One of the main appeals of investing in bonds is that they typically offer fixed interest payments known as coupons. But investors could miss out on the opportunity to earn more money if interest rates rise before the bond reaches maturity. Investing in step-up bonds, which offer gradually increasing coupon payments, can mitigate this risk. Keep reading to find out the advantages and disadvantages of step-up bonds and get the information you need to decide whether step-up bonds deserve a place in your investment portfolio....

Basis is the amount you paid for an asset. If you pass it on to an heir, they can sell it. If they sell it for more than you paid for it, they made a profit, and capital gains taxes are triggered. Step-up in basis considers the asset’s fair market value if your heir purchased it today. That way, if they sell it, capital gains taxes are either significantly reduced or avoided....

Definition and Example of an Account Inquiry An account inquiry is a review of a credit or deposit account. The inquiry is often related to previous transactions or payments, and it can be completed by both individuals and institutions. Alternate name: Credit check For instance, if you’re preparing to buy a home, you may want to check your credit report. You’ll request a copy of your report and review it to ensure all the information it contains is accurate....

For example, if you’re buying a home with a mortgage, your lender will require an appraisal to establish the home’s value—which helps determine the loan amount and how much you’ll be able to pay for the home. The appraiser then establishes a market value for the home, which the lender uses—the buyer and seller generally end up renegotiating the sale price if the appraisal is different than the sale price....

Every three months, publicly held companies are required to publish their financial results and file them with the Securities and Exchange Commission (SEC) using forms 10-Q for the first three quarters of the fiscal year and 10-K for annual reports. Since many companies have a fiscal year that follows the calendar year, January to December, a lot of them report their earnings around the same time, known as earnings season....

Anyone can be subject to an earnings withholding order depending on the circumstances. Learn when a creditor can garnish your income, and how federal and state laws limit how much money can be taken out of your paycheck. Definition and Example of an Earnings Withholding Order An earnings withholding order is a court order that forces your employer to deduct a certain amount of money from your paycheck to pay a creditor....

You may need to select a primary care physician (PCP) and get referrals from them to see specialists, but they’re not always required. EPOs also tend to offer lower-than-average premiums in exchange for higher deductibles. An EPO covers your health care costs as long as you use providers within the network. However, like most health insurance plans, you have to pay something out of pocket for covered services. These are all the costs associated with EPO plans:...

Alternate name: Bank identification number (BIN)Acronym: IIN For example, let’s say your credit card number is 5412 7512 3412 3456. If your issuer uses a six-digit IIN, then the digits 541 275 make up the IIN on your card. If your issuer uses an eight-digit IIN, then your IIN is 5412 7512. How Issuer Identification Numbers Work Every time a payment card is used, the merchant’s bank needs to know which bank issued the customer’s card in order to route, clear, and settle the transaction....

Alternate name: Debtor How an Obligor Works You could find yourself acting as an obligor in either a commercial or personal setting. For instance, if you’ve ever taken out a loan, then you’ve acted as an obligor to your lender. You’re legally bound to make all principal and interest payments on the loan. If you miss payments or default on the loan, your lender can file a debt collection lawsuit in order to collect the money you owe....

Coins and bars of precious metals such as gold, silver, platinum, and palladium are considered bullion. Bullion “rounds” are coins made of precious metals that are not intended to serve as currency, like gold or silver coins. Physical bullion can be purchased by individual investors directly from precious metals dealers online or in person. For example, you can buy gold bullion bars weighing from 1 ounce to 1 kilogram with 99....

What contributes to creditworthiness can vary, depending on the type of account for which you’re applying. The larger the debt you’re looking to take on, the more creditworthy you have to be. Mortgage lenders typically have higher standards of creditworthiness than credit card issuers. Alternate name: Credit score How Creditworthiness Works Credit reports can be several pages long. They’re very time-consuming to review. Creditors and lenders will use credit scores to measure creditworthiness rather than reviewing complete credit reports....

What Is Debt Consolidation? Debt consolidation is combining multiple debts into a single monthly payment by paying them off with a credit card or another type of loan. How Debt Consolidation Works Let’s say you have multiple credit card balances and small loans with different interest rates and monthly payments: Credit card A: $3,500, 24.90% APRCredit card B: $2,500, 18.90% APRCredit card C: $1,500, 12.00% APR Rather than paying these balances individually, you can consolidate all three balances with a single loan that requires one payment instead of three....

If the vehicle owner has no insurance or insufficient limits, the employee may face a large out-of-pocket loss. Businesses can protect their workers from such events by adding drive other car coverage to their commercial auto policy. The Basics of Drive Other Car Coverage When an employee drives a vehicle provided by their employer, they qualify as an insured person under the employer’s commercial auto liability insurance. While the liability section of the standard business auto policy doesn’t address employees specifically, it does apply to anyone using a covered auto that the named insured (employer) owns, hires, or borrows....

If you’re a small business owner, you may not have the funds to handle costly litigation. In this case, you can purchase EPLI so that you don’t face financial hardship if an employee sues the company. EPLI covers expenses such as lawyer’s fees, settlement money, and administrative expenses. However, it does not cover criminal fines, bodily injury or property damage claims, or wage-theft compensation. EPLI coverage may be available through an endorsement to a business owner’s policy (BOP) or as a stand-alone policy....

While food quality and the amount of money spent on food increases with your income, the overall proportion of your budget devoted to food spending becomes smaller. At the same time, when you have a higher income, you’re able to spend more money on items other than food. As your income rises, your spending on secondary purchases (such as video games, travel, or clothing) rises, as well. “You don’t need shoes to survive, but you need to eat,” Sean Snaith, director of the University of Central Florida’s Institute for Economic Forecasting, told The Balance by phone....

An Example of Form 1099-A Say you borrowed $150,000 to purchase your home, then encountered some financial difficulty. As a result, you couldn’t make your mortgage payments. The lender forecloses on your home. The IRS takes the position that if you still owed $125,000 at the time the lender foreclosed, and if you’re no longer liable for repaying it, that equals $125,000 in income to you. Your lender uses Form 1099-A to report this transaction to the IRS....

Individual investors usually hedge for two reasons: Over-concentration: You own a lot of stock in one company, so you want to protect yourself.Tax implications: You can use hedges to delay the sale of a stock or other asset while protecting its value. Example of Hedging Suppose the 100 shares of Apple stock you recently purchased have done very well and are sitting at $175. You’d like to hold on to the shares, but you’re concerned that the price will go down if you hold them too much longer....

In-house financing generally offers a simpler application process because both the financing and purchasing steps happen through the seller directly. Potential borrowers complete an application process either online or in person at the business where they’re interested in making a purchase. The business sets specific requirements for borrowers and works with the customer to negotiate the loan terms. If approved, the customer can make a purchase with the loan they were just extended....

Definition and Examples of Nationalism Nationalism is the idea that your nation, often identified by a shared ethnicity or set of values, is better than all other nations. Nationalism can be—and oftentimes is—expressed as aggression toward other nations. Nationalism is built around a shared language, religion, culture, or set of social values. A nation will emphasize shared symbols, folklore, and mythology. Nationalism can impact foreign and domestic political policies and typically has economic implications....

When your income passes a certain threshold, your income is subject to taxes. Therefore, an individual or corporation does not receive their full wages because they must subtract the cost of taxes. The state or federal government levies taxes to fund various services, such as transportation, or for social benefits, like Social Security, Medicare, Medicaid, and more. The amount of your wages that are left over after the taxes are applied is known as “net of tax....