Acronym: PMI How Private Mortgage Insurance Works Like any other type of insurance policy, you’re paying premiums to cover damages should an unfortunate event occur. The insurance company is liable for paying off your loan if for some reason you find yourself unable to do so. Lenders consider that this is more likely to happen if you have less of an ownership stake in the property. This would be the case if your equity were less than 20% at the outset because you didn’t put the much money down....

Alternate name: Revenue run rate Let’s say a venture capital company is analyzing the projected growth of a potential investment, ABC Software, Inc. ABC Software is a startup that has only been in business for four months, which means it has little to no historical financials to analyze its growth projections. It has consistently produced at least $100,000 in revenue per month thus far. The venture capital firm decides to use a run rate to project the future performance of ABC Software, Inc....

Stockholders’ equity shows the quality of a firm’s economic stability; it also provides insights into its capital structure. Finding it on the balance sheet is one way you can learn about the financial health of a firm. Alternate names: shareholders’ equity, book value, owners’ equity, net worth For example, stockholders’ equity represents the amount of assets remaining after subtracting total liabilities from total assets on a company’s balance sheet. So, if a company had $2 million in assets and $1....

A retirement account is one of the places you can put this saved money, but it isn’t the only option. The funds you set aside under the 10% rule also can be used to create an emergency fund, save for a down payment on a home, and more. Saving 10% of your gross income is committing to a standard higher than what most individuals in the U.S. save. Since 1983, the personal savings rate in the United States most often has been in the single digits—and that calculation is based only on a percentage of disposable income, not on a percentage of gross income....

Knowing how your credit card issuer calculates your finance charge can help you estimate the amount of interest you’ll pay if you don’t pay your balance in full in a given month. You can check your credit card billing statement or call your credit card issuer to determine if it uses the average daily balance method for calculating finance charges. Definition and Example of Average Daily Balance Your average daily balance is the sum of your balance on each day of the billing cycle divided by the number of days in the cycle....

Economist Alan A. Auerbach is credited with coming up with the BAT in 1997. For example, if U.S. had a BAT, imported goods that are sold in the U.S. would be taxed while goods exported from the U.S. would not be taxed. The BAT was proposed as a part of the sweeping tax reform in the U.S. in 2016. However, it received stiff opposition and ultimately failed to be a part of the tax rule changes that were implemented in....

The GDP growth rate is how much more the economy produced than in the previous quarter. Why a Healthy Rate of GDP Growth Matters to You Growth, unemployment, and inflation are in balance in a healthy economy. Most economists agree the ideal GDP growth rate is between 2% and 3%. Many politicians think more growth is always better. A healthy GDP growth rate is like a body temperature of 98....

In short, the maximum level of earnings subject to Social Security tax is $147,000 for 2022, increasing to $160,200 for 2023. It typically increases every year to adjust for the cost of living. The maximum you could begin collecting in 2023 would be $4,555 a month if you had earned the maximum amount for every year since you were 22, and if you waited until age 70 to retire, according to the Social Security Administration (SSA)....

S&P Dow Jones Indices, which owns the S&P 500 index, reviews and updates the list of qualifying companies every January. The index is rebalanced quarterly too, in January, April, July and October, meaning the amount of shares of each constituent is reset so that each holding makes up an equal percentage of the index. As of July 27, 2021, there are currently 65 constituents on the S&P 500 Dividend Aristocrats Index....

However, the three-day cancellation rule does not apply to all signed contracts. It allows you to cancel only agreements that use your principal residence as collateral. This main home can be a house, condominium, mobile home, or houseboat. The three-day rule doesn’t apply to vacation or second homes. Typically, the three-day cancellation rule applies to agreements such as home equity loans, home equity lines of credit (HELOC), refinancing agreements, and some reverse mortgages....

Here’s how the claims typically work. Hitting a Friend or Family Member’s Car in Your Driveway As the at-fault driver, you and your car insurance will be responsible for the damages. The claim works the same way, regardless of whether you hit a parked car on the road, in a parking lot, or in your driveway. The property damage coverage provided by the liability portion of your car insurance will cover the damage to the other vehicle....

Reasons Not to Extend the Closing After some time has passed, sellers may feel as though their property value has increased, inspiring them not to extend the closing. Perhaps friends or relatives have consistently stated that the seller did not sell for an amount that they felt was high enough. Either way, presumed value plays a big role in the decision. In fast-moving markets, prices tend to move up. Further, perhaps the buyers asked for a request for repairs during the middle of the escrow that left a bad taste in the seller’s mouth....

To determine your next move, discover why your nonrenewal happened, what your rights are, the difference between a cancellation and a nonrenewal, and what next steps you might consider. What Is a Notice of Nonrenewal? You may have a three-month, six-month, or annual auto insurance policy, and just like any other subscription, it needs to be renewed when its term ends. But you or the insurer can choose not to continue your policy, allowing it to end on the expiration date....

The credit has been extended many times, and as of December 2021, if you make energy-efficient home improvements before Jan. 1, 2024, you are eligible to reduce the amount of taxes you owe. Learn more about the regulations of the credit and how to qualify. The Residential Energy Efficient Property Tax Credit If you install alternative energy equipment to ensure your home is energy efficient you can claim the residential energy efficient property credit....

When you fill out an employment application, companies will often ask for the reason why you left each of your previous positions. It’s important to know what you’re going to say when you’re asked about why you’re no longer at your current job. Prepare now, and you won’t be caught by surprise when applying for your next job. Read advice on how to list your reasons for leaving a job on an application, along with tips for dealing with tricky situations, like being fired or quitting a job under difficult circumstances....

Alternate names: High-tech bubble, internet bubble, technology bubble, dot-com crash, dot-com bust, dot-com meltdown The dotcom bubble is just one of many bubbles in U.S. history. Bubbles commonly occur when the price of an investment vastly outpaces its actual value—in this case, the value of internet-based businesses. Another famous example was the housing bubble that peaked in 2005. How Did the Dotcom Bubble Work? The internet was a hot topic during the 1990s and this led many investors to predict a profitable future in internet-based businesses....

Your employer will generally provide a stack of paperwork that you can go through on your own, so you may not need to ask some of the questions recommended. But make sure you know the answers to all of them before you sign anything other than an acknowledgment that you have received information. Ask These 20 Questions If You Have Been Fired The following are 20 important questions to ask in a termination or layoff situation....

How Taxes on Scholarships Work Receiving a scholarship doesn’t have to mean that someone wrote you or your school a big check to cover your tuition and fees. Schools typically “erase” what you owe for the year or for the semester when they award full scholarships themselves rather than receiving the funds from a third party. You effectively attend for free. When it comes to paying taxes on scholarship money, there are a few rules to review before you’re in the clear....

Roth IRAs were created in 1997, so they’re a fairly new type of retirement investing account compared to others such as a traditional IRA or 401(k). Learn more about the history of Roth IRAs, including why Congress created them, how the limits have changed, and how their history differs from traditional IRAs’ history. Roth IRA History Individual retirement accounts, or IRAs, were first authorized by the Employee Retirement Income Security Act (ERISA) of 1974....

You must also budget for ongoing costs, such as RV insurance. It’s vital to know whether you must carry it when you’re planning to purchase a set of house-toting wheels. Many factors can come into play. Laws vary by state, making the process rather confusing at times. Some rules can make the process of knowing whether you’re legally obligated to carry it a little clearer. When RV Insurance Is Required At least the same amount of liability coverage that you must carry on a car is needed for an RV in all states....