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Quick question from a newbie who knows dick about finance. I've got about $1500 left on my car loan which isn't supposed to be paid off until December 2012, but I'm six months ahead of payments. I'm trying to get rid of it as I'm getting a new apartment soon and want to have all my cash directed towards one thing. Is it better for my credit to simply pay it off ASAP, or leave a small amount($100-500) on the loan until that last little bit is due?
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Nov 4, 2011 23:30
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Kasonic posted:Quick question from a newbie who knows dick about finance.
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Nov 4, 2011 23:53
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It's better on your credit to pay it off. However, it might not be the best financial decision based on the interest rate.
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Nov 5, 2011 01:10
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Niwrad posted:It's better on your credit to pay it off. However, it might not be the best financial decision based on the interest rate. Interest rate means dick with a loan balance that small. Don't play numbers or credit games, just pay the stupid thing off.
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Nov 5, 2011 01:22
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I have a undergrad finance question here. 1) A firm requires an investment of $20,000 and will return $26,500 after one year. If the firm borrows $5000 at 7% what is the return on levered equity? I am having a hard time with this question. The answer is 41% which I got by doing (26500 - 5350) / (20000 - 5000) - 1 = .41 but I still don't understand how that works and why I got the answer by doing that. 2) A firm requires an investment of $30,000 and borrows $10,000 at 6%. If the return on equity is 15%, what is the firm's pre tax WACC? To solve this problem I did the following: .06(10000 / 40000) + .15(30000 / 40000) = 12.75%. The answer for this multiple choice problem was 12% according to the professor but there is also a choice of 13%. What am I doing wrong here?
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Nov 5, 2011 22:13
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Busy Bee posted:I have a undergrad finance question here. 1) What you're doing is comparing the share of total value that 'belongs' to debt and equity. Initially the project is financed by $5k of debt and $15k of equity. After a year the value is $26.5k; $5350 of this 'belongs' to debt and the remainder ($26500-$5350 = $21150) belongs to equity. Equity's share has thus grown by 21150/15000 - 1 = 41%; this is the (levered) return on equity. 2) You're misunderstanding/misreading the question. The borrowed $10k is part of the required $30k investment, not in addition to it. Therefore your sum is .06(10000/30000) + .15(20000/30000) which works out nicely as 12%. k3nn fucked around with this message at 03:00 on Nov 6, 2011 |
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Nov 6, 2011 02:20
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I have a question but I'm not quite sure if this is the right thread for it. If not, I apologize in advance, I'm just not sure where to post. A friend of mine recently became employed making decent money (about $45k/year). I keep telling him to open up a roth, but he's got quite a bit of outstanding medical debt (to the tune of $50,000) and he's afraid that if he gets sued, the money might get seized. For the record, he has no intention of paying of this debt if he can avoid it (yeah, I know...). What he's thinking about doing is just putting all his paychecks into an account that has only his wife's name on it so that even if he gets sued, he has no money they can take unless they start garnishing his wages. So, to make a long story short: in the states of Florida (where they are now) and Washington (where they'll be moving soon), are the contents of a retirement fund such as an IRA subject to seizure from private debt collection?
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Nov 6, 2011 02:51
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If he files bankruptcy, the Roth should be protected up to $1 million. Florida also has traditional and Roth IRA's exempt from seizure. I would double check this information with a lawyer/tax attorney though.
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Nov 6, 2011 03:41
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Niwrad posted:If he files bankruptcy, the Roth should be protected up to $1 million. Florida also has traditional and Roth IRA's exempt from seizure. I would double check this information with a lawyer/tax attorney though. Thanks for the advice! I'll make sure to pass it along. I haven't asked him for specifics, but the impression I got was that he wasn't going to declare bankruptcy, he was just going to not pay, and if/when he got sued, he would deal with it. If he goes this route of not declaring bankruptcy, and he does get sued, would his Roth still be protected from any judgments?
