Buffett’s 90/10 Strategy In a 2014 letter to his shareholders, Buffett said, “My advice to the trustee could not be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund (I suggest Vanguard‘s). I believe the trust’s long-term results from this policy will be superior to those attained by most investors—whether pension funds, institutions, or individuals—who employ high-fee managers.” Let’s break this down....

While politicians have frequently used the debt ceiling as a bargaining chip over the years, a default would send the economy into uncharted financial territory, as the U.S. hasn’t failed to pay its debts in any meaningful way since the early 1800s, according to a report by the Congressional Research Service. One notable showdown over the debt limit in 2011 led credit agencies to downgrade the U.S. credit rating, and another in 2013 caused a brief spike in interest rates, but on neither occasion did the U....

Start Your Internship Search Early Be aware that certain industries and internships have early application deadlines. Some companies may recruit and hire as early as November for a summer internship. Beginning your internship search during winter break affords you additional lead time before the summer months. It can also give you the opportunity to make valuable connections with alumni or professionals within organizations of interest prior to returning to school. Check with your college’s Career Services Office for assistance in finding out which internships recruit early....

The Small Business Administration (SBA) says that an individual, entity, or business (Business A) is an affiliate of another business (Business B) if Business B has control over Business A, based on one of several factors. The SBA considers factors such as ownership, management, previous relationships with or ties to another business, and contractional relationships. In addition, parties to a joint venture may be considered affiliates of each other in certain circumstances....

Tetra Images / Getty Images The first ADR was created in 1927 by J.P. Morgan. This was to allow Americans to invest in shares of a British department store. Today, there are more than 2,000 ADRs available, representing shares of companies located in more than 70 countries. The Bank of New York, JPMorgan Chase, Deutsche Bank, and Citigroup are among the leading depositary banks, which create and issue ADRs. The popularity of ADRs has surged over the years....

Weekend Images Inc. / Getty Images Definition and Examples of Mortgage Servicing Rights Unless you use cash, you’ll need to take out a loan to buy a home. Your lender pays the seller the full amount, then you make installment payments to your lender. The amount of each payment is based on your principal, interest rate, property taxes, and insurance. In a process called mortgage servicing, your lender collects your mortgage payments, allocates the appropriate amounts toward your principal and interest, and manages your escrow account for your home insurance and property taxes....

Why You Should Review Your Insurance Policy An insurance policy is a legal contract between the insurer (your insurance company) and the insured (the policyholder). Legal agreements aren’t notorious for being fun to peruse, but reading and understanding your entire policy ensures you have the coverage you need and expect under the conditions you assume. Being an informed policyholder can also prevent disagreements between you and the insurer if you need to file a claim for a loss....

Basic Checking Account This “plain vanilla” account is the simplest type of checking account, and you can get it from most brick-and-mortar banks and credit unions. It provides a small set of features and is suitable for everyday banking. Basic checking accounts generally allow you to: Access and transfer moneyWithdraw funds from an ATMUse a debit cardWrite and deposit checksPay billsView and manage your account online (and in some cases, through a mobile app)...

Regulators noticed these trends and quickly set up a 750 billion euro rescue package. But the crisis persisted due in large part to political disagreements and the lack of a cohesive plan among member states to address the problem in a more sustainable way. Learn about the Eurozone Crisis, its causes, solutions, and more. What Were the Causes of the Crisis? The Eurozone Crisis began in late 2009 when Greece revealed that its debt had reached 300 billion euros....

To continue covering transactions, even when you have a low balance, some banks offer overdraft protection. Overdraft protection links your checking account to another account—like a savings account, credit card, or line of credit—and uses that account to cover transactions that would have otherwise triggered an overdraft fee. Without overdraft protection, your bank might decline any transaction over the amount in your checking account. Instead of being charged an overdraft fee, your bank would charge you a non-sufficient funds fee and the merchant to whom you presented payment might also charge a fee in addition to the original amount of the transaction....

This article discusses when federal income taxes are due, how and when to pay, penalties for non-payment, and some payment alternatives. Federal Income Tax Due Dates The IRS sets tax return due dates for each business legal type. The filing date is also the payment date. The due date for small businesses filing their business taxes on Schedule C as part of their personal taxes is the same as the personal tax return due date of April 15....

How employers structure their plans can vary. Some may allow employees to choose a flat dollar amount rather than a percentage of earnings, and some matching contributions may be defined as a percentage of the employee’s contribution. However, many plans require that you contribute a minimum amount or percentage of your salary in order to qualify for the employer match. When signing up for your employer’s 401(k) plan, you’ll establish how much money you wish to contribute from each paycheck, and that amount will be deducted before income and payroll taxes are calculated....

Alternate definition: A balanced budget can also refer to any point in time in which a budget is not experiencing a deficit. In other words, as long as your budget is breaking even or has income leftover, it’s balanced. For example, if Michael and Jessica bring home $75,000 a year but only spend $70,000, then they have a balanced budget because their expenses are equal to or less than their income....

That’s why it’s a good idea to come up with a debt repayment plan. A debt repayment plan will help you repay your debt over time and gain more control over your financial future. Definition and Example of a Debt Repayment Plan A debt repayment plan is a strategic series of steps you take to pay off your outstanding debts. It’s a plan you put in place to eliminate your debt and get your finances back on track....

The term doesn’t just apply to those with $10 million in U.S. dollars, either. It refers to anyone who has a net worth of at least 10 million in any currency. So, if you have 10 million in British pounds or 10 million in euros, you’re also a decamillionaire. How a Being a Decamillionaire Works Oftentimes, using the word “millionaire” alone doesn’t paint an accurate picture of someone’s wealth. Do they have $1 million?...

Alternate Names: telephone check, preauthorized drafts, remotely created checksAcronym: DD While a demand draft doesn’t show your signature like a check, it would instead have your name and wording that the transaction was authorized by you, the depositor. When the drawee presents the demand draft to the bank, they’ll be able to get the money you wish to transfer. You can make the request for a demand draft at your local bank or credit union....

Let’s take a closer look at what a future-advance mortgage is and how it works so you can determine if it’s a good option for your situation. Definition and Example of a Future-Advance Mortgage When you take out a traditional mortgage, you use the funds to purchase a property. With a future-advance mortgage, you purchase the property with the initial part of the loan and receive more money at a later time to meet various goals....

With an HMO, your specialist gets a good picture of your overall health and keeps track of results from different specialists. It’s an integrated care model that focuses on keeping you healthy. When you need to see a specialist, your primary care doctor will refer you to one who’s part of the HMO’s network. By seeing only in-network providers, you’ll pay lower medical costs and you won’t have any unexpected bills showing up in the mail....

Acronym: HCE For example, if an employee has a base salary of $120,000 and also receives a bonus of $20,000, then their total annual compensation would be $140,000. Therefore, they would be considered a highly compensated employee. In addition, someone who owns 7% of the company would also be considered an HCE—even if their salary was just $30,000 a year. How Does a Highly Compensated Employee Work? Being classified as a “highly compensated employee” is a tax status used by the Internal Revenue Service (IRS)....

Housing bubbles can vary in terms of how long they last and how severe the impacts are when a bubble eventually bursts. But in a nutshell, housing bubbles tend to do more harm than good on an economic level, at least in the short term. The silver lining is that housing bubbles tend to be temporary events, meaning the housing market and the economy are eventually able to recover. How Housing Bubbles Work The term “bubble” is not unique to real estate nor is it a new concept....