Questions tagged [financial-literacy]
for questions related to understanding basic concepts in finance or certain terms in a particular context
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Why isn't everybody rich?
This question came up after reading this question (stock market long term risks), in which it is re-iterated (as it has been many times on this site), that investing in the stock market, especially an ...
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21
answers
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How smart is it to really be 100% debt free?
For the last 2 years, I have been trying hard to be debt free without affecting my personal cash flow. I am by no means a rich person, but I have a decent salary.
I still have debt, specifically
...
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168
votes
11
answers
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Do I make money in the stock market from other people losing money?
Basically I am new to stock trading and neglect to see the differences between trading stocks and betting on sports. Basically I am "betting" on which company will do well, and this can ...
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132
votes
13
answers
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Why does gold have value?
I'm curious about why is there so much financial interest and news coverage about gold.
It's hard to do things like buy food or pay the rent with gold, but I can do this with cash. Gold doesn't yield ...
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130
votes
23
answers
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Why buy insurance?
I don't understand why people buy insurance when they know the odds are not in their favor. Is staying uninsured and saving money not a better bet? I am not talking about house insurance. About things ...
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14
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As a 16 year old, how can I keep my money safe from my mother?
I am 16 and still in HS and work 20+ hours a week. I live with my mother (my Dad left us when I was a kid and I don't see him anymore). My mother is an alcoholic and has trouble keeping a job. I don't ...
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9
answers
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When someone's ability to pay is suspect, why would it make sense to give them more expensive credit?
Answers to the recent question "Why don't bond makers just get loans?" Seem to take it as a given that lending someone money at a 12% interest makes sense when there is already doubt about their ...
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68
votes
3
answers
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How did this day trader lose so much?
I recently read this article about a day trader that lost $100,000:
A trader started a GoFundMe page to pay back $100,000 to E-Trade after a disastrous short
Please explain this, because I can not ...
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67
votes
14
answers
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What are some effective ways to help someone financially?
After managing my income and investments quite well over the last few years, I’m reaching the point of having more income than my personal needs require, and (after already giving thousands to charity ...
- 711
67
votes
9
answers
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Why do financial institutions charge so much to convert currency?
With all the modern technology that we have, I am astonished that financial institutions charge such exorbitant prices for currency conversions. My bank, Fifth Third, charges a 3% conversion fee, ...
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60
votes
9
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Why are 30-year mortgages seen as unwise, if you can pay off the loan in a shorter period of time anyway?
I'm slowly working towards buying my first home (yay!), and have been playing around with the numbers. As far as I can tell, there's literally zero advantage for getting a 10 or 15-year mortgage since ...
user44315
57
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6
answers
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How can a company use money from stock investors when they are constantly being bought and sold?
I am interested in the mechanisms which a company can use the money that investors give them when they buy a public stock since they are being bought and sold constantly. How can a company spend other ...
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4
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When a stock price rises, does the company get more money?
When a stock price rises, does the company get more money?
user454
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9
answers
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If stock price drops by the amount of dividend paid, what is the use of a dividend
I have heard that some people buy stocks based on how much dividend they pay, because dividend is considered 'income'. But if I buy a stock for 100$ and it pays a $1 dividend, the stock would also ...
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1
answer
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Numbers in parentheses in financial statements?
In financial statements numbers are sometimes given with parentheses around them, while other numbers appear without parentheses. What does it mean if a number is enclosed by parentheses?
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46
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10
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How do I explain why debt on debt is bad to my brother?
My brother has about 5 loans that he paying back and he thinks that another 5000 loan will "solve his problem".
He has been this way since he was young, he's now in his 30's.
I'm trying to find a ...
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14
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Hypothetically, should I pay off the smaller + higher interest rate loan first, or the larger + higher absolute interest cost?
I have this hypothetical situation on my mind and I am not sure which is the best solution.
Given:
Loan 1: $340,000 at an interest rate of 1.69% per year
Loan 2: $40,000 at an interest rate of 3.6% ...
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43
votes
14
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How can I support myself financially as a 17 year old with a loan?
I'm a 17 year old Ohio high school student who makes ~$160 a month working minimum wage. I have a $3500 loan (4 year duration) to pay off for a car with ~$2880 left.
Monthly payments are ~$80 for ...
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votes
9
answers
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Why would the bidding on a foreclosed property start at the outstanding amount of the loan?
I've read from several reliable-looking sources that if a foreclosed house goes up for auction, the bidding usually starts at the outstanding amount of the loan (plus fees, etc.): Example Money Talks,...
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37
votes
5
answers
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How can a credit card company make any money off me? I have a no-fee card and pay my balance on time
How does a credit card company make any money off of me using their card if there are no fees associated with the card (I don't pay any extra) and I pay off my balance on time every month (so I don't ...
user2667
37
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3
answers
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How do the rich and wealthy withdraw from accounts without leaving home?
I was at someone's house once and they made a phone call and had someone bring $50,000.00 cash to their home from one of their bank accounts. I think the person worked for the bank and wasn't a ...
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36
votes
8
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We're in an asset bubble currently, what can I do about it?
My opinion is that we are in an asset bubble: house and property prices are sky-rocketing, interest rates are low, and inflation rates are high.
I'm aware of the futility of trying to time the top of ...
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33
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8
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Are services provided to Google employees taxed as income or in any way?
The particular service I want to look at is food (though I think the same ideas should apply to all services). So Let's say that a Google employee spends a dollar on food, purchasing groceries. They ...
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33
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5
answers
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What are the economic benefits of owning a home in the United States?
I am trying to figure out if owning a home is more economical then renting. According to all the tools, according to the rent I pay now (< $800) owning a home is not economical, even in the long ...
