Let's Talk Money

Definition

Financial literacy is the ability to understand and apply various financial skills, including budgeting, investing, and other financial management strategies.

Why It's Important

My, oh, my!  Financial literacy is critical to master as it affects everything in your life, from well-being and relationships to opportunities that are afforded to you.  A financially literate person has a much better chance of being "successful" with money.  This is why I built this whole platform.  My personal goal is to see as many people as possible to become financially literate.  It is imperative!  

I joke and say people treat you differently when you know about money on social media, BUT it is true!  I have had salespeople and lenders tell me this.  So, I took that information and decided to help so YOU won't be taken advantage of. 

Want to see how financially literate you are?  I made a quiz to test your skills.  You can check it...

Definition
Capital gains are the profit from a sale of property or an investment

Why It's Important
When you have investments, you are not taxed until you have capital gains.  Capital gains are only triggered when you make a sale at a profit.  This is the opposite of realized loss.  With both situations, a sale is what triggers each tax treatment.  Capital gains are a good problem to have because that means you are making money!  

There are two types of capital gains, long-term and short-term.  Short-term capital gains are taxed at your current tax rate.  Short-term means that you held the investment for less than a year (generally a no-no).  Long-term capital gains are after you have held your investments for longer than a year.  These get preferable tax treatment.  For instance, if I was a single tax filer and made $45,000, my short-term capital gains rate would be 22% while my long-term rate would be 15%.  See the difference!...

Definition

The Uniform Security Act is model  legislation for securities industry regulation at the state level.  Each state may adopt the legislation in its entirety or it may adapt it (within limits) to suit its needs.

Why It's Important

The USA, as it is commonly called, protects investors from unethical practices.  It also ensures that people that choose to give investment advice are properly registered to do so.  In order to register with the state, a potential advisor has to take a licensing exam, pay fees, and submit the relevant paperwork.  

Does being registered with the state fully protect investors?  Absolutely not!  Registered advisors are sometimes subject to disciplinary action.  It happens all the time!  Your best defense is education!  There are resources such as Broker Check that allow you to see what disciplinary actions if any, were enacted on your current or potential advisor.

If you suspect an advisor is...

Definition

A mortgage is a legal agreement by a bank or other financial institution and a debtor.  The financial institution lends money with interest and takes ownership of the property if the debtor defaults.  This is a type of secured debt.

Why It's Important

Most people that purchase homes, have to get a mortgage to afford it.  In my opinion, mortgages are a form of "good debt" although cash is always king!  There are different types of mortgages a borrower can get.  For instance, a borrower can get a 30-year conventional loan with a variable interest rate or a 30-year FHA loan with a fixed interest rate.  There are many combinations these loans can come in and your best defense is to learn as much as you can before using one to purchase a home.  Some of these terms will be covered in the upcoming Wednesday Words of the Week.

Personally, I have a 30-year FHA loan with a fixed Interest rate of 4.25%.  I would like to refinance at...

Black females are working successfully around the globe in the financial field, despite racism challenges. Women-owned businesses are low in the market, and black women commonly face a lack of venture capital funding and access to loans. American Express reported that the ratio of women of color from 2018-19 is increased in women-owned businesses. During a similar period, black women entrepreneurs experienced a high growth rate in the financial industry than any other group. Many black women experts in the business are breaking barriers by serving as a role model for women from every walk. Also, they are the motivation for others to meet their financial goals.   

There has been enough to talk about the significance of diversity and inclusion in the workplace when it comes to the financial field. In 2016, black American families had 10 cents to the dollar of a white counterpart, on average. On the contrary, women earned 32 cents on the dollar as compared to men....

This episode is not just for women!  Join Tiffany as she sits down with Justine Chan as they talk about home buying and real estate investing strategies.

About Our Guest

Justine is the founder and CEO of Live With Plum, the home buying guide for the modern woman.

The site was inspired by her personal experience buying in NYC and seeing how little resources there were for female home buyers even though they buy at twice the rate of men.

Prior to starting Live With Plum, Justine was a startup operator and management consultant.

Follow her on Twitter: https://www.twitter.com/livewithplum

Join her group on Facebook: https://www.facebook.com/groups/livewithplumgroup

Follow her on Instagram: https://www.instagram.com/livewithplum

Connect with Tiffany on Social Media

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Definition
A Keogh plan (also called HR10 plans) is a tax-deferred retirement plan for self-employed individuals or unincorporated businesses.

Why It's Important
It's important to note that contributions to these plans are tax-deductible up to a certain amount.  There are two types of Keogh plans.  One type is a qualified defined-contribution plan.  This type of plan is typically in the form of a profit-sharing plan.  The beauty is that a business doesn't have to generate profits to participate in this type of plan.  As of 2019, a business can put 100% of their income or up to $56,000 of funds into this plan.  Profit-sharing plans are only contributed to by the employer (yourself if you are self employed) not the employee.  It's a good way to squirrel away money when your company is doing well.

The other type of Keogh plan is a qualified defined-benefit plan.  These types of plans are similar to pensions in that you get paid out annually after...

Definition
The head and shoulders pattern in technical stock analysis is used to predict what the support level (lowest price it will potentially go before traders make it rise again) of a stock is.

Why It's Important
You probably saw this and wondered why I would be talking about a shampoo.  LOL!  This is one of many charting patterns that technical analysts use to make stock price predictions.  I will warn that this is an advanced investing topic so if it does not make sense, do not worry!  

As you can see from the chart below, the trend looks like a head and two shoulders.  The "neckline" is a support level.  The stock price hit that level then bounced up.  Then, it hit it one more time and bounced up before breaking through the support and trending downwards.  

This same charting pattern can also happen in the opposite way as shown below.  In this scenario, the neckline shows the price ceiling instead of the support.  It is the same...

Definition
A fiduciary is a person or organization that acts on behalf of another person or persons to manage assets.

Why It's Important
The term fiduciary has been thrown around a lot lately but do you really know what it is? A fiduciaries' responsibilities and duties are both ethical and legal. Once the advisor or organization says that they are a fiduciary, they have to act in your best interest. This means that they are not supposed to do things just to pad their pockets (make money).

What does an advisor not acting like a fiduciary look like? They may try to sell you products you don’t need to make a commission. They may initiate trades unnecessarily just to get commission (also called churning). It is important to stay educated and ask questions.

Definition
In economic terms, expansion is an increase in the level of economic activity.  It is a period of economic growth as measured by a rise in real GDP (Gross Domestic Product).

Why It's Important
An expansion means that the economy is doing good.  This typically coincides with the stock market.  Think about it.  If the economy is doing good, that means companies are generally doing good which means they are profitable.  It directly effects the stock market.  This is only one phase of the economic cycle.  

Are we currently in an expansion?  You can tell by figuring out if: 

• Real GDP has grown for two or more consecutive quarters, moving from a trough to a peak
• There is a rise in employment
• There is a rise in consumer confidence
• There is a rise in equity markets 

Expansion is also sometimes called a recovery and the economic cycle is sometimes called the business cycle.  Don't let the different terms...