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Nov 6, 2011 16:38
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Lovelyn posted:Thanks for the advice! I'll make sure to pass it along. I haven't asked him for specifics, but the impression I got was that he wasn't going to declare bankruptcy, he was just going to not pay, and if/when he got sued, he would deal with it. If he goes this route of not declaring bankruptcy, and he does get sued, would his Roth still be protected from any judgments? In Canada, exempted assets do not survive bankruptcy if the bankruptcy is ruled either fraudulent or is found to have been filed in bad faith (and quite frankly that's what it sounds like your friend wants to do). I would suspect that it is illegal in the United States too, so he should probably check with a lawyer and fully disclose what he plans to do before he actually does anything. Fraternite fucked around with this message at 01:06 on Nov 7, 2011 |
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Nov 7, 2011 01:02
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Lovelyn posted:Thanks for the advice! I'll make sure to pass it along. I haven't asked him for specifics, but the impression I got was that he wasn't going to declare bankruptcy, he was just going to not pay, and if/when he got sued, he would deal with it. If he goes this route of not declaring bankruptcy, and he does get sued, would his Roth still be protected from any judgments?
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Nov 7, 2011 05:52
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I'm in Canada - is there a standard decent way to get my credit score? Google returns lots of results, but many look kind of sketchy. I'm not super concerned about it, so if the answer is "don't bother", I'm down with that as well.
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Nov 7, 2011 20:02
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Trapick posted:I'm in Canada - is there a standard decent way to get my credit score? Google returns lots of results, but many look kind of sketchy. I'm not super concerned about it, so if the answer is "don't bother", I'm down with that as well. I used Equifax when i got mine before. I should probably look into getting it again as it's been awhile... you have to pay, there are no free ways to get your credit score afaik.
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Nov 7, 2011 21:57
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asmallrabbit posted:I used Equifax when i got mine before. I should probably look into getting it again as it's been awhile... you have to pay, there are no free ways to get your credit score afaik. You can write them via snail mail and get it for free.
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Nov 7, 2011 22:01
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Fraternite posted:You can write them via snail mail and get it for free. That is for your credit report. I was under the impression that they wanted their credit score also, which you have to pay for, even if you snail mail it.
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Nov 7, 2011 22:49
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I got a solid, good paying job several months ago and now I've started the process of improving my credit. My score is bad due to some mistakes with credit cards back in college. I recently noticed on my latest credit reports that I was listed as an authorized user on my mom's Bank of America credit card which she made some pretty serious mistakes on. It was a charge-off bad debt account which she recently paid off after 6 years. I called BofA with my mom's information and they agreed to take me off the account. Do I need to go to the effort of writing the major credit bureaus to dispute/remove this from my report, or will this drop off in a month or two once BofA stops reporting it? Worst case, it will drop off in july 2012 but I'm hoping this helps. Also, will I see a significant rise in my credit score from being removed? I have 4 accounts on my report which are all roughly the same age so losing this one shouldn't hurt my account length history.
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Nov 8, 2011 05:34
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a rowdy mullet posted:I got a solid, good paying job several months ago and now I've started the process of improving my credit. My score is bad due to some mistakes with credit cards back in college. Related question: I was listed on a CC (Target Visa if it matters) of my mother's back in '03. I promptly forgot about it and thankfully she's never been delinquent. It was not showing up on my credit until this July when it reported as an authorized user or something like that on my credit report. I remembered the details and called her and asked her to remove me. She said she did this, but it is still showing up on my report 4 months later. I was never responsible for the debt and would like to get it off my record. How do I make sure that this is no longer reported given that they took so long to even begin reporting it in the first place.
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Nov 8, 2011 14:24
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I'm 23 and have not had a credit card. I'd like one. I have no debt, not much in the way of savings, and a job paying me 25k a year. Currently I'm with Bank of America. I'm going to be closing my only (checking) account with them and open up a savings and checkings account either at a local credit union or an online bank sometime soon. What are some of the better cards to start with? Ive read the thread about rewards cards and I'm thinking those are a little down the line for me.
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Nov 8, 2011 19:35
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manwithoutskin posted:I'm 23 and have not had a credit card. I'd like one. I have no debt, not much in the way of savings, and a job paying me 25k a year. Open your account at the local credit union, ask them what you can qualify for. You may be able to qualify for an unsecured card, but I wouldn't bet on it.
