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7208 | Could an ex-employee of a company find themself stranded with shares they cannot sell (and a tax bill)? | [
{
"docid": "365092",
"title": "",
"text": "\"they are entirely free to do whatever they want with the shares. In particular, they can sell them to whomever they choose No. Restrictions on who can sell when and to whom are a common thing with startups. \"\"Publicly traded\"\" companies are regulated in a much stricter way than private companies, so until the IPO the sales are limited to the OTC markets. But even that can be restricted by bylaws - for example ownership can only be limited to a group of investors approved by the board. As an employee - your grant was approved by the board, but when you come to sell, the buyer was not and the company may not agree to vet them. Bottom line is that it is not illegal to impose all kinds of restrictions on what the employees can do with their shares, as long as the shares are not listed on a public stock exchange (even after the company goes IPO with one class, other classes may remain restricted).\""
},
{
"docid": "384772",
"title": "",
"text": "\"It would take an unusual situation. They exercise certain types of option, which come in as regular income rather than capital gains, and are holding the stock \"\"long\"\" (perhaps they are not allowed to sell because of an insider-trading freeze window; like right before earnings announcements). And then the stock tanks. Their company is acquired. They get stock options in their unicorn at $1/share, which blows up to $1000/share right as HugeFirm buys it. Options are swapped dollar-for-dollar for HugeFirm stock (at $250/share) so 4 shares for 1. I heard this happened a lot in the 1999-2000 boom/bust. And the problem was, this type of stock-option had historically only been offered to $20-million salary CEOs and CFO's, who retained professional legal and financial counsel and knew how to deal with the pitfalls and traps of this type of option. During the dot-com boom, it was also offered to rank-and-file $50k salary tech employees who didn't even know the difference between a 401K and a Roth. And it exploded in their faces, making a big mess for everyone including the IRS -- now struggling to justify to Congressmen why they were collecting $400,000 in taxes on entirely phantom, never-realized income from a 24 year old tech guy earning $29k at a startup and eating ramen. When that poor guy never had a chance of understanding the financial rocks and shoals, and even if he did, couldn't have done anything about it (since he wasn't a high executive involved in the decisions). And even the company who gave him the package didn't intend to inflict this on him. It was a mistake. Even the IRS dislikes no-win situations. Some laws got changed, some practices got changed, etc. etc., and the problem isn't what it used to be.\""
}
] | [
{
"docid": "12899",
"title": "",
"text": "Full disclosure: I’m an intern for EquityZen, so I’m familiar with this space but can speak with the most accuracy about EquityZen. Observations about other players in the space are my own. The employee liquidity landscape is evolving. EquityZen and Equidate help shareholders (employees, ex-employees, etc.) in private companies get liquidity for shares they already own. ESOFund and 137 Ventures help with option financing, and provide loans (and exotic structures on loans) to cover costs of exercising options and any associated tax hit. EquityZen is a private company marketplace that led the second wave of VC-backed secondary markets starting early 2013. The mission is to help achieve liquidity for employees and other private company shareholder, but in a company-approved way. EquityZen transacts with share transfers and also a proprietary derivative structure which transfers economics of a company's shares without changing voting and information rights. This structure typically makes the transfer process cheaper and faster as less paperwork is involved. Accredited investors find the process appealing because they get access to companies they usually cannot with small check sizes. To address the questions in Dzt's post: 1). EquityZen doesn't take a 'loan shark' approach meaning they don't front shareholders money so that they can purchase their stock. With EquityZen, you’re either selling your shares or selling all the economic risk—upside and downside—in exchange for today’s value. 2). EquityZen only allows company approved deals on the platform. As a result, companies are more friendly towards the process and they tend to allow these deals to take place. Non-company approved deals pose risks for buyers and sellers and are ultimately unsustainable. As a buyer, without company blessing, you’re taking on significant counterparty risk from the seller (will they make good on their promise to deliver shares in the future?) or the risk that the transfer is impermissible under relevant restrictions and your purchase is invalid. As a seller, you’re running the risk of violating your equity agreements, which can have severe penalties, like forfeiture of your stock. Your shares are also much less marketable when you’re looking to transact without the company’s knowledge or approval. 3). Terms don't change depending an a shareholder's situation. EquityZen is a professional company and values all of the shareholders that use the platform. It’s a marketplace so the market sets the price. In other situations, you may be at the mercy of just one large buyer. This can happen when you’re facing a big tax bill on exercise but don’t have the cash (because you have the stock). 4). EquityZen doesn't offer loans so this is a non issue. 5). Not EquityZen! EquityZen creates a clean break from the economics. It’s not uncommon for the loan structures to use an interest component as well as some other complications, like upside participation and and also a liquidation preference. EquityZen strives for a simple structure where you’re not on the hook for the downside and you’ve transferred all the upside as well."
},
{
"docid": "214408",
"title": "",
"text": "How about stopping the board of directors and CEO's from doing billions of dollars worth of share buybacks so that employees can be lifted out of poverty by paying them literally $10,000+ more! ex 1) Amazon: $5 billion in share buybacks, 340,000 employees = ~$14,000 per employee ex 2) Wal-Mart: $20 billion in share buybacks, 2.2 million employees =~$9,000 per employee ex 3) Mdconalds: 20 billion in share buybacks, 1.5 million employees = ~$13,000 per employee So tell me again how much these companies cannot afford to pay their employees."
},
{
"docid": "160555",
"title": "",
"text": "\"There is nothing legal you can do in the United States to avoid the tax burden of income earned as an employee other than offsetting it with pre-tax contributions (which it sounds like you're already doing), making charitable contributions, or incurring investment losses (which is cutting off your nose to spite your face). So that $660K can't be helped. As for the $80K in stock dividends, you could move those investments into \"\"growth\"\" companies rather than \"\"value\"\" companies. Growth companies are those that pay less in dividends, where the primary increase in wealth occurs only in share price increase. This puts off your tax bill until you finally sell your shares, and (depending on how the tax laws are at that time) your tax bill will be lower on those capital gains than they are currently on these dividends. Regarding rental income I know nothing, but I think you're entitled to depreciate your property's value over time and count that against the taxes you owe on the rents. And you can deduct all the upkeep expenses. As with employment income, intentionally incurring rental losses to lower your tax bill is not logical: for every dollar you earn, you only have to give about 50 cents to the government, whereas for every dollar you lose, you've lost a dollar.\""
},
{
"docid": "150514",
"title": "",
"text": "\"You are missing the fact that the company can buy back its own shares. For simplicity, imagine the case that you own ALL of the shares of XYZ corporation. XYZ is very profitable, and it makes $1M per year. There are two ways to return $1M to you, the shareholder: 1) The company could buy back some fraction of your shares for $1M, or 2) The company could pay you a $1M dividend. After (1) you'd own ALL of the shares and have $1M. After (2) you'd own ALL of the shares and have $1M. After (1) the total number of shares would be fewer, but saying you owned less of XYZ would be like complaining that you are shorter when your height is measured in inches than in centimeters. So indeed, a buyback is an alternative to a dividend. Furthermore, buybacks have a number of tax advantages over dividends to taxable shareholders (see my answer in Can I get a dividend \"\"free lunch\"\" by buying a stock just before the ex-dividend date and selling it immediately after?). That said, it is important to recognize the shareholders who are less savvy about knowing when to accept the buyback (by correctly valuing the company) can get burned at the profit of the savvy shareholders. A strategy to avoid being burned if you aren't price savvy is simply to sell a fraction in order to get your pro rata share of the buyback, in many respects simulating a dividend but still reaping some (but not all) of the tax advantages of a buyback.\""
},
{
"docid": "76285",
"title": "",
"text": "You will need to buy a stock before the ex-dividend date to receive the dividends. You can sell a stock on the ex-dividend date or after and you will receive the dividends. So if the ex-dividend date is the 5th August, you need to buy before the 5th and you can sell on the 5th or after, to receive the dividends. Definitions from the ASX: Record date The Record Date is 5.00pm on the date a company closes its share register to determine which shareholders are entitled to receive the current dividend. It is the date where all changes to registration details must be finalised. Ex dividend date The ex dividend date occurs two business days before the company's Record Date. To be entitled to a dividend a shareholder must have purchased the shares before the ex dividend date. If you purchase shares on or after that date, the previous owner of the shares (and not you) is entitled to the dividend. A company's share price may move up as the ex dividend date approaches and then fall after the ex dividend date."
},
{
"docid": "188232",
"title": "",
"text": "\"Isn't it true that on the ex-dividend date, the price of the stock goes down roughly the amount of the dividend? That is, what you gain in dividend, you lose in price drop. Yes and No. It Depends! Generally stocks move up and down during the market, and become more volatile on some news. So One can't truly measure if the stock has gone down by the extent of dividend as one cannot isolate other factors for what is a normal share movement. There are time when the prices infact moves up. Now would it have moved more if there was no dividend is speculative. Secondly the dividends are very small percentage compared to the shares trading price. Generally even if 100% dividend are announced, they are on the share capital. On share prices dividends would be less than 1%. Hence it becomes more difficult to measure the movement of stock. Note if the dividend is greater than a said percentage, there are rules that give guidelines to factor this in options and other area etc. Lets not mix these exceptions. Why is everyone making a big deal out of the amount that companies pay in dividends then? Why do some people call themselves \"\"dividend investors\"\"? It doesn't seem to make much sense. There are some set of investors who are passive. i.e. they want to invest in good stock, but don't want to sell it; i.e. more like keep it for long time. At the same time they want some cash potentially to spend; similar to interest received on Bank Deposits. This class of share holders, it makes sense to invest into companies that give dividends, as year on year they keep receiving some money. If they on the other hand has invested into a company that does not give dividends, they would have to sell some units to get the same money back. This is the catch. They have to sell in whole units, there is brokerage, fees, etc, there are tax events. Some countries have taxes that are more friendly to dividends than capital gains. Thus its an individual choice whether to invest into companies that give good dividends or into companies that don't give dividends. Giving or not giving dividends does not make a company good or bad.\""
},
{
"docid": "194090",
"title": "",
"text": "You can find a lot of information at the HRMC website at http://hmrc.gov.uk. If you don't want to work as an employee, you can register as self-employed (basically a one-man band), which is quite simple, you can start your own company, which is more work but can have tax advantages, or you can find umbrella companies which will officially employ you while in reality you are a freelancer and only do your billing through them. Umbrella companies can be anywhere from totally legal to extremely dodgy. If they promise you that you pay only five percent tax on your income through ingenious tricks, that's only until the tax office finds out and they will make you pay. Between self-employed and your own company, the big difference is whether you are actually working independently or not. If you work like an employee (take someone else's orders) and claim you are a company, the tax office doesn't like that. And if you pay very little taxes, they don't like that either. So self-employed is the safer choice but you will pay more taxes, close to what a normal employee would pay. Obviously you will have to pay tax on your income and NHS insurance. Obviously you are required to tell the government (actually HMRC) about your income. Not doing so would be tax evasion and get you into deep trouble when you are caught. I don't think you have to tell them the source of your income, but not telling them might look very suspicious and might get your accounts checked carefully. And unless you design a website for the mafia, why wouldn't you tell them? The bill payer will try to deduct your bill from their profits anyway, so it's no secret. Most important to remember: When you send out a bill and receive payment, you'll have to pay tax on it. When self employed, as a rule of thumb put one third away into a savings account for your tax bill. Don't spend it all or you will find yourself in deep trouble when your taxes need paying. Plus put some more away for times when you can't find work."
},
{
"docid": "41625",
"title": "",
"text": "\"Oddly enough, in the USA, there are enough cost and tax savings between buy-and-hold of a static portfolio and buying into a fund that a few brokerages have sprung up around the concept, such as FolioFN, to make it easier for small investors to manage numerous small holdings via fractional shares and no commission window trades. A static buy-and-hold portfolio of stocks can be had for a few dollars per trade. Buying into a fund involves various annual and one time fees that are quoted as percentages of the investment. Even 1-2% can be a lot, especially if it is every year. Typically, a US mutual fund must send out a 1099 tax form to each investor, stating that investors share of the dividends and capital gains for each year. The true impact of this is not obvious until you get a tax bill for gains that you did not enjoy, which can happen when you buy into a fund late in the year that has realized capital gains. What fund investors sometimes fail to appreciate is that they are taxed both on their own holding period of fund shares and the fund's capital gains distributions determined by the fund's holding period of its investments. For example, if ABC tech fund bought Google stock several years ago for $100/share, and sold it for $500/share in the same year you bought into the ABC fund, then you will receive a \"\"capital gains distribution\"\" on your 1099 that will include some dollar amount, which is considered your share of that long-term profit for tax purposes. The amount is not customized for your holding period, capital gains are distributed pro-rata among all current fund shareholders as of the ex-distribution date. Morningstar tracks this as Potential Capital Gains Exposure and so there is a way to check this possibility before investing. Funds who have unsold losers in their portfolio are also affected by these same rules, have been called \"\"free rides\"\" because those funds, if they find some winners, will have losers that they can sell simultaneously with the winners to remain tax neutral. See \"\"On the Lookout for Tax Traps and Free Riders\"\", Morningstar, pdf In contrast, buying-and-holding a portfolio does not attract any capital gains taxes until the stocks in the portfolio are sold at a profit. A fund often is actively managed. That is, experts will alter the portfolio from time to time or advise the fund to buy or sell particular investments. Note however, that even the experts are required to tell you that \"\"past performance is no guarantee of future results.\"\"\""
},
{
"docid": "11311",
"title": "",
"text": "\"Why only long term investments? What do they care if I buy and sell shares in a company in the same year? Simple, your actually investing when you hold it for a long term. If you hold a stock for a week or a month there is very little that can happen to change the price, in a perfect market the value of a company should stay the same from yesterday to today so long as there is no news(a perfect market cannot exist). When you hold a stock for a long term you really are investing in the company and saying \"\"this company will grow\"\". Short term investing is mostly speculation and speculation causes securities to be incorrectly valued. So when a retail investor puts money into something like Facebook for example they can easily be burned by speculation whether its to the upside or downside. If the goal is to get me to invest my money, then why not give apply capital gains tax to my savings account at my local bank? Or a CD account? I believe your gains on these accounts are taxed... Not sure at what rate. If the goal is to help the overall health of business, how does it do that? During an IPO, the business certainly raises money, but after that I'm just buying and selling shares with other private shareholders. Why does the government give me an incentive to do this (and then hold onto it for at least a year)? There are many reasons why a company cares about its market price: A companies market cap is calculated by price * shares outstanding. A market cap is basically what the market is saying your company is worth. A company can offer more shares or sell shares they currently hold in order to raise even more capital. A company can offer shares instead of cash when buying out another company. It can pay for many things with shares. Many executives and top level employees are payed with stock options, so they defiantly want to see there price higher. these are some basic reasons but there are more and they can be more complex.\""
},
{
"docid": "393553",
"title": "",
"text": "There is a difference between an owner and a signer. An owner is the legal owner of the funds. A signer has access to withdraw the funds. In most cases, when a new personal account is opened the name is added as an owner&signer. However, that is not always the case. A person could be an owner, but not a signer, in a custodial arrangement. For example, a minor child may be an owner only on their account with a custodial parent listed as a signer. The minor could not withdraw from the account. A person could be a signer, but not an owner, in a business or estate/trust account. The business or estate would be the owner with individuals listed as signers only. The business employees do not own the funds, they are only allowed to withdraw and disburse the funds on behalf of the company. The creditor can only garnish/withhold funds that are owned by the indebted. If the second person on the account is only a signer, those funds cannot be withheld as part of a judgment against the second person (they don't own those funds). However, simply titling the second person as a signer only is not sufficient. If you share access with the second person and allow them to spend the money for their own benefit, they are no longer just a signer. They have become an owner because you are sharing your funds with them. Think of the business relationship as an example. The employee is a signer so they can withdraw funds and pay business expenses, like the electric bill. If the employee withdrew funds and bought herself a new dress, she is stealing because she does not own those funds. If the second person on the account buys things for themselves, or transfers some of the money into their own account, they are demonstrating that more than a signer-only relationship exists. A true signer-only relationship is where the individual can only withdraw funds on the owner's behalf. For example, the owner is out of town and needs a bill paid, the signer can write a check and pay the bill for the owner. A limited power of attorney may be worth looking into. With a limited POA, the owner can define the scope and expiration of the power of attorney. With this arrangement, the second person becomes an executor of the owner under certain circumstances. For example, you could write a power of attorney that states something like: John Smith is hereby granted the limited power to withdraw funds from account 1234, on deposit at Anytown Bank, for the purpose of paying debts and obligations and otherwise maintain my estate in the event of my incapacitation or inability to attend to my own affairs. This Power of Attorney shall expire on it's fifth anniversary unless renewed. If the person you have granted the power of attorney abuses their access, you could sue them and you would only have to demonstrate that they overstepped the scope of their power."
},
{
"docid": "48718",
"title": "",
"text": "\"You can hold a wide variety of investments in your TFSA account, including stocks such as SLF. But if the stocks are being purchased via a company stock purchase plan, they are typically deposited in a regular margin account with a brokerage firm (a few companies may issue physical stock certificates but that is very rare these days). That account would not be a TFSA but you can perform what's called an \"\"in-kind\"\" transfer to move them into a TFSA that you open with either the same brokerage firm, or a different one. There will be a fee for the transfer - check with the brokerage that currently holds the stock to find out how costly that will be. Assuming the stock gained in value while you held it outside the TFSA, this transfer will result in capital gains tax that you'll have to pay when you file your taxes for the year in which the transfer occurs. The tax would be calculated by taking the value at time of transfer, minus the purchase price (or the market value at time of purchase, if your plan allowed you to buy it at a discounted price; the discounted amount will be automatically taxed by your employer). 50% of the capital gain is added to your annual income when calculating taxes owed. Normally when you sell a stock that has lost value, you can actually get a \"\"capital loss\"\" deduction that is used to offset gains that you made in other stocks, or redeemed against capital gains tax paid in previous years, or carried forward to apply against gains in future years. However, if the stock decreased in value and you transfer it, you are not eligible to claim a capital loss. I'm not sure why you said \"\"TFSA for a family member\"\", as you cannot directly contribute to someone else's TFSA account. You can give them a gift of money or stocks, which they can deposit in their TFSA account, but that involves that extra step of gifting, and the money/stocks become their property to do with as they please. Now that I've (hopefully) answered all your questions, let me offer you some advice, as someone who also participates in an employee stock purchase plan. Holding stock in the company that you work for is a bad idea. The reason is simple: if something terrible happens to the company, their stock will plummet and at the same time they may be forced to lay off many employees. So just at the time when you lose your job and might want to sell your stock, suddenly the value of your stocks has gone way down! So you really should sell your company shares at least once a year, and then use that money to invest in your TFSA account. You also don't want to put all your eggs in one basket - you should be spreading your investment among many companies, or better yet, buy index mutual funds or ETFs which hold all the companies in a certain index. There's lots of good info about index investing available at Canadian Couch Potato. The types of investments recommended there are all possible to purchase inside a TFSA account, to shelter the growth from being taxed. EDIT: Here is an article from MoneySense that talks about transferring stocks into a TFSA. It also mentions the importance of having a diversified portfolio!\""
},
{
"docid": "512947",
"title": "",
"text": "Ex-Date is a function of the exchange, as well as the dividend. Consider Deutsche Bank AG, DB on the NYSE, DKR on Xetra. For a given dividend, each exchange sets the ex-date for trades on that exchange. (See http://www.sec.gov/answers/dividen.htm for a description of how it works in the US; other exchanges/countries are similar.) This ex-date is normally based on the dividends record date, which is when you must be on the company's books as a shareholder to receive the dividend, and based on when trades for an exchange are settled. The ex-date is the first date for which trades on that date will not settle until after the record date. This means that the ex-date can be different for different exchanges. If you sell your shares on an exchange before the ex-date for that exchange, you will not get the dividend. If you sell your shares on or after the ex-date for the exchange, you do not get the dividend. So it depends on the time zone of the exchange. Most stock exchanges trade T+3, but this can still come into play if there are bank holidays in different countries at different times."
