Ask MetaFilter questions tagged with funds

Paying for school

Anonymous — Wed, 01 Jul 2009 13:55:32 -0800

I have a pretty big tuition bill, even after Stafford and Perkins loans are applied. Can't pay it in cash. Should I take out another loan or take money out of the mutual funds? The thing that sucks is I had thought I could use all the money in my mutual funds to pay the school bills in the first place, and then when I started school last fall I lost nearly half of it. So far I didn't have to touch it, but it looks like tuition got raised and even if I saved every penny of my summer job I'm not going to be able to cover it with my bank account.

If I take out another loan, I have to pay interest on it. If I cash out my mutual fund, I'll basically be able to cover my bills for the rest of the year (and then I graduate) but I'll never see the money I lost in it ever again.

One other thing, so the money I have in the mutual fund now is about the same as how much I started with, seven years ago, but not accounting for inflation. So on the face of it you could argue I didn't lose any *actual* money, but if you account for inflation, I did. The question I suppose is whether I should wait for that mutual fund to recover or just cut my losses and use it so I don't incur more debt.

Sorry if this seems like a basic question. I am horribly bad with financial things, so the answer is not entirely obvious to me.

How should I invest in mutual funds?

stevechemist — Wed, 13 May 2009 11:20:30 -0800

For investing small amounts every month, is a S&P 500 index fund or a tax-free bond fund more beneficial? I know you are not my financial advisor, but I currently have about $200 in SWPIX, a S&P 500 Index fund. I've been doing some research, and found SWNTX, a tax-free bond fund that seems to be doing well (and have a good history). For small amounts of money (what I currently have plus adding an additional $20-40/month) would it be beneficial for me to split between the two funds, move completely to the bond fund, or to stay in the S&P 500? My goal is long term growth.

How do I structure my family empire?

Anonymous — Thu, 23 Apr 2009 09:37:51 -0800

How can I set myself and my family up to be the next Rothschilds? (In terms of structure of family wealth etc) I am not a billionnaire but I have some wealth. It strikes me that if my siblings and I were to pool our resources we would have considerable assets, spread out all over the world. My parents never started us off to become a powerful or rich family or anything but I'm interested in structuring things that way, rather than owning it all myself etc.

I know a bit about general structures that can be used for companies, investment funds, trusts and foundations but I'm curious if there is a particular structure commonly used for families.

For example: if I own property worth $1 million, my brother owns property worth $2 million and my sister owns nothing - how would we all contribute to the pot? How do we take stuff out? How do we avoid hating each other out of jealousy and frustration?

Allocating my assets between mutual funds in my IRA account

stuehler — Tue, 17 Feb 2009 08:06:16 -0800

I have four mutual funds in my IRA account - a Total Market index fund, a Small-cap index fund, an International stock index fund, and a Bond index fund, and I'm trying to figure out how to allocate my assets between them. I've read a little bit about "Modern Portfolio Theory" and the "Efficient Frontier", but I'm struggling to understand some of the math. So, is there a simple way I can test whether a particular allocation is on the efficient frontier? Or, see all the possible allocations on the efficient frontier and choose between them? How do I figure this out? Ideally, I'd love to see a simple enough formula that, given the mean and standard deviation (and maybe correlation matrix), of my four funds, would tell me what allocation is on the efficient frontier. Or, some type of online tool, or an Excel spreadsheet or something. As an aside, I'm not interested in using a financial advisor (I don't have nearly enough assets to justify that), nor am I interested in general rules of thumb ("If you're N years old, you should have an allocation of x% stocks, y% bonds, etc.")

Nothing wrong with that - just seems like this is something I should be able to understand myself.

A lot of what I've found on Google is high-level explanation (e.g., what MPT and EF are), but not the tools to actually allocate between N funds. Or, very sophisticated math that I don't understand.

Of course, maybe I'm wrong - maybe the math is intractably hard. But, maybe not!

Many thanks in advance for any advice or insight!

I'm having a financial existentialist crisis

MrMulan — Wed, 11 Feb 2009 09:36:19 -0800

Have I been wrong on my financial core beliefs? I have had a worldview when comes to finances for over 15 years that I am now questioning.

1. I believed 8-12% return on your money over the long term was reasonable, conservative, and realistic.
2. I believed in No-load mutual funds.
3. I believed in dollar cost averaging.
4. I believed Technical Analysis does not work.
5. I believed in A Random Walk Down Wall Street.

