A credit line can come in various forms, including a credit card, home equity line of credit (HELOC), or small business credit line. Alternate name: Line of credit (LOC) How Does a Credit Line Work? A line of credit is different from a traditional loan. With the latter, you apply for a sum of money and pay it back in installments within that set time frame. You can’t continually take out new money against the same loan....
Keep reading to learn about how you can add debt funds to your brokerage account, and why an investor might choose to do so. Definition and Examples of a Debt Fund Debt funds are similar investment products to any other fund, such as an S&P 500 ETF or a Fidelity mutual fund. Investors pool together funds, and the fund manager uses those funds to buy and sell investments held within the fund....
Strauss/Curtis / Getty Images Most glide path formulas reduce exposure to stocks as the targeted age or year approaches. There is no exact formula for your age or time until retirement, but knowing the basic ways you can use glide path formulas will help you plan your strategy. For instance, you could use a glide path formula for the date when you expect to retire. You would use the declining version of the glide path to use your current age and date of retirement to determine the allocation of stocks vs....
Premiums may be paid by you or your family members. If your company offers health insurance, your employer may also cover part or all of your premiums by deducting the amount from your salary or benefits package. How much you have to pay depends on the type of plan you have, the number of family members covered, and the insurance company you’re dealing with. Insurers may consider your age, location, and tobacco use in setting premiums as well (but not your gender or medical history)....
Here’s a closer look at how a pay-yourself-first budget works so you can decide if it’s the best method for you. Definition and Examples of a Pay-Yourself-First Budget A pay-yourself-first budget is a reverse budgeting strategy where you save a chunk of your income first—essentially treating your savings like a bill—then use the rest of your money to cover expenses and spend however you see fit. Alternate name: Reverse budget...
Learn what a portfolio line of credit is, its risks and benefits, and how it compares to other credit lines. Portfolio Line of Credit Definition and Examples A portfolio line of credit, also known as “securities-backed lending,” involves using securities as collateral for loans to investors. Lenders establish criteria for acceptable line-of-credit collateral. Eligible securities could be stocks or bonds, but they vary according how a lender values the offered securities....
A company doesn’t have to make contributions to a profit-sharing plan if it doesn’t make a profit, but it doesn’t have to be profitable in order to provide workers with this type of plan. Unlike 401(k) plan participants, workers with profit-sharing plans don’t make their own contributions. A company can offer other types of retirement plans, such as a 401(k), along with a profit-sharing plan. A company can legally exclude certain employees from the plan, including nonresident aliens, those who are younger than age 21, and those who are covered by collective bargaining agreements that don’t provide for participation....
A property’s tax bill would typically be arrived at by multiplying its assessed value by the mill rate and dividing the result by 1,000. For example, a property with an assessed value of $100,000 located in a municipality with a mill rate of 20 mills would have a property tax bill of $2,000 per year. How Does a Property Tax Assessment Work? Local governments use your assessment as the basis for calculating your annual property tax bill....
Alternate name: jumbo reverse mortgages Reverse mortgages are a means for homeowners who are age 62 or older to leverage their equity to, for example, supplement their income or pay for health care expenses. The three types of reverse mortgages are: Home equity conversion mortgage (HECM): These loans are backed by the U.S. Department of Housing and Urban Development (HUD). Single-purpose reverse mortgage: These mortgages, also backed by HUD, are designed to provide funding for a specific, lender-approved expense such as paying property taxes or completing home maintenance....
To claim a qualifying relative, you must be able to show that your relative is actually dependent on you. You must be their primary source of financial support, and no one else should be able to claim them as a dependent. For example, imagine your 25-year-old niece has lived in your household for two years, is a full-time college student, and does not have a job. You pay for her daily needs and college tuition....
Like a pension, single premium immediate annuities pay a monthly or annual income amount for the lifetime of one or more annuitants. “Annuitant” refers to the person or people receiving the income. The annuitant and the owner are often the same person, but they don’t have to be. The income amount received is based on the age of the annuitant, their sex, the amount of money used to purchase the annuity, and the payment option chosen....
For most individuals, the tax year follows the calendar year—the 12 months from January 1 through December 31. Some businesses follow a fiscal tax year, which is any period of 12 consecutive months ending on the last day of any month except December. Calendar Year Taxes for a given calendar tax year are typically due the following April. In other words, taxes on income earned between January 1 and December 31st of 2022 are due in April of 2023....
AAA bonds are considered the absolute safest by the three primary bond rating agencies: Fitch, Moody’s, and Standard & Poor’s. Grades go as low as “D” for Fitch and Standard & Poor’s. The lowest rating Moody’s grants is “C.” It is extraordinarily difficult to achieve an AAA rating. U.S. companies that have maintained their AAA ratings include Johnson & Johnson and Microsoft Corporation. How Triple-A (AAA) Bond Ratings Work Bond rating agencies look at many different metrics to determine how safe a bond is as an investment....
While there are many specific types of trust funds, they fall into two main categories: Revocable: This type of trust is also known as a “living trust.” These trusts are flexible and can be dissolved. They typically convert to an irrevocable trust on the death of the grantor.Irrevocable: This trust transfers assets out of the grantor’s estate and can’t be altered once established. This type of trust has more protections from creditors and more tax benefits than a revocable trust....
Property is something of value that you have a legal right to own and to use, such as money, buildings, investments, and vehicles. Business assets, such as intellectual property including copyrights and patents, are also considered property. An estate is the total property—real property (land and buildings) and personal property (everything else including cars and bank accounts)—owned by an individual before it’s distributed through a living trust or a will upon their death....
A second reason for providing additional insured coverage is a government statute. A business may be required to cover a government agency as an additional insured as a condition of obtaining a permit to erect a sign over a public sidewalk. A business may also provide additional insured coverage voluntarily. For instance, a church insures its members under its liability policy for activities they perform on the organization’s behalf....
Automatic bill pay allows consumers to schedule automated payments for loans, credit cards, utilities, services, and more. You can schedule payments for the due date or any day prior. It provides convenience, prevents missed payments and late fees, and can thus improve your credit score. Creditors and merchants with an online billing portal usually offer an automatic bill payment or autopay option that can be completed online. However, sharing your financial account information carries some risk, and using autopay can trigger overdraft fees and overspending if you don’t monitor your account....
Learn more about these agreements, why they’re often included in contracts, and what prevents them from being upheld when conflicts arise. What Is an Exculpatory Clause? Exculpatory clauses are portions of a contract that are written so that one party will hold the other party harmless if things go wrong. One type of exculpatory clause may declare that one party has no liability for the wrongdoing of the other party....
Mutual funds that offer exempt-interest dividends are typically invested, in whole or in part, in municipal bonds. These bonds are not subject to federal taxation. In some cases, they aren’t subject to state taxation, either. Some not-for-profit entities may also issue tax-exempt bonds. State and local bonds have been exempt from taxation since the inception of the income tax in 1913. The federal government created the exemption in order to encourage state and local investment in infrastructure projects....
“They’re expenses that you have to spend money on, even if you don’t want to,” Kevin L. Matthews II, founder of investment education site BuildingBread, told The Balance in a phone interview. “They’re called ‘autonomous’ because these are things that are going to go on anyway. You have to eat. You need a place to stay. If I were to lose my job and didn’t have income, I’m going to have to go into debt or spend savings because I need it....
