trading on business products) On the business side of it, you would show the transfer to the stocks as a draw from the business, the amount transferred would then be the cost base of the investment. For taxes, you only have to report gains or losses on investments.", "title": "" }, { "docid": "30ad621797b92569cef86bde4d7261c8", "text": "A bank is putting money on the line for you when they loan you money, which is not something they have to do. Not telling them what you intend to do with the money they are giving you, when asked, is fraud, which if you are caught will put you into very deep trouble.", "title": "" }, { "docid": "87f8690f4881bfc1793b27c16f699ea1", "text": "It means one has to provide documents to estabilsh the source of funds. This is to detect any money laundering. For example an salaried individual suddenly transacting for 1 Million, the bank would ask for proof of funds. Its possible that the individual has his own funds because of inheretance or a handsome bonus received etc or a it could be he is helping route some illegal money that is not his. There are regulations that state for what kind of transaction Proof of Funds are required.", "title": "" }, { "docid": "2254fe416d8e60c86d1f4473f3238fe0", "text": "Update: it looks like this may no longer be a requirement. I was able to withdraw from TreasuryDirect into another bank account without issue.", "title": "" }, { "docid": "beea3f671766c0cef4427097bdc05788", "text": "Funds earned and spent before opening a dedicated business account should be classified according to their origination. For example, if your business received income, where did that money go? If you took the money personally, it would be considered either a 'distribution' or a 'loan' to you. It is up to you which of the two options you choose. On the flip side, if your business had an expense that you paid personally, that would be considered either a 'contribution of capital' or a 'loan' from you. If you choose to record these transactions as loans, you can offset them together, so you don't need two separate accounts, loan to you and loan from you. When the bank account was opened, the initial deposit came from where? If it came from your personal funds, then it is either a 'contribution of capital' or a 'loan' from you. From the sound of your question, you deposited what remained after the preceding income/expenses. This would, in effect, return the 'loan' account back to zero, if choosing that route. The above would also be how to record any expenses you may pay personally for the business (if any) in the future. Because these transactions were not through a dedicated business bank account, you can't record them in Quickbooks as checks and deposits. Instead, you can use Journal Entries. For any income received, you would debit your capital/loan account and credit your income account. For any expenses, you would debit the appropriate expense account and credit your distribution/loan account. Also, if setting up a loan account, you should choose either Current Asset or Current Liability type. The capital contribution and distribution account should be Equity type. Hope this helps!", "title": "" }, { "docid": "0d2d96950af76dbab5eb5dc2f0f4e461", "text": "I quit diligently reconciling monthly statements some years before everything was online, when I realized that for years before that, every time I thought I found a mistake, it was always my own error. I was spending a fair amount of time (over the years) doing something that wasn't helping me. So I quit. That said, I do look at the statements and/or check the transactions on a regular basis (I now use email notifications of automatic deposits as the trigger, and then look over withdrawals, too) to make sure everything looks appropriate. I'm less concerned about a bank error than I am about identity or account theft.", "title": "" }, { "docid": "b1bd0ea564ea8d24d149b9876be886d1", "text": "It is possible, i've contacted different banks, and only one bank (Wells Fargo) didn't say that they need all members in person, but gave me a form which my colleague filled to authorize me to open an account.", "title": "" }, { "docid": "c776ae1e50f4a97d9e34f3bf6c8e8395", "text": "You could classify the mortgage as a different assets class and then create automated additions and deductions to the account as deems fit. other than that quickbooks online is a bit fishy so it seems.", "title": "" }, { "docid": "2f7341b2266571f2063751a1c13c6bb9", "text": "You're trying to mitigate the risk of having your investments wiped out by fraud committed by your broker by using margin loans to buy stock secured by other, non-cash assets in your account. The solution that you are proposing does not make any sense at all. You mitigate a very low probability/high impact risk by doing something that comes with a high probability/medium impact risk. In addition to interest costs, holding stocks on margin subjects you to the very real risk of being forced to sell assets at inopportune times to meet margin calls. Given the volatility that the markets are experiencing in 2011, there is a high risk that some irrational decision in Greece could wipe you out. If I were worried about this, I would: If you have enough money that SIPC protection limits are an issue, you desperately need a financial adviser. Do not implement any strategy involving margin loans until you talk to a qualified adviser.", "title": "" } ]	fiqa
4c8fcd3c4df79e3ff9e6aaa42574ec30	Google free real-time stock quotes	[ { "docid": "42ae41bba0cb5ada50da52201b1b7d59", "text": "Previously, Google had a delayed update for their stock prices (15 minutes I believe). That change enabled users of Google Finance to see updates to stock prices in real-time.", "title": "" } ]	[ { "docid": "16fc45daadb1b77449a00539b723e29d", "text": "There are several Excel spreadsheets for downloading stock quotes (from Yahoo Finance), and historical exchange rates at http://investexcel.net/financial-web-services-kb", "title": "" }, { "docid": "0da566a2cdaad2c8b83676062a6e257f", "text": "\"Can you give me a rundown of what I'm seeing? Is this basically a super zoomed in tracker of a current stock or something? Where a stock fluctuates a few cents up/down on the day, and you just trade before it goes down, then trade as it goes up or what? EDIT: Is this really live? Can you say, \"\"Yes this is live narwalls\"\"\"", "title": "" }, { "docid": "ff68b09fef2ab83c41d8cf7759d12c2c", "text": "The point of that question is to test if the user can connect shares and stock price. However, that being said yeah, you're right. Probably gives off the impression that it's a bit elementary. I'll look into changing it asap.", "title": "" }, { "docid": "b1c3ef346e865a00ed0f22d1e57bf6c2", "text": "You might have better luck using Quandl as a source. They have free databases, you just need to register to access them. They also have good api's, easier to use than the yahoo api's Their WIKI database of stock prices is curated and things like this are fixed (www.quandl.com/WIKI ), but I'm not sure that covers the London stock exchange. They do, however, have other databases that cover the London stock exchange.", "title": "" }, { "docid": "593f6298656a2b96117729003a4e30dd", "text": "You bought 1 share of Google at $67.05 while it has a current trading price of $1204.11. Now, if you bought a widget for under $70 and it currently sells for over $1200 that is quite the increase, no? Be careful of what prices you enter into a portfolio tool as some people may be able to use options to have a strike price different than the current trading price by a sizable difference. Take the gain of $1122.06 on an initial cost of $82.05 for seeing where the 1367% is coming. User error on the portfolio will lead to misleading statistics I think as you meant to put in something else, right?", "title": "" }, { "docid": "7f3e8cac96486db24344d65596d6fff2", "text": "Yahoo Finance has this now, the ticker is CL=F.", "title": "" }, { "docid": "202984fdfca72013590d80a373c28d40", "text": "\"P/E is Price divided by Earnings Per Share (EPS). P/E TTM is Price divided by the actual EPS earned over the previous 12 months - hence \"\"Trailing Twelve Month\"\". In Forward P/E is the \"\"E\"\" is the average of analyst expectations for the next year in EPS. Now, as to what's being displayed. Yahoo shows EPS to be 1.34. 493.90/1.34 = P/E of 368.58 Google shows EPS to be 0.85. 493.40/0.85 = P/E of 580.47 (Prices as displayed, respectively) So, by the info that they are themselves displaying, it's Google, not Yahoo, that's displaying the wrong P/E. Note that the P/E it is showing is 5.80 -- a decimal misplacement from 580 Note that CNBC shows the Earnings as 0.85 as well, and correctly show the P/E as 580 http://data.cnbc.com/quotes/BP.L A quick use of a currency calculator reveals a possible reason why EPS is listed differently at yahoo. 0.85 pounds is 1.3318 dollars, currently. So, I think the Yahoo EPS listing is in dollars. A look at the last 4 quarters on CNBC makes that seem reasonable: http://data.cnbc.com/quotes/BP.L/tab/5 those add up to $1.40.\"", "title": "" }, { "docid": "9e6f5a82008f9330d2061b78d7cbadd5", "text": "I spent a while looking for something similar a few weeks back and ended up getting frustrated and asking to borrow a friend's Bloombterg. I wish you the best of luck finding something, but I wasn't able to. S&P and Morningstar have some stuff on their site, but I wasn't able to make use of it. Edit: Also, Bloomberg allows shared terminals. Depending on how much you think as a firm, these questions might come up, it might be worth the 20k / year", "title": "" }, { "docid": "ff7f871a450e24d96f85664029365357", "text": "Investopedia has one and so does marketwatch I've always used marketwatch, and I have a few current competitions going on if you want me to send the link They recently remodeled the website so it works on mobile and not as well on desktop Don't know anything about the investopedia one though", "title": "" }, { "docid": "9539f48978a7abd2d6b7fa176ea6f1c2", "text": "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", "title": "" }, { "docid": "1191b085a69103a24611cadecff7bd21", "text": "\"I did a quick search, they have a $2B/5yr deal with google cloud. Downside is Google is a competitor potentially, especially in the ad market. Upside is SNAP revenue increased from $58M in 2015 to just over $404M in 2016. I think in today's market, everyone wants to hold the next \"\"Amazon\"\" or \"\"Google\"\" stocks at their conception. Sure would be nice if you had a few thousand in Amazon at their IPO. So I think pure speculation is why they were trading above IPO price for so long. It could be the next biggest thing, or it could fail in 5 years we never know these things lol\"", "title": "" }, { "docid": "dfd8a1a50537d16df5f1e082ddfefc2d", "text": "I'm answering in a perspective of an End-User within the United Kingdom. Most stockbrokers won't provide Real-time information without 'Level 2' access, however this comes free for most who trade over a certain threshold. If you're like me, who trade within their ISA Holding each year, you need to look elsewhere. I personally use IG.com. They've recently began a stockbroking service, whereas this comes with realtime information etc with a paid account without any 'threshold'. Additionally, you may want to look into CFDs/Spreadbets as these, won't include the heavy 'fees' and tax liabilities that trading with stocks may bring.", "title": "" }, { "docid": "d56cf7b2f6193eac92d57bd4a84e4d3b", "text": "\"The answer to each of your questions is no. It is important to appreciate that the \"\"quoted\"\" ticker price may be delayed by say 15 minutes, and thus is not \"\"real-time.\"\"\"", "title": "" }, { "docid": "f2b2cd5d67aa4c7040942dcefbcbc302", "text": "The biggest issue with Yahoo Finance is the recent change to the API in May. The data is good quality, includes both dividend/split adjusted and raw prices, but it's much more difficult to pull the data with packages like R quantmod than before. Google is fine as well, but there are some missing data points and you can't unadjust the prices (or is it that they're all unadjusted and you can't get adjusted? I can't recall). I use Google at home, when I can't pull from Bloomberg directly and when I'm not too concerned with accuracy. Quandl seems quite good but I haven't tried them. There's also a newer website called www.alphavantage.co, I haven't tried them yet either but their data seems to be pretty good quality from what I've heard.", "title": "" }, { "docid": "d9f08fc15393c1e8664baf7badbf7311", "text": "It looks like GOOG did not have a pre-market trade until 7:14 am ET, so Google Finance was still reporting the last trade it had, which was in the after-hours session yesterday. FB, on the other hand, was trading like crazy after-hours yesterday and pre-market today as it had an earnings report yesterday.", "title": "" } ]	fiqa
e70c80e79fa7dc50672ac811f3ed8451	Interest on Amount Exceeding CC Balance?	[ { "docid": "b251bd183b378842ff6da7ed601a96b7", "text": "\"In the US, if your monthly statement was issued by the credit card company on January 1 and it showed a balance of $1000, then a payment must be made towards that balance by January 25 or so, not February 1 as you say, to keep the card in good standing. The minimum payment required to keep the card in good standing is specified in your monthly statement, and failure to meet this requirement can trigger various consequences such as an increase in the interest rate charged by the credit card company. With regard to interest charges, whether your purchase of $2000 on January 3 is charged interest or not depends entirely on what happened the previous two months. If you had paid both your monthly statements dated November 1 and December 1 of the previous year in full by the their respective due dates of November 25 and December 25, and the $1000 balance on the January 1 statement is entirely due to purchases (no cash advances) made in December, then you will not be charged interest on your January purchase of $2000 as long as you pay it off in full by February 25 (the charge will appear on your February 1 statement). But, if you had not paid your December 1 statement in full by December 25, then that $1000 billed to you on January 1 will include purchases made during December finance charges on the unpaid balance from the previous month plus finance charges on the purchases made during December. The finance charges will continue to accumulate during January until such time as you pay off the bill in full (these charges will appear on your February 1 statement), hopefully by the due date of January 25. But even if you pay off that $1000 in full on January 25, your charge of $2000 on January 3 will start to accumulate finance charges as of the day it hits the account and these finance charges will appear on your February 1 statement. If you paid off that $1000 on January 10, say, then maybe there will be no further finance charges on the $2000 purchase on January 3 after January 10 but now we are getting into the real fine print of what your credit card agreement says. Ditto for the case when you pay off that $1000 on January 2 and made the $2000 charge on January 3. You most likely will not be charged interest on that $2000 charge but again it depends on the fine print. For example, it might say that you will be charged interest on the average of the daily balances for January, but will not be charged interest on purchases during the February cycle (unless you miss the February 25 payment and the whole cycle starts all over again). As a general rule, it takes two monthly cycles of payment in full by the due date before one gets into the state of no finance charges for new purchases and effectively an \"\"interest-free\"\" loan of $2000 from January 3 (date of purchase) till February 25 (due date of payment). Matters become more complicated when cash advances are taken from a credit card which are charged interest from the day they are taken but don't trigger finance charges on new purchases or the so-called \"\"zero percent balance transfer offers\"\" are accepted.\"", "title": "" }, { "docid": "7ca8008173ffeaca3849add20f32d982", "text": "\"The best answer to this is: Read the fine print on your credit card agreement. What is common, at least in the US, is that you can make any charges you want during a time window. When the date comes around that your statement balance is calculated, you will owe interest on any amount that is showing up as outstanding in your account. Example... To revise the example you gave, let's say Jan 1. your account balance was $0. Jan. 3rd you went out and spent $1,000. Your account statement will be prepared every XX days... usually 30. So if your last statement was Dec. 27th, you can expect your next statement to be prepared ~Jan.24 or Jan. 27. To be safe, (i.e. not accrue any interest charges) you will want to make sure that your balance shows $0 when your statement is next prepared. So back to the example you gave--if your balance showed $1,000... and you paid it off, but then charged $2,000 to it... so that there was now a new set of $2,000 charges in your account, then the bank would begin charging you interest when your next statement was prepared. Note that there are some cards that give you a certain number of days to pay off charges before accruing interest... it just goes back to my saying \"\"the best answer is read the fine print on your card agreement.\"\"\"", "title": "" } ]	[ { "docid": "d3bc9d43d0eb77da9ea929a62297be21", "text": "Suppose you have been paying interest on previous charges in the past. Your monthly statement is issued on April 12, and (since you just received your income tax refund), you pay it off in full on April 30. You don't charge anything to the card at all after April 12. Thus, on April 30, your credit card balance shows as zero since you just paid it off. But your April 12 statement billed you for interest only till April 12. So, on May 12, your next monthly bill will be for the interest for your nonzero balance from April 13 through April 30. Assuming that you still are not making any new charges on your card and pay off the May 12 bill in timely fashion, you will finally have a zero bill on June 12. What if you charge new items to your credit card after April 12? Well, your balance stopped revolving on April 30, and that's when interest is no longer charged on the new charges. But you do owe interest for a charge on April 13 (say) until April 30 when your balance is no longer revolving, and this will be added to your bill on May 12. Purchases made after April 30 will not be charged interest unless you fall off the wagon again and don't pay your May 12 bill in full by the due date of the bill (some time in early June).", "title": "" }, { "docid": "8b43f330c145b3509335301b690bd3eb", "text": "There is no interest outstanding, per se. There is only principal outstanding. Initially, principal outstanding is simply your initial loan amount. The first two sections discuss the math needed - just some arithmetic. The interest that you owe is typically calculated on a monthly basis. The interested owed formula is simply (pI)/12, where p is the principal outstanding, I is your annual interest, and you're dividing by 12 to turn annual to monthly. With a monthly payment, take out interest owed. What you have left gets applied into lowering your principal outstanding. If your actual monthly payment is less than the interest owed, then you have negative amortization where your principal outstanding goes up instead of down. Regardless of how the monthly payment comes about (eg prepay, underpay, no payment), you just apply these two calculations above and you're set. The sections below will discuss these cases in differing payments in detail. For a standard 30 year fixed rate loan, the monthly payment is calculated to pay-off the entire loan in 30 years. If you pay exactly this amount every month, your loan will be paid off, including the principal, in 30 years. The breakdown of the initial payment will be almost all interest, as you have noticed. Of course, there is a little bit of principal in that payment or your principal outstanding would not decrease and you would never pay off the loan. If you pay any amount less than the monthly payment, you extend the duration of your loan to longer than 30 years. How much less than the monthly payment will determine how much longer you extend your loan. If it's a little less, you may extend your loan to 40 years. It's possible to extend the loan to any duration you like by paying less. Mathematically, this makes sense, but legally, the loan department will say you're in breach of your contract. Let's pay a little less and see what happens. If you pay exactly the interest owed = (pI)/12, you would have an infinite duration loan where your principal outstanding would always be the same as your initial principal or the initial amount of your loan. If you pay less than the interest owed, you will actually owe more every month. In other words, your principal outstanding will increase every month!!! This is called negative amortization. Of course, this includes the case where you make zero payment. You will owe more money every month. Of course, for most loans, you cannot pay less than the required monthly payments. If you do, you are in default of the loan terms. If you pay more than the required monthly payment, you shorten the duration of your loan. Your principal outstanding will be less by the amount that you overpaid the required monthly payment by. For example, if your required monthly payment is $200 and you paid $300, $100 will go into reducing your principal outstanding (in addition to the bit in the $200 used to pay down your principal outstanding). Of course, if you hit the lottery and overpay by the entire principal outstanding amount, then you will have paid off the entire loan in one shot! When you get to non-standard contracts, a loan can be structured to have any kind of required monthly payments. They don't have to be fixed. For example, there are Balloon Loans where you have small monthly payments in the beginning and large monthly payments in the last year. Is the math any different? Not really - you still apply the one important formula, interest owed = (pI)/12, on a monthly basis. Then you break down the amount you paid for the month into the interest owed you just calculated and principal. You apply that principal amount to lowering your principal outstanding for the next month. Supposing that what you have posted is accurate, the most likely scenario is that you have a structured 5 year car loan where your monthly payments are smaller than the required fixed monthly payment for a 5 year loan, so even after 2 years, you owe as much or more than you did in the beginning! That means you have some large balloon payments towards the end of your loan. All of this is just part of the contract and has nothing to do with your prepay. Maybe I'm incorrect in my thinking, but I have a question about prepaying a loan. When you take out a mortgage on a home or a car loan, it is my understanding that for the first years of payment you are paying mostly interest. Correct. So, let's take a mortgage loan that allows prepayment without penalty. If I have a 30 year mortgage and I have paid it for 15 years, by the 16th year almost all the interest on the 30 year loan has been paid to the bank and I'm only paying primarily principle for the remainder of the loan. Incorrect. It seems counter-intuitive, but even in year 16, about 53% of your monthly payment still goes to interest!!! It is hard to see this unless you try to do the calculations yourself in a spreadsheet. If suddenly I come into a large sum of money and decide I want to pay off the mortgage in the 16th year, but the bank has already received all the interest computed for 30 years, shouldn't the bank recompute the interest for 16 years and then recalculate what's actually owed in effect on a 16 year loan not a 30 year loan? It is my understanding that the bank doesn't do this. What they do is just tell you the balance owed under the 30 year agreement and that's your payoff amount. Your last sentence is correct. The payoff amount is simply the principal outstanding plus any interest from (pI)/12 that you owe. In your example of trying to payoff the rest of your 30 year loan in year 16, you will owe around 68% of your original loan amount. That seems unfair. Shouldn't the loan be recalculated as a 16 year loan, which it actually has become? In fact, you do have the equivalent of a 15 year loan (30-15=15) at about 68% of your initial loan amount. If you refinanced, that's exactly what you would see. In other words, for a 30y loan at 5% for $10,000, you have monthly payments of $53.68, which is exactly the same as a 15y loan at 5% for $6,788.39 (your principal outstanding after 15 years of payments), which would also have monthly payments of $53.68. A few years ago I had a 5 year car loan. I wanted to prepay it after 2 years and I asked this question to the lender. I expected a reduction in the interest attached to the car loan since it didn't go the full 5 years. They basically told me I was crazy and the balance owed was the full amount of the 5 year car loan. I didn't prepay it because of this. That is the wrong reason for not prepaying. I suspect you have misunderstood the terms of the loan - look at the Variable Monthly Payments section above for a discussion. The best thing to do with all loans is to read the terms carefully and do the calculations yourself in a spreadsheet. If you are able to get the cashflows spelled out in the contract, then you have understood the loan.", "title": "" }, { "docid": "79d2333883311c3f95c3dc99d8619d1d", "text": "Not sure if this is possible... It is possible! It is called a balance transfer card and most of the major credit card companies offer them. It is possible to save a significant amount on interest during the grace period. However... Is this a viable option? Not really. Any card will charge you an upfront fee of 3% to 5% of the balance you are transferring. This really only buys you some time in case you are about to fall behind on payments. For many people it's just a way to shuffle around debt, digging themselves a little deeper into consumer debt with each transfer.", "title": "" }, { "docid": "1345b65ced89ddf7e9442434148c23c0", "text": "\"No. That's pretty unlikely. Card issuers typically base your rate on your credit score. Paying down debt reduces your percent of available credit used, and improves your score until you are in the 1-20% range. That's optimum. To this issuer, you are one of a million customers, there's no emotion in this, just numbers to them. For what it's worth, if a card issuer raises your rate, you are permitted to \"\"not accept\"\" the rate, stop using the card for new charges, and pay at the current rate. Of course this doesn't apply to zero interest deals, only to increases to your regular rate.\"", "title": "" }, { "docid": "bbff14d0604cfd236b9c40dcd9f54084", "text": "\"A credit card is basically a \"\"revolving\"\" loan, in which you're allowed to borrow up to a certain amount (the limit), and any time you borrow, you pay interest. If you were to borrow $100 to pay for something via a credit card, you'd have a $100 balance on the card. If you then pay $70 cash to the card, there would be $30 remaining. That $30 balance could accrue interest. The timing of that interest charge could vary. The 20% you've quoted is almost certainly \"\"APR,\"\" of which the \"\"A\"\" stands for \"\"annual,\"\" so that 20% would be an annual rate. It makes the most sense, mind you, to keep a minimal balance on a credit card, as the interest rate is higher than most other loans.\"", "title": "" }, { "docid": "4142c7bf9ec3e4683f0f750222804f95", "text": "I am super sorry about your divorce and nod to you for taking care of your kids and spouse. This may sound super snarky, although not my intention, but you have an income problem. Despite making almost double the national average, you are supporting two households, and live in a high cost of living area. (BTW been there, done that and also in IT.) The best way to avoid paying CC interest is to pay them off, and cut them up. Some might poo-poo the idea as you can earn some $ by getting CC rebates, but you are not in that mode right now. Consolidations, and balance transfers are a losing game as you can probably feel the November deadline looming. If I was you, I would get a second job, even if it was something like pumping gas. Making an extra $500/month increases your balance reduction by 650%. Sell stuff. Recently an older version of Visual Studio, that was sitting unused on my shelf, went for $400 on Ebay. The best way to solve this problem is through sweat equity. There are no easy answers. It sucks, but putting your big boy pants on and being prepared to work 20 hours of the day is the easiest way out of this. If you do this you will learn a lesson about CC utilization that most don't learn.", "title": "" }, { "docid": "e17891853f8ba14a06247af56ef889c3", "text": "\"No. Credit card companies will typically not care about your individual credit card account. Instead they look either at a \"\"package\"\" of card accounts opened at roughly the same time, or of \"\"slices\"\" of cardholder accounts by credit rating. If an entire package's or slice's balance drops significantly, they'll take a look, and will adjust rates accordingly (often they may actually decrease rates as an incentive to increase you use of the card). Because credit card debt is unstructured debt, the bank cannot impose an \"\"early payment penalty\"\" of any kind (there's no schedule for paying it off, so there's no way to prove that they're missing out on $X in interest because you paid early). Generally, banks don't like CC debt anyway; it's very risky debt, and they often end up writing large balances off for pennies on the dollar. So, when you pay down your balance by a significant amount, the banks breathe a sigh of relief. The real money, the stable money, is in the usage fees; every time you swipe your card, the business who accepted it owes the credit card company 3% of your purchase, and sometimes more.\"", "title": "" }, { "docid": "4b27fe4787eb6e07ed71131bc7357766", "text": "\"There are other good answers to the general point that the essence of what you're describing exists already, but I'd like to point out a separate flaw in your logic: Why add more complications so that \"\"should I call this principal or interest\"\" actually makes a difference? Why's the point (incentive) for this? The incentive is that using excess payments to credit payments due in the future rather than applying it to outstanding principal is more lucrative for the lender. Since it's more lucrative and there's no law against it most (all) lenders use it as the default setting.\"", "title": "" }, { "docid": "3852438eadf70d4f64b7605211bd9ba7", "text": "\"Stop spending on the CC with the revolving balance. After the discussion below I feel I should clarify that what I am advocating is that you make your \"\"prepayment\"\" (though I disagree with calling it that) to the existing CC. Then, rather than spending on that card, spend somewhere else so you won't accrue any interest related to your spending. At the end of the month, send any excess to the account that has a balance. This question is no different than I have $X of cash, should I let it sit in a savings account or should I send it to my CC balance? Yes, 100%, you should send this $750 to your CC balance. Then, stop spending on that CC and move your daily spending to cash or some other place that won't accrue interest at all. The first step to paying off debt is to stop adding to the balance that accrues interest. It's not worth the energy to determine the change in the velocity of paydown by paying more frequently when you could simply spend on a separate card that doesn't accrue any interest because you pay the entire balance every month. The reason something like this may be advisable on a HELOC but not a CC is the interest rate. A HELOC might run you 4% or 5% while your CC is probably closer to 17%. In one situation your monthly interest is 0.4% and in the other your monthly interest is 1.4%. The velocity of interest accrual at CC rates is just too high to justify ever putting regular spending on top of an existing revolving balance. Additionally, I doubt there is anyone who is advocating for anyone to charge their HELOC for daily spending. You would move daily spending to somewhere that isn't accruing interest no matter what. You would use a HELOC to pay down your CC debt in a lump or make a large purchase in a lump. Your morning coffee should never be spent in a way that will accrue interest immediately, ever. Stop spending on the CC(s) that are carrying a balance. (period) Generally credit cards have a grace period before interest is charged. As long as a balance isn't carried from one statement period to the next you maintain your grace period. If you spend $100 in the first month you have your card, say the period is January 1 to January 31, you'll get a statement saying you owe $100 for January and payment is due by Feb 28. If you pay your $100 statement balance before February 28 you won't pay any interest, even if you charged an additional $500 on February 15; you'll simply get your February statement indicating your statement balance is $500 and payment is due by March 31, still no interest. BUT. If you pay $99 for January, leaving just a single dollar to roll over, you now owe interest on your entire average daily balance. So now you'll receive your February statement indicating $501 + interest on approximately $233.14 of average daily balance ($1 carried + $500 charged on Feb 15) due by March 31. That $1 you let roll over just cost you $3.26 in interest ($233.14 * 0.014). AND. Now that balance is continuing to accrue interest in the month of March until the day you make a payment. It typically takes two consecutive months of payment-in-full before the grace period is restored. There is no sense in continuing to spend on a CC that is carrying a balance and accruing interest even if you intend to pay all of your current month spending entirely. You can avoid 100% of the interest related to your regular spending by simply using a different card, and no rewards will beat the interest you're charged.\"", "title": "" }, { "docid": "71486c3af9f2152dba6dc27d4088a4a3", "text": "\"Basically, your CC is (if normal) compounded monthly, based on a yearly APR. To calculate the amount of interest you'd pay on each of these accounts in a year, pull up a spreadsheet like Office Excel. Put in your current balance, then multiply it by the annual interest rate divided by 12, and add that quantity to the balance. Subtract any payment you make, and the result is your new balance. You can project this out for several months to get a good estimate of what you'll pay; in accounting or finance terms, what you're creating is an \"\"amortization table\"\". So, with a $10,000 balance, at 13.99% interest and making payments of $200/mo, the amortization table for one year's payments might look like: As you can see, $200 isn't paying down this card very quickly. In one year, you will have paid $2,400, of which $1,332.25 went straight into the bank's pockets in interest charges, reducing your balance by only $1,067.75. Up the payments to $300/mo, and in 1 year you will have paid $3,600, and only been charged $1,252.24 in interest, so you'll have reduced your balance by $2,347.76 to only $7,652.24, which further reduces interest charges down the line. You can track the differences in the Excel sheet and play \"\"what-ifs\"\" very easily to see the ramifications of spending your $5,000 in various ways. Understand that although, for instance, 13.99% may be your base interest rate, if the account has become delinquent, or you made any cash advances or balance transfers, higher or lower interest rates may be charged on a portion of the balance or the entire balance, depending on what's going on with your account; a balance transfer may get 0% interest for a year, then 19.99% interest after that if not paid off. Cash advances are ALWAYS charged at exorbitantly high rates, up to 40% APR. Most credit card bills will include what may be called an \"\"effective APR\"\", which is a weighted average APR of all the various sub-balances of your account and the interest rates they currently have. Understand that your payment first pays off interest accrued during the past cycle, then pays down the principal on the highest-interest portion of the balance first, so if you have made a balance transfer to another card and are using that card for purchases, the only way to avoid interest on the transfer at the post-incentive rates is to pay off the ENTIRE balance in a year. The minimum payment on a credit card USED to be just the amount of accrued interest or sometimes even less; if you paid only the minimum payment, the balance would never decrease (and may increase). In the wake of the 2008 credit crisis, most banks now enforce a higher minimum payment such that you would pay off the balance in between 3 and 5 years by making only minimum payments. This isn't strictly required AFAIK, but because banks ARE required by the CARD Act to disclose the payoff period at the minimum payment (which would be \"\"never\"\" under most previous policies), the higher minimum payments give cardholders hope that as long as they make the minimum payments and don't charge any more to the card, they will get back to zero.\"", "title": "" }, { "docid": "c4c73d42a968f194ea662dec8eeda100", "text": "The main risk I see to this plan is with a late payment to your credit card. For a variety of reasons, some outside your control, you could end up with a late payment on the CC and a +18% interest rate making your arbitrage attempts unprofitable. You sense that this is risky, and it derives from placing short-term risk on a long term asset. Your interest rate is high for the current market. What kind of things can you do reduce that rate? What kind of things can you do to reduce your principle? Those kind of things represent far less risk and accomplish the same goal.", "title": "" }, { "docid": "6a45bf0e2322aebf82b61762e7d69c82", "text": "\"As with many questions here, while littleadv is correct, the real answer is \"\"each bank may handle this differently.\"\" In my case, I was experimenting with my balance to see the impact of utilization, and I overpaid the current bill before the bill was issued. The prior balance was paid, but then I sent a payment to bring my account to a credit balance. Further down the statement appears the line - Your account has a credit balance. We can hold and apply this balance against future purchases and cash advances, or refund it. If you would like a check mailed to you in the amount of the credit balance, simply call us and speak to a representative. You can also see that the \"\"revolving credit available\"\" is above the line of credit, implying that someone with a $5000 credit line wanting to charge a $6000 engagement ring can send a higher payment to the account and then make that charge.\"", "title": "" }, { "docid": "7005cfd9b4897d745e7d713225a96596", "text": "\"First, pay off the highest interest first. If you have 80%, pay it first. Paying off a card/loan with a lower rate, but a lower payment or a lower balance can help your mental capacity by having fewer things to pay. But, this should be a decision where things are similar, such as 20-25%, not 20-80%. What about any actual loans? Any loans with a fixed payment and a fixed amount? If you must continue to use CC while paying them off, use the one with the lowest interest rate. Call all of your debtors and ask for reduction in interest rate. This is not the option to take first... This is a strategic possibility and will cause credit score issues... If you are considering bankruptcy or not paying back some, then you have even more negotiation power. Consider calling them all and telling them that you only have a little bit of money and would like to negotiate a settlement with them. \"\"I have only a limited amount of money, and lots of debt. I will pay back whomever gives me the best deal.\"\" See what they say. They may not negotiate until you stop paying them for a few months... It is not uncommon to get them to reduce interest (even to 0%) and/or take a reduction in the amount due - up to 25 cents on the dollar. To do this, you might need to pay the amount all at once, so look into loans from sources like retirement, home equity, life insurance, family... Also, cut out all expenses. Cut them hard; cut until it hurts. Cut out the cell phone (get a pre-paid plan and/or budget $10-20/month), cut out all things like alcohol, tobacco, firearms, lottery, tattoos, cable tv, steak, eating out. Some people would suggest that you consider pets and finding them a new home. No games, no trips, no movies, no new clothes... Cut out soft drinks, candy, and junk food. Take precautions to stay healthy - don't wear shoes in the house, brush your teeth, take a multi vitamin, get exercise, eat healthy (this is not expensive, organic stuff, just regular groceries). Consider other ways to save, like moving in with family or friends. Having family or friends live with you and pay rent. Analyze costs like daycare vs. job income. Apply for assistance - there are lots of levels, and some don't rely on others, such as daycare. Consider making more money - new job, 2nd job, overtime, new career. Consider commute - walk, bike, take the bus. Work 4/10's. Telework. Make a list of every expense and prioritize them. Only keep things which are really necessary. Good Luck.\"", "title": "" }, { "docid": "a27715be676e47c2c991c5717c23bdfa", "text": "\"I'm not sure if this answer is going to win me many friends on reddit, but here goes... There's no good reason why they couldn't have just told him the current balance shown on their records, BUT... There are some good reasons why they can't quote a definitive \"\"payoff\"\" balance to instantly settle the account: It's very possible to charge something today, and not have it show up on Chase's records until tomorrow, or Monday, or later. There are still places that process paper credit-card transactions, or that deal with 3rd-party payment processors who reconcile transactions M-F, 9-5ish, and so on. - Most transactions these days are authorized the instant you swipe the card, and the merchant won't process until they get authorization back from the CC company. But sometimes those authorizations come from third-party processors who don't bill Chase until later. Some of them might not process a Friday afternoon transaction until close-of-business Monday. - Also, there are things like taxicab fares that might be collected when you exit the cab, but the record exists only in the taxi's onboard machine until they plug it into something else at the end of the shift. - There are still some situations (outdoor flea-markets, auctions, etc) where the merchant takes a paper imprint, and doesn't actually process the payment until they physically mail it in or whatever. - Some small businesses have information-security routines in place where only one person is allowed to process credit-card payments, but where multiple customer service reps are allowed to accept the CC info, write it down on one piece of paper, then either physically hand the paper to the person with processing rights, or deposit the paper in a locked office or mail-slot for later processing. This is obviously not an instant-update system for Chase. (Believe it or not, this system is actually considered to be more secure than retaining computerized records unless the business has very rigorous end-to-end info security). So... there are a bunch of legit reasons why a CC company can't necessarily tell you this instant that you only need to pay $x and no more to close the account (although there is no good reason why they shouldn't be able to quote your current balance). What happens when you \"\"close an account\"\" is basically that they stop accepting new charges that were made after your notification, but they will still accept and bill you for legit charges that you incurred before you gave them notice. So basically, they \"\"turn off\"\" the credit-card, but they can't guarantee how much you owe until the next billing cycle after this one closes: - You notify them to \"\"close\"\" the account. They stop authorizing new charges. - Their merchant agreements basically give the merchant a certain window to process charges. The CC company process legit charges that were made prior to \"\"closing\"\" the account. - The CC company sends you the final statement after that window for any charges has expired, - When that final statement is paid (or if it is zero), THAT is when the account is settled and reported to Equifax etc as \"\"paid\"\". So it's hard to tell from your post who was being overly semantic/unreasonable. If the CC company refused to tell the current balance, they were just being dickheads. But if they refused to promise that the current balance shown is enough to instantly settle the account forever, they had legit reasons. Hope that helps.\"", "title": "" }, { "docid": "b872c3f0af8379ff2034aad9dc183f8b", "text": "Obviously you don't know the full extent of our company, but I'd be forgoing my salary for a year. Is that worth it to get 10%? I mean assuming it becomes a 1 Million Dollar Idea, I'd get 100k while he gets 700k, working the same amount of time. Then i'd get put on salary.", "title": "" } ]	fiqa
831cb06b2f68d9fe518f09fa397757ac	What is the 'real' monthly cost of a car?	[ { "docid": "3c9eeb63ce4b69eb518b866cceac5377", "text": "How can I find out what these 'additional' costs will be when looking to buy a car? If you know what model you're interested in buying you can try out Edmund's True Cost To Own calculator. This will estimate the depreciation, taxes and fees, financing costs, fuel costs, insurance premiums, maintenance, repairs, and any tax credits for owning a certain model for various periods of time. You can improve the accuracy be substituting your own calculations, like if you already have an insurance quote. Consumer Reports has a useful chart to demonstrate how much each of those additional costs will add up, percentage-wise. They also list the most and least expensive cars to own.", "title": "" } ]	[ { "docid": "3a0485f78810e7db67128ae2e457166d", "text": "There are a few factors I like to consider when I'm reasoning financially over my households cars. How many KMs will the car travel each year because I like to factor in how often tires will need to be changed, how much tires for my models cost as well as how gas efficient they are. Knowing how much the car is driven and in what environmental/road conditions is also important factors to know because that will help guestimate possible repairs cost. Also possible taxes should be taken in to consideration. For example a few years ago I had a diesel Citroen C5 that had yearly taxes of roughly 500$. The replacement costs only 150$ a year in taxes. So switching cars 3 years early would have saved me 1050$ in taxes. So some information on possible taxes, how far you drive each year, what environmental conditions, type of driving (daily long rides or just short etc..) as well as the fuel efficiency of both cars would help to better calculate your costs for say three scenarios. Car change in 12, 24 and 32 months respectively.", "title": "" }, { "docid": "4fa7d8a94b0b5ea98a89510fbdd5e585", "text": "You know how your cell phone battery gets shittier and shittier over time until you either get a new phone or buy a new battery? Well the same thing will happen to your car. And a new battery will cost $10k. And what will we do with the old one that's full of toxic chemicals? There are still many challenges for electric cars.", "title": "" }, { "docid": "df86779cf6997e4ea645f202520efc49", "text": "It depends how detailed you want to get in your calculation, but fundamentally, 1K < 25K. On a very basic level, divide the cost (less what you sell it for) by the time you'll have the car for. If you junk it, $1K/12 month = $83/month to buy tires to have a car for a year. If you sell it for $1K, then it become $0/month. (Plus other maintenance, etc..., obviously). If you pay 25K and keep the new car for ten years and sell it for nothing, it becomes roughly $208/month (plus maintenance). If you want to get more accurate, there are a lot of variables you can take into account--time cost of money, financing, maintenance costs of different vehicle types, etc...", "title": "" }, { "docid": "c7577a8c25ed9cc6e1deef21bd12ed1a", "text": "One point I don't see above: Consumer's Union (the nonprofit which publishes Consumer Reports) has a service where, for a small fee, they'll send you information about how much the car and each option cost the dealer, how much the dealer is getting back in incentive money from the manufacturer, and some advice about which features are worthwhile, which aren't, and which you should purchase somewhere other than the dealer. Armed with that info, you can discuss the price on an equal footing, negotiating the dealer's necessary profit rather than hiding it behind bogus pricing schemes. Last time I bought a new car, I got this data, walked into the dealer with it visible on my clipboard, offered them $500 over their cost, and basically had the purchase nailed down immediately. It helped that I as willing to accept last year's model and a non-preferred color; that helped him clear inventory and encouraged him to accept the offer. ($500 for 10 minutes' work selling to me, or more after an hour of playing games with someone else plus waiting for that person to walk in the door -- a good salesman will recognize that I'm offering them a good deal. These days I might need to adjust that fair-profit number up a bit; this was about 20 years ago on an $8000 car... but I'm sure CU's paperwork suggests a current starting number.) It isn't quite shelf pricing. But at least it means any haggling is based on near-equal knowledge, so it's much closer to being a fair game.", "title": "" }, { "docid": "832fdc8c674902d98b80c697574456cb", "text": "The price inflation isn't a percentage, it's a fixed amount. If the dealer adds $R to the price of both the trade-in and the purchased car, then everyone ends up with the right amount of money in their pockets. So your formula should be: D + T + R = 0.1 * (P + R)", "title": "" }, { "docid": "4b23ee969f1e4e4d90e43db4458c3090", "text": "\"The system of comparison and calculation of insurance rates seems completely and utterly flawed to me. Why would you group cars from different manufacturers together by arbitrarily defined factors such as weight and size? It is perfectly possible to have a big, heavy car with very low claims, while a small car can have a lot more claims. The response provided by Tesla seems similarly moronic. They claim that their car is being compared to the wrong types of car, but even if that were the case - so what? If the other cars you are being compared to are too cheap/slow/small, then you have obviously been assigned to the wrong group, and should be in another group with the bigger, more expensive cars, which I would gather are even more expensive to insure, and thus your car should be more expensive to insure. If an insurance company is providing insurance to 1000 Volvo XC 90 drivers and 1000 Tesla Model S drivers and they get 100 claims from the Volvo drivers costing them a total of $ 200,000, while they get 150 claims from the Tesla drivers totaling $ 300,000 during the same time period, obviously the Tesla should be 50 % more expensive to insure. That is literally how car insurance works. Here in Germany, every model of car is assigned a unique identifier (\"\"Typschlüsselnummer\"\", roughly translates as \"\"type number\"\" or \"\"type identifier\"\"). Insurance companies track which cars their clients own, and report condensed claims statistics for each model back to a central service provider, which then assigns an insurance group (Typklasse) to each car for each type of insurance (there are distinct, independent groups for liability, partial and comprehensive coverage) depending on the actual, measured per-car expenditures experienced by the insurance companies over the previous year. The insurance companies then feed that data back into their systems for their rate calculations.\"", "title": "" }, { "docid": "1c5f7796e8581ad364cb3aa2a495ea88", "text": "\"Taking the last case first, this works out exactly. (Note the Bank of England interest rate has nothing to do with the calculation.) The standard loan formula for an ordinary annuity can be used (as described by BobbyScon), but the periodic interest rate has to be calculated from an effective APR, not a nominal rate. For details, see APR in the EU and UK, where the definition is only valid for effective APR, as shown below. 2003 BMW 325i £7477 TYPICAL APR 12.9% 60 monthly payments £167.05 How does this work? See the section Calculating the Present Value of an Ordinary Annuity. The payment formula is derived from the sum of the payments, each discounted to present value. I.e. The example relates to the EU APR definition like so. Next, the second case doesn't make much sense (unless there is a downpayment). 2004 HONDA CIVIC 1.6 i-VTEC SE 5 door Hatchback £6,999 £113.15 per month \"\"At APR 9.9% [as quoted in advert], 58 monthly payments\"\" 58 monthly payments at 9.9% only amount to £5248.75 which is £1750.25 less than the price of the car. Finally, the first case is approximate. 2005 TOYOTA COROLLA 1.4 VVTi 5 door hatchback £7195 From £38 per week \"\"16.1% APR typical, a 60 month payment, 260 weekly payments\"\" A weekly payment of £38 would imply an APR of 14.3%.\"", "title": "" }, { "docid": "3ac2f85d4f64c4289fc9878e7097559c", "text": "as long as we still have consumer choice in America, it's a zero issue I can buy a $500 car or a $250,000 car. most other products are extremely diversified in price and quality to reflect their target markets' desires and purchasing powers", "title": "" }, { "docid": "097975b081d888a6335b3f57fa4f3a5c", "text": "In many (most?) cases, luxury cars are leased rather than purchased, so the payments on even an expensive car might not be as high as you'd expect. For simplicity, take a $100,000 car. If you were to buy that in cash or do a standard five-year auto loan, that would be incredibly expensive for all but the wealthiest of people. But a lease is different. When you lease a car, you are financing the car's depreciation over the lease term. So, let's suppose that you're signing up for a three-year lease. The car manufacturer will make an estimate of what that car will be worth when you bring it back in three years (this is called the residual value). If this number is $80,000, that means the lessee is only financing the $20,000 difference between the car's price and its residual value after three years - rather than the full $100,000 MSRP. At the end of the lease, he or she just turns the car back in. Luxury cars are actually especially amenable to leasing because they have excellent brand power - just because of the name on the hood, there are many people who would be happy to pay a lot for a three-year-old Mercedes or BMW. With a mid- or low-range car, the brand is not as powerful and used cars consequentially have a lower residual value (as a percentage of the MSRP) than luxury cars. So, don't look at an $80,000 luxury car and assume that the owner has paying for the entire $80,000.", "title": "" }, { "docid": "06401fa62af7f32b1642d8d2ea6771fc", "text": "\"Looking at your numbers, I would definitively consider selling the car, and use the public transportation instead. You could easily save $450 month, plus gas and maintenance. As you mentioned, public transportation will be only a fraction of this amount, so you might end up saving around $400 monthly. If you decide to keep the car, the amount that you will spent monthly is easily a payment for a brand-new car. What if, God forbid, for any kind of reason, you get a traffic ticket that can increase your insurance premium? What if the engine stops working, and you will need to spent thousands of dollars fixing the car? With this, and all of the other expenses pilled up, you might be unable to afford all this at some point. If you decide to sell the car, the money that you will save monthly can be put in a savings account (or in any other sort of \"\"safe\"\" investment instrument). In this way, if your situation changes where you need a car again, you will be able to easily afford a new car. Regarding your need to visit your friends on the suburbs every other weekend, I think you can just talk with them, and meet on places where public transportation is available, or ask them to pick you up in the nearest station to the suburbs. In conclusion, based on what you said, I do not think the \"\"little\"\" convenience that you get in owning the car outweighs the big savings that you get monthly, if you decide to sell the car.\"", "title": "" }, { "docid": "ee6c38fd143f2637083b440ec48fbf01", "text": "I like Nathan's answer some, but am horribly curious as to why you have not made payments on a $3500 student loan? If you are wealthy enough to afford a new car, this should be paid off next week. IMHO. Above all else your financial goals should dictate if you buy a new car. What are they for you? If the goal is to build wealthy quickly then Nathan's advice may be to unfrugal for you. If your goal is to impress people with the car you drive and accumulate very little real wealth then purchasing or leasing a car should be a top priority. So to answer your question correctly one must understand your goals. For 2016, the average car payment is $479 per month. If you invested that in a decent growth stock mutual fund in 40 years you'll have around 2.6 million. However, you do need something to drive now. If you can cut your car expense to $200 per month, and save the other $279 you will still end up with about 1.5 million in that same 40 years. Personally I attempt to shoot for $200 ownership cost per car per month. Its a bit difficult as I drive a lot. Also I would not purchase a new car until my net worth exceeded 2 million. At that point my investments could mitigate the steep depreciation costs of owning a new car.", "title": "" }, { "docid": "46d088082b5ee9ff77070a77368d46f6", "text": "I don't understand the calculations in the comments by the OP. He says My monthly savings after mandatory expense is around USD 2000. This includes rent, expenses, emergency fund savings, and the monthly required payment of my auto loan. (emphasis added) He has $2000 USD left over after monthly expenses (which includes rent, food, utilities etc, contribution towards emergency funds, and the required monthly payment on the auto loan). He claims that by applying the $2000 USD per month towards reducing the debt, it would take him 30-36 months to be debt-free. But is it not the case that applying the $2000 to the student loan of $18K+ (while continuing to make the auto loan payments) will pay the student loan off in less than 10 months? If no payments are made on that $18K+ student loan, the accrued interest of about $2K in 10 months (this is (18.2513.7%)(10/12) for a total of $20K+). In actuality, with the loan being paid down, the interest will be much less. Once the student loan is paid off, the extra $2000 can go towards what is left of the $10K auto loan each month and pay it off in another 4 or 5 months or so. So we are talking of 15 months max instead of 30-36 months. Of course, as Carlos Briebiescas points out, the car is more valuable as an asset than can be sold in case of job loss creating a need for cash etc, and so paying it off first might be better, but that is a different calculation.", "title": "" }, { "docid": "a3d8fefc639c7cb5e3c2ba260f5dd1fd", "text": "\"I'm going to ignore your numbers to avoid spending the time to understand them. I'm just going to go over the basic moving parts of trading an upside down car against another financed car because I think you're conflating price and value. I'm also going to ignore taxes, and fees, and depreciation. The car has an acquisition cost (price) then it has a value. You pay the price to obtain this thing, then in the future it is worth what someone else will pay you. When you finance a car you agree to your $10,000 price, then you call up Mr. Bank and agree to pay 10% per year for 5 years on that $10,000. Mr. Banker wires over $10,000 and you drive home in your car. Say in a year you want a different car. This new car has a price of $20,000, and wouldn't you know it they'll even buy your current car from you. They'll give you $7,000 to trade in your current car. Your current car has a value of $7,000. You've made 12 payments of $188.71. Of those payments about $460 was interest, you now owe about $8,195 to Mr. Banker. The new dealership needs to send payment to Mr. Banker to get the title for your current car. They'll send the $7,000 they agreed to pay for your car. Then they'll loan you the additional $1,195 ($8,195 owed on the car minus $7,000 trade in value). Your loan on the new car will be for $21,195, $20,000 for the new car and $1,195 for the amount you still owed on the old car after the dealership paid you $7,000 for your old car. It doesn't matter what your down-payment was on the old car, it doesn't matter what your payment was before, it doesn't matter what you bought your old car for. All that matters is how much you owe on it today and how much the buyer (the dealership) is willing to pay you for it. How much of this is \"\"loss\"\" is an extremely vague number to derive primarily because your utility of the car has a value. But it could be argued that the $1,195 added on to your new car loan to pay for the old car is lost.\"", "title": "" }, { "docid": "09c321175805a970c8bb8b63efec14cf", "text": "You're looking at a used car, which is good, but I think you can still be much wiser with the type of car you're looking to purchase. Maybe I'm such a fuddy-duddy because I didn't own a car until I was 25, but let's break this down with a small comparison: If you drive 1,000 miles per month with gas at $4/gallon -- which is absurdly conservative, I think -- for five years, then you're looking at an extra $60/month for just gas, and probably twice the payment, compared with a perfectly reliable but more fuel-efficient car from the same year. (Disclosure: I own a 2004 Corolla and love it. I got mine in 2007 for under $10k, and I paid cash.) $300/month or so is a good chunk of change, no? I'd do even more, and pay that loan off (which will almost certainly be less than $500/month) faster by throwing $500/month at it. You'll save hundreds of dollars in interest. Edit based on your additions: There's one thing that you don't see yet that I have. It's only because you're in your early 20s and I'm pushing 40. It is far easier to sock money away when you're single and don't have a family to take care of. (I'm assuming you're not married yet and that you don't have kids. Hopefully it's not a poor assumption.) I would be saving like crazy now if I were in your position. You have a great job for fresh out of college. My first job started ten years ago after grad school at the same salary you're making. Man, it was so easy to save money back then. Now that I'm married with a daughter, a lot of that cushion goes away. I wouldn't trade it for the world, but that's the price of being head of household. If you have any intentions of not being a hermit for the rest of your life (and I hope you do) then you'd be wise to save as much as you can now.", "title": "" }, { "docid": "01f802919d3d8a84192800cb0bda9181", "text": "A lease payment is composed of an interest portion (borrowed money) and depreciation amount (purchase - residual). The Monthly payment is then Monthly Interest Cost + Monthly Depreciation Cost The Money Factor is used to estimate the amount of interest due in a single month of a lease so you can figure out the monthly payment. If you are borrowing $100,000 then over the entire loan of repayment from a balance of $100,000 to a balance of $0, the average amount you owed was $50,000 (1/2 of principal). You are repaying this loan monthly (1/12 of a year) and percents are expressed as decimals (1/100). 6 * 1/2 (for principal) * 1/12 (for monthly) * 1/100 (to convert percentage from 6% to .06) = 6 * 1/2400. 2400 is the product of 3 consecutive conversion (1/2 * 1/12 * 1/100) to convert from an interest rate to a money factor. 6/2400 = Money factor of 0.0025 which can be multiplied against the total amount being borrowed to know what the monthly interest would roughly equal. Some Money Factor info: https://www.alphaleasing.com/resources/articles/MoneyFactor.asp", "title": "" } ]	fiqa
0a4ccf71a482ee0852b5ffa28ff6ea49	How to plan in a budget for those less frequent but mid-range expensive buys?	[ { "docid": "31f4c4a3ee243726b250881b50398efc", "text": "You would simply plan for misc. expenses in your budget, and allocate a small amount to this every time you do your budget, eventually building up a pool of money that you can then use whenever you have to make a purchase such as that.", "title": "" }, { "docid": "7b48cbbd4f123d229b5a0c52363ebd1d", "text": "\"I use a \"\"sinking\"\" fund. If you want to buy a $1000 bicycle, you put $100 per month into a savings account. 10 months from now, you can buy your $1000 bicycle. If you get a $500 windfall, you can either put it in the sinking fund and buy the item earlier. If you lose some income, you can put $50 per month in the fund.\"", "title": "" }, { "docid": "0d1e91dd9b70da76f6ad1b4bb1a86ab0", "text": "Personally I solve this by saving enough liquid capital (aka checking and savings) to cover pretty much everything for six months. But this is a bad habit. A better approach is to use budget tracking software to make virtual savings accounts and place payments every paycheck into them, in step with your budget. The biggest challenge you'll likely face is the initial implementation; if you're saving up for a semi-annual car insurance premium and you've got two months left, that's gonna make things difficult. In the best case scenario you already have a savings account, which you reapportion among your various lumpy expenses. This does mean you need to plan when it is you will actually buy that shiny new Macbook Pro, and stick to it for a number of months. Much more difficult than buying on credit. Especially since these retailers hate dealing in cash.", "title": "" }, { "docid": "cf9646025a0ff4a99136f9f51b20c0cc", "text": "\"We have what we call \"\"unallocated savings\"\" that go into a fund for this purpose. We'll also take advantage of \"\"6 months no interest\"\" or similar financing promotions, and direct this savings towards the payments.\"", "title": "" } ]	[ { "docid": "32a550a02ef92da8db1535bbecc751df", "text": "The best way is to not participate in the expensive habits at all. Try to direct your friends to cheaper venues. It's important to note that some hobbies are a large investment. Shooting sports, model airplanes, and customizing vehicles are all examples of hobbies you might want to avoid when you're on a budget.", "title": "" }, { "docid": "65d55d7a5968156b98d4dd595da12446", "text": "\"I'd recommend hitting the loan the hardest, but getting something invested as well. It's tempting to see these decisions as binary, so it's good to see you wondering if a \"\"mix\"\" is best. I admit to being a spreadsheet junky, but I think this is a good candidate for working up various scenarios to see where the pain/pleasure point is and once you've identified it, move forward with it (e.g., let's say it's a 10K lump sum you're dealing with, what does 5k on the loan and 5k invested look like over the next 6 months, 12 months, 24 months (requires assumptions on investment performance)? What about 6K loan, 4K invested? 7K loan, 3K invested? etc)\"", "title": "" }, { "docid": "4c372ebe4d33144e8b380f5ce9052c02", "text": "My approach won't work for everyone, but I keep a longer list of things I want in my head, preferably including higher value items. I then look at the cost of an item vs the amount of benefit it gets me (either enjoyment or ability to make more money or both). If I only had a few things I wanted, it would be easy to buy them even if the payback wasn't that great, but because I have a large list of things I'd like to be able to do, it's easier to play the comparison game in my head. Do I want this $50 thing now that will only give me a little bit of enjoyment and no income, or would I rather be able to get that $3000 digital cinema camera that I would enjoy having and could work on projects with and actually make money off of? (This is a RL example that I actually just bought last week after making sure I had solid leads on enough projects to pay myself back over time.) For me, it is much easier to compare with an alternative thing I'd enjoy, particularly since I enjoy hobbies that can pay for themselves, which is really the situation this strategy works best in. It might not work for everyone, but hobbies that pay for themselves can take many different forms. Mine tends to be very direct (get A/V tool, do projects that pay money), but it can also be indirect (get sports stuff, save on gym membership over time). If you can get things onto your list that can save you money in the long run, then this strategy can work pretty well, if not, you'll still have the overall saving problem, just with a longer wish list. That said, if you are good about saving already and simply want to make better use of your disposable income, then having a longer list may also work to let you seek out better deals for you. If you have funds that you know you can healthily spend on enjoyment, it is going to be difficult to choose nothing over something that gives enjoyment, even if it isn't a great return on the money. If you have alternatives that would give you better value, then it's easier to avoid the low value option.", "title": "" }, { "docid": "b2212bf69412ea6c14f623eea2fd0ac0", "text": "\"Are you asking \"\"what does everybody else do/spend\"\"? I think any amount less that 90% is \"\"safe\"\", but if depends on your goals. Saving a \"\"dime of every dollar\"\" is a good rule of thumb for retirement, so 90% is left to spend. But I believe that is the wrong way to think about it. You have expenses; some are optional and some are not. The percentages aren't the important thing. What is important is that you meet your obligations and meet your goals. Everybody is different, so I don't think you can reasonably your percent of expenses to somebody else. In setting up your budget, go the simple route. You can always get super detailed later if you want. INCOME As you have extra funds, be sure you have an emergency fund (~6 months of expenses) and a fully funded retirement. Pay off any outstanding debts. If you are so fortunate to have some left over, then revisit the savings amount or become an investor like many people here; or have fun and go on vacations; or buy a nicer car. The point being you will know you can afford it. If you put detailed categories under those main categories, that will give you a picture of where you spend you money and you can fix that if desire. If it bothers you that you spend 15% of your income on imported classical music, you can adjust that with a habit change.\"", "title": "" }, { "docid": "439dada372831d99bbfc79feee6e036b", "text": "More moving parts will make your budget harder to keep track of, not simpler. Budget systems like You Need a Budget recommend simplifying your accounts, even if the various accounts give you specialized bonuses like rewards for restaurants or gasoline or travel. The effort of keeping track of all the options and accounts can outweigh the value you get from them. Instead, I recommend using a simple and structured budget system (like YNAB) that walks you through all of the steps toward building good habits and keeping them simple so that you can maintain the habit.", "title": "" }, { "docid": "f95098e67fcd7635e3e6cf608ddf168c", "text": "\"First of all, I have to recognize up front that my \"\"spending personality\"\" is frugal. I don't recreational shop, and I save a lot of my total income. Building a budget and sticking to it is difficult, especially for people who are closer to living paycheck to paycheck than I. Theoretically, it should be easy to stick to a budget by overestimating expenses, but for many people planning to spend more than necessary isn't a luxury available. That said, I have a system that works for me, maybe it can work for you. This system lets me see how much I have to spend, and close to optimally arranges assets. As you can see, this system relies on some pretty strong upfront planning and adherence to the plan. And what you might not realize is that you can deviate from the plan in two ways: by spending variations and by timing variations. Credit should really help with a lot of the timing variations; it takes a series of expenses and translates them into one lump payment every month. As for spending variations, like spending 20 dollars for lunch when you only budgeted 5, it turns out this technique helps a lot. Some academic work suggests that spending with plastic is more likely to blow your budget than cash, unless you make detailed plans. But it sounds like your main problem is knowing whether you can afford to splurge. And the future minimum balance of your checking account can be your splurge number.\"", "title": "" }, { "docid": "f84fc57412f24d3e53079925b3255f9d", "text": "There are a lot of good answers above, all of them will probably work for you in some way or another. One point to note (from the procrastination theme) is that you could invest your free money that you have currently in some investment instrument which would require you to do some paperwork etc. to get out, this way the immediate cash flow is decreased and also invested. Now from each montly budget save a small amount for the things that you would like to buy. Give this small savings some months to accumulate so that you can afford only one of the items that you want to buy or target an item that you want to buy. After the money is accumulated, if you still want to buy the item, then you probably should. One point of note is that budgeting is also important on a monthly basis, Pete has provided excellent suggestion in this regard.", "title": "" }, { "docid": "41b672feae4a9d69a896ca23a684cf0c", "text": "Your question is rather direct, but I think there is some underlying issues that are worth addressing. One How to save and purchase ~$500 worth items This one is the easy one, since we confront it often enough. Never, ever, ever buy anything on credit. The only exception might be your first house, but that's it. Simply redirect the money you would spend in non necessities ('Pleasure and entertainment') to your big purchase fund (the PS4, in this case). When you get the target amount, simply purchase it. When you get your salary use it to pay for the monthly actual necessities (rent, groceries, etc) and go through the list. The money flow should be like this: Two How to evaluate if a purchase is appropriate It seems that you may be reluctant to spend a rather chunky amount of money on a single item. Let me try to assuage you. 'Expensive' is not defined by price alone, but by utility. To compare the price of items you should take into account their utility. Let's compare your prized PS4 to a soda can. Is a soda can expensive? It quenches your thirst and fills you with sugar. Tap water will take your thirst away, without damaging your health, and for a fraction of the price. So, yes, soda is ridiculously expensive, whenever water is available. Is a game console expensive? Sure. But it all boils down to how much do you end up using it. If you are sure you will end up playing for years to come, then it's probably good value for your money. An example of wrongly spent money on entertainment: My friends and I went to the cinema to see a movie without checking the reviews beforehand. It was so awful that it hurt, even with the discount price we got. Ultimately, we all ended up remembering that time and laughing about how wrong it went. So it was somehow, well spent, since I got a nice memory from that evening. A purchase is appropriate if you get your money's worth of utility/pleasure. Three Console and computer gaming, and commendation of the latter There are few arguments for buying a console instead of upgrading your current computer (if needed) except for playing console exclusives. It seems unlikely that a handful of exclusive games can justify purchasing a non upgradeable platform unless you can actually get many hours from said games. Previous arguments to prefer consoles instead of computers are that they work out of the box, capability to easily connect to the tv, controller support... have been superseded by now. Besides, pc games can usually be acquired for a lower price through frequent sales. More about personal finance and investment", "title": "" }, { "docid": "35a18ebf39052288dba1df16d3a440f3", "text": "\"Budgeting is a tool for planning, not for execution. It sounds like you don't have a problem BUDGETING (planning what to spend on what things) but rather with the execution of your plan. That is - living frugally. This is primarily an issue of self control and personal psychology - not an issue with the mechanics of budgeting and finance, which explains why the most popular personal finance \"\"gurus\"\" (Dave Ramsey, Suze Ormond) deal as much with your relationship to money and spending as they do with financial knowledge. There is no easy answer here, but you can learn to spend less. One helpful thought is to realize that whatever your current income is, someone in your community is currently making less than that and surviving. What would you do differently if your real, actual income was $100 or $200 less than it is currently. If your food budget is a concern, learn to cook cheaply. (Often, this is more healthy.) You mentioned schooling, so I assume you are on or near a college campus. Many colleges have all sorts of free-food opportunities. (I used to eat free vegetarian meals weekly at a Hare Krsna temple. Price of admission: listening to the monk read from the Bhagavad Gita.) Fast food is, of course, a complete no-no on low-budget living. It probably goes without saying, but just in case you haven't: cancel cable, get a cheap phone plan (Ting is excellent if available in your area), and otherwise see how you can squeeze a few dollars out of your bills. On the subject of frugality, I have found no book more enlightening than: Money Secrets of the Amish: Finding True Abundance in Simplicity, Sharing, and Saving\"", "title": "" }, { "docid": "e90889eb5f2065484f68f1a81ab324e9", "text": "I found the best way to do this was to make a spending plan at the beginning of the month with someone else. If you're married or in a relationship where you pool resources, then this is a natural way to sync up on your expectations. If you don't have a relationship of that nature, it's still good to have a friend that you talk to about things you are planning on buying. If I don't allow myself to buy things on a whim, if I have to take the time to justify my purchases to someone else, then I have to first think about the purchase and justify it to myself. Often the actual process of thinking it through is enough for me to talk myself out of it. Consider the tactics of car salesmen. Each time you attempt to leave the lot, to think about it overnight, they sweeten the offer to try to get you to buy before leaving. They know that if you leave the lot, you are much less likely to decide that you must have that car. You should have a policy of sleeping for one night before making any purchase over an arbitrary dollar amount say $250, or $500, or $1,000. Having that rule, and following it will save you a lot of buyers remorse. As an aside, I've had my eye on a 35mm prime lens for my camera for over a year now. I was ready to pay ~$500 for a nice lens that was discounted by $100, and I was a little sad that I missed the discount. However, I am very deliberate in my shopping, and I didn't want to buy until I read enough of the reviews to be certain about it. It turns out that the lens has a fatal flaw for landscape photography that most reviewers didn't notice because they were using it for portrait photography. I finally concluded that the lens I really wanted was an $800 lens. I looked at resale prices on my $600 lens and they are in the $350 range. So instead of missing out on a $100 discount, I missed out on a $150 loss trading up to the lens that I really want for the long term.", "title": "" }, { "docid": "ce7bc2c2cd732782fe38fbe089359593", "text": "The exact percentages depend on many things, not just location. For example, everyone needs food. If you have a low income, the percentage of your income spent on food would be much higher than for someone that has a high income. Any budgeting guidelines that you find are just a starting point. You need to look at your own income and expenses and come up with your own spending plan. Start by listing all of the necessities that you have to spend on. For example, your basic necessities might be: Fund those categories, and any other fixed expenses that you have. Whatever you have left is available for other things, such as: and anything else that you can think of to spend money on. If you can save money on some of the necessities above, it will free up money on the discretionary categories below. Because your income and priorities are different than everyone else, your budget will be different than everyone else, too. If you are new to budgeting, you might find that the right budgeting software can make the task much easier. YNAB, EveryDollar, or Mvelopes are three popular choices.", "title": "" }, { "docid": "482c834cf825bd1f559658f73a034ad2", "text": "In a word: budgeting. In order to have money left over at the end of the month, you need to be intentional about how you spend it. That is all a budget is: a plan for spending your money. Few people have the discipline and abundance of income necessary to just wing it and not overspend. By making a plan at home ahead of time, you can decide how much you will spend on food, entertainment, etc, and ensure you have enough money left over for things like rent/mortgage and utility bills, and still have enough for longer-term savings goals like a car purchase or retirement. If you don't have a plan, it's simply not reasonable to expect yourself to know if you have enough money for a Venti cup as you drive past the Starbucks. A good plan will allow you to spend on things that are important to you while ensuring that you have enough to meet your obligations and long-term goals. Another thing a budget will do for you is highlight where your problem is. If your problem is that you are spending too much money on luxuries, the budget will show you that. It might also reveal to you that your rent is too high, or your energy consumption is too great. On the other hand, you might realize after budgeting that your spending is reasonable, but your income is too low. In that case, you should focus on spending more of your time working or looking for a better paying job.", "title": "" }, { "docid": "f45108e61b6b73dc098892517e82086a", "text": "\"Best strategy that has worked for me is to remember first of all that you hardly ever need anything \"\"right now\"\". Try this: if you see something you want to buy, leave it for at least two weeks, better yet a month. If after that time you have hardly thought about it, then you almost certainly don't need it. But if you've thought quite a lot about owning it and how it will be beneficial, then perhaps it's worth picking up. You will probably find that a small percentage of things you'd like to buy make it through that screening period.\"", "title": "" }, { "docid": "358304736342d36c627f959472de9729", "text": "Communicate. I would recommend taking a course together on effective communications, and I would also suggest taking a course on budgeting and family financial planning. You need to be able to effectively communicate your financial plans and goals, your financial actions, and learn to both be honest and open with your partner. You also need to be certain that you come to an agreement. The first step is to draft a budget that you both agree to follow. The following is a rough outline that you could use to begin. There are online budgeting tools, and a spreadsheet where you can track planned versus actuals may better inform your decisions. Depending upon your agreed priorities, you may adjust the following percentages, Essentials (<50% of net income) Financial (>20%) Lifestyle (<30%) - this is your discretionary income, where you spend on the things you want Certain expense categories are large and deserve special advice. Try to limit your housing costs to 25% of your income, unless you live in a high-cost/rent area (where you might budget as high as 35%). Limit your expenses for vehicles below 10% of income. And expensive vehicle might be budgeted (partly) from Lifestyle. Limiting your auto payment to 5% of your income may be a wise choice (when possible). Some families spend $200-300/month on cable TV, and $200-300/month on cellphones. These are Lifestyle decisions, and those on constrained budgets might examine the value from those expenses against the benefit. Dining out can be a budget buster, and those on constrained budgets might consider paying less for convenience, and preparing more meals at home. An average family might spend 8-10% of their income on food. Once you have a budget, you want to handle the following steps, Many of the steps are choices based upon your specific priorities.", "title": "" }, { "docid": "1f67be3922fa6cb655e9dcc1c0f97932", "text": "\"The problem is \"\"what would have been\"\" without regulations. A good cause and effect is the Durbin amendment to DFA - they randomly regulated interchange debit card transactions (win for Walmart, loss for banks) so it no longer makes sense to offer free checking to poor people. WMT wins, banking loses, poor people lose. The other issue is maxing out regulations actually makes the system more frail as it promotes consolidation in the sector. Consultants love it - tons of free, easy, no thought work.\"", "title": "" } ]	fiqa
d32725a5a02ee5a1a5d6b78b3c906254	What is the Average Yield on High-Grade Corporate Bonds as of Now?	[ { "docid": "d921092e3b0e3462860f56a4e2f7cfd9", "text": "Yahoo! Finance would list it as 3.30 for the 20 year corporate AAA bonds. This is using the criteria from the Wikipedia link you stated in the initial question.", "title": "" } ]	[ { "docid": "82ea0d1ce78d1bcdea1963a057b8a119", "text": "I wrote one to check against the N3 to N6 bonds: http://capitalmind.in/2011/03/sbi-bond-yield-calculator/ Things to note:", "title": "" }, { "docid": "4ba0904c027d73e4cfead5e90c27a3d6", "text": "In addition to the other answers, also consider this: Federal bond interest rates are nowhere near the rates you mentioned for short term bonds. They are less than 1% unless you're talking about terms of 5-10 years, and the rates you mentioned are for 10 to 30-years terms. Dealer financed car loans are usually 2-5 years (the shorter the term - the lower the rate). In addition, as said by others, you pay more than just the interest if you take a car loan from the dealer directly. But your question is also valid for banks.", "title": "" }, { "docid": "63992ab475c060121e8878774c7589c3", "text": "A 20% dividend yield in most companies would make me very suspicious. Most dividend yields are in the 2-3% range right now and a 20% yield would make me worry that the company was in trouble, the stock price had crashed and the dividend was going to be cut, the company was going to go out of business or both.", "title": "" }, { "docid": "d424b29f29d724e29c526bee6f6ce5bf", "text": "The yield on Div Data is showing 20% ((3.77/Current Price)*100)) because that only accounts for last years dividend. If you look at the left column, the 52 week dividend yield is the same as google(1.6%). This is calculated taking an average of n number of years. The data is slightly off as one of those sites would have used an extra year.", "title": "" }, { "docid": "6657c05898ceb7473983e062b054aa66", "text": "\"Thanks! Do you know how to calculate the coefficients from this part?: \"\"The difference between the one-year rate and the spread coefficients represents the response to a change in the one-year rate. As a result, the coefficient on the one-year rate and the difference in the coefficients on the one-year rate and spread should be positive if community banks, on average, are asset sensitive and negative if they are liability sensitive. The coefficient on the spread should be positive because an increase in long-term rates should increase net interest income for both asset-sensitive and liability-sensitive banks.\"\" The one-year treasury yield is 1.38% and the ten-year rate is 2.30%. I would greatly appreciate it if you have the time!\"", "title": "" }, { "docid": "a4f2af7a90c5a816a855e15c4044574a", "text": "\"Negative Yields on Bonds is opposite of Getting profit on your investment. This is some kind of new practice from world wide financial institute. the interest rate is -0.05% for ten years. So a $100,000 bond under those terms would be \"\"discounted\"\" to $100,501, give or take. No, actually what you are going to get out from this investment is after 10 years when this investment is mature for liquidation, you will get return not even your principle $100,000 , but ( (Principle $100,000) minus (Negative Yields @ -0.05) Times ( 10 Years ) ) assume the rates are on simple annual rate. Now anyone may wander why should someone going to buy this kind of investment where I am actually giving away not only possible profit also losing some of principle amount! This might looks real odd, but there is other valid reason for issuing / investing on such kind of bond. From investor prospective: Every asset has its own 'expense' for keeping ownership of it. This is also true for money/currency depending on its size. And other investment possibility and risk factor. The same way people maintain checking account with virtually no visible income vs. Savings account where bank issue some positive rate of interest with various time factor like annually/half-yearly/monthly. People with lower level of income but steady on flow choose savings where business personals go for checking one. Think of Millions of Ideal money with no secure investment opportunity have to option in real. Option one to keeping this large amount of money in hand, arranging all kind of security which involve extra expense, risk and headache where Option two is invest on bond issued by Government of country. Owner of that amount will go for second one even with negative yields on bonds where he is paying in return of security and risk free grantee of getting it back on time. On Issuing Government prospective: Here government actually want people not to keep money idle investing bonds, but find any possible sector to invest which might profitable for both Investor + Grater Community ultimately country. This is a basic understanding on issue/buy/selling of Negative interest bearing bond on market. Hope I could explain it here. Not to mention, English is not my 1st language at all. So ignore my typo, grammatical error and welcome to fix it. Cheers!\"", "title": "" }, { "docid": "6e732648b31005f1d4e21e034a068d67", "text": "There is no single 'market interest rate'; there are myriad interest rates that vary by risk profile & term. Corporate bonds are (typically) riskier than bank deposits, and therefore pay a higher effective rate when the market for that bond is in equilibrium than a bank account does. If you are willing to accept a higher risk in order gain a higher return, you might choose bonds over bank deposits. If you want an even higher return and can accept even higher risk, you might turn to stocks over bonds. If you want still higher return and can bear the still higher risk, derivatives may be more appealing than stocks.", "title": "" }, { "docid": "9c8fa692b5c0406199e5b4ac1ac61e07", "text": "\"You sound like you know what you're talking about, but you say: \"\"foreign buyers will laugh at them\"\" But the Wall Street Journal, 9/20/12, says that in the last quarter FOREIGN INVESTORS ARE FLOCKING TO BUY JAPANESE BONDS IN RECORD LEVELS even though the yields are very much below other industrialized countries. LOL\"", "title": "" }, { "docid": "ebdb1628c3593302cee0c498228e0163", "text": "\"Wrong. Business lending has boomed under QE.. does the term \"\"cov-lite\"\" sound familiar? That's because there's so much liquidity, that they're willing to lend to companies with little to no restrictions. There is so much credit to go around, that a \"\"High Yield Bond\"\" can price at L+800 bps. When you're taking all the risk of a HY issuer, and maxing your return at 8.5%-9%, it's not too appealing. Instead, you could take a bit more risk, but also get all of the potential upside of equities. 1. Fed buys assets, injects money into banks. 2. Banks, flush with liquidity, need to put their balance sheet to use and begin lending to everyone. 2. Bond market flooded with supply, causes bond yields to drop to historic lows. 3. Investors don't enjoy limiting upside for incredibly low returns, and begin flooding equity markets to get some sort of yield. Business lending is booming, making equities the only place to get larger returns.\"", "title": "" }, { "docid": "2e959870c0aeb1d4a8e82a765275f23b", "text": "Hi guys, I have a difficult university finance question that’s really been stressing me out.... “The amount borrowed is $300 million and the term of the debt credit facility is six years from today The facility requires minimum loan repayments of $9 million in each financial year except for the first year. The nominal rate for this form of debt is 5%. This intestest rate is compounded monthly and is fixed from the date the facility was initiated. Assume that a debt repayment of $10 million is payed on 31 August 2018 and $9million on April 30 2019. Following on monthly repayments of $9 million at the end of each month from May 31 2019 to June 30 2021. Given this information determine the outstanding value of the debt credit facility on the maturity date.” Can anyone help me out with the answer? I’ve been wracking my brain trying to decide if I treat it as a bond or a bill. Thanks in advance,", "title": "" }, { "docid": "c26edba6c881f73da69c252b0661767a", "text": "There was this /r/offmychest post yesterday from a person claiming to work for a large investment bank as part of their default risk modelling team. The poster claims that the commercial and real estate lending divisions have been fudging numbers regarding default risks due to a lack of oversight and a bunch of bad commercial loans are about to become due. They further claim that a rise in interest rates could prevent many commercial properties from being able to properly ~~finance~~ refinance their loan. Here is the post: https://www.reddit.com/r/offmychest/comments/77a1vw/i_work_in_bankingfinance_risk_management_i_am/. Any one have any thoughts? I also found this link on the Mises blog (though it is a year old) that discusses how delinquency rates on commercial and industry loans have been steadily rising since bottoming out in 2015: https://mises.org/blog/delinquency-rates-rising-new-crisis-approaching. Could be something to keep an eye on. I would love to see some more updated data on delinquency.", "title": "" }, { "docid": "bb9efb537062f9e9ff6780d279fb71ca", "text": "\"I figured that there must be some people in a corporate office somewhere who sign $100M loans for lunch. :) The banks have that experience (but I'm not interested in asking them for a sample), and our consultants definitely have that experience, but I'm looking to evaluate the consultants with this exercise. If they provide the sample, then deliver to that sample, I'm still blind as to whether that sample is \"\"good\"\" as compared to something that the corporate world would use on the daily. I'd take your advice for the $1M loan, but I can't help but think as the factors of 10 increase, the data required to properly negotiate also increases. I don't want to go in blind, and provide a proposal that looks like a high school project.\"", "title": "" }, { "docid": "237d225e0da24ae0ac9d26ba666568d8", "text": "i will not calculate it for you but just calculate the discounted cash flow (by dividing with 1.1 / 1.1^2 / 1.1^3 ...)of each single exercise as stated and deduct the 12.000 of the above sum. in the end compare which has the highest npv", "title": "" }, { "docid": "c5da86ac16ae98fff435ef214930f834", "text": "I've recently discovered that Morningstar provides 5yr avgs of a few numbers, including dividend yield, for free. For example, see the right-hand column in the 'Current Valuation' section, 5th row down for the 5yr avg dividend yield for PG: http://financials.morningstar.com/valuation/price-ratio.html?t=PG&region=usa&culture=en-US Another site that probably has this, and alot more, is YCharts. But that is a membership site so you'll need to join (and pay a membership fee I believe.) YCharts is supposedly pretty good for long-term statistical information and trend graphs for comparing and tracking stocks.", "title": "" }, { "docid": "e8c5450e3d1e6e492f587ae662fb9d9e", "text": "\"I kind of understand the \"\"basics\"\", and have done a couple (with the assistance of pre-made excel sheets haha), I just don't feel that I'm creating an actual valuable valuation when I do one. While on the topic though, do you know where an individual investor can calculate the cost of debt for the WACC? I've been looking on morningstar and search up that public company and take the average of the coupon on all outstanding bonds. I don't feel like that's very correct though :(\"", "title": "" } ]	fiqa
88e71edaa7dcf220f38600f2a3233953	Definition of “secular” in the context of markets?	[ { "docid": "48b8c97f3504a8f579cdae8344d47681", "text": "\"According to Wikipedia: In the finance industry, something done on a secular basis is done on a long-term basis, not a temporary or cyclical one, with a time frame of \"\"10–50 years or more\"\" Source\"", "title": "" }, { "docid": "07176319083e07bb2c52470705c3e0ad", "text": "Secular means a long term. A secular basis is something done on a long term basis while a secular trend is a long term trend. http://financial-dictionary.thefreedictionary.com/Secular", "title": "" } ]	[ { "docid": "a5c828411013510f191bb0f58be880db", "text": "I'm not 100% familiar with the index they're using to measure hedge fund performance, but based on the name alone, comparing market returns to market neutral hedge fund returns seems a bit disingenuous. That doesn't mean the article is wrong, and they have a point about the democratization of data, but still.", "title": "" }, { "docid": "e6d30beaaa40f21d5137f48c6ea2cca6", "text": "It's meaningful because we as a society have collectively decided that they are. It's all imaginary value, just like fiat money. That and in our capitalist society it is yet another product you are forced to buy or risk not having access to even a semblance of a decent life. It's a pretty good racket if I do say so myself.", "title": "" }, { "docid": "015d69d227ff40cdc668457c56adcc43", "text": "I think this could be changed quickly if they were forced to participate in the markets. Sadly I spent 3 years of my bachelors degree in finance studying EMH. Only in my last year, in two classes we covered the disiquilibrium.", "title": "" }, { "docid": "bc3847d8114169b949d9e465c019279a", "text": "That value differs between a starving man and a man who never fears lack of food. Let's take, instead, the value of your mother's affection. Were you to have to pay for that affection, for her hugs, they would lose value. Offering a price makes her affection worth LESS. Therefore value is not tied to currency, nor is value indelibly tied to Capitalism. Trading capital for your mother's affection negates the value of the affection.", "title": "" }, { "docid": "b68bad2dd32ed96a0277f985351565f9", "text": "It just states that the price doesn't justify the valuation which is not a factual statement. Also this is based on someones opinion of the companies P/E. The P/E was published and public information and idiots on both the buy and sell side jumped in. The article does not make a factual claim about Fraud (cooking the books), Francine McKenna speculates that management and auditors cooked the books.", "title": "" }, { "docid": "dee15ea7fff1088e166dda993e749bab", "text": "Yes, and .. how that _prevents_, abolishes, negates or in any way opposes what I've claimed? Markets are dynamic systems (they are after all multi-player non-cooperative non-zero-sum games), and as such they can have attractors (stable closed loops toward which the trajectory of (the state of the) system progresses, and if enters into, formally can't escape, since they are closed loops). Thus intervention is usually needed to maintain competition, which is called regulation. Regulatory capture, abuse of regulations, abuse of regulatory power, and so on are problems in the greater model (in politics), where constant input sort of guarantees that it has no (stable) attractors, because as long people exist, at least some of them will have a habit of revolting. The question is, is there a more efficient way to ensure existence of markets and ensure competition on them? And maybe some sort of anarchism is the answer, but sadly we're not doing enough experiments and research into that.", "title": "" }, { "docid": "24a9395a62b5a5b2112a25ecb3e5b2b9", "text": "\"I had to look up the word contentious real quick. Thank you for that, added it to my lexicon! That makes a lot of sense. Thus far, I was fortunate enough to only view videos from renowned economists and study from textbooks. I feel like this adds another layer to this entire field. Until now, all the problems I read in the books were fixed, and under the assumption of the \"\"perfect market.\"\" I had almost forgotten that people react to incentives. (Advocate a certain stance because it's beneficial to you, not necessarily the majority) It's funny how learning little things affect so much of my perspective! Thank you.\"", "title": "" }, { "docid": "98282522c728323c92538a28f7f11623", "text": "\"Why do I like not having a planet 100% covered in salt water, with no land or fresh water? Gee, I am glad you had to ask. Globalization has been happening since before the USA declared independence, it has been happening for the past few decades within the USA, and it has nothing to do with any type of market (free, capitalistic, socialist, communist, command economy). You can't credit \"\"capitalism,\"\" with the reason the USA was so fiscally successful, when there was gold, lumber, furs, practically free tobacco and cotton thanks to slave labor, etc. It was a free-for-all in the new world, and has grown exponentially, since. I can hope to have a voice in whether we're living in the final 100 years of life on earth with dry land and clean air. I am not going to be able to refute any economic philosopher taught in grad schools across the USA, whether they espouse a command economy, capitalism, socialism, anarchy, or any other option. I am sure you liked Ricardian Theory and your professor very well.\"", "title": "" }, { "docid": "3aeb419cf864ea9fea1ab97dc09d2669", "text": "The idea of a stockmarket is multiple people betting on the value of an asset and then getting paid the difference between their bet and the real value of the asset. The goal being to keep the value of the stock as accurate as possible so capital is allocated to companies that will use it most efficiently. The reward for people making these bets is a portion of that capital. What you are suggesting is just a graph of the average happiness. The difficult part of turning this into a market, is being able to assign value to happiness, value that you can gain or lose by choice. Ironically, money is a indicator of happiness. When apple came out with the iPhone, people saw it and decided it would make them happier if they owned it creating demand. Investors noticed that people believed owning an iphone would make them happier so they bid up the price of AAPL stock. People are happier with their iPhones and investors benefitted from this happiness and got cash allowing them to spend money on things to increase their happiness. In order to extract happiness from the stock market a lot of other things come into play. A biotech company curing cancer would be a solution to something that drastically decreases happiness. Increasing alcohol sales might be a result of people trying to offset the sadness in the short term but in the long term it is a depressant and doesn't make you happy. An individual might be happier with an extra $10B but overall 1 million people getting $10k each would increase average happiness much more. But somebody like buffet can invest in companies that can generate way more happiness than just handing out cash. The happiness report is an annual report of happiness. Looking at these results next to the Gini coefficient (income inequality), and industry growth by country might start to give you an idea of what affects happiness. For instance in Africa income inequality could sky rocket while the stock market plummets and happiness could still increase because of public health investments made years ago, causing the infant mortality rate to plummet. If you want to think about this topic I recommend reading the great escape by Angus Deaton.", "title": "" }, { "docid": "1079fa38f78777eb5807808538b834c2", "text": "Value is one area where economic theories tend to diverge and the (very) basic schools of thought both have excellent points in their favor. You've identified both here; one being that economic value can always be determined by net labor* or at least cost of inputs and the other being that economic value does not exist in and of itself and that only a market can determine value. In some ways it is just a question of world-view as much as anything but the concepts of natural prices or innate worth are difficult to argue against. At the same time, without exchange the concept of value has little meaning. So, as usual, it is some sophistry mixed with some sense. Both have elements of truth and both are considerably more complex than they seem at first. Interestingly though, neither seems to work very well as predictive models despite providing the basis for some incredibly complex and interesting mathematical workups. * Note that net labor is the sum of ALL labor involved and is incredibly difficult to quantify accurately.", "title": "" }, { "docid": "18aa96f3262074f80fbd3733e132a152", "text": "I think you're over complicating it! There is the market maker in the pure sense as what chilldontkill said - a bookie, a middleman. They are just the brokers in between the buyers and sellers, and they simply make profit off of the spread differential. But market maker is also used to refer to large, high volume buyers and sellers that can influence the price because they control a larger % of volume. These only really exist on low volume products, and they slowly ween out the larger the volume. On higher volume products, I like to refer to them as institutions - that is, well informed, large pockets - whether is be central banks, clearing houses, hedge funds, boutique firms. These are the people who are generally in the know and they often bet against eachother.hope this helps ...", "title": "" }, { "docid": "6dd2469c604b6b4a4aed2ae8e069aa41", "text": "Wait... You mean that the government interfering with the market was a net negative?! It's almost as if the government is full of humans, who, by nature, are short sighted and only concerned with being re-elected. What could possibly go wrong by allowing them to meddle in the markets?", "title": "" }, { "docid": "2c55e7ad63c097288e3c3304e75c7347", "text": "Yes, it's a term in economics. It is the economy that affects goods and services, and so the vast majority of the economy. It contrasts with the paper economy, which is what goes on in the financial sector and speaks more about the virtual value in bonds, financial instruments, and shares.", "title": "" }, { "docid": "0221b08de55ce6d99cfc7df8255d9b26", "text": "Hey thanks for your response. The commodity is actually electricity, so definitely not able to store. Would you mind giving me a short summary of your thought process or an example of how you compare liquid markets vs illiquid ones when looking at more traditional commodities? If that is a bit much to ask, as I am sure it could get quite involved do you have any reading recommendations? This little project has sparked an interest.", "title": "" }, { "docid": "1403c0dc25f5e605961b289b5b269a59", "text": "\"If you have already maxed your TSP contributions, the \"\"401k\"\" for military folks, you could consider a Traditional IRA contribution. They are tax-deductible, based on some limits, so it may reduce your tax liability. Many online services (Vanguard, Fidelity, etc.) offer quick and free setup of Traditional IRA accounts. If you have already maxed the Traditional IRA as well, you could look at making taxable investments through an online service. Like homer150mw, I would recommend low-cost funds. For reasons why, see this article by John Bogle.\"", "title": "" } ]	fiqa
3615edc1a5c52d54cab13ad8da900d3b	effect of bond issue on income statement	[ { "docid": "dba4f638e967cf689e1b735cc9daed10", "text": "No, it would not show up on the income statement as it isn't income. It would show up in the cash flow statement as a result of financing activities.", "title": "" } ]	[ { "docid": "478cdde040cedfb6e01af7f6e8296744", "text": "I looked into the investopedia one (all their videos are mazing), but that detail just was not clear to me, it also makes be wonder, if a country issues bonds to finance itself, what happens at maturity when literally millions of them need to be paid? The income needs to have grown to that level or it defaults? Wouldn't all the countries default if that was the case, or are bonds being issued to being able to pay maturity of older bonds already? (I'm freaking myself out by realizing this)", "title": "" }, { "docid": "b7deba6712b7fb28aabe4197b393aa59", "text": "Assuming you are saying that the company issues 20,000 additional shares of its own stock and sells them for $8 each: The money from the sale is not income and not part of earnings. It is capital and appears on the balance sheet as part of shareholder's equity. With no other transactions, yes, the total of shares outstanding is increased by 20,000 to 100,000.", "title": "" }, { "docid": "2967b77ae227b3ece809a193dbd635fa", "text": "\"The most fundamental observation of bond pricing is this: Bond price is inversely proportional to bond yields When bond yields rise, the price of the bond falls. When bond yields fall, the price of the bond rises. Higher rates are \"\"bad\"\" for bonds. If a selloff occurs in the Russian government bond space (i.e. prices are going down), the yield on that bond is going to increase as a consequence.\"", "title": "" }, { "docid": "43edc39c145d3f08bc65729cd44c8faa", "text": "Yes this would be the same as when a corporation sells bonds. If it is the same as you describe. A product page would make it possible to give you a definitive answer. Also I strongly advice against taking out this type of loan if not for investment", "title": "" }, { "docid": "a976a049f5f67eca0de8bd55f6069b31", "text": "\"This effect has much empirical evidence as googling \"\"dividend price effect evidence\"\" will show. As the financial economic schools of thought run the gamut so do the theories. One school goes as far to call it a market inefficiency since the earning power thus the value of an equity that's affected is no different or at least not riskier by the percentage of market capitalization paid. Most papers offer that by the efficient market hypothesis and arbitrage theory, the value of an equity is known by the market at any point in time given by its price, so if an equity pays a dividend, the adjusted price would be efficient since the holder receives no excess of the price instantly before payment as after including the dividend since that dividend information was already discounted so would otherwise produce an arbitrage.\"", "title": "" }, { "docid": "6e4bbd3e7d72c51119d1690928f018d4", "text": "\"The federal funds rate is one of the risk-free short-term rates in the economy. We often think of fixed income securities as paying this rate plus some premia associated with risk. For a treasury security, we can think this way: (interest rate) = (fed funds rate) + (term premium) The term premium is a bit extra the bond pays because if you hold a long term bond, you are exposed to interest rate risk, which is the risk that rates will generally rise after you buy, making your bond worth less. The relation is more complex if people have expectations of future rate moves, but this is the general idea. Anyway, generally speaking, longer term bonds are exposed to more interest rate risk, so they pay more, on average. For a corporate bond, we think this way: (interest rate) = (fed funds rate) + (term premium) + (default premium) where the default premium is some extra that the bond must pay to compensate the holder for default risk, which is the risk that the bond defaults or loses value as the company's prospects fall. You can see that corporate and government bonds are affected the same way (approximately, this is all hand-waving) by changes in the fed funds rate. Now, that all refers to the rates on new bonds. After a bond is issued, its value falls if rates rise because new bonds are relatively more attractive. Its value rises if rates on new bonds falls. So if there is an unexpected rise in the fed funds rate and you are holding a bond, you will be sad, especially if it is a long term bond (doesn't matter if it's corporate or government). Ask yourself, though, whether an increase in fed funds will be unexpected at this point. If the increase was expected, it will already be priced in. Are you more of an expert than the folks on wall-street at predicting interest rate changes? If not, it might not make sense to make decisions based on your belief about where rates are going. Just saying. Brick points out that treasuries are tax advantaged. That is, you don't have to pay state income tax on them (but you do pay federal). If you live in a state where this is true, this may matter to you a little bit. They also pay unnaturally little because they are convenient for use as a cash substitute in transactions and margining (\"\"convenience yield\"\"). In general, treasuries just don't pay much. Young folk like you tend to buy corporate bonds instead, so they can make money on the default and term premia.\"", "title": "" }, { "docid": "9883bc47d8fd12d8301ff1079d0e0bdc", "text": "\"I think a lot of this goes to the short-sightedness of the government that was in place at the time of the first default. They caused it, and their attempt at cleaning things up just kicked the can down the road. If they would have added in a \"\"class action\"\" clause that most bonds now have, what they settled with a majority would apply to all bond-holders. What they did was the opposite: added in a clause in which the low-water mark was set by the deal that was least favourable for them. It was probably a misguided attempt at assuaging the markets with the consequences we now see...\"", "title": "" }, { "docid": "1a5352b97ed3708b09f8a8e4769ed2b0", "text": "\"Eh. A FICO change is more important than you think. Underwriting waterfalls almost always include minimum FICO scores. This only really becomes important when you get into securitization and the standards (both GSE and Private-Label) required for MBS issuance. Because -- of course -- an underwriter can originate a loan and then hold it it on the books (this is very prevalent in non-conforming Jumbo loans). That said, if you want to sell the whole loans to a GSE or private label, they have to meet underwriting requirements (Reps & Warranties). To your original answer: you're right that it probably won't make a difference but not because FICO doesn't matter. Moreso because there are only 9 million potential \"\"borrowers\"\" affected and that 9 million most likely doesn't constitute any real demand for mortgages. This also ignores the possibility that FICO requirements in underwriting standards adjust to FICO 9; but I really doubt that they will.\"", "title": "" }, { "docid": "1972c4bb86c1c26f86d8243cf45d2cbc", "text": "\"To your first comment: yup. To your second comment, A = L + E. If E goes down, and L goes up, the net effect is 0. Then, if L goes down, and A goes up, the net effect is 0 and we are balanced once again. There is no \"\"rebalancing\"\" equity. You just have to make sure that, at the end of your journal entries, the accounting equation holds. It's a very unintuitive concept to wrap your head around, but spend some time mapping out the flow of various journal entries. Once it clicks, you'll really understand the logic.\"", "title": "" }, { "docid": "77f2fb35a2beff9e1f1c485393fb6fd7", "text": "\"Hey guys I have a quick question about a financial accounting problem although I think it's not really an \"\"accounting\"\" problem but just a bond problem. Here it goes GSB Corporation issued semiannual coupon bonds with a face value of $110,000 several years ago. The annual coupon rate is 8%, with two coupons due each year, six months apart. The historical market interest rate was 10% compounded semiannually when GSB Corporation issued the bonds, equal to an effective interest rate of 10.25% [= (1.05 × 1.05) – 1]. GSB Corporation accounts for these bonds using amortized cost measurement based on the historical market interest rate. The current market interest rate at the beginning of the current year on these bonds was 6% compounded semiannually, for an effective interest rate of 6.09% [= (1.03 × 1.03) – 1]. The market interest rate remained at this level throughout the current year. The bonds had a book value of $100,000 at the beginning of the current year. When the firm made the payment at the end of the first six months of the current year, the accountant debited a liability for the exact amount of cash paid. Compute the amount of interest expense on these bonds for the last six months of the life of the bonds, assuming all bonds remain outstanding until the retirement date. My question is why would they give me the effective interest rate for both the historical and current rate? The problem states that the firm accounts for the bond using historical interest which is 10% semiannual and the coupon payments are 4400 twice per year. I was just wondering if I should just do the (Beginning Balance (which is 100000 in this case) x 1.05)-4400=Ending Balance so on and so forth until I get to the 110000 maturity value. I got an answer of 5474.97 and was wondering if that's the correct approach or not.\"", "title": "" }, { "docid": "9fe82b5a5fe49e5cbba23b29f4fee54e", "text": "\"I have a quick question about statement of cash flows and how Account Receivable (Net) and Prepaids affect it (I've already asked the accounting subreddit but was wondering if anyone who does fundamental analysis etc would have a take on it). It stems from a homework problem where I have to reconstruct a cash flow statement using two comparative balance sheets (end of period 2013 and end of period 2014) and a change in retained earnings statement. The following transaction took place in 2014 \"\"The firm wrote off accounts receivable as uncollectible totaling $16,300 in 2013 and $18,500 in 2014. It recognized expired insurance of $4,100 in 2013 and $3,900 in 2014.\"\" My understanding is that the write offs have already been subtracted in order to yield Account Receivable (Net) and therefore I can just take the change in that account and make the appropriate entry. For the recognition of expired insurance I can simply take the change in the Prepayment account and record the appropriate cash flow entry. Am I correct in assuming this? Or did they give me those amounts in order to figure out Accounts Receivable (Gross) and take the change in that?\"", "title": "" }, { "docid": "42f339e971647b05cea2661ae64b1c55", "text": "\"The answer is yes. And the reason is if today's interest rates are lower than the interest rate (coupon) at which the bond was issued. The bond's \"\"lifetime value\"\" is 100 cents on the dollar. That's the principal repayment that the investor will get on the maturity date. But suppose the bond's coupon rate is 4% while today's interest rate is 3%. Then, people who bought the bond at 100 would get 4% on their money, while everyone else was getting 3%. To compensate, a three year bond would have to rise to almost 103 so that the so-called yield to maturity\"\" would be 3%. Then there would be a \"\"capital loss\"\" (from almost 103 to 100) that would exactly offset the extra interest, that is 1% \"\"more\"\" for three years. If today's interest rates are negative (as they were from time to time in the 1930s, and in the present decade), the \"\"negative\"\" interest rates will prevent the buyer from getting the \"\"lifetime value\"\" (as defined by the OP) of principal plus interest over the original life of the bond. This happens in a \"\"flight to quality\"\" situation, where people are willing to take a (small) capital loss on Treasuries in order to prevent a large possible loss from bank failures like those that took place in 2008.\"", "title": "" }, { "docid": "7f1e8c5ba2bbd1302597d9a89ab0c762", "text": "In the question you cited, I assumed immediate exercise, that is why you understood that I was talking about 30 days after grant. I actually mentioned that assumption in the answer. Sec. 83(b) doesn't apply to options, because options are not assets per se. It only applies to restricted stocks. So the 30 days start counting from the time you get the restricted stock, which is when you early-exercise. As to the AMT, the ISO spread will be considered AMT income in the year of the exercise, if you file the 83(b). For NQSO it is ordinary income. That's the whole point of the election. You can find more detailed explanation on this website.", "title": "" }, { "docid": "3f8851d458841a55b140337c80cb1702", "text": "\"The first thing that it is important to note here is that the examples you have given are not individual bond prices. This is what is called the \"\"generic\"\" bond price data, in effect a idealised bond with the indicated maturity period. You can see individual bond prices on the UK Debt Management Office website. The meaning of the various attributes (price, yield, coupon) remains the same, but there may be no such bond to trade in the market. So let's take the example of an actual UK Gilt, say the \"\"4.25% Treasury Gilt 2019\"\". The UK Debt Management Office currently lists this bond as having a maturity date of 07-Mar-2019 and a price of GBP 116.27. This means that you will pay 116.27 to purchase a bond with a nominal value of GBP 100.00. Here, the \"\"nominal price\"\" is the price that HM Treasury will buy the bond back on the maturity date. Note that the title of the bond indicates a \"\"nominal\"\" yield of 4.25%. This is called the coupon, so here the coupon is 4.25%. In other words, the treasury will pay GBP 4.25 annually for each bond with a nominal value of GBP 100.00. Since you will now be paying a price of GBP 116.27 to purchase this bond in the market today, this means that you will be paying 116.27 to earn the nominal annual interest of 4.25. This equates to a 3.656% yield, where 3.656% = 4.25/116.27. It is very important to understand that the yield is not the whole story. In particular, since the bond has a nominal value of GBP100, this means that as the maturity date approaches the market price of the bond will approach the nominal price of 100. In this case, this means that you will witness a loss of capital over the period that you hold the bond. If you hold the bond until maturity, then you will lose GBP 16.27 for each nominal GBP100 bond you hold. When this capital loss is netted off the interest recieved, you get what is called the gross redemption yield. In this case, the gross redemption yield is given as approximately 0.75% per annum. NB. The data table you have included clearly has errors in the pricing of the 3 month, 6 month, and 12 month generics.\"", "title": "" }, { "docid": "84285f1c7b71bb6ca3ea25892aa61c50", "text": "With the formula you are using you assume that the issued bond (bond A) is a perpetual. Given the provided information, you can't really do more than this, it's only an approximation. The difference could be explained by the repayment of the principal (which is not the case with a perpetual). I guess the author has calculated the bond value with principal repayment. You can get more insight in the calculation from the excel provided at this website: http://breakingdownfinance.com/finance-topics/bond-valuation/fixed-rate-bond-valuation/", "title": "" } ]	fiqa
fbe4806c709db06b77fa6a413586e505	What is the correct pronunciation of CAGR?	[ { "docid": "feda58ab4887628b798861aced8d0b84", "text": "\"I always hear people pronounce it to rhyme with \"\"bagger\"\".\"", "title": "" }, { "docid": "2f89de8913df7fa00410588fcc7a9093", "text": "Most readers probably know that an acronym is an invented word made up of the initial letters or syllables of other words, like NASA or NATO. Fewer probably know that an initialism is a type of acronym that cannot be pronounced as a word, but must be read letter-by-letter, like FBI or UCLA. A quote from Daily Writing Tips. CAGR is an initialism, and should not be pronounced.", "title": "" } ]	[ { "docid": "316f7f42e4a123453b673e15177a9d75", "text": "> quesorizo (queso + chorizo) And if you were actually, you know, in Mexico it would be a choriqueso. So much for authenticity. Although, to be fair, that would mostly be used in the greater D.F. area. In, say, Guanajuato they wouldn't make up stupid names in the first place and it would simply be queso con chorizo.", "title": "" }, { "docid": "56736602f21db5d09956941769bd03aa", "text": "\"I think the issue here is the rules say that \"\"relevant current events in finance\"\" are acceptable when (I think) that wording is too loose. \"\"Current events in finance\"\" is just very, very general, and anything related to central banking, monetary or fiscal policy, global austerity, analysis of index movements, sovereign defaults (and speculation thereof) qualifies a \"\"current events in finance\"\" - so technically, the rules aren't being broken. I think that having the language tightened a bit would help set the subreddit tone a little more accurately.\"", "title": "" }, { "docid": "e43414a4796452742034cd684b247986", "text": "Danh sách các Công ty Chứng Khoán có nguy cơ vỡ nợ 01 CTCP CK Thăng Long 02 CTCP CK Thương mại và Công nghiệp Việt Nam 03 CTCP CK Maritime Bank 04 CTCP CK Thủ Đô 05 CTCP CK Sao Việt 06 CTCP CK Quốc tế Việt Nam 07 CTCP CK Tràng An 08 CTCP CK Phương Đông 09 CTCP CK Đông Nam Á 10 CTCP CK Quốc Gia 11 CTCP CK Đại Dương 12 CTCP CK VIT 12 CTCP CK Tầm Nhìn 13 CTCP CK Hà Nội 14 CTCP CK Hamico 15 CTCP CK Vina 16 CTCP CK SME (đã phá sản trong năm 2011) 17 CTCP CK Hà Thành 18 CTCP CK NH Phát triển Nhà Đồng bằng Sông Cửu Long 19 CTCP CK Navibank 20 CTCP CK NH Sài Gòn Thương Tín 21 CTCP CK Việt Quốc 22 CTCP CK FLC 23 CTCP CK Trường Sơn 24 CTCP CK BETA 25 CTCP CK Tân Việt 26 CTCP CK Cao su 27 CTCP CK Sài Gòn Tourist Mọi Tài Sản cần phải được chuyển giao sang các Công ty Chứng Khoán tốt hơn nhằm hạn chế RỦI RO !", "title": "" }, { "docid": "e6f81acac948e365f140fdfb3daf3d0e", "text": "Hi! This is just a friendly reminder letting you know that you should type it as `¯\\\\\\_(ツ)_/¯` to format it correctly. A backslash on reddit is used as an escape character, meaning that it can be used to make special characters, such as underscores and other backslashes ignore the formatting that they do to other characters on Reddit, and instead display them literally. --- ^I ^am ^a ^bot. ^If ^I ^have ^done ^something ^wrong, ^please ^message ^my ^owner, ^[John_Yuki](https://www.reddit.com/user/John_Yuki/).", "title": "" }, { "docid": "8a56238e87f61f08084fe4d8d5f824ad", "text": "Go through the IRS Publication 521. Generally, relocation assistance is given either as : or", "title": "" }, { "docid": "61e3b59c031e69b6163cdeb5253bd8ca", "text": "Thank you Skyy8 for voting on PORTMANTEAU-BOT. This bot wants to find the best and worst bots on Reddit. [You can view results here](https://goodbot-badbot.herokuapp.com/). * ^^Even ^^if ^^I ^^don't ^^reply ^^to ^^your ^^comment, ^^I'm ^^still ^^listening ^^for ^^votes. ^^Check ^^the ^^webpage ^^to ^^see ^^if ^^your ^^vote ^^registered!", "title": "" }, { "docid": "368790e5eacbd6516fd0071c53808ddd", "text": "Google will be issuing Class C shares (under the ticker symbol GOOCV) to current GOOG holders in the beginning of April. The Class C shares and Class A shares will then change symbols, with the Class C shares trading under GOOG. This was announced on January 30th. Details are in this benzinga article: Projected Trading Timeline March 27 - April 2 Record Date - Payment Date Class C shares commence trading on March 27 as GOOCV on a when issued basis Class A shares continue to trade as GOOG, with entitlement to Class C shares Class A shares will also trade on an ex-distribution basis, without entitlement to the Class C shares, as GOOAV April 3 EX Date The ticker for the Class A shares will change from GOOG to GOOGL The ticker for the Class C shares will change from GOOCV to GOOG and commence regular way trading The ticker for the Class A shares that traded on an ex-distribution basis - GOOAV - will be suspended", "title": "" }, { "docid": "13aab8dcb42ce054e25ea550940581ae", "text": "Yeah, that's no typo. I could've spelled that name when I was 13, and anybody who's ever laid their hands on a finance book should be able to spell it, let alone somebody who claims to actually work there and to have traded millions on their behalf.", "title": "" }, { "docid": "53715f3693b0a7430d04ed2a85a24a3f", "text": "IRR is the acronym for internal rate of return. And it appears that you do understand how it works. It's not the phrase most investors use for their own returns. I'd typically talk about my own return last year, or over the last decade, etc, as well as what the S&P did during that time, and might even use the term CAGR, compound annual growth rate, although I wouldn't pronounce it 'kegger' or anything like that. Aside from discussing company investments in some MBA class, the only time I'd use IRR is in an excel spreadsheet to calculate the return over time of a series of my own investments. The nothing magic about this, it's a function of an initial dollar investment, time passing, and the final value. All else is addition complexity based on multiple deposits/withdrawals, etc. If I deposit $100 and get back $200 in a year, it's a 100% IRR. Disclosure - I am no fan of Investopedia or re-explaining its wording on these topics. I've caught multiple errors in their articles, and unlike the times I've emailed my friends at the IRS who quickly fix typos and mistakes I've caught, Investopedia authors are no better than bloggers (which I am) who take offense at any criticism (which I do not).", "title": "" }, { "docid": "a2401db5e2cd379a4f06579cf4ee94a6", "text": "\"Not even wrong The phrase \"\"not even wrong\"\" describes any argument that purports to be scientific but fails at some fundamental level, usually in that it contains a terminal logical fallacy or it cannot be falsified by experiment (i.e., tested with the possibility of being rejected), or cannot be used to make predictions about the natural world. The phrase is generally attributed to theoretical physicist Wolfgang Pauli, who was known for his colorful objections to incorrect or sloppy thinking. Rudolf Peierls documents an instance in which \"\"a friend showed Pauli the paper of a young physicist which he suspected was not of great value but on which he wanted Pauli's views. Pauli remarked sadly, 'It is not even wrong'.\"\" This is also often quoted as \"\"That is not only not right; it is not even wrong,\"\" or \"\"Das ist nicht nur nicht richtig; es ist nicht einmal falsch!\"\" in Pauli's native German. * ^[ [^PM](https://www.reddit.com/message/compose?to=kittens_from_space) ^\| [^Exclude ^me](https://reddit.com/message/compose?to=WikiTextBot&message=Excludeme&subject=Excludeme) ^\| [^Exclude ^from ^subreddit](https://np.reddit.com/r/business/about/banned) ^\| [^FAQ ^/ ^Information](https://np.reddit.com/r/WikiTextBot/wiki/index) ^\| [^Source](https://github.com/kittenswolf/WikiTextBot) ^] ^Downvote ^to ^remove ^\| ^v0.24\"", "title": "" }, { "docid": "7edc501f23544a2f09453840525871f2", "text": "Consultant included a passing comment about whether companies were singular or plural. ... Writing about them as a Businesses plural entity seems oddly formal and doesn't look right at all. ... I had this scenario myself when referring to our own company name.", "title": "" }, { "docid": "6afdb629c29baa41d942a71a800817af", "text": "\"I don't think any of us claims pizza is an American creation instead of an Italian one. Pizza is an Italian creation. We are only saying that the regular pizzas they have in the US are mostly non-Italian style, and shouldn't be count as real authentic Italian food. It'd be like saying pastas are an Chinese creation. Pastas was inspired by the Chinese, but the Chinese didn't create pastas, they have [mian] (http://en.wikipedia.org/wiki/Chinese_noodles ), which means noodles. Point is, if someone change something too much and that thing becomes a \"\"new/different\"\" thing, we will call that person the creator and use its terms.\"", "title": "" }, { "docid": "f8a6da48d236e45fd1ced72bdf8bdfaa", "text": "Yes, I see the same problem. Google's version seems to be correct, however.", "title": "" }, { "docid": "9dc01201aa4269618c5e42e2e8990c96", "text": "Both are correct depending on what you are really trying to evaluate. If you only want to understand how that particular investment you were taking money in and out of did by itself than you would ignore the cash. You might use this if you were thinking of replacing that particular investment with another but keeping the in/out strategy. If you want to understand how the whole investment strategy worked (both the in/out motion and the choice of investment) than you would definitely want to include the cash component as that is necessary for the strategy and would be your final return if you implemented that strategy. As a side note, neither IRR or CAGR are not great ways to judge investment strategies as they have some odd timing issues and they don't take into account risk.", "title": "" }, { "docid": "7fa35b3cedda44ab3cc11b982d40296e", "text": "Sedar is I guess the Canadian equivalent of EDGAR. You can find the company's filings there. Here's a picture from their filings. Can't post the link, if you go and find the filing through Sedar you'll know why (it's not as nice a site as EDGAR). The 4.8 million is from unrealized gain on biological assets. So that's what it is. The reason, I think, as to why Operating Income is a positive 2.67 even though Operating Expense and Gross Profit are both negative is because Google Finance backed into Operating Expense. Operating Income is the same between the two sources, it's just the unrealized gain that moves.", "title": "" } ]	fiqa
739c1d6f318f43d859674d8277673fef	Company revenue increased however stock price did not	[ { "docid": "8857170018f503149b7d0033ac8cbc9f", "text": "It's great that you have gotten the itch to learn about the stock market. There are a couple of fundamentals to understand first though. Company A has strong, growing, net earnings and minimal debt, it's trading for $100 per share. Company B has good revenue but high costs of goods and total liabilities well in excess of total assets, it's trading for $0.10 per share. There is no benefit to getting 10,000 shares or 10 shares for your $1,000. Your goal is to invest in companies that have valuable products and services run by competent management teams. Sure, the number of shares you own will dictate what percentage of the company you own, and in a number of cases, your voting power. But even a penny stock will have a market capitalization of several million dollars so voting power isn't really a concern for your $1,000 investment. There is a lot more in the three basic financial statements (Income Statement, Balance Sheet, Statement of Cash Flows) than revenue. Seasoned accountants can have a hard time parsing out where money is coming from and where it's going. In general there are obvious red flags, like a fast declining cash balance against a fast growing liabilities balance or expenses exceeding revenue. While some of these things are common among new and high growth companies, it's not the place for a new investor with a small bankroll. A micro-cap company (penny stocks are in this group) will receive rounds of financing via issuing preferred convertible shares which may include options on more shares. For a company worth $20mm a $5mm financing round can materially change the finances of a company, and will likely dilute your holdings in common stock. Small growth companies need new financing frequently to fund their growth strategies. Revenue went up, great... why? Did you open another store? Did you open another sales office? Did the revenue increase this quarter based on substantially the same operation that existed last quarter or have you increased the capacity of your operation? If you increased the capacity of your operation what was the cost of the increase and did revenue increase as expected? Can you expect revenue to continue to grow at this rate or was it a one time windfall from an unusual order? Sure, there are spectacular gains to be had in penny stocks. XYZ Pharma Research (or whatever) goes from $0.05 to $0.60 and you've turned your $1,000 in to $12,000. This is a really unlikely event... Buying penny stocks is akin to buying lottery tickets. Unless you are a high ranking employee at the company capable of making decisions, or one of the investors buying the preferred shares mentioned in point 3, or are one of the insiders of a pump and dump scam on the stock, penny common stocks are not a place to invest. One could argue that even a company insider should probably avoid buying common stock. Just to illustrate the points above, you mention: Doing some really heavy research into this stock has made me question the whole penny stock market. Based on your research what is the enterprise value of the company? What were the gross proceeds of the last financing round, how many shares were issued and were there any warrants attached? What do you perceive to be heavy research? What background do you have in finance/accounting to give weight to your ability to perform such research? Crawl. Walk. Then run. Don't kid yourself in to thinking that since you have some level of education you understand the contracts involved in enterprise finance.", "title": "" }, { "docid": "d4c78c4740acac8a3570672723509ad4", "text": "looking over some historical data I cannot really a find a case where a stock went from $0.0005 to $1 it almost seem that once a stock crosses a minimum threshold the stock never goes back up. Is there any truth to that? That would be a 2000X (200,000%) increase in the per-share value which would be extraordinary. When looking at stock returns you have to look at percentage returns, not dollar returns. A gain of $1 would be minuscule for Berkshire-Hathaway stock but would be astronomical for this stock,. If the company is making money shouldn't the stock go up? Not necessarily. The price of a stock is a measure of expected future performance, not necessarily past performance. If the earnings had been more that the market expected, then the price might go up, but if the market sees it as an anomaly that won't continue then there may not be enough buyers to move the stock up. looking at it long term would it hurt me in anyway to buy ~100,000 shares which right now would run be about $24 (including to fee) and sit on it? If you can afford to lose all $24 then no, it won't hurt. But I wouldn't expect that $24 to turn into anything higher than about $100. At best it might be an interesting learning experience.", "title": "" }, { "docid": "a36ee337e2db9cb3136d74beb8113185", "text": "The company released its 2nd Quarter Revenue of $1,957,921 a couple days ago however the stock did not move up in any way. Why? If the company is making money shouldn't the stock go up. But that result doesn't indicate that the company is making money. The word for making money is profit, not revenue. Profit equals revenue minus costs. An increasing revenue could mean decreasing profits. For example, marketing expenses could eat up the entirety of the new revenue. This is one of the most basic aspects of researching stocks. If you are having trouble with this, you might find yourself better suited to invest in mutual funds, where they do this research for you. In particular, the safest kind of mutual funds for an inexperienced investor are index funds that track a major index, like the S&P 500. Another issue is that stock prices aren't based on historical results but on expected future results. Many a company has reported smaller than expected profits and had their price fall even though profits increased from previous results. Looking at it long term would it hurt me in anyway to buy ~100,000 shares which right now would run be about $24 (including to fee) and sit on it? It would cost you $24. You might get a return some day. Or you might waste your money. Given the comparatively large upside, the consensus seems to be that you will probably waste your money. That said, it's not a lot of money to waste. So it won't hurt you that much. The most likely result remains that the company will go bankrupt, leaving your stock worthless.", "title": "" }, { "docid": "177520afa3ba3c94f80b068568d73cc0", "text": "\"Note that we do not comment on specific stocks here, and have no place doing so. If your question is only about that specific stock then it is off topic. I have not tried to answer that part below. The key to valuation is predicting the net present value of all of a company's cash flows; i.e. of their future profits and losses. Through a number of methods to long to explain here investment banks and hedge funds work out what they expect the company's cash flows to be and trade so that these future profits, losses etc. are priced into the stock price. Since future cash flows, profits or whatever you want to call them are priced in, the price of a stock shouldn't move at all on an earnings statement. This begs the question \"\"why do some stock prices move violently when they announce earnings?\"\" The models that the institutional investors use are not perfect and cannot take into account everything. An unexpected craze for a product or a supply chain agreement breaking down on not being as good as it seems will not be factored into this pricing and so the price will move based on the degree to which expectation is missed or exceeded. Since penny socks are speculative their value is based far more on the long term expected cash flows and less on the short run cash flows. This goes a long way to explaining why some of the highest market capitalisation penny stocks are those making consistent losses. This means that they can be far less susceptible to price movements after an earnings announcement even if it is well out of the consensus range. Higher (potential) future value comes with the higher risks of penny stocks which discounts current value. In the end if people's expectation of the company's performance reflects reality then the profitability is priced in and there will be no price movement. If the actuality is outside of the expected range then there will be a price movement.\"", "title": "" }, { "docid": "e0032eafca184fb6973d7d72b2f60f85", "text": "If you believe in the efficient market hypothesis then the stock price reflects the information known to market participants. Consequently, if the 'market' expected earnings to rise, and they did, then the price won't change. Clearly there are circumstances, especially in the short term and for illiquid stocks, where this isn't true, but a lot of work points to this being the case on average.", "title": "" }, { "docid": "9e358688d39c4c6a8e315a4c826146db", "text": "\"The company released its 2nd Quarter Revenue of $1,957,921 a couple days ago however the stock did not move up in any way. Why? If the company is making money shouldn't the stock go up. During the time between earnings announcements, analysts occasionally publish their assessment of a company, including their estimate of the company's value and future earnings. And as part of an earnings report, companies often include \"\"guidance\"\": their prediction for the upcoming quarter (this will frequently be a conservative estimate, so they're more likely to achieve it). Investors make their purchase and sale decisions based on this information. When the earnings report comes out, investors compare these actual returns to analysts' predictions and the company's guidance. If their results are in line with these predictions, the stock price is unlikely to move much, as those results are already incorporated into the stock price. If the company is doing better than predicted, it's usually a good sign, and the price often rises; conversely, if it's doing worse, the price will likely fall. But it's not as simple as this. As others have explained, for long-term investors, stock prices are based on expectations of future activity. If the results of that quarter include some one-time actions that are unlikely to repeat, investors will often discount that portion.\"", "title": "" } ]	[ { "docid": "b630929af30262fb03a36642052d7bd0", "text": "Stock prices are set by the market - supply and demand. See Apple for example, which is exactly the company you described: tons of earnings, zero dividends. The stock price goes up and down depending on what happens with the company and how investors feel about it, and it can happen that the total value of the outstanding stock shares will be less than the value of the underlying assets of the company (including the cash resulted from the retained earnings). It can happen, also, that if the investors feel that the stock is not going to appreciate significantly, they will vote to distribute dividends. Its not the company's decision, its the board's. The board is appointed by the shareholders, which is exactly why the voting rights are important.", "title": "" }, { "docid": "fefbfd0d0f389f36234a8dfca1e4479a", "text": "Let's say the company has a million shares valued at $10 each, so market caps is $10 million dollar = $10 per share. Actual value of the company is unknown, but should be close to that $10 million if the shares are not overvalued or undervalued. If they issue 100,000 more shares at $10 each, the buyers pay a million dollar. Which goes into the bank account of the company. Which is now worth a million dollar more than before. Again, we don't know what it is worth, but the market caps should go up to $11 million dollar. And since you have now 1,100,000 shares, it's still $10 per share. If the shares are sold below or above $10, then the share price should go down or up a bit. Worst case, if the company needs money, can't get a loan, and sells 200,000 shares for $5 each to raise a million dollars, there will be suspicion that the company is in trouble, and that will affect the share price negatively. And of course the share price should have dropped anyway because the new value is $11,000,000 for $1,200,000 shares or $9.17 per share.", "title": "" }, { "docid": "69997fc43a30d7d136f11e2c6cccf3ba", "text": "Initially, Each company has 10k shares. Company B has $500k money and possibly other assets. Every company has stated purpose. It can't randomly buy shares in some other firm. Company A issued 5k new shares, which gives it $500k money. Listed companies can't make private placements without regulatory approvals. They have to put this in open market via Public issue or rights issue. Company B does the same thing, issuing 5k shares for $500k money. Company A bought those 5k shares using the $500k it just got There is no logical reason for shareholder of Company B to raise 5K from Company A for the said consideration. This would have to increase.", "title": "" }, { "docid": "442ed4cce3fedeeeb99c73feb326f40b", "text": "Not necessarily. You only need to raise prices to maintain current profit margins. Assuming you aren't living on a paper thin profit margin, you can give your employees a raise and suffer a lower profit margin. Now, that could have other negative consequences on your stock value and shareholders might be upset, but that is a different discussion.", "title": "" }, { "docid": "5f818a172800ab3e8c4068baf50271cc", "text": "The short answer to your question is yes. Company performance affects stock price only through investors' views. But note that selling for higher and lower prices when the company is doing well or poorly is not an arbitrary choice. A stock is a claim on the future cash flows of the firm, which ultimately come from its future profits. If the company is doing well, investors will likely expect that there will large cash flows (dividends) in the future and be willing to pay more to hold it (or require more to sell it). The price of a stock is equal what people think the future dividends are worth. If market participants started behaving irrationally, like not reacting to changes in the expected future cash flows, then arbitrageurs would make a ton of money trading against them until the situation was rectified.", "title": "" }, { "docid": "3226b984a2e3f7ed89feb25f3e373bf9", "text": "\"Probably the biggest driver of the increased volumes that day was a change in sentiment towards the healthcare sector as a whole that caused many healthcare companies to experience higher volumes ( https://www.bloomberg.com/press-releases/2017-07-11/asset-acquisitions-accelerate-in-healthcare-sector-boosting-potential-revenue-growth ). Following any spike, not just sentiment related spikes, the market tends to bounce back to about where it had been previously as analysts at the investment banks start to see the stock(s) as being overbought or oversold. This is because the effect of a spike on underlying ratios such as the Sharpe ratio or the PE ratio makes the stock look less attractive to buyers and more attractive to sellers, including short sellers. Note, however, that the price is broadly still a little higher than it was before the spike as a result of this change in sentiment. Looking at the price trends on Bloomberg (https://www.bloomberg.com/quote/CDNA:US) the price had been steadily falling for the year prior to the spike but was levelling out at just over $1 in the few months immediately prior to the spike. The increased interest in the sector and the stock likely added to a general change in the direction of the price trend and caused traders (as opposed to investors) to believe that there was a change in the price trend. This will have lead to them trading the stock more heavily intraday exacerbating the spike. Note that there traders will include HFT bots as well as human traders. You question the legality of this volume increase but the simple answer is that we may never know if it was the target of traders manipulating the price or a case of insider trading. What we can see is that (taking \"\"animal spirits\"\" into account) without any evidence of illegality there are plenty of potential reasons why the spike may have occurred. Spikes are common where traders perceive a change in a trend as they rush to cash in on the change before other traders can and then sell out quickly when they realise that the price is fundamentally out of sync with the firm's underlying position. You yourself say that you have been watching the stock for some time and, by that fact alone, it is likely that others are for the same reasons that you are. Otherwise you wouldn't be looking at it. Where people are looking at a stock expecting it to take off or drop you expect volatility and volatility means spikes!\"", "title": "" }, { "docid": "69e4603c713071cd9e01609a98732949", "text": "Stock trading (as opposed to IPO) doesn't directly benefit the company. But it affects their ability to raise additional funds; if they're valued higher, they don't need to sell as many shares to raise a given amount of money. And the stockholders are part owners of the company; their votes in annual corporate meetings and the like can add up to a substantial influence on the company's policies, so the company has an interest in keeping them (reasonably) happy. Dividends (distributing part of the company's profits to the stockholders) are one way of doing so. You're still investing in the company. The fact that you're buying someone else's share just means you're doing so indirectly, and they're dis-investing at the same time.", "title": "" }, { "docid": "34cde1e8bd12eb8855f66997fb014b0c", "text": "Without reading the source, from your description it seems that the author believes that this particular company was undervalued in the marketplace. It seems that investors were blinded by a small dividend, without considering the actual value of the company they were owners of. Remember that a shareholder has the right to their proportion of the company's net value, and that amount will be distributed both (a) in the form of dividends and (b) on liquidation of the company. Theoretically, EPS is an indication of how much value an investor's single share has increased by in the year [of course this is not accurate, because accounting income does not directly correlate with company value increase, but it is a good indicator]. This means in this example that each share had a return of $10, of which the investors only received $1. The remainder sat in the company for further investment. Considering that liquidation may never happen, particularly within the time-frame that a particular investor wants to hold a share, some investors may undervalue share return that does not come in the form of a dividend. This may or may not be legitimate, because if the company reinvests its profits in poorer performing projects, the investors would have been better off getting the dividend immediately. However some value does need to be given to the non-dividend ownership of the company. It seems the author believes that investors failing to consider value of the non-dividend part of the corporation's shares in question led to an undervaluation of the company's shares in the market.", "title": "" }, { "docid": "13741d54162a9c82b58e040a60a81243", "text": "There are two main ways you can make money through shares: through dividends and through capital gains. If the company is performing well and increasing profits year after year, its Net Worth will increase, and if the company continues to beat expectations, then over the long term the share price will follow and increase as well. On the other hand, if the company performs poorly, has a lot of debt and is losing money, it may well stop paying dividends. There will be more demand for stocks that perform well than those that perform badly, thus driving the share price of these stocks up even if they don't pay out dividends. There are many market participants that will use different information to make their decisions to buy or sell a particular stock. Some will be long term buy and hold, others will be day traders, and there is everything in between. Some will use fundamentals to make their decisions, others will use charts and technicals, some will use a combination, and others will use completely different information and methods. These different market participants will create demand at various times, thus driving the share price of good companies up over time. The annual returns from dividends are often between 1% and 6%, and, in some cases, up to 10%. However, annual returns from capital gains can be 20%, 50%, 100% or more. That is the main reason why people still buy stocks that pay no dividends. It is my reason for buying them too.", "title": "" }, { "docid": "e1574c4d21cc1b9e86643ae46e4b73c1", "text": "\"It means that the company earned 15 cents per share in the most recently reported quarter. Share price may or not be affected, depending on how buyers and sellers value the company. Just because profits \"\"jumped,\"\" does not mean the shares will follow suit. An increase in profits may have already been priced into the stock, or the market expected the increase in profit to be even higher. As the shareholder, you don't actually get any of these profits into your hands, unless the company pays out a portion of these profits as a dividend.\"", "title": "" }, { "docid": "96085ed5e9764b4c6311102d80047902", "text": "Ideally, stock price reflects the value of the company, the dividends it is expected to pay, and what people expect the future value of the company to be. Only one of those (maybe one and a half) is related to current sales, and not always directly. Short-term motion of a stock is even less directly linked, since it also reflects previous expectations. A company can announce disappointing sales and see its stock go up, if the previous price was based on expecting worse news.", "title": "" }, { "docid": "b152e7bee118585712db496fe8c45a9d", "text": "There are a few reason why share prices increase or decrease, the foremost is expectation of the investors that the company/economy will do well/not well, that is expectation of profit/intrinsic value growth over some time frame (1-4 qtrs.)there is also demand & supply mismatch over (usually) short time. If you really see, the actual 'value' of a company is it's net-worth (cash+asset+stock in trade+brand value+other intangibles+other incomes)/no of shares outstanding, which (in a way) is the book value, then all shares should trade at their book value, the actual number but it does not, the expectation of investors that a share would be purchased by another investor at a higher price because the outlook of the company over a long time is good.", "title": "" }, { "docid": "04981ace31d06259a6ce292baf8a6279", "text": "I expected a word or two on the price elasticity of demand here :) Andrey, Your question needs slight revision in its current form. Rising prices actually do not mean increased profitability for a company. The quantity they sell also pays a huge part and actually is correlated to the price at which they sell the goods (and other factors such as the price at which their competitor sells the goods etc., but we will ignore it for simplicity). The net profit of sales for any firm is equal to (Qty x Sale Price) - COGS - SG&A - taxes - other expenses where, COGS means cost of goods sold SG&A means sales, general and admin costs (e.g., cleaning the inventory storage area daily so that the goods stay fresh etc.) other expenses include any miscellaneous other costs that the firm incurs to make the sale. Now, if everything in that equation remains same (COGS, SG&A, taxes, and other expenditures), rising prices will only translate into a higher profit if the quantity does not fall by the same margin. Prices may also rise simply as a response to risking COGS, SG&A or other expenditures --the latter may be observed in inflationary environments. In such a case, the supplying firm can end up losing its profit margin if the quantity falls by more than the price rise.", "title": "" }, { "docid": "bd59a0d6be04b9e7ff8cc04436d98108", "text": "\"What does it mean in terms of share price? Should the share price increase by 15 cents? No, but you're on the right track. In theory, the price of a share reflects it's \"\"share\"\" of time discounted future earnings. To put it concretely, imagine a company consistently earning 15 cents a share every year and paying it all out as dividends. If you only paid 25 cents for it, you could earn five cents a share by just holding it for two years. If you imagine that stocks are priced assuming a holding period of 20 years or so, so we'd expect the stock to cost less than 3 dollars. More accurately, the share price reflects expected future earnings. If everyone is assuming this company is growing earnings every quarter, an announcement will only confirm information people have already been trading based on. So if this 15 cents announcement is a surprise, then we'd expect the stock price to rise as a function of both the \"\"surprise\"\" in earnings, and how long we expect them to stay at this new profitability level before competition claws their earnings away. Concretely, if 5 cents a share of that announcement were \"\"earnings surprise,\"\" you'd expect it to rise somewhere around a dollar.\"", "title": "" }, { "docid": "340b75b1e37eecd052b891c6d5bbe629", "text": "Inflation can be a misleading indicator. Partly because it is not measured as a function of the change in prices of everything in the economy, just the basket of goods deemed essential. The other problem is that several things operate on it, the supply of money, the total quantity of goods being exchanged, and the supply of credit. Because the supply of goods divides - as more stuff is available prices drop - it's not possible to know purely from the price level, if prices are rising because there's an actual shortage (say a crop failure), or simply monetary expansion. At this point it also helps to know that the total money supply of the USA (as measured by total quantity of money in bank deposits) doubles every 10 years, and has done that consistently since the 1970's. USA Total Bank Deposits So I would say Simon Moore manages to be right for the wrong reasons. Despite low inflation, cash holdings are being proportionally devalued as the money supply increases. Most of the increase, is going into the stock market. However, since shares aren't included in the measures of inflation, then it doesn't influence the inflation rate. Still, if you look at the quantity of shares your money will buy now, as opposed to 5 years ago, it's clear that the value of your money has dropped substantially. The joker in the pack is the influence of the credit supply on the price level.", "title": "" } ]	fiqa