First there was this segment from NPR(of all places!) that blew my mind: Technical Analysis actually works (at least for oil)
Then this article from Slate on Suzy Orman. The article disses No-load, and Dollar-Cost Averaging without any references.

Was NPR sinking to a major network level of reporting? Or does TA really work?
What is the mounting evidence against No-loads as part of a passive, long term strategy?

There is no other choice for me but to be an optimist for the long term health and prosperity of our country and by proxy, the stock market. Else, the best thing to do would be to stock up and canned food and guns, and that really isn't a nice way for me to live.
Why then is Dollar-cost averaging bad, if you are doing it in mutual funds, and doing it for the long term?

There are many books out know calling into question A Random Walk Down Wall Street. Is there any truth to them?

Help me micro-fund my business, but not like, by YOU giving me money..

Jonsnews — Thu, 05 Feb 2009 00:51:34 -0800

I am looking to self fund starting a business, but I need to seek a small amount of additional capital. Ideally, I would like to do this through friends and family, through a more formalized agreement. So how can I "sell them" a piece of my business without selling them stock? Basically, I would like to sell some sort of piece of paper for X amount of dollars with the agreement to repay it with X amount of return within X amount of time, or allow them to redeem it at the business for a greater amount. I would like to do this in small amounts to raise the rest of my capital.

Yeah, I know I could go get a small business loan, but the thought of doing it in a cool, non-traditional manner appeals to me.

No, I am not hoping to skip the business plan portion of things. I actually have already completed it along with my market research.

Yes yes, you are not my lawyer, and I will be seeing one shortly. I am just looking for ideas before hand.

What are some other "fun" ways to raise money to start a business?

Credit Crunch filter - Help me understand Electronic Traded Funds

complience — Sun, 19 Oct 2008 09:01:56 -0800

I want to diversify my asset portfolio to include Noble/Precious metals commodities (primarily Palladium). I've heard an effective method is via ETCs. Can someone explain to me what a Exchange Traded Commodity actualy is. I know a ETC/ETF is an investment vehicle that tracks the performance of the underlying commodity, rather than an actual investment in the commodity.

I understand the benefits are increased Liquidity, Tax exceptions, no costs for storage of the commodity.

But what I don't understand is what are the disadvantages?

Im looking at the ETFS Physical Palladium sold by ETF securities. Which says its 'backed by a Holding of physical palladium
metal' Thus surely removing all the advantages given above, is this holding only a 'token' amount?

http://www.etfsecurities.com/en/updates/document_pdfs/ETFS_Physical_Palladium_Fact_sheet.pdf

When should I change my 401K investment strategy from active to passive?

shinybeast — Wed, 24 Sep 2008 13:21:23 -0800

Given today's equity market conditions, when should I change my 401K investment strategy from active to passive? In my 401K, I'm planning to switch investment styles, moving out of diversified actively managed equity funds to diversified passively managed Vanguard equity, REIT, bond, and TIPS index funds.

The question is, when should I do this, today or when my current fund mix has climbed above the performance of the S&P 500 index? Or, should I wait until the market recovers its YTD losses. I'm using the S&P 500 as a crude performance benchmark. According to Morningstar, my mix of funds is currently underperforming the S&P 500 by 4% YTD and underperforming the funds' respective category benchmarks by 0.25%.

Currently, YTD, the S&P 500 is down 20%.

I can't quite figure out when to make my move. My fear is that if I move money into REIT, bond, and TIPS funds now, I'll lose out if the equity market makes a healthy recovery later.

Any suggestions?

liquidity, liquidity

Anonymous — Wed, 10 Sep 2008 13:47:38 -0800

Should use my mutual funds to pay off my credit card debt? Credit card debt is about $4K with an APR of 15%. Right now I can afford to pay a max of $300 a month--$200 more comfortably--toward my debt, and there are no bonuses or foreseeable windfalls in my future. I have about $22K in mutual funds: enough to have as an emergency/rainy day fund left over. Mutual funds are doing okay now, but obviously not making more than I'm paying in interest on the card.

Does it make sense to liquidate $4K to pay off the debt, or let it ride and chip away at it over time? Or should maybe I go halves--liquidate $2K now and chip away at the rest over time?

I have never had a head for numbers and can't figure out how to think about this.