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Nov 8, 2011 19:37
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If you have no debt and do have income, you can probably get a card with a low limit ($300-500)
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Nov 8, 2011 22:51
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It seems like I got charged twice for signing up for the SAT. Under "pending transactions" Wells Fargo online lists two 49.00 withdrawals to the College Board Should I contact the college board or wells fargo? e: debit card. any other details I should include? Winszton fucked around with this message at 03:32 on Nov 10, 2011 |
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Nov 10, 2011 03:19
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Winszton posted:It seems like I got charged twice for signing up for the SAT. Under "pending transactions" Wells Fargo online lists two 49.00 withdrawals to the College Board
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Nov 10, 2011 04:03
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10-8 posted:Wait to see if both go through. One of the pending transactions might just drop off without posting to your account in a few days. And to expand on this, they won't even do any actions anyways while the transactions are still pending, they have to be posted to your account.
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Nov 10, 2011 04:12
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So my debit/visa info got picked up somewhere (probably from a website) and i saw two fraudulent charges for just under 40$ (must be a cutoff for something) from two different places. I know i never signed up for any free trials or retarded bullshit like that which requires CC info. one doesn't have any presence or website, the other has a dinky geocities-esque frontpage. and this little threat "A billing chargeback will place your name, address, zip code, and credit card number into an Internet fraud database. ALL INTERNET CREDIT CARD COMPANIES USE THIS DATABASE. We DO NOT have any control over this fraud database. If you chargeback your membership, the billing company WILL add your information to the ban database. If you get into this database you will not be able to use that billing company again. It is impossible to get off the ban lists." Googling that exact phrase brings up hundreds and hundreds of results. So that's a crock of poo poo, and they appear to be mixing two different scams here: outright stealing CC info and charging, and getting people to sign up for free/cheap services and then jacking up the price on them from whats in the fine print Pizer fucked around with this message at 19:47 on Nov 11, 2011 |
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Nov 11, 2011 19:38
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Pizer posted:99.99999999999999% You can round that up to 100%. But you can imagine people dumb or scared enough to believe it. One of two things happened, either it is outright fraud where someone actually stole your number somehow and is using the card. Since you say you never gave out your number, this is likely. Or it is deception, but not quite fraud. Sometimes people download shareware where you have to give them a credit card number, and unless you uncheck a certain box you are enrolled in some weird buyers club or something. Either way, report the card as compromised and tell the credit card company these are not your charges.
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Nov 11, 2011 19:49
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I have a friend who has about $15k in credit card debt, and is looking at talking to a credit counselor about his options. Does anyone have any recommendations for a legit one? Googling "credit counselor" leads to disaster...
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Nov 11, 2011 20:06
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Medullah posted:I have a friend who has about $15k in credit card debt, and is looking at talking to a credit counselor about his options. Does anyone have any recommendations for a legit one? Googling "credit counselor" leads to disaster... Dave Ramsey? It’s not like you can sprinkle magic consolidation dust on it to make it go away. The only one I would consider is Money Management International, MMI (formerly CCCS). http://www.moneymanagement.org/ they are the industry supported one, but they are not going to do anything that your friend can’t do, and if your friend did it him/herself, they would not need to pay the program fee. If they did a debt consolidation loan, do it through a credit union or community bank and see if they will do a fixed rate, fixed term loan. The good thing (or bad, depending on how you look at it) is the payments likely won’t go down, but it forces you to be honest about paying it and a three year loan will force you to pay it off in 3 years. But your friend goes that route, they can never use credit cards again. There are so many people who get a consolidation loan to pay off their cards and you look a year later, they have paid $3000 on the loan and ran up $10,000 in credit cards.