},
{
"docid": "238121",
"title": "",
"text": "\"@sdg - If you can be flippant, I can be pedantic. Insider Trading is not illegal. Any employee of a company can be an insider, yet most of their trades are perfectly legal. What is illegal is trading on Inside Information. Such information may be available to those within a company, or those who have some contact with an employee. In fact, if I am seated at a restaurant table and hear Bill and Warren talking about a purchase they plan to make, I am in possession of inside information and risk prosecution should I purchase shares and profit. Often, a company will have a \"\"quiet period\"\" before earnings reports or potential stock-price-moving-news. During this time, employees are forbidden from buying or selling shares, excluding those that would be automatically bought in their retirement accounts or ESPP.\""
},
{
"docid": "344372",
"title": "",
"text": "I like C. Ross and MrChrister's advice to not be heavily weighted in one stock over the long run, especially the stock of your employer. I'll add this: One thing you really ought to find out – and this is where your tax advisor is likely able to help – is whether your company's stock options plan use qualified incentive stock options (ISO) or non-qualified stock options (NQO or NSO). See Wikipedia - Incentive stock option for details. From my understanding, only if your plan is a qualified (or statutory) ISO and you hold the shares for at least 1 year of the date of exercise and 2 years from the date of the option grant could your gain be considered a long-term capital gain. As opposed to: if your options are non-qualified, then your gain may be considered ordinary income no matter how long you wait – in which case there's no tax benefit to waiting to cash out. In terms of hedging the risk if you do choose to hold long, here are some ideas: Sell just enough stock at exercise (i.e. taking some tax hit up front) to at least recover your principal, so your original money is no longer at risk, or If your company has publicly listed options – which is unlikely, if they are very small – then you could purchase put options to insure against losses in your stock. Try a symbol lookup at the CBOE. Note: Hedging with put options is an advanced strategy and I suggest you learn more and seek advice from a pro if you want to consider this route. You'll also need to find out if there are restrictions on trading your employer's public stock or options – many companies have restrictions or black-out periods on employee trading, especially for people who have inside knowledge."
},
{
"docid": "76556",
"title": "",
"text": "Stuff I wish I had known, based on having done the following: Obtained employment at a startup that grants Incentive Stock Options (ISOs); Early-exercised a portion of my options when fair market value was very close to my strike price to minimize AMT; made a section 83b) election and paid my AMT up front for that tax year. All this (the exercise and the AMT) was done out of pocket. I've never see EquityZen or Equidate mention anything about loans for your exercise. My understanding is they help you sell your shares once you actually own them. Stayed at said startup long enough to have my exercised portion of these ISOs vest and count as long term capital gains; Tried to sell them on both EquityZen and Equidate with no success, due to not meeting their transaction minimums. Initial contact with EquityZen was very friendly and helpful, and I even got a notice about a potential sale, but then they hired an intern to answer emails and I remember his responses being particularly dismissive, as if I was wasting their time by trying to sell such a small amount of stock. So that didn't go anywhere. Equidate was a little more friendly and was open to the option of pooling shares with other employees to make a sale in order to meet their minimum, but that never happened either. My advice, if you're thinking about exercising and you're worried about liquidity on the secondary markets, would be to find out what the minimums would be for your specific company on these platforms before you plunk any cash down. Eventually brought my request for liquidity back to the company who helped connect me with an interested external buyer, and we completed the transaction that way. As for employer approval - there's really no reason or basis that your company wouldn't allow it (if you paid to exercise then the shares are yours to sell, though the company may have a right of first refusal). It's not really in the company's best interest to have their shares be illiquid on the secondary markets, since that sends a bad signal to potential investors and future employees."
},
{
"docid": "133644",
"title": "",
"text": "Is this an employee stock purchase plan (ESPP)? If so, and there is no required holding period, selling right away is essentially a guaranteed bonus with minimal risk. One caveat is that sometimes it takes a while to actually receive the shares at your brokerage, and in the meantime your company may have an earnings report that could cause the share price to drop. If your discount is only 5%, for example, a bad earnings report could easily wipe that out. The only other cons I can think of is ESPP contributions being withheld from you for months (albeit for a virtually guaranteed return), and it complicates your taxes a bit. On the flip side, another pro is that after you sell the shares, you are more likely to invest that money rather than spend it."
},
{
"docid": "261522",
"title": "",
"text": "Like others have already said, it may cause an immediate dip due to a large and sudden move in shares for that particular stock. However, if there is nothing else affecting the company's financials and investors perceive no other risks, it will probably bounce back a bit, but not back to the full value before the shares were issued. Why? Whenever a company issues more stock, the new shares dilute the value of the current shares outstanding, simply because there are now more shares of that stock trading on the market; the Earnings Per Share (EPS) Ratio will drop since the same profit and company value has to be spread across more shares. Example: If a company is valued at $100 dollars and they have 25 shares outstanding, then the EPS ratio equates to $4 per share (100/25 = 4). If the company then issues more shares (stock to employees who sell or keep them), let's say 25 more shares, then shares outstanding increase to 50, but the company's value still remains at $100 dollars. EPS now equates to $2 per share (100/50 = 2). Now, sometimes when shareholders (especially employees...and especially employees who just received them) suddenly all sell their shares, this causes a micro-panic in the market because investors believe the employees know something bad about the company that they don't. Other common shareholders then want to dump their holdings for fear of impending collapse in the company. This could cause the share price to dip a bit below the new diluted value, but again if no real, immediate risks exist, the price should go back up to the new, diluted value. Example 2: If EPS was at $4 before issuing more stock, and then dropped to $2 after issuing new stock, the micro-panic may cause the EPS to drop below $2 and then soon rebound back to $2 or more when investors realize no actual risk exists. After the dilution phase plays out, the EPS could actually even go above the pre-issuing value of $4 because investors may believe that since more stock was issued due to good profits, more profits may ensue. Hope that helps!"
},
{
"docid": "31037",
"title": "",
"text": "My friend Harry Sit wrote an excellent article No Tax Advantage In RSU. The punchline is this. The day the RSUs vested, it's pretty much you got $XXX in taxable income and then bought the stock at the price at that moment. The clock for long term gain starts the same as if I bought the stock that day. Historical side note - In the insane days of the Dotcom bubble, people found they got RSUs vested and worth, say, $1M. Crash. The shares are worth $100K. The $1M was ordinary income, the basis was $1M and the $900K loss could offset cap gains, not ordinary income above $3000/yr. Let me be clear - the tax bill was $250K+ but the poor taxpayer had $100K in stock to sell to pay that bill. Ooops. This is the origin of the 'sell the day it vests' advice. The shares you own will be long term for capital gain a year after vesting. After the year, be sure to sell those particular shares and you're all set. No different than anyone selling the LT shares of stock when owning multiple lots. But. Don't let the tax tail wag the investing dog. If you feel it's time to sell, you can easily lose the tax savings while watching the stock fall waiting for the clock to tick to one year."
},
{
"docid": "263312",
"title": "",
"text": "\"The shares are \"\"imputed income\"\" / payment in kind. You worked in the UK, but are you a \"\"US Person\"\"? If not, you should go back to payroll with this query as this income is taxable in the UK. It is important you find out on what basis they were issued. The company will have answers. Where they aquired at a discount to fair market value ? Where they purchased with a salary deduction as part of a scheme ? Where they acquired by conversion of employee stock options ? If you sell the shares, or are paid dividends, then there will be tax withheld.\""
},
{
"docid": "239769",
"title": "",
"text": "I agree with the other posters that you will need to seek the advice of a tax attorney specializing in corporate taxation. Here is an idea to investigate: Could you sell the company, and thereby turn the profits that are taxed as ordinary income into a long-term capital gain (taxed at 15%, plus state income tax, if any)? You can determine the value of a profitable business using discounted cash flow analysis, even if you expect that the revenue stream will dry up due to product obsolescence or expiry of licensing agreements. To avoid the capital gains taxes (especially if you live in a high-tax state like California), you could also transfer the stock to a Charitable Remainder Trust. The CRT then sells the shares to the third-party acquirer, invests the proceeds and pays you annual distributions (similar to an annuity). The flip side of a sale is that now the acquiring party will be stuck with the taxes payable on your company's profits (while being forced to amortize the purchase price over multiple years -- 15, if I recall correctly), which will factor into the valuation. However, it is likely that the acquirer has better ways to mitigate the tax impact (e.g. the acquirer is a company currently operating at a loss, and therefore can cancel out the tax liabilities from your company's profits). One final caveat: Don't let the tax tail wag the business dog. In other words, focus your energies on extracting the maximum value from your company, rather than trying to find convoluted tax saving strategies. You might find that making an extra dollar in profits is easier than saving fifty cents in taxes."
},
{
"docid": "272117",
"title": "",
"text": "There are a few reasons, dependent on the location of the company. The first, as you mentioned is that it means that the employee is invested in the companies success - in theory this should motivate the employee to work hard in order to increase the value of their holdings. Sometimes these have a vestment period which requires that they hold the stock for a certain amount of time before they are able to sell, and that they continue working at the company for a certain amount of time. The second, is that unlike cash, providing stocks doesn't come out of the companies liquid cash. While it is still an expense and does devalue the shares of other shareholders, it doesn't effect the daily working capital which is important to maintain to ensure business continuity. And the third, and this is for the employee, is tax reasons. In particular for substantial amounts. Of course this is dependent on jurisdiction but you can often achieve lower tax rates on receiving shares vs a cash equivalent sum, as you can draw out the money over time lowering your tax obligation each year, or other methods which aren't possible to look into now. Hope this helps."
},
{
"docid": "226197",
"title": "",
"text": "\"The answer is partly and sometimes, but you cannot know when or how. Most clearly, you do not take somebody else's money if you buy shares in a start-up company. You are putting your money at risk in exchange for a share in the rewards. Later, if the company thrives, you can sell your shares for whatever somebody else will pay for your current share in the thriving company's earnings. Or, you lose your money, when the company fails. (Much of it has then ended up in the company's employees' pockets, much of the rest with the government as taxes that the company paid). If the stockmarket did not exist, people would be far less willing to put their money into a new company, because selling shares would be far harder. This in turn would mean that fewer new things were tried out, and less progress would be made. Communists insist that central state planning would make better decisions than random people linked by a market. I suggest that the historical record proves otherwise. Historically, limited liability companies came first, then dividing them up into larger numbers of \"\"bearer\"\" shares, and finally creating markets where such shares were traded. On the other hand if you trade in the short or medium term, you are betting that your opinion that XYZ shares are undervalued against other investors who think otherwise. But there again, you may be buying from a person who has some other reason for selling. Maybe he just needs some cash for a new car or his child's marriage, and will buy back into XYZ once he has earned some more money. You can't tell who you are buying from, and the seller can only tell if his decision to sell was good with the benefit of a good few years of hindsight. I bought shares hand over fist immediately after the Brexit vote. I was putting my money where my vote went, and I've now made a decent profit. I don't feel that I harmed the people who sold out in expectation of the UK economy cratering. They got the peace of mind of cash (which they might then reinvest in Euro stocks or gold or whatever). Time will tell whether my selling out of these purchases more recently was a good decision (short term, not my best, but a profit is a profit ...) I never trade using borrowed money and I'm not sure whether city institutions should be allowed to do so (or more reasonably, to what extent this should be allowed). In a certain size and shortness of holding time, they cease to contribute to an orderly market and become a destabilizing force. This showed up in the financial crisis when certain banks were \"\"too big to fail\"\" and had to be bailed out at the taxpayer's expense. \"\"Heads we win, tails you lose\"\", rather than trading with us small guys as equals! Likewise it's hard to see any justification for high-frequency trading, where stocks are held for mere milliseconds, and the speed of light between the trader's and the market's computers is significant.\""
},
{
"docid": "177648",
"title": "",
"text": "Your first scenario, involving shareholders in a private corp being limited by a contractual agreement, is common in practice. Frequent clauses include methods of valuing the shares if someone wants to sell, first right of refusal [you have to attempt to sell to the other shareholders, before you can sell to a 3rd party], and many others. These clauses are governed by contract law [ie: some clauses may be illegal in contract law, and therefore couldn't be applied here]. A Universal Shareholders' Agreement is just the same as the above, but applied to more people. You would never get an already public company to convert to a universal shareholders' agreement - because even 1 share voting 'no' would block it [due to corporate law limiting the power of a corporation from abusing minority shareholder value]. In practice, these agreements universally exist at the start of incorporation, or at least at the first moment shares become available. An example is the Canadian mega-construction company PCL*, which is employee-owned. When the original owner transferred the corporation to his employees, there was a USA in place which still today governs how the corporation operates. In theory you could have a 'public company' where most shares are already owned by the founders, and 100% of remaining shares are owned by a specific group of individuals, in which case you may be able to get a USA signed. But it wouldn't really happen in practice. *[Note that while PCL is broadly owned by a large group of employees, it is not a 'public company' because any random schmuck can't simply buy a share on the Toronto Stock Exchange. I assume most exchanges would prevent corporations from being listed if they had ownership restrictions like this]."
},
{
"docid": "170318",
"title": "",
"text": "It depends on your investment profile but basically, dividends increase your taxable income. Anyone making an income will effectively get 'lower returns' on their investments due to this effect. If you had the choice between identical shares that either give a dividend or don't, you'll find that stock that pays a dividend has a lower price, and increases in value more slowly than stock that doesn't. (all other things being equal) There's a whole bunch of economic theory behind this but in short, the current stock price is a measure of how much the company is worth combined with an estimation of how much it will be worth in the future (NPV of all future dividends is the basic model). When the company makes profit, it can keep those profits, and invest in new projects or distribute a portion of those profits to shareholders (aka dividends). Distributing the value to shareholders reduces the value of the company somewhat, but the shareholders get the money now. If the company doesn't give dividends, it has a higher value which will be reflected in a higher stock price. So basically, all other things being equal (which they rarely are, but I digress) the price and growth difference reflects the fact that dividends are paying out now. (In other words, if you wanted non-dividend shares you could get them by buying dividend shares and re-investing the dividend as new shares every time there was a payout, and you could get dividend-share like properties by selling a percentage of non-dividend shares periodically). Dividend income is taxable as part of your income right away, however taxes on capital gains only happen when you sell the asset in question, and also has a lower tax rate. If you buy and hold Berkshire Hatheway, you will not have to pay taxes on the gains you get until you decide to sell the shares, and even then the tax rate will be lower. If you are investing for retirement, this is great, since your income from other sources will be lower, so you can afford to be taxed then. In many jurisdictions, income from capital gains is subject to a different tax rate than the rest of your income, for example in the US for most people with money to invest it's either 15% or 20%, which will be lower than normal income tax would be (since most people with money to invest would be making enough to be in a higher bracket). Say, for example, your income now is within the 25% bracket. Any dividend you get will be taxed at that rate, so let's say that the dividend is about 2% and the growth of the stock is about 4%. So, your effective growth rate after taxation is 5.5% -- you lose 0.5% from the 25% tax on the dividend. If, instead, you had stock with the same growth but no dividend it would grow at a rate of 6%. If you never withdrew the money, after 20 years, $1 in the dividend stock would be worth ~$2.92 (1.055^20), whereas $1 in the non-dividend stock would be worth ~$3.21 (1.06^20). You're talking about a difference of 30 cents per dollar invested, which doesn't seem huge but multiply it by 100,000 and you've got yourself enough money to renovate your house purely out of money that would have gone to the government instead. The advantage here is if you are saving up for retirement, when you retire you won't have much income so the tax on the gains (even ignoring the capital gains effect above) will definitely be less then when you were working, however if you had a dividend stock you would have been paying taxes on the dividend, at a higher rate, throughout the lifetime of the investment. So, there you go, that's what Mohnish Pabrai is talking about. There are some caveats to this. If the amount you are investing isn't large, and you are in a lower tax bracket, and the stock pays out relatively low dividends you won't really feel the difference much, even though it's there. Also, dividend vs. no dividend is hardly the highest priority when deciding what company to invest in, and you'll practically never be able to find identical companies that differ only on dividend/no dividend, so if you find a great buy you may not have a choice in the matter. Also, there has been a trend in recent years to also make capital gains tax progressive, so people who have a higher income will also pay more in capital gains, which negates part of the benefit of non-dividend stocks (but doesn't change the growth rate effects before the sale). There are also some theoretical arguments that dividend-paying companies should have stronger shareholders (since the company has less capital, it has to 'play nice' to get money either from new shares or from banks, which leads to less risky behavior) but it's not so cut-and-dried in real life."
},
{
"docid": "106249",
"title": "",
"text": "For one, the startup doesn't exist yet, so until March I will get nothing on hand, though I have enough reserves to bridge that time. I would not take this deal unless the start-up exists in some form. If it's just not yet profitable, then there's a risk/reward to consider. If it doesn't exist at all, then it cannot make a legal obligation to you and it's not worth taking the deal yet. If everything else is an acceptable risk to you, then you should be asking the other party to create the company and formalize the agreement with you. As regards reserves, if you're really getting paid in shares instead of cash, then you may need them later. Shares in a start-up likely are not easy to sell (if you're allowed to sell them at all), so it may be a while before a paycheck given what you've described. For a second, who pays the tax? This is my first non-university job so I don't exactly know, but usually the employer has to/does pay my taxes and some other stuff from my brutto-income (that's what I understood). If brutto=netto, where is the tax? This I cannot answer for Germany. In the U.S. it would depend in part on how the company is organized. It's likely that some or all of the tax will be deferred until you monetize your shares, but you should get some professional advice on that before you move forward. As an example, it's likely that you'd get taxed (in part or in whole) on what we'd call capital gains (maybe Abgeltungsteuer in German?) that would only be assessed when you sell the shares. For third, shares are a risk. If I or any other in the startup screw really, my pay might be a lot less than expected. Of course, if it works out I'm rich(er). This is the inherent risk of a start-up, so there's no getting around the fact that there's a chance that the business may fail and your shares become worthless. Up to you if you think the risk is acceptable. Where you can mitigate risk is in ensuring that there's a well-written and enforceable set of documents that define what rights go with the shares, who controls the company, how profits will be distributed, etc. Don't do this by spoken agreement only. Get it all written down, and then get it checked by a lawyer representing your interests."
