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What is Whole Life Insurance?

What is Whole Life Insurance?

Whole Life Insurance provides lifelong death benefit coverage as well as a tax-deferred savings account. A large portion of your premium goes into the general account of the insurance company, and this increases the cash value available to the policy holder at a growth rate dependent on the investment and sales experience of the company. Every dollar and amount of interest which is credited to the policy cash value is vested with the policy-owner and will not decrease. Continue reading...

What is the Russell 1000?

What is the Russell 1000?

The Russell 1000 is considered the optimal benchmark for large cap U.S. stocks. The Russell 1000 comprises over 90% of the total market capitalization of U.S. stocks, and is the go-to benchmark for large cap U.S. stocks. Like the S&P 500, the Russell 1000 is cap-weighted and will give investors a good idea of how the largest U.S. companies are performing. What is the Russell 2000 Index? What Should I Compare the Performance of My Portfolio With? Continue reading...

What is FINRA?

FINRA stands for Financial Industry Regulatory Authority, and they regulate securities firms in the United States. FINRA has no political affiliation and is charged with governing all business dealings conducted between dealers, brokers and all public investors. In other words, the rules that dictate how your financial advisor interacts with you are set forth by FINRA. In all, FINRA oversees more than 4,500 brokerage firms, approximately 160,000 branch offices and more than half a million registered securities representatives, as of 2016. Continue reading...

What are futures contracts?

What are futures contracts?

Futures contracts constitute a binding agreement to trade a commodity, share, or instrument at a future date at an agreed-upon price. They are auctioned on regulated futures exchanges. Futures contracts are used primarily to deal with agricultural assets and natural resources but have come into use for anything that can be commoditized, including financial instruments and technological resources. Continue reading...

What Does Debt Mean?

Debt is money owed from one party or parties to another, plain and simple. Whether it’s money borrowed, loaned, credit, or a good sold for which payment has yet to be received, debt lives on just about every company and government’s balance sheet. Debt has a negative connotation generally, but it is not always a bad thing - in fact, having certain type of debt is good! Especially if the corporation or person borrows money at an attractive interest rate in order to invest in an asset that they expect to generate a higher return. In order to maintain a good credit standing, it is imperative that a borrower make interest payments on time and never default on debt. Continue reading...

What is the Debt-to-Equity Ratio?

Also known as ‘leverage,’ the debt-to-equity ratio indicates the relative proportion of a company’s debt to total shareholder equity. Given that debt is looked at relative to shareholder equity, the debt-to-equity ratio is often given greater consideration than the debt ratio for determining leverage and risk. Similar to debt ratio, a lower debt-to-equity means that a company has less leverage and a stronger equity position. Continue reading...

What does Leverage Mean?

Leverage is the use of borrowed capital or debt to try and increase the potential return of an investment. An individual might leverage an investment account by going on margin to purchase additional securities, whereas the amount of debt used to finance a company’s assets is considered to be that company’s level of leverage. A firm with significantly more debt than equity is considered to be highly leveraged. Continue reading...

What is Adjusted Cost Basis?

Adjusted Cost Basis (ABC) is the value of an item for tax purposes, adjusted for depreciation and expenditures. Sometimes abbreviated ABC, adjusted cost basis is the valuation of an item for tax purposes; that is, if it is to be bought or sold, what gains or losses would be assigned to it? Some business assets are depreciated on a set schedule, such as equipment. For equipment sold or taken as part of an acquisition a few years after it was purchased, the depreciation factor would reduce the value of the item for tax purposes by perhaps as much as 20% per year. If a company spent significant amounts of money improving a facility, the cost basis of the facility would go up by that amount. Continue reading...

What is a Mortgage Equity Withdrawal?

Mortgage Equity Withdrawals (MEWs) may effectively be a withdrawal when viewed in a balance sheet, but they are actually loans that use the equity in a home as the collateral. These are also known as home equity loans. A full liquidation of equity through such a loan is a reverse mortgage. When a homeowner has paid off their home, they have a lot of equity and collateral to work with if they would like to get some liquidity (money) out of a hard asset. Continue reading...

Can My Employer Pay Me In Bitcoin?

Can My Employer Pay Me In Bitcoin?

The IRS has already paved the way for employers to pay wages using bitcoin and other cryptocurrencies, and more services to facilitate this activity are being established. If your employer is willing to facilitate it, you can indeed receive your paycheck, or part of it, in bitcoins. Several financial services companies that deal in bitcoins exist that can help you accomplish this, and there will likely be more of them in the future. One such company, Bitwage, acts as an intermediary between your payroll service and Bitcoin exchanges, such as Coinbase, before sending the balance to your Bitcoin Wallet. The IRS has already established guidance on the subject. As an employer, you are free to pay employees in bitcoin and other “convertible virtual currencies” as long as you adhere to the same withholding and reporting requirements that would pertain to employee remunerations in US dollars, including FICA taxes and the rest of it. Continue reading...