Who Pays for Medicare?
Taxes pay for the entirety of Medicare part A. For the optional or supplemental policies which fall under the Medicare moniker, a regular premium may be due, but it’s still better than what premiums would look like if there were no Medicare. The Social Security Administration (website—here), which is funded by taxes deducted from your paycheck under FICA, or as part of the “self-employment tax,” administers both Social Security and Medicare. Continue reading...
How is a Will Implemented After my Death?
After a person’s death, their will is typically reviewed by probate court which will enforce the terms of the will and ensure the assets are distributed according to the wishes of the deceased. Any disputes or contest to the distribution of assets will likely be heard by probate court, and can be costly if dragged out over long stretches of time. What is the Difference Between a Will and a Trust? Do I Need a Will? Continue reading...
Do I Have to Pay Taxes on My Bitcoins?
The IRS currently requires that bitcoin and other cryptocurrencies be reported as personal property and capital assets. The IRS has published guidance that, yes, you do have to report gains/losses/income in the form of bitcoin and other “convertible virtual currencies.” Generally, the IRS treats bitcoin as property, instructing taxpayers to follow the existing IRS guidelines for personal property taxation. You can claim them as a capital asset, allowing you to treat them as stocks, essentially, with the ability to only pay long-term capital gains taxes on them if you hold them for a while. You can get paid in bitcoin by your employer, but employers must still withhold the usual amount of taxes, and you must report your bitcoin income the same way you would your regular income. Continue reading...
What is an Asset-Backed Security?
Asset-backed securities are bonds or notes that come in several forms, but they typically use the cash flows from debt repayment as the asset that backs them. The assets that back the bonds called asset-backed securities (ABS) can be basically anything with a fairly predictable cash flow, but debt repayment cash flows tend to be used the most. These include credit card debt, home equity loans, auto loans, student loans, and so forth. Continue reading...
What is Bond Yield?
Bond yield is a measure of the return on investment for bonds, and there several kinds of yield that can be computed. Yield on a bond is the amount of interest that it pays annually, as a percentage of the amount invested — at least, this is the most common type of yield discussed, which is known as Current Yield. If a bond pays quarterly or monthly income to the investor, these payments are totaled up and divided by the amount invested. Continue reading...
What is Retained Earnings?
A company may reinvest earnings instead of paying out dividends. These earnings do not necessarily sit in a retained earnings account, but are used to improve the business and make it more profitable. This could even include paying off debt. Retained earnings is found in the Shareholder’s Equity portion of a company’s balance sheet. Despite the fact that earnings have not been dispensed to them in the form of dividends or share buybacks, shareholders will see the value of their stock appreciate when earnings are retained and used to grow the business. Continue reading...
What is a commodity etf?
Commodity ETFs are focused on tracking the performance of commodity prices and their derivatives contracts. ETFs are like mutual funds that trade intra-day like stocks, but the volatility of commodities prices can make these equally unpredictable. Commodity ETFs are intended to track the performance and price movements of commodities and their derivatives. All sorts of commodities can and have become part of an ETF offering, from gold to grain, cattle, and coffee, and even US and foreign currencies. Each commodity has its peculiarities and it would be good to know about the market for each commodity that you intend to invest in. Continue reading...
What are SPDRs?
SPDRs (Spiders) are index ETF shares that track the S&P 500, or could refer to other similar ETFs tracking other indices. The SPDR is the longest standing ETF (exchange traded fund), and has existed since 1993. Unlike index mutual funds that track the S&P, ETFs can trade intraday, can be sold short, and bought on margin. There are other SPDR ETFs that are spin-offs, and using “SPDRs” in the plural might refer to these as well. SPDRs are managed by State Street Global Advisors, and the S&P 500 SPDR is listed on the NYSE under the ticker symbol SPY. Continue reading...
What is a Stop Limit Order?
A Stop-Limit Order basically automates the preferences of an investor or trader, to reduce exposure to price uncertainty even after a trade ticket is entered, by stipulating a price at which the search for a bid/ask price is to begin, but limiting the range of prices at which an order can actually be entered or executed. A Stop-Limit Order has two parts: the Stop Price and the Limit Price. The stop price is like an amendment or contract rider on a security that is held which stipulates that if the price of the security crosses the Stop price, the search for an agreeable price begins. Continue reading...
How Many Dollars do We Have in Circulation?
According to the Federal Reserve, there are over 1.7 trillion U.S. Dollars in circulation. This number has been drastically increasing throughout the last few years, mostly due to programs such as Quantitative Easing. As of 2016, QE programs have ended and the Fed's balance sheet is shrinking, but M2 money supply still remains at elevated levels. What is the Size of our National Debt? What is Currency in Circulation? Continue reading...