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What are the Withdrawal Rules for My SEP IRA?

SEP IRAs are subject to the same withdrawal rules as Traditional IRAs. SEP IRA contributions and earnings may be withdrawn at any time, but there are penalties that may apply, using the same rules as those applied to Traditional IRA withdrawals. If you are under the age of 59½, you must pay a 10% penalty fee in addition to income taxes on your withdrawal. Of course, there are certain exceptions to the penalties: first time home-buyers expenses up to $10,000, medical bills, educational expenses, and a few others. Continue reading...

What is a Self-Employed 401(k)?

What is a Self-Employed 401(k)?

Self-Employed 401(k)s are one of the best ways for self-employed people to save for retirement. Self-Employed 401(k)s function in exactly the same way traditional 401(k)s do, except for a few tweaks. First of all, Self-Employed 401(k)s can only be opened by a business owner or partnership with no employees, although your spouse may also contribute to the Self-Employed 401(k) if he or she works for the business. Continue reading...

What are My Self-Employed 401(k) Investment Options?

As with other retirement plans, this will mostly depend on the options available to you through your custodian. Solo 401(k)s will have an array of asset exposure available to you, but it may come only in the form of mutual funds. This is not unlike many larger 401(k)s. The way these plans are bundled as simple and straightforward products, without so many bells and whistles that they will attract the attention of the IRS, may cause them to be slightly more plain vanilla than the options available in some 401(k)s. Continue reading...

What does price to tangible book value (PTBV) mean?

What does price to tangible book value (PTBV) mean?

Price to Tangible Book Value serves as a conservative estimation of the value inherent in a share, without Goodwill and other intangibles (opposite of tangibles) factored in. Price to Tangible Book Value (PTBV) is a ratio of the share price over the Tangible Book Value of a company and helps investors see what inherent value is present on a company's books. The Tangible Value does not include goodwill, patents, and other intangible values. Continue reading...

What is Duration?

Duration refers to the amount of time before a fixed income product will return the investment (principal and interest) to the investor. The bigger the duration number, the greater the interest-rate risk or reward for bond prices. For example, an investor should generally expect to receive better interest from a 30-year duration bond versus a 10-year, since the investor has to hold the note for longer to receive all interest payments and principal. 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 a Basis Point?

When percentages being used to describe a security are very small, basis points are often used to describe the numbers. A Basis Point (bp) is 1/100th of a percent, so 1% = 100 bps. This metric is used when discussing financial instruments for which very small changes in percentages can make a difference. For example, rates on single premium immediate annuities change weekly, and generally only by a few basis points. These small changes can make a difference competitively week-to-week, because a few basis points can translate to thousands of dollars of income over time. Other places where basis points are used include: advisory and management fees, moves in indexes and securities, bonds, and so on. Continue reading...

What is an ABA Routing Transit Number?

What is an ABA Routing Transit Number?

Most people recognize this as a “routing number.” The American Bankers Association (ABA) assigns a number to each banking institution registered with them, for the purposes of electronic transfers; this is commonly known as a routing number, and officially an RTN, or Routing Transit Number. Consumers and bank clients are familiar with this number as the 9-digit number that appears beside their account number on the bottom of their personal checks. Every client with a particular bank will have have the same routing number on their checks. Continue reading...

What is Bond Yield?

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 a Bill of Sale?

A Bill of Sale is essentially a trumped-up receipt, unless you are in England. A Bill of Sale is a document affirming that the rights of ownership of an asset have been transferred from one party to another, in exchange for “full consideration,” which is another word for compensation or payment. A receipt from a retail transaction can be considered a Bill of Sale, but a full-fledged bill of sale should accompany large transactions like car sales and so on. The British definition of Bill of Sale, however, is somewhat different. Continue reading...