73fe4864135fd027ea0733b5c7e2e222	First time investing advice (Canada)	[ { "docid": "af4dbc0ed1f473214c1b014c4152a01e", "text": "Question One: Question Two: Your best reference for this would be a brokerage account with data privileges in the markets you wish to trade. Failing that, I would reference the Chicago Mercantile Exchange Group (CME Group) website. Question Three: Considering future tuition costs and being Canadian, you are eligible to open a Registered Education Savings Plan (RESP). While contributions to this plan are not tax deductible, any taxes on income earned through investments within the fund are deferred until the beneficiary withdraws the funds. Since the beneficiary will likely be in a lower tax bracket at such a time, the sum will likely be taxed at a lower rate, assuming that the beneficiary enrolls in a qualifying post secondary institution. The Canadian government also offers the Canada Education Savings Grant (CESG) in which the federal government will match 20% of the first $2500 of your annual RESP contribution up to a maximum of $500.", "title": "" }, { "docid": "8fee664c9a7b1e8ea08585dd44b8f382", "text": "Two to three years? That is one long gestation period! :^) Welcome. Congratulations on taking savings into your own hands, you are a winner for taking responsibility for your, and your family's life. If I was you my first priority would be to pay off your car and never buy one on time again. Or you could sell it and buy something with cash if that would be easier. It is tremendous that you are thinking and planning. You are already ahead of most people. Are you working on your basement as you have time/money like when work might be slow? If so great idea.", "title": "" } ]	[ { "docid": "6733d9bb2f5cf453abc85a901eb8cb9f", "text": "It's a good question, I am amazed how few people ask this. To summarise: is it really worth paying substantial fees to arrange a generic investment though your high street bank? Almost certainly not. However, one caveat: You didn't mention what kind of fund(s) you want to invest in, or for how long. You also mention an “advice fee”. Are you actually getting financial advice – i.e. a personal recommendation relating to one or more specific investments, based on the investments' suitability for your circumstances – and are you content with the quality of that advice? If you are, it may be worth it. If they've advised you to choose this fund that has the potential to achieve your desired returns while matching the amount of risk you are willing to take, then the advice could be worth paying for. It entirely depends how much guidance you need. Or are you choosing your own fund anyway? It sounds to me like you have done some research on your own, you believe the building society adviser is “trying to sell” a fund and you aren't entirely convinced by their recommendation. If you are happy making your own investment decisions and are merely looking for a place to execute that trade, the deal you have described via your bank would almost certainly be poor value – and you're looking in the right places for an alternative. ~ ~ ~ On to the active-vs-passive fund debate: That AMC of 1.43% you mention would not be unreasonable for an actively managed fund that you strongly feel will outperform the market. However, you also mention ETFs (a passive type of fund) and believe that after charges they might offer at least as good net performance as many actively managed funds. Good point – although please note that many comparisons of this nature compare passives to all actively managed funds (the good and bad, including e.g. poorly managed life company funds). A better comparison would be to compare the fund managers you're considering vs. the benchmark – although obviously this is past performance and won't necessarily be repeated. At the crux of the matter is cost, of course. So if you're looking for low-cost funds, the cost of the platform is also significant. Therefore if you are comfortable going with a passive investment strategy, let's look at how much that might cost you on the platform you mentioned, Hargreaves Lansdown. Two of the most popular FTSE All-Share tracker funds among Hargreaves Lansdown clients are: (You'll notice they have slightly different performance btw. That's a funny thing with trackers. They all aim to track but have a slightly different way of trading to achieve it.) To hold either of these funds in a Hargreaves Lansdown account you'll also pay the 0.45% platform charge (this percentage tapers off for portolio values higher than £250,000 if you get that far). So in total to track the FTSE All Share with these funds through an HL account you would be paying: This gives you an indication of how much less you could pay to run a DIY portfolio based on passive funds. NB. Both the above are a 100% equities allocation with a large UK companies weighting, so won't suit a lower risk approach. You'll also end up invested indiscriminately in eg. mining, tobacco, oil companies, whoever's in the index – perhaps you'd prefer to be more selective. If you feel you need financial advice (with Nationwide) or portfolio management (with Nutmeg) you have to judge whether these services are worth the added charges. It sounds like you're not convinced! In which case, all the best with a low-cost passive funds strategy.", "title": "" }, { "docid": "d4ad0c93e416a8ca9c94448e846829a7", "text": "Also, my wealth manager doesn't like to discuss my money with me. To some extent, I understand this because finances are not my forte This is akin to porn surfing all day at your job instead of writing code, fire him ASAP. For now I would stick it in a bank account until you are comfortable and understand the investments you are purchasing. Here are some options to consider: The last one is tricky. You might have to interview several in order to find that one gem. With you being so young it is unlikely any of your friends have a need for such a service. I would concentrate on asking older work colleagues or friends of your parents for recommendations. Ask if they are educated by their adviser. In the end it would really pay for you to educate yourself about finances. No one can quite do as good as a job as you can in this area. You recognize that there was a problem with your current guy, that shows wisdom. If you have an interest in this area, I would recommend attending a Financial Peace University class. All my kids (about your age and older) are required to take it. It will help you navigate debt, mortgages, insurance, and investing and will cost you about $100. If you don't learn enough the first time, and you won't, you can repeat the course as many times as you wish for no additional cost.", "title": "" }, { "docid": "f3e87d9a566a713b82cacb81f7052be9", "text": "You say you have 90% in stocks. I'll assume that you have the other 10% in bonds. For the sake of simplicity, I'll assume that your investments in stocks are in nice, passive indexed mutual funds and ETFs, rather than in individual stocks. A 90% allocation in stocks is considered aggressive. The problem is that if the stock market crashes, you may lose 40% or more of your investment in a single year. As you point out, you are investing for the long term. That's great, it means you can rest easy if the stock market crashes, safe in the hope that you have many years for it to recover. So long as you have the emotional willpower to stick with it. Would you be better off with a 100% allocation in stocks? You'd think so, wouldn't you. After all, the stock market as a whole gives better expected returns than the bond market. But keep in mind, the stock market and the bond market are (somewhat) negatively correlated. That means when the stock market goes down, the bond market often goes up, and vice versa. Investing some of your money in bonds will slightly reduce your expected return but will also reduce your standard deviation and your maximum annual loss. Canadian Couch Potato has an interesting write-up on how to estimate stock and bond returns. It's based on your stocks being invested equally in the Canadian, U.S., and international markets. As you live in the U.S., that likely doesn't directly apply to you; you probably ignore the Canadian stock market, but your returns will be fairly similar. I've reproduced part of that table here: As you can see, your expected return is highest with a 100% allocation in stocks. With a 20 year window, you likely can recover from any crash. If you have the stomach for it, it's the allocation with the highest expected return. Once you get closer to retirement, though, you have less time to wait for the stock market to recover. If you still have 90% or 100% of your investment in stocks and the market crashes by 44%, it might well take you more than 6 years to recover. Canadian Couch Potato has another article, Does a 60/40 Portfolio Still Make Sense? A 60/40 portfolio is a fairly common split for regular investors. Typically considered not too aggressive, not too conservative. The article references an AP article that suggests, in the current financial climate, 60/40 isn't enough. Even they aren't recommending a 90/10 or a 100/0 split, though. Personally, I think 60/40 is too conservative. However, I don't have the stomach for a 100/0 split or even a 90/10 split. Okay, to get back to your question. So long as your time horizon is far enough out, the expected return is highest with a 100% allocation in stocks. Be sure that you can tolerate the risk, though. A 30% or 40% hit to your investments is enough to make anyone jittery. Investing a portion of your money in bonds slightly lowers your expected return but can measurably reduce your risk. As you get closer to retirement and your time horizon narrows, you have less time to recover from a stock market crash and do need to be more conservative. 6 years is probably too short to keep all your money in stocks. Is your stated approach reasonable? Well, only you can answer that. :)", "title": "" }, { "docid": "b272448378e112e1a1d362916c9b7bdf", "text": "There are three basic concepts finance (as far as I'm concerned). Liquidity is basically an asset's spendability. Assets range in liquidity from cash (very liquid) to real estate (not very liquid). You can spend cash immediately, while real estate must first be converted to cash. Another important concept is your time horizon. When do you need your money. Money you need in the near term should be kept in very liquid assets, while money you won't need for a significantly long time can be tied in to something much less liquid. Volatility is the degree to which an assets value is predictable from day to day. Cash and guaranteed savings accounts have very low volatility, while a stock portfolio will fluctuate in value from day to day, sometimes a lot and sometimes you can lose your initial investment. So really, you need to determine what you need or want this money for, and depending on when you'll need it you can make decisions about whether or not to invest it, or keep it in a savings account, or keep it in literal actual cash. Your TFSA is maxed for the year, so that's out. Do you have an emergency fund? Do you want to travel or have other more near term desires that cost money? If you have a solid financial foundation and already have an emergency fund, you may want to set up a brokerage account and invest in an index fund. You should not invest money in the stock market unless you are ready to leave it there for at least a few years. Stocks are volatile but over a long enough period the market generally goes up. In your search for the right index fund, watch out for fees. Most big brokers will have a list of funds you can invest in with no up front fees and no commission. The fund itself will charge an expense ratio, look for an index fund with an expense ratio around 0.10%. This means you'll pay 0.10% of your holdings each year to the fund manager. No matter how much money we're talking about, I wouldn't put more than half in the market. Dip your toe in, get used to the value fluctuating. Don't start reading about technical analysis and derivative trading. Just put your money in a very low fee big market index and let it ride.", "title": "" }, { "docid": "5334ecb10e7edc640226aeaf0b65475b", "text": "\"I'm a little confused on the use of the property today. Is this place going to be a personal residence for you for now and become a rental later (after the mortgage is paid off)? It does make a difference. If you can buy the house and a 100% LTV loan would cost less than 125% of comparable rent ... then buy the house, put as little of your own cash into it as possible and stretch the terms as long as possible. Scott W is correct on a number of counts. The \"\"cost\"\" of the mortgage is the after tax cost of the payments and when that money is put to work in a well-managed portfolio, it should do better over the long haul. Don't try for big gains because doing so adds to the risk that you'll end up worse off. If you borrow money at an after-tax cost of 4% and make 6% after taxes ... you end up ahead and build wealth. A vast majority of the wealthiest people use this arbitrage to continue to build wealth. They have plenty of money to pay off mortgages, but choose not to. $200,000 at 2% is an extra $4000 per year. Compounded at a 7% rate ... it adds up to $180k after 20 years ... not exactly chump change. Money in an investment account is accessible when you need it. Money in home equity is not, has a zero rate of return (before inflation) and is not accessible except through another loan at the bank's whim. If you lose your job and your home is close to paid off but isn't yet, you could have a serious liquidity issue. NOW ... if a 100% mortgage would cost MORE than 125% of comparable rent, then there should be no deal. You are looking at a crappy investment. It is cheaper and better just to rent. I don't care if prices are going up right now. Prices move around. Just because Canada hasn't seen the value drops like in the US so far doesn't mean it can't happen in the future. If comparable rents don't validate the price with a good margin for profit for an investor, then prices are frothy and cannot be trusted and you should lower your monthly costs by renting rather than buying. That $350 per month you could save in \"\"rent\"\" adds up just as much as the $4000 per year in arbitrage. For rentals, you should only pull the trigger when you can do the purchase without leverage and STILL get a 10% CAP rate or higher (rate of return after taxes, insurance and other fixed costs). That way if the rental rates drop (and again that is quite possible), you would lose some of your profit but not all of it. If you leverage the property, there is a high probability that you could wind up losing money as rents fall and you have to cover the mortgage out of nonexistent cash flow. I know somebody is going to say, \"\"But John, 10% CAP on rental real estate? That's just not possible around here.\"\" That may be the case. It IS possible somewhere. I have clients buying property in Arizona, New Mexico, Alberta, Michigan and even California who are finding 10% CAP rate properties. They do exist. They just aren't everywhere. If you want to add leverage to the rental picture to improve the return, then do so understanding the risks. He who lives by the leverage sword, dies by the leverage sword. Down here in the US, the real estate market is littered with corpses of people who thought they could handle that leverage sword. It is a gory, ugly mess.\"", "title": "" }, { "docid": "8a40781c6cc6216df49c39206af5610c", "text": "\"Thanks for the info, things are starting to make more sense now. For some reason I've always neglected learning about investments, now that Im in a position to invest (and am still fairly young) I'm motivated to start learning. As for help with TD Ameritrade, I was looking into Index Funds (as another commenter mentioned that I should) on their site and am a little overwhelmed with the options. First, I'm looking at Mutual Funds, going to symbol lookup and using type = \"\"indeces\"\". I'm assuming that's the same thing as an \"\"Index Fund\"\" but since the language is slightly different I'm not 100% sure. However, at that point I need some kind of search for a symbol in order to see any results (makes sense, but I dont know where to start looking for \"\"good\"\" index funds). So my first question is: If I FIND a good mutual fund, is it correct to simply go to \"\"Buy Mutual Funds\"\" and find it from there? and if so, my second question is: How do I find a good mutual fund? My goal is to have my money in something that will likely grow faster than a savings account. I don't mind a little volatility, I can afford to lose my investment, I'd plan on leaving my money in the fund for a several years at least. My last question is: When investing in these types of funds (or please point me in another direction if you think Index Funds aren't the place for me to start) should I be reinvesting in the funds, or having them pay out dividends? I would assume that reinvesting is the smart choice, but I can imagine situations that might change that in order to mitigate risk...and as I've said a few times in this thread including the title, I'm a complete amateur so my assumptions aren't necessarily worth that much. Thanks for the help, I really appreciate all the info so far.\"", "title": "" }, { "docid": "b676d3564243694c56c2b6b740d1dbc1", "text": "Loads of financial advisors advise holding index funds they may advise other things as well, but low fee index funds are a staple portfolio item. I can't speak to the particulars of Canada, but in the US you would just open a brokerage account (or IRA or SEP IRA in the case of a small business owner) and buy a low cost S&P index ETF or low/no fee/commission S&P index mutual fund. There's no magic to it. Some examples in no particular order are, Vanguard's VOO, Schwab's SWPPX, and iShares' IVV. There are also Canadian index equities like Vanguard's VCN and iShare's XIC.", "title": "" }, { "docid": "97e49717c8dda5b822088b6193afffef", "text": "I am a firm believer in TD's e-series funds. No other bank in Canada has index funds with such low management fees. Index funds offer the flexibility to re-balance your portfolio every month without the need to pay commission fees. Currently I allocate 10% of my paycheck to be diversified between Canadian, US, and International e-series index funds. In terms of just being for beginners, this opinion is most likely based on the fact that an e-series portfolio is very easy to manage. But this doesn't mean that it is only for beginners. Sometimes the easiest solution is the best one! :)", "title": "" }, { "docid": "e6d3eca19328b083b8a1a91f52924c39", "text": "Note, the main trade off here is the costs of holding cash rather than being invested for a few months vs trading costs from trading every month. Let's start by understanding investing every month vs every three months. First compare holding cash for two months (at ~0% for most Canadians right now) and then investing on the third month vs being invested in a single stock etf (~5% annually?). At those rates she is forgoing equity returns of around These costs and the $10 for one big trade give total costs of $16+$8+$10=$34 dollars. If you were to trade every month instead there would be no cost for not being invested and the trading costs over three months would just be 3*$10=$30. So in this case it would be better to trade monthly instead of every three months. However, I'm guessing you don't trade all $2000 into a single etf. The more etfs you trade the more trading more infrequently would be an advantage. You can redo the above calculations spliting the amount across more etfs and including the added trading costs to get a feel for what is best. You can also rotate as @Jason suggests but that can leave you unbalanced temporarily if not done carefully. A second option would be to find a discount broker that allows you to trade the etfs you are interested in for free. This is not always possible but often will be for those investing in index funds. For instance I trade every month and have no brokerage costs. Dollar cost averaging and value averaging are for people investing a single large amount instead of regular monthly amounts. Unless the initial amount is much much larger than the monthly amounts this is probably not worth considering. Edit: Hopefully the above edits will clarify that I was comparing the costs (including the forgone returns) of trading every 3 months vs trading every month.", "title": "" }, { "docid": "de18fec08e2cf256ee9a77dc22541ab7", "text": "If your requirements are hard (must have $1000/month, must have the same or bigger in capital at the end), stocks are a poor choice of investment. However, in many cases, people are willing to tolerate some level of risk to achieve the expected returns. You also do not mention inflation, which can take quite a lot out of your portfolio over the course of ten years. If we make some simplifying assumptions, you want to generate $12,000 a year. You can realistically expect the (whole) stock market, long term (i.e. over time periods substantially longer than 10 years), to return approximately 4 - 5% after factoring in inflation. That means an investment of $240,000 - $300,000 (the math is simplified somewhat here). If you don't care about inflation, you can up the percentage rather somewhat. According to this article, the S&P 500 returned an average of 11.31% from 1928 through 2010 (not factoring in inflation), which would require an investment of approximately $106,100. But! This opens you up to substantial risk. The stock market may go down 30% this year! According to the above article, the S&P returned only 3.54% from 2001 to 2010. Long-term, it goes up, but your investment case is really unsuited to investing in an index to the entire stock market given your requirements. You may be better suited investing primarily in stable bonds, or perhaps a mix of bonds and stocks. Alternatively, you may want to consider even more stable investments such as treasury notes. Treasury notes are all but guaranteed, but with a lousy rate of return. Heck, you could consider a GIC (that may be Canada-only) or even a savings account. There's also the possibility of purchasing an annuity, though almost everyone will advise against such. Personally, I'd go for a mutual fund which invested approximately 70% bonds and the rest in stocks over such a time period. Something like ING Direct's Streetwise Balanced Income Portfolio, if you were in Canada. It substantially lowers your expected return but also lowers your risk. I can't honestly say what the expected return there is; at this point, it's returned 4% per year (before inflation), but has been around only since the beginning of 2008. And to be clear, this is absolutely not free of risk.", "title": "" }, { "docid": "9c18093cba429319b80d538cd41a3589", "text": "> Theoretically you'd expect the exchange rate to move against you enough to make this a bad investment. Actually, the theoretical and intentional expectation is that the currency with the highest interest rate should appreciate even more. Canada has traditionally offered an interest rate premium over the US specifically to help the strength of its currency and attract capital to stay there. > In reality this doesn't happen Because carry trades/fx have so little margin requirements, and so many speculators on one side of the trade, there is a significant short squeeze risk any time there is a de-risking shock to the economy. Any unwinding impulse, scares other carry trade participants to unwind, and then forces many more to unwind.", "title": "" }, { "docid": "5055129e03954ba06bc3c85dc6e8e039", "text": "Just saw the update: Here's some ETFs for Canada from Vanguard.", "title": "" }, { "docid": "3632c7f94df6bb7ea3ee39992fc0aa13", "text": "I recommend that people think for themselves and get a multitude of counselors. The more you understand about what drives the prices of various assets, the better. Getting to good advice for a particular person depends on the financial picture for that person. For example, if they have a lot of consumer debt, then they probably would be better off paying off the debt before investing, as earning 5% (say) in the stock market year over year will be eaten up by the 18%+ they may be paying on their credit cards. Here's a starter list of the types of information that would be better to have in order to get fair investment advice.", "title": "" }, { "docid": "0426f28fe3338906029840877b17c603", "text": "I think the OP is getting lost in designations. Sounds to me that what he wants is a 'financial advisor' not an 'investment advisor'. Does he even have investments? Does he want to be told which securities to buy? Or is he wanting advice on overall savings, insurance, tax-shelters, retirement planning, mortgages, etc. Which is a different set of skills - the financial advisor skill set. Accountants don't have that skill set. They know operating business reporting, taxes and generally how to keep it healthy and growing. They can do personal tax returns (as a favour to only the owners of the business they keep track of usually). IMO they can deal with the reporting but not the planning or optimization. But IMO the OP should just read up and learn this stuff for himself. Accreditation mean nothing. Eg. the major 'planner' brand teaches factually wrong stuff about RRSPs - which are the backbone of Canadian's finances.", "title": "" }, { "docid": "9ddbb2ab2f56ca83404d5538de734baa", "text": "I had an RRSP account with a managed services account at a major Cdn bank that increased its fees to $125 a year per account. Because I could not trade any of my funds living in the US, it made no sense to throw away $500 a year for nothing (two accounts for me and two accounts for my wife - regular RRSP and locked in RRSP). I was able to move all my accounts to TD discount brokerage without any issue. I did this two years ago.", "title": "" } ]	fiqa
ed73dfae46cd118e4118a77091d7bee8	Calculate investment's interest rate to break-even insurance cost [duplicate]	[ { "docid": "d2fbc5dc05a3d6d3b2e81994ca5c3e12", "text": "I believe the following formula provides a reasonable approximation. You need to fill in the following variables: The average annual return you need on investing the 15% = (((MP5 - MP20) * 12) + (.0326 * .95 * PP / Y)) / (PP *.15) Example assuming an interest rate of 4% on a 100K home: If you invest the $15K you'll break even if you make a 9.86% return per year on average. Here's the breakdown per year using these example numbers: Note this does not consider taxes.", "title": "" }, { "docid": "e87cf009a427c288022fcb9eaf253bed", "text": "You are comparing a risk-free cost with a risky return. If you can tolerate that level of risk (the ups and downs of the investment) for the chance that you'll come out ahead in the long-run, then sure, you could do that. So the parameters to your equation would be: If you assume that the risky returns are normally distributed, then you can use normal probability tables to determine what risk level you can tolerate. To put some real numbers to it, take the average S&P 500 return of 10% and standard deviation of 18%. Using standard normal functions, we can calculate the probability that you earn more than various interest rates: so even with a low 3% interest rate, there's roughly a 1 in 3 chance that you'll actually be worse off (the gains on your investments will be less than the interest you pay). In any case there's a 3 in 10 chance that your investments will lose money.", "title": "" }, { "docid": "a7d5b691576bed42753b3bcb59f598f8", "text": "I wouldn't call it apples and oranges. This is literally an opportunity cost calculation. You can safely assume S&P500 will perform at least 11% over any 10 year period. Since failing companies are delisted and replaced with new growing companies, the market should continue to grow. No, it's not guaranteed. Lets use an aggressive number for inflation, 4%, leaving a 7% ROR estimate for S&P500. I assume OP has better credit than me, assume a rate around 3.5%. So it looks like net 3.5% ROR. The PMI erases that. You have to continue paying it until you pay off the loan. Put 20% down, get a 15 year fixed at lowest rate. Pay it off quicker.", "title": "" } ]	[ { "docid": "1df8591be32d4babf6b7a50426ebacda", "text": "Yes - it's called the rate of inflation. The rate of return over the rate of inflation is called the real rate of return. So if a currency experiences a 2% rate of inflation, and your investment makes a 3% rate of return, your real rate of return is only 1%. One problem is that inflation is always backwards-looking, while investment returns are always forward-looking. There are ways to calculate an expected rate of inflation from foreign exchange futures and other market instruments, though. That said, when comparing investments, typically all investments are in the same currency, so the effect of inflation is the same, and inflation makes no difference in a comparative analysis. When comparing investments in different currencies, then the rate of inflation may become important.", "title": "" }, { "docid": "772da6197e39317935aba6165983c49b", "text": "\"The question that I walk away with is \"\"What is the cost of the downside protection?\"\" Disclaimer - I don't sell anything. I am not a fan of insurance as an investment, with rare exceptions. (I'll stop there, all else is a tangent) There's an appeal to looking at the distribution of stock returns. It looks a bit like a bell curve, with a median at 10% or so, and a standard deviation of 15 or so. This implies that there are some number of years on average that the market will be down, and others, about 2/3, up. Now, you wish to purchase a way of avoiding that negative return, and need to ask yourself what it's worth to do so. The insurance company tells you (a) 2% off the top, i.e. no dividends and (b) we will clip the high end, over 9.5%. I then am compelled to look at the numbers. Knowing that your product can't be bought and sold every year, it's appropriate to look at 10-yr rolling returns. The annual returns I see, and the return you'd have in any period. I start with 1900-2012. I see an average 9.8% with STD of 5.3%. Remember, the 10 year rolling will do a good job pushing the STD down. The return the Insurance would give you is an average 5.4%, with STD of .01. You've bought your way out of all risk, but at what cost? From 1900-2012, my dollar grows to $30080, yours, to $406. For much of the time, treasuries were higher than your return. Much higher. It's interesting to see how often the market is over 10% for the year, clip too many of those and you really lose out. From 1900-2012, I count 31 negative years (ouch) but 64 years over 9.5%. The 31 averaged -13.5%, the 64, 25.3%. The illusion of \"\"market gains\"\" is how this product is sold. Long term, they lag safe treasuries.\"", "title": "" }, { "docid": "01d88eba80895040dd663fec951a0435", "text": "R = I ^ P R = return (2 means double) I = (Intrest rate / 100) + 1 [1.104 = 10.4%] P = number of periods (7 years) 2 = 1.104 ^ 7 (you double your money in seven years with a yearly Intrest rate of 10.4%) I = R^(1/P) 1.104 = 2^(1/7) P = log(R) / log(I) 7 = log(2) / log(1.104)", "title": "" }, { "docid": "0068be76f8e30082d3ecc91d92b35add", "text": "This calculation arrives at the correct answer. However, it uses the formula for an annuity due. This means the payments are made at the beginning of the month and the last month of the 10 year period has interest accrued. See the section, Calculating the Future Value of an Annuity Due. The rate is given as an effective rate. with In Excel, =FV((1+0.12)^(1/12)-1,120,3500,0,1)", "title": "" }, { "docid": "8bff6260a6a7c709a5caed50d58fbe1e", "text": "The total number of shares on April 1st is 100 + 180 + 275 = 555. The price on April 1st is required. The current price is stated as $2, but $2 * 555 = $1110 and the current fund values is stated as $1500. Opting to take the current value as $1500, the price on April 1st can be calculated as $1500/555 = $2.7027. The amounts invested as number of shares x share price are: (Note these investment amounts do not match the example scenario's investment amounts, presumably because the example numbers are just made up.) The monthly returns can be calculated: The current values for each investor as invested amount x returns are: Checking the total:", "title": "" }, { "docid": "80a85c95c7462ad01c4b710df507a311", "text": "\"Hello! I am working on a project where I am trying to determine the profit made by a vendor if they hold our funds for 5 days in order to collect the interest on those funds during that period before paying a third party. Currently I am doing \"\"Amount x(Fed Funds Rate/365)x5\"\" but my output seems too low. Any advice?\"", "title": "" }, { "docid": "80a3495c6c0a5f6b3d73ef55bcf2b348", "text": "Calculate the theoretical forward price using covered interest parity, then compare it to the actual forward price of $1.04/euro. Buy the cheap one and sell the expensive one (this will involve borrowing dollars or euros at the US or Euro interest rate to buy the other currency and longing or shorting the 6-month forward to perfectly hedge your currency exposure).", "title": "" }, { "docid": "c7cf50b1d08c74636ecff24bf8c02aa3", "text": "These are the steps I'd follow: $200 today times (1.04)^10 = Cost in year 10. The 6 deposits of $20 will be one time value calculation with a resulting year 7 final value. You then must apply 10% for 3 years (1.1)^3 to get the 10th year result. You now have the shortfall. Divide that by the same (1.1)^3 to shift the present value to start of year 7. (this step might confuse you?) You are left with a problem needing 3 same deposits, a known rate, and desired FV. Solve from there. (Also, welcome from quant.SE. This site doesn't support LATEX, so I edited the image above.)", "title": "" }, { "docid": "ecd4cb3dacf846a7498338c3ce7b3dee", "text": "This investment does not have a payback period as the net present value of your investment is negative. Your investment requires an initial cash outlay of $40,000 followed by annual savings of $2060 for the next 20 years. Your discount rate is 5% at which the NPV is $-14327.85 as calculated below by using this JavaScript financial functions library tadJS that is based on a popular tadXL add-in for Excel 2007, 2010 and 2013.", "title": "" }, { "docid": "77f2fb35a2beff9e1f1c485393fb6fd7", "text": "\"Hey guys I have a quick question about a financial accounting problem although I think it's not really an \"\"accounting\"\" problem but just a bond problem. Here it goes GSB Corporation issued semiannual coupon bonds with a face value of $110,000 several years ago. The annual coupon rate is 8%, with two coupons due each year, six months apart. The historical market interest rate was 10% compounded semiannually when GSB Corporation issued the bonds, equal to an effective interest rate of 10.25% [= (1.05 × 1.05) – 1]. GSB Corporation accounts for these bonds using amortized cost measurement based on the historical market interest rate. The current market interest rate at the beginning of the current year on these bonds was 6% compounded semiannually, for an effective interest rate of 6.09% [= (1.03 × 1.03) – 1]. The market interest rate remained at this level throughout the current year. The bonds had a book value of $100,000 at the beginning of the current year. When the firm made the payment at the end of the first six months of the current year, the accountant debited a liability for the exact amount of cash paid. Compute the amount of interest expense on these bonds for the last six months of the life of the bonds, assuming all bonds remain outstanding until the retirement date. My question is why would they give me the effective interest rate for both the historical and current rate? The problem states that the firm accounts for the bond using historical interest which is 10% semiannual and the coupon payments are 4400 twice per year. I was just wondering if I should just do the (Beginning Balance (which is 100000 in this case) x 1.05)-4400=Ending Balance so on and so forth until I get to the 110000 maturity value. I got an answer of 5474.97 and was wondering if that's the correct approach or not.\"", "title": "" }, { "docid": "fff6e6b97a0c55da6cafd3bb3c6882c0", "text": "I asked this question in another sub, but I thought I might also get answers here. I was just wondering how pension funds or investment firms calculate the interest that they give to their members or clients in the US, or whichever country you are from. I ask this because I have a gut feeling that the national pension fund in my country does it the wrong way and is basically cheating people, so I wanted to make a comparison with other countries. Forgive me if I'm wrong and there's nothing to worry about. OK, so what they do is collect money in a given financial year, which starts in July and ends in June. Let's say they collect 100 million in 2010-11. They then invest this 100 million in the year July 2011 - June 2012. After deducting admin costs and all that, interest for this 2010-11 money is declared on October 1st 2012. That basically means that money someone contributed in July 2010 will earn interest 2 years later in 2012! I just feel like that is not how it should be done, but you can correct me if I'm wrong. They also regularly give interest at about 12% which is good when I read about interest rates in the US being around 7%, but I feel like since this interest is basically announced after 2 years, that 12% isn't as good as it seems. Someone help me understand if I'm wrong. Thanks.", "title": "" }, { "docid": "5887589fd2f004e5ffadf2a922b01929", "text": "Im creating a 5-year projection on Profit and loss, cash flow and balance sheet and i\\m suppose to use the LIBOR (5 year forward curve) as interest rate on debt. This is the information i am given and it in USD. Thanks for the link. I guess its the USD LIBOR today, in one year, in two years, three years, four years and five years", "title": "" }, { "docid": "9a569aa1c64b6688f4f27726484078a5", "text": "For this, the internal rate of return is preferred. In short, all cash flows need to be discounted to the present and set equal to 0 so that an implied rate of return can be calculated. You could try to work this out by hand, but it's practically hopeless because of solving for roots of the implied rate of return which are most likely complex. It's better to use a spreadsheet with this capability such as OpenOffice's Calc. The average return on equity is 9%, so anything higher than that is a rational choice. Example Using this simple tool, the formula variables can easily be input. For instance, the first year has a presumed cash inflow of $2,460 because the insurance has a 30% discount from $8,200 that is assumed to be otherwise paid, a cash inflow of $40,000 to finance the sprinklers, a cash outflow of $40,000 to fund the sprinklers, a $400 outflow for inspection, and an outflow in the amount of the first year's interest on the loan. This should be repeated for each year. They can be input undiscounted, as they are, for each year, and the calculator will do the rest.", "title": "" }, { "docid": "c792b0ad91138ee36099aef622b3d59c", "text": "\"The answer to almost all questions of this type is to draw a diagram. This will show you in graphical fashion the timing of all payments out and payments received. Then, if all these payments are brought to the same date and set equal to each other (using the desired rate of return), the equation to be solved is generated. In this case, taking the start of the bond's life as the point of reference, the various amounts are: Pay out = X Received = a series of 15 annual payments of $70, the first coming in 1 year. This can be brought to the reference date using the formula for the present value of an ordinary annuity. PLUS Received = A single payment of $1000, made 15 years in the future. This can be brought to the reference date using the simple interest formula. Set the pay-out equal to the present value of the payments received and solve for X I am unaware of the difference, if any, between \"\"current rate\"\" and \"\"rate to maturity\"\" Finding the rate for such a series of payments would start out the same as above, but solving the resulting equation for the interest rate would be a daunting task...\"", "title": "" }, { "docid": "06724d4ce9c252533e99ccea2c29973c", "text": "If I is the initial deposit, P the periodic deposit, r the rent per period, n the number of periods, and F the final value, than we can combine two formulas into one to get the following answer: F = I(1+r)n + P[(1+r)n-1]/r In this case, you get V = 1000(1.05)20 + 100[(1.05)20-1]/0.05 = 5959.89 USD. Note that the actual final value may be lower because of rounding errors.", "title": "" } ]	fiqa
0cf0582ce94bdb0cc8c87db171ebfb58	Can my rent to own equity be used as a downpayment?	[ { "docid": "d1ccea21c553d6fdbf534fdb0d965a54", "text": "The home owner will knock 20% off the price of the house. If the house is worth $297K, then 20% is just a discount your landlord is offering. So your actual purchase price is $237K, and therefore a bank would have to lend you $237K. Since the house is worth more than the loan, you have equity. 20% to be more accurate. Another way to say is, the bank only wants to loan you 80% of the value of the item securing the loan. If you default on day one, they can sell the house to somebody else for $296K and get a 20% return on their loan. So this 20% you are worried about isn't actually money that anybody gives anybody else, it is just a concept.", "title": "" }, { "docid": "37ed914eade031022145bd219bbcf1e4", "text": "I think you need to go to a local bank and ask. The key thing is paper trail. For any mortgage I've gotten on a new purchase, the bank needs to see where the down payment came from and how it got to the seller. In this case, it can go either way. If the value is truly 100% to the 80% you are looking to finance, and the paper trail is legit, this may work just fine. The issue others seem to have is that simply buying at a 20% discount is not a legit way to finance the 80%. Here, it appears to me that the 20% came from you in installments, via the rent.", "title": "" }, { "docid": "c15d3750705dbbdb5af681e0a9faca91", "text": "I do not think the bank would consider the 52K as equity. Typically, a rent-to-own lease is technically a lease-option contract where you lease for a fixed amount and at some point during the lease you have the option to buy it at a discounted price. I think the bank would consider it a negotiated price. I know that those down payment assistance plans are considered price negotiation by the IRS for the purpose of basis cost and I suspect this would be similar where your basis is $236,800 and not $296,000.", "title": "" } ]	[ { "docid": "ee0f29ce70781de82cc27060603a7487", "text": "You'll be taxed when you sell the house, but not before that (or if you do some other transaction that realizes the gain, talk to your real estate attorney or accountant for more details). A Home Equity line-of-credit is simply a secured loan: it's a loan, conditioned on if you fail to pay it back, they have a lien on your house (and may be able to force you to sell it to pay the loan back).", "title": "" }, { "docid": "997ffcf0eb3fb67c5b69f9379e46ed51", "text": "If you can get a mortgage with 10% downpayment and the seller will accept (some may want at least 20% downpayment for whatever reasons) and with PMI it still lower than your rent, sounds like it's a good idea to buy now. Of course this assumes that the money you'd be otherwise saving for 20% downpayment will be used to pay off a mortgage faster.", "title": "" }, { "docid": "91efd15284b5feb071813dda505628cb", "text": "I've investigated this, and banks are willing to offer a deal similar to what you ask. You would take out a securities-backed loan, which provides you with the down payment on the property. For the remainder, you take out a regular mortgage. JAGAnalyst wonders why banks would accept this. Simple: because there's money to be made, both on the securities-backed loan and the mortgage. Both parts of the deal are financially sound from the banks perspective. Now, the 20% number is perhaps a bit low. Having 20% of the value in shares means you'd be able to get a loan for 50% of that, so only a 10% downpayment.", "title": "" }, { "docid": "5efb6240c4f3e22fb6f64f933cf1d4dc", "text": "\"I put about that down on my place. I could have purchased it for cash, but since my investments were returning more interest than the loan was costing me (much easier to achieve now!), this was one of the safest possible ways of making \"\"leverage\"\" work for me. I could have put less down and increased the leverage, but tjis was what I felt most comfortable with. Definitely make enough of a down payment to avoid mortgage insurance. You may want to make enough of a down payment that the bank trusts you to handle your property insurance and taxes yourself rather than insisting on an escrow account and building that into the loan payments; I trust myself to mail the checks on time much more than I trust the bank. Beyond that it's very much a matter of personal preference and what else you might do with the money.\"", "title": "" }, { "docid": "18a4acfd33c5b0a9aca4a2a2e35d466f", "text": "The issue here is that the transaction (your funds to her account) looks very similar to the rent payments which you plan to make in the future. Those rental payments (if deemed to be commercial) would normally be subject to tax. Consider the scenario where rather than an up front $5000, and $5000 over 2 years, you paid her $10000, and paid no rent. That might be an attempt to avoid paying tax. A commercial transaction can't be re-labeled as a gift just based on your election - the transaction needs to be considered as a whole. However, an interest free, unsecured loan connected with you paying rent at market rate would be (depending on local laws) simply foolish (to some extent). I don't think you are able to structure the transaction as a joint purchase (since the mortgage will prevent her from allocating a part of the property to you). Its also likely that you can live in her house and contribute an adequate amount to the household costs without creating a taxable income for her. For example in the UK, up to ~£4000 pa rental income generated from the property in which you reside does not need to be declared. You need to identify the scenarios where your particular arrangement could be imagined as resulting in a taxable or potentially taxable event - then make sure you are not avoiding those events just by choosing how you label the events.", "title": "" }, { "docid": "a92073afad23a27fb936bf7bdc9d0f55", "text": "Whenever you put less than 20% down, you are usually required to pay private mortgage insurance (PMI) to protect the lender in case you default on your loan. You pay this until you reach 20% equity in your home. Check out an amortization calculator to see how long that would take you. Most schedules have you paying more interest at the start of your loan and less principal. PMI gets you nothing - no interest or principal paid - it's throwing money away in a very real sense (more in this answer). Still, if you want to do it, make sure to add PMI to the cost per month. It is also possible to get two mortgages, one for your 20% down payment and one for the 80%, and avoid PMI. Lenders are fairly cautious about doing that right now given the housing crash, but you may be able to find one who will let you do the two mortgages. This will raise your monthly payment in its own way, of course. Also remember to factor in the costs of home ownership into your calculations. Check the county or city website to figure out the property tax on that home, divide by twelve, and add that number to your payment. Estimate your homeowners insurance (of course you get to drop renters insurance, so make sure to calculate that on the renting side of the costs) and divide the yearly cost by 12 and add that in. Most importantly, add 1-2% of the value of the house yearly for maintenance and repair costs to your budget. All those costs are going to eat away at your 3-400 a little bit. So you've got to save about $70 a month towards repairs, etc. for the case of every 10-50 years when you need a new roof and so on. Many experts suggest having the maintenance money in savings on top of your emergency fund from day one of ownership in case your water heater suddenly dies or your roof starts leaking. Make sure you've also estimated closing costs on this house, or that the seller will pay your costs. Otherwise you loose part of that from your down payment or other savings. Once you add up all those numbers you can figure out if buying is a good proposition. With the plan to stay put for five years, it sounds like it truly might be. I'm not arguing against it, just laying out all the factors for you. The NYT Rent Versus Buy calculator lays out most of these items in terms of renting or buying, and might help you make that decision. EDIT: As Tim noted in the comments below, real monthly cost should take into account deductions from mortgage interest and property tax paid. This calculator can help you figure that out. This question will be one to watch for answers on how to calculate cost and return on home buying, with the answer by mbhunter being an important qualification", "title": "" }, { "docid": "da704574752205e27128f2f8b909fbb8", "text": "First, this was never an arrangement for you to build equity, this was an arrangement for them to speculate on another house under the guise of teaching you a life lesson like responsibility or something contrived. The only way you profit from this is if the value of the house goes up and you sell it. You get 25% of the proceeds, maybe. If this was an equitable arrangement then they would be paying 75% of the property taxes and a little more for your maintenance efforts.", "title": "" }, { "docid": "1996cb63df62a460f6fbd2a182ca33f5", "text": "Also you would need to consider any taxation issues. As he will be paying you rent you will need to include this as income, plus any capital gains tax on the re-sale of the property may need to be paid.", "title": "" }, { "docid": "29f5f16def88e90faafd2ffce153b7d7", "text": "I doubt it. I researched it a bit when I was shopping for a HELOC, and found no bank giving HELOC for more than 80% LTV. In fact, most required less than 80%. Banks are more cautious now. If the bank is not willing to compromise on the LTV for the first mortgage - either look for another bank, or another place to buy. I personally would not consider buying something I cannot put at least 20% downpayment on. It means that such a purchase is beyond means.", "title": "" }, { "docid": "9ca323e13f071336a0d05518e08bf5a4", "text": "From personal experience: Loan Impact It does impact your ability to take out other loans (to an extent) Your first investment property is going to go against your debt to income levels, so if you take out a loan, you've essentially decreased the amount you can borrow before you hit a lender's debt to income ceiling. Two things about that: 1) I'm assuming you have a primary mortgage - if that's the case they will factor what you are already paying for your primary house + any car loans + any student loans, etc. Once you've successfully taken out a mortgage for your investment property, you're probably close to your debt to income ceiling for any other loans. 2) There is usually a 2 year time period where this will matter the most. Once you've rented out this property for 2 years, most financial institutions will consider a percentage of the rent as income. At this point you can then take on more debt if you choose. Other (Possibly Negative) Impacts and Considerations Maintenance Costs Renovations Turnovers Taxes and Insurance Downpayments and interest Income tax Advertising costs Property Management costs Closing costs and Legal fees Vacancies HOA fees Other (Possibly Positive) Impacts and Considerations Passive Income as long as the numbers are right and you have a good property manager Tax deductions (And depreciation) Rent has low correlation to the market Other investment alternatives: Stocks Reits (not directly comparable to investment properties) Long story short- can be a hassle but if the numbers are right, it can be a good investment. There's a series of articles further explaining these above listed components in detail.", "title": "" }, { "docid": "6db08e9c57536d8c60ef7bb2883c6aff", "text": "\"It depends on the deal: and you didn't give any details. That said, there are some things that stand out regardless, and some more specific answers to your questions. First, Mortgage rates (at the bank) are absurdly low right now. Like 4%-5%; less than 4% for excellent credit. You say your credit is ok, so unless your landlord is willing to do a deal where they get no benefit (beyond the price of the house), the bank is the way to go. If you don't have much for a down payment, go with an FHA loan, where you need only 3.5% down. Second, there is another option in between bank mortgage and rent-to-own. And that is that where your landlord \"\"carries the note\"\". Basically, there is a mortgage, and it works like a bank mortgage, but instead of the bank owning the mortgage, your landlord does. Now, in terms of them carrying all of it, this isn't really helpful. Who wants to make 3-4% interest? But, there is an interesting opportunity here. With your ok credit, you can probably get pretty close to 4% interest at the bank IF the loan is for 80% LTV (loan to value; that is, 20% equity). At 80% LTV you also won't have PMI, so between the two that loan will be very cheap. Then, your accommodating landlord can \"\"carry\"\" the rest at, say, 6-7% interest, junior to the bank mortgage (meaning if you default, the bank gets first dibs on the value of the house). Under that scenario, your over all interest payment is very reasonable, and you wouldn't have to put any money down. Now for your other questions: If we rent to own are we building equity? Not usually. Like the other posters said, rent-to-own is whatever both parties agree on. But objectively, most rent-to-own agreements, whether for a TV or a house, are set up to screw the buyer. Sorry to be blunt, and I'm not saying your landlord would do that, this is just generally how it is with rent to own. You don't own it till you make the last payment, and if you miss a payment they repo the property. There is no recourse because, hey, it was a rental agreement! Of course the agreements vary, and people who offer rent to own aren't necessarily bad people, but it's like one of those payday loan places: They provide a valid service but no one with other options uses them. If we rent to own, can we escape if we have to (read: can't pay anymore). Usually, sure! Think about what you're saying: \"\"Here's the house back, and all that money I paid you? Keep it!\"\" It's a great deal if you're on the selling side. How does rent to own affect (or not) our credit? It all depends on how it's structured. But really, it comes down to are they going to do reporting to the credit bureaus? In a rent-to-own agreement between individuals, the answer is no. (individuals can't report to a credit bureau. it's kind of a big deal to be set up to be able to do that)\"", "title": "" }, { "docid": "8a9db923f5454f64bb4e44d06c74908f", "text": "\"The loan is the loan, the down payment is not part of the loan. The principle amount owed on the loan at the beginning of the loan is the amount of the loan. If your loan amount is $390,000 then that's below the \"\"jumbo\"\" classification. Your down payment is irrelevant. Lenders may want or require 20% (or any other amount) down so the loan will meet certain \"\"loan to value\"\" ratio requirements. In the case of real estate the lenders in general want a 20% down side cushion before you're \"\"upside down\"\" (owe more than the home is worth). This is not unique to homes and is common in many secured lending instruments; like cars for example.\"", "title": "" }, { "docid": "fea9b1f4dbe119cd9b6056137450fc07", "text": "Yes, you can have a buy-to-let mortgage on a rental property at the same time as a residential mortgage on your own property. A lot of landlords do this. I wouldn't go expecting your rental property to contribute much to paying off your residential mortgage. Most of it will go on the various costs and fees of renting out a property (not least the buy-to-let mortgage!). The main financial benefit in the UK of owning a rental property with a substantial mortgage on it is that the value of the property goes up (in a rising market, which it normally seems to be).", "title": "" }, { "docid": "50d0b42ef54f328df9c633c45a1d2aba", "text": "No, you can't do this indefinitely. For one, you can't just take money out as home equity with no strings attached. The cash out is done as a loan (often a HELOC) or second mortgage and you have to make payments. The lender will always make sure you are able to afford the payments. At some point, you won't qualify for the loan because of insufficient income or too many previous liens on the property. While home values often go up, there's no guarantee. And your examples are more than a bit optimistic.", "title": "" }, { "docid": "9b5ad6c50ddd6f92617ff2bf39a2fb69", "text": "That may become complicated depending on the State laws. In some States (California for example), LLCs are taxed on gross receipts, so you'll be paying taxes on paying money to yourself. In other States this would be a no-op since the LLC is disregarded. So you need to check your State law. I assume the LLC is not taxed as a corporation since that would be really stupid of course, but if it is then it adds the complexity of the Federal taxes on top as well (corporate entity will pay taxes on your rent, and you'll pay taxes on your dividends to get the money back). The best option would be to take that property out of the LLC (since there's no point in it anyway, if you're the tenant).", "title": "" } ]	fiqa
fe4221608854d583a1225f853c7f9892	Possible replacement for Quicken	[ { "docid": "1ca480847c8abfafbf8136bc97e2d5e0", "text": "I would investigate mint.com further. Plenty of people have written off using them because Intuit purchased them, but that seems like cutting of your nose to spite your face. I think mint.com is worth it for its Trends functionality alone, not to mention its automatic categorization of your purchases, reminders when bills are due, notifications of increased credit card interest rates, and overdraft notices. I don't think mint.com schedules bills & deposits, but it tracks stocks & mutual fund investments and compares your portfolio returns against Dow Jones, S&P 500, or NASDAQ if you wish. I'm not sure I see the advantage of manual transaction entry, but you can add cash or check transactions manually. As I mentioned earlier, automated categorization is a great feature. In addition, you can tag certain transactions as reimbursable or tax-related. If the primary feature you're interested in is stock quotes, maybe something like Yahoo Finance or Google Finance will be enough.", "title": "" }, { "docid": "3bbda03f837541c501058d5c2e9831a5", "text": "Given your needs, GNUcash will do swimmingly. I've used it for the past 3 years and while it's a gradual learning process, it's been able to resolve most stuff I've thrown at it. Schedule bills and deposits in the calendar view so I can keep an eye on cash flow. GNUcash has scheduled payments and receipts and reconcilation, should you need them. I prefer to keep enough float to cover monthly expenses in accounts rather than monitor potential shortfalls. Track all my stock and mutual fund investments across numerous accounts. It pulls stock, mutual and bond quotes from lots of places, domestic and foreign. It can also pull transaction data from your brokers, if they support that. I manually enter all my transactions so I can keep control of them. I just reconcile what I entered into Quicken based on the statements sent to me. I do not use Quicken's bill pay There's a reconciliation mode, but I don't use it personally. The purpose of reconcilation is less about catching bank errors and more about agreeing on the truth so that you don't incur bank fees. When I was doing this by hand I found I had a terrible data entry error rate, but on the other hand, the bayesian importer likes to mark gasoline purchases from the local grocery store as groceries rather than gas. I categorize all my expenditures for help come tax time. GNUcash has accounts, and you can mark expense accounts as tax related. It also generates certain tax forms for you if you need that. Not sure what all you're categorizing that's helpful at tax time though. I use numerous reports including. Net Worth tracking, Cash not is retirement funds and total retirement savings. Tons of reports, and the newest version supports SQL backends if you prefer that vs their reports.", "title": "" }, { "docid": "dd5f4d764f834e39685b779495d7f5b5", "text": "It has a bit of a learning curve, but I like GNU Cash. (And since it open source, it's free!)", "title": "" }, { "docid": "4d45e9dc0d4750359d6b0956564dfd23", "text": "Do you use any other online features of Quicken? How many unique ticker symbols do you have? How often do you really need to update the prices? You can always continue to use Quicken, and enter the stock prices by hand. Maybe update them once a month to get an idea of how your investments are doing. That should work indefinitely.", "title": "" } ]	[ { "docid": "1b6dc909d29bd9d8110c0e24b4a3d8d3", "text": "In all honesty, the best solution I've come across is Microsoft's now defunct Money.", "title": "" }, { "docid": "9e73b8c9ad91cf3c650c89a14d2f62db", "text": "Quicken has tools for this, but they have some quirks so i hesitate to actually recommend it on that basis.", "title": "" }, { "docid": "d7b4f03d1e0956ca87f51146a917da16", "text": "I like Quicken for personal use, and they have a small business edition if you don't want to move into QuickBooks.", "title": "" }, { "docid": "2ccda6b515f09fe101f3d7e6ccb0150d", "text": "You should consider Turbocash. It's a mature open-source project, installed locally (thick client).", "title": "" }, { "docid": "8586796e8d64cc6ebeb5ef6bc6cc0f27", "text": "Yes and no, P2P Capital Markets is similar concept but is more geared towards business loans. Community Lend used to offer this service but has stopped.", "title": "" }, { "docid": "1c4a0bcd6ec884cb4e38e9035f7e5ffb", "text": "I haven't used it in years, but look at GnuCash. From the site, one bullet point under Feature Highlights:", "title": "" }, { "docid": "e60126f35b17cfb92270360e7ec36ea1", "text": "I like Pocketsmith for simple cashflow forecasting. I use Moneycenter for more complex tracking.", "title": "" }, { "docid": "1455bbcecbe56de5592edbf1106a085e", "text": "Aha, perhaps...also, perhaps someone like Louis with a product such as this, to the (reasonably) technically literate while pushed through a next-generation service that isn't rapacious when it comes to something as simple as digitally moving money...perhaps it's time. Shake our fists to the heavens, and all.", "title": "" }, { "docid": "9c7310340478610eea3f1d4b154baaf6", "text": "\"As far as I can tell there are no \"\"out-of-the-box\"\" solutions for this. Nor will Moneydance or GnuCash give you the full solution you are looking for. I imaging people don't write a well-known, open-source, tool that will do this for fear of the negative uses it could have, and the resulting liability. You can roll-you-own using the following obscure tools that approximate a solution: First download the bank's CSV information: http://baruch.ev-en.org/proj/gnucash.html That guy did it with a perl script that you can modify. Then convert the result to OFX for use elsewhere: http://allmybrain.com/2009/02/04/converting-financial-csv-data-to-ofx-or-qif-import-files/\"", "title": "" }, { "docid": "4767150d12ae946f266ade3beae6a7b0", "text": "You could keep an eye on BankSimple perhaps? I think it looks interesting at least... too bad I don't live in the US... They are planning to create an API where you can do everything you can do normally. So when that is released you could probably create your own command-line interface :)", "title": "" }, { "docid": "ee8fccbcca3d7618962273ff5df1d43a", "text": "The model itself is fairly common for serving particular niche markets. A few other organizations which operate in similar setups: prepaid card providers such as NetSpend, GreenDot, AccountNow, etc; startups such as SmartyPig, PerkStreet, WePay, and HigherOne. Still, nobody else seems to be providing full-service online banking to mainstream customers the way we plan to. We plan to have much better security than most banks, which isn't hard given the current sorry state of online banking in the US. And having an intermediary who's looking out for your interests can be a good thing. David, my co-founder Josh lays out our launch plans and why we are invite-only in his latest post. In short, we made a decision to build our own call center rather than outsource it, and that limits how quickly we can bring people on.", "title": "" }, { "docid": "a3cb261d0561cda92eabd6e103677895", "text": "I use Banktivity. It's very much not free, but it automatically downloads all my bank and credit card activity and has excellent reporting options.", "title": "" }, { "docid": "0339acde124bc7d1ff0f4bbec49f66dc", "text": "\"To begin with, bear in mind that over the time horizon you are talking about, the practical impact of inflation will be quite limited. Inflation for 2017 is forecast at 2.7%, and since you are talking about a bit less than all of 2017, and on average you'll be withdrawing your money halfway through, the overall impact will be <1.3% of your savings. You should consider whether the effort and risk involved in an alternative is worth a few hundred pounds. If you still want to beat inflation, the best suggestion I have is to look at peer-to-peer lending. That comes with some risk, but I think over the course of 1 year, it's quite limited. For example, Zopa is currently offering 3.1% on their \"\"Access\"\" product, and RateSetter are offering 2.9% on the \"\"Everyday\"\" product. Both of these are advertised as instant access, albeit with some caveats. These aren't FSCS-guaranteed bank deposits, and they do come with some risk. Firstly, although both RateSetter and Zopa have a significant level of provision against bad debt, it's always possible that this won't be enough and you'll lose some of your money. I think this is quite unlikely over a one-year time horizon, as there's no sign of trouble yet. Secondly, there's \"\"liquidity\"\" risk. Although the products are advertised as instant access, they are actually backed by longer-duration loans made to people who want to borrow money. For you to be able to cash out, someone else has to be there ready to take your place. Again, this is very likely to be possible in practice, but there's no absolute guarantee.\"", "title": "" }, { "docid": "628d5e85eae78da96540a2a6aab4c2f7", "text": "I found this page at CNN Money, that lists 5 viable alternatives to Paypal, namely: I would suggest looking for unbiased sources like CNN rather than searching for alternatives and happening upon the merchant's sites themselves. Hope this helps!", "title": "" }, { "docid": "268cd755684c231e913f38fbc07eafd4", "text": "Long time Quicken user, but I have Bootcamp on my Mac, and one reason is so I can run Quicken Windows. That's one solution. You didn't mention what version of the Mac OS you're running, but Bootcamp is one alternative if you have (or can purchase) a Windows license. Be advised, Bootcamp 4, which is available with OS 10.7 (Lion) and OS 10.8 (Mountain Lion), officially supports Windows 7 only. Quicken running under Bootcamp isn't perfect, but it's better than any Mac version, and Quicken 2013 has a mobile app that allows you to view your data & enter transactions via your mobile. The Mac Version of Quicken has been panned by users. I do use Windows for work-related stuff, so I have a reason for running Windows besides using Quicken. I've read that Intuit has a market share of more than 70% in the personal finance software sector, and at this point it seems pretty clear that they are not interested in pursuing a larger share via Mac users. So if we ever see a highly functional version of Quicken for the Mac OS, it won't be any time soon. I've not used other products, but there are many reviews out there which rank them, and some consistently come to the front. Top 10 Reviews Mac Personal Finance Software 2013; WeRockYourWeb Personal Finance Software Rankings includes many Web-based alternatives; Personally, I'm not real enthusiastic about posting my personal financial data on someone's Web site. I have nothing to hide, but I just can't get comfortable with cloud-based personal finance software providers that are combing through my data, Google-like, to generate revenue. Too, it seems an unnecessary risk giving a third party a list of all my account numbers, user names, and passwords. I know that information is out there, if one has the right sort of access, but to my way of thinking, using a cloud-based personal finance software application makes it more out there.", "title": "" } ]	fiqa
b8f53cc948f79f239fe8dd4d1a11204f	Questioning my Realtor	[ { "docid": "acc4f60101fdf559230bc1ce405a2751", "text": "A mortgage lender will not usually lend more than they could get if they had to repossess the property and sell it to recover their investment (in the U.S. it is generally accepted that 80% of market value is the golden number that makes the mortgage work). That's why an appraisal is required. Even with 50% down, the numbers might not add up if your property is appraised very low (extremely unlikely, though. It's more likely your realtor is inexperienced).", "title": "" }, { "docid": "395a2b4705a8df8d87d90cd275e639fd", "text": "My realtor told me that even though they're only asking for 1/2 the money and have excellent credit that the mortgage company may not lend it to them if I'm over priced. Is this true? I've never heard of it before. It is a chance, but it is a red herring to the discussion. Having excellent credit has nothing to do with being eligible for a debt object of a specific size. Just because you have excellent credit, would you get approved for a property of $10,000,000 if you only made $35,000 a year (and had no other net worth)? But regarding your potential buyers, a chance vs a good chance is different. Your realtor just told you some basic always true lending fact that has nothing to do with your situation.", "title": "" }, { "docid": "61c079ef2f132f729a06ac1ac383560e", "text": "\"even though they're only asking for 1/2 the money and have excellent credit that the mortgage company may not lend it to them if I'm over priced Yes. If the house's value, as determined by the appraisal, is less than the sale price, the bank will not finance the loan. Appraisals and the appraisal process have become much tighter since the Frannie and Freddie debacle. This fact is true regardless of amounts or credit history. Though this is happens somewhat rarely; typically if a seller and buyer agree to a price, this price is a reasonable value -- after all, that is nearly the definition of \"\"market value\"\". So, yes, it is true (and always true, for any financed purchase), but that shouldn't really affect your decision. If you try to sell for more than the appraisal, you will just lower the price to the appraised amount.\"", "title": "" } ]	[ { "docid": "b5adc69cca3d027f18083e62afca7523", "text": "From the apartment owners perspective what was the purpose of $300? They promised they wouldn't rent it to somebody before you had a chance to see it. But lets say you did see it, and decided you didn't like the view. Would they have to give the money back? if so, why would they promise not to rent it if somebody showed up first? I would have made it clear, as the owner, what the money was for. It was a $300 fee to delay rental. You would have essentially bought x number of days of delay. You could view it as a mini-short-term rental. Of course there should have been paperwork involved. There should have been been a receipt that at least mentioned the amount of money involved. You may need to pay the amount owed, and may need to determine if you want to sue in small claims court. Of course your agent may have some liability based on your contract with them and any paperwork they signed when the money was sent to the owner. The fact that the bank sided with you doesn't mean the courts will.", "title": "" }, { "docid": "0be150e2de05d0803683bdd9f2013eed", "text": "I still don't understand. What's your exact role in all this? Do you own a plot of land that you want to sell them? Or are you just a bystander with an idea that you'd like to share? Or do you want to open a hotel yourself but need their help?", "title": "" }, { "docid": "652cc16ef345d128bcc3aea88d04be47", "text": "> I don't think you are trying to understand my position I'm trying to find out if we can agree on truth claims. We (probably) have numerous disagreements. Can we agree that some of the people who do not like the current job market have the option of trying to start a new business?", "title": "" }, { "docid": "bd143bca25c6456b86a9972ccf736e22", "text": "Also, is seems the wife that's doing the taxes is very reluctant on giving me access to the statements. As an owner, I do have the legal right to those statements do I not? What power would a majority owner of a bar (40%) hold over the other two minority owners (each with 30%)? According to her, she's broken even on her investment, whereas I've collected not even half of my initial investment. The fact that you feel this is fishy reconfirms my belief that she not being truthful to some degree.", "title": "" }, { "docid": "22c5a8fca780f139551b854850dda1a5", "text": "I see your remarks regarding Zillow, but would add a question. Why not look only for recent sales? If you find homes similar to yours with recent sales, that's similar to how the appraisers do it. I've refinanced many times and each time, I looked at sales within three miles of my house. I hit the appraised price very close in my estimate, high or low compared to Zillow, but used transaction data from there.just my thought. I chose a random neighborhood, and this was the first house I clicked. The main view shows last sale date, so I'd obviously suggest the OP look for more recent ones. If turnover is that low in his neighborhood, I understand, but the comment that transactions aren't listed is factually incorrect. I'd like my 2pts back. :)", "title": "" }, { "docid": "59dfe8e3de44ef0f09bc523785a2ea34", "text": "Same here. I work with realtors on a weekly basis and they all have given me this advice: if you have parents/grandparents/rich uncle, etc., that might be leaving you money when they pass, swallow your pride and kindly ask for it now. Get into the market as soon as possible because this catch 22 is not going to change anytime soon.", "title": "" }, { "docid": "f4c7855baaae2b066a743a6c78dff032", "text": "First, let me say that you have to take everything your agent says with a grain of salt. Freakonomics had a great article that discussed the math behind the motivation of the real estate agent. It described the home seller, trying to get, say $400K. On a 6% commission, the $24K is destined to be split between seller realtor office and buyer's realtor's office. The selling agent gets $6,000 (or so) in the end. As a seller, if I settle for $380K, my realtor is only out $300, netting $5700. But $20K lower sale price, and I just lost nearly $19K after commission is paid. The agent would have the natural goal of volume, not extracting the last dollar from the buyer. Gaining back the last $20K to the seller will cost the realtor far more than $300 in her time, keeping the house on the market and waiting for the better offer. Sellers might use down payment as one way to estimate the probability of the financing falling through, but it's a rough estimate at best because, in the case of bank financing, the bank needs the same time to run through the paperwork for a 3% down or a 20% down. It's just as easy for the buyer to qualify or not qualify for one loan or the other. There are young couples with great incomes and no debt, who blow away the required ratios for proposed debt to income, but haven't saved up the otherwise huge 20% downpayment. Then there are those who have saved for years, even having 30% to put down, but their income is still not going to qualify them. The offer will be contingent on the financing, regardless. It will show that you are putting $XX dollars as a downpayment, and the final transaction is contingent on your bank approving you.", "title": "" }, { "docid": "c77680824f5285dad88ec81c6946359a", "text": "I asked my realtor, but she recommends to go with just one banker (her friend), and not to do any rate shopping. You need a new realtor. Anyone who would offer such advice is explicitly stating they are not advocating on your behalf. I'd do the rate shopping first. When you make an offer, once it's accepted, time becomes critical. The seller expects you to go to closing in so many days after signing the P&S. The realtor is specifically prohibited from pushing a particular lender on you. She should know better. In response to comment - Rate Shopping can be as simple as making a phone call, and having a detailed conversation. Jasper's list can be conveyed verbally. Prequalification is the next step, where a bank actually writes a letter indicating they have a high confidence you will qualify for the loan.", "title": "" }, { "docid": "54ef3ad16dbc8b52057c5f837180c80d", "text": "\">I think you mean: 60% of all mortgages on homes in Nevada are underwater. Not every home has a mortgage, so it's not 60% of the homes, it's 60% of the mortgages. Spot on. In the US typically somewhere around 30% to 40% of homes have no mortgage at all (i.e. 100% equity by the owners). So... IF Nevada follows the US average (which it may not, having a lot of new developments) then 60% of 60%/70% would be somewhere between 36% to 42% of homes. That of course, is still HUGE -- if even 10% of homes in a locale are \"\"distressed\"\" sales, it is enough to drive prices down. But another caveat is that just because a place is \"\"underwater\"\" does not mean that it has a HIGH negative equity -- point of fact is that ANY home bought with an LTV mortgage or a really low down payment (i.e. 0% to 10% down payment) is probably underwater from day one and remains pretty close to that for the first couple of years. Why? Because typical realtor fees are around 6%, and closing costs are easily another couple of percent, add in that with a self-amortizing loan that very little equity is built up in the first few years, and any loss for aging and owner \"\"cash out\"\" equity can easily be near zero or negative. (That's one of the reasons you shouldn't buy unless you are planning on living somewhere for at least 5 years, because it takes that long to \"\"recoup\"\" the realtor & closing costs -- ergo the whole \"\"flipping\"\" phenom is in and of itself a sign that a market is in a speculative bubble.)\"", "title": "" }, { "docid": "f6bdba3040528635a47946d6d4f18927", "text": "Sounds like the seminar is about using OPM (other people's money), which means you're going to have to find not just real estate, but investors. Those investors are going to need a business plan, contracts, and a lot of work from you to provide as much equity as possible before the property is sold. If you're serious about Real Estate, I suggest finding the most successful broker/agent you can, buying them a beer, glass of wine, or cup of coffee, and picking their brain about it. It'll be cheaper then a scam seminar.", "title": "" }, { "docid": "39d5031d5986136c4c29598f88e3bb45", "text": "After a 6% commission to sell, you have $80K in equity. 20% down on a $400K house. 5% down will likely cost you PMI, and I don't know that you'll ever see a 3.14% rate. The realtor may very well have knowledge of the cost to finish a basement, but I don't ask my doctor for tax advice, and I'd not ask a realtor for construction advice. My basement flooring was $20/sqft for a gym quality rubber tile. You can also get $2/sqft carpet. I'd take the $15K number with a grain of salt until I got real bids. What's there now? Poured cement? Is there clearance to put in a proper subfloor and still have adequate ceiling height? There are a lot of details that you need to research to do it right. That said, the move to a bigger house impacts your ability to save to the extent that you are taking too large a risk. The basement finish, even if $20K, is just a bit more than the commission on your home. I like the idea of sticking it out. Once the nanny is gone, enjoy the extra income, and use the money to boost your savings and emergency funds. As I read your question again, I suggest you cut the college funding in favor of the emergency fund. What good is a funded college account if you have no funds to sustain you through a period of unemployment? There's a lot to be gained in holding tight for these 3 years. It seems that what's too small for 5 would be spacious once the nanny is gone and the basement added. The cost of a too-big house is enormous over the long run. It's going to rise in value with inflation, but no more, and has all the added costs that you've mentioned. On a personal note, I'm in a large house, with a dining room that's used 2 or 3 times a year, and a living room (different from family room) that is my dog's refuge, but we never go in there. In hindsight, a house 2/3 the size would have been ideal. Finishing the basement doesn't just buy you time, it eliminates the need for the larger house.", "title": "" }, { "docid": "e5b6e65ac800eef776b4c63e06168ad8", "text": "As a buyer you must realize they are doing everything they can to get the best deal for their client (the seller). They have made the first offer (the listing price), you made a counter offer, now they are trying to get you to see that your offer is too low. How can they do this: show you comps that they have found to show that either their listing price was where it should be, or even that it could have been higher. If there are fresh comps that are showing an upward trend, they will be sure to show you those. Another approach is to show you what is happening in the neighborhood today. If those sales have settled, then they are public record. If they haven't settled they are not public record. Your agent should be reminding you that they are worthless as a comp until they are settled. The only ethics issue is did the agent, by disclosing the contract, commit a violation against the rights of buyer and the seller of the other house. You have not been harmed, and the seller of the house you are interested in most likely approved the maneuver. I would look at the documents you signed to see who owns the info on the form. Because that will tell you if your offer on the house is being used by another agent, or even your agent, as leverage in another deal.", "title": "" }, { "docid": "369b54c7023ad44fe1764d78e1c1be63", "text": "To the best of my knowledge, Los Angeles County does not require a lawyer to be involved in a real-estate transaction. I looked through the County Recorder site and found no evidence that a lawyer is required. I live in a different county in California where a lawyer is also not required for real-estate transactions. Some counties do require a lawyer to be involved. That said, a purchase contract - is a contract. A legal document which you sign. A realtor may be able to help you understand the housing market pricing trends, but cannot (not allowed by law) draft the contract for you or advise to you on the clauses of the contract you're signing. Only a lawyer licensed in your State (California) is allowed to do that. So if you want a legal advice about the contract you're going to sign - you need to talk to a lawyer. Especially if you want a contract drafted for your own special needs, or have some specific titling requirements (for a company, or a trust - for example). Same goes for the mortgage contract and any other piece of paper you'll be signing during the closing meeting (and there will be plenty of such signatures). So it is not a question of need, it's a question of should.", "title": "" }, { "docid": "c977c0dd2a64bb2a411a5684705c689d", "text": "There is a lot of your financial information that the selling agent handles in the course of a real estate transaction, including but not limited to your pre-approval letter which states what maximum purchase price might be. Closing costs and interest rate are not details they would know unless you shared that with them, given that that is done after you go binding. I agree with xiaomy in that, while in absolute monetary terms the higher amount should always be more attractive, the selling agent wants to ensure the transaction goes as smoothly as possible. With contracts falling through due to first-time buyers not making it through mortgage underwriting, it is in the seller's interest - and thus the seller's agent's concern - that the buyer not present such hurdles. Insofar as a higher down payment is a signal for that, then I can understand why it would be more attractive.", "title": "" }, { "docid": "ea86135aefc19f735f834aa9cfa4eac0", "text": "\"Pre-edit, Pete mentioned that he feels real estate agents would (a) like you to buy as much house as you afford, and (b) would love to show you three houses and have you choose one. As a real estate agent myself, I believe his warnings were understated. As with any industry, there are good and bad people. Agents are paid to move houses. If the median US home is under $200K, and commissions average say 5%, the $10,000 to be gained is split between the buyer brokerage and selling agent. The $5000 to each is then shared with 'the house.' So, this sale would net me $2500, gross. Move one a week, and the income is great, one per month, not so much. Tire kickers will waste an agent's time for a potential decision to wait another year and continue renting. Their obligation is to tell you the truth, but not to offer financial advice. Remember the mortgage crisis? It seems the banks and brokers aren't watching out for you either. They will tell you what they'll lend you, but not what you can afford. These numbers are worlds apart. I strongly recommend a 20% downpayment. The FHA PMI calculator shows that a 90% LTV (i.e. a 10% downpayment) for a $100K house will cost you $1200/yr in PMI. Think about this. For the $10,000 that you didn't put down, you are paying an extra $1200 each year. This is on top of the interest, so even at 5%, that last $10,000 is costing nearly 17%. If you can't raise that $10K (or whatever 10% is on that house) in cheaper funds, you should hold off. Using the 401(k) loan for this purpose is appropriate, yet emotionally charged. As if suck loans are written by the devil himself. \"\"Buy the biggest house you can\"\"? No. I have a better idea. Buy the smallest place you can tolerate. I have a living room (in addition to family room) that has been used 3 times in 20 years. A dining room we actually use. Twice per year. When your house is 50% too big, you pay 50% more property tax, more utility bills, and more maintenance. Closing costs, commission, etc, isn't cheap, but the lifetime cost of living in a too-big house is a money pit.\"", "title": "" } ]	fiqa
ea4feff5a609725a9354587c49bd493d	Getting over that financial unease? Budgeting advice	[ { "docid": "35a18ebf39052288dba1df16d3a440f3", "text": "\"Budgeting is a tool for planning, not for execution. It sounds like you don't have a problem BUDGETING (planning what to spend on what things) but rather with the execution of your plan. That is - living frugally. This is primarily an issue of self control and personal psychology - not an issue with the mechanics of budgeting and finance, which explains why the most popular personal finance \"\"gurus\"\" (Dave Ramsey, Suze Ormond) deal as much with your relationship to money and spending as they do with financial knowledge. There is no easy answer here, but you can learn to spend less. One helpful thought is to realize that whatever your current income is, someone in your community is currently making less than that and surviving. What would you do differently if your real, actual income was $100 or $200 less than it is currently. If your food budget is a concern, learn to cook cheaply. (Often, this is more healthy.) You mentioned schooling, so I assume you are on or near a college campus. Many colleges have all sorts of free-food opportunities. (I used to eat free vegetarian meals weekly at a Hare Krsna temple. Price of admission: listening to the monk read from the Bhagavad Gita.) Fast food is, of course, a complete no-no on low-budget living. It probably goes without saying, but just in case you haven't: cancel cable, get a cheap phone plan (Ting is excellent if available in your area), and otherwise see how you can squeeze a few dollars out of your bills. On the subject of frugality, I have found no book more enlightening than: Money Secrets of the Amish: Finding True Abundance in Simplicity, Sharing, and Saving\"", "title": "" }, { "docid": "23cfce3f17de79968700586a33c61354", "text": "You sound like you are budgeting too much for food. Try limiting yourself to $200 a month for food and take that out in cash. When it's up, it's up. It's a hard way to learn but if you can tackle that, then budgeting for other things gets easier. In terms of your fear of doing a financial bellyflop, which is valid, it sounds like you may need to both sit down and learn a little more about personal finance. Try mrmoneymustache.com or fivecentnickel, or any of the other frugal living blogs that are out there. There are whole communities that can help you and give you tips to do more with less, and learn budgeting and finance and how to handle your money and your future. And no worries, the fact you are concerned enough to look for direction now means you may be able to avoid your fear completely.", "title": "" }, { "docid": "819557c32a8d63b6258f95d14b085c0a", "text": "Put your budget down on paper/spreadsheet/tool of choice (e.g Mint, YNAB, Excel). Track every cent for a few months. Seeing it written down makes The Financial Conversation easier. One simple trick is to pay yourself first. Take $100 and sock it away each month, or $25 per paycheck - send it to another account where you won't see it. Then live off the rest. For food - make a meal plan. Eggs are healthy and relatively cheap so you have breakfast covered. Oatmeal is about $2 for a silos' worth. Worst case you can live off of ramen noodles, peanut butter and tuna for a month while you catch up. Cut everything as some of the others have answered - you will be amazed how much you will not miss. Dave Ramsey's baby steps are great for getting started (I disagree with DR on a great many things so that's not advocating you sign up for anything). Ynab's methodology is actually what got me out of my mess - they have free classes in their website - where budgeting is about planning and not simply tracking. Good luck.", "title": "" } ]	[ { "docid": "d2cfeada7a458040c3b683316ec66c21", "text": "\"There is no magic formula to this, quite simply: earn, cut expenses, and pay. It sounds like you can use a little bit of help in the earning area. While it sounds like you are career focused (which is great) what else can you do to earn? Can you start a low cost of entry side business? Examples would include tutoring, consulting, or even baby sitting. Can you work a part time job that is outside of your career field (waiter, gas station, etc...)? One thing that will help greatly is a written budget each and every month. Have a plan on where to spend your money. Then as you pay off a loan throw that money at the next one. No matter if you use the smallest loan first or highest interest rate first method if you do that your debt payments will \"\"snowball\"\", and you will gain momentum. I'd encourage you to keep good records and do projections. Keeping good records will give you hope when you begin to feel discouraged (it happens to just about everyone). Doing projections will give you goals to meet and then exceed. The wife and I had a lot of success using the cash envelope system and found that we almost always had money left over at the end of the pay cycle. For us that money went to pay off more debt. Do you contribute to a 401K? I'd cut that to at least the match, and if you want to get crazy cut it to zero. The main thing to know is that you can do it. I'd encourage you to pay off all your loans not just the high interests ones.\"", "title": "" }, { "docid": "06e5cec01e37f8eb72bb05d352980cf3", "text": ">if you don’t have a lot of money, the presence of a sizable sum in the house or even in the bank means that you’ll be constantly tempted to dip into it. The psychology behind statements like this are a source of amusement to me. They seem to presuppose that those who have less money are bad with it, kind of a chicken and egg issue that assumes one over the other. It makes me think that authors, researchers and opiners have likely never felt the degree of financial insecurity that drives behaviors such as the ones being discussed. If you don't have a lot of money, the possession of a sizable sum presents other problems, such as issues of needs and purchases that have been put off due to a lack of resources while you prioritized for survival. You put off buying the washing machine because your car needed repairs, how else were you going to be able to get to work? You can limp by using a laundromat or doing laundry at your parents' house. But you likely put off all sorts of other needs as well, and now you have to find the best way to allocate a sizable sum that likely isn't going to be enough to address all of the needs you have put off. While you're trying to decide how to best allocate this resource, don't forget the talking heads that lecture you on the importance of an emergency fund. Disregard for a moment that when cash is such a scarce resource, any unexpectedly dire circumstance which would be best resolved by your having more of it probably constitutes an emergency.", "title": "" }, { "docid": "747228de68d50eeb53a114dfcfce24a9", "text": "\"I think it's great that you want to contribute. Course Instructor You may want to take a look at becoming an instructor for a course like Dave Ramsey's Financial Peace University. These are commonly offered through churches and other community venues for a fee. This may be a good fit if you want to focus on basic financial literacy, setting up and sticking to a budget, and getting their financial \"\"house\"\" in order. It may not be a good fit if you don't want to teach an existing curriculum, or if you find the tenets of the course too unpalatable. A significant number of the people in Dave's audience are close to or in the middle of a financial meltdown, and so his advice includes controversial ideas such as avoiding credit altogether, often because that's how they got into their current mess. Counselor If you want to run your own show, I know of several people who have built their own practice that is run along the lines of a counselor charging hourly rates, and they work with couples who are having money problems. Building a reputation and a network of referring counselors and professionals is key here, and definitely seems like it would require a full-time commitment. I would avoid \"\"credit counseling\"\" and the like. Most of these organizations are focused on restructuring credit card debt, not spending signficant time on behavioral change. You don't need a series 7, 63, 65 etc. or even a CFA. I've previously acquired a number of these and can confirm that they are investment credentials that are intended to help you get a job and/or get more business as a broker or conventional financial planner, i.e. salesperson of securities. The licensure process is necessary to protect consumers from advice that serves the investment sales force but is bad for the consumer, and because you must be licensed to provide investment advice. There is a class of fee-only financial planners, but they primarily deal with complex issues that allow them to make money, and often give away basic personal finance advice for free in the form of articles, podcasts, etc. Charity For part-time or free work, in my area there are also several charity organizations that help people do their taxes and provide basic budgeting and personal finance instruction, but this is very localized and may vary quite a bit depending on where you live. However, if there are none near you, you can always start one! Journalism If you have an interest in writing, there are also people who work as journalists and write columns, books, or newsletters, and it is much easier now to publish and build a network online, either on your own, through a blog or contributing to a website. Speaker at Community events There are also many opportunities to speak to a specific community such as a church or social organization. For example, where I live there are local organizations for Spanish speaking, Polish speaking, elderly, young professional, young mother and retiree groups for example, all of who might be interested in your advice on issues that specifically address their needs. Good luck!\"", "title": "" }, { "docid": "3efd6b04f4c411da91108e1ba6a83ead", "text": "\"Debt cripples you, it weighs you down and keeps you from living your life the way you want. Debt prevents you from accomplishing your goals, limits your ability to \"\"Do\"\" what you want, \"\"Have\"\" what you want, and \"\"Be\"\" who you want to be, it constricts your opportunities, and constrains your charity. As you said, Graduated in May from school. Student loans are coming due here in January. Bought a new car recently. The added monthly expenses have me concerned that I am budgeting my money correctly. Awesome! Congratulations. You need to develop a plan to repay the student loans. Buying a (new) car before you have planned you budget may have been premature. I currently am spending around 45-50% of my monthly (net)income to cover all my expenses and living. The left over is pretty discretionary, but things like eating dinner outside the house and expenses that are abnormal would come out of this. My question is what percentage is a safe amount to be committing to expenses on a monthly basis? Great! Plan 40-50% for essentials, and decide to spend under 20-30% for lifestyle. Be frugal here and you could allocate 30-40% for financial priorities. Budget - create a budget divided into three broad categories, control your spending and your life. Goals - a Goal is a dream with a plan. Organize your goals into specific items with timelines, and steps to progress to your goals. You should have three classes of goals, what you want to \"\"Have\"\", what you want to \"\"Do\"\", and who you want to \"\"Be\"\"; Ask yourself, what is important to you. Then establish a timeline to achieve each goal. You should place specific goals or steps into three time blocks, Near (under 3-6 months), medium (under 12 months), and Long (under 24 months). It is ok to have longer term plans, but establish steps to get to those goals, and place those steps under one of these three timeframes. Example, Good advice I have heard includes keeping housing costs under 25%, keeping vehicle costs under 10%, and paying off debt quickly. Some advise 10-20% for financial priorities, but I prefer 30-40%. If you put 10% toward retirement (for now), save 10-20%, and pay 10-20% toward debt, you should make good progress on your student loans.\"", "title": "" }, { "docid": "8f5459f1cebd7e7c8731886b20bd6197", "text": "\"I see you have posted other questions regarding household budgets. This is a huge first step. Once you see what is coming in, then list everything that goes out regularly...and then try to break down what is leftover into spending, household maintenance, gifts, haircuts, whatever...it becomes very obvious if you have x to spend and you spend 3x. I budget a certain amount of discretionary money for both my husband and myself to spend each month. All of our basic expenses are covered under other categories, but I found out long ago that we each need some money to blow on Starbucks, DVD's, books, etc without having to defend or explain it. If we spend too much, it digs into the next month's amount, or if we are careful, we get to carry it over. I can impulse shop guilt free because it's budgeted in. Long story short, if you set up a budget and have an amount budgeted for most reasonable expenses, and see what is left over...it becomes harder to \"\"unwittingly\"\" overspend. When you are paying attention to your money, and start looking carefully at how you are spending it, you'll notice.\"", "title": "" }, { "docid": "0b13393accc83213c5973089554b85d3", "text": "\"A budget that you both agree on is a great goal. X% to charity, y% to savings, $z a month to a reserve for house repairs, and so on. Your SO is likely to agree with this, especially if you say it like this: I know you're concerned that I might want to give too much to charity. Why don't we go through the numbers and work out a cap on what I can give away each year? Like, x% of our gross income or y% of our disposable income? Work out x and y in advance so you say real percentages in this \"\"meeting request\"\", but be prepared to actually end up at a different x and y later. Perhaps even suggest an x and y that are a little lower than you would really wish for. If your SO thinks you earn half what you really do, then mental math if you say 5% will lead to half what you want to donate, but don't worry about that at the moment. That could even work in your favour if you've already said you want to give $5000 (or $50,000) a year and mental math with the percentage leads your SO to $2500 (or $25,000), (s)he might think \"\"yes, if we have this meeting I can rein in that crazy generosity.\"\" Make sure your budget is complete. You don't want your SO worrying that if the furnace wears out or the roof needs to be replaced, the money won't be there because you gave it away. Show how these contingencies, and your retirement, will all be taken care of. Show how much you are setting aside to spend on vacations, and so on. That will make it clear that there is room to give to those who are not as fortunate as you. If your SO's motivations are only worry that there won't be money when it's needed, you will not only get permission to donate, you'll get a happier SO. (For those who don't know how this can happen, I knew a woman just like this. The only income she believed they had was her husband's pension. He had several overseas companies and significant royalty income, but she never accounted for that when talking of what they could afford. Her mental image of their income was perhaps a quarter of what it really was, leading to more than one fight about whether they could take a trip, or give a gift, that she thought was too extravagant. For her own happiness I wish he had gone through the budget with her in detail.)\"", "title": "" }, { "docid": "4b65a7bc2e4502b2f706e84c5fc12f04", "text": "\"As THEAO suggested, tracking spending is a great start. But how about this - Figure out the payment needed to get to zero debt in a reasonable time, 24 months, perhaps. If that's more than 15% of your income, maybe stretch a tiny bit to 30 months. If it's much less, send 15% to debt until it's paid, then flip the money to savings. From what's left, first budget the \"\"needs,\"\" rent, utilities, etc. Whatever you spend on food, try to cut back 10%. There is no budget for entertainment or clothes. The whole point is one must either live beneath their means, or increase their income. You've seen what can happen when the debt snowballs. In reality, with no debt to service and the savings growing, you'll find a way to prioritize spending. Some months you'll have to choose, dinner out, or a show. I agree with Keith's food bill, $300-$400/mo for 3 of us. Months with a holiday and large guest list throws that off, of course.\"", "title": "" }, { "docid": "d4e224990a834d6a94e802252d5c6860", "text": "\"There's no easy solution to this. Unfortunately I think you need a different approach, as you say, using software to track expenses to visualise the percentages and such hasn't helped and in my own experience this sort of money management does not work with all people. Maybe you need to look at the expenses and decide what you can cut out. Somehow we all need to make a distinction between what we need (milk, bread) and what we don't need (magazines, dvds) but still purchase every now and then. Sadly buying things for the second category quickly builds up a bill just as big as the one for the weekly shop only that it contains nothing of actual value and it just seems too easy for some to spend and equal amount of money on \"\"wants\"\" as on \"\"needs\"\" and if a substantial amount of your outgoings are in this category that's where you need to focus the discussion. If you can't find any purchases like that I suspect you need to buy less expensive food.\"", "title": "" }, { "docid": "973cb5be67f212b096e1480696eac5df", "text": "Fuck managerial accounting to death. Anywho, I'm not sure what they mean by the variance being higher or lower in the budget. Variance in principle is the discrepancy from a budget and actual. I'll try to answer this from what I can see. The budget variance in this problem is unfavorable for Busy Community Support, mostly caused by a significant underestimating of your salaries expense in the budget.", "title": "" }, { "docid": "746c288007882dc4c832371ee62667c6", "text": "If you are happy, really honestly happy, there is no need to change because you read it somewhere. While I believe that budgeting in some fun is smart so you don't go crazy, I am really speaking for myself. I personally have to work at not spending more than I make, so I need to blow off some steam. I also think that you will find in the future something you want to do that costs money, and you would be glad to have it now. The same rules apply for you as they apply to everybody", "title": "" }, { "docid": "4212b0339f7fe317e16e428659c08334", "text": "\"Use the budget to drive down spending so you can save (for retirement, for college, for expenses) and so you can pay off your mortgage early. Some, (Dave Ramsey, for example) advocate for an \"\"Envelope system\"\"... If your budget says 100 a month for restaurants, then at the beginning of the month, you put 100 into that envelope. Once you've spent that much on restaurants that month, you're done for the month. On the other hand, if you don't spend the 100, then you have two choices: either you can adjust the budget downward and put the money somewhere else (like your Mortgage) or you can build up cash in that account so you can afford a really expensive restaurant in a few months.\"", "title": "" }, { "docid": "24ce1d080d8142a55975f5ea1e071e6d", "text": "\"I can see why you are feeling financial stress. If I understand right you have put yourself in a very uncomfortable and unsustainable situation and one that should indeed be very stressful for a person of your age. I feel a lot of stress just reading over your question. I'm going to be very frank. Your financial situation suggests that you have very aggressively taken wealth from your future self in order to consume and to make inefficient investments. Well, look in the mirror and say to yourself \"\"I am now my future self and it is time to pay for my past decisions.\"\" Don't take money out of your IRA. That would be continuing the behavior as it is a very inefficient use of your resources that will lead to yet more extreme poverty down the line. Ok, you can't take back what you have done in the past. What to do now? Major life restructuring. If I were you, I'd sell my house if I had one. Move in with one of your kids if you have any nearby. If not, move into the cheapest trailer you can find. Take a second job. Very seriously look to see if you can get a job that pays more for your primary job--I know you love your current job but you simply cannot continue as you are now. Start eating really cheap food and buying clothes at thrift stores. Throw everything you can at your debts, starting with the ones with the highest interest rate. Plan now to continue working long after your peers have retired. Early in life is the time to be borrowing. Middle age is when you should be finishing paying off any remaining debts and tucking away like crazy for retirement. Now is not an OK time to be taking on additional debt to fund consumption. I know changing your life is going to be very uncomfortable, but I think you will find that there is more peace of mind in having some amount of financial security (which for you will require a LOT of changes) than in borrowing ever more to fund a lifestyle you cannot sustain.\"", "title": "" }, { "docid": "eae66be543511758236f6463a1f93a21", "text": "\"You know how when people called in on the Car Talk radio show (Click and Clack, I miss those guys), and while the caller asked a question about his car, really he needed marital advice? And the hosts would pounce on the part about the disagreement with family member and provide an unexpected answer (\"\"Yeah, the trick to a using a clutch is [...], but really, if you want to learn to drive a stick shift, get your dad out of the car!\"\") So I'm pouncing on the part about the spouse. It sounds like you and your spouse don't always agree on saving and spending, and you want to find a way to agree on saving and spending. If you can find a coach or planner or counselor that you both like and both trust, then go for it. You're looking more for the right personality than a precise job description. Start with exploring what you do agree on: we agree we need to save money, we agree we need to have a spending plan and budget, etc. The right coach will help you get to more agreement -- the job title is less important.\"", "title": "" }, { "docid": "358304736342d36c627f959472de9729", "text": "Communicate. I would recommend taking a course together on effective communications, and I would also suggest taking a course on budgeting and family financial planning. You need to be able to effectively communicate your financial plans and goals, your financial actions, and learn to both be honest and open with your partner. You also need to be certain that you come to an agreement. The first step is to draft a budget that you both agree to follow. The following is a rough outline that you could use to begin. There are online budgeting tools, and a spreadsheet where you can track planned versus actuals may better inform your decisions. Depending upon your agreed priorities, you may adjust the following percentages, Essentials (<50% of net income) Financial (>20%) Lifestyle (<30%) - this is your discretionary income, where you spend on the things you want Certain expense categories are large and deserve special advice. Try to limit your housing costs to 25% of your income, unless you live in a high-cost/rent area (where you might budget as high as 35%). Limit your expenses for vehicles below 10% of income. And expensive vehicle might be budgeted (partly) from Lifestyle. Limiting your auto payment to 5% of your income may be a wise choice (when possible). Some families spend $200-300/month on cable TV, and $200-300/month on cellphones. These are Lifestyle decisions, and those on constrained budgets might examine the value from those expenses against the benefit. Dining out can be a budget buster, and those on constrained budgets might consider paying less for convenience, and preparing more meals at home. An average family might spend 8-10% of their income on food. Once you have a budget, you want to handle the following steps, Many of the steps are choices based upon your specific priorities.", "title": "" }, { "docid": "df5b065cb05a89d4e4f2b3b525e02327", "text": "\"Brokerages offer you the convenience of buying and selling financial products. They are usually not exchanges themselves, but they can be. Typically there is an exchange and the broker sends orders to that exchange. The main benefit that brokers offer is a simpler commission structure. Not all brokers have their own liquidity, but brokers can have their own allotment of shares of a stock, for example, that they will sell you when you make an order, so that you get what you want faster. Regarding accounts at the exchanges to track actual ownership and transfer of assets, it is not safe to assume thats how that works. There are a lot of shortcomings in how the actual exchange works, since the settlement time is 1 - 3 business days, depending on the product (so upwards of 5 to 6 actual days). In a fast market, the asset can change hands many many times making the accounting completely incorrect for extended time periods. Better to not worry about that part, but if you'd like to read more about how that is regulated look up \"\"Failure To Deliver\"\" regulations on short selling to get a better understanding of market microstructure. It is a very antiquated system.\"", "title": "" } ]	fiqa
802d22b913644be8ccb4715a6a695ee9	Mitigate Effects Of Credit With Tangible Money	[ { "docid": "f0f27d3d497769d2b2fda5a0d8869bff", "text": "If you have no credit history but you have a job, buying an inexpensive used car should still be doable with only a marginally higher interest rate on the car. This can be offset with a cosigner, but it probably isn't that big of a deal if you purchase a car that you can pay off in under a year. The cost of insurance for a car is affected by your credit score in many locations, so regardless you should also consider selling your other car rather than maintaining and insuring it while it's not your primary mode of transportation. The main thing to consider is that the terms of the credit will not be advantageous, so you should pay the full balance on any credit cards each month to not incur high interest expenses. A credit card through a credit union is advantageous because you can often negotiate a lower rate after you've established the credit with them for a while (instead of closing the card and opening a new credit card account with a lower rate--this impacts your credit score negatively because the average age of open accounts is a significant part of the score. This advice is about the same except that it will take longer for negative marks like missed payments to be removed from your report, so expect 7 years to fully recover from the bad credit. Again, minimizing how long you have money borrowed for will be the biggest benefit. A note about cosigners: we discourage people from cosigning on other people's loans. It can turn out badly and hurt a relationship. If someone takes that risk and cosigns for you, make every payment on time and show them you appreciate what they have done for you.", "title": "" }, { "docid": "95f8b0a9613586413cfb36902c06e781", "text": "Genius answer: Don't spend more than you make. Pay off your outstanding debts. Put plenty away towards savings so that you don't need to rely on credit more than necessary. Guaranteed to work every time. Answer more tailored to your question: What you're asking for is not realistic, practical, logical, or reasonable. You're asking banks to take a risk on you, knowing based on your credit history that you're bad at managing debt and funds, solely based on how much cash you happen to have on hand at the moment you ask for credit or a loan or based on your salary which isn't guaranteed (except in cases like professional athletes where long-term contracts are in play). You can qualify for lower rates for mortgages with a larger down-payment, but you're still going to get higher rate offers than someone with good credit. If you plan on having enough cash around that you think banks would consider making you credit worthy, why bother using credit at all and not just pay for things with cash? The reason banks offer credit or low interest on loans is because people have proven themselves to be trustworthy of repaying that debt. Based on the information you have provided, the bank wouldn't consider you trustworthy yet. Even if you have $100,000 in cash, they don't know that you're not just going to spend it tomorrow and not have the ability to repay a long-term loan. You could use that $100,000 to buy something and then use that as collateral, but the banks will still consider you a default risk until you've established a credit history to prove them otherwise.", "title": "" }, { "docid": "3016523c58d3732669c4b1fb1f76b3e5", "text": "\"Right now you are standing at a fork in the road. If I could tell my younger self who blasted past that fork without noticing it what to do, I would say: Research \"\"Financial Independence\"\" and \"\"Early Retirement\"\" and \"\"frugal living\"\". If you do it right you can be financially independent in 5-15 years depending on your comfort level with frugal living. Many people celebrate graduation by financing a new car. It's like a quadruple whammy. New car brings sticker shock. Financing is paying to use someone else's money. Buying a car period is buying into the commuter lifestyle. And the cash flow could have gone to reducing debt or building savings. One blog I read advises that this step adds ten years to the time you have to work before you become financially independent.\"", "title": "" } ]	[ { "docid": "67c16553eb107f3a09a363b409f3429c", "text": "Although I do not know about US Institutions; In India Banks have adopted a mix of features that mitigate the risk. Some ways that are used are;", "title": "" }, { "docid": "41be16162f9c8fab361ef64f24f0ab6f", "text": "That might happen if this incident leads to a deflationary demand for consumer credit instruments in the US to approaching Third World penetration levels. Ironic, as the consumer credit industry is spending gigadollars trying to spark the same consumer credit frenzy in those countries. The demographics are already primed for turning away from consumer credit, as the Millennials are already increasingly predisposed against credit as they age.", "title": "" }, { "docid": "1eeac08e28c08a3705cc03b636ef3e2c", "text": "\"Those are just a form of \"\"rent tax\"\" on real economy - that is, people that work in those non-productive sectors of economy are just using the fruits of labor of all the others. But only the real economy actually matters - and having a few extra zeroes in the bank accounts of the rich don't really affect it as long as those money stay there. Money that are not exchanged for real world goods and services don't really exist for the real economy.\"", "title": "" }, { "docid": "9e8ab7bad2338f1701bb254dfdb8835e", "text": "\"Nobel laureate economist, Paul Krugman, wrote a piece many moons ago about economic expansion and money supply. As an illustration of how money supply affects the economy, he used the example of a baby-sitting co-op. While simplistic, it provides an easy to grasp notion of how printing money and restricting it (e.g. by pegging the currency to gold reserves) can affect the economy. Here is an excerpt from his webpage ( http://web.mit.edu/krugman/www/howfast.html ): \"\"With the decline of the traditional extended family, in which relatives were available to take care of children at need, many parents in the United States have sought alternative arrangements. A popular scheme is the baby-sitting coop, in which a group of parents agree to help each other out on a reciprocal basis, with each parent serving both as baby-sitter and baby-sittee. Any such coop requires rules that ensure that all members do their fair share. One natural answer, at least to people accustomed to a market economy, is to use some kind of token or marker system: parents \"\"earn\"\" tokens by babysitting, then in turn hand over these tokens when their own children are minded by others. For example, a recently formed coop in Western Massachusetts uses Popsicle sticks, each representing one hour of babysitting. When a new parent enters the coop, he or she receives an initial allocation of ten sticks. This system is self-regulating, in the sense that it automatically ensures that over any length of time a parent will put in more or less the same amount of time that he or she receives. It turns out, however, that establishing such a token system is not enough to make a coop work properly. It is also necessary to get the number of tokens per member more or less right. To see why, suppose that there were very few tokens in circulation. Parents will want on average to hold some reserve of tokens - enough to deal with the possibility that they may want to go out a few times before they have a chance to babysit themselves and earn more tokens. Any individual parent can, of course, try to accumulate more tokens by babysitting more and going out less. But what happens if almost everyone is trying to accumulate tokens - as they will be if there are very few in circulation? One parent's decision to go out is another's opportunity to babysit. So if everyone in the coop is trying to add to his or her reserve of tokens, there will be very few opportunities to babysit. This in turn will make people even more reluctant to go out, and use up their precious token reserves; and the level of activity in the coop may decline to a disappointingly low level. The solution to this problem is, of course, simply to issue more Popsicle sticks. But not too many - because an excess of popsicle sticks can pose an equally severe problem. Suppose that almost everyone in the coop has more sticks than they need; then they will be eager to go out, but reluctant to babysit. It will therefore become hard to find babysitters - and since opportunities to use popsicle sticks will become rare, people will become even less willing to spend time and effort earning them. Too many tokens in circulation, then, can be just as destructive as too few.\"\" -- Paul Krugman, 1997 (accessed webpage 2010).\"", "title": "" }, { "docid": "7252370787b0eb06f8699bd008627e83", "text": "\"Most of your money doesn't exist as physical cash, but simply as numbers in a ledger. At any given time, banks expect their clients to withdraw a certain percentage of their balances... For instance, checking accounts are frequently drawn down to zero, savings accounts might be emptied once our twice a year, CDs are almost never withdrawn, etc. To cover those withdrawals, banks keep a certain amount of physical cash on hand, and an additional amount remains on the ledgers. The rest gets loaned out to their customers for use in buying homes, cars, credit cards,etc. Anything they can't loan out directly gets deposited with the federal reserve or loaned directly to other institutions who need it. However, those last two options tend to be short term (ie overnight) loans. With debit cards functioning 24/7, you could get cash at an atm or make a purchase anytime of the day our night. The weekend has nothing to do with it. Which is a long way of saying \"\"No, they do it all the time, not just on weekends\"\" ;)\"", "title": "" }, { "docid": "c3c3f7d8b8ea34d9e2946cdc47094ef5", "text": "What you are seeing is the effects of inflation. As money becomes less valuable it takes more of it to buy physical things, be they commodities, shares in a company's stock, and peoples time (salaries). Just about the only thing that doesn't track inflation to some degree is cash itself or money in an account since that is itself what is being devalued. So the point of all this is, buying anything (a house, gold, stocks) that doesn't depreciate (a car) is something of a hedge against inflation. However, don't be tricked (as many are) into thinking that house just made you a tidy sum just because it went up in value so much over x years. Remember 1) All the other houses and things you'd spend the money on are a lot more expensive now too; and 2) You put a lot more money into a house than the mortgage payment (taxes, insurance, maintenance, etc.) I'm with the others though. Don't get caught up in the gold bubble. Doing so now is just speculation and has a lot of risk associated with it.", "title": "" }, { "docid": "16c971d462a23ed54ab3fe14c517f1e1", "text": "It's so wonderful. Through the magic of fractional reserve banking, a bank the vast majority of the time is loaning out money they created from thin air. And if you don't pay the obligation, they get a yacht, personal jet, or racehorse in return! Now, of course having to repossess something might be undesirable in an accounting context, but it still beggars belief that basically the entire economy and money supply of the developed world is based on obligations backed by nothing, by private parties, created out of thin air.", "title": "" }, { "docid": "01f84dfb9ac0438003575fe35c16a1ed", "text": "Well, it is a negative point of view, but nobody in the history of money has ever loaned money because they like you. I suppose you could paint it as an honest point of view. All money lending is for profit. If you have a high score, you are very likely to repay your loan because you are lower risk. We always hear lower risk... but the risk is that they won't make money off of you. I think that just like we buy previously owned vehicles cars instead of used cars, and we banks call them service fees instead of junk fees, our credit score discusses our credit worthiness instead of profitability But none of that means you can't benefit from it. It isn't a fear tactic, it is a way to judge each other. You probably pay interest and fees to keep it high, but that is price of lending. I think the questioner has a negative view of credit (which I suppose is fine and is their right, I will defend their right to an opinion) but the way we do and judge credit is neither evil or benevolent. I could certainly agree that more transparency would be good, but only for honest folks. If the credit bureaus made it public how they judged us, there would be a new industry for people who want to game the system. Update Since it always will cost to use credit, and using credit is the only way to prove your a low credit risk, it will therefore always cost money to raise your credit score. However the return on investment is exemplified in this question: a person with no credit was able to get a loan, but at serious out of pocket cost. Later, after establishing credit at a price of real money, he was able to secure a nearly identical loan for considerably less cost (in terms of interest paid) because he had proven himself worthy. When I say proven, I mean paid interest. There is nothing wrong with questioning the system, change only occurs when people question the status quo. And for sure our current system is not perfect, but like many employed systems while it is terrible but there is nothing better.", "title": "" }, { "docid": "8e1f3402f6be1995f6370f699e651c10", "text": "glass steall is one. getting rid of glass stegall meant commercial banks could create iou money irresponsibly through loaning and sell the loan to wall street speculators. This drives up assets to bubble prices. Inflation for all.", "title": "" }, { "docid": "b7f76f9460f0bf9659675302d6fb77fd", "text": "\"As others have pointed out, it sounds like the problem isn't the accessibility of your money, the problem is willpower. So, address that instead. How? Willpower is both a finite resource AND a resource that can be increased -- like muscle strength. Since willpower is finite, break down the problem into as many pieces as possible, then address only one of those pieces at a time. \"\"Be more sensible with my money\"\" is nebulous, vague, and large; there's no place to start. So break it apart: first thing is the one example in your question -- you go out on payday with friends/coworkers, intending to only buy a couple of beers (alcohol lowers willpower), and end up blowing through far more. So, what about making a rule to not go out on payday? Nice idea, but that might still be too hard to do -- if you have a habit of going out with them on payday, then this has become your community, and you will feel the loneliness of not going out with them, as well as the social pressure from them to do as you've always done. So, set up a different habit for that night, one that both involves the obligation of going there instead, and other people who will expect you to be there. Some examples would be a sport that happens to practice or compete on payday nights, or some charity that happens to need you at that time. Once you've broken that habit (and exulted in the resulting fattening of your wallet), look for other, similar leaks. I'm going to guess that all your money gets spent on going out to pubs (as opposed, say, to buying bric-a-brac you don't need). If so, then you need to face that you've adopted a pub-going culture, and that your community has shrunk to just those kind of people. It may seem like you have a lot of people in your life, but if all it takes to lose connection to all of them is to stop going to pubs, then you really don't. Your human connections, essential for an enjoyable life, are too fragile, too singly focused. So if that's the problem, branch out. Diversify the communities you're part of. I've already mentioned sport; church is another good one -- I mean a living church, the kind where the people are always doing stuff together and it's fun to go to, not the other kind where everyone sits in a pew for an hour a week and rushes the exits as soon as possible. Other possibilities are reaching out to neighbors or becoming politically involved. Hmmm... I started writing about willpower but I'm ending up at community. At your core, do you feel like if you didn't spend this way, that you wouldn't have any friends?\"", "title": "" }, { "docid": "b27e71a404f46fc0845924799db1fdac", "text": "\"In double-entry bookkeeping, no transaction is ever negative. You only deal in positive numbers. We \"\"simulate\"\" negative numbers by calling numbers debits and credits, where one is the negative of the other. Only a balance can be negative. In this case, Income is a credit account. That means that things that increase your balance are credits and things that reduce your balance are debits. So a gift from grandma is a credit. It's a positive number, and you write it in the credit column. You pretty much never subtract from Income except to correct a mistake. Assets, like a checking account, are debit accounts. Increases are debits and decreases are credits. You routinely have both debits and credits on a checking account, i.e. you put money in and you take money out. Every transaction affects (at least) two accounts: one with a debit and one with a credit. So in this case, the gift from grandma credits income and debits checking. Buying food credits checking and debits expenses.\"", "title": "" }, { "docid": "664ca934ade5fc73d94be5e943cbd187", "text": "The government multiplier effect is zero sum. You will see a multiplier in the short term, but taxpayers will have to pare back spending in the future to service the debt, reversing the initial multiplier. The funding burden for education and infrastructure spending should fall more heavily on those actually using it - more tuition fees, toll roads, etc.", "title": "" }, { "docid": "0507b77c98c3fcf6da71fa48b8d2b9c8", "text": "My bank will let me download credit card transactions directly into a personal finance program, and by assigning categories to stores I can get at least a rough overview of that sidd of things, and then adjust categories/splits when needed. Ditto checks. Most of my spending is covered by those. Doesn't help with cash transactions, though; if I want to capture those accurately I need to save receipts. There are ocr products which claim to help capture those; haven't tried them. Currently, since my spending is fairly stable, I'm mostly leaving those as unknown; that wouldn't work for you.", "title": "" }, { "docid": "9a6c83105beb787ba79e78241aa458a9", "text": "There is very little effect whatsoever of having a joint bank account--positive or negative. Positive effects: It would be very easy to send your mother money...she can just take it out of the account. If you passed away she could get the money without having to use the legal system (or vice versa). This latter effect is why I have a bunch of joint accounts with my wife...if either of us died I wouldn't want getting access to our money to be an additional hassle. Negative effects: She is able to access money in that account without your consen, which you have pointed out is not going to happen. The case I'm thinking of would be something like a tax lien against her. A government agency might choose to pull money out of that joint account. That would be a downside for you. If we were discussing credit cards, a loan, or a line of credit, there would be a number of legal and credit-rating effects from joint ownership. Not so much with checking accounts.", "title": "" }, { "docid": "f8fc4653026c6dc3c8d09768da22a0b7", "text": "edited you's to they's and I's =) Further, I'm not ballsy enough to go all out on this. I actually am slightly in debt buying silver. But in a hyper-inflation event credit is cheap to pay off. If one was confident enough they could hypothetically go into silver on large margin and pay it off quite easily after the hyperinflation occured. Much like what the government is doing with it's debt. At that point you are betting the government will continue doing what it is for a long while though. Just a thought.", "title": "" } ]	fiqa
d1adf4a55e800317f539105f17ca83a0	Where I can find S&P 500 stock data history?	[ { "docid": "c043eae8ce68058c54aca7a490fff9c7", "text": "I assume you're after a price time series and not a list of S&P 500 constituents? Yahoo Finance is always a reasonable starting point. Code you're after is ^GSPC: https://finance.yahoo.com/quote/%5EGSPC/history?p=^GSPC There's a download data button on the right side.", "title": "" } ]	[ { "docid": "545e9e42cce983a37760a9ff4bb41ede", "text": "I tried direct indexing the S&P500 myself and it was a lot of work. Lots of buys and sells to rebalance, tons of time in spreadsheets running calculations/monitoring etc, dealing with stocks being added or removed from the index, adding money (inflows). Etc. All of the work is the main reason I stopped. I came to realize the 0.05% I pay Vanguard is a great deal.", "title": "" }, { "docid": "c139204ef8db6cebd5386f5e6f653212", "text": "You'd have to buy that information. Quoting from this page, Commercial Historical Data Higher resolution and more complete datasets are generally not available for free. Below is a list of vendors which have passed our quality screening (in total, we screened over a dozen vendors). To qualify, the vendor must aggregate data from all US national/regional exchanges as only complete datasets are suitable for research use. The last point is especially important as there are many vendors who just get data from a couple sources and is missing important information such as dark pool trades. They offer some alternatives for free data: Daily Resolution Data 1) Yahoo! Finance– Daily resolution data, with split/dividend adjustments can be downloaded from here. The download procedure can be automated using this tool. Note, Yahoo quite frequently has errors in its database and does not contain data for delisted symbols. 2) QuantQuote Free Data– QuantQuote offers free daily resolution data for the S&P500 at this web page under the Free Data tab. The data accounts for symbol changes, splits, and dividends, and is largely free of the errors found in the Yahoo data. Note, only 500 symbols are available unlike Yahoo which provides all listed symbols. And they list recommendations about who to buy the data from.", "title": "" }, { "docid": "82c2ef3a0f37dfd65929f13ca4d90f18", "text": "I was going to comment above, but I must have 50 reputation to comment. This is a question that vexes me, and I've given it some thought in the past. Morningstar is a good choice for simple, well-organized financial histories. It has more info available for free than some may realize. Enter the ticker symbol, and then click either the Financials or the Key Ratios tab, and you will get 5-10 years of some key financial stats. (A premium subscription is $185 per year, which is not too outrageous.) The American Association of Individual Investors (AAII) provides some good histories, and a screener, for a $29 annual fee. Zacks allows you to chart a metric like EPS going back a long ways, and so you can then click the chart in order to get the specific number. That is certainly easier than sorting through financial reports from the SEC. (A message just popped up to say that I'm not allowed to provide more than 2 links, so my contribution to this topic will end here. You can do a search to find the Zacks website. I love StackExchange and usually consult it for coding advice. It just happens to be an odd coincidence that this is my first answer. I might even have added that aside in a comment, but again, I can't comment as of yet.) It's problem, however, that the universe of free financial information is a graveyard of good resources that no longer exist. It seems that eventually everyone who provides this information wants to cash in on it. littleadv, above, says that someone should be paid to organize all this information. However, think that some basic financial information, organized like normal data (and, hey, this is not rocket science, but Excel 101) should be readily available for free. Maybe this is a project that needs to happen. With a mission statement of not selling people out later on. The closest thing out there may be Quandl (can't link; do a search), which provides a lot of charts for free, and provides a beautiful and flexible API. But its core US fundamental data, provided by Sharadar, costs $150 per quarter. So, not even a basic EPS chart is available there for free. With all of the power that corporations have over our society, I think they could be tabulating this information for us, rather than providing it to us in a data-dumb format that is the equivalent of printing a SQL database as a PDF! A company that is worth hundreds of billions on the stock market, and it can't be bothered to provide us with a basic Excel chart that summarizes its own historical earnings? Or, with all that the government does to try to help us understand all of these investments, they cannot simply tabulate some basic financial information for us? This stuff matters a great deal to our lives, and I think that much of it could and should be available, for free, to all of us, rather than mainly to financial professionals and those creating glossy annual reports. So, I disagree that yet another entity needs to be making money off providing the BASIC transparency about something as simple as historical earnings. Thank you for indulging that tangent. I know that SE prides itself on focused answers. A wonderful resource that I greatly appreciate.", "title": "" }, { "docid": "6f8f4f0e86dfd43dd70b7d48f6ee9d1f", "text": "A number of places. First, fast and cheap, you can probably get this from EODData.com, as part of a historical index price download -- they have good customer service in my experience and will likely confirm it for you before you buy. Any number of other providers can get it for you too. Likely Capital IQ, Bloomberg, and other professional solutions. I checked a number of free sites, and Market Watch was the only that had a longer history than a few months.", "title": "" }, { "docid": "e05dcedf1a1bea716785027fabcee543", "text": "\"Considering the fact that you are so unaware of how to find such data, I find it very very hard to believe that you actually need it. \"\"All trade and finance data for as much tickers and markets as possible.\"\" Wtf does that even mean. You could be referencing thousands of different types of data for any given \"\"ticker\"\" with a statement so vague. What are you looking for?\"", "title": "" }, { "docid": "5e9f78b304262a787f28122f0e2865ff", "text": "I haven't seen one of these in quite some time. Back in the 1970s, maybe the 1980s, stock brokers would occasionally send their retail clients a complimentary copy once in a while. Also, I remember the local newspaper would offer a year-end edition for a few dollars (maybe $3) and that edition would include the newspaper company's name on the cover. They were very handy little guides measuring 5 1/2 x 8 (horizontal) with one line devoted to each company. They listed hundreds of publicly traded companies and had basic info on each company. As you stated, for further info you needed to go to the library and follow-up with the big S&P and/or Moody's manuals. That was long before the internet made such info available at the click of a button on a home computer!", "title": "" }, { "docid": "477ff98da46062514eaec62de026fd63", "text": "Center for Research in Security Prices would be my suggestion for where to go for US stock price history. Major Asset Classes 1926 - 2011 - JVL Associates, LLC has a PDF with some of the classes you list from the data dating back as far as 1926. There is also the averages stated on a Bogleheads article that has some reference links that may also be useful. Four Pillars of Investing's Chapter 1 also has some historical return information in it that may be of help.", "title": "" }, { "docid": "5e94e5d41bae9c399526f9811866f985", "text": "It's quite alright, it's been over a decade since he passed so I'm not particularly sensitive about it any more. I'll have a look at investopedia, but what I'm mainly interested in is private equity. I wanted to ask directly about that, but I feel that I need a frame of reference to understand what's going on. As in, I doubt I'd be able to really get private equity without first having an understanding of public trading. Is this subreddit really that reputable? I've learned to not really trust reddit, for the most part. Is there some kind of curation here?", "title": "" }, { "docid": "9764ba3afd9210806de741e49eaf845a", "text": "\"Google Docs spreadsheets have a function for filling in stock and fund prices. You can use that data to graph (fund1 / fund2) over some time period. Syntax: =GoogleFinance(\"\"symbol\"\", \"\"attribute\"\", \"\"start_date\"\", \"\"num_days\|end_date\"\", \"\"interval\"\") where: This analysis won’t include dividends or distributions. Yahoo provides adjusted data, if you want to include that.\"", "title": "" }, { "docid": "699745e7c7937d1720f0f1a34cb89933", "text": "Hi guys, This is an app I've been working on over the summer. It's my belief that a lot of people want to learn about the stock market but in the end can't because they're turned off by long walls of text you get when you Google about them/read a textbook. I know there are other simplified solutions out there but they're not widely adopted yet and I don't think there are any (?) that were made app first. Anyway, check it out if you can. Appreciate all feedback/comments.", "title": "" }, { "docid": "8874c2e14077c87317b65163a01e3d35", "text": "\"The graphing tools within Yahoo offer a decent level of adjustment. You can easily choose start and end years, and 2 or more symbols to compare. I caution you. From Jan 1980 through Dec 2011, the S&P would have grown $1 to $29.02, (See Moneychimp) but, the index went up from 107.94 to 1257.60, growing a dollar to only $11.65. The index, and therefore the charts, do not include dividends. So long term analysis will yield false results if this isn't accounted for. EDIT - From the type of question this is, I'd suggest you might be interested in a book titled \"\"Stock Market Logic.\"\" If memory serves me, it offered up patterns like you suggest, seasonal, relations to Presidential cycle, etc. I don't judge these approaches, I just recall this book exists from seeing it about 20 years back.\"", "title": "" }, { "docid": "7ab8da72c085bedff94ecbf207642e2a", "text": "The S&P 500 represents a broadly diversified basket of stocks. Silver is a single metal. If all else is equal, more diversification means less volatility. A better comparison would be the S&P 500 vs. a commodities index, or silver vs. some individual stock.", "title": "" }, { "docid": "7617e14cd3d865fab29e1444486990d8", "text": "Well i dont know of any calculator but you can do the following 1) Google S&P 500 chart 2) Find out whats the S&P index points (P1) on the first date 3) Find out whats the S&P index points (P2) on the second date 4) P1 - P2 = result", "title": "" }, { "docid": "6360e82fca576b1e4ac690aac5a37829", "text": "\"I looked at data from Sept 2010 to present: Standard deviation is what shows the spread shape of returns over time, and it meanS that about 2/3 of the time, AAPL return was within +/- 1.65 higher/lower than the daily average return which was .21 %. Not sure where to go with this except to suggest that in fact, AAPL is more volatile than the S&P and even another random tech company. With time, I'd probably come up with a list of stock more volatile. I know that when I look at a list of stocks I track on Yahoo, there are always a few that are just as volatile on a given day. Excel makes the above analysis easy to do for a given stock, and it's actually an interesting exercise, at least for me. Disclaimer - the shape of stock returns is not a bell curve, and STdev is just a best fit. Edit - given more time to tinker on excel, it would be interesting to see how the stock's volatility tracked over the years, did it increase or does it feel that way due to the high price? A $20 swing on a $600 stock is the same as a $2 swing on a $60 stock, yet \"\"up $20\"\" sounds huge.\"", "title": "" }, { "docid": "9e6f5a82008f9330d2061b78d7cbadd5", "text": "I spent a while looking for something similar a few weeks back and ended up getting frustrated and asking to borrow a friend's Bloombterg. I wish you the best of luck finding something, but I wasn't able to. S&P and Morningstar have some stuff on their site, but I wasn't able to make use of it. Edit: Also, Bloomberg allows shared terminals. Depending on how much you think as a firm, these questions might come up, it might be worth the 20k / year", "title": "" } ]	fiqa
8fa70e8f39f9f638844b2b640d81a071	Refinancing a vehicle, longer term with extra in the kitty, or shorter term and just make scheduled payment?	[ { "docid": "2c751bc2bae47eaa538903251c897a69", "text": "\"It really depends on the answers to two questions: 1) How tight is your budget going to be if you have to make that $530 payment every month? Obviously, you'd still be better off than you are now, since that's still $30 cheaper. But, if you're living essentially paycheck to paycheck, then the extra flexibility of the $400/month option can make the difference if something unforeseen happens. 2) How disciplined (financially) have you proven you can be? The \"\"I'll make extra payments every month\"\" sounds real nice, but many people end up not doing it. I should know, I'm one of them. I'm still paying on my student loans because of it. If you know (by having done it before), that you can make that extra $130 go out each and every month and not talk yourself into using it on all sorts of \"\"more important needs\"\", then hey, go for it. Financial flexibility is a great thing, and having that monthly nut (all your minimum living expenses combined) as low as possible contributes greatly to that flexibility. Update: Another thing to consider Another thing to consider is what they do with your extra payment. Will they apply it to the principal, or will they treat it as a prepayment? If they apply it to principal, it'll be just like if you had that shorter term. Your principal goes down additionally by that extra amount, and the next month, you owe another $400. On the other hand, if they treat it as a prepayment, then that extra $130 will be applied to the next month's bill. Principal stays the same, and the next month you'll be billed $270. There are two practical differences for you: 1) With prepayment, you'll pay slightly more interest over that 60 months paying it off. Because it's not amortized into the loan, the principal balance doesn't go down faster while the loan exists. And since interest is calculated on the remaining principal balance, end result is more interest than you otherwise would have paid. That sucks, but: 2) with the prepayment, consider that at the end of year 2, you'd have over 7 months of payments prepaid. So, if some emergency does come up, you don't have to send them any money at all for 7 months. There's that flexibility again. :-) Honestly, while this is something you should find out about the loan, it's really still a wash. I haven't done the math, but with the interest rate, amount of the loan and time frame, I think the extra interest would be pretty minor.\"", "title": "" }, { "docid": "a088c74e47a57ae6275d22424c8002ee", "text": "Refinancing a car for anything other than lowering the rate is not a good idea. Keep the same term, or take a shorter one. Remember that unlike real property, a car only loses value. So when you make your payments on your 84 month (!) loan, those payments are amortized so that the interest is front loaded. The problem is, when your car gets totalled around month 24, insurance will generally only pay what the car is worth, and you'll owe more.", "title": "" } ]	[ { "docid": "046678fd241d5fd776f2a2c6d324bd7e", "text": "No. It's perhaps a bit obvious, but with the shorter term loan you would be contractually obligated to pay the higher monthly payment. By paying double on the longer loan, you retain the flexibility to pay less. And you would pay less interest if you truly doubled your payment on the longer loan. This is because you'd be paying off more of the principal more quickly. (But you'd also be making a slightly higher payment than on the shorter term loan.) You can play with the amortization calculator at Bankrate to understand this.", "title": "" }, { "docid": "7665543f728d53114d0388a6ea8c214e", "text": "Dealerships make a lot of money in the finance department. One of the thing they play upon is your emotional reaction of purchasing a new vehicle (new to you in this case). They perform all sorts of shenanigans, like adding undercoat, selling gap insurance, or extended warranties. They entice you with a promise of a lower interest rate, but really what they are trying to do is back you into a payment. So if you can fiance 20,000, but the car you are buying is 16,000, then they will try to move that figure up to the 20K mark. In your case it sounded like some borderline (at the least) illegal activity they used to fool you into paying more. It sounds like you regret this decision which puts you a step ahead of most. How many people brag about the extended warranty or gap insurance they got included in the sale? As mentioned in another answer the best bet is to go into the dealership with financing in place. Say you were able to get a 3% loan on 16K. The total interest would be ~1600. If you avoid the finance room, you might avoid their dubious add ons that would probably cost you more then the 1600 even if you can get 0%. If you are going to buy a car on time, my advice would be to not fill out a credit app at the dealership. The dealership people through a conniption fit, but hold your ground. If need be get up and walk out. They won't let you leave. One thing I must mention, is that one feels very wealthy without that monthly pain in the a$$ payment for a car. You may want to try and envision yourself without a car payment, and make steps to making that a reality for the rest of your life.", "title": "" }, { "docid": "9e814218015e61c473d66135a4cfd495", "text": "I agree with the deposit part. But if you are buying a new car, the loan term should meet the warranty term. Assuming you know you won't exceed the mileage limits, it's a car with only maintainence costs and the repayment cost at that point.", "title": "" }, { "docid": "ff0eb373e33424d8d23565b07f33a629", "text": "Does the full time PHD student extend to 70-80 hours/week or more? If not, can you pick up an extra job to aid with living expenses? Also, whose name is the debt in? Is your wife paying to avoid the black mark on her credit record or her mother's? Basically what it looks like to me is that you guys currently have a car you cannot afford and that her mother doesn't seem to be able to afford either, at a ridiculous interest rate on top. Refinancing might be an option but at a payoff amount of 12k you're upside down even when it comes to the KBB retail value. I'm somewhat allergic to financing a deprecating asset (especially at a quick back of the envelope calculation suggests that she's already paid them around $18k if you are indeed three years into the loan). What I would be tempted to do in your situation is to attempt to negotiate a lower payoff to see if they're willing to settle for less and give you clean title to the car - worst thing they can say is no, but you might be able to get the car for a little less than the $12k, then preferably use your emergency money to pay off the car and put it up for sale. Use some of the money to buy her a cheaper car for, say, $4k-$5k (or less if you're mechanically inclined) and put the rest back into your emergency fund. The problem I see with refinancing it would be that it looks like you're underwater from a balance vs retail value perspective so you might have a problem finding someone to refinance it with you throwing some of your emergency money at it in the first place.", "title": "" }, { "docid": "79d2ca0681ec20663320a4dee527ced1", "text": "It could be a couple of things besides extra principal: I seem to remember hearing that some (shady?) lenders would just pocket extra payments if you didn't specify where they were headed, but I've also been told that this just isn't true.", "title": "" }, { "docid": "58e95a431a54882c2dd8e7b9524e93b1", "text": "\"Let's assess the situation first, then look at an option: This leaves you with about $1,017/mo in cash flow, provided you spend money on nothing else (entertainment, oil changes, general merchandise, gifts, etc.) So I'd say take $200/mo off that as \"\"backup\"\" money. Now we're at $817/mo. Question: What have you been doing with this extra $800/mo? If you put $600/mo of that extra towards the 10% loan, it would be paid off in 12 months and you would only pay $508 in interest. If you have been saving it (like all the wisest people say you should), then you should have plenty enough to either pay for a new transmission or buy a \"\"good enough\"\" car outright. 10% interest rate on a vehicle purchase is not very good. Not sure why you have a personal loan to handle this rather than an auto loan, but I'll guess you have a low credit score or not much credit history. Cost of a new transmission is usually $1,700 - $3,500. Not sure what vehicle we're talking about, so let's make it $3,000 to be conservative. At your current interest rate, you'll have paid another $1,450 in interest over the next 33 months just trying to pay off your underwater car. If you take your old car to a dealership and trade it in towards a \"\"new to you\"\" car, you might be able to roll your existing loan into a new loan. Now, I'm not sure when you say personal loan if you mean an official loan from a bank or a personal loan from a friend/family-member, so that could make a difference. I'm also not sure if a dealership will be willing to recognize a personal loan in the transaction as I'd wager there's no lien against the vehicle for them to worry about. But, if you can manage it, you may be able to get a lower overall interest rate. If you can't roll it into a new financing plan, then you need to assess if you can afford a new loan (provided you even get approved) on top of your existing finances. One big issue that will affect interest rates and approvals will be your down payment amount. The higher it is, the better interest rate you'll receive. Ultimately, you're in a not-so-great position, but if your monthly budget is as you describe, then you'll be fine after a few more years. The perils of buying a used car is that you never know what might happen. What if you don't repair your existing car, buy another car, and it breaks down in a year? It's all a bit of a gamble. Don't let your emotions get in the way of making a decision. You might be frustrated with your current vehicle, but if $3,000 of repairs makes it last 3 more years, (by which time your current loan should be paid off), then you'll be in a much better spot to finance a newer vehicle. Of course it would be much better to save up cash over that time and buy something outright, but that's not always feasible. Would you rather fix up your current car and keep working to pay down the debt, or, would you rather be rid of the car and put $3,000 down on a \"\"new to you\"\" car and take on an additional monthly debt? There's no single right answer for you. First and foremost you need to assess your monthly cash flow and properly allocate the extra funds. Get out of debt as soon as reasonably possible.\"", "title": "" }, { "docid": "5a0c90388fb6d27537a840d0a9086ab9", "text": "\"In addition to the two options in your question - pay off the entire loan, depleting your emergency fund; or continue as you are today - there is a third, middle-ground option that might be worth considering. Since you currently have an emergency fund, zero credit card debt, and you stated \"\"we can afford these expenses\"\", I think I'd be correct to assume that you're currently making regular contributions to either the emergency fund itself, or to another savings account, etc. Temporarily stop making those contributions, and divert those funds to make larger payments towards the upside-down loan. The additional amount will all be applied to the loan principal, reducing the interest you'll have to pay, but you'll avoid the risk of depleting the emergency fund. Additionally, the insurance premium may possibly be avoided, as in many places in the world it's possible to de-register the car (for example, in California, USA, you can submit an affidavit of Non-Use) then terminate the insurance on it. However, the car will likely have to be parked off-street (or in a location such as a private road governed by rules that do not include legal registration requirements).\"", "title": "" }, { "docid": "ac1b913c39ab30f29679bf9167b2f2b5", "text": "Hope you figure it out. There wouldn't be a different RFR / discount rate because you're assuming a return on parked cash - that's what it's for. Since both situations would theoretically happen simultaneously you use the same rate unless you would do something different with cash in each instance.", "title": "" }, { "docid": "6a5c235f65fc1356e1a56bb1815957f7", "text": "\"a link to this article grabbed my Interest as I was browsing the site for something totally unrelated to finance. Your question is not silly - I'm not a financial expert, but I've been in your situation several times with Carmax Auto Finance (CAF) in particular. A lot of people probably thought you don't understand how financing works - but your Car Loan set up is EXACTLY how CAF Financing works, which I've used several times. Just some background info to anyone else reading this - unlike most other Simple Interest Car Financing, with CAF, they calculate per-diem based on your principal balance, and recalculate it every time you make a payment, regardless of when your actual due date was. But here's what makes CAF financing particularly fair - when you do make a payment, your per-diem since your last payment accrued X dollars, and that's your interest portion that is subtracted first from your payment (and obviously per-diem goes down faster the more you pay in a payment), and then EVerything else, including Any extra payments you make - goes to Principal. You do not have to specify that the extra payment(S) are principal only. If your payment amount per month is $500 and you give them 11 payments of $500 - the first $500 will have a small portion go to interest accrued since the last payment - depending on the per-diem that was recalculated, and then EVERYTHING ELSE goes to principal and STILL PUSHES YOUR NEXT DUE DATE (I prefer to break up extra payments as precisely the amount due per month, so that my intention is clear - pay the extra as a payment for the next month, and the one after that, etc, and keep pushing my next due date). That last point of pushing your next due date is the key - not all car financing companies do that. A lot of them will let you pay to principal yes, but you're still due next month. With CAF, you can have your cake, and eat it too. I worked for them in College - I know their financing system in and out, and I've always financed with them for that very reason. So, back to the question - should you keep the loan alive, albeit for a small amount. My unprofessional answer is yes! Car loans are very powerful in your credit report because they are installment accounts (same as Mortgages, and other accounts that you pay down to 0 and the loan is closed). Credit cards, are revolving accounts, and don't offer as much bang for your money - unless you are savvy in manipulating your card balances - take it up one month, take it down to 0 the next month, etc. I play those games a lot - but I always find mortgage and auto loans make the best impact. I do exactly what you do myself - I pay off the car down to about $500 (I actually make several small payments each equal to the agreed upon Monthly payment because their system automatically treats that as a payment for the next month due, and the one after that, etc - on top of paying it all to principal as I mentioned). DO NOT leave a dollar, as another reader mentioned - they have a \"\"good will\"\" threshold, I can't remember how much - probably $50, for which they will consider the account paid off, and close it out. So, if your concern is throwing away free money but you still want the account alive, your \"\"sweet spot\"\" where you can be sure the loan is not closed, is probably around $100. BUT....something else important to consider if you decide to go with that strategy of keeping the account alive (which I recommend). In my case, CAF will adjust down your next payment due, if it's less than the principal left. SO, let's say your regular payment is $400 and you only leave a $100, your next payment due is $100 (and it will go up a few cents each month because of the small per-diem), and that is exactly what CAF will report to the credit bureaus as your monthly obligation - which sucks because now your awesome car payment history looks like you've only been paying $100 every month - so, leave something close to one month's payment (yes, the interest accrued will be higher - but I'm not a penny-pincher when the reward is worth it - if you left $400 for 1.5 years at 10% APR - that equates to about $50 interest for that entire time - well worth it in my books. Sorry for rambling a lot, I suck myself into these debates all the time :)\"", "title": "" }, { "docid": "990ee84479564d58ebd1880610c64df2", "text": "Hindsight is 20/20, but I offer some suggestions for how this might have gone down. If you had told the bank what was going on they might have extended the terms of your loan until the truck was ready. Alternatively you might have taken the loan (was it secured on the truck?) and put the money in a savings account until the truck showed up, while asking the dealer to pay the interest on it until the truck showed up. Or you might asked the dealer to supply you with a rental truck until yours showed up. I'm not saying I would have thought of these under the circumstances, but worth trying.", "title": "" }, { "docid": "a6edaf773aa0ae067158a533a5d4cbb6", "text": "If your payment schedule would have you pay the car off after 11 months then you might be best served by leaving a small final payment for July. The loan will appear on your credit for 7 years but the bump to your score will be reduced more after 2 years if you pay it off in less than 12 months. If you would have several payment left after you have the ability to pay it off then just pay it off. The reduction is not severe or worth the price of interest unless you have <1%. Unused credit has an attrition factor. If you continue to use your credit in a healthy way (>0 <20% balance, no late payments, long term accounts) then you should not even realize much of a negative change.", "title": "" }, { "docid": "3f619a6f40638cb8a9ed76badeb58cb7", "text": "\"Paperwork prevails. What you have is a dealer who get a kickback for sending financing to that institution. And the dealer pretty much said \"\"We only get paid our kickback at two levels of loan life, 6 and 12 months.\"\" You just didn't quite read between the lines. This is very similar to the Variable Annuity salespeople who tell their clients, \"\"The best feature about this product is that the huge commissions I get from the sale fund my kid's college tuition and my own retirement. You, on the other hand, don't really do so well.\"\" Car salesmen and VA sellers.\"", "title": "" }, { "docid": "9812d64c3ece8001274f40ca58b458fb", "text": "\"Assuming you've got no significant prepayment penalty, I would think about getting a longer mortgage, but making payments like it was a shorter mortgage. This will get the mortgage paid off in a shorter time period - but if you run into financial difficulties and/or find a better use for your money, you can drop back to paying the minimum necessary to retire the loan in 30 years without needing to refinance. (If you need to reduce your payments because you're between jobs, you don't have a very good negotiating position). For the most part, there's nothing that says you can only make one payment per month, or that it must be in the amount printed on the statement. If you want to, you can make payments weekly (or biweekly, or every 4 weeks) which typically means that you'll pay more every year. If your mortgage payments are $1000/month, that's $12,000 per year. If you tell yourself that 1000/month = $250 weekly and make yourself send a payment every week (or 500 every 2 weeks), you'll end up paying 250 * 52 = $13,000 per year, without particularly feeling the difference, especially if you get paid on a weekly/biweekly schedule instead of monthly or semi-monthly. Also, by paying more often, you're borrowing a tiny bit less money over the course of the year (because the money didn't sit in your account waiting until the 1st of the month to make a payment) so you save a little in interest there, too. Think of \"\"30 years\"\" or \"\"10 years\"\" as the basis for a minimum payment schedule, not necessarily the length of time that you or the lender really intend to keep the loan.\"", "title": "" }, { "docid": "2bf62c09fe325de41096aaf3e8b4b8f3", "text": "\"Does your planning include contingencies for Can you afford the late fees, insurance increases, bad credit hits and all the other downsides when this goes bad? Why does she NEED a new car on lease? Personally? I'd go for option B) Do what it takes to have her OWN a car. Why not just have her get a car that costs IN ENTIRE the $3k that would be used for a down payment on a lease? Maybe add a bit of your own money \"\"for old times sake\"\" to the pile? Or a small loan to get to where she can get a usable, dependable car? Say, a $3-5k loan in your name that she's responsible for the payments. $3-10k can get a very dependable old car. 10 great cars for 6k or less Everyone else has been burned by her - for whatever reason. No idea what the reasons are, but she seems to be unable to pay her bills. Why would this time be any different? Your name on a car + someone who can't pay bills = a bad proposition. I would LOVE to help anyone who's been important in my life. Including MY x-wife. But I wouldn't agree to this deal unless I KNEW that I could 100% cover the costs when things go bad - because at this point, odds are they will.\"", "title": "" }, { "docid": "1dbbd5514b243927ca57f2e225547cd7", "text": "Anytime you borrow money at that rate, you are getting ripped off. One way to rectify this situation is to pay the car off as soon as possible. You can probably get a second job that makes $1000 per month. If so you will be done in 4 months. Do that and you will pay less than $300 in interest. It is a small price to pay for an important lesson. While you can save some money refinancing, working and paying the loan off is, in my opinion a better option. Even if you can get the rate down to 12%, you are still giving too much money to banks.", "title": "" } ]	fiqa
586f58968a01c28eabd9b7e958b99b18	Accounting for currency depreciation	[ { "docid": "1df8591be32d4babf6b7a50426ebacda", "text": "Yes - it's called the rate of inflation. The rate of return over the rate of inflation is called the real rate of return. So if a currency experiences a 2% rate of inflation, and your investment makes a 3% rate of return, your real rate of return is only 1%. One problem is that inflation is always backwards-looking, while investment returns are always forward-looking. There are ways to calculate an expected rate of inflation from foreign exchange futures and other market instruments, though. That said, when comparing investments, typically all investments are in the same currency, so the effect of inflation is the same, and inflation makes no difference in a comparative analysis. When comparing investments in different currencies, then the rate of inflation may become important.", "title": "" } ]	[ { "docid": "3afb0883ae38ba9c71dcea12eef9398c", "text": "I have been following some of these threads. Some of them are really old. I have read used recording to equity accounts to resolve the imbalance USD issue. The thing I noticed is that all my imbalances occur when paying bills. I took all the bills and set them up as vendor accounts, entered the bills in the new bills, and used the process payment when paying bills. The imbalance issue stopped. It makes sense. The system is a double entry. That's it will credit and debit. Assets accounts are increased with a debit and decreased with a credit. Equity accounts are increased with a credit and decreased with a debit. ie; Say you have an monthly insurance bill for $100. You enter it into the new vendor bill. This credits Accounts Payable. When paying the bill it credits checking, debits account payable, credits vendor account, debits the expense insurance. In short for each credit there has to be a debit for the books to balance. When there is no account for it to record to it will record in Imbalance USD to balance the books.", "title": "" }, { "docid": "2a0cdfb465cc280f9d44a1a6d815150e", "text": "Straight line depreciation is marginal as far as I understand. It would be a flat expense each year. Unless you mean 2 mil year one and 4 mil for years one and two combined and it's just written ambiguously here. It seems pretty straight-forward to me. 10 mil rev per year operating increase. 6.5 mil operation expense increase. Net income= rev-expenses. Depreciation expense is not an operating expense. As far as relevant cash flows I guess if there's not omitted info in this post would just be the cash for the initial investment, the added expenses, the added revenue, the salvage sale.", "title": "" }, { "docid": "c7eaa130ef48b436d0261060eaf23c20", "text": "If you're audited routinely you probably have an accountant to get this straight. It's not something that I would be too worried about as it is purely journal-entry issue, there's no problem with the actual money. Mistakes happen. I'd suggest converting the currency, taking loss/gain on the conversion as a capital loss/gain, and credit the correct currency to the correct account. If GnuCash causes problems - just record it in the EUR equivalent, putting in notes the actual SGD value. Note that I'm not an accountant and this is not a professional advice.", "title": "" }, { "docid": "3df65e68c8633ccfc01a4496253623f3", "text": "How can I calculate my currency risk exposure? You own securities that are priced in dollars, so your currency risk is the amount (all else being equal) that your portfolio drops if the dollar depreciates relative to the Euro between now and the time that you plan to cash out your investments. Not all stocks, though, have a high correlation relative to the dollar. Many US companies (e.g. Apple) do a lot of business in foreign countries and do not necessarily move in line with the Dollar. Calculate the correlation (using Excel or other statistical programs) between the returns of your portfolio and the change in FX rate between the Dollar and Euro to see how well your portfolio correlated with that FX rate. That would tell you how much risk you need to mitigate. how can I hedge against it? There are various Currency ETFs that will track the USD/EUR exchange rate, so one option could be to buy some of those to offset your currency risk calculated above. Note that ETFs do have fees associated with them, although they should be fairly small (one I looked at had a 0.4% fee, which isn't terrible but isn't nothing). Also note that there are ETFs that employ currency risk mitigation internally - including one on the Nasdaq 100 . Note that this is NOT a recommendation for this ETF - just letting you know about alternative products that MIGHT meet your needs.", "title": "" }, { "docid": "eafe19575c9337cfa63e45572f1e32ba", "text": "Huh. It appears it's only currencies in sterling that are fully exempt. https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg12602 Government manuals are more detailed than .gov but still not perfect as it's HMRCs interpretation of legislation and has been overturned in the past. There is also another (old) article here about foreign currency transactions. https://www.taxation.co.uk/articles/2010/10/27/21191/currency-gains I have never come across forex capital gains in practice but I've learnt something today! Something to look out for in the UK as well I guess.", "title": "" }, { "docid": "00d49f052fb781ee71a1495d8231ff6e", "text": "It depends on the asset and the magnitude of the exchange rate change relative to the inflation rate. If it is a production asset, the prices can be expected to change relative to the changes in exchange rate regardless of magnitude, ceteris paribus. If it is a consumption asset, the prices of those assets will change with the net of the exchange rate change and inflation rate, but it can be a slow process since all of the possessions of the country becoming relatively poorer cannot immediately be shipped out and the need to exchange wants for goods will be resisted as long as possible.", "title": "" }, { "docid": "e61919cc2567f96df4868a9c4de17281", "text": "At any instant, three currencies will have exchange rates so if I know the rate between A and B, and B to C, the A to C rate is easily calculated. You need X pounds, so at that moment, you are subject to the exchange rate right then. It's not a deal or bargain, although it may look better in hindsight if the currencies move after some time has passed. But if a currency is going to depreciate, and you have the foresight to know such things, you'd already be wealthy and not visiting here.", "title": "" }, { "docid": "ccef86861b5918e8ad02925f6b4ea9c4", "text": "Is there not some central service that tracks current currency rates that banks can use to get currency data? Sure. But this doesn't matter. All the central service can tell you is how much the rate was historically. But the banks/PayPal don't care about the historical value. They want to know the price that they'll pay when they get around to switching, not the last price before the switch. Beyond that, there is a transaction cost to switching. They have to pay the clearinghouse for managing the transaction. The banks can choose to act as a clearinghouse, but that increases their risk. If the bank has a large balance of US dollars but dollars are falling, then they end up eating that cost. They'll only take that risk if they think that they'll make more money that way. And in the end, they may have to go on the currency market anyway. If a European bank runs out of US dollars, they have to buy them on the open market. Or a US bank might run out of Euros. Or Yen. Etc. Another problem is that many of the currency transactions are small, but the overhead is fixed. If the bank has to pay $5 for every currency transaction, they won't even break even charging 3% on a $100 transaction. So they delay the actual transaction so that they can make more than one at a time. But then they have the risk that the currency value might change in the meantime. If they credit you with $97 in your account ($100 minus the 3% fee) but the price actually drops from $100 to $99, they're out the $1. They could do it the other way as well. You ask for a $100 transaction. They perform a $1000 transaction, of which they give you $97. Now they have $898 ($1000 minus the $5 they paid for the transaction plus the $3 they charged you for the transaction). If there's a 1% drop, they're out $10.98 ($8.98 in currency loss plus a net $2 in fees). This is why banks have money market accounts. So they have someone to manage these problems working twenty-four hours a day. But then they have to pay interest on those accounts, further eating into their profits. Along with paying a staff to monitor the currency markets and things that may affect them.", "title": "" }, { "docid": "fb7d5856aacec43324d7bec156957748", "text": "Evaluating the value of currencies is always difficult because you are usually at the mercy of a central bank that can print new currency on a whim. I am trying to diversify my currency holdings but it is difficult to open foreign bank accounts without actually being in the foreign country. Any ideas here? You don't indicate which currencies you own but I would stick with your diversified portfolio of currencies and add some physical assets as a hedge against the fiat currencies.", "title": "" }, { "docid": "3200217e7939b7c9eb0a82e4a1124feb", "text": "Here is the technical guidance from the accounting standard FRS 23 (IAS 21) 'The Effects of Changes in Foreign Exchange Rates' which states: Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition during the period or in previous financial statements shall be recognised in profit or loss in the period in which they arise. An example: You agree to sell a product for $100 to a customer at a certain date. You would record the sale of this product on that date at $100, converted at the current FX rate (lets say £1:$1 for ease) in your profit loss account as £100. The customer then pays you several $100 days later, at which point the FX rate has fallen to £0.5:$1 and you only receive £50. You would then have a realised loss of £50 due to exchange differences, and this is charged to your profit and loss account as a cost. Due to double entry bookkeeping the profit/loss on the FX difference is needed to balance the journals of the transaction. I think there is a little confusion as to what constitutes a (realised) profit/loss on exchange difference. In the example in your question, you are not making any loss when you convert the bitcoins to dollars, as there is no difference in the exchange rate between the point you convert them. Therefore you have not made either a profit or a loss. In terms of how this effects your tax position; you only pay tax on your profit and loss account. The example I give above is an instance where an exchange difference is recorded to the P&L. In your example, the value of your cash held is reflected in your balance sheet, as an asset, whatever its value is at the balance sheet date. Unfortunately, the value of the asset can rise/fall, but the only time where you will record a profit/loss on this (and therefore have an impact on tax) is if you sell the asset.", "title": "" }, { "docid": "e3ddaf7271004c475e64b50bd5c65277", "text": "\"This formula is not calculating \"\"Earnings\"\". Instead, it is calculating \"\"Free Cash Flow from Operations\"\". As the original poster notes, the \"\"Earnings\"\" calculation subtracted out depreciation and amortization. The \"\"Free Cash Flow from Operations\"\" adds these values back, but for two different reasons:\"", "title": "" }, { "docid": "3048fcd106371966f419a784a95ddf8e", "text": "The closest thing that you are looking for would be FOREX exchanges. Currency value is affected by the relative growth of economies among other things, and the arbritrage of currencies would enable you to speculate on the relative growth of an individual economy.", "title": "" }, { "docid": "1a5261fd35e60a67b52827496240db6b", "text": "\"Like Jeremy T said above, silver is a value store and is to be used as a hedge against sovereign currency revaluations. Since every single currency in the world right now is a free-floating fiat currency, you need silver (or some other firm, easily store-able, protect-able, transportable asset class; e.g. gold, platinum, ... whatever...) in order to protect yourself against government currency devaluations, since the metal will hold its value regardless of the valuation of the currency which you are denominating it in (Euro, in your case). Since the ECB has been hesitant to \"\"print\"\" large amounts of currency (which causes other problems unrelated to precious metals), the necessity of hedging against a plummeting currency exchange rate is less important and should accordingly take a lower percentage in your diversification strategy. However, if you were in.. say... Argentina, for example, you would want to have a much larger percentage of your assets in precious metals. The EU has a lot of issues, and depreciation of hard assets courtesy of a lack of fluid currency/capital (and overspending on a lot of EU governments' parts in the past), in my opinion, lessens the preservative value of holding precious metals. You want to diversify more heavily into precious metals just prior to government sovereign currency devaluations, whether by \"\"printing\"\" (by the ECB in your case) or by hot capital flows into/out of your country. Since Eurozone is not an emerging market, and the current trend seems to be capital flowing back into the developed economies, I think that diversifying away from silver (at least in overall % of your portfolio) is the order of the day. That said, do I have silver/gold in my retirement portfolio? Absolutely. Is it a huge percentage of my portfolio? Not right now. However, if the U.S. government fails to resolve the next budget crisis and forces the Federal Reserve to \"\"print\"\" money to creatively fund their expenses, then I will be trading out of soft assets classes and into precious metals in order to preserve the \"\"real value\"\" of my portfolio in the face of a depreciating USD. As for what to diversify into? Like the folks above say: ETFs(NOT precious metal ETFs and read all of the fine print, since a number of ETFs cheat), Indexes, Dividend-paying stocks (a favorite of mine, assuming they maintain the dividend), or bonds (after they raise the interest rates). Once you have your diversification percentages decided, then you just adjust that based on macro-economic trends, in order to avoid pitfalls. If you want to know more, look through: http://www.mauldineconomics.com/ < Austrian-type economist/investor http://pragcap.com/ < Neo-Keynsian economist/investor with huge focus on fiat currency effects\"", "title": "" }, { "docid": "9ae6bb4df00454b020003c9348baf8aa", "text": "QE2 will mean that there are about $500 billion dollars in existence which weren't there before. These dollars will all be competing with the existing dollars for real goods and services, so each dollar will be worth a little less, and prices will rise a little. This is inflation. You can probably expect 1.5%-2% annual inflation for the US dollar over the next several years (the market certainly does in the aggregate, anyway). This is in terms of US-based goods and services. QE2 will also reduce the amount of other currencies you can get for the same dollar amount. The extent to which this will occur is less clear, in part because other currencies are also considering quantitative easing. Your long-term savings should probably not be in cash anyway, because of the low returns; this will probably affect you far more than the impact of quantitative easing. As for your savings which do remain in cash, what you should do with them depends on how you plan to dispose of them. The value of a currency is usually pretty stable in terms of the local economy's output of goods and services - it's the value in international trade which tends to fluctuate wildly. If you keep your savings in the same currency you plan to spend them in, they should be able to maintain their value decently well in the intermediate term.", "title": "" }, { "docid": "dfc83f88b6585b59ac0a6f5dd80350e4", "text": "\"No money is gone. The movement of the existing currency has slowed down. Currency moves through the economy through deposits or loans to banks, and withdrawal from banks as proceeds from loans or return of deposits. When a bank makes a loan they provide a balance in a bank account, which isn't converted to hard currency until withdrawn. So those bank loans essentially count as currency, and thus effectively multiply the stock of currency available. Deposits into money market funds, and those funds loans into the commercial paper markets, have the same effect. Banks and money funds are now making fewer loans. In particular they are not funding \"\"companies\"\" that invested in securitizations of home mortgages and credit card receivables, but they are also lending less to businesses and consumers. Because they are lending less they are \"\"effectively multiplying\"\" the currency less. Think of deposited and lent currency as spare cycles on a desktop computer. You let your computer help decipher the genome when you aren't using it yourself. If you somehow feared that you would lose those cycles, slowing down your own computing, you would be less likely to lend those cycles out. There would still be the same number of computing cycles in the world, but the stock of those available for actual computing would appear to be diminished. The technical term for this concept is \"\"monetary velocity\"\" and it is a crucial factor in determing the level of overall economic activity, banking stability, and inflation.\"", "title": "" } ]	fiqa
