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What Are Qualified Charitable Distributions

A qualified charitable distribution (QCD) allows individuals who are 70½ years old or older to donate up to $100,000 total to one or more charities directly from a taxable IRA instead of taking their required minimum distributions. As a result, donors may avoid being pushed into higher income tax brackets and prevent phaseouts of other tax deductions, though there are some other limitations.

How do qualified charitable distributions work?

The recipient of the QCD generally must be a 501(c)(3) or another recognized charity recognized by the IRS. The contribution must be in the form of U.S. cash or property, which means cash (or the equivalent in check or coin) or a current bank account, with a physical location of the charity. Non-cash contributions may include stock or other securities, or units in a qualified business enterprise (QBE). For 2016, the maximum cash deduction is $100,000, or 50% of the donation amount if the contribution is $100,000 or more. For tax years 2017 and 2018, the maximum is $100,000, or 50% of the donation amount if the contribution is $100,000 or more. For 2019, the maximum is $100,000, or 50% of the donation amount if the contribution is $100,000 or more.

Benefits of qualified charitable distributions

QCDs may be more valuable than ever because the income limits for the most current and future deductible contributions to traditional IRAs have increased. The IRS made these changes for all taxpayers except those with adjusted gross income (AGI) below certain limits. Donors will avoid having their basic exemption for the following tax year reduced from $0 to $10,000 for the first two qualified charitable distributions and $20,000 for additional distributions. The donor can contribute up to $13,000 to the same qualified charitable organization and avoid having the donor’s base income count towards their state and local income tax burden. The donor can avoid the greater than $1,050 state income tax for every $1,000 donated, and the $1,050 federal income tax.

Who can make a qualified charitable distribution?

QCDs may be made by a donor who is 70½ years old or older as well as anyone that is blind, disabled, or age 65 or older, although a retiree may be exempt from the requirement to take the distributions by taking the distribution on a spouse’s record. A qualified charitable distribution must be made from all of an individual’s lifetime RMDs, with the exception of RMDs taken before age 70½. In addition, a qualified charitable distribution is not considered a distribution from the estate, so there is no probate process or other tax consequences for making a qualified charitable distribution. Qualified charitable distributions must be made on an individual’s tax return, even if the individual is deceased, and are treated as ordinary income.

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Type of charity that can receive a QCD

The following are the types of charities that can receive a QCD. Generally speaking, a QCD will be made directly from a qualified charitable distribution to a charity of your choice. However, certain situations may lead to a partial or complete charitable distribution to a specific charity, rather than to any or all of the charities of your choice. Make charitable gifts within 60 days of the end of the calendar year. You do not need to wait until your retirement to make charitable gifts. If you want to make your QCDs after your retirement, you need to follow this three-step process. If you make a QCD, you can receive a tax deduction for the value of the transfer from the assets that are included in the QCD.

When might a qualified distribution not be effective?

When donations are paid out of pre-tax accounts, they count against the donor’s taxable income. That means that if the taxable income is too high, the donations may be more than the individual is required to pay in taxes. And there are some more unusual rules. For instance, you may not be able to make a QCD if your total IRA balance is less than $611,000, or if you are 55 years old or older, you may be required to pay capital gains taxes on a QCD.

Tax reporting

QCDs are reported on Schedule A of your 1040 and are subject to standard income tax withholding. QCDs are a bonus to charities and a bonus to taxpayers, but they can make or break the charities. Ask the charities to plan for this tax benefit by organizing tax-deductible contributions into their accounts, even though you cannot itemize donations. You will need to stay on top of your donations, though, as you might miss out on larger donations that can boost their fund-raising efforts.

What are the limitations of using QCDs?

They may be used to donate to any 501(c)(3) charity (or a local community organization), but they must go through a qualified charitable distribution representative to make sure all applicable tax rules and regulations are followed. Contributions must be made directly to a qualified charitable distribution representative, and QCDs cannot be used for church, nonprofit religious organizations, political parties, or other organizations that are not recognized charities. A charitable contributor is required to include a copy of the tax identification number for the charity in the QCD form.

How can I find out if I am eligible for a QCD?

The IRS allows individuals to apply for a QCD in one of four ways: filling out Form 8604, a form required to start or continue a QCD; writing a check to an authorized charity; scheduling a qualified donor meeting with an IRS representative, or initiating a transfer with a qualified charitable organization. These sources provide a helpful way to research your eligibility for a QCD.

What should I consider before making a QCD?

If you are 70½ years old or older and make a QCD, you must use the money to help individuals or families who are low income or otherwise in need. Generally, the first $100,000 you donate each year is tax-free, but there are some special restrictions that could apply to you. Here’s what to consider before making a QCD: If you donate QCD funds to a charity that doesn’t exist yet, the IRS can audit you, which might not be worth the potential tax benefits. In addition, charities that aren’t incorporated as charities may not be eligible for the QCD. If your QCD fund goes to a new charity every year, the value will eventually be below the $100,000 amount, and you will have to start the process all over again.


Tax reform is a significant benefit for taxpayers in many ways. Through new limits on itemized deductions and the elimination of most of the itemized deductions available to higher-income taxpayers, tax reform benefits taxpayers in several ways. The first step to taking advantage of these changes is to ensure you understand and have documented your tax situation.

“If you have any feedback about what are qualified charitable distributions that you have tried out or any questions about the ones that I have recommended, please leave your comments below!”

NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.


Should I Buy Or Lease A Car?

Choosing whether to lease a new vehicle instead of buying it largely comes down to priorities. For some drivers, leasing or buying is purely a matter of dollars and cents. For others, it’s more about forming an emotional connection to the car. Before choosing which road to go down, it’s important to understand the key distinctions.

What is a lease?

A car lease is a contract between the driver and a car dealer that agrees to cover the cost of a new car for a specified time (known as “lease term”). The contract guarantees that the buyer will return the car at the end of the lease, and makes sure that payments won’t go up during the duration of the lease. By contrast, a loan is more like a traditional, permanent loan from a bank. It provides the car buyer with a lump sum payment – known as the down payment – which is the amount the owner of the car will pay toward the purchase price of the car. If the car buyer decides that they do want to own the car at the end of the lease, they must pay the full price of the car upfront (called “forever payments”).

Advantages of Leasing a car

Leasing offers a lot of benefits for drivers who lease new cars: It’s a simple way to own a car. It’s easy to check-in and out of a lease. Because you don’t have the added cost of owning a car, there are fewer variables to manage. There are some tax benefits. There are many different ways to get car tax paid. Leasing is another option for those who don’t want to do the math to figure out how much tax they’ll owe. Leasing a car has many advantages as well. You can easily drop the payments on your lease, and you don’t have to worry about returning the car if you change your mind. Leasing is cheaper than buying a new car. Another advantage is the fact that you can own the car as long as you’re willing to pay for a maintenance contract.

Disadvantages of Leasing a car

It’s worth remembering that leasing can come with some major drawbacks. If you don’t pay down the balance of your loan, you’ll owe a monthly fee, even if the car is paid off at the end of the contract. For some drivers, leasing is a quick way to rack up high monthly payments, which eats into the budget. Leasing also means the car might not be the right size for your needs.

