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What are the FinCEN Guidelines Surrounding Cryptocurrency?
FinCEN is an agency of the Treasury Department responsible for preventing financial crimes, and they have taken a few steps toward creative effective regulations for cryptocurrency transactions. FinCEN is the Financial Crimes Enforcement Network, an office of the Treasury Department, primarily concerned with money laundering and other forms of financial fraud domestically and internationally. It is because of FinCEN’s far=reaching authority that major cryptocurrency exchanges who do business with US citizens will generally require identity and bank account verification, and will impose limits on transaction amounts. In 2013, FinCEN issued guidance that anyone engaged in the transmission or exchange of cryptocurrencies may fall under their jurisdiction to regulate Money Service Businesses (MSBs), meaning you may potentially have to register as a Money Transmitter on the Federal and state level if you frequently engage in cryptocurrency transactions. Continue reading...
How Do You Accept Bitcoin Payments for Your Store?
Several services make it easy to accept bitcoin payments, or a programmer can help you set up your own node. The most convenient way to accept bitcoin payments as a merchant is to use the services made available by exchanges like Coinbase and Bitpay, who make it simple enough to add a button to your website and to accept payments in person via NFC and QR codes. These exchanges have established what is called Full Nodes on the blockchain, which are slightly more efficient than using regular client software on the blockchain, and have optimized them for merchant services. Continue reading...
Can I Withdraw Money From My Defined Benefit Plan?
Most pensions will not allow in-service withdrawals but some will allow loans. While you are working for your employer, you typically may not withdraw money from your Defined Benefit Plan. The IRS permits plan loans if the plan administrator permits it. In-service withdrawals are possible after age 62, meaning money can get taken out before separation from service. If you leave your employer before retirement, the funds are usually kept in a Trust until you reach retirement age (or until a specified age at which you can start to receive the benefits). Continue reading...
Who is an Account Manager?
Account managers are the point of contact and liaison between a business and its clients. An account manager is assigned to specific accounts to maintain the customer relationship, provide service, and to ensure that the customer remains client. It is easier and more cost-effective to preserve a long-term relationship with a client and to get their repeat business than to find new clients. This is especially true when the client is a business entity and their business constitutes a significant portion of overall Revenue. Continue reading...
What is Revenue?
Revenue is a word describing any cash flowing into a business as a result of goods and services rendered. It is sometimes call gross income, and is a representation of income before all expenses. It is notable, though, that revenue only includes receivables in the current period. The Accounts Receivable on the company’ s books may include the entire cost of the goods or services rendered during that period, but the Revenue should generally only reflect the amount that is paid to the company in the current year. Continue reading...
What is Accommodative Monetary Policy?
Accommodative monetary policy is when a central bank makes it easier for banks and consumers to borrow money by lowering the interbank exchange rate. A central bank, such as the Federal Reserve Bank in the United States, can influence the economy by loosening or tightening the money supply. Loosening the money supply is known as accommodative policy, because it give the businesses and individuals in the country access to a higher degree of liquidity. Continue reading...
What if I Need the Money in My 401(k) Before I Retire?
Withdrawals and loans can be taken out of a 401(k) before retirement, but the money may be subject to penalties, conditions, and taxes. It is quite common that 401(k) funds are needed before retirement, even though the IRS wants you to wait until you’re 59 ½, and will generally want to levy a 10% penalty on any premature withdrawals. Most plans allow employees to take non-taxed loans out on their balance, which may stunt the growth of the account which was intended for retirement, but if the funds are paid back on-schedule, as stipulated in the plan’s loan agreement, the employee can get back on track quickly. Continue reading...
What does “Buy-Side” Mean?
The “buy side” refers to businesses in the financial services industry such as pensions, mutual funds, and asset managers that manage money. Since firms on this “side” of Wall Street tend to be the ones buying and selling securities for their portfolios, when a person works for one of these funds or companies they are said to be on the “buy side.” Research analysts that provide analysis and data to fund managers solely for the purpose of making investment decisions within the portfolio are “buy side analysts.” That research is typically not published for public use. Continue reading...
What is market saturation?
Market Saturation is the point at which there are few consumers that are still interested in buying a product because those who were ever likely to already have done so. Saturation can be said to exist for all similar products in a market. This may call for different strategies which could keep a company going. One is that products can be made to wear out after a certain amount of time and need replacement. Another is that the business can shift its focus to subscription or service-based income. Continue reading...
What is the Lehman Aggregate Bond Index?