4581a6eae30779b6abb4a05b7887868e	How to pay for Alzheimer's care?	[ { "docid": "4154e7f8fb068f0cfaf8ecbc9a39142f", "text": "The cost of Alzheimer's care depends on the facility that provides this care. Specialized facilities usually have higher costs than general geriatric care ones. Though there are several ways to cover the cost: I think you'd better read the article http://www.autumngrove.com/blog/how-to-pay-for-alzheimers-care/ or learn their brochure http://www.autumngrove.com/wp-content/uploads/cost-of-assisted-living.pdf", "title": "" }, { "docid": "c7a373c6b5cc8e5e102a833725e031ba", "text": "See Paying for Care \| Caregiver Center \| Alzheimer's Association. Notable excerpts: For most individuals 65 or older, Medicare is the primary source of health care coverage. However, private insurance, a group employee plan or retiree health coverage also may be in effect. [...] In addition to Medicare, the person with dementia may qualify for a number of public programs. These programs provide income support or long-term care services to people who are eligible. This includes Social Social Security Disability Income (SSDI) for workers younger than 65, Supplemental Security Income (SSI), Medicaid, veteran benefits, and tax deductions and credits. [...] Many community organizations provide low-cost or even free services, including respite care, support groups, transportation and home-delivered meals. You also may consider informal care arrangements using family, friends, neighbors, faith communities and volunteer groups.", "title": "" } ]	[ { "docid": "6a9d4eb4926031c53315866f497992e3", "text": "\"More like: nobody can pay for it. Just paying for someone to be available near a person 24 hours a day is very labor intensive. Expensive, even at minimum wage. So a worker has to earn enough both to pay their own living expenses, but also the living expenses of their ailing mom and the living expenses of 2-3 aide workers. That's crazy. And that's not even counting in actual health care. We're going to reach a breaking point with nursing homes etc soon. To a much greater extent, you'll see some combination of ailing parents who would otherwise need 24 hour care allowed to die by not having medical interventions, moving back in with their kids and the kids sacrificing their career, \"\"suicided\"\"...\"", "title": "" }, { "docid": "1974b67e6034872ebcac953936b2da0b", "text": "Depending on the particulars, you could get an Amex Serve account, load it into your Serve account, have them send a check for $150 to a family member of yours, and then have your family member transfer $150 to you seperately.", "title": "" }, { "docid": "1adbc690ea6828a3f524569c99e9d71d", "text": "You can also approach some charities with this idea. They can set it up so that the extra funds, if you die early, go to the charity. They will set it up as an annuity through an insurance company they work with.", "title": "" }, { "docid": "aa5888916091d16a9b14403dc22f162d", "text": "They do. The $260 already accounts for fees, I just left that out as I didn't believe it necessary info for the question of how to solve for group B. Edit : Oh, you mean accounting for the 1.5% interchange for group A? Yeah, I didn't do that. For group A we weren't given a number for monthly spend but we were told that they carry an average monthly balance of $3000.", "title": "" }, { "docid": "e996747e1904ce83ebdf2805a55b39b1", "text": "Approximately $6,000 a year on the healthcare marketplace (obamacare). They can get away with a little cheaper for a plan with a huge deductible (ie $5,000), which could reduce their plan to $4k a year. They also pay medicare tax of 2.9% of their income (1.45% from employee side, and 1.45% payroll taxes). These pay for medical care for retirees.", "title": "" }, { "docid": "cb69d68309783f2b7e25947e1d78a5c7", "text": "This is a good question and you seemed troubled by this and this person's choices in life. And that is the rub, they are choices. They know how to make them, they know the consequences, and they know how to work around them. Its a skill you probably don't have (and don't want to have). In the end they will survive. If you go to a fast food store in a popular retirement location you will see plenty of elderly people working. They might live in low income housing, receive some financial assistance, and utilize other charities such a food banks. They might depend on family and friends. There is also the ugly, it is not a fairy tale that some supplement their diets with pet food. There is of course social security. The amount is very low for most workers, but the amount is almost inconsequential. They would spend it all anyway and still be short despite the predictability of the income and a time frame with predictable expenses. Budgeting is a skill. So I have a friend that deals with this himself, and is helping an elder relation. He and his wife provide some help, but when it started there was a endless stream of requests. His policy now is: No more help unless he works out a budget with the person requesting help. I've used his ideas myself, and by using this it becomes clear on who is in actual need and who is just looking for the next handout. You can feel good about yourself for helping an actual needy person or guiltless say no.", "title": "" }, { "docid": "dc064c759f6a8ca2f0f40e02630229d7", "text": "It's simple. Most people don't spend $6000 a year in medical care. As for myself, there's probably only $400 or less, mostly in annual checkups and the like. If you are the type to require more medical care, then you will pay more per month. I know a person with asthma, kidney stones, and inflammatory issues. This person spends probably $1000 in co-pays per year, with considerable more if you were to include the hospital visits in the likes. But if you don't think you are one of these people, then don't get the higher cost plan.", "title": "" }, { "docid": "62d5c32ad49fc3189ebd8b98819ce212", "text": "Your relative in the US could buy a pre-paid Visa (aka Visa gift card) and give you the numbers on that to pay. They're available for purchase at many grocery/convenience stores. In most (all??) cases there'll be a fee of a several dollars charged in addition to the face value of the card. The biggest headache I can think of would be that pre-paid cards are generally only available in $25/50/100 increments; unless the current SAT price matches one of the standard increments they'll have to buy the next card size up and then get the remaining money off it in a separate transaction. A grocery store would be one of the easier places for your relative to do this because cashiers there are used to splitting transactions across multiple payment sources (something not true at most other types of business) due to regularly processing transactions partially paid for via welfare benefits.", "title": "" }, { "docid": "8e79d13cec6a0277e23d61b915ae2a5a", "text": "If you know the amounts that were combined ($5,000 and $7,500 in your example) -- NOT the original loan amounts necessarily -- then you can calculate a payment schedule (in Excel, Google Sheets, online, etc.) using that amount and the interest rate. You can then apply your payments ($100) to that payment schedule, making sure to either accrue interest if your $100 didn't cover the monthly payment, or pay down extra principal if your $100 more than covered the payment. The outstanding principal is the amount left or remaining balance. A program like GnuCash or Quicken makes doing the payment schedule, and applying payments relatively easy to handle. Spreadsheets will require you to have 36 lines (3 years x 12 months) of payment and recalculation detail, but that shouldn't be too much work. To be fair to your mother, make sure you include any partially accrued interest on the full balance when paying it off. Or even better, include a full month's interest in the pay-off amount.", "title": "" }, { "docid": "10dad58de53089d15cf755545b887fc9", "text": "\"There really isn't any good ways that I'm aware of. (The exception is in New York or California, where hospitals must post prices.) The law sets price floors on many procedures by setting Medicare and Medicaid reimbursement rates. As a result, the \"\"list price\"\" for a given procedure is dramatically inflated, and various health insurers negotiate rates somewhere in the middle. I'd recommend talking to the business offices or financial counselors at medical groups that you do business with. Ask about \"\"self pay discounts\"\" or other programs appropriate for folks in your position.\"", "title": "" }, { "docid": "1fbac63e295fd6118f2d310ee0774c67", "text": "\"“Nobody put me on this Earth to pay for everybody’s health plan. I know that sounds like Scrooge or somebody. But this is the real world.”\"\" Things like this ring a bit hollow when for what the US already pays for Medicare, the NHS covers everyone. Not only that, but corporate subsidies and military spending far outweigh medicine expenditures. It seems like a simple easy and wrong answer that avoids even a hint of reality.\"", "title": "" }, { "docid": "99c93f2fe2ecfd9f8c0cadc9cdd16ccf", "text": "The US is where you want to go for complex, highly invasive, or cutting-edge-not-quite-experimental-anymore medical care. If it's not heart surgery or brain surgery or treating cancer with your own harvested stem cells, there are much cheaper options available in other nations.", "title": "" }, { "docid": "de53631e0efae1de2fb69b6861fdff8c", "text": "Apparently, you have never visited with any Elders. The money provided by the government has undermined the work ethic of the native Americans which is why drug and alcohol abuse is rampant in their communities. If you pay some to do nothing they will do nothing.", "title": "" }, { "docid": "e6d424c1dc7a5cfa5ecc510e1fd6c9c9", "text": "\"Welcome to America! This country is not meant to be a free ride. I personally (single, \"\"native\"\" male) pay a significant amount each year to Uncle Sam and receive no benefits at all. Where do \"\"natives\"\" sign up for the free stuff?!\"", "title": "" }, { "docid": "4864753b99d7a96b7700b749d5cb8693", "text": "The solution to this problem is somewhat like grading on a curve. Use the consumption ratio multiplied by the attendance (which is also a ratio, out of 100 days) to calculate how much each person owes. This will leave you short. Then add together all of the shares in a category, determine the % increase required to get to the actual cost of that category, and increase all the shares by that %.", "title": "" } ]	fiqa
c2165a3fa1e9678b34c542d852e58bc9	Historical data files for NYSE/NASDAQ daily open/close price data?	[ { "docid": "ea53f26fcd0dbb82c5c79e8ebe2c3638", "text": "I think Infochimps has what you are looking for: NYSE and NASDAQ.", "title": "" }, { "docid": "19626720f85dcf1e74d4b90ea17a917e", "text": "Another possibly more flexible option is Yahoo finance here is an example for the dow.. http://finance.yahoo.com/q/hp?s=%5EDJI&a=9&b=1&c=1928&d=3&e=10&f=2012&g=d&z=66&y=0 Some of the individual stocks you can dl directly to a spreadsheet (not sure why this isn't offer for indexs but copy and paste should work). http://finance.yahoo.com/q/hp?s=ACTC.OB+Historical+Prices", "title": "" } ]	[ { "docid": "cf39c3a9e8e02af032360611ed716696", "text": "You're only counting one year. Let's say 30 years of data, minutewise, for 2,000 stocks, and 50 characters per data line. That's 1.5TB of data. Since the market has grown, that's an overestimate - 30 years ago there weren't 2,000 stocks in the NYSE - but it still gives us ballpark of roughly 1 TB. Not an easy download.", "title": "" }, { "docid": "3451c2779bca4a3422a1edf0de832b52", "text": "At this time, Google Finance doesn't support historical return or dividend data, only share prices. The attributes for mutual funds such as return52 are only available as real-time data, not historical. Yahoo also does not appear to offer market return data including dividends. For example, the S&P 500 index does not account for dividends--the S&P ^SPXTR index does, but is unavailable through Yahoo Finance.", "title": "" }, { "docid": "105d56c81f6e2fbc365e6571b8b8d301", "text": "you could try [FRED](http://research.stlouisfed.org/fred2/graph/?g=HO7), or maybe try the CME and ICE's websites for some decent data.. haven't looked just suggestions - pretty sure the symbol for the Libor futures is EM, you could approximate from that so long as it's not a doctoral thesis", "title": "" }, { "docid": "eec00fac4023bd89d4a52ab034993c41", "text": "If you want to go far upstream, you can get mutual fund NAV and dividend data from the Nasdaq Mutual Fund Quotation Service (MFQS). This isn't for end-users but rather is offered as a part of the regulatory framework. Not surprisingly, there is a fee for data access. From Nasdaq's MFQS specifications page: To promote market transparency, Nasdaq operates the Mutual Fund Quotation Service (MFQS). MFQS is designed to facilitate the collection and dissemination of daily price, dividends and capital distributions data for mutual funds, money market funds, unit investment trusts (UITs), annuities and structured products.", "title": "" }, { "docid": "9764ba3afd9210806de741e49eaf845a", "text": "\"Google Docs spreadsheets have a function for filling in stock and fund prices. You can use that data to graph (fund1 / fund2) over some time period. Syntax: =GoogleFinance(\"\"symbol\"\", \"\"attribute\"\", \"\"start_date\"\", \"\"num_days\|end_date\"\", \"\"interval\"\") where: This analysis won’t include dividends or distributions. Yahoo provides adjusted data, if you want to include that.\"", "title": "" }, { "docid": "39e680ba097f0ffc975fb39a29e5dcd0", "text": "Check the answers to this Stackoverflow question https://stackoverflow.com/questions/754593/source-of-historical-stock-data a number of potential sources are listed", "title": "" }, { "docid": "477ff98da46062514eaec62de026fd63", "text": "Center for Research in Security Prices would be my suggestion for where to go for US stock price history. Major Asset Classes 1926 - 2011 - JVL Associates, LLC has a PDF with some of the classes you list from the data dating back as far as 1926. There is also the averages stated on a Bogleheads article that has some reference links that may also be useful. Four Pillars of Investing's Chapter 1 also has some historical return information in it that may be of help.", "title": "" }, { "docid": "47e01f887e2e09330e8d0a228ce71e54", "text": "You need a source of delisted historical data. Such data is typically only available from paid sources. According to my records, AULT (Ault Inc) began as an OTC stock in the 1980s prior it having an official NASDAQ listing. It was delisted on 27 Jan 2006. Its final traded price was $2.94. It was taken over at a price of $2.90 per share by SL Industries. Source: Symbol AULT-200601 within Premium Data US delisted stocks historical price data set available from http://www.premiumdata.net/products/premiumdata/ushistorical.php Disclosure: I am a co-owner of Norgate / Premium Data.", "title": "" }, { "docid": "c043eae8ce68058c54aca7a490fff9c7", "text": "I assume you're after a price time series and not a list of S&P 500 constituents? Yahoo Finance is always a reasonable starting point. Code you're after is ^GSPC: https://finance.yahoo.com/quote/%5EGSPC/history?p=^GSPC There's a download data button on the right side.", "title": "" }, { "docid": "4eeeb700522713da024781f45893656f", "text": "Interactive Brokers provides historical intraday data including Bid, Ask, Last Trade and Volume for the majority of stocks. You can chart the data, download it to Excel or use it in your own application through their API. EDIT: Compared to other solutions (like FreeStockCharts.com for instance), Interactive Brokers provides not only historic intraday LAST** trades but also historic BID and ASK data, which is very useful information if you want to design your own trading system. I have enclosed a screenshot to the chart parameter window and a link to the API description.", "title": "" }, { "docid": "3ae22710c80a01cf0fa6319f8862dcff", "text": "Apparent data-feed issues coming out of NASDAQ in the after hours market. Look at MSFT, AMZN, AAPL, heck even Sears. Funny thing though, is that you see traces of irregular prices during the active session around 10:20am on stocks like GOOG.", "title": "" }, { "docid": "fb67ec3740545851f323621075d7a83c", "text": "There are about 250 trading days in a year. There are also about 1,900 stocks listed on the NYSE. What you're asking for would require about 6.2M rows of data. Depending on the number of attributes you're likely looking at a couple GB of data. You're only getting that much information through an API or an FTP.", "title": "" }, { "docid": "90f3ac4042a941d61e7a35f1938326dc", "text": "\"The Securities Industry and Financial Markets Association (SIFMA) publishes these and other relevant data on their Statistics page, in the \"\"Treasury & Agency\"\" section. The volume spreadsheet contains annual and monthly data with bins for varying maturities. These data only go back as far as January 2001 (in most cases). SIFMA also publishes treasury issuances with monthly data for bills, notes, bonds, etc. going back as far as January 1980. Most of this information comes from the Daily Treasury Statements, so that's another source of specific information that you could aggregate yourself. Somewhere I have a parser for the historical data (since the Treasury doesn't provide it directly; it's only available as daily text files). I'll post it if I can find it. It's buried somewhere at home, I think.\"", "title": "" }, { "docid": "5596b89a7503739bfe1ed3ba97b4b993", "text": "Robert Shiller has an on-line page with links to download some historical data that may be what you want here. Center for the Research in Security Prices would be my suggestion for another resource here.", "title": "" }, { "docid": "efd0097229164057ef16b3e11f442cf7", "text": "The closest I can think of from the back of my head is http://finviz.com/map.ashx, which display a nice map and allows for different intervals. It has different scopes (S&P500, ETFs, World), but does not allow for specific date ranges, though.", "title": "" } ]	fiqa
79b80d7c2ddb0c5d860d4a820f5826aa	Where can one find intraday prices for mutual funds?	[ { "docid": "6c1812f3fbceba34e9a196440b30e9e3", "text": "Mutual funds don't have intraday prices. They have net asset values which are calculated periodically (daily or weekly or any other period depending on the fund).", "title": "" }, { "docid": "3f09a659705f500b5a9e46f2f59bb4d0", "text": "This idea does not make sense for most mutual funds. The net asset value, or NAV, is the current market value of a fund's holdings, minus the fund's liabilities, that is usually expressed as a per-share amount. For most funds, the NAV is determined daily, after the close of trading on some specified financial exchange, but some funds update their NAV multiple times during the trading day. http://en.wikipedia.org/wiki/Mutual_fund I am not certain, but I believe that OppenheimerFunds does not report intraday prices. I would call them up and ask.", "title": "" }, { "docid": "5bfedbdd63f74534043d2d59fcef16b4", "text": "Like others have said, mutual funds don't have an intraday NAV, but their ETF equivalents do. Use something like Yahoo Finance and search for the ETF.IV. For example VOO.IV. This will give you not the ETF price (which may be at a premium or discount), but the value of the underlying securities updated every 15 seconds.", "title": "" }, { "docid": "2abb8df1826b080d3192ab38ee0dc96f", "text": "Look at morningstar holdings.It will list the top 25 holdings and their current price.This will give you a good idea of the intra-day price of the fund.", "title": "" } ]	[ { "docid": "a5e5dbb140511e66e895c62be614c8e3", "text": "\"If you want the answer from the horse's mouth, go to the website of the ETF or mutual find, and the expense ratio will be listed there, both on the \"\"Important Information\"\" part of the front page, as well as in the .pdf file that you click on to download the Prospectus. Oh wait, you don't want to go the fund's website at all, just to a query site where you type in something like VFINX. hit SEARCH, and out pops the expense ratio for the Vanguard S&P 500 Index Fund? Well, have you considered MorningStar?\"", "title": "" }, { "docid": "8d00dd5afb4e0e6968e4d1bf071575e6", "text": "\"ETFs purchases are subject to a bid/ask spread, which is the difference between the highest available purchase offer (\"\"bid\"\") and the lowest available sell offer (\"\"ask\"\"). You can read more about this concept here. This cost doesn't exist for mutual funds, which are priced once per day, and buyers and sellers all use the same price for transactions that day. ETFs allow you to trade any time that the market is open. If you're investing for the long term (which means you're not trying to time your buy/sell orders to a particular time of day), and the pricing is otherwise equal between the ETF and the mutual fund (which they are in the case of Vanguard's ETFs and Admiral Shares mutual funds), I would go with the mutual fund because it eliminates any cost associated with bid/ask spread.\"", "title": "" }, { "docid": "6e1a49099026facd9c7a976bb9804035", "text": "I searched for FTSE 100 fund on Yahoo Finance and found POW FTSE RAF UK 100 (PSRU.L), among many others. Google Finance is another possible source that immediately comes to mind.", "title": "" }, { "docid": "9a71e54c51a33edaa86448edea5040c1", "text": "Your link is pointing to managed funds where the fees are higher, you should look at their exchange traded funds; you will note that the management fees are much lower and better reflect the index fund strategy.", "title": "" }, { "docid": "b3df873e2c35947a0dea12b229e1a6b2", "text": "The NYSE holidays are listed online here: https://www.nyse.com/markets/hours-calendars", "title": "" }, { "docid": "eec00fac4023bd89d4a52ab034993c41", "text": "If you want to go far upstream, you can get mutual fund NAV and dividend data from the Nasdaq Mutual Fund Quotation Service (MFQS). This isn't for end-users but rather is offered as a part of the regulatory framework. Not surprisingly, there is a fee for data access. From Nasdaq's MFQS specifications page: To promote market transparency, Nasdaq operates the Mutual Fund Quotation Service (MFQS). MFQS is designed to facilitate the collection and dissemination of daily price, dividends and capital distributions data for mutual funds, money market funds, unit investment trusts (UITs), annuities and structured products.", "title": "" }, { "docid": "9ba531704a6a6569d654bfcf27ce3fb7", "text": "\"Morningstar is often considered a trusted industry standard when it comes to rating mutual funds and ETFs. They offer the same data-centric information for other investments as well, such as individual stocks and bonds. You can consult Morningstar directly if you like, but any established broker will usually provide you with Morningstar's ratings for the products it is trying to sell to you. Vanguard offers a few Emerging Markets stock and bond funds, some actively managed, some index funds. Other investment management companies (Fidelity, Schwab, etc.) presumably do as well. You could start by looking in Morningstar (or on the individual companies' websites) to find what the similarities and differences are among these funds. That can help answer some important questions: I personally just shove a certain percentage of my portfolio into non-US stocks and bonds, and of that allocation a certain fraction goes into \"\"established\"\" economies and a certain fraction into \"\"emerging\"\" ones. I do all this with just a few basic index funds, because the indices make sense (to me) and index funds cost very little.\"", "title": "" }, { "docid": "9e6f5a82008f9330d2061b78d7cbadd5", "text": "I spent a while looking for something similar a few weeks back and ended up getting frustrated and asking to borrow a friend's Bloombterg. I wish you the best of luck finding something, but I wasn't able to. S&P and Morningstar have some stuff on their site, but I wasn't able to make use of it. Edit: Also, Bloomberg allows shared terminals. Depending on how much you think as a firm, these questions might come up, it might be worth the 20k / year", "title": "" }, { "docid": "4cf75cc35ece65ec6ebd8065d546b909", "text": "This is going to be a bit of a shameless plug, but I've build a portfolio tracking website to track your portfolio and be able to share it (in read-only mode) as well. It is at http://frano.carelessmusings.com and currently in beta. Most portfolio trackers are behind a login wall and thus will lack the sharing function you are looking for. Examples of these are: Yahoo Finance, Google Finance, Reuters Portfolios, MorningStart Portfolios, and many others. Another very quick and easy solution (if you are not trading too often) is a shared google docs spreadsheet. Gdocs has integration with google finance and can retrieve prices for stocks by symbol. A spreadsheet can contain the following: Symbol, Quantity, Avg. Buy Price, Price, P/L, P/L% and so on. The current price and P/L data can be functions that use the google finance API. Hope this helps, and if you check out my site please let me know what you think and what I could change.", "title": "" }, { "docid": "96ffe6a551593b9b69ec6a68d6a2175b", "text": "You may refer to project http://jstock.sourceforge.net. It is open source and released under GPL. It is fetching data from Yahoo! Finance, include delayed current price and historical price.", "title": "" }, { "docid": "43b5e2eff2438cb0614ae2ecf7afe2da", "text": "Yes, Alpha Vantage. As MasticatedTesticle points out, it is worth asking where it originally comes from, but it looked to me like a solid source for, in particular, intraday trading data. Additionally, Yahoo finance is done on R (zoo, PerformanceAnalytics libraries don't work anymore as far as I can tell). The numbers look right to me tho, let me know if things are off.", "title": "" }, { "docid": "19626720f85dcf1e74d4b90ea17a917e", "text": "Another possibly more flexible option is Yahoo finance here is an example for the dow.. http://finance.yahoo.com/q/hp?s=%5EDJI&a=9&b=1&c=1928&d=3&e=10&f=2012&g=d&z=66&y=0 Some of the individual stocks you can dl directly to a spreadsheet (not sure why this isn't offer for indexs but copy and paste should work). http://finance.yahoo.com/q/hp?s=ACTC.OB+Historical+Prices", "title": "" }, { "docid": "8a40781c6cc6216df49c39206af5610c", "text": "\"Thanks for the info, things are starting to make more sense now. For some reason I've always neglected learning about investments, now that Im in a position to invest (and am still fairly young) I'm motivated to start learning. As for help with TD Ameritrade, I was looking into Index Funds (as another commenter mentioned that I should) on their site and am a little overwhelmed with the options. First, I'm looking at Mutual Funds, going to symbol lookup and using type = \"\"indeces\"\". I'm assuming that's the same thing as an \"\"Index Fund\"\" but since the language is slightly different I'm not 100% sure. However, at that point I need some kind of search for a symbol in order to see any results (makes sense, but I dont know where to start looking for \"\"good\"\" index funds). So my first question is: If I FIND a good mutual fund, is it correct to simply go to \"\"Buy Mutual Funds\"\" and find it from there? and if so, my second question is: How do I find a good mutual fund? My goal is to have my money in something that will likely grow faster than a savings account. I don't mind a little volatility, I can afford to lose my investment, I'd plan on leaving my money in the fund for a several years at least. My last question is: When investing in these types of funds (or please point me in another direction if you think Index Funds aren't the place for me to start) should I be reinvesting in the funds, or having them pay out dividends? I would assume that reinvesting is the smart choice, but I can imagine situations that might change that in order to mitigate risk...and as I've said a few times in this thread including the title, I'm a complete amateur so my assumptions aren't necessarily worth that much. Thanks for the help, I really appreciate all the info so far.\"", "title": "" }, { "docid": "4eeeb700522713da024781f45893656f", "text": "Interactive Brokers provides historical intraday data including Bid, Ask, Last Trade and Volume for the majority of stocks. You can chart the data, download it to Excel or use it in your own application through their API. EDIT: Compared to other solutions (like FreeStockCharts.com for instance), Interactive Brokers provides not only historic intraday LAST** trades but also historic BID and ASK data, which is very useful information if you want to design your own trading system. I have enclosed a screenshot to the chart parameter window and a link to the API description.", "title": "" }, { "docid": "3b758cc9b01b3c40ca56a7c8367938dc", "text": "A mutual fund has several classes of shares that are charged different fees. Some shares are sold through brokers and carry a sales charge (called load) that compensates the broker in lieu of a fee that the broker would charge the client for the service. Vanguard does not have sales charge on its funds and you don't need to go through a broker to buy its shares; you can buy directly from them. Admiral shares of Vanguard funds are charged lower annual expenses than regular shares (yes, all mutual funds charge expenses for fund adninistration that reduce the return that you get, and Vanguard has some of the lowest expense ratios) but Admiral shares are available only for large investments, typically $50K or so. If you have invested in a Vanguard mutual fund, your shares can be set to automatically convert to Admiral shares when the investment reaches the right level. A mutual fund manager can buy and sell stocks to achieve the objectives of the fund, so what stockes you are invested in as a share holder in a mutual fund will typically be unknown to you on a day-to-day basis. On the other hand, Exchange-traded funds (ETFs) are fixed baskets of stocks, and you can buy shares in the ETF. These shares are bought and sold through a broker (so you pay a transaction fee each time) but expenses are lower since there is no manager to buy and sell stocks: the basket is fixed. Many ETFs follow specific market indexes (e.g. S&P 500). Another difference between ETFs and mutual funds is that you can buy and sell ETFs at any time of the day just as if you could if you held stocks. With mutual funds, any buy and sell requests made during the day are processed at the end of the day and the value of the shares that you buy or sell is determined by the closing price of the stocks held by the mutual fund. With ETFs, you are getting the intra-day price at the time the buy or sell order is executed by your broker.", "title": "" } ]	fiqa
b769833ddcfc5f61549ec777a39e9764	What is the best approach to save money for College for three kids?	[ { "docid": "eba5c2ba274df6502e56ad38243d40fb", "text": "I'm not a 'rule of thumb' guy, but here, I'd suggest that if you can set aside 10% of your income each year for college, that would be great. That turns out to be $900/mo. In 15 years, if you saw an 8% CAGR, you'd have $311K which happens to be in your range of expenses. And you'd still have time to go as the baby won't graduate for 22(?) years. (Yup, 10% is a good rule of thumb for your income and 3 kids) Now, on the other hand, I'd research what grants you'd be able to get if you came up short. If instead of saving a dime, you funded your own retirement and the spouse's IRA if she's not working, and time the mortgage to pay it off in 15 years from now, the lack of liquid funds actually runs in your favor. But, I'm not an expect on this, just second guessing my own fully funded college account for my daughter.", "title": "" }, { "docid": "08ee211456d7e66773f461a9c5da1805", "text": "In your situation you will be using your normal savings to offset additional funding from student loans or similar financing. Also, sending your children to or moving to a jurisdiction that has lower education costs but ample opportunity should also be in your cards. That can be another state, or another country.", "title": "" }, { "docid": "aeea9f35d7a9d2dab8fea36f74b043f3", "text": "Live where you live now untill your kids are about to go to college. Then move to Germany and send your children to college for FREE. The german universities may be not in the top 10 of the world (THE), but are still competitive enough on a worldwide scale. Also, if your children excell at college, it should not be a huge problem to transfer them to the top universities in the UK or US (with scholarships from Germany). In addition, your children can go on a exchange to other universities for a couple of months or multiple years, fully funded by the European Union or the german universities.", "title": "" } ]	[ { "docid": "f64638bc09f0ef72ed1083f5cd0918a8", "text": "Talk freely about what you can now do because of saving. If you plan to retire sooner than most, or more comfortably than most, and can tie that to something you want them to do, show them that. If you buy a very nice car, or install a pool, and they wish they could afford that, tell them it took 5 or 10 or 20 years to save up for it, at x a week, and now you have it with no loan. Or be a cautionary tale: wish you had something, and regret not having saved for it. Young adults are generally well served by knowing more of parental finances than they did while they were dependents. Ask them if they will want or need to fund parental leaves, make a down payment for a house, own vacation property, put a child through post secondary education (share the cost of theirs including living expenses if you paid them), or go on amazing vacations fairly regularly. Tell them what those things cost in round figures. Explain how such a huge sum of money can accumulate over 2, 5, 10 years of saving X a month. for example $10 a week is $500 a year and so on. While they may not want to save 20 years for their downpayment, doing this simple math should let them map their savings amounts to concrete wishes and timeframes. Finally, if this is your own child and they live with you, charge them rent. This will save them from developing the habit of spending everything they earn, along with the expensive tastes and selfish speaking habits that come with it. Some parents set the rent aside and give it back as a wedding or graduation present, or to help with a downpayment later, but even if you don't, making them live within their true means, not the inflated means you have when you're living rent-free, is truly a gift.", "title": "" }, { "docid": "818edb54d776c4eabb8f6feafd817655", "text": "If I were in your shoes (I would be extremely happy), here's what I would do: Get on a detailed budget, if you aren't doing one already. (I read the comments and you seemed unsure about certain things.) Once you know where your money is going, you can do a much better job of saving it. Retirement Savings: Contribute up to the employer match on the 401(k)s, if it's greater than the 5% you are already contributing. Open a Roth IRA account for each of you and make the max contribution (around $5k each). I would also suggest finding a financial adviser (w/ the heart of a teacher) to recommend/direct your mutual fund investing in those Roth IRAs and in your regular mutual fund investments. Emergency Fund With the $85k savings, take it down to a six month emergency fund. To calculate your emergency fund, look at what your necessary expenses are for a month, then multiply it by six. You could place that six month emergency fund in ING Direct as littleadv suggested. That's where we have our emergency funds and long term savings. This is a bare-minimum type budget, and is based on something like losing your job - in which case, you don't need to go to starbucks 5 times a week (I don't know if you do or not, but that is an easy example for me to use). You should have something left over, unless your basic expenses are above $7083/mo. Non-retirement Investing: Whatever is left over from the $85k, start investing with it. (I suggest you look into mutual funds) it. Some may say buy stocks, but individual stocks are very risky and you could lose your shirt if you don't know what you're doing. Mutual funds typically are comprised of many stocks, and you earn based on their collective performance. You have done very well, and I'm very excited for you. Child's College Savings: If you guys decide to expand your family with a child, you'll want to fund what's typically called a 529 plan to fund his or her college education. The money grows tax free and is only taxed when used for non-education expenses. You would fund this for the max contribution each year as well (currently $2k; but that could change depending on how the Bush Tax cuts are handled at the end of this year). Other resources to check out: The Total Money Makeover by Dave Ramsey and the Dave Ramsey Show podcast.", "title": "" }, { "docid": "67c31d2f35d612cbf8002be1e740d5fd", "text": "while not stated, if you have any debt at all, use the $3000 to pay it off. That's the best investment in the short term. No risk and guaranteed reward. College can invite all sorts of unexpected expenses and opportunities, so stay liquid, protect working capital.", "title": "" }, { "docid": "d88b143f604b061c9ef2d7da84ec1e71", "text": "\"Others have given some good answers. I'd just like to chime in with one more option: treasury I-series bonds. They're linked to an inflation component, so they won't lose value (in theory). You can file tax returns for your children \"\"paying\"\" taxes (usually 0) on the interest while they're minors, so they appreciate tax-free until they're 18. Some of my relatives have given my children money, and I've invested it this way. Alternatively, you can buy the I-bonds in your own name. Then if you cash them out for your kids' education, the interest is tax-free; but if you cash them out for your own use, you do have to pay taxes on the interest.\"", "title": "" }, { "docid": "8a979a73f77054a714c784cc7b2ad6e0", "text": "The value of money is not only in the earning and saving of it but also in the discipline in spending it. Any approach to teaching children about money must ensure a balance between the two otherwise they will either become fearful of spending (and so never actually learn that money is but a tool and can be enjoyed) or irresponsible (spending with abandon with all that concomitant misery): Teaching kids about money is a wonderful opportunity to instil discipline and values. Any strategy must be structured to suite the child's age and abilities as well. Trying to teach compound interest to too young a child will just become needlessly confusing and worrying for them. Hope this gives a few ideas.", "title": "" }, { "docid": "f9ba2fbf8bc4ade401666b89c7123cbf", "text": "\"First of all, I'm happy that the medical treatments were successful. I can't even imagine what you were going through. However, you are now faced with a not-so-uncommon reality that many households face. Here's some other options you might not have thought of: I would avoid adding more debt if at all possible. I would first focus on the the cost side. With a good income you can also squeeze every last dollar out of your budget to send them to school. I agree with your dislike of parent loans for the same reasons, plus they don't encourage cost savings and there's no asset to \"\"give back\"\" if school doesn't work out (roughly half of all students that start college don't graduate) I would also avoid borrowing more than 80% of your home's value to avoid PMI or higher loan rates. You also say that you can pay off the HELOC in 5 years - why can you do that but not cash flow the college? Also note that a second mortgage may be worse that a HELOC - the fees will be higher, and you still won't be able to borrow more that what the house is worth.\"", "title": "" }, { "docid": "4f741b5e69fc8bdf210951b55a0ed4c7", "text": "There are some useful comments about the tradeoffs of the decisions in front of you. Intertwined with the financial choices, hopefully you can see a map opening up. Make a little chart if it helps. Benefit and Cost. If you're looking for financial options, you will have to also add more columns to that chart: Option and Cost. An example is the comment on making connections with rich kids. Trust fund babies are everywhere in this country. Did you know any rich kids while growing up? How were those rich kids you knew of back then... in your school... in your town? How did they treat you? Were you ever invited to their parties or gatherings? Now there's an opportunity for the privilege to pay a lot of money to sit in a classroom next to them? Even in the early days of American history with merit based millionaires... tycoons who made it rich by the seat of their pants. At fancy dinner parties and soirees, a new term emerged to put each other again out of reach: old money (the deserving) and new money (uncultured climbers). That's my bias. You'll have some of your own. What is important to YOU has to come through because these days, the price tag of any higher education implies a considerable piece of your life's timeline will be committed to... something. Make sure you get what you feel is worth that commitment. Take stock of what has been said here by the others, but put a value on those choices and seriously consider what you're willing to pay for... and what you're not. There is no formula for your success as there's been thousands of exceptions... ESID (Every Situation is Different).", "title": "" }, { "docid": "89dc3693851505397f9ef379fcf04750", "text": "Just a thought, but have you considered approaching your sister about assuming the student loans or repaying your mother (even if it is a small amount/month) for financing her college education? If she is in her last year of college, in theory she should be earning at least some income within the next 2 years. Also, it doesn't seem like a lot to ask considering the sacrifices (both financial and otherwise) that a single mom probably made over the years. I'm sure your mom would be hesitant to ask as it seems like she prioritizes her children above herself by your description of the situation, but I bet if you could talk the sister into the mom would grudgingly accept it if she really is in such a tight financial situation.", "title": "" }, { "docid": "d2c29031750a1f4124686de9a85bd34f", "text": "\"Create one account. You can change the beneficiary of the plan (even to nephews, nieces, yourself or your wife) as many times as you need so long as you are spending the money on valid educational expenses. Are you 100% sure both of your kids are going to college? If you aren't really 100% sure, a single account that you can move between them is the best bet. Also, having recently looked in 529 plans, here are some things you have probably already thought about. Look up good 529 plans here: http://www.clarkhoward.com/news/education/preparing-for-college/clarks-529-guide/nFZS/ EDIT: I don't think you can worry about fairly dividing the money up. I can see your wanting to be fair but what is more important, school or fairly dividing the money? A 529 is money only for school. Assuming your kids aren't the same age and won't go to the same school, their expenses will likely be different. The younger kid will benefit from more interest from a longer investment, but suffer from having higher costs. So if you want to insure both kids got $50K (for example) from you by the time it is all said and done, I think you would have to make that up from your own pocket. If only one child goes to school, any money you give the other for starting their own business couldn't come from the 529 without big tax penalties. Depending on your position and finances you could state something like \"\"I will cover your college expenses up to $50K\"\" and then that is that. Just monitor your 529 and shoot for having $100K in the account by the time they are both college age. That runs a risk though, because if one child doesn't go to school your money is locked up for a while or will have tax issues.\"", "title": "" }, { "docid": "d2d3bd109720544f604955e63246b380", "text": "Having separate savings account for your kids college fund, retirement fund, holiday fund etc is one way to compartmentalise savings. Downside to this is the management of these funds especially if you have them with different banks. Like others here have pointed out, keeping track via spreadsheet is relatively easy and especially most banks now like OCBC, HSBC , DBS, POSB etc offer online banking, however from a financial standpoint, spreading your funds doesn't allow you to get as much interest as you would from one account that has the highest interest rate.", "title": "" }, { "docid": "a5a8f00d13d6121c63e2703247e507dc", "text": "\"Bookkeeping and double-entry accounting is really designed for tracking the finances of a single entity. It sounds like you're trying to use it to keep multiple entities' information, which may somewhat work but isn't really going to be the easiest to understand. Here's a few approaches: In this approach, the books are entirely from your perspective. So, if you're holding onto money that \"\"really\"\" belongs to your kids, then what you've done is you're taking a loan from them. This means that you should record it as a liability on your books. If you received $300, of which $100 was actually yours, $100 belongs to Kid #1 (and thus is a loan from him), and $100 belongs to Kid #2 (and thus is a loan from her), you'd record it just that way. Note that you only received $100 of income, since that's the only money that's \"\"yours\"\", and the other $200 you're only holding on behalf of your kids. When you give the money to your kids or spend it on their behalf, then you debit the liability accordingly and credit the Petty Cash or other account you spent it from. If you wanted to do this in excruciating detail, then your kids could each have their own set of books, in which they would see a transfer from their own Income:Garage Sale account into their Assets:Held by Parents account. For this, you just apportion each of your asset accounts into subaccounts tracking how much money each of you has in it. This lets you treat the whole family as one single entity, sharing in the income, expenses, etc. It lets you see the whole pool of money as being the family's, but also lets you track internally some value of assets for each person. Whenever you spend money you need to record which subaccount it came from, and it could be more challenging if you actually need to record income or expenses separately per person (for some sort of tax reasons, say) unless you also break up each Income and Expense account per person as well. (In which case, it may be easier just to have each person keep their entirely separate set of books.) I don't see a whole lot of advantages, but I'll mention it because you suggested using equity accounts. Equity is designed for tracking how much \"\"capital\"\" each \"\"investor\"\" contributes to the entity, and for tracking a household it can be hard for that to make a lot of sense, though I suppose it can be done. From a math perspective, Equity is treated exactly like Liabilities in the accounting equation, so you could end up using it a lot like in my Approach #1, where Equity represents how much you owe each of the kids. But in that case, I'd find it simpler to just go ahead and treat them as Liabilities. But if it makes you feel better to just use the word Equity rather than Liability, to represent that the kids are \"\"investing\"\" in the household or the like, go right ahead. If you're going to look at the books from your perspective and the kids as investing in it, the transaction would look like this: And it's really all handled in the same way an Approach #1. If on the other hand, you really want the books to represent \"\"the family\"\", then you'd need to have the family's books really look more like a partnership. This is getting a bit out of my league, but I'd imagine it'd be something like this: That is to say, the family make the sale, and has the money, and the \"\"shareholders\"\" could see it as such, but don't have any obvious direct claim to the money since there hasn't been a distribution to them yet. Any assets would just be assumed to be split three ways, if it's an equal partnership. Then, when being spent, the entity would have an Expense transaction of \"\"Dividend\"\" or the like, where it distributes the money to the shareholders so that they could do something with it. Alternatively, you'd just have the capital be contributed, And then any \"\"income\"\" would have to be handled on the individual books of the \"\"investors\"\" involved, as it would represent that they make the money, and then contributed it to the \"\"family books\"\". This approach seems much more complicated than I'd want to do myself, though.\"", "title": "" }, { "docid": "4aa520a1d1a26c149834d06fbe2adda4", "text": "For the requirement for risk free and hassle free account a CD or money market account through your local bank, credit union, or even large online bank will be fine. These funds won't grow very fast over time but they are safe and insured. These types of accounts are perfect for all the miscellaneous birthday, Holiday and religious event checks. There is not a requirement that the money be in a UGMA (Uniform Gifts to Minors Act) account. Putting it in a UGMA account does make it hard for the parents to spend. The IRS does allow the child to have earnings from banks without the formality of a UGMA. The money shouldn't be moved between the parent's and child's account but it is possible for the parents to spend the child's money if times are tight and the money is used for items that benefit the child. If there is a reasonable assumption of college then the 529 plan makes a lot of sense. The prepaid tuition options would be risky because they tend to be tied to a single state, and who knows where they will be living in 10 to 15 years. The 529 does focus the money to be used for educational expenses, but it can be used for non-educational expenses if you are willing to pay the taxes and penalties. It can also be transferred to another child later, or even other family members. In my state the 529 plan doesn't have to be used right after high school graduation. It can be used up to 30 years after graduation. So they can decide a few years later that they want to go back to school.", "title": "" }, { "docid": "47159602579961792fc1d47d4eaa0d10", "text": "Please take a look a Dave Ramsey's Baby Step plan. It has all the details that you need to clean up your personal finance situation. None of your options are good. As some of the other answers mentioned, behavior modification is the key. Any idea will be worthless if you just wind up in debt again. Many, many people, including me, have made the change using Dave's plan. You can too. With regard to helping your son with tuition, are there better or cheaper options? It does not make sense to put yourself in financial peril in order to cover college expenses. I understand that is a tough decision but he is a man now and needs to be part of the real world solution. Following the Baby Steps: The biggest factor is a belief that you can fix the mess. 30k is not really that much, with a good plan and focus, you can clean it up. Good luck.", "title": "" }, { "docid": "5b5a9693833bb4297095593573f88ccf", "text": "Budget. Figure out how much money you need to keep for your own spending purposes, then figure out from that how much you can afford to move to longer term savings for youeself and/or the kid. Try it for a while, see if it works, adjust how much you can afford to save, repeat. (Actually, you want to further reduce the savings a bit until the emergency fund comes up to a level you feel comfortable at, then increase them to acceptable targets.) It's OK if you miss or reduce some deposits to the savings plans while you get the emergency fund up to a level you're comfortable at. If you don't feel you're saving enough after making these adjustments, you need to economize somewhere so you have more money to save, or make more money, or recalibrate your expectations. You can't get a gallon out of a quart container.", "title": "" }, { "docid": "73665670f8f89a0dfc6e8dd8afc68fdb", "text": "A $100K house and $100K are not equivalent assets. Here's a hypothetical... You and I both work for the same company, and both get a $100K bonus (yes, I said it's hypothetical). You decide to use the $100K to pay off your house. I put the money in the bank. Six months later, our company lays both of us off. I have $100K in the bank. I can last for quite a while with that much money in the bank. You have a house, but you can't get a mortgage or home equity loan, because you don't have a job. The only way you can access the money is by selling the house, which requires you to pay money to a real estate agent and perhaps taxes, and leaves you looking for a place to live. That assumes there isn't something systemic going on - like the credit crash - and there is credit available for somebody else to buy your house.", "title": "" } ]	fiqa
de71ee6aab37cdda5a3951f2bff05472	Any Loop Holes for Owner Occupancy?	[ { "docid": "213859f312c4e3f48e0be8dd4479e533", "text": "\"There are 2 and 3 family houses that have an \"\"owner occupied\"\" clause for certain financing. Of course, one would rent out the extra apartments without question. The key thing is that owner-occupied means just that, occupancy for tax purposes. Just using a small area like an office won't satisfy the requirement, so no, this isn't legal.\"", "title": "" } ]	[ { "docid": "f6bbadb8199fa90aa011568f6a6db40c", "text": "I have loved using AirBnB. I have found it easier to hire a maid to clean and it has been extremely financially advantageous for me. Be sure to check out out regulations in your area regarding AirBnB. I spoke with a personal advisor before I used AirBnB just to be sure that it would not affect my insurance, property taxes, as well income tax. It was very helpful to take this step before becoming a host!", "title": "" }, { "docid": "b4c4472436470581adf08370392e7add", "text": "\"The obvious advantage is turning your biggest liability into an income-generating asset. The downside are: (1), you have to find tenants (postings, time to show the place, credit/background check, and etc) (2), you have to deal with tenants (collection of rent, repairs of things that broke by itself, complaints from neighbors, termination, and etc) (3), you have to deal with the repairs In many ways, it's no different from running another (small) business, so it all boils down to how much time you are willing to invest and how handy you are in doing reno's and/or small repairs around the house. For profitability/ROI analysis, you want to assume collection of 11 months of rent per year (i.e. assume tenant doesn't renew after year, so you have the worst case scenario) and factor in all the associated expense (be honest). Renting out a second property is a bit tricky as you often have to deal with a large operating expense (i.e. mortgage), and renting a basement apartment is not bad financially and you will have to get used to have \"\"strangers\"\" downstairs.\"", "title": "" }, { "docid": "9f47d532ee2ff1cd4da42aa86e7f3042", "text": "Carnegie Mellon University (CMU) and the University of Pittsburgh (Pitt) have different end of term dates but by less than a month. Both have summer sessions, but most students do not stay over the summer. You can rent over the summer, but prices fall by a lot. Thirty to forty thousand students leave over the summer between the two. Only ten to twenty thousand remain throughout the year and not all of those are in Oakland (the neighborhood in Pittsburgh where the universities are located). So many of the landlords in Oakland have the same problem. Your competitors will cut their rates to try to get some rent for the summer months. This also means that you have to handle eight, nine, and three month leases rather than year long and certainly not multiyear leases. You're right that you don't have to buy the latest appliances or the best finishes, but you still have to replace broken windows and doors. Also, the appliances and plumbing need to mostly work. The furnace needs to produce heat and distribute it. If there is mold or mildew, you will have to take care of it. You can't rely on the students doing so. So you have to thoroughly clean the premises between tenants. Students may leave over winter break. If there are problems, the pipes may freeze and burst, etc. Since they're not there, they won't let you know when things break. Students drop out during the term and move out. You probably won't be able to replace them when that happens. If you have three people in two bedrooms, two of them may be in a romantic relationship. Romantic relationships among twenty-year olds end frequently. Your three people drops back to two. Your recourse in that case is to evict the remaining tenants and sue for breach of contract. But if you do that, you may not replace the tenants until a new term starts. Better might be to sue the one who left and accept the lower rent from the other two. But you likely won't get the entire rent amount for the remainder of the lease. Suing an impoverished student is not the road to riches. Pittsburgh is expected to have a 6.1% increase in house prices which almost all of it is going to be pure profit. I don't know specifically about Pittsburgh, but in the national market, housing prices are about where they were in 2004. Prices were flat to increasing from 2004 to 2007 and then fell sharply from 2007 to 2009, were flat to decreasing from 2009 to 2012, and have increased the last few years. Price to rent ratios are as high now as in 2003 and higher than they were the twenty years before that. Maybe prices do increase. Or maybe we hit a new 20% decrease. I would not rely on this for profit. It's great if you get it, but unreliable. I wouldn't rely on estimates for middle class homes to apply to what are essentially slum apartments. A 6% average may be a 15% increase in one place and a 3% decrease in another. The nice homes with the new appliances and the fancy finishes may get the 15% increase. The rundown houses in a block where students party past 2 AM may get no increase. Both the city of Pittsburgh and the county of Allegheny charge property taxes. Schools and libraries charge separate taxes. The city provides a worksheet that estimates $2860 in taxes on a $125,000 property. It doesn't sound like you would be eligible for homestead or senior tax relief. Realtors should be able to tell you the current assessment and taxes on the properties that they are selling you. You should be able to call a local insurance agent to find out what kinds of insurance are available to landlords. There is also renter's insurance which is paid by the tenant. Some landlords require that tenants show proof of insurance before renting. Not sure how common that is in student housing.", "title": "" }, { "docid": "a68bc6f5d96f39d59ba541147e41b861", "text": "A look at the utility bills should give you an idea of the actual number of tenants. Some places- like I once read of Carmel, California- may require you prove you have enough water to support more rental cabins. You may find the nearby community is anti-growth. If a profitable expansion were possible, I'm wondering why the current owner didn't do it. Since a fire or flood could destroy all, you'll want to know what full replacement-value insurance and riders will cost. Can emergency vehicles travel the current roads, or is the new owner going to be liable for any costs to widen, cut back brush, and otherwise bring up to code? We did this on the access to our property, then the County graded it. If the location is so remote that a storm could cut you off, you'll want to mentally and physically prepare for this. I've lived in remote areas and it can be heavenly-until someone needs an emergency MediVac. Ensure you've got good antenna for CB or HAM-don't rely on cell alone.", "title": "" }, { "docid": "366e4f092dbfd5bf75a34ea777a4fe2b", "text": "Here would be the big two you don't mention: Time - How much of your own time are you prepared to commit to this? Are you going to find tenants, handle calls if something breaks down, and other possible miscellaneous issues that may arise with the property? Are you prepared to spend money on possible renovations and other maintenance on the property that may occur from time to time? Financial costs - You don't mention anything about insurance or taxes, as in property taxes since most municipalities need funds that would come from the owner of the home, that would be a couple of other costs to note in having real estate holdings as if something big happens are you expecting a government bailout automatically? If you chose to use a property management company for dealing with most issues then be aware of how much cash flow could be impacted here. Are you prepared to have an account to properly do the books for your company that will hold the property or would you be doing this as an individual without any corporate structure? Do you have lease agreements printed up or would you need someone to provide these for you?", "title": "" }, { "docid": "38693a7bdb7f98d5bc1b396555832d8b", "text": "\"Sure, it's irresponsible for an executor to take actions which endanger the estate. But what about passivity or inaction? Put it another way. Is it the obligation of the executor to avoid making revenue for the estate? Think about it - what a silly idea! Consider a 12-unit apartment building full of rent paying tenants. A tenant gives notice and leaves. So do 4 more. With only 7/12 tenants, the building stops being a revenue center and becomes a massive money pit. Is that acceptable? Heck no! Realistically this will be managed by a property management company, and of course they'll seek new tenants, not stopping merely because the owner died. This situation is not different; the same fiscal logic applies. The counter-argument is usually along the lines of \"\"stuff might happen if you rent it out\"\"... true. But the stuff that happens to abandoned houses is much worse, and much more likely: squatters, teen \"\"urban explorers\"\", pot growers, copper thieves, winter pipe freeze flooding and wrecking interiors, etc. Don't take my word on it -- ask your insurer for the cost of insuring an abandoned house vs. a rented one. Renting brings a chunk of cash that comes in from tenants - $12,000/year on a $1000/mo. rental. And that will barely pay the bills if you have a young mortgage on a freshly purchased house at recent market rates. But on an old mortgage, renting is like printing money. That money propagates first to the estate (presumably it is holding back a \"\"fix the roof\"\" emergency fund), and then to the beneficiaries. It means getting annual checks from the estate, instead of constantly being dunned for another repair. But I don't care about making revenue (outside of putting back a kitty to replace the roof). Even if it was net zero, it means the maintenance is being done. This being the point. It is keeping the house in good repair, occupied, insured, and professionally managed -- fit and ready for the bequest's purpose: occupancy of an aunt. What's the alternative? Move an aunt into a house that's been 10 years abandoned? Realistically the heirs are going to get tired/bored of maintaining the place at a total cash loss, maintenance will slip, and you'll be moving them into a neglected house with some serious issues. That betrays the bequest, and it's not fair to the aunts. Rental is a very responsible thing to do. The executor shouldn't fail to do it merely out of passivity. If you decide not to do it, there needs to be a viable alternative to funding the home's decent upkeep. (I don't think there is one). Excluding a revenue-producing asset from the economy is an expensive thing to do.\"", "title": "" }, { "docid": "a62f37b34eba5991155bb33948b3dbf5", "text": "It might some but I'd wager it pushes the short-term rental pricing down (like hotels) while pushing the long-term rental and housing market prices up. If landlords can make way more in short-term rentals they are going to do that and limit the supply of long-term. The tourism sector may have increased revenue but by what extent I don't know. I'd wager that exploding rent and housing prices will negate any benefits for most residents and may end up costing them much more. This is why I think you should only be able to do it on your primary residence. Unless you want to be regulated like a hotel because if you have short-term rentals that you don't reside in, that is effectively what you are. Not being regulated the same as a hotel at that point only gives you an unfair loophole advantage to other short-term rentals.", "title": "" }, { "docid": "dd3b478a6bdb1e7a8d291a965d3ca2fc", "text": "Others have already made good points, so I'll just add a few more: You say that if you bought it, your mortgage, insurance, and taxes minus the rental income from the bottom floor would leave you with costs of 1/4 of your current rent. That means you're getting a fantastic deal on the purchase price. I suspect you may be underestimating some of those costs. So, get exact figures on the mortgage, insurance and taxes and do the math. If it is that good, go for it, just make sure to get that home inspection (in case there's major problems and they're trying to get out while the gettin's good) Also, some advice: Be prepared to cover that entire monthly cost for a few months. Units can stand empty for a while. Also, you may want to rent out slowly - a good tenent found after a couple months is much better than a bad tenent found quickly. Also, have some money set aside for maintenence. As a renter, you've never really had to think about that before, but as a homeowner you do. As a landlord, it's even more important - you can not fix something in your own home for a while if you needed to wait, but in a tenent unit, you have to fix it immediately. Finally, taxes: You do get to deduct interest, and so on, but it'll work a little differently than you think. You'll have to split it in half (if the units are the same size) and deduct half the interest as a normal homeowner deduction, the other half as a business expense. Same for PMI, insurance, and property taxes. If you do maintenance that effects both units, like fixing the roof, half will be deductible, the other half not. However, maintenance that only affects the tenant unit is fully deductible. You can claim depreciation, but only for half. So, your starting amount you can depreciate would be (purchase price - land value)/2. Same thing here - half is your home, the other half is a business. Note that some things you'd think of as maintenance costs actually can't be deducted, only depreciated over time. Take that leaky roof, for example. If you replaced it instead of repairing it, you could not deduct your replacement costs. It counts as an improvement, and gets added to your cost-basis, where you depreciate it along with (half!) the house. If your tenant's refrigerator went out, and you replaced it, you couldn't deduct that either. However you can depreciate all of it on another schedule (seperate from home depreciation). If you repaired it instead, you can deduct all of it immediately. Taxes suck.", "title": "" }, { "docid": "8b50f43e5a7eefb771bcd826a71b5627", "text": "Heres what you need to know: This can be prevented by what a previous renter did to us. This is a smart, kind of a jerky way to do it but its VERY SMART, as long as your property is worth it, raise the rent higher. You must have a very nice, clean, everything working, house. You must be willing to have anything fixed. this is all to make up the high rent. You don't want the rent way out of proportion but just a bit higher. This is because, more than likely, people who are going to pay for a higher rent don't usually leave a mess, (higher class families vs lower class people living alone..) What might also help from the risk of damage is create a fee (also what my renter did) of any painting needed done like finger prints on the wall, nails in the wall, carpet stains, etc when the tenant is ready to move out. I would suggest a required professional carpet cleaning as well when lease is up. My renter was very nice, but very strict and did all these things. He has a few properties that are very nice middle class houses. Your home sounds like it could easily pass for this kind of business depending on where you live. If the tenant leaves before his lease is up you could charge a 1-2 month's rent to be able to find a new tenant. Be proactive on finding a tenant before the lease is up. This would be a bit of work to first set up and usually maintain, but its a good thing to think about.", "title": "" }, { "docid": "17a97468d02ef23f8242fabd8c3ad769", "text": "\"I very much agree with what @Grade 'Eh' Bacon said about townhouses, but wanted to add a bit about HOA's, renting after moving on, and appreciation: HOA's HOA's can be restrictive, but they can also help protect property values, not all HOA's are created equal, some mean you have zero exterior maintenance, some don't. You'll be able to review the HOA financials to see where the money goes (and if they have healthy reserves). You'll see how much they spend on administration, I think ~10% is typical, and administration can be offset by the savings associated with doing everything in bulk. A well-run HOA should actually save you money over paying for all the things separately, but many people are happy to do some things themselves rather than pay for it, and would come out ahead if they didn't have an HOA. And of course, not all HOA's are well-run. Just do your best to get informed Transitioning to Rental If you are interested in trying your hand being a landlord after living there for a while, a townhouse typically exposes you to less rental risk than a single-family home, because the cost is typically lower and if the HOA maintains everything outside the house then you don't have to worry as much about tenants keeping a lawn in good shape, for example. Appreciation Appreciation varies wildly by market, some research by Trulia suggests in general condo's have outperformed single-family houses over the last 5 years by 10.5%. The same article notes that others disagree with Trulia's assessment and put condo's below single-family houses by 1.3% annually. My first townhouse has appreciated 41% over the last 3 years, while houses in the area are closer to 30% over the same period, but I believe that's a function of my local market more than a nationwide trend. I wouldn't plan around any appreciation forecasts. Source: Condos may be appreciating faster than single-family houses My adviceYou have to do your research on each potential property regardless of whether it's a condo/townhouse/single-family to find out what restrictions there are and what services are provided by the HOA (if any), your agent should be provided with most of the pertinent info, and you may not get to see HOA financials until you're under contract. Most importantly in my view, I wouldn't buy anywhere near the top of your budget. Being \"\"house-poor\"\" is no fun and will limit your options, don't count on appreciation or better income in the future to justify stretching yourself thin in the short-term.\"", "title": "" }, { "docid": "87da576f3c8012a74209d6db176a2c7a", "text": "\"You are assuming 100% occupancy and 100% rent collection. This is unrealistic. You could get lucky and find that long term tenant with great credit that always pays their bills... but in reality that person usually buys a home they do not rent long term. So you will need to be prepared for periods of no renters and periods of non payment. The expenses here I would expect could wipe out more than you can make in \"\"profit\"\" based on your numbers. Have you checked to find out what the insurance on a rental property is? I am guessing it will go up probably 200-500 a year possibly more depending on coverage. You will need a different type of insurance for rental property. Have you checked with your mortgage provider to make sure that you can convert to a rental property? Some mortgages (mine is one) restrict the use of the home from being a rental property. You may be required to refinance your home which could cost you more, in addition if you are under water it will be hard to find a new financier willing to write that mortgage with anything like reasonable terms. You are correct you would be taking on a new expense in rental. It is non deductible, and the IRS knows this well. As Littleadv's answer stated you can deduct some expenses from your rental property. I am not sure that you will have a net wash or loss when you add those expenses. If you do then you have a problem since you have a business losing money. This does not even address the headaches that come with being a landlord. By my quick calculations if you want to break even your rental property should be about 2175/Month. This accounts for 80% occupancy and 80% rental payment. If you get better than that you should make a bit of a profit... dont worry im sure the house will find a way to reclaim it.\"", "title": "" }, { "docid": "77b59558c9d957cfd8149d31f8d1c34c", "text": "Disadvantage is that tenant could sue you for something, and in an unfavorable judgement they would have access to your house as property to possess. You could lose the house. Even if you make an LLC to hold the house, they'll either sue you or the LLC and either way you could lose the house. This might be why the landlord is moving to Florida where their house cannot be possessed in a judgement because of the state's strong homestead exemption ;)", "title": "" }, { "docid": "05cd46be385369599415155435befba7", "text": "Thanks for the feedback obelus, The cost is $20,000 to 50,000 sqft. Ya I am just looking for a rough idea of what a similar newer building is costing I figured what we are paying is really high as the building is extremely old and designated as a heritage site so we can't just knock it down. Beautiful building just not very efficient. The newer building is the route I think we are gonna end up going not sure what we can do with the current building as not too many options for resale. We can't adjust the lease rates to compensate for the cost as the tenants are all seniors and it is an integrated care home. A change to apartments would prove difficult as there are no kitchens in 90% of the suites. We are currently paying approximately $0.40 psf a month to heat (All electric) and the estimate for the new building is $0.1425 psf (Geothermal) so it is a pretty huge impact in comparison if it is possible but I haven't heard of a real building actually costing that little before. Thanks for the suggestion for the IR I think I am gonna get some one in after the holidays to do a inspection to see if there is any short term fixes we can do with our system.", "title": "" }, { "docid": "b9b5799fc7da961ab2a1c9d6082c9be0", "text": "\"Several, actually: Maintenance costs. As landlord, you are liable for maintaining the basic systems of the dwelling - structure, electrical, plumbing, HVAC. On top of that, you typically also have to maintain anything that comes with the space, so if you're including appliances like a W/D or fridge, if they crap out you could spend a months' rent or more replacing them. You are also required to keep the property up to city codes as far as groundskeeping unless you specifically assign those responsibilities to your tenant (and in some states you are not allowed to do so, and in many cases renters expect groundskeeping to come out of their rent one way or the other). Failure to do these things can put you in danger of giving your tenant a free out on the lease contract, and even expose you to civil and criminal penalties if you're running a real slum. Escrow payments. The combination of property tax and homeowner's insurance usually doubles the monthly housing payment over principal and interest, and that's if you got a mortgage for 20% down. Also, because this is not your primary residence, it's ineligible for Homestead Act exemptions (where available; states like Texas are considering extending Homestead exemptions to landlords, with the expectation it will trickle down to renters), however mortgage interest and state taxes do count as \"\"rental expenses\"\" and can be deducted on Schedule C as ordinary business expenses offsetting revenues. Income tax. The money you make in rent on this property is taxable as self-employment income tax; you're effectively running a sole proprietorship real-estate management company, so not only does any profit (you are allowed to deduct maintenance and administrative costs from the rent revenues) get added to whatever you make in salary at your day job, you're also liable for the full employee and employer portions of Medicare/Medicaid/SS taxes. You are, however, also allowed to depreciate the property over its expected life and deduct depreciation; the life of a house is pretty long, and if you depreciate more than the house's actual loss of value, you take a huge hit if/when you sell because any amount of the sale price above the depreciated price of the house is a capital gain (though, it can work to your advantage by depreciating the maximum allowable to reduce ordinary income, then paying lower capital gains rates on the sale). Legal costs. The rental agreement typically has to be drafted by a lawyer in order to avoid things that can cause the entire contract to be thrown out (though there are boilerplate contracts available from state landlords' associations). This will cost you a few hundred dollars up front and to update it every few years. It is deductible as an ordinary expense. Advertising. Putting up a \"\"For Rent\"\" sign out front is typically just the tip of the iceberg. Online and print ads, an ad agency, these things cost money. It's deductible as an ordinary expense. Add this all up and you may end up losing money in the first year you rent the property, when legal, advertising, initial maintenance/purchases to get the place tenant-ready, etc are first spent; deduct it properly and it'll save you some taxes, but you better have the nest egg to cover these things on top of everything your lender will expect you to bring to closing (assuming you don't have $100k+ lying around to buy the house in cash).\"", "title": "" }, { "docid": "3fd14cd78e53580cfc1beb0f4514c885", "text": "I believe that the form you will need to fill out for the company is the IRS' W-8ECI form. My US-based Fortune 50 company pays my rent in Germany, and had my landlord fill one out so that they would not need to do any withholding for the payments. From this IRS site on withholding income for payments to Foreign Individuals: Withholding exemption. In most cases, you do not need to withhold tax on income if you receive a Form W-8ECI on which a foreign payee represents that: The foreign payee is the beneficial owner of the income, The income is effectively connected with the conduct of a trade or business in the United States, and The income is includible in the payee's gross income. Good luck!", "title": "" } ]	fiqa
5752b7b9c2053b7903dd9360d8e18309	Historical P/E ratios of small-cap vs. large-cap stocks?	[ { "docid": "ec71eaa74d95a27d599d989b6c92d992", "text": "There is most likely an error in the WSJ's data. Yahoo! Finance reports the P/E on the Russell 2000 to be 15 as of 8/31/11 and S&P 500 P/E to be 13 (about the same as WSJ). Good catch, though! E-mail WSJ, perhaps they will be grateful.", "title": "" } ]	[ { "docid": "306e4dbc38dd9989c1d6bd8e12f8a6bc", "text": "\"What you need to do is go to yahoo finance and look at different stock's P/E ratios. You'll quickly see that the stocks can be sorted by this number. It would be an interesting exercise to get an idea of why P/E isn't a fixed number, how certain industries cluster around a certain number, but even this isn't precise. But, it will give you an idea as to why your question has no answer. \"\"Annual earnings are $1. What is the share price?\"\" \"\"Question has no answer\"\"\"", "title": "" }, { "docid": "258018bc30de9480e38e90433adec6f5", "text": "\"Yes, there are situations where a stock is a bad buy in spite of a low PE. PE ratio tells you the current share price divided by the prior 4 quarters earnings per share. It does not consider: Imagine someone walked up to you and said, \"\"Do you want to buy a piece of my business? I'll sell you 1% of it for $1000. Last year the business earned $25000.\"\" A quick calculation shows a PE of 4 [$1000/($25000 .01)]. Even though this PE is comparatively low, you wouldn't buy in without a lot more info. What kinds of things might you ask? PE is one tiny component of an informed investment decision.\"", "title": "" }, { "docid": "76e622fc225406dbd70fb144752364dc", "text": "\"You could use any of various financial APIs (e.g., Yahoo finance) to get prices of some reference stock and bond index funds. That would be a reasonable approximation to market performance over a given time span. As for inflation data, just googling \"\"monthly inflation data\"\" gave me two pages with numbers that seem to agree and go back to 1914. If you want to double-check their numbers you could go to the source at the BLS. As for whether any existing analysis exists, I'm not sure exactly what you mean. I don't think you need to do much analysis to show that stock returns are different over different time periods.\"", "title": "" }, { "docid": "b83a3611deb97cfa58b7ba4e4c074fc7", "text": "To a certain extent, small cap companies will in general follow the same trends as large cap companies. The extent of this cointegration depends on numerous factors, but a prime reason is the presence of systemic risk, i.e. the risk to the entire market. In simple terms, sthis is the risk that your portfolio will approach asymptotically as you increase its diversification, and it's why hedging is also important. That being said, small cap businesses will, in general, likely do worse than large cap stocks, for several reasons. This was/is certainly the case in the Great Recession. Small cap businesses have, on average, higher betas, which is a measure of a company's risk compared to the overall market. This means that small cap companies, on average outperform large cap companies during boom times, but it also means that they suffer more on average during bear times. The debate over whether or not the standard beta is still useful for small cap companies continues, however. Some economists feel that small cap companies are better measured against the Russell 2000 or similar indexes instead of the S&P 500. Small cap companies may face problems accessing or maintaining access to lines of credit. During the Great Recession, major lenders decreased their lending to small businesses, which might make it harder for them to weather the storm. On a related point, small businesses might not have as large an asset base to use as collateral for loans in bad times. One notable large cap company that used its asset base to their advantage was Ford, which gave banks partial ownership of its factories during hard times. This a) gave Ford a good amount of cash with which to continue their short-term operations, and b) gave the banks a vested interest in keeping Ford's lines of credit open. Ford struggled, but it never faced the financial problems of GM and Chrysler. Despite political rhetoric about Main Street vs. Wall Street, small businesses don't receive as much government aid in times of crisis as some large cap companies do. For example, the Small Business Lending Fund, a brilliant but poorly implemented idea in 2010, allocated less than $30 billion to small businesses. (The actual amount loaned was considerably less). Compare that to the amounts loaned out under TARP. Discussions about corporate lobbying power aside, small businesses aren't as crucial to the overall stability of the financial system Small businesses don't always have the manpower to keep up with changes in regulation. When the Dodd-Frank Act passed, large banks (as an example), could hire more staff to understand it and adapt to it relatively easily; small banks, however, don't always have the resources to invest in such efforts. There are other reasons, some of which are industry-specific, but these are some of the basic ones. If you want visual confirmation that small cap businesses follow a similar trend, here is a graph of the Russell 2000 and S&P 500 indexes: Here is a similar graph for the Russell 2000 and the Dow Jones Industrial Average. If you wanted to confirm this technically and control for the numerous complicated factors (overlap between indexes, systemic risk, seasonal adjustment, etc.), just ask and I'll try to run some numbers on it when I have a chance. Keep in mind, too, that looking at a pretty picture is no substitute for rigorous financial econometrics. A basic start would be to look at the correlation between the indexes, which I calculate as 0.9133 and 0.9526, respectively. As you can see, they're pretty close. Once again, however, the reality is more complicated technically, and a sufficiently detailed analysis is beyond my capabilities. Just a quick side note. These graphs show the logarithm of the values of the indexes, which is a common statistical nuance that is used when comparing time series with radically different magnitudes but similar trends. S&P500 and Russell 2000 data came from Yahoo! Finance, and the Dow Jones Industrial Average data came from Federal Reserve Economic Data (FRED) Per usual, I try to provide code whenever possible, if I used it. Here is the Stata code I used to generate the graphs above. This code assumes the presence of russell2000.csv and sp500.csv, downloaded from Yahoo! Finance, and DJIA.csv, downloaded from FRED, in the current directory. Fidelity published an article on the subject that you might find interesting, and Seeking Alpha has several pieces related to small-cap vs. large-cap returns that might be worth a read too.", "title": "" }, { "docid": "5f5014ca6d5e1582d914c4400f4a7023", "text": "This is a note from my broker, CMC Markets, who use Morningstar: Morningstar calculate the P/E Ratio using a weighted average of the most recent earnings and the projected earnings for the next year. This may result in a different P/E Ratio to those based solely on past earnings as reported on some sites and other publications. They show the P/E as being 9.93. So obviously past earnings would usually be used but you would need to check with your source which numbers they are using. Also, as BHP's results just came out yesterday it may take a while for the most recent financial details to be updated.", "title": "" }, { "docid": "b30bd7a9465bf07e15893e3617051654", "text": "\"I am doing an assignment for a finance class, and I am writing a recommendation for a specific capital structure. One of the concerns brought up by the \"\"board of directors\"\" was interest coverage, so in my addressing that topic in my report, I want to compare to competitors. The interest coverage ratio under this capital structure that I'm choosing is 11.8 and the two competitors we are given information on are Company A (who has an interest coverage ratio of 6.67) and Company B (who has an interest coverage ratio of 11.25). It seems good, but my concern is that I may be missing something, as Company A is similar in size (in terms of sales) to the company I am writing a report for while Company B has ~50 times more sales than the company I am writing a report for. Advice, things to consider as I move forward?\"", "title": "" }, { "docid": "ce39b9dfd8d0449374b8c1df3bc0e9d5", "text": "\"For free, 5 years is somewhat available, and 10 years is available to a limited extent on money.msn.com. Some are calculated for you. Gurufocus is also a treasure trove of value statistics that do in fact reach back 10 years. From the Gurufocus site, the historical P/E can be calculated by dividing their figure for \"\"Earnings per Share\"\" by the share price at the time. It looks like their EPS figure is split adjusted, so you'll have to use the split adjusted share price. \"\"Free cash\"\", defined in the comments as money held at the end of the year, can be found on the balance sheet as \"\"Cash, Cash Equivalents, Marketable Securities\"\"; however, the more common term is \"\"free cash flow\"\", and its growth rate can be found at the top of the gurufocus financials page.\"", "title": "" }, { "docid": "f535a0d7cc0538b79c889db8e26ef801", "text": "Stock price = Earning per share P/E Ratio. Most of the time you will see in a listing the Stock price and the P/E ration. The calculation of the EPS is left as an exercise for the student Investor.", "title": "" }, { "docid": "70e23a1994c05aa2ebbf3034d32bde75", "text": "PEG is Price/Earnings to Growth. It is calculated as Price/Earnings/Annual EPS Growth. It represents how good a stock is to buy, factoring in growth of earnings, which P/E does not. Obviously when PEG is lower, a stock is more undervalued, which means that it is a better buy, and more likely to go up. Additional References:", "title": "" }, { "docid": "55b98bac35fca6833f115fb68dd9e9e2", "text": "The simple answer is technically bonds don't have earnings, hence no P/E. What I think the OP is really asking how do I compare stock and bond ETFs. Some mature stocks exhibit very similar characteristics to bonds, so at the margin if you are considering investing between 2 such investments that provide stable income in the form of dividends, you might want to use the dividend/price ratio (D/P) of the stock and compare it to the dividend yield of the bond. If you go down to the basics, both the bond and the stock can be considered the present value of all future expected cashflows. The cash that accrues to the owner of the stock is future dividends and for the bond is the coupon payments. If a company were to pay out 100% of its earnings, then the dividend yield D/P would be conveniently E/P. For a company with P/E of 20 that paid out it's entire earnings, one would expect D/P = 1/20 = 5% This serves as a decent yard stick in the short term ~ 1 year to compare mature stock etfs with stable prospects vs bond funds since the former will have very little expected price growth (think utilities), hence they both compete on the cashflows they throw off to the investor. This comparison stops being useful for stock ETFs with higher growth prospects since expected future cashflows are much more volatile. This comparison is also not valid in the long term since bond ETFs are highly sensitive to the yield curve (interest rate risk) and they can move substantially from where they are now.", "title": "" }, { "docid": "2136538e1c183dd41f933085eadd0b7f", "text": "\"The mathematics site, WolframAlpha, provides such data. Here is a link to historic p/e data for Apple. You can chart other companies simply by typing \"\"p/e code\"\" into the search box. For example, \"\"p/e XOM\"\" will give you historic p/e data for Exxon. A drop-down list box allows you to select a reporting period : 2 years, 5 years, 10 years, all data. Below the chart you can read the minimum, maximum, and average p/e for the reporting period in addition to the dates on which the minimum and maximum were applicable.\"", "title": "" }, { "docid": "08e3908c35c115650acb1de2f67303e9", "text": "It's safe to say that for mature companies, with profits that have been steady, and steadily growing, that a multiple of earnings can come into play. It's not identical between companies or even industries, but for consumer staples, for instance, you'll see a clustering around a certain P/E. On the other hand, there are companies like FaceBook, 18 months ago, trading at 20, now at 70 with a 110 P/E. Did the guys valuing the stock simply get it wrong then or is it wrong now? Contrast this with KO (Coca-cola) a 20 P/E and 3.2% dividend, PG (Proctor and Gamble) 21 P/E, 3% dividend. Funny though, a $1M valuation for $50K in profit may be Shark ridiculous, but a $1B valuation on a $50M company with great prospects, i.e. a pipeline of new products in growing markets, is a steal. Disclosure I have no positions in the mentioned stocks.", "title": "" }, { "docid": "2f59413ac77aa486091797a12cd9d78e", "text": "Robert Shiller published US Stock Market data from 1871. Ken French also has historical data on his website. Damodaran has a bunch of historical data, here is some historical S&P data.", "title": "" }, { "docid": "f619457d2ac508e86957b06260510702", "text": "\"This is a really interesting question and something a lot of work is being done to understand. I'm going to look at the closely related question \"\"Do non market-cap etf weighting methods consistently outperform once you take into account their investment biases?\"\" Let's use revenue weighting as a reason why investment biases are so important. In revenue weighting, you would own almost no fast-growing tech companies as they generally have little revenue. This sounds great if we are talking about say Pets.com in the late 90s but you also would miss most of the rise of Google. To believe in these ETFs consistently outperform (adjusted for risk) you would have to have a strong reason to believe that earnings, sales, or dividends are a better predictor of company value than market value. Market analysts include the above three metrics and many more when pricing stocks so out-performance using only one of the above metrics seems unlikely. There is one caveat to this and that is value and small cap stocks have been shown to give slightly better risk-adjusted returns in the very long run (see Fama/French) and many of these alternative weighting methods will have a value or small cap bias. First, it is unclear if this out-performance will continue now that it is more widely known. Second, even if you believe this will continue you can more easily and cheaply get this bias though value/small-cap etfs than these weighting schemes. In the end, the only thing that is perfectly clear is that higher fee investments will generally under-perform.\"", "title": "" }, { "docid": "763b874917da099d22ea9724fbc4d829", "text": "PEG is Price to Earnings Growth. I've forgotten how it's calculated, I just remember that a PEG ratio of 1-2 is attractive by Graham & Dodd standards.", "title": "" } ]	fiqa
cc0336d12b206033a4c0fceb595ae0e8	Separating money in bank account without opening another account	[ { "docid": "7c28f5c19dd0acae5429e650ad60cfcb", "text": "\"There are some banks that offer \"\"pot\"\" accounts like this (off the top of my head I think Intelligent Finance does, although they call them \"\"jars\"\"). The other option for charity specifically would be a CAF account: https://www.cafonline.org/my-personal-giving/plan-your-giving/individual-charity-account.aspx\"", "title": "" } ]	[ { "docid": "e2556cddd3a3db377c1f4eef65198dbc", "text": "\"The official guide can be found here, but that can be a little in depth as well. To make good use of you need at least a little knowledge of double-entry bookkeeping. Double-entry bookkeeping, in accounting, is a system of bookkeeping so named because every entry to an account requires a corresponding and opposite entry to a different account. From Wikipedia Another way to think of it is that everything is an account. You'll need to set up accounts for lots of things that aren't accounts at your bank to make the double-entry system work. For example you'll need to set up various expense accounts like \"\"office supplies\"\" even though you'll never have a bank account by that name. Generally an imbalanced transfer is when you have a from or to account specified, but not both. If I have imbalanced transactions I usually work them from the imbalance \"\"account\"\", and work each transaction to have its appropriate tying account, at which point it will no longer be listed under imbalance.\"", "title": "" }, { "docid": "32062a8ccc2d04e06e6d0bc000eab399", "text": "If your old bank has online billpay, you might be able to either use that to send a check to yourself, or do an ACH transfer directly into your new account.", "title": "" }, { "docid": "b2c42bddf3080ea7ae21817338063ec0", "text": "The bank won't let you because: Differences in required account features — Business accounts have different features (many of them legal features) that are required by businesses. For instances: Do you want to be able to deposit cheques that are written out to your business name? You need a business account for that. Your business could be sold. Then it wouldn't be your business, so it wouldn't make sense to put the business account under your personal name. The bank account and the cash it holds is a business asset and should be owned by the business, so when the business is sold the account goes with it. This is especially the case for a corporation that has shareholders, and not a sole proprietorship. For a business, you could also, in theory, assign other people as signing authorities on the business account (e.g. your corporate treasurer), and the individuals performing that role could change over time. Business accounts allow for this kind of use. Market segmentation — The bank has consciously undertaken to segment their product offerings in order to maximize their profit. Market segmentation helps the bottom line. Even if there were zero legal reasons to have separate personal vs. business accounts, banks would still make it their policy to sell different account types according to use because they can make more money that way. Consider an example in another industry: The plain-old telephone company also practices segmentation w.r.t. personal/business. Do you want a telephone line for a business and listed as such in the phone book? You need a business line. Do you want a phone line hooked up at a non-residential address? You need a business line. Here it's clear it is less of a legal issue than with the bank account, and it doesn't matter that the technical features of the phone line may be identical for the basic product offerings within each segment. The phone company has chosen to segment and price their product offerings this way. Q. Why do companies choose to charge some kinds of customers more than others for essentially the same underlying service? A. Because they can.", "title": "" }, { "docid": "9d9b8106c6faa5826c974441dda0bf78", "text": "Almost any financial institution has the technical ability to do this (simply called sweeps, auto sweeps, or deposit sweeps); the issue you face is finding an institution that is willing to do it for you. I think you will have the most luck at your primary financial institution where you currently keep the majority of your banking relationship. You will have better luck at small-town banks and credit unions. The mega banks will likely not waver from their established policies. Deposit sweeps are common for business accounts. They are usually tied to a savings account, which is usually held within the same institution, however this is not a requirement. The sweep can send money to any US bank if you can provide the routing number and account number. The sweep will establish a peg balance, or floor balance, on the checking account. At the end of the day, any amount above the peg is swept into the savings account automatically. I doubt you will find what you’re asking for within an online banking system. You will likely have to go into a branch and speak with a personal banker. Explain to them you want to establish a sweep on your checking account and want to send the funds to another financial institution. You will have better luck asking for a peg of $100, or some other small amount. They may not take your request seriously if you want to completely empty the checking account to zero.", "title": "" }, { "docid": "06da1a02f4be05b0bd45a099ebcfa5e0", "text": "There is very little difference these days between account types. The fee structure and interest paid is different, but the actual mechanics, and as noted by others, the coverage by deposit insurance is identical. So look at how much money you have in the account(s) you have; are you maximizing the interest that you could be receiving, even from the small amounts that the banks will pay? If you could get more interest from the savings account, and only write one or two cheques per month, you might be better off with that account only; but given common fee structures, you likely would not want that as your primary account. Another reason for separate accounts is more psychological. You might be able to train yourself to not dip in to your savings if you don't have a chequebook.", "title": "" }, { "docid": "35a05cfc4c1ac63cbf2f0d766a3e4561", "text": "\"How can someone use the account number to withdraw money without my consent? They can use your account number to game your banks phone support and try to phish their way into your account. Banks have gotten very good at combating this, but theoretically with just the address he lives in, your name, and a bad bank phone rep, he could get into your business. The account number would just be one more piece of information to lead with. I have 1 savings and 3 checking accounts with the same bank. Would they be able to gain access to the other accounts? Dependent on how incompetent the bad bank rep I referenced above is, sure. But the odds are incredibly low, and if anything were to happen, the bank would be falling over itself to fix it and make reparations so that you don't sue for a whole crap ton more. Is there a more secure and still free option that I have overlooked? Opening up yet another checking account solely for accounts receivable and transfer to accounts payable would keep your financial records more transparent. Also, banks are doing \"\"money transfer by email\"\" now, so I don't know how great that is for business transactions, but in that instance you're just giving out an email linked to a money receiving account instead of an actual account number. Paypal is also a pretty good EFT middleman, but their business practices have become shady in the past 5 years.\"", "title": "" }, { "docid": "79bd7c4f01712b2cf475a97e1c718284", "text": "I am not a lawyer, but the big thing to consider would be how you would split the money should either of you decide you want to close the account (or, at least her/his portion of the account). I suspect you'd also need to determine how to split the capital gains/losses for tax purposes. I can't really see any benefit to a joint account, unless you needed her money to qualify for some of the lower cost funds, and even then the difference in cost would be fairly low, much lower than the cost of having to potentially hire a lawyer to sort out all the questions.", "title": "" }, { "docid": "4798cc006c3126a0594e2e93fe22ef11", "text": "Allowing others to share access to your Bank Account; i.e. giving then the login id and password has its risks;", "title": "" }, { "docid": "de65cacded988a766e4187cca6904dd6", "text": "There are two basic ways you can separate your investments from the dollar (or any other currency).", "title": "" }, { "docid": "679ced9e58378ae7fe027ef282d26078", "text": "IngDirect has this concept of sub accounts inside a main account - that might be perfect for what you are looking for. To clarify, you basically have one physical account with logical sub account groupings.", "title": "" }, { "docid": "102958f9f7eb224d49a0ecd63eb3d7da", "text": "I see three ways to do this. Note that I kept saying interest. I assumed for this answer you were only considering money being saved in a savings account. Money that is to be invested for the long term (college fund, retirement) have much different rules for contributions, use, deductibility, age rules: that they would tend not to be mixed within the same account.", "title": "" }, { "docid": "d5982a14db1374b7b7bd1a61436c9343", "text": "\"Your first and second paragraphs are two different cases. Moving money between a checking account and a savings account will credit Cash and debit Cash, making a GL transaction unnecessary, unless the amounts in the two bank accounts are tracked as two separate GL accounts. You might have account 1001 (Cash-Checking) and account 1002 (Cash-Savings). In that case, a movement of money between these two accounts should be tracked by a transaction between the GL accounts; credit checking, debit savings. It won't affect your balance sheet, but depending on your definition of liquidity of assets it might affect working capital on your statement of cash flows (if you consider the savings account \"\"illiquid\"\" then money moved to it is a decrease in working capital). Basically, what you are creating with your \"\"store credit\"\" accounts for each client is an \"\"unearned revenue\"\" account. When clients pay you cash for work you haven't done yet, or you refund money for a return as \"\"store credit\"\" instead of cash, the credit is a liability account, balancing an increase in cash, inventory, or an expense (if you're giving credit for free, perhaps due to a mistake on your part, you would debit a \"\"Store Credit Expense\"\" account). This can be split out client-by-client in the GL if you wish, avoiding the need for a holding account. The way you want to do it, you'd have a \"\"Client Holding\"\" account. It must be unique in the GL and to the client, and yes, it is a liability account. To transfer to holding, you simply debit Unearned Revenue and credit Client Holding, logging the transaction as \"\"transfer of client store credit\"\" or similar (moving liability to liability; balance sheet doesn't change). Then, as you sell goods or services to the client, you debit Accounts Receivable and credit Revenue, then to record the payment you credit AR and debit Client Holding (up to its current credit balance, after which the client pays you Cash and you debit that, or the client still owes you). To zero out a remaining balance on the Holding account, debit Client Holding and credit Unearned Revenue. I don't think the Holding account, the way you want to use it, is a good idea. If you want to track each customer's store credit balance with a GL account, then create specialized Unearned Revenue accounts for each client who gets a store credit, named for the client and containing their balance (zero or otherwise). If you don't care about it at the GL level, then pool it in one Unearned Revenue account (have one Store Credit account if you must), and track individual amounts off the books.\"", "title": "" }, { "docid": "2e9d7187a9b2c2c141ae0b571c19d9bd", "text": "You can use an intermediary online bank account. For example, ING Direct has the ability to link to other real banks. You can link to both your old and new banks. Once linked, transfer the money from old bank to ING. Then transfer from ING to new bank. There are delays, and you can't transfer directly from bank-to-bank, but this should work, and should be free. The same concept should apply for something like PayPal or another online financial service.", "title": "" }, { "docid": "b8c4ae8966c19697d96576190b6a9ba8", "text": "Do you have direct deposit of your paycheck? If so, almost every employer will allow you to split the paycheck into two accounts. You could open one account for savings, and one for spending. Put $x from each paycheck into the savings account, and the rest into the spending account. Keep the savings account totally separate, with its own ATM card. There should be no way to get money out of this account except by using the SEPARATE ATM card. Now, get a dish of water. Put the ATM card in the dish of water. Put the dish of water in the freezer. If you are ever tempted to spend your savings, you'll have to wait for the block of ice to defrost. Hopefully, while the ice is defrosting, the urge to waste money will pass :)", "title": "" }, { "docid": "8695e8030ee3269d15f22929ed6fbf9f", "text": "I know of websites that do this, but I don't know of banks that do. Is there any reason you want to do this at a bank rather than use a service? My main concern with using a bank for this would be the risk of overdraft fees", "title": "" } ]	fiqa
3211b04b8b21f6f04bb929fc6a657b7f	Source(s) for hourly euro/usd exchange rate historic data?	[ { "docid": "fe09430d51b96d6d5c254dc47da2aefd", "text": "See the FX section of the quantitative finance SE data wiki.", "title": "" } ]	[ { "docid": "2649f29b989d8e7f895fca5b3d7d7194", "text": "\"At the bottom of Yahoo! Finance's S & P 500 quote Quotes are real-time for NASDAQ, NYSE, and NYSE MKT. See also delay times for other exchanges. All information provided \"\"as is\"\" for informational purposes only, not intended for trading purposes or advice. Neither Yahoo! nor any of independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. By accessing the Yahoo! site, you agree not to redistribute the information found therein. Fundamental company data provided by Capital IQ. Historical chart data and daily updates provided by Commodity Systems, Inc. (CSI). International historical chart data, daily updates, fund summary, fund performance, dividend data and Morningstar Index data provided by Morningstar, Inc. Orderbook quotes are provided by BATS Exchange. US Financials data provided by Edgar Online and all other Financials provided by Capital IQ. International historical chart data, daily updates, fundAnalyst estimates data provided by Thomson Financial Network. All data povided by Thomson Financial Network is based solely upon research information provided by third party analysts. Yahoo! has not reviewed, and in no way endorses the validity of such data. Yahoo! and ThomsonFN shall not be liable for any actions taken in reliance thereon. Thus, yes there is a DB being accessed that there is likely an agreement between Yahoo! and the providers.\"", "title": "" }, { "docid": "6f8f4f0e86dfd43dd70b7d48f6ee9d1f", "text": "A number of places. First, fast and cheap, you can probably get this from EODData.com, as part of a historical index price download -- they have good customer service in my experience and will likely confirm it for you before you buy. Any number of other providers can get it for you too. Likely Capital IQ, Bloomberg, and other professional solutions. I checked a number of free sites, and Market Watch was the only that had a longer history than a few months.", "title": "" }, { "docid": "652a441b503ccae88a469cfbf4f0a0d6", "text": "I can't think of any specifically, but if you haven't already done so it would be worthwhile reading a textbook on macro-economics to get an idea of how money supply, exchange rates, unemployment and so on are thought to relate. The other thing which might be interesting in respect of the Euro crisis would be a history of past economic unions. There have been several of these, not least the US dollar (in the 19C, I believe); the union of the English and Scottish pound (early 1600s); and the German mark. They tend to have some characteristic problems, caused partly by different parts of the union being at different stages in an economic cycle. Unfortunately I can't think of a single text which gathers this together.", "title": "" }, { "docid": "23bfc7bcf5bd8e07cbdc2c8e76c31ccb", "text": "\"You've cited nothing but your own outlandish claims. Aside from the original USAToday article, you've not provided one link to substantiate any of the many, many assertions that you have made. > none of the people doing any of these things are \"\"true economists\"\". unsubstantiated >It's a subconscious bias thing... they all inherently belive that an \"\"inflationary currency\"\" is a good & necessary thing... ergo they do not really TRY to disprove that dogmatic assumption. unsubstantiated >... and that \"\"confirmation\"\" was the entire goal of the project. unsubstantiated Not one link. End of discussion. This is a waste of my time.\"", "title": "" }, { "docid": "ccef86861b5918e8ad02925f6b4ea9c4", "text": "Is there not some central service that tracks current currency rates that banks can use to get currency data? Sure. But this doesn't matter. All the central service can tell you is how much the rate was historically. But the banks/PayPal don't care about the historical value. They want to know the price that they'll pay when they get around to switching, not the last price before the switch. Beyond that, there is a transaction cost to switching. They have to pay the clearinghouse for managing the transaction. The banks can choose to act as a clearinghouse, but that increases their risk. If the bank has a large balance of US dollars but dollars are falling, then they end up eating that cost. They'll only take that risk if they think that they'll make more money that way. And in the end, they may have to go on the currency market anyway. If a European bank runs out of US dollars, they have to buy them on the open market. Or a US bank might run out of Euros. Or Yen. Etc. Another problem is that many of the currency transactions are small, but the overhead is fixed. If the bank has to pay $5 for every currency transaction, they won't even break even charging 3% on a $100 transaction. So they delay the actual transaction so that they can make more than one at a time. But then they have the risk that the currency value might change in the meantime. If they credit you with $97 in your account ($100 minus the 3% fee) but the price actually drops from $100 to $99, they're out the $1. They could do it the other way as well. You ask for a $100 transaction. They perform a $1000 transaction, of which they give you $97. Now they have $898 ($1000 minus the $5 they paid for the transaction plus the $3 they charged you for the transaction). If there's a 1% drop, they're out $10.98 ($8.98 in currency loss plus a net $2 in fees). This is why banks have money market accounts. So they have someone to manage these problems working twenty-four hours a day. But then they have to pay interest on those accounts, further eating into their profits. Along with paying a staff to monitor the currency markets and things that may affect them.", "title": "" }, { "docid": "b1c3ef346e865a00ed0f22d1e57bf6c2", "text": "You might have better luck using Quandl as a source. They have free databases, you just need to register to access them. They also have good api's, easier to use than the yahoo api's Their WIKI database of stock prices is curated and things like this are fixed (www.quandl.com/WIKI ), but I'm not sure that covers the London stock exchange. They do, however, have other databases that cover the London stock exchange.", "title": "" }, { "docid": "3b3693eaaf4c08b45af87d0fb167ac98", "text": "\"This is the best tl;dr I could make, [original](https://www.bloomberg.com/news/articles/2017-06-21/ecb-sees-trump-administration-as-key-risk-to-global-economy) reduced by 68%. (I'm a bot) *** > The European Central Bank cited the government of U.S. President Donald Trump as a key reason why the risks to the global economy remain tilted to the downside. > &quot;Since the U.S. election, pressures for more inward-looking policies have risen,&quot; it said. > &quot;In particular, there is significant policy uncertainty surrounding the intentions of the new U.S. administration regarding fiscal and, especially, trade policies, the latter entailing potentially significant negative effects on the global economy.\"\" * [Extended Summary*](http://np.reddit.com/r/autotldr/comments/6imebn/ecb_sees_trump_administration_as_key_risk_to/) \| [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ \"\"Version 1.65, ~149467 tl;drs so far.\"\") \| [Feedback](http://np.reddit.com/message/compose?to=%23autotldr \"\"PM's and comments are monitored, constructive feedback is welcome.\"\") \| Top* keywords: policy^#1 U.S.^#2 economy^#3 global^#4 ECB^#5\"", "title": "" }, { "docid": "8bcdf4cca2c9f6777c2b69ade14f4138", "text": "Current and past FX rates are available on Visa's website. Note that it may vary by country, so use your local Visa website.", "title": "" }, { "docid": "2285e494799ac5c925329e0178beab88", "text": "I had a question about this but it apparently wasn’t formed in the right way as I got no explanations and only downvotes, so let me try again. Given the massive amount of info you gave, I tried to go through and find the data I was asking for- data behind the projections of such a loss. Perhaps since I’m not a professional economist, It was not immediately apparent to me how to find the data behind the projections. Would you mind demonstrating how any of these sources provide the data behind how such projections are made? Or do you have any other advice as to how I could find an answer?", "title": "" }, { "docid": "63351b4cb549ad41b342e0dbf094f410", "text": "The Federal Reserve Bank publishes exchange rate data in their H.10 release. It is daily, not minute by minute. The Fed says this about their data: About the Release The H.10 weekly release contains daily rates of exchange of major currencies against the U.S. dollar. The data are noon buying rates in New York for cable transfers payable in the listed currencies. The rates have been certified by the Federal Reserve Bank of New York for customs purposes as required by section 522 of the amended Tariff Act of 1930. The historical EURUSD rates for the value of 1 EURO in US$ are at: http://www.federalreserve.gov/releases/h10/hist/dat00_eu.htm If you need to know USDEUR the value of 1 US$ in EUROS use division 1.0/EURUSD.", "title": "" }, { "docid": "94d2490c97d88ed2dc63b9efb26711fb", "text": "\"You are right, if by \"\"a lot of time\"\" you mean a lot of occasions lasting a few milliseconds each. This is one of the oldest arbitrages in the book, and there's plenty of people constantly on the lookout for such situations, hence they are rare and don't last very long. Most of the time the relationship is satisfied to within the accuracy set by the bid-ask spread. What you write as an equality should actually be a set of inequalities. Continuing with your example, suppose 1 GBP ~ 2 USD, where the market price to buy GBP (the offer) is $2.01 and to sell GBP (the bid) is $1.99. Suppose further that 1 USD ~ 2 EUR, and the market price to buy USD is EUR2.01 and to sell USD is EUR1.99. Then converting your GBP to EUR in this way requires selling for USD (receive $1.99), then sell the USD for EUR (receive EUR3.9601). Going the other way, converting EUR to GBP, it will cost you EUR4.0401 to buy 1 GBP. Hence, so long as the posted prices for direct conversion are within these bounds, there is no arbitrage.\"", "title": "" }, { "docid": "73f0f5884654654b0658b3caef2f0620", "text": "You will most likely not be able to avoid some form of format conversion, regardless of which data you use since there is, afaik, no standard for this data and everyone exports it differently. One viable option would be, like you said yourself, using the free data provided by Dukascopy. Please take into consideration that those are spot currency rates and will most likely not represent the rate at which physical and business-related exchange would have happened at this time.", "title": "" }, { "docid": "914a8d1f0698c2ba87071f40992cf1cb", "text": "Well your gripe is using historic data to estimate VAR. That is separate topic. Either way however something that happens twice a century cant be considered an outlier and if you choose to use historic data then such things need to be included.", "title": "" }, { "docid": "045a95698737bb16498d42194ede6411", "text": "I am just a C student with no hope for grad school, so you are going to have to walk me through this... The ECB (until recently), Japan, and the Swiss have been running QE programs equal to that of the Fed's in 2009 for the last couple of years. That's an extraordinary amount of money being created... what's more, is that the Swiss are even buying shitloads of American equities with it. Perhaps my understanding of M2 is flawed, but how would the Swiss national bank buying $63B in equities change M2? It's not like the fed is printing the money specifically for the transaction. The amount of QE being pumped into a healthy economy over the last couple years should be concerning, if only because it's unprecedented, especially since some of it is being directly invested into equities. I don't think there is a viable argument that can truthfully say that it isn't a pretty large variable in the market today.... but I could be wrong. Also, I've read enough, and heard enough, on how the inflation rate is measured to cultivate a healthy skepticism for the entire metric. The way they choose baskets, while obviously the best possible, is not something that lends itself to precision. Please be kind to my grammar.", "title": "" }, { "docid": "32ae5183f2ffd4b2641838817e138638", "text": "\"This is the best tl;dr I could make, [original](http://www2.gsu.edu/~ecobth/HMW_PuzzlingMultJobHolding_SEJ_2017.pdf) reduced by 99%. (I'm a bot) *** > Just as the United States displays substantial differences in MJH across states and regions, Zangelidis finds large variation in MJH rates across countries in the EU, ranging from less than 1 to 9%.6 Livanos and Zangelidis document large differences in MJH rates across regions of Greece with rural areas with large primary sectors having the highest rates, likely due to low labor demand and weak primary 6 Zangelidis also finds that mean weekly hours on the second job average 12.9 hours across the continent, with little variation across countries. > A quick glance at state rates of MJH show Minnesota with among the highest MJH rates, while New York has a relatively low rate MJH rate as compared to other northern states. > Our approach is to examine the extent to which controlling for a variety of detailed worker, job, and city attributes can account for differences across labor markets in MJH. To describe the magnitude of MSA differences in MJH, we calculate the mean absolute deviation of MJH across our 259 labor markets based on estimates from increasingly dense individual worker OLS MJH equations using the 1995-2014 urban sample. * [Extended Summary*](http://np.reddit.com/r/autotldr/comments/6l4ana/the_puzzling_pattern_of_multiple_job_holding/) \| [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ \"\"Version 1.65, ~158577 tl;drs so far.\"\") \| [Feedback](http://np.reddit.com/message/compose?to=%23autotldr \"\"PM's and comments are monitored, constructive feedback is welcome.\"\") \| Top* keywords: MJH^#1 Job^#2 rate^#3 work^#4 Labor^#5\"", "title": "" } ]	fiqa
9522c6baaf907d78bdc96cf9e0b9ccde	What kinds of exchange-traded funds (ETFs) should specifically be avoided?	[ { "docid": "147924dddfdbd367a72caeaf012a1646", "text": "\"Stay away from leveraged or synthetic ETFs. This answer talks about why leveraged ETFs are dangerous. There are numerous articles to be found by searching for \"\"leveraged etf\"\". My answer to this question links to one of the more accessible explanations I've read.\"", "title": "" }, { "docid": "4e6c72b6fbf4a531c9d0cc225f1b2e1d", "text": "One of the key things to look for is trading volume. I think the price spread will be better on high volume ETFs, which means you'll be able to sell for more when the time comes. Check Google or Yahoo finance for those stats.", "title": "" }, { "docid": "9680062e8d91759cbf38b661420710a6", "text": "\"As with ANY investment the first answer is....do not invest in any that you do not fully understand. ETF's are very versatile and can be used for many different people for many different parts of their portfolio, so I don't think there can be a blanket statement of \"\"this\"\" one is good or bad for all.\"", "title": "" } ]	[ { "docid": "80df8f80a32972fa0445cd1e0d529ac9", "text": "This is the chart going back to the first full year of this fund. To answer your question - yes, a low cost ETF or Mutual fund is fine. Why not go right to an S&P index? VOO has a .05% expense. Why attracted you to a choice that lagged the S&P by $18,000 over this 21 year period? (And yes, past performance, yada, yada, but that warning is appropriate for the opposite example. When you show a fund that beat the S&P short term, say 5 years, its run may be over. But this fund lagged the S&P by a significant margin over 2 decades, what makes you think this will change?", "title": "" }, { "docid": "32f8ed7f56090d35f8e7317aa23eaf3f", "text": "\"Bit hesitant to put this in an answer as I don't know if specific investment advice is appropriate, but this has grown way too long for a comment. The typical answer given for people who don't have the time, experience, knowledge or inclination to pick specific stocks to hold should instead invest in ETFs (exchange-traded index funds.) What these basically do is attempt to simulate a particular market or stock exchange. An S&P 500 index fund will (generally) attempt to hold shares in the stocks that make up that index. They only have to follow an index, not try to beat it so are called \"\"passively\"\" managed. They have very low expense ratios (far below 1%) and are considered a good choice for investors who want to hold stock without significant effort or expense and who's main goal is time in the market. It's a contentious topic but on average an index (and therefore an index fund) will go even with or outperform most actively managed funds. With a sufficiently long investment horizon, which you have, these may be ideal for you. Trading in ETFs is also typically cheap because they are traded like stock. There are plenty of low-fee online brokers and virtually all will allow trading in ETFs. My broker even has a list of several hundred popular ETFs that can be traded for free. The golden rule in investing is that you should never buy into something you don't understand. Don't buy individual stock with little information: it's often little more than gambling. The same goes for trading platforms like Loyal3. Don't use them unless you know their business model and what they stand to gain from your custom. As mentioned I can trade certain funds for free with my broker, but I know why they can offer that and how they're still making money.\"", "title": "" }, { "docid": "f824112e5846e465882fb442b9ec6dd2", "text": "\"As an exercise, I want to give this a shot. I'm not involved in a firm that cares about liquidity so all this stuff is outside my purview. As I understand it, it goes something like this: buy side fund puts an order to the market as a whole (all or most possibly exchanges). HFTs see that order hit the first exchange but have connectivity to exchanges further down the pipe that is faster than the buy side fund. They immediately send their own order in, which reaches exchanges and executes before the buy side fund's order can. They immediately put up an ask, and buy side fund's order hits that ask and is filled (I guess I'm assuming the order was a market order from the beginning). This is in effect the HFT front running the buy side fund. Is this accurate? Even if true, whether I have a genuine issue with this... I'm not sure. Has anyone on the \"\"pro-HFT\"\" side written a solid rebuttal to Lewis and Katsuyama that has solid research behind it?\"", "title": "" }, { "docid": "f104aaaa262a368acdac8f46ddc2c436", "text": "Index funds: Some of the funds listed by US SIF are index funds. ETFs: ETFdb has a list, though it's pretty short at the moment.", "title": "" }, { "docid": "66b6d7651ba92fdc726761af5e89c6f9", "text": "\"I made an investing mistake many (eight?) years ago. Specifically, I invested a very large sum of money in a certain triple leveraged ETF (the asset has not yet been sold, but the value has decreased to maybe one 8th or 5th of the original amount). I thought the risk involved was the volatility--I didn't realize that due to the nature of the asset the value would be constantly decreasing towards zero! Anyhow, my question is what to do next? I would advise you to sell it ASAP. You didn't mention what ETF it is, but chances are you will continue to lose money. The complicating factor is that I have since moved out of the United States and am living abroad (i.e. Japan). I am permanent resident of my host country, I have a steady salary that is paid by a company incorporated in my host country, and pay taxes to the host government. I file a tax return to the U.S. Government each year, but all my income is excluded so I do not pay any taxes. In this way, I do not think that I can write anything off on my U.S. tax return. Also, I have absolutely no idea if I would be able to write off any losses on my Japanese tax return (I've entrusted all the family tax issues to my wife). Would this be possible? I can't answer this question but you seem to be looking for information on \"\"cross-border tax harvesting\"\". If Google doesn't yield useful results, I'd suggest you talk to an accountant who is familiar with the relevant tax codes. Are there any other available options (that would not involve having to tell my wife about the loss, which would be inevitable if I were to go the tax write-off route in Japan)? This is off topic but you should probably have an honest conversation with your wife regardless. If I continue to hold onto this asset the value will decrease lower and lower. Any suggestions as to what to do? See above: close your position ASAP For more information on the pitfalls of leveraged ETFs (FINRA) What happens if I hold longer than one trading day? While there may be trading and hedging strategies that justify holding these investments longer than a day, buy-and-hold investors with an intermediate or long-term time horizon should carefully consider whether these ETFs are appropriate for their portfolio. As discussed above, because leveraged and inverse ETFs reset each day, their performance can quickly diverge from the performance of the underlying index or benchmark. In other words, it is possible that you could suffer significant losses even if the long-term performance of the index showed a gain.\"", "title": "" }, { "docid": "9834bdc362754f1f5c411c9cedadb7bf", "text": "Agree with Michael here. The exchanges help you more than they will hurt. It begs the question why you want to avoid exchanges and the brokers since they do provide a valuable service. If you want to avoid big fees, most of the discount brokerages have tiny fees these days (optionshouse is down to $4), plus many have deals where you get 60 or more trades for free.", "title": "" }, { "docid": "b13d7ac82c5befb55fd314984545bbf5", "text": "\"I used to use etfconnect before they went paid and started concentrating on closed end funds. These days my source of information is spread out. The primary source about the instrument (ETF) itself is etfdb, backed by information from Morningstar and Yahoo Finance. For comparison charts Google Finance can't be beat. For actual solid details about a specific ETF, would check read the prospectus from the managing firm itself. One other comment, never trust a site that \"\"tells you\"\" which securities to buy. The idea is that you need sources of solid information about financial instruments to make a decision, not a site that makes the decision for you. This is due to the fact that everyone has different strategies and goals for their money and a single site saying buy X sell Y will probably lead you to lose your money.\"", "title": "" }, { "docid": "2c44d62e3ce8df5859c2428ecb00f5a3", "text": "Note that many funds just track indexes. In that case, you essentially don't have to worry about the fund manager making bad decisions. In general, the statistics are very clear that you want to avoid any actively managed fund. There are many funds that are good all-in-one investments. If you are in Canada, for example, Canadian Couch Potato recommends the Tangerine Investment Funds. The fees are a little high, but if you don't have a huge investment, one of these funds would be a good choice and appropriate for 100% of your investment. If you have a larger investment, to the point that Tangerine's MER scares you a little, you still may well look at a three or four fund (or ETF) portfolio. You may choose to use an actively-managed fund even though you know there's virtually no chance it'll beat a fund that just tracks an index, long-term. In that case, I'd recommend devoting only a small portion of your portfolio to this fund. Many people suggest speculating with no more than 10% of your combined investment. Note that other people are more positive on actively-managed funds.", "title": "" }, { "docid": "9ea59d67dcb34045c7694a346a08d840", "text": "SeekingAlpha has a section dedicated to Short ETFs as well as others. In there you will find SH, and SDS. Both of which are inverse to the S&P 500. Edit: I linked to charts that compare SH and SDS to SPY.", "title": "" }, { "docid": "0a0abff4a29bb7980683feabb76108a1", "text": "\"While @JB's \"\"yes\"\" is correct, a few more points to consider: There is no tax penalty for withdrawing any time from a taxable investment, that is, one not using specific tax protections like 401k/IRA or ESA or HSA. But you do pay tax on any income or gain distributions you receive from a taxable investment in a fund (except interest on tax-exempt aka \"\"municipal\"\" bonds), and any net capital gains you realize when selling (or technically redeeming for non-ETF funds). Just like you do for dividends and interest and gains on non-fund taxable investments. Many funds have a sales charge or \"\"load\"\" which means you will very likely lose money if you sell quickly typically within at least several months and usually a year or more, and even some no-load funds, to discourage rapid trading that makes their management more difficult (and costly), have a \"\"contingent sales charge\"\" if you sell after less than a stated period like 3 months or 6 months. For funds that largely or entirely invest in equities or longer term bonds, the share value/price is practically certain to fluctuate up and down, and if you sell during a \"\"down\"\" period you will lose money; if \"\"liquid\"\" means you want to take out money anytime without waiting for the market to move, you might want funds focussing on short-term bonds, especially government bonds, and \"\"money market\"\" funds which hold only very short bonds (usually duration under 90 days), which have much more stable prices (but lower returns over the longer term).\"", "title": "" }, { "docid": "793ccb71f403b6df10f6d9e5aeef7d72", "text": "Bond ETFs are just another way to buy a bond mutual fund. An ETF lets you trade mutual fund shares the way you trade stocks, in small share-size increments. The content of this answer applies equally to both stock and bond funds. If you are intending to buy and hold these securities, your main concerns should be purchase fees and expense ratios. Different brokerages will charge you different amounts to purchase these securities. Some brokerages have their own mutual funds for which they charge no trading fees, but they charge trading fees for ETFs. Brokerage A will let you buy Brokerage A's mutual funds for no trading fee but will charge a fee if you purchase Brokerage B's mutual fund in your Brokerage A account. Some brokerages have multiple classes of the same mutual fund. For example, Vanguard for many of its mutual funds has an Investor class (minimum $3,000 initial investment), Admiral class (minimum $10,000 initial investment), and an ETF (share price as initial investment). Investor class has the highest expense ratio (ER). Admiral class and the ETF generally have much lower ER, usually the same number. For example, Vanguard's Total Bond Market Index mutual fund has Investor class (symbol VBMFX) with 0.16% ER, Admiral (symbol VBTLX) with 0.06% ER, and ETF (symbol BND) with 0.06% ER (same as Admiral). See Vanguard ETF/mutual fund comparison page. Note that you can initially buy Investor class shares with Vanguard and Vanguard will automatically convert them to the lower-ER Admiral class shares when your investment has grown to the Admiral threshold. Choosing your broker and your funds may end up being more important than choosing the form of mutual fund versus ETF. Some brokers charge very high purchase/redemption fees for mutual funds. Many brokers have no ETFs that they will trade for free. Between funds, index funds are passively managed and are just designed to track a certain index; they have lower ERs. Actively managed funds are run by managers who try to beat the market; they have higher ERs and tend to actually fall below the performance of index funds, a double whammy. See also Vanguard's explanation of mutual funds vs. ETFs at Vanguard. See also Investopedia's explanation of mutual funds vs. ETFs in general.", "title": "" }, { "docid": "83019dc6c425172c79135e3a453e0f56", "text": "\"I recommend avoiding trading directly in commodities futures and options. If you're not prepared to learn a lot about how futures markets and trading works, it will be an experience fraught with pitfalls and lost money – and I am speaking from experience. Looking at stock-exchange listed products is a reasonable approach for an individual investor desiring added diversification for their portfolio. Still, exercise caution and know what you're buying. It's easy to access many commodity-based exchange-traded funds (ETFs) on North American stock exchanges. If you already have low-cost access to U.S. markets, consider this option – but be mindful of currency conversion costs, etc. Yet, there is also a European-based company, ETF Securities, headquartered in Jersey, Channel Islands, which offers many exchange-traded funds on European exchanges such as London and Frankfurt. ETF Securities started in 2003 by first offering a gold commodity exchange-traded fund. I also found the following: London Stock Exchange: Frequently Asked Questions about ETCs. The LSE ETC FAQ specifically mentions \"\"ETF Securities\"\" by name, and addresses questions such as how/where they are regulated, what happens to investments if \"\"ETF Securities\"\" were to go bankrupt, etc. I hope this helps, but please, do your own due diligence.\"", "title": "" }, { "docid": "9a71e54c51a33edaa86448edea5040c1", "text": "Your link is pointing to managed funds where the fees are higher, you should look at their exchange traded funds; you will note that the management fees are much lower and better reflect the index fund strategy.", "title": "" }, { "docid": "d2ee45566bdfe71aa642ed965b2bc49e", "text": "\"There are some index funds out there like this - generally they are called \"\"equal weight\"\" funds. For example, the Rydex S&P Equal-Weight ETF. Rydex also has several other equal weight sector funds\"", "title": "" }, { "docid": "658da749635d3d732d9faa1a74195a60", "text": "Options are contractual instruments. Most options you'll run into are contracts which allow you to buy or sell stock at a given price at some time in the future, if you feel like it (it gives you the option). These are Call and Put options, respectively (for buying the stock and selling the stock). If you have a lot of money in an index fund ETF, you may be able to protect your portfolio against a market decline by (e.g.) buying Put options against the ETF for a substantially lower price than the index fund currently trades at. If the market crashes and your fund falls in value significantly, you can exercise the options, selling the fund at the price that your option has specified (to the counter-party of your contract). This is the risk that the option mitigates against. Even if you don't have one particular fund with your investments, you could still buy a put option on a similar fund, and resell it to another person in lieu of exercise (they would be capable of buying the stock and performing the exercise themselves for profit if necessary). In general, if you are buying an option for safety, it should be an option either on something you own, or something whose price behavior will mimic something you own. You will note that options are linked to the price of stocks. Futures are contracts whose values are linked to the price of other things, typically commodities such as oil, gold, or orange juice. Their behaviors may diverge. With an option you can have a contractual guarantee on the exact investment you're trying to protect. (Additionally, many commodities' value may fall at the same time that stock investments fall: during economic contractions which reduce industrial activity, resulting in lower profits for firms and less demand for commodities.) You may also note that there are other structures that options may have - PUT options on index funds or similar instruments are probably most specifically relevant to your interests. The downside of protecting yourself with options is that it costs money to buy this option, and the option eventually expires, so you may lose money. Essentially, you are buying safety and risk-tolerance from the option contract's counterparty, and safety is not free. I cannot inform you what level of safety is appropriate for your portfolio's needs, but more safety is more expensive.", "title": "" } ]	fiqa
c05142c3c76498b4d1a121bd1c4f2bd0	Passive vs. active investing past performance comparison/data?	[ { "docid": "93272704c3255f614b4bc281253cb3a1", "text": "The Telegraph had an interesting article recently going back 30 years for Mutual's in the UK that had beaten the market and trackers for both IT and UT http://www.telegraph.co.uk/finance/personalfinance/investing/11489789/The-funds-that-have-returned-more-than-12pc-per-year-for-THIRTY-years.html", "title": "" } ]	[ { "docid": "76e622fc225406dbd70fb144752364dc", "text": "\"You could use any of various financial APIs (e.g., Yahoo finance) to get prices of some reference stock and bond index funds. That would be a reasonable approximation to market performance over a given time span. As for inflation data, just googling \"\"monthly inflation data\"\" gave me two pages with numbers that seem to agree and go back to 1914. If you want to double-check their numbers you could go to the source at the BLS. As for whether any existing analysis exists, I'm not sure exactly what you mean. I don't think you need to do much analysis to show that stock returns are different over different time periods.\"", "title": "" }, { "docid": "545e9e42cce983a37760a9ff4bb41ede", "text": "I tried direct indexing the S&P500 myself and it was a lot of work. Lots of buys and sells to rebalance, tons of time in spreadsheets running calculations/monitoring etc, dealing with stocks being added or removed from the index, adding money (inflows). Etc. All of the work is the main reason I stopped. I came to realize the 0.05% I pay Vanguard is a great deal.", "title": "" }, { "docid": "2379e2f1e6f178d08404ad68f7796fef", "text": "http://www.moneysupermarket.com/shares/CompareSharesForm.asp lists many. I found the Interactive Investor website to be excruciatingly bad. I switched to TD Waterhouse and found the website good but the telephone service a bit abrupt. I often use the data presented on SelfTrade but don't have an account there.", "title": "" }, { "docid": "402212bfb569a8f87f74352254c9928e", "text": "Yahoo's primary business isn't providing mutual fund performance data. They aim to be convenient, but often leave something to be desired in terms of completeness. Try Morningstar instead. Their mission is investment research. Here's a link to Morningstar's data for the fund you specified. If you scroll down, you'll see:", "title": "" }, { "docid": "3cf0e38a9490502c906628977ecba626", "text": "Under construction, but here's what I have so far: Schwab Data from 1970-2012: About.com data from 1980-2012:", "title": "" }, { "docid": "13b60ae729cdff6623eb64f3477e3dc9", "text": "\"I've just started using Personal Capital (www.personalcapital.com) after seeing the recommendation at several places. I believe it gives you what you want to see, but I don't think you can back populate it with old information. So if you log in and link accounts today, you'll have it going forward. I only put in my investment accounts as I use another tool to track my day-to-day spending. I use Personal Capital to track my investment returns over time. How did my portfolio compare to S&P 500, etc. And here is a shot of the \"\"You Index\"\" which I think is close to what you are looking for:\"", "title": "" }, { "docid": "cce033f385da61f67b0c492443451b1d", "text": "\"It's easy for me to look at an IRA, no deposits or withdrawal in a year, and compare the return to some index. Once you start adding transactions, not so easy. Here's a method that answers your goal as closely as I can offer: SPY goes back to 1993. It's the most quoted EFT that replicates the S&P 500, and you specifically asked to compare how the investment would have gone if you were in such a fund. This is an important distinction, as I don't have to adjust for its .09% expense, as you would have been subject to it in this fund. Simply go to Yahoo, and start with the historical prices. Easy to do this on a spreadsheet. I'll assume you can find all your purchases inc dates & dollars invested. Look these up and treat those dollars as purchases of SPY. Once the list is done, go back and look up the dividends, issues quarterly, and on the dividend date, add the shares it would purchase based on that day's price. Of course, any withdrawals get accounted for the same way, take out the number of SPY shares it would have bought. Remember to include the commission on SPY, whatever your broker charges. If I've missed something, I'm sure we'll see someone point that out, I'd be happy to edit that in, to make this wiki-worthy. Edit - due to the nature of comments and the inability to edit, I'm adding this here. Perhaps I'm reading the question too pedantically, perhaps not. I'm reading it as \"\"if instead of doing whatever I did, I invested in an S&P index fund, how would I have performed?\"\" To measure one's return against a benchmark, the mechanics of the benchmarks calculation are not needed. In a comment I offer an example - if there were an ETF based on some type of black-box investing for which the investments were not disclosed at all, only day's end pricing, my answer above still applies exactly. The validity of such comparisons is a different question, but the fact that the formulation of the EFT doesn't come into play remains. In my comment below which I removed I hypothesized an ETF name, not intending it to come off as sarcastic. For the record, if one wishes to start JoesETF, I'm ok with it.\"", "title": "" }, { "docid": "d68b02b590f00b6b9e569a4648f50fa8", "text": "\"For US stocks it's a bit of a gamble. Many actively managed funds underperform the market indexes, but some of them outperform in many years. With an index you will get average results. With an active manager you \"\"might\"\" do better than average. So you can view active management as a higher risk, potentially higher reward investment approach. On the other hand, if you want to diversify some of your investments into international stocks, bonds, junk bonds, and real estate (REITs) active management is highly likely to be better than indexing. For these specialized areas specialized knowledge and research is needed.\"", "title": "" }, { "docid": "8c755610386012c509020b65c42c3891", "text": "\"Yes, there is a very good Return vs Risk graph put out at riskgrades.com. Look at it soon, because it will be unavailable after 6-30-11. The RA (return analysis) graph is what I think you are looking for. The first graph shown is an \"\"Average Return\"\", which I was told was for a 3 year period. Three period returns of 3, 6 and 12 months, are also available. You can specify the ticker symbols of funds or stocks you want a display of. For funds, the return includes price and distributions (total return), but only price movement for stocks - per site webmaster. I've used the graphs for a few years, since Forbes identified it as a \"\"Best of the Web\"\" site. Initially, I found numerous problems with some of the data and was able to work with the webmaster to correct them. Lately though, they have NOT been correcting problems that I bring to their attention. For example, try the symbols MUTHX, EDITX, AWSHX and you'll see that the Risk Grades on the graphs are seriously in error, and compress the graph results and cause overwriting and poor readability. If anyone knows of a similar product, I'd like to know about it. Thanks, George\"", "title": "" }, { "docid": "0f6578a0e47baf4d84e13d9c27cc29bd", "text": "\"The problem I have with this argument is exemplified by the following statement: \"\"Focusing on share-restricted hedge funds between 1999 and 2008, Sadka and Ozik found that funds with recent inflows on average earned an additional 5.6 percent annually compared to funds that experienced outflows.\"\" Funds that are doing well tend - on average - to see customer inflows. Funds that are doing poorly tend - on average - to see customer outflows. It's the concept of \"\"hot money.\"\" The authors here imply that it's the fund inflows that prompt the outperformance, when - in reality - outperformance prompts fund inflows.\"", "title": "" }, { "docid": "b282659fa53b115ffc7586011c0f390f", "text": "Over a period of time greater than 10 years (keep in mind, 2000-2009 ten year period fails, so I am talking longer) the market, as measured by the S&P 500, was positive. Long term, averaging more than 10%/yr. At a 1 year horizon, the success is 67 or so percent. It's mostly for this reason that those asking about investing are told that if they need money in a year or two, to buy a house for instance, they are told to stay out of the market. As the time approaches one day or less, the success rate drops to 50/50. The next trade being higher or lower is a random event. Say you have a $5 commission. A $10,000 trade buy/sell is $10 for the day. 250 trading days costs you $2500 if you get in and out once per day. You need to be ahead 25% for the year to break even. You can spin the numbers any way you wish, but in the end, time (long time spans) is on your side.", "title": "" }, { "docid": "89c2990dfb7720502059f4fcbbbfa872", "text": "I dont know if this data is available for the 1980s, but this response to an old question of mine discusses how you can pull stock related information from google or yahoo finance over a certain period of time. You could do this in excel or google spreadsheet and see if you could get the data you're looking for. Quote from old post: Google Docs spreadsheets have a function for filling in stock and fund prices. You can use that data to graph (fund1 / fund2) over some time period.", "title": "" }, { "docid": "7978a163ea6fbead1bd037bcc1a14902", "text": "I also searched for some time before discovering Market Archive, which AFAIK is the most affordable option that basically gives you a massive multi-GB dump of data. I needed sufficient data to build a model and didn't want to work through an API or have to hand-pick the securities to train from. After trying to do this on my own by scraping Yahoo and using the various known tools, I decided my time was better spent not dealing with rate-limiting issues and parsing quirks and whatnot, so I just subscribed to Market Archive (they update the data daily).", "title": "" }, { "docid": "9b303954acf188426116b459d9b2a890", "text": "\"Back-testing itself is flawed. \"\"Past performance is no guarantee of future results\"\" is an important lesson to understand. Market strategies of one kind or another work until they don't. Edited in -- AssetPlay.net provides a tool that's halfway to what you are looking for. It only goes back to 1972, however. Just to try it, I compared 100% S&P to a 60/40 blend of S&P with 5 yr t-bills (a misnamed asset, 5 yr treasuries are 'notes' not 'bills') I found the mix actually had a better return with lower volatility. Now, can I count on that to work moving forward? Rates fell during most of this entire period so bonds/notes both looked pretty good. This is my point regarding the backtest concept. GeniusTrader appears more sophisticated, but command line work on PCs is beyond me. It may be worth a look for you, JP. ETF Replay appears to be another backtest tool. It has its drawbacks, however, (ETFs only)\"", "title": "" }, { "docid": "2f59413ac77aa486091797a12cd9d78e", "text": "Robert Shiller published US Stock Market data from 1871. Ken French also has historical data on his website. Damodaran has a bunch of historical data, here is some historical S&P data.", "title": "" } ]	fiqa
7ca9ebcdfc0e42db5a730b4003281f86	Should I switch to this high rate checking account for my emergency fund?	[ { "docid": "bc0868f993b2fbc3bd7ab7251dc90b69", "text": "I do this, and as you say the biggest downside is not having a separate account for your savings. If you're the type of person who struggles with restraint this is not for you. On the other hand this type of account gives more interest than any other type of US Checking or Savings account I've seen, so you will benefit from the interest.", "title": "" }, { "docid": "c30523deb4e43b91af3bc6186bbdedf7", "text": "\"Check out the \"\"rewards checking\"\" accounts listed on this thread at fatwallet finance forums. You could easily get 3.5% - 4% right now if you are willing to do the rewards checking dance. If not, you should look into the 1-2% accounts at the top. I use Alliant CU and their website is nice (and they give you your credit score every six months).\"", "title": "" }, { "docid": "663e63cd3eeb3bc4767f5bf67af15d76", "text": "If you're relatively certain that you're going to meet the requirements, it sounds like a good move for you. The #1 priority with emergency funds should be easy access to the money when you need it. Before the current economic situation, money market funds were great for this since they preserved the value of the dollars you put in. Now the rates on money market accounts are barely better than the 0.2% you're currently getting.", "title": "" }, { "docid": "34e5558ac152aca03def0ccadb6b56a6", "text": "I would also check into whether you can keep using your credit card instead of switching to a debit card tied to your checking account. The credit card provides you protection from someone wiping your account out. Most banks will help you get the money back if this happens while using a debit card. But you are out the money while the bank figures out who is wrong. In the credit cards case none of your money is actually taken from your account while you dispute the charge. I also agree with the others that having all your money in one account is more difficult to keep real spending money separate from emergency fund money.", "title": "" } ]	[ { "docid": "78b866346dad4ae9859949c7e4c33b55", "text": "There are a lot of open questions about if this is your only accessible money or if you have other emergency funds, and if you have any retirements savings and when do you plan to retire, but leaving this all aside: You currently pay 2.65% on the mortgage, and you make less on savings (maybe 1 or 1.5%). So putting the savings into the mortgage makes you the difference, which is a good deal. However, you need to reflect this with your risk-averisty, and your long term goals, and look at potential even better deals. For example, you could put the savings into higher risk/higher gain investments (let’s assume index funds), and make 6 - 10% per year in average. That obviously is a lot more. Why would you not want to do that? Investing like this is a long term plan. If this is your only savings/emergency fund, or if you need the money within the next five years, you should not do it; it could catch you in a bad market situation, and then it might be a severe loss. If you are sure you don’t need it for at least five if not ten years, invest it and keep the mortgage, you will easily beat its interest rate. If you are risk-averse, and can’t sleep with your savings doing loopings while you watch, that is also not a plan for you. There are many things to consider, and your personal situation is relevant for the decision. Consider all options, and be sure to always have a emergency fund remaining. It is also not black and white - there are options in between of your two propositions - pay some in, and keep some for emergencies.", "title": "" }, { "docid": "a79f8bc8c214b05f8019784e6ee277da", "text": "Duffbeer703 covers most everything. The entire point of an emergency fund IS for it to be liquid. Now I do understand (if you feel your situation requires over 6 months of living expenses): That is a lot of money to have sitting in a statement savings account! Under no circumstances should you take any sort of risk with an emergency fund. However, you COULD do this: Invest some of the assets in a six month, 1 year or 2 year CD if returns were enough to be worthwhile. If you don't need the money, then fine, great. But if you do, you can break a Certificate of Deposit before maturity. There will be a penalty fee. You might lose interest too. But you'll have access to your money, no liquidity risk. So maybe you could put most, say 60% of your rainy day funds in truly liquid assets. The remainder could be in longer term CD's which you hopefully won't need because you'll be back to non rainy day living again.", "title": "" }, { "docid": "af1d3cfb1e1f06493e0d3358116d4882", "text": "\"There's a cliche, \"\"out of the frying pan and into the fire\"\". I've never had the occasion to use it till now. I understand some people find they have a dozen cards and struggle to keep organized. An extra percent or two seems worth the feeling of just one payment to make. In your case, 3 checks (or online payments) per month shouldn't push you to a bad decision. Twice the interest? No thanks. Just make the minimum payments on the two lower rate cards, and pay all you can to the highest rate. Do all you can to cut expenses. The only way out of this is to change your habits avoiding what got you here in the first place.\"", "title": "" }, { "docid": "d8f8b586137024aa1835b2138547c2d8", "text": "\"The most important thing to look at is the FDIC insurance. Savings accounts are covered. Money markets - not necessarily. Online savings accounts provide rates of ~1%. Look at American Express, Ally, Capitol One, ING Direct, E*Trade, etc. The \"\"pledge\"\" basically brings EverBank into the same list, as they all have similar rates. Being top 5% of competitive accounts is not that hard, because there are thousands of banks around, you know. 0.76 is not the highest rate available. American Express currently give 1% on their savings account. Re moving the money a lot - depends on the amounts, but when the rates were higher, I moved around a lot. Now, it just doesn't worth the trouble, although I would move for 0.25%.\"", "title": "" }, { "docid": "b8d347f46e81ba0f67ad4363338c0677", "text": "Here are my conditions for an emergency account: A compromise would be to have 1,000-2,000 in a very liquid account and the rest in something a little less liquid that maybe has a minimum balance (but no transaction requirements). The behavioral risk is when you do have an emergency and you don't want to cash out or go through any hassle to get it out, so you just charge the emergency instead of paying cash.", "title": "" }, { "docid": "1987a4c02059deb3b349f0f1ebff01a3", "text": "Savings accounts with 8% APY? Unheard of these days. You're lucky if you find one at 1%. You should use checking and savings accounts only to hold an emergency fund (6 to 12 months of living expenses), or money that you will need in 2 years or so. The rest, invest in stocks and bonds.", "title": "" }, { "docid": "346c33dc312a12045a763dfadf35366c", "text": "\"From a quick look at sources on the web, it looks to me like Money Market Accounts and savings accounts are both paying about the same rate today: around 1%, give or take maybe 0.4%. I suppose that's better than nothing, but it's not a whole lot better than nothing. (I saw several savings accounts advertising 0.1% interest. If they mailed you a check, the postage could be more than the returns.) Personally, I keep a modest amount of emergency cash in my checking account, and I put my \"\"savings\"\" in a very safe mutual fund. That generally gets somewhere from making maybe 3% a year to losing a small amount. Certainly nothing to sing about, but better than savings or money markets. Whether you are willing to tolerate the modest risk or the sales charges is a matter for your personal situation and feelings.\"", "title": "" }, { "docid": "78d29ec1636d812761993c1efc07f934", "text": "Emergency funds are good to keep yourself out of debt, for whatever reason. Job loss is a big place where an emergency fund can help you out. It buys you time to find another job before hauling out the credit cards for your groceries, falling behind on your mortgage and car payments, etc. But it can just as easily be used for major car repairs, serious medical issues, home repairs, etc. ... anything that needs to be done quickly, and isn't a discretionary item. The bigger your cash reserves, the better, especially now that the economy is bad.", "title": "" }, { "docid": "b85a9a30cf0dbf72c89680e510ae5fc5", "text": "Consider also setting up a CD ladder. CD rates are often better than savings account rates. You have a 12-month CD that you purchase in January with a twelfth of your money, then another small one in February, then another in March.... then, when January comes around again, you a little more money to the first CD, and the ladder is complete. The idea is that you have more access to your money than one big CD, since you'll always have a CD maturing next month that you can get to in case of an emergency, and you can get better rates on a 1-year CD than on something else (with less risk of being locked into a bad interest rate). And you'll be less tempted to tap it all at once to buy some fancy car or what-not because you can't get at it all at once (without a penalty). And in a major emergency, losing a few percent of your interest for early withdrawals is likely the least of your problems.", "title": "" }, { "docid": "bab6ea73a159b162acf0efe1a8be6b24", "text": "\"The answer to your question depends very much on your definition of \"\"long-term\"\". Because let's make something clear: an investment horizon of three to six months is not long term. And you need to consider the length of time from when an \"\"emergency\"\" develops until you will need to tap into the money. Emergencies almost by definition are unplanned. When talking about investment risk, the real word that should be used is volatility. Stocks aren't inherently riskier than bonds issued by the same company. They are likely to be a more volatile instrument, however. This means that while stocks can easily gain 15-20 percent or more in a year if you are lucky (as a holder), they can also easily lose just as much (which is good if you are looking to buy, unless the loss is precipitated by significantly weaker fundamentals such as earning lookout). Most of the time stocks rebound and regain lost valuation, but this can take some time. If you have to sell during that period, then you lose money. The purpose of an emergency fund is generally to be liquid, easily accessible without penalties, stable in value, and provide a cushion against potentially large, unplanned expenses. If you live on your own, have good insurance, rent your home, don't have any major household (or other) items that might break and require immediate replacement or repair, then just looking at your emergency fund in terms of months of normal outlay makes sense. If you own your home, have dependents, lack insurance and have major possessions which you need, then you need to factor those risks into deciding how large an emergency fund you might need, and perhaps consider not just normal outlays but also some exceptional situations. What if the refrigerator and water heater breaks down at the same time that something breaks a few windows, for example? What if you also need to make an emergency trip near the same time because a relative becomes seriously ill? Notice that the purpose of the emergency fund is specifically not to generate significant interest or dividend income. Since it needs to be stable in value (not depreciate) and liquid, an emergency fund will tend towards lower-risk and thus lower-yield investments, the extreme being cash or the for many more practical option of a savings account. Account forms geared toward retirement savings tend to not be particularly liquid. Sure, you can usually swap out one investment vehicle for another, but you can't easily withdraw your money without significant penalties if at all. Bonds are generally more stable in value than stocks, which is a good thing for a longer-term portion of an emergency fund. Just make sure that you are able to withdraw the money with short notice without significant penalties, and pick bonds issued by stable companies (or a fund of investment-grade bonds). However, in the present investment climate, this means that you are looking at returns not significantly better than those of a high-yield savings account while taking on a certain amount of additional risk. Bonds today can easily have a place if you have to pick some form of investment vehicle, but if you have the option of keeping the cash in a high-yield savings account, that might actually be a better option. Any stock market investments should be seen as investments rather than a safety net. Hopefully they will grow over time, but it is perfectly possible that they will lose value. If what triggers your financial emergency is anything more than local, it is certainly possible to have that same trigger cause a decline in the stock market. Money that you need for regular expenses, even unplanned ones, should not be in investments. Thus, you first decide how large an emergency fund you need based on your particular situation. Then, you build up that amount of money in a savings vehicle rather than an investment vehicle. Once you have the emergency fund in savings, then by all means continue to put the same amount of money into investments instead. Just make sure to, if you tap into the emergency fund, replenish it as quickly as possible.\"", "title": "" }, { "docid": "04c21153b5d394d895d328bf75096588", "text": "Overall I think it sounds like it's worth it. It's hard to find that high of a rate on a checking account these days. It looks like you're looking at this bank, and I can see they have a few more requirements that seem a little tedious: If you don't do these things every month, then you lose the great interest rate. If you can think of an easy way to jump through these hoops and not forget, then it's probably worth it. For example, if you routinely eat out for lunch or buy a morning coffee, you can use that card to pay for it. Set yourself a recurring reminder in your calendar or smartphone to remind you to login to the online banking site. Ultimately, since this is an emergency fund, it's a good idea to keep it nice and liquid in a checking account. You're not likely going to find many other options that will give you a better (and safe) return and still keep your funds available for when you need them. In summary, it sounds like a good idea to me so long as you think you can reliably jump through their hoops.", "title": "" }, { "docid": "0fe826a1cf809e4dddefdd6a66c2f2ac", "text": "Not OP, but let's see: My money-market account is showing 0.25% interest rate. My savings account, 0.20%. And checking, 0.22%. It doesn't matter where I keep my emergency fund and what I keep my checking balance. It's making fuck-all for interest. And I need to keep a couple thousand in there because my mortgage hits for about $1600. And my monthly CC spend averages ~$3500 monthly. I simply can't keep a couple hundred in there.", "title": "" }, { "docid": "685f41d0666957a5964f2687f3f79aee", "text": "\"The \"\"Yield Pledge\"\" looks like a marketing promise to me. It may well be true, but I'm not sure it's useful. As you say, it's currently not the best account out there. If those extra $24 per $10000 are really important to you, why not do your own analysis? Put the money in the highest interest account you can find, and then every three months survey the accounts available and, if it isn't still the highest, transfer the funds to the one that is. Personally I wouldn't put that much effort in for $24, but you may be different.\"", "title": "" }, { "docid": "6a3ec9b0c7870ef5eef3a926d09037f6", "text": "\"There are no risk-free high-liquidity instruments that pay a significant amount of interest. There are some money-market accounts around that pay 1%-2%, but they often have minimum balance or transaction limits. Even if you could get 3%, on a $4K balance that would be $120 per year, or $10 per month. You can do much better than that by just going to $tarbucks two less times per month (or whatever you can cut from your expenses) and putting that into the savings account. Or work a few extra hours and increase your income. I appreciate the desire to \"\"maximize\"\" the return on your money, but in reality increasing income and reducing expenses have a much greater impact until you build up significant savings and are able to absorb more risk. Emergency funds should be highly liquid and risk-free, so traditional investments aren't appropriate vehicles for them.\"", "title": "" }, { "docid": "8961afa6a6500b768f5abbbbb4d0e6ea", "text": "This is a great idea and I can't think of any downside. The best part about it is in the future when you have built up your emergency fund beyond the maximum contributions to the Roth IRA, you can then move your Roth funds into a higher yielding investment. I might take it a step further. In addition to this, try to get a line of credit from your bank (with no annual fee). In case of emergency, you can decide if you want to take the money from your Roth or borrow from the line and pay some interest temporarily. Depending on the situation it may actually make sense to pay a little bit of interest and leave the money in the Roth, since over the long run the future earnings of that money could easily make you more than the interest you'll pay for (let's hope) a short amount of time. To really hit home why your idea is fantastic:", "title": "" } ]	fiqa