This post contains affiliate links. Please please read my Disclaimer for more information

Advantages of Buying a car

Buying a car has many advantages. There are no monthly payments to think about. You can buy as much or as little of the car as you want. You can always sell it if you decide it’s not working for you. Not everyone wants to deal with the hassle and headaches that come with ownership, though.

Disadvantages of Buying a car

Buying a car is not an inexpensive proposition. In fact, according to Edmunds, the average sticker price for new cars sold in the U.S. in 2017 was $35,558. However, there are some crucial costs to consider before making your decision. “Even with the best interest rate, financing isn’t always the best way to get the lowest price,” said Michael Hitchings, president of “When looking for a car, you have to consider what you’re getting and what you’re giving up. Buying a car can cost $1,000 more or more than if you lease.” Also, dealers and private sellers offer a wide range of financing options. In fact, one survey by the financing comparison website CompareCards found that 63 percent of car shoppers who purchased a vehicle in 2016 did so with a loan or lease.

Maximizing Tax Deductions

A lease makes sense if you expect to keep the car for a long time. In addition, a car lease can take the pain out of paying car tax and registration fees. With that in mind, a car lease usually has a lower monthly payment than a traditional purchase and is often cheaper to finance as well.

Longer-Term Considerations

Leasing isn’t for everyone, but if you’re unsure about how much you’ll be using a car every year or two, and you don’t want to be locked into a long-term car payment, leasing might be your best option. It’s no secret that these days, leases on used cars are incredibly expensive, so you’ll want to have ample time to negotiate a lease deal that fits your budget. The biggest downside to leasing a car is the payment. For short-term, casual leasing, the up-front cost is more or less unavoidable. For example, you might not be able to trade in your car once you’ve been leasing it for six months or more. When the lease ends, you’ll have a huge payment to contend with – and there’s no option to extend the lease.

How to Find the Best Car Purchase Deals

Buying a new car is typically the most economical way to go. Compared with the lifetime cost of leasing a car, buying a new car is typically more affordable. The price of buying a new car is determined by how long you will own the vehicle, as well as how much you’ll pay in lease and maintenance fees.

Invest in the brands you love

When it comes to selecting a new car, consumers could have a narrow set of options when deciding on which brand to go for. When considering a sedan over a crossover, for example, consumers can typically go for a sedan because of its handling capabilities, comfort, safety features, reliability, and available options. This makes it a more straightforward choice than choosing between, say, the Audi A4 and A5. But this is only true when choosing an upgrade over an equivalent luxury car. It’s not easy to pick between two brands when it comes to choosing their next car, but for some drivers, their values and passions are tied to particular brands. Those with a passion for certain car brands, in particular, may be more likely to go with them over competitors.


Cars are extremely expensive and people are extremely fickle when it comes to their needs and requirements. It’s rare that you find a car that can satisfy all of your needs. Instead of making a hasty decision, think through your wants and needs. It’s best to spend a few hours researching each car on the market to ensure that it meets all of your demands and needs.

“If you have any feedback about should I buy or lease a car that you have tried out or any questions about the ones that I have recommended, please leave your comments below!”

NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.

S&P 500 Index

What Is S&P 500 Index? How Does It Work?

Credit rating agency Standard and Poor’s launched the S&P 500 in 1957 to track the performance of the 500 largest public companies in the United States. Today, the S&P 500 serves to gauge the health of the nation’s economy and, on a smaller scale, it impacts the returns on individual fixed index annuities and index-linked investments.

What is the S&P 500 index?

Today, the S&P 500 index is considered to be the standard benchmark index for the U.S. stock market. The S&P 500 index is composed of 500 stocks, which are listed on the New York Stock Exchange and the Nasdaq Stock Market. As the name indicates, the S&P 500 represents the 500 largest publicly-traded companies in the United States. The index is weighted by market capitalization and consists of these 500 stocks. These companies are diversified, which is why they all have different market caps and stock prices.

How does S&P 500 index work?

Each company must be included in the S&P 500 Index, but they are selected based on several criteria that go beyond financials. The metrics that S&P uses for their stock selections include P/E ratio (price-to-earnings ratio), Cash flow (return on cash flow), P/B ratio (price-to-book value ratio), Revenue growth, and Fundamental analysis. These factors will help the index determine whether or not a company is a good investment. Companies’ profitability and quality of their products determine whether a company is included in the index or excluded. Companies excluded from the S&P 500 Index often have poor overall credit ratings, high levels of debt, or a poor track record of performance.

Benefits of S&P 500 index

First, let’s talk about the most obvious benefit of tracking the S&P 500. It acts as a benchmark for an entire economy. And, in many ways, the fate of the economy may turn on how the S&P 500 performs. If the S&P 500 rises, then investors may be inclined to follow. If the S&P 500 falls, then people will likely move to short-term investments to protect their money from a drop in the stock market. In other words, the S&P 500 index acts as an easy way for people to gauge how well the country’s economy is doing. Additionally, the S&P 500 contains hundreds of large publicly traded companies that are part of the nation’s economic core. Consequently, being part of the index can act as a sign of stability or growth for a particular company.

This post contains affiliate links. Please please read my Disclaimer for more information

Which companies are in the S&P 500 index?

The S&P 500 index includes 505 equities from 500 different firms. Because a few S&P 500 component businesses issue multiple classes of stock, there is a variation in the numbers below. For example, Alphabet Class C (NASDAQ:GOOG) and Alphabet Class A (NASDAQ:GOOGL) shares are both included in the S&P 500 index. Obviously, listing all of the S&P 500 companies would be impractical. However, because the S&P 500 is weighted by market capitalization, its performance is mostly determined by the performance of the largest firms’ stocks.

Why use the S&P 500?

The S&P 500 contains the top 500 public companies in the United States and serves as a proxy for overall U.S. equity market performance. With the highest concentration of publicly traded stocks in the United States, the index serves as a good comparison to global equity markets. Standard and Poor’s and other credit rating agencies have been tracking the S&P 500 since 1957. In addition to tracking financial data, the S&P 500 helps provide a view of the overall state of the economy. Since its inception, the S&P 500 has delivered annualized returns of approximately 9.4 percent, significantly higher than a broad basket of funds. Why index-linked investments? Unlike mutual funds, indexed annuities and index-linked investments are cheaper and more liquid.

How can you invest in the S&P 500 index?

You can buy shares of a mutual fund or an exchange-traded fund (ETF) that tracks the S&P 500 index to invest in it. In proportional weights, these investment vehicles own all of the stocks in the S&P 500 index. Two appealing possibilities are the Vanguard S&P 500 ETF (NYSEMKT:VOO), which trades like a stock, and the Vanguard 500 Index Fund Admiral Shares (NASDAQMUTFUND:VFIAX) mutual fund. Both offer extremely low fees and deliver nearly equal long-term returns to the S&P 500 index. You can also invest in S&P 500 futures, which are traded on the Chicago Mercantile Exchange. These are essentially bought and sell options that allow you to hedge or speculate on the index’s future performance.

Is investing in the S&P 500 right for you?

S&P 500 Index is the benchmark that most index-tracking exchange-traded funds (ETFs) and fixed income mutual funds use to track the performance of the 500 largest companies in the United States. Here is an example: if you wanted to invest in an S&P 500 Index fund (or an ETF with that goal) and try to maintain a level of the S&P 500 Index, then you would have to own the 500 largest companies. That might be a reasonable way to invest if you’re just looking for a way to supplement your retirement savings and invest in a way that leverages the power of the stock market. But investing in the S&P 500 in that manner can have serious consequences for your retirement nest egg.