},
{
"docid": "178497",
"title": "",
"text": "Stock options represent an option to buy a share at a given price. What you have been offered is the option to buy the company share at a given price ($5) starting a given date (your golden handcuffs aka vesting schedule). If the company's value doubles in 1 year and the shares are liquid (i.e. you can sell them) then you've just made $125k of profit. If the company's value has gone to zero in 1 year then you've lost nothing other than your hopes of getting rich. As others have mentioned, the mechanics of exercising the option and selling the shares can typically be accomplished without any cash involved. The broker will do both in a single transaction and use the proceeds of the sale to pay the cost of buying the shares. You should always at least cover the taxable portion of the transaction and typically the broker will withhold that tax anyways. Otherwise you could find yourself in a position where you have actually lost money due to tax being owed while the shares decline in value below that tax. You don't have to worry about that right now. Again as people have mentioned options will typically expire 10 years from vesting or 90 days from leaving your employment with the company. I'm sure there are some variations on the theme. Make sure you ask and all this should be part of some written contract. I'm sure you can ask to see it if you wish. Also typical is that stock option grants have to be approved by the board which is normally a technicality. Some general advice:"
},
{
"docid": "66943",
"title": "",
"text": "\"The bill proposed to \"\"Under existing law, employers may take tax deductions for the costs associated with moving jobs out of the country. The proposed legislation would have eliminated that, and used the resulting new revenue to fund a 20 percent tax credit for the costs companies run up \"\"insourcing\"\" labor back into the U.S.\"\" From http://abcnews.go.com/m/blogEntry?id=16816660 as found by beermethestrength. I will explain this in an example below. Lets use allen edmonds. I manufacture shoes and sell them in the US. The facts we will assume is Revenue or sales is $100. Manufacturing cost is $50. Tax rate is 10%. Therefore, Profit before tax is $100 -$50 = $50. Tax is $5. Net profit is $45. However, suppose offshoring to Canada saves money. They say please and thank you at every opportunity and the positive work environment allows them to work faster. Correspondingly to make the same number of shoes our costs has decreased because we pay less for labour. The manufacturing cost decreases to $30. However, we incur costs to move such as severance payments to layoff contracted employees. (I promise to hire you and pay $1 a year for 2 years. I fire you at the end of the first year. To be fair, I pay you $1) However, it can be any legitimate expense under the sun. In this case we suppose this moving cost is $10. Revenue or sales is $100. Manufacturing cost is $30. Moving cost is $10. Tax rate is 10%. Profit before tax is $100 -$40 = $60. Tax is $6. Net profit is $54. Yay more jobs for Canadians. However, the legislation would have changed this. It would have denied that moving expense if you were moving out of the country. Therefore, we cannot consider $10 worth of expenses for tax purposes. Therefore Revenue or sales is $100. Manufacturing cost is $30. Tax rate is 10%. Profit before tax for tax purposes is $100 - $30 = $70. Tax is $7. Net profit for tax purposes is $63. However, my accounting/net/real profit is $53. I must deduct the $10 associated with moving. The difference between the two scenarios is $1. In general our net profit changes by our moving cost * our tax rate. There is no tax break associated with moving. In Canadian tax, any business expense in general can be deducted as long as it is legitimate and not specifically denied. I am uncertain but would assume US tax law is similar enough. Moving expenses in general are legitimate and not specifically denied and therefore can be deducted. Offshoring and onshoring are seen as legitimate business activities as in general companies do things to increase profit. (forget about patriotism for the moment). The bill was to make offshoring more expensive and therefore fewer companies would find offshoring profitable. However, republicans defeated this bill in congress. Most likely the house For completeness let us examine what would happen when we onshore (bring jobs from canada to us :( ). In our example, silly unions demand unrealistically high wages and increase our cost of manufacturing to $50 again. We decide to move back to the US because if it is the same everywhere for the sake of silly national pride we move our jobs back to the US. We incur the same moving cost of $10. Therefore we have Revenue or sales is $100. Manufacturing cost is $50. Moving cost of $10. Tax rate is 10%. Profit before tax for tax purposes is $100 - $60 = $40. Tax is $4. However, we are given a 20% tax credit for moving expense. $10 * .2 = 2. The government only assess us tax of 2. Net profit is $38. Tax credits are a one time deal so profit in the future will be $100 -$50 - $5 = $45. Same as the first example. insourcing = onshoring , outsourcing = offshoring for the purposes of this article. Not quite the same in real life.\""
},
{
"docid": "30774",
"title": "",
"text": "The biggest challenge with owning any individual stock is price fluctuation, which is called risk. The scenarios you describe assume that the stock behaves exactly as you predict (price/portfolio doubles) and you need to consider risk. One way to measure risk in a stock or in a portfolio is Sharpe Ratio (risk adjusted return), or the related Sortino ratio. One piece of advice that is often offered to individual investors is to diversify, and the stated reason for diversification is to reduce risk. But that is not telling the whole story. When you are able to identify stocks that are not price correlated, you can construct a portfolio that reduces risk. You are trying to avoid 10% tax on the stock grant (25%-15%), but need to accept significant risk to avoid the 10% differential tax ($1000). An alternative to a single stock is to invest in an ETF (much lower risk), which you can buy and hold for a long time, and the price/growth of an ETF (ex. SPY) can be charted versus your stock to visualize the difference in growth/fluctuation. Look up the beta (volatility) of your stock compared to SPY (for example, IBM). Compare the beta of IBM and TSLA and note that you may accept higher volatility when you invest in a stock like Tesla over IBM. What is the beta of your stock? And how willing are you to accept that risk? When you can identify stocks that move in opposite directions, and mix your portfolio (look up beta balanced portolio), you can smooth out the variability (reduce the risk), although you may reduce your absolute return. This cannot be done with a single stock, but if you have more money to invest you could compose the rest of your portfolio to balance the risk for this stock grant, keep the grant shares, and still effectively manage risk. Some years ago I had accumulated over 10,000 shares (grants, options) in a company where I worked. During the time I worked there, their price varied between $30/share and < $1/share. I was able to liquidate at $3/share."
},
{
"docid": "481339",
"title": "",
"text": "There's an odd anomaly that often occurs with shares acquired through company plans via ESPP or option purchase. The general situation is that the share value above strike price or grant price may become ordinary income, but a sale below the price at day the shares are valued is a capital loss. e.g. in an ESPP offering, I have a $10 purchase price, but at the end of the offering, the shares are valued at $100. Unless I hold the shares for an additional year, the sale price contains ordinary W2 income. So, if I see the shares falling and sell for $50, I have a tax bill for $90 of W2 income, but a $50 capital loss. Tax is due on $90 (and for 1K shares, $90,000 which can be a $30K hit) but that $50K loss can only be applied to cap gains, or $3K/yr of income. In the dotcom bubble, there were many people who had million dollar tax bills and the value of the money netted from the sale couldn't even cover the taxes. And $1M in losses would take 300 years at $3K/yr. The above is one reason the lockup date expiration is why shares get sold. And one can probably profit on the bigger companies stock. Edit - see Yelp down 3% following expiration of 180 day IPO lock-up period, for similar situation."
},
{
"docid": "130303",
"title": "",
"text": "The core issue is to understand what 'selling a share' means. There is no special person or company that takes the share from you; you are selling on the open market. So your question is effectively 'can I find a guy on the street that buys a 10$-bill for 11$ ?' - Well, maybe someone is dumb enough, but chances are slim."
}
] |
1753 | Better ways to invest money held by my small, privately-held Canadian corporation? | [
{
"docid": "72131",
"title": "",
"text": "Since you are talking about a small firm, for the long term, it would be advisable to invest your money into the expansion - growth, diversification, integration - of your business. However, if your intention is to make proper use of your earnings in the short term, a decent bank deposit would help you to increase the credit line for your business with the benefit of having a high enough liquidity. You can also look at bonds and other such low risk instruments to protect your assets."
},
{
"docid": "97233",
"title": "",
"text": "The issue only arises when the investments grow in size. A small amount won't trigger the higher tax rates. If the amount is large enough, then consider using either: Insurance products that are 'segregated', or RRSPs in your own name after your business pays you wages, or Gifting to other family members."
}
] | [
{
"docid": "306679",
"title": "",
"text": "\"First note that CIBC issued these bonds with a zero coupon, so they do not pay any interest. They were purchased by the market participants at a small premium, paying an average of 100.054 for a nominal value of 100. This equates to a negative annual \"\"redemption\"\" yield of 0.009% - i.e., if held until maturity, then the holder will witness a negative annual return of 0.009%. You ask \"\"why does this make sense?\"\". Clearly it makes no sense for a private individual to purchase these bonds since they will be better off simply holding cash. To understand why there is a demand for these bonds we need to look elsewhere. The European bond market is currently suffering a dwindling supply owing to the ECBs bond buying programme (i.e., quantitative easing). The ECB is purchasing EUR 80 billion per month of Eurozone sovereign debt. This means that the quantity of high grade bonds available for purchase is shrinking fast. Against this backdrop we have all of those European institutions and financial corporations who are legally obliged to purchase bonds to be held as assets against their obligations. These are mostly national and private pension funds as well as insurance companies and fund managers. In this sort of environment, the price of high quality bonds is quickly bid up to the point where we see negative yields. In this environment companies like CIBC can borrow by issuing bonds with a zero coupon and the market is willing to pay a small premium over their nominal value. TL/DR The situation is further complicated by the subdued inflation outlook for the Eurozone, with a very real possibility of deflation. Should a prolonged period of deflation materialise, then negative redemption yield bonds may provide a positive real return.\""
},
{
"docid": "165998",
"title": "",
"text": "No of course not, they are privately held, have no relationship with publicly held financial institutions, do not mine and sell your information to publicly held corporations, do not play revolving door of board members, the board members own no stocks, fired and retired board members will never get on another board, they never lobby congress on behalf of extracting more money from the public, and never engage in insider trading for sure. Nothing at all to do with Wall Street."
},
{
"docid": "141458",
"title": "",
"text": "\"Not really, no. The assumption you're making—withdrawals from a corporation are subject to \"\"[ordinary] income tax\"\"—is simplistic. \"\"Income tax\"\" encompasses many taxes, some more benign than others, owing to credits and exemptions based on the kind of income. Moreover, the choices you listed as benefits in the sole-proprietor case—the RRSP, the TFSA, and capital gains treatment for non-registered investments—all remain open to the owner of a small corporation ... the RRSP to the extent that the owner has received salary to create contribution room. A corporation can even, at some expense, establish a defined benefit (DB) pension plan and exceed individual RRSP contribution limits. Yes, there is a more tax-efficient way for small business owners to benefit when it comes time to retirement. Here is an outline of two things I'm aware of: If your retirement withdrawals from your Canadian small business corporation would constitute withdrawal from the corporation's retained earnings (profits), i.e. income to the corporation that had already been subject to corporate income tax in prior years, then the corporation is able to declare such distributions as dividends and issue you a T5 slip (Statement of Investment Income) instead of a T4 slip (Statement of Remuneration Paid). Dividends received by Canadian residents from Canadian corporations benefit from the Dividend Tax Credit (DTC), which substantially increases the amount of income you can receive without incurring income tax. See TaxTips.ca - Non-eligible (small business) dividend tax credit (DTC). Quote: For a single individual with no income other than taxable Canadian dividends which are eligible for the small business dividend tax credit, in 2014 approximately $35,551 [...] could be earned before any federal* taxes were payable. * Provincial DTCs vary, and so combined federal/provincial maximums vary. See here. If you're wondering about \"\"non-eligible\"\" vs. \"\"eligible\"\": private small business corporation dividends are generally considered non-eligible for the best DTC benefit—but they get some benefit—while a large public corporation's dividends would generally be considered eligible. Eligible/non-eligible has to do with the corporation's own income tax rates; since Canadian small businesses already get a big tax break that large companies don't enjoy, the DTC for small businesses isn't as good as the DTC for public company dividends. Finally, even if there is hardly any same-year income tax advantage in taking dividends over salary from an active small business corporation (when you factor in both the income tax paid by the corporation and the individual), dividends still allow a business owner to smooth his income over time, which can result in a lower lifetime average tax rate. So you can use your business as a retained earnings piggy bank to spin off dividends that attract less tax than ordinary income. But! ... if you can convince somebody to buy your business from you, then you can benefit from the lifetime capital gains exemption of up to $800,000 on qualifying small business shares. i.e. you can receive up to $800K tax-free on the sale of your small business shares. This lifetime capital gains exemption is a big carrot—designed, I believe, to incentivize Canadian entrepreneurs to develop going-concern businesses that have value beyond their own time in the business. This means building things that would make your business worth buying, e.g. a valued brand or product, a customer base, intellectual property, etc. Of course, there are details and conditions with all of what I described, and I am not an accountant, so please consult a qualified, conflict-free professional if you need advice specific to your situation.\""
},
{
"docid": "53993",
"title": "",
"text": "\"A company whose stock is available for sale to the public is called a publicly-held or publicly-traded company. A public company's stock is sold on a stock exchange, and anyone with money can buy shares through a stock broker. This contrasts with a privately-held company, in which the shares are not traded on a stock exchange. In order to invest in a private company, you would need to talk directly to the current owners of the company. Finding out if a company is public or private is fairly easy. One way to check this is to look at the Wikipedia page for the company. For example, if you take a look at the Apple page, on the right sidebar you'll see \"\"Type: Public\"\", followed by the stock exchange ticker symbol \"\"AAPL\"\". Compare this to the page for Mars, Inc.; on that page, you'll see \"\"Type: Private\"\", and no stock ticker symbol listed. Another way to tell: If you can find a quote for a share price on a financial site (such as Google Finance or Yahoo Finance), you can buy the stock. You won't find a stock price for Mars, Inc. anywhere, because the stock is not publicly traded.\""
},
{
"docid": "314056",
"title": "",
"text": "This question is indeed rather complicated. Let's simplify it a little bit. Paying down your mortgage makes sense if your expected return in the rest of your portfolio is less than the cost of the mortgage. In many cases, people may also decide to pay down their mortgage because they are risk-averse and do not like carrying debt. There's no tax benefit to doing so, though; Canada doesn't generally allow you to write off mortgage interest, unlike the U.S. As to keeping money in the corporation or not, I'm not going to address that. I don't have a firm enough understanding of corporate taxation. Canadian Couch Potato advises treating all of your investment assets as one large portfolio. That is what you are trying to do here. However, let's consider a different approach. If you do not have enough money to max out your RRSP or TFSA, you may choose to keep your TFSA for an emergency fund, where the money is kept highly liquid. Keep your cash in an interest-bearing TFSA, or perhaps invest it in the money market, inside your TFSA. Then, use your RRSP for the rest of your investment money, split according to your investment goals. This is not the most tax-efficient approach, but it is nice and simple. But you are looking for the most tax-efficient approach. So, let's assume you have enough to more than max out your TFSA and RRSP contributions, and all of your investments are going toward your retirement, which is at least a decade away. Because you are not taxed on your investment income from RRSPs (until you withdraw the money) or TFSA, it makes sense to hold the least tax-efficient investments there. Tax-advantaged investments such as Canadian equities should be held in your investment accounts outside of TFSA and RRSPs. Again, the Canadian Couch Potato has a great article on where to put your investment assets. That article covers interest, dividends, foreign dividends, and capital gains, as well as RRSPs, RESPs, and TFSAs. That article recommends holding Canadian equities in a taxable account, REITs in a tax-sheltered account (TFSA or RRSP), bonds, GICs, and money-market funds in a tax-sheltered account (as these count as interest). The article goes into rather more detail than this, and is worth checking out. It mentions the 15% withholding tax on US-listed ETFs, for example. In addition to that website, I recommend the following three books: The above three resources strongly advocate passive indexed investments, which I like but not everyone agrees with. All three specifically discuss tax implications, which is why I include them here."