4714638812787e6f8f351daa67bb52bc	Pay down on second mortage when underwater?	[ { "docid": "4665044a834f492e274170147eb32613", "text": "I'd split whatever cash flow you have between saving money and paying down the 20% loan. The fact that you are carrying an unrealized loss isn't really too relevant -- unless you have plans to walk away from the loan or go bankrupt, it doesn't really matter until you sell. You're either going to repay now or later.", "title": "" }, { "docid": "7d541af5b4da0db28fcb027de43578f3", "text": "\"You're welcome to throw in the towel and stop paying any time you want. You'll just suffer the consequences of doing so. It sounds like you're concerned about losing your job \"\"in the next few years.\"\" What are you doing to stem this off? Are you building up a side income? Are you building up portable skills -- ones that can be used anywhere? If you think you have a few years left, use them. Build something up. You may be able to recover more quickly, or last longer until you find a new job. Some of my blogging friends have been at it about as long as I have, and they're in high-five, low-six figures now. For blogging. Some did it even faster. All it takes is time. Your expenses for starting a blog are $10/month plus cutting out two hours of TV / drinking / anything else consumer-ish to learn more about your favorite interest, write about it, and interact with the online community. That's just one idea. Season to taste or choose a different meal altogether. Are you frugal? Are you looking for ways to cut expenses? If you can find extra money to save a little bit more and knock out just one of those debts (say, the car), you'll be able to throw that payment at the student loan. Then they'll both be gone, and you can save up a cushion for yourself faster. I just think it's a little weak to give up when you're not really in trouble yet. You're tight, but you can get through that.\"", "title": "" }, { "docid": "fd5609bb27cf8730ce7d33454f9284f8", "text": "If you're planning to walk away from the house - don't invest any more money in it. Just be aware of the consequences. It may be worth considering a short sale if both the lenders will agree to erase the debt. If you're going to keep the house, then the fact that you're underwater now is irrelevant, and you should do your best to reduce the burden by paying off the higher rate loan. But, I personally think that accumulating enough cash to make you comfortable in case of a job loss for several months is a higher priority.", "title": "" }, { "docid": "11aad3f1d262f1dfeb3eb0ce32de0665", "text": "I think everyone else answered before you added the info about your car loan in your comment. While it makes sense to pay off loans with the highest interest rate first, keep in mind that in most cases you can deduct mortgage interest from your taxable income. So the after-tax rate of interest that you're paying on your 8.6% second mortgage will be less than your 7% car loan, assuming that your tax bracket is more than 18% (federal and state combined). If you plan to use your funds to pay down debt, definitely attack the car loan first.", "title": "" }, { "docid": "7eef0d2655e34152349d76720329f339", "text": "\"Well, I suppose it depends on your idea of a \"\"lost cause\"\". Are you planning to lose the house to foreclosure? If so, then yes, it's a lost cause. Don't waste your money paying down the principal. In any other scenario* you should absolutely pay down the principal to the extent that you'd pay down any loan with nearly 9% interest (in other words, moderately aggressively). The fact is, you owe someone $265,000 unless you plan on losing the home to foreclosure. You can manage the amount of interest you pay while you hold that debt by paying it down. * Short sale and bankruptcy would be special conditions as well, but not exactly the same effect as foreclosure.\"", "title": "" }, { "docid": "6c71772824094fe9bf7f68024218d142", "text": "There are programs out there which will let you refinance even when underwater, under the Government's HARP program. You are overpaying by nearly $7,000 per year compared to a refinance to 4.5%. A classic example of how the bubble hurt people who overextended themselves a bit as housing shot up. The bank risks a $50K loss if you default or short sell this property. I'd go in and sit down with a branch manager and ask what they can do to recast the loan to a lower rate as you are ready, wiling and able to keep the house and make your payments. Good luck.", "title": "" } ]	[ { "docid": "ba2428b923a0e7dab801eb370c32c17b", "text": "\"It's legal. That's what a home equity loan is, for example. More generally, what you're talking about is a \"\"second mortgage\"\". It has no effect on the primary mortgage that you've already made to your bank; they're still secured, and if you get foreclosed, they get paid, and only if there's something left over does the second mortgage holder get anything. That's why second mortgages are more risky than first mortgages, and why you might have trouble finding someone willing to do it.\"", "title": "" }, { "docid": "b4e446ef6ed7ae3dba27349e0b3fede8", "text": "You're not crazy, but the banks are. Here's the problem: You're taking 100% LTV on property A - you won't be able to get a second mortgage for more than 80% total (including the current mortgage) LTV. That's actually something I just recently learned from my own experience. If the market is bad, the banks might even lower the LTV limit further. So essentially, at least 20% of your equity in A will remain on the paper. Banks don't like seeing the down-payment coming from anywhere other than your savings. Putting the downpayment from loan proceeds, even if not secured by the property which you're refinancing, will probably scare banks off. How to solve this? Suggest to deal with it as a business, putting both properties under a company/LLC, if possible. It might be hard to change the titles while you have loans on your properties, but even without it - deal with it as if it is a business. Approach your bank for a business loan - either secured by A or unsecured, and another investment loan for B. Describe your strategy to the banker (preferably a small community bank in the area where the properties are), and how you're going to fund the properties. You won't get rates as low as you have on A (3.25% on investment loan? Not a chance, that one is a keeper), but you might be able to get rid of the balloon/variable APR problem.", "title": "" }, { "docid": "134c8643c7d0968b1b1f1b35db13137e", "text": "\"I've found that once people \"\"fall in love\"\" with a home or the idea of a home, there's little chance they will chance course. I'd implore you to do some reading about individuals and families trapped in an underwater mortgage and having lost a job -- now they can't move for work, and they can't refinance or sell. In short, they are trapped and will be foreclosed upon (or, at best, will short-sell). If you want to play knife-catcher (e.g., trying to buy an asset while its value is falling) then at least don't go in blind or kid yourself about the risks. Of course, many folks believe the housing market has bottomed - if that's true then there's no harm in waiting 6 or 12 months and verifying that premise. At most, you'll lose a couple of points in equity. On the other hand, you may well discover that all is not well, and suddenly you can \"\"afford\"\" even \"\"more\"\" house. It is not hyperbole to say that the housing market in the USA has financially destroyed millions of people -- be careful out there especially as Europe comes unglued.\"", "title": "" }, { "docid": "be816d3b043c56037b73e0fd3e97e7a6", "text": "There are two scenarios that I see. You have a mortgage on the property. Generally the insurance company sends the funds to the lender, who then releases the funds to you as you make the repairs. They do it this way because if you never make the repairs the value of the collateral is decreased, and the lender wants to protect their investment. There is no mortgage. You will get the funds directly, and the insurance company will not force you to make the repairs especially if the repairs are cosmetic in nature. In either case if you don't fix the cause of the leak, and make repairs to the site around the leak, you will run into a problem in the future if the leak continues, or the rot and mold continues to spread. If you file a future claim they are likely to ask for proof of the original repair. If you didn't make it, they are likely to deny the second claim. They will say the cause is the original incident and if you had made the repair, the second incident wouldn't have happened. They are likely to drop you at that point. If you try to sell the house you will have to disclose the original leak, and the potential buyers will want you to make the repairs. Any mold or rot spotted by the home inspector will be a big issue for them. It is also likely to be an item that they will be advised to demand that you get a legitimate company to make the repair before the deal can move forward, and won't negotiate a lower price or a credit for $x so they can get the repair done. Some will just cancel the deal based on the inspection report.", "title": "" }, { "docid": "dca1a33a7f94d8ef59daa6de936c28c3", "text": "\"If it was me, I would sell the house and use the proceeds to work on/pay off the second. You don't speak to your income, but it must be pretty darn healthy to convince someone to lend you ~$809K on two homes. Given this situation, I am not sure what income I would have to have to feel comfortable. I am thinking around 500K/year would start to make me feel okay, but I would probably want it higher than that. think I can rent out the 1st house for $1500, and after property management fees, take home about $435 per month. That is not including any additional taxes on that income, or deductions based on repair work, etc. So this is why. Given that your income is probably pretty high, would something less than $435 really move your net worth needle? No. It is worth the reduction in risk to give up that amount of \"\"passive\"\" income. Keeping the home opens you up to all kinds of risk. Your $435 per month could easily evaporate into something negative given taxes, likely rise in insurance rates and repairs. You have a great shovel to build wealth there is no reason to assume this kind of exposure. You will become wealthy if you invest and work to reduce your debt.\"", "title": "" }, { "docid": "4219f1b4c9bc79997ce785361da41a1c", "text": "I'd pile up as much cash as you can in a savings account - you will need money for the move (even if it's just gas money) and it's going to be hard to predict where house prices are going so you might or might not be underwater when it comes time to sell the house. Or you might be so deep underwater by then that the extra money doesn't make much of a difference anymore anyway. Once you're actually in the process of selling the house, you can figure out if you can (or need to) use the savings to cover the shortfall, closing costs or if you just built up a little wealth during the time you put the money aside.", "title": "" }, { "docid": "a12d8076c8f121fd8555d860d0e17859", "text": "A second mortgage is a loan taken out on your house while you still have another mortgage secured by your house. They are a secured loan as they use the borrower’s home as security. Some advantages of Second Mortgages: Some important points to consider when you take a second mortgage If you stop making payments, your lender will be able to take your home through foreclosure, which can cause serious problems for you and your family. Second mortgages can be expensive. You’ll need to pay numerous costs for things like credit checks, appraisals, origination fees, and more. The mortgage rates are typically lower than credit card interest rates, but they’re often slightly higher than your first loan’s rate.", "title": "" }, { "docid": "4f2a3af6526fd4b4e1134e9c460ed9f6", "text": "The market can stay irrational longer than you can remain solvent -John Maynard Keynes The stocks could stagnate and trade in a thin range, or decline in value. You assume that your stocks will offer you ANY positive return for every month over 24 months. Just one month of negative returns puts you underwater. Thats whats wrong with it. Even if you identified any stock that has been up every month for a consecutive 24 months in the past, there is nothing that says it will be so in the future, and a broad market selloff will effect both indexes as well as individual stocks. Literally any adverse macroeconomic event in the next two years will put you underwater on your loan, no matter how much research you do on individual stocks.", "title": "" }, { "docid": "239eefd27af2f242572ffc8aa02b5f83", "text": "It is highly unlikely that this would be approved by a mortgage underwriter. When the bank gives a loan with a security interest in a property (a lien), they are protected - if the borrower does not repay the loan, the property can be foreclosed on and sold, and the lender is made whole for the amount of the loan that was not repaid. When two parties are listed on the deed, then each owns an UNDIVIDED 50% share in the property. If only one party has pledged the property as surety against the loan, then in effect only 50% of the property is forecloseable. This means that the bank is unable to recoup its loss. For a (fictional, highly simplified) concrete example, suppose that the house is worth $100,000 and Adam and Zoe are listed on the deed, but Adam is the borrower for a $100,000 mortgage. Adam owes $100,000 and has an asset worth $50,000 (which he has pledged as security for the loan), while Zoe owes nothing and has an asset worth $50,000 (which is entirely unencumbered). If Adam does not pay the mortgage, the bank would only be able to foreclose on his $50,000 half of the property, leaving them exposed to great risk. There are other legal and financial reasons, but overall I think you'll find it very difficult to locate a lender who is willing to take that kind of risk. It's very complicated and there is absolutely no up-side. Also - speaking from experience (from which I was protected because of the bank's underwriting rules) and echoing the advice offered by others on this site: don't bother trying. Commingling assets without a contract (either implicit by marriage or explicit by, well a contract) is going to get you in trouble.", "title": "" }, { "docid": "995ef1b1bf6ddd14a9d3fe8709374f0b", "text": "Let's say you owe $200K (since you didn't mention balance. If you do, I'd edit my response), and can get 4.5%. You'd save 1.5% or about $3K/yr the first few years. If a $12K paydown is all that's between you and and refi I'd figure out a way. There are banks that are offering refi's under the HARP program if your current mortgage is owned by FNMA or FMAC which permit even if under water. So, the first step is research to see if you can refi exactly what's owed, failing that, shop around. A 401(k) loan will not appear as a loan on your credit report, that may be one way to raise the $12K. The best thing you can do is put all the savings into the 401(k) to really get it going.", "title": "" }, { "docid": "0304ba8ba788cb874d4d4d0fd988a58e", "text": "You definitely can under those conditions. Just be very careful to specify that you are making extra principal payments.", "title": "" }, { "docid": "95dcf8a389872b6b5395158b82d9b75c", "text": "I have this exact same issue. Event the dollar amounts are close. Here is how I am looking at the problem. Option 1: Walk away. Goodbye credit for 7+ years. Luckily I can operate in cash with the extra $800 per month, but should I have a non medical emergency I might be SOL. With a family I am not sure I am willing to risk it. What if my car dies the month after I quit paying and the bank chooses to foreclose? What if my wife or I lose our job and we have no credit to live? Option 2: Short sale. Good if I can let it happen. I might or might not be on the hook for the balance depending on the state. If I am on the hook, okay, suck but I could live. If I am not on the hook, it is going to hurt my credit the same as foreclosure. It isn't easy, you need an experienced real estate agent and a willing bank. Option 3: Keep paying. I am going for this. At the moment I can still afford the house even though it is at the expense of some luxuries in my live. (Cable TV, driving to work, a new computer). I am wagering the market fixes itself in the next several years. Should the S hit the fan in most any manner, the mortgage is the first thing I stop paying. I don't know what other options I have. I can't re-fi; too upside down. I can't sell; the house isn't worth the mortgage (and I don't have the cash for the balance). I can't walk away; the credit hit wouldn't be worth the monthly money gain. I have no emotions about the house. I am in a real bad investment and getting out now seems like a good idea, but I am going to guess that having the house 10 years from now is better than not. I don't care about the bank at all, nor do I feel I owe them the money because I took the loan. They assumed risk loaning me the money in the first place. The minute it gets worse for me than for the bank; I will stop paying. Summary Not much to do without a serious consequence. I would suggest holding out for the very long term if you feel you can. The best way to minimize the bad investment is to ride it out and pray it gets better. I am thinking I am a landlord for the next 10 years.", "title": "" }, { "docid": "252746493a0e4309e5f8a4c89e7e6467", "text": "I'll preface this with saying that I'm not a finance or real estate professional, this is just how I understand the situation and what I'm doing: We just got a 30year/FHA mortgage, there's no prepayment penalty, and no fees associated with paying it biweekly. In fact (Wells Fargo), while the payments get withdrawn biweekly, they don't actually post to the mortgage until there's enough for a full payment. So essentially here are the benefits I'm realizing:", "title": "" }, { "docid": "e401a8ff82d95f592eab06973e952461", "text": "While this question is old and I generally agree with the answers given I think there's another angle that needs a little illuminating: insurance. If you go with an 84 month loan your car will likely be worth less than the amount owed for substantially all of the entire 84 month loan period; this will be exacerbated if you put zero down and include the taxes and fees in the amount borrowed. Your lender will require you to carry full comprehensive/collision/liability coverage likely with a low maximum deductible. While the car is underwater it will probably also be a good idea to carry gap insurance because the last thing you want to do is write a check to your lender to shore up the loan to value deficit if the thing is totaled. These long term car loans (I've seen as high as 96 months) are a bear when it comes to depreciation and related insurance costs. There is more to this decision than the interest calculation. Obviously, if you had the cash at the front of this decision presumably you'll have the cash later to pay off the loan at your convenience. But while the loan is outstanding there are costs beyond interest to consider.", "title": "" }, { "docid": "e2afadb028d4d5d23a772479a3d008b2", "text": "\"You owe $20,000 to a loanshark, 1% per week interest. I'm happy to get 1% per month, and trust you to pay it back, so I lend you the $20,000. The first lender got his money, and now you are paying less interest as you pay the loan back. This is how a refi works, only the first bank won't try to break the legs of the second bank for moving into their business. This line \"\"reinvested the money into the mortgage to lower his monthly payments\"\" implies he also paid it down a bit, maybr the new mortgage is less principal than the one before.\"", "title": "" } ]	fiqa
6c4e0ffcb5503b3d091814dae4cbe6c4	Can you explain why these items are considered negatives on my credit report?	[ { "docid": "64a03e132badfa3d034aa6372607bc69", "text": "Creditworthiness is proven over time. The longer your track record of making payments on time, the more probable you will stick to credit agreements in future (or so the reasoning goes). Conversely, someone who has only just started applying for credit could be someone whose finances were previously stable but have now started to get into difficulty. Obviously this is not necessarily the case but it is one possible inference. This inference is strengthened when same person applies for further credit in a short space of time. Ultimately, what is considered positive is a stable credit record over a reasonable period of time, because it indicates you stick to payment schedules and don't suddenly need credit due to money problems. Credit card accounts are considered a good indicator of credit status because they imply what kind of borrower you are. Whereas many credit arrangements present a straightforward case of arrears / no arrears (e.g. think of a mobile phone account – either you pay your bill or you don't), with credit cards there is an element of flexibility in how much you borrow, and how much of that you repay. If you run up four figure monthly balances but clear them in full each month without fail, that is a good sign. If your average balance is increasing and you are paying on time but just the minimum amount, that is a potential flag. In other words, credit cards are of particular interest because they paint a more nuanced picture. Provided you use one responsibly, getting and using a credit card may improve your status with credit reference agencies.", "title": "" }, { "docid": "001467b6ee0f5efdbd4ee55a495d55c5", "text": "Consider that however high your credit score gets, there is a 'worst piece of it'. The automated software will always report your 'weakest' two points, even if they are already at the top 0.0001% of everyone; that's just how it is coded.", "title": "" }, { "docid": "39b81eac18f0945c5eef39e28d5894c2", "text": "I'm going to give the succinct, plain language version of the answers: 1. Your oldest active credit agreement is not very old You don't have much experience or history for me to base my analysis on -- how do I know I can trust you to pay back the money? 2. You have no active credit card accounts Other people haven't trusted you with credit or you haven't trusted yourself with credit and there's no active good behavior of paying credit cards on time -- you want me to be the first one to go out on a limb and loan you money? How do I know I can trust you to pay back the money?", "title": "" }, { "docid": "9c874ef74bab9f06158c5ad1e9c6b530", "text": "\"1. Your oldest active credit agreement is not very old This is fairly straight forward. If you've not been exposed to borrowing for a reasonable length of time, people won't want to lend you money. They have no reason to have any confidence in your ability to repay them. As other said, it's pretty much a case of proving yourself by being good with credit over a period of time. 2. You have no active credit card accounts Credit reference agencies have to consider a variety of factors for a variety of purposes. Notably, they will be used for credit cards, unsecured loans, mortgages, and secured loans such as vehicle finance applications. These all have varying types of customer, and some will be inherently more risky than others. For instance, someone with a mortgage on a home is far more likely to make payments because they would be homeless without, however someone with a finance agreement on a car is relatively less likely to make those payments because all they stand to lose is their car. Consider that the most fruitful information the lender will get is a score and some breakdown of how it's generated, it's a very general understanding of your history. For that reason, having a wide variety of credit is very important. A good variety of credit to have would be one secured loan (e.g car finance) to get started, as well as at least one revolving unsecured credit account (e.g a credit card), and later on in your \"\"credit life\"\" an unsecured fixed term loan (e.g a loan for something which has nothing secured against it). I say the above reluctantly, because that's how I increased my credit score from 450 to 999 - first step was the car finance where in 3 months or so I changed from 450 to around 600, with a credit card I was approaching 900, and once I had an unsecured loan for 8 months I hit 999 - now I have all of the above plus a competitive mortgage and remain at 999. Whether each is mandatory to maintain 999 is debatable but based on personal experience, it seems reasonable.\"", "title": "" } ]	[ { "docid": "c96e617f294c24e6721181ac817418af", "text": "First, A credit account is increased by credit transactions and decreased by debits. Liabilities is a credit account and should be a positive number. A debit account is increased by debit transactions and decreased by credit. Assets is a debit account and should be a positive number. Equity = Assets (debit) - Liabilities (credit) may be positive or negative. You currently are subtracting a negative number for a net positive, since your Liabilities is set as a debit account. How you currently are set -> Equity = Assets (debit) - Liabilities (debit) It is easier to understand if you change the columns from Increase/Decrease to Credit/Debit. I believe this is changed through Edit > Preferences > Accounts > Labels > Use formal accounting labels. To fix your situation, open up the Loan account and switch columns on the amounts. This will decrease Opening Balances and increase the loan, per your current column headings. This is a snippet of Opening Balances. You see that Opening Balances is debited and the Loan/Liability account credited. I included Petty Cash to show the reverse. Petty Cash is an asset, so it credits Opening Balances and debits Petty cash. This is a student loan Liability account. As you see, the Opening Balance is debited and decreased. The loan is credited and Liabilities increased. As payments are made, the reverse happens. The loan, being a credit account, is debited and the balance decreases. Opening Balances moves closer to 0 as well. The savings account, being a debit account, is credited and the balance decreases. There has been no change in Equity since Liabilities and Assets decresed by the same amount.", "title": "" }, { "docid": "8d3a8e900cecf7ac3996efc9e605a862", "text": "\"I think your confusion comes from the negative impact when a creditor writes off your bad credit and ceases attempting to collect it. \"\"Chargebacks\"\" as you call them are an attempt to undo fraudulent charges on your card, whether from stolen credit card info or from a merchant who is using shady business practices. For what it's worth, if you joined on December 20, January 20 seems like a reasonable date for the next billing cycle, with the December 31 date reflecting the fact that their system couldn't automatically bill you the day you joined. I also think it's reasonable for you to ask them to refund the bill for the second month if you do not plan to use their gym further. So the dispute seems like a reasonable one on both sides. Good luck.\"", "title": "" }, { "docid": "01dc966313e526b2e674d4f246e477e0", "text": "Absolutely nothing will happen. These credit history companies have no scruples and no reason to give a damn about consumers. Every recourse you have to fix inaccuracies in your credit history were won with legislation or litigation. They don't care about you.", "title": "" }, { "docid": "87d965cd8c97f1faa8784ca29206e209", "text": "Because even if you won the lottery, without at least some credit history you will have trouble renting cars and hotel rooms. I learned about the importance, and limitations of credit history when, in the 90's, I switched from using credit cards to doing everything with a debit card and checks purely for convenience. Eventually, my unused credit cards were not renewed. At that point in my life I had saved a lot and had high liquidity. I even bought new autos every 5 years with cash. Then, last decade, I found it increasingly hard to rent cars and sometimes even a hotel rooms with a debit card even though I would say they could precharge whatever they thought necessary to cover any expenses I might run. I started investigating why and found out that hotels and car rentals saw having a credit card as a proxy for low risk that you would damage the car or hotel room and not pay. So then I researched credit cards, credit reports, and how they worked. They have nothing about any savings, investments, or bank accounts you have. I had no idea this was the case. And, since I hadn't had cards or bought anything on credit in over 10 years there were no records in my credit files. Old, closed accounts had fallen off after 10 years. So, I opened a couple of secured credit cards with the highest security deposit allowed. They unsecured after a year or so. Then, I added several rewards cards. I use them instead of a debit card and always pay in full and they provide some cash back so I save money compared to just using a debit card. After 4 years my credit score has gone to 800+ even though I have never carried any debt and use the cards as if they were debit cards. I was very foolish to have stopped using credit cards 20 years ago but just had no idea of the importance of an established credit history. And note that establishing a great credit history does not require that you borrow money or take out loans for anything. just get credit cards and pay them in full each month.", "title": "" }, { "docid": "b83e9ce022aee6abbedc891366578447", "text": "You're going to have a huge problem getting approved for anything as long as you have an unpaid bill on your report. Pay it and make sure its reported as paid in full - ASAP. Once that settled, your credit will start to improve slowly. Can't do anything about that, it will take time. You can make the situation improve a bit faster by lending money to yourself and having it reported regularly on your report. How? Easy. Get a secured credit card. What does it mean? You put X amount of money in a CD and the bank will issue you a credit card secured by that CD. Your credit line will be based on the amount in that CD, and you'll probably pay some fees to the bank for the service (~$20-50/year, shop around). You might get lucky and find a secured card without fees, if you look hard enough. Secured cards are reported as revolving credit (just as any other credit card) and are easy to get because the bank doesn't take the risk - you do. If you default on your payments - your CD goes to cover the debt, and the card gets cancelled. But make absolutely sure that you do not default. Charge between 10% and 30% of the credit limit each month, not more. Pay the balance shown on your credit card statement in full every month and by the due date shown on your monthly statement. It will take a while, but you would typically start noticing the improvement within ~6-12 months. Stop applying for stuff. Not store cards, not car loans, you're not going to get anything, and will just keep dragging your scores down. Each time you have a pull on your report, the score goes down. A lot of pulls, frequent pulls - the score goes down a lot. Lenders can see when one is desperate, and no-one wants to lend money to desperate people. Optimally lenders want to lend money to people who doesn't need loans, but in order to keep the business running they'll settle for slightly less - people who don't usually need loans, and pay the loans they do have on time. You fail on both, as you're desperate for a loan and you have unpaid bills on your report.", "title": "" }, { "docid": "1f1da2383bf77d16e0fca936499ad01e", "text": "\"In the United States, the Fair Credit Reporting Act allows companies to buy your credit information for \"\"legitimate business needs.\"\" The legitimate use of credit scores and credit reporting varies state to state, but like it or not, you can expect a lot more non-lending use of your credit information in the future. Companies and individuals use credit reports as an assessment of general behavior because, unfortunately, they work. You've seen the disclaimers about \"\"past performance…\"\", but unfortunately in this case… past performance really has been shown to be a pretty reliable indicator of future behavior. So…\"", "title": "" }, { "docid": "f4ae02894dbadb96f5c5342a4b2b27a0", "text": "8 hard inquiries spread over two years is not a negative factor, with a score of 750. Real question #1: How much of your credit limits are you currently using? Less than 30% of your credit limits is good. Less than 15% is even better, 10% is great You don't need to wait X amount of days after applying for a mortgage or a card to increase your chances of getting approved for something else. You do need to be conscious of how many hard pulls you have done in a reporting period though, but again as I said, 8 spread over two years is not a whole lot. Real question #2: What negative things do you have in your credit history? Young age, income, delinquent payments, bankruptcies, low limits? Some of these negative factors are catch-22's (low limits, young age = low limits because of age and young credit history) but these contribute to how much institutions would be willing to lend you", "title": "" }, { "docid": "37e08839cdf11b0ddd69897437b1b0ad", "text": "Something I'd like to plant firmly into your mind - If you're able to save up enough money to buy the things you want outright, credit will be of little use to you. Many people find once they've accumulated very good credit scores by use of good financial habits, that they rarely end up using credit, and get little out of having a 'great' credit score compared to an 'average' credit score. Of course, a lot of that would depend on your financial situation, but it's something to keep in mind. As stated by others, and documented widely online, you don't need to make payments on a loan or carry a card balance to build your credit history. Check your credit on a popular site, such as Credit Karma (No affiliation). There, you'll see a detailed breakdown of the different areas of your credit profile that matter; things like: The best thing I could recommend is get a credit line or credit card, and use it responsibly. Carrying a balance will waste money on interest, much like the car payment. Just having it and not over-using it (Or not using it at all) will 'build' your credit history. Of course, some institutions may close your account after X number of years of inactivity. With this in mind, I'd say it's safe to pay off the car loan. Read your agreement and make sure there aren't early termination / early payment fees for this. Edit: There have been notes in the comments section's of question/answer's here about concerns with getting apartment. My two cents here: Most apartments I've seen check your credit for negative marks. Having no credit history, and thus never missing a payment or having a judgement made against you, will likely be enough to get you into most normal-quality apartments, assuming the rest of your application / profile is in order, like: - Good references, if asked for them - At least 2.5x rent payment in gross income etc, things like that. If they really think you're a risk, they may ask for a larger deposit (Though I'm sure in some areas there may be restrictions on whether they can do this, or how much they can do it) and still let you rent there.", "title": "" }, { "docid": "8bba82847005e0638501d794ffa3685d", "text": "\"0% furniture loans can hurt your credit rating. I was told by a bank mortgage officer (sorry I can't cite a document) that credit rating algorithms consider \"\"consumer\"\" loans like 0% appliance loans and certain store-specific credit cards as a negative factor, lowering your overall score. The rationalization given was that that taking that type of credit is an indicator that you have zero cash reserves. The actual algorithms are proprietary, so I don't know how you could verify this. If true, it runs counter to the conventional wisdom that getting credit and then paying it off builds your credit score.\"", "title": "" }, { "docid": "05566dc1f7eabf546c872438675b8ce9", "text": "I too was very confused when I tried to be tricky and paid down my balance BEFORE the bill date. I thought this would be a great thing because it would show my utilization near zero percent. The opposite happen, it dropped my credit score from 762 to 708. Here is the best example I can come up with when it comes to utilization. Lets pretend you are an insurance company and you trying to figure out who are the best risk drivers. The people that drive 10% of the day are a better risk than the people that drive 50% of the day. The people that drive 50% of the day are a better risk than the people that drive 90% of the day. Here is the rub when people drive 0%. When you look at the people at 0% they appear to be walking, busing or flying. What they are NOT doing is driving. Since they are not driving (using Credit) they are viewed as POOR drivers since they are not keeping up on their driving skills. (Paying bills, watching how they spend, and managing their debt). So, now before the billing date I pay down my balance to something between 5 to 10% of my utilization. After the bill is issued, I pay it off in FULL. ( I am not going to PAY these crazy interest rates). What shows up on my credit report is a person that is driving his credit between 5 and 10% utilization. It shows I know I how to manage my revolving accounts. I know it's dumb, you would think they reward people that have zero debt, I don't hate banks I hate the game. ( I do love me some reward points =))", "title": "" }, { "docid": "97fc96baef2e86e53277f919901fb170", "text": "\"The blurb from the law site is accurate. I'm not going to say any other info from them is or isn't accurate though as I have not read their site at all. If you check the public resources from Fair Issac directly you will get similar wording to that of the law firm: Presence of adverse public records (bankruptcy, judgements, suits, liens, wage attachments, etc.), collection items, and/or delinquency (past due items) Once the items are on your report they will weigh the score down (though less over time). Also, paying the accounts off, other than a successful Pay For Delete (PFD), can have a negative impact on your score. By paying the account off you'll trigger a status change that will allow the account record to stick around for up to 7 more years (10 for medical debts). Which is why it is a better idea to let accounts fall off than it is to pay them once they are over a certain age. Be aware that paying off a collection account on which you previously missed a payment, will not remove it from your credit report. Your FICO score will still consider this information, because it reflects your past credit pattern. Source: Fair Issac: Understanding your FICO Score [PDF] Paying an account off and getting it marked \"\"Paid in Full\"\" or \"\"Settled\"\" or anything else really won't help you at all. The adverse account record drags on your score just for being there.\"", "title": "" }, { "docid": "60f197fcd24ac4a0004f929ef51fa4a2", "text": "This strategy will have long lasting effects since negative items can persist for many years, making financing a home difficult, the primary source of household credit. It is also very risky. You can play hard, but then the creditor may choose you to be the one that they make an example out of by suing you for a judgement that allows them to empty your accounts and garnish your wages. If you have no record of late payments, or they are old and/or few, your credit score will quickly shoot up if you pay down to 10% of the balance, keep the cards, and maintain that balance rate. This strategy will have them begging you to take on more credit with offers of lower interest rates. The less credit you take on, the more they'll throw at you, and when it comes time to purchase a home, more home can be bought because your interest rates will be lower.", "title": "" }, { "docid": "faf24c20508fc14ee7b7220428afd0ce", "text": "It costs money to pull credit information, and there's a record of who requested the info. And hard pulls are only a temporary, short-term ding on your score. Basically, if someone wants to make trouble, there are better ways to do so.", "title": "" }, { "docid": "a9be848b4054ffe1f5af563fcd6422f6", "text": "\"First of all, whatever you do, DON'T PAY! Credit reporting agencies operate on aged records, and paying it now will most certainly not improve your score. For example, let's say that you had an unpaid debt that was reported as a \"\"charge-off\"\" to the credit bureaus. After, say, six months, the negative effect on your score is reduced. It is reduced even further after a year or two, and after two years, the negative effect on your score is negligible. Now, say you were to pay the debt after the two years. This would \"\"refresh\"\" the record, and show as a \"\"paid charge-off\"\". Sure, now it shows as paid, but it also shows the date of the record as being today, which increases the effect on your credit drastically. In other words, you would have just shot yourself in the foot, big-time. As others have noted, the best option is to dispute the item. If, for some reason, it isn't removed, you are allowed to submit an annotation to the item, explaining your side of the story. Anyone pulling your credit record would see this note, which can help you in some instances. In any case, these scam artists don't deserve your money. Finally, you should check who is the local ombusdman, and report this agent to them. She could lose her license for such a practice.\"", "title": "" }, { "docid": "08c639825810cbc9f961658068dc39d2", "text": "Is it normal in QuickBooks to have credit card expenses being shows as liabilities? Is there a way I can correct this? If they are expenses they shouldn't be negative liabilities unless you overpaid your credit card by that amount. It sounds like perhaps when you linked the account the credit/debit mapping may have been mixed up. I've not used QB Online, but it looks like you might have to un-link the account, move all the existing transactions to 'excluded' and then link the account again and flip-flop the debit/credit mapping from what it is now. Hopefully there's an easier way. This QB community thread seems to address the same issue.", "title": "" } ]	fiqa
56325485f95d382ccb53d2e03d160979	Is the Chrysler extended warranty coverage worth it?	[ { "docid": "7421f097b776fb34d00007b3fe10bb32", "text": "I haven't looked at that warranty in detail, but generally speaking this should help. What is GAP insurance? In the case of a total loss/write off gap insurance covers the outstanding finance after your regular insurance pay out. The two won't match up usually because of the depreciation right after you buy the car. For example, if you take out $20,000 finance and buy a car, then write it off after six months, your insurance company may only value it at $16,000 but it's unlikely you will have cleared $4,000 from your finance. Gap insurance will pay out the difference and settle the debt. Will Chrysler change the engine, if it comes to bhore? Yes, unless they identify misuse or deliberate damage. For instance, if you do 1000 miles and the engine explodes, it's a mechanical fault that the warranty would cover. If they open up the engine/look at diagnostics and find it's been thrashed to within an inch of it's life, they may claim it was your driving which has destroyed the engine and you would have to prove it was an underlying fault and would have blown either way. Will car dents be covered with this bumper to bumper insurance? Not likely, as I mentioned in the last point, if it's your fault it wouldn't be covered. I think you may be confusing the terms insurance and warranty at this point. Insurance would cover your dents but a warranty only covers the manufacturer's faults, even in the case of extended warranties. What does basic mean in terms of warranty? Sounds obvious, but whatever Chrysler want it to mean! There's no legal definition of 'basic' so you would need to check the documents thoroughly or ask them to explain exactly what is and isn't covered. If they're reluctant, it's probably because 'basic' covers very little...", "title": "" } ]	[ { "docid": "464cbae1aff1457fc0fc804fb43863e4", "text": "I have coworker who reported that he leased a Nissan Leaf from 2013-2016 and was offered $4000 off the contracted purchase price at the end of the lease due to a glut of other lessees turning in for a lease on the newest model with greater range. It's not clear that this experience will be repeated by others three years from now, but there is enough uncertainty in the future electric car market that it's quite possible to have faster depreciation on a new vehicle than you might otherwise expect based on experience with conventional internal combustion powered vehicles. Leasing will remove that uncertainty. Purchasing a lease-return can also offer great value. I looked at the price for a lease return + a new battery with the extended range, and it was still significantly cheaper than buying a completely new vehicle.", "title": "" }, { "docid": "403294d631b330a34ef94f13a824f49d", "text": "\"My knee-jerk reaction was \"\"no, they are not worth it\"\", but I took a little time to look up what some of the trusted names in consumer electronics reviews had to say about extended warranties/service contracts. A cnet writer said that your decision should consider the price of the service contract relative to the price of the item you're buying, as well as the amount of hassle you're willing to endure, should something go wrong. Consumer Reports believes that the warranties that come with your products are almost always enough, and they say that electronics and appliances are so well-built nowadays, the likelihood of you needing extra service before you upgrade are slim-to-none. And the folks over at epinions.com offer the same maybe-yes-maybe-no advice as the cnet guys: depends on your appetite for risk and the options available to you. So I would suggest that the answer be \"\"no\"\" most of the time, but consider it anyway.\"", "title": "" }, { "docid": "fb9010f18a4e49aa74aab3af0e2b48b8", "text": "\"The general answer to any \"\"is it worth it\"\" insurance question is \"\"no,\"\" because the insurance company is making a profit on the insurance.* To decide if you want the insurance, you need to figure out how much you can afford to pay if something happens, how much they cover, and how badly you want to transfer your risk to them. If you won't have trouble coming up with the $4000 deductible should you need to, then don't get this extra insurance. * I did not mean to imply that insurance is always a bad idea or that insurance companies are cheating their customers. Please let me explain further. When you buy any product from a business, that business is making a profit. And there is nothing wrong with that at all. They are providing a service and should be compensated for their efforts. Insurance companies also provide a service, but unlike other types of businesses, their product is monetary. You pay them money now, and they might pay you money later. If they pay you more money then you spent, you came out ahead, and if you spend more money then they give you, it was a loss for you. In order for the insurance company to make a profit, they need to bring in more money than they pay out. In fact, they need to bring in a lot more money then they pay out, because in addition to their profit, they have all the overhead of running a business. As a result, on average, you will come out behind when you purchase insurance. This means that when you are on the fence about whether or not to purchase any insurance product, the default choice should be \"\"no.\"\" On average, you are financially better off without insurance. Now, that doesn't mean you should never buy insurance. As mentioned by commenter @xiaomy, insurance companies spread risk across all of their customers. If I am in a situation where I have a risk of financial ruin in a certain circumstance, I can eliminate that risk by purchasing insurance. For example, I have term life insurance, because if I were to pass away, it would be financially catastrophic for my family. (I'm hoping that the insurance company makes 100% profit on that deal!) I also continue to buy expensive health insurance because an unexpected medical event would be financially devastating. However, I always decline the extended warranty when I buy a $300 appliance, because I don't have any trouble coming up with another $300 in the unlikely event that it breaks, and I would rather keep the money than contribute to the profits of an insurance company unnecessarily. In my original answer above, I pointed out how you would determine whether or not to purchase this particular insurance product. This product pays out a bunch of relatively small amounts for certain events, up to a limit of $4000. Would this $4000 be hard for you to come up with if you needed to? If so, get the insurance. But if you are like me and have an emergency fund in place to handle things like this, then you are financially better off declining this policy.\"", "title": "" }, { "docid": "49d7df2a564c7f112e7110d4297f6f96", "text": "I know, right? What a joke. If they were a real car company, they would never acknowledge a problem and put in a repair and warrantee program that benefits the customer. When will Tesla learn to cover-up problems, and then do calculations to see if the legal costs they will pay due to the problem are more than the cost of fixing the problem? What a joke of a company.", "title": "" }, { "docid": "c9a065ed30ff915be1b10120f9fb8152", "text": "I've put 75K miles on my 2013 Volt and it's holding up great. Solid car. I've got a pre-reveal Model 3 reservation, and I'm reluctant to trade the Volt in. Looks like I'll have to make that decision pretty soon.", "title": "" }, { "docid": "eba53fd80c5837cfce7101bde3dca035", "text": "The first 10-30k may have some issues. Nissan had frame / battery problems with the first 30k Leaf's.This is the reason that the first 10k T3 will be going to employees. Second 10k to loyal Model S / X owners and third 10k to buyers in CA near the factory. I have a friend that had one of the first Model X, it took almost a year to work out all of the issues, but everything is working now and they are happy!", "title": "" }, { "docid": "1a9b3e0a93ed53db45c09ac5106b70d0", "text": "Consumers got what they paid for and Tesla put better equipment than necessary inside to A. Assist with resale value and B. Lessen manufacturing costs. The side effect is longer battery life and the option to upgrade without needing service. It's kind of a win win win win.", "title": "" }, { "docid": "8a1f39931d478f146422f20709cd9041", "text": "\"Ditto other answers, but I'd add there's a lot of psychology going on in a sale. If you're paying cash, you presumably have a pretty fixed upper limit on what you can spend. But if you're getting a loan, a large increase in the price of the car may sound like just a small addition to the monthly payment. Also, these days dealers often try to roll \"\"extended warranties\"\" into the loan payment. Most people can't calculate loan amortizations in their heads -- I'm pretty good at math, and I need a calculator to work it out, assuming I remember or wrote down the formula -- a dealer can often stick a piece of paper in front of you saying \"\"Loan payment: $X per month\"\" with fine print that says that includes $50 for the extended warranty, and most people would just say, \"\"oh, okay\"\".\"", "title": "" }, { "docid": "59203d7869768ceb481d019ec026eddd", "text": "\"The good news about maintenance is that there's much less scheduled maintenance because the cars are mechanically much simpler. See the official service schedule. Most of it is just \"\"rotate tires / replace cabin air filter\"\". The brake and suspension systems are very similar to those of a normal car and require comparable maintenance. The bad news is the battery will decay over time and is a major component of the cost of the car. From that link: In the UK, the LEAF’s standard battery capacity loss warranty is for 60,000 miles or five years So you should factor your warrantied battery lifetime into the depreciation calculation. I don't think there are going to be many ten- or twenty- year old electric cars from the current crop in 2030 or 2040 as they're still improving dramatically year-on-year. (Slightly too long for a comment, slightly too short for a proper answer)\"", "title": "" }, { "docid": "84a8d60f42a6c234b8c259c0b7425e96", "text": "One thing to consider: the Apple service plan covers replacement of the battery in addition to the normal things you expect. Since the battey is not consumer replaceable, and, according to what I hear, is almost certain to wear out within the two year life of the phone, and is more expensive to have Apple replace than the extended coverage, it's probably worth it. (Disclaimer: this was told to me by my son who used an iPhone for two years before I got mine. I haven't independently verifies his facts. This also applied to the 3G and 3GS. I'm just assuming it's also true for the 4.)", "title": "" }, { "docid": "afdc13cf37d3aac53e192165a6e6f1a0", "text": "I suspect this is done at least in part in response to [this review by Edmunds](http://www.edmunds.com/tesla/model-s/2013/long-term-road-test/wrap-up.html) and a [similar one by Consumer Reports](http://www.consumerreports.org/cro/news/2014/08/consumer-reports-tesla-model-s-has-more-than-its-share-of-problems/index.htm) where they describe the number of problems Tesla had over 1 year of ownership. Esp in the Edmunds review, if you scroll down part way down the article, you'll see the number of powertrain part replacements that were done; it's quite substantial.", "title": "" }, { "docid": "3818fe9bb023c347f74da394e87c2c71", "text": "\"In general, if you can afford to replace something, you are able to \"\"self-insure\"\". You really want to understand a little of the statistics before you can make a generic call, but my rule of thumb is that insurance via \"\"extended warranty\"\" is rarely a good deal. Here is a simple expected value math formula you can apply (when the > is true, then you should buy it): replacement cost x likelihood of using warranty % > cost of insurance You can then back-compute, what is the likelihood that I'd need to lose this item to break even? Given your numbers: $2000 x Y > $350 or Y > (350/2000) or Y > 17.5% So if you think there is a 17.5% or greater chance that you'll need to have you system replaced (i.e. not just a simple fix) AND (as Scott pointed out) you'll be able to actually use the replacement warranty then the applecare is a good purchase. Note, this only applies to items you can replace out-of-pocket without significant burden, because if you didn't have the $10k to replace your car, it wouldn't matter if the insurance wasn't such a good deal (especially if you need the car to get to work, etc.) So the obvious question is: \"\"Why would a for-profit company ever offer insurance on something they are statistically likely to lose money on?\"\" The obvious answer is \"\"they wouldn't,\"\" but that doesn't mean you should never buy this type of insurance, because you may have statistically significant circumstances. For instance, I purchased a $40 remote helicopter as a gift for my children. I also paid the $5 for a \"\"no questions asked\"\" warranty on it because, knowing my kids, I knew there was a nearly 100% chance they would break it at least once. In this case, this warranty was well worth the $5, because they did break it! Presumably they make money on these warranties because most of the purchasers of the plan are more attentive (or too lazy to make the claim) than in this case. Edit note: I incorporated Scott's comment about likelihood of being able to utilize the warranty into a combined \"\"likelihood of using warranty\"\" term. This term could be broken up into likelihood of needing replacement x likelihood of actually getting company to replace it I didn't do this above because it makes it a little harder to understand, and may not be a major factor in all cases, but you can definitely add it after the fact (i.e. if there's only a 90% chance Applecare will pay out at all, then divide the 17.5% by 0.9 to get 19.4% likelihood of needing the replacement for it to be cost effective). More complete formulas can be derived also (including terms for full replacement costs vs repair costs and including terms for \"\"deductible\"\" type costs or shipping), but I'm trying to keep things relatively simple for those who aren't statistics nerds like I am.\"", "title": "" }, { "docid": "0e019ffa890ed2cb59a52e635dafe7f1", "text": "\"> I am confused how you spin an \"\"infinite mileage warranty\"\" into something negative It will increase their costs in a business model which, until recently, lost money on every unit. It's good news for buyers in the short term. If Tesla goes out of business, however, the infinite-mileage warranty won't make any difference. And, in the larger picture, if they're out of business, their awesome customer-focused model doesn't really benefit their customers in any way.\"", "title": "" }, { "docid": "85003e0414cf9df7ca49bf330b63a9ab", "text": "\"Short answer: Absolutely not, unless you're comfortable with putting years of your labor into a depreciating asset that will incur hefty maintenance costs over its remaining life. i.e. consider your 10K gone forever once you buy the car, and then some. Some comments on your reasons: \"\"Keeping up with spoiled brats\"\" is a losing proposition, and is a mindset counterproductive to financial independence. I'd encourage you to find a way to not care about how the spoiled brats live their lives. It won't be easier when you're older and you see your peers driving fancy cars and living fantasy lifestyles that you are tempted to emulate. Break the impulse to \"\"keep up\"\" and you'll be in a much better place. A used BMW may not be a piece of junk at first, but once you hit 100K miles, everything will suddenly fall apart and need repair. Been there myself. Still have the car after 7 years, only because very few people want to buy a high-mileage German sport sedan with recurring maintenance issues. See #2. It will be a good drive for a while, then it will own you. This is not so bad when you have a decent amount of savings, but when you have nothing, it's very hard to truly enjoy the car while knowing that any problems not covered by warranty will be financially devastating. Are you prepared to ride the bus for 4 weeks while saving enough income from work to replace a bad clutch? I had to do this, and it's not something I brag about.\"", "title": "" }, { "docid": "9660733404c6142453215fb3d053158f", "text": "In my opinion it depends on the type of product. I would get a warranty for a washing machine or tumble dryer or other product with lots of moving parts that is liable to break down. I also take into account my luck, the one washing machine I didn't get covered broke down 2 weeks outside the normal warranty period... I would not get a warranty for a consumer electronics product like a TV, PC, or iPod because they devalue so quickly. As a rule of thumb, if the model you buy today is going to be on sale for the next few years for around the same price and has moving parts, it is worth considering a warranty. If it will be worth a small percentage of its value because newer faster shinier models come along to replace it don't bother. I would also not get the warranty from the shop I bought the product from. You can get warranties for consumer products from specialist third parties that will allow you to cover multiple products for a discount. These work out a lot cheaper than the one the shop will give you. For example in the UK, DomGen will cover 3 appliances for £14.99/month and 6 for £20.99/month", "title": "" } ]	fiqa
0c03ba13deb8c2e4cf7d52499ceced5d	Does a larger down payment make an offer stronger?	[ { "docid": "51c48c3c858a292ef20050113ff62cf3", "text": "There is some element of truth to what your realtor said. The seller takes the house off the market after the offer is accepted but the contract is contingent upon, among other things, buyer securing the financing. A lower down payment can mean a higher chance of failing that. The buyer might be going through FHA, VA or other programs that have additional restrictions. If the buyer fails to secure a financing, that's weeks and months lost to the seller. In a seller's market, this can be an important factor in how your bid is perceived by the seller. Sometimes it even helps to disclose your credit score, for the same reason. Of course for your situation you will have to assess whether this is the case. Certainly do not let your realtor push you around to do things you are not comfortable with. Edit: A higher down payment also helps in the situation where the house appraisal does not fare well. As @Dilip Sarwate has pointed out, the particular area you are interested in is probably a seller's market, thus giving sellers more leverage in picking bids. All else equal, if you are the seller with multiple offers coming in at similar price level, would you pick the one with 20% down or 5% down? While it is true that realtors have their own motives to push through a deal as quickly as possible, the sellers can also be in the same boat. One less mortgage payment is not trivial to many. It's a complicated issue, as every party involved have different interests. Again, do your own due diligence, be educated, and make informed decisions.", "title": "" }, { "docid": "f4c7855baaae2b066a743a6c78dff032", "text": "First, let me say that you have to take everything your agent says with a grain of salt. Freakonomics had a great article that discussed the math behind the motivation of the real estate agent. It described the home seller, trying to get, say $400K. On a 6% commission, the $24K is destined to be split between seller realtor office and buyer's realtor's office. The selling agent gets $6,000 (or so) in the end. As a seller, if I settle for $380K, my realtor is only out $300, netting $5700. But $20K lower sale price, and I just lost nearly $19K after commission is paid. The agent would have the natural goal of volume, not extracting the last dollar from the buyer. Gaining back the last $20K to the seller will cost the realtor far more than $300 in her time, keeping the house on the market and waiting for the better offer. Sellers might use down payment as one way to estimate the probability of the financing falling through, but it's a rough estimate at best because, in the case of bank financing, the bank needs the same time to run through the paperwork for a 3% down or a 20% down. It's just as easy for the buyer to qualify or not qualify for one loan or the other. There are young couples with great incomes and no debt, who blow away the required ratios for proposed debt to income, but haven't saved up the otherwise huge 20% downpayment. Then there are those who have saved for years, even having 30% to put down, but their income is still not going to qualify them. The offer will be contingent on the financing, regardless. It will show that you are putting $XX dollars as a downpayment, and the final transaction is contingent on your bank approving you.", "title": "" }, { "docid": "fa3d4b96522bea88e0bdae412d40b18e", "text": "\"There is considerable truth to what your realtor said about the Jersey City NJ housing market these days. It is a \"\"hot\"\" area with lots of expensive condos being bought up by people working on Wall Street in NYC (very easy commute by train, etc) and in many cases, the offers to purchase can exceed the asking price significantly. Be that as is may, the issue with accepting a higher offer but smaller downpayment is that when the buyer's lender appraises the property, the valuation might come in lower and the buyer may have to come up with the difference, or be required to accept a higher interest rate, or be refused the loan altogether if the lender estimates that the buyer is likely to default on the loan because his credit-worthiness is inadequate to support the monthly payments. So, the sale might fall through. Suppose that the property is offered for sale at $500K, and consider two bids, one for $480K with 30% downpayment ($144K) and another for $500K with 20% downpayment ($100K). If the property appraises for $450K, say, and the lender is not willing to lend more than 80% of that ($360K), then Buyer #1 is OK; it is only necessary to borrow $480K - $144K = $336K, while Buyer #2 needs to come up with another $40K of downpayment to be able to get the loan, or might be asked to pay a higher interest rate since the lender will be lending more than 80% of the appraised value, etc. Of course, Buyer #2's lender might be using a different appraiser whose valuation might be higher etc, but appraisals usually are within the same ballpark. Furthermore, good seller's agents can make good estimates of what the appraisal is likely to be, and if the asking price is larger than the agent's estimate of appraised value, then it might be to the advantage of the selling agent to recommend accepting the lower offer with higher downpayment over the higher offer with smaller downpayment. The sale is more likely to go through, and an almost sure 6% of $480K (3% if there is a buyer's agent involved) in hand in 30 days time is worth more than a good chance of nothing at the end of 15 days when the mortgage is declined, during which the house has been off the market on the grounds that the sale is pending. If you really like a house, you need to decide what you are willing to pay for it and tailor your offer accordingly, keeping in mind what your buyer's agent is recommending as the offer amount (the higher the price, the more the agent's commission), how much money you can afford to put down as a downpayment (don't forget closing costs, including points that might be need to be paid), and what your pre-approval letter says about how much mortgage you can afford. If you are Buyer #1, have a pre-approval letter for $360K, and have enough savings for a downpayment of up to $150K, and if you (or your spouse!) really, really, like the place and cannot imagine living in any other place, then you could offer $500K with 30% down (and blow the other offer out of the water). You could even offer more than $500K if you want. But, this is a personal decision. What your realtor said is perfectly true in the sense that for Y > Z, an offer at $X with $Y down is better than an offer at $X with $Z down. It is to a certain extent true that for W > X, a seller would find an offer at $X with $Y down to be more attractive that an offer at $W with $Z$ down, but that depends on what the appraisal is likely to be, and the seller's agent's recommendations.\"", "title": "" }, { "docid": "c977c0dd2a64bb2a411a5684705c689d", "text": "There is a lot of your financial information that the selling agent handles in the course of a real estate transaction, including but not limited to your pre-approval letter which states what maximum purchase price might be. Closing costs and interest rate are not details they would know unless you shared that with them, given that that is done after you go binding. I agree with xiaomy in that, while in absolute monetary terms the higher amount should always be more attractive, the selling agent wants to ensure the transaction goes as smoothly as possible. With contracts falling through due to first-time buyers not making it through mortgage underwriting, it is in the seller's interest - and thus the seller's agent's concern - that the buyer not present such hurdles. Insofar as a higher down payment is a signal for that, then I can understand why it would be more attractive.", "title": "" } ]	[ { "docid": "2496a1379b1d804b89bcf3e6c0b4205c", "text": "Sorry, I don't think a bounty is the issue here. You seem to understand LTV means the bank you are talking to will lend you 60% of the value of the home you wish to purchase. You can't take the dollars calculated and simply buy a smaller house. To keep the numbers simple, you can get a $600K mortgage on a $1M house. That's it. You can get a $540K mortgage on a $900K house, etc. Now, 60% LTV is pretty low. It might be what I'd expect for rental property or for someone with bad or very young credit history. The question and path you're on need to change. You should understand that the 'normal' LTV is 80%, and for extra cost, in the form of PMI (Private Mortgage Insurance) you can even go higher. As an agent, I just sold a home to a buyer who paid 3% down. The way you originally asked the question has a simple answer. You can't do what you're asking.", "title": "" }, { "docid": "e5d0aae8c372fa841d206c133d72eb68", "text": "The cleanest way to accomplish this is to make the purchase of your new house contingent on the sale of your old one. Your offer should include that contingency and a date by which your house needs to sell to settle the contract. There will also likely be a clause that lets the seller cancel the contract within a period of time (like 24-48 hours) if another offer is received. This gives you (the buyer) at least an opportunity to either sell the house or come up with financing to complete the deal. For example, suppose you make an offer to buy a house for $300,000 contingent on the sale of your house, which the seller accepts. In the meantime, the seller gets an offer of $275,000 in cash (no contingency). The seller has to notify you of the offer and give you some time to make good on your offer, either by selling your house or obtaining $300,000 in financing. If you cannot, the seller can accept the cash offer. This is just a hypothetical example; the offer can have whatever clauses you agree to, but since sale contingencies benefit the buyer, the seller will generally want some compensation for that benefit, e.g. a larger offer or some other clause that benefits them. Or do I find a house to buy first, set a closing date far out and then use that time to sell my current one? Most sellers will not want to set a closing date very far out. Contingency clauses are far more common. In short, yes it's possible, and any competent realtor should be able to handle it. It also may mean that you have to either make a higher offer to compensate for the contingency and to dissuade the seller from entertaining other offers, or sell your home for less than you'd like to get the cash sooner. You can weigh those costs against the cost of financing the new house until yours sells.", "title": "" }, { "docid": "54586d646c58ca462fe5b9b1041724b9", "text": "In most cases an rent with option to buy is structured as follows: The renter/buyer will place a deposit/premium (not the same as a security deposit) that purchases the option( the right ) to buy the home at a future date at a specific price. The renter / buyer will often pay extra rent in addition to market rent. Many times this additional rent is contracted to be applied to the purchase price of the home. The risks to the renter/buyer are as follows: Also, something to note: Many people will recommend that you use the additional rents to be applied specifically towards the downpayment. Be wary of this. There are no institutional lenders available today that will allow the additional rent money to be applied towards your downpayment. That means you must come up with the downpayment in cash before closing. The additional rent payments can be used towards the price. Hope that helps. Good luck!", "title": "" }, { "docid": "b246e24973a7635f4a5a208b83cd5d4a", "text": "No offer is too low. You can always offer more but you can't offer less once you have made your first offer. And there is always another great deal just around the corner. The more enthusiastic you are about buying this property the less your negotiating power will be. The pproperty has already been on the market for a long while, so the vendor may be getting desperate to sell, so their negotiating power is already lessened. Know what the market is in the the area and offer at least 10% below the market. If it is a weak market then offer at least 20% below market. (Note: the list price is usually more than the market price). So offer as low as possible and you can always offer more if you think it is still a good price. Treat it like a game and have some fun, don't stress out if you miss out, there will always be a better deal just around the corner.", "title": "" }, { "docid": "a4fbdc6fb725647d5a2aa9ab359f388c", "text": "Also keep in mind that with an all-cash offer, they get their money now and not spread over X-many years, which means they can reinvest it now rather than piece meal across the term of whatever the loan would be. (Presuming the bank would be financing the house themselves.) Additionally, with an all-cash offer, there end to be fewer lawyers at the table, fewer parties total, so the process can generally proceed faster.", "title": "" }, { "docid": "b2bbed915d44426de310febe8fe1942d", "text": "\"If you mortgage after the fact you will usually pay an extra .25% higher on the interest rate because a \"\"cash out\"\" refinance is treated as riskier than a new home purchase mortgage. You might save enough on the purchase price of the home with a cash offer to make that higher interest rate worth it, but in most cases, if you are planning to hold the loan for a long time, it's best to get that mortgage at the time of purchase. You might be able to get the same deal with an offer that says you will pay cash if there are any problems getting the loan approved.\"", "title": "" }, { "docid": "4756eab6ac2200618ce3994a7c1fc7a3", "text": "That really depends on the lender, and in the current climate this is extremely unlikely. In the past it was possible to get a loan which is higher than the value of the house (deposit considered), usually on the basis that the buyer is going to improve the property (extend, renovate, etc.) and this increase the value of the property. Responsible lenders required some evidence of the plans to do this, but less responsible ones simply seem to have given the money. Here in the UK this was often based on the assumption that property value tends to rise relatively quickly anyway so a seemingly-reasonable addition to the loan on top of the current value of the property will quickly be covered. That meant that indeed some people have been able to get a loan which is higher than the cost of the purchase, even without concrete plans to actively increase the value of the property. Today the situation is quite different, lenders are a lot more careful and I can't see this happening. All that aside - had it been possible, is it a good idea? I find it difficult to come up with a blanket rule, it really depends on many factors - On the one hand mortgage interest rates tend to be significantly lower than shorter term interest rates and from that point of view, it makes sense, right?! However - they are usually very long term, often with limited ability to overpay, which means the interest will be paid over a longer period of time.", "title": "" }, { "docid": "e239d909ca156269088da94ad1f39999", "text": "This is almost exactally what the BK attorneys I work with have always said. If you have trouble offer a larger down payment. . . . that is the point of the down payment after all. You do sometimes have better luck with renting from individual people rather than larger corporately owned rentals. There are options out there.", "title": "" }, { "docid": "c6821fb6e4cff1782e53e6c1d8065879", "text": "Watch pawn stars. Whatever someone offers offer 1/3 or less then go up from there. At least that's how to get the number. The rest is having the tact to make someone believe what you are offering is a good deal as that gentlemen clearly demonstrated.", "title": "" }, { "docid": "ea86135aefc19f735f834aa9cfa4eac0", "text": "\"Pre-edit, Pete mentioned that he feels real estate agents would (a) like you to buy as much house as you afford, and (b) would love to show you three houses and have you choose one. As a real estate agent myself, I believe his warnings were understated. As with any industry, there are good and bad people. Agents are paid to move houses. If the median US home is under $200K, and commissions average say 5%, the $10,000 to be gained is split between the buyer brokerage and selling agent. The $5000 to each is then shared with 'the house.' So, this sale would net me $2500, gross. Move one a week, and the income is great, one per month, not so much. Tire kickers will waste an agent's time for a potential decision to wait another year and continue renting. Their obligation is to tell you the truth, but not to offer financial advice. Remember the mortgage crisis? It seems the banks and brokers aren't watching out for you either. They will tell you what they'll lend you, but not what you can afford. These numbers are worlds apart. I strongly recommend a 20% downpayment. The FHA PMI calculator shows that a 90% LTV (i.e. a 10% downpayment) for a $100K house will cost you $1200/yr in PMI. Think about this. For the $10,000 that you didn't put down, you are paying an extra $1200 each year. This is on top of the interest, so even at 5%, that last $10,000 is costing nearly 17%. If you can't raise that $10K (or whatever 10% is on that house) in cheaper funds, you should hold off. Using the 401(k) loan for this purpose is appropriate, yet emotionally charged. As if suck loans are written by the devil himself. \"\"Buy the biggest house you can\"\"? No. I have a better idea. Buy the smallest place you can tolerate. I have a living room (in addition to family room) that has been used 3 times in 20 years. A dining room we actually use. Twice per year. When your house is 50% too big, you pay 50% more property tax, more utility bills, and more maintenance. Closing costs, commission, etc, isn't cheap, but the lifetime cost of living in a too-big house is a money pit.\"", "title": "" }, { "docid": "f4ca4ceb8537d75d6b09d221943b50d5", "text": "If you are the only one who puts in a large market buy order, then it would definitely push the price up. How much up would depend on how many would be willing to sell at what price point. It would also be possible that your trade will not get executed as there are no sellers. The same would be true if you put in a large sell order, with no buyers. The price would go down or trade not get executed as there aren't enough buyers.", "title": "" }, { "docid": "fa327188e0f66a6892b1eb4a93527697", "text": "Yes, in 2 ways: As you mention, the price of a home generally grows with inflation - along with other factors (supply and demand in local markets, etc.). Through financing. If you finance 80% of your purchase today, in 2014 dollars, you will pay back in future dollars. Those future dollars are worth less, because of inflation.", "title": "" }, { "docid": "cabd6507f50414dfaa6ef94b564f4d3a", "text": "\"The reason to put more money down or accept a shorter maximum term is because the bank sweetens the deal (or fails to sour it in some fashion). For example, typically, if there is less than 20% down, you have to pay an premium called \"\"Private Mortgage Insurance\"\", which makes it bad deal. But I see banks offering the same rate for a 15%-year mortgage as for a 30-year one, and I think: fools and their money. Take the 30-year and, if you feel like it pay more every month. Although why you would feel like it, I don't know, since it's very difficult to get that money back if you need it.\"", "title": "" }, { "docid": "4d7f0dab1da044ee38655d1d3c8a4adb", "text": "Leverage increase returns, but also risks, ie, the least you can pay, the greater the opportunity to profit, but also the greater the chance you will be underwater. Leverage is given by the value of your asset (the house) over the equity you put down. So, for example, if the house is worth 100k and you put down 20k, then the leverage is 5 (another way to look at it is to see that the leverage is the inverse of the margin - or percentage down payment - so 1/0.20 = 5). The return on your investment will be magnified by the amount of your leverage. Suppose the value of your house goes up by 10%. Had you paid your house in full, your return would be 10%, or 10k/100k. However, if you had borrowed 80 dollars and your leverage was 5, as above, a 10% increase in the value of your house means you made a profit of 10k on a 20k investment, a return of 50%, or 10k/20k*100. As I said, your return was magnified by the amount of your leverage, that is, 10% return on the asset times your leverage of 5 = 50%. This is because all the profit of the house price appreciation goes to you, as the value of your debt does not depend on the value of the house. What you borrowed from the bank remains the same, regardless of whether the price of the house changed. The problem is that the amplification mechanism also works in reverse. If the price of the house falls by 10%, it means now you only have 10k equity. If the price falls enough your equity is wiped out and you are underwater, giving you an incentive to default on your loan. In summary, borrowing tends to be a really good deal: heads you win, tails the bank loses (or as happened in the US, the taxpayer loses).", "title": "" }, { "docid": "a06533d7177634bb712fb080219b3f5b", "text": "The seller has a legitimate desire to know of your preapproval. I have two current anecdotes on this issue. As a realtor helping a client buy a home, I worked closely with buyer's bank, and got a pre-approval for the amount we were offering. When there was a counteroffer, and we were going to raise the price, the bank upped the numbers on the pre-approval letter. I have a property of my own I am trying to sell. I had a negotiated price, P&S, but no pre-approval from the buyer. The buyer of his home couldn't get a mortgage, and so far, the deal has fallen through. I agree with you, you don't want to signal you can afford more, nor show any emotion about how great that house is. That's just giving the seller a bargaining chip.", "title": "" } ]	fiqa
c11ff27e38fcae7ced6b3ff3d193a2d6	Can an immigrant get a mortgage in the us?	[ { "docid": "daaca503aa30d95ef943eb99ce5fbee2", "text": "There are two Questions: Financial institutions do not care about your nationality, only your ability to pay over time. For long term debt the lender will want assurances that the borrower has the ability and means to pay the debt over time. A legal resident in the US should have no more difficulty obtaining financing than a citizen under similar life circumstances. The Lender is also under legal obligation to confirm that the borrower is who they say they are, will have the ability to pay over time AND have no malicious intent in the purchase. Persons who do not have legal status in the US, AND who do not have the means to pay for property outright will have difficulty obtaining financing as they will have trouble establishing the requirements of the Lender. This is simple math, a lender will be reluctant to lend to any person who is more likely to have difficulty paying the obligation than another. In your case Your father would be an unlikely candidate for a mortgage because he cannot establish his legal status nor can he guarantee that he will have the legal right to earn a means to pay the loan back. This puts the lender at risk both of losing the money lent AND losing the right to repossess the property if the borrower doesn't pay. Despite all of the obstacles I have indicated above, it is still possible for your father to purchase property legally, but the risk and the cost go way up for him as a borrower. There may be sellers willing to finance property over time, but your father's status puts him at a disadvantage if the seller is not honest. There may be community coalitions which can help you work through the challenges of property ownership. Please see these related articles", "title": "" } ]	[ { "docid": "e8a2434e4e41ba2a70e1dd06ac106b53", "text": "The one big drawback I know is when you take the mortgage credit, your credit ability is calculated, and from that sum all of your credits are subtracted, and credit limit on credit card counts as credit... I don't know if it is worldwide praxis, but at least it is the case in Poland.", "title": "" }, { "docid": "b994b0f50c6b08e9548da99ccc0e2b00", "text": "I don't think that they ask you for your citizenship status when you apply in a dealership. At least I don't remember being asked. I know of at least 3 people from my closest circle of friends who are in various immigration statuses (including one on F1) and got an auto loan from a dealership without a problem and with good rates. They have to ask for your immigration status on online applications because of the post-9/11 law changes. Edit to allow Dilip to retract his unjustified downvote: Chase and Wells Fargo have a reliable track of extending auto loans to non-permanent residents.", "title": "" }, { "docid": "76384f87eaa0952d8425ce9d84c3dd45", "text": "\"You have figured out most of the answers for yourself and there is not much more that can be said. From a lender's viewpoint, non-immigrant students applying for car loans are not very good risks because they are going to graduate in a short time (maybe less than the loan duration which is typically three years or more) and thus may well be leaving the country before the loan is fully paid off. In your case, the issue is exacerbated by the fact that your OPT status is due to expire in about one year's time. So the issue is not whether you are a citizen, but whether the lender can be reasonably sure that you will be gainfully employed and able to make the loan payments until the loan is fully paid off. Yes, lenders care about work history and credt scores but they also care (perhaps even care more) about the prospects for steady employment and ability to make the payments until the loan is paid off. Yes, you plan on applying for a H1-B visa but that is still in the future and whether the visa status will be adjusted is still a matter with uncertain outcome. Also, these are not matters that can be explained easily in an on-line application, or in a paper application submitted by mail to a distant bank whose name you obtained from some list of \"\"lenders who have a reliable track record of extending auto loans to non-permanent residents.\"\" For this reason, I suggested in a comment that you consider applying at a credit union, especially if there is an Employees' Credit Union for those working for your employer. If you go this route, go talk to a loan officer in person rather than trying to do this on the phone. Similarly, a local bank,and especially one where you currently have an account (hopefully in good standing), is more likely to be willing to work with you. Failing all this, there is always the auto dealer's own loan offers of financing. Finally, one possibility that you might want to consider is whether a one-year lease might work for you instead of an outright purchase, and you can buy a car after your visa issue has been settled.\"", "title": "" }, { "docid": "c518372928a9ebe110d7a5c884e5c820", "text": "I am only familiar with American banks, but generally speaking, they will work with you if you can demonstrate that you have an adequate average income over a period of time. It is likely they will want a record of your income for at least the last 24 months (more would be better). The terms of the individual contracts (i.e. termination clauses, etc.) shouldn't be important as long as you have a demonstrated history of making a good income. I'd recommend finding a bank that performs manual underwriting, i.e. they actually have someone on staff that will look at your credit history, income, debt ratios, as opposed to them just generating an offer based on a computer model. Lending standards can vary quite a bit from bank to bank, and you have not listed your average annual income, so it is difficult to say whether they will offer you a mortgage, or for what amount, but you have a significant down payment. However, assuming that your numbers are good and that you can find someone intelligent to work with, it's unlikely that they will deny you simply because your income is uneven. Best of luck!", "title": "" }, { "docid": "b9300c42e6ddab9c79fd61d14d4cb061", "text": "You should also be aware that there are banks that do business in the US that do not deal with Fannie Mae, and thus are not subject to the rules about conforming loans. Here is an example of a well-known bank that lists two sets of rates, with the second being for loans of $750,000 or more (meaning the first covers everything up to that) https://home.ingdirect.com/orange-mortgage/rates", "title": "" }, { "docid": "9d7889c564e13973982ade3a7679300e", "text": "What about the debt attached to more recently purchased properties, purchased at the price before the market gets flooded with baby-boomer homes? I'm not an expert in real estate finance, but it sounds like if that downward pressure on prices isn't slight, financial institutions will be taking that risk for anyone who defaults on a mortgage after their property loses a substantial amount of its value. It seems like immigration could play an important role in offsetting this and keeping the prices stable, but that's a politically unpredictable issue to say the least.", "title": "" }, { "docid": "dbf8d5a2db71f056ab85223ef6589783", "text": "I did that. What is allowed changes over time, though — leading up to the crisis, lenders would approve at the flimsiest evidence. In particular, my SO had only been in the country a couple years and was at a sweet spot where lack of history was no longer counting against her. Running the numbers, the mortgage was a fraction of a percent cheaper in her name than in mine. Even though she used a “stated income” (self reported, not backed by job history) of the household, not just herself. The title was in her name, and would have cost money to have mine added later so we didn’t. This was in Texas, which is a “community property” state so after marriage for sure everything is “ours”.", "title": "" }, { "docid": "e0b589d58e89dc2487eaf6e429674240", "text": "\"Americans are snapping, like crazy. And not only Americans, I know a lot of people from out of country are snapping as well, similarly to your Australian friend. The market is crazy hot. I'm not familiar with Cleveland, but I am familiar with Phoenix - the prices are up at least 20-30% from what they were a couple of years ago, and the trend is not changing. However, these are not something \"\"everyone\"\" can buy. It is very hard to get these properties financed. I found it impossible (as mentioned, I bought in Phoenix). That means you have to pay cash. Not everyone has tens or hundreds of thousands of dollars in cash available for a real estate investment. For many Americans, 30-60K needed to buy a property in these markets is an amount they cannot afford to invest, even if they have it at hand. Also, keep in mind that investing in rental property requires being able to support it - pay taxes and expenses even if it is not rented, pay to property managers, utility bills, gardeners and plumbers, insurance and property taxes - all these can amount to quite a lot. So its not just the initial investment. Many times \"\"advertised\"\" rents are not the actual rents paid. If he indeed has it rented at $900 - then its good. But if he was told \"\"hey, buy it and you'll be able to rent it out at $900\"\" - wouldn't count on that. I know many foreigners who fell in these traps. Do your market research and see what the costs are at these neighborhoods. Keep in mind, that these are distressed neighborhoods, with a lot of foreclosed houses and a lot of unemployment. It is likely that there are houses empty as people are moving out being out of job. It may be tough to find a renter, and the renters you find may not be able to pay the rent. But all that said - yes, those who can - are snapping.\"", "title": "" }, { "docid": "7585bcca27d71994d5a2abc5fdd9ed24", "text": "Speaking from experience, yes (this was 9 years ago though and may have changed due to stricter laws). I lived in London and was moving to NYC and wanted to have a functioning bank account upon arrival. I banked in London with HSBC and asked them if they could set me up. They connected me with the right people in the US and after many forms I had a fully functional US bank account with a foreign address and without having a social security number - and I was (am) just your average person. You will most likely not be able to get a credit card through them because of lack of credit history (unless you are ridiculously rich or go for a secured credit card), but a debit card should be possible.* My advice is to talk to your local bank and see if they can help you, although it will help if they operate in the US. Good luck! *I have heard from various expats that American Express may be willing to issue cards in the states based on their existing relation with clients in other countries, but I digress. If you have an Amex in Switzerland or Sweden I would recommend talking to them.", "title": "" }, { "docid": "7060958d04aeaa00434f7d5a0d442542", "text": "Would it be worth legitimizing his business or is it too late at this point? To be blunt, you're asking if we recommend that he stop breaking the law. The answer is obviously yes, he should be declaring his income. And it would probably benefit him to get on the same page as his employer (or client) so they can both start obeying the law together. Once he's filed a tax return for 2016 that would certainly help his cause as far as a lender is concerned, and as soon as he can provide some recent pay stubs (or paid invoices) he should be ready to move forward on the mortgage based on that additional income.", "title": "" }, { "docid": "779300a60e57ff333c291551940b1bbd", "text": "\"Please clarify your question. What do you mean by \"\"..loan in Greece\"\"? If you are referring to taking a mortgage loan to purchase residential property in Greece, there are two factors to consider: If the loan originates from a Greek bank, then odds are likely that the bank will be nationalized by the government if Greece defaults. If the loan is external (i.e. from J.P. Morgan or some foreign bank), then the default will certainly affect any bank that trades/maintains Euros, but banks that are registered outside of Greece won't be nationalized. So what does nationalizing mean for your loan? You will still be expected to pay it according to the terms of the contract. I'd recommend against an adjustable rate contract since rates will certainly rise in a default situation. As for property, that's a different story. There have been reports of violence in Greece already, and if the country defaults, imposes austerity measures, etc, odds are there will be more violence that can harm your property. Furthermore, there is a remote possibility that the government can attempt to acquire your private property. Unlikely, but possible. You could sue in this scenario on property rights violations but things will be very messy from that point on. If Greece doesn't default but just exits the Euro Zone, the situation will be similar. The Drachma will be weak and confidence will be poor, and unrest is a likely outcome. These are not statements of facts but rather my opinion, because I cannot peek into the future. Nonetheless, I would advise against taking a mortgage for property in Greece at this point in time.\"", "title": "" }, { "docid": "3519245e2bbed46d3af790588ad319f8", "text": "There are a few loan programs that grant exceptions to bankruptcy requirements in the event of extenuating circumstances that can be proven to be outside of your control (i.e. massive medical bills that you used bankruptcy to settle, etc.) however, in order to make the case for this exemption, you would need to make a strong case for your solvency, shown the ability to re-establish your credit reputation since the discharge of your bankruptcy, and would almost certainly have to go through a bank that offers manual underwriting. Additionally, if you are Native American, the HUD-184 program is a great option for your situation as it allows for a wide latitude in terms of underwriter discretion and is always manually underwritten as there is no automated underwriting system developed for the loan program. There are several great lenders that offer nationwide financing (as long as you're in a HUD-184 eligible area) and would be a great potential solution if you meet the qualifying parameter of being Native American.", "title": "" }, { "docid": "1ffcc47f3210c28ba75ab76b4bbe19b0", "text": "Interesting read. If that is true then residential neighborhoods are about to become a HOT investment in RE. If millennials do move out then this also could delay a subprime auto loan mini recession. Edit: transportation into cities would increase and we haven't quite moved into the electric car market so this is a positive read for those in auto", "title": "" }, { "docid": "ba2a0873a0a994e1a55a97a56a394542", "text": "\"The answer is, unfortunately, along the lines of \"\"it depends\"\". It does depend a little on the bank - I've had a US bank account for years before moving to the US, and I didn't have an SSN or any status when I opened the account. What I did have however was an address in the US that they could send the statements to, and proof that I was living abroad (oh, and US citizen wife that had an account with the same bank). Not all banks will open a bank account for a foreigner with no status in the US, but it is generally possible. You will have to check with several banks and basically have paperwork showing your foreign address and proof of id (passport, possibly a drivers license as well).\"", "title": "" }, { "docid": "6a9ee65e23ca31bab5694a8e24912035", "text": "Yes. A mortgage is a kind of debt. Someone lends you money to buy your house, and you owe them the money, so you have debt.", "title": "" } ]	fiqa
cc87f52cec67edaf57926d4846e1c18e	Like a Roth IRA for intellectual property, offshore assignment?	[ { "docid": "263f0df2357af278570138ee70aab0e7", "text": "One can have a self-directed IRA. This is not like a Schwab, eTrade, etc IRA. It has a special type of custodian that knows how to manage it. I became aware of such an account as a way to purchase a rental property. There were two issues. The type of property I looked at wasn't anything a bank was willing to finance. And the rules regarding self dealing added a potential layer of expense as I technically could not perform the simplest of things for the property. For you, the obstacle looks like self-dealing. Any IRA can only be funded with cash or transfer/conversion from another IRA/401(k). I don't know how you would get the intelligent property into the IRA in the first place. Once you own a patent, or anything else, you can't sell it into the IRA. It's at times like this that member littleadv would suggest this is the time to talk to a pro before you do anything hazardous to your wealth.", "title": "" } ]	[ { "docid": "85000bed497e6334aa780dbb0d8bbd83", "text": "Annuities, like life insurance, are sold rather than bought. Once upon a time, IRAs inherited from a non-spouse required the beneficiary to (a) take all the money out within 5 years, or (b) choose to receive the value of the IRA at the time of the IRA owner's death in equal installments over the expected lifetime of the beneficiary. If the latter option was chosen, the IRA custodian issued the fixed-term annuity in return for the IRA assets. If the IRA was invested in (say) 15000 shares of IBM stock, that stock would then belong to the IRA custodian who was obligated to pay $x per year to the beneficiary for the next 23 years (say). There was no investment any more that could be transferred to another broker, or be sold and the proceeds invested in Facebook stock (say). Nor was the custodian under any obligation to do anything except pay $x per year to the beneficiary for the 23 years. Financial planners loved to get at this money under the old IRA rules by suggesting that if all the IRA money were taken out and invested in stocks or mutual funds through their company, the company would pay a guaranteed $y per year, would pay more than $y in each year that the investments did well, would continue payment until the beneficiary died (or till the death of the beneficiary or beneficiary's spouse - whoever died later), and would return the entire sum invested (less payouts already made, of course) in case of premature death. $y typically would be a little larger than $x too, because it factored in some earnings of the investment over the years. So what was not to like? Of course, the commissions earned by the planner and the lousy mutual funds and the huge surrender charges were always glossed over.", "title": "" }, { "docid": "3a867c6f052ff0ca6c6709e1a4dfacbe", "text": "The LLC portion is completely irrelevant. Don't know why you want it. You can create a joint/partnership trading account without the additional complexity of having LLC. What liability are you trying to limit here? Her sisters will file tax returns in the us using the form 1040NR, and only reporting the dividends they received, everything else will be taxed by Vietnam. You'll have to investigate how to file tax returns there as well. That said, you'll need about $500,000 each to invest in the regional centers. So you're talking about 1.5 million of US dollars at least. From a couple of $14K gifts to $1.5M just by trading? I don't see how this is feasible.", "title": "" }, { "docid": "57f22c47bf5f9f300b5ec61568a01f88", "text": "\"This type of structured product is called a capital protection product. It's like an insurance product - where you give up some upside for protection against losses in certain cases. From the bank's perspective they take your investment, treat it as an \"\"interest-free loan\"\" and buy derivatives (like options) that give them an expected return greater then They make their money: With this product, you are giving up some potential upside in order to protect against losses (other than catastrophic losses if the lower index drops by 50% or more). What's the catch? There's not really a catch. It's a lot like insurance, you might come out ahead (e.g. if the market goes down less than 50%), but you might also give up some upside. The bank will sell enough of these in various flavors to reduce their risk overall (losses in your product will be covered by gains in another). Note that this product won't necessarily sell for $1,000. You might have to pay $1,100 (or $1,005, or whatever the bank can get people to buy them for) for each note whenever it's released. That's where the gain or loss comes into play. If you pay $1,100 but only get $1,000 back because the index didn't go up (or went down) you'd have a net loss of $100. It's subtle, but it is in the prospectus: The estimated value of the notes is only an estimate determined by reference to several factors. The original issue price of the notes will exceed the estimated value of the notes because costs associated with selling, structuring and hedging the notes are included in the original issue price of the notes. These costs include the selling commissions, the projected profits, if any, that our affiliates expect to realize for assuming risks inherent in hedging our obligations under the notes and the estimated cost of hedging our obligations under the notes.\"", "title": "" }, { "docid": "5d543db57b9da9b0caee694dbc6cf2fb", "text": "There are different strategies but the short version is that they set it up so the US corporation pays a legal entity in a low-tax jurisdiction for the rights to use the IP which the company has transferred there previously. One such strategy is called the [Double Irish (possibly with a Dutch Sandwich)](http://en.wikipedia.org/wiki/Double_Irish_arrangement) which is what Apple, Google, Facebook and many others use.", "title": "" }, { "docid": "762ab641a0efe27313282e4079dd8588", "text": "\"While you’re new or relatively new to this idea then the fitting idea is to perform a little research and primary get conversant in what’s possible with offshore investment opportunities. I couldn't agree more. A good way to begin this research would be to do an online search for an investment opportunity called \"\"Royal Siam Trust.\"\"\"", "title": "" }, { "docid": "dde088edc2f49ecae8ae4c271db47e23", "text": "\"hello – I am a natural born US citizen; I have worked 35+ years in the United States; I have a 401(k), IRA, Social Security benefits. I have researched the ex-patriot possibilities for several years. I've consulted both accountants and tax attorneys. The long answer is: hire tax consultants/attorneys to try to shelter what assets you can. 401(k), IRA, and Social Security benefits are all taxable worldwide to US citizens. unless you become the citizen of your new country of residence, these taxes are unavoidable. since all of the above assets are considered \"\"pretax\"\" to the US government, they are all taxable on distribution whether slowly or in lump sum. the short answer is: \"\"Hotel California\"\"… \"\"Relax, said the watchman – we are programmed to receive. You can check out any time, but you can never leave…\"\"\"", "title": "" }, { "docid": "bc5e4cb4631274d24c6ed6886da7d9c4", "text": "\"There are countries out there that are known as tax havens, where they offer companies low or no taxes on earned revenue. I haven't looked into this in over a decade, but recall that countries like the Cayman Islands, Switzerland, Ireland, and Nauru, to name a few fit that tag. But like bstpierre stated, there's a reason why the IBM's of the world can pull that off easier then us mere mortals. They have the financial clout to make sure they have accountants that dot every i, cross every t, and close every loophole that would give an \"\"in\"\" to the folks at the IRS, CRA, Inland Revenue, or who have you.\"", "title": "" }, { "docid": "baef691dc7ff5863b8a6717410737bea", "text": "\"While you want it to grow faster than inflation, there are things like I-bonds that can carry some inflation protection with them for an idea that may make sense for part of this. There are now some more details and I'd think this seems alright initially though I would suggest considering having some kind of on-going plan to handle periodically seeing how much more to invest here and what kind of taxes will this generate for you as taxable accounts can carry a mix of dividends, interest and capital gains that you may have to pay even though you didn't see the gain yourself. Keep in mind that if you do go with a big-name investment bank, this could well add more fees as well as other stuff. Lehman Brothers was a big name investment bank once upon a time and they went broke. While you may want to be hands-off, I'd still suggest having some kind of timeline for how often are your investments to be reviewed and things re-allocated. Each quarter, semi-annually, or annual? There isn't so much a right or wrong answer here as much as I'd point out that one should be aware of the trade-offs in each case. If you take annual and wonder each week how it is doing, then something a bit more frequent may make sense. On the other hand, some people may well \"\"set it and forget it\"\" which can work as long as there is something to know about where to go if something does go broke. As these are managed investments, the SIPC check I'd make may not hold though this would be the equivalent of FDIC for deposits when dealing with securities. The REIT can be useful for diversification, sure. You do realize that there may be some interesting taxes for you in the next few years given the nature of a REIT investment, right? The \"\"Return of Capital\"\" that a REIT may pass through as a REIT to maintain its tax status must distribute 90% of its net income each year that can be quite a off shoot of funds. Where would those proceeds be invested? This isn't mentioned in your post and thus I'm curious as if the REIT passes out a dividend yield of say 5% then this is $2,000/year that could go somewhere.\"", "title": "" }, { "docid": "bde6bba4256ec0b5dc1dad835b10a5c9", "text": "There are a few company they can help you open an offshore account. I searched and found rtrsupportslimited.com on another discussion forum. It is a company which does the exact same thing. I got my own company incorporation and bank account from them.", "title": "" }, { "docid": "4cde17aa6b9aefc3d4e12718987fbf44", "text": "\"This kind of investment is called \"\"sweat equity\"\". It is sometimes taken into account by lenders and other investors. Such investors look at the alleged value of the input labor with a very skeptical eye, but they often appreciate that the entrepreneur has \"\"skin in the game\"\". The sort of analysis described by the original poster is useful for estimating \"\"economic profit\"\" -- how much better off was the entrepreneur than if he had done something else with his time. But this sort of analysis is not applicable for tax purposes for most small businesses in the United States. It is usually not in the entrepreneur's interest to use this method of accounting for tax purposes, for three reasons: It requires setting up the business in such a way that it can pay him wages or salaries for his time. The business might not have enough cash resources to do so. Furthermore, setting up the business in this way requires legal and accounting expertise, which is expensive. If the entrepreneur does set up the business like this, the wages and salaries will be subject to tax. Wage and salary tax rates are often much higher than capital gains tax rates, especially when one considers taxes like Social Security taxes, Medicare taxes, and Business & Occupation taxes. If the entrepreneur does set up the business like this, the taxes on the wages and salaries would be due long before the hoped-for sale of the company. The sale of the company might never happen. This results in a time-value-of-money penalty, an optionality penalty, and a risk penalty.\"", "title": "" }, { "docid": "66786513c4ca328a928805d2de4d7409", "text": "when investing in index funds Index fund as the name suggests invests in the same proportion of the stocks that make up the index. You can choose a Index Fund that tracks NYSE or S&P etc. You cannot select individual companies. Generally these are passively managed, i.e. just follow the index composition via automated algorithms resulting in lower Fund Manager costs. is it possible to establish an offshore company Yes it is possible and most large organization or High Net-worth individuals do this. Its expensive and complicated for ordinary individuals. One needs and army of International Tax Consultants / International Lawyers / etc but do I have to pay taxes from the capital gains at the end of the year? Yes Canada taxes on world wide income and you would have to pay taxes on gains in Canada. Note depending on your tax residency status in US, you may have to pay tax in US as well.", "title": "" }, { "docid": "9bfabe50d6001014ed5fa3c000d03d43", "text": "\"Well, I'm not an expert and you sound pretty credible however I still don't see anything to back up what your saying in the sources that I've found: > Active business income can still be earned by [foreign] subsidiaries (if you can prove to Revenue Canada that it is a \"\"real\"\" corporation) and taxed at better offshore rates if 90% or more of its income comes from third party transactions. This seems to be consistent with my definition. >Active business profits earned by a foreign sub are taxed when profits are repatriated. Certain tax credits are available for foreign taxes paid and certain dividends out of surplus are tax free to the corporation (not individuals). http://www.can-offshore.com/tax-planning/reporting-rule1-ccra.htm So when foreign sub pays dividends to the parent corp they are still charged repatriation - just like in the US. Again, this sounds consistent with my previous comment. Canada has a corporate tax rate that is over 10% lower than the US so this is still a very good deal in its own right. Maybe you can explain in more detail or provide a source that has some additional detail? I also can't find any pieces on this or the Valeant deal that suggests beneficial repatriation rules.\"", "title": "" }, { "docid": "64179b9abe526e78ade3da280069e512", "text": "You are likely thinking of a individual variable insurance contract (IVIC) , better known as a segregated fund, or a principal-protected note (PPN). For a segregated fund, to get a full guarantee on invested capital, you need a 100/100 where the maturity value and death benefit are each 100% guaranteed. The PPN works similar to a long-term GIC (or CD) with a variable investment component. The thing is, neither of these things are cheap and the cost structure that is built in behind them makes it difficult to make any real above market rates of return. In both cases, if you try to break the contracts early then the guarantees are null and void and you get out what you get out.", "title": "" }, { "docid": "9cac2f8096f2ec2234d0b587551f30b9", "text": "You could buy debt/notes or other instruments that pay out periodically. Some examples are If there is an income stream you can discount the present value and then buy it/own the rights to income stream. Typically you pay a discounted price for the face value and then receive the income stream over time.", "title": "" }, { "docid": "524cddb28590d076ce9cdaf36faf147c", "text": "So ... how are you going to have a bank run if you got rid of cash? I suspect big investors will attempt (have already attempted?) to pull their cash, but regular people? Not like running to the ATM will do much good and I don't think they have offshore accounts. Excuse my naïveté, but that's the first thing that came to my mind...", "title": "" } ]	fiqa
3c2dc277e1148cd9b0c8a4c92991d36c	Sell home to buy another home for cash	[ { "docid": "e5d0aae8c372fa841d206c133d72eb68", "text": "The cleanest way to accomplish this is to make the purchase of your new house contingent on the sale of your old one. Your offer should include that contingency and a date by which your house needs to sell to settle the contract. There will also likely be a clause that lets the seller cancel the contract within a period of time (like 24-48 hours) if another offer is received. This gives you (the buyer) at least an opportunity to either sell the house or come up with financing to complete the deal. For example, suppose you make an offer to buy a house for $300,000 contingent on the sale of your house, which the seller accepts. In the meantime, the seller gets an offer of $275,000 in cash (no contingency). The seller has to notify you of the offer and give you some time to make good on your offer, either by selling your house or obtaining $300,000 in financing. If you cannot, the seller can accept the cash offer. This is just a hypothetical example; the offer can have whatever clauses you agree to, but since sale contingencies benefit the buyer, the seller will generally want some compensation for that benefit, e.g. a larger offer or some other clause that benefits them. Or do I find a house to buy first, set a closing date far out and then use that time to sell my current one? Most sellers will not want to set a closing date very far out. Contingency clauses are far more common. In short, yes it's possible, and any competent realtor should be able to handle it. It also may mean that you have to either make a higher offer to compensate for the contingency and to dissuade the seller from entertaining other offers, or sell your home for less than you'd like to get the cash sooner. You can weigh those costs against the cost of financing the new house until yours sells.", "title": "" } ]	[ { "docid": "896be0b7de9735410139e90a43cb3306", "text": "\"As an investment opportunity: NO. As a friendly assist with money you don't mind ever getting back, legal depending on amount. A few years back I was in the housing market myself and researching interest rates and mortgages. For one property I was very interested in, I would need about $4K extra in liquid cash to complete the down-payment. A pair of options I saw were a \"\"combo loan\"\" 15yr 4% interest for the house, 1yr 8% interest for the $4K. Alternately, the \"\"bank of mom and dad\"\" could offer the 4K loan for a much lower rate. The giftable limit where reporting is not required was $12,000 at the time I did the review. IRS requires personal loans to be counted as having interest at the commercial rate. Thus an interest free loan of $10K with commercial interest rate of 1% (for easy math) would be counted as a gift of $10,100 for that calendar year. Disclaimer: Ultimately, I did not use this approach and did not have it subjected to a legal review.\"", "title": "" }, { "docid": "305961f1031f30c9caf1ae48720be01e", "text": "You didn't answer my questions above, but the biggest factor if the two interest rates are similar is what it will cost you for mortgage insurance if you do not include a 20% down-payment on your next house purchase. I would take the extra money from the proceeds of the other sale to get to a 15-year loan on your next house, then put all of your extra money into paying down the student loans ahead of the 7 year schedule.", "title": "" }, { "docid": "4b9d593b1a04755bdf0903d4018edc79", "text": "Presumably this house is a great deal for you for some reason if you are willing to go to great lengths such as these to acquire it. I suggest you have your father purchase the house with cash, then you purchase the house from him. You might want to discuss this with the title company, it's possible that there are some fees that they will waive if you close both sales through them in a short period of time. If the home will appraise for a higher amount than purchase, then you may be able to get a mortgage without a significant down-payment. If not, then you will need to owe your father at least the amount of the down-payment at closing time.", "title": "" }, { "docid": "a5d1d152614dde74cea6e8431471e43b", "text": "\"You can make a contingent offer: \"\"I will buy this house if I sell my own.\"\" In a highly competitive environment, contingent offers tend to be ignored. (Another commentator described such a contingency clause as synonymous with \"\"Please Reject Me\"\".) You can get a bridge loan: you borrow money for a short term, at punishingly high interest. If your house doesn't sell, you're fscked. You pay for two mortgages (or even buy the other house for cash). If you can afford this, congratulations on, you know, being super-rich. Or you can do what I am doing: selling one house and then living at my mom's until I buy another one. (You will have to stay at your own mom's house; my mom's house will be full, of course.) Edit: A commentator with the disturbingly Kafkaesque name of \"\"R.\"\" made the not-unreasonable suggestion that you buy both and rent out one or the other. Consider this possibility, but remember: On the other hand, if the stars align, you might not want to extricate yourself. If the tenant is paying the mortgage and a little more, you have an appreciating asset, and one you can borrow against. With a little work and a little judicious use of leverage, doing this over and over, you can accumulate a string of income-producing rental properties.\"", "title": "" }, { "docid": "4219f1b4c9bc79997ce785361da41a1c", "text": "I'd pile up as much cash as you can in a savings account - you will need money for the move (even if it's just gas money) and it's going to be hard to predict where house prices are going so you might or might not be underwater when it comes time to sell the house. Or you might be so deep underwater by then that the extra money doesn't make much of a difference anymore anyway. Once you're actually in the process of selling the house, you can figure out if you can (or need to) use the savings to cover the shortfall, closing costs or if you just built up a little wealth during the time you put the money aside.", "title": "" }, { "docid": "2328833836397e7b0dd33404beb1c97f", "text": "You're correct in your implied point: Selling a cash secured put has less risk (in terms of both volatility and maximum loss) than buying the security outright. However, many brokerages don't allow cash-secured put writing in IRA accounts. There are three reasons this tends to be the case:", "title": "" }, { "docid": "441cb33517b78809ab0bb9a2dcf44c46", "text": "So let's assume some values to better explain this. For simplicity, all of these are in thousands: So in this example, you're going to destroy $250 in value, pay off the existing $150 loan and have to invest $300 in to build the new house and this example doesn't have enough equity to cover it. You typically can't get a loan for much more than the (anticipated) property value. Basically, you need to get a construction loan to cover paying off the existing loan plus whatever you want to spend to pay for the new house minus whatever you're planning to contribute from savings. This new loan will need to be for less than the new total market value. The only way this will work out this way is if you bring significant cash to closing, or you owe less than the lot value on the current property. Note, that this is in effect a simplification. You can spend less building a house than it's worth when you're done with it, etc., but this is the basic way it would work - or NOT work in most cases.", "title": "" }, { "docid": "b174397e769644cf9b5fe820748fef34", "text": "Using cash to purchase a home allows you access to certain deals that mortgage buyers cannot take advantage of. These are typically distressed properties and need to be moved off the books quickly. Think of things like foreclosures and auctions. This does not mean that it gives you an advantage with every house on the market. While you may be able to close quickly, with cash, some buyers may choose to wait for the (presumably) higher offers of mortgage buyers. There are complications to purchasing in cash then mortgaging to replace that cash. Namely, how was that cash invested? If one were in mutual funds or stocks, with the money, one will have to pay capital gains tax on any profit. If those investments increase in value, during the time the money is tied up, what do you do then? Do you buy at the higher value or hold it back and dollar cost average it in?", "title": "" }, { "docid": "241f4865e904c4cb490fc953274884e1", "text": "\"First off; I don't know of the nature of the interpersonal relationship between you and your roommate, and I don't really care, but I will say that your use of that term was a red flag to me, and it will be so to a bank; buying a home is a big deal that you normally do not undertake with just a \"\"friend\"\" or \"\"roommate\"\". \"\"Spouses\"\", \"\"business partners\"\", \"\"domestic partners\"\" etc are the types of people that go in together on a home purchase, not \"\"roommates\"\". Going \"\"halvsies\"\" on a house is not something that's easily contracted; you can't take out two primary mortgages for half the house's value each, because you can't split the house in half, so if one of you defaults that bank takes the house leaving both the other person and their bank in the lurch. Co-signing on one mortgage is possible but then you tie your credit histories together; if one of you can't make their half of the mortgage, both of you can be pursued for the full amount and both of you will see your credit tank. That's not as big a problem for two people joined in some other way (marriage/family ties) but for two \"\"friends\"\" there's just way too much risk involved. Second, I don't know what it's like in your market, but when I was buying my first house I learned very quickly that extended haggling is not really tolerated in the housing market. You're not bidding on some trade good the guy bought wholesale for fifty cents and is charging you $10 for; the seller MIGHT be breaking even on this thing. An offer that comes in low is more likely to be rejected outright as frivolous than to be countered. It's a fine line; if you offer a few hundred less than list the seller will think you're nitpicking and stay firm, while if you offer significantly less, the seller may be unable to accept that price because it means he no longer has the cash to close on his new home. REOs and bank-owned properties are often sold at a concrete asking price; the bank will not even respond to anything less, and usually will not even agree to eat closing costs. Even if it's for sale by owner, the owner may be in trouble on their own mortgage, and if they agree to a short sale and the bank gets wind (it's trivial to match a list of distressed mortgaged properties with the MLS listings), the bank can swoop in, foreclose the mortgage, take the property and kill the deal (they're the primary lienholder; you don't \"\"own\"\" your house until it's paid for), and then everybody loses. Third, housing prices in this economy, depending on market, are pretty depressed and have been for years; if you're selling right now, you are almost certainly losing thousands of dollars in cash and/or equity. Despite that, sellers, in listing their home, must offer an attractive price for the market, and so they are in the unenviable position of pricing based on what they can afford to lose. That again often means that even a seller who isn't a bank and isn't in mortgage trouble may still be losing thousands on the deal and is firm on the asking price to staunch the bleeding. Your agent can see the signs of a seller backed against a wall, and again in order for your offer to be considered in such a situation it has to be damn close to list. As far as your agent trying to talk you into offering the asking price, there's honestly not much in it for him to tell you to bid higher vs lower. A $10,000 change in price (which can easily make or break a deal) is only worth $300 to him either way. There is, on the other hand, a huge incentive for him to close the deal at any price that's in the ballpark: whether it's $365k or $375k, he's taking home around $11k in commission, so he's going to recommend an offer that will be seriously considered (from the previous points, that's going to be the asking price right now). The agent's exact motivations for advising you to offer list depend on the exact circumstances, typically centering around the time the house has been on the market and the offer history, which he has access to via his fellow agents and the MLS. The house may have just had a price drop that brings it below comparables, meaning the asking price is a great deal and will attract other offers, meaning you need to move fast. The house may have been offered on at a lower price which the seller is considering (not accepted not rejected), meaning an offer at list price will get you the house, again if you move fast. Or, the house may have been on the market for a while without a price drop, meaning the seller can go no lower but is desperate, again meaning an offer at list will get you the house. Here's a tip: virtually all offers include a \"\"buyer's option\"\". For a negotiated price (typically very small, like $100), from the moment the offer is accepted until a particular time thereafter (one week, two weeks, etc) you can say no at any time, for any reason. During this time period, you get a home inspection, and have a guy you trust look at the bones of the house, check the basic systems, and look for things that are wrong that will be expensive to fix. Never make an offer without this option written in. If your agent says to forego the option, fire him. If the seller wants you to strike the option clause, refuse, and that should be a HUGE red flag that you should rescind the offer entirely; the seller is likely trying to get rid of a house with serious issues and doesn't want a competent inspector telling you to lace up your running shoes. Another tip: depending on the pricepoint, the seller may be expecting to pay closing costs. Those are traditionally the buyer's responsibility along with the buyer's agent commission, but in the current economy, in the pricepoint for your market that attracts \"\"first-time homebuyers\"\", sellers are virtually expected to pay both of those buyer costs, because they're attracting buyers who can just barely scrape the down payment together. $375k in my home region (DFW) is a bit high to expect such a concession for that reason (usually those types of offers come in for homes at around the $100-$150k range here), but in the overall market conditions, you have a good chance of getting the seller to accept that concession if you pay list. But, that is usually an offer made up front, not a weapon kept in reserve, so I would have expected your agent to recommend that combined offer up front; list price and seller pays closing. If you offer at list you don't expect a counter, so you wouldn't keep closing costs as a card to play in that situation.\"", "title": "" }, { "docid": "9cf24905eb8a622c1f126f7420ec46f5", "text": "Assets can be acquired in different ways and for different purposes. I will only address common legal ways of acquiring assets. You can trade one asset for another asset. This usually takes place in the form of trading cash or a cash equivalent for an asset. The asset received should be of equal or greater value than the asset given in the eyes of the purchaser in order for the trade to be rational. Take this example: I am selling a bike that has been sitting on my porch for a few months. It's worth about $25 to me. My friend, Andy, comes by and offers $90 for it. I happily accept. Andy valued the bike at $110. This transaction produced value for both parties. I had a value benefit of $65 (90 - 25) and Andy had a value benefit of $20 (110 - 90). You can receive an asset as a gift or an inheritance. Less common, but still frequent. Someone gives you a gift or a family member dies and you receive an asset you did not own previously. You can receive an asset in exchange for a liability. When you take out a loan, you receive an asset (cash) which is financed by a liability (loan payable). In your case: Why would I buy a mall if having assets worth the same amount as the mall? I must value the mall more than the assets I currently have. This may stem from the possibility of greater future returns than I am currently making on my asset, or, if I financed the purchase with a liability, greater future returns than the cost associated with payment on the principal and interest of the liability.", "title": "" }, { "docid": "828d65f2a6078dcbc1e404f18aebdec2", "text": "It may be possible to get more cash than you currently have. For example, If you have $200,000, you could buy a distressed property for $150,000, spend $50,000 on renovations, get it appraised for $300,000 and then cash out refi $240,000 (keeping 20% equity to avoid MIPs) to invest. This would be analogous to flipping a house for yourself. Normally flippers buy a house for cheap, then sell it to someone else for way more than their total outlay in purchase + improvements. The only difference here is there's no 3rd party - you stay in the house and essentially buy it from yourself with the mortgage.", "title": "" }, { "docid": "b11a00537c257f650ed6a54ae8d0c128", "text": "I'm not sure about your first two options. But given your situation, a variant of option three seems possible. That way you don't have to throw away your appraisal, although it's possible that you'll need to get some kind of addendum related to the repairs. You also don't have your liquid money tied up long term. You just need to float it for a month or two while the repairs are being done. The bank should be able to preapprove you for the loan. Note that you might be better off without the loan. You'll have to pay interest on the loan and there's extra red tape. I'd just prefer not to tie up so much money in this property. I don't understand this. With a loan, you are even more tied up. Anything you do, you have to work with the bank. Sure, you have $80k more cash available with the loan, but it doesn't sound like you need it. With the loan, the bank makes the profit. If you buy in cash, you lose your interest from the cash, but you save paying the interest on the loan. In general, the interest rate on the loan will be higher than the return on the cash equivalent. A fourth option would be to pay the $15k up front as earnest money. The seller does the repairs through your chosen contractor. You pay the remaining $12.5k for the downpayment and buy the house with the loan. This is a more complicated purchase contract though, so cash might be a better option. You can easily evaluate the difficulty of the second option. Call a different bank and ask. If you explain the situation, they'll let you know if they can use the existing appraisal or not. Also consider asking the appraiser if there are specific banks that will accept the appraisal. That might be quicker than randomly choosing banks. It may be that your current bank just isn't used to investment properties. Requiring the previous owner to do repairs prior to sale is very common in residential properties. It sounds like the loan officer is trying to use the rules for residential for your investment purchase. A different bank may be more inclined to work with you for your actual purchase.", "title": "" }, { "docid": "9eba7b4b42d5fbc2ded2082e426640d5", "text": "\"That is called \"\"substitution of collateral.\"\" And yes, it can be done, but only with consent of the lender. The \"\"best case\"\" for this kind of maneuver is if the second house is larger and more valuable than the first. Another possibility is that you have two mortgages on the first house and none on the second, and you want to move the second mortgage on the first house to the second one, effectively making it a \"\"first\"\" mortgage. In these instances, the lender has a clear incentive to allow a substitution of collateral, because the second one is actually better than the first one. The potential problem in your case, is if the second house were more expensive than the first house, you could not use the sale proceeds of the first house as to buy the second house without borrowing additional money. In that case, a possible solution would be to go back to the lender on your first house for a larger mortgage, with the proceeds of that mortgage being used to retire the earlier mortgage. Depending on your credit, payment record, etc. they might be willing to do this.\"", "title": "" }, { "docid": "c6d494d875ef2d49a7a91e6dcd0de5f4", "text": "\"Short Answer: You're going to end up paying taxes on it. Despite the home being your primary residence, you don't meet the ownership test, and it isn't noted that you have had a change in employment, health, or other unforeseen circumstances that are \"\"forcing\"\" you to sell. Otherwise, you could qualify for a reduced maximum exclusion that might allow you to walk away without owing taxes, or with a reduced tax bill. You can't even do a 1031 exchange to re-invest into a new primary residence. You should check with a tax professional to see what adjustments you can make to the cost basis of the property to minimize your reported net profits. During the 5-year period prior to the sale, you must have: These periods do not necessarily have to coincide (You don't to live in it as your main house for 2 consecutive years, just 2 years worth of time of the last 5).\"", "title": "" }, { "docid": "88e58fc7aacfc73d67d95be2def2b2c2", "text": "I would tell the former owner that you will sell him the house for you current loan balance. He wants the home, he may be willing to pay what you owe. You can't really do a short sale unless you are behind on your payments. Banks only agree to a short sale when they think they are going to have to foreclose on the property. Not to mention a short sale is almost as bad as a foreclosure and will wreck your credit. If the former buying is not willing to buy the house for what you owe your only real option is to come up with the difference. If he offers you say $50K less than you owe, you will have to give the mortgage holder the remaining balance $50K in this example for them to release the property. Another problem you will face, if the former owner is willing to pay more than what the house is worth, and he is going to finance it, he will have to have enough cash to put down so that the loan amount is not more than the property is worth. Finally if none of that works you can just hold on to the property until the value comes up or you mortgage is payed down enough to make the balance of the mortgage less than the value of the house. Then offer the property to the former owner again.", "title": "" } ]	fiqa
28a9df529e2b322cc5fef3b73c59c0b8	Is it worth it to reconcile my checking/savings accounts every month?	[ { "docid": "0d2d96950af76dbab5eb5dc2f0f4e461", "text": "I quit diligently reconciling monthly statements some years before everything was online, when I realized that for years before that, every time I thought I found a mistake, it was always my own error. I was spending a fair amount of time (over the years) doing something that wasn't helping me. So I quit. That said, I do look at the statements and/or check the transactions on a regular basis (I now use email notifications of automatic deposits as the trigger, and then look over withdrawals, too) to make sure everything looks appropriate. I'm less concerned about a bank error than I am about identity or account theft.", "title": "" }, { "docid": "35521eafb32f55645fbcfd314a99e5f0", "text": "While it's wise, easier and safer to check your transactions online a few times a month, I opt to receive and file paper statements as a hard copy back up of account history. Any reconciliation I perform is a quick glance to make sure the numbers sound right. It's probably a small waste of time and space, but it settles some of my paranoia (due to my training as a computer engineer) about failure of electronic banking systems. If someone tampers with bank records or a SAN explodes and wipes out a bunch of account data, then I will have years worth of paper statements to back up my numbers. Having years worth of statements printed on the banks stationary will have better credibility in court than a .pdf or printout thereof that could have been doctored, in case I ever needed to take my bank to court. A little piece of mind for the price of a letter opener, a square foot file box and a couple of minutes a month.", "title": "" }, { "docid": "c7b5dd2134f0fb5f9c21644d94ebc408", "text": "Account statements and the account information provided by your personal finance software should be coming from the same source, namely your bank's internal accounting records. So in theory one is just as good as the other. That being said, an account statement is a snapshot of your account on the date the statement was created, while synchronizations with your personal finance application is dynamically generated upon request (usually once a day or upon login). So what are the implications of this? Your account statement will not show transactions that may have taken place during that period but weren't posted until after the period ended (common with credit card transactions and checks). Instead they'd appear on the next statement. Because electronic account synchronizations are more frequent and not limited to a specific time period those transactions will show up shortly after they are posted. So it is far easier to keep track of your accounts electronically. Every personal finance software I've ever used supports manual entries so what I like to do is on a daily basis I manually enter any transaction which wasn't posted automatically. This usually only takes a few minutes each evening. Then when the transaction eventually shows up it's usually reconciled with my manually entered one automatically. Aside from finding (infrequent) bank errors this has the benefit of keeping me aware of how much I'm spending and how much I have left. I've also caught a number of cashier errors this way (noticing I was double-charged for an item while entering the receipt total) and its the best defense against fraud and identity theft I can think of. If you're looking at your accounts on a daily basis you're far more likely to notice an unusual transaction than any monitoring service.", "title": "" }, { "docid": "34680985779d836f69029cf7538223bf", "text": "\"My wife and I are paid every two weeks. I go on line see the exact deposit, add it to register, and see what checks cleared. In effect, I reconcile twice per month, and the statement can't be different that what their system tells me. Since the online site shows \"\"last statement balance\"\" I feel there's no need to bother with the paper, nothing left to reconcile.\"", "title": "" }, { "docid": "d17c12d9c0392b1881adaa68bbdca8ea", "text": "Banks make mistakes. Reconciling your account with your bank statement is the way to catch the errors.", "title": "" }, { "docid": "98deac234312b8b39ece2d300ed8d336", "text": "I don't use debit cards, but if I did I would review that portion of the statement. I look at my credit card statements pretty closely, and probably catch one or two mistakes or things I want to question every year.", "title": "" }, { "docid": "686817fbd259ffef5a8868190f15bd6d", "text": "Sounds like you are reconciling more than once a month. I like to say I glance at all my statements, but these days I just look at the final balance and call it good. If a transaction shows up by mistake, I would find it in a couple of days because of how often I update my Quicken and Mint.com", "title": "" } ]	[ { "docid": "d90fea8919eaee4e7a4053d3661257cb", "text": "You should have a separate business account. Mixing business and personal funds is a bad practice. Shop around, you should be able to find a bank that will let you open a free checking account, especially if you are going to have minimal activity (e.g. less than 20 of checks per month) and perhaps maintain a small balance (e.g. $100 or $500).", "title": "" }, { "docid": "2875d3ac6c740d64a5c36db290aad6f9", "text": "It's not clear the cost of funds is a annual or monthly rate. If it is a monthly rate the answers do not converge and you lose money assuming the customer spending is linear. Let's assume you spent $100 a month (evenly spread out). You generate $1.50 in interchange fees. What's my cost of funds within that month? Subtract that from your interchange fee number. (I think calculus might be the best option for calculating this). There's your notional income off of $100, which can easily be solved for $260/year.", "title": "" }, { "docid": "704b2bcb28d2999847a056b205a74490", "text": "Do you plan a monthly budget at the beginning of each month? This might seem counter-intuitive, but hear me out. Doing a budget is, of course, critically important for those who struggle with having enough money to last the month. Having this written spending plan allows people struggling with finances to control their spending and funnel money into debt reduction or saving goals. However, budgeting can also help those with the opposite problem. There are some, like you perhaps, that have enough income and live frugally enough that they don't have to budget. Their money comes in, and they spend so little that the bank account grows automatically. It sounds like a good problem to have, but your finances are still out of control, just in a different way. Perhaps you are underspending simply because you don't know if you will have enough money to last or not. By making a spending plan, you set aside money each month for various categories in three broad areas: Since you have plenty of money coming in, generously fund these spending categories. As long as you have money in the categories when you go to the store, you can feel comfortable splurging a little, because you know that your other categories are funded and the money is there to pay those other bills. Create other categories, such as technology or home improvement, and when you need an app or have a home improvement project, you can confidently spend this money, as it has already been allocated for those purposes. If you are new to budgeting, software such as YNAB can make it much easier.", "title": "" }, { "docid": "7321466081f8fd7cb69eaf1c53d7983e", "text": "The effect on your credit score would be a positive one. If you have plenty of money now then pay off the balance each month. If you are very disciplined and can pay off the balance each month you could stop using your debit card to make daily purchases and use your credit card instead. That way you can keep your money in an interest bearing account all month and pay the bill in full when it comes due.", "title": "" }, { "docid": "b9310f8df731e3ba1a7449b6c4d807dd", "text": "I would suggest opening a new account (credit card and bank) for just your business. This protects you in multiple ways, but is no bigger burden for you other than carrying another card in your wallet. Then QB can download the transactions from your website and reconciling is a cinch. If you got audited, you'd be in for a world of pain right now. From personal experience there are a few charges that go unnoticed that reconciling finds every month at our business. We have a very strict process in place, but some things slip through the cracks.", "title": "" }, { "docid": "9e73b8c9ad91cf3c650c89a14d2f62db", "text": "Quicken has tools for this, but they have some quirks so i hesitate to actually recommend it on that basis.", "title": "" }, { "docid": "bc0868f993b2fbc3bd7ab7251dc90b69", "text": "I do this, and as you say the biggest downside is not having a separate account for your savings. If you're the type of person who struggles with restraint this is not for you. On the other hand this type of account gives more interest than any other type of US Checking or Savings account I've seen, so you will benefit from the interest.", "title": "" }, { "docid": "4ba84bfbdd386cc7be5016258b24fb99", "text": "If this matters to you a lot, I agree you should leave. My primary bank account raised chequing account and transaction fees. I left. When I was closing my account the teller asked for the reason (they needed to fill out a form) and I explained it was the monthly fees. Eventually, if a bank gets enough of these, they will change. I want to get back those features for the same price it cost when I opened it They are in their rights to cancel features or raise prices. Just as you are in your rights to withdraw if they don't give you a deal. The reason why I mention this is that this approach is comical in some instances. A grocery store may raise the price of carrots. Typically you either deal with it or change stores. Prices rise occasionally. thus they will lose a lot of money from my savings From my understanding, a bank makes a large chunk of their money from fees. Very little is from the floating kitty they can have because of your savings. If you have an investment account with your bank (not recommended) or your mortgage, that would matter more. I've had friends who have left banks (and moved their mortgages) because of the bank not giving them a better rate. Does the manager have any pressure into keeping the account to the point of giving away free products to keep the costumer or they don't really care? Depends. I've probably say no. One data point is an anecdote; it is expected in a client base of thousands that a few will leave for seemingly random reasons. Only if mass amounts of clients leave or complain will the manager or company care. A note: some banks waive monthly account or service fees if you keep a minimal account balance. I have one friend who keeps X thousand in his bank account to save the account fee; he budgets a month ahead of time and savings account rates are 0% so this costs him nothing.", "title": "" }, { "docid": "394bb6647586be1013b72bbe7b8f1858", "text": "Wells Fargo. They have an account called PMA, an umbrella account for checking, savings, mortgage, and brokerage accounts. It would cost $30/month, but I never had to pay because I have a rollover retirement account that is enough to waive the fees. They count all accounts, including mortgage, which I used to have. Oh, and no restrictions. An added advantage is there are no fees for any of the accounts, nor for some other things, like bank checks, outside ATM fees, etc. I'm in California, so I don't know if the same deal exists in other states. But if you qualify for the free account, it's pretty good. Actually, most of my investments are Vanguard funds. And I have another rollover account with Vanguard, and never pay fees, but I only buy or sell from one Vanguard fund to another, and rarely since I have targeted retirement funds that are designed to be no maintenance. For some reason, I trust Vanguard more than most other funds; maybe because I like their philosophy on low-cost funds, which they started but are now getting more popular.", "title": "" }, { "docid": "346c33dc312a12045a763dfadf35366c", "text": "\"From a quick look at sources on the web, it looks to me like Money Market Accounts and savings accounts are both paying about the same rate today: around 1%, give or take maybe 0.4%. I suppose that's better than nothing, but it's not a whole lot better than nothing. (I saw several savings accounts advertising 0.1% interest. If they mailed you a check, the postage could be more than the returns.) Personally, I keep a modest amount of emergency cash in my checking account, and I put my \"\"savings\"\" in a very safe mutual fund. That generally gets somewhere from making maybe 3% a year to losing a small amount. Certainly nothing to sing about, but better than savings or money markets. Whether you are willing to tolerate the modest risk or the sales charges is a matter for your personal situation and feelings.\"", "title": "" }, { "docid": "cc13c4bd1503bbb1b62c7955bea94d58", "text": "\"An alternative to a savings account is a money market account. Not a bank \"\"Money Market\"\" account which pays effectively the same silly rate as a savings account, but an actual Money Market investment account. You can even write checks against some Money Market investment accounts. I have several accounts worth about 13,000 each. Originally, my \"\"emergency fund\"\" was in a CD ladder. I started experimenting with two different Money market investment accounts recently. Here's my latest results: August returns on various accounts worth about $13k: - Discover Bank CD: $13.22 - Discover Bank CD: $13.27 - Discover Bank CD: $13.20 - Discover Savings: $13.18 - Credit Union \"\"Money Market\"\" Savings account: $1.80 - Fidelity Money Market Account (SPAXX): $7.35 - Vanguard Money market Account (VMFXX): $10.86 The actual account values are approximate. The Fidelity Money Market Account holds the least value, and the Credit Union account by far the most. The result of the experiment is that as the CDs mature, I'll be moving out of Discover Bank into the Vanguard Money Market account. You can put your money into more traditional equities mutual fund. The danger with them is the stock market may drop big the day before you want to make your withdrawl... and then you don't have the down payment for your house anymore. But a well chosen mutual fund will yield better. There are 3 ways a mutual fund increase in value: Here's how three of my mutual funds did in the past month... adjusted as if the accounts had started off to be worth about $13,000: Those must vary wildly month-to-month. By the way, if you look up the ticker symbols, VASGX is a Vanguard \"\"Fund of Funds\"\" -- it invests not 100% in the stock market, but 80% in the stock market and 20% in bonds. VSMGX is a 60/40 split. Interesting that VASGX grew less than VSMGX...but that assumes my spreadsheet is correct. Most of my mutual funds pay dividends and capital gains once or twice a year. I don't think any pay in August.\"", "title": "" }, { "docid": "cf1ea72c231c421ef324015bd601661b", "text": "\"If I had to take sides, I'd think that it would be better to be able to divide up the entirety of your savings into big \"\"buckets,\"\" as others are saying in their answers -- if not in physically accounts, then at least conceptually. Let's say you're 45 years old and have $350,000 in various accounts. I would argue that you should at the very least know this level of detail: So, if you get in a really, really bad snowmobile accident that costs $100,000, you know, at least conceptually, that: Now, you're in a better position to revise your goals. Maybe you decide that real estate isn't \"\"all that\"\" and you allocate the entire shortfall to that item, and reallocate it to start the first Snowmobile Safety Program in the country. So now it looks like this: But had you not compartmentalized the funds to begin with, you wouldn't have known where you stood.\"", "title": "" }, { "docid": "6c83669580ab193c4f02820bf7fe54f9", "text": "Great work so far, and good question. I think a lot of it depends on how risky your financial life is. For example lets say that you are working a temp or contract job that ends in 3 months. That is also the same month your savings and student loan will be equal. I think most would agree that it would be foolish to empty out your savings in such a risky month. Now same situation one month later. The company you were working for takes you on as a full time employee. I would go ahead and empty out my savings and make the student loan go away. There could be other risks to consider like needing a different car, moving to a new place, potential medical bills, or a needing to travel. Anything like that on the horizon I would hold off emptying out my savings. However, once it is smooth sailing GO FOR IT! Being debt free is wonderful and it is a worthy goal.", "title": "" }, { "docid": "8a8a67ea7ce494e435405a0f4a50e3b6", "text": "Yes, and there are several ways, the safest is a high-yield savings account which will return about 1% yearly, so $35 per month. That's not extremely much, but better than nothing (you probably get almost zero interest on a regular checking account).", "title": "" }, { "docid": "ac5e3eceb0f3f7efed7542521895e212", "text": "I have gotten a letter of credit from my credit union stating the maximum amount I can finance. Of course I don't show the dealer the letter until after we have finalized the deal. I Then return in 3 business days with a cashiers check for the purchase price. In one case since the letter was for an amount greater then the purchase price I was able drive the car off the lot without having to make a deposit. In another case they insisted on a $100 deposit before I drove the car off the lot. I have also had them insist on me applying for their in-house loan, which was cancelled when I returned with the cashiers check. The procedure was similar regardless If I was getting a loan from the credit union, or paying for the car without the use of a loan. The letter didn't say how much was loan, and how much was my money. Unless you know the exact amount, including all taxes and fees,in advance you can't get a check in advance. If you are using a loan the bank/credit Union will want the car title in their name.", "title": "" } ]	fiqa
cf935e6603e0e1dd241a92add4836046	Helping girlfriend accelerate credit score improvement	[ { "docid": "ea644dd27f3b2afa63e02f3f282f44e9", "text": "This is an all too common problem and is not easy to resolve. Divorce agreements do not alter prior mortgage contracts. Most importantly, the bank is not required, and will not normally, remove the girlfriend from the mortgage even if she quitclaimed it to her Ex. If he has abandoned the property there is a good chance he will not make any more future payments. She should be prepared to make the payments if he doesn't or expect her credit to continue to deteriorate rapidly. She needs to contact her divorce attorney to review their mutual obligations. A court can issue orders to try to force the Ex to fulfill the divorce agreement. However, a court cannot impose a change to the mortgage obligations the borrowers made to the bank. Focus on this. It's far more important than adding her to a car loan or credit card. Sorry for the bad news. As for the car loan, it's best to leave her off the loan. You will get better terms without her as a joint owner. You can add her as an additional driver for insurance purposes. Adding her to your credit cards will help her credit but not a lot if the mortgage goes to default or foreclosure.", "title": "" }, { "docid": "0bd390b162602650837587935d7d2400", "text": "\"In the short term what does it matter if she has poor credit? Just let it ride and focus on the important things. In the long term the most important part is \"\"completing the divorce\"\". That is separating all parts of her financial life from her ex-husband. This might mean she takes possession of the house and has him off the loan, or she gets off the loan and this may mean forcing a sale. If there are children or alimony involved she needs to build her income to the point that paying child support or alimony does not impact her budget. If she is on the receiving end, then she should budget so those items are bonus money and not counted on. She is flat broke and does not need to worry about borrowing money at this juncture. In this case a low credit score is a blessing.\"", "title": "" } ]	[ { "docid": "90aa732c8acaa39ca745a812f96591f0", "text": "Apart from the reasons currently given (which have to do with personal relations), wouldn't a good reason to take the loan from the bank be to build up a credit history and/or improve your credit score?", "title": "" }, { "docid": "675808629f61d92d9fa2b989e67ef4c3", "text": "\"A drop in credit score of 300 is pretty significant, right? You describe the cause of this as \"\"unfortunate circumstances\"\". Lets say you observe a mother giving a small child a ball to play with in the median of a busy interstate. Once the inevitable happens, would you also describe that as \"\"unfortunate circumstances\"\"? Because really it is the same thing. You overextended yourself and did not consider risk in the decision to borrow money. This may sound harsh, but you have proven that you cannot handle credit. So your solution is to borrow more? That makes no sense. The best thing you can do for your credit score is to reduce, then eliminate all debt.\"", "title": "" }, { "docid": "ff0eb373e33424d8d23565b07f33a629", "text": "Does the full time PHD student extend to 70-80 hours/week or more? If not, can you pick up an extra job to aid with living expenses? Also, whose name is the debt in? Is your wife paying to avoid the black mark on her credit record or her mother's? Basically what it looks like to me is that you guys currently have a car you cannot afford and that her mother doesn't seem to be able to afford either, at a ridiculous interest rate on top. Refinancing might be an option but at a payoff amount of 12k you're upside down even when it comes to the KBB retail value. I'm somewhat allergic to financing a deprecating asset (especially at a quick back of the envelope calculation suggests that she's already paid them around $18k if you are indeed three years into the loan). What I would be tempted to do in your situation is to attempt to negotiate a lower payoff to see if they're willing to settle for less and give you clean title to the car - worst thing they can say is no, but you might be able to get the car for a little less than the $12k, then preferably use your emergency money to pay off the car and put it up for sale. Use some of the money to buy her a cheaper car for, say, $4k-$5k (or less if you're mechanically inclined) and put the rest back into your emergency fund. The problem I see with refinancing it would be that it looks like you're underwater from a balance vs retail value perspective so you might have a problem finding someone to refinance it with you throwing some of your emergency money at it in the first place.", "title": "" }, { "docid": "6f5d5938b69abf99b4c65d4e08c8b232", "text": "\"My sister had a similar problem and went to an actual lawyer, not a \"\"credit repair agency\"\". The lawyers settled her debt for a lot less than she owed, and she also got a bonus: one of the creditors called her repeatedly, even after her lawyers had told them not to. The lawyers ended up getting her an extra $40,000. Combined with the debt settlement, she actually came out ahead. Of course, her credit score went down, but it recovered in a couple of years.\"", "title": "" }, { "docid": "bfa0272d5b3a2671dfda9ee449eee319", "text": "\"littleadv's first comment - check the note - is really the answer. But your issue is twofold - Every mortgage I've had (over 10 in my lifetime) allows early principal payments. The extra principal can only be applied at the same time as the regular payment. Think of it this way - only at that moment is there no interest owed. If a week later you try to pay toward only principal, the system will not handle it. Pretty simple - extra principal with the payment due. In fact, any mortgage I've had that offered a monthly bill or coupon book will have that very line \"\"extra principal.\"\" By coincidence, I just did this for a mortgage on my rental. I make these payments through my bank's billpay service. I noted the extra principal in the 'notes' section of the virtual check. But again, the note will explicitly state if there's an issue with prepayments of principal. The larger issue is that your friend wishes to treat the mortgage like a bi-weekly. The bank expects the full amount as a payment and likely, has no obligation to accept anything less than the full amount. Given my first comment above here is the plan for your friend to do 99% of what she wishes: Tell her, there's nothing magic about bi-weekly, it's a budget-clever way to send the money, but over a year, it's simply paying 108% of the normal payment. If she wants to burn the mortgage faster, tell her to add what she wishes every month, even $10, it all adds up. Final note - There are two schools of thought to either extreme, (a) pay the mortgage off as fast as you can, no debt is the goal and (b) the mortgage is the lowest rate you'll ever have on borrowed money, pay it as slow as you can, and invest any extra money. I accept and respect both views. For your friend, and first group, I'm compelled to add - Be sure to deposit to your retirement account's matched funds to gain the entire match. $1 can pay toward your 6% mortgage or be doubled on deposit to $2 in your 401(k), if available. And pay off all high interest debt first. This should stand to reason, but I've seen people keep their 18% card debt while prepaying their mortgage.\"", "title": "" }, { "docid": "cfaa0623509847dbfeb78d6499835351", "text": "\"From the comments, it sounds like you have a technical background. So I'm going to suggest you think of this as a technical problem: it's an optimization problem, where the variable you're trying to optimize for is total interest paid over the lifetime of the loans. Step 1 is making sure you're using the credit available to you most efficiently. If there's room in the credit limit for card #1 to move more of your debt there, then definitely move your balances from the higher-interest cards. However, be careful; some cards will have different interest rates for balance transfers or cash advances. And definitely don't move any principal from Card #3 until the 0% interest rate expires. Pursuing a bank loan as part of step 1 is valid as well. You could start with the bank you use for your checking account today. Credit unions can be a good source of lower-interest loans as well. Ensure that you fully understand the terms and interest rates, particularly if they change. Just be careful about applying for them; too many rejections can affect your credit rating negatively. You also mention in the comments that you're paying \"\"her\"\" mortgage. I don't know how the ownership is set up there, but either refinancing or taking out a home equity loan can be a way to consolidate debt. The interest rate on a home loan will almost assuredly be less than on your higher rate cards, especially taking the tax deduction into account. Step 2 is paying down the debt efficiently. The rule here is simple: Pay the minimum payment on all cards except for the one with the highest interest rate; any money you have above the minimum payments should go into paying down the principal on that one. In your case, that's Card #2. Good luck!\"", "title": "" }, { "docid": "30c3fa9ee32741f71ad214987a63e3a0", "text": "If you keep the account in your name only and your girlfriend is depositing money into it, then she is in effect making gifts of money to you. If the total amount of such gifts exceeds $14K in 2014, she will need to file a gift tax return (IRS Form 709, due April 15 of the following year, but not included with her Federal tax return; it has to be sent to a specific IRS office as detailed in the Instructions for Form 709). She would need to pay gift tax (as computed on Form 709) unless she opts to have the excess over $14K count towards her Federal lifetime combined gift and estate tax exclusion of $5M+ and so no gift tax is due. Most estates in the US are far smaller than $5 million and pay no Federal estate tax at all and for most people, the reduction of the lifetime combined... is of no consequence. Another point (for your girlfriend to think about): if you two should break up and go your separate ways at a later time, you are under no obligation to return her money to her, and if you do choose to do so, you will need to file a gift tax return at that time. If you will be returning her contributions together with all the earnings attributable to her contributions, then keep in mind that you will have paid income taxes on those earnings all along since the account is in your name only. Finally, keep in mind that the I in IRA stands for Individual and your girlfriend is not entitled to put her contributions into your IRA account. Summary: don't do this (or open a joint account as tenants in common) no matter how much you love each other. She should open accounts in her name only and make contributions to those accounts.", "title": "" }, { "docid": "4eaf0ece65e124c8ee239f8b0f7821d9", "text": "I've seen credit cards that provide you your credit score for free, updated once a month and even charted over the last year. Unfortunately the bank I used to have this card with was bought and the purchasing bank discontinued the feature. Perhaps someone out there knows of some cards that still offer a feature like this?", "title": "" }, { "docid": "12846ee71ec9c5769954964fdc8c2f01", "text": "\"Patience has never been my strong suit Unfortunately this is what you need to build up credit. The activities that increase your credit score are paying your bills on time and not using too much of the available credit that you do have. The rest (age of accounts, recent pulls, etc.) are short-term indicators that indicate changes in behavior that will make lenders pause and understand what the reasons behind the events are. Also keep in mind that your credit score shouldn't run your life. It should be a passive indicator of your financial habits - not something that you actively manipulate. Is there anything I can do to raise my score without having to take out a loan with interest? Pay your bills on time, and don't take out more credit than you need. You're already in the \"\"excellent\"\" category, so there's no reason to panic or try to manipulate it. Even if you temporarily dip below, if you need to make a big purchase (house), your loan-to-value and debt/income ratio will be much bigger factors in what interest rate you can get. As far as the BofA card goes, if you don't need it, cancel it. It might cause a temporary dip in your credit, but it will go away quickly, and you're better off not having credit cards that you don't need.\"", "title": "" }, { "docid": "17959bcfa1b6b44a2e5324c302c4c977", "text": "This works even better when you have a good credit score when you want to arbitrarily inflate it for bragging rights or lowest interest rates, I'm only pointing this out because it has nothing to do with your current score and CK's recommendation. The presence of an installment loans is 10% of your credit score, according to some credit scoring models. So theoretically someone with a solid 720 score could gain 72 points, while someone with a 480 score would only gain 48 points. But the scores are weighted so you wouldn't get that kind out outcome regardless, it will have less of an impact. You can do this, amongst other things, but if that installment loan alters your utilization of credit it will more greatly lower your score, and the hard inquiry to apply for the loan will also temporarily hurt your score and you also might not be approved. These are the things to consider (but fortunately utilization has no history). Yes you can pay the loan off with a monthly payment. The loan's interest will cost slightly more than the monthly payments, by the end of the loan term. I've done this with a 5 year $500 installment loan at a credit union. As others pointed out, you don't have to spend money to raise your credit score (unnecessary interest, in this case), but you certainly can!", "title": "" }, { "docid": "737a84c075b317740b52a0f932e0261a", "text": "\"It is possible to achieve a substitute for refinancing, but because of the \"\"short\"\" life of cars at least relative to housing, there are no true refinancings. First, the entire loan will not be able to be refinanced. The balance less approximately 80% of the value of the car will have to be repaid. Cars depreciate by something like 20% per year, so $2,000 will have to be repaid. Now, you should be able to get a loan if your boyfriend has good credit, but the interest rate will not drop too much further from the current loan's rate because of your presumably bad credit rating, assumed because of your current interest rate. While this is doable, this is not a good strategy if you intend to have a long term relationship. One of the worst corruptors of a relationship is money. It will put a strain on your relationship and lower the odds of success. The optimal strategy, if the monthly payments are too high, is to try to sell the car so to buy a cheaper car. The difficulty here is that the bank will not allow this if balance of the loan exceeds the proceeds from the sale, so putting as much money towards paying the balance to allow a sale is best. As a side note, please insure your car against occurrences such as theft and damage with a deductible low enough to justify the monthly payment. It is a terrible position to have a loan, no car, and no collateral against the car.\"", "title": "" }, { "docid": "7d87c699d1503768a304fa752a29f7e3", "text": "Your score is real-time, updating every time new data hits the reporting agencies. Dilip is correct, go over 20%, and it will hit the report, but then the score returns to normal after the next bill shows a sub-20% utilization. Say your average spending is $1000, but your limit is $5000. There's no harm in asking for a small increase in the limit, or simply pay a bit toward the bill before the statement is cut. The bill and reported balance will be lower and your score, unaffected.", "title": "" }, { "docid": "6a9dd6bae4dd9b0df552ce4ddd556727", "text": "You need to pay off the entire balance of 7450 as soon as possible. This should be your primary financial goal at this point above anything else. A basic structure that you can follow is this: Is the £1500 balance with the 39.9% interest rate the obvious starting point here? Yes, that is fine. But all the cards and overdraft debts need to be treated with the same urgency! What are the prospects for improving my credit score in say the next 6-12 months enough to get a 0% balance transfer or loan for consolidation? This should not be a primary concern of yours if you want to move on with your financial life. Debt consolidation will not help you achieve the goals you have described (home ownership, financial stability). If you follow the advice here, by the time you get to the point of being eligible, you may not see enough savings in interest to make it worth the hassle. Focus on the hard stuff and pay off the balances. Is that realistic, or am I looking at a longer term struggle? You are looking at a significant struggle. If it was easy you would not be asking this question! The length of time will be determined by your choices: how aggressively you will cut your lifestyle, take on extra jobs, and place additional payments on your debt. By being that extreme, you will actually start to see progress, which will be encouraging. If you go in half-committed, your progress will show as much and it will be demotivating. Much of your success will hinge on your mental and emotional toughness to push through the hard work of delaying pleasure and paying off these balances. That is just my personal experience, so you can take it or leave it. :) The credit score will take care of itself if you follow this method, so don't worry about it. Good Luck!", "title": "" }, { "docid": "0a3635891c8b92cab85d81c3554a08fe", "text": "\"This is the best tl;dr I could make, [original](http://voxeu.org/article/credit-growth-and-global-crisis-new-narrative) reduced by 96%. (I'm a bot) *** > In a new paper, we also examine the evolution of mortgage debt and defaults during the credit boom and throughout the financial crisis and its aftermath, using individual-level data from the Federal Reserve Bank of New York Consumer Credit Panel. > While borrowers with low credit scores typically had higher default rates than those with higher credit scores, default rates for borrowers with higher credit scores rose substantially during the financial crisis. > The investor share of new delinquencies was close to 15% for all credit score quartiles throughout the credit boom and increases to 25%, 35% and 40% between 2006 and 2009 for credit score quartiles 2-4, respectively. * [Extended Summary*](http://np.reddit.com/r/autotldr/comments/74jwyc/credit_growth_and_the_global_crisis_a_new/) \| [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ \"\"Version 1.65, ~222899 tl;drs so far.\"\") \| [Feedback](http://np.reddit.com/message/compose?to=%23autotldr \"\"PM's and comments are monitored, constructive feedback is welcome.\"\") \| Top* keywords: credit^#1 score^#2 borrower^#3 quartile^#4 Mortgage^#5\"", "title": "" }, { "docid": "d9758baa2e8282051e22e60e24a3559e", "text": "\"It makes no sense to spend money unnecessarily, just for the purpose of improving your credit score. You have to stop and ask yourself the question \"\"Why do I need a good credit score?\"\" Most of the time, the answer will be \"\"so I can get a lower interest rate on (ABC loan) in the future.\"\" However, if you spend hundreds or even thousands of dollars in the present, just so that you can save a few points on a loan, you're not going to come out ahead. The car question should be considered strictly in the context of transportation expenses: \"\"It cost me $X to get around last year using Lyft. If instead I owned a car, it would have cost me $Y for gas, insurance, depreciation, parking, etc.\"\" If you come out ahead and Y < X, then buy the car. Don't jump into an expensive vehicle (which is never a good investment) or get trapped into an expensive lease which will costs you many times more than the depreciation value of a decent used car, just so that you can save a few points on a mortgage. Your best option moving forward would be to pay off your student loans first, getting rid of that interest expense. Place the remainder in savings, then start to look at a budget. Setting aside a 20% down payment on a home is considered the minimum to many people, and if that is out of reach you might need to consider other neighborhoods (less than 400K!). If you're still concerned about your credit score, a good way to build that up (once you have a budget and spending under control) is to get a credit card with no annual fees. Start putting all of your expenses on the credit card (groceries, etc), and paying off the balance IN FULL every month. By spending only what you need to within a reasonable budget, and making payments on time and in full, your credit rating will begin to gradually improve. If you have a difficult time tracking your expenses or sticking to a budget, then there is potential for danger here, as credit cards are notorious for high interest and penalties. But by keeping it under control and putting the rest toward savings, you can begin to build wealth and put yourself in a much better financial position moving into the future.\"", "title": "" } ]	fiqa