How To Use the S&P 500 to Make Money

The S&P 500 Index represents the 500 largest companies in the United States. These companies are typically large firms in the oil, chemicals, aerospace, building materials, consumer products, food and beverage, financial services, telecommunications, technology, utilities, healthcare, and natural resources sectors. As such, the 500 companies are generally large and stable firms. The S&P 500 Index does not include small companies and does not include real estate investment trusts (REITs), foreign companies, or real estate investment trusts which are popular among many investors. Like any index, the S&P 500 Index is subject to management trading by professional investment managers.

S&P 500 vs. Other Stock Market Indexes

Most investors are familiar with the Dow Jones Industrial Average, which tracks the performance of 30 of the largest publicly-traded companies in the United States. But, there are also indices that track the performance of the stock market for individual companies, in addition to broader market performance. The MSCI EAFE Index tracks stocks from European, African, and Asian markets. The Standard and Poor’s/TSX Composite tracks the performance of the largest Canadian companies. When a company is deemed an S&P 500 Index member, it becomes eligible for inclusion in the S&P 500 Index, and S&P determines the appropriate level of its inclusion.


Even if you don’t own the S&P 500 index, it’s time to start thinking about adding real estate to your portfolio. Having equity in real estate means you have more control over your income and can adjust it to your needs. Just be careful not to let the land value erode below the price you paid.

“If you have any feedback about what is S&P 500 index that you have tried out or any questions about the ones that I have recommended, please leave your comments below!”

NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.

1031 Exchange

What Is A 1031 Exchange? How Does It Work?

If you’re a real estate investor, the 1031 exchange—which gets its name from Section 1031 of the U.S. Internal Revenue Code—is your best friend! Why? Because for about 100 years, the 1031 exchange has allowed real estate investors the chance to reinvest the profits from the sale of a property without having to pay capital gains tax. As long as you replace one investment property with another and follow all the rules set by Uncle Sam (we’ll get to all of those in a minute), you can keep kicking that tax bill down the road.

What is a 1031 Exchange?

In essence, the 1031 exchange gives investors the opportunity to move property they had purchased within a certain time frame and realize substantial capital gains tax benefits. With a personal 1031 exchange, you create a “Trust” or “Subscription”. In order for the Trust to exist, you must contribute your property to the Trust. When you make an exchange, the property must remain in the Trust. When you sell your property, the proceeds must be disbursed to the Trust. Once your property is used to fund the Trust, any income that is generated by the property is reinvested into the Trust in the form of a distribution (or dividend).

How does 1031 Exchange work?

To understand the 1031 exchange, we need to take a quick break and dig into some confusing tax law jargon. We promise the confusion ends here. It’s actually very simple. A tax break is called a “sell-through” because the original investment property has been sold. The profit from that sale can then be reinvested into another real estate investment. But the selling property can’t be sold at the same time that it’s bought. For example, say you are looking to sell your first investment property, a duplex in California, for $300,000. If you purchase a new investment property, say a 2-bedroom, 1-bathroom apartment in Maryland, for $200,000, and then sell that one in California for $300,000, you would only be taxed on $300,000.

Benefits of a 1031 Exchange?

Keep reading and we’ll go over some of the major benefits of a 1031 exchange! Keep in mind, while the benefits below are geared towards real estate investors, you should follow these rules if you’re trying to sell any other type of investment property. If you sell your property in a 1031 exchange, the proceeds you receive will be taxed as ordinary income by Uncle Sam. While this is all good news, it can also be confusing. Luckily, we’re here to help! The way the IRS determines your gains on a property sold in a 1031 exchange is pretty simple. The IRS will look at what you sold your property for, along with any other income you may receive on that property—whether it’s your salary or rental income.

This post contains affiliate links. Please please read my Disclaimer for more information

Choosing a Replacement Property for a 1031 Exchange

The first rule of a 1031 exchange is that you have to start with the property you plan to invest in and sell. You’re not just exchanging the property for cash; you’re also making a down payment on a new investment. This new property must be located in the same state as the one you sold, and you’ll also need to close on that property before the end of the year. At this point, you’ll need to figure out exactly which investment property you plan to replace. Start with your finances, and find a piece of real estate property that you’re willing to buy from a seller in a transaction known as a “1031 exchange”. The catch is that you’ll need to have a property to sell. If you don’t have one, then you’ll need to rent one out until you do.

What Is Depreciation and Why Is It Important to a 1031 Exchange?

If you take a look at the IRS guidelines for Section 1031, you’ll find that the two main factors that go into deciding whether you can use the 1031 Exchange to your advantage are depreciation and an increase in value. When you own a rental property, you’re losing a chunk of your earnings each year to property taxes. And let’s face it, when you’re in the market for a new home, you’re not going to want to shell out hundreds of thousands of dollars more on property taxes. Since depreciation on your home is going to take a long time (that’s the point!) and housing prices are always going to rise, if you own a rental property, then you’ll have to lose a lot of money before you can begin to come out ahead.

1031 and Estate Planning

Before we get into the details of 1031, it’s important to address two important issues: 1) What does 1031 mean for real estate investors? 2) What is a 1031 exchange supposed to do? 1031 means that the 10% of capital gains tax that an investor pays on the sale of one property can be reinvested in another property. This is a tax deferral. Let’s say that an investor sells their house and redeems their appreciated stock in an S corporation for $150,000. With $150,000 in capital gains, the investor still has to pay $4,400 in capital gains tax. But if instead, the investor had reinvested $150,000 in the market, without paying capital gains tax, then the investor would receive a $6,600 gain in market value. That’s a $4,400 difference. One is taxed; the other is not.

1031 Exchange Expertise

Not all investors know about the 1031 exchange, or they don’t know how to use it to their advantage. Fortunately, our friends at Rand Realty, Realty One Group, and Freeman Real Estate have mastered the art of the 1031 exchange—so you don’t have to! Realty One Group’s Mike Brenner learned about the 1031 exchange in the 1980s while selling multifamily properties in Brooklyn and Manhattan. Today, he’s a consultant to the real estate industry, with knowledge of the 1031 exchange that stretches back more than 25 years. Brenner says the easiest way to create an income stream and turn a profit on a property you sold is to buy another property with the funds you’d usually use to purchase that initial property.

How much do you need to spend and borrow for a new 1031 exchange property?

If you are a big-time investor—and you should be, because you are going to enjoy the most tax advantages—the cost and time of your 1031 exchange will depend on the amount of money you have invested in real estate and the size of the proceeds from the sale of your current property. It is not unusual to spend $50,000 to $100,000 on a new property, but if you are doing a 1031 exchange, the cost will probably be less because you are getting some money back. When you come up with your list of what to buy, you have two options: One is to buy what you like and “unwrap” it and decide where to move it next, or you can buy some sort of a “placeholder”—one that you really like but aren’t sure how you’re going to use it in the next year.

