New answers tagged

1

To state the basics, revenues/profits/earnings/EPS are accounting figures that tell you how the company is doing in its business. Stock price changes and dividends tell you how well the stockholders are doing in their investment.


4

A company hopefully if profitable. When they are one way to express that is using earnings per share. If they have profit of $1 Billion and they have $1 Billion shares then the earnings per share is $1. Of course companies that aren't profitable have losses per share. Many famous technology companies had losses in their early years as they built their ...


0

its me, the asker of the question I think we should go by this model as : To understand the concept of DCF Terminal Value, we must know that after a period of growth, a company reaches a “steady state” which is when all sources of competitive advantage are exhausted and its profitability and efficiency ratios are stabilized. The steady-state period typically ...


0

It's derived from the formula for a growing perpetual annuity. The present value of a perpetual annuity is the initial cash flow (the payment after one period) divided by the discount factor minus the growth rate (C1/(r-g)) - you can look up the derivation of that formula offline. So if we treat all of the cash flows after year N as a growing perpetual ...


0

Without knowing where you are seeing this I'm guessing at some of these. My guess is that "TQ" = "trailing quarter" The only "ACO" reference I'm aware of is related to healthcare companies...Accountable Care Organization CfEbit=cash flow earning before interests and taxes. So they're looking at that amount per share.


2

"pay down $90k in debt immediately" - This is a poor decision. It uses the entire pot of money in one go. Keeping the $90k available will allow your friend and his spouse flexibility that they would not have if it were used immediately. They can: pay taxes (if any are owed) on the profit from the sale of the home use the money for moving expenses ...


3

The general rule is not to buy a house if you don't plan to stay for 5+ years. This has nothing to do with prices going up or down, rather the transaction costs. https://www.cnbc.com/2018/01/25/thinking-about-buying-a-home-ask-yourself-how-long-you-plan-to-stay.html With respect to the $90k, for a medical resident in a specialist field, maybe spend the money ...


3

I'm so dumb about this stuff that I'm probably doing something horribly wrong Anyone who can't say this about themselves is being dishonest. This stuff is extremely complicated, and changes all the time as laws get updated. Don't be afraid to call in the experts. Regardless of what income bracket you're in, any financial expert that's worth their salt ...


6

How does one find trustworthy financial help? TLDR: Find a fee-only financial advisor that doesn't do commission business with anyone. Not my last guy, who said "Oh, you want a fee-based advisor? OK, pay me $2000 also." I suppose I should get some professional help, but a friend of mine is a "financial advisor", and I know that all she ...


13

Given everything you've posted here, I suspect your biggest risk is dementia. Specifically, your mind going enough that you're able to be taken in by scams - which can go through your money pretty quickly. Given you have enough current money to support yourself pretty happily even without your larger savings, I would consider putting most of that savings ...


10

For point 3, I think you're looking for a "Fiduciary Financial Advisor". This is an advisor which agrees to a "fiduciary" duty towards you. You pay the advisor, and in exchange for that fee the advisor must act solely in your interest. Kick-backs would be a conflicting interest. Of course, that still does not guarantee competent advice, ...


18

The simplest advice would be: Live today on your future means; both financially and physically. If it's just the two of you in a 3,000 sq. ft home then consider building a perfect new and well-insulated 1,000 sq. ft ranch which won't need major maintenance until well after both of you have gotten use out of it. Plan for accessibility everywhere; ...


4

Think of the family dynamics first. What do you want most to happen; who is legally entitled to what, and what is at your discretion; do you not mind conflict, or it is the worst thing that could happen? An estate plan, will, living trust, or other trusts could reduce any scramble for your assets when you are older and feebler. As for charity, would you ...


4

Some good answers already. A few additional points: Some disastrous taxation event that I don't know about. The main thing you will probably have to think about is "Required Minimum Distribution" for your tax deferred accounts (IRA, 401k) etc that kicks in at age 72. It's certainly not "disastrous" but it's annoying and it can guide ...


8

I'm 70 years old, but I'm still working, because it's still fun. My salary is around $300K per year. I have around $5M in assets, including the house we live in, stocks (fairly well diversified), IRAs, etc. I receive about $4K/month from social security, and another $3K/month in pensions from previous employers. No debt. That's way more than most other ...


37

Some comments: Some disastrous taxation event that I don't know about. These are rare. Usually disastrous taxation events are well publicized in advance and require a lot of legislative work. Seeing that you mentioned IRA, I'm assuming you're in the US. In the US the political system is such that it's really difficult to nearly impossible to make changes ...


1

Do I need to do a loan agreement with my brother for tax purposes? Because he will transfer a significant amount to my account, will I need some document to show to IRS as its reason? If yes, then what? Or is it enough if he mentions some things in the transfer memo? Both of you will need a proper note. It probably shouldn't be a 0% note since your brother ...


1

Do I need to do a loan agreement with my brother. Yes. It will set out the repayment process. It will specify when the payments will start, how much they will be, and other important details. The more explicit the agreement the more details the lawyers will have to work with if the partnership goes south. Do I need to do a loan agreement with my brother ...


3

If all you're looking for is a way to move more of your income into a 401(k), you might be better served by doing a mega backdoor Roth conversion. The expanded contribution limits aren't just for your employer match - they also include your own post-tax contributions (if your employer's plan allows them). Normally, these contributions wouldn't be tax-...