a88165ddf0892700d31afc1f73e62cde	How can I tell if this internet sales manager is telling me the real “true cost” of a new car to the dealer	[ { "docid": "51efadd821f1bda70945d48d468a2950", "text": "I don't buy new cars anymore, but I've helped family members negotiate prices on new cars recently. There are various online services to see the average price paid, as well as the low outliers. I've looked at truecar.com for instance to see what others have paid within 50 miles of my zip-code. I think the only way for you to know you're being offered a good deal is to see if any of the other dealers that have not responded are willing to talk when you offer them $22,300 which the dealer above suggested was break-even point. If none of them respond, then you know you're really at the bottom of the negotiating window. If one of them does respond, then you can go back to that internet sales manager and ask why another dealership (do not disclose which one) is willing to sell it to you for less than $22,400 (do not disclose how much lower they offered to sell it for). In my experience, most dealers will sell at or just below the break-even price at the end of the quarter so that they can beat other dealerships out for the quota. That gives you a week and a half to find the bottom price before going in on New Years Eve to seal the deal.", "title": "" }, { "docid": "bdcb65a4ec2e966adfb3087f18f1e5a7", "text": "\"Consumer Reports offers a service that can tell you detailed actual cost to a dealer for a specific model and accessories -- real cost after rebates, not just invoice price. It costs a bit to order these reports, but if you are serious about buying a new car they are a highly recommended tool -- cu is independent and will give you the best info available, and simply walking into the dealership with the report in your hand can save huge amounts of negotiating. \"\"If you can give it to me for $500 over the real price, as shown here, I'll sign now.\"\" Of course, standard advice is that it's usually better to buy a recent-model used car. I believe cu has other reports that can help you determine what a fair price is in that case, but usually I just bring it to a trusted garage and pay them to tell me exactly how much work it needs and whether they think it's worth the asking price.\"", "title": "" } ]	[ { "docid": "ca6825a395b2bee9c84e0f46ececc662", "text": "\"At one point in my life I sold cars and from what I saw, three things stick out. Unless the other dealership was in the same network, eg ABC Ford of City A, and ABC Ford of City B, they never had possession of that truck. So, no REAL application for a loan could be sent in to a bank, just a letter of intent, if one was sent at all. With a letter of intent, a soft pull is done, most likely by the dealership, where they then attached that score to the LOI that the bank has an automated program send back an automatic decline, an officer review reply, or a tentative approval (eg tier 0,1,2...8). The tentative approval is just that, Tentative. Sometime after a lender has a loan officer look at the full application, something prompts them to change their offer. They have internal guidelines, but lets say an app is right at the line for 2-3 of the things they look at, they chose to lower the credit tier or decline the app. The dealership then goes back and looks at what other offers they had. Let's say they had a Chase offer at 3.25% and a CapOne for 5.25% they would say you're approved at 3.5%, they make their money on the .25%. But after Chase looks into the app and sees that, let's say you have been on the job for actually 11 months and not 1 year, and you said you made $50,000, but your 1040 shows $48,200, and you have moved 6 times in the last 5 years. They comeback and say no he is not a tier 2 but a tier 3 @ 5.5%. They switch to CapOne and say your rate has in fact gone up to 5.5%. Ultimately you never had a loan to start with - only a letter of intent. The other thing could be that the dealership finance manager looked at your credit score and guessed they would offer 3.5%, when they sent in the LOI it came back higher than he thought. Or he was BSing you, so if you price shopped while they looked for a truck you wouldn't get far. They didn't find that Truck, or it was not what they thought it would be. If a dealership sees a truck in inventory at another dealer they call and ask if it's available, if they have it, and it's not being used as a demo for a sales manager, they agree to send them something else for the trade, a car, or truck or whatever. A transfer driver of some sort hops in that trade, drives the 30 minutes - 6 hours away and comes back so you can sign the Real Application, TODAY! while you're excited about your new truck and willing to do whatever you need to do to get it. Because they said it would take 2-5 days to \"\"Ship\"\" it tells me it wasn't available. Time Kills Deals, and dealerships know this: they want to sign you TODAY! Some dealerships want \"\"honest\"\" money or a deposit to go get the truck, but reality is that that is a trick to test you to make sure you are going to follow through after they spend the gas and add mileage to a car. But if it takes 2 days+, The truck isn't out there, or the dealer doesn't have a vehicle the other dealership wants back, or no other dealership likes dealing with them. The only way it would take that long is if you were looking for something very rare, an odd color in an unusual configuration. Like a top end model in a low selling color, or configuration you had to have that wouldn't sell well - like you wanted all the options on a car except a cigarette lighter, you get the idea. 99.99% of the time a good enough truck is available. Deposits are BS. They don't setup any kind of real contract, notice most of the time they want a check. Because holding on to a check is about as binding as making you wear a chicken suit to get a rebate. All it is, is a test to see if you will go through with signing the deal. As an example of why you don't let time pass on a car deal is shown in this. One time we had a couple want us to find a Cadillac Escalade Hybrid in red with every available option. Total cost was about $85-90k. Only two new Red Escalade hybrids were for sale in the country at the time, one was in New York, and the other was in San Fransisco, and our dealership is in Texas, and neither was wanting to trade with us, so we ended up having to buy the SUV from one of the other dealerships inventory. That is a very rare thing to do by the way. We took a 25% down payment, around $20,000, in a check. We flew a driver to wherever the SUV was and then drove it back to Texas about 4 days later. The couple came back and hated the color, they would not take the SUV. The General Manager was pissed, he spent around $1000 just to bring the thing to Texas, not to mention he had to buy the thing. The couple walked and there was nothing the sales manager, GM, or salesman could do. We had not been able to deliver the car, and ultimately the dealership ate the loss, but it shows that deposits are useless. You can't sell something you don't own, and dealerships know it. Long story short, you can't claim a damage you never experienced. Not having something happen that you wanted to have happen is not a damage because you can't show a real economic loss. One other thing, When you sign the paperwork that you thought was an application, it was an authorization for them to pull your credit and the fine print at the bottom is boiler plate defense against getting sued for everything imaginable. Ours took up about half of one page and all of the back of the second page. I know dealing with car dealerships is hard, working at them is just as hard, and I'm sorry that you had to deal with it, however the simplest and smoothest car deals are the ones where you pay full price.\"", "title": "" }, { "docid": "52e40fd08cb30cf52d054148af711b47", "text": "\"I read a really good tract that my credit union gave me years ago written by a former car salesman about negotiation tactics with car dealers. Wish I could find it again, but I remember a few of the main points. 1) Never negotiate based on the monthly payment amount. Car salesmen love to get you into thinking about the monthly loan payment and often start out by asking what you can afford for a payment. They know that they can essentially charge you whatever they want for the car and make the payments hit your budget by tweaking the loan terms (length, down payment, etc.) 2) (New cars only) Don't negotiate on the price directly. It is extremely hard to compare prices between dealerships because it is very hard to find exactly the same combination of options. Instead negotiate the markup amount over dealer invoice. 3) Negotiate one thing at a time A favorite shell game of car dealers is to get you to negotiate the car price, trade-in price, and financing all at one time. Unless you are a rain-man mathematical genius, don't do it. Doing this makes it easy for them to make concessions on one thing and take them right back somewhere else. (Minus $500 on the new car, plus $200 through an extra half point on financing, etc). 4) Handling the Trade-In 5) 99.9999% of the time the \"\"I forgot to mention\"\" extra items are a ripoff They make huge bonuses for selling this extremely overpriced junk you don't need. 6) Scrutinize everything on the sticker price I've seen car dealers have the balls to add a line item for \"\"Marketing Costs\"\" at around $500, then claim with a straight face that unlike OTHER dealers they are just being upfront about their expenses instead of hiding them in the price of the car. Pure bunk. If you negotiate based on an offset from the invoice instead of sticker price it helps you avoid all this nonsense since the manufacturer most assuredly did not include \"\"Marketing costs\"\" on the dealer invoice. 7) Call Around before closing the deal Car dealers can be a little cranky about this, but they often have an \"\"Internet sales person\"\" assigned to handle this type of deal. Once you know what you want, but before you buy, get the model number and all the codes for the options then call 2-3 dealers and try to get a quote over the phone or e-mail on that exact car. Again, get the quote in terms of markup from dealer invoice price, not sticker price. Going through the Internet sales guy doesn't at all mean you have to buy on the Internet, I still suggest going down to the dealership with the best price and test driving the car in person. The Internet guy is just a sales guy like all the rest of them and will be happy to meet with you and talk through the deal in-person. Update: After recently going through this process again and talking to a bunch of dealers, I have a few things to add: 7a) The price posted on the Internet is often the dealer's bottom line number. Because of sites like AutoTrader and other car marketplaces that let you shop the car across dealerships, they have a lot of incentive to put their rock-bottom prices online where they know people aggressively comparison shop. 7b) Get the price of the car using the stock number from multiple sources (Autotrader, dealer web site, eBay Motors, etc.) and find the lowest price advertised. Then either print or take a screenshot of that price. Dealers sometimes change their prices (up or down) between the time you see it online and when you get to the dealership. I just bought a car where the price went up $1,000 overnight. The sales guy brought up the website and tried to convince me that I was confused. I just pulled up the screenshot on my iPhone and he stopped arguing. I'm not certain, but I got the feeling that there is some kind of bait-switch law that says if you can prove they posted a price they have to honor it. In at least two dealerships they got very contrite and backed away slowly from their bargaining position when I offered proof that they had posted the car at a lower price. 8) The sales guy has ultimate authority on the deal and doesn't need approval Inevitably they will leave the room to \"\"run the deal by my boss/financing guy/mom\"\" This is just a game and negotiating trick to serve two purposes: - To keep you in the dealership longer not shopping at competitors. - So they can good-cop/bad-cop you in the negotiations on price. That is, insult your offer without making you upset at the guy in front of you. - To make it harder for you to walk out of the negotiation and compromise more readily. Let me clarify that last point. They are using a psychological sales trick to make you feel like an ass for wasting the guy's time if you walk out on the deal after sitting in his office all afternoon, especially since he gave you free coffee and sodas. Also, if you have personally invested a lot of time in the deal so far, it makes you feel like you wasted your own time if you don't cross the goal line. As soon as one side of a negotiation forfeits the option to walk away from the deal, the power shifts significantly to the other side. Bottom line: Don't feel guilty about walking out if you can't get the deal you want. Remember, the sales guy is the one that dragged this thing out by playing hide-and-seek with you all day. He wasted your time, not the reverse.\"", "title": "" }, { "docid": "fe53fc578ef231eb4f000c990378512f", "text": "You have a good start (estimated max amount you will pay, estimated max down payment, and term) Now go to your bank/credit union and apply for the loan. Get a commitment. They will give you a letter, you may have to ask for it. The letter will say the maximum amount you can pay for the car. This max includes their money and your down payment. The dealer doesn't have to know how much is loan. You also know from the loan commitment exactly how much your monthly payment will be in the worst case. If you have a car you want to trade in, get an written estimate that is good for a week or so. This lets you know how much you can get from selling the car. Now visit the dealer and tell them you don't need a loan, and won't be trading in a car. Don't show them the letter. After all the details of the purchase are concluded, including any rebates and specials, then bring up financing and trade-in. If they can't beat the deal from your bank and the written estimate for the car you are selling, then the deal is done. Now show them the letter and discuss how much down they need today. Then go to the bank for the rest of the money. If they do have a better loan deal or trade in then go with the dealer offer, and keep the letter in your pocket. If you go to the dealer first they will confuse you because they will see the price, interest rate, length of loan, and trade in as one big ball of mud. They will pick the settings that make you happy enough, yet still make them the most money.", "title": "" }, { "docid": "f66e25bacedbdcc71660c7a8b122bb2e", "text": "The only issue I can see is that the stranger is looking to undervalue their purchase to save money on taxes/registration (if applicable in your state). Buying items with cash such as cars, boats, etc in the used market isn't all that uncommon* - I've done it several times (though not at the 10k mark, more along about half of that). As to the counterfeit issue, there are a couple avenues you can pursue to verify the money is real: *it's the preferred means of payment advocated by some prominent personal financial folks, including Dave Ramsey", "title": "" }, { "docid": "3f619a6f40638cb8a9ed76badeb58cb7", "text": "\"Paperwork prevails. What you have is a dealer who get a kickback for sending financing to that institution. And the dealer pretty much said \"\"We only get paid our kickback at two levels of loan life, 6 and 12 months.\"\" You just didn't quite read between the lines. This is very similar to the Variable Annuity salespeople who tell their clients, \"\"The best feature about this product is that the huge commissions I get from the sale fund my kid's college tuition and my own retirement. You, on the other hand, don't really do so well.\"\" Car salesmen and VA sellers.\"", "title": "" }, { "docid": "c9ca73093da2b020403e5db113fab51c", "text": "No. At least not in my case. Without divulging too much information. I don't tell any of my distributors how to sell my company's products our engage their customer base, but due to the nature of my business, I am frequently called on for product selection, marketing, quality, etc. Distributors often utilize their account reps and managers to help them push products on their customer base. The only way this could be seen as truthful, in my opion, is direct retail distribution. Because how are you going to track the product after it has been purchased by a consumer.", "title": "" }, { "docid": "ac5e3eceb0f3f7efed7542521895e212", "text": "I have gotten a letter of credit from my credit union stating the maximum amount I can finance. Of course I don't show the dealer the letter until after we have finalized the deal. I Then return in 3 business days with a cashiers check for the purchase price. In one case since the letter was for an amount greater then the purchase price I was able drive the car off the lot without having to make a deposit. In another case they insisted on a $100 deposit before I drove the car off the lot. I have also had them insist on me applying for their in-house loan, which was cancelled when I returned with the cashiers check. The procedure was similar regardless If I was getting a loan from the credit union, or paying for the car without the use of a loan. The letter didn't say how much was loan, and how much was my money. Unless you know the exact amount, including all taxes and fees,in advance you can't get a check in advance. If you are using a loan the bank/credit Union will want the car title in their name.", "title": "" }, { "docid": "f95bc581a3d4e6fe834469a1a551bbe3", "text": "\"It is a legitimate practice. The dealers do get the loan money \"\"up front\"\" because they're not holding the loan themselves; they promptly sell it to someone else or (more commonly) just act as salesmen for a lending institution and take their profit as commission or origination fees. The combined deal is often not a good choice for the consumer, though. Remember that the dealer's goal is to close a sale with maximum profit. If they're offering to drop the price $2k, they either didn't expect to actually get that price in the first place, or expect at least $2k of profit from the loan, or some combination of these. Standard advice is to negotiate price, loan, and trade-in separately. First get the dealer's best price on the car, compare it to other dealer and other cars, and walk away if you don't like their offer. Repeat for the loan, checking the dealer's offer against banks/credit unions available to you. If you have an older car to unload, get quotes for it and consider whether you might do better selling it yourself. ========= Standard unsolicited plug for Consumef Reports' \"\"car facts\"\" service, if you're buying a new car (which isn't usually the best option; late-model used is generally a better value). For a small fee, they can tell you what the dealer's real cost of a car is, after all the hidden incentives and rebates. That lets you negotiate directly on how much profit they need on this sale... and focuses their attention on the fact that the time they spend haggling with you is time they could be using to sell the next one. Simply walking into the dealer with this printout in your hand cuts out a lot of nonsense. The one time I bought new, I basically walked in and said \"\"It's the end of the model year. I'll give you $500 profit to take one of those off your hands before the new ones come in, if you've got one configured the way I want it.\"\" Closed the deal on the spot; the only concession I had to make was on color. It doesn't always work; some salesmen are idiots. In that case you walk away and try another dealer. (I am not affiliated in any way with CU or the automotive or lending industries, except as customer. And, yes, this touch keyboard is typo-prone.)\"", "title": "" }, { "docid": "b1b626a6a93f933925f5e3d6ad2d08dd", "text": "\"I bought a car a few years ago. The salesman had the order, I knew the car I wanted and we had a price agreed on. When I refused the payment plan/loan, his manager came over and did a hard sell. \"\"99% of buyers take the financing\"\" was the best he could do. I told him I was going to be part of the 1%. With rates so low, his 2 or 3% offer was higher than my own cost of money. He went so far as to say that I could just pay it off the first month. Last, instead of accepting a personal check and letting me pick up the car after it cleared, he insisted on a bank check to start the registration process. (This was an example of one dealer, illustrating the point.) In other cases, for a TV, a big box store (e.g. Best Buy) isn't going to deal for cash, but a small privately owned \"\"mom and pop\"\" shop might. The fees they are charged are pretty fixed, they don't pay a higher fee cause I get 2% cash back, vs your mastercard that might offer less.\"", "title": "" }, { "docid": "2a7fe5da9ac721e18879a72399c629a4", "text": "Yes, Edmunds gets money from the dealerships in this program. According to this USA Today article from 2013, dealers pay Edmunds a monthly fee to participate in the program. This contrasts with TrueCar.com, a similar service, where dealers pay a fee for each sale. And yes, it is certainly possible to negotiate a lower price than the Edmunds Price Promise quote, if you enjoy haggling. The purpose of the program is not to get you the best price, just the easiest buying experience. From the USA Today article: Edmunds.com's price promise business model is designed to take the uncertainty out of pricing, speed up the buying process and also comes with the expectation that the customer will be given top-notch customer service. Dealers who have participated find that they are able to sell their cars for $300 to $500 more than consumers who go through the more traditional price quote request process. Customers, [Edmunds.com president and chief operating officer Seth] Berkowitz said, are willing to pay a little more than the best possible deal if they can save time, get great customer service and know they are getting a fair price.", "title": "" }, { "docid": "742133d583b237c209e3e151a9afde1f", "text": "\"If there's one reasonably close to you, you could go to a no-haggle dealership. Instead of making you haggle the price downward, they just give a theoretically fixed price that's roughly what the average customer could negotiate down to at a conventional dealer. Then just do your best broken record impression if they still try to sell you dubious addons: \"\"No. No. No. No. No...\"\" The last time I bought a new car (06), a no haggle dealer offered the second best deal I got out of 4 dealerships visited. The one I ended up buying with made an exceptional offer on my trade (comparable to 3rd party sale bluebook value). - My guess is they had a potential customer looking for something like my old car and were hoping to resell it directly instead of flipping it via auction.\"", "title": "" }, { "docid": "30f16531b7454d3d187e72c0f44fc93f", "text": "\"—they will pull your credit report and perform a \"\"hard inquiry\"\" on your file. This means the inquiry will be noted in your credit report and count against you, slightly. This is perfectly normal. Just don't apply too many times too soon or it can begin to add up. They will want proof of your income by asking for recent pay stubs. With this information, your income and your credit profile, they will determine the maximum amount of credit they will lend you and at what interest rate. The better your credit profile, the more money they can lend and the lower the rate. —that you want financed (the price of the car minus your down payment) that is the amount you can apply for and in that case the only factors they will determine are 1) whether or not you will be approved and 2) at what interest rate you will be approved. While interest rates generally follow the direction of the prime rate as dictated by the federal reserve, there are market fluctuations and variances from one lending institution to the next. Further, different institutions will have different criteria in terms of the amount of credit they deem you worthy of. —you know the price of the car. Now determine how much you want to put down and take the difference to a bank or credit union. Or, work directly with the dealer. Dealers often give special deals if you finance through them. A common scenario is: 1) A person goes to the car dealer 2) test drives 3) negotiates the purchase price 4) the salesman works the numbers to determine your monthly payment through their own bank. Pay attention during that last process. This is also where they can gain leverage in the deal and make money through the interest rate by offering longer loan terms to maximize their returns on your loan. It's not necessarily a bad thing, it's just how they have to make their money in the deal. It's good to know so you can form your own analysis of the deal and make sure they don't completely bankrupt you. —is that you can comfortable afford your monthly payment. The car dealers don't really know how much you can afford. They will try to determine to the best they can but only you really know. Don't take more than you can afford. be conservative about it. For example: Think you can only afford $300 a month? Budget it even lower and make yourself only afford $225 a month.\"", "title": "" }, { "docid": "a3d8fefc639c7cb5e3c2ba260f5dd1fd", "text": "\"I'm going to ignore your numbers to avoid spending the time to understand them. I'm just going to go over the basic moving parts of trading an upside down car against another financed car because I think you're conflating price and value. I'm also going to ignore taxes, and fees, and depreciation. The car has an acquisition cost (price) then it has a value. You pay the price to obtain this thing, then in the future it is worth what someone else will pay you. When you finance a car you agree to your $10,000 price, then you call up Mr. Bank and agree to pay 10% per year for 5 years on that $10,000. Mr. Banker wires over $10,000 and you drive home in your car. Say in a year you want a different car. This new car has a price of $20,000, and wouldn't you know it they'll even buy your current car from you. They'll give you $7,000 to trade in your current car. Your current car has a value of $7,000. You've made 12 payments of $188.71. Of those payments about $460 was interest, you now owe about $8,195 to Mr. Banker. The new dealership needs to send payment to Mr. Banker to get the title for your current car. They'll send the $7,000 they agreed to pay for your car. Then they'll loan you the additional $1,195 ($8,195 owed on the car minus $7,000 trade in value). Your loan on the new car will be for $21,195, $20,000 for the new car and $1,195 for the amount you still owed on the old car after the dealership paid you $7,000 for your old car. It doesn't matter what your down-payment was on the old car, it doesn't matter what your payment was before, it doesn't matter what you bought your old car for. All that matters is how much you owe on it today and how much the buyer (the dealership) is willing to pay you for it. How much of this is \"\"loss\"\" is an extremely vague number to derive primarily because your utility of the car has a value. But it could be argued that the $1,195 added on to your new car loan to pay for the old car is lost.\"", "title": "" }, { "docid": "8a1f39931d478f146422f20709cd9041", "text": "\"Ditto other answers, but I'd add there's a lot of psychology going on in a sale. If you're paying cash, you presumably have a pretty fixed upper limit on what you can spend. But if you're getting a loan, a large increase in the price of the car may sound like just a small addition to the monthly payment. Also, these days dealers often try to roll \"\"extended warranties\"\" into the loan payment. Most people can't calculate loan amortizations in their heads -- I'm pretty good at math, and I need a calculator to work it out, assuming I remember or wrote down the formula -- a dealer can often stick a piece of paper in front of you saying \"\"Loan payment: $X per month\"\" with fine print that says that includes $50 for the extended warranty, and most people would just say, \"\"oh, okay\"\".\"", "title": "" }, { "docid": "e3f2fe213073a0ef09e9a491cd875a15", "text": "Believe it or not, what they're asking you is not as unusual as you might think. Our company sells a tremendous amount of expensive merchandise over the Internet, and whenever there's something odd or suspicious about the transaction, we may ask the customer to provide a picture of the card simply to prove they have physical possession of it. This is more reassurance to us (to the extent that's possible) that the customer isn't using a stolen card number to order stuff. It doesn't help too much, but if the charge is disputed, at least we have something to show we made reasonable efforts to verify the ownership of the card. I think it's pretty thin, but that's what my employer does.", "title": "" } ]	fiqa
ace3be9009ff579bc76457b46638fbc5	Complete Opposite Calculations and Opinions - Using Loan to Invest - Paying Monthly Installments with Monthly Income	[ { "docid": "0cb4a3e7c9c7595824aee3a2a06a1aea", "text": "The advice you were given in the other question was don't do it. The math is not the issue. The interest structure is not the issue. But there is a significant chance that you could lose money on the deal. If you invested your money in a NASDAQ heavy position in January 2000, you are still waiting to break even in November of 2013; Invest in almost anything in August 2001 and you will be down for a long time. Invest just before the housing collapse in 2007 and only now returning back to where you were. If you take money on a monthly basis and invest it you will be better off. If want to get the loan; then set up a stream of money into a bank account to make sure that when payments are due you have the cash to do so. When the two years are up you will have cash to repay the loan, and no need to sell the investments. Also if you are a bad judge of investments you won't have a problem repaying the loan. Using a loan to purchase stock reduces your gains and increases your losses. Use the power of Dollar cost averaging by making periodic purchases.", "title": "" }, { "docid": "954a3d43d0606d72a674712c5fb5738e", "text": "\"Sorry in advance, but this will be long. Also, it sounds like your friend is a tool. I hope this \"\"friend\"\" is not also your financial advisor... they would be encouraging you to make a very poor investment decision. They also don't know how to do financial math. For what it's worth, I am not wrong. I have correctly answered a set of changing questions as you have asked them... Your friend is answering based on a third, completely different investment model, which you proposed in the edit to your last post. If that's what you meant all along, then you should have been more clear in the questions you were asking. Please let me layout the following: How the previous questions//investment proposals were built How to analyze this current proposal What your other option is Why the other option is best in a 'real world' market The First Question My understanding of the initial proposal was to take out a $10,000 loan, invest the proceeds, and expect to not have any money of your own tied up in this. Because that OP did not specify that this is an interest-only loan (you still haven't in any of your questions), the bank will require you to make payments back to them each month that include principal and interest. Your \"\"friend\"\" is talking about the total interest paid being the only cost of a loan. While that is (almost) true, regardless of what your friend says, significantly more cash is involved in making sure that all the payments are made on time---unless you set up an interest-only loan. But with the set up laid out in this post, and with the assumptions I specified there, the principal payments must be included because the borrower has to pay back the bank and isn't not tying up any of their own money. In that case, my initial analysis is correct--your breakeven is in the low teens for an annual required return. The Second Proposal Your second proposal... before any edits... refined things a little bit, to try to capture the any possible returns by not selling something. As I indicated there, (with what was an exaggerating assumption), the lack of clarity makes for an outlandish required return. The Second Proposal...with edits, or the one proposed above I will get to the one proposed above in a second, but first let me highlight a few problems with your friend's analysis. Simple interest: the only place (in the US at least) that will lend with simple interest is student loans. Any loan that you actually take out will be compound interest. Not an interest only loan: your \"\"friend\"\" is not calculating interest correctly. Since this isn't an interest-only loan, the principal balance will reduce every time you make a payment, by ~$320-$340 each month. This substantially reduces the total interest paid, to $272.79 over the total 24 months. \"\"Returns\"\": I don't know what country, or what business your friend works in, but \"\"returns\"\" are a very ambiguous concept. Investopedia defines returns as gains or losses. (I wish I could inhabit the lala land that your friend lives in when returns are always positive). TheFreeDictionary.com defines a return for finance as \"\"The change in the value of a portfolio over an evaluation period, including any distributions made from the portfolio during that period.\"\" When you have not made it clear that any other money is being used in this investment plan (as was the case in scheme #1 and scheme #2a,) the loan still has to be paid. So, clearly the principal must be included in the return calculations. How to evaluate this proposed investment scheme Key dimensions: Loan ($8,000 ... 24 months ... 0.27% monthly rate... monthly compounding... no loan origination fees) Monthly payment (PMT in Excel yields $344.70). Investment capital (starting = $8,000) Monthly Return (Investment yields... we hope it's positive!) Your monthly contribution from your salary Taxes = 10%. Transaction Fees = $20 Go and lookup how to build an amortization table for a loan in Excel. Your life will be infinitely better for it. Now, you get this loan set up and invested into something... (it costs $20 to buy the assets). So you've got $7980 chugging away earning interest. I calculate that your break even, with you paying in $344.70 of your own money each month is 1.81% annually, or 3.42% over the 24 month life of this scheme. That is using monthly compound interest for the payments, because that's what the real world would use, and using monthly compounding of the investments' returns. Your total interest expense would be $272.79. This seems feasible. But let's talk about what your other option is, given that you're ready to spend $344.70 each month on an investment. Your other option I understand the appeal of getting $8,000... right away... to invest in something. But the risk behind this is that if the market goes down (and markets do) you're stuck paying a fixed amount for your loan that is now worth less money. Your other option is to take your $344.70, and invest it step-by-step. (You would want to skip a month or two buying assets in the market, so that you can lessen transaction costs). This has two advantages: (1) you save yourself $272 in interest. (2) When the market goes down, you still win. With this strategy, you still win when the market goes down because of what is commonly called \"\"dollar cost averaging\"\". When the market is up, your investments are also up. When the market goes down, your previous investments decrease in value but you can invest new money at the lower rates. Why the step-by-step, invest your own money strategy is better At low rates (when you're looking for your break-even), the step-by-step model outperforms the loan. At higher rates of return (~4% + per year), you get the benefit of having the borrowed money earning more gains. In fact, for every continuous (meaning set... not changing month-to-month) interest rate that you can dream up that is greater than about 4% per year, the borrowed money earns more. At 10% per year, the borrowed money will earn about $500 more over the 2 years than your step by step investment would. BUT I recognize that you might feel like the market will always go up. That's what everyone thinks. And that's alright. But have one really bad month, or a couple of just-not-great-months, and your fixed 'loan' portfolio will underperform. Have a few really bad months, and your portfolio could be substantially reduced in value... but you would still be paying the same amount for it each month. And if that happened (say your assets declined -3% in 3 of the 24 months...) You'd be losing money relative to the step-by-step portfolio.\"", "title": "" } ]	[ { "docid": "4f77f8854fdb229c38831d58f0a7ec59", "text": "First problem I see is you'd be getting that rent per month, so you get 12% a year before taxes and related expenses. Loans will allow you to leverage your capital, so you can cover the mortgage payments with rent and still have money left over. Do this a couple times, and you can make serious money. Obviously, I don't know the specifics but this is just my viewpoint of RE in general. There could potentially be many downfalls.", "title": "" }, { "docid": "4d08ff3e58982b76204e36b8c574f08f", "text": "Here are my re-run figures. Not counting capital gains taxes, I calculate you need to be making 1.875% per annum or 0.155% per month on your $8,000 investment to break-even on the loan. It's interesting that the return you need to gain to break-even is less than the interest you're paying, even with commission. It happens because the investment is gaining a return on an increasing amount while the load is accruing interest on a decreasing amount. Ref. r, logarithmic return", "title": "" }, { "docid": "9269ac9dbe2b303176fc7b1fd4142849", "text": "Easier to copy paste than type this out. Credit: www.financeformulas.net Note that the present value would be the initial loan amount, which is likely the sale price you noted minus a down payment. The loan payment formula is used to calculate the payments on a loan. The formula used to calculate loan payments is exactly the same as the formula used to calculate payments on an ordinary annuity. A loan, by definition, is an annuity, in that it consists of a series of future periodic payments. The PV, or present value, portion of the loan payment formula uses the original loan amount. The original loan amount is essentially the present value of the future payments on the loan, much like the present value of an annuity. It is important to keep the rate per period and number of periods consistent with one another in the formula. If the loan payments are made monthly, then the rate per period needs to be adjusted to the monthly rate and the number of periods would be the number of months on the loan. If payments are quarterly, the terms of the loan payment formula would be adjusted accordingly. I like to let loan calculators do the heavy lifting for me. This particular calculator lets you choose a weekly pay back scheme. http://www.calculator.net/loan-calculator.html", "title": "" }, { "docid": "99cc8912af7bb550771b1a511771da1d", "text": "The way I usually make this decision is to answer the following question: Do I think that I can earn a better return on my savings than the interest rate I would get on the loan? Yes= Get a loan No= Use the savings If you have your savings in a fixed income investment like a CD or bond, then it is just simple math to answer the question, for more volatile investments like stocks you just have to make an educated guess based on the direction of the markets and past performance.", "title": "" }, { "docid": "4e6b3c3d49316238ac8a589d1dd171d9", "text": "\"The problem here can be boiled down to that fact you are attempting to obtain a loan without collateral. There are times it can be done, but you have to have a really good relationship with a banker. Your question suggests that avenue has been exhausted. You are looking for an investor, but you are offering something very speculative. Suppose an investor gives you 20K, what recourse does he have if you do not pay the terms of the loan? From what income will this be paid from? What event will trigger the capability to make a balloon payment? Now if you can find a really handy guy that really needs a place to live could you swap rent for repairs? Maybe. Perhaps you buy the materials, and he does the roof in exchange for 6 months worth of rent or whatever. If you approached me with this \"\"investment\"\", the thing that would raise a red flag is why don't you have 20K to do this yourself? If you don't how will you be able to make payments? For example of the items you mentioned: That is a weekend worth of work and some pretty inexpensive materials. Why does money need to be borrowed for this? A weekend worth of demo, and $500 worth of material and another weekend to build something serviceable for a rental. Why does money need to be borrowed for this? 2K? Why does money need to be borrowed for this? This can be expensive, but most roofing companies offer financing. Also doing some of the work yourself can save a ton of money. Demoing an old roof is typically about 1/3 of the roofing cost and is technically simple, but physically difficult. So besides the new roof, you could have a lot of your list solved for less than 3K and three weekends worth of work. You are attempting to change this into a rental, not the Taj Mahal.\"", "title": "" }, { "docid": "f0fcaada709d1c45c7d277159146313d", "text": "With 10% return over three years, depositing $900 each month, in three years $34,039.30. Re. downvote. I guess this is too brief and without explanation, but I was rushing. If you want further explanation of how this is calculated check the link already posted by JoeTaxpayer, and have a look at the formula for continuously compounded return. Also, try out the numbers in the simplified example below yourself. E.g. Addendum mhoran_psprep has pointed out that I didn't read the OP's post closely enough. With rolling investments the total return will be: Where n is the month number i.e. 36, 37, etc.", "title": "" }, { "docid": "1a0d11aa89ee26bfe0547b42c454dc15", "text": "\"Now, my own answer: If you join and receive equity, do the 1/3 split as a max. Truthfully, if it were my company, I would try to negotiate with you to only give you 15%--20% because as an advisor you're not going to be involved in executing the idea to turn it into a business. If you contribute capital, do it as a loan. End of story. You don't own more because you financed growth... you shouldn't. The growth will have come because of the collective performance of the whole team. You should get paid back at a \"\"fair\"\" rate for your investment... if the company can handle it, I would argue something like 10% interest is reflective of the risk you're taking with your money. If the finances are so tight that the interest repayment isn't an option, do the math behind what you should be paid for the loan in interest, and convert that to shares or equity somehow, and get paid back for the invested capital. If the company can't repay your loan, the business model may not be sound enough, or developed enough, to be investing in to begin with.\"", "title": "" }, { "docid": "b19485d48912744b6d9b8497f8acad0c", "text": "What you want to do is figure out how much you're paying in interest, solely (ie, the interest part of each payment), add that up over 48 months, then figure out the net value of the cash inflow/outflow for the points over 48 months (ie, 3.5% annual return on the positive or negative value). Sum those two. Then you can see your P&L, and your total cash outflow (up to you if you add a % to your negative initial outflow, and how exactly you consider your $2k closing costs; I agree with JoeTaxpayer about adding at least closing costs to the loan amount. If you have money to pay the points that would otherwise be earning money, you could alternately consider it a negative cash (ie, instead of accruing 3.5% it's a negative balance accruing that). In excel I'd do something like: Then track changes in H and I when you change columns B and C and G.", "title": "" }, { "docid": "17959bcfa1b6b44a2e5324c302c4c977", "text": "This works even better when you have a good credit score when you want to arbitrarily inflate it for bragging rights or lowest interest rates, I'm only pointing this out because it has nothing to do with your current score and CK's recommendation. The presence of an installment loans is 10% of your credit score, according to some credit scoring models. So theoretically someone with a solid 720 score could gain 72 points, while someone with a 480 score would only gain 48 points. But the scores are weighted so you wouldn't get that kind out outcome regardless, it will have less of an impact. You can do this, amongst other things, but if that installment loan alters your utilization of credit it will more greatly lower your score, and the hard inquiry to apply for the loan will also temporarily hurt your score and you also might not be approved. These are the things to consider (but fortunately utilization has no history). Yes you can pay the loan off with a monthly payment. The loan's interest will cost slightly more than the monthly payments, by the end of the loan term. I've done this with a 5 year $500 installment loan at a credit union. As others pointed out, you don't have to spend money to raise your credit score (unnecessary interest, in this case), but you certainly can!", "title": "" }, { "docid": "0dbacdfc45f0f936cc1fe6137cec4fab", "text": "The only way this suggestion works is if you can realize a higher rate of return on the investment than the payoff of the loan. There's no guarantee of that, so it can be a risky strategy from the standpoint that you'll end up paying more for the car when all is said and done.", "title": "" }, { "docid": "7515b32ac0cc666f93929353cfda8291", "text": "\"A) Yes, it does accomplish the goal of adding more money, but the money is in lieu of any return you can earn while the loan is outstanding. If you somehow knew exactly which periods where going to run negative, and you took a 401k loan during that time, you'd be in pretty good shape, but if you had that information you'd probably be ruling the world in short order and wouldn't care much about a measly 401k. B) It's a nice idea, but unfortunately you are not allowed to set your own interest rate. (If you could your idea would work perfectly.) The interest rate is bank specific, and is typically 1-2 points over prime. But if your plan was to leave your money sitting in cash or low interest bearing accounts anyway, the loan does actually achieve the goal of \"\"getting more money in there\"\". Though it's your money; you aren't \"\"earning\"\" it.\"", "title": "" }, { "docid": "3e2d5e66e86a5fbcc1fbb7874344dc99", "text": "\"Assuming the numbers you gave are forecasted 2013 annual income, you should really use an average and give the lender 1 number, as long as you can provide documentation to back it up. Lenders aren't as sophisticated as considering your monthly income fluctuations into their underwriting algorithm. If you're not tied down to your existing lender, I highly recommend you to shop around. There isn't an \"\"universal lending requirement\"\". You'll be surprised at how flexible they are. Not as a recommendation to get around the rules, but just finding a lender that'll work with your situation. Try personal finance forums such as FatWallet or Slickdeal to find low-cost lenders: http://goo.gl/vIojT\"", "title": "" }, { "docid": "20da17c1d234ab04d7163b51a80bab93", "text": "Generally loan goes against an asset, in your case though it appear that you don't have any fixed assets related to this loan. So it seems like you got a cash loan (current asset/checking account?) which you spent (expenses). Since you're doing it retroactively, you'll probably just put totals in the expenses without detailing them.", "title": "" }, { "docid": "752e054a65d930d5a2efae595a2d3d62", "text": "Are there any laws against doing this? so long as you are truthful in your application for the loan, none that I know of - technically you could use the loan to pay for school and the cash that you would have used instead to invest. Are there other reasons why this is a very bad idea? I think you've already identified the biggest one, but here are my reasons: Will you go broke or go to jail? Likely not, but there is significant risk in investing with borrowed money. You might come out ahead, but you might also lose a bundle. If you're willing to take that risk, that's your right, but I would not call it a good idea under any circumstances.", "title": "" }, { "docid": "34df5ec1c05afd8af852ecb3db4b3b77", "text": "\"I got $3394.83 The first problem with this is that it is backwards. The NPV (Net Present Value) of three future payments of $997 has to be less than the nominal value. The nominal value is simple: $2991. First step, convert the 8% annual return from the stock market to a monthly return. Everyone else assumed that the 8% is a monthly return, but that is clearly absurd. The correct way to do this would be to solve for m in But we often approximate this by dividing 8% by 12, which would be .67%. Either way, you divide each payment by the number of months of compounding. Sum those up using m equal to about .64% (I left the calculated value in memory and used that rather than the rounded value) and you get about $2952.92 which is smaller than $2991. Obviously $2952.92 is much larger than $2495 and you should not do this. If the three payments were $842.39 instead, then it would about break even. Note that this neglects risk. In a three month period, the stock market is as likely to fall short of an annualized 8% return as to beat it. This would make more sense if your alternative was to pay off some of your mortgage immediately and take the payments or yp pay a lump sum now and increase future mortgage payments. Then your return would be safer. Someone noted in a comment that we would normally base the NPV on the interest rate of the payments. That's for calculating the NPV to the one making the loan. Here, we want to calculate the NPV for the borrower. So the question is what the borrower would do with the money if making payments and not the lump sum. The question assumes that the borrower would invest in the stock market, which is a risky option and not normally advisable. I suggest a mortgage based alternative. If the borrower is going to stuff the money under the mattress until needed, then the answer is simple. The nominal value of $2991 is also the NPV, as mattresses don't pay interest. Similarly, many banks don't pay interest on checking these days. So for someone facing a real decision like this, I'd almost always recommend paying the lump sum and getting it over with. Even if the payments are \"\"same as cash\"\" with no premium charged.\"", "title": "" } ]	fiqa
cd2ac5cf741b5a520fdd027d2dd6703c	Any good software for value investment?	[ { "docid": "99d31c87c76cd3b1accf472e992a46f9", "text": "\"I hope people don’t see this as being facetious but invest some time in learning to do that with Excel. Most financial information websites (Yahoo, MSN, etc.) will allow you to extract all the data you need into excel. This way you can learn to do analysis with something that isn’t a \"\"black box\"\" (as to mean you don’t know the exact equations behind the outputs) whereas with excel you can delve into and really understand the equations behind the numbers you are looking at. If you use Bloomberg it does all that for you but if you are just starting out you may not truly understand what it means and how everything is connected. If you create the same with excel you have no choice but to deeply understand because you built it from scratch! I'm certian there are plenty of tutorials to help you out there as every analyst who has worked in finance since the advent of excel has had to create these at one time or another. Good luck!\"", "title": "" }, { "docid": "3b97c12e43ff897b685f9465d1f85e67", "text": "I had the same problem and was looking for a software that would give me easy access to historical financial statements of a company, preferably in a chart. So that I could easily compare earnings per share or other data between competitors. Have a look at Stockdance this might be what you are looking for. Reuters Terminal is way out of my league (price and complexity) and Yahoo and Google Finance just don't offer the features I want, especially on financials. Stockdance offers a sort of stock selection check list on which you can define your own criterion’s. Hence it makes no investment suggestions but let's you implement your own investing strategy.", "title": "" }, { "docid": "de1433f15a5657ab6d10c2427bdd38b9", "text": "As @littleadv and @DumbCoder point out in their comments above, Bloomberg Terminal is expensive for individual investors. If you are looking for a free solution I would recommend Yahoo and Google Finance. On the other side, if you need more financial metrics regarding historic statements and consensus estimates, you should look at the iPad solution from Worldcap, which is not free, but significantly cheaper then Bloomberg and Reuters. Disclosure: I am affiliated with WorldCap.", "title": "" } ]	[ { "docid": "8c755610386012c509020b65c42c3891", "text": "\"Yes, there is a very good Return vs Risk graph put out at riskgrades.com. Look at it soon, because it will be unavailable after 6-30-11. The RA (return analysis) graph is what I think you are looking for. The first graph shown is an \"\"Average Return\"\", which I was told was for a 3 year period. Three period returns of 3, 6 and 12 months, are also available. You can specify the ticker symbols of funds or stocks you want a display of. For funds, the return includes price and distributions (total return), but only price movement for stocks - per site webmaster. I've used the graphs for a few years, since Forbes identified it as a \"\"Best of the Web\"\" site. Initially, I found numerous problems with some of the data and was able to work with the webmaster to correct them. Lately though, they have NOT been correcting problems that I bring to their attention. For example, try the symbols MUTHX, EDITX, AWSHX and you'll see that the Risk Grades on the graphs are seriously in error, and compress the graph results and cause overwriting and poor readability. If anyone knows of a similar product, I'd like to know about it. Thanks, George\"", "title": "" }, { "docid": "fc8484f24d0c259e02cb1c1a590e2d52", "text": "\"A lot of investors prefer to start jumping into tools and figuring out from there, but I've always said that you should learn the theory before you go around applying it, so you can understand its shortcomings. A great starting point is Investopedia's Introduction to Technical Analysis. There you can read about the \"\"idea\"\" of technical analysis, how it compares to other strategies, what some of the big ideas are, and quite a bit about various chart patterns (cup and handle, flags, pennants, triangles, head & shoulders, etc). You'll also cover ideas like moving averages and trendlines. After that, Charting and Technical Analysis by Fred McAllen should be your next stop. The material in the book overlaps with what you've read on Investopedia, but McAllen's book is great for learning from examples and seeing the concepts applied in action. The book is for new comers and does a good job explaining how to utilize all these charts and patterns, and after finishing it, you should be ready to invest on your own. If you make it this far, feel free to jump into Fidelity's tools now and start applying what you've learned. You always want to make the connection between theory and practice, so start figuring out how you can use your new knowledge to generate good returns. Eventually, you should read the excellent reference text Technical Analysis of the Financial Markets by John Murphy. This book is like a toolbox - Murphy covers almost all the major techniques of technical analysts and helps you intuitively understand the reasoning behind them. I'd like to quote a part of a review here to show my point: What I like about Mr. Murphy is his way of showing and proving a point. Let me digress here to show you what I mean: Say you had a daughter and wanted to show her how to figure out the area of an Isosceles triangle. Well, you could tell her to memorize that it is base*height/2. Or if you really wanted her to learn it thoroughly you can show her how to draw a parallel line to the height, then join the ends to make a nice rectangle. Then to compute the area of a rectangle just multiply the two sides, one being the height, the other being half the base. She will then \"\"derive\"\" this and \"\"understand\"\" how they got the formula. You see, then she can compute the area under a hexagon or a tetrahedron or any complex object. Well, Mr. Murphy will show us the same way and \"\"derive\"\" for us concepts such as how a resistance line later becomes a support line! The reson for this is so amusing that after one reads about it we just go \"\"wow...\"\"\"\" Now I understand why this occurs\"\". Murphy's book is not about strategy or which tools to use. He takes an objective approach to describing the basics about various tools and techniques, and leaves it up to the reader to decide which tools to apply and when. That's why it's 576 pages and a great reference whenever you're working. If you make it through and understand Murphy, then you'll be golden. Again, understand the theory first, but make sure to see how it's applied as well - otherwise you're just reading without any practical knowledge. To quote Richard Feynman: It doesn't matter how beautiful your theory is, it doesn't matter how smart you are. If it doesn't agree with experiment, it's wrong. Personally, I think technical analysis is all BS and a waste of time, and most of the top investors would agree, but at the end of the day, ignore everyone and stick to what works for you. Best of luck!\"", "title": "" }, { "docid": "9e6f5a82008f9330d2061b78d7cbadd5", "text": "I spent a while looking for something similar a few weeks back and ended up getting frustrated and asking to borrow a friend's Bloombterg. I wish you the best of luck finding something, but I wasn't able to. S&P and Morningstar have some stuff on their site, but I wasn't able to make use of it. Edit: Also, Bloomberg allows shared terminals. Depending on how much you think as a firm, these questions might come up, it might be worth the 20k / year", "title": "" }, { "docid": "afae3b9d38616f166679f52fff990a33", "text": "I use GnuCash which I really like. However, I've never used any other personal finance software so I can't really compare. Before GnuCash, I used an Excel spreadsheet which works fine for very basic finances. Pros Cons", "title": "" }, { "docid": "d65e2d5329fa3d2f3b1c4b2a853847b7", "text": "\"Yahoo Finance is definitely a good one, and its ultimately the source of the data that a lot of other places use (like the iOS Stocks app), because of their famous API. Another good dividend website is Dividata.com. It's a fairly simple website, free to use, which provides tons of dividend-specific info, including the highest-yield stocks, the upcoming ex-div dates, and the highest-rated stocks based on their 3-metric rating system. It's a great place to find new stocks to investigate, although you obviously don't want to stop there. It also shows dividend payment histories and \"\"years paying,\"\" so you can quickly get an idea of which stocks are long-established and which may just be flashes in the pan. For example: Lastly, I've got a couple of iOS apps that really help me with dividend investing: Compounder is a single-stock compound interest calculator, which automatically looks up a stock's info and calculates a simulated return for a given number of years, and Dividender allows you to input your entire portfolio and then calculates its growth over time as a whole. The former is great for researching potential stocks, running scenarios, and deciding how much to invest, while the latter is great for tracking your portfolio and making plans regarding your investments overall.\"", "title": "" }, { "docid": "5a48eecde3a549d01fefdc565b1a78b9", "text": "\"It is very hard to find any \"\"tough math\"\" application that isn't already packaged nicely in a library or app. Unless you're out to break grounds, you don't need to do any math beyond knowing what function to call and what button to click. After went through and understanding a bunch of the option pricing equations, I forgot 99.9% of them already. Why? Because in a day to day basis, all I needed to know is which function to call in quantlib and trust whoever wrote quantlib know what they're doing.\"", "title": "" }, { "docid": "cd78bc9c9eaffdab15fa29d6837f52a5", "text": "I can personally recommend MoneyWell. I've been using it for about a month now, and version 1.5 that was just released is a great upgrade from the previous version. The developer was very responsive during the open beta period, and from what I understand an iPhone version is in the works. (and no, I don't work for the publisher!) That aside, I've used a few other packages. I tried out iBank, which was fairly nice, but the account downloading functionality left a lot to be desired. I come from a MS Money background, and I am used to a seamless, reliable download scheme, and iBank's was (unfortunately) neither. Otherwise the interface was very nice. I had settled on MoneyDance before I found MoneyWell, and it's a pretty nice package. Unfortunately it's a Java application and doesn't adhere to most OSX interface practices. While the account downloading is substantially better than iBank's, the ugly interface made moving away from it fairly easy once I found something that had feature parity.", "title": "" }, { "docid": "900880c11c86edca4ff624f8f1f53405", "text": "I've used Wikinvest before and think that's close to what you're looking for - but in Wiki-style rather than forums. Otherwise, I agree with CrimsonX that The Motley Fool is a good place to check out.", "title": "" }, { "docid": "3a4e7fc154723ae86557de42ee699f07", "text": "Investopedia got some good tutorials on stocks and a good simulator to play around without loosing hard earned money. http://www.investopedia.com/university/stocks/ http://www.investopedia.com/simulator/", "title": "" }, { "docid": "22d57b67ca815daf49301d978bbff5b9", "text": "\"You may want to look into robo-investors like Wealthfront and Betterment. There are many others, just search for \"\"robo investor\"\".\"", "title": "" }, { "docid": "8be84e4133969ba6462f5fa6309b578b", "text": "About 10 years ago, I used to use MetaStock Trader which was a very sound tool, with a large number of indicators, but it has been a number of years since I have used it, so my comments on it will be out of date. At the time it relied upon me purchasing trading data myself, which is why I switched to Incredible Charts. I currently use Incredible Charts which I have done for a number of years, initially on the free adware service, now on the $10/year for EOD data access. There are quicker levels of data access, which might suit you, but I can't comment on these. It is web-based which is key for me. The data quality is very good and the number of inbuilt indicators is excellent. You can build search routines on the basis of specific indicators which is very effective. I'm looking at VectorVest, as a replacement for (or in addition to) Incredible Charts, as it has very powerful backtesting routines and the ability to run test portfolios with specific buy/sell criteria that can simulate and backtest a number of trading scenarios at the same time. The advantage of all of these is they are not tied to a particular broker.", "title": "" }, { "docid": "db80ee9cc1f82f76ee6adc6bc300bb4f", "text": "\"Yes, Interactive Brokers is a good source for live data feeds and they have an API which is used to programmatically access the feeds, you will have to pay for data feeds from the individual data sources though. The stock exchanges have a very high price for their data and this has stifled innovation in the financial sector for several decades in the united states. But at the same time, it has inflated the value and mystique of \"\"quants\"\" doing simple algorithms \"\"that execute within milliseconds\"\" for banks and funds. Also RIZM has live feeds, it is a younger service than other exchanges but helps people tap into any online broker's feeds and let you trade your custom algorithms that way, that is their goal.\"", "title": "" }, { "docid": "d2ecc077203c74417c448dd706889ea5", "text": "hledger is a free software, cross-platform double-entry accounting tool I've been working on for a while. It has command-line and web-based interfaces to your local data, and some other interesting features. There's also ledger (http://wiki.github.com/jwiegley/ledger/) which is command-line only. These are.. different, but worth a look for some folks.", "title": "" }, { "docid": "baeda48ad38b88a95a6cbfd626419096", "text": "I've looked into Thinkorswim; my father uses it. Although better than eTrade, it wasn't quite what I was looking for. Interactive Brokers is a name I had heard a long time ago but forgotten. Thank you for that, it seems to be just what I need.", "title": "" }, { "docid": "639bc6d80c441eae03aacc9b5ee99b53", "text": "Relative valuation is always my go to. Reason being i can make any company a buy or sell by changing assumptions such as growth rate, discount rate ect with a DCF. Still a great exercise to complete on all investments. Also an RV will help you pick the best out of the group (hopefully) rather than take a stance on whether you can actually predict the future inputs ( no one can)", "title": "" } ]	fiqa
c2027b4d6052fc34cbea2cafa1776763	Refinance a land loan into a mortgage loan	[ { "docid": "e34733e8209beceff2f237e0e73fdc3c", "text": "\"The Answer is yes according to multiple online sources and my local bank. This approach is a common technique to building your own home. You finance the land, build the simplest possible dwelling (say a garage with 1 bathroom/bedroom), refi into a mortgage and get cash back and then build your \"\"real house\"\" or add on, etc. This eliminates the banks demands that come with a \"\"construction loan\"\" and saves you 10s of thousands in the process (fees, contractors, scheduling, design, etc)\"", "title": "" } ]	[ { "docid": "7dac3bea905e716cc1763cc0cedb785b", "text": "I could be wrong, but I doubt you're going to be able to roll the current mortgage into a new one. The problem is that the bank is going to require that the new loan is fully collateralized by the new house. So the only way that you can ensure that is if you can construct the house cheaply enough that the difference between the construction cost and the end market value is enough to cover the current loan AND keep the loan-to-value (LTV) low enough that the bank is secured. So say you currently owe $40k on your mortgage, and you want to build a house that will be worth $200k. In order to avoid PMI, you're going to have to have an LTV of 80% or less, which means that you can spend no more than $160k to build the house. If you want to roll the existing loan in, now you have to build for less than $120k, and there's no way that you can build a $200k house for $120k unless you live in an area with very high land value and hire the builders directly (and even then it may not be possible). Otherwise you're going to have to make up the difference in cash. When you tear down a house, you are essentially throwing away the value of the house - when you have a mortgage on the house, you throw away that value plus you still owe the money, which is a difficult hole to climb out of. A better solution might be to try and sell the house as-is, perhaps to someone else who can tear down the house and rebuild with cash. If that is not a viable option (or you don't want to move) then you might consider a home equity loan to renovate parts of the house, provided that they increase the market value enough to justify the cost (e.g. modernize the kitchen, add on a room, remodel bathrooms, etc. So it all depends on what the house is worth today as-is, how much it will cost you to rebuild, and what the value of the new house will be.", "title": "" }, { "docid": "f1f1690e97d60a6dcbc7d05e5578b1c4", "text": "In my county one can pay your taxes up front, or pay a fee and then pay in 2 installments. I caught countrywide mortgages paying the fee (from my escrow account) then paying the 2 installments so that they could keep the interest over the 6 months. After that I've always insisted on not having an escrow account.", "title": "" }, { "docid": "b36ccc075295208c0816895759186562", "text": "You are talking about adjusting the basis of your property which has its own IRS publication Publication 551: Basis of Assets Assuming you've not taken depreciation on your land in any way, pages 4-5 cover the various ways you can increase the basis of your property. Improvements like paving and wiring such as your second case would increase the basis of the property and reduce your gains when you sell. Note that regular real estate taxes do NOT alter your basis. Again the IRS publication is where you should look on what activity would have altered your basis during your period of ownership. Consult appropriate accounting and legal practitioners when in doubt.", "title": "" }, { "docid": "72c6294a241bea25d2691f469ed674e1", "text": "What you are describing is called a Home Equity Line of Credit (HELOC). While the strategy you are describing is not impossible it would raise the amount of debt in your name and reduce your borrowing potential. A recent HELOC used to finance the down payment on a second property risks sending a signal of bad financial position to credit analysts and may further reduce your chances to obtain the credit approval.", "title": "" }, { "docid": "e2afadb028d4d5d23a772479a3d008b2", "text": "\"You owe $20,000 to a loanshark, 1% per week interest. I'm happy to get 1% per month, and trust you to pay it back, so I lend you the $20,000. The first lender got his money, and now you are paying less interest as you pay the loan back. This is how a refi works, only the first bank won't try to break the legs of the second bank for moving into their business. This line \"\"reinvested the money into the mortgage to lower his monthly payments\"\" implies he also paid it down a bit, maybr the new mortgage is less principal than the one before.\"", "title": "" }, { "docid": "a2c62a6f95a19d4d305afd7ae5426f82", "text": "First, many banks do not keep the loan. Even if they send you a payment notice and process the monthly payment, there's still a good chance the loan itself was packed up and sold to investors. Collateralizing mortgages, in and of itself, is not inherently dangerous. But the loan definitely needs a house behind it. If you found a bank that keeps its loans, it would be a tough sell. You'd be asking them to trust that you've chosen the right number to match up with the house you intend to buy. And then they'd need to have another round of processing to turn this into a loan with normal collateral (i.e. put a lien on the house and tie them together.)", "title": "" }, { "docid": "ee130539baebd437a80d1acf6b6fc3e5", "text": "The reason for borrowing instead of paying cash for major renovations should be the same for the decision about whether to borrow or pay cash for the home itself. Over history, borrowing using low, tax-deductible interest while increasing your retirement contributions has always yielded higher returns than paying off mortgage principal over the long term. You should first determine how much you need to save for retirement, factor that into your budget, then borrow as much as needed (and can afford) to live at whatever level of home you decide is important to you. Using this same logic, if interest rates are low enough, it would behoove you to refinance with cash out leveraging the cash to use as additional retirement savings.", "title": "" }, { "docid": "b72faafa690bbfb528899a7265893f15", "text": "Some types of loans allow for reamortization (recasting) - which does exactly what you're talking about (making a big payment and then refiguring the monthly amount rather than the overall lifespan), without requiring any kind of a fee that refinancing does. Not every, or even most, mortgages, allow for recasting. And most that do offer recasting, may limit the recasting to a once-a-loan type of thing. So check beforehand, and make those big payments before you do any recasting. (Most banks and mortgage servicing companies may not advertise or even speak about recasting options unless you specifically ask your loan officer.)", "title": "" }, { "docid": "1f9a3362862b1e793b3f861d03e6f37f", "text": "Yes, you may do this at any time before signing - but to make a change like this after the official loan documents have been drawn up will cost you extra fees. The typical redraw fee is around $200 in CA. Does it make sense to do so? No, it does not. If you have an extra 1%, it would probably be better to use that money to purchase a lower interest rate. Here's an example: Let's say you're buying a $200,000 house and your offered interest rate is 4.75% (just an example). With 10% down you'd have a loan amount of $180,000 and a p&i payment of $938.97 per month. With 11% down you'd have a loan amount of $178,000 and a p&i payment of $928.53 per month. Now let's pretend you buy your interest rate down to 4.375%. With 10% down you'd still have a loan amount of $180,000 but your p&i payment would be $898.71 per month. Even though the last option gives you the best payment, if I were in your shoes I'd stick with the 10% down and save that extra cash in the bank for a rainy day. Buying a home comes with a lot of new expenses and many are unexpected. Good luck!", "title": "" }, { "docid": "3d0658033b028dc27886717f8b643785", "text": "\"There is no guarantee improvements will raise the appraised value. You also don't want your property tax appraisal to go up if you can avoid it. Since you are talking on the order of $10k I'll assume you're only a few thousand dollars more from getting to 20%. That said, any schemes you might come up with like refinancing or second line of credit will probably cost more in fees than they are worth, unless you can get a much nicer interest rate. Figure out how long you plan to stay there, Evaluate your options (do nothing, principal reduction, refinance for 30, 15, or even an ARM) and figure out your bottom line by comparing everything in a spreadsheet One more thing: if you do pay a substantial amount of extra principal, you can ask the lender to \"\"rebalance\"\" which will correct the minimum monthly payment to your remaining term. This will likely incur a fee, but could be helpful in an emergency\"", "title": "" }, { "docid": "d61e89de7232a0aba05688b9f0cf2f03", "text": "What are you missing? Volume. Bank of America is more than willing to refinance a loan from Wells Fargo as long as the loan is still profitable. There are some caveats with that, though. For one, many land have penalties if they are paid off within two or three years. Additionally, the fact that banks are offering to refinance at great rates doesn't mean that you'll be approved, or that you'll get those rates. If you could post some actual numbers, we could help you see if it's a good deal to refi, and explain exactly where the bank expects it's profit.", "title": "" }, { "docid": "779300a60e57ff333c291551940b1bbd", "text": "\"Please clarify your question. What do you mean by \"\"..loan in Greece\"\"? If you are referring to taking a mortgage loan to purchase residential property in Greece, there are two factors to consider: If the loan originates from a Greek bank, then odds are likely that the bank will be nationalized by the government if Greece defaults. If the loan is external (i.e. from J.P. Morgan or some foreign bank), then the default will certainly affect any bank that trades/maintains Euros, but banks that are registered outside of Greece won't be nationalized. So what does nationalizing mean for your loan? You will still be expected to pay it according to the terms of the contract. I'd recommend against an adjustable rate contract since rates will certainly rise in a default situation. As for property, that's a different story. There have been reports of violence in Greece already, and if the country defaults, imposes austerity measures, etc, odds are there will be more violence that can harm your property. Furthermore, there is a remote possibility that the government can attempt to acquire your private property. Unlikely, but possible. You could sue in this scenario on property rights violations but things will be very messy from that point on. If Greece doesn't default but just exits the Euro Zone, the situation will be similar. The Drachma will be weak and confidence will be poor, and unrest is a likely outcome. These are not statements of facts but rather my opinion, because I cannot peek into the future. Nonetheless, I would advise against taking a mortgage for property in Greece at this point in time.\"", "title": "" }, { "docid": "15403ed7ab7fbb0b95f83fa531977291", "text": "I've done this, but on the other side. I purchased a commercial property from someone I had a previous relationship with. A traditional bank wouldn't loan me the money, but the owner was willing to finance it. All of the payments went through a professional escrow company. In our case it was a company called Westar, but I'm sure there are plenty out here. They basically serve as the middle-man, for a fee (something like $5 a payment, plus something to set it up). They have the terms of the loan, and keep track of balances, can handle extra principle payments and what that does to the term of the loan, etc. You want to have a typical mortgage note that is recorded with the local clerk's office. If you look around, you should be able to find a real estate lawyer who can set all this up for you. It will cost you a bit up front, but it is worth it to do this right. As far as taxes, my understanding is that the property itself is taxed the same as any other property transfer. You would owe taxes on the difference between the value of the property when you inherited it and when you sold it. The interest you get from the loan would be taxed as regular income. The escrow company should send you tax forms every year listing the amount of interest that you received. There are also deductions you can take for expenses in the process.", "title": "" }, { "docid": "300215e28bd985700295a949b4055d8c", "text": "You don't always have a choice. If you RTA, this is about loans that BoA bought from other lenders, or banks they acquired. If there is such a thing as a conventional mortgage contract that cannot be sold to another bank, I have never heard of it. Any bank you borrow from is generally free to re-sell the loan to any other bank. You agree to the contract, not the name on the letterhead.", "title": "" }, { "docid": "e2611bf6a66d3ae63bfc45fe22a883f3", "text": "\"I am going to add just one more item to what are some very well thought out answers. The element of \"\"Cash Out\"\" If you are taking out 80% of the value of the home that you already own free and clear the bank considers this a \"\"Cash Out\"\" transaction - meaning you would effectively walk away from closing with a check for 80% of your home's value. So in a hypothetical situation you have a $200,000 home value - you would be handed a check for $160,000 with which you could do anything that you wanted. Granted, you are likely going to do something responsible with it and purchase another home - BUT (big BUT) the bank can't control what you do with it and that is the part they don't like - and therefore they treat these types of transactions with a higher degree of scrutiny. It is all about control - if the property you are downsizing to fits their rules for lending they may actually loan you a higher loan to value on that purchase than they would on your \"\"cash out\"\" refinance transaction on your current home. With the purchase loan the money you get goes immediately to the purchase of a new home. In the \"\"cash out\"\" transaction it goes to a check with which you could do anything you want . . . and then not pay the loan back . . . I know no one here would do that - but there are some folks that would . . . and this is one of the reasons \"\"Cash Out\"\" loans are not nearly as easy as they once were to get. http://www.justice.gov/usao/az/mortgagefraud.html\"", "title": "" } ]	fiqa
961c05c5a64f889c044041a680fe9d9a	Can value from labor provided to oneself be taxed?	[ { "docid": "2d46e4f9ed7e9e8d566747dd6c2d59a8", "text": "This is called imputed income, which is generally not taxed in the US.", "title": "" }, { "docid": "7ab2b7a9ead93dbd14f80545351f29f7", "text": "The basis of the home is the cost of land and material. That's it. Your time isn't added to basis. No different than if you spend 1000 hours in a soup kitchen. You deduct miles for your car and expenses you can document but you can't deduct your time. Over 2 years, you could have a gain up to $500K per married couple and pay no tax.", "title": "" }, { "docid": "40ade67514cf40b0bc2c77312cce276e", "text": "I've heard of handyman type people making a living this way untaxed. They move into a fixer-upper, fix it up while living there, stay over two years and sell. They can pocket $125k/yr tax free this way assuming they produce that much value in their fixing-up. (Beware, though, that this will bite you in low social security payments in retirement!)", "title": "" } ]	[ { "docid": "e20a9c8c36738492aa0363c1113b6ca9", "text": "\"I'm working on similar problem space. There seems to be some working ambiguity in this space - most focus seems to be on more complex cases of income like Dividends and Capital Gains. The US seems to take a position of \"\"where the work was performed\"\" not \"\"where the work was paid\"\" for purposes of the FEIE. See this link. The Foreign Tax Credit(FTC) is applied (regardless of FEIE) based on taxes paid in the other Country. In the event you take the FEIE, you need to exclude that from the income possible to claim on the FTC. i.e. (TOTAL WAGES(X) - Excluded Income) There is a weird caveat on TOTAL WAGES(X) that says you can only apply the FTC to foreign-sourced income which means that potentially we are liable for the on-US-soil income at crazy rates. See this link.. Upon which... there is probably not a good answer short of writing your congressperson.\"", "title": "" }, { "docid": "83b8ff6405ec069847836954c0674ea8", "text": "If it's a legitimate cost of doing business, it's as deductible as any other cost of doing business. (Reminder: be careful about the distinctions between employee and contractor; the IRS gets annoyed if you don't handle this correctly.)", "title": "" }, { "docid": "6a8a3c216908f110c3f8039d8e1ba396", "text": "I've never heard of an employer offering this kind of arrangement before, so my answer assumes there is no special tax treatment that I'm not aware of. Utilizing the clause is probably equivalent to exercising some of your options, selling the shares back to your employer at FMV, and then exercising more options with the proceeds. In this case if you exercise 7500 shares and sell them back at FMV, your proceeds would be 7500 x $5 = $37,500, with which you could exercise the remaining 12,500 options. The tax implications would be (1) short-term capital gains of 7500 x ($5 - $3) = $15,000 and (2) AMT income of 12,500 x ($5 - $3) = $25,000, assuming you don't sell the shares within the calendar year.", "title": "" }, { "docid": "79b3ac3fc497ba856f77e7399316c904", "text": "But the US has a higher rate than any other OECD country. So you are still taxing profits from money that wasn't made in the US. Obviously way more complicated, but it's pretty insane. It can be even worse for an individual. Oh, and imagine you'd like to start a sole propietorship overseas as a US citizen. You either renounce or have insane compliance costs.", "title": "" }, { "docid": "8b8d28b5cc468191072149c2e1c9c59f", "text": "Here is a quote from the IRS website on this topic: You may be able to deduct premiums paid for medical and dental insurance and qualified long-term care insurance for yourself, your spouse, and your dependents. The insurance can also cover your child who was under age 27 at the end of 2011, even if the child was not your dependent. A child includes your son, daughter, stepchild, adopted child, or foster child. A foster child is any child placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction. One of the following statements must be true. You were self-employed and had a net profit for the year reported on Schedule C (Form 1040), Profit or Loss From Business; Schedule C-EZ (Form 1040), Net Profit From Business; or Schedule F (Form 1040), Profit or Loss From Farming. You were a partner with net earnings from self-employment for the year reported on Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc., box 14, code A. You used one of the optional methods to figure your net earnings from self-employment on Schedule SE. You received wages in 2011 from an S corporation in which you were a more-than-2% shareholder. Health insurance premiums paid or reimbursed by the S corporation are shown as wages on Form W-2, Wage and Tax Statement. The insurance plan must be established, or considered to be established as discussed in the following bullets, under your business. For self-employed individuals filing a Schedule C, C-EZ, or F, a policy can be either in the name of the business or in the name of the individual. For partners, a policy can be either in the name of the partnership or in the name of the partner. You can either pay the premiums yourself or your partnership can pay them and report the premium amounts on Schedule K-1 (Form 1065) as guaranteed payments to be included in your gross income. However, if the policy is in your name and you pay the premiums yourself, the partnership must reimburse you and report the premium amounts on Schedule K-1 (Form 1065) as guaranteed payments to be included in your gross income. Otherwise, the insurance plan will not be considered to be established under your business. For more-than-2% shareholders, a policy can be either in the name of the S corporation or in the name of the shareholder. You can either pay the premiums yourself or your S corporation can pay them and report the premium amounts on Form W-2 as wages to be included in your gross income. However, if the policy is in your name and you pay the premiums yourself, the S corporation must reimburse you and report the premium amounts on Form W-2 as wages to be included in your gross income. Otherwise, the insurance plan will not be considered to be established under your business. Medicare premiums you voluntarily pay to obtain insurance in your name that is similar to qualifying private health insurance can be used to figure the deduction. If you previously filed returns without using Medicare premiums to figure the deduction, you can file timely amended returns to refigure the deduction. For more information, see Form 1040X, Amended U.S. Individual Income Tax Return. Amounts paid for health insurance coverage from retirement plan distributions that were nontaxable because you are a retired public safety officer cannot be used to figure the deduction. Take the deduction on Form 1040, line 29.", "title": "" }, { "docid": "92c0079346d0ded3ed163d22572d3b90", "text": "You are describing a corporation. You can set up a corporation to perform business, but if you were using the money for any personal reasons the courts could Pierce the corporate veil and hold you personally liable. Also, setting up a corporation for purely personal reasons is fraud.", "title": "" }, { "docid": "ee0f34fa27cb4ca84be860d651f060f3", "text": "You tagged with S-Corp, so I assume that you have that tax status. Under that situation, you don't get taxed on distributions regardless of what you call them. You get taxed on the portion of the net income that is attributable to you through the Schedule K that the S-Corp should distribute to you when the S-Corp files its tax return. You get taxed on that income whether or not it's distributed. If you also work for the small business, then you need to pay yourself a reasonable wage. The amount that you distribute can be one factor in determining reasonableness. That doesn't seem to be what you asked, but it is something to consider.", "title": "" }, { "docid": "a90eba7df1e05c2d0b73a98ba3ababf1", "text": "Nope pay the employer back the due does not involve any tax. Just keep a record of the transaction so that its available as reference.", "title": "" }, { "docid": "70959a94ab8dc442e876159289f59fd4", "text": "\"? You quoted an oft cited oft disproven false factoid. It's extremely biased. Like you seem to be. Most of those \"\"self made\"\", notice those quotes, people came from money. Their business is \"\"self made\"\", with family money. Like the article implies.\"", "title": "" }, { "docid": "691b6d6029c2f362848881780986f078", "text": "I think you can. I went to Mexico for business and the company paid for it, so if you are self employed you should be able to expense it.", "title": "" }, { "docid": "ce251ce6d31823ac7124eae816392f7c", "text": "Do you have any insight on average effective rates paid by SE owners? As a counterpoint to your (very valid) links, filing as S-corp allows for taxes on distributions to be exempt from payroll tax and taxed at much lower rates. Also, being SE allows for various deductions not possible for wage earners. There's probably other examples not immediately coming to mind. Also, SE taxes equal taxes otherwise paid by employer + employee. It's just that those employer taxes don't appear on the employee's paystub so not everyone realizes this.", "title": "" }, { "docid": "5515ade36125a97c8fbdc1347c57998a", "text": "\"In the UK, I could start my own business - either as a self-employed person, or by starting a company. With a company, the company might have £50,000 income, £5,000 cost, and pay me a £45,000 salary. In that case the company has no profit and pays no taxes, but I personally pay income tax. Or I could pay myself any salary I like, say £20,000 salary, so I pay tax on £25,000 profit and £20,000 salary. The state actually gets less money in total if I set my salary so the company makes a profit. If I'm self employed, income minus cost is my profit and I pay taxes on that. If I don't make profit, I pay no tax. Unfortunately, I also wouldn't have any money to buy food, pay the rent, and so on and so on. I'd have the same income and pay the same taxes as someone who is unemployed. There are \"\"businesses\"\" that are just run for the enjoyment of the owner and don't make profit. Rich guy buys a farm and starts breeding race horses, that kind of thing. In that case, there is zero difference between a guy breeding race horses and calling it a \"\"business\"\" and another guy breeding race horses and calling it a hobby. Neither makes money and neither pays taxes.\"", "title": "" }, { "docid": "70b440149f0ea2945f6e0a986e1c361f", "text": "In the current economy there is no upside to working for yourself. Get in a salaried position as soon as you can, and sacrifice to whatever gods you worship that you don't get made redundant. If you're already working for yourself, and wouldn't give it up for anything, hire someone, and get them off the street.", "title": "" }, { "docid": "559b05e48a817e0e9841d2cc181a9a71", "text": "\"You are confusing entirely unrelated things. First the \"\"profit distribution\"\" issue with Bob's S-Corp which is in fact tax evasion and will probably trigger a very nasty audit. Generally, if you're the sole employee of your own S-Corp, and the whole S-Corp income is from your own personal services, as defined by the IRS - there's no profit there. All the net income from such a S-Corp is subject to SE tax, either through payroll or through your K-1. Claiming anything else would be lying and IRS is notorious for going after people doing that. Second - the reclassification issue. The reason employers classify employees as contractors is to avoid payroll taxes (which the IRS gets through Bob's S-Corp, so it doesn't care) and providing benefits (that is Bob's problem, not the IRS). So in the scenario above, the IRS wouldn't care whose employee Bob is since Bob's S-Corp would have to pay all the same payroll taxes. The reclassification is an issue when employees are abused. See examples of Fedex drivers, where they're classified as contractors and are not getting any benefits, spend their own money on the truck and maintenance, etc. The employees are the ones who sued for reclassification, but in this case the IRS would be interested as well since a huge chunk of payroll taxes was not paid (driver's net is after car maintenance and payments, not before as it would be if he was salaried). So in your scenario reclassification is not as much a concern to Bob as his tax evasion scheme claiming earnings from performing personal services as \"\"profits from S-Corp\"\". A precedent to look at, as I mentioned elsewhere, would be the Watson v Commissioner case.\"", "title": "" }, { "docid": "86a58016d685e1775ba7bfe86afae3c2", "text": "\"You mean to tell me that everyone doesn't pay his/her fair share?! Please say it isn't so. :) Therein lies the welfare state: Tax the rich more heavily to subsidize the poor, and hobble the rich's ability to do so on their own accord. In any case, though, in the United States, if you make any money whatsoever, that usually counts as income, and can hence be taxed. Here's the IRS' definition of gross income. Pretty all-inclusive, isn't it? Businesses are allowed to deduct expenses to count against their income, but if one has more expenses than income year after year, (a) this is the road to financial ruin, and (b) the IRS puts an end to the tax losses after enough years of failing to show a profit. So, sure, if a businessperson doesn't have any income, then they're technically using the roads, etc., \"\"for free,\"\" but unless the businessperson wants to live off the land and the kindness of strangers, he'd better turn a profit eventually. Then he'll be taxed.\"", "title": "" } ]	fiqa
c2ab327130b9423ccbfba6c234376a7b	Are there any funds tracking INDEXDJX:REIT?	[ { "docid": "c6cfd328152923cd18a400e5ea5ef1a5", "text": "Although you can't invest in an index, you can invest in a fund that basically invests in what the index is made up of. Example: In dealing with an auto index, you could find a fund that buys car companies's stock. The Google Finance list of funds dealing with INDEXDJX:REIT Although not pertaining to your quetion exactly, you may want to consider buying into Vanguard REIT ETF I hope this answers your question.", "title": "" } ]	[ { "docid": "74e5c4eb9edac1768960798a29a788c8", "text": "\"Beatrice does a good job of summarizing things. Tracking the index yourself is expensive (transaction costs) and tedious (number of transactions, keeping up with the changes, etc.) One of the points of using an index fund is to reduce your workload. Diversification is another point, though that depends on the indexes that you decide to use. That said, even with a relatively narrow index you diversify in that segment of the market. A point I'd like to add is that the management which occurs for an index fund is not exactly \"\"active.\"\" The decisions on which stocks to select are already made by the maintainers of the index. Thus, the only management that has to occur involves the trades required to mimic the index.\"", "title": "" }, { "docid": "7281e2011dcf9a28ad110b6fda9ae354", "text": "\"The majority (about 80%) of mutual funds are underperforming their underlying indexes. This is why ETFs have seen massive capital inflows compared to equity funds, which have seen significant withdrawals in the last years. I would definitively recommend going with an ETF. In addition to pure index based ETFs that (almost) track broad market indexes like the S&P 500 there are quite a few more \"\"quant\"\" oriented ETFs that even outperformed the S&P. I am long the S&P trough iShares ETFs and have dividend paying ETFs and some quant ETFS on top (Invesco Powershares) in my portfolio.\"", "title": "" }, { "docid": "13804378135ed6bfb6d6e7517aac9d40", "text": "index ETF tracks indented index (if fund manager spend all money on Premium Pokemon Trading Cards someone must cover resulting losses) Most Index ETF are passively managed. ie a computer algorithm would do automatic trades. The role of fund manager is limited. There are controls adopted by the institution that generally do allow such wide deviations, it would quickly be flagged and reported. Most financial institutions have keyman fraud insurance. fees are not higher that specified in prospectus Most countries have regulation where fees need to be reported and cannot exceed the guideline specified. at least theoretically possible to end with ETF shares that for weeks cannot be sold Yes some ETF's can be illiquid at difficult to sell. Hence its important to invest in ETF that are very liquid.", "title": "" }, { "docid": "18ba65edf360c23887d0043f4696facb", "text": "Now, if I'm not mistaken, tracking a value-weighted index is extremely easy - just buy the shares in the exact amount they are in the index and wait. Yes in theory. In practise this is difficult. Most funds that track S&P do it on sample basis. This is to maintain the fund size. Although I don't have / know the exact number ... if one wants to replicate the 500 stocks in the same %, one would need close to billion in fund size. As funds are not this large, there are various strategies adopted, including sampling of companies [i.e. don't buy all]; select a set of companies that mimic the S&P behaviour, etc. All these strategies result in tracking errors. There are algorithms to reduce this. The only time you would need to rebalance your holdings is when there is a change in the index, i.e. a company is dropped and a new one is added, right? So essentially rebalance is done to; If so, why do passive ETFs require frequent rebalancing and generally lose to their benchmark index? lets take an Index with just 3 companies, with below price. The total Market cap is 1000 The Minimum required to mimic this index is 200 or Multiples of 200. If so you are fine. More Often, funds can't be this large. For example approx 100 funds track the S&P Index. Together they hold around 8-10% of Market Cap. Few large funds like Vangaurd, etc may hold around 2%. But most of the 100+ S&P funds hold something in 0.1 to 0.5 range. So lets say a fund only has 100. To maintain same proportion it has to buy shares in fraction. But it can only buy shares in whole numbers. This would then force the fund manager to allocate out of proportion, some may remain cash, etc. As you can see below illustrative, there is a tracking error. The fund is not truly able to mimic the index. Now lets say after 1st April, the share price moved, now this would mean more tracking error if no action is taken [block 2] ... and less tracking error if one share of company B is sold and one share of company C is purchased. Again the above is a very simplified view. Tracking error computation is involved mathematics. Now that we have the basic concepts, more often funds tracking S&P; Thus they need to rebalance.", "title": "" }, { "docid": "bfb745490ac34704883d49a7836287d0", "text": "News-driven investors tend to be very short-term focussed investors. They often trade by using index futures (on the S&P 500 index for instance).", "title": "" }, { "docid": "550a87849ede22f46d68fc8a9722b6d3", "text": "\"You asked 3 questions here. It's best to keep them separate as these are pretty distinct, different answers, and each might already have a good detailed answer and so might be subject to \"\"closed as duplicate of...\"\" That said, I'll address the JAGLX question (1). It's not an apples to apples comparison. This is a Life Sciences fund, i.e. a very specialized fund, investing in one narrow sector of the market. If you study market returns over time, it's easy to find sectors that have had a decade or even two that have beat the S&P by a wide margin. The 5 year comparison makes this pretty clear. For sake of comparison, Apple had twice the return of JAGLX during the past 5 years. The advisor charging 2% who was heavy in Apple might look brilliant, but the returns are not positively correlated to the expense involved. A 10 or 20 year lookback will always uncover funds or individual stocks that beat the indexes, but the law of averages suggests that the next 10 or 20 years will still appear random.\"", "title": "" }, { "docid": "001308bb6898cc328653575ba51889b7", "text": "Not to my knowledge. Often the specific location is diversified out of the fund because each major building company or real estate company attempts to diversify risk by spreading it over multiple geographical locations. Also, buyers of these smaller portfolios will again diversify by creating a larger fund to sell to the general public. That being said, you can sometimes drill down to the specific assets held by a real estate fund. That takes a lot of work: You can also look for the issuer of the bond that the construction or real estate company issued to find out if it is region specific. Hope that helps.", "title": "" }, { "docid": "545e9e42cce983a37760a9ff4bb41ede", "text": "I tried direct indexing the S&P500 myself and it was a lot of work. Lots of buys and sells to rebalance, tons of time in spreadsheets running calculations/monitoring etc, dealing with stocks being added or removed from the index, adding money (inflows). Etc. All of the work is the main reason I stopped. I came to realize the 0.05% I pay Vanguard is a great deal.", "title": "" }, { "docid": "f364a2de6e832ec99014996a345e4136", "text": "Over the past five years, QFVOX has returned 13.67%, compared to the index fund SPY that has returned 50.39%. SEVAX has lost 23.96%. AKREX has returned 81.82%. In two of your three examples, you would have done much better in an index fund with a very low expense ratio as suggested. While one can never, as you see, make a generalization, in almost every case, most investors will do better, and often much better, with an index fund with a low expense ratio. My source was Google Finance.", "title": "" }, { "docid": "3b0513ea719821872a14f80eda6c8c71", "text": "ACWI refers to a fund that tracks the MSCI All Country World Index, which is A market capitalization weighted index designed to provide a broad measure of equity-market performance throughout the world. The MSCI ACWI is maintained by Morgan Stanley Capital International, and is comprised of stocks from both developed and emerging markets. The ex-US in the name implies exactly what it sounds; this fund probably invests in stock markets (or stock market indexes) of the countries in the index, except the US. Brd Mkt refers to a Broad Market index, which, in the US, means that the fund attempts to track the performance of a wide swath of the US stock market (wider than just the S&P 500, for example). The Dow Jones U.S. Total Stock Market Index, the Wilshire 5000 index, the Russell 2000 index, the MSCI US Broad Market Index, and the CRSP US Total Market Index are all examples of such an index. This could also refer to a fund similar to the one above in that it tracks a broad swath of the several stock markets across the world. I spoke with BNY Mellon about the rest, and they told me this: EB - Employee Benefit (a bank collective fund for ERISA qualified assets) DL - Daily Liquid (provides for daily trading of fund shares) SL - Securities Lending (fund engages in the BNY Mellon securities lending program) Non-SL - Non-Securities Lending (fund does not engage in the BNY Mellon securities lending program) I'll add more detail. EB (Employee Benefit) refers to plans that fall under the Employee Retirement Income Security Act, which are a set a laws that govern employee pensions and retirement plans. This is simply BNY Mellon's designation for funds that are offered through 401(k)'s and other retirement vehicles. As I said before, DL refers to Daily Liquidity, which means that you can buy into and sell out of the fund on a daily basis. There may be fees for this in your plan, however. SL (Securities Lending) often refers to institutional funds that loan out their long positions to investment banks or brokers so that the clients of those banks/brokerages can sell the shares short. This SeekingAlpha article has a good explanation of how this procedure works in practice for ETF's, and the procedure is identical for mutual funds: An exchange-traded fund lends out shares of its holdings to another party and charges a rental fee. Running a securities-lending program is another way for an ETF provider to wring more return out of a fund's holdings. Revenue from these programs is used to offset a fund's expenses, which allows the provider to charge a lower expense ratio and/or tighten the performance gap between an ETF and its benchmark.", "title": "" }, { "docid": "3451c2779bca4a3422a1edf0de832b52", "text": "At this time, Google Finance doesn't support historical return or dividend data, only share prices. The attributes for mutual funds such as return52 are only available as real-time data, not historical. Yahoo also does not appear to offer market return data including dividends. For example, the S&P 500 index does not account for dividends--the S&P ^SPXTR index does, but is unavailable through Yahoo Finance.", "title": "" }, { "docid": "5a2597ff9b7701bb15d381e14a0bc724", "text": "\"What does ETFs have to do with this or Amazon? Actually, investing in ETFs means you are killing actively managed Mutual Funds (managed by people, fund managers) to get an average return (and loss) of the market that a computer manage instead of a person. And the ETF will surely have Amazon stocks because they are part of the index. I only invest in actively managed mutual funds. Yes, most actively managed mutual funds can't do better than the index, but if you work a bit harder, you can find the many that do much better than the \"\"average\"\" that an index give you.\"", "title": "" }, { "docid": "3e0cc51cddecc1fe58524e39c9897ba2", "text": "It would involve manual effort, but there is just a handful of exclusions, buy the fund you want, plug into a tool like Morningstar Instant X Ray, find out your $10k position includes $567.89 of defense contractor Lockheed Martin, and sell short $567.89 of Lockheed Martin. Check you're in sync periodically (the fund or index balance may change); when you sell the fund close your shorts too.", "title": "" }, { "docid": "6aa7994d1eb6dfbbd1f75c1cafa06219", "text": "A general mutual fund's exact holdings are not known on a day-to-day basis, and so technical tools must work with inexact data. Furthermore, the mutual fund shares' NAV depends on lots of different shares that it holds, and the results of the kinds of analyses that one can do for a single stock must be commingled to produce something analogous for the fund's NAV. In other words, there is plenty of shooting in the dark going on. That being said, there are plenty of people who claim to do such analyses and will gladly sell you their results (actually, Buy, Hold, Sell recommendations) for whole fund families (e.g. Vanguard) in the form of a monthly or weekly Newsletter delivered by US Mail (in the old days) or electronically (nowadays). Some people who subscribe to such newsletters swear by them, while others swear at them and don't renew their subscriptions; YMMV.", "title": "" }, { "docid": "0546c54dd914223b64e3377ed748a20b", "text": "Here's a very simple answer, ask your broker/bank. Mine uses ofx. When asked if they would reimburse me for any unauthorized activity, the answer was no. Simple enough, the banks that use it don't feel its secure enough.", "title": "" } ]	fiqa
95f8a282fb2da4f82a6159566ef4d6bd	What are good games to play to teach young children about saving money?	[ { "docid": "be328e7afd1c173af50f4af885eb9548", "text": "\"I found this great resource at MarketWatch.com - a listing on online games that help parents teach kids about saving and finance, set up by age group. Here's an example of some of the content: For children six to nine: www.fleetkids.com, sponsored by the Fleet Bank, has great games -- like \"\"Buy lo, Sell hi\"\" and \"\"Chunka Change\"\" -- that teach kids about spending and saving. Kids can compete for prizes such as computers and backpacks for their schools.\"", "title": "" }, { "docid": "138cb7c5d74d3dedf94f4625b42ca63d", "text": "\"I've found that good old fashioned \"\"Monopoly\"\" teaches children about cash flow, mortgaging properties, and paying income taxes.\"", "title": "" }, { "docid": "bdafa2dce2f688a186e89e67784f6778", "text": "I know this question is closed now, but I just found this site that people might be interested in... http://www.practicalmoneyskills.com/games/", "title": "" }, { "docid": "ed84cd7e792008e2aeaff8db6a43c879", "text": "I also saw a lot of reference to Mutual Mania Board Game, which is geared towards kids 11yrs+ and helps them learn about spending, saving, profit and loss.", "title": "" }, { "docid": "e7c1b23c7bd81128ccc1ac438d7c3aa2", "text": "We play Cash Flow and Cashflow for Kids by Robert Kiyosaki. Our kids love it.", "title": "" }, { "docid": "3a6008d86d348741f14c8373c472ecff", "text": "Animal Crossing is great for all ages and teaches kids the importance of saving money to pay off a debt for a home and to become successful by helping out the community and what it gets you.", "title": "" } ]	[ { "docid": "f829c5590b6964b2e6b929ca81b0be2c", "text": "I am not sure whether this hold in all countries, but at least in the Netherlands my bank allows for investment in funds without charging transaction costs. The downside is that these funds charge an annual fee of about 1%, but for the amounts you are talking about this definitely sounds more attractive than the alternative. As an alternative, you could ofcourse just take care of the transaction costs. That way your child can see their funds develop as you put it into different stocks without being distracted by the details. Of course you feel the 'pain' but I believe the main lesson stands out most this way.", "title": "" }, { "docid": "f64638bc09f0ef72ed1083f5cd0918a8", "text": "Talk freely about what you can now do because of saving. If you plan to retire sooner than most, or more comfortably than most, and can tie that to something you want them to do, show them that. If you buy a very nice car, or install a pool, and they wish they could afford that, tell them it took 5 or 10 or 20 years to save up for it, at x a week, and now you have it with no loan. Or be a cautionary tale: wish you had something, and regret not having saved for it. Young adults are generally well served by knowing more of parental finances than they did while they were dependents. Ask them if they will want or need to fund parental leaves, make a down payment for a house, own vacation property, put a child through post secondary education (share the cost of theirs including living expenses if you paid them), or go on amazing vacations fairly regularly. Tell them what those things cost in round figures. Explain how such a huge sum of money can accumulate over 2, 5, 10 years of saving X a month. for example $10 a week is $500 a year and so on. While they may not want to save 20 years for their downpayment, doing this simple math should let them map their savings amounts to concrete wishes and timeframes. Finally, if this is your own child and they live with you, charge them rent. This will save them from developing the habit of spending everything they earn, along with the expensive tastes and selfish speaking habits that come with it. Some parents set the rent aside and give it back as a wedding or graduation present, or to help with a downpayment later, but even if you don't, making them live within their true means, not the inflated means you have when you're living rent-free, is truly a gift.", "title": "" }, { "docid": "66391544bf97a3858c7e540b5e958624", "text": "To be honest, wall street survivor is good but when it comes to learning the stock markets from Europe, Beat wall street is the game to be playing. You can try it out for your self here on http://beatwallstreet.equitygameonline.com/ It is easy to use and there are monthly prizes available to winners, such as Ipads, Iphones and students who play it the game can win internships at top investment banks and brokers", "title": "" }, { "docid": "e1616d8bf5ea75501f47408abdac52ee", "text": "\"Although my kid just turned 5, he's learning the value of money now, which should help him in the future. First thing, teach him that you exchange money for goods and services. Let him see the bills, and explain what they're for (i.e. \"\"I pay ISP Co to give us Internet; that lets us watch Youtube and Netflix, as well as play games with Grandma on your GameStation\"\"). After a little while, they will see where it goes, and why. Then you have your automatic bills, such as mortgage payments. I make a habit of taking out the cash after I get paid, and my son comes with me to the bank where I deposit it again (I get paid monthly, so it's only one extra withdraw). He can physically see the money, and understand that if the stack is gone, it's gone. Now that he is understanding things cost money, he wants to make money himself. He volunteers to help clean up the kitchen and vacuum rooms in the house, usually without being asked. I give him a dollar or two for the simple chores like that. Things like cleaning his room or his own mess, he does not get paid for. He puts all his money into his piggy bank, and he has some goals in mind: a big fire truck, a police helicopter, a pool, a monster truck, a boat. Remember he's only 5. He has his goals, and we have the money he's been saving up. We calculate how many times he needs to vacuum the living room, or clean up dishes, to get there, and he realizes it takes a long time. He looks for other ways to make money around the house, and we come up with solutions together. I am hoping in a year or two that I can show him my investments and get him to understand why they make or lose money. I want to get him in to the habit of investing a little bit every few months, then every month, to help his income grow, even if he can't touch the money quite yet.\"", "title": "" }, { "docid": "bf619eadd14b8b2972b677bf40bcbe6f", "text": "\"For the most part, saving money usually depends upon having a budget and being able to stick to it. The toughest part of budgeting is usually setting it up (how much do I need for X) and sticking to it each month. In regards to sticking to it, there is software that you can use that helps figure out how much you are spending and how much you have left in a given category and they all pretty much do the same thing: track your spending and how much you have left in the category. If you are good with spreadsheets you might prefer that route (cost: free) but software that you can buy usually has value in that it can also generate reports that help you spot trends that you might not see in the spreadsheet. Sticking to a budget can be tough and a lot of what people have said already is good advice, but one thing that helps for me is having \"\"play money\"\" that can be used for whatever I want. In general this should be a fairly nominal amount ($20 or $40 a week) but it is enough that if you see a new book you want or what to go out for lunch one day you can do it without impacting the overall budget in some way. Likewise, having bigger savings goals can also be useful in that if times get tough it is easier to stop putting $100 a month to the side for a vacation than it is to cut back your grocery budget.\"", "title": "" }, { "docid": "64440338a893914c038cd0251d2410ea", "text": "\"This simulation game uses actual historical S&P 500 data to test whether you can \"\"time the market.\"\" You start with $10,000 invested, and it plays back 10 years of index values, in which time you can choose to sell (once), and if you do sell you can subsequently buy (once). Then you find out how you did relative to just holding what you started with. If you play it enough times, you might eventually beat it once. I never did.\"", "title": "" }, { "docid": "bc2d9c67f3633cf1df373499f44f618f", "text": "There's no formula for how much is the ideal amount to spend on entertainment and fun. As JoeTaxpayer says, it's all about balance. Maybe relative costs are different in France than in the US where I live, but here, housing and the things that go with it -- electricity, heat, insurance, maybe a few other miscellaneous items -- are usually a huge portion of a young person's expenses. If you don't mind living with your parents -- and they don't mind having you -- you can save a lot of money. There are lots of things you can do for fun that don't cost a lot of money. If your idea of fun is collecting fancy cars and making round-the-world trips, yes, that can get expensive fast. When I was in my 20s, my entertainment mostly consisted of going to movies, amusement parks, and occasional concerts; and playing computer games. Those aren't super expensive as long as you don't do them every day. And keeping my car running, which saved money over buying a new car. These days I'm in a situation analogous to yours: I'm getting older, and so I'm trying to build up a retirement account so I can retire comfortably. So I have to balance how much I put away for retirement with spending on fun things now. I have certain targets, and so I budget that I will put this amount away for retirement every month, and my spending money is what I have left. I think that's better than, spend whatever I want on fun, and then put what's left toward retirement. The latter plan is probably a fast route to debt.", "title": "" }, { "docid": "af223850d5c390d6a986d4bdb93cfedf", "text": "Establish good saving and spending habits. Build up your savings so that when you do buy a car, you can pay cash. Make spending decisions, especially for housing, transportation and entertainment, that allow you to save a substantial portion of your income. The goal is to get yourself to a place where you have enough net worth that the return on your assets is greater than the amount you can earn by working. (BTW, this is basically what I did. I put my two sons through top colleges on my dime and retired six years ago at the age of 56).", "title": "" }, { "docid": "3e1626a8841ae03410334dd28d884510", "text": "\"If one takes a slightly more expansive view of the word \"\"saving\"\" to include most forms of durable asset accumulation, I think the reason some do and most don't is a matter of a few factors, I will include the three that seem obvious to me: Education Most schools in the US where I live do not offer personal finance courses, and even when they do, there is no opportunity for a student to practice good financial habits in that classroom setting. I think a simple assignment that required students to track every penny that they spend over the period of a few months would help them open their eyes to how much money is spent on trivial things that they don't need. Perhaps this would be more effective in a university setting where the students are usually away from home and therefore more responsible for the spending that occurs on their own behalf. Beyond simple education about personal finances, most people have no clue how the various financial markets work. If they understood, they would not allow inflation to eat away at their savings, but that's a separate topic from why people do not save. Culture Since much of the education above isn't happening, children get their primary financial education from their parents. This means that those who are wealthy teach their children how to be wealthy, and those who are poor pass on their habits to children who often also end up poor. Erroneous ideas about consumption vs. investment and its economic effects also causes some bad policy encouraging people to live beyond their means and use credit unwisely, but if you live in a country where the average person expects to eat out regularly and trade in their automobiles as soon as they experienced their highest rate of depreciation, it can be hard to recognize bad financial behavior for what it is. Collective savings rates reflect a lot of individuals who are emulating each other's bad behavior. Discipline Even when someone is educated about finances, they may not establish good habits of budgeting regularly, tracking spending, and setting financial goals. For me, it helps to be married to someone who has similar financial goals, because we budget monthly and any major purchases (over $100 or so) must be agreed upon at the beginning of the month (with obvious exceptions for emergencies). This eliminates any impulsive spending, which is probably 90% of the battle for me. Some people do not need to account to someone else in order to spend wisely, but everyone should find a system that works for them and helps them to maintain some financial discipline.\"", "title": "" }, { "docid": "75499f0a26a8cd8961d79b389d1190d3", "text": "My brother's wife does some pretty intense couponing. She recently posted on facebook when she bought about $300 worth of items for $30. It was almost all toiletries and food that her family uses regularly, though there were some items they've now got 3 months supply of. She told me that it is a pain to track and exploit all of the different coupons/discounts but the savings help to offset the cost of homeschooling 4 children.", "title": "" }, { "docid": "c547404eede9e58b41e6ea8afdaf4146", "text": "\"I am surprised by the term \"\"spoil\"\". My kids would argue that having to practice piano/violin for an hour every day is hard work. Ditto for science lessons and sports. >it's easy to spend it on yourself too. I don't think so. Money spent on kids's education and personal development is an investment. Money spent on yourself... unless you are talking health and fitness, or professional education?\"", "title": "" }, { "docid": "4c372ebe4d33144e8b380f5ce9052c02", "text": "My approach won't work for everyone, but I keep a longer list of things I want in my head, preferably including higher value items. I then look at the cost of an item vs the amount of benefit it gets me (either enjoyment or ability to make more money or both). If I only had a few things I wanted, it would be easy to buy them even if the payback wasn't that great, but because I have a large list of things I'd like to be able to do, it's easier to play the comparison game in my head. Do I want this $50 thing now that will only give me a little bit of enjoyment and no income, or would I rather be able to get that $3000 digital cinema camera that I would enjoy having and could work on projects with and actually make money off of? (This is a RL example that I actually just bought last week after making sure I had solid leads on enough projects to pay myself back over time.) For me, it is much easier to compare with an alternative thing I'd enjoy, particularly since I enjoy hobbies that can pay for themselves, which is really the situation this strategy works best in. It might not work for everyone, but hobbies that pay for themselves can take many different forms. Mine tends to be very direct (get A/V tool, do projects that pay money), but it can also be indirect (get sports stuff, save on gym membership over time). If you can get things onto your list that can save you money in the long run, then this strategy can work pretty well, if not, you'll still have the overall saving problem, just with a longer wish list. That said, if you are good about saving already and simply want to make better use of your disposable income, then having a longer list may also work to let you seek out better deals for you. If you have funds that you know you can healthily spend on enjoyment, it is going to be difficult to choose nothing over something that gives enjoyment, even if it isn't a great return on the money. If you have alternatives that would give you better value, then it's easier to avoid the low value option.", "title": "" }, { "docid": "6ce8759db51b2ce834797cbbd3ed6464", "text": "\"IMHO It is definitively not too early to start learning and thinking about personal finances and also about investing. If you like to try stock market games, make sure to use one that includes a realistic fee structure simulation as well - otherwise there'll be a very unpleasant awakening when switching to reality... I'd like to stress the need for low fees with the brokerage account! Sit down and calculate how much fees different brokers take for a \"\"portfolio\"\" of say, 1 ETF, 1 bond, 1 share of about $500 or $1000 each (e.g. order fee, annual fee, fee for paying out interest/dividend). In my experience, it is good if you can manage to make the first small investing steps before starting your career. Real jobs tend to need lots of time (particularly at the beginning), so time to learn investing is extremely scarce right at the time when you for the first time in your life earn money that could/should be invested. I'm talking of very slowly starting with a single purchase of say an ETF, a single bond next time you have saved up a suitable amount of toy money, then maybe a single share (and essentially not doing anything with them in order to avoid further fees). While such a \"\"portfolio\"\" is terrible with respect to diversification and relative fees, this gives you the possibility to learn the procedures, to see how the fees cut in, what to do wrt taxes etc. This is why I speak about toy money and why I consider this money an investment in education. An order fee of, say, $10 on a $500 position are terrible 4% (2 x $10) for buying + selling - depending on your local taxes, that would be several years of dividend yield for say some arbitrary Dow Jones ETF. Nevertheless, purchase + sale together are less than 3 cinema tickets.\"", "title": "" }, { "docid": "002b80db4e03dd70e5339d96f08e5817", "text": "It is possible to figure out the next price. Just not for Joe Average. A stock exchange has a orderbook. This has two sides. One side has alle the buyers, how many shares they want, and what they are willing to pay. The other side has all the sellers, how many shares they got, and what price they are willing to accept. If any buyers and sellers match up, their orders are executed, money and shares are exchanged, everyone is happy. So the current asking price (the price you have to pay, to get some shares) is currently 12.46$. Let's say you want 6000 shares, for any price. The orderbook now looks like this: Your order is executed, you get 6000 shares for a total of 74,761$ (5900 * 12,46 + 100 * 12,47$). The order book now looks like this: The new asking price is 12.47$. Congrats, you knew the price in advance. Of course this is simplified, there are millions of entries on both sides, thousands of trades happen every millisecond and you'll have to pay the stock exchange a lot of money to give you all this information in real time. That's what high frequency traders are doing. They use highly specialised computer systems to exploit differences in stock exchanges all over the world. It's called arbitage. They have to be faster than the other guy. This race has gone on for a few years now, so that the limiting factor starts to become the speed of light. YOU are not going to benefit, or else you would not be asking questions on PERSONAL finance :)", "title": "" }, { "docid": "7d040358f6a20041bc83832cbfa7f5f6", "text": "Congratulations on starting your own business. Invest in a tax software package right away; I can't recommend a specific one but there is enough information out there to point you in the right direction: share with us which one you ended up using and why (maybe a separate question?) You do need to make your FICA taxes but you can write off the SE part of it. Keep all your filings as a PDF, a printout and a softcopy in the native format of the tax software package: it really helps the next tax season. When you begin your business, most of the expenses are going to be straightforward (it was for me) and while I had the option of doing it by hand, I used software to do it myself. At the beginning, it might actually seem harder to use the tax software package, but it will pay off in the end. Build relationships with a few tax advisors and attorneys: you will need to buy liability insurance soon if you are in any kind of serious (non hobby) business and accounting for these are no trivial tasks. If you have not filed yet, I recommend you do this: File an extension, overpay your estimated taxes (you can always collect a refund later) and file your return once you have had a CPA look over it. Do not skimp on a CPA: it's just the cost of running your business and you don't want to waste your time reading the IRS manuals when you could be growing your own business. Best of luck and come back to tell us what you did!", "title": "" } ]	fiqa
6e00b59e84a9c04c5fef18698c16b5b0	How to see a portfolio's overall profit or loss on Yahoo Finance?	[ { "docid": "c6effa3c656af35b34c03fcec6b383f6", "text": "The steps that I could imagine following:", "title": "" } ]	[ { "docid": "ff68b09fef2ab83c41d8cf7759d12c2c", "text": "The point of that question is to test if the user can connect shares and stock price. However, that being said yeah, you're right. Probably gives off the impression that it's a bit elementary. I'll look into changing it asap.", "title": "" }, { "docid": "3b97c12e43ff897b685f9465d1f85e67", "text": "I had the same problem and was looking for a software that would give me easy access to historical financial statements of a company, preferably in a chart. So that I could easily compare earnings per share or other data between competitors. Have a look at Stockdance this might be what you are looking for. Reuters Terminal is way out of my league (price and complexity) and Yahoo and Google Finance just don't offer the features I want, especially on financials. Stockdance offers a sort of stock selection check list on which you can define your own criterion’s. Hence it makes no investment suggestions but let's you implement your own investing strategy.", "title": "" }, { "docid": "5bfedbdd63f74534043d2d59fcef16b4", "text": "Like others have said, mutual funds don't have an intraday NAV, but their ETF equivalents do. Use something like Yahoo Finance and search for the ETF.IV. For example VOO.IV. This will give you not the ETF price (which may be at a premium or discount), but the value of the underlying securities updated every 15 seconds.", "title": "" }, { "docid": "6d9657c607586b37a6adb1bcd2413064", "text": "Returns reported by mutual funds to shareholders, google, etc. are computed after all the funds' costs, including Therefore the returns you see on google finance are the returns you would actually have gotten.", "title": "" }, { "docid": "ac305c586c01762a2f7fedcdf4e4420e", "text": "You can use Google Finance Stock Screener for screening US stocks. Apparently it doesn't have the specific criterion (Last Price % diff from 52 week low) you are (were!) looking for. I believe using its api you can get it, although it won't exactly be a very direct solution.", "title": "" }, { "docid": "193bc946d8e72c744a5e6362450cf56c", "text": "\"My Broker and probably many Brokers provide this information in a table format under \"\"Course of Sale\"\". It provides the time, price and volume of each trade on that day. You could also view this data on a chart in some charting programs. Just set the interval to \"\"Tick by Tick\"\" and look at the volume. \"\"Tick by Tick\"\" will basically place a mark for every trade that is taken and then the volume will tell you the size of that trade.\"", "title": "" }, { "docid": "835aea544af9ee19eb114bf793e8f425", "text": "\"I keep spreadsheets that verify each $ distribution versus the rate times number of shares owned. For mutual funds, I would use Yahoo's historical data, but sometimes shows up late (a few days, a week?) and it isn't always quite accurate enough. A while back I discovered that MSN had excellent data when using their market price chart with dividends \"\"turned on,\"\" HOWEVER very recently they have revamped their site and the trusty URLs I have previously used no longer work AND after considerable browsing, I can no longer find this level of detail anywhere on their site !=( Happily, the note above led me to the Google business site, and it looks like I am \"\"back in business\"\"... THANKS!\"", "title": "" }, { "docid": "76e622fc225406dbd70fb144752364dc", "text": "\"You could use any of various financial APIs (e.g., Yahoo finance) to get prices of some reference stock and bond index funds. That would be a reasonable approximation to market performance over a given time span. As for inflation data, just googling \"\"monthly inflation data\"\" gave me two pages with numbers that seem to agree and go back to 1914. If you want to double-check their numbers you could go to the source at the BLS. As for whether any existing analysis exists, I'm not sure exactly what you mean. I don't think you need to do much analysis to show that stock returns are different over different time periods.\"", "title": "" }, { "docid": "2649f29b989d8e7f895fca5b3d7d7194", "text": "\"At the bottom of Yahoo! Finance's S & P 500 quote Quotes are real-time for NASDAQ, NYSE, and NYSE MKT. See also delay times for other exchanges. All information provided \"\"as is\"\" for informational purposes only, not intended for trading purposes or advice. Neither Yahoo! nor any of independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. By accessing the Yahoo! site, you agree not to redistribute the information found therein. Fundamental company data provided by Capital IQ. Historical chart data and daily updates provided by Commodity Systems, Inc. (CSI). International historical chart data, daily updates, fund summary, fund performance, dividend data and Morningstar Index data provided by Morningstar, Inc. Orderbook quotes are provided by BATS Exchange. US Financials data provided by Edgar Online and all other Financials provided by Capital IQ. International historical chart data, daily updates, fundAnalyst estimates data provided by Thomson Financial Network. All data povided by Thomson Financial Network is based solely upon research information provided by third party analysts. Yahoo! has not reviewed, and in no way endorses the validity of such data. Yahoo! and ThomsonFN shall not be liable for any actions taken in reliance thereon. Thus, yes there is a DB being accessed that there is likely an agreement between Yahoo! and the providers.\"", "title": "" }, { "docid": "6efc06d196afec374bb60ee6e801f6e6", "text": "I second the Yahoo! Finance key stats suggestion, but I like Morningstar even better: http://quote.morningstar.com/stock/s.aspx?t=roic They show projected yield, based on the most recent dividend; the declared and ex-dividend dates, and the declared amount; and a table of the last handful of dividend payments. Back to Yahoo, if you want to see the whole dividend history, select Historical Prices, and from there, select Dividends Only. http://finance.yahoo.com/q/hp?s=ROIC&a=10&b=3&c=2009&d=00&e=4&f=2012&g=v", "title": "" }, { "docid": "593f6298656a2b96117729003a4e30dd", "text": "You bought 1 share of Google at $67.05 while it has a current trading price of $1204.11. Now, if you bought a widget for under $70 and it currently sells for over $1200 that is quite the increase, no? Be careful of what prices you enter into a portfolio tool as some people may be able to use options to have a strike price different than the current trading price by a sizable difference. Take the gain of $1122.06 on an initial cost of $82.05 for seeing where the 1367% is coming. User error on the portfolio will lead to misleading statistics I think as you meant to put in something else, right?", "title": "" }, { "docid": "14a425ef8cb11db564bada29217d8e6f", "text": "First - Google's snapshot - Then - Yahoo - I took these snapshots because they will not exist on line after the market opens, and without this context, your question won't make sense. With the two snapshots you can see, Yahoo shows the after hours trades and not just the official market close for the day. The amount it's down is exactly tracked from the close shown on Google. Now you know.", "title": "" }, { "docid": "20c9e9ae8c397b3bcdda3a75e314265a", "text": "You can write industry loss warrants. This is the closest thing I’ve found since I’ve been interested in this side of the ILS trade. Hedge funds and asset managers can do this. From what I understand it’s you selling the risk. Want to start a fund? 🤔", "title": "" }, { "docid": "0037a4d50e0ab3ce6e8a5bbc69965b9c", "text": "\"VaR does not do what it is supposed to do which is give you a \"\"floor\"\" with confidence on your potential losses. Even for portfolios with millions of instruments, it will not give you a metric that means anything. The point im trying to convey is that VaR does not give any meaningful information as its horribly inaccurate and that we would be better off WITHOUT VaR.\"", "title": "" }, { "docid": "77f2a13d7f418f6ab1209e08d7ad0ce6", "text": "The portfolio manager at Value Research Online does this very nicely. It tracks the underlying holdings of each fund, yielding correct calculations for funds that invest across the board. Take a look at the screenshot from my account: If you have direct equity holdings (e.g., not through a mutual fund), that too gets integrated. Per stock details are also visible.", "title": "" } ]	fiqa
e023a109075d508d61f4ea8d7513be6b	How do I factor dividends and yield into the performance of a security?	[ { "docid": "bfc93d42724ce523038b6fabed0ec9fc", "text": "Instead of a price chart can use a performance chart, which is usually expressed as a percentage increase from the original purchase price. To factor in the dividends, you can either add in all of your dividends to the final price, or subtract the accumulated dividends from your cost basis (the initial price).", "title": "" }, { "docid": "fdb6ac862a66bbb445259d15855dd771", "text": "Usually I've seen people treat the dividend like a separate cash flow, which is discounted if the company doesn't have a well-established dividend history. I've never really seen dividends rolled into a total return chart (except in the context of an article), probably because dividend reinvestment is a nightmare of record-keeping in a taxable account, and most folks don't do it. One of my brokers (TD Ameritrade) does allow you to plot dividend yield historically on their charts.", "title": "" }, { "docid": "dda0fb223ab5a85f71808cc1cc96cd93", "text": "\"Good observation. In fact, the S&P index itself is guilty of not including dividends. So when you look at the index alone, the delta between any two points in time diverges, and the 20 return observed if one fails to include dividends is meaningless, in my my humble opinion. Yahoo finance will let you look at a stock ticker and offer you an \"\"adjusted close\"\" to include the dividend effect.\"", "title": "" } ]	[ { "docid": "83ee753bf0e789e557df6966e4cfcbc9", "text": "You could take these definitions from MSCI as an example of how to proceed. They calculate price indices (PR) and total return indices (including dividends). For performance benchmarks the net total return (NR) indices are usually the most relevant. In your example the gross total return (TR) is 25%. From the MSCI Index Defintions page :- The MSCI Price Indexes measure the price performance of markets without including dividends. On any given day, the price return of an index captures the sum of its constituents’ free float-weighted market capitalization returns. The MSCI Total Return Indexes measure the price performance of markets with the income from constituent dividend payments. The MSCI Daily Total Return (DTR) Methodology reinvests an index constituent’s dividends at the close of trading on the day the security is quoted ex-dividend (the ex-date). Two variants of MSCI Total Return Indices are calculated: With Gross Dividends: Gross total return indexes reinvest as much as possible of a company’s dividend distributions. The reinvested amount is equal to the total dividend amount distributed to persons residing in the country of the dividend-paying company. Gross total return indexes do not, however, include any tax credits. With Net Dividends: Net total return indexes reinvest dividends after the deduction of withholding taxes, using (for international indexes) a tax rate applicable to non-resident institutional investors who do not benefit from double taxation treaties.", "title": "" }, { "docid": "20b29763e065272d5f4da2550a982ceb", "text": "Say you buy a bond that currently costs $950, and matures in one year, at $1000 face value. It has one coupon ($50 interest payment) left. The coupon, $50, is 50/950 or 5.26%, but you get the face value, $1000, for an additional $50 return. This is why the yield to maturity is higher than current yield. If the maturity were in two years, the coupons still provide 5.26%, and the extra 1000/950 is another 5.26% over 2 years, or (approx) 2.6%/yr compounded, for a total YTM of 7.86%. This is a back-of envelope calculation, the real way to calculate is with a finance calculator. Entering PV (present value) FV (future value) PMT (coupon payment(s)) and N (number of periods). With no calculator or spreadsheet, my estimate will be pretty close.", "title": "" }, { "docid": "4a03c953af7e493438d0b7e0261d42eb", "text": "\"Everything you are doing is fine. Here are a few practical notes in performing this analysis: Find all the primary filing information on EDGAR. For NYSE:MEI, you can use https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000065270&type=10-K&dateb=&owner=exclude&count=40 This is the original 10-K. To evaluate earnings growth you need per share earnings for the past three years and 10,11,12 years ago. You do NOT need diluted earnings (because in the long term share dilution comes out anyway, just like \"\"normalized\"\" earnings). The formula is avg(Y_-1+Y_-2+Y_-3) / is avg(Y_-10+Y_-11+Y_-12) Be careful with the pricing rules you are using, the asset one gets complicated. I recommend NOT using the pricing rules #6 and #7 to select the stock. Instead you can use them to set a maximum price for the stock and then you can compare the current price to your maximum price. I am also working to understand these rules and have cited Graham's rules into a checklist and worksheet to find all companies that meet his criteria. Basically my goal is to bottom feed the deals that Warren Buffett is not interested in. If you are interested to invest time into this project, please see https://docs.google.com/document/d/1vuFmoJDktMYtS64od2HUTV9I351AxvhyjAaC0N3TXrA\"", "title": "" }, { "docid": "e11a156276e3268bd1b63620fce86a21", "text": "When you sell the stock your income is from the difference of prices between when you bought the stock and when you sold it. There's no interest there. The interest is in two places: the underlying company assets (which you own, whether you want it or not), and in the distribution of the income to the owners (the dividends). You can calculate which portion of the interest income constitutes your dividend by allocating the portions of your dividend in the proportions of the company income. That would (very roughly and unreliably, of course) give you an estimate what portion of your dividend income derives from the interest. Underlying assets include all the profits of the company that haven't been distributed through dividends, but rather reinvested back into the business. These may or may not be reflected in the market price of the company. Bottom line is that there's no direct correlation between the income from the sale of the stake of ownership and the company income from interest, if any correlation at all exists. Why would you care about interest income of Salesforce? Its not a bank or a lender, they may have some interest income, but that's definitely not the main income source of the company. If you want to know how much interest income exactly the company had, you'll have to dig deep inside the quarterly and annual reports, and even then I'm not sure if you'll find it as a separate item for a company that's not in the lending business.", "title": "" }, { "docid": "759e601171450b86a2054b66acd393e7", "text": "\"I will add another point to ChrisinEdmonton's answer... I recognize that this is perhaps appropriate as a comment--or maybe 1/2 of an answer, but the comment formatting is inadequate for what I want to say. The magic formula that you need to understand is this: (Capital Invested) * (Rate of Return) = (Income per Period) When ChrisinEdmonton says that you need $300,000, he is doing some basic algebra... (Capital Required) = (Income per Period) / (Rate of Return) So if you're looking at $12,000 per year in passive income as a goal, and you can find a \"\"safe\"\" 4% yield, then what ChrisinEdmonton did is: $12,000 / 0.04 = $300,000 You can use this to play around with different rates of return and see what investment options you can find to purchase. Investment categories like REITs will risk your principal a little more, but have some of the highest dividend yields of around 8%--12%. You would need $100,000--$150,000 at those yields. Some of the safest approaches would be bonds or industrial stocks that pay dividends. Bonds exist around 3%--4%, and industrial dividend stocks (think GE or UTX or Coca Cola) tend to pay more like 2%-3%. The key point I'm trying to make is that if you're looking for this type of passive income, I recommend that you don't plan on the income coming from gains to the investment... This was something that ChrisinEdmonton wasn't entirely clear about. It can be complicated and expensive to whittle away at a portfolio and spend it along the way.\"", "title": "" }, { "docid": "ae8f67bfd285b1254b3005ffff7b1f00", "text": "It looks like you need a lot more education on the subject. I suggest you pick up a book on investing and portfolio management to get a first idea. Dividend yields are currently way below 5% on blue chips. Unlike coupons from fixed income instruments (which, in the same risk category, pay a lot less), dividend yields are not guaranteed and neither is the invested principal amount. In either case, your calculation is far away from reality. Sure, there are investments (such as the mentioned direct investments in companies or housings in emerging economies) that can potentially earn you two digit percentage returns. Just remember: risk always goes both ways. A higher earning potential means higher loss potential. Also, a direct investment is a lot less liquid than an investment on a publicly quoted high turnover market place. If you suddenly need money, you really don't want to be pressed to sell real estate in an emerging market (keyword: bid ask spread). My advice: the money that you can set aside for the long term (10 years plus), invest it in stock ETFs, globally. Everything else should be invested in bond funds or even deposits, depending on when you will need the access. As others have pointed out, consider getting professional advice.", "title": "" }, { "docid": "1aa6e57fcc88ff4c8206e366d19db581", "text": "As mentioned, dividends are a way of returning value to shareholders. It is a conduit of profit as companies don't legitimately control upward appreciation in their share prices. If you can't wrap your head around the risk to the reward, then this simply means you partially fit the description for a greater investment risk profile, so you need to put down Warren Buffett's books and Rich Dad Poor Dad and get an investment book that fits your risk profile.", "title": "" }, { "docid": "16b0f346130714809d8295fe35c92f4d", "text": "\"Dividend-paying securities generally have predictable cash flows. A telecom, electric or gas utility is a great example. They collect a fairly predictable amount of money and sells goods at a fairly predictable or even regulated markup. It is easy for these companies to pay a consistent dividend since the business is \"\"sticky\"\" and insulated by cyclical factors. More cyclic investments like the Dow Jones Industrial Average, Gold, etc are more exposed to the crests and troughs of the economy. They swing with the economy, although not always on the same cycle. The DJIA is a basket of 30 large industrial stocks. Gold is a commodity that spikes when people are faced with uncertainty. The \"\"Alpha\"\" and \"\"Beta\"\" of a stock will give you some idea of the general behavior of a stock against the entire market, when the market is trending up and down respectively.\"", "title": "" }, { "docid": "0ccdc6551bab3d553a85e58f297e935e", "text": "A share is more than something that yields dividends, it is part ownership of the company and all of its assets. If the company were to be liquidated immediately the shareholders would get (a proportion of) the net value (assets - liabilities) of the company because they own it. If a firm is doing well then its assets are increasing (i.e. more cash assets from profits) therefore the value of the underlying company has risen and the intrinsic value of the shares has also increased. The price will not reflect the current value of the firms assets and liabilities because it will also include the net present value of expected future flows. Working out the expected future flows is a science on par with palmistry and reading chicken entrails so don't expect to work out why a company is trading at a price so much higher than current assets - liabilities (or so much lower in companies that are expected to fail). This speculation is in addition to price speculation that you mention in the question.", "title": "" }, { "docid": "35ec6ed1d2beb27b9ab3d584c9de8470", "text": "Dividend yield is a tough thing to track because it's a moving target. Dividends are paid periodically the yield is calculated based on the stock price when the dividend is declared (usually, though some services may update this more frequently). I like to calculate my own dividend by annualizing the dividend payment divided by my cost basis per share. As an example, say you have shares in X, Co. X issues a quarterly dividend of $1 per share and the share price is $100; coincidentally this is the price at which you purchased your shares. But a few years goes by and now X issues it's quarterly dividend of $1.50 per share, and the share price is $160. However your shares only cost you $100. Your annual yield on X is 6%, not the published 3.75%. All of this is to say that looking back on dividend yields is somewhat similar to nailing jello to the wall. Do you look at actual dividends paid through the year divided by share price? Do you look at the annualized dividend at the time of issue then average those? The stock price will fluctuate, that will change the yield; depending on where you bought your stock, your actual yield will vary from the published amount as well.", "title": "" }, { "docid": "ee5ebb3166c476aae0783c775c317dc4", "text": "Having a good dividend yield doesn't guarantee that a stock is safe. In the future, the company may run into financial trouble, stop paying dividends, or even go bankrupt. For this reason, you should never buy a stock just because it has a high dividend yield. You also need some criteria to determine whether that stock is safe to buy. Personally, I consider a stock is reasonably safe if it meets the following criteria:", "title": "" }, { "docid": "aa908a8d6e858642e3071789fcc63f55", "text": "This is a great question for understanding how futures work, first let's start with your assumptions The most interesting thing here is that neither of these things really matters for the price of the futures. This may seem odd as a futures contract sounds like you are betting on the future price of the index, but remember that the current price already includes the expectations of future earnings as well! There is actually a fairly simple formula for the price of a futures contract (note the link is for forward contracts which are very similar but slightly more simple to understand). Note, that if you are given the current price of the underlying the futures price depends essentially only on the interest rate and the dividends paid during the length of the futures contract. In this case the dividend rate for the S&P500 is higher than the prevailing interest rate so the futures price is lower than the current price. It is slightly more complicated than this as you can see from the formula, but that is essentially how it works. Note, this is why people use futures contracts to mimic other exposures. As the price of the future moves (pretty much) in lockstep with the underlying and sometimes using futures to hedge exposures can be cheaper than buying etfs or using swaps. Edit: Example of the effect of dividends on futures prices For simplicity, let's imagine we are looking at a futures position on a stock that has only one dividend (D) in the near term and that this dividend happens to be scheduled for the day before the futures' delivery date. To make it even more simple lets say the price of the stock is fairly constant around a price P and interest rates are near zero. After the dividend, we would expect the price of the stock to be P' ~ P - D as if you buy the stock after the dividend you wouldn't get that dividend but you still expect to get the rest of the value from additional future cash flows of the company. However, if we buy the futures contract we will eventually own the stock but only after the dividend happens. Since we don't get that dividend cash that the owners of the stock will get we certainly wouldn't want to pay as much as we would pay for the stock (P). We should instead pay about P' the (expected) value of owning the stock after that date. So, in the end, we expect the stock price in the future (P') to be the futures' price today (P') and that should make us feel a lot more comfortable about what we our buying. Neither owning the stock or future is really necessarily favorable in the end you are just buying slightly different future expected cash flows and should expect to pay slightly different prices.", "title": "" }, { "docid": "1b69eea97ab6432c7cde802d6fd58942", "text": "Dividend yield is not the only criteria for stock selection. Companies past performance, management, past deals, future expansion plans, and debt equity ratio should be considered. I would also like to suggest you that one should avoid making any investment in the companies that are directly affected by frequent changes in regulations released by government. All the above mentioned criteria are important for your decision as they make an impact on your investment and can highly affect the profits.", "title": "" }, { "docid": "ccc65bbb1614f209f9f526eccf3e7119", "text": "\"The term you're looking for is yield (though it's defined the other way around from your \"\"payout efficiency\"\", as dividend / share price, which makes no substantive difference). You're simply saying that you want to buy high-yield shares, which is a common investment strategy. But you have to consider that often a high-yielding share has a reason for the high yield. You probably don't want to buy shares in a company whose current yield is 10% but will go into liquidation next year.\"", "title": "" }, { "docid": "c4f7c8ce1fa7c6b9b2e7b2b7670828a4", "text": "\"To try and address your 'how' it goes a bit like this. You need to first assess how your stuff is invested, if for example half is in stocks, and the other half is in bonds, then you will need to calculate a 'blended' rate for what are reasonable 'average return' for both. That might mean looking at the S&P500 or Russell 3000 for the stock portion, and some bond index for that portion, then 'blend the rates', in this case using a formula like this then compare the blended rate with the return in your IRA. It is generally a lot more useful to compare the various components of your total return separately, especially if you investing with a particular style such as 'agressive growth' or you are buying actual bonds and not a bond fund since most of the bond oriented indexes are for bond funds, which you can't really compare well with buying and holding bonds to maturity. Lets say your stock side was two mutual funds with different styles, one 'large cap' the other 'aggressive growth'. In that case you might want to compare each one of those funds with an appropriate index such as those provided by Morningstar If you find one of them is consistently below the average, you might want to consider finding an alternative fund who's manager has a better track record (bearing in mind that \"\"past performance....\"\") For me (maybe someone has a good suggestion here) bonds are the hard thing to judge. The normal goal of actually owning bonds (as opposed to a fund) is to retain the entire principal value because there's no principal fluctuation if you hold the bond to maturity (as long as you choose well and the issuer doesn't default) The actual value 'right now' of a bond (as in selling before maturity) and bond funds, goes up and down in an inverse relationship with interest rates. That means the indexes for such things also go up and down a lot, so it's very hard to compare them to a bond you intend to hold to maturity. Also, for such a bond, there's not a lot of point to 'switch out' unless you are worried about the issuer defaulting. If rates are up from what you are getting on your bonds, then you'll have to sell your bond at a discount, and all that happens is you'll end up holding a different bond that is worth less, but has higher interest (basically the net return is likely to be pretty much the same). The better approach there is generally to 'ladder' your maturity dates so you get opportunities to reinvest at whatever the prevailing rates are, without having to sell at a discount.. anyway the point is that I'm not sure there's a lot of value to comparing return on the bond portion of an IRA unless it's invested in bond funds (which a lot of people wanting to preserve principal tend to avoid)\"", "title": "" } ]	fiqa