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Nov 11, 2011 20:18
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I don't know if this is better for the investing thread, but it is a pretty newbie question. I am pretty stupid about doing anything other than purchasing stock and then sitting on it forever (I have PG and LMT from forever). The Zynga IPO is coming up pretty soon, and I think it is an OK bet in the short term. Even if this isn't true, the general question is the same: I have a Scottrade account, is there some mechanism by which I can say: Buy $1000 worth of this stock as soon as it is available. Sell it automatically if it drops by more than 10% at one time. (bonus option: Also sell if value increases by over 30% from initial.) It seems like, if I expect the stock to rise after IPO, I can lock in some amount of gain (and get out if I make X% gain), and prevent myself from losing a ton of money if it goes to hell. Is there some automated way to tell scottrade to do this? Is there a name for it? EDIT: It looks like what I'm talking about is a trailing stop. So I'd need to place a BUY market order, and simultaneously or immediately afterwards place a SELL trailing stop order that would trigger a sale if the price drops below X% Hufflepuff or bust! fucked around with this message at 22:33 on Nov 11, 2011 |
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Nov 11, 2011 22:02
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Here's the advice you want: You're looking for a sell stop order for the bottom price and a sell limit order for the top price (after your market order, naturally). Here's the advice you don't want: I wouldn't screw around with an IPO especially if you're just speculating on the drat thing. Be aware that the stock will have already been available to all sorts of big-money investors before you can get your paws on it, and that you're not in a good position relative to them when it comes to making money off of suckers because you're not getting the shares at the 'lowest price', so to speak. But if you're still gung-ho, then go for it, I guess. And all joking aside, let me know how it turns out. Fraternite fucked around with this message at 22:58 on Nov 11, 2011 |
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Nov 11, 2011 22:50
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Yeah, I'm pondering this. I know you're right about the people in before me, but I think this will be similar to Groupon - a tech stock with a lot of hype (although Zynga actually has profits to back it up). If it opens at $20 and I can get in around that price, like 50 shares/$1000. If I set a trailing stop at 10%, then the most I can lose is 10% plus a little bit to allow for execution. I'd feel like an rear end in a top hat, but I won't cry over $1-200. On the other hand, if it pulls a groupon and briefly hits $28, and then starts back down, the sell would trigger at $25.20 making me like $250. I'd treat it like an experiment, comforted in the fact that I couldn't lose more than X$. On the other hand, it's probably fairly likely that I won't be able to get any stocks at all, as I am not an active trader.
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Nov 11, 2011 23:12
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Medullah posted:I have a friend who has about $15k in credit card debt, and is looking at talking to a credit counselor about his options. Does anyone have any recommendations for a legit one? Googling "credit counselor" leads to disaster... Seconding Dave Ramsey. $10 for The Total Money Makeover.
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Nov 12, 2011 07:02
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I have a traditional IRA from my previous job that has $4,500 in it. I no longer put into that IRA. One question: Will the IRA continue to grow even though I no longer put into it? This is mainly out of curiosity. Second, and main, question is right now I'm making the least amount of money that I'll probably make for the rest of my life. Should I roll the traditional over into a Roth IRA and pay the taxes on it now, so when I'm older and in a higher tax bracket I don't have to pay taxes on it? After I roll it over, if that's the best advice, I can continue to put about 1,040 a year according to my budget. That's 10% of my income. I also have a 401(k) that my employer matches 3% of. So basically here is my goal: Currently match 3% into 401(k). It's free money. Convert traditional IRA into Roth pay taxes on it now. Continue putting 10% of my income into Roth Ball hard when I retire. Should I convert it over? Do the taxes just come out of the money I convert, or do I have to come out of pocket with that? What are the risks? Are there any?
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Nov 12, 2011 16:50
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I have a Chase Freedom Mastercard, and a few months ago I got a letter saying they were going to change it to a "World Mastercard" unless I told them not to. Because that would change the card from a credit limit to a "credit access line" which wouldn't be reported to the credit agencies, I called up and declined. This is my biggest credit limit card and removing it from my report would change my utilization ratio from ~5% to 25%. However today I got new cards in the mail and they are World Mastercards, saying to call up and activate them and destroy the old cards. Am I pretty much hosed on this or is there a realistic way to get them to correct the error?
