Articles by Mark Cussen
Top 10 High-Risk Investments With Potential High Returns
Key Takeaways High-risk investments include options, futures, and speculative assets, which could lead to large gains or losses. Junk bonds offer higher returns but come with a greater risk of default compared to stable bonds. Penny stocks and IPOs are highly volatile, offering potential huge profits and significant losses. Leveraged ETFs are volatile and not suitable for average investors due to trading at multiples of benchmarks.
Understanding STRIPS: A Bond Alternative for Definite Cash Flows
Key Takeaways STRIPS are zero-coupon bonds created by separating interest and principal. They offer guaranteed cash flows at maturity, appealing to institutional and retail investors. STRIPS are taxed on phantom interest, not actual payments, reported on Form 1099-OID. The secondary market for STRIPS is often sparse, making pre-maturity sales challenging. STRIPS are ideal for avoiding taxes when held in IRAs and tax-deferred plans.
Top Challenges for Financial Advisors
Financial advisors face myriad difficulties each day. To succeed, they must combine the skills of asset managers, financial planners, psychologists, and marketers. While most advisors can wear some of these hats well, managing several roles is very difficult, especially if switching from one role to another during a single advising session.
How Mutual Funds Pay Dividends
There are thousands of mutual funds for you to choose from, and most share the characteristics that have made them a popular investment: liquidity, diversification, and professional management. However, only certain mutual funds have a high dividend yield. Below, we take a look at how some mutual funds generate and distribute dividends. Mutual funds that own dividend-paying or interest-bearing securities pass those to investors in the fund. Dividends are the investor’s part of a company’s profits.
Tax-Efficient Wealth Transfer
Passing wealth on to succeeding generations of a family, especially when the assets are significant, requires careful strategic thinking and estate planning. Having an estate plan helps to make sure that your property and money go to those you designate as your beneficiaries and that the impact of estate and gift taxation is minimized.
Becoming a Registered Investment Advisor (RIA)
Securities Professionals and Their Firms Attributes Registered Representative (RR) Broker-Dealer (BD) Investment Adviser Representative (IAR) Registered Investment Adviser (RIA) Also known as Stockbroker Securities dealer Financial adviser Financial advisory, wealth manager Primary Regulating Bodies FINRA FINRA, SEC SEC, state regulators SEC, state regulators Primary Services Buying and selling securities on behalf of clients Facilitating trading of securities Providing financial advice and...
How to Split IRAs and Other Retirement Plans During a Divorce
In a divorce or legal separation, individual retirement accounts (IRAs) are divided using a process known as transfer incident to divorce, while 403(b) and qualified plans such as 401(k)s are split under a qualified domestic relations order (QDRO). Whether you are giving up retirement funds or receiving them, you need to understand the rules that govern asset division in a divorce. When you define and allocate retirement plan assets in a divorce correctly, you can avoid unnecessary taxes and more.
The Difference Between Emerging And Frontier Markets
Aggressive investors may decide to invest in the stocks of smaller companies that trade in less-developed, international markets as a way of reaping larger capital gains. These companies are often located in countries with frontier and emerging market economies. However, there are key differences to be aware of between frontier and emerging market economies.
How to Keep Up With Your Continuing Education
Investopedia Financial professionals must stay updated on industry changes and innovations, especially if continuing education is required to maintain their licenses or credentials. CFP® professionals must complete 30 hours of continuing education every two years, including 2 hours of ethics training, with the remaining hours covering approved financial topics. Investopedia Mark P. Cussen January 2, 2025
It’s never fun to lose money in the stock market, but it can help you out when it’s time to file your taxes. Those losses that you took in the previous calendar year in your portfolio can now be used to save you some money. When filing your taxes, capital losses can be used to offset capital gains and lower your taxable income. This is the silver lining to be found in selling a losing investment. The rules for computing capital gains and losses are relatively straightforward.
Not All Retirement Accounts Should Be Tax-Sheltered
Millions of Americans sock money away every year in individual retirement accounts (IRAs), annuities, and traditional, employer-sponsored retirement plans. The tax deferral that these plans and accounts provide can amount to significant savings, as long as your tax bracket in retirement is less than your tax bracket when you contributed to the plan. Roth IRAs and Roth 401(k)s, on the other hand, offer no upfront tax break, but there are tax-free withdrawals, as long as certain conditions are met.
Capital Losses and Tax
A capital loss occurs when you sell a capital asset for less than you bought it. It’s never fun to lose money on an investment, but declaring a capital loss on your tax return can be an effective consolation prize in many cases. That’s because capital losses can be applied against capital gains or other income to reduce taxable income. Investors who understand the rules of capital losses can often generate useful deductions with a few simple strategies.