da6bfd1664fdfa653ac2105fbc1042e8	Need something more basic than a financial advisor or planner	[ { "docid": "d52706334c40738d1212f1ded17f611b", "text": "Yes, there is a profession that does exactly what you're looking for. It's called a fee-only financial advisor. These are professionals who (in the United States) enter into a fiduciary relationship with a client, meaning they are legally required to put your financial interests above all other considerations (such as any behind-the-scenes incentives to promote certain products). Between that requirement and the fact that they are paid for their time (and not on commission), they have zero incentive to try to sell you anything that you do not need. Their only job is to help you with your financial situation. (Of course, some of them may be better than others.) See the profession's website here to find such an advisor near you. (Credit to Marketplace Money, the old name for Marketplace Weekend, for mentioning fee-only advisors at least 87 times per show.)", "title": "" }, { "docid": "eae66be543511758236f6463a1f93a21", "text": "\"You know how when people called in on the Car Talk radio show (Click and Clack, I miss those guys), and while the caller asked a question about his car, really he needed marital advice? And the hosts would pounce on the part about the disagreement with family member and provide an unexpected answer (\"\"Yeah, the trick to a using a clutch is [...], but really, if you want to learn to drive a stick shift, get your dad out of the car!\"\") So I'm pouncing on the part about the spouse. It sounds like you and your spouse don't always agree on saving and spending, and you want to find a way to agree on saving and spending. If you can find a coach or planner or counselor that you both like and both trust, then go for it. You're looking more for the right personality than a precise job description. Start with exploring what you do agree on: we agree we need to save money, we agree we need to have a spending plan and budget, etc. The right coach will help you get to more agreement -- the job title is less important.\"", "title": "" }, { "docid": "ea3e6dd54a88f4d92b78eaffc3d96e8e", "text": "\"What you are looking for is a Money Coach or a Personal Finance Coach. From mymoneycoach.com: \"\"Money Coach: Everyone uses money, but few people fully understand how to use it wisely. To be debt free and enjoy a comfortable lifestyle takes special skills. Money coaches provide solutions for household budgeting, investing, using credit wisely, and saving for retirement. With the principles offered by a money coach, you can live the life you want to live.\"\" Usually money coaches or personal finance coaches will not tell you \"\"you should put your money here or there\"\" but instead they will work with you to identify and correct bad money behaviours that affect more than just your investments, and they will not sell you anything. Maybe you could take a look at some coaches in your area, but a lot of them work via the internet too. Good luck!\"", "title": "" }, { "docid": "8d188aef0f2e7774ca9ec028627a9339", "text": "\"If you are living near a land-grant university, you might be able to find help from the university's Extension Service. In many land-grant universities (the land grants were given to universities formed for the purpose of improving \"\"agricultural and mechanical arts\"\"), the Extension Services have expanded beyond farm-related services to include horticulture, food and nutrition counseling, consumer finance, money management and budgeting advice etc. See, for example this site.\"", "title": "" }, { "docid": "998308ee3ff8f396abe59c9e60451502", "text": "In addition to a fee-only advisor, brought up by dg99, you could consider asking your questions on message boards such as Bogleheads.org. I have found the advice amazing, obviously conflict-free, and free.", "title": "" } ]	[ { "docid": "2fc79b65310eb6cba590a08089bf4016", "text": "Try the Envelope Budgeting System. It is a pretty good system for managing your discretionary outflows. Also, be sure to pay yourself first. That means treat savings like an expense (mortgage, utilities, etc.) not an account you put money in when you have some left over. The problem is you NEVER seem to have anything leftover because most people's lifestyle adjusts to fit their income. The best way to do this is have the money automatically drafted each month without any action required on your part. An employer sponsored 401K is a great way to do this.", "title": "" }, { "docid": "27190f396673fa1761500386491ffe9a", "text": "My former accountant, used to provide this service as part of him doing my taxes. During the off season, he would provide a planning session and he would review strategies that I might look into. Since he did not make any money off of providing investments, he was about as unbiased as one could be. However, something like that might not be enough for you guys. You could go with someone online, Scottrade is going into the business of providing advice, as well as Charles Schwab or Fidelity, but you might need someone more personal. In that case, I would use my network. Talk to people, ask who they use, like, and respect. I would say it is very easy to find mediocre investment advisers, the good ones are hard. I would look for one that teaches. It is very easy to tell someone what to do, much harder to teach them what is the right thing. One thing that is easy about your situation: Planning to buy a home. Put money for a down payment in a high interest savings account. What I mean by high interest, is they still pay almost nothing. You can't really make a mistake. If you find one with .5% instead of .85%, what is the real difference after 5 years? About $180?", "title": "" }, { "docid": "087e6933bdc64feb0d5331a49f615b23", "text": "\"So, you have $100k to invest, want a low-maintenance investment, and personal finance bores you to death. Oooohhh, investment companies are gonna love you. You'll hand them a wad of cash, and more or less say \"\"do what you want.\"\" You're making someone's day. (Just probably not yours.) Mutual fund companies make money off of you regardless of whether you make money or not. They don't care one bit how carefully you look at your investments. As long as the money is in their hands, they get their fee. If I had that much cash, I'd be looking around for a couple of distressed homes in good neighborhoods to buy as rentals. I could put down payments on two of them, lock in fixed 30-year mortgages at 4% (do you realize how stupid low that is?) and plop tenants in there. Lots of tax write-offs, cash flow, the works. It's a 10% return if you learn about it and do it correctly. Or, there have been a number of really great websites that were sold on Flippa.com that ran into five figures. You could probably pay those back in a year. But that requires some knowledge, too. Anything worthwhile requires learning, maintenance and effort. You'll have to research stocks, mutual funds, bonds, anything, if you want a better than average chance of getting worthwhile returns (that is, something that beats inflation, which savings accounts and CDs are unlikely to do). There is no magic bullet. If someone does manage to find a magic bullet, what happens? Everyone piles on, drives the price up, and the return goes down. Your thing might not be real estate, but what is your thing? What excites you (i.e., doesn't bore you to death)? There are lots of investments out there, but you'll get out of it what you put into it.\"", "title": "" }, { "docid": "f81c03209131e25b1f2c5c6b4ec90622", "text": "I would make this a comment, but I am not worthy...... You will need to define your objectives before you can do anything. What is the money for? What is your risk tolerance? Where do you live? Capital appreciation? Preservation? Can you eat if your savings are cut in half? How much are you currently making? How much are you currently saving? What do you already have exposure to? How secure is your job? What is the makeup of the congregation? Do you have any tax-related surprises? Do you own your home? Have you previously consulted with a financial planner? There are many many factors obviously. More than I think most people want to give out over the internet, but they are all important to making a decision. Get a recommendation from someone you know for a financial planner. Ask upfront what their background is. Education, experience credentials. You want a certified financial planner or analyst. Ask how their fees are structured and what their approach is like, and make sure they're speaking intelligibly. Feel free to shop around until you find someone you like.", "title": "" }, { "docid": "88e299ae89dcf52f5637fbf7df9cc1f1", "text": "\"Lifecycle funds might be a suitable fit for you. Lifecycle funds (aka \"\"target date funds\"\") are a mutual fund that invests your money in other mutual funds based on how much time is left until you need the money-- they follow a \"\"glide-path\"\" of reducing stock holdings in favor of bonds over time to reduce volatility of your final return as you near retirement. The ones I've looked at don't charge a fee of their own for this, but they do direct your portfolio to actively managed funds. That said, the ones I've seen have an \"\"acquired\"\" expense ratio of less than what you're proposing you'd pay a professional. FWIW, my current plan is to invest in a binary portfolio of cheap mutual funds that track S&P500 and AGG and rebalance regularly. This is easy enough that I don't see the point of adding in a 1 percent commission.\"", "title": "" }, { "docid": "80a32d2885545261ad2faffcd6d0c8e6", "text": "\"This is not a direct answer to your question, but you might want to consider whether you want to have a financial planner at all. Would a large mutual fund company or brokerage serve your needs better than a bank? You are still quite young and so have been contributing to IRAs for only a few years. Also, the wording in your question suggests that your IRA investments have not done spectacularly well, and so it is reasonable to infer that your IRA is not a large amount, or at least not as large as what it would be 30 years from now. At this level of investment, it would be difficult for you to find a financial planner who spends all that much time looking after your interests. That you should get away from your current planner, presumably a mid-level employee in what is typically called the trust division of the bank, is a given. But, to go to another bank (or even to a different employee in the same bank), where you will also likely be nudged towards investing your IRA in CDs, annuities, and a few mutual funds with substantial sales charges and substantial annual expense fees, might just take you from the frying pan into the fire. You might want to consider transferring your IRA to a large mutual fund company and investing it in something simple like one of their low-cost (meaning small annual expense ratio) index funds. The Couch Potato portfolio suggests equal amounts invested in a no-load S&P 500 Index fund and a no-load Bond Index fund, or a 75%-25% split favoring the stock index fund (in view of your age and the fact that the IRA should be a long-term investment). But the point is, you can open an IRA account, have the money transferred from your IRA account with the bank, and make the investments on-line all by yourself instead of having a financial advisor do it on your behalf and charge you a fee for doing so (not to mention possibly screwing it up.) You can set up Automated Investment too; the mutual fund company will gladly withdraw money from your checking account and invest it in whatever fund(s) you choose. All this is not complicated at all. If you would like to follow the Couch Potato strategy and rebalance your portfolio once a year, you can do it by yourself too. If you want to invest in funds other than the S&P 500 Index fund, etc. most mutual fund companies offer a \"\"portfolio analysis\"\" and advice for a fee (and the fee is usually waived when the assets increase above certain levels - varies from company to company). You could thus have a portfolio analysis done each year, and hopefully it will be free after a few more years. Indeed, at that level, you also typically get one person assigned as your advisor, just as you have with a bank. Once you get the recommendations, you can choose to follow them or not, but you have control over how and where your IRA assets are invested. Over the years, as your IRA assets grow, you can branch out into investments other than \"\"staid\"\" index funds, but right now, having a financial planner for your IRA might not be worth it. Later, when you have more assets, by all means if you want to explore investing in specific stocks with a brokerage instead of sticking to mutual funds only but this might also mean phone calls urging you to sell Stock A right now, or buy hot Stock B today etc. So, one way of improving your interactions and have a better experience with your new financial planner is to not have a planner at all for a few years and do some of the work yourself.\"", "title": "" }, { "docid": "abd2717d0bd18225adbb2f31cd3320ac", "text": "\"A financial planner can help with investments, insurance, estate planning, budgeting, retirement planning, saving for college, tax planning/prep, and other money topics. One way to get a sense is to look at this Certified Financial Planner topic list. Another idea is to look at this book (my favorite I've read) which covers roughly a similar topic list in a concise form: http://www.amazon.com/Smart-Simple-Financial-Strategies-People/dp/0743269942 It could not hurt at all to read that before deciding to visit a planner, so you have baseline knowledge. By the way, look for the CFP certification which is a generalist certification. A CFP might also have a deeper cert in certain topics or connect you with someone who does. For example: You really want a generalist (CFP) who may have an additional credential as well. The idea is to holistically look at what you're trying to accomplish and all finance-related areas. Especially because there may be tradeoffs. The CFP would then refer you to or work with lawyers, accountants, etc. Importantly, some advisors are fiduciaries (must act in your interests) and some are not. In particular many stockbrokers are neither qualified planners (no CFP or equivalent) nor are they fiduciaries. Stay away. There are several models for paying a financial planner, including: There's an organization called NAPFA (napfa.org) for fiduciary non-commission-based planners. Membership there is a good thing to look for since it's a third party that defines what fee-only means and requires the no-commissions/fiduciary standard. Finally, the alternative I ended up choosing was to just take the CFP course myself. You can do it online via correspondence course, it costs about the same as 1 year of professional advice. I also took the exam, just to be sure I learned the stuff. This is the \"\"extreme DIY\"\" approach but it is cheaper over time and you know you are not going to defraud yourself. You still might do things that are counterproductive and not in your interests, but you know that already probably ;-) Anyway I think it's equivalent to about a quarter's worth of work at a decent college, or so. There are about 6 textbooks to dig through. You won't be an experienced expert at the end, but you'll know a lot. To get an actual CFP cert, you need 3 years experience on top of the courses and the exam - I haven't done that, just the book learning. Someone who puts \"\"CFP\"\" after their name will have the 3 years on top of the training. Some editorial: many planners emphasize investing, and many people looking for planners (or books on finance) emphasize investing. This is a big mistake, in my view. Investing is more or less a commodity and you just need someone who won't screw it up, overcharge, and/or lose your money on something idiotic or inappropriate. Some people are in plain-bad and inappropriate investments, don't get me wrong. But once you fix that and just get into anything decent, your biggest planning concerns are probably elsewhere. On investments, I'd look for a planner to just get you out of overpriced annuities and expensive mutual funds you may have been sold (anything you were sold by a salesperson is probably crap). And look for them to help you decide how much to invest, and how much in stocks vs. bonds. Those are the most important investment decisions.\"", "title": "" }, { "docid": "54db13a53d574da9ddcc67071d469716", "text": "Some sample prices for straightforward pay-for-hours-or-deliverables planners: I think I've seen some similar rates elsewhere, too. I'd feel like you might get something perfunctory and boilerplate for too much less than $1000 - how could the person afford to spend much time? - and I'd feel like lots more than $1000 for just a standard straightforward plan might be a ripoff. Basically you're paying $1000 for a day or two of work, you don't want just a couple hours of work, but you don't need a week of work either. Anyway, extracting the general guideline (since prices may vary regionally or over time), you could figure it takes a day or two to do a decent job on a basic complete financial plan without a lot of complexities in it. From there you can decide what's fair, adding or subtracting time if you need less than a complete plan or have complex issues. This is assuming you're paying for time and deliverables, which is not a given. The biggest factor in how much you pay is probably how they charge; a couple of the most common models, (There are other models but these are the ones I've seen most.) The difference between these two models is a lot of money over time. Hourly is going to be much cheaper, because it's a one-time cost instead of ongoing, and unrelated to what you have in assets. However, you won't get investment management, which can be valuable if you aren't the kind to stick to an investment plan or you want someone else to completely take care of it for you. The investment-management planners have the potential to make a lot more money (and are more likely to be in it for the money). Hourly planners don't really have as good a business from a business owner's perspective, but they are cheaper from a customer perspective, as long as you're happy to DIY a bit. One thing I like about hourly planners is that I don't really feel investments are the main place planners can add value, so it makes me nervous to have the compensation based on that. Insurance, estate planning, taxes, etc. are where it's harder for a layperson to know all the ins and outs and DIY. From what I've seen, the cheapest planners are the ones that you can get free or discounted from companies like USAA or Vanguard if you have an account with them. However, they will only recommend products from the company in question, so that's a downside, and you probably won't get to meet them in person. This question may be useful too: What exactly can a financial advisor do for me, and is it worth the money?", "title": "" }, { "docid": "1c532c0e90a5f1c38e5940728091b8c4", "text": "If you don't have the time or interest to manage investments, you need a financial advisor. Generally speaking, you're better served by an advisor who collects an annual fee based on a percentage of your account value. Advisors who are compensated based on transactions have a vested interest to churn your account, which is often not in your best interest. You also need to be wary of advisors who peddle expensive mutual funds with sales loads (aka kick-backs to the advisor) or annuities. Your advisor's compensation structure should be transparent as well.", "title": "" }, { "docid": "343d01b5f2726763ff0f0cd166d76d57", "text": "\"I'm still recommending that you go to a professional. However, I'm going to talk about what you should probably expect the professional to be telling you. These are generalities. It sounds like you're going to keep working for a while. (If nothing else, it'll stave off boredom.) If that's the case, and you don't touch that $1.4 million otherwise, you're pretty much set for retirement and never need to save another penny, and you can afford to treat your girl to a nice dinner on the rest of your income. If you're going to buy expensive things, though - like California real estate and boats and fancy cars and college educations and small businesses - you can dip into that money but things will get trickier. If not, then it's a question of \"\"how do I structure my savings?\"\". A typical structure: Anywho. If you can research general principles in advance, you'll be better prepared.\"", "title": "" }, { "docid": "d9090c82c10d0ab26682d90301bde7aa", "text": "\"It is difficult to find investment banks that offer both low fees and low minimum investments. If you google around for \"\"no-fee low-minimum mutual funds\"\" you can find various articles with recommendations, such as this one. One fund they mention that looks promising is the Schwab Total Stock Market Index Fund, which apparently has a minimum investment of only $100 and an expense ratio of 0.09%. (I've never heard of this fund before, so I'm just repeating the info from the site. Be sure to look into it more thoroughly to see if there are any hidden costs here. I'm not recommending this fund, just mentioning it as an example of what you may be able to find.) Another possibility is to make use of funds in an existing brokerage account that you use for yourself. This could allow you to make use of Craig W.'s suggestion about ETFs. For instance, if you already have a brokerage account at Vanguard or another firm, you could add $100 to the account and buy some particular fund, mentally earmarking it as your daughter's.\"", "title": "" }, { "docid": "67cbe9429df7739550de8c0cf95a68ba", "text": "\"Do I need an Investment Adviser? No, but you may want to explore the idea of having one. Is he going to tell me anything that my accountant can't? Probably. How much expertise are you expecting from your accountant here? Do you think your accountant knows everything within the realms of money from taxes, insurance products, investments and all your choices and what would work or wouldn't? Seems like it could be a tall order to my mind. My accountant did say to come to him for advice on investment/business issues. So, he is willing, but is he able? Not asking about his competence, but rather \"\"is there something that only an Investment Adviser can provide, by law, that an accountant can't\"\"? Not that I know though don't forget how much expertise are you expecting here from one person. Is this person intended to answer all your money questions? But isn't that something that my accountant could/should do? Perhaps though how well are you expecting one person to be aware of so much stuff? I want you to know all the tax law so I can minimize taxes, maximize my investment returns, cover me with adequate insurance, and protect my savings seems like a bit much to put on one entity. Do I need either of them? Won't the Internet and sites like this one suffice? Need no. However, how much time are you prepared to spend learning the basics of strategies that work for you? How much money are you prepared to put into things to learn what works and doesn't? While it is your decision, consider how to what extent do you diagnose your medical issues through the internet versus going to see a doctor? Be careful of how much of a do it yourself approach you want to go here and recognize that there are multiple approaches that may work. The question is which trade-offs are OK for you.\"", "title": "" }, { "docid": "750ac12a6b41230be09d1b31bceb0f1c", "text": "Again, you are asking people to trust you with their life savings so you can take your 1% and the best you can do is google? You don't have a lawyer or anything? Plenty of advisory shops allow you to set up your own business within their infrastructure.", "title": "" }, { "docid": "cf54036c6776fec58c6975a58b2792a0", "text": "A financial advisor is a service professional. It is his/her job to do things for you that you could do for yourself, but you're either too busy to do it yourself (and you want to pay somebody else), or you'd rather not. Just like some people hire tax preparers, or maids, or people to change their oil, or re-roof their houses. Me, I choose to self-manage. I get some advise from Fidelity and Vanguard. But we hired somebody this year to re-roof our house and someone else to paint it.", "title": "" }, { "docid": "eb8297b5ca140c0fb70085814539e5a3", "text": "The Gordon equation does not use inflation-adjusted numbers. It uses nominal returns/dividends and growth rates. It really says nothing anyone would not already know. Everyone knows that your total return equals the sum of the income return plus capital gains. Gordon simply assumes (perfectly validly) that capital gains will be driven by the growth of earnings, and that the dividends paid will likewise increase at the same rate. So he used the 'dividend growth rate' as a proxy for the 'earnings growth rate' or 'capital gains rate'. You cannot use inflation-removed estimates of equity rates of return because those returns do not change with inflation. If anything they move in opposite directions. Eg in the 1970's inflation the high market rates caused people to discount equity values at larger rates --- driving their values down -- creating losses.", "title": "" } ]	fiqa
4a55e555c0256da95190132baae60654	Can future rental income be applied to present debt-to-income ratio when applying for second mortgage?	[ { "docid": "a07291b4de8087c2421bb4e70ecf6573", "text": "They will include the rental income into the calculation. They don't give you a 100% credit for the income because they have to factor that you might have a gap between tenants. Years ago they only credited me with 66% of the expected monthly income. Example: This expense was then supposed to come from the 10% of my income that was allocated for monthly non-principal mortgage loans, e.g student loan, auto loan, credit card debt...", "title": "" }, { "docid": "aa55d2a06f07727f5c894fe98b1271e6", "text": "Having both purchased income properties and converted prior residences into rental properties I have found that it is difficult to get the banks to consider the potential rental income in qualifying you for a loan. It helps if you have prior rental experience but in many cases you will have to qualify outright (i.e. without consideration of the potential income). The early 2000s were great for responsible borrows/investors but today's regulations make it much more difficult to finance income property.", "title": "" }, { "docid": "86ef9962360668eba7a9c6caf07a7265", "text": "Generally speaking, no they won't. In this case, though I haven't done it myself, I was recommended to put the mortgage on the real estate after it's been leased out and has a contract on it. Then, yes, they will use it for that. But, ex-ante don't expect any bank to count on income from it because, at that point, there's zero guarantee you'll get it leased, and even if you do, at what rate.", "title": "" } ]	[ { "docid": "50f8deed2522263fddbfeed7c4d1f20d", "text": "Two principles in comparing different scenarios: 1) keep the two scenarios as equal as possible in amount and timing of payments; and 2) find the financial comparison at one particular point. So, your car loan, $10,000 for 35 months at 8% compounded monthly means you're paying $321.29 Suppose you make the switch and keep on paying the same, mortgage and $321.29 for the 35 months (see 1, above) Those extra payments, continued for 35 months at your mortgage rate of 5.59%, will pay off a mortgage of $10,354.10, which will more than pay off the $10,000 you added to the mortgage In other words, making the switch will benefit you to the tune of 354.10 as of the day of the switch. You could ask the mortgage company to give you the $10,000 and the $354.10, and all your payments and amortization would stay the same... (see 2 above) Of course, this is pretty much what Joe Taxpayer said...", "title": "" }, { "docid": "18709a398b2b7066a205463a07181a42", "text": "There's a couple issues to consider: When you sell your primary home, the IRS gives you a $500k exemption (married, filing jointly) on gain. If you decide not to sell your current house now, and you subsequently fall outside the ownership/use tests, then you may owe taxes on any gains when you sell the house. Rather than being concerned about your net debt, you should be concerned about your monthly debt payments. Generally speaking, you cannot have debt payments of more than 36% of your monthly income. If you can secure a renter for your current property, then you may be able to reach this ratio for your next (third) property. Also, only 75% of your expected monthly rental income is considered for calculating your 36% number. (This is not an exhaustive list of risks you expose yourself to). The largest risk is if you or your spouse find yourself without income (e.g. lost job, accident/injury, no renter), then you may be hurting to make your monthly debt payments. You will need to be confident that you can pay all your debts. A good rule that I hear is having the ability to pay 6 months worth of debt. This may not necessarily mean having 6 months worth of cash on hand, but access to that money through personal lines of credit, borrowing against assets, selling stocks/investments, etc. You also want to make sure that your insurance policies fully cover you in the event that a tenant sues you, damages property, etc. You also don't want to face a situation where you are sued because of discrimination. Hiring a property management company to take care of these things may be a good peace-of-mind.", "title": "" }, { "docid": "18a4acfd33c5b0a9aca4a2a2e35d466f", "text": "The issue here is that the transaction (your funds to her account) looks very similar to the rent payments which you plan to make in the future. Those rental payments (if deemed to be commercial) would normally be subject to tax. Consider the scenario where rather than an up front $5000, and $5000 over 2 years, you paid her $10000, and paid no rent. That might be an attempt to avoid paying tax. A commercial transaction can't be re-labeled as a gift just based on your election - the transaction needs to be considered as a whole. However, an interest free, unsecured loan connected with you paying rent at market rate would be (depending on local laws) simply foolish (to some extent). I don't think you are able to structure the transaction as a joint purchase (since the mortgage will prevent her from allocating a part of the property to you). Its also likely that you can live in her house and contribute an adequate amount to the household costs without creating a taxable income for her. For example in the UK, up to ~£4000 pa rental income generated from the property in which you reside does not need to be declared. You need to identify the scenarios where your particular arrangement could be imagined as resulting in a taxable or potentially taxable event - then make sure you are not avoiding those events just by choosing how you label the events.", "title": "" }, { "docid": "15c158701768c423b56c2ce8adef5483", "text": "I also am paying roughly twice as much in rent as a mortgage payment would be on the type of house I have been looking at, so I'd really like to purchase a house if possible. Sounds like I need to rain on your parade a bit: there's a lot more to owning a house than the mortgage. Property tax, insurance, PMI, and maintenance are things that throw this off. You'll also be paying more interest than normal given your recent credit history. It's still possible that buying is better than renting, but one really should run the detailed math on this. For example, looking at houses around where I live, insurance, property tax and special assessments over the course of a year roughly equal the mortgage payments annually. You probably won't be able to get a loan just yet. If you've just started your new job it will take a while to build a documentable income history sufficient for lenders. But take heart! As you take the next year to save up a down payment / build up an emergency fund you'll discover that credit score improves with time. However, it's crucial that you don't do anything to mess with the score. Pay all your bills on time. Don't take out a car loan. Don't close your old revolving accounts. But most of all, don't worry. Rent hurts (I rent too) but in many parts of the US owning hurts more, as your property values fall. A house down the street from my dear old mother has been on the market for several months at a price 33 percent lower than her most recent appraisals. I'm comfortable waiting until markets stabilize / start rising before jumping on real estate.", "title": "" }, { "docid": "2cd417b896d953ed5d5f667607a01b85", "text": "There is no issue - and no question - if you get married. The question is only relevant in the event that you go separate ways. Should that happen, you imply that you would want to refund whatever amount your girlfriend has paid toward the mortgage. The solution, then, would seem to be to exempt her from any payments, as you will either give that money back to her (if you break up) or make her a co-owner of the condo (if you get married). If you actually need her contributions to the monthly nut, you could give her a written agreement whereby you would refund her money (plus interest) at her discretion.", "title": "" }, { "docid": "34d633282f0e3a21679c224f05219a83", "text": "Utilization is near real-time. What that means is that what is reported is what is taken in terms of debt-to-income (DTI) ratios. When a mortgage broker pulls your credit, they will pull the latest balances with the minimum payments. This is what is taken to determine DTI along with your gross monthly income. If you do not pay your account in full before the statement date, then you more than likely will have to wait an additional statement cycle before it reports to the credit bureaus. Therefore, your utilization is dynamic and the history of your utilization month-to-month is not recorded forever. Only the current balance. What is maintained and reported is your payment history. So you want to never be late if you want to be approved anytime soon for a mortgage. A lower DTI will not help your interest rate. As long as you stay away from the maximum DTI for the mortgage vehicle you are attempting to be approved for (VA, FHA, Conventional, etc), then your DTI should not be a concern. If you are borderline at the time of underwriting, you can take the opportunity and pay off the balances. The mortgage company can then do what is called a credit supplement which entails contacting those lenders where you have proven you have a zero balance and manually input the zero balance cards, that have not yet reported to the bureaus, in your final application to the mortgage company for underwriting approval.", "title": "" }, { "docid": "7da7f4bfd86810b55a4c938eb892ef0a", "text": "As pointed out in a comment, it would be more natural to get a regular mortgage on the second house, which is essentially using the second house as collateral for its own loan. If you are to use the first house, either mortgage it or get a home equity line of credit on it and use that money to buy the second house. The relative merits of the options may depend in part on where you live, whether or not you live in the homes, and the relative cost of the two properties. For example, in the US, first and second homes get preferred tax treatment in addition to rates that are typically better than commercial loans (including mortgages for investment properties). If you're going to get a better rate and pay less taxes on one option and not on the others, that's definitely something to weigh.", "title": "" }, { "docid": "7ce55e9bf0dbb378da0165acec00aef8", "text": "It's not typically possible for someone to jointly own the house, who is not also jointly liable for the mortgage. This doesn't matter however, because it is possible for two people to get a mortgage together, where only one person's income is assessed by the lender. If that person could get a mortgage of that amount on their own, then the couple should also be able to get the same mortgage. Source: My wife and I got a mortgage like this. She is self-employed, rather than meet the very high requirements for proving her self-employment income, we simply said that we only wanted my income to be taken into consideration.", "title": "" }, { "docid": "5de97a1bc0bbdec7f2e311fbfba9d0bd", "text": "\"Be careful that pride is not getting in the way of making a good decision. As it stands now what difference does it make to have 200K worth of debt and a 200K house or 225K of debt and a 250K house? Sure you would have a 25K higher net worth, but is that really important? Some may even argue that such an increase is not real as equity in primary residence might not be a good indication of wealth. While there is nothing wrong with sitting down with a banker, most are likely to see your scheme as dubious. Home improvements rarely have a 100% ROI and almost never have a 200% ROI, I'd say you'd be pretty lucky to get a 65% ROI. That is not to say they will deny you. The banks are in the business of lending money, and have the goal of taking as much of your hard earned paycheck as possible. They are always looking to \"\"sheer the sheep\"\". Why not take a more systematic approach to improving your home? Save up and pay cash as these don't seem to cause significant discomfort. With that size budget and some elbow grease you can probably get these all done in three years. So in three years you'll have about 192K in debt and a home worth 250K or more.\"", "title": "" }, { "docid": "5069019873055d17bce6fac7e64c7c24", "text": "You could use the money to buy a couple of other (smaller) properties. Part of the rent of these properties would be used to cover the mortgage and the rest is income.", "title": "" }, { "docid": "254c020807418d441f950c780a5fdfb7", "text": "The loan agent surely knows that having a combination of loans greater than the value of the property (less some margin) is illegal, but also impossible. Your first mortgage, mechanic's liens, tax liens, and so forth are a matter of public record. In most states the records can be viewed online, by anyone, for free. The title search prerequisite for getting the second mortgage looks beyond the low hanging fruit for things like aborigines claims for parcels of land that include your property. The loan agent is trying to sell you a home equity line of credit. Almost everyone gets one after building up some equity. There's often no closing cost and it's not necessary to ever use it. Keep it for emergencies.", "title": "" }, { "docid": "f9b1bf923509f92cd18fa79c4a176dc8", "text": "There are several things that are missing from your estimate: The terms for the mortgage for a rental property will be different. You may be required to have a larger down payment. When approving you for the mortgage they will not count all the rental income as income, they will assume periodic vacancies. This difference may impact other credit you will be getting in the near future.", "title": "" }, { "docid": "8458e6ebcc66911b291d37d15bc50a86", "text": "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.", "title": "" }, { "docid": "b0583fd50b3c20ae13a401c553cac3d1", "text": "\"The Solicitor involved up front should be able to place constrictions as your suggesting. I think you should look carefully at the desired wording. You deserve a return on your £100k. Say, the day after you buy (this is hypothetical, please bear with me) a developer says he needs the property and will give you £460k. Your wording here says you get £100k, and then, after the mortgage split £230k, but it seems more reasonable that your deposit doubles to £200k, the remaining £260k pays the mortgage, and the £130k left is split, £65k each. My method accounts for the value of your £100k. Some would ask, why not apply the mortgage rate to that deposit? Because the home value may grow at a different rate. In my opinion, it's fair to apply the home value growth to the £100k deposit. \"\"Fair\"\" means different things to different people. This is my opinion, and a suggestion. Consider it, and do what you and your partner wish. Use a solicitor. Put it in writing.\"", "title": "" }, { "docid": "9d9403bb9d1a39b292f8692b5bc67126", "text": "\"Have you been rejected from a rental for a specific reason (leading to this question)? Landlords are in the business of exchanging space for regular payments with no drama. Anything they ask in an application should be something to minimize the risk of drama. The \"\"happy path\"\" optimistic goal is that you pay your rent by the due date every month. If your income is not sufficient for this, demonstrating you have assets and would be able to pay for the full term of the lease is part of the decision to enter into the lease with you. In the non-happy-path, say you fall off the face of the earth before ending the lease. The landlord could be owed several months of rent, and could pursue a legal judgment on your assets. With a court order, they can make the bank pay out what is owed; having bank information reduces the landlord's cost and research efforts in the event the story has degenerated to this point (in the jargon of landlording, this means the tenant is \"\"collectable\"\"). While of course you could have zeroed out your accounts or moved money to a bank you didn't tell the landlord in the meantime, if you are not the bad actor in this story, you probably wouldn't have. If you get any kind of \"\"spidey-sense\"\" about a landlord or property at all there is probably a better rental situation in your city. You also want to minimize drama. If the landlord is operating like a business, they're not in this to perform identity theft. If the landlord is sloppy, or has sloppy office workers, that would be different. In the event sharing your asset information truly bothers you, and the money is for rental expense anyway, you could offer to negotiate a 1 year prepaid rental (of course knock another 5%-10% off for time value of money and lower risk to landlord) if you're sure you wouldn't want to leave early.\"", "title": "" } ]	fiqa
7577705e989ab7955133712db5129890	implementation of risk managed momentum strategy	[ { "docid": "1f738863ccbfc977661c6ec14948285c", "text": "The paragraph before on page 115 states: Scaling corresponds to having a weight in the long and short legs that is different from one and varies over time, but the strategy is still self-financing. Meaning that the long and short positions are no longer equal due to weighting one side more highly than the other. The weighting of one side (either long or short) is the number between 0.2 and 2 that you mention.", "title": "" } ]	[ { "docid": "43efa4f1ce571c7f5ce6531d28dfee39", "text": "\"There are two umbrellas in investing: active management and passive management. Passive management is based on the idea \"\"you can't beat the market.\"\" Passive investors believe in the efficient markets hypothesis: \"\"the market interprets all information about an asset, so price is equal to underlying value\"\". Another idea in this field is that there's a minimum risk associated with any given return. You can't increase your expected return without assuming more risk. To see it graphically: As expected return goes up, so does risk. If we stat with a portfolio of 100 bonds, then remove 30 bonds and add 30 stocks, we'll have a portfolio that's 70% bonds/30% stocks. Turns out that this makes expected return increase and lower risk because of diversification. Markowitz showed that you could reduce the overall portfolio risk by adding a riskier, but uncorrelated, asset! Basically, if your entire portfolio is US stocks, then you'll lose money whenever US stocks fall. But, if you have half US stocks, quarter US bonds, and quarter European stocks, then even if the US market tanks, half your portfolio will be unaffected (theoretically). Adding different types of uncorrelated assets can reduce risk and increase returns. Let's tie this all together. We should get a variety of stocks to reduce our risk, and we can't beat the market by security selection. Ideally, we ought to buy nearly every stock in the market so that So what's our solution? Why, the exchange traded fund (ETF) of course! An ETF is basically a bunch of stocks that trade as a single ticker symbol. For example, consider the SPDR S&P 500 (SPY). You can purchase a unit of \"\"SPY\"\" and it will move up/down proportional to the S&P 500. This gives us diversification among stocks, to prevent any significant downside while limiting our upside. How do we diversify across asset classes? Luckily, we can purchase ETF's for almost anything: Gold ETF's (commodities), US bond ETF's (domestic bonds), International stock ETFs, Intl. bonds ETFs, etc. So, we can buy ETF's to give us exposure to various asset classes, thus diversifying among asset classes and within each asset class. Determining what % of our portfolio to put in any given asset class is known as asset allocation and some people say up to 90% of portfolio returns can be determined by asset allocation. That pretty much sums up passive management. The idea is to buy ETFs across asset classes and just leave them. You can readjust your portfolio holdings periodically, but otherwise there is no rapid trading. Now the other umbrella is active management. The unifying idea is that you can generate superior returns by stock selection. Active investors reject the idea of efficient markets. A classic and time proven strategy is value investing. After the collapse of 07/08, bank stocks greatly fell, but all the other stocks fell with them. Some stocks worth $100 were selling for $50. Value investors quickly snapped up these stocks because they had a margin of safety. Even if the stock didn't go back to 100, it could go up to $80 or $90 eventually, and investors profit. The main ideas in value investing are: have a big margin of safety, look at a company's fundamentals (earnings, book value, etc), and see if it promises adequate return. Coke has tremendous earnings and it's a great company, but it's so large that you're never going to make 20% profits on it annually, because it just can't grow that fast. Another field of active investing is technical analysis. As opposed to the \"\"fundamental analysis\"\" of value investing, technical analysis involves looking at charts for patterns, and looking at stock history to determine future paths. Things like resistance points and trend lines also play a role. Technical analysts believe that stocks are just ticker symbols and that you can use guidelines to predict where they're headed. Another type of active investing is day trading. This basically involves buying and selling stocks every hour or every minute or just at a rapid pace. Day traders don't hold onto investments for very long, and are always trying to predict the market in the short term and take advantage of it. Many individual investors are also day traders. The other question is, how do you choose a strategy? The short answer is: pick whatever works for you. The long answer is: Day trading and technical analysis is a lot of luck. If there are consistent systems for trading , then people are keeping them secret, because there is no book that you can read and become a consistent trader. High frequency trading (HFT) is an area where people basically mint money, but it s more technology and less actual investing, and would not be categorized as day trading. Benjamin Graham once said: In the short run, the market is a voting machine but in the long run it is a weighing machine. Value investing will work because there's evidence for it throughout history, but you need a certain temperament for it and most people don't have that. Furthermore, it takes a lot of time to adequately study stocks, and people with day jobs can't devote that kind of time. So there you have it. This is my opinion and by no means definitive, but I hope you have a starting point to continue your study. I included the theory in the beginning because there are too many monkeys on CNBC and the news who just don't understand fundamental economics and finance, and there's no sense in applying a theory until you can understand why it works and when it doesn't.\"", "title": "" }, { "docid": "da9bcd80c4b84b951d5e8c1372a1ed05", "text": "\"This article is written by an idiot!! Risk ≠ failure, risk = possibility of failure Reward (return) should be commensurate with risk and this is why long-shot propositions should be worthwhile. An example of this could be something like the following; an investment with a 95% chance of success should return about 5% on the investment (1 in 20 risk of loss, 1/20th return on investment for taking the risk) while a long-shot investment with a 5% chance of success should be paying a 2000% return (1 in 20 will succeed but they will pay 20 times the investment if they do). An investment with a 0% chance of return (that you are suckered into due to \"\"opacity\"\") is not an investment, it is being robbed and it should be illegal. WTF is opacity? Lying?\"", "title": "" }, { "docid": "a3476b8afcadd6b4a489bb36c8eac4c8", "text": "\"...or neither. Even if the overall benefit of X transport system is positive, if there isn't enough concentrated economic need, willingness to pay, and high risk long term investors, it won't generate enough momentum to go forward. This is especially true if sufficient \"\"I've got mine\"\" options exist.\"", "title": "" }, { "docid": "6241d19ae4f4a34d2000f940bf82e549", "text": "The issue is the time frame. With a one year investment horizon the only way for a fund manager to be confident that they are not going to lose their shirt is to invest your money in ultra conservative low volatility investments. Otherwise a year like 2008 in the US stock market would break them. Note if you are willing to expand your payback time period to multiple years then you are essentially looking at an annuity and it's market loss rider. Of course those contacts are always structured such that the insurance company is extremely confident that they will be able to make more in the market than they are promising to pay back (multiple decade time horizons).", "title": "" }, { "docid": "050c767b77c61494380662aa4b300d36", "text": "\"Investing is always a matter of balancing risk vs reward, with the two being fairly strongly linked. Risk-free assets generally keep up with inflation, if that; these days advice is that even in retirement you're going to want something with better eturns for at least part of your portfolio. A \"\"whole market\"\" strategy is a reasonable idea, but not well defined. You need to decide wheher/how to weight stocks vs bonds, for example, and short/long term. And you may want international or REIT in the mix; again the question is how much. Again, the tradeoff is trying to decide how much volatility and risk you are comfortable with and picking a mix which comes in somewhere around that point -- and noting which assets tend to move out of synch with each other (stock/bond is the classic example) to help tune that. The recommendation for higher risk/return when you have a longer horizon before you need the money comes from being able to tolerate more volatility early on when you have less at risk and more time to let the market recover. That lets you take a more aggressive position and, on average, ger higher returns. Over time, you generally want to dial that back (in the direction of lower-risk if not risk free) so a late blip doesn't cause you to lose too much of what you've already gained... but see above re \"\"risk free\"\". That's the theoretical answer. The practical answer is that running various strategies against both historical data and statistical simulations of what the market might do in the future suggests some specific distributions among the categories I've mentioned do seem to work better than others. (The mix I use -- which is basically a whole-market with weighting factors for the categories mentioned above -- was the result of starting with a general mix appropriate to my risk tolerance based on historical data, then checking it by running about 100 monte-carlo simulations of the market for the next 50 years.)\"", "title": "" }, { "docid": "75e2b29099a8c4fa0c12049ef7f73594", "text": "What you may be looking for are multi-manager ETFs; these invest in a basket of diversified funds to get the best out of all of the funds. The problem with multi-manager funds is, of course, that you pay fees twice; once to the fund itself and once to each of the funds in the fund. The low fees on ETFs mean that it is not very profitable to actively maintain one so there are not many around (Googling returns very few). Noting that historic success doesn't guarantee future success and that fees are being applied to fees these funds only really benefit from diversification of manager performance risk. partial source of information and an example of a (non-outperforming) Multi-manager ETF: http://www.etfstrategy.co.uk/advisorshares-sets-date-for-multi-manager-etf-with-charitable-twist-give-53126/", "title": "" }, { "docid": "1b807557ba137c1143736dc37981715b", "text": "I think your premise is slightly flawed. Every investment can add or reduce risk, depending on how it's used. If your ordering above is intended to represent the probability you will lose your principal, then it's roughly right, with caveats. If you buy a long-term government bond and interest rates increase while you're holding it, its value will decrease on the secondary markets. If you need/want to sell it before maturity, you may not recover your principal, and if you hold it, you will probably be subject to erosion of value due to inflation (inflation and interest rates are correlated). Over the short-term, the stock market can be very volatile, and you can suffer large paper losses. But over the long-term (decades), the stock market has beaten inflation. But this is true in aggregate, so, if you want to decrease equity risk, you need to invest in a very diversified portfolio (index mutual funds) and hold the portfolio for a long time. With a strategy like this, the stock market is not that risky over time. Derivatives, if used for their original purpose, can actually reduce volatility (and therefore risk) by reducing both the upside and downside of your other investments. For example, if you sell covered calls on your equity investments, you get an income stream as long as the underlying equities have a value that stays below the strike price. The cost to you is that you are forced to sell the equity at the strike price if its value increases above that. The person on the other side of that transaction loses the price of the call if the equity price doesn't go up, but gets a benefit if it does. In the commodity markets, Southwest Airlines used derivatives (options to buy at a fixed price in the future) on fuel to hedge against increases in fuel prices for years. This way, they added predictability to their cost structure and were able to beat the competition when fuel prices rose. Even had fuel prices dropped to zero, their exposure was limited to the pre-negotiated price of the fuel, which they'd already planned for. On the other hand, if you start doing things like selling uncovered calls, you expose yourself to potentially infinite losses, since there are no caps on how high the price of a stock can go. So it's not possible to say that derivatives as a class of investment are risky per se, because they can be used to reduce risk. I would take hedge funds, as a class, out of your list. You can't generally invest in those unless you have quite a lot of money, and they use strategies that vary widely, many of which are quite risky.", "title": "" }, { "docid": "93ac5c7e87fbf813b47b44d966bcd307", "text": "\"Yes, and the math that tells you when is called the Kelly Criterion. The Kelly Criterion is on its face about how much you should bet on a positive-sum game. Imagine you have a game where you flip a coin, and if heads you are given 3 times your bet, and if tails you lose your bet. Naively you'd think \"\"great, I should play, and bet every dollar I have!\"\" -- after all, it has a 50% average return on investment. You get back on average 1.5$ for every dollar you bet, so every dollar you don't bet is a 0.5$ loss. But if you do this and you play every day for 10 years, you'll almost always end up bankrupt. Funny that. On the other hand, if you bet nothing, you are losing out on a great investment. So under certain assumptions, you neither want to bet everything, nor do you want to bet nothing (assuming you can repeat the bet almost indefinitely). The question then becomes, what percentage of your bankroll should you bet? Kelly Criterion answers this question. The typical Kelly Criterion case is where we are making a bet with positive returns, not an insurance against loss; but with a bit of mathematical trickery, we can use it to determine how much you should spend on insuring against loss. An \"\"easy\"\" way to undertand the Kelly Criterion is that you want to maximize the logarithm of your worth in a given period. Such a maximization results in the largest long-term value in some sense. Let us give it a try in an insurance case. Suppose you have a 1 million dollar asset. It has a 1% chance per year of being destroyed by some random event (flood, fire, taxes, pitchforks). You can buy insurance against this for 2% of its value per year. It even covers pitchforks. On its face this looks like a bad deal. Your expected loss is only 1%, but the cost to hide the loss is 2%? If this is your only asset, then the loss makes your net worth 0. The log of zero is negative infinity. Under Kelly, any insurance (no matter how inefficient) is worth it. This is a bit of an extreme case, and we'll cover why it doesn't apply even when it seems like it does elsewhere. Now suppose you have 1 million dollars in other assets. In the insured case, we always end the year with 1.98 million dollars, regardless of if the disaster happens. In the non-insured case, 99% of the time we have 2 million dollars, and 1% of the time we have 1 million dollars. We want to maximize the expected log value of our worth. We have log(2 million - 20,000) (the insured case) vs 1% * log(1 million) + 99% * log(2 million). Or 13.7953 vs 14.49. The Kelly Criterion says insurance is worth it; note that you could \"\"afford\"\" to replace your home, but because it makes up so much of your net worth, Kelly says the \"\"hit it too painful\"\" and you should just pay for insurance. Now suppose you are worth 1 billion. We have log(1 billion - 20k) on the insured side, and 1%log(999 million) + 99% log(1 billion) on the uninsured side. The logs of each side are 21.42 vs 20.72. (Note that the base of the logarithm doesn't matter; so long as you use the same base on each side). According to Kelly, we have found a case where insurance isn't worth it. The Kelly Criterion roughly tells you \"\"if I took this bet every (period of time), would I be on average richer after (many repeats of this bet) than if I didn't take this bet?\"\" When the answer is \"\"no\"\", it implies self-insurance is more efficient than using external insurance. The answer is going to be sensitive to the profit margin of the insurance product you are buying, and the size of the asset relative to your total wealth. Now, the Kelly Criterion can easily be misapplied. Being worth financially zero in current assets can easily ignore non-financial assets (like your ability to work, or friends, or whatever). And it presumes repeat to infinity, and people tend not to live that long. But it is a good starting spot. Note that the option of bankruptcy can easily make insurance not \"\"worth it\"\" for people far poorer; this is one of the reasons why banks insist you have insurance on your proprety. You can use Kelly to calculate how much insurance you should purchase at a given profit margin for the insurance company given your net worth and the risk involved. This can be used in Finance to work out how much you should hedge your bets in an investment as well; in effect, it quantifies how having money makes it easier to make money.\"", "title": "" }, { "docid": "791a284b641dc2d848f1556503700ffe", "text": "I don't know of any books, but there are a lot of good white papers on the subject if you take the time to look for them. For example, Moody's has a white paper on their LGD model (LossCalc) that explains their calibration methodology. Searching for academic papers on the subject is really the only way to go, because credit risk is a field that really is just being explored. Really only since 2006 have banks started to actively try to use a risk rating model that incorporates PD and LGD. This is because of data insufficiency - banks just didn't keep active and centralized loan level data that is required to calibrate the models. tl;dr: Use the internet - it is your friend.", "title": "" }, { "docid": "7233de6ba124e2371d6e3d98cfe9d292", "text": "\"Your interpretation is reasonable, yes. But I think the author -- here, at least -- has an alternative interpretation that applies just as frequently. In a large and/or public company, especially one that is not in a strong growth period, there is an incredible incentive to not get blamed -- and therefore, fired or undesirably transferred -- if something goes wrong. The CYA approach may lead to a better decision by seeking best practices, or it may not. A given situation may be better served by some variation on best practicies. But the author is right in that CYA is top-of-mind in decision-making for many. If something fails, but the decision-maker has done sufficient CYA -- \"\"We followed best practices but we hit a perfect storm of headwinds...\"\" -- then failure doesn't matter.\"", "title": "" }, { "docid": "cc774863ed13c1d2f406183d15b26019", "text": "Quick and dirty paper but pretty interesting.. I'm not in Portfolio Management but I probably would have ended up at the modal number as well. I don't know the subject deeply enough to answer my own question, but is the bias always toward underestimation of variance? Or is that a complex of the way the problem was set up? Another question I have for those in investment management; Would this impact asset allocation?", "title": "" }, { "docid": "5a9a5dcc1532513df50baedcb611b3ce", "text": "Thanks for the answer/comments! The time-based method was something we mooted and something I almost went with. But just to wrap this up, the method we settled on was this: Every time there is an entry or exit into the fund, we divvy out any unrealised market profits/losses according to each person's profit share (based on % of the asset purchased at buy-in) JUST BEFORE the entry/exit. These realised profits are then locked in for those particpants, and then the unrealised profits/loss counter starts at zero, we do a fresh recalculation of shareholding after the entry/exit, and then we start again. Hope this helps anyone with the same issue!", "title": "" }, { "docid": "a43d0a13a01babe7f87b6ccb7c57d41d", "text": "the strategy is tested all the way to 97. how is the continuous series backadjusted? the emini is rolledover and Ratio back adjusted to the 2nd nearest contract, 9 days prior to expiration. since it is an intraday trade, the discrepancy to the real thing should be next to irrelevant. but comparing it to the spx could make it interesting. what would be a good format to present the results ? jpeg? pdf ?", "title": "" }, { "docid": "9eb7766286bcb7ea485bc32992de60ec", "text": "\"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.\"", "title": "" }, { "docid": "5f433f37e8a807b99fd870b5f098ff10", "text": "well well, good question, worth a discussion, the more filters you add to your strategy (volatility in this case), the lower its predictive power. i mean, one could further filter it by day of the week, whether prices are above or below a 200 day moving average...etc.", "title": "" } ]	fiqa
e218cc199d90304f46cc4cff2654bf42	Pay for a cheap car or take out a loan?	[ { "docid": "968b4cb1fc34aafd1f9a4bb0445e8ef4", "text": "\"This was a huge question for me when I graduated high school, should I buy a new or a used car? I opted for buying used. I purchased three cars in the span of 5 years the first two were used. First one was $1500, Honda, reliable for one year than problem after problem made it not worth it to keep. Second car was $2800, Subaru, had no problems for 18 months, then problems started around 130k miles, Headgasket $1800 fix, Fixed it and it still burnt oil. I stopped buying old clunkers after that. Finally I bought a Nissan Sentra for $5500, 30,000 miles, private owner. Over 5 years I found that the difference between your \"\"typical\"\" car for $1500 and the \"\"typical\"\" car you can buy for $5500 is actually a pretty big difference. Things to look for: Low mileage, one owner, recent repairs, search google known issues for the make and model based on the mileage of the car your reviewing, receipts, clean interior, buying from a private owner, getting a deal where they throw in winter tires for free so you already have a set are all things to look for. With that said, buying new is expensive for more than just the ticket price of the car. If you take a loan out you will also need to take out full insurance in order for the bank to loan you the car. This adds a LOT to the price of the car monthly. Depending on your views of insurance and how much you're willing to risk, buying your car outright should be a cheaper alternative over all than buying new. Save save save! Its very probably that the hassles of repair and surprise break downs will frustrate you enough to buy new or newer at some point. But like the previous response said, you worked hard to stay out of debt. I'd say save another grand, buy a decent car for $3000 and continue your wise spending habits! Try to sell your cars for more than you bought them for, look for good deals, buy and sell, work your way up to a newer more reliable car. Good luck.\"", "title": "" }, { "docid": "0023829af08e1f223028c03a4ed6db45", "text": "You are really showing some wisdom here, and congratulations on finishing college. Its a lot about likelihoods. If you buy a new car, there is something like a 99.5% chance you will get a car that will not need repairs. If you buy a car for $1200 there is probably a 20% chance that the car will only need minimal repairs. So the answer is there is no real guarantee that spending any amount of money you will end up with a car with no repairs. You also can't assume that with buying a car it will immediately need repairs. Its possible, that you could spend 1200 on a car and it will need an oil change. In three months it might need brakes and in 6 months tires. If that is the case, you could save up the money for repairs. Have you looked for a car? It will take some work, but you might be able to find something in good condition for your budget. If you shop for a loan, go with a good credit union or local bank. Mostly you are looking for a low rate. However, I would advise against it. You worked so hard on getting out of school without debt, why start now? Be weird and buy a car for cash. Heck someone may be able to loan you a car for a short time while you save some money.", "title": "" }, { "docid": "8d3eef26be24ff71bbe382f829bf25fe", "text": "If you buy a new car, the odds that it will require repairs are fairly low, and if it does, they should be covered by the warranty. If you buy a used car, there is a fair chance that it will need some sort of repairs, and there probably is no warranty. But think about how much repairs are likely to cost. A new car these days costs like $25,000 or more. You can find reasonably decent used cars for a few thousand dollars. Say you bought a used car for $2,000. Is it likely that it will need $23,000 in repairs? No way. Even if you had to make thousands of dollars worth of repairs to the used car, it would almost certainly be cheaper than buying a new car. I've bought three used vehicles in the last few years, one for me, one for my son, and one for my daughter. I paid, let's see, I think between $4,000 and $6,000 each. We've had my son's car for about 9 months and to date had $40 in repairs. My daughter's car turned out to have a bunch of problems; I ended up putting maybe another $2,000 into it. But now she's got a car she's very happy with that cost me maybe $6,000 between purchase and repairs, still way less than a new car. My pickup had big time problems, including needing a new transmission and a new engine. I've put, hmm, maybe $7,000 into it. It's definitely debatable if it was worth replacing the engine. But even at all that, if I had bought that truck new it would have cost over $30,000. Presumably if I bought new I would have had a nicer vehicle and I could have gotten exactly the options I wanted, so I'm not entirely happy with how this one turned out, but I still saved money by buying used. Here's what I do when I buy a used car: I go into it expecting that there will be repairs. Depending on the age and condition of the car, I plan on about $1000 within the first few months, probably another $1000 stretched out over the next year or so. I plan for this both financially and emotionally. By financially I mean that I have money set aside for repairs or have available credit or one way or another have planned for it in my budget. By emotionally I mean, I have told myself that I expect there to be problems, so I don't get all upset when there are and start screaming and crying about how I was ripped off. When you buy a used car, take it for granted that there will be problems, but you're still saving money over buying new. Sure, it's painful when the repair bills hit. But if you buy a new car, you'll have a monthly loan payment EVERY MONTH. Oh, and if you have a little mechanical aptitude and can do at least some of the maintenance yourself, the savings are bigger. Bear in mind that while you are saving money, you are paying for it in uncertainty and aggravation. With a new car, you can be reasonably confidant that it will indeed start and get you to work each day. With a used car, there's a much bigger chance that it won't start or will leave you stranded. $2,000 is definitely the low end, and you say that that would leave you no reserve for repairs. I don't know where you live or what used cars prices are like in your area. Where I live, in Michigan, you can get a pretty decent used car for about $5,000. If I were you I'd at least look into whether I could get a loan for $4,000 or $5,000 to maybe get a better used car. Of course that all depends on how much money you will be making and what your other expenses are. When you're a little richer and better established, then if a shiny new car is important to you, you can do that. Me, I'm 56 years old, I've bought new cars and I've bought used cars and I've concluded that having a fancy new car just isn't something that I care about, so these days I buy used.", "title": "" }, { "docid": "792f34a8a0feaa870a3ffcb996e3ab3c", "text": "The stupid question nobody asked: how mechanically inclined are you? I buy used cars, but then again I can work on them (I am building a new engine to my specs for one of my cars). Replacing a head gasket in a Subaru would be less than $200 for me, so I would find someone who blew his and offer $1000-1500 for the car if it is one of the models I like. The reality of buying an used car is that you are buying someone's else problems. How much do you know about that specific car model, its quirks, and what usually goes bad on them? For instance, it is a fact most people who buy a BMW 3 series flog them, so expect an used one to have been abused by someone trying to pick up girls by acting like he is a racer. A 5 series, on the other hand, would have a better life. Then some cars tend to rust on certain areas of the body. On the other hand I have seen Hyundai Elantras take a lot of abuse -- no oil change in 3 years -- and keep on ticking. Yes, you need to do some research on new cars, but old ones require even more. If you are going to save money buying used, make sure to spend time and research the options and their hidden costs. And learn how to check a car and have a feel for how much you will spent on repairing/maintaining it. And what you are willing to give up on your first car: is having a working AC that important? How about power windows? If you do buy a used car, try to put $100-200 aside every month, as if you are doing car payments. That will be your emergency and downpayment-for-next-car money. No matter what you buy, remember all you want on a new car is reliability and fuel efficiency. And, how much do you need a car right now? If you have to ride 30minutes to work in pouring rain and then be talking to customers, maybe a car worth having. But, where I live, a lot of people ride bicycles to work and back or use public transportation. I would trust getting into my car right now and drive 5h, and yet I take the bus every day (I like saving money on fuel and parking fees).", "title": "" }, { "docid": "fc53eca0c196453ea98891f5d5c52656", "text": "Buying a car is a very big financial decision. There are three major factors to decide which car to buy: Pick two because you can't have all three. You can either have a reliable car that has cheap running costs but will be expensive to buy or a cheap car that is unreliable. If you are mechanically minded then reliability might not be that important to you. However, if you must get to work on time every day then owning a car that breaks down once every six months might be something you wish to avoid. There are a lot of hidden costs that should be thought about very carefully when considering purchasing a car: In my country, annual car registration costs are around $650. I budget around $1000 for maintenance each year (a major + minor service and some extra repair work). When I factor in an amount for depreciation, that brings the running costs of the car to somewhere between $1500 and $2000 per annum before I've driven it anywhere. Generally I will fill up my car for $50 around once a month (I don't drive too often) which makes my total cost of ownership somewhere around $2500 per annum. When I was driving my car to work daily, the petrol costs were much higher at around $50 per week, which made my TCO somewhere around $4500 p.a. And this is on an extremely reliable, fuel efficient 2006 model car which cost me $18k to purchase. I have no debt on this car. But the car itself is a liability. Any car will be a liability. I understand that petrol prices are ridiculously low in the US and probably registration is lower as well. In this case you will need to adjust your figures and do the maths to work out what your annual cost of ownership will be. There are three alternatives to car ownership to consider which may save you money: Public transportation and car pooling are highly recommended from a financial perspective, though you may not have access to either in your situation. Moving closer to work may also be an option, though for many jobs this may increase your cost of living. If you decide that you do need a car and decide that $2000 is not going to get you the car you feel you need ($2000 usually does not get you much), you will need to decide how to finance the car. You will want to avoid most dealer-based finance deals. Be very wary of any dealer offering interest free finance as they usually have some pretty nasty conditions. Getting a loan from your parents or another family member is usually the best option. Otherwise consider getting a personal loan, which will have a lower interest rate than a credit card or dealer finance. Another option could be to get a credit card on an interest-free promotional deal which you could pay down before the interest kicks in. Be warned though, these deals usually require you to pay off your whole balance before the due date or they will back-charge interest on the whole amount. In short, these are the decisions that you will need to make:", "title": "" }, { "docid": "336aa42c53d72c72b5139be22607f652", "text": "You may not have a good choice until you start that job. $2,000 is awfully low for a car, so it could be very risky. But you may not be able to get a loan until you start the new job. I would talk to a bank or credit union to get an idea of how much, if anything, you could borrow at this time. If you have a letter offering you the job that might help to get a loan. There are dealers who will finance a very cheap used car for anybody, but that kind of deal is likely to be at a very high interest rate and should be avoided. You could wind up with a debt and no car. One other possibility is to have a co-signer, such as a parent or other relative. That could make getting a car loan easy.", "title": "" } ]	[ { "docid": "6e5776554e72177e1428313f872537e1", "text": "\"Thanks for your question. Definitely pay the car down as soon as possible (reasoning to follow). In fact, I would go even further and recommend the following: Why? 1) Make money risk free - the key here is RISK FREE. By paying down the loan now, you can avoid paying interest on the additional amount paid toward principal risk free. Imagine this scenario: if you walked into a bank and they said, \"\"If you give us $100, we'll give you $103 back today\"\", would you do it? That is exactly what you get to do by not paying interest on the remaining loan principal. 2) The spread you might make by investing is not as large as you may think. Let's assume that by investing, you can make a market return of 10%. However, these are future cash flows, so let's discount this for inflation to a \"\"real\"\" 8% return. Then let's assume that after fees and taxes this would be a 7% real after-tax return. You also have to remember that this money is at risk in the market and may not get this return in some years. Assuming that your friend's average tax rate on earned income is 25%, this means that he'd need to earn $400 pre-tax to pay the after-tax payment of $300. So this is a 4% risk-free return after tax compared to a 7% average after tax return from the market, but one where the return is at risk. The equivalent after-tax risk-free return from the market (think T-Bills) is much lower than 7%. You are also reducing risk by paying the car loan off first in a few other ways, which is a great way to increase peace of mind. First, since cars decline in value over time, you are minimizing the possibility that you will eventually end up \"\"under water\"\" on the loan, where the loan balance is greater than the value of the car. This also gives you more flexibility in terms of being able to sell the car at any point if desired. Additionally, if the car breaks down and must be replaced, you would not need to continue making payments on the old loan, of if your friend loses his job, he would own the car outright and would not need to make payments. Finally, ideally you would only be investing in the market when you intend to leave the money there for 5+ years. Otherwise, you might need to pull money out of the market at a bad time. Remember, annual market returns vary quite a bit, but over 5-10 year periods, they are much more stable. Unfortunately, most people don't keep cars 5-10+ years, so you are likely to need the money back for another car more frequently than this. If you are pulling money out of the market every 5-10 years, you are more likely to need to pull money out at a bad time. 3) Killing off the \"\"buy now, pay later\"\" mindset will result in long-term financial benefits. Stop paying interest on things that go down in value. Save up and buy them outright, and invest the extra money into things that generate income/dividends. This is a good long-term habit to have. People also tend to be more prudent when considering the total cost of a purchase rather than just the monthly payment because it \"\"feels\"\" like more money when you buy outright. As a gut check for whether this is a good idea, here is an example that Dave Ramsey likes to use: Suppose that your friend did not have the emergency fund, and also did not have the car loan and owned the car outright. In that case, would your friend take out a title loan on the car in order to have an emergency fund? I think that a lot of people would say no, which may be a good indicator that it is wise to reduce the emergency fund in order to wipe out the debt, rather than maintaining both.\"", "title": "" }, { "docid": "1d7a9f474c7febfeb6d52e5333e4c82e", "text": "The car company loans you money at 1 or 2% because it is part of the incentive to get you to buy the car. Car company transactions are complex involving the manufacturer, the dealership, and the financing part of the car company. Not to mention Rebates, the used car transaction, and the leasing department. If they don't offer you a loan then the profit from that part of transaction is lost to an outside company. The better loan rates from the manufacturer are only with shorter term loans and without the rebate. That is why some suggest that you get the rebate, and then go to a credit union for the loan for lowest overall cost and greatest flexibility. The advertised rates are also only for the customers with great credit scores and the room in their clash flow to pay off the loan in a year or two. If you don't fit in that category, the rates will be higher.", "title": "" }, { "docid": "11692d59ac54be45ba7425bb06463446", "text": "The only reason to lend the money in this scenario is cashflow. But considering you buy a $15000 car, your lifestyle is not super luxurious, so $15000 spare cash is enough.", "title": "" }, { "docid": "4874af977160f3a38caa439a8163e5d8", "text": "The only time it makes sense to take out a loan is: The drawbacks of these 2 points are: Otherwise it's better to pay for the car up front. You have not mentioned whether you need the car to earn income. A car will incur other costs such as insurance and maintenance.", "title": "" }, { "docid": "f3796ebab3370b9916c28dc5d95cf556", "text": "An option that no one has yet suggested is selling the car, paying off the loan in one lump sum (adding cash from your emergency sum, if need be), and buying an old beater in its place. With the beater you should be able to get a few years out of it - hopefully enough to get you through your PhD and into a better income situation where you can then assess a new car purchase (or more gently-used car purchase, to avoid the drive-it-off-the-lot income loss). Even better than buying another car that you can afford to pay for is if you can survive without that car, depending on your location and public transit options. Living car free saves you not only this payment but gas and maintenance, though it costs you in public transit terms. Right now it looks as if this debt is hurting you more than the amount in your emergency fund is helping. Don't wipe out your emergency fund completely, but be willing to lower it in order to wipe out this debt.", "title": "" }, { "docid": "fb32ab169c1794b67f1a1ee65fd22d70", "text": "If you buy a car using a loan, the dealer gets benefited by the financing institution by the way of referring fee paid to the dealer by the institution, and that too if the dealer has helped in financing the purchase. Otherwise for the dealer it doesn't matter if one pays in full or through financing. The dealer is paid in full in either cases. Hence the dealer may slightly get disappointed that you are not taking a loan.", "title": "" }, { "docid": "779de2d5da4c82a02fa53175cae9b41e", "text": "Can't you just organise with the dealership to pick it up a few days later? Yes you will still have to pay the interest, not a professional but going off my experience you will have a minimum $$$ to pay the loan, and often be charged a penalty for paying it off so soon.", "title": "" }, { "docid": "c67a88c4227e0bf04bf2a770ce04fe61", "text": "When getting a car always start with your bank or credit union. They are very likely to offer better loan rate than the dealer. Because you start there you have a data point so you can tell if the dealer is giving you a good rate. Having the loan approved before going to the dealer allows you to negotiate the best deal for the purchase price for the car. When you are negotiating price, length of loan, down payment, and trade in it can get very confusing to determine if the deal is a good one. Sometimes you can also get a bigger rebate or discount because to the dealer you are paying cash. The general advice is that a lease for the average consumer is a bad deal. You are paying for the most expensive months, and at the end of the lease you don't have a car. With a loan you keep the car after you are done paying for it. Another reason to avoid the lease. It allows you to purchase a car that is two or three years old. These are the ones that just came off lease. I am not a car dealer, and I have never needed a work visa, but I think their concern is that there is a greater risk of you not being in the country for the entire period of the lease.", "title": "" }, { "docid": "2bf62c09fe325de41096aaf3e8b4b8f3", "text": "\"Does your planning include contingencies for Can you afford the late fees, insurance increases, bad credit hits and all the other downsides when this goes bad? Why does she NEED a new car on lease? Personally? I'd go for option B) Do what it takes to have her OWN a car. Why not just have her get a car that costs IN ENTIRE the $3k that would be used for a down payment on a lease? Maybe add a bit of your own money \"\"for old times sake\"\" to the pile? Or a small loan to get to where she can get a usable, dependable car? Say, a $3-5k loan in your name that she's responsible for the payments. $3-10k can get a very dependable old car. 10 great cars for 6k or less Everyone else has been burned by her - for whatever reason. No idea what the reasons are, but she seems to be unable to pay her bills. Why would this time be any different? Your name on a car + someone who can't pay bills = a bad proposition. I would LOVE to help anyone who's been important in my life. Including MY x-wife. But I wouldn't agree to this deal unless I KNEW that I could 100% cover the costs when things go bad - because at this point, odds are they will.\"", "title": "" }, { "docid": "e346a7e245bbe83d9c2932a8ed22b985", "text": "Here is a simple way to analyze the situation. Go to your bank or credit union website and use their loan calculator with their current real interest rates and down payment requirements. Enter the rate, and number of years. Enter different values for the loan amount to get the monthly payment to the level you want ($400). Today for my credit union, the max loan would be about $9,500. Keep in mind there may be taxes, registration fees, and down payment on top of this. Jump ahead two years. The loan is paid off, the car is owned free and clear. You will be able to sell it and get some money in your pocket. If you go for a longer term loan to keep the payments under your goal the issue is that in two years you might be upside down on the loan. The car may be worth less than the remaining balance on the loan. Your equity would be negative.", "title": "" }, { "docid": "2bb4e06785887fbf93def08101666f95", "text": "\"For the future: NEVER buy a car based on the payment. When dealers start negotiating, they always try to have you focus on the monthly payment. This allows them to change the numbers for your trade, the price they are selling the car for, etc so that they maximize the amount of money they can get. To combat this you need to educate yourself on how much total money you are willing to spend for the vehicle, then, if you need financing, figure out what that actually works out to on a monthly basis. NEVER take out a 6 year loan. Especially on a used car. If you can't afford a used car with at most a 3 year note (paying cash is much better) then you can't really afford that car. The longer the note term, the more money you are throwing away in interest. You could have simply bought a much cheaper car, drove it for a couple years, then paid CASH for a new(er) one with the money you saved. Now, as to the amount you are \"\"upside down\"\" and that you are looking at new cars. $1400 isn't really that bad. (note: Yes you were taken to the cleaners.) Someone mentioned that banks will sometimes loan up to 20% above MSRP. This is true depending on your credit, but it's a very bad idea because you are purposely putting yourself in the exact same position (worse actually). However, you shouldn't need to worry about that. It is trivial to negotiate such that you pay less than sticker for a new car while trading yours in, even with that deficit. Markup on vehicles is pretty insane. When I sold, it was usually around 20% for foreign and up to 30% for domestic: that leaves a lot of wiggle room. When buying a used car, most dealers ask for at least $3k more than what they bought them for... Sometimes much more than that depending on blue book (loan) value or what they managed to talk the previous owner out of. Either way, a purchase can swallow that $1400 without making it worse. Buy accordingly.\"", "title": "" }, { "docid": "da02720a8b9ffe0e17799b5fe72029d6", "text": "Here's another way to look at this that might make the decision easier: Looking at it this way you can turn this into a financial arbitrage opportunity, returning 2.5% compared to paying cash for the vehicle and carrying the student loan. Of course you need to take other factors into account as well, such as your need for liquidity and credit. I hope this helps!", "title": "" }, { "docid": "c0fe33895155584f1300c18b4cf9ef9f", "text": "Presumably you need a car to get to work, so let's start with the assumption that you need to buy something to replace the car you just lost. The biggest difficulty to overcome in buying a car is the concept of the monthly payment. Dealers will play games with all of the numbers to massage a monthly payment that the buyer can swallow, but this usually doesn't end up giving the customer the best deal. The 18 month term is not normal for a lease, typically you'll see 24 or 36 months. You are focusing on another goal of paying your student loans by then which would free up much more money for other wants (like a car) but at what cost? The big difficulty of personal finance is the mental mind game of delaying gratification for greater long-term benefit. You are focusing on paying your student loans now so that you can be free of that debt and have more flexibility for the future. Good. You're tempted to spend another $5400 (assuming no down-payment or other surprise fees) to drive a car for 18 months. That doesn't sound any wiser than $5,000 for an unreliable used car that gave you more problems than you bargained for. Presumably you got some percentage of that money back from the insurance company when the car was totaled, but even if not, the real lesson should be finding a car that you can afford up-front, but also one that you can still use when the loan is paid off (like your education--that investment will keep giving even when the loans are a distant memory). My advice would be to look for a car that has about 30k miles on it and pay for it as quickly as possible, then drive it at least for 70-120k more miles before replacing it. You may wish for a newer car, especially in 3 or 4 more years when it starts to show its age, but you'll also thank yourself when you can buy a newer better car with cash and break out of the monthly payment game that dealers try to push on you. You might even enjoy negotiating with car salesmen when you see through their manipulations and simply work for the best cash price you can get.", "title": "" }, { "docid": "32dd739eac07fbd82c8dc3578df86f0b", "text": "\"I've run into two lines of thinking on cars when the 0% option is offered. One is that you should buy the car with cash - always. Car debt is not usually considered \"\"good debt,\"\" as there is no doubt but that your car will depreciate. Unless something very odd happens or you keep the car to antique status (and it's a good one), you won't make money off of it. On the other hand, with 0% interest - if you qualify, and remember that dealer promotions aren't for everyone, just those who qualify - you can invest that money in a savings account, bonds, a mutual fund, or the stock market and theoretically make a lot more over the 5 years while paying down the car. In that case, you really only need to make sure you save enough to make the payment low enough for your comfort zone. Personally I prefer to not be making a car payment. Your personal comfort level may vary. Also, in terms of getting your money's worth a gently used car in good condition is miles better than a new car. Someone else took the hit on the \"\"drive it off the lot\"\" decline in price for you.\"", "title": "" }, { "docid": "a27aa855bc4ec51e802ca7061b80e5e4", "text": "Austin did it while Uber was gone w/RideAustin. A portion of the fares could go to charity as well. I used the app a few weeks ago (literally weekend before Uber came back)....the app straight up ripped off Uber. It felt like Uber just made this satellite company to still ride share.", "title": "" } ]	fiqa
728e06e291de42e2cf7d71cfb1312b5d	Checking the math on a Truth-in-Lending Disclosure	[ { "docid": "24b247b07b0d373f65b7599ba2d8cffe", "text": "As your question is written now, it looks like you have a typo. Your stated APR is 5.542% = 0.05542, not 0.005542 as you've written. I ran the numbers that you gave (accounting for the typo) through the formula at Wikipedia and got $849.2528 / month, which will round to $849.25 for most payments. That doesn't match the number that you computed or the number on your TIL. (Maybe you also miskeyed the result of your calculation?) I agree that it's unlikely that this is just a calculation error by the mortgage company, although I wouldn't completely rule it out. Are you paying anything else like a property tax escrow? I didn't pull a blank TIL form to see what might go into the monthly payment line that you showed, but in many cases you do pay more than just principle and interest each month. (Not sure if that gets reflected at that point on the form though.)", "title": "" } ]	[ { "docid": "44f4ca9ec9699874555210c8cdf727e2", "text": "I'd be interested in seeing a source regarding the transposing of signatures onto different documents. That's blatant criminal fraud without even falling into a grey area. About math, a study ran in the Economist showed that people who were bad at relatively basic math (understanding fractions, interest, percentages) were far more likely to have requested loans they could not afford.", "title": "" }, { "docid": "0728c771610b8d73857743160db5d244", "text": "This is of course using 'new math'. Namely, if I lend you $100 and you keep it for a month, I've lent you $100. In fact, if I loan you $100 for a year I've loaned you $100. But if I lend you $100 overnight, you pay me back in the morning, I lend you $100 overnight, you pay me back in the morning and we repeat that for a month, I've supposedly lent you $3,000. That's some interesting math for sure.", "title": "" }, { "docid": "526b49773d4cadf21e72433fba36f526", "text": "It's not an easy calculation so I made this demonstration that compares a fixed investment with a 100% mortgage, for a simple case. (Obviously if you lessen the mortgage with a deposit it's somewhere between the extremes.) The demonstrations shows some definite differences at higher interest rates. You can probably decipher the calculations in the code if you're interested. It's intended to be legible. http://demonstrations.wolfram.com/BuyOrRentInvestmentReturnCalculator/", "title": "" }, { "docid": "65e1ef47e425946ecb04d12b623cf3eb", "text": "Proof of funds for funding firms are used to determine if you have any money before they lend to you. (determine risk of lending to you if you defaulted) If you came in with 10 million dollars, the firms will turn a blind eye to any money laundering regulations and just lend to you.", "title": "" }, { "docid": "bd00e7e46a43efa0feb2741b202746a8", "text": "Interesting thing is not all of this analysis is typically done by the person you are speaking with re: your mortgage. Likely there is an economic team (at some institution or another, as many many loans are sold/distributed in some fashion), finance team, and all of them are looking at various rates etc. Typically what is offered is matching an offsetting liability somewhere else. So there may be cases where the spread someone is looking to pick up might be tighter or looser within institutions or types of institutions vs others, even though the overall market is at one place. (e.g. banks vs. insurance companies). So you may have negotiating room at a certain term, but not another, or the reverse at another firm. One firm might have lots of 10 year money, while another might be limited, so will be picky in what they choose. Either more conservative loan terms/ltv, or a higher spread, for example. So many things go into the ultimate rate someone can get, but in theory the blog did a decent job.", "title": "" }, { "docid": "662244bb697ba42ca630f74cd02a7791", "text": "Surely some borrowers and lenders make decisions about making and taking loans based on the actual interest rates on the actual loans? In which case it doesn't matter so much if the rates are calculated based on a fictional assumption about something. At the end of the day every borrower or lender in the market makes their own decision about which lending contracts they take part in.", "title": "" }, { "docid": "4cbc08ca586bb6481b02839029c3f7d0", "text": "What you are looking here is the cost of capital, because that is what you are effectively giving up in order to invest in those loans. In a discounted cash-flow, it would be the i in the denominator (1+i). For instance, instead of purchasing those loans you could have lent your money at the risk-free rate (not 100% true, but typical assumption), and therefore you are taking a slight risk in those loans for a higher return. There are several ways to compute that number, the one most often used would be the rate if the bank were to lend that money. In this way, it would be the Fed Funds rate plus some additional risk premium.", "title": "" }, { "docid": "ffffed3d8a58994285be96defc1b39dc", "text": "\"From the Op's comment below re: the \"\"audit\"\" http://www.gao.gov/new.items/d11696.pdf, the first paragraph states that loans outstanding peaked at just over 1 trillion in 2008. So you'd look at the Fed's balance sheet of loans outstanding over time, and perhaps subtract amounts reported as more normal operations.\"", "title": "" }, { "docid": "acbff6d144a04d785c94ea5caaf1cfd1", "text": "The calculation can be made on the basis that the loan is equal to the sum of the repayments discounted to present value. (For more information see Calculating the Present Value of an Ordinary Annuity.) With Deriving the loan formula from the simple discount summation. As you can see, this is the same as the loan formula given here. In the UK and Europe APR is usually quoted as the effective interest rate while in the US it is quoted as a nominal rate. (Also, in the US the effective APR is usually called the annual percentage yield, APY, not APR.) Using the effective interest rate finds the expected answer. The total repayment is £30.78 * n = £1108.08 Using a nominal interest rate does not give the expected answer.", "title": "" }, { "docid": "832fdc8c674902d98b80c697574456cb", "text": "The price inflation isn't a percentage, it's a fixed amount. If the dealer adds $R to the price of both the trade-in and the purchased car, then everyone ends up with the right amount of money in their pockets. So your formula should be: D + T + R = 0.1 * (P + R)", "title": "" }, { "docid": "d4acc1a9edb2c7a9f30e843af3b6bbcf", "text": "I wouldn't say this is a lie. Person 2 just made themselves the offer of 38k. If it sells then they were outbid. If it doesn't sell then they're stuck with the asset as if they had bid themselves. They're paying themselves, or they're representing a party that is paying themselves. That balances out to a $0 profit/loss + ownership of the asset. I think something like this would be unethical: Person 1: I'll buy your car for 30k Person 2: Okay Person 3:That's my car!", "title": "" }, { "docid": "fdb012344bb1443fc5a22c7647a6ca73", "text": "\"There is no equation. Only data that would help you come to the decision that's right for you. Assuming the 401(k) is invested in a stock fund of one sort or another, the choice is nearly the same as if you had $5K cash to either invest or pay debt. Since stock returns are not fixed, but are a random distribution that somewhat resembles a bell curve, median about 10%, standard deviation about 14%. It's the age old question of \"\"getting a guaranteed X% (paying the debt) or a shot at 8-10% or so in the market.\"\" This come up frequently in the decision to pre-pay mortgages at 4-5% versus invest. Many people will take the guaranteed 4% return vs the risk that comes with the market. For your decision, the 401(k) loan, note that the loan is due if you separate from the company for whatever reason. This adds an additional layer of risk and another data point to the mix. For your exact numbers, the savings is barely $50. I'd probably not do it. If the cards were 18%, I'd lean toward the loan, but only if I knew I could raise the cash to pay it back to not default.\"", "title": "" }, { "docid": "171389fcafc9df1f6c8072c7fe2c12cc", "text": "Sounds like he's just had the theory playing in his head since someone told him they did that instead of just purchasing it and going in to payments. Perhaps I need to sit down and calculate it for my clueless self.", "title": "" }, { "docid": "e14660d08b4b2fa45f1d81f43002d2c7", "text": "\"Wow, this turns out to be a much more difficult problem than I thought from first looking at it. Let's recast some of the variables to simplify the equations a bit. Let rb be the growth rate of money in your bank for one period. By \"\"growth rate\"\" I mean the amount you will have after one period. So if the interest rate is 3% per year paid monthly, then the interest for one month is 3/12 of 1% = .25%, so after one month you have 1.0025 times as much money as you started with. Similarly, let si be the growth rate of the investment. Then after you make a deposit the amount you have in the bank is pb = s. After another deposit you've collected interest on the first, so you have pb = s * rb + s. That is, the first deposit with one period's growth plus the second deposit. One more deposit and you have pb = ((s * rb) + s) * rb + s = s + s * rb + s * rb^2. Etc. So after n deposits you have pb = s + s * rb + s * rb^2 + s * rb^3 + ... + s * rb^(n-1). This simplifies to pb = s * (rb^n - 1)/(rb - 1). Similarly for the amount you would get by depositing to the investment, let's call that pi, except you must also subtract the amount of the broker fee, b. So you want to make deposits when pb>pi, or s(ri^n-1)/(ri-1) - b > s(rb^n-1)/(rb-1) Then just solve for n and you're done! Except ... maybe someone who's better at algebra than me could solve that for n, but I don't see how to do it. Further complicating this is that banks normally pay interest monthly, while stocks go up or down every day. If a calculation said to withdraw after 3.9 months, it might really be better to wait for 4.0 months to collect one additional month's interest. But let's see if we can approximate. If the growth rates and the number of periods are relatively small, the compounding of growth should also be relatively small. So an approximate solution would be when the difference between the interest rates, times the amount of each deposit, summed over the number of deposits, is greater than the fee. That is, say the investment pays 10% per month more than your bank account (wildly optimistic but just for example), the broker fee is $10, and the amount of each deposit is $200. Then if you delay making the investment by one month you're losing 10% of $200 = $20. This is more than the broker fee, so you should invest immediately. Okay, suppose more realistically that the investment pays 1% more per month than the bank account. Then the first month you're losing 1% of $200 = $2. The second month you have $400 in the bank, so you're losing $4, total loss for two months = $6. The third month you have $600 in the bank so you lose an additional $6, total loss = $12. Etc. So you should transfer the money to the investment about the third month. Compounding would mean that losses on transferring to the investment are a little higher than this, so you'd want to bias to transferring a little earlier. Or, you could set up a spreadsheet to do the compounding calculations month by month, and then just look down the column for when the investment total minus the bank total is greater than the broker fee. Sorry I'm not giving you a definitive answer, but maybe this helps.\"", "title": "" }, { "docid": "185dbae572642a73b52c95ff09ec426e", "text": "\"For 3X, it's about 114, and for 4X, 144, which naturally, is twice 72. These are close, back of napkin, results. With smart phone apps offering scientific calculators, you should get comfortable just taking the nth root of a number for a more precise answer. Update in response to Brick's comment. The rule of 72 says that (n)(y)=72 to double your money. It answers both questions, how much time do I need, given a rate, and how much return do I need, given a time? Logic tells me that if 72 is the number to double, 144 is the 4X. But I'm a math guy, and my logic might not be logical to OP. So - Let's take the 20th root of 4. This is the key to use. 4, (hit key) 20, equals. The result is 1.07177 or 7.177%. And this is the precise rate you'd need to quadruple your money in 20 years) Now (n)(y)= 20* 7.177 = 143.55 which rounds to 144. \"\"Rule of 144\"\" to quadruple your money. This now answers OP's question, \"\"How to derive a Rule of X\"\" for a return other than doubling. One more example? I want 10X my money. Of course I need the initial guess to enter one calculation. People like 8%, in general. It's a bit below the 10% long term S&P return, and a good round number. The Rule of 72 says 9 years to double, so, 18 years is 4X, and 36 years is 8X. For my initial calculation, I'll use 40 years. The 40th root of 10. I get 5.925% (Again the precise rate that gives 10 fold over 40 years) and multiplying this by 40, I get a \"\"Rule of 237\"\" which I'm tempted to round to 240. At 6%, 237/6= 39.5 yrs, 1.06^39.5 = 9.99 At 6%, 240/6= 40.0 yrs, 1.06^40.0 = 10.29 You can see that you lose some accuracy for the sake of a number that's easier to remember, and manipulate. 72 to double is pretty darn accurate, so I'll stick with \"\"Rule of 237\"\" to get 10X my money. To close, the purpose of these rules is to create the tool that lets you perform some otherwise tough calculations away from any electronic device. Of course I know how to use logs, and in real life I'm paid to explain them to students who are typically glad when that chapter is over. I've shown above how the \"\"Rule of X\"\" can be formulated with a power/root key, which, for most people, is simpler. Ironically, log calculations as @jkuz offered, force a continuous compounding which may not be desired at all. It would give a result of 230 for my 10X return example, and the following (using the first equation he offered) - At 6%, 230/6= 38.3 yrs, 1.06^38.3 = 9.31 which is further away from the desired 10X than my 237 or rounded 240.\"", "title": "" } ]	fiqa
460e046f6530dc791409f2b475a99d7a	Remortgaging my home to release capital for second property	[ { "docid": "b8381f6e7afdb98bc894287b37b344a6", "text": "I've had a hard time finding out details on remortgaging Help to Buy loans myself, but found one article (http://www.thisismoney.co.uk/money/mortgageshome/article-3038831/Help-Buy-borrowers-risk-missing-best-remortgage-deals.html) which points out it IS possible. But also that there aren't many lenders offering such deals out there. The article lists a number of lenders that do offer these programs, and the extra requirements on equity you might have to have. It sounds like it's going to be critical to know how much equity you've built up. Since part of the valuation increase will be credited to Help to Buy, you won't get all the £30k increase you've mentioned. Instead, I believe you'll only get 80%, so £24k. Which would mean your total equity is £24k + £7k = £31k, plus whatever you might have already paid off. I'm going to assume there isn't much you've paid off, so will assume just over 18%. (31/170) While this is higher than most of the equity limits mentioned in the above article, keep in mind you'd only get cash out corresponding to the difference between your current equity amount and the equity required for the loan. For example, if you went with a loan requiring 15% equity to qualify, you'd only have 3% over that, and thus get £5.1k out. And that's before any fees you might have to pay! (You might have new origination fees, but you also might have early repayment fees.) Maybe you could pursue a lower money down refi and get to keep more, but the same article points out that Help to Buy might consider that too risky for you, and refuse to allow the refi. I think it's worth shopping around to get actual numbers for your exact situation, but personally it doesn't sound like you have enough equity yet to get much cash out of a refi. Perhaps you'll get lucky though. Best of luck!", "title": "" } ]	[ { "docid": "3d0658033b028dc27886717f8b643785", "text": "\"There is no guarantee improvements will raise the appraised value. You also don't want your property tax appraisal to go up if you can avoid it. Since you are talking on the order of $10k I'll assume you're only a few thousand dollars more from getting to 20%. That said, any schemes you might come up with like refinancing or second line of credit will probably cost more in fees than they are worth, unless you can get a much nicer interest rate. Figure out how long you plan to stay there, Evaluate your options (do nothing, principal reduction, refinance for 30, 15, or even an ARM) and figure out your bottom line by comparing everything in a spreadsheet One more thing: if you do pay a substantial amount of extra principal, you can ask the lender to \"\"rebalance\"\" which will correct the minimum monthly payment to your remaining term. This will likely incur a fee, but could be helpful in an emergency\"", "title": "" }, { "docid": "68642bb5b333c7a9d73475cbedecadc0", "text": "You could be in a bit of a bind. I wouldn't push it any more until you read your loan papers very carefully. Going back to the lender for a refinance after you converted it to a rental (presumably without their knowledge) is risky. I doubt they'd let you refinance anyway, as the house is underwater. If the loan is performing then I wouldn't think they'd look too hard for reasons to upset the flow of checks by calling the loan due, but if you brazenly advertise the change of property use to them they may reconsider. Read your loan papers carefully to see what they can do before you lean on them too much. As for managing the finances on that property, I'd build up a cushion to deal with the fact that your payment is going to shoot up considerably in year 8. Also consider building up a side business to get another income stream going to compensate as well. You have a little time before it shoots up.", "title": "" }, { "docid": "9480629b3fcd1e52c37b21d24bc2587a", "text": "\"I took a second mortgage when I moved house because I had a long-term fixed rate mortgage that would have incurred punitive fees if I had cancelled it. Rather than doing that I took a second mortgage over the same term for the difference. As my second mortgage was with the same lender, they still had \"\"First Charge\"\" on the property (This means that in the event of default they have first call on the property to recoup their losses), so the interest rate was not higher (actually it was slightly less than my first mortgage). My case is not that usual, normally a 'second mortgage' is with a separate provider that takes a \"\"Second Charge\"\" on the property. The interest rates are normally higher as a result as there is more chance that the lender will not recoup their money in case of a default as the first charge has priority. The second mortgage may still be cheaper than an unsecured loan, as the second charge provides some collateral, this might make it attractive if a sudden expense needs to be covered.\"", "title": "" }, { "docid": "9dbafaba1e866e9f43f3a6ce0e416426", "text": "Although it may be a little late for you, the real answer is this: When you close on a mortgage for a primary residence you are affirming (in an affidavit), two intents: Now, these are affirming intentions — not guarantees; so if a homeowner has a change of circumstance, and cannot meet these affirmed intentions, there is almost always no penalty. Frankly, the mortgage holder's primary concern is you make payments on time, and they likely won't bother with any inquiry. That being said, should a homeowner have a pattern of buying primary residences, and in less than 1 year converting that primary to a rental, and purchasing a new primary; there will likely be a grounds for prosecution for mortgage fraud. In your specific situation, you cannot legally sign the owner-occupancy affidavit with the intention of not staying for 1 year. A solution would be to purchase the condo as a second home, or investment; both of which you can still typically get 80% financing. A second home is tricky, I would ask your lender what their requirements are for 2nd home classification. Outside that, you could buy the condo as a primary, stay in it for a year, then convert. If you absolutely had to purchase the 2nd property before 1 year, you could buy it as a primary with a 2 month rent back once you reach 10 months. Should you need it earlier, just buy the 2nd house as an investment, then once you move in, refinance it as a primary. This last strategy requires some planning ahead and you should explain your intention to the loan officer ahead of time so they can properly price the non-owner occupied loan.", "title": "" }, { "docid": "73024bd68e9d96fd5a838935cfb82ed3", "text": "You did borrow money for the downpayment. When you apply for a mortgage loan on your new home, you will be required to list all your assets and all your liabilities. You must disclose the first mortgage as well as the second mortgage on your current condo as well as the monthly payment on each of these loans. If you took out the second mortgage five years ago, you can truthfully say that you have not taken out any loans within the past year to get cash for the down payment when you apply for a mortgage for purchasing your new house. But, what the lender will be looking at is: Can the applicants' current income support monthly payments of $1000 for the first mortgage on the condo plus $300 for the second mortgage on the condo plus $1500 for the proposed mortgage on the new house? You might argue that you will be selling that condo soon, or will be renting it out and that the rental income will cover the mortgage payments on the condo, but will the lender give much credence to this? The condo may not sell easily, you might not be able to find a tenant right away, or be able to rent the condo at a high enough rental to cover the costs etc. If you simply save money from your current extra cash flow and use that to make the down payment, the lender will be pondering the question Can the applicants' current income support monthly payments of $1000 for the mortgage on the condo plus $1500 for the proposed mortgage on the new house? Which deal will the lender be happier with? If you are uncomfortable saving your extra cash flow in a savings account or CD or investing it in stocks and/or bonds until you need the money for the down-payment on your new house, put that money in a sock under your mattress (and don't smoke in bed!)", "title": "" }, { "docid": "4de70d581061d6bf240c21767d96b9f8", "text": "You say that one property is 65% of the value of the two properties and the other is 35%. But how much of that do the two of you actually own? If you have co-signed mortgages on both properties, then your equity is going to be lower. If you sold both properties, then your take away would be just half of that equity. And while the 35% property may be less valuable, if you bought it first, it may actually have more equity. It's the equity that matters here, not the value of the property. With a mortgage, the bank is more of an owner than you are until you've paid down most of the loan. You may find that the bank won't agree to a single-owner refinance. A co-signed mortgage is a lot easier for them to collect, as they can hold either of you responsible for the entire loan. If you sell the 65% property, then you can pay off any mortgage on that property and use the equity payout from that to buy out your relative on the 35% property. If you currently have no mortgage, you'd even have cash back. This is your fewest strings option. Let's say that you have no mortgage now. So this mortgage would be the only mortgage on the property. It's not so much, as 15:65 is 3:13 or 18.75% of the value of the property. That's more of a home equity loan than a mortgage. You should be able to get a good rate. It might reduce your short term profit, but it should be survivable if you have other income. If you don't have other income, then seriously consider selling the 65% property and diversifying the payout into something else. E.g. stocks and bonds. Perhaps your relative would be willing to float you the loan. That would save you bank fees and closing costs. Write up a contract and agree to take assignment of the title at payoff. You'll need to pay a lawyer to write up the contract (paying a modest amount now to cover the various future possibilities), but that should still be cheaper. There's a certain amount of trust required on both sides, but this gives you some separation. And of course it takes your relative out of the day-to-day management entirely. Perhaps the steady flow of cash would provide what they need. If your relative is willing to remain that involved, that can work. Note that they may not want to do this, so don't get too attached to the idea. Be prepared for a no. This would be a great option for you, as you pretty much get everything you have now. They get back the time meeting with you to make decisions, but they also give up control over those decisions. Some people would not like that tradeoff. The one time I was involved with a professional managing a property for me, the fee was around 7% of the rent. If that fits your area, you might reasonably charge 5%. That gives a discount for family and not being a professional. There's a relatively easy way to find out what fits your area. Look around and see what companies offer multiple listings. Call until you find a couple that will do management for you. Get quotes for managing your properties. Now you'll know the amounts. The big failing though is that this may not describe the issue that your relative has. If the real problem is that the two of you have different approaches to property management, then making you the only decision maker may be the wrong direction. This is certainly financially feasible, but it still may not be the right solution for your relationship. If you get a no on this, I'd recommend moving on to other solutions immediately. This may simply be too favorable to you.", "title": "" }, { "docid": "6c9fa6e0083a4b1e77d2cf50c48f93da", "text": "and I need to upgrade my current home to a larger, longer-term property Would selling your current home give you (at least) a 20% DP on the new home? Take additional cash out of the refinance of the first home to accelerate saving Dittoing D Stanley, that makes no sense. Purchase and move to a second property of greater cost and value to first You'll need to find the new house at the same time you're selling the existing home, and write the new-home purchase contract in such a way that you can back out in case the purchaser of your home backs out.", "title": "" }, { "docid": "a124946eb7dc8c8a9cb3c3cc6b64bf69", "text": "\"As others have said, congratulations on saving up 75K in cash while seemingly not neglecting other areas of personal finance. Considering that only 15% of Americans have more than 10K saved this is quite a feat. source If you sell your old house, and buy the new one you will still be in really good financial shape. No need to comment further. Renting your current home and buying a new home introduces a great amount of risk into your life. The risk in this case is mitigated by cash. As others have pointed out, you will need to save a lot more to remove an acceptable amount of risk. Here is what I see: So without paying off your existing house I would see a minimum savings account balance of about double of what you have now. Once you purchase the new house, the amount would be reduced by the down payment, so you will only have about 50K sitting around. The rental emergency fund may be a little light depending on how friendly your state is to landlords. Water heaters break, renters don't pay, and properties can sit vacant. Also anytime you move into a new business there will be mistakes made that are solved by writing checks. Do you have experience running rentals? You might be better off to sell your existing home, and move into a more expensive home than what you are suggesting. You can continue to win at money without introducing a new factor into your life. Alternatively, if you are \"\"bitten by the real estate bug\"\" you could mitigate a lot risk by buying a property that is of similar value to your current home or even less expensive. You can then choose which home to live in that makes the most financial sense. For example some choose to live in the more dilapidated home so they can do repairs as time permits. To me upgrading the home you live in, and renting an expensivish home for a rental is too much to do in such a short time frame. It is assuming far too much risk far to quickly for a person with your discipline. You will get there.\"", "title": "" }, { "docid": "2ca3122b4ea0f4b65e23a55d740ddd19", "text": "When I purchased my house I struggled with this same idea. I felt sick to my stomach signing a contract stating how much money I now owe a bank. However, the lawyer I was using put it in terms that eased the nausea a little (I still hate owing that much money - but it's a little more palatable). His words, paraphrased: At the end of the day, you have to have a place to stay. Your mortgage payment is replacing your rent except in this case, you're paying yourself instead of someone else. You lose a little flexibility in being able to up and move with relative ease. However, you've lived in apartments, you know that rent almost only goes up. Your mortgage will not. He wrote out some numbers and basically showed that everything evened out except mortgage payments will give you property as opposed to paying for someone else's property. To answer your question though - others have already stated - you'll get a better return in the stock market (usually). But unless you're really really bad at real estate evaluation - you should make some money off your house when you decide to sell.", "title": "" }, { "docid": "7e6d7849a72dd09bd6e94185741f837a", "text": "The Globe and Mail has an interesting article on what you can do with your RRSPs. Be aware that the article is from early 2011 and rules change. They describe holding your own mortgage inside your RRSP. That is, if you have $100,000 inside your RRSP already and your remaining mortgage is $100,000, you can use that money to pay off your mortgage, then pay back the money at interest, generating a tax-deferred profit inside your RRSP. That approach may be viable, though you'd want to talk to your accountant first. I'd be very cautious about loaning money to someone else for a second mortgage using my RRSP, though. Second mortgages are inherently risky, so this is a very speculative investment. Once you make an RRSP contribution, that space is used up (barring a couple of exceptions such as the life-long learning plan). So, let's say you used $100,000 of your RRSP to loan to someone for a second mortgage. Any interest payments should be sheltered inside the RRSP (substantial benefit), but if the person defaults on the second mortgage (which you should expect to be a significant possibility), you've lost your entire $100,000 contribution room (as well as, obviously, the $100,000 that you loaned out). I can't tell you whether or not it makes sense to invest in risky second-mortgage loans and I can't tell you whether, if you choose to do so, it definitely should be done inside an RRSP. There are substantial risks in the loan and there are both costs and benefits to doing so inside an RRSP. Hopefully, though, I've helped you understand the questions you should be asking yourself.", "title": "" }, { "docid": "5fe52d5fef8c9d41f4507ecd15372d83", "text": "\"Taking out your equity when refinancing means that you take out a new loan for the full value of your house (perhaps less 20% as a down payment on the new mortgage, otherwise you'll be paying insurance), pay off your old lender, and keep the rest for yourself. The result is much the same as using as a HELOC or home equity loan (or a second mortgage), except it's all rolled into a single new mortgage. The advantage is that the interest rate on a first mortgage is going to be lower than on HELOC or equivalent, and the equity requirements may be lower (e.g. a HELOC may only let you borrow against the amount of equity that exceeds 25% or 30%, while a new mortgage will require you only to have 20% equity). This is especially attractive to those whose homes have appreciated significantly since they bought them, especially if they have a lot of high-interest debt (e.g. credit cards) they want to pay off. Of course, rolling credit card debt into a 30-year mortgage isn't actually paying it off, but the monthly payments will be a lot lower, and if you're lucky and your home appreciates further, you can pay it off fully when you sell the property and still have paid a lot less interest. The downside is that you have turned unsecured debt into secured debt, which puts your home at risk if you find yourself unable to pay. In your case, you don't yet have even 20% equity in your home, so I wouldn't recommend this. :-) Equity is simply the difference between the amount you still owe on your home and the amount you'd get if you were to sell it. Until you do sell it, this amount is tentative, based on the original purchase price and, perhaps, an intervening appraisal that shows that the property has appreciated. That is really all that it is and there's nothing magic about it, except that since you own your home, you have equity in it, while as a renter, you would not. It used to be (decades ago, when you needed 20% down to get a mortgage) that selling was the only time you'd be able to do anything with the equity in your home. Now you can \"\"take it out\"\" as described above (or borrow against it) thanks to various financial products. It is sometimes tempting to consider equity roughly equivalent to \"\"profit.\"\" But some of it is your own money, contributed through the down payment, your monthly principal payment, and improvements you have made -- so \"\"cashing out\"\" isn't all profit, it's partly just you getting your own money back. And there are many additional expenses involved in owning a home, such as interest, property taxes, maintenance, utilities, and various fees, not to mention the commissions when you buy or sell, which the equity calculation doesn't consider. Increasing equity reflects that you own a desirable property in a desirable location, that you have maintained and maybe even improved it, that you are financially responsible (i.e., paying your mortgage, taxes, etc.), and that your financial interests are aligned with your neighbors. All those things feel pretty good, and they should. Otherwise, it is just a number that the banks will sometimes let you borrow against. :-)\"", "title": "" }, { "docid": "2c81cded03e56b49760d6e19fd22bb8b", "text": "You have the 2 properties, and even though the value of property B is less than the amount you owe on it hopefully you have some equity in propery A. So if you do have enough equity in property A, why don't you just go to the one lender and get both property A and B refinanced under the same mortgage. This way hopefully the combined equity in both properties would be enough to cover the full amount of the loan, and you have the opportunity to refinance at favourable rate and terms. Sounds like you are in the USA with an interest rate of 3.25%, I am in Australia and my mortgage rates are currently between 6.3% to 6.6%.", "title": "" }, { "docid": "488a2e2da0765eb148803ded8cdeccfb", "text": "Like @littleadv, I don't consider a mortgage on a primary residence to be a low-risk investment. It is an asset, but one that can be rather illiquid, depending on the nature of the real estate market in your area. There are enough additional costs associated with home-ownership (down-payment, insurance, repairs) relative to more traditional investments to argue against a primary residence being an investment. Your question didn't indicate when and where you bought your home, the type of home (single-family, townhouse, or condo) the nature of your mortgage (fixed-rate or adjustable rate), or your interest rate, but since you're in your mid-20s, I'm guessing you bought after the crash. If that's the case, your odds of making a profit if/when you sell your home are higher than they would be if you bought in the 2006/2007 time-frame. This is no guarantee of course. Given the amount of housing stock still available, housing prices could still fall further. While it is possible to lose money in all sorts of investments, the illiquid nature of real estate makes it a lot more difficult to limit your losses by selling. If preserving principal is your objective, money market funds and treasury inflation protected securities are better choices than your home. The diversification your financial advisor is suggesting is a way to manage risk. Not all investments perform the same way in a given economic climate. When stocks increase in value, bonds tend to decrease (and vice versa). Too much money in a single investment means you could be wiped out in a downturn.", "title": "" }, { "docid": "4e6b3c3d49316238ac8a589d1dd171d9", "text": "\"The problem here can be boiled down to that fact you are attempting to obtain a loan without collateral. There are times it can be done, but you have to have a really good relationship with a banker. Your question suggests that avenue has been exhausted. You are looking for an investor, but you are offering something very speculative. Suppose an investor gives you 20K, what recourse does he have if you do not pay the terms of the loan? From what income will this be paid from? What event will trigger the capability to make a balloon payment? Now if you can find a really handy guy that really needs a place to live could you swap rent for repairs? Maybe. Perhaps you buy the materials, and he does the roof in exchange for 6 months worth of rent or whatever. If you approached me with this \"\"investment\"\", the thing that would raise a red flag is why don't you have 20K to do this yourself? If you don't how will you be able to make payments? For example of the items you mentioned: That is a weekend worth of work and some pretty inexpensive materials. Why does money need to be borrowed for this? A weekend worth of demo, and $500 worth of material and another weekend to build something serviceable for a rental. Why does money need to be borrowed for this? 2K? Why does money need to be borrowed for this? This can be expensive, but most roofing companies offer financing. Also doing some of the work yourself can save a ton of money. Demoing an old roof is typically about 1/3 of the roofing cost and is technically simple, but physically difficult. So besides the new roof, you could have a lot of your list solved for less than 3K and three weekends worth of work. You are attempting to change this into a rental, not the Taj Mahal.\"", "title": "" }, { "docid": "6b80cfd67567b2482cfe5fb29d67f9c5", "text": "It depends on how much equity you have in your home. Scenario 1: Your home is worth $100K, and your current mortgage is for $100K (or more which means you are underwater.) In this case you can't get a 2nd mortgage because: That being said, you can use different portions of equity in your home as collateral for multiple mortgages, as long as none of the equity overlaps, but you may need permission from the primary mortgage bank first, for example: Scenario 2: Your home is worth $100K, and your current mortgage is for $80K meaning you currently have $20K in equity. It is possible to get a 2nd mortgage or home equity line of credit for $20K. As a side note, if your loan agent is telling you to use a different bank, it sounds like she is trying (and willing) to do something shady. If you are in Scenario 1, I'd find a new agent.", "title": "" } ]	fiqa
ae1ef1f54a80016c1ff62a5f50c68f28	How do I know what loan terms I can qualify for?	[ { "docid": "d2aa9ba776cab68fb9f0bd1333bbea3b", "text": "\"You can find out the most money they will loan you for a car loan when you approach your current bank/credit union. They should be willing to layout options based on your income, and credit history. You then have to decide if those terms work for you. There are several dangers with getting loan estimates, they may be willing to lend you more than you can actually handle. They think you can afford it, but maybe you can't. They may also have a loan with a longer term, which does bring the monthly cost down, but exposes you to being upside down on the loan. You then use this a a data point when looking at other lenders. The last place you look is the auto dealer. They will be trying to pressure you on both the loan and the price, that is not the time to do doing complex mental calculations. The Suntrust web page was interesting, it included the quote: The lowest rate in each range is for LightStream's unsecured auto loan product and requires that you have an excellent credit profile. It also induced the example the rate of 2.19% - 4.24% for a 24 to 36 month loan of $10,000 to $24,999 for a used car purchased from a dealer. Also note that my local credit union has a new/used loan at 1.49%, but you have to be a member. Sunstrust seems to be in the minority. In general a loan for X$ and y months will have a lower rate if it is secured with collateral. But Suntrust is offering unsecured loans (i.e. no collateral) at a low rate. The big benefit for their product is that you get the cash today. You can get the cash before you know what you want to buy. You get the cash before you have negotiated with the dealer. That makes that step easier. Now will they in the near future ask for proof you bought a car with the money? no idea. If you went to the same web page and wanted a debt consolidation loan the rate for the same $ range and the same months is: 5.49% - 11.24% the quote now changes to: The lowest rate in each range requires that you have an excellent credit profile. I have no idea what rate they will actually approve you for. It is possible that if you don't have excellent credit the rate rises quickly, but 4.24% for the worst auto loan is better than 5.49% for the best debt consolidation. Excellent Credit Given the unique nature of each individual’s credit situation, LightStream believes there is no single definition for \"\"excellent credit\"\". However, we find individuals with excellent credit usually share the following characteristics: Finally, it should be noted again that each individual situation is different and that we make our credit judgment based on the specific facts of that situation. Ultimately our determination of excellent credit is based on whether we conclude that there is a very high likelihood that our loan will be repaid in a full and timely manner. All the rates mentioned in this answer are from 15 July 2017.\"", "title": "" } ]	[ { "docid": "58adb939b72e4e204fe83ac37fdbc96c", "text": "To point #1: We are moving but I don't know If I can afford the rent as the family grows I would start by looking at your debt-to-income ratio. In the US, most banks look at this for mortgage purposes, but it also gives you a general idea of what monthly mortgage payments will be comfortable given your particular financial situation. Think of it this way, if a bank is unwilling to lend you money because of a high debt-to-income level, this indicates that you have very little leeway with regard to your budget. So a lower number indicates that you will have more flexibility and comfort with meeting your rent/mortgage obligations when unforeseen bills pop up. The article below indicates having < 43% DTI is ideal (in the US). Here's a link to a debt to income calculator and some extra info (I suggest finding one aimed at the UK market): WellsFargo debt to income calculator Why is the 43% debt to income ratio important? Point #2: How can a person measure how much to spend on food, car, bills or rent from his salary? Is there a formula to keep in check? Other answers have addressed how to make a budget, so I will not repeat that. However, here's another angle with regards to spending/saving. This article recommends 50/30/20: According to the popular 50/30/20 rule, you should reserve 50 percent of your budget for essentials like rent and food, 30 percent for discretionary spending, and at least 20 percent for savings. Read more at: https://www.moneyunder30.com/how-much-should-you-save-every-month-2 In the real world, these goals may not be realistic, and different people have different ideas about how aggressive to be with regards to savings. However, you can get a general idea and adapt for your particular needs. Point 3: I find myself looking at my account every single day and get tensed and sad because almost whenever the money (pay) comes in I freak out that after everything there is nothing for us to enjoy or save.", "title": "" }, { "docid": "3b46cd1cd828458b9853b605028dc8a9", "text": "\"Your headline question \"\"How do you find best mortgage without damaging credit score?\"\" has a simple answer. If you have all your ducks in a row, and know what you are doing, you will get qualified. If you are like a recent client of mine, low FICO, low downpayment, random income, you might have issues. If your self-prequalification is good, you are in control, go find the best rate/ total cost, no need to put in multiple applications. If, for some reason you do, FICO sees that you are shopping for a single loan, and you are not dinged.\"", "title": "" }, { "docid": "81e079f623118c63a7ed8de3064df61d", "text": "A bank can reject a loan if they feel you do not meet the eligibility criteria. You can talk to few banks and find out.", "title": "" }, { "docid": "c0db27213851577a1005e953be0e24a6", "text": "According to GOV.UK, you can only apply for Student Finance if: Since you don't fulfill the criterion 2 and 3, you are technically not eligible for Student Finance. Since you have received information from Student Finance England that you can apply for the maintenance loan, you should either write to them or call them again, to confirm the information given to you.", "title": "" }, { "docid": "97346439b9bda6cb87eaf6f87a228137", "text": "Keep in mind that lenders will consider the terms of any loans you have when determining your ability to pay back the mortgage. They'll want to see paperwork, or if you claim it is a gift they will require a letter to that effect from your relative. Obviously, this could effect your ability to qualify for a loan.", "title": "" }, { "docid": "982b04c5e536ff4051aaacf79f34c438", "text": "Some lenders will work with you if you contact them early and openly discuss your situation. They are not required to do so. The larger and more corporate the lender, the less likely you'll find one that will work with you. My experience is that your success in working out repayment plan for missed payments depends on the duration of your reduced income. If this is a period of unemployment and you will be able to pay again in a number of months, you may be able to work out a plan on some debts. If you're permanently unable to pay in full, or the duration is too long, you may have to file bankruptcy to save your domicile and transportation. The ethics of this go beyond this forum, as do the specifics of when it is advisable to file bankruptcy. Research your area, find debt counselling. They can really help with specifics. Speak with your lenders, they may be able to refer you to local non-profit services. Be sure that you find one of those, not one of the predatory lenders posing as credit counselling services. There's even some that take the money you can afford to pay, divide it up over your creditors, allowing you to keep accruing late/partial payment fees, and charge you a fee on top of it. To me this is fraudulent and should be cause for criminal charges. The key is open communication with your lenders with disclosure to the level that they need to know. If you're disabled, long term, they need to know that. They do not need to know the specific symptoms or causes or discomforts. They need to know whether the Social Security Administration has declared you disabled and are paying you a disability check. (If this is the case, you probably have a case worker who can find you resources to help negotiate with your creditors).", "title": "" }, { "docid": "f5f3811c84e5e74a6e214a26c56bc648", "text": "If you're able to pop this data into excel you can quickly calculate the solution. Every one of these problems boils down to 'Interest Rate', 'Term', 'Payment', 'Present Value', and 'Future Value' (FV will typically be zero). Excel has a formula to calculate any of these components based off of the other inputs. In this case, the given information is: Interest Rate: 7.56% Term: 36 Months Monthly PMT: $350 Present Value: ? You can use the =PV() formula and input the other known values. One caveat is that you'll need to adjust the interest rate to account for the monthly compounding. So, the formula would be =PV(.0063,36,-350). This gives a result of $11,242, which is the amount you'd be able to borrow. [All of these can also be solved on the TI-84+, but I don't have my old calculator on me to walk through the steps] To calculate the total interest paid, you would then find out how much you'll be paying over the life of the loan. If your monthly payment is $350 for 36 months, the total amount you'd pay is $12,600 ($350*36). Subtract the $11,242 calculated in step one, and you are left with $1,358 worth of interest. Hope that makes sense. Let me know if you want me to go over any of the steps in more detail. As a former finance student, I would highly recommend locking down the TVM functions, as they will pop up quite often throughout your schooling/career. Best of luck!", "title": "" }, { "docid": "94b7b27feac8a3dcef63056fa43001dd", "text": "It seems like you are asking two different questions, one is, how do I know if I can afford a house? The other is, how do I know what type of mortage to get? The first question is fairly simple to answer, there's plenty of calculators out there that will tell you what you can afford, but rule of thumb is 30% of income can goto housing. Now what type of mortgage to get can be much more confusing, because the mortgage industry makes money off of these confusing products. The best thing to do in my opionion in situations like this is to keep it simple. You need to be careful buying a house. So much money is changing hands and there are so many parasites involved in the transaction I would be extremely wary of anybody who is going to tell you what mortgage to get. I've never heard of a fee only independent mortgage broker, and if I found one that claimed to be I wouldn't believe him. I would just ignore all the exotic non-conforming products and just answer one simple question. Are you the type of person that buys an insurance policy or that likes to self insure? If you like insurance, get a 30 year fixed mortgage. If you like to self insure, get a 7 year ARM. The average lenghth someone owns a house is 7 years, plus in 7 years time, it might not adjust up, and even if it does, you can just accelerate your payments and pay it off quickly (this is the self insurance part of it). If you're like me, I'm willing to pay an extra .5% for the 30 year so that my payment never changes and I'm never forced to move (which is admitedly extremely unlikely, but I like the safety). I don't like 15 year term loans because rates are so low, you can get way better returns in the stock market right now, so why pay off sooner then you need to. Heck, if I had a paid off house right now I'd refi into a 30 year and invest the money. In summary, pick 30 year or ARM, then just shop around to find the lowest rate (which is extremely easy).", "title": "" }, { "docid": "02634f6caa3dc8b28eea7e02af3835a1", "text": "You have 2 out of 3 (income and good credit). That is usually a pass where I work. The job longevity may factor in if they are strict. As for pay stubs, can you get a letter from your employer stating your start date and annual pay? Offer letters work just as well.", "title": "" }, { "docid": "6d2c5c75a3a4275cd1e4dd42f690d634", "text": "If you are putting down less than 20% expect to need to pay PMI. When you first applied they should have described you a group of options ranging from minimal to 20% down. The monthly amounts would have varied based on PMI, down payment, and interest rate. The maximum monthly payment for principal, interest, taxes, and insurance will determine the maximum loan you can get. The down payment determines the price of the house above the mortgage amount. During the most recent real estate bubble, lenders created exotic mortgage options to cover buyers who didn't have cash for a down-payment; or not enough income for the principal and interest, or ways to sidestep PMI. Many of these options have disappeared or are harder to get. You need to go back to the bank and get more information on your different options, or find a lender broker who will help you.", "title": "" }, { "docid": "ad0028567b8dc2822bbcb30238ef587a", "text": "\"Concise answers to your questions: Depends on the loan and the bank; when you \"\"accelerate\"\" repayment of a loan by applying a pre-payment balance to the principal, your monthly payment may be reduced. However, standard practice for most loan types is that the repayment schedule will be accelerated; you'll pay no less each month, but you'll pay it off sooner. I can neither confirm nor deny that an internship counts as job experience in the field for the purpose of mortgage lending. It sounds logical, especially if it were a paid internship (in which case you'd just call it a \"\"job\"\"), but I can't be sure as I don't know of anyone who got a mortgage without accruing the necessary job experience post-graduation. A loan officer will be happy to talk to you and answer specific questions, but if you go in today, with no credit history (the student loan probably hasn't even entered repayment) and a lot of unknowns (an offer can be rescinded, for instance), you are virtually certain to be denied a mortgage. The bank is going to want evidence that you will make good on the debt you have over time. One $10,000 payment on the loan, though significant, is just one payment as far as your credit history (and credit score) is concerned. Now, a few more reality checks: $70k/yr is not what you'll be bringing home. As a single person without dependents, you'll be taxed at the highest possible withholdings rate. Your effective tax rate on $70k, depending on the state in which you live, can be as high as 30% (including all payroll/SS taxes, for a 1099 earner and/or an employee in a state with an income tax), so you're actually only bringing home 42k/yr, or about $1,600/paycheck if you're paid biweekly. To that, add a decent chunk for your group healthcare plan (which, as of 2014, you will be required to buy, or else pay another $2500 - effectively another 3% of gross earnings - in taxes). And even now with your first job, you should be at least trying to save up a decent chunk o' change in a 401k or IRA as a retirement nest egg. That student loan, beginning about 6 months after you leave school, will cost you about $555/mo in monthly payments for the next 10 years (if it's all Stafford loans with a 50/50 split between sub/unsub; that could be as much as $600/mo for all-unsub Stafford, or $700 or more for private loans). If you were going to pay all that back in two years, you're looking at paying a ballpark of $2500/mo leaving just $700 to pay all your bills and expenses each month. With a 3-year payoff plan, you're turning around one of your two paychecks every month to the student loan servicer, which for a bachelor is doable but still rather tight. Your mortgage payment isn't the only payment you will make on your house. If you get an FHA loan with 3.5% down, the lender will demand PMI. The city/county will likely levy a property tax on the assessed value of land and building. The lender may require that you purchase home insurance with minimum acceptable coverage limits and deductibles. All of these will be paid into escrow accounts, managed by your lending bank, from a single check you send them monthly. I pay all of these, in a state (Texas) that gets its primary income from sales and property tax instead of income, and my monthly payment isn't quite double the simple P&I. Once you have the house, you'll want to fill the house. Nice bed: probably $1500 between mattress and frame for a nice big queen you can stretch out on (and have lady friends over). Nice couch: $1000. TV: call it $500. That's probably the bare minimum you'll want to buy to replace what you lived through college with (you'll have somewhere to eat and sleep other than the floor of your new home), and we're already talking almost a month's salary, or payments of up to 10% of your monthly take-home pay over a year on a couple of store credit cards. Plates, cookware, etc just keeps bumping this up. Yes, they're (theoretically) all one-time costs, but they're things you need, and things you may not have if you've been living in dorms and eating in dining halls all through college. The house you buy now is likely to be a \"\"starter\"\", maybe 3bed/2bath and 1600 sqft at the upper end (they sell em as small as 2bd/1bt 1100sqft). It will support a spouse and 2 kids, but by that point you'll be bursting at the seams. What happens if your future spouse had the same idea of buying a house early while rates were low? The cost of buying a house may be as little as 3.5% down and a few hundred more in advance escrow and a couple other fees the seller can't pay for you. The cost of selling the same house is likely to include all the costs you made the seller pay when you bought it, because you'll be selling to someone in the same position you're in now. I didn't know it at the time I bought my house, but I paid about $5,000 to get into it (3.5% down and 6 months' escrow up front), while the sellers paid over $10,000 to get out (the owner got married to another homeowner, and they ended up selling both houses to move out of town; I don't even know what kind of bath they took on the house we weren't involved with). I graduated in 2005. I didn't buy my first house until I was married and pretty much well-settled, in 2011 (and yes, we were looking because mortgage rates were at rock bottom). We really lucked out in terms of a home that, if we want to or have to, we can live in for the rest of our lives (only 1700sqft, but it's officially a 4/2 with a spare room, and a downstairs master suite and nursery/office, so when we're old and decrepit we can pretty much live downstairs). I would seriously recommend that you do the same, even if by doing so you miss out on the absolute best interest rates. Last example: let's say, hypothetically, that you bite at current interest rates, and lock in a rate just above prime at 4%, 3.5% down, seller pays closing, but then in two years you get married, change jobs and have to move. Let's further suppose an alternate reality in which, after two years of living in an apartment, all the same life changes happen and you are now shopping for your first house having been pre-approved at 5%. That one percentage point savings by buying now, on a house in the $200k range, is worth about $120/mo or about $1440/yr off of your P&I payment ($921.42 on a $200,000 home with a 30-year term). Not chump change (over 30 years if you had been that lucky, it's $43000), but it's less than 5% of your take-home pay (month-to-month or annually). However, when you move in two years, the buyer's probably going to want the same deal you got - seller pays closing - because that's the market level you bought in to (low-priced starters for first-time homebuyers). That's a 3% commission for both agents, 1% origination, 0.5%-1% guarantor, and various fixed fees (title etc). Assuming the value of the house hasn't changed, let's call total selling costs 8% of the house value of $200k (which is probably low); that's $16,000 in seller's costs. Again, assuming home value didn't change and that you got an FHA loan requiring only 3.5% down, your down payment ($7k) plus principal paid (about another $7k; 6936.27 to be exact) only covers $14k of those costs. You're now in the hole $2,000, and you still have to come up with your next home's down payment. With all other things being equal, in order to get back to where you were in net worth terms before you bought the house (meaning $7,000 cash in the bank after selling it), you would need to stay in the house for 4 and a half years to accumulate the $16,000 in equity through principal payments. That leaves you with your original $7,000 down payment returned to you in cash, and you're even in accounting terms (which means in finance terms you're behind; that $7,000 invested at 3% historical average rate of inflation would have earned you about $800 in those four years, meaning you need to stick around about 5.5 years before you \"\"break even\"\" in TVM terms). For this reason, I would say that you should be very cautious when buying your first home; it may very well be the last one you'll ever buy. Whether that's because you made good choices or bad is up to you.\"", "title": "" }, { "docid": "03c1690b83249edd54f7e6a09e48bd72", "text": "\"That \"\"something\"\" you are signing means you are liable for the mortgage payments - yes, all of them - if he can't or won't pay at any point. The limit on what the bank will lend him based on his salary is there for a reason - they don't expect him to be able to keep up repayments if they lend him more (or more precisely, there's a big risk that he won't). Don't forget that even if he swears up and down to you that he can afford them, interest rates can rise; this is a 25 or 30 year commitment you would be making. Interest rates are at a historic low and the only way from here is up; in my living memory rates have been 12% or even 15%. As a very rough rule of thumb, for every £100k borrowed, every additional 1% on the interest rates costs an additional £100 on your monthly payment. Also, the \"\"Transitional Arrangement\"\" is not without its own fees and the bank won't let him simply take you off the mortgage unless they are convinced he can keep up the repayments on his own, which they clearly aren't. Also thanks to @Kat for the additional good point that being on the hook for your friend's mortgage will prevent you from being able to get a mortgage yourself while the liability still exists, or at least severely limit your options. No matter how many times you protest \"\"but I'm not paying any money for that!\"\" - it won't help. Another point: there are various schemes available to help first time buyers. By signing up for this, you would exclude yourself from any of those schemes in the future.\"", "title": "" }, { "docid": "a5711d12602cfcbaf9d52c641416cb4d", "text": "\"Fundamentals: Then remember that you want to put 20% or more down in cash, to avoid PMI, and recalculate with thatmajor chunk taken out of your savings. Many banks offer calculators on their websites that can help you run these numbers and figure out how much house a given mortgage can pay for. Remember that the old advice that you should buy the largest house you can afford, or the newer advice about \"\"starter homes\"\", are both questionable in the current market. =========================== Added: If you're willing to settle for a rule-of-thumb first-approximation ballpark estimate: Maximum mortgage payment: Rule of 28. Your monthly mortgage payment should not exceed 28 percent of your gross monthly income (your income before taxes are taken out). Maximum housing cost: Rule of 32. Your total housing payments (including the mortgage, homeowner’s insurance, and private mortgage insurance [PMI], association fees, and property taxes) should not exceed 32 percent of your gross monthly income. Maximum Total Debt Service: Rule of 40. Your total debt payments, including your housing payment, your auto loan or student loan payments, and minimum credit card payments should not exceed 40 percent of your gross monthly income. As I said, many banks offer web-based tools that will run these numbers for you. These are rules that the lending industy uses for a quick initial screen of an application. They do not guarantee that you in particular can afford that large a loan, just that it isn't so bad that they won't even look at it. Note that this is all in terms of mortgage paymennts, which means it's also affected by what interest rate you can get, how long a mortgage you're willing to take, and how much you can afford to pull out of your savings. Also, as noted, if you can't put 20% down from savings the bank will hit you for PMI. Standard reminder: Unless you explect to live in the same place for five years or more, buying a house is questionable financially. There is nothing wrong with renting; depending on local housing stock it may be cheaper. Houses come with ongoung costs and hassles rental -- even renting a house -- doesn't. Buy a house only when it makes sense both financially and in terms of what you actually need to make your life pleasant. Do not buy a house only because you think it's an investment; real estate can be a profitable business, but thinking of a house as simultaneously both your home and an investment is a good way to get yourself into trouble.\"", "title": "" }, { "docid": "f6a9e83f6e8a21d73dc388f11ca3632c", "text": "Mortgage qualification is typically done based on pretax income. To keep the math easy, let's assume $10K/month gross. A well written loan allows 28% or $2800 to be used for the mortgage and property tax. Property tax varies, but 1% is the average of the 2 states mentioned. This results in $7500/yr property or $625/mo tax leaving $2175/mo. Note here - OP stated $750K house. $2175 will finance $450K at 4%/30 years. $2175 will finance $300K at 3.5% /15years. Let me pause here. Facts are most important to make these decisions. Unless you're clear on gross income, which may be higher, the constraints above quickly come into play. Once the numbers are spelled out, you may find that you are qualified to only borrow $350K based on a 30 year note. Nathan's $2500 payment was correct, but for the mortgage only. Add property tax and you'd be at $3125. You'd need a gross $11,160/mo. to meet the 28% rule. The above discussion would render any further thoughts (of mine) moot.", "title": "" }, { "docid": "dc21ff450a0a0809f018f1758627b97f", "text": "\"Sometimes when you are trying to qualify for a loan, the lender will ask for proof of your account balances and costs. Your scheme here could be cause for some questions: \"\"why are you paying $20-30k to your credit card each month, is there a large debt you haven't disclosed?\"\". Or perhaps \"\"if you lost your job, would you be able to afford to continue to pay $20-30k\"\". Of course this isn't a real expense and you can stop whenever you want, but still as a lender I would want to understand this fully before loaning to someone who really does need to pay $20-30k per month. Who knows this might hiding some troublesome issues, like perhaps a side business is failing and you're trying to keep it afloat.\"", "title": "" } ]	fiqa
4c451bbc4846c86b71c3f2525eef9726	Is a real estate attorney needed for builder deposit contract?	[ { "docid": "7561647c86ee2f2e4b5a95ab543ff10a", "text": "You are planning on signing a contract for, likely, hundreds of thousands of dollars, and plan on paying, likely, tens of thousands of dollars in a deposit. For a house that is not built yet. This isn't particularly unusual, lots of people do this. But, you need a lawyer. Now, before you sign anything. Your agent may be able to recommend a lawyer, but beware; your agent may have a conflict of interest here.", "title": "" }, { "docid": "f752478bb338482f979c351338c9bfd0", "text": "You need to let a lawyer look at it. Concerns you have include:", "title": "" } ]	[ { "docid": "eaec0527d5e0ab0cafc2ab3505c52c0c", "text": "If I understand correctly you describe putting a hold on an appartment as such: A sum of money that you give to the owner of the appartment to let them hold it for you because you are probably going to rent. In case you back out of the deal, this money can mitigate the expected loss from turning down other candidates. After asking them to hold the appartment for you, you decided not to rent. Also, you used the bank to get back the hold sum. Regardless of the legal details, it seems very clear to me that after putting down a hold and walking away, you should not get the money back. There may have been some things that distracted/confused you (call about the key), but if you actually look at the things that happened it seems both right and practical to pay them their reclaimed hold as soon as possible.", "title": "" }, { "docid": "3e2719b026c9708a7d51c44bc55c3aff", "text": "\"The Trustee has allowed me to act as his \"\"agent\"\", continuing to pay bills, and take care of much of the administrative affairs for my mother's estate since I did all of it for years before she passed away. I was not paid for any of this work. ... The expenses were more than $30K last year, and there is still a punch list to go this year. The trust should reimburse your expenses and deduct them on the trust tax return. Since the Trust owned the property in 2015, and I will receive ownership this month, can last year's expenses incurred for the Trust be deducted again future income for my property this year? Not exactly. The trust will file its own tax return and will report the income/loss attributed to the beneficiaries per the trust rules. What is attributed to you will flow to your Schedule E. From there you own it and if it is a passive activity where the loss is limited - you can carry it forward and offset with future gain. The trustee will have to deal with all the paperwork. Do 1099-misc forms need to be filed for the contractors who worked to get it ready for rental? It is my understanding that since 2010 (and before 2010) landlords who are not in real-estate trade or business are not required to send out 1099. But it won't hurt if you do, also. In any case - for all of these issues you should talk to a tax adviser (EA/CPA licensed in your State).\"", "title": "" }, { "docid": "1fa2ff1b70c096390eb86367e2b0199b", "text": "A real estate contract is a form of seller financing. It is similar to a mortgage, but rather than borrowing money from a lender or bank to buy real estate, the buyer makes payments to the real estate owned, or seller, until the purchase price is paid in full. If you want to real estate purchase and sale contracts, then you can visit our office. We can provide the best deal of the real estate contact.", "title": "" }, { "docid": "b11a00537c257f650ed6a54ae8d0c128", "text": "I'm not sure about your first two options. But given your situation, a variant of option three seems possible. That way you don't have to throw away your appraisal, although it's possible that you'll need to get some kind of addendum related to the repairs. You also don't have your liquid money tied up long term. You just need to float it for a month or two while the repairs are being done. The bank should be able to preapprove you for the loan. Note that you might be better off without the loan. You'll have to pay interest on the loan and there's extra red tape. I'd just prefer not to tie up so much money in this property. I don't understand this. With a loan, you are even more tied up. Anything you do, you have to work with the bank. Sure, you have $80k more cash available with the loan, but it doesn't sound like you need it. With the loan, the bank makes the profit. If you buy in cash, you lose your interest from the cash, but you save paying the interest on the loan. In general, the interest rate on the loan will be higher than the return on the cash equivalent. A fourth option would be to pay the $15k up front as earnest money. The seller does the repairs through your chosen contractor. You pay the remaining $12.5k for the downpayment and buy the house with the loan. This is a more complicated purchase contract though, so cash might be a better option. You can easily evaluate the difficulty of the second option. Call a different bank and ask. If you explain the situation, they'll let you know if they can use the existing appraisal or not. Also consider asking the appraiser if there are specific banks that will accept the appraisal. That might be quicker than randomly choosing banks. It may be that your current bank just isn't used to investment properties. Requiring the previous owner to do repairs prior to sale is very common in residential properties. It sounds like the loan officer is trying to use the rules for residential for your investment purchase. A different bank may be more inclined to work with you for your actual purchase.", "title": "" }, { "docid": "bb9ea76eef68b7af44e872e2f37d6569", "text": "Sorry, but I think you really do need an attorney here. This is the kind of minefield where knowing all the precedents and edge cases can make a huge difference in what you can or can't do, and a misplaced comma can make or break your case. Note that AT BEST you could sell your own interest in the house -- owning the note does not mean owning the property, it only means that they issued the note on the strength of your share of the property. And a half-interest in a single family house has little value outside the family, except to sell it to whoever owns the other half. Which is probably the best answer: Sell your half to your Aunt, if she can afford to buy it. She then gets sole control of the house, and you get the money you seem to need right now, and everyone in the family is much less stressed.", "title": "" }, { "docid": "2de869e9b4c67e8ad0198cdafdbc1620", "text": "Per Md. REAL PROPERTY Code Ann. § 8-203: (d) (1) (i) The landlord shall maintain all security deposits in federally insured financial institutions, as defined in § 1-101 of the Financial Institutions Article, which do business in the State. (ii) Security deposit accounts shall be maintained in branches of the financial institutions which are located within the State and the accounts shall be devoted exclusively to security deposits and bear interest. (iii) A security deposit shall be deposited in an account within 30 days after the landlord receives it. (iv) The aggregate amount of the accounts shall be sufficient in amount to equal all security deposits for which the landlord is liable. (2) (i) In lieu of the accounts described in paragraph (1) of this subsection, the landlord may hold the security deposits in insured certificates of deposit at branches of federally insured financial institutions, as defined in § 1-101 of the Financial Institutions Article, located in the State or in securities issued by the federal government or the State of Maryland. (ii) In the aggregate certificates of deposit or securities shall be sufficient in amount to equal all security deposits for which the landlord is liable. As such, one or more accounts at your preference; it's up to the bank how to treat the account, so it may be a personal account or it may be a 'commercial' account depending on how they treat it (but it must be separate from your personal funds). A CD is perhaps the easiest way to go, as it's not a separate account exactly but it's easily separable from your own funds (and has better interest). You should also note (further down on that page) that you must pay 3% interest, once per six months; so try to get an account that pays as close as possible to that. You likely won't get 3% right now even in a CD, so consider this as an expense (and you'll probably find many people won't take security deposits in many situations as a result).", "title": "" }, { "docid": "29392f0f37fbabadd75e643e01fc97a7", "text": "\"Getting a specific service recommendation is off-topic, but the question of what type of professional you need seems on-topic to me. You may be looking for more than one professional in this case, but you could try these to start your search: Different people do things differently, but I think it would be pretty common to have a relationship (i.e. contract, retainer agreement, at least have met the person in case you have an \"\"emergency\"\") with a business law attorney and either a CPA or tax attorney. You may try not to use them too much to keep costs down, but you don't want to be searching for one after you have an issue. You want to know who you're going to call and may establish at least a basis working relationship.\"", "title": "" }, { "docid": "6bf287ee3b6953698f41118db739d1d4", "text": "They are looking at your work history to see that you have maintained a similar level of income for a period of time, and that you have a reasonable expectation to continue that for the foreseeable future. They are looking to make a commitment for 15-30 years. They see the short term contract, and have no confidence in making a guess to your ability to pay. Before the real estate bubble burst, you would have had a chance with a no documentation loan. These were setup for people who earned fluctuating incomes, mostly due to being commissioned based. They were easily abused, and lenders have gotten away from them becasue they were burned too often. Just like building your credit rating over time, and your down payment over time, you might have to wait to build a work history.", "title": "" }, { "docid": "fab868581152d6464183e52963bacff7", "text": "\"To the best of my knowledge, in California there's no such thing as registering a place as a business. There's zoning (residential/commercial/mixed/etc), and there's \"\"a business registered at a place\"\". But there's no \"\"place registered as a business\"\". So you better clarify what it is that you think your landlord did. It may be that the place is used for short term rentals, in which case the landlord may have to have registered a business of short term rentals there, depending on the local municipal or county rules. Specifically regarding the deposit, however, there's a very clear treatment in the California law. The landlord must provide itemized receipt for the amounts out of the deposit that were used, and the prices should be reasonable and based on the actual charges by the actual vendors. If you didn't get such a receipt, or the amounts are bogus and unsubstantiated - you have protection under the CA law.\"", "title": "" }, { "docid": "e1aa1ce6aba2c9edee99881da6cbb51b", "text": "Why should a bank get into construction specifically? Lots of business opportunities require capital. Conceivably banks could build factories, develop consumer electronics, complete with SpaceX, etc. It's all capital in, profits out, with varying levels of risk and returns. There's nothing special about constructing apartments. The reason banks don't run businesses is because there are plenty of private firms that compete with each other for business. What's the chance that a bank, with all its bureaucracy, can deliver cheaper apartments than an apartment developer? Pretty low in fact, and that's why they would rather lend to an apartment developer rather than building the apartments themselves. Banks are in the business of competing with other banks. The main work they do is to sort out good investments from poor ones. And if they can do that just a bit more efficiently than their competitors, they make big bucks. For example, it might only take a few additional hours to better vet a deal worth millions. Whereas with an apartment building, you wouldn't be able to make that amount of money per hour even if the materials and labor cost you nothing.", "title": "" }, { "docid": "6dee4f8ad5f540f7e52067a6528e9df5", "text": "There is heap of instances where you may want a franchise lawyer. For instance, during the ending of your franchise lawyer California agreement, an attorney can make certain that the conditions of the agreement are being duly observed. Likewise, in instances of statutory compliance, your attorney can not only interpret and defend you but can also work as a link between you and the franchise lawyer California. This can help break up whatever matters or concerns arising out of a franchisor's allegation.", "title": "" }, { "docid": "285e035044dccf4f29173d10b888d0c5", "text": "Without the contract it's hard to say for sure, but Consumer Reports indicates that it's pretty easy to lose these deposits; they're not as well protected as other deposits or purchases (depending on your state and other details). You should make an effort to comply with all of the requests from the financing arm promptly, and in particular you should probably highlight that you could afford to pay for the car in cash (and be prepared to show bank/money market/investment statements to back that up). Credit is mostly a numbers game, but there is a human on the other side making the decision (assuming you're remotely close) and that makes a big difference. I would be prepared to walk away from your deposit if they come back and offer you a 5% APR or similar (and you're uncomfortable with the loan at that rate) - over 5 years, a $20k loan at 5% APR will cost you several thousand dollars; it might be worth it even if they don't give you your deposit back. And if you're clearly ready to walk away from the deposit, that might cause them to negotiate in better faith. Some tips, both from that article and my general experience:", "title": "" }, { "docid": "de748d4e51918166b8ed834aba87e209", "text": "Some requirements needed for availing loans are FICA documents, a certain percentage of equity of the purchase price and A signed Offer to Purchase/Deed of Sale etc. A single loan can be availed that will include both the purchase and construction components of the investor’s project.", "title": "" }, { "docid": "6e6eb756cc10517e78138928fe576fa8", "text": "\"Depositum irregulare is a Latin phrase that simply means \"\"irregular deposit.\"\" It's a concept from ancient Roman contract law that has a very narrow scope and doesn't actually apply to your example. There are two distinct parts to this concept, one dealing with the notion of a deposit and the other with the notion of irregularity. I'll address them both in turn since they're both relevant to the tax issue. I also think that this is an example of the XY problem, since your proposed solution (\"\"give my money to a friend for safekeeping\"\") isn't the right solution to your actual problem (\"\"how can I keep my money safe\"\"). The currency issue is a complication, but it doesn't change the fact that what you're proposing probably isn't a good solution. The key word in my definition of depositum irregulare is \"\"contract\"\". You don't mention a legally binding contract between you and your friend; an oral contract doesn't qualify because in the event of a breach, it's difficult to enforce the agreement. Legally, there isn't any proof of an oral agreement, and emotionally, taking your friend to court might cost you your friendship. I'm not a lawyer, but I would guess that the absence of a contract implies that even though in the eyes of you and your friend, you're giving him the money for \"\"safekeeping,\"\" in the eyes of the law, you're simply giving it to him. In the US, you would owe gift taxes on these funds if they're higher than a certain amount. In other words, this isn't really a deposit. It's not like a security deposit, in which the money may be held as collateral in exchange for a service, e.g. not trashing your apartment, or a financial deposit, where the money is held in a regulated financial institution like a bank. This isn't a solution to the problem of keeping your money safe because the lack of a contract means you incur additional risk in the form of legal risk that isn't present in the context of actual deposits. Also, if you don't have an account in the right currency, but your friend does, how are you planning for him to store the money anyway? If you convert your money into his currency, you take on exchange rate risk (unless you hedge, which is another complication). If you don't convert it and simply leave it in his safe, house, car boot, etc. you're still taking on risk because the funds aren't insured in the event of loss. Furthermore, the money isn't necessarily \"\"safe\"\" with your friend even if you ignore all the risks above. Without a written contract, you have little recourse if a) your friend decides to spend the money and not return it, b) your friend runs into financial trouble and creditors make claim to his assets, or c) you get into financial trouble and creditors make claims to your assets. The idea of giving money to another individual for safekeeping during bankruptcy has been tested in US courts and ruled invalid. If you do decide to go ahead with a contract and you do want your money back from your friend eventually, you're in essence loaning him money, and this is a different situation with its own complications. Look at this question and this question before loaning money to a friend. Although this does apply to your situation, it's mostly irrelevant because the \"\"irregular\"\" part of the concept of \"\"irregular deposit\"\" is a standard feature of currencies and other legal tender. It's part of the fungibility of modern currencies and doesn't have anything to do with taxes if you're only giving your friend physical currency. If you're giving him property, other assets, etc. for \"\"safekeeping\"\" it's a different issue entirely, but it's still probably going to be considered a gift or a loan. You're basically correct about what depositum irregulare means, but I think you're overestimating its reach in modern law. In Roman times, it simply refers to a contract in which two parties made an agreement for the depositor to deposit money or goods with the depositee and \"\"withdraw\"\" equivalent money or goods sometime in the future. Although this is a feature of the modern deposit banking system, it's one small part alongside contract law, deposit insurance, etc. These other parts add complexity, but they also add security and risk mitigation. Your arrangement with your friend is much simpler, but also much riskier. And yes, there probably are taxes on what you're proposing because you're basically giving or loaning the money to your friend. Even if you say it's not a loan or a gift, the law may still see it that way. The absence of a contract makes this especially important, because you don't have anything speaking in your favor in the event of a legal dispute besides \"\"what you meant the money to be.\"\" Furthermore, the money isn't necessarily safe with your friend, and the absence of a contract exacerbates this issue. If you want to keep your money safe, keep it in an account that's covered by deposit insurance. If you don't have an account in that currency, either a) talk to a lawyer who specializes in situation like this and work out a contract, or b) open an account with that currency. As I've stated, I'm not a lawyer, so none of the above should be interpreted as legal advice. That being said, I'll reiterate again that the concept of depositum irregulare is a concept from ancient Roman law. Trying to apply it within a modern legal system without a contract is a potential recipe for disaster. If you need a legal solution to this problem (not that you do; I think what you're looking for is a bank), talk to a lawyer who understands modern law, since ancient Roman law isn't applicable to and won't pass muster in a modern-day court.\"", "title": "" }, { "docid": "e34733e8209beceff2f237e0e73fdc3c", "text": "\"The Answer is yes according to multiple online sources and my local bank. This approach is a common technique to building your own home. You finance the land, build the simplest possible dwelling (say a garage with 1 bathroom/bedroom), refi into a mortgage and get cash back and then build your \"\"real house\"\" or add on, etc. This eliminates the banks demands that come with a \"\"construction loan\"\" and saves you 10s of thousands in the process (fees, contractors, scheduling, design, etc)\"", "title": "" } ]	fiqa
