A 1035 Exchange is an exchange process that permits individuals to replace their existing life insurance policy or annuity contract with a similar new contract or policy. Thanks to a provision in the tax code, this can be affected without suffering any negative tax repercussions as part of the trade off exchange. The Internal Revenue Service permits those who hold [...]

401k retirement plans are specific kinds of accounts that the government established to help individuals to plan and save for retirement. Individuals fund these accounts using pre-taxed dollars from payrolls. People invest money in these accounts into several different types of investments. These include stocks, mutual funds, and bonds. Gains earned in the account include dividends, capital gains, and interest. [...]

403(b) plans were created for employees of schools, churches, and tax exempt organizations. Individuals who are eligible may establish and maintain their own 403(b) accounts.  Their employers can and often do make contributions to the employees’ accounts. Individuals are able to open one of three different types of 403(b)s. The first is an annuity plan that an insurance company establishes. [...]

The 408(k) Plan is a retirement plan that employers set up to assist their employees in saving money for their post working years. It is named for the section of the IRS code that describes these accounts. Though there are some distinctions, a 408(k) Plan is actually a simpler version of the ever popular 401(k) plan. These 408(k)’s are intended [...]

412(i) Plans are pension plans that are classified as qualified defined benefit arrangements. They were established by the IRS for small companies and self employed business owners to have a way to save for their retirement and those of their employees. Employers fund these plans with only fixed annuities or both annuities and permanent life insurance. For the 412(i) Plans [...]

A 457(b) plan is a retirement savings vehicle. It derives its name from the Internal Revenue Service code that regulates the plans in its section 457(b). Many times this retirement account name is simply shortened to 457 Plan. There are many similarities between these 457 Plans and tax deferred, employer provided retirement vehicles including 403(b) and 401(k) plans. All of [...]

501(c) designations refer to incorporations of entities which are established as charitable not for profit corporations. These charitable operations are companies which are founded in order to offer the benefits of a community service instead of attempting to make profits for their founders or managers. When such an outfit is incorporated it becomes legal. This gives it responsibility for the [...]

AAA Rating refers to the maximum potential credit rating that a credit ratings bureau can award to an issuing entity’s bonds. Such a credit rating represents a superb level of creditworthiness. It means that the issuing entity is easily capable of meeting its various financial obligations. The three major ratings agencies of Moody’s, Standard & Poor’s, and Fitch Ratings all [...]

Absorption rate is a term used in real estate. It represents the speed with which homes available in a real estate market are sold in a certain amount of time. Real estate professionals figure out this absorption rate by taking the number of houses that are available and dividing this by the average number of sales in a month. The [...]

Accountants are professional financial personnel whose careers are centered on dealing with money and figures. Their responsibilities cover compiling financial records, certifying them, and recording them for businesses, individuals, government organizations, and not for profit organizations. As such, they track a company or individual’s money through the development of reports. Managers of companies and organizations and other individuals read these [...]

An acquisition refers to a corporate act where it purchases either controlling interest or complete interest in another company. Companies do this by buying out the stock shares in order to gain control of it. Technically, acquisitions happen as the buyer is able to acquire an over 50 percent ownership stake in the target firm. Typically the acquirer will buy [...]

An ad valorem tax refers to taxes that governments assess on an item like personal or real estate property. While the most usual types of such taxes prove to be real estate transaction levied ones, they can also be issued on other kinds like foreign goods in the form of import duties. Such real estate taxes are usually one of [...]

Adam Smith wrote the economic and political world shaking book The Wealth of Nations. This book marked the original birth of free market economics. It also spelled the doom of mercantilism, the dominant economic system of the day. March 9, 1776 marked the publication of An Inquiry into the Nature and Causes of the Wealth of Nations that became known [...]

Adjustable Rate Mortgages, also known by their acronym ARM’s, are those mortgages whose interest rates change from time to time. These changes commonly occur based on an index. As a result of changing interest rates, payments will rise and fall along with them. Adjustable Rate Mortgages involve a number of different elements. These include margins, indexes, discounts, negative amortization, caps [...]