Calculating the cost basis of the property you sell

The tax code is clear when it comes to how you determine your cost basis. You’ll need to use the year you bought the property, the acquisition date, and the period you owned it (within a year and a day). If you’re thinking about selling your property for more than you paid for it, it’s important to do some research. While there are exceptions, a sale for more than your purchase price is considered a short-term gain (i.e., less than one year). A sale for more than two years of ownership is considered a long-term gain (i.e., more than two years). It’s also important to remember that as long as you don’t live in the property, or rent it out, there’s no gain to be had when you sell the property.


Overall, the amount of money available in the real estate market at any given time and the number of properties available to purchase are a relatively small part of the reason the mortgage market has been so much stronger during the past few months. If the same logic applies to the housing market as it does to the mortgage market, then the surging prices won’t mean much because there won’t be nearly as many properties to purchase. In order to fix this, the economy needs to continue to improve. That will force people to spend money on more goods and services, which will push prices back up. In the meantime, however, the signs of life in the real estate market are undeniable.

“If you have any feedback about what is a 1031 exchange that you have tried out or any questions about the ones that I have recommended, please leave your comments below!”

NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.

Rising Interest Rates

How Do Rising Interest Rates Affect Your Finances?

Worried about all the ways the Fed interest rate could impact your finances? That’s totally natural, considering the Fed and its interest rate hikes have dominated headlines for months. Many people get spooked when interest rates come up. Rising rates can raise a lot of questions: Will rising interest rates impact your finances by making mortgages too expensive? Could you miss out on your chance to borrow while it’s still cheap to do so? These questions are valid when talking about rate hikes, but making decisions based on news headlines alone can be problematic.

What are interest rates?

Understanding what interest rates are, why they’re rising, and what that means for your finances can go a long way in helping you understand your financial future. Let’s say you’re shopping for a car. You probably know that interest rates can affect your monthly payments. One car loan’s interest rate might go up, while a different loan might offer lower rates than you’re used to. This is because each loan has different interest rates. This is called an interest rate “spread” — it’s the difference in the average interest rates for different loans. The higher the rate, the less you pay on your loan. After calculating the difference in your car loan interest rates, you’ll find out that you can expect a lower monthly payment if you take out a different loan.

Benefits of interest rates

Any time your investments or money grows, it’s generally a good thing. It just means the underlying investments, like your money in a 401(k), aren’t getting weaker. Similarly, the Fed rate hike will help keep the economy from getting too strong. Inflation will also be lower with a higher rate, meaning people can spend more money on the items they want without having their money go too fast. The point is that higher interest rates are, for the most part, good. Higher interest rates are good. On the other hand, interest rates are not always good. High rates can be bad for investors because of their potential effect on a retirement account. If you’re trying to put money away for the future, you want to make sure it stays as safe as possible.

How would interest rates increase

Rate hikes come in stages. Interest rates increase from 1% to 2% each year, but sometimes there are one-time increases. To illustrate how increases in rates work, let’s look at a real-life example. A 2% federal income tax rate — higher than the current top rate of 37% — is the rate most commonly used when discussing rising interest rates. If the top tax rate increases to 35%, your savings will effectively increase from 2% to 3%. This example isn’t meant to paint a rosy picture. There are several ways the federal government could increase tax rates (you can read more about this here) and the potential consequences could be disastrous for some people. Still, it provides a quick way to illustrate the basic concepts involved in increasing interest rates.

Effects of rising interest rates on finances

In many ways, it’s best to avoid making hasty financial decisions solely on the basis of the Fed interest rate hikes. Consider these key pieces of the puzzle: The Fed’s intent when raising interest rates is to slow down growth in the economy and bring interest rates up to more normal levels. The Fed believes that slowing down growth and slowing down interest rates are positive outcomes. When they’re behind the scenes planning interest rate hikes, they’re thinking of how rising rates will impact the economy in general. After all, rising rates only affect things that are tied to the economy, such as mortgages.

This post contains affiliate links. Please please read my Disclaimer for more information

Impact on mortgage payments

First, when it comes to purchasing a home, your mortgage interest rate affects the size of your monthly payment and how long you’ll need to pay it off. You may assume that it’s not high enough to change your monthly payment, but that’s incorrect, as shown in the analysis from According to that report, an owner of a $200,000 home pays on average $844 per month in mortgage interest. The percentage change in that mortgage rate over 12 months, would lower your monthly payment by $23 per month. That could be enough for you to pay off your mortgage earlier, although there’s no one-size-fits-all rule for the size of your monthly mortgage payment. Interest rate changes may make it more expensive to make a mortgage payment for the rest of your life.

Impact on Car loans

When interest rates rise, the average car loan rate in the United States tends to rise with it. But there are a few different ways rising interest rates could impact you if you’re buying a new car. First, let’s look at the latest Federal Reserve interest rate hike. In December, the Federal Reserve raised the Fed Funds rate from a range of 1.25% to 1.5% to a range of 1.75% to 2% after keeping rates at 1.5% for over seven years. This was the third interest rate hike in 2018, and the second of the year. Under this rate hike, some borrowers, such as people who currently have loans at 2.5%, will likely see their rate increase.

Impact on credit card rate

Credit card interest rates move in tandem with interest rates. When interest rates rise, the credit card interest rate (and associated fees and interest) also rise. Unlike mortgages and other loans, interest rates on credit cards typically are not fixed, so even a single percentage point change in interest rates will have a noticeable impact on the balance you owe. Changes in credit card interest rates depend largely on two factors: the Federal Reserve’s moves and the credit card issuer’s strategy. In general, issuers are more likely to increase rates when the Fed is raising rates and lower rates when the Fed is lowering rates. When interest rates are rising, issuers are most likely to lower rates on credit card balances.

Impact on Private student loans

If you borrowed money to go to school, you may have private student loans. Private student loans aren’t backed by the Federal Government, but instead by the investor. To gauge if your private student loan is affected by rising interest rates, ask: Are your payments going up? Will I get a new student loan, or another loan, with more favorable terms? If you have outstanding federal student loans, you may be looking forward to an exciting new federal student loan program. According to the Department of Education, there will be a new federal student loan for students that will allow them to borrow money to pay for their education without making payments for a set period of time.

Impact on Returns on savings

Not all people pay close attention to the Fed, but those who do have reason to be concerned. Here are the reasons why: While rising interest rates could theoretically be good for investors, it is still negative for savers. The chart below illustrates how fixed-income investors stand to lose money on fixed-income investments that are already priced relatively low by the market. Because the market rate is already higher than the interest rate on a savings account, a 1% higher market rate will make all savers poorer. On the other hand, many investors are at risk of losing their money in the stock market when rates rise, since the stock market is priced higher than it has been in a long time.


It’s a lot to think about when you look at all the variables at play. However, it’s critical to know how rising rates impact you. It’s often best to sit down and think about your needs, finances, and financial goals before diving into any decision. The more prepared you are, the more confidence you’ll have when making the best choice for you.

“If you have any feedback about how do rising interest rates affect your finances that you have tried out or any questions about the ones that I have recommended, please leave your comments below!”

NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.

401k use for a house

Can You Use Your 401K To Buy A House?


If you’re short on cash for a down payment, and you happen to have a retirement plan at work, you might be wondering if you can use a 401(k) to buy a house. The short answer is yes, you are allowed to use funds from your 401(k) plan to buy a home. It is not the best move, however, because there is an opportunity cost in doing so; the funds you take from your retirement account cannot be made up easily. Here’s a look at the details of tapping your 401(k) for the joys of homeownership, along with some better alternatives.