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32
votes
7
answers
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Bought stock at higher price than current price
I wanted to buy stock ABCD at a price of 880. The current price was 900. When I bought, I set 980 instead of 880 and it was fully executed. I don't understand how it is possible to buy stock at a ...
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votes
11
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Will a credit card issuer cancel an account if it never incurs interest?
I have a few credit cards that are currently carrying some larger "promotional" balances. These are purchases that I decided to put on a 6, 12, or 18 month 0% APR financing offer vs. taking any points ...
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31
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2
answers
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Is my stock gone forever from a reverse split / bought by another company?
I'm a complete novice in regards to investing and had purchased some shares of OXIS from TD Ameritrade back in March of 2015 (NASDAQ). The company (OXIS International) became very devalued and did a "...
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If I can put together a loan that pays out like a 7.579%-a-year loan, but has a total term of 18.63 years … would you be interested?
I'm reading about Household International's fraudulent mortgage interest rate. According to Michael Lewis, Household disguised a 15 year, fixed-rate loan as a thirty-year loan. The sales would offer ...
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What does "Yield Curve" mean?
In the financial news we often read about the Yield Curve. What exactly is it?
28
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10
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Which practice to keep finances after getting married: joint, or separate?
My wife and I have been keeping our finances separate for a long time. Some of my friends just put everything in a big pot. We each have our own pot, but then we have a common pot where we put all ...
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27
votes
4
answers
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What is the meaning of "short selling" or "going short" a stock?
Can someone please explain the meaning of 'shorting' a stock with an example?
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Where to start with personal finance?
I am married with kids and starting to look hard at savings for retirement, buying a house and sending my kid to college (still a LONG way away).
However, I am completely new to the world of finance ...
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25
votes
3
answers
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Can someone just forcefully take over a public company for its market price?
I am working for a Fortune 500 company. A recent drop in our stock price caused, let's say, some startle.
Following that, one of our executives said in a global Q&A session in response to one ...
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1
answer
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What does 'mutual' mean in mutual fund?
I am confused on the usage of 'mutual'. Is there any 'mutual benefit' or 'mutual dependence' between the participants (unit holders) in a mutual fund?
It looks more like a 'mixed fund' with diverse ...
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5
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Why don't SPY, SPX, and the e-mini s&p 500 track perfectly with each other?
These tickers (SPY, SPX, /ES) are all based off the S&P 500 yet the relative lows and highs diverge. Can someone provide a basic explanation what causes this to happen? I feel like it may stem ...
- 361
25
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3
answers
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What is a trust? What are the different types of trusts?
What is a trust? What are the different types of trusts? Are some better than others? What are the different roles involved in a trust?
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4
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My out-of-the-money call options are near expiration and won't sell in the open market. What are my choices?
I had attempted to sell my contracts off today but was unsuccessful. They are currently OTM options and will expire tomorrow. What can I do to minimize loss and why was I unable to sell?
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What are the best strategies to give pocket money or an allowance to children?
What are the best strategies to give pocket money or allowance to a child especially if you would like to teach them something through this, e.g. saving?
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Is 95% of what you read in the financial press “either wrong or irrelevant?”
From a Cato Institute article by Steve Hanke1 (emphasis added):
Most press reports about Zimbabwe’s fantastic hyperinflation are off the mark – way off the mark. Even our most trusted news sources ...
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2
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What's the difference between a certified check, a cashier's check, a money order, and a bank draft?
The question comes from reading this answer.
I've heard these terms used somewhat interchangeably, but I have no idea what the differences are.
What's the difference between a certified check, a ...
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votes
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What is the difference between "good debt" vs. "bad debt"?
This other question about home renovations makes reference to the concept of "good debt."
Could somebody explain the concepts of good debt vs. bad debt, providing examples of each?
Are there cases ...
user178
21
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6
answers
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Is rent considered a debt?
I am taking a financial assessment. It asks me:
What is your total monthly debt payment (e.g. student loans, vehicles, credit cards, personal loans, etc.)?
Then the next questions are about ...
- 529
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3
answers
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Buying shares in a company after you quit
US law dictates that you cannot buy / sell shares in a company you work for except during open trading windows. I understand lockout periods when you're in a company but what about after you quit?
...
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21
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2
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I have Sprint shares. What does this merger with T-Mobile mean for my shares?
Over the weekend Sprint and T-Mobile announced again that they would try to merge.
Assuming the powers that be in the US don't have any issue with this deal and it moves forward as proposed, what ...
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2
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What are "headwinds" and "tailwinds" in financial investments?
I've seen/heard these terms in various writings & broadcasts lately. What do they mean?
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3
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In what way does technical analysis involve astrology and reading tea leaves?
I am considering whether or not I should learn technical analysis after fundamental analysis. When I searched for "technical analysis" on internet forums to gauge whether or not it is ...
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1
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What does "gross of" mean?
I'm reading a financial report summary of an investment and it says "The numbers below are presented gross of fees." Does that mean the numbers include fees, or don't include fees?
Why don't they ...
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10
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Why are American-style options worth more than European-style options?
Why are American-style options worth more than European-style options?
I realize I can exercise American-style options anytime before the
expire, but I can only exercise European-style options ...
user1731
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votes
3
answers
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If I were to buy something a day before my due date for my credit card bill, would I be charged interest?
First of all, I am a resident of Canada.
I am new to credit cards, so I hope my question makes sense. I've had my card for a few months ago and I've always paid the balance in full by the time the ...
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Special Needs Trust and Financial Planning
update: I may not have explained it clearly in my post below but I don't believe the intent is to close out the 401k or fund the life ins. policy using it. I will clarify with the consultant what the ...
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