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185 Cards in this Set
- Front
- Back
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How much does an individual health care plan for a family cost?
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More than $15,000/year!
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deductible
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the amount you pay each year before the insurance company pays
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co-payment or co-insurance
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the share of the bill you pay after you have met your deductible, co-pays are a fee you pay for a certain service, co-insurance is the amount you pay after a deductible is met
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stipulated makimum
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maximum you can pay out of pocket/year for health care
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High Deductible Health Plan (HDHP)
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high deductible
singles: 1250-6250 families: 2500-12500 |
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Cobra
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est 1985
continue w/ your employer's insurance 18 mo after leaving or if cut back to less than 20 hrs/week employer doesn't contribute |
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Health maintenance organizations (HMOs)
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nonprofits
flat monthly fee for coverage, very small deductible geographical coverage limited goal: healthy members |
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Preferred Provider Organizations (PPOs)
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chose from providers w/ contract
more flexibility pay for the care that is received |
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Health Savings Accounts (HSA)
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set aside pre-tax dollars for medical expenses
tax sheltered employer or individual with hdhp contribution is tax deuctible up to 3250/person, 6450/family leftover money can be invested transferrable |
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Flexible Savings Accounts (FSA)
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employer only sponsored plan
deducted from paycheck on a pretax basis to pay for out of pocket health care expenses max is 2500 |
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ACA 2010 Changes
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can't cancel if sick
have to cover kids no lifetime coverage limits appeals process medicaid expanded pcps get paid more if medicaid |
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ACA 2011 changes
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under 26 covered w parents
insurers must spen 80% of premiums on medical services claims (rebates) federal subsidy payments frozen limits on premium variation employers have to tell employees how much insurance costs free pereventative to medicare |
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ACA 2013 Change
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floor on itemized deductions increased to 10%
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ACA 2014 Changes
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1/1/2014 need medical insurance or fined
must cover: emergency, maternity, newborn, mental health, drug abuse, rehab, chronic disease, pediatrics no denying pre-existing women pay less no annual limuts state based exchanges minimum standard of coverage medicare payroll tax new 3.8% on unearned income for peoper making more than 200k, puls 2.35 medicare a employers with 50+ employees must provide insurance or they will have to pay a fine can't negotiate drug prices |
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Social Security disability benefit
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workers whose disabilyt for 12 months, no gainful employment
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Workman's Comp
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paid by emplore
for injuries or illnesses that are job related businesses ore experience rated to avoid being sued |
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State Disability Insurance
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non-work related illnesses or injuries
paid via payroll deductions 1% of payroll up to one year |
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auto insurance disability
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valid if related to an accident
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Individual Disability Income Insurance Policy
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must be emploed
not all of salary non-cancellable or guaranteed renewable short term or long term |
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term insurance
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death insurance
permiums based on age and other conditions most protection for your money |
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whole life insurance
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cost of insurance plus cash value that builds up
costs more premuum doesn't increase can borrow from the cash value |
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carfax
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get info on a totalled or stolen car, vin or license plate, costs 40 bucks
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MSRP
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manufacturers suggested retail price
sticker price nobody pays knock off about 15% |
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Fred's Law
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the price you pay is inversely related to the amount of the salesperson's time you waste
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best times to buy a car
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last two days of the month
old models |
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invoice price
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manufacturers price to the dealer before rebates etc...
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base price
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price of car not including the options already on the car
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incentives for car buying
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bonuses for buying a certain car
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How is the cost of a car lease calculated?
