These expenses are paid at regular intervals and the amount doesn’t change too much. You could have fixed expenses that you pay weekly, monthly, quarterly, or annually. Example of a Fixed Expense Here are some examples of fixed expenses: Mortgage or rent paymentsLoan paymentsChildcare costsTuition paymentsInsurance premiums These bills don’t have to occur monthly to be considered fixed expenses. For instance, let’s say you have a life insurance payment that you make quarterly....

Forwards are traded over-the-counter rather than on an exchange. This means they are flexible. The two parties involved can customize things like their expiration dates or the amounts of the commodities involved in the transactions. However, the lack of an exchange and clearinghouse opens them up to additional risk. An example of a forward contract would be two companies agreeing to a forward contract on June 1 that states that company A will sell 1,000 tons of grain to company B on Aug....

This is where fund managers come in. Mutual funds, made up of a variety of stocks that fit an investment theme or strategy, are one of the most common ways to invest. When investors deposit money into actively managed funds, they rely on fund managers to make investment decisions on their behalf. One of the most notable mutual fund managers in the U.S. has been Peter Lynch, who ran the Fidelity Magellan fund from 1977 to 1990....

Hedge Fund Eligibility Requirements Hedge funds are not marketed to the general public or made available in a public offering. Instead, they are offered privately to institutional investors such as pension funds, and to high-net-worth individuals—usually individuals or couples with a net worth of $1 million or more. They are offered to investors through a private placement memorandum (PPM), which explains the investment strategy, fees and expenses, and redemption rules, much like a mutual fund prospectus....

If you’re a beneficiary, you should know how the policy pays out, what your options are, and what might complicate the process. Read on to learn more about naming or being a life insurance beneficiary. What Is a Life Insurance Beneficiary? When you purchase a life insurance policy, you can name an heir, which can be a person or an entity. You can also have more than one. If you pass away during the policy term, they receive a set amount of money or a series of payments....

Let’s take a look at what mortgage indexes are, how they work, and what they mean for you. Definition and Examples of Mortgage Indexes A mortgage index is an interest rate that fluctuates based on general market conditions. When you apply for an adjustable-rate mortgage (ARM), the lender will use the mortgage index as a starting point for your interest rate. It will then add on a specific percentage, known as the margin, to arrive at the total interest rate for your loan....

Learn more about these 401(k)s and how you can use one to plan for your retirement. How a Self-Employment 401(k) Plan Works Self-employed 401(k)s allow small business owners with no other employees to contribute to a retirement plan as both an employee and employer. The same person makes both contributions. There are two types of contributions that can be made: elective deferrals and employer non-elective deferrals. Employees make elective deferrals and can include up to 100% of their compensation to the limit of $20,500 in 2022, increasing to $22,500 in 2023....

While the general ledger may be enough for day-to-day financial maintenance, detailed subledgers are crucial components of accurate accounting, especially for businesses with a large sales volume. Subledgers help to segment data and transactions into manageable categories, which can be individually analyzed. Below, we’ll delve further into how subledgers work. Definition and Examples of Subledgers A subledger contains details of transactions within different categories on a business’s chart of accounts....

Alternate name: Bad credit, bad credit history You may also hear adverse credit history referred to as having bad credit. This means that your credit report reflects somewhat recent negative credit issues, such as: Making late payments on your debt Having unpaid debts ending up in collections Experiencing a mortgage foreclosure Having a car repossessed Filing for debt bankruptcy relief For example, if you were unable to make your car payment for several months, this will show up in your credit report....

izusek / Getty Images Alternate name: flight taxes Airport taxes come in a variety of forms that range from government taxes to fuel charges and noise nuisance fees. The federal ticket excise tax, which is charged on all domestic flights, is a common airport tax in the U.S. You’ll pay 7.5% of your fare in the U.S. federal excise tax. For example, if you buy a ticket from Toledo, Ohio, to Los Angeles for $300, then about $22....

You can carry out an options roll up on an option that’s already made you money to lock in your profits by selling it for more than you bought it. This also reduces your risk because you’re selling it before the price can drop while still riding the money-making trend. You execute an options roll up by selling your current contract to make money and buy another contract that’s further out of the money (OTM)—meaning the underlying asset is trading below the strike price—thus reducing your overall risk....

Different amounts factor into your out-of-pocket maximum, including: Deductible: This is the dollar amount you owe for covered medical services before your health plan starts to pay.Coinsurance: A coinsurance is your share of costs for covered medical services, typically calculated as a percentage of the balance after paying your deductible. Coinsurance stops when you hit your out-of-pocket limit, so you won’t continue paying when you reach this amount.Copay: A copay is the fixed dollar amount you pay for covered health care services after paying your deductible....

But what if a micro-burst kept it hovering in the air? That powerful gust of wind is an example of all other things not being equal. The law of gravity is still valid nonetheless, even though the bathroom scale didn’t fall to the ground this time. Here’s a real-world example. Thanks to the Great Recession, demand for oil dropped declining from 87.8 million barrels per day in the fourth quarter of 2007 to 84....

Charges that have been approved by the issuer may show up right away as “pending,” but not be included in your balance. On the other hand, some credit card issuers do show your balance adjusted for pending transactions. Either way, if the transaction doesn’t have a post date, it’s still processing. For instance, if you purchase groceries on October 8, you’ll see a pending or pre-authorized charge in your online transaction history right away....

Learn what face value is, when it matters, and how to best consider it in your investing endeavors. We’ll also refer to face value as “par value.” Consider the terms interchangeable, with par value coming up more often in relation to bonds. What Is Face Value? Par value, or face value, is a “static value” assigned when a company brings stock or a bond to market. Unlike market value, par or face value doesn’t change....

The IRS says most errors in claiming the EITC are related to claiming children who don’t meet the qualifying rules. These rules include: Having a valid Social Security numberBeing under age 19, under age 24 if they were a full-time student for at least five months of the year, or permanently and totally disabledBeing related to you, legally adopted, or placed in your foster care by a government agency, licensed organization, or court orderLiving in the same home as you in the United States for more than half the tax yearNot filing a joint return with their spouse...

Level term policies are, perhaps, the most popular type of life insurance policies due to their affordability and flexibility. Discover the benefits and features of level term life insurance, plus its alternatives, to determine which type of coverage best suits your needs. What Is Level Term Life Insurance? A level term life insurance policy maintains the same death benefit throughout its term. For example, if you buy a 10-year, $100,000 level term life policy, your beneficiary will receive a $100,000 payout if you die at any time during the contract period....

If you have company stock in a retirement plan, you can roll the plan assets over to an individual retirement account (IRA) when you retire from or leave your job. You also might be able to distribute the stock out of the plan and pay a lower tax rate on part of the money. For instance, suppose you retire with 1,000 shares of your company’s stock. You paid $10 per share, but now they’re each worth $50....

Definition and Examples of Overtrading Overtrading involves buying and selling investments too frequently. Not everyone will agree on the line between normal trading and overtrading. A financial advisor, for example, may have their own recommendations regarding what qualifies as overtrading based on a trader’s particular circumstances. Overtrading is also a strategy used by some brokers to try and collect more commissions. This is known as churning and is illegal. Alternate name: Excessive trading, churning...

Let’s take a look at proof of funds, how it works, and what one means for you. Definition and Examples of Proof of Funds Proof of funds is simply the verification you provide to show you have the money required for a transaction. For example, in real estate, a seller may ask you to provide proof of funds to show that you can cover the costs of purchasing a home....