},
{
"docid": "451898",
"title": "",
"text": "\"Discussing individual stocks is discouraged here, so I'll make my answer somewhat generic. Keep in mind, some companies go public in a way that takes the shares that are held by the investment VCs (venture capitalists) and cashes them out of their positions, i.e. most if not all shares are made public. In that case, the day after IPO, the original investors have their money, and, short of the risk of being sued for fraud, could not care less what the stock does. Other companies float a small portion up front, and retain the rest. This is a way of creating a market and valuing the company, but not floating so many shares the market has trouble absorbing it. This stock has a \"\"Shares Outstanding\"\" of 2.74B but has only floated 757.21M. The nearly 2 billion shares held by the original investors certainly impact their wallets with how this IPO went. See the key statistics for the details.\""
},
{
"docid": "444568",
"title": "",
"text": "There are some great answers on this site similar to what you asked, with either a non-jurisdictional or a US-centric focus. I would read those answers as well to give yourself more points of view on early investing. There are a few differences between Canada and the US from an investing perspective that you should also then consider, namely tax rules, healthcare, and education. I'll get Healthcare and Education out of the way quickly. Just note the difference in perspective in Canada of having government healthcare; putting money into health-savings plans or focusing on insurance as a workplace benefit is not a key motivating factor, but more a 'nice-to-have'. For education, it is more common in Canada for a student to either pay for school while working summer / part-time jobs, or at least taking on manageable levels of debt [because it is typically not quite as expensive as private colleges in the US]. There is still somewhat of a culture of saving for your child's education here, but it is not as much of a necessity as it may be in the US. From an investing perspective, I will quickly note some common [though not universal] general advice, before getting Canadian specific. I have blatantly stolen the meat of this section from Ben Miller's great answer here: Oversimplify it for me: the correct order of investing Once you have a solid financial footing, some peculiarities of Canadian investing are below. For all the tax-specific plans I'm about to mention, note that the banks do a very good job here of tricking you into believing they are complex, and that you need your hand to be held. I have gotten some criminally bad tax advice from banking reps, so at the risk of sounding prejudiced, I recommend that you learn everything you can beforehand, and only go into your bank when you already know the right answer. The 'account types' themselves just involve a few pages of paperwork to open, and the banks will often do that for free. They make up their fees in offering investment types that earn them management fees once the accounts are created. Be sure to separate the investments (stocks vs bonds etc.) vs the investment vehicles. Canada has 'Tax Free Savings Accounts', where you can contribute a certain amount of money every year, and invest in just about anything you want, from bonds to stocks to mutual funds. Any Income you earn in this account is completely tax free. You can withdraw these investments any time you want, but you can't re-contribute until January 1st of next year. ie: you invest $5k today in stocks held in a TFSA, and they grow to $6k. You withdraw $6k in July. No tax is involved. On January 1st next year, you can re-contribute a new $6K, and also any additional amounts added to your total limit annually. TFSA's are good for short-term liquid investments. If you don't know for sure when you'll need the money, putting it in a TFSA saves you some tax, but doesn't commit you to any specific plan of action. Registered Retirement Savings Plans allow you to contribute money based on your employment income accrued over your lifetime in Canada. The contributions are deducted from your taxable income in the year you make them. When you withdraw money from your RRSP, the amount you withdraw gets added as additional income in that year. ie: you invest $5k today in stocks held in an RRSP, and get a $5k deduction from your taxable income this year. The investments grow to $6k. You withdraw $6k next year. Your taxable income increases by $6k [note that if the investments were held 'normally' {outside of an RRSP}, you would have a taxable gain of only 50% of the total gain; but withdrawing the amount from your RRSP makes the gain 100% taxable]. On January 1st next year, you CANNOT recontribute this amount. Once withdrawn, it cannot be recontributed [except for below items]. RRSP's are good for long-term investing for retirement. There are a few factors at play here: (1) you get an immediate tax deduction, thus increasing the original size of investment by deferring tax to the withdrawal date; (2) your investments compound tax-free [you only pay tax at the end when you withdraw, not annually on earnings]; and (3) many people expect that they will have a lower tax-rate when they retire, than they do today. Some warnings about RRSP's: (1) They are less liquid than TFSA's; you can't put money in, take it out, and put it in again. In general, when you take it out, it's out, and therefore useless unless you leave it in for a long time; (2) Income gets re-characterized to be fully taxable [no dividend tax credits, no reduced capital gains tax rate]; and (3) There is no guarantee that your tax rate on retirement will be less than today. If you contribute only when your tax rate is in the top bracket, then this is a good bet, but even still, in 30 years, tax rates might rise by 20% [who knows?], meaning you could end up paying more tax on the back-end, than you saved in the short term. Home Buyer Plan RRSP withdrawals My single favourite piece of advice for young Canadians is this: if you contribute to an RRSP at least 3 months before you make a down payment on your first house, you can withdraw up to $25k from your RRSP without paying tax! to use for the down payment. Then over the next ~10 years, you need to recontribute money back to your RRSP, and you will ultimately be taxed when you finally take the money out at retirement. This means that contributing up to 25k to an RRSP can multiply your savings available for a down payment, by the amount of your tax rate. So if you make ~60k, you'll save ~35% on your 25k deposited, turning your down payment into $33,750. Getting immediate access to the tax savings while also having access to the cash for a downpayment, makes the Home Buyer Plan a solid way to make the most out of your RRSP, as long as one of your near-term goals is to own your own home. Registered Pension Plans are even less liquid than RRSPs. Tax-wise, they basically work the same: you get a deduction in the year you contribute, and are taxed when you withdraw. The big difference is that there are rules on when you are allowed to withdraw: only in retirement [barring specific circumstances]. Typically your employer's matching program (if you have one) will be inside of an RPP. Note that RPP's and RRSP's reduce your taxes on your employment paycheques immediately, if you contribute through a work program. That means you get the tax savings during the year, instead of all at once a year later on April 30th. *Note that I have attempted at all times to keep my advice current with applicable tax legislation, but I do not guarantee accuracy. Research these things yourself because I may have missed something relevant to your situation, I may be just plain wrong, and tax law may have changed since I wrote this to when you read it."
},
{
"docid": "445378",
"title": "",
"text": "\"I did a little research and found the eligible investments for TFSAs. In this document under heading \"\"Shares of private and other corporations\"\", sub heading \"\"Shares of small business corporations\"\" there is clause about owning less than 10% share and less than $25000 total value of the corporation. Generally, a connected shareholder of a corporation (as defined in subsection 4901(2) of > the Regulations) at any time is a person who owns, directly or indirectly, at that time, 10% or more of the shares of any class of shares of the corporation or of any other corporation related to the corporation. However, where • such a person is dealing at arm's length with the corporation or any other related corporation; and • the aggregate cost amount of all shares of the corporation or any other related corporation the person owns, or is deemed to own, is less than $25,000 that person will not be a connected shareholder of the corporation. For purposes of the 10% and $25,000 tests, the rules in the definition of ìspecified shareholderî in subsection 248(1) apply with the result that certain shares will be deemed to be owned by the shareholder. For example, by virtue of paragraphs (a) and (b), respectively, of that definition, an annuitant, a beneficiary or a subscriber under a plan trust is deemed to own the shares owned by a person with whom the annuitant, beneficiary or subscriber is not dealing at armís length, as well as the shares owned by the plan trust. In addition, any share that • the annuitant, beneficiary, or subscriber under a plan trust; or • a person not dealing at arm's length with any of the above has a right to acquire is also included in the calculation of the percentage and cost amount of the shares held for purposes of the 10% and $25,000 tests pursuant to subsection 4901(2.2) of the Regulations.\""
},
{
"docid": "377563",
"title": "",
"text": "INR held in an NRE account can be converted to non-Indian currencies without any problems. Converting money in an NRO account is more difficult but do-able. Whether it is wise for you to invest in a privately held company is a different issue."
},
{
"docid": "272585",
"title": "",
"text": ">Why not give extra tax breaks for the sale of stock purchased during a public offering (since that goes to helping the company) but not for secondhand (less necessary) trading Because secondary trading determines how easy it is for companies to raise additional money and it also allows the company to manipulate private vs publicly held stakes in their company. >Should we give big tax breaks to people who lend businesses money? There's a difference between lending money and investing in a corporation. Furthermore the income tax code when it comes to lending money via bonds is a complete mess. Corporate bond coupons are taxed like regular income (although the principal return is, of course, tax free). Federal and munis are taxed differently. There is also the advantage that you do get a tax break in the event of default, so any additional risk you take on has some marginal tax benefits."
},
{
"docid": "458376",
"title": "",
"text": "There would be a catastrophic collapse in the financial industry. Not exaggerating. Every bank is a company that's technically held by another company, a bank holding company. Every investment firm typically has anywhere from dozens to thousands of separate little companies (depending on the size of the overall firm) that it uses to manage money and risk. There's ways to try and solve agency problems and moral hazard problems in corporate governance, but disallowing corporations from creating wholly owned subsidiaries is not the way to do it."
},
{
"docid": "137572",
"title": "",
"text": "Why do savings accounts for businesses offer less yield than bank accounts for individuals? The money held in savings account on a collective average substantial amount stays with the Bank. The Bank is better able to predict and thus invest this money in individual savings account in market to make more money. Money held in Business accounts are unpredictable and can get withdrawn, the Bank is thus not able to predict the behaviour and hence not able to invest this better to get good returns, hence the interest offered is low. Most Banks have special products for Businesses that would give better return but come with some kind of lock-in or minimum balances."
},
{
"docid": "145334",
"title": "",
"text": "littleadv's answer gives a concise summary of the system as it stands now, but much more changed than just the portion of the mandatory contribution that was diverted to the private plan. In broad terms, the balances of your accounts and your future benefit won't change. It's only the source of these benefits that's changing. The Bloomberg article describes the changes this way: The state will take over the amount of bonds that pension funds held as of end of Sept. 3 and turn them into pension liabilities in the state-run social security system... The state will assume control of 51.5 percent of pension-fund assets, including bonds guaranteed by the government and “other non-stock assets” After the change, Polish workers that held bonds in the private portion of their retirement portfolios will instead have more payments from the state-run pension system. The balances of your retirement portfolio and your future benefits shouldn't change, but the reality may depend on how the state pension system is managed and any future changes the government implements. The effect this change will have on future benefits isn't clear, because the change may simply delay the problem of high levels of outstanding sovereign debt, not solve it. The government stated that because increasing numbers of workers invested their money in private pension funds, less money went into the government's fund, which forced them to issue sovereign debt in order to cover the shortfall in their current pension liabilities. The government's recent cancellation of government bonds in the hands of private pensions will decrease their overall outstanding debt, but in exchange, the government is increasing its future pension liabilities. Years down the road, the government may find that they need to issue more sovereign debt to cover the increased pension liabilities they're taking on today. In other words, they may find themselves back in the same situation years down the road, and it's difficult to predict what changes they might make at that time."
},
{
"docid": "36659",
"title": "",
"text": "Typically the debt is held by individuals, corporations and investment funds, not by other countries. In cases where substantial amounts are held by other countries, those countries are typically not in debt themselves (e.g. China has huge holdings of US Treasuries). If the debts were all cancelled, then the holders of the debt (as listed above) would lose out badly and the knock-on effects on the economy would be substantial. Also, governments that default tend to find it harder to borrow money again in the future."
},
{
"docid": "465820",
"title": "",
"text": "\"Bloomberg suggests that two Fidelity funds hold preferred shares of Snapchat Inc.. Preferred shares hold more in common with bonds than with ordinary stock as they pay a fixed dividend, have lower liquidity, and don't have voting rights. Because of this lower liquidity they are not usually offered for sale on the market. Whether these funds are allowed to hold such illiquid assets is more a question for their strategy document than the law; it is completely legal for a company to hold a non-marketable interest in another, even if the company is privately held as Snapchat is. The strategy documents governing what the fund is permitted to hold, however, may restrict ownership either banning non-market holdings or restricting the percentage of assets held in illiquid instruments. Since IPO is very costly, funds like these who look to invest in new companies who have not been through IPO yet are a very good way of taking a diversified position in start-ups. Since they look to invest directly rather than through the market they are an attractive, low cost way for start-ups to generate funds to grow. The fund deals directly with the owners of the company to buy its shares. The markdown of the stock value reflects the accounting principle of marking to market (MTM) financial assets that do not have a trade price so as to reflect their fair value. This markdown implies that Fidelity believe that the total NPV of the company's net assets is lower than they had previously calculated. This probably reflects a lack of revenue streams coming into the business in the case of Snapchat. edit: by the way, since there is no market for start-up \"\"stocks\"\" pre-IPO my heart sinks a little every time I read the title of this question. I'm going to be sad all day now :(.\""
},
{
"docid": "2338",
"title": "",
"text": "The answer to this question is related to another question: How would I invest in Uber? Given that Uber is a privately-held company, the average investor cannot directly buy stock. However, there are some indirect methods that you can use to invest in Uber, and as a result, it is also possible to indirectly short Uber. One method is to invest in (or short) companies that invest in Uber. Alphabet/Google (GOOG) owns some, as well as Microsoft (MSFT), Toyota (ADR), and other companies. Theoretically, you could short these companies, as a hit to Uber would be bad for those companies. Another method would be to look at Uber's competitors. Think about what companies would do well if Uber went under. Lyft, perhaps, although it is so similar to Uber that if one has trouble, the other may as well. Perhaps instead you might invest in a traditional taxi company, or a company that provides services to taxi companies, such as Medallion Financial Corporation (MFIN). Keep in mind that either investing or shorting any of these is not really the same as investing/shorting Uber. It provides you some exposure in Uber, but your investment is also affected by many other things that have nothing to do with Uber. For more information, see the Investopedia article Ways to Invest in Uber before It Goes Public. For the record, I don't recommend that you do any of this."
},
{
"docid": "584241",
"title": "",
"text": "\"As others have mentioned, you avoid \"\"payroll taxes\"\" (Medicaid, Social Security, etc) by using pre-tax money rather than post-tax money. However, there is one benefit to getting your own privately held one: you can choose the service provider. A previous employer's HSA charged $4/month, and did not allow me to invest in any funds unless I had over $4k in my account. However, a single year's maximum contribution is less than $4k, so it was stuck in a money market account perpetually. The tax saving probably is larger than both your monthly fees and your investment gains, but the HSA provider's rules are another (fairly-opaque) consideration.\""
},
{
"docid": "469194",
"title": "",
"text": "To be absolutely sure you should call the agent and check That said I have been renting accommodation through both agencies and directly through landlords for seven years (I live in London) and this is quite a common situation. It normally means that the deposit is being securely held by a third party so that it cannot be taken or depleted without the agreement of both parties. The deposit protection scheme ( https://www.depositprotection.com/ ) is one way that deposits are securely held in this manner. As a third party they will have different account details. It may be the case that the agency is protecting the deposit and you are paying rent to the landlord directly. This means that your deposit goes to the agency's account and the rent goes to the landlord's account. Obviously your landlord and agency have different accounts. A little colour to brighten your day: I am currently paying my rent to the agency who also took the deposit but, because of the way they handle deposits versus rent, the deposit was sent to a different account held by the same agent. In my previous flat I paid the deposit to an agency and the rent directly to the landlord. This resulted in an issue one time where I got the two accounts confused and paid rent to the agency who, after giving me a small slap on the wrist, transferred it to my landlord. In the flat before that I paid rent and the deposit to my landlords' holding company. That is one of the few times that I paid rent and the deposit into the same account. Again check with the agent that one of these situations is the case but this is absolutely normal when renting through an agency."
},
{
"docid": "40241",
"title": "",
"text": "\"You understood it pretty right. Every fiscal year (which runs from April 6 year Y to April 5 year Y+1), you can deposit a total GBP15k (this number is subject to an annual increase by HMRC) into your ISAs. You can open 2 new ISA every year but the amount deposited to those ISAs shall not excess GBP15k in total. From the 2016/17 tax year some ISAs now permit you to replace any funds you have withdrawn, without using up your allowance. It used to be that if you deposited GBP15K and then withdrew GBP5K, you could not pay in to that ISA again within that tax year as you had already used your full allowance. Under new Flexible ISA rules this would be allowed providing you replace the funds in the same ISA account and within the same tax year (strongly recommend that you check the small prints related to your account to make sure this is he case). Any gains and losses on the investments held in the ISA accounts are for you to take. i.e. If you make investment gains of GBP5K this does not reduces your allowance. You will still be able to deposit GBP15k (or whatever HMRC increases that number to) in the following year. You are also allowed to consolidate your ISAs. You can ask bank A to transfer the amount held into an ISA with bank held with bank B. This is usually done by filling a special form with the bank that will held the money post transactions. Again here be very careful. DO NOT withdraw the money to transfer it yourself as this would count against the GBP15K limit. Instead follow the procedures from the bank. Finally if you don't use your allowance for a given year, you cannot use it during the following year. i.e. if you don't deposit the GBP15K this year, then you cannot deposit GBP30K next year. NB: I used the word \"\"deposit\"\". It does not matter to HMRC if the money get invested or not. If you are in a rush on April 4th, just make sure the money is wired into the ISA account by the 5th. No need to rush and make bad investment decision. You can invest it later. Hope it helps\""
},
{
"docid": "156358",
"title": "",
"text": "Pre-Enron many companies forced the 401K match to be in company shares. That is no longer allowed becasue of changes in the law. Therefore most employees have only a small minority of their retirement savings in company shares. I know the ESOP and 401K aren't the same, but in my company every year the number of participants in the company stock purchase program decreases. The small number of participants and the small portion of their new retirement funds being in company shares would mean this spike in volume would be very small. The ESOP plan for my employer takes money each paycheck, then purchases the shares once a quarter. This delay would allow them to manage the purchases better. I know with a previous employer most ESOP participants only held the shares for the minimum time, thus providing a steady steam of shares being sold."