The Lehman Aggregate Bond Index is a broad bond index, widely considered the best total bond market index to track performance across various types of bonds. The index includes government bonds, mortgage backed securities, corporate bonds, and asset backed securities with maturities greater than a year. It is used by many money managers as a measuring stick for tracking the relative performance of a managed bond portfolio. Continue reading...
What is the Federal Unemployment Tax Act (FUTA)?
The Federal Unemployment Tax Act was passed in 1939, and it set up trust funds for the purpose of providing unemployment insurance. Businesses, not individuals, are taxed to provide funds for the program. There are 53 state funds (including D.C., Puerto Rico, and the Virgin Islands), 4 federal accounts, and 2 associated with railroad retirement. The Federal Unemployment Tax helps states fund their own unemployment programs. Continue reading...
What is an Account Executive?
An account executive is an individual who has executive responsibility of the maintenance of client account. In certain businesses, some client accounts have a high degree of importance and priority with regards to sales and operations, perhaps because they generate significant revenue for the company. Examples of such businesses might be advertising, office products, and investment services. The title of account executive is especially fitting if there is a staff which supports the lead account executive in maintenance of the client relationship and account service, but a staff is not required to hold this title. In other businesses this position might be called an account manager. Continue reading...
What is a Form 2106: Employee Business Expense?
IRS Link to Form — Found Here Form 2106 is the long-form way to request deductions for unreimbursed business expenses incurred by an employee in the course of work. This can include professional affiliation dues, continuing education, insurances, vehicle mileage and depreciation, and other possible deductions. Often, employees are not reimbursed for every out-of-pocket expense they incur in the course of their work. This might include wear and tear on a vehicle, professional dues, travel expenses, business meals, and many more items. For any amount to go towards a tax deduction, the itemized unreimbursed expenses must be over 2% of adjusted gross income. Continue reading...
What is Cash Flow After Taxes?
Cash flow after taxes (CFAT) is nearly the same thing as EBITDA, but with taxes left in. One way to arrive at Cash Flow After Taxes is to take the net income of the business and add in interest, amortization, depreciation and other non-cash expenses. This is one item away from the formula for EBITDA, which also adds tax back in to arrive at the Earnings Before Interest, Taxes, Depreciation and Amortization. Continue reading...
What is Burn Rate?
Burn rate is a term for negative cash flow, or the rate at which a company burns through capital, especially a startup company. Burn rate is used frequently in the world of startups and venture capital. Using a burn rate, investors can see how much longer operations can be sustained with the capital at hand, and this length of time is called a runway. Startups will normally need at least a few months before they start generating enough revenue to have a positive cash flow. Burn rate is normally expressed as the monthly negative cash flow. Continue reading...
What is a Money Market?
Money markets are very short duration debt securities, essentially the equivalent of cash traded between banks and offered to investors at a very nominal interest rate. Money market securities are essentially IOUs issued by governments, financial institutions and large corporations, and they’re traded between each other in very high denominations. Retail investors can gain access to money markets via money market funds, which generally pay very low interest rates. Continue reading...
What is the difference between active and passive money management?
The debate on whether active or passive management is better for investors has polarized many advisors and theorists for years. There are two schools of thought when it comes to long-term investing. One basically states that you should determine a proper allocation of asset classes for yourself, buy index funds to reflect each particular asset class, and possibly rebalance the portfolio periodically. This basically means “set it and forget it,” and the investor must be willing to ignore fluctuations in the markets and maintain a faith in an Efficient Market. Continue reading...
What are Accounting Methods?
Accounting Methods are the overarching style of accounting and bookkeeping which determine the practices, procedures, systems, and controls which should be put in place. There are two main methods of accounting that businesses and individuals can use to approach their accounting, and these are known as cash basis and accrual basis. The IRS expects businesses to choose early one which method they will use, and it can be difficult to change accounting styles later on. Continue reading...
What is asset management?
Asset management is a term often reserved for the overseeing of assets on behalf of a business or for wealthy clients with significant and various assets. A financial planner, CPA, or estate attorney who is capable of assisting a client with various types of assets and their optimal arrangement for that client’s goals can be said to be in a business of asset management. Tax considerations and cash flows may be a larger consideration with asset management than with investment advising. Continue reading...
What is a Federal Credit Union?
Federal Credit Unions are essentially banks that are owned by their clients instead of publicly traded or what-have-you. Instead of being part of the FDIC, they have the National Credit Union Association (NCUA). They tend to be able to offer higher interest rates on savings and lower interest rates on loans than banks can, due to their mutual-ownership structure. Credit Unions operate as non-for-profit businesses, which can allow their management to use 457 retirement plans, but they are not associated with the Federal government. They do, however, charter under federal regulations, as opposed to state banks. Continue reading...