What is a 401k?

The 401(k) plan is a retirement plan for your company. Most large employers offer at least one type of 401(k), either a traditional or a Roth 401(k), but your company can and most likely will have multiple options. Let’s say your company offers a traditional 401(k) plan. Traditional 401(k) plans have a high contribution limit. If you were an employee of a company that offers a 401(k) plan, you could put up to $18,000 in a traditional 401(k) account during the 2018 tax year. The downside is that there is a lot of paperwork and management overhead in a traditional 401(k) plan. A traditional 401(k) plan gives your employer a larger portion of your money, all the way up to 50% in most cases.

How does 401k work?

One of the first questions most people have about tapping into their 401(k) plan is how does it work? This is really a very simple process. It is similar to the “regular” way of setting up an Individual Retirement Account (IRA), where you set up an investment account that earns a little bit of interest every year. The difference with the 401k, however, is that your 401(k) account cannot normally be touched until retirement. So, the good news is that you can leave your 401(k) money invested in a brokerage account, and pull some money out whenever you feel like it. The bad news is that you are then no longer in a position where you can use those funds for a major purchase like a home. That is until you take money out early and then put it back in.

Can you use your 401k to buy a house?

The short answer is yes, you are allowed to tap your 401(k) plan to buy a house, but you should only do so as long as you have the funds to do so. If you don’t have enough to buy a home, it’s not really an option. That said, your 401(k) plan is a good asset class for purchasing a home. The general rule is that you can only tap the 401(k) funds to buy real estate if you have access to the down payment amount in cash, or if you have enough money to get a 30-year fixed-rate mortgage. If your plan allows, you can tap the 401(k) account to buy a home, with the caveat that if you don’t have enough saved, you’ll be rolling the dice. While your 401(k) doesn’t have a custodian (your employer must manage it), it still offers a lot of investment choices.

This post contains affiliate links. Please please read my Disclaimer for more information

401(k) Loans

A 401(k) loan, also called a loan from a retirement account, is a temporary loan that is usually paid back after you are finished working for the company. It can be used for a variety of different purposes. You can borrow money for a car, purchase a second home, go on vacation, or if you don’t mind taking a risk, you can get a mortgage on your new home with the help of a 401(k) loan. However, there are two potential downsides to borrowing from your 401(k): You can only use the money you take out of your 401(k) for one purpose at a time. This means that if you need to use your 401(k) to get an early mortgage payment on your house, you won’t be able to take advantage of other options like refinancing or selling your home.

401(k) Withdrawals

Money withdrawn from your 401(k) retirement account can be used only to buy a home, not to pay taxes on that money, or to pay for other things, such as closing costs. You have to pay the IRS a 10% penalty on withdrawals made before age 59½, so it’s better to hold on to the funds until you are ready to actually purchase a home. You cannot take out money for living expenses, but you can pay for medical expenses or college expenses without an additional penalty. These provisions do not apply to Roth 401(k)s, so don’t expect to have to pay taxes on the money you take out for these purposes.

Drawbacks to Using Your 401(k) to Buy a House

The biggest cost is the higher taxes you have to pay on the income from the home loan. The good news is that you can eliminate the need to worry about the tax bite by making sure you’ve started building an emergency fund before doing anything else. It is also important that you diversify the types of investments you have in your retirement account. The bigger drawback to using a 401(k) is that you’ll need to contribute up to $10,000 to a retirement account in order to buy a house. This is because the maximum you can contribute to a 401(k) every year is $18,000, and a 401(k) account is not free. It takes money to build one, so you will have to pay at least $1,000 (your $10,000 in contribution) in fees to keep the account active.

Alternatives to Tapping Your 401(k)

The key point about using a 401(k) to buy a house is that you’ll have to pay income taxes on the amount. So if you make $100,000, you will be paying approximately $16,000 in income taxes. This is money that could have gone toward your retirement.

Find The Mortgage Option That’s Right For You

Before going down the road of using your retirement plan to buy a house, it’s important to first take a look at whether your 401(k) could be tapped for other purposes such as a second car, a college education, or even some non-necessities like vacations and hobbies. For example, if your employer offers a matching program, it’s usually easiest to invest in an IRA, which you can only do if you’re younger than age 50. If the option to tap a 401(k) is the only realistic way for you to purchase a home, there are other ways to save for a down payment without missing out on other financial goals.

What is the cost of using 401(k) for a house?

How much you need to contribute toward a home purchase varies by household. For many first-time buyers, a simple rule of thumb is to save 15% of the home price. The other 10% should go toward closing costs. According to, the average home sale price in July was $266,000 in the U.S. Fees to buy a home Over the course of a 30-year mortgage, if you were to pay 0% interest and the 10% of a $267,000 home cost would cover the balance, you would end up paying $110,000. Assuming a 6% interest rate, that equals $7,167. Applying the cost of the down payment to 0% for a 30-year loan equals $4,962, which means you would need an extra $12,216 to put toward your down payment. As the cost of a home goes up, it becomes more difficult to save enough for a down payment.


It’s important that you understand all of the potential ramifications and tradeoffs that come along with taking money from your 401(k) to buy a home. Using a 401(k) for the purpose of buying a home is a move that should be scrutinized closely to determine if it is the right move for you. A final word of caution: The IRS warns that not only are these funds not guaranteed to come back, but the IRS might also consider this activity as an attempt to avoid or evade paying income taxes. Take this into account and weigh the possible outcomes carefully before taking any action.

“If you have any feedback about can you use your 401k to buy a house that you have tried out or any questions about the ones that I have recommended, please leave your comments below!”

NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.



What Is Blockchain? How Does It Work?

If you have been following banking, investing, or cryptocurrency over the last ten years, you may have heard the term “blockchain,” the record-keeping technology behind the Bitcoin network.

Blockchain seems complicated, and it definitely can be, but its core concept is really quite simple. A blockchain is a type of database. To be able to understand blockchain helps to first understand what a database actually is. A database is a collection of information that is stored electronically on a computer system. Information, or data, in databases is typically structured in table format to allow for easier searching and filtering for specific information.

What is blockchain?

A blockchain is a new kind of database. A blockchain is the network of people, devices, and machines working together to maintain and update the data in the database. Blockchain is built on what is called a distributed ledger. In plain English, distributed ledger describes a database system in which all of the information that is needed to keep the system operating is stored on many different computers. In a traditional database, each computer keeps its own copy of the data. A distributed ledger system allows all of the computers to store and share the same information, called a distributed ledger. Each node on the network runs a computer program that holds the blockchain database. The programs are based on the Bitcoin protocol, the open-source ledger used by Bitcoin.

How does blockchain work?

Now that we have an understanding of a database, let’s take a look at how blockchain works. A blockchain is essentially a distributed database. In other words, instead of one computer in a building storing a database of information, there are hundreds or thousands of computers around the world sharing the same database.

In the blockchain world, a database is much more than just a data structure. Blockchain is a distributed ledger a continuously growing, mutable digital database that is kept safe and secure by the use of cryptography. Smart money is increasingly turning to blockchain for its ability to provide a solution for one of the biggest challenges facing the digital economy: securely moving, verifying, and safely storing data. According to research firm IDC, 90% of all blockchain projects are focused on improving payment security. Blockchain applications and services are now being offered by major tech giants and startups, offering more and more robust products for companies looking to eliminate inefficiencies and create unprecedented transparency.