},
{
"docid": "400845",
"title": "",
"text": "\"The number one difference is that bank savings accounts, or money market accounts (MMAs allow limited checking--six non-ATM withdrawals per month, max, else possible fees) have FDIC insurance up to $250,000. However don't put that much in--allow some room for interest, so you never go over the $250,000. Money Market Mutual Funds do not enjoy FDIC insurance. There may be some SPIC insurance--generally against brokerage failure though, but its coverage is questionable--search out those details, and if they apply to anything besides actual cash held at the brokerage. If the money market mutual fund is strictly invested in US Treasury securities (like T-Bills, or other short-term US Treasury instruments), it enjoys the full faith and credit of the US government, FWIW--but many MMMFs invest in corporate instruments. If the fund has any pricing issues, there might be a delay in getting paid off. (Extremely unlikely.) Number two, and more importantly, bank savings accounts (or MMAs) pay way more! You can get a bit over 1% APY now--many paying 0.90% APY, or higher. No money market mutual funds are close to that, generally yielding a small fraction of that, almost zero for US Treasury MMM funds. Sure 1.05% ain't too exciting, but you may as well get the most you can if holding \"\"cash,\"\" and fully insured to boot.\""
},
{
"docid": "513620",
"title": "",
"text": "There are two reasons to do a reverse split. Those partial shares will then be turned into cash and returned to the investors. For large institutional investors such as mutual funds or pension funds it results in only a small amount of cash because the fund has merged all the investors shares together. If the company is trying to meet the minimum price level of the exchange they have little choice. If they don't do the reverse split they will be delisted. If the goal is to reduce the number of investors they are using one of the methods of going private: A publicly held company may deregister its equity securities when they are held by less than 300 shareholders of record or less than 500 shareholders of record, where the company does not have significant assets. Depending on the facts and circumstances, the company may no longer be required to file periodic reports with the SEC once the number of shareholders of record drops below the above thresholds. A number of kinds of transactions can result in a company going private, including:"
},
{
"docid": "519473",
"title": "",
"text": "\"The difference between the provincial/territorial low and high corporate income tax rates is clear if you read through the page you linked: Lower rate The lower rate applies to the income eligible for the federal small business deduction. One component of the small business deduction is the business limit. Some provinces or territories choose to use the federal business limit. Others establish their own business limit. Higher rate The higher rate applies to all other income. [emphasis mine] Essentially, you pay the lower rate only if your income qualifies for the federal small business deduction (SBD). If you then followed the small business deduction link in the same page, you'd find the SBD page describing \"\"active business income\"\" from a business carried on in Canada as qualifying for the small business deduction. If your corporation is an investment vehicle realizing passive investment income, generally that isn't considered \"\"active business income.\"\" Determining if your business qualifies for the SBD isn't trivial — it depends on the nature of your business and the kind and amount of income it generates. Talk to a qualified corporate tax accountant. If you're looking at doing IT contracting, also pay close attention to the definition of \"\"personal services business\"\", which wouldn't qualify for the SBD. Your accountant should be able to advise you how best to conduct your business in order to qualify for the SBD. Don't have a good accountant? Get one. I wouldn't operate as an incorporated IT contractor without one. I'll also note that the federal rate you would pay would also differ based on whether or not you qualified for the SBD. (15% if you didn't qualify, vs. 11% if you qualify.) The combined corporate income tax rate for a Canadian-controlled private corporation in Ontario that does qualify for the small business deduction would be 11% + 4.5% = 15.5% (in 2013). Additional reading:\""
},
{
"docid": "21975",
"title": "",
"text": "\"In an IPO (initial public offering) or APO (additional public offering) situation, a small group of stakeholders (as few as one) basically decide to offer an additional number of \"\"shares\"\" of equity in the company. Usually, these \"\"shares\"\" are all equal; if you own one share you own a percentage of the company equal to that of anyone else who owns one share. The sum total of all shares, theoretically, equals the entire value of the company, and so with N shares in existence, one share is equivalent to 1/Nth the company, and entitles you to 1/Nth of the profits of the company, and more importantly to some, gives you a vote in company matters which carries a weight of 1/Nth of the entire shareholder body. Now, not all of these shares are public. Most companies have the majority (51%+) of shares owned by a small number of \"\"controlling interests\"\". These entities, usually founding owners or their families, may be prohibited by agreement from selling their shares on the open market (other controlling interests have right of first refusal). For \"\"private\"\" companies, ALL the shares are divided this way. For \"\"public\"\" companies, the remainder is available on the open market, and those shares can be bought and sold without involvement by the company. Buyers can't buy more shares than are available on the entire market. Now, when a company wants to make more money, a high share price at the time of the issue is always good, for two reasons. First, the company only makes money on the initial sale of a share of stock; once it's in a third party's hands, any profit from further sale of the stock goes to the seller, not the company. So, it does little good to the company for its share price to soar a month after its issue; the company's already made its money from selling the stock. If the company knew that its shares would be in higher demand in a month, it should have waited, because it could have raised the same amount of money by selling fewer shares. Second, the price of a stock is based on its demand in the market, and a key component of that is scarcity; the fewer shares of a company that are available, the more they'll cost. When a company issues more stock, there's more shares available, so people can get all they want and the demand drops, taking the share price with it. When there's more shares, each share (being a smaller percentage of the company) earns less in dividends as well, which figures into several key metrics for determining whether to buy or sell stock, like earnings per share and price/earnings ratio. Now, you also asked about \"\"dilution\"\". That's pretty straightforward. By adding more shares of stock to the overall pool, you increase that denominator; each share becomes a smaller percentage of the company. The \"\"privately-held\"\" stocks are reduced in the same way. The problem with simply adding stocks to the open market, getting their initial purchase price, is that a larger overall percentage of the company is now on the open market, meaning the \"\"controlling interests\"\" have less control of their company. If at any time the majority of shares are not owned by the controlling interests, then even if they all agree to vote a certain way (for instance, whether or not to merge assets with another company) another entity could buy all the public shares (or convince all existing public shareholders of their point of view) and overrule them. There are various ways to avoid this. The most common is to issue multiple types of stock. Typically, \"\"common\"\" stock carries equal voting rights and equal shares of profits. \"\"Preferred stock\"\" typically trades a higher share of earnings for no voting rights. A company may therefore keep all the \"\"common\"\" stock in private hands and offer only preferred stock on the market. There are other ways to \"\"class\"\" stocks, most of which have a similar tradeoff between earnings percentage and voting percentage (typically by balancing these two you normalize the price of stocks; if one stock had better dividends and more voting weight than another, the other stock would be near-worthless), but companies may create and issue \"\"superstock\"\" to controlling interests to guarantee both profits and control. You'll never see a \"\"superstock\"\" on the open market; where they exist, they are very closely held. But, if a company issues \"\"superstock\"\", the market will see that and the price of their publicly-available \"\"common stock\"\" will depreciate sharply. Another common way to increase market cap without diluting shares is simply to create more shares than you issue publicly; the remainder goes to the current controlling interests. When Facebook solicited outside investment (before it went public), that's basically what happened; the original founders were issued additional shares to maintain controlling interests (though not as significant), balancing the issue of new shares to the investors. The \"\"ideal\"\" form of this is a \"\"stock split\"\"; the company simply multiplies the number of shares it has outstanding by X, and issues X-1 additional shares to each current holder of one share. This effectively divides the price of one share by X, lowering the barrier to purchase a share and thus hopefully driving up demand for the shares overall by making it easier for the average Joe Investor to get their foot in the door. However, issuing shares to controlling interests increases the total number of shares available, decreasing the market value of public shares that much more and reducing the amount of money the company can make from the stock offering.\""
},
{
"docid": "482386",
"title": "",
"text": "\"Wait, so if you have more money you get to follow \"\"unpopular rules\"\"? That sounds even worse than what we have today. And you didn't answer my question about how private courts and private security companies would be held accountable.\""
},
{
"docid": "214195",
"title": "",
"text": "\"It isn't an edge janitor. As a whole, BART employees vastly better compensated than private industry. http://blog.vctr.me/bart/ It's noble that you desire a \"\"fair wage\"\" for every worker but that's not how this works. The role of the business is to earn profit and return money to the shareholder. There is no corporate doctrine advocating that compensation must be equal or somehow divided. The janitor doesn't need $100k/year -- he needs affordable housing. But efforts like that are stymied by public unions sucking up undue compensation that would have been better invested in a public-private trust for affordable housing construction. Even Zuckerberg, arguably the biggest liberal in town doesn't implement your \"\"fair wage\"\" system -- why? Because he runs a private corporation and has to answer to share holders. Watch a companies profits plunge and hard decisions be made -- if it's a bonus for your in-demand finance or engineers or a $100k salary for the janitor I think you know what will take precedence. Companies make these decisions every day. Back to the root issue. My argument is that public transportation by rail can be a real money loser, even in a dense urban setting like SF Bay. The only way to fix BART is to starve the beast but bay area voters see the system through rose-tinted glasses and fail to do. Counties should privatize the system, disband the public union and cut labor costs by 50% so that taxpayer subsides aren't required to maintain a system that takes in $6B over 10 a ten year timespan.\""
},
{
"docid": "178586",
"title": "",
"text": "> Umm, one of the benefits of creating a corporation is to keep personal money separate from the business. you missed the key statement from that little link you posted. Here, I'll help you out: > An owner of a corporation can be held personally liable if he or she: personally guarantees a bank loan or a business debt on which the corporation defaults And for a brand new company, you can sure as shit guarantee that as an owner, you'll be held personally liable."
},
{
"docid": "475580",
"title": "",
"text": "\"Money market accounts, insured in the same way as other deposits, are strange hybrids of traditional bank deposits and bond mutual funds. Because of the high inflation of the 1970s, banks were starved of deposits and could not produce loans at sufficient rates. For this reason, they desired a way to fund loans, and Congress enacted the Depository Institutions Deregulation and Monetary Control Act which permitted a new form of account that retained the functionality of a deposit account, such as checking and now electronic transfers, yet transferred the risk to the account thus most of the profit. This allowed banks to fund each others' new loans through packaging them into asset backed securities to be held in these special accounts. As an added \"\"protection\"\", they are not permitted to carry a market value less than what's owed to depositors and are forcibly liquidated and paid in such event. This is a rare occurrence because of the nature of the assets held: credit assets such as commercial paper, mortgages, and corporate bonds. This is the opposite case of deposits because so long as a bank can maintain payments on its liabilities and satisfy a few other regulatory requirements, non-regulation satisfying assets could theoretically carry a zero balance, meaning that a bank could owe depositors more than what could be paid by liquidating all assets. Money market accounts will typically pay a higher rate because of their structure. While inflation is low and immediate term interest rates set by the central bank are also low, the net figure will not appear high, but the ratio will be fantastic, usually something like 3x. The one downside to money market accounts is that withdrawals are restricted by frequency. This is not such a problem as before since brokerages are now issuing debit cards tied to brokerage accounts, and excess money can be \"\"swept\"\" into money market accounts, bypassing the regulatory restriction. In short, money market accounts are currently a far better choice than traditional checking accounts but pay less than savings accounts.\""
},
{
"docid": "314342",
"title": "",
"text": "\"Many individual states, counties, and cities have their own income taxes, payroll taxes, sales taxes, property taxes, etc., you will need to consult your state and local government websites for information about additional taxes that apply based on your locale. Wages, Salaries, Tips, Cash bonuses and other taxable employee pay, Strike benefits, Long-term disability, Earnings from self employment Earned income is subject to payroll taxes such as: Earned income is also subject to income taxes which are progressively higher depending on the amount earned minus tax credits, exemptions, and/or deductions depending on how you file. There are 7 tax rates that get progressively larger as your income rises but only applies to the income in each bracket. 10% for the first 18,650 (2017) through 39.6% for any income above 470,700. The full list of rates is in the above linked article about payroll taxes. Earned income is required for contributions to an IRA. You cannot contribute more to an IRA than you have earned in a given year. Interest, Ordinary Dividends, Short-term Capital Gains, Retirement income (pensions, distributions from tax deferred accounts, social security), Unemployment benefits, Worker's Compensation, Alimony/Child support, Income earned while in prison, Non-taxable military pay, most rental income, and S-Corp passthrough income Ordinary income is taxed the same as earned income with the exception that social security taxes do not apply. This is the \"\"pure taxable income\"\" referred to in the other linked question. Dividends paid by US Corporations and qualified foreign corporations to stock-holders (that are held for a certain period of time before the dividend is paid) are taxed at the Long-term Capital Gains rate explained below. Ordinary dividends like the interest earned in your bank account are included with ordinary income. Stocks, Bonds, Real estate, Carried interest -- Held for more than a year Income from assets that increase in value while being held for over a year. Long term capital gains justified by the idea that they encourage people to hold stock and make long term investments rather than buying and then quickly reselling for a short-term profit. The lower tax rates also reflect the fact that many of these assets are already taxed as they are appreciating in value. Real-estate is usually taxed through local property taxes. Equity in US corporations realized by rising stock prices and dividends that are returned to stock holders reflect earnings from a corporation that are already taxed at the 35% Corporate tax rate. Taxing Capital gains as ordinary income would be a second tax on those same profits. Another problem with Long-term capital gains tax is that a big portion of the gains for assets held for multiple decades are not real gains. Inflation increases the price of assets held for longer periods, but you are still taxed on the full gain even if it would be a loss when inflation is calculated. Capital gains are also taxed differently depending on your income level. If you are in the 10% or 15% brackets then Long-term capital gains are assessed at 0%. If you are in the 25%, 28%, 33%, or 35% brackets, they are assessed at 15%. Only those in the 39.6% bracket pay 20%. Capital assets sold at a profit held for less than a year Income from buying and selling any assets such as real-estate, stock, bonds, etc., that you hold for less than a year before selling. After adding up all gains and losses during the year, the net gain is taxed as ordinary income. Collectibles held for more than a year are not considered capital assets and are still taxed at ordinary income rates.\""
},
{
"docid": "360434",
"title": "",
"text": "While it is a true loss, as you've determined, is not a cash cost, per se. A cash cost would be a decrease in cash holdings. Inflation does not take your cash balance; it devalues it, so it is an accrued loss. Central banks are extremely lazy in determining inflation, so the highest resolution available at a public level is monthly. In the United States, there is a small project that tries to calculate daily inflation rates and seems to do a decent job, but unless if you are a customer of a particular financial institution, you will suffer a lag. The small project refuses to make the data public in real time or even allow outside analysis. In the UK, the Office for National Statistics is responsible for consumer inflation statistics. The methodology is not readily available, but considering the name, it is most likely an inferior Laspeyres index instead of the optimal Fisher index as it is in the US. To calculate the accrued cost due to inflation, simply multiply the amount of money held by the price index value at the beginning of the time held and divide by the price index value at the end of the time held. For example, to determine the amount of value lost since March 2014, multiply the money held by the price index value for March 2014 and divide by June 2014."
}
] |
6068 | At what point is it most advantageous to cease depositing into a 401k? | [
{
"docid": "477021",
"title": "",
"text": "It's probably advantageous to stop depositing into a 401(k) when one is no longer receiving payroll deductions into them. Other than that, why would you want to give up the benefits? Remember, 401(k) is just the kind of account. Most offer a variety of investment options within them, and let you move money between those, so you can rebalance to suit your currently preferred risk/return tradeoffs without having to break them open. You might sometimes want to reduce your contribution for a while, if you have immediate cashflow needs elsewhere... but try to avoid doing that. Compound returns are a good thing, and the earlier the money goes in the more you get back from it."
},
{
"docid": "160780",
"title": "",
"text": "\"A fascinating view on this. The math of a 10% deposit and projected 10% return lead to an inevitable point when the account is worth 10X your income (nice) and the deposit, 10% of income only represents 1% of the account balance. The use of an IRA is neither here nor there, as your proposed deposit is still just 1% of your retirement account total. Pay off debt? For one with this level of savings, it should be assumed you aren't carrying any high interest debt. It really depends on your age and retirement budget. Our \"\"number\"\" was 12X our final income, so at 10X, we were still saving. For you, if you project hitting your number soon enough, I'd still deposit to the match, but maybe no more. It might be time to just enjoy the extra money. For others, their goal may be much higher and those extra years deposits are still needed. I'd play with a spreadsheet and see the impact of reduced retirement account deposits. Note - the question asks about funding the 401(k) vs paying down debt. I'd always advise to deposit to the match, but beyond that, one should focus on their high interest debt, especially by their 50's.\""
},
{
"docid": "404881",
"title": "",
"text": "\"You'd need to test the assumptions here - in effect you're saying that in 15 years your account will have a balance 10x your income. But normally you'd expect your income to grow over the years (e.g. promotions) and so you'd hope that your income in 15 years would be significantly larger than what it is now. But, even in the case where your account eventually does grow to 10x your salary at that time, it may still be worth continuing to contribute. In effect, adding a further 1% to your account is boosting the \"\"compounding return\"\" on your account by 1% - after fees and risk free. This additional 1% \"\"return\"\" in effect makes your retirement plan safer - you either get a higher total return for the same investment mix, or you can get the same total return for a slightly safer investment mix. In effect, you're treating your salary as a \"\"safe\"\" annuity and each year putting 10% of the \"\"return\"\" from that into your more risky retirement account.\""
},
{
"docid": "337561",
"title": "",
"text": "\"The only time to stop saving money for retirement is when you have enough money to retire tomorrow. Not all of your \"\"retirement savings\"\" need to be in a 401k, it is just better if you can. Be sure to get as much as you can from the employer matching program. Unfortunately some employer matching programs discourage you from putting in too much. I've been able to max out the 401k contribution a number of times, which helps. Remember: you are likely to live to 100, so you better save enough to live that long. I don't trust social security to be there. I recommend saving so that you end up with \"\"enough to be comfortable\"\" -- this is usually about 25x your current income - PLUS inflation between now and when you plan to retire (age 62 is a good target). It is worth knowing your \"\"retirement savings number\"\". If you are making $100K per year now, you need to target $2.5M - PLUS allowance for inflation between now and when you plan to retire. This usually means you need to also arrange to make more money as well as save as much as you can and to use passive investing. Finance advisors are not worth it if you have less than $1M to invest.\""
}
] | [
{
"docid": "564796",
"title": "",
"text": "\"Since most of the answers are flawed in their logic, I decided to respond here. 1) \"\"What if you lose your job, you can't pay back the loan\"\" The point of the question was to reduce the amount paid per month. So obviously it would be easier to pay off the 401k loan rather than the 3 separate loans that are in place now. Also it's stated in the question that there's a mortgage, a child with medical costs, a car loan, student loans, other debt. On the list of priorities the 401k loan does not make the top 10 concerns if they lost their job. 2) \"\"Consider stopping the 401k contribution\"\" This is such a terrible idea. If you make the full contribution to the 401k and then just withdraw from the 401k rather than getting a loan you only pay a 10% penalty tax. You still get 90% of the company match. 3) \"\"You lose compound interest\"\" While currently the interest you get on a 401k (depending on how that money is invested) is higher than the interest you pay on your loans (which means it would be advantageous to keep the loans and keep contributing to the 401k), it's very unreliable and might even go down. I think you actually have a good case for getting a loan against the 401k if a) You have your spending and budget under control b) Your income is consistent c) You are certain that the loan will be paid back. My suggestion would be to take a loan against the 401k, but keep the current spending on the loans consistent. If you don't need the extra $150 per month, you really should try to pay off the loans as fast as you can. If you do need the $150 extra, you are lowering the mental threshold for getting more loans in the future.\""
},
{
"docid": "49614",
"title": "",
"text": "\"401k plans are required to not discriminate against the non-HCE participants, and one way they achieve this is by limiting the percentage of wages that HCEs can contribute to the plan to the average annual percentage contribution by the non-HCE participants or 3% whichever is higher. If most non-HCE employees contribute only 3% (usually to capture the employer match but no more), then the HCEs are stuck with 3%. However, be aware that in companies that award year-end bonuses to all employees, many non-HCEs contribute part of their bonuses to their 401k plans, and so the average annual percentage can rise above 3% at the end of year. Some payroll offices have been known to ask all those who have not already maxed out their 401k contribution for the year (yes, it is possible to do this even while contributing only 3% if you are not just a HCE but a VHCE) whether they want to contribute the usual 3%, or a higher percentage, or to contribute the maximum possible under the nondiscrimination rules. So, you might be able to contribute more than 3% if the non-HCEs put in more money at the end of the year. With regard to NQSPs, you pretty much have their properties pegged correctly. That money is considered to be deferred compensation and so you pay taxes on it only when you receive it upon leaving employment. The company also gets to deduct it as a business expense when the money is paid out, and as you said, it is not money that is segregated as a 401k plan is. On the other hand, you have earned the money already: it is just that the company is \"\"holding\"\" it for you. Is it paying you interest on the money (accumulating in the NQSP, not paid out in cash or taxable income to you)? Would it be better to just take the money right now, pay taxes on it, and invest it yourself? Some deferred compensation plans work as follows. The deferred compensation is given to you as a loan in the year it is earned, and you pay only interest on the principal each year. Since the money is a loan, there is no tax of any kind due on the money when you receive it. Now you can invest the proceeds of this loan and hopefully earn enough to cover the interest payments due. (The interest you pay is deductible on Schedule A as an Investment Interest Expense). When employment ceases, you repay the loan to the company as a lump sum or in five or ten annual installments, whatever was agreed to, while the company pays you your deferred compensation less taxes withheld. The net effect is that you pay the company the taxes due on the money, and the company sends this on to the various tax authorities as money withheld from wages paid. The advantage is that you do not need to worry about what happens to your money if the company fails; you have received it up front. Yes, you have to pay the loan principal to the company but the company also owes you exactly that much money as unpaid wages. In the best of all worlds, things will proceed smoothly, but if not, it is better to be in this Mexican standoff rather than standing in line in bankruptcy court and hoping to get pennies on the dollar for your work.\""
},
{
"docid": "472882",
"title": "",
"text": "\"Why not do both? The object is to \"\"squirrel\"\" away as much money as possible. The 401k has the advantage of being a payroll deduction. The IRA, if you can save the money, gives you more control. When you change jobs, you can \"\"roll over\"\" your first 401k into either your IRA or your second job's 401k. Note: There are legal limits on total contributions to IRA and 401ks. I've forgotten what they are, so find out for yourself. There may also be income limits, but ones that don't apply to most 23-year olds, unless they own their own company or work for say, Goldman Sachs.\""
},
{
"docid": "418864",
"title": "",
"text": "\"Keep in mind, there are too many variables to address in a single post. I could (and might) write a full book on the topic. One simple way to comprehend your perceived observation. In the 25% bracket, you have $1000 of income and two choices. Net out $750, and deposit to Roth, or deposit the full $1000 to the traditional IRA or 401(k). Sufficient time passes for the investment to grow 10 fold. For what it's worth, 8% at 30 years will do that. The Roth is now worth $7500 tax free. The traditional 401(k) is worth $10000 but subject to tax. At 25%, we're at the same $7500. For those looking to invest more than a gross $18,000, the Roth flavor is an effective $24,000, as post tax, this is $18,000. I wrote a bit more on this in the whimsically titled The Density of Your IRA. This is really a top 10%er issue, as it takes quite a bit of income for the $23,000 combined IRA and 401(k) limits to be a problem. In my writing, the larger case to be made is for taking advantage of the tax rate difference between the time of deposit and withdrawal. A look at the 2016 tax rates is in order. Let's stick with 25% while working. Now, at retirement, but before social security, as that's another story, the couple has $20,600 in standard deduction and exemption, and both the 10 and 15% brackets to enjoy. Ignoring any other deductions, potential credits, etc, let's look at a gross $80,000 withdrawal. The numbers happen to work out to an average 10%, with the couple being in a marginal 15% bracket. A full 25% or $20,000 tax would be the break-even to the \"\"same bracket in/out\"\" analysis, so this produces a $12,000 benefit. This issue is often treated as if there were 2 points in time, the deposit, and the withdrawal. For most people, that may be the case. Keep in mind, current law allows a conversion to Roth any time in between. This gives an opportunity to make a deposit while in the 25% bracket, and convert in any year the marginal rate drops back to 15% for whatever reason. Last - I can't ignore the Social Security problem. Simply put, when half of your Social Security benefits plus other income exceed $25,000 ($32,000 if married filing joint) your benefits start to become taxable, until 85% of your benefits are fully taxed. This issue is worthy of multiple posts by itself. It's not a deal killer, just another point to consider. A very high income earner might be beyond these levels already, in which case the point is moot. A low income earner, not impacted at all. It's those who are in the range to navigate this that would benefit to take advantage of the scenario I presented above and spend down pre-tax accounts, while planning to use the Roths when Social Security starts. This should make it clear - it's not all or none. Those retiring with $2M in 100% pretax, or $1.5M 100% in Roth have both missed the chance to have the optimal mix.\""
},
{
"docid": "509837",
"title": "",
"text": "You need to look at all your investment as a whole. The 401K, IRA, and any taxable account need to be a part of the diversification and re-balancing. The fact you have regular deposits into the 401K needs to also be a part of your strategy. Regardless of how much specific investments have gone up this year, you need to first determine how you want to be invested in large cap stock, small cap stock, bond, international, emerging markets... Then you need to see where you are today compared to those investment percentages. You then move the money in the retirement accounts to get to your desired percentage. And set the 401K deposits to be consistent with your goals. Many times the deposits are allocated the same way the balances are, but that is more complex if one of the sectors you are investing in exists completely outside the 401K. When you re-balance in the future you will be selling sectors that grew the most and buying those that grew the least compared to their planned percentages. If all the moves are within the 401K and IRA then capital gains are not a concern. Don't think of the different accounts as separate baskets, but think of them as a whole investment strategy."
