Thanks for the discussion. I've been doing research for the past couple weeks, but haven't really come up with a definitive solution.

My parents aren't in the loop about this anymore. They just gave us a check for the money with the restriction that it's used to split between our children. The money is currently sitting in a joint savings account that I have with my wife.

A co-worker just went through this with one of his kids. They used the UGMA and transferred the money over to his son as he started college recently. That's what gave me the idea of the UGMA account.

The idea of avoiding the 529 is not whether my child(ren) is college material, but that they may not want to go to college. My concern is just to find the best solution to keep options open while growing the money.

Real estate newb here:

I've saved up enough money to make a decent (20%+) downpayment on a condo in downtown Toronto. Is it silly to consider buying real estate right now? I've heard conflicting reports that the housing market in this area has either cooled vs. that its more inflated than its ever been. My other option is to continue renting for the time being and and see how things shake out. (I am seeing this is a long term investment to live in vs something I'm looking to flip - if that helps)

Need some advice from some smart 2+2ers here before I make this important life decision

Question about financial statements, specifically the borrowings sheet. A foreign stock I"m looking at (Turkcell) has a ton of high interest debt. It seems outrageous considering they're a fundamentally sound company. Typically companies like this have low interest debt, I thought. Some of the debt is above 20%. And it's in foreign currence while the Turkish lira is dropping considerably, which will basically double the debt, I think.

Here's the link to the report, and page 35 has what I'm talking about, if anyone wants to look. My question is how bad is this, basically, and is it not as bad as I think? I want to like this company since it seems cheap right now.

https://s2.turkcell.com.tr/hakkimizd...ort-Q22018.PDF

not a real estate guy but I think it is a bad mindset to judge whether to buy a home on an attempt to time the market

also you probably dont really need to put 20% down if that matters

My bank trolled me essentially, is filing a complaint/threatening them to fix the situation or ill move to another bank +EV or -EV?

I agree with most of this. The first house I bought was done in part because I, and others I trusted, thought it would be a good investment. It ended up being a good investment (for a piece of real estate), but it wasn’t really what I wanted in a home.

When buying or selling a home I’ll never think of it as an investment again.

Need more details...

What exactly are the details of the "trolling"?
Who are you going to file a complaint with, federal reserve? bank support web chat?
EV analysis - what benefits would you be sacrificing and are they available elsewhere?
Your play is also prob dependent on the size of the bank- WF/BoA vs. local credit union would be entirely different imo

The details you've provided makes me feel like the answer is- complain/threaten if you want to waste some time, only to be "+EV" if you expect you'll get some entertainment/amusement out of the interaction...

Related- I recently got picked up by a WF twitter support bot(didn't @ them, just mentioned bank name) after bemusedly opining about local branch's try-hard in cultivating a main street feel when they turn over tellers in this college town like it's a whorehouse.

Bot was almost combative, claiming it was a human while signing off with different initials on every tweet. Begging me for the branch address so they could help me resolve my situation. I ended the convo by explaining that their poor high turnover staff gets punished enough with their corporate policies and I didn't want to throw them further under the bus.

Just a follow up here. The CEO has changed the deal so that I will be given a smaller percentage of both the Holding Company (HC) and the Operating Company (OC). This will be simpler to value and simpler going forward if anything changes with the structure of the business.

The HC doesn't have any equity though looking at their balance sheet. They owe lots on the aircraft, and the business owes a few hundred grand to the CEO. In reality the aircraft won't have depreciated as much as they have on paper, so maybe there is 100k worth of equity there. Cash flows are basically break-even for the Holding Company. They are paying 7% on the aircraft if that is relevant.

The OC cash flow is alright but overheads (wages mostly) keep going way up. Under normal operation cash flow would be 50k-200k (it was 120k in last 12 months, less in prior periods).