What is a database?

A database can be thought of as a virtual collection of all information related to a specific activity, and the information is kept in this virtual collection as a record of transactions. This database is stored electronically in a location that can be accessed by a computer. This concept is also known as a “shared digital library,” because the information is shared with a very large network of computers. The information in the database is stored so that everyone in the network has access to it, and can also make copies. This allows you to access the information while others have access to it. Once the information is in the database, it stays there permanently. This is exactly how a record-keeping system works.

Blockchain and bitcoin

A blockchain is a type of database that uses “blockchains” to form a database. It creates “blocks” or logical units of information, which are each linked to each other by what is called a “hash” or cryptographic key. The idea is that if something were to happen to a blockchain, like losing access to a computer, the information would still be completely accurate. The concept behind bitcoin is that someone whose computer is hacked, or if they don’t have the ability to access their wallet can have the information printed out in order to transfer bitcoins (or whatever cryptocurrency it is) without the bank knowing. In order to help that process along, a “coin” is created which is an item with a unique serial number associated with it.

This post contains affiliate links. Please please read my Disclaimer for more information

What are the different types of blockchains?

The Bitcoin blockchain has only digital currency as currency. Unlike most cryptocurrencies that require a digital wallet, Bitcoin is stored in the form of a blockchain. The Ethereum blockchain stores data in the form of smart contracts, also known as scripts. The Tron blockchain stores and executes data in the form of smart contracts. And the Ethereum blockchain can also execute scripts in the form of a proxy chain. A proxy chain is the equivalent of execution, that is, a distributed autonomous organization (DAO), in computer science, which is a contractless autonomous organization that issues a token called a “tokens.” These contracts enable the creation of contracts that run autonomously, outside of the normal control of any single institution.

Applications of blockchain in education, finance, law, and healthcare

Blockchain can be used in a variety of different industries, but its most common use is in financial services. A very popular use of blockchain in finance is in financial trading. The blockchain contains all the information about financial trades. The blockchain also records the information, which allows traders and traders of the future to track the sale and purchase of stocks and other financial assets. But beyond financial services, blockchain can be used in many other sectors of the economy. E-commerce applications Some of the more significant blockchain-based e-commerce applications are prediction markets, crowdsourcing, and artificial intelligence.

What are the main advantages of blockchain?

A blockchain system is both secure and trustworthy, which allows a lot of things to happen that wouldn’t be possible in the normal world. For example, we use credit cards every day, but it’s possible to steal the money if you steal the information about the card (how much is on it, how much is available to spend, etc.). When you do this, you put the card in question out of business. With a blockchain system, thieves have a very hard time accessing and stealing information. So, with blockchain, you can leave your card at an ATM, get your money back when you put the card back in your wallet, and your card is not in a database of credit cards that can be stolen.

What are the limitations of blockchain technology?

In order to be a successful blockchain, a cryptocurrency must have all of the following attributes. A blockchain must have an organization, a website, or other associated social media to distribute the currency. The organization or website must be easily traceable through publicly available records. Each organization or website that has the ability to distribute a currency must be able to have it validated and in control of its own “keys.” Each key that the organization has is akin to an authorization token, or a digital signature. The currency must have an identifiable and secure address on the blockchain. Every transaction on the blockchain must involve a specific cryptocurrency for the transaction to be valid.

How is a blockchain created and maintained?

The first step in creating a blockchain is to distribute and verify a new set of data through a network of computers that are all working to verify the information. These computers, called “nodes,” verify the transaction information by making sure that the parties involved in a transaction are legitimate and meet minimum requirements. The blockchain network is open source. Anyone can run a node. In order to maintain the integrity of the blockchain network, nodes are required to update the transaction information as it changes. This ensures that the integrity of the database is maintained and that it cannot be changed retroactively.


While there are other types of databases that are more traditional, such as relational databases and document databases, it is fair to say that most databases are designed to hold information in a database format. Blockchain is not a database, but it is a type of database with one key feature: that it is distributed. Blockchain is distributed not because it is being stored across many different computers around the world, but because it is stored on all the computers in the system and stored in a decentralized manner. It is managed by the computers that store it. Although the term “blockchain” has been around for many years, it really took off after the creation of the Bitcoin blockchain.

“If you have any feedback about what is a blockchain that you have tried out or any questions about the ones that I have recommended, please leave your comments below!”

NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.

What's a shareholder

What Is A Shareholder? How Does It Work?

When you buy a stock, you technically become a part-owner of a company or business — although generally without the responsibility of the day-to-day running of that business. There are a number of rights and benefits that come with being a shareholder, whether you own one share or thousands.

Publicly traded, for-profit companies can raise money by selling shares to investors, who in turn become part owners of the company. When shares are purchased as part of a company’s initial public offering (IPO), the funds go directly to the company. Once they’re trading hands between shareholders, of course, companies no longer raise money from those transactions.

What is a shareholder?

A shareholder is a person who directly or indirectly holds a specified number of shares in a company’s initial public offering, or is a preferred shareholder. If the shares are bought by company insiders, there is also the possibility that the investor will influence management, the company’s board of directors, or the board of advisers. Shares can also be owned by institutions, mutual funds, and other investors, although they may own shares in a non-public forum. Typically, investors buy shares to keep the company in business and to share in its profits. Some may want to sell their shares for tax reasons and then become passive investors. Others may buy shares to add to the total capital of a company or to guarantee a level of voting rights, such as that of preferred shareholders.

How does it work?

A share in a company is similar to owning a part of a stock portfolio. Each shareholder buys a portion of a company, usually with the intent of holding onto the share long term. The price for a share of stock can be linked to the company’s profits and performance. Buyers often are attracted to the company’s potential future performance. As you’ll see, you could make a substantial profit if the stock does well or even lose money if it doesn’t. Typically, for-profit companies list their shares on a publicly traded exchange. What is a stock’s price? In the case of publicly traded companies, it’s a common misconception that shares are traded as one large unit. Most companies don’t market their shares as if they were shares of stock.

What is the role of a shareholder?

A shareholder is the main person or body of people who directly own shares in a company. They have the right to vote on corporate matters or nominate a member to a company’s board of directors. A share has an ownership interest in the company, but it doesn’t necessarily have the same rights and responsibilities as a full investor. Shareholders are often the owners of businesses, and often have some sort of formal connection to the company. That could be that they have bought shares in the company on behalf of their employees, or they work for a related company. Is it better to own shares in a company or not? A shareholder owns a portion of a company’s shares a small percentage of the total number of shares.

This post contains affiliate links. Please please read my Disclaimer for more information

What are the benefits of being a shareholder?

There are a number of perks that come with being a shareholder. As a shareholder, you have more of a say in how a company is run, including receiving voting rights — or the right to vote shares according to how they vote on company matters — and being eligible for dividends and other share-price-boosting incentives. Can I take my share of the company with me if I leave it? No, that’s not how it works. For an IPO, for example, once a company reaches a certain number of shareholders, it is required to register with the SEC. At this point, shares can still be taken home but must be declared to the commission within 10 days of purchase and then accounted for in the company’s annual financial filing.