How To Build an Investment Portfolio for Retirement
To live out your retirement in comfort, you will need a carefully managed investment portfolio. Your retirement portfolio, which is the sum total of all your investments across various accounts, grows throughout your working years so that it can provide you with the income you need to maintain your lifestyle after you’re done working. As your risk tolerance and time horizon change throughout your lifetime, your investment portfolio and strategy probably will also need to change.
Building Your Own Annuities Could Be Easier Than You Think. Here's How
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Directors and Officers (D&O) Liability Insurance
Directors and Officers (D&O) liability insurance is a type of professional liability or errors and omissions (E&O) insurance that protects company executives and board members when they are sued for mismanagement, misrepresentation, or other breaches of duty or regulations.
Tax-Efficient Wealth Transfer
Passing wealth on to succeeding generations of a family, especially when the assets are significant, requires careful strategic thinking and estate planning. Having an estate plan helps to make sure that your property and money go to those you designate as your beneficiaries and that the impact of estate and gift taxation is minimized.
Tax Rules for Resident and Nonresident Aliens
Different rules apply for resident and nonresident aliens in the United States compared to citizens when filing taxes. Filers who are not citizens may be exempt from declaring certain types of income, depending on their circumstances. Resident vs. Nonresident Aliens The U.S. government has several classifications of residents. A citizen acquires citizenship by birth, acquisition, derivation, or naturalization. Many rights and responsibilities that come with being a citizen include paying taxes.
The Three Most Successful Unions in the U.S.
Labor unions have sprung up in every sector and subsector of the U.S. economy to provide workers and professionals with a means of banding together for collective bargaining. But some have succeeded more in accomplishing their objectives than others today and throughout history. Government intervention has squashed the efforts of some unions to strike, such as the Pullman car railroad workers' strike in the late 19th century.
Where to Find Non-Profit Finance Jobs
Many financial professionals have discovered that working in the non-profit sector provides them with a measure of satisfaction and enjoyment that they didn't get previously when they were working for just a paycheck. Although the pay is less, jobs tend to be more secure in this sector in the long run, and those who work in the higher echelons of larger firms can still earn a respectable salary.
Top Strategies to Attract Elite Clients
Financial advisors who achieve a high level of success in the industry often seem to have a corner on the market when it comes to getting and retaining clients and increasing revenues. Those who eclipse the rest of the pack often take a somewhat different approach to how they do things versus the many newer and/or smaller advisors. Those who are trying to get their practices to the next level may benefit by using some of the following strategies.
How Long Does It Take for a Series EE Bond to Mature? Original
Since World War II, the U.S. Department of the Treasury has offered Series EE bonds as a way for Americans to save money without incurring high risk on their principal, while also benefiting from compound interest. For Series EE savings bonds, interest accrues monthly and compounds biannually, ultimately providing a tidy sum by the date of maturity.
The Basics of the T-Bill
What Is a T-Bill? A Treasury Bill or T-Bill is a debt obligation issued by the U.S. Department of the Treasury. Of the debt issued by the U.S. government, the T-Bill has the shortest maturity, ranging from a few days to one year. T-Bills are typically sold at a discount to par value (also known as face value). When the bill matures, you are paid par value. The difference between your purchase price and par value represents your interest.
Everything You Should Know About Corporate-Owned Life Insurance
By MARK P. CUSSEN April 11, 2023 Life insurance provides financial protection for millions of people in America and around the world. Not all life policies are purchased by individuals; many companies and other institutions also use life insurance for various purposes, such as to provide liquidity. But the rules that pertain to corporate ownership of life insurance are somewhat more complex than for individual or group policies.
5 Groups Exempt From Taxes
Key Takeaways U.S. citizens who work abroad may not have to pay taxes to the Internal Revenue Service (IRS) if they meet specific criteria. Religious organizations are exempt from paying taxes. Some low-income taxpayers may be exempt from paying taxes. Taxpayers who are eligible for many deductions may be able to avoid paying by filing a return and claiming them. Get personalized, AI-powered answers built on 27+ years of trusted expertise.
What Is the Average Net Worth of the Top 1%?
By MARK P. CUSSEN Sept. 20, 2022 Many people perceive being wealthy as having a nice house, a late-model car, and a summer cottage. But the kind of money that the wealthiest 1% of the world's households has dwarfs this concept. This segment of the population owns large portions of major corporations, multibillion-dollar investment funds, islands in the Caribbean, and even rocket ships that are taking them into outer space. KEY TAKEAWAYS The minimum net worth of the top 1% is roughly $11.1 million.