},
{
"docid": "167103",
"title": "",
"text": "\"Keep in mind one possible gotcha on depositing a bonus into your 401K: Tax withholding. Depending on whether your employer combines your bonus onto a regular paycheck, you can be bitten if you allocate a large chunk to your 401K. I suspect your bonus is, like most, subject to an arbitrary federal withholding requirement of 25%, and if you allocate 100% of the bonus to your 401K, the 25% withholding may come out of what would ordinarily be the take-home in your \"\"regular\"\" paycheck - leaving you with a literal take-home of zero for one pay period. There are lots of variables in that calculation, obviously, but it's one a lot of people seem to overlook.\""
},
{
"docid": "47614",
"title": "",
"text": "If you can afford it, there are very few reasons not to save for retirement. The biggest reason I can think of is that, simply, you are saving in general. The tax advantages of 401k and IRA accounts help increase your wealth, but the most important thing is to start saving at an early age in your career (as you are doing) and making sure to continue contributing throughout your life. Compound interest serves you well. If you are really concerned that saving for retirement in your situation would equate to putting money away for no good reason, you can do a couple of things: Save in a Roth IRA account which does not require minimum distributions when you get past a certain age. Additionally, your contributions only (that is, not your interest earnings) to a Roth can be withdrawn tax and penalty free at any time while you are under the age of 59.5. And once you are older than that you can take distributions as however you need. Save by investing in a balanced portfolio of stocks and bonds. You won't get the tax advantages of a retirement account, but you will still benefit from the time value of money. The bonus here is that you can withdraw your money whenever you want without penalty. Both IRA accounts and mutual fund/brokerage accounts will give you a choice of many securities that you can invest in. In comparison, 401k plans (below) often have limited choices for you. Most people choose to use their company's 401k plan for retirement savings. In general you do not want to be in a position where you have to borrow from your 401k. As such it's not a great option for savings that you think you'd need before you retire. Additionally 401k plans have minimum distributions, so you will have to periodically take some money from the account when you are in retirement. The biggest advantage of 401k plans is that often employers will match contributions to a certain extent, which is basically free money for you. In the end, these are just some suggestions. Probably best to consult with a financial planner to hammer out all the details."
},
{
"docid": "130118",
"title": "",
"text": "I'm afraid you're mistaking 401k as an investment vehicle. It's not. It is a vehicle for retirement. Roth 401k/IRA has the benefit of tax free distributions at retirement, and as long as you're in the low tax bracket - it is for your benefit to take advantage of that. However, that is not the money you would be using to start a business or buy a home (except for maybe up to $10K you can withdraw without penalty for first time home buyers, but I wouldn't bother with $10k, if that's what will help you buying a house - maybe you shouldn't be buying at all). In addition, you should make sure you take advantage of the employer 401k match in full. That is free money added to your Traditional 401k retirement savings (taxed at distribution). Once you took the full advantage of the employer's match, and contributed as much as you consider necessary for your retirement above that (there are various retirement calculators on line that can help you in making that determination), everything else will probably go to taxable (regular) savings/investments."
},
{
"docid": "555377",
"title": "",
"text": "An experienced individual wouldn't ask such questions. I don't say this to take a jab at you, but to provide context. The matter is much more complicated than a simple answer to your question could accomplish. The short answer is no, not necessarily; but it depends on the details. Generally, if the employer matches, it's suggested that you take advantage of the match. It's free money. That said, it comes with some strings attached, like a vesting schedule. It's not yours right away, necessarily. Choices are limited in a 401k, but we should still come out ahead with that free money. The investment choices available in a 401k are also a part of the details. If they meet your needs you should certainly consider the 401k even if the employer doesn't match. There is also the matter of one's particular tax situation, which is certainly an involved matter. A 401k can certainly be a part of judicious tax planning. It's a matter of working out the details. Continuing this theme of details and coming back to the employer match: if the employer doesn't mach, I would make sure that I'm maxing out an IRA before considering the 401k. If the employer matched, I would probably contribute to take advantage of that match. However, it quickly becomes complicated here. I'm accustomed to employer matching up to some percentage of pay, which typically works out to be less then the anual contribution limits for a 401k. So, I my plan for such a situation is to contribute up to the employer match in the 401k, then max out an IRA, and then return to the 401k to finish contributing up to its yearly maximum. There is plenty for you to consider in order to come up with a plan of action. While it's certainly complicated, it's accessible to most people. You don't have to be a genius. In fact, eggheads are regularly trounced by the markets."
},
{
"docid": "206285",
"title": "",
"text": "\"First off, I highly recommend the book Get a Financial Life. The basics of personal finance and money management are pretty straightforward, and this book does a great job with it. It is very light reading, and it really geared for the young person starting their career. It isn't the most current book (pre real-estate boom), but the recommendations in the book are still sound. (update 8/28/2012: New edition of the book came out.) Now, with that out of the way, there's really two kinds of \"\"investing\"\" to think about: For most individuals, it is best to take care of #1 first. Most people shouldn't even think about #2 until they have fully funded their retirement accounts, established an emergency fund, and gotten their debt under control. There are lots of financial incentives for retirement investing, both from your employer, and the government. All the more reason to take care of #1 before #2! Your employer probably offers some kind of 401k (or equivalent, like a 403b) with a company-provided match. This is a potential 100% return on your investment after the vesting period. No investment you make on your own will ever match that. Additionally, there are tax advantages to contributing to the 401k. (The money you contribute doesn't count as taxable income.) The best way to start investing is to learn about your employer's retirement plan, and contribute enough to fully utilize the employer matching. Beyond this, there are also Individual Retirement Accounts (IRAs) you can open to contribute money to on your own. You should open one of these and start contributing, but only after you have fully utilized the employer matching with the 401k. The IRA won't give you that 100% ROI that the 401k will. Keep in mind that retirement investments are pretty much \"\"walled off\"\" from your day-to-day financial life. Money that goes into a retirement account generally can't be touched until retirement age, unless you want to pay lots of taxes and penalties. You generally don't want to put the money for your house down payment into a retirement account. One other thing to note: Your 401K and your IRA is an account that you put money into. Just because the money is sitting in the account doesn't necessarily mean it is invested. You put the money into this account, and then you use this money for investments. How you invest the retirement money is a topic unto itself. Here is a good starting point. If you want to ask questions about retirement portfolios, it is probably worth posting a new question.\""
},
{
"docid": "271949",
"title": "",
"text": "What asset allocation is right for you (at the most basic the percentage if stocks vs bonds; at the advanced level, percentage of growth vs value, international vs domestic etc) is a function of your age, retirement goals, income stability and employment prospects until retirement. Roth IRA is orthogonal to this. Now, once you have your allocation worked out there are tactical tax advantage decisions available: interest income, REIT and MLP dividends are taxed at income and not capital gains rate, so the tactical decision is to put these investments in tax advantage accounts like Roth and 401ks. Conversely, should you decide to buy and hold growth stocks there are tactical advantages to keeping them in a taxable account: you get tax deferment until the year you choose to sell (barring a takeover), you get the lower lt cap gains rate, and you can employ tax loss harvesting."
},
{
"docid": "9845",
"title": "",
"text": "Your tax bracket is determined by your total taxable income in a given year, where money drawn from a traditional-style deferred-tax 401k or IRA is taxable income. (Money drawn from a Roth account was taxed before deposit and is not taxed when withdrawn after the relevant date.) Your recent salary history has no effect on this, except salary in the same year -- and there is no advantage to be gained by taking a deliberate pay cut for its own sake."
},
{
"docid": "41417",
"title": "",
"text": "\"1) Usually, the choice between Traditional vs. Roth is whether you believe that your tax rate will be higher or lower in the future than it is now. Your income is probably in the 25% bracket now. It's hard to say whether that should be considered \"\"high\"\" or \"\"low\"\". Some people advocate Roth only for 15% bracket; but your income would probably go into higher brackets in the future, so Roth may be preferable from this point of view. Roth IRA also has another advantage that the principal of contributions can be taken out at any time without tax or penalty, so it can serve as an emergency fund just as well as money in taxable accounts. Given that you may not have a lot of money saved up right now, this is useful. 2) In a sense, it's nice to have a mix of Traditional and Roth when you withdraw to hedge against uncertainty in future tax rates and have the option of choosing whichever one is advantageous to withdraw when you need to withdraw. That said, you will likely have many years of access to a 401k and high income in your future working years, in which you can contribute to a Traditional 401k (or if no access to 401k, then Traditional IRA), so a mix will almost certainly happen even if you go all Roth IRA now. 3) I think that depends on you, whether you are a hands-on or hands-off kind of investor.\""
},
{
"docid": "419160",
"title": "",
"text": "The advantage of an IRA (or 401k) is you get taxed effectively one time on your income, whereas you get taxed effectively multiple times on some of the money in a taxable account. You have to consider it from the perspective of time value of money -- the concept that an amount of money now is the same value as a greater amount of money in the future. And in fact, if you put your money in an investment, the principal at the start can be considered the same value as the principal + earnings at the end. In both Traditional and Roth IRA, you pay taxes on the entire value of money once (remember that the principal when depositing is the same value as the principal + earnings when withdrawing). The only difference is when (year deposited or year withdrawn), so the main difference between the two is the tax rate when depositing vs. tax rate when withdrawing. I'll give you an example to demonstrate. We will assume you invest $1000 of pre-tax wages, it grows at 5% per year, there's a 25% flat tax now and in the future, you withdraw it after 20 years, and withdrawals are not subject to any penalty."
},
{
"docid": "588029",
"title": "",
"text": "\"Let's pretend that the author of that article is not selling anything and is trying to help you succeed in life. I have nothing against sales, but that author is throwing out a lot of nonsense to sell his stuff and is creating a state of urgency so that people adopt this mindset. It's clever and it obviously works. From a pure time perspective, most people won't make enough money to run their own business and be as profitable as if they worked for a company. This is a reality that few want to acknowledge. If you invested in yourself and your career with the same discipline and urgency as an entrepreneur, most people would be better off at a company when you consider the benefits and the fact that employees have a full 7.5% of social security paid by their employer (entrepreneurs see the full 15% while employees don't). Why do I start here, because this author isn't telling you that the more people take his advice, the more their earnings will regress to the mean or below. In fact, most of my entrepreneur friends have to go back to work when their reality fails after they burn through their savings. 401ks are not a perfect system, but there are more 401k millionaires now than ever before this, and people who give the author's advice are always looking to avoid doing what they need to do - save for retirement. Most people I know sadly realize this in their 50s, when it's too late, and start trying to \"\"catch up.\"\" I don't blame the author for this, as he knows his article will appeal to younger people who don't have the wisdom to see that his advice hasn't been great for most. The reality is that for most people 401ks will provide tax advantaged savings that you can use when you're older; taxes will eat at your earnings, so these accounts really help. Finally, look at the article again especially the part you quote. He says inflation will carve out what you save, yet inflation is less than 2%. Where is he getting this from? In the past decade, we've seen numerous deflationary spirals and the market overall has come back from the fall in 2009. Again, this isn't \"\"good enough\"\" for this author, so buy his stuff to learn how to succeed! There have been numerous decades (50s,70s) that were much worse for investors than this past one.\""
},
{
"docid": "391896",
"title": "",
"text": "Your question is very widely scoped, making it difficult to reply to, but I can provide my thoughts on at least the following part of the question: I have a 401k plan with T. Rowe Price, should I use them for other investments too? Using your employer's decision, on which 401k provider they've chosen, as a basis for making your own decision on a broker for investing $100k when you don't even know what kind of investments you want seems relatively unwise to me, even if one of your focuses is simplicity. That is, unless your $100k is tax-advantaged (e.g. an IRA or other 401k) and your drive for simplicity means you'd be happy to add $100k to any of your existing 401k investments. In which case you should look into whether you can roll the $100k over into your employer's 401k program. For the rest of my answer, I'll assume the $100k is NOT tax-advantaged. I assume you're suggesting this idea because of some perceived bundling of the relationship and ease of dealing with one company & website? Yes, they may be able to combine both accounts into a single login, and you may be able to interact with both accounts with the same basic interface, but that's about where the sharing will end. And even those benefits aren't guaranteed. For example, I still have a separate site to manage my money in my employer's 401k @ Fidelity than I do for my brokerage/banking accounts @ Fidelity. The investment options aren't the same for the two types of accounts, so the interface for making and monitoring investments isn't either. And you won't be able to co-mingle funds between the 401k and non-tax-advantaged money anyway, so you'll have two different accounts to deal with even if you have a single provider. Given that you'll have two different accounts, you might as well pick a broker/provider for the $100k that gives you the best investment options, lowest fees, and best UI experience for your chosen type/goal of investments. I would strongly recommend figuring out how you want to invest the $100k before trying to figure out which provider to use as a broker for doing the investment."
},
{
"docid": "483695",
"title": "",
"text": "IRA and 401k are investment accounts. 401k accounts may be limited in what you're allowed to invest in more than the IRA, but still - these are investment accounts. The money you deposit in them - is invested, per your instructions. What happens to it is up to you. When you leave your job, if you have some unvested match balance in the 401k, it may be refunded back to your employer, but your own contributions are always vested."
},
{
"docid": "386390",
"title": "",
"text": "The general discussion of inflation centers on money as a medium of exchange and a store of value. It is impossible to discuss inflation without considering time, since it is a comparison between the balance between money and goods at two points in time. The whole point of using money, rather than bartering goods, is to have a medium of exchange. Having money, you are interested in the buying power of the money in general more than the relative price of a specific commodity. If some supply distortion causes a shortage of tobacco, or gasoline, or rental properties, the price of each will go up. However, if the amount of circulating money is doubled, the price of everything will be bid up because there is more money chasing the same amount of wealth. The persons who get to introduce the additional circulating money will win at the expense of those who already hold cash. Most of the public measures that are used to describe the economy are highly suspect. For example, during the 90s, the federal government ceased using a constant market basket when computing CPI, allowing substitutions. With this, it was no longer possible to make consistent comparisons over time. The so-called Core CPI is even worse, as it excludes food and energy, which is fine provided you don't eat anything or use any energy. Therefore, when discussing CPI, it is important to understand what exactly is being measured and how. Most published statistics understate inflation."