Just as an insight into my spending habits: I usually am able to pay off my balance--I just use the card for the miles--but I had some medical expenses that I put on the card that have just accumulated a lot of interest, and I'd like it to go away.

My credit is excellent, so I don't feel a compelling reason to keep this debt around just to improve my score. (I have a student loan that I pay on time every month.) I also have a Roth IRA and 401k, so this is not my only cushion for the future. I am at least 30 years away from retirement.

Any insights appreciated. Thanks.

Safety for a 401K

Freedomboy — Mon, 28 Apr 2008 15:33:49 -0800

Aged 65, still working, have 401K, worried about it, can I move the funds to a self directed IRA money market fund?

Is anyone else having bank problems?

mr. creosote — Fri, 01 Feb 2008 18:41:53 -0800

Has anyone noticed banks here in the U.S. pulling shenanigans today? This may be nothing but I want to ask anyway. One of our friends tried to cash his CD today for several thousand dollars. The bank manager had to call a higher-up to get approval, and they declined to cash the CD saying that because it wasn't paid for in cash, it couldn't be cashed out. Another friend said their bank imposed a cap on wire transfer limits this week.

Tonight, my wife and I were doing our monthly bill paying, the same way we've always done. Up until last month the web interface always allowed us to move money immediately between our accounts. It no longer allows this and is making us wait until the next business day (Monday), thus we're unable to pay our bills out of that account this weekend and understandably we're pissed.

And of course what do I hear on the news but job numbers being way down and Bush finally talking about a recession.

Is this just weird coincidence or have you all noticed any new troubles?

Tracing Offshore Accounts

bettyboop4 — Sun, 27 Jan 2008 08:33:44 -0800

I need help in trying to find hidden assets of my soon to be ex--he has gone to the Caymans, and I had heard that I may be able to trace fund transfers somehow through Homeland Security? Any suggestions of how to proceed?

Help me figure out if there's any way to claim a deceased family member's unclaimed property

mintchip — Sun, 20 Jan 2008 18:22:38 -0800

Help me figure out if there's any way to claim a deceased family member's unclaimed property My father (who was estranged from the family for a while) is deceased.

He had funds in a bank account at the time of his death, which was almost a decade ago. Internet searches revealed the dollar amount for his unclaimed funds. After talking to family members, I was able to get the name and account number at the bank where the funds were. In fact, I have the unused checks from this account.

Problem is, the bank where the funds were held no longer exists...it was bought and absorbed by a larger bank several years ago. Calls to the new bank yielded no information as the account number is no longer valid. I believe I can pursue the matter with the state where my father lived, but I believe I need the death certificate and this is long lost. I don't know how to get a new death certificate issued.

Do any of you have enough knowledge to walk me through the process for tracking down and claiming this unclaimed property? The dollar amount is not huge, but it's large enough that I think it's worth pursuing. Not only that, this is all that I have of my father, and I'd like to think this would be a gift that he'd be giving me all these years later. (I've talked to my other family members. Since they are quite comfortable financially they have said that they are not interested in pursuing this matter and are happy to let me have the money, if I am able to claim it. They have agreed to sign any necessary paperwork, etc.)

Time is of the essence because I believe it's nearing the time limit for unclaimed property.

amazon.com --> amazon.de

freddymetz — Thu, 29 Nov 2007 21:28:33 -0800

amazon.com --> amazon.de transfer gift gertificate balance between sites? is is possible to transfer my funds from the us site to the german site?

Good/bad/indifferent time to buy in to China funds?

stavrosthewonderchicken — Tue, 13 Nov 2007 16:27:11 -0800

Investment timing: what do you think of the timing at the moment for dropping money into China funds, or BRICs? I'm very much on-board and up-to-date on the impending recession (or worse) in America, the ongoing housing collapse, the devaluation of the dollar, and growing credit woes, for what it's worth. I'm also aware of the need to carefully investigate the fee structure of any potential investment. I am fairly risk-adverse, but wanting to diversify and see if I can bring in a little higher average rate of return over the whole portfolio.

The wrinkle here is that the currency I'd be buying in to a fund or funds with would be Korean won. (Let's say, if it's germane, that I'm thinking on the order of the equivalent of tens of thousands of dollars, currently making about 6%, basically zero risk.)

The ones I'm looking at (although I am very much aware that 'past results are no guarantee of future performance') have averaged a 60%-100+% return in the past couple of years. Needless to say, that kind of thing is tempting indeed.

