How Can I Use the Money From My 529 Plan?
You can technically use it however you see fit if you are willing to pay the 10% IRS penalty. Money from 529 Plans can be used for tuition, books, supplies, room and board and, as of recently, computers and electronic necessities. Always check if you’re not sure that an expense is covered by the 529 plan. Money used for anything other than the specified costs will be subject to federal income taxes and a 10% penalty on the earnings. You can also transfer the account to another beneficiary or yourself if you or someone else will need the money for college one day, without incurring any penalties or taxes. Continue reading...
What is a Home Equity Conversion Mortgage?
The main type of reverse mortgage that people get today is the Home Equity Conversion Mortgage, backed by the US Department of Housing and Urban Development (HUD) and the Federal Housing Administration (FHA). These reverse mortgages are available to people age 62 or older who are interested in leveraging their home equity to gain liquidity, either in the form of a lump sum, monthly payments, or other arrangement. A Home Equity Conversion Mortgage (HECM) is a reverse mortgage available to homeowners age 62 or older, insured by the Federal Housing Administration (FHA). Continue reading...
What is Investment Analysis?
Investment analysis is the practice of evaluating assets or securities in terms of value, risk and return, as well as correlation with other assets. It is to determine their possible place within various strategies and portfolios. Some analysis will be done seeking the best option for specific asset classes, some analysis will focus on the best overall portfolio for a given situation. Analysis is done using quantitative metrics and indicators, some of which can be considered fundamental analysis tools and some of which are technical analysis tools. Continue reading...
What is the XRP Escrow Lock-Up?
Ripple does not have a mining rewards system like Bitcoin for releasing new coins into the market, so they’ve enacted a plan to put 55 billion XRP into escrow accounts. Prior to 2017, Ripple did not offer any guarantees to coin-holders concerning the rate at which Ripple would release XRP coins into the wild, and this made investors nervous. At any moment, Ripple theoretically could have dumped the approximately 60 billion remaining XRP into the market and washed out any value that the investors... Continue reading...
What is Depreciation?
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. Continue reading...
What is the FTSE 100?
The FTSE 100 Index - also known as the Financial Times Stock Exchange or the “Footsie” - tracks the performance of the largest 100 stocks by market capitalization traded on the London Stock Exchange. Since many of these companies are multinationals, however, the FTSE 100 does not provide the best gauge for how the UK economy is performing. The FTSE 225 is a better barometer for the UK. The FTSE 100, however, much like the S&P 500 provides a good general gauge for how stocks are performing globally. Continue reading...
What is the Technology Sector?
The Technology sector consists of companies involved in the research, development, and sale of technology products. It is perhaps the most relevant and exciting growth sector in today’s world, with new technologies being developed and tested on nearly a daily basis. Technology is a cyclical sector, and one where leadership changes hands often. Companies can be in the business of developing hardware, software, web-based applications, and so much more. Continue reading...
What is the Hang Seng Index?
The Hang Seng Index (HSI) is comprised of the 50 biggest stocks traded on the Hong Kong Stock Exchange. The Hong Kong stock market is much different than that of China, in that foreign investors are allowed access and the index is calculated on a free floating cap-weighted basis. It tracks the 50 biggest companies on the Hong Kong Stock Exchange, and is a better barometer for measuring overall performance of companies from the region. Continue reading...
What are credit derivatives?
Stemming from the hedging strategy of Credit Default Swaps, an entire speculative derivatives market continues to grow, in which tranches of credit risk and indices are traded. With the ballooning of consumer credit in recent years, it is only natural that a credit derivatives market would follow it. In essence, the risk associated with a loan or bond is separated from the actual asset and is passed on to a counter-party for a premium, and then other market participants become involved, perhaps in the form of futures contracts or other derivatives. Continue reading...
What are REITs?
REITs are pooled investments similar to mutual funds, but, like mutual funds, they can take many shapes. They invest in different kinds of real estate and real estate-oriented assets, depending on the REIT, and sell ownership shares to investors. REIT is an acronym for Real Estate Investment Trust. REITs are similar to mutual funds, except that they only invest in real estate properties and related companies and assets such as mortgages. REITs will define the scope of their investments and strategies in their prospectus, which may read something like “We invest only in commercial Real Estate” or “Only in residential houses in Las Vegas” while other REITs are very general. Continue reading...