Shareholder’s rights and responsibilities

If you invest in a publicly traded company, your rights and responsibilities will depend largely on whether you’re investing in the same company as a small number of other people, or whether you’re investing in a group of private companies. Either way, you’ll want to know what rights you have, what responsibilities you’ll have, and when you can expect to see some of your money back. To find out whether you have ownership in the business, it helps to understand how a publicly traded company works and its ownership structure. Publicly traded companies are required by law to make a certain percentage of revenue available for investment in the company’s share price in order to maintain their status as public companies.

The disadvantage of being a shareholder

While the benefits of being a shareholder are fairly obvious, for-profit companies generally have a number of disadvantages. Some of them are bad for you and others could mean losing money. Let’s look at two of the biggest disadvantages of being a shareholder: Membership dues Just being a member of a company can be expensive. All publicly traded, for-profit companies have to pay an annual fee to the U.S. Securities and Exchange Commission (SEC) to be able to raise money, which represents a cost of $11 for every $10,000 in shareholder equity. While the minimum fee is a small percentage of the total raising funds, there’s no such thing as getting a break.

Why are shareholders important in a company?

Shareholders own the rights associated with the shares they hold and can control how the business operates. Without a willing buyer, companies cannot raise capital, and without a stockholders’ equity, businesses cannot grow and can remain stagnant. If a stockholder, or the company, has a stake in the company, they hold the power to influence decision making, as well as a significant influence on whether the business succeeds or fails. What rights are common to all common shareholders? Common shareholders typically have the right to participate in the management of the company, such as voting at shareholder meetings. There are two types of common shares: voting and non-voting. Voting shares allow shareholders to vote at meetings; non-voting shares have no voting rights.

How to become a shareholder?

Owning stock in a publicly-traded company can be a good way to become a part-owner of the business. Many companies are created, run, and managed by a board of directors. They select the business’s management, and the president or CEO of the company is usually on the board. You are a shareholder of the company’s decision-making. You also own stock in companies that are privately held. Private companies typically hire an independent board of directors, who are responsible for appointing the company’s management team and setting the company’s annual and longer-term strategic direction.

What powers do shareholders have?

Generally speaking, shareholders have two main rights: one is to participate in the company’s decision-making process, through voting shares. This allows them to have a say in the way that a business is run a shareholder could have two votes, one for the directors on the board and one for the management team. The other power of a shareholder is to invest their money in the company there are two ways they can do this. The first is to purchase stock through the company. The second is to buy stocks in the open market and hold them in their own name. For companies with annual revenue below the revenue threshold for the Financial Stability Board’s listing guidelines, shareholders have to be “equity holders.” These are investors who are buying shares to control a company.


Business owners and private investors of all types need to invest in shares to reap the benefits of capital appreciation and to lower their risk of volatility. The new tax law is making it a lot easier to invest in publicly traded companies. Being an investor will provide you with ownership of the company, which will enhance your overall financial outlook.

“If you have any feedback about what is a shareholder that you have tried out or any questions about the ones that I have recommended, please leave your comments below!”

NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.

Forex Trading

What Is Forex Trading? How Does It Work?

The foreign exchange market, also known as the forex market, is the world’s most traded financial market. Read on to learn how to become a forex trader with our comprehensive Beginner’s Guide. You’ll find everything you need to know about forex trading, what it is, how it works, and how to start trading.

What is Forex trading?

Forex trading is essentially a high-stakes game of trading currencies between traders and institutions, using foreign currency. In order to understand the trading market, you need to know how foreign exchange (FX) works. If you already know about how FX works you may be wondering how forex trading can be used to grow your money and get rich quickly. That’s a great question! Forex trading can be the ideal way to increase your wealth, but it’s not the easiest way to make a million

How does Forex trading work?

Forex trading involves placing small bids and offers for currencies. These bids and offers represent the current value of the currency. Once you have placed your bids or offers, you wait for the price to fall. When the price falls, you will be paid money for the currency. If the price does not fall, you may have to purchase the currency at a higher price. Your purchase will cost you more money than your original bid. Forex trading is most commonly used by traders who work for international banks and other large banks.

Why Forex trade?

Forex is the world’s oldest and largest market for the purchase and sale of financial instruments that allow investors to protect themselves against exchange rate fluctuations by buying or selling currencies. Almost all of the world’s financial transactions are forex trades. Forex is basically a type of insurance; it allows investors to protect their portfolios against the risks of exchange rate fluctuations. Forex trading can be highly profitable and lucrative, which is one of the main reasons that it is so popular. However, it is not a complete walk in the park, and there are certain pitfalls that traders need to avoid at all costs. When you first start out with forex trading, you will likely discover a lot of things you didn’t know.

What is Forex Trader?

Forex Trader is one of the most common terms used to describe a money trader. It is a term used to refer to any of a variety of individuals who make money on the foreign exchange market. Generally speaking, a forex trader trades between two exchanges – the U.S. and European Forex markets. The rules and regulations of the foreign exchange markets are regulated by a number of agencies, including the Swiss Financial Market Supervisory Authority. They are involved in setting the requirements for forex traders and trying to keep the trading environment fair. The U.S. dollar is the world’s most popular currency and the forex market is often regarded as the most liquid and easy-to-trade marketplace for currencies.

What is the Forex Market?

Forex is one of the oldest markets and there are various different “markets” with each currency trading in a different currency. Forex (short for foreign exchange) is not an exchange but a currency market, in which currency traders sell and buy currencies as part of day-to-day business transactions. Exchange platforms offer tools for traders and a huge range of financial instruments to help fund your trading such as stocks, commodities, ETFs, and even cryptocurrencies.

This post contains affiliate links. Please please read my Disclaimer for more information

Why we can trade currencies

You might think that Forex is all about the exchange rates between currencies. But you’d be wrong. Forex trading allows you to purchase assets or liabilities denominated in a range of different currencies and assets. By investing in what’s known as a ‘pair trade’, you’re able to make an exchange of one currency for another: for example, buying a euro and selling a pound. What does it mean to trade currency pairs? Forex trading means you can trade between different currencies using ‘alternative’ pairs, such as the USD/JPY pair, USD/CAD pair, or GBP/EUR pair. This type of trading is often called arbitrage or currency trading. This is because, when you buy an asset or a liability denominated in one currency, you are actually trading one currency for another.

How to Get Started with Forex Trading

So, how do you start your forex trading career? The best way is to start learning the basics of this market. Beginner’s Guide to Forex Trading is designed to help you get up and running fast. That’s because there are many of the processes and processes involved in Forex trading, that you will only need to learn once you understand them. Forex trading takes place in a number of different ways, but the most commonly known method is to trade directly against other traders on online trading platforms. You can also buy and sell currency through your own account.

Forex trading can be done directly with currencies traded directly between traders on stock exchanges or futures markets or it can be done on fixed-income markets. With this method, you can trade directly against other people using a broker who acts as a middle-man between you and other traders. You’ll need to find a broker that allows this. There are also exchange-traded forex products, which allow you to trade on foreign exchange markets as well as a number of other foreign exchange markets on which you can buy and sell currencies such as the AUD, CAD, and USD.