Any hard info, links, or just opinions would be most welcome, as I'm still far from fully-versed in this stuff.

Yet Another Savings Question

sprocket87 — Fri, 09 Nov 2007 10:18:18 -0800

How can I maximize my savings for a trip I'm planning for 2009? The wife and I are potentially going to Africa in late 2009. I've got an HSBC Direct savings account (currently 4.5%), the contents of which I'm allocating toward this trip. There's currently just over $3000 in the account, and I add $75 every week. That'll grow pretty quickly, but I'd like to know what options are available for maximizing my return. Since the trip won't be for another 2 years, I figure I can make those funds relatively illiquid if it means a higher return.

So what options are there? Obviously nothing that would be considered a "risky" investment, as I want to ensure I have a secure savings accrued come 2009. But I'd like to have something that grows even marginally faster than inflation, eh?

Thanks!

401(k) with index funds?

bananafish — Wed, 04 Apr 2007 13:12:05 -0800

Help me find a 401(k) plan or retirement plan managed through a payroll service that offers index funds. Currently, we have a 401(k) plan at work that offers only mutual funds with high fees (100 basis points). We only have four employees. We'd like to switch to a 401(k) provider that offers index funds as an option. The catch is that my boss would like the 401(k) plan to be offered through a competent payroll service (Paychex or similar). He is worried that without having a payroll service involved the contributions will not be transferred immediately and he will incur substantial penalties (he's had problems with this in the past). I understand that ADP does offer an all index fund 401(k) plan, but I've had two friends who have had horrible experiences with ADP (as in one friend didn't get paid for a month), so I'm leery. Has anyone had a good experience with ADP's all index fund 401(k)? Does anyone have good experience with something similar?

Claiming unclaimed property in CA

miriam — Sun, 07 Jan 2007 19:11:23 -0800

Any experience with unclaimed property in California? I have a very specific question. Apologies for the very-specific question; I couldn't find un-shady info on this anywhere, and it's impossible to get in touch with the Bureau of Unclaimed Property.

When I was four, my grandmother purchased stock for me in my name and my mother's name. It was forgotten and turned up in a search on California's unclaimed property database. It's listed under my name and my mother's name. My mother is still living, and agrees that the money should go to me. The problem is claiming it.

The last time I tried to claim the money, I got a letter back six months later informing me that I needed my mother's signature as well as my own. But there's no place on the form for her signature. Should she fill out a separate form? If so, how do we indicate that the money goes to me? If we each fill out a form with our own addresses, will the money be split in half and sent to both of us?

This is what the Bureau's FAQ say:

Can I claim all of the funds in a jointly owned account?
If you file a claim for property that has joint ownership, payment of the claim is based on how the property ownership was originally established.

* If the owners are listed as joint tenants, each owner is entitled to half of the property or both owners may claim all of the property together. If one of the owners is deceased, the other owner is entitled to all of the property.

*If the owners are listed as owner/owner, each owner is entitled to half of the property or both owners may claim all of the property together. If one of the owners is deceased, the other owner is entitled to all of the property.

* If the property is listed as "and/or," we will pay the entire amount of the property to whomever files a claim.

I find this mystifying. How do we file a claim together if there's no space on the form for that and we don't live at the same address?

Gah! Help me, please -- I don't want to wait another six months only to be told that I've done the wrong thing.

How can I accept funds anonymously?

Anonymous — Sat, 07 Oct 2006 15:54:54 -0800

The short version: how can I accept funds anonymously? I've got an idea for a website, and would like to be able to accept funds via PayPal and/or Amazon and/or Google. I don't need to be anonymous from the IRS or government agencies--nothing illegal going on--I just don't need all my personal info splashed around the internet. As long as I'm dreaming, I'm dreaming big. What if this thing takes off? I don't want my kids singled out at school, kidnapped for ransom, etc.

Also, what kinds of precautions do I need to take when setting up the website, other than having Dreamhost keep my whois information private?

Books about the systems behind banking

qslack — Fri, 10 Feb 2006 20:04:06 -0800

Are there books that explain, in great detail, the systems that clear trades (equities and options) on the markets and shuffle funds among banks in the U.S.? This is a personal curiosity. I know how all of these things work, but I am interested in the mechanisms behind them.

Specifically, I'm looking for books (or other resources) that explain in detail what happens in...

