The general securities licensing test required by FINRA is the Series 7 examination. Member firms who are part of the solicitation of securities which are not managed by other parties. If a representative only solicits securities such as mutual funds and variable annuities which are managed elsewhere, a Series 6 and Series 63 combined would fulfill the licensing requirements in that situation. The Series 7 licenses a representative or broker to solicit the sale of individual securities, such as stocks and bonds, as well as options, derivatives, and private placement. The only securities that a Series 7 does not license an individual to solicit are commodities futures, which require a Series 3.
Start basic, and just open a savings account at a bank or create a brokerage account at a major custodian (Charles Schwab, Fidelity, for example). As a rule of thumb, you should have six months’ worth of living expenses in this account. Another good rule of thumb is to avoid touching this money at all costs, and never invest this money in risky assets like stocks. It’s better to keep the money as liquid as possible, so even buying Certificates of Deposit (CDs) may not be the best idea. The purpose of this money is not to make you rich – this is your safety net.
Amortization is like giving a life span to a financial obligation, over a set number of years, and gradually killing-off the obligation with set payments. Amortization is the calculation of a fixed payment schedule over a set number of years to allow the repayment of a loan, such as a home mortgage. From an accounting standpoint, it can refer to the practice of spreading-out the cost of any intangible asset over time. For example, the IRS will allow a taxpayer to amortize the premium of a bond for deductions.
Depreciation is the accounting practice of recording the decreasing value of a fixed asset, such as a building or piece of equipment, over time, or, effectively, spreading the tax deduction for the cost of the asset over time. The IRS has created set schedules which describe the number of years over which a business can amortize the cost of a business asset for the purpose of tax deductions. The number of years is different for each type of asset or equipment.
Minority interest is a portion of a company’s stock that is not owned by the parent company, and refers to a type of ownership that generally cannot exert influence over a company’s business decisions. If an outside investor or another company has a less than 50% stake in a company via shares, then they are said to have a minority interest. From an accounting standpoint, only the dividends of a minority interest are counted on a company’s books. If they exert influence over the decision-making, then a percentage of the income may also need to be included.
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