Are Labor Unions Effective?
At the dawn of the 20th century, heavy industry and big business were in their infancy and a great deal of human labor was needed in order to facilitate the mushrooming Industrial Revolution. This quickly led to widespread abuse of workers, including children, who were often consigned to sweatshops where they were forced to toil for many hours a day. Workers eventually united to form labor unions that stood up to the big companies.
Real Time Definition
What Is Real Time? In the investing world, real time is the absence of any lag between when a user requests information online or from a computer and the time when the data is sent. Real time is often instantaneous, meaning there is no time lag between the time of the request and the time of arrival. Brokerage firms and day trading platforms usually promise real-time quotes and trades for investors.
Cost Basis Definition
What Is Cost Basis? Cost basis is the original price of an investment or asset used to calculate capital gains taxes. Usually, the cost basis is the price at which the asset in question was purchased. Cost basis is the number used by accountants and tax preparers to compute the gain or loss on certain types of assets, such as stocks, bonds, real estate or business equipment. How Does Cost Basis Work? Cost basis is used to determine tax liability.
A Beginner's Guide to Growth Investing
People have many different styles and tastes when it comes to money, but making your money grow is typically considered the most fundamental investment objective. The best way to accomplish this goal will vary according to factors such as the investor's risk tolerance and time horizon. However, there are some key principles and techniques that are applicable to many different types of investors and growth strategies. What Is Growth Investing?
Economic Stimulus Definition
What Is Economic Stimulus? Economic stimulus is a way for a government or central bank to spur growth in the economy using various fiscal or monetary policy measures. These measures come in the form of lowering taxes or interest rates or providing some other means of monetary relief to either a specific sector of the economy or the economy as a whole.
Capital Goods Definition
What Are Capital Goods? Capital goods are any asset that is used by a company to produce products or services for consumers. For example, car factories are capital goods used in the auto industry, while cooking appliances are capital goods for restaurants. Cars and other vehicles that are used in the transportation industry are also capital goods because they are used to provide services for customers. The IRS classifies capital goods as tangible assets because of their physical nature.
The Basics of Deferred Compensation Plans
In the world of retirement savings, employer-sponsored retirement plans can be divided into two categories: qualified and nonqualified. Qualified plans include 401(k) and 403(b) plans; employers offering such plans must enable participation by all employees who meet certain qualifications and cannot discriminate in favor of executives or key employees. Such plans also have contribution limits.
How to Qualify for the Home-Office Tax Deduction
Even before the coronavirus pandemic, an increasing number of people worked from home. Technology gave rise to the personal computer, the internet, email, file sharing, and video conferencing. Put all these together and you have the makings of a home office. This is a place where you can do all the things you do at work, but in pajama bottoms. Not only is this arrangement much more convenient for many workers, but it also allows some to take a tax deduction for the use of their homes as well.
Capital Losses and Tax
A capital loss occurs when you sell a capital asset for less than you bought it. It's never fun to lose money on an investment, but declaring a capital loss on your tax return can be an effective consolation prize in many cases. That's because capital losses can be applied against capital gains or other income to reduce taxable income. Investors who understand the rules of capital losses can often generate useful deductions with a few simple strategies.
Unhoused In Winter: 6 Ways To Help The Unhoused This Winter
Key takeaways: Close to 600,000 people in the U.S. live without housing. This includes individuals and families with children. Donating layers of warm clothing like hoodies and sweatshirts may help more than heavy coats. Homelessness organizations need volunteers who will sit down and chat with the unhoused people they serve. eclipse_images/E+ via Getty Images Over half a million people across the U.S. are unhoused. They come from a diverse range of races, genders, and ethnicities.
Life Insurance Quote | Bankrate
Purchasing life insurance can be a daunting and sometimes overwhelming task with the amount of choices available, especially if you are unsure how much coverage you need and what policy is the best choice. However, if you do a bit of prep work before shopping for life insurance quotes, the process may be faster and easier. Life insurance needs are unique to each family’s lifestyle and financial situation.
Can You Deduct Legal Fees on Your Personal Taxes?
If you are getting divorced, starting a new business, or suing someone, then you’re probably going to have to enlist the services of a lawyer. Will you be able to deduct any of the fees your attorney charges you? In some cases, the answer is yes. Although there are still a few types of personal legal fees that are deductible, the vast majority of them currently are not—at least until the Tax Cuts and Jobs Act of 2017 (TCJA) expires in 2025.