Buying a stock -- info about how big brokerages work the spread, and also info about the electronic systems that provide liquidity for smaller trades

Shorting a stock -- what steps does the broker take to find a bank from which to borrow the shares?

Buying/selling options -- how is the exchange of the option contract between buyer and seller handled?

Transferring money -- details about ACH (the article's "ACH process" section is good, but I'd like to read more about what happens on the Fed's side)

In summary, where can I read more about the systems that transfer huge amounts of money among banks and people?

Why do electronic fund transfers take so long?

ubernostrum — Wed, 14 Sep 2005 12:04:30 -0800

I'm a freelance web developer, and I've recently set up a PayPal business-level account to take payment from clients who prefer that method. But I'm growing more and more upset with the fact that it inevitably takes about a week from the day I get the notice of pending payment for the money to actually show up in my PayPal account, and another 4-5 days to get it out and into my bank account. What's the holdup? There are two reasons why the amount of "processing time" makes no sense to me:

First, the transfer is entirely electronic. That means, basically, that it comes down to making some database queries and shuffling some packets. I make my living building systems that make database queries and shuffle packets, so I know it doesn't take that long.

Second, I've Googled a bit, and while nothing directly relevant came up aside from some vague hand-waving about "processing time", the same search brought up plenty of hits about the Check 21 law, all of which say that while it used to take 3-4 days for a check to clear, now they ought to clear pretty much immediately (according to government info on Check 21, "within hours").

The second point there is a bit more important to me, since a couple of bank personnel I've spoken with have replied that "we have to do the paperwork on the transaction". Yet it seems to me that there's not much difference between cashing a check and moving some money online; if one can be cleared immediately, the other should be too. If one takes "3-4 business days" due to alleged paperwork, the other should too.

What's going on here?

Overseas money

Dag Maggot — Mon, 30 May 2005 23:23:11 -0800

What's the best way to get money out of your bank while traveling overseas? I'll be traveling around the world from Australia next month. I don't like traveler's checks much. How about ATM withdrawals? Any good tricks to get cheap transaction fees and good exchange rates? I'll be traveling to the US, Canada, Ireland, Japan and Thailand.

Factchecking my financial advisor on mutual funds

ajr — Thu, 30 Dec 2004 09:40:39 -0800

I am presently working with a financial advisor to select mutual funds for my retirement plan. He has explained the differences between Class A, B, and C funds to me, and also suggested that Class A is probably the best option. Is he correct? [more inside] I don't expect to frequently shift fund selections, but the idea of keeping all of the same selections for five years does not seem right.

Runaround closing my 401k account

cactus — Fri, 24 Dec 2004 16:20:43 -0800

In California, upon leaving a job, an employer has under most circumstances at most 72 hours to pay the leaving employee their final paycheck or the employer gets fined.

Are there any similar laws which require investment/financial institutions to give the investor their funds within a certain amount of time of the request? (MI) I have a 401k with Prudential from an employer I left four years ago. I never rolled the account over to my IRA because the money was doing just fine where it was and I'm sort of lazy about such things. Now I want that money, in cash. (Never mind the penalties - I don't pay taxes so there's not much disincentive to taking the money right now.) I first requested the funds be sent to me in November and I still don't have them and I've spent over half an hour on the phone with Prudential every day since last week. They say they can only give me my funds with a check and that a EFT or transfer is not possible. Since last Friday it's been nothing but stopped checks, checks getting sent to wrong addresses, me being lied to, me being giving invalid UPS tracking numbers, and other shenanigans that have generally dampened my christmas spirit - everything except a check ending up in my hand.... What legal recourse do I have? Bonus points for something bad happening to them, like fines or eternal damnation.

What Is the Most Financially Profitable Way of Investing $5,000?

geoff. — Wed, 03 Mar 2004 18:19:04 -0800

What is the best thing to do with a small amount of money, around $5,000? Savings interest is almost a joke, CDs look attractive or maybe even mutual funds. Preferably the safer the better, as in investing it all in a high-risk mutual fund and losing it would make me cry. I've checked out "Investment FAQ" and it seems as if CDs are the best. I know little about investing but making money doing nothing intrigues me. What would be an expected return on such an investment? Is it even worth locking the money up for something like $10 a month? This is just out of curiosity really. If I was really serious about this I'd be talking to a paid professional. I was just seeing if $5,000 was really enough to invest in or was it more of a "ha ha ha, investing is only for RICH people". All advice given will be seen as for educational purposes only.