0e6ca30090395b75fff78d251d854cee	What is the difference between Protected-equity loan vs Equity loan?	[ { "docid": "4289b7bb5ea91d1017834c973289a724", "text": "In simple terms : Equity Loan is money borrowed from the bank to buy assets which can be houses , shares etc Protected equity loan is commonly used in shares where you have a portfolio of shares and you set the minimum value the portfolio can fall to . Anything less than there may result in a sell off of the share to protect you from further capital losses. This is a very brief explaination , which does not fully cover what Equity Loan && Protected Equity Loan really mean", "title": "" } ]	[ { "docid": "0ada391b851e4f03449e58bdfff9259c", "text": "\"Many thanks for thedetailed response, appreciate it. But I am still not clear on the distinction between a public company and the equity holders. Isn't a public company = shareholders + equity holders? Or do you mean \"\"company\"\" = shareholders+equity holders + debt holders?\"", "title": "" }, { "docid": "4c1accbd88e23857f1a69ca9641745f5", "text": "Though I have never had construction loan, for a regular loan this clause only covers the period between when you submit the forms, and when you close on the loan. Normally the construction loan is converted into a regular mortgage after the home is completed. The lender wants to make sure that you don't do anything that will make it impossible for the loans to close. They are concerned about new or enlarged loans. They also care about spending the down payment money on something else. When I was selling my condo, the purchaser bought a new car the week before closing. That made closing very interesting.", "title": "" }, { "docid": "2674e3dbb422406c13629b52b2e65c27", "text": "This is a very common misconception. I've been studying equities and credits for a while now, and the simplest way to explain the difference is this: - Credit is about stable cash flows. Your investment in a bond has almost (read: almost) nothing to do with growth rate. It has everything to do with how stable the cash flows are and interest coverage. - Equity is about growth. No wonder companies with highly irregular cash flows (e.g., every single young tech company in the history of tech companies) can have the most in-demand equity while few bond investors would touch them with a ten foot pole.", "title": "" }, { "docid": "88eb0c2b6d234fab9d14c3c476390f47", "text": "I am not a structured products expert, just relaying what's in the article, but I'd imagine it includes a larger equity tranche in the structured product, thereby giving more cushion against losses to the actual debt investors in the tranches above it in the payment water fall.", "title": "" }, { "docid": "e75c40eb45ca97f6bf56c0e96ce36708", "text": "You should look into a home equity line of credit: A home equity line of credit (often called HELOC and pronounced HEE-lock) is a loan in which the lender agrees to lend a maximum amount within an agreed period (called a term), where the collateral is the borrower's equity in his/her house. Because a home often is a consumer's most valuable asset, many homeowners use home equity credit lines only for major items, such as education, home improvements, or medical bills, and choose not to use them for day-to-day expenses.", "title": "" }, { "docid": "cb94429e3043d5c4e86d091bbfba89e7", "text": "I don't see how it makes a difference? Setup a futures contract for 33 times more than you have the capital to support and write it as confirmed income, slot it into your balance sheet and then borrow against it. It's fundamentally no different to the example from the OP, it's just a different way of reaching it.", "title": "" }, { "docid": "95540cd3cda0fc31266f42621fd93732", "text": "\"Residential mortgages normally explicitly state that the property cannot be let without explicit permission, whereas BTL mortgages typically require that the property be let. There are other differences. Residential mortgages are regulated, which means that consumers have a degree of protection from mis-selling; most BTLs are not, as landlords are expected to know what they're doing. Affordability of residential mortgages are based on your income, since that is how you are going to pay for them. BTLs are (mostly) assessed based on the property's rental income, since it's that that will fund the mortgage. Finally, residential mortgages are typically done on a repayment basis, so that at the end of the term, you've paid off the entire loan, whereas BTLs are typically interest-only, on the assumption that you'll either sell the property, or remortgage, at the end of the term. (I've used words like \"\"typically\"\" a lot to give an overall picture of the differences. Obviously it's a bit more complicated than that, and there are exceptions to a lot of the above descriptions.)\"", "title": "" }, { "docid": "ff8f7a486adf61b296339b15fb9d2700", "text": "Thanks for that, it did help. I think my issue is I don't work in finance itself, I'm a lawyer, and 'capital' generally has a very specific meaning in English company law, where it refers exclusively to shareholder capital. I realise capital in finance terms includes both debt and equity investment.", "title": "" }, { "docid": "a3721fd666e6ea8920304e2b973bef1c", "text": "\"The part that I find confusing is the loan/stock hybridization. Why would the investor be entitled to a 30% share if he's also expecting to be getting paid back in full? This is the part that's making me scratch my head. I can understand giving equity and buying out later. I can understand giving equity with no expectation of loan repayment. I can understand loan repayment without equity. I can even understand collateralizing the loan with equity. I can not understand how \"\"zeroing out\"\" the loan still leaves him with a claim on 30% of the equity. Would this be more of a good will gesture as a way to thank the investor for taking a chance? Please forgive any naivety in my questions.\"", "title": "" }, { "docid": "ba0cd51c908d585d41f246ec408aa78a", "text": "Another thing to consider is that paying extra principal (either via one of these services, or by including something extra with your normal mortgage payment and designating that it go to principal rather than be held to reduce next month's payment, or just sending an additional payment to the bank and designating it as reducing the principal) shortens the term of your loan. Is this good? Maybe. Consider that banks lend with a variety of terms. Usually the 15-year fixed rate mortgage has a lower interest rate than the 30-year fixed-rate mortgage, and the 5-year home-equity-loan has an even lower rate. When you prepay your loan, your interest rate stays the same, but the bank gets its money back sooner. This makes more profit for the bank as it can then invest the money in other things. That profit could have been yours if you had made that investment instead of prepaying your mortgage.", "title": "" }, { "docid": "ee0f29ce70781de82cc27060603a7487", "text": "You'll be taxed when you sell the house, but not before that (or if you do some other transaction that realizes the gain, talk to your real estate attorney or accountant for more details). A Home Equity line-of-credit is simply a secured loan: it's a loan, conditioned on if you fail to pay it back, they have a lien on your house (and may be able to force you to sell it to pay the loan back).", "title": "" }, { "docid": "5379e3edcfed336432b98afdd0b7da9e", "text": "Equity means having ownership, and I think that's a REALLY bad idea in the scenario that you described. If you stay together, there's really no upside to either of you in this scheme. If you break-up then you'll have a terrible mess, especially if the break-up goes badly. If she's really building equity, you're going to be faced with several hard questions: If this went bad at the end, it might be worse than a divorce in some sense since at least in the divorce you have established law to sort out the issues. You'll be on your own here without a formal contract. (Marriage being a special case of a contract for our purposes here.) If she wants to share costs (which seems perfectly fair) then agree to rent and a split on utilities. If you really insist on going down the path that you described, I think that you'll need some sort of contract, which probably involves a lawyer. Anything short of that could not be considered having equity at all and will be completely unenforceable in the event of a bad break-up. (There is some notion of a verbal contract, but that's very hard to prove and subject to misunderstanding and misremembering.) Aside from all of these potential problems in event of a break-up, you would probably also be violating the terms of your mortgage, if you have one. From the bank's perspective, you are selling the property that is the collateral for that loan, which you're almost surely not allowed to do.", "title": "" }, { "docid": "a25b57209b7b65d9120b4099816dbf27", "text": "Generally, the answer is as follows: If there is a legal obligation to pay cash flow (including the possibility of court determined restructuring), then it is debt. If the asset owner is not guaranteed any cash flow, but instead owns the residual cash flow from the operations of the business (I.e. the cash flow left-over), then it is equity.", "title": "" }, { "docid": "59f650ab89664f2869c7fc1035ed48a4", "text": "In finance you are taught that debt financing is cheaper than equity financing. Also to improve your credit rating, showing that you can carry debt responsibly and pay it off without a hitch sends dog whistle that the corporation is operating well.", "title": "" }, { "docid": "a938e155f251581f578bedd34f425065", "text": "\"The main disadvantage is that interest rates are higher for the interest-only loan. It's higher risk to the bank, since the principal outstanding is higher for longer. According to the New York Times, \"\"Interest rates are usually an eighth- to a half-percentage point higher than on fully amortized jumbo loans.\"\" They're also tougher to qualify for, and fewer lenders offer them, again due to the risk to the bank. Since you can always put extra towards the principal, strictly speaking, these are the only downsides. The upside, of course, is that you can make a lower payment each month. The question is what are you doing with this? If this is the only way you can afford the payments, there's a good chance the house is too expensive for you. You're not building equity in the home, and you have the risk of being underwater if the house price goes down. If you're using the money for other things, or you have variable income, it might be a different story. For the former, reinvesting in a business you own might be a reason, if you're cognizant of the risks. For the latter, salespeople on commission, or financial industry types who get most of their income in bonuses, can benefit from the flexibility.\"", "title": "" } ]	fiqa
375edb185041c0cea6f13ae2d2381965	Sell or keep rental Property?	[ { "docid": "a4dd10f15f9081bfd2123bee0dc06b18", "text": "Sell the house, in the scenario you describe he is using the property as an investment with a $250 per month buy-in. This investment doesn't make a return right now and when you add in the cost of dealing with the tenant (even if he doesn't have those cost now, he will when they move out)he is out of more than $250 a month and he has no direct knowledge that the value will definitely increase. He would be better spent selling the house and putting the funds into an investment, even a risky investment. It will have less maintenance cost associated with the risky investment than the rental property. Besides sitting on the property for 10-15 years would cost him 30-45k plus the cost of re-renting the house when empty.Not to mention the inevitable increases in taxes over that time which will either increase his deficit or eat up the rent increase he is able to charge. Don't take the loss on the sale, just short sale it and take the money and invest! One last thought... An alternative is to creatively finance a sale (take payments from a buyer until they can buy outright) that will cover the FULL mortgage and get him the price he needs. You can look up owner financing to find out more on how to do this. Hope this helps!", "title": "" }, { "docid": "28add8d067474fc049e881940e368e57", "text": "How is the current mortgage payment broken out? I have a mortgage on a rental property with a payment of $775, but $600 is principal. If I were at breakeven on a sale or a bit underwater, I'd be better off just holding still, the tenant paying the loan down over $7000/year. You question is a good one, but a good answer would require more details. A bank may not agree to a short sale on an investment property, especially since there's a second property to go after. I'm not making a judgement, just saying, it's not a slam-dunk to just short sell it.", "title": "" }, { "docid": "584d4fc1a1307f5a2858d74f936892f4", "text": "And he has to pay for it every home repair and every month the property sets empty. His loss each month is not $250, but probably closer to $500. In generally you need to clear at least $200 ABOVE PTI (principle, taxes and interest) to cover repair and the like to property. From your post, it sounds like your dad was forced into the land-lord business by the recession. Unless he plans to hold the property until its rental value has increased by $500 a month, he should consider selling it and writing-off the loss. Losing money bit by bit on a house isn't a tax write-off event. Selling a property for less than you bought it for generally is. FYI, I got the $500/month loss by assuming that repairs/emptiness/etc will cost you about $200 a month, and added $50 for your dad's time managing the property.", "title": "" } ]	[ { "docid": "8dd79db65f2185bdc8fe64923d0173c3", "text": "\"Is the mortgage debt too high? The rental property is in a hot RE market, so could be easily sold with significant equity. However, they would prefer to keep it. Given the current income, there is no stress. However in absence of any other liquid [cash/near cash] assets, having everything locked into Mortgage is quite high. Even if real estate builds assets, these are highly illiquid investments. Have debt on such investments is risky; if there are no other investments. Essentially everything looks fine now, but if there is an crisis, unwinding mortgage debt is time consuming and if it forces distress sale, it would wipe out any gains. Can they afford another mortgage, and in what amount? (e.g. they are considering $50K for a small cabin, which could be rented out). I guess they can. But should they? Or diversify into other assets like stocks etc. Other than setting cash aside, what would be some good uses of funds to make sure the money would appreciate and outpace inflation and add a nice bonus to retirement? Mutual Funds / Stocks / bullions / 401K or other such retirement plans. They are currently in mid-30's. If there is ONE key strategy or decision they could make today that would help them retire \"\"early\"\" (say, mid-50's), what should it be? This opinion based ... it depends on \"\"what their lifestyle is\"\" and what would they want their \"\"lifestyle\"\" to be when they retire. They should look at saving enough corpus that would give an year on year yield equivalent to the retirement expenses.\"", "title": "" }, { "docid": "5069019873055d17bce6fac7e64c7c24", "text": "You could use the money to buy a couple of other (smaller) properties. Part of the rent of these properties would be used to cover the mortgage and the rest is income.", "title": "" }, { "docid": "deb2bff6905ef128e60e380efdfb843f", "text": "In general you do not want to show a taxable gain on rental properties if you can avoid it. One of the more beneficial advantages of owning cash flowing rental properties, is that the income is tax deferred because of the depreciation. I say deferred, because depreciation affects the cost basis of your property. Also since you are considering financing, it sounds like you don't need the cash flow currently. You usually can get better returns by financing and buying more rental properties, especially with investment mortgages at historical lows (Win via inflation over time)", "title": "" }, { "docid": "87da576f3c8012a74209d6db176a2c7a", "text": "\"You are assuming 100% occupancy and 100% rent collection. This is unrealistic. You could get lucky and find that long term tenant with great credit that always pays their bills... but in reality that person usually buys a home they do not rent long term. So you will need to be prepared for periods of no renters and periods of non payment. The expenses here I would expect could wipe out more than you can make in \"\"profit\"\" based on your numbers. Have you checked to find out what the insurance on a rental property is? I am guessing it will go up probably 200-500 a year possibly more depending on coverage. You will need a different type of insurance for rental property. Have you checked with your mortgage provider to make sure that you can convert to a rental property? Some mortgages (mine is one) restrict the use of the home from being a rental property. You may be required to refinance your home which could cost you more, in addition if you are under water it will be hard to find a new financier willing to write that mortgage with anything like reasonable terms. You are correct you would be taking on a new expense in rental. It is non deductible, and the IRS knows this well. As Littleadv's answer stated you can deduct some expenses from your rental property. I am not sure that you will have a net wash or loss when you add those expenses. If you do then you have a problem since you have a business losing money. This does not even address the headaches that come with being a landlord. By my quick calculations if you want to break even your rental property should be about 2175/Month. This accounts for 80% occupancy and 80% rental payment. If you get better than that you should make a bit of a profit... dont worry im sure the house will find a way to reclaim it.\"", "title": "" }, { "docid": "257c70a9f954a96a7657e3761647efee", "text": "Think carefully about the added expenses. It may still make sense, but it probably won't be as cheap as you are thinking. In addition to the mortgage and property taxes, there is also insurance and building maintenance and repairs. Appliances, carpets, and roofs need to be replaced periodically. Depending on the area of the country there is lawn maintenance and now removal. You need to make sure you can cover the expenses if you are without a tenant for 6 months or longer. When tenants change, there is usually some cleaning and painting that needs to be done. You can deduct the mortgage interest and property taxes on your part of the building. You need to claim any rent as income, but can deduct the other part of the mortgage interest and taxes as an expense. You can also deduct building maintenance and repairs on the rental portion of the building. Some improvements need to be depreciated over time (5-27 years). You also need to depreciate the cost of the rental portion of the building. This basically means that you get a deduction each year, but lower the cost basis of the building so you owe more capital gains taxes when you sell. If you do this, I would get a professional to do your taxes at least the first year. Its not hard once you see it done, but there are a lot of details and complications that you want to get right.", "title": "" }, { "docid": "faafc603fc4fdc218a969f17936f5d17", "text": "Our two rentals have yielded 8.5% over the past two years (averaged). That is net, after taxes, maintenance, management, vacancy, insurance, interest. I am only interested in cash flow - expenses / original investment. If you aren't achieving at least 4.5-5% net on your original investment you probably could invest elsewhere and earn a better return on a similar risk profile.", "title": "" }, { "docid": "75afbb044a044305e7c497e1093aa9a4", "text": "In order to arrive at a decision you need the numbers: I suggest a spreadsheet. List the monthly and annual costs (see other responses). Then determine what the market rate for rental. Once you have the numbers it will be clear from a numbers standpoint. One has consider the hassle of owning property from a distance, which is not factored into the spreadsheet", "title": "" }, { "docid": "7afe1fea85b8fbd92dabd49aec409b5d", "text": "With student loans at 2%, I wouldn't pay a dime over minimum on that, and I certainly wouldn't sell an investment property to pay them off, you can get CD's that beat 2% interest. With the rentals, you could sell the one that isn't performing as well and pay no capital gains tax if you lived in it 2 of the last 5 years (counting 5 years back from sale date). That'd be a nice chunk of money for your down-payment. The risk of using proceeds to buy a different rental property is that you may find you don't like being a distance landlord, and then you'd lose money selling or be stuck doing something you don't enjoy for a while until you can sell without a loss. Like you mentioned, the risk of selling either/both rental properties is that if the Arizona housing/rental markets do well you'd have given up your position and missed out. Ultimately, I think it's about your desired timeline, if you are content to wait a while to buy in San Diego, you could have a handsome down payment, will know whether or not you like being a distance landlord, and can sell/keep the rentals accordingly. Alternatively, if you want to get a house in San Diego sooner, then selling one or both rentals gets you there faster. If I was in your position, I'd probably sell the rental that I lived in and put that toward a down-payment on a primary residence, keeping the other rental for now and trying my hand at being a distance landlord.", "title": "" }, { "docid": "0c83a16dae83b4e8deba713a10e4b6ad", "text": "You may be in a situation where buying is preferred, especially because you can enter the market in a strong position - with a 20% down payment. If you have the financial ability to assume the risk of owning, you may be better off. I would consider two things. Renting is purchasing a service. You are buying the flexibility to move with minimum hassle and the landlord is assuming the risk of owning the asset (property). They will make money on you, like any service provider. Buying is purchasing an asset. You are buying the underlying asset and assume all the risks associated with it. This is large, unforeseen maintenance, fees, taxes, depreciation, etc... Some of these risks were passed to you as a renter, but some were not. Just like purchasing $400k in stock, if you have to sell when the market is down, you lose big. You win if you can hold. Unlike a stock, real estate will eat your cash in taxes and repairs unless it is rented. If you are willing to be a long-distance landlord, this may work out. Understand that property management fees will eat into your rent income and being long-distance will give more potential for a bad tenant to ruin your property value. These and other factors (e.g. vacancy rate) will increase your risk of loss and should be considered. Some of this will be your preference, since you will spend much more time dealing with buying/selling/property management as opposed to a more clean rental situation. Is this hassle worth the savings? For many, yes; others, no. Finally, I hope this calculator can help clarify some of the financial aspects for you. http://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html?_r=0 Good Luck!", "title": "" }, { "docid": "a873928ae3e926d6bf8cd38ab90ef9d7", "text": "You have some of the math right, but are missing a few things. Here's what I can offer - if I leave anything out, someone please expand or clarify. Rental income can be reduced by mortgage interest and maintenance costs (as you mentioned), but also by property tax payments, association fees, insurance costs, landlord expenses, and depreciation. Note that if you don't live in the property for 3 years, you'll have to pay capital gains tax if/when you sell the house. You can live in it again for 2 of the last 5 years to avoid this. Many people recommend only assuming you will get 10 months of rental income a year, to account for transitions between tenants, difficult in finding new tenants, and the occasional deadbeat tenant. This also adds a buffer for unexpected problems you need to fix in the house. If you can't at least break even on 10 months of income a year, consider the risk. I think there are also some cases where you need to repay depreciation amounts that you have deducted, but I don't know the details. Renting out a house can be fun and profitable, but it's very far from a sure thing. I'd always recommend preparation and caution, and of course talking to professionals about the finances, accounting, and lease-writing. Good luck!", "title": "" }, { "docid": "5a1293a666b8079d199978def4663f03", "text": "Getting the first year right for any rental property is key. It is even more complex when you rent a room, or rent via a service like AirBnB. Get professional tax advice. For you the IRS rules are covered in Tax Topic 415 Renting Residential and Vacation Property and IRS pub 527 Residential Rental Property There is a special rule if you use a dwelling unit as a personal residence and rent it for fewer than 15 days. In this case, do not report any of the rental income and do not deduct any expenses as rental expenses. If you reach that reporting threshold the IRS will now expect you to to have to report the income, and address the items such as depreciation. When you go to sell the house you will again have to address depreciation. All of this adds complexity to your tax situation. The best advice is to make sure that in a tax year you don't cross that threshold. When you have a house that is part personal residence, and part rental property some parts of the tax code become complex. You will have to divide all the expenses (mortgage, property tax, insurance) and split it between the two uses. You will also have to take that rental portion of the property and depreciation it. You will need to determine the value of the property before the split and then determine the value of the rental portion at the time of the split. From then on, you will follow the IRS regulations for depreciation of the rental portion until you either convert it back to non-rental or sell the property. When the property is sold the portion of the sales price will be associated with the rental property, and you will need to determine if the rental property is sold for a profit or a loss. You will also have to recapture the depreciation. It is possible that one portion of the property could show a loss, and the other part of the property a gain depending on house prices over the decades. You can expect that AirBnB will collect tax info and send it to the IRS As a US company, we’re required by US law to collect taxpayer information from hosts who appear to have US-sourced income. Virginia will piggyback onto the IRS rules. Local law must be researched because they may limit what type of rentals are allowed. Local law could be state, or county/city/town. Even zoning regulations could apply. Also check any documents from your Home Owners Association, they may address running a business or renting a property. You may need to adjust your insurance policy regarding having tenants. You may also want to look at insurance to protect you if a renter is injured.", "title": "" }, { "docid": "1018d9e6c1f99370dcffd85bd768bfaf", "text": "To your secondary question: Appropriately consider all estimated numbers involved with keeping the house compared to your closest estimate of what the home could sell for. Weigh out the pros and cons yourself as a stranger will not be able to 100% appreciate what you value and dislike. Remember to include insurances, taxes, HOA(s), and the actual mortgage payment. Depending on how you also plan to rent out the property, include whichever utilities you intend to cover (if any). There will also be costs for property management and upkeep as things will break overtime and tenants will not hesitate to get you (or your management) to fix them, either way that means you are paying. I would also keep in mind while homes typically appreciate in value there is a higher risk with tenants for the value to depreciate to damages and poor upkeep. There are increased legal risks to renting, so be sure you have properly vetted whichever management you are going with. In extreme circumstances you also could be required to retain an attorney to defend yourself again litigation because whichever management team you hire will most likely defend themselves and not include you in that umbrella. My family lives in the LA area as well and a judge refused to throw out an obvious frivolous suit when my parents attempted to rent out a house. The possible renters after signing the main paperwork never showed to finish a second set of documents for renting. Parents immediately declined to rent to these people as they missed something so important without any explanation and they sued claiming racism, emotional damages, and some other really crazy things despite my parents never having met them (first meeting was between property management and renters only). Personally and professionally, I would only suggest renting our the place and not selling if you can turn a profit after all the above mentioned costs. If renters are only paying to keep the property in the black you have yourself a non-earning asset which WILL be damaged over time and require repairs which will come out of your pocket. Also, while the property is unoccupied you also must remember it is not earning at that time. Much of this may sound obvious, overcautious, etc... I simply wish to provide my family's experience to help you in making your decisions. Best of luck with your endeavor. Edit: Also, you will be required to report all earned rental income on your taxes. They will fall under the Schedule E and possibly K-1 area. I would strongly recommend consulting with an actual accountant about the impacts to you.", "title": "" }, { "docid": "85fb7e40d6726fddd153b282009a0666", "text": "Sounds like you have a nice rental on your hands, honestly, if it's blue-collar-ish material. Not too expensive for a rental. Is the rental market fairly strong there? You're probably looking at $400-$500 per month income after you pay everybody. (My property manager takes 10% of gross rents and she would inspect the property quarterly for me.) I'd take as many of those as I can get, though if I had ten of them I could be set for the rest of my life. :) That way you can offset any losses you might incur by selling now.", "title": "" }, { "docid": "b9eba242b203aa7e35353ed409783780", "text": "I'd rent and put the $30K/ yr into savings. When the short sale comes off your credit, you'll have a substantial downpayment. You don't mention the balance, but the current rate you're paying is 3% too high. Even if you get the rate reduced, you have a $100K issue. I recommend reading through Will Short Sale Prevent Me From Getting VA Home Loan Later? A bit different question, but it talks more about the short sale. A comment for that question makes a key point - if you have a short sale, will the bank chase you for the balance? If not, you have a choice to make. Adding note after user11043 commented - First, run the numbers. If you were to pay the $100K off over 7 years, it's $1534/mo extra. Nearly $130K, and even then, you might not be at 80% LTV. I don't know what rents are like in your area, but do the math. First, if the rent is less than the current mortgage+property tax and maintenance, you will immediately have better cash flow each month, and over time, save towards the newer house. If you feel compelled to work this out and stay put, I'd go to the bank and tell them you'd like them to recast the loan to a new rate. They have more to lose than you do, and there's nothing wrong with a bit of a threat. You can walk away, or they can do what's reasonable, to just fix your rate. With a 4% rate, you'd easily attack the principal if you wish. As you commented above, if the bank offers no option, I'd seriously consider the short sale. There's nothing wrong with that option from a moral standpoint, in my opinion. This is not Bedford Falls, and you are not hurting your neighbors. The bank is amoral, if not immoral.", "title": "" }, { "docid": "c3ac0b78be10b95f31383ab7fc2eb0a9", "text": "He owns some giants. I'd bet Coca-Cola is his biggest cash cow. This is a non-story. The revenue naturally follows actual value provided, as opposed to buying and selling shares with the swings of the stock market. Buffet buys and holds, and builds and collects the revenue from his companies, that's been his core philosophy since the beginning.", "title": "" } ]	fiqa
d8b0fc7ca51312f3db3810e9a1bb282f	Is it common for a new car of about $16k to be worth only $4-6k after three years?	[ { "docid": "c5778c02b5f7bc25fa3180e5e555eb28", "text": "It depends completely on the car. Some cars retain their value much better, and others drop in value like a rock (no pun intended). The mileage and condition on a car also has a huge impact on value. According to this site, cars on average lose 46% of their value in three years, so seeing one that drops 62% in roughly 3 years does not seem impossible. That value could also have been trade-in value, which is significantly lower than what you could get with a private party sale (or what you'd pay to get that same car from a dealer) One example: a new Ford Taurus (lowest model) has a Kelly Blue Book value of $28,000. A 2014 Taurus (lowest model) with average mileage and in fair condition has a private party value of about $12,000, for a 57% drop in value. Note: I picked Taurus because it's a car that should not have exceptional resale value (unlike BMW, trucks, SUVs), not to make any kind of judgement of the quality or resellability of the car)", "title": "" }, { "docid": "78c7b2bf71f314407d951a11d5e096fb", "text": "\"It's possible the $16,000 was for more than the car. Perhaps extras were added on at purchase time; or perhaps they were folded into the retail price of the car. Here's an example. 2014: I'm ready to buy. My 3-year-old trade-in originally cost $15,000, and I financed it for 6 years and still owe $6500. It has lots of miles and excess wear, so fair blue-book is $4500. I'm \"\"upside down\"\" by $2000, meaning I'd have to pay $2000 cash just to walk away from the car. I'll never have that, because I'm not a saver. So how can we get you in a new car today? Dealer says \"\"If you pay the full $15,000 retail price plus $1000 of worthless dealer add-ons like wax undercoat (instead of the common discounted $14,000 price), I'll eat your $2000 loss on the trade.\"\" All gets folded into my new car financing. It's magic! (actually it's called rollover.) 2017: I'm getting itchy to trade up, and doggone it, I'm upside down on this car. Why does this keep happening to me? In this case, it's rollover and other add-ons, combined with too-long car loans (6 year), combined with excessive mileage and wear on the vehicle.\"", "title": "" }, { "docid": "c4454d8ffce998d225e20eb9e5771fb5", "text": "It isn't common to lose that much value in 3 years, but it is possible. If you don't take care of small dents, scratches, etc., you can quickly reduce the value far beyond what you might expect looking at graphs. Another big factor is the trim level of the car that you purchase. If you spend $30,000 for the highest trim level of a car, instead of $22,000 for the lowest trim level, the higher trim car could lose 50% of it's value while the lower trim car loses only 35%. There's no way to know why the OP of your linked question had such a large loss, but again, that's not the usual experience. It is definitely a good idea to consider used though.", "title": "" } ]	[ { "docid": "d656c57d1205ae4ee389bed0fd9b70d4", "text": "New tires will increase the resale value of the car; while not by the full cost of the tires, it will not be entirely a sunk cost. You'd need to factor that in and find out how much the new tires increase the resale value of the car to determine how much they would truly cost you. However, I suspect they would cost you less than a $25,000 car a year early would. That new car would cost some amount over time - it sounds like you buy a new car every 8 years or so? So it would cost you $25/8 = $3.3k/year. That would, then, be the overall cost of the new car a year early - $3.3k (as it would mean one less year out of your old car, so assuming it was also $25k/8 year or similar, that year becomes lost and thus a cost).", "title": "" }, { "docid": "245336b48b3c31776ed8abff41e15592", "text": "Edmunds.com has a really cool guide that calculates some of these intangibles for a wide swath of cars under their True Cost to Own Ratings section. I highly recommend it.", "title": "" }, { "docid": "28d242f7c2ac47f3f855c8fc7f4ac7c1", "text": "Nothing's generating a whole lot of interest right now. But more liquid and stable is better (cash or cash-like). But a related question: Why a new car? You can knock thousands of dollars off of the price of a comparable vehicle by buying one that's one or two years old. Your new vehicle loses thousands of dollars in value the moment it goes off the lot.", "title": "" }, { "docid": "a126eabc0702abd8448d4555f3a2125b", "text": "I tend to agree with Rocky's answer. However it sounds like you want to look at this from the numbers side of things. So let's consider some numbers: I'm assuming you have the money to buy the new car available as cash in hand, and that if you don't buy the car, you'll invest it reasonably. So if you buy the new car today, you're $17K out of pocket. Let's look at some scenarios and compare. Assuming: If you buy the new car today, then after 1 year you'll have: If you keep the old car, after 1 year you get: After 2 years, you have: And after 3 years, you're at: Or in other words, nothing depletes the value of your assets faster than buying the new car. After 1 year, you've essentially lost $5K to depreciation. However, over the short term the immediate cost of the tires combined with the continued depreciation of the old car do reduce your purchasing power somewhat (you won't be able to muster $25K towards a new car without chipping in a bit of extra cash), and inflation will tend to drive the cost of the new car up as time goes on. So the relative gap between the value of your assets and the cost of the new car tends to increase, though it stays well below the $5k that you lose to depreciation if you buy the new car immediately. Which is something that you could potentially spin to support whichever side you prefer, I suppose. Though note that I've made some fairly pessimistic assumptions. In particular, the current U.S. inflation rate is under 1%, and a new car may depreciate by as much as 25% in the first year while older cars may depreciate by less than the 8% assumed. And I selected the cheapest new car price cited, and didn't credit the tires with adding any value to your old car. Each of those aspects tends to make continuing to drive the older car a better option than buying the new one.", "title": "" }, { "docid": "538ef3adfa102a7b779d2a954447ef04", "text": "I respectfully disagree with @JohnFX's comment regarding new vs used. (John knows what is talking about though; he gave an awesome answer on buying a car: What are some tips for getting the upper hand in car price negotiations?) The answer to your question is based on whether or you not you can stand to have a small, loud, cheap but reliable car for the next 10 or 15 years. If you plan to keep your new car until it dies 20 years from now, then a new car can be a fine choice. I just bought a car and the difference between my 2013 Hyundai and a comparable 2012 Hyundai wasn't much. Furthermore, it was hard to even find a 2012 (which justifies the higher price from dealerships and the private market). Doing math in my head told me the reduced usage I will get out of the car wasn't offset by the slightly lower price. Depending on the specific age, insurance on newer cars can be cheaper than insurance on older cars. (But you have to have carry more insurance, so consider that as well.) There might not be a different between a 2010 and a 2012, but there will likely be for a 2005 and the 2013. New cars can be cheaper to operate. Lower fuel costs, better safety and possibly pollution costs. They are tuned up and you know everything about their history. Repairs and factory warranties might not be available on a used car, so if you car turns out to be a problem, your out of pocket is limited. These programs don't mean anything. Get an independent certified mechanic to check out any used car you buy. If the dealer won't let you get the car checked out, then they aren't worth your business. Certified cars don't justify their cost according to consumer reports, they are more for marketing than reliability. Don't waste money on a third party warranty. Either the car is good and doesn't need it, or it needs a warranty and you shouldn't buy it. If you new car comes with a factory warranty, that is fine. Radio host Clark Howard is indifferent if you want to purchase a factory warranty separately, but never a third party. Just out of college, you probably will be better off spending the least amount of money you can for a good used car. If for no other reason, this likely isn't going to be your car in the near future. (Only you can answer that) If you have a feeling you won't keep your tiny car well into your 30s, then definitely don't buy a new car. Also, my experience only applies to my make and model. Certain models of cars keep their value and the difference between new and used isn't much for the most recent model years. But there are many more makes and models that don't pan out that way.", "title": "" }, { "docid": "ab573c1f875dcbc6bc45473c81083849", "text": "\"A while back I sold cars for a living. Over the course of 4 years I worked for 3 different dealerships. I sold new cars at 2 and used at the last one. When selling new cars I found that the majority of people buying the higher end cars honestly shouldn't have been - 80%+. They almost always came in owing more on their trades then they were worth, put down very little cash and were close to being financially strapped. From a financial perspective these deals were hard to close, not because the buyer was picky but rather because their finances were a mess. Fully half, and probably more, we had to switch from the car they initially wanted down to a much cheaper version or try to convert to a lease because it was the only way the bank would loan the money. We called them \"\"$30,000 millionaires\"\" because they didn't make a whole lot but tried to look like they did. As a salesman you knew you were in serious trouble when they didn't even try to negotiate. Around 2% of the deals I did were actual cash deals - meaning honest cash, not those who came in with a pre-approved loan from a bank. These were invariably for used cars about 3 to 4 years old and they never had a trade in. The people doing this always looked comfortable but never dressed up, you wouldn't even look at them twice. The negotiations were hard because they knew exactly how much that car should go for and wouldn't even pay that. It was obvious they knew the value of money. That said, I've been in the top 3% of wage earners for about 20 years and at no point have I considered myself in a position to \"\"afford\"\" a new \"\"luxury\"\" car. IMHO, there are far more important things you can do with that kind of money.\"", "title": "" }, { "docid": "e136cafcae837d65d87c1e9fd27b5988", "text": "You can negotiate a no penalty for early payment loan with dealerships sometimes. Dealerships will often give you a better price on the car when you finance through them vs paying cash, so you negotiate in a 48 month finance, after you've settled on the price THEN you negotiate the no penalty for early payment point. They'll be less likely to try to raise the price after you've already come to an agreement. My dad has SAID he does this when buying cars, but that could just be hearsay and bravado. Has said he will negotiate on the basis of a long term lease, nail down a price then throw that clause in, then pay the car off in the first payment. Disclaimer: it's...um not a great way to do business though if you plan to purchase a new car every 2-3 years from the same dealer. Do it once and you'll have a note in their CRM not to either a) offer price reductions for financing or b) offer no penalty early payment financing.", "title": "" }, { "docid": "8d3eef26be24ff71bbe382f829bf25fe", "text": "If you buy a new car, the odds that it will require repairs are fairly low, and if it does, they should be covered by the warranty. If you buy a used car, there is a fair chance that it will need some sort of repairs, and there probably is no warranty. But think about how much repairs are likely to cost. A new car these days costs like $25,000 or more. You can find reasonably decent used cars for a few thousand dollars. Say you bought a used car for $2,000. Is it likely that it will need $23,000 in repairs? No way. Even if you had to make thousands of dollars worth of repairs to the used car, it would almost certainly be cheaper than buying a new car. I've bought three used vehicles in the last few years, one for me, one for my son, and one for my daughter. I paid, let's see, I think between $4,000 and $6,000 each. We've had my son's car for about 9 months and to date had $40 in repairs. My daughter's car turned out to have a bunch of problems; I ended up putting maybe another $2,000 into it. But now she's got a car she's very happy with that cost me maybe $6,000 between purchase and repairs, still way less than a new car. My pickup had big time problems, including needing a new transmission and a new engine. I've put, hmm, maybe $7,000 into it. It's definitely debatable if it was worth replacing the engine. But even at all that, if I had bought that truck new it would have cost over $30,000. Presumably if I bought new I would have had a nicer vehicle and I could have gotten exactly the options I wanted, so I'm not entirely happy with how this one turned out, but I still saved money by buying used. Here's what I do when I buy a used car: I go into it expecting that there will be repairs. Depending on the age and condition of the car, I plan on about $1000 within the first few months, probably another $1000 stretched out over the next year or so. I plan for this both financially and emotionally. By financially I mean that I have money set aside for repairs or have available credit or one way or another have planned for it in my budget. By emotionally I mean, I have told myself that I expect there to be problems, so I don't get all upset when there are and start screaming and crying about how I was ripped off. When you buy a used car, take it for granted that there will be problems, but you're still saving money over buying new. Sure, it's painful when the repair bills hit. But if you buy a new car, you'll have a monthly loan payment EVERY MONTH. Oh, and if you have a little mechanical aptitude and can do at least some of the maintenance yourself, the savings are bigger. Bear in mind that while you are saving money, you are paying for it in uncertainty and aggravation. With a new car, you can be reasonably confidant that it will indeed start and get you to work each day. With a used car, there's a much bigger chance that it won't start or will leave you stranded. $2,000 is definitely the low end, and you say that that would leave you no reserve for repairs. I don't know where you live or what used cars prices are like in your area. Where I live, in Michigan, you can get a pretty decent used car for about $5,000. If I were you I'd at least look into whether I could get a loan for $4,000 or $5,000 to maybe get a better used car. Of course that all depends on how much money you will be making and what your other expenses are. When you're a little richer and better established, then if a shiny new car is important to you, you can do that. Me, I'm 56 years old, I've bought new cars and I've bought used cars and I've concluded that having a fancy new car just isn't something that I care about, so these days I buy used.", "title": "" }, { "docid": "09f617a19b176a24cbf9aba7eb01e74a", "text": "Another bit of advice specific to your scenario. Consider buying an ALMOST new car. Buying last year's model can knock a huge amount off the price and the car is going to still feel very new to you, especially if you buy from a dealer who has had it detailed.", "title": "" }, { "docid": "f2d1c0c043e6c0d127ce9c0d8d2b9b31", "text": "Any way you look at it, this is a terrible idea. Cars lose value. They are a disposable item that gets used up. The more expensive the car, the more value they lose. If you spend $100,000 on a new car, in four years it will be worth less than $50,000.* That is a lot of money to lose in four years. In addition to the loss of value, you will need to buy insurance, which, for a $100,000 car, is incredible. If your heart is set on this kind of car, you should definitely save up the cash and wait to buy the car. Do not get a loan. Here is why: Your plan has you saving $1,300 a month ($16,000 a year) for 6.5 years before you will be able to buy this car. That is a lot of money for a long range goal. If you faithfully save this money that long, and at the end of the 6.5 years you still want this car, it is your money to spend as you want. You will have had a long time to reconsider your course of action, but you will have sacrificed for a long time, and you will have the money to lose. However, you may find out a year into this process that you are spending too much money saving for this car, and reconsider. If, instead, you take out a loan for this car, then by the time you decide the car was too much of a stretch financially, it will be too late. You will be upside down on the loan, and it will cost you thousands to sell the car. So go ahead and start saving. If you haven't given up before you reach your goal, you may find that in 6.5 years when it is time to write that check, you will look back at the sacrifices you have made and decide that you don't want to simply blow that money on a car. Consider a different goal. If you invest this $1300 a month and achieve 8% growth, you will be a millionaire in 23 years. * You don't need to take my word for it. Look at the car you are interested in, go to kbb.com, select the 2012 version of the car, and look up the private sale value. You'll most likely see a price that is about half of what a new one costs.", "title": "" }, { "docid": "ee6c38fd143f2637083b440ec48fbf01", "text": "I like Nathan's answer some, but am horribly curious as to why you have not made payments on a $3500 student loan? If you are wealthy enough to afford a new car, this should be paid off next week. IMHO. Above all else your financial goals should dictate if you buy a new car. What are they for you? If the goal is to build wealthy quickly then Nathan's advice may be to unfrugal for you. If your goal is to impress people with the car you drive and accumulate very little real wealth then purchasing or leasing a car should be a top priority. So to answer your question correctly one must understand your goals. For 2016, the average car payment is $479 per month. If you invested that in a decent growth stock mutual fund in 40 years you'll have around 2.6 million. However, you do need something to drive now. If you can cut your car expense to $200 per month, and save the other $279 you will still end up with about 1.5 million in that same 40 years. Personally I attempt to shoot for $200 ownership cost per car per month. Its a bit difficult as I drive a lot. Also I would not purchase a new car until my net worth exceeded 2 million. At that point my investments could mitigate the steep depreciation costs of owning a new car.", "title": "" }, { "docid": "3f2d7cb8ce82aa73b1882a63e63724e8", "text": "\"Yea but they might feel swindled and that you pulled a fast one on them, and not be as willing to give you good deals in the future. Like, as a totally non mathematical example, they have a car for $50k. They lower the price to 40k with a financing that will bring total payment to 60k. Their break even on that car is let's say 45k. The financier cuts them a commission on expected profits, of maybe 7k? They made an expected 2k on the car. But if you pay it all off asap, they may lose that commission, be 5k in the hole on the sale, and pretty upset. Even more upset if they finance in house. So when you go back to buy another car they'll say \"\"fuck this guy, we need to recoup past lost profits, don't go below 4K above break even.\"\" I'm not really 100% on how financing workings when it comes to cars but from my background in sales this is the bar I would set for a customer that made me take a loss by doing business with them if they tried to come back in the future. This doesn't take into account how car dealerships don't own their inventory, finance all of their cars and actually ARE willing to take a loss on a car just to get it off the lot some times.\"", "title": "" }, { "docid": "83f722d2f398117aafd522e4bfb3384e", "text": "I think you are making this more complicated that it has to be. In the end you will end up with a car that you paid X, and is worth Y. Your numbers are a bit hard to follow. Hopefully I got this right. I am no accountant, this is how I would figure the deal: The payments made are irrelevant. The downpayment is irrelevant as it is still a reduction in net worth. Your current car has a asset value of <29,500>. That should make anyone pause a bit. In order to get into this new car you will have to finance the shortfall on the current car (29,500), the price of the vehicle (45,300), the immediate depreciation (say 7,000). In the end you will have a car worth 38K and owe 82K. So you will have a asset value of <44,000>. Obviously a much worse situation. To do this car deal it would cost the person 14,500 of net worth the day the deal was done. As time marched on, it would be more as the reduction in debt is unlikely to keep up with the depreciation. Additionally the new car purchase screen shows a payment of $609/month if you bought the car with zero down. Except you don't have zero down, you have -29,500 down. Making the car payment higher, I estamate 1005/month with 3.5%@84 months. So rather than having a hit to your cash flow of $567 for 69 more months, you would have a payment of about $1000 for 84 months if you could obtain the interest rate of 3.5%. Those are the two things I would focus on is the reduction in net worth and the cash flow liability. I understand you are trying to get a feel for things, but there are two things that make this very unrealistic. The first is financing. It is unlikely that financing could be obtained with this deal and if it could this would be considered a sub-prime loan. However, perhaps a relative could finance the deal. Secondly, there is no way even a moderately financially responsible spouse would approve this deal. That is provided there were not sigificant assets, like a few million. If that is the case why not just write a check?", "title": "" }, { "docid": "6e81284e67aa3f687270883260414ac1", "text": "I work for an auto finance company and have performed some job related analysis looking into this as well. From what I can tell I don't think the numbers are there for a 2008 recession. The loans are smaller, the asset is already known to depreciate, and the auction market is pretty effective at cutting deficiencies even more. Something to watch out for if you are analyzing this stuff though is the influx of used cars into the market. Remember, more defaults means more repossessions which means more used cars on the market. I'm curious to see what happens with this influx of used, relatively reliable cars onto the market and how this impacts the constant pumping out of new vehicles that manufacturers are forced to meet. We've already seen scaling back by some big players. There's definitely something happening in the auto industry but I don't know what to make of it yet and I would hardly say we are looking at Great Recession 2.", "title": "" }, { "docid": "6797579e382f872edec271063c5a4793", "text": "I understand, and I'm not necessarily disagreeing; I'm just asking how we know this. It's one thing if it's a logical deduction you've made, but it's another if there's direct objective evidence. Do these statistics pertain to all car sales or just factory car sales? The car I own today is the car I've owned the longest, but it's not because I can't afford to buy another one, it's because I have absolutely no reason to. My car was made in 2000; it has 115k miles on it. I could write a long list of things that are still performing just as adequately as they did when it was new, and how aside from being somewhat less powerful it doesn't actually do anything worse than comparable new cars; I'll spare you. :) Cars in 1970 were never expected to be driven past 100k miles without major service work, including an engine and transmission overhaul. Many cars well into the late 70s didn't even come with that many digits on the odometer. The economic conditions you mention, including the astonishing transfer of wealth between classes, are not good signs and it obviously needs to be reversed or this country is going to be a really shitty place to live soon. And hell yes I believe it's affecting car sales. But I'm really not convinced it's the main reason car sales peaked 40 years ago. Housing sales only peaked a few years ago, and both markets have screwed themselves over-issuing credit, albeit in different ways. Point is, you don't need to be able to afford a car when you can get a loan practically at the push of a button; Americans don't think in terms of what something costs, they think in terms of what it costs per month. Income shrinkage has been allowed to happen because people have been allowed to spend money they don't have. I know people living paycheck-to-paycheck who spend $150 - $250 per month on just data. They also have $10k's of revolving credit card debt and, even worse, $10k's in student loans. $250 per month won't save up for a new Cadillac anytime soon, but it will put you into a Cadillac if you don't mind having spent $63k on a $38k car by the time your loan matures. (Edit: those numbers are pretty exaggerated, $250/mo. wouldn't get you a Cadillac until it was several years old. You'd still end up paying several thousand more than if you'd paid cash, though... the point is that our economy is floating on credit, and this has allowed rampant overspending and living above means in the average household). You see what I'm saying? All other factors being equal car sales should have peaked a few years ago, or at least in the late 90s during the (first?) dot com bubble. There was far more spending power out there - not income, but spending power.", "title": "" } ]	fiqa
39582de08ac8583faf5697abbcfc518d	“Convertible -debt/note/bond/debentures” which of these are the same or different?	[ { "docid": "cdb2c9e7a8162c2a1041367a9e534e2c", "text": "They all basically mean the same thing - a type of debt than can be exchanged for (converted into) equity at some point. It's only the mechanics that can be different. A convertible bond is structured just like a regular bond - it (usually) pays periodic interest and has a face value that's due at maturity. The difference is that the bond holder has the option to exchange the debt for equity at some point during the life of the bond. There can be restrictions on when that conversion is possible, and they typically define a quantity of equity (number of shares) that the bond can be converted into. If the market price of the shares goes above a price that would make the shares more valuable than the bond, it's in the best interest of the bond holder to convert. A convertible note is typically used to describe a kind of startup financing that does not pay interest or have a face value that's redeemed, but instead is redeemed for equity as part of a later financing round. Rather than specifying a specific number of shares, the bond holder receives equity at a certain discount to the rest of the market. So they both are debt instruments that can turn into equity investments, just through different mechanisms. A debenture is a fancy word for unsecured debt, and convertible debt could be used to described either structure above, so those terms could mean either type of structure.", "title": "" } ]	[ { "docid": "b573ff1763f664a030871b1be7801af5", "text": "Could be misunderstanding your context. But ev = equity + debt - cash. So don't think it makes sense for an equity holder to have an individual ev/ebitda different from the company's. Are you asking in context of valuing equity and debt from an ev/ebitda multiple?", "title": "" }, { "docid": "9bdaaccecc7a6d0050c1aae306971a78", "text": "\"By protected you mean what exactly? In the US, generally you'd get a promissory note signed by B saying \"\"B promises to repay A such and such amount on such and such terms\"\". In case of default you can sue in a court of law, and the promissory note will be the evidence for your case. In case of B declaring bankruptcy, you'd submit the promissory note to the bankruptcy court to get in line with all the other creditors. Similarly in all the rest of the world, you make a contract, you enforce the contract in courts.\"", "title": "" }, { "docid": "ac7d925f057087cb08455ca02173736c", "text": "If I hold a bond then I have a debt asset. If I hold physical silver then I have a commodity asset. If I hold the stock of an individual company then I have an equity asset. Equities, commodities and debts are the three kinds of assets that a person can hold. Edit: I forgot one other kind of asset; monetary asset. If I stuff my mattress with cash (USD) I am holding a monetary asset. Short-term Treasury Bills really behave more like a monetary asset than a bond. So besides actual, physical, currency I would categorize T-bill as a monetary asset. https://www.treasurydirect.gov/indiv/products/prod_tbills_glance.htm", "title": "" }, { "docid": "bc84d9ca973aeea4e184a8ddea4f3d16", "text": "\"In theory, the term of the bond does not affect the priority. It does not matter whether a \"\"Junior Subordinated Debenture\"\" is due in one year or sixty, it is still lower priority than a \"\"Secured Note\"\". On the other hand, if the \"\"Secured Note\"\" is secured by something that is not worth as much as the note, the excess is an unsecured debt. In practice, the term of the bond has two effects: Short term debt holders are more likely to get out just before the company goes broke. Sometimes their efforts to get out are exactly what causes the company to go broke! (\"\"Commercial paper\"\" is even more fickle than banks.) All other things being equal, and depending on the terms of the loan, some bonds get priority over bonds of the same type that are issued later. For example, your first mortgage usually takes precedence over your second mortgage.\"", "title": "" }, { "docid": "33ca4957f280bfa7813dc82826943aaa", "text": "\"Mortgage is a (secured) debt, a combination of a promissory note, and a security interest providing the mortage holder a secured interest in the property. Yes, you are \"\"in debt\"\". But that depends upon whether you define the term \"\"in debt\"\" as a debt appearing on the balance sheet, or the net of assets - liabilities is less than zero, whether you have a \"\"debt\"\" expense on the income statement (budget), or whether the net of income - expenses is less than zero. One person might look at their budget, find the (monthly) mortgage payment listed, and judge that they have a debt payment, and thus are \"\"in debt\"\". Or they might look at their expenses, find they exceed their income, and judge that they are \"\"in debt\"\". Another person might look at their balance sheet, compare assets to liabilities, and only say they were \"\"in debt\"\" when their liabilities exceeded their assets. Some people view mortgage debt as \"\"good debt\"\", as they view certain debts as \"\"good\"\" and others as \"\"bad\"\". Trust me, having a high mortgage payment (higher 30% of your net income) is hard, and over 40% is bad. Consider you balance sheet and your income statement. On your balance sheet, the house appears on the \"\"asset\"\" side with an (estimated) value, while the \"\"mortgage\"\" (really, the promissory note part of the mortgage) appears on the \"\"liability\"\" side. On your income statement, your house does not appear on the income side, but the mortgage (promissory note) payment appears on the expense side. So, you clearly have both a \"\"liability\"\" with a clearly-defined value and an \"\"expense\"\" with a clearly-defined payment. But do you have an \"\"asset\"\"? According to an accountant, you have an \"\"asset\"\" and a \"\"liability\"\". But you do not have a business asset that is producing revenue (income), nor do you have a business asset that can be amortized and expensed to reduce taxable income. When we think about an asset, does the word have the connotation of some thing with value, something that produces income? Well, by that measure, a house only provides income when we rent it out, and only has value when we consider selling it. As millions of families discovered during the housing (price) collapse, when the market price of your \"\"asset\"\" falls substantially, your personal financial status can fall negative and you can be \"\"broke\"\".\"", "title": "" }, { "docid": "2b49a84cc6307004df52a8092a033866", "text": "\"You are asking multiple questions here, pieces of which may have been addressed in other questions. A bond (I'm using US Government bonds in this example, and making the 'zero risk of default' assumption) will be priced based on today's interest rate. This is true whether it's a 10% bond with 10 years left (say rates were 10% on the 30 yr bond 20 years ago) a 2% bond with 10 years, or a new 3% 10 year bond. The rate I use above is the 'coupon' rate, i.e. the amount the bond will pay each year in interest. What's the same for each bond is called the \"\"Yield to Maturity.\"\" The price adjusts, by the market, so the return over the next ten years is the same. A bond fund simply contains a mix of bonds, but in aggregate, has a yield as well as a duration, the time-and-interest-weighted maturity. When rates rise, the bond fund will drop in value based on this factor (duration). Does this begin to answer your question?\"", "title": "" }, { "docid": "141eafddbda39e17d4fc29f187dd72dc", "text": "\"The word \"\"good\"\" was used in contrast to \"\"bad\"\" but these words are misused here. There are three kinds of debt: Debt for spending. Never go into debt to buy consumables, go out for a good time, for vacations, or other purchases with no lasting financial value. Debt for depreciating assets, such as cars and sometimes things like furniture. There are those who put this in the same category as the first, but I know many people who can budget a car payment and pay it off during the life of the car. In a sense, they are renting their car and paying interest while doing so. Debt for appreciating, money-making assets. Mortgage and student loans are both often put into the good category. The house is the one purchase that, in theory, provides an immediate return. You know what it saves you on the rent. You know what it costs you, after tax. If someone pays 20% of their income toward their fixed rate mortgage, and they'd otherwise be paying 25% to rent, and long term the house will keep up with inflation, it's not bad in the sense that they need to aggressively get rid of it. Student loans are riskier in that the return is not at all guaranteed. I think that one has to be careful not to graduate with such a loan burden that they start their life under a black cloud. Paying 10% of your income for 10 years is pretty crazy, but some are in that position. Finally, some people consider all debt as bad debt, live beneath their means to be debt free as soon as they can, and avoid borrowing money.\"", "title": "" }, { "docid": "62a306f2983f3b6fa7523495c2e9051e", "text": "At the heart of this issue is an accounting disagreement that BIS has with current accounting standards. So basically, foreign investors want to invest in lucrative American Dollar investment products but they don't want to have to buy American Dollars in order to do so because of foreign exchange risk (the risk that by the time your investment is realized, any gains are adversely effected by the change in currency values). So instead, they trade in a series of (currency) swaps that allow them to mitigate that foreign exchange risk. In doing so, they are only required by current accounting standards to record such transactions at fair value = 0, thus skipping over the balance sheet and only hitting the footnotes. BIS believes these transactions should be recorded at gross values and on the balance sheet as opposed to the footnotes. The debt is hidden insofar as global dollar debt is calculated using liabilities on balance sheets and not the footnotes. That being said, in no way are these transactions truly hidden as (1) any good analyst values footnotes as much as the financial statements themselves and (2) exposure isn't really the same as debt. TL:DR BIS (as reputable as they are) wants to change currently accepted accounting standards and screaming $14 TRILLION DOLLARS is their way of doing it.", "title": "" }, { "docid": "48c01e8025f37a2255ffd3c048d8b06a", "text": "Perhaps something else comes with the bond so it is a convertible security. Buffett's Negative-Interest Issues Sell Well from 2002 would be an example from more than a decade ago: Warren E. Buffett's new negative-interest bonds sold rapidly yesterday, even after the size of the offering was increased to $400 million from $250 million, with a possible offering of another $100 million to cover overallotments. The new Berkshire Hathaway securities, which were underwritten by Goldman, Sachs at the suggestion of Mr. Buffett, Berkshire's chairman and chief executive, pay 3 percent annual interest. But they are coupled with five-year warrants to buy Berkshire stock at $89,585, a 15 percent premium to Berkshire's stock price Tuesday of $77,900. To maintain the warrant, an investor is required to pay 3.75 percent each year. That provides a net negative rate of 0.75 percent.", "title": "" }, { "docid": "138dffcbb14d51c140e77c76bd629783", "text": "The 1 month and 1 year columns show the percentage change over that period. Coupon (coupon rate) is the amount of interest paid on the bond each period (as specified on the coupon itself. Price is the normalised price of the bond; the price of taking a position of $100 worth of the principal in the bond. Yield is the interest rate that you would receive by buying at that price (this is the inverse of the price). The time is the time of the quote presented.", "title": "" }, { "docid": "143c8924071160f71f9e1bd71c72159c", "text": "Two parties will agree to pay each other's interest obligations. This is generally for one of two reasons: * One party wishes to swap a fixed interest rate (eg coupons on a bond) for a floating interest rate (eg: payments on a loan). If their counterparty wishes the opposite, and the rates are acceptable to both, they will agree to swap their obligations * There are two firms, based in countries A and B. Each firm has a branch in the other's country, and these branches each have a loan, denominated in that other countries currency. To reduce each firm's exposure to FX risk, they can swap their obligations, so A will pay interest on B's loan (which is in A's currency) and B on A's loan (which is in B's currency). edit: removed infuriating unterminated bracket.", "title": "" }, { "docid": "7c879be1b73cca7d13a6cc4ca5f8c222", "text": "In the strictest sense, there are bills,notes, and bonds, named when issued based on their time to maturity. Even though it's called a bond ETF it may have a duration short enough to be made of T-bills, less than a year to maturity. Simply put, for bonds, risk comes from the duration, time to maturity.", "title": "" }, { "docid": "59f54cbaa67b1798e28fbcb031da4510", "text": "\"The term \"\"stock\"\" here refers to a static number as contrasted to flows, e.g. population vs. population growth. Stock, in this context, is not at all related to an equity instrument. Yes, annual refinance costs, interest rate payments etc. are what we should be looking at when assessing debt burden. Those are flows. That was my point when cautioning against naive debt GDP comparisons. Also, keep in mind that by borrowing in it's sovereign currency, the US has an enormous amount of monetary tools to handle the debt if it ever became a problem. Greece, by comparison, is at the mercy of the ECB, so they only have fiscal levers to pull. The interest expense does not strike me as especially concerning, but I'd be happy to verify BIS or IMF reports if you would like.\"", "title": "" }, { "docid": "f974cda43eb4fee7fd6b2844f12a5fd7", "text": "\"There are normally three key factors that define different kinds of loans, these factors affect the risk that the lender takes on and so the interest rate. The interest rate on any loan is linked to market interest rates; the lender shouldn't be able to receive a higher rate of interest for lending the money at no risk, and the level of risk that the lender believes the borrower to have. The three features of a particular loan are: These reduce the risk of complete or total non-payment (default) of the principal or any missed interest payments. Taken in order: Amortising Here some of the monthly payment pays a proportion of the underlying principal of the loan. This reduces the amount outstanding and so reduces the capacity for default on the full principal as part of the principal has already been paid. Security In a secured loan there is an asset such as a car, house, boat, gold, shares etc. that has a value on resale that is held against the loan. The lender may repossess the security if the borrower defaults and recover their money that way. This also acts as a \"\"stick\"\" using the loss of property to convince the borrower that it is better to keep paying the interest. The future value of the security will be taken into account when deciding how much this reduces the interest rate. Guarantor A guarantor to a loan guarantees that the borrower will repay the loan and interest in full and, if the borrower does not fulfil that obligation, the lender is able to seek legal redress from the guarantor for the borrower's debts. Each of these reduce the risk of the loan as detailed and so reduce the interest rate. The interest rate, then, is made up of three parts; the market interest rate (m) plus the interest rate premium for the borrower's own credit worthiness (c) minus the value of the features of the loan that help to reduce risk (l). The interest rate of the loan (r) is categorised as: r = m + c - l. Credit ratings themselves are an inexact science and even when two lenders are looking at the same credit score for the same person they will give a different interest rate premium. This is mostly for business reasons, and the shape of their loan book, that are too tedious to go through here. All in all the different types of loan give flexibility at the cost of a different interest rate. If you don't want the chance of your car being repossessed you don't take a secured loan, if you have a family member who can help and doesn't mind taking on your risk take a guaranteed loan.\"", "title": "" }, { "docid": "5fbcb91f3b5b42e99a3cd31ec42b68b4", "text": "When individuals take on a loan, it's often in the form of a mortgage, right? And companies take out business loans all the time, only they might be a regular bank loan and not in the form of buying bonds, more similar to when an individual takes a loan. I was seeing through what process a firm would have to go through in order to get funding via the bond process.", "title": "" } ]	fiqa
16a4a577fc627531dd5f7f9a902d8007	Stranger in Asia wants to send me $3000 in Europe over Western Union because he “likes me”? [duplicate]	[ { "docid": "275674d1993bb7ceb51d2722c83c64e9", "text": "how are the ways he could scam me? There are hundreds of different ways the scam can progress ... broadly;", "title": "" }, { "docid": "9d329e887d7499a6cd163013dc560b17", "text": "\"The first question I have to ask is, why would your \"\"friend\"\" even be considering something so ridiculous? There are so many variations of the banking scam running around, and yet people can't seem to see them for what they are -- scams. The old saying \"\"there's no such thing as a free lunch\"\" really comes into play here. Why would anyone send you/your friend $3,000.00 just because they \"\"like you\"\"? If you can't come up with a rational answer to that question then you know what you (or your friend) should do -- walk away from any further contact with this person and never look back! Why? Well, the simple answer is, let's assume they DO send you $3,000.00 by some means. If you think there aren't strings attached then all hope is lost. This is a confidence scam, where the scammer wins your trust by doing something nobody would ever do if they were trying to defraud you. As a result, you feel like you can trust them, and that's when the games really begin. Ask yourself this -- How long do you think it will be (even assuming the money is sent) before they'll talk you into revealing little clues about yourself that allow them to develop a good picture of you? Could they be setting you up for some kind of identity theft scheme, or some other financial scam? Whatever it is, you'd better believe the returns for them far outweigh the $3,000.00 they're allegedly going to send, so in a sense, it's an investment for them in whatever they have planned for you down the road. PLEASE don't take the warnings you get about this lightly!!! Scams like this work because they always find a sucker. The fact that you're asking the question in the first place means you/your \"\"friend\"\" are giving serious thought to what was proposed, and that's nothing short of disaster if you do it. Leave it be, take the lesson for what it's worth before it costs you one red cent, and move on. I hope this helps. Good luck!\"", "title": "" }, { "docid": "aaa7691ca4e8a234d85989b338da4378", "text": "\"It can be a money laundering scheme. The stranger gives you cash for free at first, then proposes to give you more but this time asks you to \"\"spend\"\" a fraction of it (like 80%). So on his side the money comes from a legitimate source. So you do it because after all you get to keep the rest of it and it is \"\"free\"\" money. But you are now involved in something illegal. Having money for which you cannot tell the origin is also something highly suspicious. You will not pay tax on it, and the fiscal administration of your country might give you a fine. Customs might also be able to confiscate the money if they suspect it comes from an illegal source.\"", "title": "" } ]	[ { "docid": "d0bbc0508b93a37b85d8f6b39652161d", "text": "\"Money has to come from somewhere. It can't just appear. So if there is really an aunt at an agency, and she is sending checks, then she is writing checks from that company, and stealing from that company. If that is the case, then the person with whom you are in contact would be using you to launder money (hide its illegal origin) and when the aunt was caught, you would be also. If it is really being done between countries, then it might be more difficult for them to find you, but it is still illegal. However, it is also likely that your contact may be using a common scam, as described by another answerer, that of asking for money in return for a cashier's check. Although cashier's checks were designed to be \"\"safer\"\" than regular checks, in that they won't bounce, if it is a fake cashier's check, it was never worth anything in the first place. When the bank tries to claim the cash from the other bank, and finds it doesn't exist, or there is no record of that check, then the effect is similar to that of a personal check bouncing: the bank will want the money back. If you have already given a portion of that money to your contact, chances are, when your find this out, he will be long gone. I would not have anything further to do with this person. Good luck.\"", "title": "" }, { "docid": "5ce583345d3b1edc1a00356f0e5996be", "text": "This is a scam. There is no soldier, no money ... This is a story to gain sympathy and make one part with Bank account and other details so that the scammer can make away with your money.", "title": "" }, { "docid": "defacdad2fe54876438533f538acc0a1", "text": "You could find a relative in another country who has the ability to receive PayPal, and have them transfer the money to you via Western Union or Hawala.", "title": "" }, { "docid": "6ba706c8c818d2b2b72005061275a4ff", "text": "\"OK, reading between the lines here it looks like the services offered by your company are of an \"\"adult\"\" (possibly illegal?) nature and that this individual has actually paid you in full for the services rendered up to this point. The wrinkle here is that you say that you've been offered large cash \"\"gifts\"\" in return for unspecified future favours, but that your client hasn't provided a real Paypal account to do so. When you pressed him on it, he sent a fake email and invented a \"\"financial adviser\"\" to fob you off, then hasn't contacted you since. It's pretty clear that he hasn't got any intention of making these payments to you. What you're now proposing to do is to use his known banking details to collect money to cover those verbal promises. In pretty much every part of the world, that's a crime. Without a written agreement to use that payment method for those promises, he could easily call the police and have you arrested for theft of funds. The further wrinkle is that his actions (claiming to have made payment via paypal, forged email headers, etc) strongly suggest that this individual is involved in cyber-crime and may well have used a fake bank account to pay for your initial services. The bottom line here is that you need real legal advice, from an actual lawyer.\"", "title": "" }, { "docid": "a278186efa1880c67a343e7a64454b5f", "text": "Summary: MHRA of UK said Xu was bringing fake drugs into Europe. They had ICE from US help meet Xu in Thailand. Found out Xu's wife loved materlistic things like diamonds. They used Xu's wife's love of diamonds to lure him to the US by offering whole sale price for diamonds. Xu went. They arrested him. Charged in US. Xu had a European dealer, Gillespie, who was the one ferrying the goods to UK, and through a few things, found link and charged him. Gillespie claims it was all conspiracy to blame someone in Europe, he happen to be fall guy.", "title": "" }, { "docid": "95027669f9c35e4703223ae15a60e31e", "text": "A quick search shows that https://www.westernunion.com/de/en/send-money/start.html says they will transfer €5,000 for a cost of €2.90. Assuming you can do a transfer every week, that would be six weeks at a cost of €17.40. €17.40 is slightly less than €1,500.00. I'm sure there are more ways.", "title": "" }, { "docid": "0b94911436e766d7e927bbe443605fb5", "text": "tl;dr: Be patient, money is probably sitting somewhere, and it will eventually be credited back to your account. I had a similar problem about 10 years ago. I sent an international wire transfer, from my own bank account in Germany to my bank account in Central America. I had done this before, and there had been no issues, but in this case, even though all the information was correct, the bank rejected the wire because it was above $10K, and in that case, the bank needs written proof from the owner of the receiving account (me) , and so didn't know where the funds were coming from. I had to call the local Sparkasse bank in Germany, as well as an intermediary bank in London to sort it all out, and in total, had to wait about 3-4 weeks to get the money back in my Sparkasse bank account. At one point I thought I may never see that money back, especially since there was an intermediary bank to deal with, but it all worked out in the end.", "title": "" }, { "docid": "b9ebd8659554d647404cba860998ab27", "text": "Ask your bank to recall the transfer (as if went to wrong account and you have inform the bank about it). Secondly get a police report in the country where you sent the money from and where it was sent to, and state the person's name and account details. Ethically this person should return the funding, but if he or she wants to play gangsters paradise, then you want to take police action and push your bank to take the funds back by RECALLING THE FUNDS UNDER INDEMNITY. Ask your bank to give you a copy of the message they have sent to the beneficiary's bank. Use this wording and you will have success. Contact the beneficiary bank also and give them details.", "title": "" }, { "docid": "5be2abf7ea57d91c0d4d15e22705ea53", "text": "\"Not sure about specific French laws. Assuming its not a political party receiving such donations, and it an normal individual ... General common sense answer would be; but it could very well be a generous donation from someone in the Caimans or Germany The onus would be on you to prove it is a generous donation. What is the threshold between \"\"this money looks like money-laundering\"\" and \"\"this money looks like a generous donation\"\"? There is no threshold. By default if you don't know the source; it is money-laundering. In particular: is it up to me to explain where the money comes from, or is it the sender's problem? You have to explain the source of money. That the Bank in Germany may have to do its own due-diligence is separate from your having to explain the source of funds.\"", "title": "" }, { "docid": "288d276228f14c790a00ed38f2cbcab0", "text": "Go to the police. This is fraud and is illegal. Sure, this will hurt your friend but better now then when he starts abusing of his position to fraud even more people... Original comment by Bakuriu sorry for not giving credit", "title": "" }, { "docid": "7d9579caffe876adaaec0604f08c7549", "text": "Currency exchange is rather the norm than the exception in international wire transfers, so the fact that the amount needs to be exchanged should have no impact at all. The processing time depends on the number of participating banks and their speeds. Typically, between Europe and the US, one or two business days are the norm. Sending from Other countries might involve more steps (banks) which each takes a bit of time. However, anything beyond 5 business days is not normal. Consider if there are external delays - how did you initiate the sending? Was it in person with an agent of the bank, who might have put it on a stack, and they type it in only a day later (or worse)? Or was it online, so it is in the system right away? On the receiver side, how did you/your friend check? Could there be a delay by waiting for an account statement? Finally, and that is the most common reason, were all the numbers, names, and codes absolutely correct? Even a small mismatch in name spelling might trigger the receiving bank to not allocate the money into the account. Either way, if you contact the sender bank, you will be able to make them follow up on it. They must be able to trace where they money went, and where it currently is. If it is stuck, they will be able to get it ‘unstuck’.", "title": "" }, { "docid": "800c5783f99b60b8c046861416bb28c6", "text": "If you trust the other party, an international bank wire would be the quickest, easiest, and cheapest option. It is the standard way to pay for something overseas from the United States. Unfortunately, in most cases, they are not reversible. I don't believe Paypal is an option for an amount that large. Escrow companies do exist, but you would have to research those on a case by case basis to see if any fit the criteria for your transaction and the countries involved. I'll also add: If it were me, and there was no way to get references or verify the person's identity and intent to my satisfaction, then I would probably consider hopping on a plane. For that amount of money, I would verify the person and items are legitimate, in person, and then wire the money.", "title": "" }, { "docid": "625b4ac57726954c615a0f324b509988", "text": "There are several red flags here. can they get my bank account info in any way from me transferring money to them? Probably yes. Almost all bank transactions are auditable, and intentionally cause a money track. This track can be followed from both sides. If they can use your bank account as if they were you, that is a bit deeper than what you are asking, but yes they (and the polish cops) can find you through that transfer. I did look up the company and didn't find any scam or complaints concerning them. Not finding scams or complains is good, but what did you find? Did you find good reviews, the company website, its register, etc, etc? How far back does the website goes (try the wayback machine) Making a cardboard front company is very easy, and if they are into identity theft the company is under some guy in guam that never heard of poland or paypal. As @Andrew said above, it is probably a scam. I'd add that this scam leverages on the how easier is to get a PayPal refund compared to a regular bank transfer. It is almost impossible to get the money back on an international transaction. Usually reverting a bank transfer requires the agreement in writing of the receiver and of both banks. As for paypal, just a dispute from the other user: You are responsible for all Reversals, Chargebacks, fees, fines, penalties and other liability incurred by PayPal, a PayPal User, or a third party caused by your use of the Services and/or arising from your breach of this Agreement. You agree to reimburse PayPal, a User, or a third party for any and all such liability. (source) Also, you might be violating the TOS: Allow your use of the Service to present to PayPal a risk of non-compliance with PayPal’s anti-money laundering, counter terrorist financing and similar regulatory obligations (including, without limitation, where we cannot verify your identity or you fail to complete the steps to lift your sending, receiving or withdrawal limit in accordance with sections 3.3, 4.1 and 6.3 or where you expose PayPal to the risk of any regulatory fines by European, US or other authorities for processing your transactions); (emphasis mine, source) So even if the PayPal transfer is not disputed, how can you be sure you are not laundering money? Are you being paid well enough to assume that risk?", "title": "" }, { "docid": "b7d9a5849f2f445daea08fec938a24c5", "text": "\"You're potentially in very deep water here. You don't know who this person is that you're dealing with. Before you'd even met him, he just gave you his banking info, seemingly without a second thought. You have no idea what the sources of his money are, so what happens if the money is stolen or otherwise illegal? If it is determined that you used any of that money, you'll be on the hook to return it, at the very least. Who knows what the legal ramifications are either? So it sounds like you began spending his money before you had any kind of written agreement in place? Doesn't that seem odd to you to have someone just so trusting as to not even ask for that? Was the source of the email about the $2500 from PayPal, or from him or his advisor? PayPal always sends you a notice directly when funds are received into your account, and even if they were going to put a temporary hold on them for whatever reason (sometimes they do that), it would still show up in your account. I would HIGHLY (can I be more emphatic?) advise you not to go anywhere NEAR his bank account until or unless you can absolutely verify who he is, where his money comes from, and what the situation is. If you start dipping into his account, whether you think you're somehow entitled to the money or not, he could cry foul and have you arrested for theft. This is a very odd situation, and for someone who says he's normally cautious and skeptical, you sure let your guard down here when you started spending his money without making any serious effort to confirm his bona fides. Just because he passes himself off as smart and the \"\"doctor type\"\" doesn't mean squat. The very best scammers can do that (ever see the movie \"\"Catch Me If You Can\"\", based on a true story?), so you have no basis for knowing he's anything at all. I am thoroughly confused as to why you'd just willfully start using his money without knowing anything about him. That's deeply disconcerting, because you've opened yourself up to a world of potential criminal and civil liability if this situation goes south. If this guy was giving you money as an investment in your business and you instead used some of that money for your own personal expenses then you could land in very serious trouble for co-mingling of funds. Even if he told you it was okay, it doesn't sound like there's anything in writing, so he could just as easily deny giving you permission to use the money that way and have you charged with embezzlement. You need to step back, take a deep breath, stop using his money, and contact a lawyer for advice. Every attorney will give you a free consultation, and you need to protect yourself here. Be careful, my friend. If this makes you suspicious then you need to listen to that voice in your head and find a way to get out of this situation.\"", "title": "" }, { "docid": "27f2ea3f06194bf4fdbfa53f7af8e376", "text": "It's the rate of return on new opportunities. The rate on existing projects isn't relevant. If you buy a bond 10 years ago when market Interest rates were 8%, and you have cash to buy another bond today, it is today's interest rates that are relevant, not the rates 10 years ago.", "title": "" } ]	fiqa
522e2fe66834ae0ebf8e6b16c938cf22	Buying a home - brokerage fee	[ { "docid": "d155ae5534d0d32f1e77521fe072f09c", "text": "\"That sounds like a particularly egregious version of exclusivity. However, the way that you could handle that is to include a \"\"contingency\"\" in your purchase agreement stating that your offer is contingent upon the seller paying the brokerage fee. The argument against this, and something your broker might use to encourage you not to do so, is that it makes your offer less attractive to the buyer. If they have two offers in hand for the same price, one with contingencies and one without, they will likely take the no-contingency offer. In my area, right now, house offers are being made without very common contingencies like a financing contingency (meaning you can back out if you can't finance the property) or an inspection contingency. So, if your market is really competitive, this may not work. One last thought is that you could also use this to negotiate with your broker. Simply say you're only sign this expecting that any offer would have such a contingency. If it's untenable in your current market, it will likely cause your broker to move on. Either way, I'd say you should push back and potentially talk to some other brokers. A good broker is worth their weight in gold, and a bad one will cost you a boat load. And if you're in Seattle, I'll introduce you to literally the best one in the world. :-)\"", "title": "" }, { "docid": "1b03246a08db52042f9433dcd7ce3d62", "text": "\"Every situation is possible, it depends on what the contract states. According to Nolo: Your ability to withdraw from a home purchase depends on two things: 1) the exact point at which you are \"\"in contract\"\" to buy the house, and 2) after you're in contract, what the contract says about terminating the transaction. Therefore, you need to be 100% ready for anything to happen. After you sign the contract, it is binding and you must adhere to what the contract states. Buying a home is a big purchase - arguably the biggest of your life - you need to be comfortable with every aspect of this experience.\"", "title": "" }, { "docid": "699083d44a8467e0807cd0d675c919a8", "text": "\"I feel like you didn't actually read your agent's agreement, which should say where the money actually comes from. You sign it so that your agent can get paid by the listing agency from the net brokerage fees which the buyer pays. In the United States, \"\"real estate agents are prohibited from being paid a commission directly by the consumer.\"\" (citation: https://www.thebalance.com/how-do-buyer-s-agents-get-paid-1798872 ) The agreement will say exactly where your buyer's-agent's money is going to come from. Typically the listing agency receives the broker fees from the seller, and then pays both the seller's agent and the buyer's agent from that. It means both agents have to split the fee. [If] for some reason the seller won't pay the buyer broker, can I just not purchase the house? Pretty much, yes, though it won't be you saying \"\"deal's off\"\". Unless they have some really unusual contracts with their OWN broker, if the seller refuses to pay fees, their own side of the transaction is going to fall apart and the sale won't happen at all, leaving you off the hook for your own broker's fee.\"", "title": "" } ]	[ { "docid": "747cc718e1016927fc48bf0216b35c05", "text": "As others have said, it depends on the brokerage firm. My broker is Scottrade. With Scottrade the commission is assessed and applied the moment the order is filled. If I buy 100 shares of XYZ at $10 a share then Scottrade will immediately deduct $1007.02 out of my account. They add the commission and fees to the buy transaction. On a sale transaction they subtract the commission and fees from the resulting money. So if I sell 100 shares of XYZ at $11 a share I will get 1,092.98 put into my account, which I can use three business days later.", "title": "" }, { "docid": "3862e880f4ef2433c90221a639b0914e", "text": "The brokerage executes the transactions you tell them to make on your behalf. Other than acting as your agent for those, and maintaining your account, and charging a fee for the service, they have no involvement -- they do not attempt to predict optimal anything, or hold any assets themselves.", "title": "" }, { "docid": "863caebe164e5bd922034f24c3029475", "text": "\"New SEC rules also now allow brokers to collect fees on non-dividend bearing accounts as an \"\"ADR Pass-Through Fee\"\". Since BP (and BP ADR) is not currently paying dividends, this is probably going to be the case here. According to the Schwab brokerage firm, the fee is usually 1-3 cents per share. I did an EDGAR search for BP's documents and came up with too many to read through (due to the oil spill and all of it's related SEC filings) but you can start here: http://www.schwab.com/public/schwab/nn/m/q207/adr.html\"", "title": "" }, { "docid": "8ab91520c2ca608ff5b18cef8bc8bc97", "text": "\"What are reasonable administrative fees for an IRA? was recently discussed here. My answer was zero. An IRA is not an investment, it's a container representing the tax status of an account. Once you decide what to actually invest it in, you'll likely incur additional fees. Mutual funds, for instance can range from .05% per year to 2.00% or more. In your case, you are telling us you are spending 2% per year even before you decide what to invest in. The real question I'd like to see answered is \"\"what value can an advisor bring to one's retirement account to deserve a 2%/year fee?\"\" My final thought - most financial types had been suggesting that a retiree can target a 4% per year withdrawal after retiring. This rule of thumb has been debated since the lost decade of 2000-2009, and the safe number may be lower. If an advisor is taking 2% off the top, you are basically sharing half your income with him. A million dollar IRA, you get $20K, he gets $20K?\"", "title": "" }, { "docid": "a4e5e4d432355e265639b5ac35bdbe3a", "text": "\"Banks make money on load origination fees. The \"\"points\"\" you pay or closing costs are the primary benefit to the banks. A vast majority of the time risks associated with the mortgage are sold to another party. FYI, the same is true with investment banks. In general, the transaction costs (which are ignored by modern finance theory) are the main thing running the incentives for the industry.\"", "title": "" }, { "docid": "143bcb802543729b3a4d8b18656ffe00", "text": "12b1's have fallen out of favor in recent years, and are typically capped at about 0.25%. they are also usually waived and factored into the fund OER these days, too, though it depends on who your broker is. any revenue sharing shouldn't increase your fees. in my experience, there is more incentivizing for cross selling rather than revenue sharing, but in any case those would be fractions of your revenue allocated to different parties, and not additional fees.", "title": "" }, { "docid": "c730a794b925cb372bb786761aaee5ff", "text": "There is such a thing as a buy-write, which is buying a stock and writing a (covered) call simultaneously. But as far as I know brokers charge two commissions, one stock trade and one options trade so you're not going to save on commissions.", "title": "" }, { "docid": "8aca17fd7b02d385d8b2326c84fadefe", "text": "If that $6k includes points to buy down the rate, it could be a good deal, depending on the total cost of the house and the rates involved. If that's pure administrative and legal fees, that seems pretty high. I've bought a number of houses in my time and I don't think I ever paid over $2000. I refinanced my current house a year or two ago, with the same bank, and total closing costs were $500. That said, I don't know where you live, the cost of the house, etc. Might be that's normal in your area and your circumstances. But I'd shop around before just accepting it.", "title": "" }, { "docid": "a466255400ad63956a96c33886d5dda3", "text": "\"You don't \"\"deduct\"\" transaction fees, but they are included in your cost basis and proceeds, which will affect the amount of gain/loss you report. So in your example, the cost basis for each of the two lots is $15 (10$ share price plus $5 broker fee). Your proceeds for each lot are $27.50 (($302 - $5 )/2). Your gain on each lot is therefore $12.50, and you will report $12.50 in STCG and $12.50 in LTCG in the year you sold the stock (year 3). As to the other fees, in general yes they are deductible, but there are limits and exceptions, so you would need to consult a tax professional to get a correct answer in your specific situation.\"", "title": "" }, { "docid": "6bec9caf8b089c9ce554751fccbf01ad", "text": "In this case, trust the real estate agent; negotiating experience is one of the things you selected them for. Especially if they're suggesting a lower number than you expected, since they get paid on commission and so may be biased the other way. Part of their job is to look for hints about how motivated this seller is and what price they might accept, as opposed to what price they hope to get. And remember that the default assumption is that the two parties will meet in the middle somewhere, which means it's customary to offer 10% less to signal that you could probably be talked into it if they drop the price about 5%. This is like bridge-hand bidding: it's a semi-formalized system of hints about levels of interest, except with fewer conventions and less rationality. As far as the seller paying the closing costs: that's really part of the same negotiation, and doing it that way makes the discussion more complicated for the seller since they need to figure out how much more to charge you to cover this cost. If they offer, great, factor that into what you are willing to pay... but I wouldn't assume it or ask for it. Edit: Yes, unless you have engaged a Buyer's Agent (which I recommend for first-time buyers and maybe all huyers), their fiduciary duty is to the seller. But part of that duty is to make the sale happen. If the price goes too high and you walk away, neither the agent nor the seller make money. A bad agent can be as bad as a bad car salesman, sure. But if you don't like and mostly trust your agent, you are working with the wrong agent. That doesn't mean you give them every bit of information the seller might want, but it does mean you probably want to listen to their input and understand their rationalle before deciding what your own strategy will be.", "title": "" }, { "docid": "62b14dd6a2c9023faba26ce0e07ea9b2", "text": "\"Before the prevalence of electronic trading, trading stocks was very costly, dropping from ~15c in the late 1970s to less than a nickel per share today. Exchange fees for liquidity takers are ~0.3c per share, currently. When orders were negotiated exclusively by humans, stocks used to be quoted in fractions rather than decimal, such as $50 1/2 instead of something more precise like $50.02. That necessary ease of negotiation for humans to rapidly trade extended to trade size as well. Traders preferred to handle orders in \"\"round lots\"\", 100 shares, for ease of calculation of the total cost of the trade, so 100 shares at $50 1/2 would have a total cost of $5,050. The time for a human to calculate an \"\"odd lot\"\" of 72 shares at $50.02 would take much longer so would cost more per share, and these costs were passed on to the client. These issues have been negated by electronic trading and simply no longer exist except for obsolete brokerages. There are cost advantages for extremely large trades, well above 100 shares per trade. Brokerage fees today run the gamut: they can be as insignificant as what Interactive Brokers charges to as high as a full service broker that could charge hundreds of USD for a few thousand USD trade. With full service brokerages, the charges are frequently mystifying and quoted at the time a trade is requested. With discount brokerages, there is usually a fee per trade and a fee per share or contract. Interactive Brokers will charge a fee per share or option only and will even refund parts of the liquidity rebates exchanges provide, as close as possible to having a seat on an exchange. Even if a trader does not meet Interactive Brokers' minimum trading requirement, the monthly fee is so low that it is possible that a buy and hold investor could benefit from the de minimis trade fees. It should be noted that liquidity providing hidden orders are typically not rebated but are at least discounted. The core costs of all trades are the exchange fees which are per share or contract. Over the long run, costs charged by brokers will be in excess of charges by exchanges, and Interactive Brokers' fee schedule shows that it can be reduced to a simple markup over exchange fees. Exchanges sometimes have a fee schedule with lower charges for larger trades, but these are out of reach of the average individual.\"", "title": "" }, { "docid": "f0a6ae037fbb51b1c3c62cad032ee4ce", "text": "I'm not positive my answer is complete, but from information on my broker's website, the following fees apply to a US option trade (which I assume you're concerned with given fee in dollars and the mention of the Options Clearing Corporation): They have more detail for other countries -- see https://www.interactivebrokers.co.uk/en/index.php?f=commission&p=options1 for North America. Use the sub-menu near the top of the page to pick Europe or Asia. The brokerage-charged commission for this broker is as low as $0.25 per contract with a $1.00 minimum. Though I've been charged less than $1 to STO an options position, as well as less than $1 to BTC an options position, so not sure about that minimum. Regarding what I read as your overall underlying question (why are option fees so high), in my research this broker has one of the cheapest commission rates on options I've ever seen. When I participate in certain discussions, I'm routinely told that these fees are unbelievable and that $5.95, $7.95, or even $9.95 are considered low fees. I've heard this so much, and discussed commissions with enough people who've refused to switch brokers, that I conclude there just isn't enough competition to drive prices lower. If most people won't switch brokers to go from $9.95 to $1 per trade, there simply isn't a reason to lower rates.", "title": "" }, { "docid": "0ca7b0a68b8b52bb9fb8f2139eb24b78", "text": "\"And to answer your other questions about fees, there are a number of sites that compare brokers' fees, Google \"\"broker fee comparison\"\". I like the Motley Fool, although there are a lot of others. However, don't go just by the comparison sites, because they can be out-of-date and usually just have the basic fees. Once you find a broker that you like, go to that broker's site and get all the fees as of now. You can't sell the shares that are in your Charles Schwab account using some other broker. However, you can (possibly now, definitely eventually, see below) transfer the shares to another broker and then sell them there. But be aware that Charles Schwab might charge you a fee to transfer the shares out, which will probably be larger than the fee they'll charge you to sell the shares, unless you're selling them a few at a time. For example, I have a Charles Schwab account through my previous employer and it's $9.99 commission to sell shares, but $50 to transfer them out. Note that your fees might be different even though we're both at Charles Schwab, because employers can negotiate individual deals. There should be somewhere on the site that has a fee schedule, but if you can't find it, send them a message or call them. One final thing to be aware of, shares you get from an employer often have restrictions on sale or transfer, or negative tax consequences on sale or transfer, that shares just bought on the open market wouldn't, so make sure you investigate that before doing anything with the shares.\"", "title": "" }, { "docid": "70dd94ebee52e6a3aa1787f229346ce8", "text": "\"AFAIK, It's also possible that the ETF company is paying Ameritrade for every trade you make. Even if your brokerage doesn't make you pay a fee to trade ETFs, the company that created and runs the ETF is still making money when you purchase and use their ETFs. See \"\"What motivates each player?\"\" at Yahoo Finance.\"", "title": "" }, { "docid": "b26146f4690f6340fd7e29cdd4f8fd28", "text": "Here's the purely mathematical answer for which fees hurt more. You say taking the money out has an immediate cost of $60,000. We need to calculate the present value of the future fees and compare it against that number. Let's assume that the investment will grow at the same rate either with or without the broker. That's actually a bit generous to the broker, since they're probably investing it in funds that in turn charge unjustifiable fees. We can calculate the present cost of the fees by calculating the difference between: As it turns out, this number doesn't depend on how much we should expect to get as investment returns. Doing the math, the fees cost: 220000 - 220000 (1-0.015)^40 = $99809 That is, the cost of the fees is comparable to paying nearly $100,000 right now. Nearly half the investment! If there are no other options, I strongly recommend taking the one-time hit and investing elsewhere, preferably in low-cost index funds. Details of the derivation. For simplicity, assume that both fees and growth compound continuously. (The growth does compound continuously. We don't know about the fees, but in any case the distinction isn't very significant.) Fees occur at a (continuous) rate of rf = ln((1-0.015)^4) (which is negative), and growth occurs at rate rg. The OPs current principal is P, and the present value of the fees over time is F. We therefore have the equation P e^((rg+rf)t) = (P-F) e^(rg t) Solving for F, we notice that the e^rg*t components cancel, and we obtain F = P - P e^(rf t) = P - P e^(ln((1-0.015)^4) t) = P - P (1-0.015)^(4t)", "title": "" } ]	fiqa
ce2dac5f8a9889fbb98616d49b23b238	Are there any disadvantages of Progress Draw Mortgage?	[ { "docid": "3303ff7feab704409a282dcd626fac88", "text": "Presumably, the inverse of the advantages? You are guaranteed the interest rate that is written on your mortgage commitment as long as the first draw happens before the rate hold expiry date (typically 120 days from application date). In most cases, it takes at least 6 months or more to build a home from the ground up. That means that you are taking a chance at what the interest rates and qualifying criteria will be several months down the road. You can normally only lock in 120 days prior to possession with a 'Completion Mortgage'. Lenders are constantly changing their guidelines and rates are predicted to increase over the coming months. That means you are much better to obtain draw mortgage financing to avoid any of these uncertainties. You will know that you have your financing in place right away before construction even starts. This is a huge peace of mind so you can relax and get ready for the big move. So thus, if interest rates are lower 6 months or a year from now, that'd be the disadvantage -- a longer lock-in period.", "title": "" } ]	[ { "docid": "661faa4d48f96d63ec1a4467fefc9842", "text": "The catch is that you're doing a form of leveraged investing. In other words, you're gambling on the stock market using money that you've borrowed. While it's not as dangerous as say, getting money from a loan shark to play blackjack in Vegas, there is always the chance that markets can collapse and your investment's value will drop rapidly. The amount of risk really depends on what specific investments you choose and how diversified they are - if you buy only Canadian stocks then you're at risk of losing a lot if something happened to our economy. But if your Canadian equities only amount to 3.6% of your total (which is Canada's share of the world market), and you're holding stocks in many different countries then the diversification will reduce your overall risk. The reason I mention that is because many people using the Smith Maneuver are only buying Canadian high-yield dividend stocks, so that they can use the dividends to accelerate the Smith Maneuver process (use the dividends to pay down the mortgage, then borrow more and invest it). They prefer Canadian equities because of preferential tax treatment of the dividend income (in non-registered accounts). But if something happened to those Canadian companies, they stand to lose much of the investment value and suddenly they have the extra debt (the amount borrowed from a HELOC, or from a re-advanceable mortgage) without enough value in the investments to offset it. This could mean that they will not be able to pay off the mortgage by the time they retire!", "title": "" }, { "docid": "2c42f2eb5810f7b396be829f8e997dfd", "text": "\"Outside of broadly hedging interest rate risk as I mentioned in my other answer, there may be a way that you could do what you are asking more directly: You may be able to commit to purchasing a house/condo in a pre-construction phase, where your bank may be willing to lock in a mortgage for you at today's rates. The mortgage wouldn't actually be required until you take ownership from the builder, but the rates would be set in advance. Some caveats for this approach: (1) You would need to know the house/condo you want to move into in advance, and you would be committing to that move today. (2) The bank may not be willing to commit to rates that far in advance. (3) Construction would likely take far less than 5 years, unless you are buying a condo (which is the reason I mention condos specifically). (4) You are also committing to the price you are paying for your property. This hedges you somewhat against price fluctuation in your future area, but because you currently own property, you are already somewhat hedged against property price fluctuation, meaning this is taking on additional risk. The 'savings' associated with this plan as they relate to your original question (which are really just hedging against interest rate fluctuations) are far outweighed by the external pros and cons associated with buying property in advance like this. By that I mean - if it was something else you were already considering, this might be a (small) tick in the \"\"Pro\"\" column, but otherwise is far too committal / complex to be considered for interest rate hedging on its own.\"", "title": "" }, { "docid": "1d141ce8a573675facfabe058a4d18a1", "text": "In such a situation, is there any reason, financial or not, to NOT pay as many points as mortgage seller allows? I can think of a few reasons not to buy points, in the scenario you described: If interest rates decrease you could be better off refinancing to a lower rate than buying points now. If buying points reduced your down payment below 20% then the PMI would more than offset the benefit of having purchased points. Your situation changes and you aren't able to stay in the home as long as planned. That said, current interest rates are pretty low, so I'd probably gamble on them not getting too much lower anytime soon. I also assume that if you can afford as many points as they allow, that you wouldn't have to dip below 20% down payment even with points. Edit: Others have mentioned that it's important to note opportunity cost when calculating the benefit of purchasing points, I agree, you wouldn't want to buy points at a rate that saved you less than you could earn elsewhere. Personally, I've not seen a points scenario that didn't yield more benefit than market average returns, but that could be due to my market, or just coincidence, you should definitely calculate the benefit for your scenario and shop for a good lender. Don't forget that points are tax deductible in the year paid when calculating their benefit.", "title": "" }, { "docid": "34d633282f0e3a21679c224f05219a83", "text": "Utilization is near real-time. What that means is that what is reported is what is taken in terms of debt-to-income (DTI) ratios. When a mortgage broker pulls your credit, they will pull the latest balances with the minimum payments. This is what is taken to determine DTI along with your gross monthly income. If you do not pay your account in full before the statement date, then you more than likely will have to wait an additional statement cycle before it reports to the credit bureaus. Therefore, your utilization is dynamic and the history of your utilization month-to-month is not recorded forever. Only the current balance. What is maintained and reported is your payment history. So you want to never be late if you want to be approved anytime soon for a mortgage. A lower DTI will not help your interest rate. As long as you stay away from the maximum DTI for the mortgage vehicle you are attempting to be approved for (VA, FHA, Conventional, etc), then your DTI should not be a concern. If you are borderline at the time of underwriting, you can take the opportunity and pay off the balances. The mortgage company can then do what is called a credit supplement which entails contacting those lenders where you have proven you have a zero balance and manually input the zero balance cards, that have not yet reported to the bureaus, in your final application to the mortgage company for underwriting approval.", "title": "" }, { "docid": "b8f73b9acadf8986c48c36572b1a410d", "text": "First consider the basic case of what you are asking: you expect to have a future obligation to pay interest, and you are concerned that the rate when you pay it, will be higher than the rate today. In the simplest case, you could theoretically hedge that risk by buying an asset which pays the market interest rate. As the interest rate rises, increasing your costs, your return on this asset would also increase. This would minimize your exposure to interest rate fluctuations. There are of course two problems with this simplified solution: (1) The reason you expect to pay interest, is because you need/want to take on debt to purchase your house. To fully offset this risk by putting all your money in an asset which bears the market interest rate, would effectively be the same as just buying your house in cash. (2) The timing of the future outflow is a bit unique: you will be locking in a rate, in 5 years, which will determine the payments for the 5 years after that. So unless you own this interest-paying asset for that whole future duration, you won't immediately benefit. You also won't need / want to buy that asset today, because the rates from today to 2022 are largely irrelevant to you - you want something that directly goes against the prevailing mortgage interest rate in 2022 precisely. So in your specific case, you could in theory consider the following solution: You could short a coupon bond, likely one with a 10 year maturity date from today. As interest rates rise, the value of the coupon bond [for it's remaining life of 5 years], which has an implied interest rate set today, will drop. Because you will have shorted an asset dropping in value, you will have a gain. You could then close your short position when you buy your house in 5 years. In theory, your gain at that moment in time, would equal the present value of the rate differential between today's low mortgage rates and tomorrow's high interest rates. There are different ways mechanically to achieve what I mention above (such as buying forward derivative contracts based on interest rates, etc.), but all methods will have a few important caveats: (1) These will not be perfect hedges against your mortgage rates, unless the product directly relates to mortgage rates. General interest rates will only be a proxy for mortgage rates. (2) There is additional risk in taking this type of position. Taking a short position / trading on a margin requires you to make ongoing payments to the broker in the event that your position loses money. Theoretically those losses would be offset by inherent gains in the future, if mortgage rates stay low / go lower, but that offset isn't in your plan for 5 years. (3) 5 years may be too long of a timeline for you to accurately time the maturity of your 'hedge' position. If you end up moving in 7 years, then changes in rates between 2022-2024 might mean you lose on both your 'hedge' position and your mortgage rates. (4) Taking on a position like this will tie up your capital - either because you are directly buying an asset you believe will offset growing interest rates, or because you are taking on a margin account for a short position (preventing you from using a margin account for other investments, to the extent you 'max out' your margin limit). I doubt any of these solutions will be desirable to an individual looking to mitigate interest rate risk, because of the additional risks it creates, but it may help you see this idea in another light.", "title": "" }, { "docid": "d5469858d8cfd023db94dfea7688ed40", "text": "The major drawback to borrowing to invest (i.e. using leverage) is that your return on investment must be high enough to overcome the cost of finance. The average return on the S&P 500 is about 9.8% (from CNBC) a typical unsecured personal loan will have an interest rate of around 18-36% APR (from NerdWallet). This means that on average you will be paying more interest than you are receiving in returns so are losing money on the margin investment. Sometimes the S&P falls and over those periods you would be paying out interest having lost money so will have a negative return! You may have better credit and so be able to get a lower rate but I don't know your loan terms currently. Secured loans, such as remortgaging your house, will have lower costs but come with more life changing risks. The above assumes that you are getting financing by directly borrowing money, however, it is also possible to trade on margin. This is where you post a proportion of the value that you wish to trade with as collateral against a loan to buy the security. This form of finance is normally used by day traders and other short term holders of stocks. Although the financing costs here are low (I am not charged an interest rate on intraday margin trading) there are very high costs if you exceed the term of the loan. An example is that I am charged a fee if I hold a position overnight and my profits and losses are crystallised at that time. If I am in a losing position at that time the crystallisation process and fee can result in not having enough margin to recover the position and the loss of a potentially profit making position. Additionally if the amount of collateral cash (margin) posted is insufficient to cover the expected losses as calculated by your broker they will initiate a margin call asking for more collateral money. If you do not (or cannot) post this extra margin your losing position will be cashed out and you will take as a loss the total loss at that time. Since the market can change very rapidly, such as in a flash crash, this can result in your losing more money than you had in the first place. As this is essentially a loan you can be bankrupted by this. Overall using leverage to invest magnifies your potential profits but it also magnifies your potential losses. In many cases this magnification could be sufficient to lose you more money than you had originally invested. In addition to magnification you need to consider the cost of finance and that your return over the course of the loan needs to be higher than your cost of finance as well as inflation and other opportunity costs of capital. The S&P 500 is a relatively low volatility market in general so is unlikely to return losses in any given period that will mean that leverage of 1.25 times will take you into losses beyond your own capital investment but it is not impossible. The low level of risk automatically means that your returns are lower and so your cost of capital is likely to be a large proportion of your returns and your returns may not completely cover the cost of capital even when you are making money. The key thing if you are going to trade or invest on leverage is to understand the terms and costs of your leverage and discount them from any returns that you receive before declaring to yourself that you are profitable. It is even more important than usual to know how your positions are doing and whether you are covering your cost of capital when using leverage. It is also very important to know the terms of your leverage in detail, especially what will happen when and if your credit runs out for whatever reason be it the end of the financing period (the length of the loan) or your leverage ratio gets too high. You should also be aware of the costs of closing out the loan early should you need to do so and how to factor that into your investing decisions.", "title": "" }, { "docid": "77b59558c9d957cfd8149d31f8d1c34c", "text": "Disadvantage is that tenant could sue you for something, and in an unfavorable judgement they would have access to your house as property to possess. You could lose the house. Even if you make an LLC to hold the house, they'll either sue you or the LLC and either way you could lose the house. This might be why the landlord is moving to Florida where their house cannot be possessed in a judgement because of the state's strong homestead exemption ;)", "title": "" }, { "docid": "552cf0cf29a72c23f41e4ca40e19724a", "text": "At this time there is one advantage of having a 30 year loan right now over a 15 year loan. The down side is you will be paying 1% higher interest rate. So the question is can you beat 1% on the money you save every month. So Lets say instead of going with 15 year mortgage I get a 30 and put the $200 monthly difference in lets say the DIA fund. Will I make more on that money than the interest I am losing? My answer is probably yes. Plus lets factor in inflation. If we have any high inflation for a few years in the middle of that 30 not only with the true value of what you owe go down but the interest you can make in the bank could be higher than the 4% you are paying for your 30 year loan. Just a risk reward thing I think more people should consider.", "title": "" }, { "docid": "75fe4e68887941daac5a00d26e9a3c06", "text": "Assumptions 1 & 2 are correct. Plus you will improve on credit score. The only disadvantage is if you get lax about it and overspend beyond your limit ... Plus a small risk of fraud of card transactions ...", "title": "" }, { "docid": "ea6705d66b1d82c46a23d71d6c73fe2f", "text": "If you don't carry a balance, there is no disadvantage. Merchants pay less for their in-house credit, so there are often incentives for you to use the store card. The perils of opening a credit card hurting your credit score are way overblown in general, if you have good to excellent credit. If you have excellent credit, there is no material effect on your ability to borrow. You'll get knocked down a few points when you open the card, but as long as you're not on a credit application frenzy there isn't an issue.", "title": "" }, { "docid": "533546a8bd52ff06c852c9289bb0573c", "text": "\"Banks are currently a lot less open to 'creative financing' than they were a few years ago, but you may still be able to take advantage of the tactic of splitting the loan into two parts, a smaller 'second mortgage' sometimes called a 'purchase money second' at a slightly higher interest rate for around 15-20% of the value, and the remaining in a conventional mortgage. Since this tactic has been around for a long time, it's not quite in the category of the shenanegans they were pulling a few years back, so has a lot more potential to still be an option. I did this in for my first house in '93 and again in '99 when I moved to a larger home after getting married. It allowed me to get into both houses with less than 20% down and not pay PMI. This way neither loan is above 80% so you don't have to pay PMI. The interest on the second loan will be higher, but usually only a few percent, and is thus usually a fraction of what you were paying for the PMI. (and it's deductible from your taxes) If you've been making your payments on time and have a good credit rating, then you might be able to find someone who would offer you such a deal. You might even be able to get a rate for your primary that is down in the low 4's depending on where rates are today and what your credit rating is like. If you can get the main loan low enough, even if the other is like say 7%, your blended rate may still be right around 5% If you can find a deal like this, it's also great material to use to negotiate with your current lender \"\"either help me get the PMI off this loan or I'm going to refinance.\"\" Then you can compare what they will offer you with what you can get in a refinance and decide what makes the most sense for you. On word of warning, when refinancing, do NOT get sucked into an adjustable rate mortgage. If you are finding life 'tight' right now with house payments and all, the an ARM could be highly seductive since they often offer a very low initial rate.. however then invariably adjust upwards, and you could suddenly find yourself with a monster payment far larger than what you have now. With low rates where they are, getting a conventional fixed rate loan (or loans in the case of the tactic being discussed here) is the way to go.\"", "title": "" }, { "docid": "1e78a7689dc55077eb13c694a60c5654", "text": "\"When you say \"\"apartment\"\" I take it you mean \"\"condo\"\", as you're talking about buying. Right or no? A condo is generally cheaper to buy than a house of equal size and coondition, but they you have to pay condo fees forever. So you're paying less up front but you have an ongoing expense. With a condo, the condo association normally does exterior maintenance, so it's not your problem. Find out exactly what's your responsibility and what's theirs, but you typically don't have to worry about maintaining the parking areas, you have less if any grass to mow, you don't have to deal with roof or outside walls, etc. Of course you're paying for all this through your condo fees. There are two advantages to getting a shorter term loan: Because you owe the money for less time, each percentage point of interest is less total cash. 1% time 15 years versus 1% times 30 years or whatever. Also, you can usually get a lower rate on a shorter term loan because there's less risk to the bank: they only have to worry about where interest rates might go for 15 years instead of 30 years. So even if you know that you will sell the house and pay off the loan in 10 years, you'll usually pay less with a 15 year loan than a 30 year loan because of the lower rate. The catch to a shorter-term loan is that the monthly payments are higher. If you can't afford the monthly payment, then any advantages are just hypothetical. Typically if you have less than a 20% down payment, you have to pay mortgage insurance. So if you can manage 20% down, do it, it saves you a bundle. Every extra dollar of down payment is that much less that you're paying in interest. You want to keep an emergency fund so I wouldn't put every spare dime I had into a down payment if I could avoid it, but you want the biggest down payment you can manage. (Well, one can debate whether its better to use spare cash to invest in the stock market or some other investment rather than paying down the mortgage. Whole different question.) \"\"I dont think its a good idea to make any principal payments as I would probably loose them when I would want to sell the house and pay off the mortgage\"\" I'm not sure what you're thinking there. Any extra principle payments that you make, you'll get back when you sell the house. I mean, suppose you buy a house for $100,000, over the time you own it you pay $30,000 in principle (between regular payments and any extra payments), and then you sell it for $120,000. So out of that $120,000 you'll have to pay off the $70,000 balance remaining on the loan, leaving $50,000 to pay other expenses and whatever is left goes in your pocket. Scenario 2, you buy the house for $100,000, pay $40,000 in principle, and sell for $120,000. So now you subtract $60,000 from the $120,000 leaving $60,000. You put in an extra $10,000, but you get it back when you sell. Whether you make or lose money on the house, whatever extra principle you put in, you'll get back at sale time in terms of less money that will have to go to pay the remaining principle on the mortgage.\"", "title": "" }, { "docid": "ae4a1abb765f600dff454184a76b5944", "text": "From my experience and friends' experiences, I can say that there are advantages and disadvantages for paying off your mortgage quickly. Basically, it depends on these factors: the type of the mortgage, its interest rate, your financial stability, your skills in making investments and other outside factors, such as inflation, liquidity, oppurtunity cost, etc. Paying it off means you save on interest ratings, you decrease investment risks and your investment rates are taxable. Disadvantages are that you cannot use this money for investing, you cannot use this money for tax deductions and that in a state of inflation, not paying it off in advance could save you a lot of money. However, I always recommend to read some more on websites that deal with mortgages, and speak with the mortgage expert in your bank.Just acquire enough information to make a good assessment. An interesting article on this topic - The Advantages and Disadvantages of Paying Off Your Mortgage", "title": "" }, { "docid": "d30d9944ffb350a939e480f136721847", "text": "Will having a lower credit limit, which I will still never reach, negatively impact my ability to get a mortgage in future? This would increase your utilization, the percentage of your total available credit that you use at any one time. Because it decreases the divisor, your total available credit, while not changing the dividend, the amount of your credit that you use. In the United States, you generally want utilization to be between 8% and 30%. So if this increases your utilization, it could hurt your credit score (or if your utilization is low enough, possibly help it). I do not know if the rule is the same in the United Kingdom or not, but this site claims that it is at least similar. 22% is an OK utilization, assuming you have no other debt. But a utilization of 17% is closer to 8% and may be better. It may be worth calling them to keep your credit limit where it is if they don't ask too much from you.", "title": "" }, { "docid": "ec0dddc2268c033816cb2cfd2c347cbb", "text": "The interest that you are proposing to pay your MIL is actually quite low compared to even extremely conservative investing which easily earns 7% or more with quantifiable low risk. You claim that it would be no risk, but what would happen if you lost your job? The risk she faces is more or less exactly what a bank would experience while giving the loan, or in other words it is pretty much whatever your credit score says. Even worse, she does not have a large pool of investments to distribute this risk like a bank would. Making loans this large in a family situation is a recipe for disaster. Taking a huge risk with the relationship your wife has with her mother over three points of interest is exceptionally unwise. Are these private or federal student loans? Federal student loan debt is some of the safest to carry due to its income based repayment plans and eventual loan forgiveness after 25 years. Have you investigated income based repayment options?", "title": "" } ]	fiqa
169fa155dec2495a27bc13aae160c171	Is it adventageous to expedite my wedding before the new year for tax savings?	[ { "docid": "1f33923b63e20731cd99a87dc94d3cc1", "text": "You are correct. If you get married by December 31, you will file as married for this year (Married Filing Jointly or Married Filing Separately) instead of Single. That could indeed save you some amount of taxes, if your situation is as you described. Some people do plan their date of marriage in such a way to optimize tax savings. Whether your marriage date should be set in such a way is your personal decision.", "title": "" }, { "docid": "839bc77afe0b3e79ea541157edd5018f", "text": "\"Yes on taxes. It depends on the other point. As you already see from Ben's comment, if you're both very Western in your culture, you may want to consider Ben's advice because while you will save money, it may not be considered a healthy way to start a relationship. Western culture tends to see marriage as more of a \"\"do it for love\"\" whereas other cultures may view marriage more pragmatically and take economics and finance as a major consideration. For instance, a friend of mine married his spouse and it was 100% pragmatic - considering taxes and laws, driving most of his family insane because \"\"it doesn't sound very loving\"\" (these were the exact words). Unfortunately, this created tension later on because family on both sides kept telling both of them that the other didn't love the partner and they used how their marriage started as proof. As surprising as it is to me (non-Western), many Americans are horrified at people marrying at the JOP or other pragmatic ways, even if it saves them thousands. Answering questions about relationships is very difficult because often the issue is less about money and more about culture. If you're both from pragmatic cultures where economics and finance weigh strongly and you don't see possible issues with family (and really be honest on this point), then consider the financial advantages.\"", "title": "" } ]	[ { "docid": "b239ecbe22ac4293f7f0df722ed82b8e", "text": "You cannot deduct. Even if you could, unless you also hold the mortgage, it's unlikely that you would have sufficient deductions to exceed the standard deduction for a married couple.", "title": "" }, { "docid": "d648a09e6189cf33a897ab01a72be5fa", "text": "Not a financially sound decision in my humble opinion. Basically, you are prepaying your taxes and the only reason you want to do that is if you don't have the discipine to save that money for when it is time to pay next year (assuming you will have to).", "title": "" }, { "docid": "900adb9bbdf3136da55ded446a22ad2b", "text": "\"There is no simple rule like \"\"you can/can't spend more/less than $X per person.\"\" Instead there is a reasonableness test. There is such a thing as an audit of just your travel and entertainment expenses - I know because I've had one for my Ontario corporation. I've deducted company Christmas parties, and going-away dinners for departing employees, without incident. (You know, I presume, about only deducting half of certain expenses?) If the reason for the entertainment is to acquire or keep either employees or clients, there shouldn't be a problem. Things are slightly trickier with very small companies. Microsoft can send an entire team to Hawaii, with their families, as a reward at the end of a tough project, and deduct it. You probably can't send yourself as a similar reward. If your party is strictly for your neighbours, personal friends, and close family, with no clients, potential clients, employees, potential employees, suppliers, or potential suppliers in attendance, then no, don't deduct it. If you imagine yourself telling an auditor why you threw the party and why the business funded it, you'll know whether it's ok to do it or not.\"", "title": "" }, { "docid": "0e1bfb6281bc518b30d2f31adac17e93", "text": "\"Does your company offer a Medical Savings Account? That can allow you to reduce your taxable income. You normally have to join during \"\"open season\"\". Another option is Medical and Dental Expenses above 7.5% of your adjusted gross income. This is a high hurdle to meet, and only reduces your taxes by the tax rate x the amount your bills exceed 7.5%\"", "title": "" }, { "docid": "2482ee4a00fa06c724e92f2f8d7321d2", "text": "Yes. There are a number of reasons for this, most notably some form of tax credits transfer over from year to year IF you file your taxes, and the CRA will only pay you deductions if all your taxes have been filed. If you don't owe them anything you won't necessarily get in trouble, but don't expect to get any money back from them until you file! Also, while it's probably much too late for this, if you have a partner, you can transfer a certain amount of tax deductions to them, and save them some money. The site is here: http://www.cra-arc.gc.ca/formspubs/t1gnrl/llyrs-eng.html", "title": "" }, { "docid": "96be169c2db8ab9588b647f3b54e964b", "text": "By definition, this is a payroll deduction. There's no mechanism for you to tell the 401(k) administrator that a Jan-15 deposit is to be credited for 2016 instead of 2017. (As is common for IRAs where you do have the 'until tax time' option) If you are paid weekly, semi-monthly, or monthly, 12/31 is a Saturday this year and should leave no ambiguity about the date of your last check. The only unknown for me if if one is paid bi-weekly, and has a check covering 12/25 - 1/7. Payroll/HR will need to answer whether that check is considered all in 2016, all in 2017 or split between the two.", "title": "" }, { "docid": "761274b4d9c73d275e0d25318886e723", "text": "Best consult a CA. There is no clear guideline on this. Some articles do suggest that if engaged and planning to marry, one can transfer money to fiancée without any tax implication.", "title": "" }, { "docid": "105fbbdc7d6044068263a6a89a7e4217", "text": "Graduating from college is probably one of the most fulfilling triumphs you’ll ever achieve in your entire life. However, that joy also brings bigger responsibilities in life that could affect tax time too. This specific time in your life will have a lot to offer and before the winds of change take you to wherever you dream of, here are some advices from [Southbourne Tax Group](http://www.thesouthbournegroup.com/) to make your taxes easier where you can get a refund during filing time and save money as well. If your modified adjusted gross income is below $80,000 and you’re single, up to $2,500 of the interest portion of your student loan payments can be tax deductible, and below $160,000 for married person filing jointly. Job hunting expenses can be tax deductible too but there are exceptions such as expenses involved in your search for a new job in a new career field and working full-time for the first time. Major tax breaks are expected in case you are moving to a new and different city for your first job. Get a jump start on retirement savings with your company’s 401(k). Each year, you can secure up to $18,000 from your income taxes by contributing on one. If you have a family coverage, you could secure $6,750 from contributing to a health savings account in case you are enrolled in a high-deductible health plan. And if you are single, you can secure up to $3,400. Placing your money into a flexible spending account could keep an added $2,600 out of your taxable income. Getting big deductions for business expenses is possible if you are planning to be a freelancer or to be your own boss as a new college graduate. Southbourne Group also advises saving at least 25% of what you’re earning for the IRS. Research more about lifetime learning credit and understand its importance. You can claim up to $2,000 of a tax credit for post-secondary work at eligible educational institutions. This is possible if your adjusted gross income is below $65,000 as a single filer, or below $131,000 as a married person filing jointly. Saving money has a lot of benefits and one of which is cutting your tax bill. If you’re a married person filing jointly and have an adjusted gross income of less than $62,000, you may qualify for the saver’s credit, while for a single filer, it should be below $31,000. That can reduce your tax bill by up to 50% of the first $2,000 if you’re a single filer, or $4,000 if you’re a married person filing jointly you contribute to an eligible retirement plan. Southbourne Tax Group doesn’t want you to overspend on tax software and getting professional help in this regard. The firm suggests using the free packages from trusted tax software companies if your tax situation is quite simple. Get that professional help at Volunteer Income Tax Assistance program, which can help you meet with a pro at little or no cost.", "title": "" }, { "docid": "0dbe615376361cbe5aee13c01dac142b", "text": "\"Hearing somewhere is a level or two worse than \"\"my friend told me.\"\" You need to do some planning to forecast your full year income and tax bill. In general, you should be filing a quarterly form and tax payment. You'll still reconcile the year with an April filing, but if you are looking to save up to pay a huge bill next year, you are looking at the potential of a penalty for under-withholding. The instructions and payment coupons are available at the IRS site. At this point I'm required to offer the following advice - If you are making enough money that this even concerns you, you should consider starting to save for the future. A Solo-401(k) or IRA, or both. Read more on these two accounts and ask separate questions, if you'd like.\"", "title": "" }, { "docid": "326441a0a81ba1ba71dfc6fde4bb36b5", "text": "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.", "title": "" }, { "docid": "f8e65433179d144a0fa508ebc7a70957", "text": "Two points You don't really get the full 10,000 annual interest as tax free income. Well you do, but you would have gotten a substantial amount of that anyway as the standard deduction. ...From the IRS.... Standard deduction The standard deduction for married couples filing a joint return is at $11,900 for 2012. The standard deduction for single individuals and married couples filing separate returns is $5,950 for 2012. The standard deduction for heads of household increases by $50 to $8,700 for 2012. so If you were married it wouldn't even make sense to claim the 10,000 mortgage interest deduction as the standard one is larger. It can make sense to do what you are talking about, but ultimately you have to decide what the effective interest rate on your mortgage is and if you can afford it. For instance. I might have a 5% mortgage. If I am in a 20% tax bracket it effectively is a 4% mortgage to me. Even though I am saving tax money I am still paying effectively 4%. Ultimately the variables are too complex to generalize any hard and fast rules, but it often times does make sense. (You should also be aware that there has been some talk of eliminating or phasing out the mortgage interest deduction as a way to close the deficit and reduce the debt.)", "title": "" }, { "docid": "3a9e090e68efc6a7dd6f60a34be482a9", "text": "As long as your total doesn't exceed the per-year limit, you should be able to deposit after-tax money into your Health Savings Account. Contact the HSA administrator for details. Note that unless your employer sets this up, you'd be sending them after-tax money, which goes in the same category as other non-reimbursed health expenses, so you may not get any immediate tax savings by doing this vs. just spending the money out of pocket. However, once there us enough reserve money in your HSA for you to invest it in the same way a 401k can be invested, it will grow tax-free. So if you're putting in significantly more than you expect to withdraw any time soon, this may still be a worthwhile thing to do. Definitely talk to HR about whether you can still get it set up pre-tax... though most employers don't allow midyear changes unless there has been a significant change in your family (new wife, new kids, that sort of thing).", "title": "" }, { "docid": "f4a4af29e563aa15daf97b16eebf08a5", "text": "It sounds like they want to enter you into a contract in which they are allowed to charge a flat fee for filing contingent on money saving results from a tax review service, paid in full. Like those who answered before I have no legal experience. IRS Circular 230 defines the ethics for tax practitioners and the definition of a tax practitioner is broad enough (effective Aug 2011) to include those who are not EAs, CTRPs, CPAs as long as the person is compensated to prepare or assist in a substantial part of the preparation of a document pertaining to a taxpayer's liability for submission to the IRS. Section 10.27 Fees: (b)(2)A practitioner may charge a contingent fee for services rendered in connection with the Service’s examination of, or challenge to — (i) An original tax return Paragraph c defines what a contingent fee is basically a fee that depends on the specific result attained, in this case saving you money. In the section above 'Service's examination' is an audit in plain speak. If your 2013 return has not been submitted and you have not received a written notice for examination, H&R block can not charge a contingent fee, period. Furthermore, H&R Block cannot hold your tax documents, upon your request, they must return all original tax documents like W2s and 1099s ( they don't have to return the tax forms an employee prepared). Like I said above, I'm not a lawyer, unless I missed a key detail, I don't believe they were permitted to charge you a filing fee contingent on saving you money.", "title": "" }, { "docid": "55d0352e77cbf9feac3c222d54381206", "text": "Daniel, first of all, I'm jealous of your predicament. That said, I think you've gotten some good advice already, so I won't repeat what's been said. But I will throw out a few ideas that haven't come up. My first thought is that you may be underestimating upcoming expenses. It sounds like your current expenses are low, and that's great! I'm impressed that you're living below your means, and looking for the best way to use your extra cash. But you may not be thinking of a few things. You have a girlfriend, and maybe your relationship isn't such that you are planning a wedding quite yet. But, regardless of whether your current girlfriend is your future life partner or not, if you think marriage may be in your future at all, you'll save yourself a lot of stress if you've got some savings for a wedding in place before you're ready to commit. Next, what are you driving? If it's a good car that you expect to last you another 10 years, you're probably ok right now. But if you may need to replace your vehicle in the next few years, start saving now and you may be able to buy it outright. (I expect your interest rate on financing a car would be higher than your current student loan rates, so I would save for a car before paying down loans with such beautiful rates.) A house has already been discussed, and there was also mention of additional education, and both of those require a solid financial plan that begins far in advance. In summary, I think you need a lot more than $5K in savings. Sure, have some fun, and take advantage of opportunities to travel, etc, as they come along, but if you're able to bump your savings by $500 to $1000/month, I think you'll really be glad you did. When it comes time for a new car, or you find you're ready to settle down, it will be nice to have somewhere to draw from, and if there's only $5K in your savings, you may come to regret choices you made when you were 22.", "title": "" }, { "docid": "c2355fd290d4917d14f57a1c73572a49", "text": "Not as you suggest. Since you are sole prop, you are taxed on a cash basis. Within reason, you can prepay vendors - so temp to hire through an agency might appear more attractive than direct hire. But there needs to be a justification other than avoidance of taxes. So pre-paying 100k on 12/25 would look fishy as fuck. Plus your quality of candidate will suffer if you need anything other than low skill labor. Look at your other fully deductible expenses - anything you can prepay-prepay. For example, I set my liability insurance renewal January 15 to provide optionality. But it just shifts one year into another .. Means fuckall if you are in the same marginal bracket next year. The IRS has also relaxed depreciation on office technology. Computers are now fully deductible rather than being capitalized. @ 500k revenue you should have a CPA and legal counsel. Simply incorporating isn't tax magic. The purpose is to limit yourersonal liability, not a tax shelter - but shitty things happen once you have employees, don't create the potential for a disgruntled employee lawsuit put your shelter at risk of court judgment. That said, assuming you aren't dumping a hypothetical on the Internet, congrats - for all the headaches, having employees is the ultimate leverage .. it's like a xerox machine for your labor (including loss of fidelity with each copy) ..", "title": "" } ]	fiqa