},
{
"docid": "411910",
"title": "",
"text": "\"Unfortunately, I missed most of segment and I didn't get to understand the Why? To begin with, Cramer is an entertainer and his business is pushing stocks. If you put money into mutual funds (which most 401k plans limit your investments to), then you are not purchasing his product. Also, many 401k plans have limited selections of funds, and many of those funds are not good performers. While his stock-picking track record is much better than mine, his isn't that great. He does point out that there are a lot of fees (mostly hidden) in 401k accounts. If you read your company's 5500 filing (especialy Schedule A), you can determine just how much your plan administrators are paying themselves. If paying excessive fees is your concern, then you should be rolling over your 401k into your IRA when you quit (or the employer-match vests, which ever is later). Finally, Cramer thinks that most of his audience will max out their IRA contributions and have only a little bit left for their 401k. I'm most definately \"\"not most people\"\" as I'm maxing out both my 401k and IRA contributions.\""
},
{
"docid": "190266",
"title": "",
"text": "\"There is such a thing as Deposit Only. This will allow the individual's account to function only for collection of monetary deposits. NO ONE will be able to withdraw...only deposit. The account holder may still physically withdraw at their banking institution. Think of it as taking your account from a \"\"public\"\" profile to a \"\"private\"\" profile. Doing this is beneficial for ppl who may have been scammed into a program or product where there account is bieng fraudulently overdrafted, or simply to protect your funds from bieng drafted without your approval or despite your requests for ceasing the drafts. When making your account a deposit only account it's a good idea to open a NEW account at a Different banking institution, because some banks will still allow an account that is \"\"attached\"\" to the deposit only account to be drafted from it. WIth the new account you can utilize that one for paying day to day bills and just transfer funds from the deposit only account to the new account. A deposit only account is also a good way to build up a nice nest egg for yourself or even a young adult! source- Financial Adivsor 4years-\""
},
{
"docid": "98018",
"title": "",
"text": "The simple answer is that with the defined contribution plan: 401k, 403b, 457 and the US government TSP; the employer doesn't hold on to the funds. When they take your money from your paycheck there is a period of a few days or at the most a few weeks before they must turn the money over to the trustee running the program. If they are matching your contributions they must do the same with those funds. The risk is in that window of time between payday and deposit day. If the business folds, or enters bankruptcy protection, or decides to slash what they will contribute to the match in the future anything already sent to the trustee is out of their clutches. In the other hand a defined a benefit plan or pension plan: where you get X percent of your highest salary times the number of years you worked; is not protected from the company. These plans work by the company putting aide money each year based on a formula. The formula is complex because they know from history some employees never stick around long enough to get the pension. The money in a pension is invested outside the company but it is not out of the control of the company. Generally with a well run company they invest wisely but safely because if the value goes up due to interest or a rising stock market, the next year their required contribution is smaller. The formula also expects that they will not go out of business. The problems occur when they don't have the money to afford to make the contribution. Even governments have looked for relief in this area by skipping a deposit or delaying a deposit. There is some good news in this area because a pension program has to pay an annual insurance premium to The Pension Benefit Guaranty Corporation a quai-government agency of the federal government. If the business folds the PBGC steps in to protect the rights of the employees. They don't get all they were promised, but they do get a lot of it. None of those pension issues relate to the 401K like program. Once the money is transferred to the trustee the company has no control over the funds."
},
{
"docid": "136627",
"title": "",
"text": "\"Congratulations on the job offer! That type of matching sounds good if you plan to stay at a company for more than a year. My experience has been that 401k matching can range from 2% up to 8% for your typical starting job, so a total of 6% is good. You would definitely want to contribute at least 5% to take advantage of the \"\"Free\"\" money. Loan provision could mean that loans from 401k are allowed. I did some research and found that not all company 401ks allow for you to take a loan out of your 401k. Typically this is bad practice since you are robbing your 401k of it's major advantage - tax free compound interest. Source\""
},
{
"docid": "280530",
"title": "",
"text": "Most people carry a diversity of stock, bond, and commodities in their portfolio. The ratio and types of these investments should be based on your goals and risk tolerance. I personally choose to manage mine through mutual funds which combine the three, but ETFs are also becoming popular. As for where you keep your portfolio, it depends on what you're investing for. If you're investing for retirement you are definitely best to keep as much of your investment as possible in 401k or IRAs (preferably Roth IRAs). Many advisers suggest contributing as much to your 401k as your company matches, then the rest to IRA, and if you over contribute for the IRA back to the 401k. You may choose to skip the 401k if you are not comfortable with the choices your company offers in it (such as only investing in company stock). If you are investing for a point closer than retirement and you still want the risk (and reward potential) of stock I would suggest investing in low tax mutual funds, or eating the tax and investing in regular mutual funds. If you are going to take money out before retirement the penalties of a 401k or IRA make it not worth doing. Technically a savings account isn't investing, but rather a place to store money."
},
{
"docid": "15841",
"title": "",
"text": "I have worked for companies that have done this. One did have a match and the other did not. When they figured their profit at the end of the year a portion was given to the employees as a 401K deposit. retirement-topics-401k-and-profit-sharing-plan-contribution-limits Total annual contributions (annual additions) to all of your accounts in plans maintained by one employer (and any related employer) are limited. The limit applies to the total of: elective deferrals employer matching contributions employer nonelective contributions allocations of forfeitures The annual additions paid to a participant’s account cannot exceed the lesser of: 100% of the participant's compensation, or $54,000 ($60,000 including catch-up contributions) for 2017; $53,000 ($59,000 including catch-up contributions) for 2016. So as long as everything stays below that $54,000 limit you are good. In one case the decision was made by the company for the employee, the other company gave us the option of bonus check or 401K. I heard that most of the employees wanted the money in the 401K."
},
{
"docid": "443002",
"title": "",
"text": "\"I agree with the other answers that it is a benefit, but wanted to add another explanation for this: Also, why a company would prefer matching someone's contributions (and given him or her additional free money) instead of just offering a simple raise? In addition to a match being a benefit that is part of your total compensation, 401ks have special rules for Highly Compensated Employees. If the lower paid employees do not contribute, the \"\"Highly Compensated Employees\"\" do not get to take full advantage of the 401k. By offering a match, more lower paid employees will take advantage of a 401k program allowing more Highly Compensated Employees to also take advantage of the program.\""
},
{
"docid": "32009",
"title": "",
"text": "\"So many complicated answers for a straight forward question. First to this point \"\"I am failing to see why would a person get an IRA, instead of just putting the same amount of money into a mutual fund...\"\" An IRA can be invested in a mutual fund. The IRA benefit over standard mutual fund is pre-tax contribution lowering your current tax liability. The advantage of an IRA over a 401k is control. Your employer controls where the 401k is invested, you control where your IRA is invested. Often employers have a very small number of options, because this keeps their costs with the brokerage low. 401k is AMAZING if you have employer matched contributions. Use them to the maximum your employer will match. After that OWN your IRA. Control is key when it comes to your money. On IRA's. Buy ROTH first. Contribute the calendar maximum. Then get a traditional. The benefit of ROTH is that you already paid taxes on the contribution so your withdrawal is not taxed AND they do not tax the interest earned like they do on a standard mutual fund.\""
},
{
"docid": "419550",
"title": "",
"text": "\"I doubt it would ever make it to court. \"\"They printed a curse word on clothes, we did it first, we don't own a trademark on 'fuck you' but they can't do that!\"\" Their cease and desist had the desired effect, they took a site down with $0 court fees on their part. They win. My point is to not necessarily be scared by cease and desists, especially in situations like these. Anyone can send them. There are no laws broken or intellectual property infringements here.\""
},
{
"docid": "374803",
"title": "",
"text": "See Started new job. Rollover previous employer 401k to new 401k, IRA or Roth IRA? for a start. Kevin, the discussion is far more complex than you might think. Say your account grows by X, (pretend it's 10 if you wish) and your tax rate is Y (25%?). If you take the initial sum, tax it at Y, but then grow it X, the result is identical to doing it in the reverse order. So $1000 to start can grow to $10,000, then after tax, $7500. Or $1000 taxed to $750, then grow to $7500. For pretax deposits, the key is that you deposit those contributions at your marginal rate, i.e. the rate you'd pay on the last $X taxed. But withdrawals start at zero. In the perfect scenario, you will save 25-28% tax on deposits, but at retirement, enjoy taxation at 0%,10%,15% for a large portion or all of the withdrawals. (Note, others can suggest rates will rise, and they may be right. My answer is based on the current tax structure.) A new earner, at 10 or 15% may be better off starting with Roth, and as they earn their way to 25% or higher slide over to pre-tax deposits. My 14 year old baby sits, and makes enough to fund a Roth, but pays no tax as she earns less than her own standard deduction for what that's worth."
},
{
"docid": "12488",
"title": "",
"text": "easier access to your money That can be a disadvantage for some people. Based on the number of people who tap their 401K for non-retirement reasons, or just cash it in when they change jobs; making it painful to use before retirement age does keep some people from spending it too early. They need to be able to compartmentalize the funds in order to understand the difference between funds spending, saving and investing for retirement. Roth 401K One advantage that the 401K may have is that you can in many plans invest the funds in a Roth 401K. This allows you to go beyond the Roth IRA limits. You are currently investing the maximum amount in your Roth IRA, so this could be a big advantage."
},
{
"docid": "444107",
"title": "",
"text": "\"Technically there could be a true cash fund, but the issue is it would need to have some sort of cost associated with it, which would mean it would have negative yield or would charge a fee. In some cases, this might be preferable to having it invested in \"\"cash equivalents,\"\" which as you note are not cash. It is important to note that there is nothing, even cash or physical precious metals, that is considered zero risk. They all just have different risks associated with them, that may be an issue under certain circumstances. In severe deflation, cash is king, and all non-cash asset classes and debt could go down in value. Under severe inflation, cash can become worthless. One respondent mentioned an alternative of stopping contributing to a 401k and depositing money in a bank, but that is not the same as cash either. In recent decades, people have been led to believe that depositing your money in the bank means you hold that in cash at the bank. That is untrue. They hold your deposit on their books and proceed to invest/loan that money, but those investments can turn sour in an economic and financial downturn. The same financial professionals would then remind you that, while this is true, there is the Federal Deposit Insurance Corporation (FDIC) that will make you whole should the bank go under. Unfortunately, if enough banks went under due to lack of reserves, the FDIC may be unable to make depositors whole for lack of reserves. In fact, they were nearing this during the last financial crisis. The sad thing is that the financial industry is bias against offering what you said, because they make money by using your money. Fractional reserve banking. You are essentially holding IOUs from your bank when you have money on deposit with them. Getting back to the original question; you could do some searching and see if there is an institution that would act as a cash depository for physical cash in your IRA. There are IRA-approved ways of holding physical precious metals, which isn't all too different of a concept from holding physical cash. 401k plans are chosen by your company and often have very limited options available, meaning it'd be unlikely you could ever hold physical cash or physical precious metals in your 401k.\""
}
] |
1952 | What happened when the dot com bubble burst? | [
{
"docid": "414596",
"title": "",
"text": "\"The dot.com companies were purveyors of the Internet, then a \"\"new\"\" technology around 2000. Everyone \"\"knows\"\" that such a new technology will change the economy and society. What people didn't know at the time was WHICH companies would be the leaders/beneficiaries of such change. So investors pushed up the stock prices of ALMOST ALL companies in the \"\"space.\"\" Any ONE (or two or three) companies can benefit from such a new technology. But not ALL of them can: It's something called the \"\"fallacy of composition.\"\" That is, there can be one or two Googles (or Microsoft of a previous era), but not 100 of them. Most of the other 98 will go bust. Those were victims of the bubble that affected all, including the successful ones. It's a bit like the California gold rush. Maybe one of 10 miners got \"\"rich\"\" (or at least moderately wealthy). The other 90% died heartbroken, trying.\""
},
{
"docid": "273509",
"title": "",
"text": "\"From the perspective of an investor and someone in high-tech during that period, here is my take: A few high tech companies had made it big (Apple, Microsoft, Dell) and a lot of people were sitting around bemoaning the fact that we all should have realized that computers were going to be huge and invested early in those companies. We all convinced ourselves that we knew it was going to happen (whether we did or not), but for some reason we didn't put our money where our mouth was and now we were grumpy because we could be millionaires already. In the meantime the whole Internet thing transitioned from being something that only nerds and academics used to a new paradigm for computing. Many of us reasoned that we weren't going to be suckers twice and this time we were getting on that boat before it left for money-land. So it became fashionable to invest in Internet stocks. Everyone was doing it. It was guaranteed to come up in any conversation at parties or with friends at work. So with all this investment money out there for the Internet's \"\"next big thing\"\" naturally lots of companies popped up to take advantage of the easy money. It got to the point where brokers and Venture capital firms were beating the bushes LOOKING for companies to throw money at and often they didn't scrutinize these company's business plans very well and/or bought into insane growth projections. Frankly, most of the business plans amounted to \"\"We may not make any money off our users, but if we get enough people to sign up that HAS to be valuable, right?\"\" Problem #2 was that most of these companies weren't run by proven business types, but that didn't matter. It worked for those rag-tag kids at Google, Apple and Microsoft right? Well-heeled business types who know how to build a sustainable business model are so gauche in the new \"\"Internet Economy\"\". Also, the implicit agenda of most of these new entrepreneurs is (1) Get enough funding to make the company big enough go public while keeping enough equity to get rich when it does; (2) Buy a Ferrari; (3) Repeat with another company. Now these investors weren't stupid. They knew what was going on and that most of these Internet companies weren't going to be around in a decade. Everyone was just playing the momentum and planned to get out when they saw \"\"the signal\"\" that the whole house of cards was going to fall. At the time we always talked about the fact that these investments were totally playing with monopoly money, but it was addictive. During the peak, at least on paper, my brokerage account was earning more money for me than my day job. The problem was, that it was all kind of a pyramid scheme. These dot com companies needed a continual supply of new investment because most of them were operating at a loss and some didn't even have a mechanism to make a profit at all, at least not a realistic one. A buddy of mine, for example worked for an IPO bound company that made a freaking web based contact management system. They didn't charge yet, but they would one day turn on the meter and all of those thousands of customers who signed up for a free account would naturally start paying for something the company was actively devaluing by giving it away for free. This company raised more than $100M in venture capital. So eventually it started to get harder for these companies to continue to raise new money to pay operational costs without showing some kind of ROI. That is, the tried-and-true model for valuing a company started to seep back in and these companies had to admit that the CEO had no clothes. So without money to continue paying for expensive developers and marketing, these companies started to go under. When a few of the big names tumbled, everyone saw that as \"\"the signal\"\" and it was a race to the bank. The rest is history.\""
},
{
"docid": "220156",
"title": "",
"text": "\"What happened was that people would start an \"\"Internet\"\" company without any viable business plan, and investors would pour money. Any company with \"\".COM\"\" or \"\"eSomething\"\" or \"\"netXXX\"\" or whatever would get tons of money from investors, basically selling dreams of getting rich fast. The companies that flourished back than had often no sales and no income, yet they paid high salaries and provided very lucrative benefits to the employees. One of the examples is Mirabilis - company that invented the on-line messenger (ICQ), but provided free service and free products (there were no fees associated with using the ICQ messenger). They got bought for almost half a billion dollars when they had ZERO revenues, by AOL. AOL sold the company, ten years later, for less than 200 million dollars when at that time ICQ (or, as re-branded, AIM) was already providing revenue (from advertisements). Eventually, investors stopped pouring the money in (for various reasons, but amongst others the higher rates and the slower overall economy), and almost immediately companies started going out of business, and then it all blew up.\""
},
{
"docid": "287167",
"title": "",
"text": "To add to the already existing answers, most of the dotcom companies used an accounting sheningan so profusely that everything looked rosy. To account for revenues, what dotcom companies did was, get into a barter transaction with another dotcom company by selling advertising space and stuff on each other's website. So the final outcome was each had quite a substantial amount of revenue while in reality there wasn't any revenue earned. This cooked up their books to look quite rosy to investors who then poured in their money, without realizing they were pouring money into a black hole. As someone mentioned Cisco, which sells networking gear and was heavily dependent on the dotcom boost. So when everything went bust, its stock price also crashed heavily. This was for the losers, but some good ones did sail through. Dotcom companies which had substance took a hit, in fact everybody did, during the bust but more than made up for it later on when investors realized they are valuable."
},
{
"docid": "559912",
"title": "",
"text": "Well basically a lot of dot-com companies that had no real plans for having actual profit's, self-destructed. I had worked for a company called VarsityOnline.com which was depending on endless money from investor's, and had never really made any kind of profit, for which it had ample opportunity. People lost sight of reality, that just because it wasn't a real brick and mortar store, that common sense, good service and good products didn't matter. We were so clueless back then."
},
{
"docid": "585900",
"title": "",
"text": "\"It's tough to share exactly what happened. Go to yahoo and look at the chart for Cisco from 1990 to 2003 or so. From a split adjusted 8 cents a share, it peaked at just under $80 in March 2000, up by a factor of 1000. People were buying in thinking this stock would continue to rise at this pace, but logic says that's preposterous. By April of 2001, it was down to $14, 80% off its high, and later to drop below $10. This was a classic bubble and should be studied so you don't get caught in them. A book titled Extraordinary Popular Delusions & the Madness of Crowds was published in 1841, yes is still an interesting read. Bubbles in markets are not new, but can be recognized and avoided. Cisco at $80 had a market cap of $438B. Had it risen 1000 fold over another decade, it would have been worth $438T, but all the wealth in the US isn't even $75T, so something was wrong, very wrong. This is one story, one stock. A remarkable time. Yes, many companies went under, and the employees lost their jobs. And those who were heavy into the \"\"dotcom\"\" stocks lost as much as 80% (or more) of their wealth. Entire 401(k) accounts dropping this amount due to bad decisions. Those who bailed out in time survived, some doing better than others.\""
},
{
"docid": "20409",
"title": "",
"text": "Two big things: In many ways, the early internet people were correct -- in 2011 we are much more productive as a society than we were in 1991. (Which comes with downsides, such as high unemployment) The bubble was a result of over-estimating those improvements and under-estimating the time required to yield those productivity gains."
}
] | [
{
"docid": "519297",
"title": "",
"text": "\"This refers to the faulty idea that the stock market will behave differently than it has in the past. For example, in the late 1990s, internet stocks rose to ridiculous heights in price, to be followed soon after with the Dot-Com Bubble crash. In the future, it's likely that there will be another such bubble with another hot stock - we just don't know what kind. Saying that \"\"this time it will be different\"\" could mean that you expect this bubble not to burst when, historically, that is never the case.\""
},
{
"docid": "183699",
"title": "",
"text": "\">those fossil free funds have been outperforming their fossilized index counterparts Why am I not surprised that over a 3 year or less time period, during the worst oil crash in at least 20 years, a fund the excludes that sector is performing better? What a misleading statement. Like saying in early 2000, \"\"oh my tech-free fund is outperforming the funds with tech stocks\"\" while ignoring the dot com bubble bursting having any effect, and implying that tech stocks will never recover.\""
},
{
"docid": "469473",
"title": "",
"text": "\"Honestly, I think the best thing the government could do at this point is to stop with stimulus spending and let the market pick the winners and losers. The government is horrible at this because it just throws money where it makes sense politically, not economically (which is what got us into this mess in the first place). Obama is repeating all of the same mistakes made by Bush, but to a larger degree. When the dot-com bubble burst, Bush & Greenspan artificially lowered interest rates to 1% and printed money to \"\"stimulate\"\" the economy. The goal was not to create a housing bubble like what happened, but rather to get people to invest in stocks again. Instead, the people who had been bitten by stocks looked around and saw that housing had a history of increasing in value w/o nearly as much risk of loss, so they invested in housing instead. Clinton's and Bush's policies of guaranteeing loans to lower-income families for the purpose of buying homes also contributed to this, and the next thing you know - housing prices boomed because there was a massive demand... thus leading to the housing market crash of 2007/8. But that's not all, you see, because as people started to believe that their homes would increase in value by huge amounts, they started spending more, risking more on the stock market, and generally going into massive debt because they felt wealthy. So in 2008, when the housing bubble crashed, so did the stock bubble and the personal debt bubble, leaving many home owners broke, their retirement funds (401k's and IRA's) destroyed, and without any means of paying their mortgages, thus the rise in people losing their homes. What has Obama's policy been? The same as Bush's policy, but he printed MORE (tripled our money supply in 3 years) and lowered interest rates even MORE (effectively to 0%). What so many people don't seem to understand is that printing money effectively steals money from the middle class. It's a hidden tax on our savings accounts. If more people realized this, they'd be outraged. Luckily for the government, most people are mindless sheep willing to buy into the political propaganda being pushed by the media.\""
},
{
"docid": "295435",
"title": "",
"text": "The schools you refer to used to be based in the US until businesses decided to go global for cheaper labor. After the dot Com bubble burst the US tech schools disappeared. Those adventurous enough picked up and moved to places like India, Russia, China, etc and built lucrative businesses."