Forex Trading Strategies

Forex trading can be described as the trading of a financial instrument for the purpose of making a profit. Traders engage in the trading of stocks, currency, commodities, and bonds, each of which are traded on an exchange and can be bought and sold through brokers or banks. But you won’t make a living from forex trading. Instead, your money is the only investment you have, and you’ll need to trade a good amount of currency to make a profit. Each currency comes with its own specific strength and weakness, which means traders must find the right deal for their financial instruments. Forex brokers will be able to find a good trade that suits your needs. Trading is based on the concept of volume, which is the total number of trades made in a certain amount of time by an individual.

What are the most traded currency pairs on the forex market?

You can gain a better understanding of how the foreign exchange market works by learning about currency pair trading. Currency pair trading is the practice of going long one currency against the other, i.e. buying one currency for one side and selling the other currency for the other side. The practice of trading currency pair trades dates back to the 1930s. In many cases, it’s the pairs that make the most sense. The most commonly traded currency pairs are USD/CNY and EUR/USD, which also make up the largest markets. You’ll know the best time to use which pair of currencies, as this directly affects profit and loss. Forex brokers will typically allow you to use as much or as little as you want. You’ll know this by the number of bids and ask prices shown in your account.


Forex trading is a fast and profitable way to earn money. You can get started today.

“If you have any feedback about what is forex trading that you have tried out or any questions about the ones that I have recommended, please leave your comments below!”

NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.


What To Do With An Inheritance In The United States

Anyone planning on buying property in the USA will need to brush up on their knowledge of US inheritance law in order to protect the best interests of their loved ones. This is because, like most US laws, how things are governed will depend upon the state in which you’re located.

In the USA, inheritance laws govern how people receive their share of assets. They also govern which relatives have a statutory right to claim an inheritance even if they aren’t included in the express terms of the will. Each state either adopts a ‘community property approach or a common-law approach this essentially determines the way in which estates are divided and which members of the family are automatically entitled to their share.

What are the inheritance laws in the United States?

In the USA, there are three main areas to pay particular attention to probate, legacies, and in-trust issues. While many of the standard areas of probate will be the same across the USA, there will be different laws for different states – so we’ll only be looking at the most general matters. However, there are a number of other issues that are unique to the USA and require special attention. Why should you consider filing a probate case? Probate cases are typically used for handling inheritance requests from surviving family members, which are generally made by a written letter to the executor, or the closest relative who is a legal guardian.

How does inheritance work in the USA?

When you leave an estate to someone in the US, a strict set of rules apply. Like in most other countries, the general rule is that all money, property, or other assets passed down to beneficiaries are treated as the property of that person, even if they aren’t named in the will. In particular, a beneficiary isn’t entitled to a share of property that was acquired by means of another person’s will or other written testament. This means that you can’t leave all your money to a dependent, as this would amount to an indirect gift, which is not allowed. The test of heirship is key The proof of heirship required for an inheritance to pass through the hands of beneficiaries is often referred to as the “test of heirship”.

Inheritance Rules in the United States

The following are some examples of what can happen if you are considering an inheritance in the USA:

1. A disinherited child is entitled to claim a share of the estate, even if they weren’t involved in the will or executor.

2. A person can give away one-quarter of their assets, but if they die intestate (without a will) their heirs will be entitled to only one-sixth of the total amount.

3. If a loved one dies without leaving a will, they will not be eligible for a share of the estate, which will go to the nearest blood relative of the deceased.

4. If a parent has pre-existing debts of more than $20,000 at the time of their death, they may be subject to bankruptcy.

5. If a child inherits the entire estate, there will be a financial sibling that will receive a flat tax of 35 percent.

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Who has a right to claim an inheritance?

When an estate is placed in the trust, the executor, who is typically the trustee’s lawyer, is responsible for distributing the inheritance among relatives and even to charities. However, while heirs might receive some of the inheritance, the rest is administered by the trustee. If a person dies without leaving a trust, the entire estate will go to the state. It’s up to the state to distribute the assets. In this way, it doesn’t matter whether the person who will be receiving an inheritance actually exists. When to claim an inheritance If an heir (or in some cases, a trust or executor’s lawyer) is unable to reach the relative who is to receive the inheritance, they can go to court to fight for their rights to the money.

What to do with an inheritance in the United States?

There are a number of situations where it’s necessary to make provisions for what will happen to an inheritance once the person is no longer alive. This usually means leaving some sort of legal responsibility in place, even if the person whose inheritance you’re planning to leave to isn’t technically a relative. But it also means appointing a guardian or executor, if the person being left money is not mentally capable of making decisions. Depending on how you intend to dispose of an inheritance, it’s possible that you might also need to appoint a caretaker. If this is the case, you should be aware that you will need to spend money on their services for the duration of the person’s life, after which you’ll have to find some way to support them when they can no longer live alone.

Who is entitled to inheritance in the USA?

According to the United States courts, inherited assets fall into two broad categories: property and debt. Individuals who are deceased and had no interest in the family home or businesses generally don’t have the right to an inheritance and so their assets are entirely passed onto the executor of their will. After they’ve died, the property of a person who still has an interest in the estate passes to family members who were close to the deceased person. These relatives include grandchildren, siblings, spouses, parents, and others who were close to the person and who survived them. This means they can access any money they were entitled to before their relative died.

 What can you do if you don’t want to share your inheritance with other relatives?

Although the general inheritance laws of the USA dictate that a person may exclude others from receiving an inheritance, this is based on the fact that they didn’t expressly write about it in their will. A person may be able to specify in their will that other relatives should not receive any share in the property. But, this will only apply to property left to the descendants in a living will. If the person is deceased, the law dictates that it must go to the nearest living relative. What about Ireland? Although it’s a long way away, Irish inheritance law is very similar to that in the USA. The biggest differences arise when dealing with inter-family disputes, as there are different rules regarding who may act on the executor’s behalf.

How much can you inherit in the United States?

While it’s fairly common for an executor to receive an inheritance worth half of the estate’s value, estate lawyers will argue that that’s the maximum you’re allowed to receive. If you’re buying property in the USA, it’s worth noting that legal guardians may receive a “survivor’s share” in the case of a joint estate, which allows them to receive a larger proportion of the inheritance if they were unable to have a legal capacity to make decisions in the first place. It’s worth remembering that this is in the case of a common-law family. There are a number of reasons why a bereaved relative may need to raise a new child as a ward of the state in the USA.

Taxes for US Citizens

As a US citizen, you have an equal opportunity to inherit assets from an American citizen or an American company. As well as being able to inherit any personal estate and inheritance could be subject to inheritance tax (called ‘estate tax’ in the UK). It is in the US estate planning requirements that this tax is calculated at a rate of 15%. Inheritance abroad If you are looking to inherit assets abroad, you need to ensure that they are received overseas. If you are a US citizen, any assets you receive in a foreign country will be subject to a double taxation agreement between the US and the recipient country. The rules regarding inherited US property or goods abroad are detailed below. How can I protect my inheritance? A trustee is often used to hold the contents of the estate.


In the UK and most of Europe, you can leave everything to the government once your death has occurred. However, in the USA, it is important to know all of your options before making any decisions. This will give your family the best chance of obtaining the financial support that they may need in your absence. Have you ever considered the implications of leaving assets to the government?

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NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.