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Nov 12, 2011 17:50
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Moniker posted:I have a traditional IRA from my previous job that has $4,500 in it. I no longer put into that IRA. One question: Will the IRA continue to grow even though I no longer put into it? This is mainly out of curiosity. As long as you have that $4500 invested in something in the IRA, it will continue to grow. If your current tax rate is going to be real low, then I think it's a good idea to convert it to a Roth. Particularly if you are young and feel you'll be in a higher tax bracket when you retire. Below is a handy calculator for figuring out the difference. It's tough to see where you're at and where you'll be at, but you can get a rough idea for the difference in savings. http://www.dinkytown.net/java/RothTransfer.html
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Nov 13, 2011 08:51
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Niwrad posted:As long as you have that $4500 invested in something in the IRA, it will continue to grow. As for the second question, if I do pay taxes on it, do the taxes just get deducted from the $4,500 or do I have to come out of pocket for them?
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Nov 13, 2011 15:10
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Moniker posted:As for the second question, if I do pay taxes on it, do the taxes just get deducted from the $4,500 or do I have to come out of pocket for them? Out of own pocket. Otherwise the amount deducted from the ira balance would be subject to early withdrawal penalties.
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Nov 13, 2011 17:40
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80k posted:Out of own pocket. Otherwise the amount deducted from the ira balance would be subject to early withdrawal penalties. Ah! That makes sense. Thanks. I've got more than enough in savings, I just wasn't sure. Cheers.
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Nov 13, 2011 20:50
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Moniker posted:Ah! That makes sense. Thanks. I've got more than enough in savings, I just wasn't sure. Cheers. Actually i should clarify. You will have the option to do either way. Make sure to choose to pay out of pocket for the reason i mentioned.
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Nov 13, 2011 21:54
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kaishek posted:Yeah, I'm pondering this. I know you're right about the people in before me, but I think this will be similar to Groupon - a tech stock with a lot of hype (although Zynga actually has profits to back it up). If it opens at $20 and I can get in around that price, like 50 shares/$1000. If I set a trailing stop at 10%, then the most I can lose is 10% plus a little bit to allow for execution. I'd feel like an rear end in a top hat, but I won't cry over $1-200. On the other hand, if it pulls a groupon and briefly hits $28, and then starts back down, the sell would trigger at $25.20 making me like $250. I'd treat it like an experiment, comforted in the fact that I couldn't lose more than X$.
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Nov 14, 2011 02:55
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kaishek posted:Yeah, I'm pondering this. I know you're right about the people in before me, but I think this will be similar to Groupon - a tech stock with a lot of hype (although Zynga actually has profits to back it up). If it opens at $20 and I can get in around that price, like 50 shares/$1000. If I set a trailing stop at 10%, then the most I can lose is 10% plus a little bit to allow for execution. I'd feel like an rear end in a top hat, but I won't cry over $1-200. On the other hand, if it pulls a groupon and briefly hits $28, and then starts back down, the sell would trigger at $25.20 making me like $250. I'd treat it like an experiment, comforted in the fact that I couldn't lose more than X$. Let me also point out that even with Scottrade's $7 trades, you're looking at 1.4% of your investment in fees. That's hefty. Throw in a $20 wire out fee and you're needing a 4% profit to break even. This all completely ignores the regulatory and transactional fees that while small are still there. $1,000 speculative bet on an IPO is silly at the retail level. You are essentially throwing money into a hat to give investment bankers more money. Edit: Let me demonstrate my point. This is Groupon's publicly available price history. The earliest you would have been able to purchase it would have been just about market open on Monday, Nov 7. That would have cost you about $27.50/share. At a 10% loss limit, you would have a limit of $2.75 or an actual price of $24.75. You would have hit that at about 11:20am. You would have programatically lost 10% in 2 hours. Throw in 2% in fees and you're annual rate of loss was %525,600! Good move. Even if you hadn't sold, really at no point on this curve has Groupon gone above it's initial public market entry price. Linkedin was also profitable when it went public, that didn't stop it from going from 94 to 65 in it's first month. IPO's are not about fundamentals. They are about speculative buzz and you can't get in before anyone else.  KennyG fucked around with this message at 15:43 on Nov 14, 2011 |
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Nov 14, 2011 15:30
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