What is a straddle?
Straddles are options strategies that use both a call and put on the same underlying asset at the same strike price and expiration. The Straddle strategy involves either buying a call and a put with the same strike price and expiration, or selling a call and a put with the same strike price and expiration. The former is known as a Long Straddle, and the latter is known as a Short Straddle. Long straddles profit from significant price movement in either direction on the underlying asset. Continue reading...
How Does My Retirement Age Impact My Social Security Benefits?
Social Security benefits are calculated using the Normal Retirement Age (NRA), which is 67 for people born after 1960. If you take benefits early, your payment will be reduced by as much as 30% if taken at age 62. After NRA, your benefit will be increased by 8% for every year you defer benefits. You cannot defer taking Social Security past age 70. As a rule of thumb, the closer to age 70 you retire, the higher your Social Security benefits will be. Of course, there are some specific guidelines. Everyone has an NRA (Normal Retirement Age), which determines the age at which you can receive your full Social Security benefits. Continue reading...
What is the Best Age to Start Receiving Social Security Benefits?
Generally speaking, the closer you are to age 70, the better. But everyone will need to take all of their options into account and use some planning tools or the assistance of a professional planner to arrive at an ideal cash flow scenario for retirement. All assets should be brought into consideration, as well as the possible social security benefits of both spouses and their spousal benefits. There is no one “best age” to start receiving the Social Security benefits. Everyone has a Normal Retirement Age (NRA), which determines the age at which you can receive your “full” Social Security benefits, but you can defer your benefits past this point to receive an 8% increase for every additional year you deferred your benefit. Note that benefits cannot be deferred past age 70. Continue reading...
What is a Monte Carlo Simulation?
Monte Carlo Simulations can help investors project future values and the impact to portfolios from market movements and cash flows. A Monte Carlo Simulation outlines the many possible outcomes of a situation with random variables, as well as the probability that any particular outcome will occur. It is used in a wide variety of professional fields from finance to engineering and even astrology. The technique has many applications in finance and is commonly used to help predict the future value of an asset when there are multiple variables involved. Continue reading...
What is a Home, Legally-Speaking?
The laws concerning a legal residence or primary residence may come into play for purposes of insurance, state taxes, and business matters. Some people have secondary residences, some people choose to remain legal residents of one state while they inhabit another. It can be quite complicated and various statutes may apply, depending on the situation. It can matter for a mortgage loan, for local voting, for healthcare and for business: what is a home? Continue reading...
What is a Home Inspection?
A home inspection is performed by a certified home inspector to determine the condition of a property and to find out if there any safety of compliance issues that the home or property may have. Home inspectors are typically hired by real estate professionals and homebuyers when a home is on the market. It is not required except for FHA loan termite inspection requirements, but it is always advisable for a potential home buyer. A home inspection is not to be confused with a home appraisal. Continue reading...
What is an Operating Expense?
Operating expenses are the costs a company incurs as a part of everyday business operations. The goal of most every management team is to figure out how a company can minimize operating expenses while maximizing production and profitability. Operating expenses can involve buying inventory, the cost of running machines, rent, payroll, and so on. What it costs a company to undergo normal business operations and output. It is sometimes referred to as OPEX. Continue reading...
What is an Accounting Convention?
An accounting convention is an established an agreed-upon method of documenting specific items on a company’s books. The most widely-used accounting conventions are part of the Generally Accepted Accounting Principals (GAAP), which is the only accounting methodology accepted for quarterly 10-Q filings with the SEC in the United States, and has also become the basis for regulatory accounting practices in other countries. Continue reading...
Can I settle my debts for less than I owe?
It is possible to get a settlement arrangement that allows you to settle your debts for less than you owe, but there are consequences. An individual can personally seek a settlement with the credit card company or other creditor that they may owe, or they can enlist the help of a debt settlement company. People should only seek to settle when they have no other option, because their credit score will be badly damaged for many years. 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...