0912ef511b3d1af8c10f0509d9eb8f2e	How can this be enough to fund a scholarship in perpetuity?	[ { "docid": "c4ec080f48901e5d1591782ca087bcba", "text": "The Trinity study looked at 'safe' withdrawal rates from retirement portfolios. They found it was safe to withdraw 4% of a portfolio consisting of stocks and bonds. I cannot immediately find exactly what specific investment allocations they used, but note that they found a portfolio consisting largely of stocks would allow for the withdrawal of 3% - 4% and still keep up with inflation. In this case, if you are able to fund $30,000, the study claims it would be safe to withdraw $900 - $1200 a year (that is, pay out as scholarships) while allowing the scholarship to grow sufficiently to cover inflation, and that this should work in perpetuity. My guess is that they invest such scholarship funds in a fairly aggressive portfolio. Most likely, they choose something along these lines: 70 - 80% stocks and 20 - 30% bonds. This is probably more risky than you'd want to take, but should give higher returns than a more conservative portfolio of perhaps 50 - 60% stocks, 40 - 50% bonds, over the long term. Just a regular, interest-bearing savings account isn't going to be enough. They almost never even keep up with inflation. Yes, if the stock market or the bond market takes a hit, the investment will suffer. But over the long term, it should more than recover the lost capital. Such scholarships care far more about the very long term and can weather a few years of bad returns. This is roughly similar to retirement planning. If you expect to be retired for, say, 10 years, you won't worry too much about pulling out your retirement funds. But it's quite possible to retire early (say, at 40) and plan for an infinite retirement. You just need a lot more money to do so. $3 million, invested appropriately, should allow you to pull out approximately $90,000 a year (adjusted upward for inflation) forever. I leave the specifics of how to come up with $3 million as an exercise for the reader. :) As an aside, there's a Memorial and Traffic Safety Fund which (kindly and gently) solicited a $10,000 donation after my wife was killed in a motor vehicle accident. That would have provided annual donations in her name, in perpetuity. This shows you don't need $30,000 to set up a scholarship or a fund. I chose to go another way, but it was an option I seriously considered. Edit: The Trinity study actually only looked at a 30 year withdrawal period. So long as the investment wasn't exhausted within 30 years, it was considered a success. The Trinity study has also been criticised when it comes to retirement. Nevertheless, there's some withdrawal rate at which point your investment is expected to last forever. It just may be slightly smaller than 3-4% per year.", "title": "" }, { "docid": "71416857365a4d4aa2f956807b17fbf4", "text": "Some historical and mathematical insights as a complement to existing answers. History. I found it astonishing that already in Ancient Roman they investigated the issue of perpetuity of 30'000 (almost). Columella writes in De re rustica (3, 3, 7–11.) in 1-st century AD about a perpetuity of 32480 sesterces principal under 6% p.a. resulting in 1950 sesterces annual payment. And if the husbandman would enter this amount as a debt against his vineyards just as a moneylender does with a debtor, so that the owner may realize the aforementioned six per cent. interest on that total as a perpetual annuity, he should take in 1950 sesterces every year. By this reckoning the return on seven iugerum, even according to the opinion of Graecinus, exceeds the interest on 32'480 sesterces. Math. If we fix a scholarship at 1'000 a year, then it's clear that it could be paid out infinitely if we could achieve 3.33% p.a. on it. On the other side, with 0% we'll spend out the endowment in 30 years. Thus, having the interest rate between 0% and 3.33% p.a. we could vary the life of endowment between 30 years and infinity. Just a few numbers in between: under 1%, it would be ~36 years, under 2% ~46 years, under 3% ~78 years (however, 1000$ in 78 years could be less than 10$ today). Conclusion: to keep it perpetual either the fund's yield must be at the level of scholarship, or re-adjust the amount of scholarship depending on fund achievement, or redefine the notion of perpetuity (like 50 years is approximately infinite for our purpose).", "title": "" }, { "docid": "9847e66640bcf30db81505f3092a1c1f", "text": "\"What's the value of the scholarship, and is it administered by itself or by the university? If by itself, the financial return discussed above drives. If by the university, they create the tuition, so it gets more interesting. If this is something that is administered and backstopped by the university, then keep in mind that while it may be named the \"\"John Doe Memorial Scholarship\"\" with $30000 in it's account under the endowment, the university overall is likely to cut some number of students' tuition in financial aid packages anyway. Let's say they substitute a generic tuition adjustment in past years with this happens-to-be-named \"\"John Doe Memorial Scholarship\"\" moving forward: the university can do this as long as they are not constrained in pricing power by laws and financial aid customs. There's the finance answer, and there's the fact that a university can create a \"\"coupon\"\" indefinitely (Similar in concept to the price discrimination where Proctor and Gamble can launch a new flavor of Tide at a high price to maintain the market position, and flood marketing channels with coupons) Also the university might find it to be an inexpensive benefit to the faculty to create a ceremony around a valued, deceased professor; collecting funds from other professors or staff to partially pay for it at finance price or even a slight loss.\"", "title": "" } ]	[ { "docid": "79bd1f7fa03d24bd2c00af21a84a8ba9", "text": "isn't the answer in the question? it says the company starts officially NEXT year, yet it is asking for the net present value...i.e what that project is worth today. it could be that funds for that particular project may not be necessary for another year, but there may be other projects to evaluate against today.", "title": "" }, { "docid": "79b730bea961def6987f5d292bed6251", "text": "Let P denote the amount of the investment, R the rate of return and I the rate of inflation. For simplicity, assume that the payment p is made annually right after the return has been earned. Thus, at the end if the year, the investment P has increased to P(1+R) and p is returned as the annuity payment. If I = 0, the entire return can be paid out as the payment, and thus p = PR. That is, at the end of the year, when the dust settles after the return PR has been collected and paid out as the annuity payment, P is again available at the beginning of the next year to earn return at rate R. We have P(1+R) - p = P If I > 0, then at the end of the year, after the dust settles, we cannot afford to have only P available as the investment for next year. Next year's payment must be p(1+I) and so we need a larger investment since the rate of return is fixed. How much larger? Well, if the investment at the beginning of next year is P(1+I), it will earn exactly enough additional money to pay out the increased payment for next year, and have enough left over to help towards future increases in payments. (Note that we are assuming that R > I. If R < I, a perpetuity cannot be created.) Thus, suppose that we choose p such that P(1+R) - p = P(1+I) Multiplying this equation by (1+I), we have [P(1+I)](1+R) - [p(1+I)] = P(1+I)^2 In words, at the start of next year, the investment is P(1+I) and the return less the increased payout of p(1+I) leaves an investment of P(1+I)^2 for the following year. Each year, the payment and the amount to be invested for the following year increase by a factor of (1+I). Solving P(1+R) - p = P(1+I) for p, we get p = P(R-I) as the initial perpetuity payment and the payment increases by a factor (1+I) each year. The initial investment is P and it also increases by a factor of (1+I) each year. In later years, the investment is P(1+I)^n at the start of the year, the payment is p(1+I)^n and the amount invested for the next year is P(1+I)^{n+1}. This is the same result as obtained by the OP but written in terms that I can understand, that is, without the financial jargon about discount rates, gradients, PV, FV and the like.", "title": "" }, { "docid": "f3c332fbce2b61f308b02c595062977e", "text": "Ok so this is the best information I could get! It is a guarantee from a financial institution that payment will be made for items or services once certain requirements are met. Let me know if this helps! I'll try to get more info in the meantime.", "title": "" }, { "docid": "70871e94302038a1d3b12f2603dde00f", "text": "\"It appears you can elect to classify some or all of your scholarship money as taxable. If you do this, you would be deemed to have used the scholarship funds for non-deductible purposes (e.g., room and board), and you could be eligible to claim the American opportunity credit based on the money you used to pay for the tuition out of your own pocket. I found this option in the section of Publication 970 about \"\"Coordination with Pell grants and other scholarships\"\", specifically example 3: The facts are the same as in Example 2—Scholarship excluded from income [i.e., Bill receives a $5600 scholarship and paid $5600 for tuition]. If, unlike Example 2, Bill includes $4,000 of the scholarship in income, he will be deemed to have used that amount to pay for room and board. The remaining $1,600 of the $5,600 scholarship will reduce his qualified education expenses and his adjusted qualified education expenses will be $4,000. Bill's AGI will increase to $34,000, his taxable income will increase to $24,250, and his tax before credits will increase to $3,199. Based on his adjusted qualified education expenses of $4,000, Bill would be able to claim an American opportunity tax credit of $2,500 and his tax after credits would be $699. You can only reclassify income in this way to the extent that your scholarship allows you to use that money for nonqualified expenses (such as room and board). You should carefully check the terms of the scholarship to determine whether it allows this. The brief paragraph you cite from the Palmetto fellowship document is not totally clear on this point (at least to my eye). You might want to ask the fellowship administrators if there are restrictions on how they money may be used. In addition, I would be cautious about attempting to do this unless you actually did pay for the nonqualified expenses yourself, so you can treat the money as fungible. If, for instance, your parents paid for your room and board, it's not clear whether you could legitimately claim that you used the scholarship money to pay for that, since you didn't pay for it at all (although in this case your parents could possibly be able to claim the AOC themselves). I mention this because you say in your question that you \"\"only used the scholarship for tuition and fees\"\". I'm not sure how exactly you meant that, but it seems from the example cited above that, in order to claim the scholarship as taxable income, you have to actually have nonqualified expenses which you can say you paid for with the scholarship. (Also, of course, you had to actually receive the money yourself. If the scholarship money was given directly to your school as payment of tuition, then you never had any ability to use it for anything else.)\"", "title": "" }, { "docid": "0b418207b6cf9316c2b7b5d6ebf0b31c", "text": "\"There is no simple answer to your question. It depends on many things, perhaps most notably what college your daughter ends up going to and what kind of aid you hope to receive. Your daughter will probably fill out the FAFSA as part of her financial aid application. Here is one discussion of what parental assets \"\"count\"\" towards the Expected Family Contribution on the FAFSA. You can find many similar pages by googling. Retirement accounts and primary residence are notable categories that do not count. So, if you were looking to reduce your \"\"apparent\"\" assets for aid purposes, dumping money into your mortgage or retirement account is a possibility. However, you should be cautious when doing this type of gaming, because it's not always clear exactly how it will affect financial aid. For one thing, \"\"financial aid\"\" includes both grants and loans. Everyone wants grants, but sometimes increasing your \"\"eligibility\"\" may just make you (or your daughter) eligible for larger loans, which may not be so great. Also, each college has its own system for allocating financial aid. Individual schools may ask for more detailed information (such as the CSS Profile). So strategies for minimizing your apparent assets that work for one school may not work for others. Some elite schools with large endowments have generous aid policies that allow even families with sizable incomes to pay little or nothing (e.g., Stanford waives tuition for most families with incomes under $125,000). You should probably research the financial aid policies of schools your daughter is interested in. It can be helpful to talk to financial aid advisors at colleges, as well as high school counselors, not to mention general financial advisors if you really want to start getting technical about what assets to move around. Needless to say, it all begins with talking with your daughter about her thoughts on where to go.\"", "title": "" }, { "docid": "3841186b573af2ba2dc5c2085df4e93e", "text": "\"First, don't save anything in a tax sheltered vehicle. You will be paying so little tax that there will be essentially no benefit to making the contributions, and you'll pay tax when they come out. Tax free compounding for 40 years is terrific, but start that after you're earning more than a stipend. Second, most people recommend having a month's expenses readily available for emergencies. For you, that would be $1500. If you put $100 a month aside, it will take over a year to have your emergency fund. It's easy to argue that you should pick a higher pace, so as to have your emergency money in place sooner. However, the \"\"emergencies\"\" usually cited are things like home repair, car repair, needing to replace your car, and so on. Since you are renting your home and don't have a car, these emergencies aren't going to happen to you. Ask yourself, if your home was destroyed, and you had to replace all your clothes and possessions (including furniture), how much would you need? (Keep in mind any insurance you have.) The only emergency expense I can't guess about is health costs, because I live in Canada. I would be tempted to tell you to get a credit card with a $2000 limit and consider that your emergency fund, just because grad student living is so tight to the bone (been there, and 25 years ago I had $1200 a month, so it must be harder for you now.) If you do manage to save up $1500, and you've really been pinching to do that (walking instead of taking the bus, staying on campus hungry instead of popping out to buy food) let up on yourself when you hit the target. Delaying your graduation by a few months because you're not mentally sharp due to hunger or tiredness will be a far bigger economic hit than not having saved $200 a month for 2 or 3 years. The former is 3-6 months of your new salary, the latter 5-7K. You know what you're likely to earn when you graduate, right?\"", "title": "" }, { "docid": "b434b7b7a2e750295a18e50334555552", "text": "If you have children in a university institution, then your annual salary is reported via financial aid forms. The small raise could be the difference between full tuition covered and only half tuition covered.", "title": "" }, { "docid": "4386006583bf590ccf6ce15b61c555f5", "text": "The average of a dozen good answers is close to what would be right, the wisdom of crowds. But any one answer will be skewed by one's own opinions. The question is missing too much detail. I look at $400K as $16K/yr of ongoing withdrawals. How much do you make now? When the kids are all in school full time, can your wife work? $400K seems on the low side to me, especially with 3 kids. How much have you saved for college? The $150K for your wife is also a bit low. Without a long tangent on the monetary value of the stay at home spouse, what will you spent on childcare if she passes? Term life also has a expiration date. When my daughter was born, my wife and I got 20 year term. She is now 16, her college account fully funded, and we are semi-retired. The need for insurance is over. If one of us dies, the survivor doesn't need this big of a house, and will have more than they need to be comfortable in a downsized one. My belief is that the term value should bridge the gap to the kids getting through college and the spouse getting resettled. Too much less, I'd have left my wife at risk. Too much more, she'd be better off if I were dead. (I say that half joking, the insurance company will often limit the size policy to something reasonable.)", "title": "" }, { "docid": "91387448bed5117c2724195994ae32b7", "text": "As more people earn it, the value will dilute to some degree. However, I think for some parts of finance, the charter will retain usefulness. I mean, college degrees are extremely diluted, but they're still seen as a necessary requirement. I see that happening for PM type of roles. Clearly anywhere it isn't useful now won't see appreciation in that later.", "title": "" }, { "docid": "b3d0d88450f4b4c6e9b9ff492aefca89", "text": "So what if someone gets approved for a larger credit card balance and gambles it away? There's nothing tangible left except for maybe some norepinephrine left in your system... Honestly if the student loan system dried up for anything in like Liberal Arts, universities would scramble to fill positions in their schools and maybe tuitions would come down to an affordable level. Right now it's a joke. People are willing to pay for school and living on res when they get qualified for 100k in student loans. If the student loans weren't there perhaps they'd live with their parents and work to support their education. Tuitions should fall to affordable levels if that were the case.", "title": "" }, { "docid": "bc318b71525376c0e18cccb46902d65b", "text": "Thanks for that great explanation. I figured you were referring to FAFSA but wanted to be sure. I'm just having my first so i'm trying to plan for the future but I probably won't be paying for college either, it seems like trade schools may be the better deal nowadays.", "title": "" }, { "docid": "9f38bd0a46bf85a3c29ba74acc1ff4e3", "text": "\"Sometimes an assumptions is so fundamentally flawed that it essentially destroys the relevance and validity of any modelling outputs. \"\"Obviously, we're assuming the company can pay it back\"\" Is one of those assumptions. The person gets a notes stating that they will get $525 'IN ONE YEAR' You need to divide $525/(1+Cost of Capital)^n n being the number of periods to find out what the note will be worth today. Google 'Present Value of an Annuity' to deal with debt that is more complex than you have $500 now and give me $525 in a year...\"", "title": "" }, { "docid": "39759f3a694b4c798f6717f6d8314396", "text": "\"This is a tricky question, because the financial aid system can create odd incentives. Good schools tend to price themselves above and beyond any reasonable middle-class ability to save and then offer financial aid, much of it in the form of internal \"\"grants\"\" or \"\"loans\"\". If you think about it, the internal grant is more of a discount than a grant since no money need have ever existed to \"\"fund\"\" the grant. The actual price to the parents is based on financial aid paperwork and related rules, perhaps forming a college price-setting cartel. It is these rules that need to be considered when creating a savings plan. Suppose it is $50k/year to send your kids to the best school admitting them. Thats $200k for the 4 years. Suppose you had $50k now to save instead of $10K, and are wondering whether to put it in your son's college savings (whether or not you can do so in a tax advantaged way) or to pay down the mortgage. If you put it in your kids savings, and the $50k becomes $75k over time, that $75k will be used up in a year and a half as the financial aid system will suck it dry first before offering you much help. On the other hand, if you put the $50k on paying down the mortgage [provided the mortgage is \"\"healthy\"\" not upside down], your house payment will still be the same when your kids go to college. The financial aid calculations will consider that the kid has no savings, and allocate a \"\"grant\"\" and some loans the first year and a parental portion that you might be able to tap with a home equity loan or work overtime. Generally, you should also be encouraging your kids to excel and perhaps obtain academic scholarships or at least obtain some great opportunities. A large college savings fund might be as counterproductive as a zero fund. They shouldn't be expecting to breeze through some party school with a nice pad and car, homework assistance, and beer money. Unless they are good at a sport, like maybe football -- in which case you won't need to be the provider. It is not obvious how much the optimal ESA amount is. It might not be $0. Saving like crazy in there probably isn't the best thing to do, either.\"", "title": "" }, { "docid": "02fc74037147deb4142ef946e110d69c", "text": "I worked at a for-profit school, one associated with Full Sail University. I can say this from experience: -Most of the people receiving stipends (loan money from federal or private sources) are black and from low-income neighborhoods. -In SOME instances the people enrolled in the school were obviously mentally ill and very likely homeless. -Most of the people receiving stipends either drop out themselves or are dropped for poor academic progress and attendance. This is after a hefty debt is built up. -The school goes to extraordinary lengths to enroll military vets. I can't say anything about admission tactics other than they check to see if you have a high school degree. Personally I would never go to these type of schools.", "title": "" }, { "docid": "57d81d7a88f068400691d7daa7e77615", "text": "I think it's interesting to look at bitcoin not as a get-rich quick scheme, but rather a tool to study socio-economics through looking how areas in developing countries view this type of model (and the entire world at large of course). The entire crypto-coin scene has a variety of different algorithms which replicate different monetary policies to promote the most value and high functioning societies. For example: dogecoin was meant as a quick laugh but has now developed into an inflation based coin to encourage high velocity through tipping. This micropayment model and friendly community hope to gain adoption through spreading it far and wide. Bitcoin looks at the properties that made gold a useful state-less trade asset and tried to adapt that to the web. It solved traditional problems which made this impossible before without a central party and thus now experiments and studies can be done. Who knows what happens. Gavin, the chief engineer of the bitcoin core development group says, > I still say that it's an experiment, and the whole thing could implode. Coming from the guy who is literally making the edits to the code, I think it's safe to take off the wary of it being used to scam people and instead look at it from a more academic light to see what could be gleaned from bitcoin to improve current institutions.", "title": "" } ]	fiqa
cc185138602ba83216cb57ead5dfcd4e	Sell your home and invest in growth stock mutual fund	[ { "docid": "ce7aaa5ab63eb5f36f70ce6968d53cd8", "text": "It wouldn't surprise me to see a country's return to show Inflation + 2-4%, on average. The members of this board are from all over the world, but those in a low inflation country, as the US,Canada, and Australia are right now, would be used to a long term return of 8-10%, with sub 2% inflation. In your case, the 20% return is looking backwards, hindsight, and not a guarantee. Your country's 10 year bonds are just under 10%. The difference between the 10% gov bond and the 20% market return reflects the difference between a 'guaranteed' return vs a risky one. Stocks and homes have different return profiles over the decades. A home tends to cost what some hour's pay per month can afford to finance. (To explain - In the US, the median home cost will center around what the median earner can finance with about a week's pay per month. This is my own observation, and it tends to be correct in the long term. When median homes are too high or low compared to this, they must tend back toward equilibrium.) Your home will grow in value according to my thesis, but an investment home has both value that can rise or fall, as well as the monthly rent. This provides total return as a stock had growth and dividends. Regardless of country, I can't predict the future, only point out a potential flaw in your plan.", "title": "" }, { "docid": "0684a7f985a97f821bc5a971b0f1a34d", "text": "The 20%+ returns you have observed in the mutual funds are not free money. They are compensation for the risk associated with owning those funds. Given the extraordinarily high returns you are seeing I would expect extremely high risk. This means there is a good possibility of extreme losses at some point. By putting a lot of money in those mutual funds you are taking a gamble that may or may not pay off. Assuming what your friend is paying you for rent is fair, you are not losing money on your house relative to the market. You are earning less because you are invested in a less risky asset. If you want a higher return, you should borrow some money (or sell your house) and invest in the market. You may make more money that way. But if you do that, you will have a larger chance of losing a lot of money at some point. That's the way risk works. No one can promise a 20% return on a risky asset, they can only hint that it may do in the future what it did in the past. A reasonable approach to investment is to get invested in lots of different things: stocks, bonds, real estate. If you are afraid of risk and willing to earn less, keep more money in safe assets. If you are willing to take big risks in exchange for the possibility of high returns, move more assets into risky stuff. If you want extreme returns and are willing to take extreme risk, borrow and use the money to invest in risky assets. As you look over investment options, remember that anything that pays high returns most likely has high risk as well.", "title": "" } ]	[ { "docid": "f9e48a11308d97a1a6dc2bc0223e38dd", "text": "Paying $12,000 in lump sumps annually will mean a difference of about $250 in interest vs. paying $1,000 monthly. If front-load the big payment, that saves ~$250 over paying monthly over the year. If you planned to save that money each month and pay it at the end, then it would cost you ~$250 more in mortgage interest. So that's how much money you would have to make with that saved money to offset the cost. Over the life of the loan the choice between the two equates to less than $5,000. If you pay monthly it's easy to calculate that an extra $1,000/month would reduce the loan to 17 years, 3 months. That would give you a savings of ~$400,000 at the cost of paying $207,000 extra during those 17 years. Many people would suggest that you invest the money instead because the annual growth rates of the stock market are well in excess of your 4.375% mortgage. What you decide is up to you and how conservative your investing strategy is.", "title": "" }, { "docid": "aae6aa95ca158a1d7d4a9e369456150d", "text": "\"You are a \"\"strategic\"\" investor, which is to say that you are in the best position to evaluate the deal because you already live there. Others don't have this advantage going in, which is why they might not be inclined to do what you're doing. Your biggest advantage is that you know at least one tenant. In essence, you are your own \"\"tenant\"\" for the top floor You also presumably have a pretty good idea of the neighborhood. These are arguments for owning your own home, although it does get a bit trickier with a second tenant, whom you may not know. Do check credit and references, etc. You might ask the landlord why he wants to sell. Presumably it's because he wants to retire or move, and not a problem with the property. But it does no harm to ask.\"", "title": "" }, { "docid": "a31a9db361a97b55d29f3aaf7dc22cfc", "text": "Other answers are already very good, but I'd like to add one step before taking the advice of the other answers... If you still can, switch to a 15 year mortgage, and figure out what percentage of your take-home pay the new payment is. This is the position taken by Dave Ramsey, and I believe this will give you a better base from which to launch your other goals for two reasons: Since you are then paying it off faster at a base payment, you may then want to take MrChrister's advice but put all extra income toward investments, feeling secure that your house will be paid off much sooner anyway (and at a lower interest rate). Dave's advice isn't for everyone, because he takes a very long-term view. However, in the long-term, it is great advice. See here for more. JoeTaxpayer is right, you will not see anything near guaranteed yearly rates in mutual funds, so make sure they are part of a long-term investing plan. You are not investing your time in learning the short-term stock game, so stay away from it. As long as you are continuing to learn in your own career, you should see very good short-term gains there anyway.", "title": "" }, { "docid": "001ad7f8030aa55b992aab75c2bd3b7d", "text": "This is one way in which the scheme could work: You put your own property (home, car, piece of land) as a collateral and get a loan from a bank. You can also try to use the purchased property as security, but it may be difficult to get 100% loan-to-value. You use the money to buy a property that you expect will rise in value and/or provide rent income that is larger than the mortgage payment. Doing some renovations can help the value rise. You sell the property, pay back the loan and get the profits. If you are fast, you might be able to do this even before the first mortgage payment is due. So yeah, $0 of your own cash invested. But if the property doesn't rise in value, you may end up losing the collateral.", "title": "" }, { "docid": "75f914274e0dd57bcb5f30258ce50a8c", "text": "One estimate is to sell today, estimate the taxes, and determine how much cash you need to set aside over the next 12 months. The is no way to calculate what impact dividends and capital gains the funds will have, because unlike interest they aren't guaranteed. The other complexity is that the funds themselves could drop in value. In that case the dividends and capital gains may not even be enough to get you back to even. I use mutual funds to invest over the long term, with the idea of spending the funds over decades. When needing to save for a short term goal, I use banking products. They are guaranteed not to lose value, and the interest changes are slowerand thus easier to predict.", "title": "" }, { "docid": "e4bf0dcb96ce68979ca1b604142bb2d7", "text": "\"Forget the math's specifics for a moment: here's some principles. Additional housing for a renter gives you returns in the form of money. Additional housing for yourself pays its returns in the form of \"\"here is a nice house, live in it\"\". Which do you need more of? If you don't need the money, get a nicer house for yourself. If you need (or want) the money, get a modest house for yourself and either use the other house as a rental property, or invest the proceeds of its sale in the stock market. But under normal circumstances (++) don't expect that buying more house for yourself is a good way to increase how much money you have. It's not. (++ the exception being during situations where land/housing value rises quickly, and when that rise is not part of a housing bubble which later collapses. Generally long-term housing values tend to be relatively stable; the real returns are from the rent, or what economists call imputed rent when you're occupying it yourself.)\"", "title": "" }, { "docid": "d1472c65dc003b8301b259da45632449", "text": "Have you changed how you handle fund distributions? While it is typical to re-invest the distributions to buy additional shares, this may not make sense if you want to get a little cash to use for the home purchase. While you may already handle this, it isn't mentioned in the question. While it likely won't make a big difference, it could be a useful factor to consider, potentially if you ponder how risky is it having your down payment fluctuate in value from day to day. I'd just think it is more convenient to take the distributions in cash and that way have fewer transactions to report in the following year. Unless you have a working crystal ball, there is no way to definitively predict if the market will be up or down in exactly 2 years from now. Thus, I suggest taking the distributions in cash and investing in something much lower risk like a money market mutual fund.", "title": "" }, { "docid": "7758c3023162cce1343902f8f79088b2", "text": "You don't say why you want to move. Without knowing that, it is hard to recommend a course of action. Anyway... The sequence of events for an ECONOMICAL outcome in a strong market is as follows: (1) You begin looking for a new house (2) You rent storage and put large items into storage (3) You rent an apartment and move into the apartment (4) The house now being empty you can easily do any major cleaning and renovations needed to sell it (5) You sell the house (and keep looking for a new house while you do so). Since the house is empty it will sell a lot more easily than if you are in it. (6) You invest the money you get from selling the house (7) You liquidate your investment and buy the new house that you find. If you are lucky, the market will have declined in the meantime and you will get a good deal on the new house in addition to the money you made on your investment. (8) You move your stuff out of storage into the new house. There are other possibilities that involve losing a lot of money. The sequence of events above will make money for you, possibly a LOT of money.", "title": "" }, { "docid": "2fe8d4d9dc64c2444c8bf4f0f9589930", "text": "In addition to all the good information that JoeTaxpayer has provided, be aware of this. When you sell mutual fund shares, you can, if you choose to do so, tell the mutual fund company which shares you want to sell (e.g. all shares purchased on xx/yy/2010 plus 10 shares out of 23.147 shares purchased on ss/tt/2011 plus...) and pay taxes on the gains/losses on those specific shares. If you do not specify which shares you want sold, the mutual fund company will tell you the gains/losses based on the average cost basis and you can use this information if you like. Note that some of your gains/losses will be short-term gains or losses if you use the average cost basis. Or, you can use the FIFO method (usually resulting in the largest gain) in which the shares are sold in the order in which they were purchased. This usually results in no short-term gains/losses. Just so that you know, most mutual fund companies will link your checking account in your bank to your account with them (a one-time paperwork deal is necessary in which your bank manager's signature is required on the authorization to be sent to the fund company). After that, the connection is nearly as seamless as with your current system. Tell the fund company you want to invest money in a certain mutual fund and to take the money from your linked checking account, and they will take care of it. Sell some shares and they will deposit the money into your linked bank account, and so on. The mutual fund company will not accept instructions from you (or someone purporting to be you) to sell shares and to send the money to Joe Blow (or to Joe Taxpayer for that matter): the proceeds of redemptions go to your checking account or are used to buy shares in other mutual funds offered by the company (called an exchange and not a redemption). Oh, and most fund companies offer automatic investments (as well as automatic redemptions) at fixed time intervals, just as with your bank.", "title": "" }, { "docid": "3a46df1e59911cde4014915fbe13d480", "text": "Myself I am in a similar position. I've had a few good conversations about this with people in the financial services industry. It all depends how much time you want to spend on yielding your profits and how much risk you would like to take. High time and high risk obviously means higher expected gain, but also has a high chance of creating a loss. Option 1: You could buy a home now and take out a mortgage with a high down payment (thus lower interest rates) and rent it out. By the time you are ready to have your own house, you can decide to either take out a mortgage on your second house and make money off your first house, and keep renting it out. Or you could move in there yourself. If you use an asset-back mortgage (i'm not sure if that is the term, but a mortgage where in the worst case you give your home back to the bank), you generally carry least risk. If you keep doing this you can have 2 houses paid off if everything goes well. Option 2: You could also invest in stocks. This all depends on the risk you want to take and the time you want to put in it. Option 3: You could also put the money in a savings account. Some banks will give you better interest rates if you lock the money for a set amount of years. Option 4: You could buy a foreclosure and try to flip it, though this is very risky and requires a lot of time. Also, it is important to also have some sort of emergency fund, so whatever you do, don't spend all your money. Save some for a rainy day :-) Hope it helps..", "title": "" }, { "docid": "e05a30c4c2dd0cf27738493f5d1a2b47", "text": "This investment strategy may have tax advantages. In some countries, income received from dividends is taxed as income, whereas profits on share trades are capital gains. If you have already exceeded your tax-free income limit for the year, but not your capital gains tax allowance, it may be preferable to make a dealing profit rather than an investment income. These arrangements are called a bed-and-breakfast.", "title": "" }, { "docid": "80487a818ba0d9771ca050373e0de5f9", "text": "It's generally a bad idea to use low-risk credit (low-risk in sense you're practically guaranteed to be forced to pay it off) to buy high-risk shares. In optimistic scenario, the profit from shares would be higher than your credit percentages. In less optimistic scenario you come with nothing. In worse scenario you have worthless shares and another credit to pay. If your only problem is the non-profitable property, you can always sell it and get rid of negative cash flow. It won't affect your quality of life negatively. In your high-risk scenario you trade the opportunity for a bit better life with for a risk of turning it into disaster for you and your family.", "title": "" }, { "docid": "a13a5183fa18ad97d0487ffeb6827fd9", "text": "\"is it worth it? You state the average yield on a stock as 2-3%, but seem to have come up with this by looking at the yield of an S&P500 index. Not every stock in that index is paying a dividend and many of them that are paying have such a low yield that a dividend investor would not even consider them. Unless you plan to buy the index itself, you are distorting the possible income by averaging in all these \"\"duds\"\". You are also assuming your income is directly proportional to the amount of yield you could buy right now. But that's a false measure because you are talking about building up your investment by contributing $2k-$3k/month. No matter what asset you choose to invest in, it's going to take some time to build up to asset(s) producing $20k/year income at that rate. Investments today will have time in market to grow in multiple ways. Given you have some time, immediate yield is not what you should be measuring dividends, or other investments, on in my opinion. Income investors usually focus on YOC (Yield On Cost), a measure of income to be received this year based on the purchase price of the asset producing that income. If you do go with dividend investing AND your investments grow the dividends themselves on a regular basis, it's not unheard of for YOC to be north of 6% in 10 years. The same can be true of rental property given that rents can rise. Achieving that with dividends has alot to do with picking the right companies, but you've said you are not opposed to working hard to invest correctly, so I assume researching and teaching yourself how to lower the risk of picking the wrong companies isn't something you'd be opposed to. I know more about dividend growth investing than I do property investing, so I can only provide an example of a dividend growth entry strategy: Many dividend growth investors have goals of not entering a new position unless the current yield is over 3%, and only then when the company has a long, consistent, track record of growing EPS and dividends at a good rate, a low debt/cashflow ratio to reduce risk of dividend cuts, and a good moat to preserve competitiveness of the company relative to its peers. (Amongst many other possible measures.) They then buy only on dips, or downtrends, where the price causes a higher yield and lower than normal P/E at the same time that they have faith that they've valued the company correctly for a 3+ year, or longer, hold time. There are those who self-report that they've managed to build up a $20k+ dividend payment portfolio in less than 10 years. Check out Dividend Growth Investor's blog for an example. There's a whole world of Dividend Growth Investing strategies and writings out there and the commenters on his blog will lead to links for many of them. I want to point out that income is not just for those who are old. Some people planned, and have achieved, the ability to retire young purely because they've built up an income portfolio that covers their expenses. Assuming you want that, the question is whether stock assets that pay dividends is the type of investment process that resonates with you, or if something else fits you better. I believe the OP says they'd prefer long hold times, with few activities once the investment decisions are made, and isn't dissuaded by significant work to identify his investments. Both real estate and stocks fit the latter, but the subtypes of dividend growth stocks and hands-off property investing (which I assume means paying for a property manager) are a better fit for the former. In my opinion, the biggest additional factor differentiating these two is liquidity concerns. Post-tax stock accounts are going to be much easier to turn into emergency cash than a real estate portfolio. Whether that's an important factor depends on personal situation though.\"", "title": "" }, { "docid": "6f559fa60e775b9ba47eced6e74218b4", "text": "\"Typically mutual funds will report an annualized return. It's probably an average of 8% per year from the date of inception of the fund. That at least gives some basis of comparison if you're looking at funds of different ages (they will also often report annualized 1-, 3-, 5-, and 10- year returns, which are probably better basis of comparison since they will have experience the same market booms and busts...). So yes, generally that 8% gets compounded yearly, on average. At that rate, you'd get your investment doubled in roughly 9 years... on average... Of course, \"\"past performance can't guarantee future results\"\" and all that, and variation is often significant with returns that high. Might be 15% one year, -2% the next, etc., hence my emphasis on specifying \"\"on average\"\". EDIT: Based on the Fund given in the comments: So in your fund, the times less than a year (1 Mo, 3 Mo, 6 Mo, 1 Yr) is the actual relative change that of fund in that time period. Anything greater is averaged using CAGR approach. For example. The most recent 3 year period (probably ending end of last month) had a 6.19% averaged return. 2014, 2015, and 2016 had individual returns of 8.05%, 2.47%, and 9.27%. Thus that total return over that three year period was 1.08051.02471.0927=1.21 = 21% return over three years. This is the same total growth that would be achieved if each year saw consistent 6.5% growth (1.065^3 = 1.21). Not exactly the 6.19%, but remember we're looking at a slightly different time window. But it's pretty close and hopefully helps clarify how the calculation is done.\"", "title": "" }, { "docid": "07f7202017432ca3558e5ec9494595bc", "text": "Current evidence is that, after you subtract their commission and the additional trading costs, actively managed funds average no better than index funds, maybe not as well. You can afford to take more risks at your age, assuming that it will be a long time before you need these funds -- but I would suggest that means putting a high percentage of your investments in small-cap and large-cap stock indexes. I'd suggest 10% in bonds, maybe more, just because maintaining that balance automatically encourages buy-low-sell-high as the market cycles. As you get older and closer to needing a large chunk of the money (for a house, or after retirement), you would move progressively more of that to other categories such as bonds to help safeguard your earnings. Some folks will say this an overly conservative approach. On the other hand, it requires almost zero effort and has netted me an average 10% return (or so claims Quicken) over the past two decades, and that average includes the dot-bomb and the great recession. Past results are not a guarantee of future performance, of course, but the point is that it can work quite well enough.", "title": "" } ]	fiqa
3e8bc1fc7d95e8c896b193e47b116caf	New or Used Car Advice for Recent College Grad	[ { "docid": "79321e67e3305637d5b93a9aeae5f4df", "text": "Never buy a new car if cost is an issue. A big chunk of the price will disappear to depreciation as you drive it off the lot. If you want a shiny new car with the latest equipment (and if you can afford it!), buy a lightly-used car. Normally I would recommend a 1-3 year old car. 95% of the value, with a big cost savings. But this depends on your financial situation. Given that you just need a commuter car for mostly highway driving, in a place where the weather is easier on cars, you could be fine with a 5-6 year old import. Camry's, Accords, Civics, etc are all well-built, reliable, and affordable due to their numbers. As for financing, shop around. Don't blindly use dealer financing. Check with banks and especially local credit unions and see what rate they can offer you. Then, when you are ready to go, get pre-approved (this is when they pull your credit) and get the car.", "title": "" }, { "docid": "00d9207d87f20b7fb8267243b0e74810", "text": "17.5 thousand miles/year is pretty high mileage. You could find an Accord or Civic of comparable age with much lower mileage than that, and it wouldn't be a stretch for someone (even with your limited credit history) to get a loan on an old car like that. You might try to have your parents cosign on a loan depending on their financial circumstances. That's how I bought my first car 13 years ago. The biggest surprise you might want to consider is the cost of full collision auto coverage which will be required by whatever bank you finance through. Get quotes for that before signing any papers. (I spent $2000 more on a motorcycle because the more powerful one cost $2000 less/year to insure just a few years after I bought that first car.) Speaking of which, another thing to consider given the nice LA weather is a motorcycle. The total cost of ownership is much lower than a car. You will probably not want to pursue that option if you do not have medical insurance, and you may not want to anyway.", "title": "" } ]	[ { "docid": "8d3eef26be24ff71bbe382f829bf25fe", "text": "If you buy a new car, the odds that it will require repairs are fairly low, and if it does, they should be covered by the warranty. If you buy a used car, there is a fair chance that it will need some sort of repairs, and there probably is no warranty. But think about how much repairs are likely to cost. A new car these days costs like $25,000 or more. You can find reasonably decent used cars for a few thousand dollars. Say you bought a used car for $2,000. Is it likely that it will need $23,000 in repairs? No way. Even if you had to make thousands of dollars worth of repairs to the used car, it would almost certainly be cheaper than buying a new car. I've bought three used vehicles in the last few years, one for me, one for my son, and one for my daughter. I paid, let's see, I think between $4,000 and $6,000 each. We've had my son's car for about 9 months and to date had $40 in repairs. My daughter's car turned out to have a bunch of problems; I ended up putting maybe another $2,000 into it. But now she's got a car she's very happy with that cost me maybe $6,000 between purchase and repairs, still way less than a new car. My pickup had big time problems, including needing a new transmission and a new engine. I've put, hmm, maybe $7,000 into it. It's definitely debatable if it was worth replacing the engine. But even at all that, if I had bought that truck new it would have cost over $30,000. Presumably if I bought new I would have had a nicer vehicle and I could have gotten exactly the options I wanted, so I'm not entirely happy with how this one turned out, but I still saved money by buying used. Here's what I do when I buy a used car: I go into it expecting that there will be repairs. Depending on the age and condition of the car, I plan on about $1000 within the first few months, probably another $1000 stretched out over the next year or so. I plan for this both financially and emotionally. By financially I mean that I have money set aside for repairs or have available credit or one way or another have planned for it in my budget. By emotionally I mean, I have told myself that I expect there to be problems, so I don't get all upset when there are and start screaming and crying about how I was ripped off. When you buy a used car, take it for granted that there will be problems, but you're still saving money over buying new. Sure, it's painful when the repair bills hit. But if you buy a new car, you'll have a monthly loan payment EVERY MONTH. Oh, and if you have a little mechanical aptitude and can do at least some of the maintenance yourself, the savings are bigger. Bear in mind that while you are saving money, you are paying for it in uncertainty and aggravation. With a new car, you can be reasonably confidant that it will indeed start and get you to work each day. With a used car, there's a much bigger chance that it won't start or will leave you stranded. $2,000 is definitely the low end, and you say that that would leave you no reserve for repairs. I don't know where you live or what used cars prices are like in your area. Where I live, in Michigan, you can get a pretty decent used car for about $5,000. If I were you I'd at least look into whether I could get a loan for $4,000 or $5,000 to maybe get a better used car. Of course that all depends on how much money you will be making and what your other expenses are. When you're a little richer and better established, then if a shiny new car is important to you, you can do that. Me, I'm 56 years old, I've bought new cars and I've bought used cars and I've concluded that having a fancy new car just isn't something that I care about, so these days I buy used.", "title": "" }, { "docid": "e71c6afd7c26283b65b25a4f933fa20c", "text": "Assuming the amount of your car payment and student loan aren't crazy you should be fine. I would suggest starting with a baseline budget listing your monthly income and expenses. Be sure to include miscellaneous expenses like car maintenance, insurance, food, clothes, etc (the common things that sometimes get overlooked in a budget). After all of your necessary expenses (fluff like entertainment doesn't count), if your employer has a 401k with a match I would contribute to that up to the match amount. Next I would save an emergency fund to cover unforseen events such as car repairs, etc. $1000 is not an uncommon amount to see people suggest for this. Next I would knock out your car loan then student loan as fast as possible. This will free up some cash flow which gives you more freedom to do what you want. At this point you save more so you don't have to finance the next car or have a down payment for a home or whatever. Building your savings to be 3-6 months of income is a good idea, this covers things like being laid off or other larger unexpected events. After you get to that point how you handle your budget is pretty open.", "title": "" }, { "docid": "f3796ebab3370b9916c28dc5d95cf556", "text": "An option that no one has yet suggested is selling the car, paying off the loan in one lump sum (adding cash from your emergency sum, if need be), and buying an old beater in its place. With the beater you should be able to get a few years out of it - hopefully enough to get you through your PhD and into a better income situation where you can then assess a new car purchase (or more gently-used car purchase, to avoid the drive-it-off-the-lot income loss). Even better than buying another car that you can afford to pay for is if you can survive without that car, depending on your location and public transit options. Living car free saves you not only this payment but gas and maintenance, though it costs you in public transit terms. Right now it looks as if this debt is hurting you more than the amount in your emergency fund is helping. Don't wipe out your emergency fund completely, but be willing to lower it in order to wipe out this debt.", "title": "" }, { "docid": "45edffe069cb64d03ffa47769489889d", "text": "Keyless entry and stereo are the only items that come to mind on that list as having after-market potential. If you buy a used car, seat could be an option, but you would probably give up power controls and things like heating unless you are a real car guy. In general, if you're buying a new car, I think it makes sense to negotiate as much as possible during the sale. Accessories are always high margin, and you have leverage when you're buying the car. If you want fancy aftermarket stuff, you probably want to buy a nice, clean used car and fund your aftermarket stuff with the savings!", "title": "" }, { "docid": "b1c91b3a85c77daa1716961527a74130", "text": "If everyone bought used cars, who would buy the new cars so that everyone else could buy them used? Rental car companies? Your rant expresses a misunderstanding of fundamental economics (as demand for used cars increases, so will prices) but economics is off-topic here, so let me explain why I bought a new car—that I am now in the 10th year of driving. When I bought the car I currently drive, I was single, I was working full-time, and I was going to school full-time. I bought a 2007 Toyota Corolla for about $16,500 cash out the door. I wanted a reliable car that was clean and attractive enough that I wouldn't be embarrassed in it if I took a girl out for dinner. I could have bought a much more expensive car, but I wanted to be real about myself and not give the wrong impression about my views on money. I've done all the maintenance, and the car is still very nice even after 105K miles. It will handle at least that many more miles barring any crashes. Could I have purchased a nice used car for less? Certainly, but because it was the last model year before a redesign, the dealer was clearly motivated to give me a good deal, so I didn't lose too much driving it off the lot. There are a lot of reasons why people buy new cars. I didn't want to look like a chump when out on a date. Real-estate agents often like to make a good impression as they are driving clients to see new homes. Some people can simply afford it and don't want to worry about what abuse a prior owner may have done. I don't feel defensive about my decision to buy a new car those years ago. The other car I've purchased in the last 10 years was a four year old used car, and it certainly does a good job for my wife who doesn't put too many miles on it. I will not rule out buying another new car in the future either. Some times the difference in price isn't significant enough that used is always the best choice.", "title": "" }, { "docid": "7d981886fcd3d12405655510fc4a88ff", "text": "There are many reasons for buying new versus used vehicles. Price is not the only factor. This is an individual decision. Although interesting to examine from a macro perspective, each vehicle purchase is made by an individual, weighing many factors that vary in importance by that individual, based upon their specific needs and values. I have purchased both new and used cars, and I have weighted each of these factors as part of each decision (and the relative weightings have varied based upon my individual situation). Read Freakonomics to gain a better understanding of the reasons why you cannot find a good used car. The summary is the imbalance of knowledge between the buyer and seller, and the lack of trust. Although much of economics assumes perfect market information, margin (profit) comes from uncertainty, or an imbalance of knowledge. Buying a used car requires a certain amount of faith in people, and you cannot always trust the trading partner to be honest. Price - The price, or more precisely, the value proposition of the vehicle is a large concern for many of us (larger than we might prefer that it be). Selection - A buyer has the largest selection of vehicles when they shop for a new vehicle. Finding the color, features, and upgrades that you want on your vehicle can be much harder, even impossible, for the used buyer. And once you have found the exact vehicle you want, now you have to determine whether the vehicle has problems, and can be purchased at your price. Preference - A buyer may simply prefer to have a vehicle that looks new, smells new, is clean, and does not have all the imperfections that even a gently used vehicle would exhibit. This may include issues of pride, image, and status, where the buyer may have strong emotional or psychological needs to statisfy through ownership of a particular vehicle with particular features. Reviews - New vehicles have mountains of information available to buyers, who can read about safety and reliability ratings, learn about problems from the trade press, and even price shop and compare between brands and models. Contrasted with the minimal information available to used vehicle shoppers. Unbalanced Knowledge - The seller of a used car has much greater knowledge of the vehicle, and thus much greater power in the negotiation process. Buying a used car is going to cost you more money than the value of the car, unless the seller has poor knowledge of the market. And since many used cars are sold by dealers (who have often taken advantage of the less knowledgeable sellers in their transaction), you are unlikely to purchase the vehicle at a good price. Fear/Risk - Many people want transportation, and buying a used car comes with risk. And that risk includes both the direct cost of repairs, and the inconvenience of both the repair and the loss of work that accompanies problems. Knowing that the car has not been abused, that there are no hidden or lurking problems waiting to leave you stranded is valuable. Placing a price on the risk of a used car is hard, especially for those who only want a reliable vehicle to drive. Placing an estimate on the risk cost of a used car is one area where the seller has a distinct advantage. Warranties - New vehicles come with substantial warranties, and this is another aspect of the Fear/Risk point above. A new vehicle does not have unknown risk associated with the purchase, and also comes with peace of mind through a manufacturer warranty. You can purchase a used car warranty, but they are expensive, and often come with (different) problems. Finance Terms - A buyer can purchase a new vehicle with lower financing rate than a used vehicle. And you get nothing of value from the additional finance charges, so the difference between a new and used car also includes higher finance costs. Own versus Rent - You are assuming that people actually want to 'own' their cars. And I would suggest that people want to 'own' their car until it begins to present problems (repair and maintenance issues), and then they want a new vehicle to replace it. But renting or leasing a vehicle is an even more expensive, and less flexible means to obtain transportation. Expense Allocation - A vehicle is an expense. As the owner of a vehicle, you are willing to pay for that expense, to fill your need for transportation. Paying for the product as you use the product makes sense, and financing is one way to align the payment with the consumption of the product, and to pay for the expense of the vehicle as you enjoy the benefit of the vehicle. Capital Allocation - A buyer may need a vehicle (either to commute to work, school, doctor, or for work or business), but either lack the capital or be unwilling to commit the capital to the vehicle purchase. Vehicle financing is one area banks have been willing to lend, so buying a new vehicle may free capital to use to pay down other debts (credit cards, loans). The buyer may not have savings, but be able to obtain financing to solve that need. Remember, people need transportation. And they are willing to pay to fill their need. But they also have varying needs for all of the above factors, and each of those factors may offer value to different individuals.", "title": "" }, { "docid": "46f295dd712175146f902bb3afbad09b", "text": "\"You are still paying a heavy price for the 'instant gratification' of driving (renting) a brand-new car that you will not own at the end of the terms. It is not a good idea in your case, since this luxury expense sounds like a large amount of money for you. Edited to better answer question The most cost effective solution: Purchase a $2000 car now. Place the $300/mo payment aside for 3 years. Then, go buy a similar car that is 3 years old. You will have almost $10k in cash and probably will need minimal, if any, financing. Same as this answer from Pete: https://money.stackexchange.com/a/63079/40014 Does this plan seem like a reasonable way to proceed, or a big mistake? \"\"Reasonable\"\" is what you must decide. As the first paragraph states, you are paying a large expense to operate the vehicle. Whether you lease or buy, you are still paying this expense, especially from the depreciation on a new vehicle. It does not seem reasonable to pay for this luxury if the cost is significant to you. That said, it will probably not be a 'big mistake' that will destroy your finances, just not the best way to set yourself up for long-term success.\"", "title": "" }, { "docid": "5e9b3afd041177df172055cd40cbd57b", "text": "Alternative: buy a recent-model used car in good condition. Or buy an older car in good condition. Let someone else pay the heavy depreciation that happens the moment you drive a new car off the dealer's lot.", "title": "" }, { "docid": "f2d1c0c043e6c0d127ce9c0d8d2b9b31", "text": "Any way you look at it, this is a terrible idea. Cars lose value. They are a disposable item that gets used up. The more expensive the car, the more value they lose. If you spend $100,000 on a new car, in four years it will be worth less than $50,000.* That is a lot of money to lose in four years. In addition to the loss of value, you will need to buy insurance, which, for a $100,000 car, is incredible. If your heart is set on this kind of car, you should definitely save up the cash and wait to buy the car. Do not get a loan. Here is why: Your plan has you saving $1,300 a month ($16,000 a year) for 6.5 years before you will be able to buy this car. That is a lot of money for a long range goal. If you faithfully save this money that long, and at the end of the 6.5 years you still want this car, it is your money to spend as you want. You will have had a long time to reconsider your course of action, but you will have sacrificed for a long time, and you will have the money to lose. However, you may find out a year into this process that you are spending too much money saving for this car, and reconsider. If, instead, you take out a loan for this car, then by the time you decide the car was too much of a stretch financially, it will be too late. You will be upside down on the loan, and it will cost you thousands to sell the car. So go ahead and start saving. If you haven't given up before you reach your goal, you may find that in 6.5 years when it is time to write that check, you will look back at the sacrifices you have made and decide that you don't want to simply blow that money on a car. Consider a different goal. If you invest this $1300 a month and achieve 8% growth, you will be a millionaire in 23 years. * You don't need to take my word for it. Look at the car you are interested in, go to kbb.com, select the 2012 version of the car, and look up the private sale value. You'll most likely see a price that is about half of what a new one costs.", "title": "" }, { "docid": "879a2f9d08d157b5b6885499455c88a8", "text": "Generally, banks will report your loan to at least one (if not all three) credit bureaus - although that is not required by law. The interest you're paying, in addition to your insurance isn't justifiable for building credit. I would recommend paying the car off and then perhaps applying for a secure credit card if you are worried about being rejected. Of course, since you have very little credit, applying for an unsecured card and getting rejected won't hurt you in the long run. If you are rejected, you can always go for a secured credit card the second time. As I mentioned in my comments, it's better to show 6 months of on-time payments than to have no payment history at all. So if your goal is to secure an apartment near campus, I'm sure you're already a step ahead of the other students.", "title": "" }, { "docid": "2d233f6bf99fad1cc8751ba1049fd362", "text": "You could consider buying a fairly recent used car from CarMax. They have fixed pricing, and you'd save a good amount of money on the car (since cars lose tons of value in their first year or so).", "title": "" }, { "docid": "c7577a8c25ed9cc6e1deef21bd12ed1a", "text": "One point I don't see above: Consumer's Union (the nonprofit which publishes Consumer Reports) has a service where, for a small fee, they'll send you information about how much the car and each option cost the dealer, how much the dealer is getting back in incentive money from the manufacturer, and some advice about which features are worthwhile, which aren't, and which you should purchase somewhere other than the dealer. Armed with that info, you can discuss the price on an equal footing, negotiating the dealer's necessary profit rather than hiding it behind bogus pricing schemes. Last time I bought a new car, I got this data, walked into the dealer with it visible on my clipboard, offered them $500 over their cost, and basically had the purchase nailed down immediately. It helped that I as willing to accept last year's model and a non-preferred color; that helped him clear inventory and encouraged him to accept the offer. ($500 for 10 minutes' work selling to me, or more after an hour of playing games with someone else plus waiting for that person to walk in the door -- a good salesman will recognize that I'm offering them a good deal. These days I might need to adjust that fair-profit number up a bit; this was about 20 years ago on an $8000 car... but I'm sure CU's paperwork suggests a current starting number.) It isn't quite shelf pricing. But at least it means any haggling is based on near-equal knowledge, so it's much closer to being a fair game.", "title": "" }, { "docid": "a7b084a4ffebac53bd5ddbb862991b22", "text": "Yes, you are correct to go to the credit union first. Get approved for a loan first. Often, upon approval, the credit union will give you a blank check good for any amount up to the limit of the loan. When you buy the car, make it payable to the dealer, write in the amount and sign it. Enjoy the new car!", "title": "" }, { "docid": "f1ebfd79bc9d4bef340a0a0db7ad909b", "text": "You are currently $30k in debt. I realize it is tempting to purchase a new car with your new job, but increasing your debt right now is heading in the wrong direction. Adding a new monthly payment into your budget would be a mistake, in my opinion. Here is what I would suggest. Since you have $7k in the bank, spend up to $6k on a nice used car. This will keep $1k in the bank for emergencies, and give you transportation without adding debt and a monthly payment. Then you can focus on knocking out the student loans. Won't it be nice when those student loans are gone? By not going further into debt, you will be much closer to that day. New cars are a luxury that you aren't in a position to splurge on yet.", "title": "" }, { "docid": "adb7c3eb452280c427bd24d4c008a04d", "text": "Some questions: Will you need a car after 18 months? What are you going to do then? How likely are you able to go over the mileage? Granted paying $300 per month seems somewhat attractive as a fixed cost. However lease are notorious for forcing people into making bad decisions. If your car is over miles, or there is some slight damage (even normal wear and tear), or you customize your car (such as window tint) the dealer can demand extra dollars or force you to purchase the car for more than it is actually worth. The bottom line is leasing is one of the most expensive ways to own a vehicle, and while you have a great income you have a poor net worth. So yes I would say it is somewhat irresponsible for you to own a vehicle. If I was in your shoes, I would cut my gym expenses, cut my retirement contributions to the match, and buy another used car. I understand you may have some burnout over your last car, but it is the best mathematical choice. Having said all that you have a great income and you can absorb a lot of less than efficient decisions. You will probably be okay leasing the car. I would suggest going for a longer term, or cutting something to pay off the student loans earlier. This way there is some cushion between when the lease ends and the student loan ends. This way, when lease turn in comes, you will have some room in your budget to pay some fees as you won't have your student loan payment (assuming around 1400/month) that you can then pay to the dealer.", "title": "" } ]	fiqa
3107f064cfde041317b0ea2c911a6bf0	What are the disadvantages of using a small leverage?	[ { "docid": "d5469858d8cfd023db94dfea7688ed40", "text": "The major drawback to borrowing to invest (i.e. using leverage) is that your return on investment must be high enough to overcome the cost of finance. The average return on the S&P 500 is about 9.8% (from CNBC) a typical unsecured personal loan will have an interest rate of around 18-36% APR (from NerdWallet). This means that on average you will be paying more interest than you are receiving in returns so are losing money on the margin investment. Sometimes the S&P falls and over those periods you would be paying out interest having lost money so will have a negative return! You may have better credit and so be able to get a lower rate but I don't know your loan terms currently. Secured loans, such as remortgaging your house, will have lower costs but come with more life changing risks. The above assumes that you are getting financing by directly borrowing money, however, it is also possible to trade on margin. This is where you post a proportion of the value that you wish to trade with as collateral against a loan to buy the security. This form of finance is normally used by day traders and other short term holders of stocks. Although the financing costs here are low (I am not charged an interest rate on intraday margin trading) there are very high costs if you exceed the term of the loan. An example is that I am charged a fee if I hold a position overnight and my profits and losses are crystallised at that time. If I am in a losing position at that time the crystallisation process and fee can result in not having enough margin to recover the position and the loss of a potentially profit making position. Additionally if the amount of collateral cash (margin) posted is insufficient to cover the expected losses as calculated by your broker they will initiate a margin call asking for more collateral money. If you do not (or cannot) post this extra margin your losing position will be cashed out and you will take as a loss the total loss at that time. Since the market can change very rapidly, such as in a flash crash, this can result in your losing more money than you had in the first place. As this is essentially a loan you can be bankrupted by this. Overall using leverage to invest magnifies your potential profits but it also magnifies your potential losses. In many cases this magnification could be sufficient to lose you more money than you had originally invested. In addition to magnification you need to consider the cost of finance and that your return over the course of the loan needs to be higher than your cost of finance as well as inflation and other opportunity costs of capital. The S&P 500 is a relatively low volatility market in general so is unlikely to return losses in any given period that will mean that leverage of 1.25 times will take you into losses beyond your own capital investment but it is not impossible. The low level of risk automatically means that your returns are lower and so your cost of capital is likely to be a large proportion of your returns and your returns may not completely cover the cost of capital even when you are making money. The key thing if you are going to trade or invest on leverage is to understand the terms and costs of your leverage and discount them from any returns that you receive before declaring to yourself that you are profitable. It is even more important than usual to know how your positions are doing and whether you are covering your cost of capital when using leverage. It is also very important to know the terms of your leverage in detail, especially what will happen when and if your credit runs out for whatever reason be it the end of the financing period (the length of the loan) or your leverage ratio gets too high. You should also be aware of the costs of closing out the loan early should you need to do so and how to factor that into your investing decisions.", "title": "" } ]	[ { "docid": "544edd3bd1f3734a332ddf9166bad4ae", "text": "I use over half my buying power of my portfolio for options, and I'm not a fan of any of the strategies listed above either (I stay away from negative theta trades for the most part), but I just listed them to point out that saying the reason someone wouldn't enter a short position is for fear of infinite losses is asinine. It's easy enough to make any trade risk defined if that is something the trader cares about.", "title": "" }, { "docid": "546792aa87a8fc9803b6e52a578eb73c", "text": "The main advantage of commodities to a largely stock and bond portfolio is diversification and the main disadvantages are investment complexity and low long-term returns. Let's start with the advantage. Major commodities indices and the single commodities tend to be uncorrelated to stocks and bonds and will in general be diversifying especially over short periods. This relationship can be complex though as Supply can be even more complicated (think weather) so diversification may or may not work in your favor over long periods. However, trading in commodities can be very complex and expensive. Futures need to be rolled forward to keep an investment going. You really, really don't want to accidentally take delivery of 40000 pounds of cattle. Also, you need to properly take into account roll premiums (carry) when choosing the closing date for a future. This can be made easier by using commodities index ETFs but they can also have issues with rolling and generally have higher fees than stock index ETFs. Most importantly, it is worth understanding that the long-term return from commodities should be by definition (roughly) the inflation rate. With stocks and bonds you expect to make more than inflation over the long term. This is why many large institutions talk about commodities in their portfolio they often actually mean either short term tactical/algorithmic trading or long term investments in stocks closely tied to commodities production or processing. The two disadvantages above are why commodities are not recommended for most individual investors.", "title": "" }, { "docid": "e4d57b940f6bcc3cb7b72f3bb209aefc", "text": "This isn't totally wrong- there are hedge funds that are long 150% of AUM and short 50%. However, Rentech has said that holding a position for 8 seconds is long for them, so that's not what they're doing. I'd assume the 4X leverage most just refers to option positions that have delta 4 on average. They also may be borrowing money, which they can probably do extremely cheaply since they have a 35 year track record showing they're essentially risk-free.", "title": "" }, { "docid": "935cd924ed52f16c8409aaec99f643b2", "text": "Not really my field but this is how I see the impact Disadvantages for banks : not being able to chose where they park assets/cash they have been trusted with which mean lower income from investing those disadvantage for banks shareholders : less earnings disadvantage for the economy : harder criteria to lend, lower loan growth advantage for the economy : (theoretically) less risks of liquidity crunch and financial crisis", "title": "" }, { "docid": "fcd9990896be0b5c627ec5da25a4af72", "text": "I think George's answer explains fairly well why the brokerages don't allow this - it's not an exchange rule, it's just that the brokerage has to have the shares to lend, and normally those shares come from people's margin, which is impossible on a non-marginable stock. To address the question of what the alternatives are, on popular stocks like SIRI, a deep In-The-Money put is a fairly accurate emulation of an actual short interest. If you look at the options on SIRI you will see that a $3 (or higher) put has a delta of -$1, which is the same delta as an actual short share. You also don't have to worry about problems like margin calls when buying options. The only thing you have to worry about is the expiration date, which isn't generally a major issue if you're buying in-the-money options... unless you're very wrong about the direction of the stock, in which case you could lose everything, but that's always a risk with penny stocks no matter how you trade them. At least with a put option, the maximum amount you can lose is whatever you spent on the contract. With a short sale, a bull rush on the stock could potentially wipe out your entire margin. That's why, when betting on downward motion in a microcap or penny stock, I actually prefer to use options. Just be aware that option contracts can generally only move in increments of $0.05, and that your brokerage will probably impose a bid-ask spread of up to $0.10, so the share price has to move down at least 10 cents (or 10% on a roughly $1 stock like SIRI) for you to just break even; definitely don't attempt to use this as a day-trading tool and go for longer expirations if you can.", "title": "" }, { "docid": "b405c7562084dd618b32e159f6744abc", "text": "Leverage is when you borrow in order to invest. Mind you, most people aren't going to just give you money to gamble on the stock market completely unsecured; rather, you deposit (say) $10,000 and buy a stock... and then you have $10k in assets which you can borrow against, so you can buy another $10,000 of that stock. Now if the stock goes up you'll make twice the gain (2x leverage). However, if it goes down, you'll lose twice as much as well. If the value of your stock falls, your line of credit will be reduced as well; in this case, since you used all your credit and are now over your limit, your broker will issue a margin call (they will demand a deposit of additional funds, or they will sell some of your stock at their discretion). This protects you from owing more than you invested, but it's still sometimes possible (for instance, if a company spontaneously goes bankrupt and becomes worthless, and your stock becomes worthless). There are also things like leveraged index funds and commodity funds which aim to return some multiple of the market's earnings. These are designed for intraday trading, though, and usually end up underperforming significantly over the long term. [edit] Mose people who accept borrowed funds should generally accept real cash as well. However, if you're trying to short sell, i.e. borrow shares and sell them (in the hopes you can get them back cheaper later after the stock falls) you will need a margin line of credit to do so as well. [edit 2] clarified margin calls", "title": "" }, { "docid": "bd956edbcd479bb5f0dd7fc28e1f9f97", "text": "Yes, 6% is a waste of money, because some other brokers such as IB offer margin rates below 2%. Also, to borrow money for even less than any broker's margin interest rate, one can do an EFP transaction. This involves simultaneously shorting a stock and buying the SSF for the same stock. When the futures contract expires, you take delivery of the underlying stock to automatically close out your short position. Until then, you've effectively borrowed cash for the cost of borrowing the stock, which is typically less than 0.5% interest for widely traded ones. You also pay for the slight difference in price between the stock and the future, which is typically equivalent to another 0.5% interest or less. The total often comes to less than 1% interest. The only risk with this transaction is that the stock could become hard to borrow at some point, so then you would have to pay higher interest on it temporarily or maybe even have to close out your short early. But it is extremely rare for large, high-volume stocks to become hard-to-borrow. The borrowing cost of SPY has spiked above 5% on only a handful of days in the last decade.", "title": "" }, { "docid": "66cb4794526b297c6db88ed859cc12b4", "text": "Yes, more leverage increases the variance of your individual portfolio (variance of your personal net worth). The simple way to think about it is that if you only own only 50% of your risky assets, then you can own twice as many risky assets. That means they will move around twice as much (in absolute terms). Expected returns and risk (if risk is variance) both go up. If you lend rather than borrow, then you might have only half your net worth in risky assets, and then your expected returns and variation in returns will go down. Note, the practice of using leverage differs from portfolio theory in a couple important ways.", "title": "" }, { "docid": "44eb02cae8302ba335d2032af7a43460", "text": "You can only lose your 7%. The idea that a certain security is more volatile than others in your portfolio does not mean that you can lose more than the value of the investment. The one exception is that a short position has unlimited downside, but i dont think there are any straight short mutual funds.", "title": "" }, { "docid": "d27453d9a8051fc9c96ed1dfb6f78f07", "text": "Another disadvantage is the inability to value commodities in an accounting sense. In contrast with stocks, bonds and real estate, commodities don't generate cash flows and so any valuation methodology is by definition speculative. But as rhaskett notes, there are diversification advantages. The returns for gold, for instance, tend to exhibit low/negative correlation with the performance of stocks. The question is whether the diversification advantage, which is the primary reason to hold commodities in a multi-asset class portfolio through time, overcomes the disadvantages? The answer... maybe.", "title": "" }, { "docid": "1bd71d2b21416caa623fa525043c3812", "text": "That's not 100% correct, as some leveraged vehicles choose to re-balance on a monthly basis making them less risky (but still risky). If I'm not mistaken the former oil ETN 'DXO' was a monthly re-balance before it was shut down by the 'man' Monthly leveraged vehicles will still suffer slippage, not saying they won't. But instead of re-balancing 250 times per year, they do it 12 times. In my book less iterations equals less decay. Basically you'll bleed, just not as much. I'd only swing trade something like this in a retirement account where I'd be prohibited from trading options. Seems like you can get higher leverage with less risk trading options, plus if you traded LEAPS, you could choose to re-balance only once per year.", "title": "" }, { "docid": "1873a5a20046d642ceb757e02a4e523e", "text": "Well, I didn't know those existed. Author might not either. I'm also not aware of the trading requirements in Europe. Could be different than US. In any event, I think most who are concerned are (1) doomsayers who've predicted 30 of the last 1 recessions, (2) don't understand the point of leverage and are irrationally scared of it, or (3) understand leverage can be good but think this will be used in a bad way.", "title": "" }, { "docid": "370a026942c01c105a8f898c44d99b69", "text": "The main advantage and disadvantage I can see in a scenario like this are - how savvy and good an investor are you? It's a good way to create below-market average returns if you're not that good at investing and returns way above market average if you are...", "title": "" }, { "docid": "ddfe0fd135b294be3b3199c6a3eced9e", "text": "Your original example is a little confusing because just shorting for 1k and buying for 1k is 100% leveraged or an infinitive leverage ratio. (and not allowed) Brokerage houses would require you to invest some capital in the trade. One example might be requiring you to hold $100 in the brokerage. This is where the 10:1 ratio comes from. (1000/10) Thus a return of 4.5% on the 1000k bond and no movement on the short position would net you $45 and voila a 45% return on your $100 investment. A 40 to 1 leverage ratio would mean that you would only have to invest $25 to make this trade. Something that no individual investor are allowed to do, but for some reason some financial firms have been able to.", "title": "" }, { "docid": "09e78ce34f595a619c5e4668338748ef", "text": "\"Leverage means you can make more investments with the same amount of money. In the case of rental properties, it means you can own more properties and generate more rents. You exchange a higher cost of doing business (higher interest fees) and a higher risk of total failure, for a larger number of rents and thus higher potential earnings. As with any investment advice, whenever someone tells you \"\"Do X and you are guaranteed to make more money\"\", unless you are a printer of money that is not entirely true. In this case, taking more leverage exposes you to more risk, while giving you more potential gain. That risk is not only on the selling front; in fact, for most small property owners, the risk is primarily that you will have periods of time of higher expense or lower income. These can come in several ways: If you weather these and similar problems, then you will stand to make more money using higher leverage, assuming you make more money from each property than your additional interest costs. As long as you're making any money on your properties this is likely (as interest rates are very low right now), but making any money at all (above and beyond the sale value) may be challenging early on. These sorts of risks are magnified for your first few years, until you've built up a significant reserve to keep your business afloat in downturns. And of course, any money in a reserve is money you're not leveraging for new property acquisition - the very same trade-off. And while you may be able to sell one or more properties if you did end up in a temporarily bad situation, you also may run into 2008 again and be unable to do so.\"", "title": "" } ]	fiqa
9cb1223085c293eacf3f0b7509017b14	Should I avoid credit card use to improve our debt-to-income ratio?	[ { "docid": "8c47ad741b9b74cdefbfc9275a90146a", "text": "\"For scoring purposes, having a DTI between 1-19% is ideal. From Credit Karma: That being said, depending on the loan type you looking at receiving (FHA, VA, Conventional, etc), there are certain max DTIs that you want to stay away from. As a rule, for VA, you want to try to stay away from 41% DTI. Exceptions are made for people with sufficient funds in the bank (3-9 months) to go to higher DTIs. If you keep a 19% utilization overall, that will get you a higher score but it will also show that you have a monthly payment on a particular revolving credit account. While the difference between 729 and 745 seems like a lot of points, there are rules as to how the interest rates are determined. So you will find that many banks have the same or similar rates due to recent legislation in Dodd-Frank. In the days of subprime mortgages, this was not the case. Adjustable rate mortgages did not necessarily go away, the servicer just has to make sure that the buyer can weather the full amount once it reaches maturity, not the lower amount. That is what got a lot of people in trouble. From \"\"how interest rates are set\"\": Before quoting you an interest rate, the loan officer will add on how much he and his branch want to earn. The branch or company sets a policy on how little that can be (the minimum amount the loan officer adds on to his cost) but does not want to overcharge borrowers either (so they set a maximum the loan officer can charge) Between that minimum and maximum, the loan officer has a great deal of flexibility. For example, say the loan officer decides he and his branch are going to earn one point. When you call and ask for a rate quote, he will add one point to the cost of the loan and quote you that rate. According to the rate sheet above, seven percent will cost you zero points. Six and three-quarters percent will cost you one point. In our example, at 7.125% the loan officer and branch would earn one point and have some money left over. This could be used to pay some of the fees (processing, documents, etc), which is how you get a \"\"no fees -no points\"\" mortgage. You just pay a higher interest rate. Where this scoring helps you is in credit card interest rates and auto loan and personal loan rates, which have different rate structures. My personal opinion is to avoid the use of the credit cards. Playing games to try to maximize your score in this situation won't help you when you are talking about 20 points potentially. If you were at the bottom level and were trying to meet a minimum score to qualify, then I would recommend you try to game this scoring system. Take the extra money you would put on a credit card and save it for housing expenses. Taking the Dave Ramsey approach, you should have at least $1000 in emergency funds as most problems you encounter will be less than $1000. That advice rings true.\"", "title": "" }, { "docid": "bce104a3950b808c1fd2966dfbe848ea", "text": "The answer depends on how much you spend every month. The DTI is calculated using the minimum payment on the balance owed on your card. Credit card minimum payments are ridiculous, often being only $50 for balances of a couple thousand dollars. In any case, when you get preapproved, the lender will tell you (based on your DTI) the maximum amount they will approve you for. If your minimum payment is $50, that's another $50 that could go towards your mortgage, which could mean an additional $10,000 financed. It's up to you to decide if $10,000 will make enough of a difference in the houses you look at.", "title": "" }, { "docid": "6517ba1f07915102ded4d29d75dde043", "text": "If you pay it off before the cycle closes it will look like you have 100% available credit. So if you credit card statement closes on the 7th pay it off on the 6th in full don't pay it when its due 2/3 weeks later. Then after three months of doing that your credit score will go up based on the fact that your debt ratio is so low. That ratio is 30% of your credit score. It will help quite alot.", "title": "" } ]	[ { "docid": "704eec7c676961ec1790bd188c8b0292", "text": "Depends upon the debt cost. Assuming it is consumer debt or credit card debt, it is better to pay that off first, it is the best investment you can make. Let's say it is credit card debt. If you pay 18% interst and have for example a $1,000 amount. If you pay it off you save $180 in interest ($1,000 times 18%). You would have to earn 18% on 1,000 to generate $180 if it was in aninvestment. Here is a link discussing ways of reducing debt Once you have debt paid off you have the cashflow to begin building wealth. The key is in the cashflow.", "title": "" }, { "docid": "c3fc85dd71f3a47adf539ee2ef8c1ebd", "text": "\"First I want to be sure Op understands how \"\"Credit Utilization\"\" is scored as this confuses many folks here in the US. There is no \"\"reward\"\" for charging money or carrying balances, only penalty. If you have one credit card with a $10,000 limit and owe $8,000 you have an 80% utilization which will signal to banks that you are having financial difficulties. (Anything over 30% on a single card is usually penalized significantly.) The ideal utilization is something around 0, which is in the ballpark of the 5% Op mentioned. Again there is never any direct benefit to your credit of spending a penny on any of your credit cards.* Banks offer the best rates to people that pay off their balances each month or don't use their cards in the first place. Why? Despite the system being imperfect in many ways, utilization is a good indicator. Example: If you have a card with a $10,000 limit and pay it off every month that speaks to you being a good risk. If you compared this person to the person above, who do you think would be the most likely to pay back a car loan? Finally, Utilization is a small part of the credit score. I would call it more of a \"\"hurdle\"\" than a factor, at least concerning good rates and approvals. Most of your credit, is based on length of history, paying on time, and having multiple types of credit. Real life example: I had a relative that had perfect payment history for decades. They got divorced and started accumulating a balance. The person got other cards with 0% apr to avoid the interest, but their balance only grew. -They had to use the card to make ends meet, etc. (3 kids, single parent) They ended up filing a sizable bankruptcy a few years later. This was one of the most responsible people I've ever known. (Yes that statement will seem far fetched to someone else. It was almost impossible to get them to file bankruptcy, even though there was no way to ever pay the money back.) The point? Utilization shows a more 'current' picture than some of the other portions due. - Had those banks used the high utilization as a warning sign they would have saved a lot of money. A 'fun' way of looking at credit: Sometimes I describe credit score as a popularity contest. If you really 'need' money banks are not going to help you. However if your credit shows everyone is lining up to loan you money, other banks are going to want in too. \"\"Banks only make loans to people that don't need them.\"\" *** Spending a lot on Credit Cards does sometimes have the indirect effect of getting balance increases that could have a slight increase in your score. This happens less than it did prior to the financial fiasco. Also the effect of this is on the score negligible unless carrying a balance. ( And the person carrying a balance also has a lower score anyways.) Additionally someone charging less could probably get a similar raise if they asked for it. (Raises vary greatly by issuer.))\"", "title": "" }, { "docid": "0158d90036d675c31f5634bff5202605", "text": "Regardless of how it exactly impacts the credit score, the question is does it help improve your credit situation? If the score does go up, but it goes up slowly that was a lot of effort to retard credit score growth. Learning to use a credit card wisely will help you become more financially mature. Start to use the card for a class of purchases: groceries, gas, restaurants. Pick one that won't overwhelm your finances if you lose track of the exact amount you have been charging. You can also use it to pay some utilities or other monthly expenses automatically. As you use the card more often, and you don't overuse it, the credit card company will generally raise your credit limit. This will then help you because that will drop your utilization ratio. Just repeat the process by adding another class of charges to you credit card usage. This expanded use of credit will in the long run help your score. The online systems allow you to see every day what your balance is, thus minimizing surprises.", "title": "" }, { "docid": "e674ed76f3aa585ef0cb15210fb3b9bb", "text": "\"You don't need to have a bunch of credit cards lying around; just a couple is fine. Get a \"\"rewards\"\" card (without annual fee) that pays you back for use, and use it regularly to buy groceries, for example. Pay it off promptly each month, using the rewards, if you like, to reduce the amount you have to send in. Or you can use the rewards for other purchases; some merchants offer $25 worth of merchandise for $20 in rewards. It used to be the case that you could negotiate a discount for paying cash rather than use a credit card, but that is a lot harder to do now, in many cases because credit-card company contracts with merchants prohibit this practice. Also, merchants often prefer credit cards rather than cash because money-handling is an issue (pay for an armored car to come pick up the day's receipts, or risk getting mugged on the way to the bank, possible burglaries if you leave the money overnight in the store, daily balancing of cash-register trays, etc.) So, not being in debt and being rich enough to not need to be in debt are laudable goals, and you have my best wishes that you will reach them soon, but getting rid of all your credit cards as a part of not being in debt may be more trouble than it is worth. Keep a couple, pay them off promptly, and if you are concerned about being in debt, you can time your charges so that you are in debt at most 2 or 3 days each month.\"", "title": "" }, { "docid": "73482068f4307869d77dc8e96df8edd4", "text": "Why would a lender for a down payment want proof of income for a house when a credit card issuer gave me more and doesn't care? The risk profile and rate of interest are different. Could I use this argument as a basis that they have no reasoning to request proof of income, if another lender (credit card company) would give me more without proof of repayment? You could argue anything, but it does not mean the other company will agree with your argument. Should I borrow a home loan from a credit card company then? Or what's the catch here? You can. Check the rate of interest and penal fees; you would realize how much you will end up paying. Depending on the country, the difference could be in the region of 10-15%.", "title": "" }, { "docid": "17623f52cf7471b1f4d016ed8e5e8957", "text": "There are non-financial costs to having a debt: you need to remember to make monthly payments, perhaps keep track of changing interest rates, be aware of conditions of the debt, archive the related paperwork. Life is simpler with fewer debts, and that has value. Of course, if the difference in interest rate is large, then that is more important and the higher interest should be paid off first. But if the difference is only half a percentage point or so, you may decide that having fewer debts is in itself worth the bit of extra interest you pay.", "title": "" }, { "docid": "656fa8ca4e7f2805511c0fe027f03114", "text": "\"There are two issues here: arithmetic and psychology. Scenario 1: You are presently paying an extra $500 per month on your student loan, above the minimum payments. Your credit card company offers a $4000 cash advance at 0% for 8 months. So you take the cash advance, pay it toward the student loan, and then instead of paying the extra $500 per month toward the student loan you use that $500 for 8 months to repay the cash advance. Net result: You pay 0% interest on the loan, and save roughly 8 months times $4000 times the interest on the student loan divided by two. (I say \"\"divided by two\"\" because it's not the difference between $4000 and zero, but between $4000 and the $500 you would have been paying off each month.) Clearly you are better off. If you are NOT presently paying an extra $500 on the student loan -- or even if you are but it is a struggle to come up with the money -- then the question becomes, can you reasonably expect to be able to pay off the credit card before the grace period runs out? Interest rates on credit cards are normally much higher than interest rates on student loans. If you get the cash advance and then can't repay it, after 8 months you are paying a very steep interest rate, and anything you saved on the student loan will quickly be lost. What I mean by \"\"psychological\"\" is that you have to have the discipline to really repay the credit card within the grace period. If you're not very confidant that you can do that, this plan could go bad very quickly. Personally, I've thought about doing things like this many times -- cash advances against credit cards, home equity loans, etc, all give low-interest money that could be used to pay off a higher-interest debt. But it's easy to get into trouble doing things like this. It's easy to say to yourself, Well, I don't need to put ALL the money toward that other debt, I could keep a thousand or so to buy that big screen TV I really need. Or to fail to pay back the low-interest loan on schedule because other things keep coming up that you spend your money on instead, whether frivolous luxuries or true emergencies. And there's always the possibility that something will happen to mess up your finances, from a big car repair bill to losing your job. You don't want to paint yourself into a corner. Finally, maxing out your credit cards hurts your credit rating. The formulas are secret, but I understand that if you use more than half your available credit, that's a minus. How much it hurts you depends on lots of factors.\"", "title": "" }, { "docid": "fc8424217a86294ba50e8a485dea0f79", "text": "\"Pay cash. You have the cash to pay for it now, but God forbid something happen to you or your wife that requires you to dip into that cash in the future. In such an event, you could end up paying a lot more for your home theater than you planned. The best way to keep your consumer credit card debt at zero (and protect your already-excellent credit) is to not add to the number of credit cards you already have. At least in the U.S., interest rates on saving accounts of any sort are so low, I don't think it's worthwhile to include as a deciding factor in whether not you \"\"borrow\"\" at 0% instead of buying in cash.\"", "title": "" }, { "docid": "30896bb83843311d354c67952e993188", "text": "This is a good idea, but it will barely affect your credit score at all. Credit cards, while a good tool to use for giving a minor boost to your credit score and for purchasing things while also building up rewards with those purchases, aren't very good for building credit. This is because when banks calculate your credit report, they look at your long-term credit history, and weigh larger, longer-term debt much higher than short-term debt that you pay off right away. While having your credit card is better than nothing, it's a relatively small drop in the pond when it comes to credit. I would still recommend getting a credit card though - it will, if you haven't already started paying off a debt like a student or car loan, give you a credit identity and rewards depending on the credit card you choose. But if you do, do not ever let yourself fall into delinquency. Failing to pay off loans will damage your credit score. So if you do plan to get a credit card, it is much better to do as you've said and pay it all off as soon as possible. Edit: In addition to the above, using a credit card has the added benefit of having greater security over Debit cards, and ensures that your own money won't be stolen (though you will still have to report a fraudulent charge).", "title": "" }, { "docid": "a4d4d17abf7f4bb3f36468d46080dd2e", "text": "You should check out Dave Ramsey's Baby Steps. He has an great and well organized plan for getting out of debt and building wealth. My wife and I have followed the plan and will be paying off our home this year :) His advice on debt payments is to pay off the smallest balance first. This helps motivate you and your husband to push harder on your debts. Once the first pay is paid the money that would have gone to that debt is applied to the next smallest debt and so on. This is called a 'debt snowball' since by the end you will have plenty of money to pay that last few debts. While working on the smallest debt, making minimum payments on the others. Stop using the credit cards entirely! Don't use gimmicks to avoid facing the reality of the debt. Close your accounts and commit to never borrowing money again. This is a huge physiological shift. I used credit cards all the time for decades, that is a thing of the past for us, we pay cash or don't buy it. In your case, paying the 80% interest loan off is likely to be priority. I didn't even realize that was legal. Hopefully that is also the smallest balance. Start making a monthly budget and sticking to it. Check out Dave's 'irregular income' budget form, it is meant for couples in your situation. The first steps will be to pay food, rent, utilities and transportation. After that, list your debts in priority order and pay them as your husbands income comes in during the month. Don't despair, you two can get your financial life cleaned up! You just need a good plan and a lot of focus.", "title": "" }, { "docid": "ff94d2c1b922fbda2b7e1af8cf1d21de", "text": "40% of income going to debt payments being their line is reasonable I guess, BUT maybe it should be higher for educated high earners. For example, currently I'm technically using about 50% of my monthly income because I'm a new graduate with some student debt and I'm trying to pay it off aggressively, in under a year. Despite this, my income is high enough that the remaining 50% is enough to support a decent lifestyle. In a couple of months when I'm paid off I can probably start saving several thousand dollars a month. Do I really have a debt problem?", "title": "" }, { "docid": "7eed84ad4b80fec1858f73bf62327c7e", "text": "\"It can be difficult when all your disposable income is spoken for. Your options depend on how good your credit is and how flexible your expenses are. I don't have all the answers without more details (possibly not then). However, couple of points of advice: Paying off that credit card debt (and not adding any more to it) is your #1 priority. You should make minimum payments to every other debt until you have done that because the interest on it will kill you in the mean time. It is always optimal to pay the maximum to your highest interest debt and minimum to all other debts. 11% doesn't sound very good on your house loan. You may want to consider refinancing. That is, if you can get a lower rate. You may also want to get a longer term loan (if you have enough discipline to use the extra income to actually pay off your credit card and then the put it toward the house when the cards are paid off). Look at options to increase your income, at least temporarily. Second jobs and such. When your finances are more in order, you can back off. The debt \"\"trap\"\" is behavioral. We humans tend to increase our spending until we can't any more. But the reason we can't spend any more is that we have increased our debt until we have no flexible income. Then we are stuck for a long time and have few options. The only way out (long term) is to change our habits so that we don't increase spending each time we pay down a debt or get an increase to our income. Financial discipline is the only way to have financial security. Almost always the first step is to pay off credit cards and stop maintaining a balance (always pay off every card at the end of each month). Then start paying off other debts from highest interest rate to lowest. This is a hard challenge and one most of us face at some point in our lives. Good luck!\"", "title": "" }, { "docid": "a47cc29f2e01747714734a1f3a1113ca", "text": "Eventually you are going to need some sort of real credit history. It is possible that you will be able to evade this if you never buy a house, or if you pay cash for any house/condo/car/boat/etc that you buy. Even employers check credit history these days. I wouldn't be surprised if some medical professionals such as surgeons check it also. Obviously if you have a mortgage and car loan this doesn't apply, but I'd be curious how you acquired those unless you have substantial income and/or assets. Combine this with the fact that certain things like renting a car essentially require a credit card (because they need to put a hold on more money than they are actually going to take out of your card, so they can take that money if you don't bring the car back), and I think you should have a credit card unless you and your wife are individuals with zero impulse control, which sounds highly improbable. If your concern is the financial liability of the credit line, just keep the credit line low.", "title": "" }, { "docid": "4092581e5dfc9f3941908358653b8cde", "text": "With a credit card debt at 17%, you should basically not eat in order to pay the balance off. This should be gone within the month. That being said, I would have a hard time reducing my contributions below the 4%, but would certainly do it to the 4%. However, I would also deliver pizzas on nights and weekends and work all available overtime. Coincidentally the pizza place by my home is hiring delivery drivers however, they did not disclose how much they typically make. Only that they make min wage plus tips. Make sure you stop borrowing first, then try to have this knocked out in 4 weeks or less.", "title": "" }, { "docid": "cd95920332a53490541978e50e20cf44", "text": "By reducing your debt you will increase your borrowing capability which will only increase your credit score. But before you start worrying about your credit score as JoeTaxpayer says I would first stop paying 18+% to the bank.", "title": "" } ]	fiqa
e8fea7f6ed2c81f1d64efe0dbf1dbdf3	Will paying off my car early hinder my ability to build credit?	[ { "docid": "02e6798c639b94b2ad34d967795f687b", "text": "Don't fuss about your credit score when you're paying 9%. Get rid of the loan as fast as you can. Period.", "title": "" }, { "docid": "2b5ce47533be35a241aa99f1f4f8fec9", "text": "No. Credit scores are primarily built by doing the following: To build credit, get a few major credit cards and a couple of store cards. Use one of them to make routine purchases like gas and groceries. Pay them on time every month. You're good to go. I would hate to sell stocks to pay off a loan -- try finding a better loan. If you financed through the dealer, try joining a credit union and see if you can get a better rate.", "title": "" }, { "docid": "06b62f2e839c4409e58c08dab7ad9f74", "text": "1) How long have you had the car? Generally, accounts that last more than a year are kept on your credit report for 7 years, while accounts that last less than a year are only kept about 2 years (IIRC - could someone correct me if that last number is wrong?). 2) Who is the financing through? If it's through a used car dealer, there's a good chance they're not even reporting it to the credit bureaus (I had this happen to me; the dealer promised he'd report the loan so it would help my credit, I made my payments on time every time, and... nothing ever showed up. It pissed me off, because another positive account on my credit report would have really helped my score). Banks and brand name dealers are more likely to report the loan. 3) What are your expected long term gains on the stocks you're considering selling, and will you have to pay capital gains on them when you do sell them? The cost of selling those stocks could possibly be higher than the gain from paying off the car, so you'll want to run the numbers for a couple different scenarios (optimistic growth, pessimistic, etc) and see if you come out ahead or not. 4) Are there prepayment penalties or costs associated with paying off the car loan early? Most reputable financiers won't include such terms (or they'll only be in effect during the first few months of the loan), but again it depends on who the loan is through. In short: it depends. I know people hate hearing answers like that, but it's true :) Hopefully though, you'll be able to sit down and look at the specifics of your situation and make an informed decision.", "title": "" }, { "docid": "ab424416dc1d8ad0e216fd37e4b0ff4a", "text": "12% is ridiculously high and routine for loans with no credit history, esp. from the dealer. I don't think though paying off would hurt your credit - you've already got installment loan on your report, and you have history of payments, so it shouldn't matter how long the history is (warning: this is kind of guesswork compiled from personal experience and stuff read on the net, since officially how credit score calculated is Top Secret). If you have the loan and credit card with good payments, only thing you need to build credit is time (and, of course, keeping everything nicely paid). Of course, if you could find a loan with lower rate somewhere it's be great to refinance but with low credit you would probably not get the best rates from anywhere, unfortunately.", "title": "" } ]	[ { "docid": "15c15857ff5c581f243a3b1e99ffd3f1", "text": "If you have no credit score it is generally far easier and more affordable to establish credit the cheapest way possible, which is usually in the form of a small credit card (student card if you are a student, low credit line unsecured, or even secured if you need). Your local bank/credit union will usually be keen to offer you something to start out, but you can also apply online to some of the major credit card vendors. As always, look out for annual fees, etc. In general, trying to get a larger loan to establish credit will cost you a lot as you will not qualify for any legitimate 0% or ultra-low APR car loans - those are reserved for people with established and generally pretty good credit. I expect you'll find a car loan that will have a lower APR than you could get investing your money otherwise - especially if you do not have established excellent credit - to simply be a phantom (you won't find it), and even if you could it is more risky than it is worth. Furthermore, if establishing credit is important to you (such as for buying a house down the road), you can build an excellent credit score without ever having a car loan. So you don't have to buy a car on borrowed money just to hope to get approved for a house some day - it's just not a requirement. Finally, I urge you to make a decision on the best car for you in your situation, ignoring the credit score - especially if you are more than 3-5+ years away from buying a house. Everything else about buying a car is more important - the actual cost of the car, year, mileage, suitability for your needs, gas mileage, maintenance and insurance costs, etc. Then, at the very end of your decision making process, ensure that buying the car would not put you dangerously low on savings by squeezing your emergency fund. Decide if you really need a loan or as expensive of a car, considering the costs over the expected life of you owning the car (or at least the next 2-5 years). Never get trapped into just thinking about monthly payments, which hide the true cost of loans and buying beyond what you can afford to purchase today.", "title": "" }, { "docid": "d4d9b4643ff543beead589bc07cf7501", "text": "\"I think so. I am doing this with our furniture. It doesn't cost me any more money to pay right now than it will to pay over the course of 3 years, and I can earn interest on the money I didn't spend. But know this: they aren't offering 0%, they are deferring interest for 3 years. If you pay it off before then great, if you don't you will owe all the accumulated interest. The key with these is that you always pay it, and on time. Miss a payment and you get hosed. If you don't pay on time you will owe the interest that is being deferred. They will also be financing this through a third party (like a major bank) and that company is now \"\"doing business with you\"\" which means in the US they can call you and solicit new services. I am willing to deal with those trade offs though, plus, as you say, you can always pay it off. WHY THEY DO IT (what is in it for them...) A friend of mine works for a major bank that often finances these deals here is how they work. Basically, banks do this to generate leads for their divisions that do cold calls. If you are a high credit, high income customer you go to a classic bank and request cash, if you are building credit or have bad credit, you go to a \"\"financial services\"\" branch. If you tend to finance things like cars and furniture, you get more cold calls.\"", "title": "" }, { "docid": "9803f597eb3d7a5ba67d66094d3a4d74", "text": "Imagine that your normal mode of using credit gets you a score of X. As time goes by your score trends upward if the positive items (length of credit) outweigh your negative items. But there are no big increases or decrease in your score. Then you make a one time change to how you use credit. If this is a event that helps your score, there will be a increase in your score. If it is bad thing your score will drop. But if you go back to your standard method of operating your score will drift back to the previous range. Getting a car loan for a few months to get a bump in your credit score, will not sustain your score at the new level indefinitely. Overtime the impact will lessen, and the score will return your your normal range. Spending money on the loan just to buy a temporary higher credit score is throwing away money.", "title": "" }, { "docid": "4f9f5b030ba22a07c5635bb76abf7cda", "text": "The dealership is getting a kickback for having you use a particular bank to finance through. The bank assumes you will take the full term of the loan to pay back, and will hopefully be a repeat customer. This tactic isn't new, and although it maybe doesn't make sense to you, the consumer, in the long run it benefits the bank and the dealership. (They wouldn't do it otherwise. These guys have a lot of smart people running #s for them). Be sure to read the specifics of the loan contract. There may be a penalty for paying it off early. Most customers won't be able to pay that much in cash, so the bank makes a deal with the dealership to send clients their way. They will lose money on a small percentage of clients, but make more off of the rest of the clients. If there's no penalty for paying it off early, you may just want to take the financing offer and pay it off ASAP. If you truly can only finance $2500 for 6 mos, and get the full discount, then that might work as well. The bank had to set a minimum for the dealership in order to qualify as a loan that earns the discount. Sounds like that's it. Bonus Info: Here's a screenshot of Kelley Blue Book for that car. Car dealers get me riled up, always have, always will, so I like doing this kind of research for people to make sure they get the right price. Fair price range is $27,578 - $28,551. First time car buyers are a dealers dream come true. Don't let them beat you down! And here's more specific data about the Florida area relating to recent purchases:", "title": "" }, { "docid": "8785bed1c0db891da8bbb9ac28373e9d", "text": "The problem is that the reason you find out may be that you are at the car dealer, picked out a car, and getting ready to sign the loan papers with your supposedly good credit, and you are denied for late payment on loans you didn't know you have. Or debt collectors start hounding you. Or you credit card interest rates go up. Or you are charged more for your insurance because you are seen as a bad credit risk. Or you can't rent an apartment. The list is almost endless. It can takes many months and hours spent on the phone to fix these things.", "title": "" }, { "docid": "7272a66bfcb146100e122085b2ec6a24", "text": "From what I have heard on Clark Howard if you pay your balance off before the statement's closing date it will help your utilization score. He has had callers confirm this but I don't have first hand knowledge for this to be true. Also this will take two months to make the difference. So it will be boarder line if you will get the benefit in time. Sign up for credit karma if you like. You can get suggestions on how to help your score.", "title": "" }, { "docid": "6517ba1f07915102ded4d29d75dde043", "text": "If you pay it off before the cycle closes it will look like you have 100% available credit. So if you credit card statement closes on the 7th pay it off on the 6th in full don't pay it when its due 2/3 weeks later. Then after three months of doing that your credit score will go up based on the fact that your debt ratio is so low. That ratio is 30% of your credit score. It will help quite alot.", "title": "" }, { "docid": "fd92ae640d0132ad1116e6974e160e93", "text": "\"Paying off a loan early isn't a bad thing. Having a credit card for 6 months and then closing it is probably unneeded; pay it off and then keep it as an emergency card. The key is debt:available credit ratio. Look at this article for example which explains the different elements; the only one you're affecting here is the second, your debt load. If you're not planning on asking for another loan in the next six months, none of this really matters - assuming you are paying it off for sure, in six months, your debt will be gone and your credit score recovered from any hit it takes (and if you get a $1500 credit card and only put $300 on it, it might actually improve your credit). But having an open $1500 credit card with a 0 balance will probably improve your credit rating, unless you have a really high amount of available credit. It will improve your debt/credit ratio (ie, total $ you owe divided by total $ you could put on your CCs/revolving credit). This is all aside from the \"\"is it a good idea to borrow money for a 3 month vacation before starting working\"\", which the answer is \"\"Well, not exactly\"\". That's not from a credit perspective, just from a living within your means perspective. If you have a firm job that will easily pay off the vacation, it's probably not a bad thing, but definitely a certain number of people will take this and end up in 'spending bad habits' that last their life. Be aware of that, and if you're just loaning yourself money from the future, make sure you understand the terms of that loan... and are certain you can pay it off.\"", "title": "" }, { "docid": "941588d47aacbc1883e1d105c11e0b4b", "text": "\"Credit is like dignity - it takes a long time to build but a short time to lose. Your credit history is mostly made up of your prior activity for several years. There's no \"\"quick fix\"\" to raise your credit score in a short period. Paying your student loans on time will help, but it will take quite some time for that activity to make a big difference in your credit. If you can't get approved for a car loan of $15k, then perhaps it's time to either reset your expectations or save up enough to make a large down payment on a more expensive car. Instead of prepaying your student loans that are not due, save up that money for a down payment. You can get an incredibly reliable car for much less than $15,000. Also, make sure that you will be able to afford the car payment when your student loans do become due (based on your current salary, not some hypothetical future salary) Another plan: drive your car for another year, pay off your student loans in that time, and then you might have enough credit history to get a better loan.\"", "title": "" }, { "docid": "6787c5a4ece0bd9aca6d411366063770", "text": "While, from a money-saving standpoint, the obviously-right course of action is to make only the minimum payment on the 0% loan, there are potentially legal reasons to try to pay off a car loan early. With a mortgage, you are the legal owner of the property and any action by the lender beyond imposing fees (e.g. foreclosure) requires going through the proper legal channels. On the other hand, in most jurisdictions, you are not the legal owner of a car purchased on a loan, and a missed or even lost payment can result in repossession without the lender even having to go to court. So from a risk-aversion standpoint, there's something to be said for getting rid of car loans as soon as you can.", "title": "" }, { "docid": "46e0fd4a0513b1e04e20f5ec1819ed82", "text": "Sometimes I think it helps to think of the scenario in reverse. If you had a completely paid off car, would you take out a title loan (even at 0%) for a few months to put the cash in a low-interest savings account? For me, I think the risk of losing the car due to non-payment outweighs the tens of dollars I might earn.", "title": "" }, { "docid": "4e5fd662a672e4645120d38ef17e20f9", "text": "The main benefit of paying off the loan early is that it's not on your mind, you don't have to worry about missing a payment and incurring the full interest due at that point. Your loan may not be set up that way, but most 0% interest loans are set up so that there is interest that's accruing, but you don't pay it so long as all your payments are on time, oftentimes they're structured so that one late payment causes all of that deferred interest to be due. If you put the money in the bank you'd make a small amount of interest and also not have to worry about funds availability for your car payment. If you use the money for some other purpose, you're at greater risk of something going wrong in the next 21 months that causes you to miss a payment and being hit with a lot of interest (if applicable to your loan). If you already have an emergency fund (at least 3-6 months of expenses) then I would pay the loan off now so you don't have to think about it. If you don't have an emergency fund, then I'd bank the money and keep making payments, and pay it off entirely when you have funds in excess of your emergency fund to do so.", "title": "" }, { "docid": "ab26a4fd6f538c04bfc2f5b70df5e51d", "text": "Personally, I don't think that the interest from the car loan is worth the credit history you're building through it. There are other ways to build credit that don't require you to pay interest, like the credit card you mentioned (so long as you keep paying off the balance). So I'd go that route: ditch the auto loan and replace it with a line of consumer credit. Just be careful not to overspend because the card will likely have a higher interest rate than your loan.", "title": "" }, { "docid": "d9758baa2e8282051e22e60e24a3559e", "text": "\"It makes no sense to spend money unnecessarily, just for the purpose of improving your credit score. You have to stop and ask yourself the question \"\"Why do I need a good credit score?\"\" Most of the time, the answer will be \"\"so I can get a lower interest rate on (ABC loan) in the future.\"\" However, if you spend hundreds or even thousands of dollars in the present, just so that you can save a few points on a loan, you're not going to come out ahead. The car question should be considered strictly in the context of transportation expenses: \"\"It cost me $X to get around last year using Lyft. If instead I owned a car, it would have cost me $Y for gas, insurance, depreciation, parking, etc.\"\" If you come out ahead and Y < X, then buy the car. Don't jump into an expensive vehicle (which is never a good investment) or get trapped into an expensive lease which will costs you many times more than the depreciation value of a decent used car, just so that you can save a few points on a mortgage. Your best option moving forward would be to pay off your student loans first, getting rid of that interest expense. Place the remainder in savings, then start to look at a budget. Setting aside a 20% down payment on a home is considered the minimum to many people, and if that is out of reach you might need to consider other neighborhoods (less than 400K!). If you're still concerned about your credit score, a good way to build that up (once you have a budget and spending under control) is to get a credit card with no annual fees. Start putting all of your expenses on the credit card (groceries, etc), and paying off the balance IN FULL every month. By spending only what you need to within a reasonable budget, and making payments on time and in full, your credit rating will begin to gradually improve. If you have a difficult time tracking your expenses or sticking to a budget, then there is potential for danger here, as credit cards are notorious for high interest and penalties. But by keeping it under control and putting the rest toward savings, you can begin to build wealth and put yourself in a much better financial position moving into the future.\"", "title": "" }, { "docid": "e6f35098b4eace30b2e36802e1eef540", "text": "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.", "title": "" } ]	fiqa
3e3c33c39a17469e54ee135478fad2cd	If the co-signer on my car loan dies, can the family take the car from me like they're threatening to?	[ { "docid": "fefedb73e7061bab2a239618cd3b88c2", "text": "It looks to me like this is a 'call an attorney' situation, which is always a good idea in situations like this (family legal disputes). But, some information. First off, if your family is going to take the car, you certainly won't need to make payments on it any more at that point, in my opinion. If the will goes through probate (which is the only way they'd really be able to take it), the probate judge should either leave you with the car and the payments, or neither (presumably requiring the family to pay off the loan and settle your interest in the car). Since the car has negative net value, it seems unlikely that the probate judge would take the car away from you, but who knows. Either way, if they do take the car away from you, they'll be doing you a service: you have a $6,000 car that you owe $12,000 on. Let them, and walk away and buy another car for $6,000. Second, I'm not sure they would be allowed to in any event. See the Illinois DMV page on correcting titles in the case of a deceased owner; Illinois I believe is a joint tenancy state, meaning that once one owner dies, the other just gets the car (and the loan, though the loan documents would cover that). Unless you had an explicit agreement with your grandfather, anyway. From that page: Joint Ownership A title in the names of two or more persons is considered to be in joint tenancy. Upon the death of one of them, the surviving joint tenant(s) becomes the owner(s) of the vehicle by law. Third, your grandfather can fix all of this fairly easily by mentioning the disposition of the car and loan in his will, if he's still mentally competent and wishes to do so. If he transfers his ownership of the car to you in the will, it seems like that would be that (though again, it's not clear that the ownership wouldn't just be yours anyway). Finally, I am not a lawyer, and I am not your lawyer, so do not construe any of the text of this post as legal advice; contact a lawyer.", "title": "" }, { "docid": "a657ebfb18ae322601582d68caf28d63", "text": "If you've been paying on the car for three years, it's possible that your credit is in a place where you don't need a co-signer any more. See if your bank will re-fi with you as the sole debtor. If they won't do it, find another institution who will. The re-fi will take your grandpa off the loan, and whichever institution that does the re-fi will still have a lien on the title until you pay it off. Then, if you can do this soon enough, figure out if grandpa can sign you off the title.", "title": "" }, { "docid": "3e75f93da64387ecaa1aa9283f7e38ac", "text": "You're driving a car worth about $6000 which has a $12,000 loan against it. You're driving around in a nett debt of $6000. The best thing your grandfather could do for you, if possible, is to take your name off both the title and the loan, refinancing the car in his name only. If possible while still letting you drive the car. When he dies, you will be out of a car, but also out of a $12,000 debt which I'm sure you could do without. Okay, the best thing your grandfather could do, from your wallet's point of view, is paying off the loan for you and then taking his name off the title.", "title": "" }, { "docid": "103910ac8dd3b76e41e68a79b1d5874f", "text": "My grandmother passed away earlier this year. When I got my car 3 years ago, I did not have good enough credit to do it on my own or have her as a co-signer. We had arranged so that my grandmother was buying the car and I was co-signing. A similar situation was happening and I went to my bank and took out a re-finance loan prior to her passing. I explained to them that my grandmother was sick and on her death bed. They never once requested a power of attorney or required her signature. I am now the sole owner of the vehicle.", "title": "" }, { "docid": "ee24f07034a377de82b18f0529c03443", "text": "I think Joe is right, it seems that you will get the car once grandpa passes. It clearly states that on the DMV page. I would work like crazy to get this car paid off ASAP. Work extra and see if you can get it paid off in less than a year. Once paid off, have grandpa sign it over to you. This is a really toxic situation that you can reduce somewhat by having the car in your name only. Learn from this: have a will and keep it up to date. There is going to be a lot of fighting over the assets that grandpa leaves behind. You don't want that to be your legacy, and you don't want to tarnish your grandfathers memory by participating in such nonsense. My concern is why you have such poor credit. Understand that poor credit is a choice of behavior and there is no one to blame but yourself. I would recommend to stop borrowing completely until this car is paid off and all of your obligations are paid back (that is if you have items that are in collections). No vacations, no eating out, etc... Work don't spend.", "title": "" }, { "docid": "6a48cbd080376ed93cb44d5e4eb88d26", "text": "\"I was in a similar situation about a year ago, and the expedient thing to do would be to remove your grandfather from the Title. He would probably have to agree with this, but I think he will if you approach it correctly. In my case, I was the cosigner for my son's car loan and was told by the dealer that I \"\"had to be on the title\"\". This is not true as far as Virginia is concerned (Illinois may be different). I know this because when my son dropped his auto insurance I got the fine for having an uninsured vehicle and was told during the hearing that the dealer was mistaken. It all worked out in the end, but all we had to do was go down to the DMV and get my name taken off of the title. I'm sure if you approach it this way - you do not want him to be responsible for things that you do (who would get sued if you caused an accident?) he would agree to have his name removed from the title.\"", "title": "" }, { "docid": "2ef47bc6e77a08529092f461b85d993b", "text": "\"The lead story here is you owe $12,000 on a car worth $6000!! That is an appalling situation and worth a lot to get out of it. ($6000, or a great deal more if the car is out of warranty and you are at risk of a major repair too.) I'm sorry if it feels like the payments you've made so far are wasted; often the numbers do work out like this, and you did get use of the car for that time period. Now comes an \"\"adversary\"\", who is threatening to snatch the car away from you. I have to imagine they are emotionally motivated. How convenient :) Let them take it. But it's important to fully understand their motivations here. Because financially speaking, the smart play is to manage the situation so they take the car. Preferably unbeknownst that the car is upside down. Whatever their motivation is, give them enough of a fight; keep them wrapped up in emotions while your eye is on the numbers. Let them win the battle; you win the war: make sure the legal details put you in the clear of it. Ideally, do this with consent with the grandfather \"\"in response to his direct family's wishes\"\", but keep up the theater of being really mad about it. Don't tell anyone for 7 years, until the statute of limitations has passed and you can't be sued for it. Eventually they'll figure out they took a $6000 loss taking the car from you, and want to talk with you about that. Stay with blind rage at how they took my car. If they try to explain what \"\"upside down\"\" is, feign ignorance and get even madder, say they're lying and they won, why don't they let it go? If they ask for money, say they're swindling. \"\"You forced me, I didn't have a choice\"\". (which happens to be a good defense. They wanted it so bad; they shoulda done their homework. Since they were coercive it's not your job to disclose, nor your job to even know.) If they want you to take the car back, say \"\"can't, you forced me to buy another and I have to make payments on that one now.\"\"\"", "title": "" }, { "docid": "a2d26997f808375f6f9b0725bb83a7ee", "text": "My family members, particularly my aunt (his daughter), are telling me that when my grandpa dies they are taking my car. Bring this up with Grandpa. If this is what he wants to have happen, then help him make it happen before you finish paying $12,000 on a car worth only $6,000. Let the Aunt and other relatives deal with the remaining $12,000. If that isn't what he wants to have happen, then work out how you and he can legally make sure that what he wants to have happen actually happens. If the Aunt or others bring it up, make sure they understand that you still owe $12,000 on the car, and if they get the car they also get the loan. If they refuse to pay the loan then make sure they know you will cooperate with the bank when they attempt to repossess the car - up to and including providing them with keys and location. This will hurt your credit, and you will be on the hook for the remaining portion of the loan, but you at least won't have to deal with all of it - they'll sell it at auction and your loan amount will fall a little. But the best course of action is to work with Grandpa, and make sure that he understands the family's threats, how that will affect you since you're on the loan, and what options you'd like to pursue.", "title": "" }, { "docid": "500a2e4390c95d1355fd370b677acfd3", "text": "Possession is 9/10 of the law, and any agreement between you and your grandfather is covered under the uniform commercial code covering contracts. As long as your fulfilling your obligation of making payments, the contract stands as originally agreed upon between you and the lender. In short, the car is yours until you miss payments, sell it, or it gets totalled. The fact that your upside down on value to debt isn't that big of a deal as long as you have insurance that is covering what is owed.", "title": "" } ]	[ { "docid": "47f824d42ed7ff0928853fa65f72d426", "text": "\"I am not sure how anyone is answering this unless they know what the loan was for. For instance if it is for a house you can put a lien on the house. If it is for the car in most states you can take over ownership of it. Point being is that you need to go after the asset. If there is no asset you need to go after you \"\"friend\"\". Again we need more specifics to determine the best course of action which could range from you suing and garnishing wages from your friend to going to small claims court. Part of this process is also getting a hold of the lending institution. By letting them know what is going on they may be able to help you - they are good at tracking people down for free. Also the lender may be able to give you options. For example if it is for a car a bank may help you clear this out if you get the car back plus penalty. If a car is not in the red on the loan and it is in good condition the bank turns a profit on the default. If they can recover it for free they will be willing to work with you. I worked in repo when younger and on more than a few occasions we had the cosigner helping. It went down like this... Co-signer gets pissed like you and calls bank, bank works out a plan and tells cosigner to default, cosigner defaults, banks gives cosigner rights to repo vehicle, cosigner helps or actually repos vehicle, bank gets car back, bank inspects car, bank asks cosigner for X amount (sometimes nothing but not usually), cosigner pays X, bank does not hit cosigners credit, bank releases loan and sells car. I am writing this like it is easy but it really requires that asset is still in good condition, that cosigner can get to the asset, and that the \"\"friend\"\" still is around and trusts cosigner. I have seen more than a few cosigners promise to deliver and come up short and couple conspiring with the \"\"friend\"\". I basically think most of the advice you have gotten so far is crap and you haven't provided enough info to give perfect advice. Seeking a lawyer is a joke. Going after a fleeing party could eat up 40-50 billable hours. It isn't like you are suing a business or something. The lawyer could cost as much as repaying the loan - and most lawyers will act like it is a snap of their fingers until they have bled you dry - just really unsound advice. For the most part I would suggest talking to the bank and defaulting but again need 100% of the details. The other part is cosigning the loan. Why the hell would you cosign a loan for a friend? Most parents won't cosign a loan for their own kids. And if you are cosigning a loan, you write up a simple contract and make the non-payment penalties extremely costly for your friend. I have seen simple contracts that include 30% interests rates that were upheld by courts.\"", "title": "" }, { "docid": "0f422c0f802ac7f1df127f96a2e1c1e2", "text": "It's perfectly legal for your brother to make a loan to you. However those two transactions are separate. If he defaults on the LC loan because you didn't pay him, it's his responsibility. If you default on your loan with him, you've got big problems. Money + family/friends = scary.", "title": "" }, { "docid": "f95199bb23a6a4f41cb7bd60ecc340f8", "text": "It is possible for him to get a loan against the house as long as the deeding all takes place at the same time as the loan is closing. Basically you and your brother will both have paperwork to sign, and the title company will not send out checks until the loan funds from the mortgage company. For that deeding to take place, the estate will generally have to be fully settled. That can take time, but you might wish to retain a lawyer to be certain your interests are completely protected. Many people feel like getting legal representation will strain family relationships, but I find the opposite to be true. They often grease the wheels and get the process finished quickly and fairly which ultimately reduces such strain. I would view it as a good sign if he is paying off large debts, because that means he will be in a better position to take a mortgage to pay you your share, but that assumes he is acting in good faith.", "title": "" }, { "docid": "bb68642a73cf83fa8b727e24c41e3068", "text": "\"I'll take an alternate route: honesty + humor. Say something like this with a smile and a laugh, like you know they're crazy, but they maybe don't know it yet. \"\"Are you crazy? Co-signing a loan can put us both in a lot of potential danger. First, you shouldn't get a loan that you can't afford/attain on your own, and second, I'd be crazy to agree to be liable for a loan that someone else can't get on their own. You want something bad enough, you get your credit rating in order, or you save up the money - that's how I bought (my car/house/trip to Geneva). I'd be happy to point you in the right direction if you want to put a plan together.\"\" You're offering help, but not the kind that puts you in danger. Declining to co-sign a loan can't damage your relationship with this person as much as failure to pay will.\"", "title": "" }, { "docid": "64fb7a323214f50afbc01fecc4753d61", "text": "Your first step is to talk to the current lender and ask about refinancing in the other person's name. The lender is free to say no, and if they think the other person is unlikely to pay it back, they won't refinance. If you're in this situation because the other person didn't qualify for a loan in the first place, the lender probably won't change their mind, but it's still worth asking. From the lender's point of view, you'll be selling the other person the car. If they qualify for a loan, it's as simple as getting the loan from a bank, then doing whatever is required by your state to sell a car between either private parties or between relatives (depending on who the other person is). The bank might help you with this, or your state's DMV website. Here are a few options that don't involve changing who is on the loan: Taking out a loan for another person is always a big risk. Banks have entire departments devoted to determining who is a good credit risk, and who isn't, so if a person can't get a loan from a bank, it's usually for a good reason. One good thing about your situation: you actually bought the car, and are the listed owner. Had you co-signed on a loan in the other person's name, you'd owe the money, but wouldn't even have the car's value to fall back on when they stopped paying.", "title": "" }, { "docid": "471cf77dadff4da873d468a9f47e4634", "text": "Trying to forcefully reclaim the money will ruin the relationship. In general it's bad practice to loan money to family.", "title": "" }, { "docid": "02c554b123f454bc0dc4804415f6849f", "text": "If I am the guarantor for someone else's loan, can my personal property be possessed if the other person doesn't pay back the loan? As you have not indicated jurisdiction / country ... laws vary. In general; Yes. Your personal property can be possessed. However the financial institution has to send notices, get a court order and then possess your property and auction it. They can also freeze your Bank Account, or any other assets you have. There is no restriction as you have given a blanket guarantee. Note depending on Jurisdictions your estate and or legal heirs can also be liable to this if you die during the course of loan. can my property be mortgaged as a guarantee to his loan? Depending on how this is worded in legal contract, you can mortgage your property ONLY as a guarantee to his loan. In such cases financial institution can only take your property, but cannot take any other assets such as Bank deposits etc.", "title": "" }, { "docid": "7ba1aa8230b37c2401e3c92abe036ee2", "text": "\"Your arrangements with the bank are irrelevant. Whoever is named on the title of the vehicle owns it. If she is the \"\"primary\"\", then I assume her name is on the title, therefore she owns the car. If you drive off with the car and it is titled in her name, she can report it stolen and have you arrested for grand theft auto unless you have a dated and signed permission in writing from her to use the car. Point #2: If a car loan was involved, then you didn't \"\"purchase\"\" the car, the bank did. If you want to gain ownership of the car, then you need to have her name removed from the title and have yours put in its place. Since the bank has possession of the title, this will require the cooperation of both your girlfriend and the bank.\"", "title": "" }, { "docid": "d76c00feba56517fbd458f3b54de4739", "text": "\"My personal rule is to not loan money (or co-sign) for any amount that I am not willing to give away. It can go wrong in so many ways, and having a family or friend involved means making a \"\"business\"\" decision is difficult. If a bank won't loan the person the money, why should I? Being a co-signer is the same as borrowing the money in my name and giving it right over to the borrower. There might be great reasons to do it. I would probably sign a loan to keep my family alive or healthy, but no other reason. There are many ways to help without signing a loan. Give a room and a place to live, loan a car. The other thing is if you really truly believe in the borrower, it won't do long term damage to your credit or your financial goals, and you are the only resort; go ahead. I am thinking about helping a teenager afford their first car or student loans.\"", "title": "" }, { "docid": "f88dded301c180c38ceda078c73a1813", "text": "California bankruptcy law requires disclosure of any gift made by the person declaring bankruptcy in the past 12 months, and any asset transfers in the past 2 years (with a couple of minor exceptions). This would most certainly include the car, if it is regifted back to you. Such a claim would likely be considered fraudulent, though this would be a matter for the lawyers and bankruptcy trustee in question. There's a blog which you may wish to check out, the California Bankruptcy Blog, which has a specific entry on gifts. Now, there is a specific exemption for automobiles, but only up to a total of $2725. Legally, I believe there's nothing you can do here. If the $10K was a loan, it will be discharged in bankruptcy. If it was a gift, it'll have to be declared and the car will have to be sold. If regifted or transferred, it must be declared and will likely (but not definitely) be determined as an invalid disposal of assets. Either you or your family member will have to discuss this with a bankruptcy lawyer. I'm sorry your generous act is likely to get tangled up here. :(", "title": "" }, { "docid": "aa7249bc10aae89097fb5618623ffebb", "text": "\"I can answer this question for my jurisdiction (Florida, USA), because I lived through it. My Dad (\"\"Alice\"\") passed away in 2008, just as the housing crisis was starting to heat up. What happened to the Mortgage? My Dad had a will in place. It was an old will (from the 1980's), but never-the-less, a will. We had to provide paperwork to the court that my Mom had already passed away, and my oldest brother was living out-of-state (he would have been the executor, otherwise). With the proper paperwork, I became the Executor, and the property passed in to probate. At this point, the \"\"Estate\"\" was responsible for the house and the mortgage on it (meaning me, as I was the Executor). We decided to sell the house, so we hired a realtor, and set an asking price about $40k over what was owed on it. As we waited for it to sell, I had to make monthly mortgage payments, and payments to the HOA (otherwise the HOA could put a lien on the property, making it more difficult to sell, should we find a buyer). Is it Automatically Transferred? In most jurisdictions, I would say not \"\"automatic\"\". I definitely had get an estate lawyer and file the proper legal paperwork with the local county courthouse. Some states have an easier probate process (\"\"Summary Administration\"\" in Florida), that eases the requirements for small estates. Is Bob expected to pay it off all at once? No, the mortgage holder was happy for me to make payments (out of other estate assets) in lieu of my Dad. The were earning interest, after all. This is probably true in most cases. Can the House be Foreclosed on? Yes. In our case, being 2008, we had a hard time selling the property. The asking price quickly went from $40k over what was owed, to $20k over, to $10k over, then to being equal to the mortgage value. Finally, I approached the bank about options. They suggested a \"\"Deed in Lieu of Foreclosure\"\" process. It was easier for us, and the bank had to pay less lawyers and such. Otherwise, a \"\"Deed in Lieu\"\" is effectively the same as a Foreclosure. At that point, we stopped making payments. Eventually, me and all my siblings (the \"\"heirs\"\") had to sign the proper paperwork giving the house over to the bank. In our case, the bank did not pursue us (or rather, the Estate) for the difference between final (auction) sale price and the mortgage balance (it was an FHA loan, so the US Government wound up picking up the difference). From what I understand, this could have happened, and we would have wound up with basically nothing out of the Estate. Can the Lender Force the Sale? I can't give a definite answer on this, but it probably depends. If you don't pay? Yes they sure can--it's usually part of the standard mortgage contract! I see 2 other options:\"", "title": "" }, { "docid": "bb9ea76eef68b7af44e872e2f37d6569", "text": "Sorry, but I think you really do need an attorney here. This is the kind of minefield where knowing all the precedents and edge cases can make a huge difference in what you can or can't do, and a misplaced comma can make or break your case. Note that AT BEST you could sell your own interest in the house -- owning the note does not mean owning the property, it only means that they issued the note on the strength of your share of the property. And a half-interest in a single family house has little value outside the family, except to sell it to whoever owns the other half. Which is probably the best answer: Sell your half to your Aunt, if she can afford to buy it. She then gets sole control of the house, and you get the money you seem to need right now, and everyone in the family is much less stressed.", "title": "" }, { "docid": "25c80accc613ec73f5527afe291d030d", "text": "\"The wording of this question is very confusing because \"\"primary signer\"\" would, in ordinary parlance, mean the person borrowing the money and the co-signer (not consigner) would mean the one who is guaranteeing the repayment of the loan: if the borrower does not pay, the co-signer is liable for making the payments. Whose name is on the title of the car? Who borrowed the money to buy the car? Is the loan in your name and your son co-signed the loan to induce the bank to loan you money to purchase the car, or is it the other way around, that your son borrowed the money and you co-signed the loan in order to induce the bank to loan your son the money? If the car title and the loan are in your name, are you defaulting on the loan and so your son is making the loan payments that should have come from you? Or is it that your son borrowed the money to buy the car, his name is on the title, he is making the payments, and you are no longer interested in backing him up in case he defaults and the bank comes after you for the money?\"", "title": "" }, { "docid": "47ca2ebd48c16a0fe2a36b483c2e944e", "text": "\"fair enough, but I wasn't sure if you actually get it or not because your question seemed to revolved around cash and transaction value. You are really just said \"\"skewing\"\" is if you didn't add net debt the multiple wouldn't be a valid muliptle. If you understand it, why start out with this mental exercise of saying \"\"we shouldn't calculate multiples wrong, because then they would be wrong\"\"?\"", "title": "" }, { "docid": "aa1af5d9d393c3f322ed64975a43200c", "text": "\"Not all of the reason to start an LLC is liability (although that is implicit). There are two main reasons as far as I have experienced it: I always recommend that people set things up properly from the beginning. If you do start to grow, or if you need to cut your losses, it can be very difficult to separate yourself from the company if it isn't set up entirely apart from you. I was once told, \"\"Run your small company as you would wish it to be.\"\" Don't get into bad habits at the beginning. They become bad habits in big companies later on.\"", "title": "" } ]	fiqa
fc2b8f19da98d1affecfadeb13535e96	Is “folio” an acceptable contraction of “portfolio”?	[ { "docid": "76b2d1968365c35f2e5bf98dcb880a9a", "text": "\"Technically, no. According to the dictionary, a folio is a single sheet, and a portfolio is a folder or case for keeping your folios. In finance, your collection of investments is called your portfolio, probably because your broker (before the digital age) would keep the records of what each of his clients held in separate portfolios. However, I have seen the word folio used as a short colloquialism for portfolio, and if you google \"\"investment folio\"\" you will see it used this way, mainly in trademarked names of financial firms.\"", "title": "" } ]	[ { "docid": "ab52113ec7e01f75d7dbf10acd3beb4c", "text": "\"I'm searching for a master's thesis topic in equity investment or portfolio management and I'd be grateful if someone could tell me what are the hot \"\"trends\"\" going on right now on the market? Any new phenomenons (like the rise of blockchain, etf... but more relate to the equity side) or debates ( the use of the traditional techniques such as Beta to calculate WACC for example ...) ?\"", "title": "" }, { "docid": "295c1cac07bfe58abdf2e0119bef2013", "text": "\"> When did we switch the word \"\"image\"\" with \"\"optics\"\"? Back in 2010, the NYT wrote that \"\"[although the metaphorical expansion of 'optics' into the political arena feels novel, it has actually been brewing for a few decades.](http://www.nytimes.com/2010/03/07/magazine/07FOB-onlanguage-t.html)\"\" They identify usages going back to 1978 at least. It's not a direct synonym for \"\"image\"\", because it's often used to refer to a specific incident or transaction, where \"\"image\"\" wouldn't fit as well.\"", "title": "" }, { "docid": "1591690bb979c2f47dd02263ca7e3b83", "text": "\"This is another semantics question. Again what matters is how the words are commonly used, as the usage came about long before the technical definitions. In this case, when people say \"\"mutual fund,\"\" they are often including both unit investment trusts and closed end funds. Despite the labels the SEC has given in order to differentiate them, I'd say it's common (typical) practice to think of a closed-end fund as a type of mutual fund, rather than a different category altogether. That's the way I've seen it used, anyway.\"", "title": "" }, { "docid": "5af9686e550690d467ae3b41d118daf3", "text": "I get CapIQ and Bloomberg, and I definitely prefer Bloomberg just because of the completeness of information. There's nowhere else that you can get a full financial statement breakdown and then seconds later have a debt distribution schedule and then with another couple keystrokes get a complete credit ratings history and have that only be scratching the surface of the info available. CapIQ is sometimes better than Bloomberg for street consensus estimates going out more than a year or two but I don't find myself using it that much.", "title": "" }, { "docid": "4528e5c0fe117e1e8d0137b204884a6a", "text": "For us it's good. Long-only equity investing is mostly reading, thinking and modeling. Then there's the exciting 1% of communicating your work. Our office doesn't feel too DM like though. Gorgeous wood walls, plush rugs, artwork amazing NYC skyline view etc. We joke that you would think it was a law firm if not for the multiple monitors.", "title": "" }, { "docid": "1cbcf770e60f79eaa8769eba124b4658", "text": "\"Split your contributions evenly across the funds on that list with the word \"\"core\"\" or \"\"S&P\"\" in the name. Maybe add \"\"International Large Cap Index\"\". Leave it & rebalance occasionally. Read a book on Modern Portfolio Theory sometime in the next 5 years.\"", "title": "" }, { "docid": "f34126938100d1ea659c4147bd5c1df9", "text": "\"The SEC requires a certain format when submitting filings, which generally does not line up with how documents are typeset for printing. Rather than typeset the entire document again, it's just sort of accepted that the format in EDGAR will suck. Typesetters actually call the process \"\"EDGARizing.\"\" (I'm not making this up, I used to work in the department at a mutual fund company that put together the financial reports for the funds.) My guess is it's a relic from legacy systems at the SEC that can't handle newer formats like PDF.\"", "title": "" }, { "docid": "ff68b09fef2ab83c41d8cf7759d12c2c", "text": "The point of that question is to test if the user can connect shares and stock price. However, that being said yeah, you're right. Probably gives off the impression that it's a bit elementary. I'll look into changing it asap.", "title": "" }, { "docid": "12cf46e5aa8dc153b2ce8e72f94d8999", "text": "Diversified is relative. Alfred has all his money in Apple. He's done very well over the last 10 years, but I think most investors would say that he's taking an incredible risk by putting everything on one stock. Betty has stock in Apple, Microsoft, and Google. Compared to Alfred, she is diversified. Charlie looks at Betty and realizes that she is only investing in one particular industry. All the companies in an individual industry can have a downturn together, so he invests everything in an S&P 500 index fund. David looks at Charlie and notes that he's got everything in large, high-capitalization companies. Small-cap stocks are often where the growth happens, so he invests in a total stock market fund. Evelyn realizes that David has all his money tied up in one country, the United States. What about the rest of the world? She invests in a global fund. Frank really likes Evelyn's broad approach to equities, but he knows that some portion of fixed-income assets (e.g. cash deposits, bonds) can reduce portfolio volatility—and may even enhance returns through periodic rebalancing. He does what Evelyn does, but also allocates some percentage of his portfolio to fixed income, and intends to maintain his target allocations. Being diversified enough depends on your individual goals and investing philosophy. There are some who would say that it is wrong to put all of your money in one fund, no matter what it is. Others would say that a sufficiently broad index fund is inherently diversified as-is.", "title": "" }, { "docid": "17a27fcb24515dc5d0e26fce9f262469", "text": "\"Keep in mind, if the name is trademarked, you might have it taken away from you. If it's generic, there's a good chance the potential buyer would just move on and set up another domain name. Consider web names such as Stockpickr. The proper spelling is there, and remains unused, \"\"This domain may be for sale\"\" at the top of the page. I'm guessing they asked for too much money and the potential buyer just decided to move on. We are at the point where the new domain extensions (.space .name .guru and hundreds more) have watered down the potential value of many sets of words. I'm sure there are still good names, and yours might be as good as you think, but you might find resistance getting a deal that lasts beyond the sale date.\"", "title": "" }, { "docid": "015774d66cb5e67eebca40e7135e0a96", "text": "A proper world porfolio is a non-trivial task. No one answer exists which is the best one and how one should construct it. World? The problem with world portfolio is that it is not well-defined. Providers use it as they wish and people use it as they wish, read the history for further ado (messy stuff). You can build yourself world portfolio but warning it is getting harder. You can use this tool by selecting global equity to search through global funds -- it is very useful and allows you to find the low-cost funds with PE/PB/Div.yield. Also, investigate topic more with this tool, less spam.", "title": "" }, { "docid": "5103c63d89644a428f070da7464eb105", "text": "\"Ah ok, I can appreciate that. I'm fluent in English and Mr. Graham's command of English can be intimidating (even for me). The edition I have has commentary by Mr. Jason Zweig who effectively rewrites the chapters into simpler English and updates the data (some of the firms listed by Mr. Graham don't exist either due to bankruptcy or due to consolidation). But I digress. Let's start with the topics you took; they're all very relevant, you'd be surprised, the firm I work for require marketing for certain functions. But not being good at Marketing doesn't block you from a career in Finance. Let's look at the other subjects. You took high level Maths, as such I think a read through Harry Markowitz's \"\"Portfolio Selection\"\" would be beneficial, here's a link to the paper: https://www.math.ust.hk/~maykwok/courses/ma362/07F/markowitz_JF.pdf Investopedia also has a good summary: http://www.investopedia.com/walkthrough/fund-guide/introduction/1/modern-portfolio-theory-mpt.aspx This is Mr. Markowitz's seminal work; while it's logical to diversify your portfolio (remember the saying \"\"don't put all your eggs in one basket\"\"), Mr. Markwotiz presented the relationship of return, risk and the effects of diversification via mathematical representation. The concepts presented in this paper are taught at every introductory Finance course at University. Again a run through the actual paper might be intimidating (Lord knows I never read the paper from start to finish, but rather read text books which explained the concepts instead), so if you can find another source which explains the concepts in a way you understand, go for it. I consider this paper to be a foundation for other papers. Business economics is very important and while it may seem like it has a weak link to Finance at this stage; you have to grasp the concepts. Mr. Michael Porter's \"\"Five Forces\"\" is an excellent link between industry structure (introduced in Microeconomics) and profit potential (I work in Private Equity, and you'd be surprised how much I use this framework): https://hbr.org/2008/01/the-five-competitive-forces-that-shape-strategy There's another text I used in University which links the economic concept of utility and investment decision making; unfortunately I can't seem to remember the title. I'm asking my ex-classmates so if they respond I'll directly send you the author/title. To finish I want to give you some advice; a lot of subjects are intimidating at first, and you might feel like you're not good enough but keep at it. You're not dumber than the next guy, but nothing will come for free. I wasn't good at accounting, I risked failing my first year of University because of it, I ended up passing that year with distinction because I focused (my second highest grade was Accounting). I wasn't good in economics in High School, but it was my best grades in University. I wasn't good in financial mathematics in University but I aced it in the CFA. English is your second language, but you have to remember a lot of your peers (regardless of their command of the language) are being introduced to the new concepts just as you are. Buckle down and you'll find that none of it is impossible.\"", "title": "" }, { "docid": "4fb93947461cf2614b37f4ea50bbec9b", "text": "Googling vanguard target asset allocation led me to this page on the Bogleheads wiki which has detailed breakdowns of the Target Retirement funds; that page in turn has a link to this Vanguard PDF which goes into a good level of detail on the construction of these funds' portfolios. I excerpt: (To the question of why so much weight in equities:) In our view, two important considerations justify an expectation of an equity risk premium. The first is the historical record: In the past, and in many countries, stock market investors have been rewarded with such a premium. ... Historically, bond returns have lagged equity returns by about 5–6 percentage points, annualized—amounting to an enormous return differential in most circumstances over longer time periods. Consequently, retirement savers investing only in “safe” assets must dramatically increase their savings rates to compensate for the lower expected returns those investments offer. ... The second strategic principle underlying our glidepath construction—that younger investors are better able to withstand risk—recognizes that an individual’s total net worth consists of both their current financial holdings and their future work earnings. For younger individuals, the majority of their ultimate retirement wealth is in the form of what they will earn in the future, or their “human capital.” Therefore, a large commitment to stocks in a younger person’s portfolio may be appropriate to balance and diversify risk exposure to work-related earnings (To the question of how the exact allocations were decided:) As part of the process of evaluating and identifying an appropriate glide path given this theoretical framework, we ran various financial simulations using the Vanguard Capital Markets Model. We examined different risk-reward scenarios and the potential implications of different glide paths and TDF approaches. The PDF is highly readable, I would say, and includes references to quant articles, for those that like that sort of thing.", "title": "" }, { "docid": "3e157c99719de6362593777ca5c8ce03", "text": "\"It may not apply for your situation, but if you were running a mutual fund, you could use the term \"\"front-end load\"\".\"", "title": "" }, { "docid": "ef18299621646b2cd361cf1313bf5a04", "text": "> A short position also loses money if the stock just appreciates more slowly than the broader market, which is one way an overvaluation can correct itself. Is there a derivative based on the literal second derivative (acceleration) of the stock price? If so, you'd be able to short those, yes?", "title": "" } ]	fiqa
394ca2b08e3722423b5e92e9cdbd5ece	Google market cap	[ { "docid": "fca73e29b05038112a00f43c8a4f49ef", "text": "You are right: if the combined value of all outstanding GOOG shares was $495B, and the combined value of all GOOGL shares was $495B, then yes, Alphabet would have a market cap of at least $990B (where I say at least only because I myself don't know that there aren't other issues that should be in the count as well). The respective values of the total outstanding GOOG and GOOGL shares are significantly less than that at present though. Using numbers I just grabbed for those tickers from Google Finance (of course), they currently stand thus:", "title": "" } ]	[ { "docid": "ad993468933429d86a8b8e460cafd7cb", "text": "\"Short answer: google finance's market cap calculation is nonstandard (a.k.a. wrong). The standard way of computing the market capitalization of a firm is to take the price of its common stock and multiply by the number of outstanding common stock shares. If you do this using the numbers from google's site you get around $13.4B. This can be verified by going to other sites like yahoo finance and bloomberg, which have the correct market capitalization already computed. The Whole Foods acquisition appears to be very cut-and-dry. Investors will be compensated with $42 cash per share. Why are google finance's numbers wrong for market cap? Sometimes people will add other things to \"\"market capitalization,\"\" like the value of the firm's debt and other debt-like securities. My guess is that google has done something like this. Whole Foods has just over $3B in total liabilities, which is around the size of the discrepancy you have found.\"", "title": "" }, { "docid": "3a66a5e43fcafe49252adcf58e4aacba", "text": "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.", "title": "" }, { "docid": "dfa933229cc96a45eb5007baee03701a", "text": "The difference between the two numbers is that the market size of a particular product is expressed as an annual number ($10 million per year, in your example). The market cap of a stock, on the other hand, is a long-term valuation of the company.", "title": "" }, { "docid": "04a2a79a70e0db2bef7ab9d57b6563bb", "text": "\"When you look at those results you'll see that it lists the actual market cap for the stocks. The ones on the biggest price move are usually close the the $1B capitalization cut-off that they use. (The don't report anything with less than $1B in capitalization on these lists.) The ones on the biggest market cap are much larger companies. So, the answer is that a 40% change in price on a company that has $1B capitalization will be a $400M change in market cap. A 4% change on a company with $100B capitalization will be a $4B change in market cap. The one that moved 40% will make the \"\"price\"\" list but not the market cap list and vice versa.\"", "title": "" }, { "docid": "c95d90004449b4c437f71ca0186dfcca", "text": "That seems like a very high valuation. 2 years ago in the Ellen Pao lawsuit Pao's side claimed Reddit was worth $250mm, and the press had claimed it was $500mm. Either Reddit's valuation has more than tripled in 2 years, or this article is misleading.", "title": "" }, { "docid": "f3932cc2002b359f9b9105bc0e28a203", "text": "You can invest upto $200K per year abroad, and yes, you can buy Google as a stock. Consider opening an international account with a broker like interactive brokers (www.interactivebrokers.co.in) which allows you to fund the account from your local Indian account, and then on, buy shares of companies listed abroad.", "title": "" }, { "docid": "6b45beb208958f92f06816ae6a8a6035", "text": "\"Market Capitalization is the value the market attributes to the company shares calculated by multiplying the current trading price of these shares by the total amount of shares outstanding. So a company with 100 shares trading at $10 has a market cap of $1000. It is technically not the same as the value of a company (in the sense of how much someone would need to pay to acquire the company), Enterprise value is what you want to determine the net value of a company which is calculated as the market capitalization + company debt (as the acquirer has to take on this debt) - company cash (as the acquirer can pocket this for itself). The exact boundary for when a company belongs to a certain \"\"cap\"\" is up for debate. For a \"\"large cap\"\" a market capitalization of $10 billion+ is usually considered the cutoff (with $100+ billion behemoths being called \"\"mega caps\"\"). Anything between $10 billion and ~$1 billion is considered \"\"mid cap\"\", from ~$1billion to ~$200 million it's called a \"\"small cap\"\" and below $200 million is \"\"nano cap\"\". Worth noting that these boundaries change quite dramatically over time as the overall average market capitalization increases as companies grow, for example in the 80s a company with a market cap of $1 billion would be considered \"\"large cap\"\". The market \"\"determines\"\" what the market cap of company should be based (usually but certainly not always!) on the historical and expected profit a company makes, for a simple example let's say that our $1000 market cap company makes $100 a year, this means that this company's earnings per share is $1. If the company grows to make $200 a year you can reasonably expect the share price to rise from $10 to ~$20 with the corresponding increase in market cap. (this is all extremely simplified of course).\"", "title": "" }, { "docid": "26add6882c3b0f92d535fd869f8d55ee", "text": "\"Market caps is just the share price, multiplied by the number of shares. It doesn't represent any value (if people decide to pay more or less for the shares, the market cap goes up or down). It does represent what people think the company is worth. NAV sounds very much like book value. It basically says \"\"how much cash would we end up with if we sold everything the company owns, paid back all the debt, and closed down the business? \"\" Since closing down the business is rarely a good idea, this underestimates the value of the business enormously. Take a hairdresser who owns nothing but a pair of scissors, but has a huge number of repeat customers, charges $200 for a haircut, and makes tons of money every year. The business has a huge value, but NAV = price of one pair of used scissors.\"", "title": "" }, { "docid": "d6614c80a1bfd3d9994c53dd2e02b2ba", "text": "Try Google Finance Screener ; you will be able to filter for NASDAQ and NYSE exchanges.", "title": "" }, { "docid": "85763044dbc21fd7039232b4874772f8", "text": "I think there is a huge difference to what Google does with intangible assets as compared to a company such as Facebook. Facebook floated and as people thought it was highly overvalued the share price plummeted. Google on the other hand has many years of relatively stable growth and share price in a market that is generally pretty well informed. So I disagree.", "title": "" }, { "docid": "1191b085a69103a24611cadecff7bd21", "text": "\"I did a quick search, they have a $2B/5yr deal with google cloud. Downside is Google is a competitor potentially, especially in the ad market. Upside is SNAP revenue increased from $58M in 2015 to just over $404M in 2016. I think in today's market, everyone wants to hold the next \"\"Amazon\"\" or \"\"Google\"\" stocks at their conception. Sure would be nice if you had a few thousand in Amazon at their IPO. So I think pure speculation is why they were trading above IPO price for so long. It could be the next biggest thing, or it could fail in 5 years we never know these things lol\"", "title": "" }, { "docid": "3451c2779bca4a3422a1edf0de832b52", "text": "At this time, Google Finance doesn't support historical return or dividend data, only share prices. The attributes for mutual funds such as return52 are only available as real-time data, not historical. Yahoo also does not appear to offer market return data including dividends. For example, the S&P 500 index does not account for dividends--the S&P ^SPXTR index does, but is unavailable through Yahoo Finance.", "title": "" }, { "docid": "193fcf22ed5e553406178908183e95ff", "text": "To figure this out, you need to know the price per share then vs the price per share now. Google Finance will show you historical prices. For GOOG, the closing price on January 5, 2015 was $513.87. The price on December 31, 2015 was $758.88. Return on Investment (ROI) is calculated with this formula: ROI = (Proceeds from Investment - Cost of Investment) / Cost of Investment Using this formula, your return on investment would be 47.7%. Since the time period was one year, this number is already an annualized return. If the time period was different than one year, you would normally convert it to an annualized rate of return in order to compare it to other investments.", "title": "" }, { "docid": "5f217d3abc42166d1c23f9eb0259334e", "text": "like any share, valuing facebook requires a projection of earnings and earnings growth to arrive at a present value for the right to share in these future earnings. there are economic arguments to be had for facebook to see either a negative or positive future long term net income growth. given the uncertainty we can establish a very rough baseline value by treating it as a perpetuity (zero growth) discounted at historical equity growth rate (8%) with some very simple math. An annual net income of 900 million discounted at 8 percent in perpetuity is worth 11.25 Billion. Now, take into account the fact that tech stocks trade at an inflated PE multiple of around 3 times that of a mature company in an established industry (PE x10-20 for average stocks and anywhere between x30-60+ for tech stocks), and I would expect the market cap for this perpetuity to be around 34 Billion. A market cap of 34 billion is a share value of around 15.5, which is the point where I would take up a long position with fair confidence. I do think that the share deserves a premium for potential income growth (despite the current and potential future revenue losses) simply due to the incredibly large user base and the potential to monetize this. Of course, it wasn't worth the 22 dollar premium that IPO buyers paid but its worth something. I think there is simply too much uncertainty for me to go long in the next 6 months unless it hits 15/share which may never happen. If the company can monetize mobile and show quarterly results in the next year I would consider a long position for anywhere from 15-20 a share.", "title": "" }, { "docid": "3daa8dfcc2bb62b6a3a6ee4291dda11f", "text": "Google Finance portfolios take into account splits and cash deposits/withdrawals.", "title": "" } ]	fiqa

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