The local industry has recently been shafted by a regulator, adding a lot of additional costs and giving the power to a competitor to put us out of business. This will involve an expensive legal fight which will be a pain in the ass, and even if it is successful there is no guarantee that the business will be trading after 2021 when concessions are renewed.

A couple questions:
-If the Holding Company has 2MM in assets but no equity, zero cash flow, is it it worth anything? It gets enough income to pay for financing, maintenance and build equity in the aircraft.
-How to discount the future cash flows of a business that has huge risk of folding shop?
-Is there much chance this business is worth more than zero?

Could you explain how dividends are tax inefficient? I figure if you hold the stock long enough, you will get taxed at long term capital gains.

Barrin6,

In many countries (this is not expert advice for you) dividends are taxed as income in the year they are received. This tax rate is typically much higher than the tax rate that applies to capital gains.

In my case, I would have to pay 20% tax on dividend income, but 0% tax on capital gains. Thus, I'd rather not receive dividends.

Dividends get taxed in the year they're paid, whereas gains via price appreciation only get taxed if/when you end up selling, potentially many years down the road. This allows you to defer the capital gains tax indefinitely - or avoid it completely via cost basis step-up when you die or if you donate the shares to charity.

It is still worth what you could sell your stake for in the open market, so $0.00.

Are there irrevocable bylaws that state that all positive cash flow is paid out as dividends annually? If not, I'd put about a 100% discount on the value of a business that will likely cease to be.

I was looking at IB's interest rates, and I got to thinking... isn't it +EV to hold Swiss Francs (CHF) up to the 100k limit where they start charging a negative interest rate (-1.238%)? Currency futures seem to imply the Franc is expected to be worth ~1.0453 USD by next September, if I'm reading it correctly, which means an expected annual USD return of ~3.9%. 1 year CDs and treasuries are only yielding 2.7%, so this seems like a good risk arbitrage. What am I missing?

More risk that treasuries.

"expected"

1 6F contract represents 125k CHF, so you will have to pay some interest. And I don't know how liquid 6F is that far in the future, so I don't buy that 1.04 number.

What does everyone think of precious metals?

I know it not a super sexy investment but i just think it fun it is neat holding an ounce of gold in my hands.

I'm not putting alot into them atm and whatever I do I won't need to touch for several years but I think a nice goal is 500 oz of silver and 5 oz of gold...while silver so cheap.

Yeah, this is reasonable, if it's worth your time. Hold 100k CHF and sell 1 CHF future contract. You don't have to sell the Sep19 contract, you can sell the front month and roll it over as it expires. You'd have to open a second account that held 25k CHF to balance out the exposure. And I'm not sure how easy IB makes it to actually buy foreign currency as opposed to trading futures.

All in all $1200 additional profit vs. just buying a CD, minus transaction costs.

The only reason to buy physical is if you enjoy holding it in your hands. Buying an ETF is much more liquid and safer from burglary.

This actually the complete opposite of how I think you should think about it.

The only reason to buy the ETF is if its a trade. If its a long term investment I think you should be buying physical.

A large part of the argument behind the bullish case for PMs is rehypothecation. If those schenanigans blow up good luck getting your gold with a paper claim on the ETF.

Also, if it is a currency hedge and the USD / world currencies do have a minsky moment...good luck getting your gold with a paper claim on a paper claim.

So basically, while there is good logic behind what you are saying (I see it), I think you are dead wrong...

In other words, if your reason to own gold is that you want to have it in case it ever becomes illegal, hold physical. Otherwise hold the etf.

Yeah, what a freakin nasty scenario...gold bugs get it handed to them during the status quo. SHTF and their gold becomes really valuable. The government then takes it away and gives the gold bug currency as compensation...exactly what they didn't want. LOL.

Man, that would make a pessimist out of the best.

Sorry, yes, the other reason to buy physical gold is to fantasize about how the world will end but you'll be rich and everyone will know how smart you were to see it coming.

except you wont be able to sell/trade the gold or tell anyone unless you're also fantasizing about getting shot