},
{
"docid": "277791",
"title": "",
"text": "\"While that's possible, there is no guarantee. The ultimate thing causing the \"\"scare\"\" was a loss of jobs due to outsourcing. I know we associate it with the housing bubble. But really we moved to housing from dot-com, and we moved to dot-com from real manufacturing and production. These more recent bubbles were ways of \"\"making up\"\" for the lost of manufacturing jobs. Manufacturing jobs left (I'm going to focus on the US) the US because it was cheaper in other countries. Now, once debt is largely payed off, people will likely be willing to accept lower pay, making production in the US cheaper. However, we still have environmental regulations and basic labor laws. Further, initial education to enter the job market brings about massive debt as well. This is pure speculation, but what I think will happen is collapse of the \"\"education bubble\"\". People will lose faith in college degrees and start working as contractors, plumbers, mechanics, etc. This will generate a direct wealth, but it will also severely hurt our ability to innovate due to the resulting \"\"brain drain\"\". Multiple educational facilities will close down or contract, and some private schools will convert to public to stay afloat. Many jobs will also be lost. The resulting outflow of academicians will stimulate the development of new start-ups in online education and smaller institutes. This will lead to cheaper education with more \"\"certifications\"\" over \"\"degrees\"\". This will also lead to more start-ups in direct production of goods. I'm thinking this process will take another 5-7 years or so. Again, this is just wild-ass guessing on my side based on observed trends.\""
},
{
"docid": "592578",
"title": "",
"text": "\"Anyone remember \"\"Fucked Company\"\" dot-com? It was a hit during the dot-com bust. a dot-com company deadpool blog/website... And I recall the founder tried to sell customized pr0n videos (like 30 secs or so) of POV shot nailing some girl while she screamed your name. I think that lasted all but a week before he shut that idea off. I want to know what he was thought about it, what happened, and what went wrong... demand? costs? The open flood of just other pr0n movies, and people not caring about stroking the ego of hearing their name, instead of just stroking other things? not that I care so so much, it was just something crazy from way back when that popped into my mind.\""
},
{
"docid": "114857",
"title": "",
"text": "The cap loss can be used to offset future gains or $3000/yr of ordinary income. (I just used up the last of mine from the dot com bubble.) I hope you have future gains that let you use this up quickly. The IRS debt is separate, and I don't imagine they'll let you use any of the loss to offset it. As always, it can't hurt to ask. Their normal payment plans are for 5 years. $40k/yr is a lot. Edit - The IRS does negotiate. I recall, from the dot-com bubble, instances where someone exercised stock grants, but kept the shares. Now, they had a $1M gain, but after year end, the stock crashed. They owed tax on that gain, but the loss was in the next tax year, with nothing to offset. These people were 'regular' guys and gals, no background in finance. I understand the IRS looked at these people and made some exceptions."
},
{
"docid": "506824",
"title": "",
"text": "I wish I had learned my lesson from the dot com bubble before I took a piece of the housing bubble."
},
{
"docid": "25507",
"title": "",
"text": "When that happens the least desired things get cut off first. This condition signals to the market that we are correcting very badly missallocated sources which in turn is a good thing because we are allowing the bubbles to burst. These burstings will bring prices back down to acceptable levels so that the economy starts moving again. What you instead are suggesting is to not allow, for example, home prices to come back down to affordable levels and just keep the bubbles inflated."
},
{
"docid": "475479",
"title": "",
"text": "The perfect conditions to sell a business are when it is very valuable (lots of profit each year) and you've lost interest in growing it any further. Also if you're in a particular industry when everyone is dying to get into that industry (like the dot com bubble) those are perfect conditions to sell. Other things like low interest rates and excess M&A capital might contribute to good conditions, but the two cases above are perfect conditions."
},
{
"docid": "237579",
"title": "",
"text": "That's what I tell others to do. And for the most part it's what I've done. Before the crash I knew something was wrong. Interest only loans was the real kicker for me. Then I started looking at the people I knew and the loans they were getting and I knew things weren't right. Not everyone should qualify, yet I knew people with bad credit getting jumbo loans and people making meager wages buying big homes. I got out and then my husband joined me when things started going south. I picked the dot com burst right, too, but my husband fed me so much shit about being out that I got back in just to shit him up. I lost my shirt. This time is different. And it feels bad to me. We can't do QE to get out of it either. Europe is still not out of trouble either. The only reason the market here is up is because of QE. It's a fake economy. If manufacturing were booming I could see a justification in the market increase. But it's not. Hopefully I'm wrong."
},
{
"docid": "599420",
"title": "",
"text": "A stopped clock is right two times a day. We may get a market crash similar to the financial crisis or the dot com crash or we may not. What if over the next 10 years rates rise very sluggishly, low inflation, and low growth more or less continues with maybe one brief and shallow recession. In that case I bet US stocks produce 4-5% returns per year and US bonds produce maybe 1-2% per year. European and emerging market stocks should have higher returns because they are in an earlier part of the cycle. I think your baseline has to look something like that. The last two crashes were caused by the tech bubble and the housing bubble - where is the bubble today? US stocks are expensive, but probably not in bubble territory. Bonds worldwide are unattractive with low or negative yields - negative yields maybe a bubble, but central banks will be the most hurt by negative rates and they are in a strong position to take the pain. There could be a crash I just don't see how we get there yet - maybe china?"
},
{
"docid": "429860",
"title": "",
"text": "\"> I guess all those other experts in the ad industry and tech don't have any idea what they're talking about Dude, that's a really safe bet. Do you even remember the housing bubble? The dot com bubble? Those people were the ones inspiring confidence both times. You know what they were doing in the 1990s when the internet was being delivered to consumers? They were getting high and chasing girls. They were hanging out in the hallways at school, talking about cars or their abusive fathers or their college plans to become MBAs etc. None of them owned 486s, or used dial-up modems before AOL and Hollywood introduced them to \"\"You've got Mail\"\". Meanwhile I was ditching school to learn about how the internet worked. Computers have been a part of my daily life for more years than many of those \"\"experts\"\" have been alive. They masquerade as experts on the subject now because the internet is what's on everyone's minds these days, and talking about it is what those folks have to do to get a paycheck, but that doesn't mean they have any idea what they're talking about. You buy their bullshit because they're on TV and I'm just some guy on the internet, which is what I've been for the past 3 decades, on the internet.\""
},
{
"docid": "522486",
"title": "",
"text": "\"They aren't necessarily trustworthy. Many institutions claim to have a \"\"Chinese Wall\"\" between their investment banking arms and analysis arms. In practice, these walls have sometimes turned out to be entirely imaginary. That is, analysis is published with an eye to what is good for their investment banking business. One of the most notorious cases of this was Henry Blodget, an analyst with Merrill Lynch during the dot-com bubble. Blodget became a star analyst after he correctly predicted Amazon would hit $400/share within a year. However some of his later public analysis dramatically conflicted with his private comments. Famously when he started covering GoTo.com, rating it as \"\"neutral to buy\"\", he was asked \"\"What's so interesting about Goto except banking fees????\"\" Blodget replied, \"\"nothin\"\". Eventually he was permanently banned from the securities industry.\""
},
{
"docid": "552757",
"title": "",
"text": "\">During the dot-com boom, tons of people with liberal arts degrees and no experience wound up as \"\"software engineers\"\". Not all of them sucked, but many did, and the dot-com crash sorted that out. As an engineer, I saw this first hand, and it wasn't a bad thing -- I had a lot of co-workers in 2000 who weren't pulling their weight. This is going to sound heartless, and maybe it is, but if someone has been unemployed 3 years, maybe it is time for a career change. This was what I'm arguing about not the economics of the situation. You make the argument that it is not a bad thing because their skills were lacking. But that isn't the case with the receptionists and this is not just one branch that is suffering. I think its a terrible thing that has little to do with the skills of people and the \"\"right\"\" career path. When there are no jobs or very little jobs being unemployed for 3 years is hell and considering a career change it not as simple as you make it sound.\""
},
{
"docid": "77361",
"title": "",
"text": "The article is talking about relative cost. You could use the cash Schiller P/E ratio as a proxy. That's unit of price per unit of earning. The answer to your question is one time in history, during the 2000 dot com bubble. It's higher than 2008 before the downturn. You are paying more for the same earnings. That has nothing to do with the size of the economy and everything to do with interest rates being too low for too long"
},
{
"docid": "355597",
"title": "",
"text": "\"So true. I can't even remember how many times I've heard \"\"I was making x amount before the dotcom bubble burst.\"\" When the crash happened I was barely aware of it because I know what the fuck I'm doing. edit- damn auto correct liked sitcom instead of dotcom\""
},
{
"docid": "499279",
"title": "",
"text": "In the case you propose, a taxable windfall, your best hope is to marry someone who has his/her own loss of about the same amount. This advice would work if your gain is a 10 bagger, as you suggest, but not for a lottery. In the dot com bubble, I heard of more than one couple that got married under these conditions. As far as other gains, it would be tough to contrive a situation that would give you such a tax offset without taking on a huge risk, far greater that the $133K in tax you might save."
},
{
"docid": "394941",
"title": "",
"text": "You're wise to consider mitigating risks considering your age and portfolio size, but 'in' and 'out' are so reductive and binary. Why not be both? Leave some in and let it ride, providing growth but taking risk. Put some in bonds, where it'll earn more than cash and maybe zig when stocks zag. I applaud you for calling the last two crashes, but remember: a lot of people called them. Jeremy Bentham called the dot com bubble *years* in advance - of course, he got out too early, and the investors in his funds suffered for it. Timing means getting the sell and the buy right, which very few can do. Hence my advice to hold a balanced portfolio or *if you really do have the golden touch* make use of that ability and get rich - no need to work a 9 to 5 if you can call market crashes accurately."
},
{
"docid": "482488",
"title": "",
"text": "\"I don't disagree that it is terrible what the current job situation is doing to people. And I didn't mean to imply that I thought it was \"\"good\"\" that in the dot-com bust people had to leave the field and find new careers. As I said before, this situation \"\"exists\"\". It's not good or bad, it's just how it is. The dot-com bust made a lot of engineers unemployable, receptionists and secretaries aren't in demand anymore, and there's nothing we can do to change the economics of the situation. I'm certain a tax credit for hiring the chronically unemployeed won't help, which is the point I came here to argue. If you're chastising me for being unsympathetic to those who dealing with this on a personal level, fine, I'll consider myself chastized. I'm still not seeing the point of your statements -- what are you suggesting needs to be done to help out the woman in TFA?\""
},
{
"docid": "336387",
"title": "",
"text": "Websites like neobudget dot com or mint dot com can help you see where your money is going, especially if you use mostly checks, debit cards, or credit cards for your purchases. They are less useful if you use cash often."
},
{
"docid": "58335",
"title": "",
"text": "I've seen a lot of people with what seems to be important titles next to their names talk about a stock market/U.S. dollar collapse or bubble burst. Is there anyone with any insight to the potential of something like this happening?"
},
{
"docid": "495964",
"title": "",
"text": "It's not just salary. I went through university during the dot com bubble and graduated in 2002 into a brutal job market. Programmers took it in the chin during the recession, especially in the areas that now have high demand again, and then suffered through a decade of outsourcing fads where programming and IT were the number one targets. CS enrolment at almost every university plummeted, often by 50% or more. It's only been in the last few years that the job market for programmers has recovered, and only then in very specific regions. Is it any wonder that people are still gun-shy about going into CS? The current demand for programmers is largely driven by bubble investment in social media startups, which is itself driven by huge amounts of capital looking for high returns in a post-2008 environment of low interest rates. It's not hard to imagine another collapse and a return to the mass firings and outsourcing of the early 2000s. Not to mention that the average career in programming is something like fifteen years... The athletic analogy isn't a bad one. It's a good paying job right now, but there's an insane amount of risk and stress involved in being a programmer at one of these high-paying companies."
},
{
"docid": "81909",
"title": "",
"text": "\"The opposite of an economic bubble is a bubble burst :p! Jokes aside though, an economic bubble occurs when the economy is in bull market mode and asset prices are growing very fast. It's usually measured by ratio's like price to earnings and the levels of various market indices. So, the opposite would be when valuations are falling very fast or are very low, and price to earnings ratios are low. This condition is usually a recession. A recession is a market slowdown, generally after a bubble bursts, and severe recessions can become depressions if they last long enough (Great Depression, 1930s). A bubble is not necessarily negative - stock prices usually rise a lot so paper wealth is greatly magnified. If you can get out in time, you're golden. Similarly, a recession isn't bad for everyone. Some investors keep large amounts of cash waiting for recessions so they can \"\"buy low, sell high\"\". For most people, however, recessions are negative because unemployment increases and some people get fired, and the economy slows down. Asset prices have fallen so their investments are worth less than they used to be (on paper), and people mainly have to bide it out until the market starts growing again.\""
},
{
"docid": "461206",
"title": "",
"text": "Mt Gox was an exchange that went belly up because of financial and strategic mismanagement. It was also a valuable lesson for many people: if you don't control your private key, you don't control your bitcoin. Scams running bitcoin (or any other cryptocurrency for that matter) are vastly underrepresented in the grand scheme of things concerning money. US Dollars, Euros, Yen, World of Warcraft Gold - it is all being used to manipulate people into spending tokens of worth for worthless tokens. This is not inherent to bitcoin, and you are misrepresenting it if you think it is. Cryptocurrencies are in their infancy still, and many of the current adopters are being scammed by so called ICO's. This is, however, a natural process, and will even out again as ICO's get a bad rep, and only those with a good business case get valued. We saw the same thing during the dot com bubble."
},
{
"docid": "491845",
"title": "",
"text": "\"The market will always be efficient. What they forgot in 1999 is that gold prices had been going down for several years and therefore stock prices were going up, but no trend lasts forever. The \"\"dot com\"\" boom was not a result of magic new technologies, it was the result of the end of the Cold War when people started getting rid of their gold reserves.\""
},
{
"docid": "22108",
"title": "",
"text": "Im always suspicious whenever an article uses 2 data points to suggest a trend. November 1997 and December 2016. Ok? What about all the years inbetween? '97 may have had an unusually high number due to the Dot Com boom when everyone and their brother were creating do-nothing websites and going public."
},
{
"docid": "363984",
"title": "",
"text": "For most business purposes, Gmail/ Outlook should suffice. Just make sure your username sounds professional enough. Try and stick to FirstName+LastName @ Gmail/Outlook dot com, if that's available. You could also get yourself NameOfYourBusiness @ Gmail/ Outlook dot com If you want to come across as a well established business, and only if you've some cash to spare every year, getting yourself a domain name would be a good idea. But, if your business/ services aren't too popular, yet; I'd suggest you defer that expense."
},
{
"docid": "326020",
"title": "",
"text": "\"If you look at the biotech breakdown, you'll find a lot of NAs when it comes to P/E since there are many young biotech companies that have yet to make a profit. Thus, there may be something to be said for how is the entire industry stat computed. Biotechnology can include pharmaceutical companies that can have big profits due to patents on drugs. As an example, look at Shire PLC which has a P/E of 1243 which is pretty high with a Market Capitalization of over a billion dollars, so this isn't a small company. I wonder what dot-com companies would have looked like in 1998/1999 that could well be similar as some industries will have bubbles you do realize, right? The reason for pointing out the Market Capitalization is that this a way to measure the size of a company, as this is merely the sum of all the stock of the company. There could be small companies that have low market capitalizations that could have high P/Es as they are relatively young and could be believed to have enough hype that there is a great deal of confidence in the stock. For example, Amazon.com was public for years before turning a profit. In being without profits, there is no P/E and thus it is worth understanding the limitations of a P/E as the computation just takes the previous year's earnings for a company divided by the current stock price. If the expected growth rate is high enough this can be a way to justify a high P/E for a stock. The question you asked about an industry having this is the derivation from a set of stocks. If most of the stocks are high enough, then whatever mean or median one wants to use as the \"\"industry average\"\" will come from that.\""
},
{
"docid": "533780",
"title": "",
"text": "I was commenting on your other assessments. I have investments in various funds and some stocks I think may end up being bought up. Your judgements on the health market and student loans fails to scratch the surface of why we have these issues. There will be a market bubble burst though it always happens. Short any consumer stock you see as it'll likely be the most hurt by the bubble. Also any of these tech stocks with no profit."
}
] |
8032 | What pension options are there for a 22 year old graduate in the UK? | [{"docid":"164819","title":"","text":"Major things to consider: If you're expecting to look at the p(...TRUNCATED) | [{"docid":"325113","title":"","text":"In the UK you have an allowance of £40,000 per annum for tax (...TRUNCATED) |
5465 | How can I get the car refinanced under my name if my girlfriend signed for the loan? | [{"docid":"94317","title":"","text":"Your best bet would be to add your name to the title through th(...TRUNCATED) | [{"docid":"249017","title":"","text":"\"Your arrangements with the bank are irrelevant. Whoever is n(...TRUNCATED) |
10677 | "I am a Canadian resident who wants to gift my Adult US child CAD$175K. What are the tax implication(...TRUNCATED) | [{"docid":"309555","title":"","text":"The United States taxes gifts to the giver, not the receiver. (...TRUNCATED) | [{"docid":"97010","title":"","text":"\"I have heard that I can give 10k as a gift in cash for my aun(...TRUNCATED) |
838 | Need your help and suggestion | [{"docid":"322838","title":"","text":"How much amount can we transfer from India to the USA? Is the (...TRUNCATED) | [{"docid":"437901","title":"","text":"\"Most of what other ppl are suggesting can be be filed under (...TRUNCATED) |
7979 | What is meant by a market that is technically strong | [{"docid":"547370","title":"","text":"A technically strong stock or market is simply a stock or mark(...TRUNCATED) | [{"docid":"295785","title":"","text":"What you said is technically correct. But the implication OP m(...TRUNCATED) |
7526 | First time investor wanting to invest in index funds especially Vanguard | [{"docid":"376485","title":"","text":"\"Congratulations on deciding to save money and choosing to in(...TRUNCATED) | [{"docid":"138383","title":"","text":"Bond ETFs are just another way to buy a bond mutual fund. An (...TRUNCATED) |
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