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Is There Any Escape From Student Loans?

It didn’t seem so bad while you were in school – yes, you’d have to pay for it eventually, but here it is, tens of thousands of dollars a year to support not only your Master’s degree in ethnomusicology, but the biggest parties in the conference, and that one week in Cozumel you’ve sworn never to tell anyone about, and now it’s due.

You’ve already got a job lined up after graduation, but it’s not in your field (what is, anyway?), and at $13.60 per hour, with food, shelter, the health insurance penalty, and a couple of cases of beer a week to pay first, that doesn’t leave much for paying off your loans, let alone starting that 401(k) or finally going to London. Even on the income-based plan, you’re still looking at 40 years of your disposable income eaten up to pay for that education, and all of a sudden you regret everything you’ve learned, and start researching more and more drastic ways to get free… here are a few that are recommended around the Internet, some of which work, and some of which really, really, don’t. Read more…

Are Option Quotes All Greek To You?

Once investors move on from basic equity trading, for purposes of seeking alpha, or leverage (investments that move up and down at a faster rate parallel to the market), it’s hard to get very far without making use of options. But where most companies only have one stock, and one price for that stock, dozens of options exist for each share with options available.

Options, in general, give you (hence the name) the option to buy or sell one share of a stock at a named price, whether or not that price is the market value of the security. Like futures, options also have an expiration, or execution, date. However, unlike the commodities futures, where a forgetful investor can suddenly find themselves drowning in a tanker-truck worth of orange juice, all an expiring option does is whatever it says it will do — for example, if you have an option agreement to buy 400 shares of Wal-Mart stock for $73 each at the end of August 2017, and you do not actively exercise it, it goes into expiration. Read more…

When Bad Business Pays Off

According to an article in Friday’s New York Times, Vitaly Borker is back in prison.

Infamous for a previous business venture, DecorMyEyes.com, Borker believes strongly in the tenet that “any press is good press,” which he followed to its logical conclusion, running the business as erratically and counterintuitively as possible to remain in the spotlight.

Read more…

Why the Fiduciary Rule Matters

In the first 100 days of the Trump administration, one of the main directives given to the transition team was to eliminate two regulations for every new government regulation passed. In addition, the administration used a rarely-utilized loophole known as the Congressional Review Act to target every amendment and regulation passed in the closing months of the Obama presidency.  One of the prime targets, the Fiduciary Rule, is a financial regulation intended to provide customers an extra measure of protection when they find a financial advisor, originally scheduled to go into effect in April.

Why was this law so controversial? For one, the financial industry has always preferred self-regulation to government involvement. But the Fiduciary Rule goes far beyond that in terms of customer assurance and transparency. Read more…

Surging Tech Stocks Lead In Market Cap

In one of the strongest signs yet of the long-term effects of the economic recovery, for the first time since 1974, the world’s five largest corporations by market capitalization are both US-based and all in the same sector.

While the last two years have been particularly bullish for tech stocks, the broader-market slowdown combined with continued growth in the internet sector have shifted the focus away from the traditional market titans, energy and heavy industry. This change reflects the shift in the employment market as well, with the smallest share of American labor involved in manufacturing since pre-industrial times. Read more…

Should You Care About The “Hard Fork”?

One month ago, amid even higher than normal volatility, Bitcoin underwent a split known as the “hard fork”. While there were myriad technical reasons for this to happen, the most pressing issue was the Bitcoin network being too slow to process the much higher volume of trades developing as cryptocurrency becomes a viable investment. After a few alternative solutions failed to get enough support to improve this situation, including a “replace-by-fee” method where, in essence, the trades that paid the highest commission would pass through the exchange first, the community gained enough votes to support splitting in two, and launching a second currency. While a financial advisor may compare this to a stock spinoff, what is actually happening is rather different, since unlike a stock spinoff, no value needs to be lost or redistributed from Bitcoin into an alt-coin. Read more…

Medicaid and Your Estate: What Can Be Saved?

While Medicaid pays for 59% of long-term elder care in the US (its largest category of spending by far), when the program was created it was intended as a “payer of last resort” — a form of insurance that takes over for poor seniors or, as is often the case, senior citizens made poor by their long-term care. With the average cost of a nursing home in New York reaching $128,000 per year, twice the cost of college, Medicaid is an inevitable fact of life for even successful retirees with what seemed like perfect estate planning.

Due to its need-based mandate, Medicaid has notoriously stringent criteria for eligibility, including hard limits on income (zero – any incoming payments must go directly to Medicaid), assets (no more than $14,200 in cash or investments), and gifts, both given and received. These rules became stricter after the Deficit Reduction Act of 2006 (which also made bankruptcy a more difficult, painful process) and will likely be tightened again in the next few years through the currently proposed health care reform. Read more…

What Is the Means Test?

If you have been considering filing for bankruptcy, you’ve probably heard about the “means test,” a requirement for filing Chapter 7 Bankruptcy in US courts.

Bankruptcy, by definition, depends on not having enough money to pay off one’s debts, let alone money to save or spend. Therefore it is a function of total net income, disposable income, and discretionary income, such that the total of one’s bills is greater than their disposable income, the amount that they receive in paychecks after tax withholding. If the remaining amount, the discretionary income, is zero or negative then you are, in fact, bankrupt.

The means test, specified by the Bankruptcy Protection Act of 2005, is an added eligibility requirement to file for bankruptcy, introduced by the Bush administration to make it more difficult for higher-income households to declare bankruptcy and have their debts discharged. Previously, the only requirement was to have negative discretionary income, i.e., more bills than earnings, especially when these bills are related to servicing debts such as mortgage and credit cards. Read more…

The New Tax Code And You – Deductions

As most of us know, there have been drastic changes to the income tax system taking effect this year, thanks to the Tax Cuts and Jobs Act, otherwise known as the Republican tax reform.

This is the first in a series of special articles to guide you through the most important changes, and show you where you may be able to maximize your refund or save money on your tax payments this year.

Did you know that the federal tax code is 6600 pages long? Or that there is another 70,000 pages and growing of case law around it, interpreting, expanding and attempting to clarify these rules? And despite being an attempt to simplify tax law, this year’s legislation is likely to lengthen the code even further, rather than making it less, well, taxing. Read more…

The New Tax Code And You – Millennials

As tax time approaches, there are even more questions than usual this year. With the sweeping changes in tax law that passed in December, what used to be deductible might not be anymore, and what used to be taxed might be taxed differently, or not at all, now.

The scariest change for millennials, the removal of the deductions for tuition, student loan interest, and grad student tuition waivers, was removed from the House bill at the last minute, sparing college students from the worst of the tax reform.

But what else does the new tax code have in store, and how will it affect you? Read more…