Here’s the Difference Between Forms 1040 and 1099
Figuring out which forms to use at tax time can be a challenge, especially if this is the first year you've earned income that must be reported on a 1099 form. Reporting this type of income is a bit more complicated than reporting W-2 income like wages or a salary from employment. But comparing Form 1040 and Form 1099 is actually pretty straightforward.
What's the Difference Between Forms 1040 and 1099?
One is the master tax return, and the other is an information form Figuring out which forms to use at tax time can be a challenge, especially if this is the first year you've earned income that's been reported to you and to the Internal Revenue Service (IRS) on a 1099 form. Reporting this type of income is a bit more complicated than reporting W-2 income like wages or a salary from employment. But comparing Form 1040 and Form 1099 is pretty straightforward.
Best Whole Life Insurance for 2021
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict , this post may contain references to products from our partners. Here’s an explanation for As with other types of insurance, such as home and auto insurance, life insurance provides financial protection and is an important part of your financial planning process. Whole life insurance is one of the simplest types of life insurance policies.
What happens when your life insurance beneficiary dies before you?
© Nitat Termmee/Getty Images Mixed race family sitting together with kids in the kitchen. Life insurance benefits are meant to help support your loved ones financially after your passing. You can name as many beneficiaries on your life insurance policy as needed and the death benefit will be distributed among them once you are gone, according to your policy type and parameters.
What Are the Different Types of Whole Life Insurance?
Whole life insurance is a type of permanent coverage that’s offered in a range of “styles” to suit different needs. Since permanent coverage, including whole life, is more expensive than temporary or “term” coverage, many of the different types of whole life insurance have evolved to help owners manage the cost of premiums. But other types are built to maximize the death benefit or the cash value “savings” element.
What age does car insurance go down?
High schoolers and college students typically pay significantly higher rates, on average, for car insurance. Whether you are a teen on a parent’s policy, or a young driver on your own policy, you may be wondering, when will my insurance rates start to go down? From age 16 to 30, rates will generally decrease, provided you don’t add any accidents, speeding tickets or DUIs to your record.
How much does insurance go up after a DUI?
The consequences of getting a DUI are much more severe than many other driving incidents. Sorting out the legal consequences can be complicated on its own, and then there is the matter of your car insurance. Your insurance rates will usually see a steep increase once a DUI is on your record. Historically, law enforcement agencies referred to drunk driving offenses as DWIs, or driving while intoxicated. A DUI was commonly associated with driving under the influence of drugs.
How to buy life insurance without a medical exam
© jeffbergen/Getty Images Shot of a mature couple managing their budget together at home If you need life insurance, but lack time to get a medical exam, dislike the idea of having your blood drawn, or have potential health issues, you may want to explore life insurance that does not require you to take a physical exam. Getting life insurance without a medical exam is possible. For example, buying into life insurance through an employer does not typically require any exams.
Car insurance coverage types
Carrying a form of car insurance or verification of financial responsibility is a requirement of all drivers. Because the exact amount and categories of coverage required varies by state, it is important to understand the different types of car insurance that are available, and what each type covers. This can help you to determine what types of insurance you’ll want to carry based on your circumstances and needs.
What Happens When Your Life Insurance Beneficiary Dies Before You?
Life insurance can be used for many purposes. It can serve to protect the financial future of the primary income earner's family, pay estate taxes and other debts of the deceased or facilitate the succession [...]
Collateral assignment of life insurance
If you need to take out a loan for any reason, your lender may require that you supply some form of collateral before you are approved. In most cases, this could be any type of asset, such as a savings account, IRA or employer-sponsored retirement plan or even a tangible asset, such as your home or car. However, you may be unaware that you can use life insurance policies as collateral, in some cases. In fact, life insurance can be one of the most effective forms of collateral available.
What is a prepaid insurance asset?
Insurance is an inescapable expense in today’s world. Car insurance, home insurance, life insurance and health insurance are all necessities for most Americans today. In some cases, it may make sense for an individual or business to pay the premiums for insurance coverage in advance, or they may be required to do so. This allows the payer to enjoy a period of coverage without having to fork over additional money once the premium has been paid.
Life Insurance Retirement Plans (LIRPs)
Although most financial planners will tell you that stocks and stock mutual funds are the way to go when it comes to retirement planning, some investors will look for alternatives in order to be more broadly diversified. A life insurance retirement plan (LIRP) can serve as an effective alternative or supplement to traditional forms of retirement savings, such as through an IRA or employer-sponsored retirement plan.
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