3

First some numbers from the IRS: Defined Contribution Limits 61,000 for 2022 58,000 for 2021 Catch-up Contributions 6,500 for 2022 6,500 for 2021 that limit covers: An overall limit on contributions to a participant’s account. The limit applies to the total of: elective deferrals (but not catch-up contributions) employer matching ...


1

The most likely answer is you are entitled to nothing, but it totally depends on the documentation on the preferred stock and the terms. You are clearly an owner of preferred stock, correct? Preferred stock is not common stock. Common stock is what is generally purchased in the sale of a company or an IPO, not preferred stock. There is the possibility you're ...


1

Inflation and interest rates are related but somewhat disjointed measures. Inflation, by its strictest definition, is the change in purchasing power of a currency, usually measured by the real cost of some basket of consumer goods (the Consumer Price Index or CPI). The price of those goods can change for many reasons, only one of which in interest rates. ...


2

In order to do algorithmic trading one needs more than just access to a commercial app like Robinhood or Webull. Correct, while it may be possible (perhaps it violates their TOS) to algorithmically trade using an app-based broker, you will have a much easier time simply trading with a broker that provides a documented trading API. all the execution of ...


3

It rather depends on what you mean by "reasonable". In a free money market, nobody with any sense would lend out money at an interest rate below the rate of inflation. Because it would mean that when the loan was paid back, the lender's money would be worth less than it was when they lent it out. And they have taken on the risk of the borrower ...


0

U.S. centric answer: As of November 2021, the inflation rate was 6.8%. Current money market yield is about half a percent with banks paying even less. The current 10 Year Treasury Rate is about 1.50%. Investment grade bonds aren't much higher than that. Cash is currently losing value because of inflation.


1

Lets assume this is a good idea, and that this is the plan you want to go forward with. when should I actually make the withdrawal? Is there an amount of time before applying for credit I should do this, or a smart strategy for timing or pacing it? Because it should only take a few days to go from Roth IRA to your bank account, there is no need to do this ...


2

At least one broker has an API: Interactive Brokers Use our modern REST API to trade, monitor and manage your IBKR account.


6

The Board of Directors decides whether or not to issue a dividend. Who are the Board of Directors? The people that the owners vote to to be their "proxy overseers" above the CEO and President. If you don't like the fact that you aren't getting a dividend, vote for a new slate of Directors who promise to issue a dividend. Practically, though, for a ...


15

No. The definition of a shareholder is a partial owner of the company. Whether a dividend is paid has nothing to do with it. Just like any company, the owners might decide they would rather re-invest the profits back into the company so it can grow instead of taking those profits as dividends. As a shareholder you have a say in whether they pay dividends, ...


3

There are many questions on this site about dividends or the lack of dividends. If the company wants to use the profits to expand the business instead of paying dividends they can do so. They can also save the profits waiting for opportunities to invest in other businesses. These decisions are made either by the board of directors, or the shareholders using ...


6

It depends on how you structure the transaction. If you want to have personal assets, you can sell some of the stock you personally hold in the business to an outside investor. If you want the business to have the assets, the business can issue additional shares of stock to the investor. In practice, a venture capitalist will almost certainly require the ...


1

Every manager of an actively-managed mutual fund is "bad" at managing money in the sense that no one has beaten the appropriate index fund consistently over a very large number of years. It is true that in the relatively short term, fund managers do beat index funds, sometimes spectacularly and sometimes even for several years in a row (Fidelity ...


2

The fact that the wash-sale tag gets a new question every few weeks (around 30 questions in 2021 with wash-sale and united-states) means that there are answers much more recent than 2019. In the united states the law hasn't changed in decades. I haven't heard any rumblings about changing it. The wash-sale rules do not cause much of an impact for most ...


0

As a "variety of money-weighted rate of return", the higher the return the better. https://en.wikipedia.org/wiki/Rate_of_return#Internal_rate_of_return


4

You're looking at the wrong numbers. To judge whether an asset manager is good at managing money or assets, you need to compare the funds' returns to their specific benchmarks. For example, FZILX's benchmark is The Fidelity Global ex U.S. Index The Fidelity Global ex U.S. Index is a float-adjusted market capitalization-weighted index designed to reflect the ...


6

You should analyze your remaining financial goals and push that money towards those. For example, Do you have any remaining debt? Snowballing funds allocated to your student loans into those debts will make them disappear all that much faster. Are you contributing what you'd like towards retirement? It's typically recommended that you contribute ~15%, but ...


7

I thought it would be good to diversify with a couple of funds. By diversifying you made it so that on average you will under-perform the best of the options you picked, it also made it so you would over-perform the worst of the options you picked. That is by design. You achieved your goal. If one of the sector has a very bad year the others might not. If ...


-2

This is a classic "active vs passive" issue. Given a long enough time frame, almost all active funds will underperform their benchmark index due to cost, bad tax management and simply following fads. See Why do people claim that it's hard to outperform the S&P 500? It has only increased in value by ~1.5x in the past 5 years Is there any ...


0

It may be worth noting that the FTC is a non-refundable tax credit and thus, if your income falls under an effective tax rate of less than 15%, then you won't be able to fully recover the IRS 15% Foreign Withholding tax for those US dividends. Please see this for more info.


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