Adjusted Gross Income (AGI) refers to a means of calculating income off of an individual’s actual gross income. People use this figure in order to determine the amount of their income which the Internal Revenue Service will subject to tax assessment. It is ultimately the United States tax code which creates this AGI figure. This number should never be confused [...]

An Affidavit is a declaration in writing which includes a sworn oath or positive confirmation that written contents are factual and true. These declarations and statements could be made related to court cases. They also could be made to support an important document as with mortgage applications or tax returns. Though many people may not be aware of it, a [...]

Agency bonds are those bonds that are actually issued by United States’ government sponsored entities. This means that these bonds are not government guaranteed, as they are created by private companies. They are backed up implicitly by the United States government, since these organizations were created to permit some categories of individuals to have the ability to receive lower cost [...]

Among the various Chairmen of the Board of Governors for the Federal Reserve System over the years, Alan Greenspan stands out as a living legend. He began his nearly two decade term as Federal Reserve Chairman on August 11, 1987 and then served all the way through January 31, 2006. An unprecedented four different sitting presidents appointed Alan Greenspan as [...]

Algorithmic trading has many names. Users also know it as black box trading and algo trading. This system of trading works with complicated and highly advanced mathematical formulas. It takes these models and engages in rapid decisions to execute transactions in various financial markets. This type of trading is only possible with super fast computers and programs. It combines these [...]

The American Bankers Association, or ABA, is a trade association of the U.S. banks large and small conveniently located in Washington, D.C. This powerful lobbying organization hails back to 1875 when it was established by several bankers. Today, the ABA has grown to represent banks of all stripes and sizes and encompasses more than 95% of all bank assets in [...]

The American Express Company proves to be the New York City headquartered multinational financial services outfit. It was established in 1850 and today is among the 30 constituents of the Dow Jones Industrial Average. The company is world renowned for its various traveler’s checks, chard card, and credit card businesses. The Amex cards make up around 24 percent of all [...]

The American Institute of Banking (AIB) is a venerable educational and training institution for the United States based banking industry which was established by the American Bankers Association (ABA) back in 1907. This AIB offers continuing training and a full range of banking career education for parties who are interested in the banking field or who are already participants within [...]

American International Group is one of the largest insurance companies in the world. It boasts over 90 million customers living in over 100 countries around the globe. The company has provided risk management and insurance services for customers for almost a hundred years. Today the company is changing to try to meet their clients’ needs better. They are simplifying the [...]

The AMEX is the acronym for the American Stock Exchange. This exchange proves to be the third biggest such stock market in all of the United States when trading volume is considered, after the NYSE and the NASDAQ national exchanges. Located in the American financial center of New York, the AMEX carries around ten percent of every security that is [...]

The word amortization is one that is commonly utilized by financial officers of corporations and accountants. They utilize it when they are working with time concepts and how they relate to financial statements of accounts. You typically hear this word employed when you are figuring up loan calculations, or when you are determining interest payments. The concept of amortization possesses [...]

An Angel Investor refers to an accredited investor (with over a million dollars net worth) which invests funds into entrepreneurs and smaller startups. These special investors are commonly from the friends or family of the entrepreneur. This capital which they deliver is often in the form of a lump sum one-time payment to help get the business going or to [...]

The annual percentage rate, or APR, is the actual interest rate that a loan charges each year. This single percentage number is truthfully used to represent the literal annual expense of using money over the life span of a given loan. Annual percentage rate not only covers interest charged, but can also be comprised of extra costs or fees that [...]

APY describes the amount of compound interest which individuals or businesses will earn in a given year (or longer time period). Investments in money market accounts, savings accounts, and CD Certificates of Deposit all pay out such interest. It is the annual percentage yield that demonstrates precisely the amount in interest individuals will receive. This is helpful for people or [...]

An annuity is an investment contract that an insurance company sells to individuals. This agreement promises that it will make a regular series and dollar amount of payments to the buyer. This can be either for the rest of his or her life or for a set amount of time. The payments out are typically made after the individual retires. [...]

Appraisals are professionally done estimates of a property’s real value. These are conducted by appraisers. Many things can have an appraisal done on them, including smaller items like artwork or jewelry, as well as larger things like businesses, commercial buildings, or homes. Appraisals are commonly required before many different transactions can be performed. In advance of getting a house, piece [...]