Finance

Notes and scripts for getting a handle on investing and taxes. All information offered is strictly for educational purposes and should not be used to make your own financial decisions without consulting a professional first.

• Index Funds
• IRS Tax Code
  • 2024

Useful Links

• Tax Caculator
  • https://www.irscalculators.com/tax-calculator
• Highlighted Videos
  • Sean Mullaney
    • Taxes Will Crush This $3M Traditional IRA!!! Or Maybe Not
    • The Tax Hikes are Coming!!! Or Maybe Not
    • Traditional Versus Roth 2023
• Bogleheads
  • Bogleheads Youtube Channel
  • Bogleheads Wiki
    • Prioritizing investments
    • Three-fund portfolio

Concepts

Basis Point

• Used to represent fractional percentages (1/100 of 1 percent)
• Abbreviated at bp (plural: bps) and often pronounced "bip" or "bips"
• 1 basis point equals 0.0001. 100 basis points (0.0100) is equal to 1 percent
• For every 10,000.00 USD a 1 basis point expense equals 1.00 USD

Back-of-Envelope

• Change amounts to exponental notation, e.g.
  • 1,000,000 = 1 x 10^6
  • 100,000 = 1 x 10^5
  • 10,000 = 1 x 10^4
• Use the following negative exponents for percentages:
  • 0.01% = 1 x 10^-4 (1 bp)
  • 1.00% = 1 x 10^-2 (100 bps)
• Multiplying is simply adding the exponents, e.g.:
  • 100,000 x 0.01% = 10^5 * 10^-4 = 10^1 = 10
  • 3,000,000 x 0.15% = (3*10^6) * (15*10^-4) = (3*15)*10^2 = 45 * 100 = 4500