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It's based on the amount the vehicle will depreciate during the lase period
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capitialized cost
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price you and the dealer agree on for the car to be valued at the time of the lease
want to minumize this |
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residual value
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predetermined value of a car at the end of the lease, not negotiable
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car lease payments
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mothly lease payments
based on capitalized cost-residual value |
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mileage allowance
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amount you can drive/year on a lease without an extra fee
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liability coverage
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most important part of auto insurance
covers you for injuries caused to another person or their property doesn't cover you or your injuries mandator 20/50/25 for bodily injury/bi 1+/property damage goal 100/300/25 |
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no fault insurance
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meducal coverage when it is unclear who is at fault
to pay our own medical not property damage or pain and suffering |
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collision coverage
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damage to your car regardless of fault
deductible to eliminate small claims extended to rental cars |
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medical payment
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for medical expenses for you and your family
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uninsured motorist
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if you're hurt by someone uninsured
bodily injury if other driver at fault also hit and run |
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comprehensive auto insurance
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damage from fire theft forces of nature
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tax code incentives for real estate investment
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taxt deductions for interest and origination costs
insurance, property taxes repairs and maintenance depreciation |
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triple net leases
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ex round table and safeway
lesee will pay property tax insurance and maintenance, someone else builds it |
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depreciation on property
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not a physical cost
lowers profit less taxes 1/27.5 is yearly deprireciation decreases cost basis capital expenditures should equal depreciation |
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1031 exchange
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can exchange like kind property and defer payment of captial gains
at least as much equity and debt |
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REIT
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real estate investment trusts
must pay out 90% of profits (if they don't want to pay tax) if you have a share, you pay ordinary income tax on it unless it's in your IRA |
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Student Loan Guidelines
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don't take out more than you can earn in a year
interest rate linked to that of a 10 yr treasury note pay off slowly so you can save or retirement studentaid.ed.gov can garnish wages or report you to credit agencies if you are late on your payments |
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Residential Rental Property
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apartments, houses, condos flat duplexes lofts etc
business investment rent is income deduct allowable expenses loan principal payments not tax deductible |
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commercial and industrial property
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larger amounts of captial
can be owner operated |
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sale-leaseback
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property build by a company, sold to an investor and leased back
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capital improvements
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can be added to the cost basis
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Student Loan Bill of 2010
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all federal student loans must originate from the government
reinvesting in increasing pell grants, community colleges, hbcs, deficit rediuction, student refinancing |
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Income Based Repayment
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current repayment plan for federal student loans
if debt equals or exceeds your anual income earl less than 1.5 poverty line? no payments on loans debt forgiveness after 20 years 10% of income and base budget |
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Pay As You Earn Repayment Plan
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lower mothly payments and qualify for earlier loan forgiveness
lots of requirements |
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forbearance
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putting total payments on hold for a number of moths, but interest accrues and is added to loan principal
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interest-only loans
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defer principal payments until a later date, but continue to pay the interest
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Cash or car?
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write out two checks, one for new car, one for old car, then see if you can sell your car for more
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Traditional IRA
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money you put in is tax deductible
money you take out is subject to income tax if you take anything out before 59.5, you get taxed and a 10% penalty is added RMD at age 70.5 leftover money goes to a beneficiary max of 5500/year 6550 if you're over 50 |
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Roth IRA
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very similar
money in isn't tax deductible account is tax sheltered no tax to pay when taking it out no RMD cap applies to sum of this and traditional IRA |
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Requirements for IRA contributions to be tax deductible
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>69K can't tax deduct what you put in
<59K you can 59-69K tax deductions inversely proportional to your income |
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401 (k) Plans
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by private compaines
replacement for pensions you and the company contribute like a traditionsal IRA (money in tax dectutible, money out taxed) can put in up to 25% of your wages, not to exceed 17k can be invested in a list of approved items a defined contribution plan |
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100% vesting
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all money they give you automatically yours
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cliff vesting
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everyithng yours after a certain amount of time working there
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graded vesting
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amount you automatically keep increases the longer you work there
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401 (k) options if you leave your company
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can leave your money there if it's more than 5k
can transfer to new employer but you may need to change investments transfer it to your own IRA |
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solo 401(k)
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strickly for sole propireter with no emloyees
save both as emploee and employer up to the lesser of 25% of income or 51k contributions are vuluntary traditional and roth available |
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SEP IRA
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Simplified Emploee Pension Individual Retirement Account
self-employed individuals and small business owners with only a few employees can contribute w/ same limits as solo 401(k) if you chose to contribute, you must contribute to your own, and to that of every eligible employee eligible if: 21+, has earned 500+, 3/5 years |
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Retirement Targets
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life expectancy 95
save 15% of your income |
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defined benefit plans
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plans in which an employer promises an employee a specific lifetime monthly benefit, basically a pension
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403 (b) plans
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defined contribution plans established by nonprofits
matching contributions from employers |
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Section 457 plans
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defined contribution plans
est by gov agencies only funded by your contributions |
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Roth 401 (k)
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not a requiremnet
similar to Roth IRA tax wise no income limit and phase out max contribuiton is 25% of income ore 17k whatever you're allowed to put into a traditional 401 (k), you're allowed to put some or all of it into a Roth 401 (k) |
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mortgage
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you owe bank, if you don't pay, the bank will take your house, first mortgage gets paid when house sold, if not already repaid
up to 80% of the cost of the house |
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collateral
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what you use to back up your loan, usually the house
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2nd mortgage
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additional loan, has to be taken out after the first one
riskier for less money 2-5 years |
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equity
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the share that you own
value of property-unpaid loan (your equity increases if the house value increases, even if you aren't paying anymore!) |
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private mortgage insurance
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need this if your down payment is less than 20% of the house
protects the lender from loss in the event of a default for the amount of the property's price in excess of 80% |
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foreclosure
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bank reposseses a house if owner doesn't comply
the lender can cell of the property, as long as it pays off the liens |
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short sell
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the amount you make off of selling the house is not enough to pay off the mortgage
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lien
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property becomes a security but lien holder can't force sale
you can't transfer property ownership without liens being paid for |
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negative ameritization
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evil
lower interest rate as a teaser but then the rate goes up and the interest you weren't paying gets added to the cost of the loan |
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leverage
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using OPM to buy a house
the owner makes all the profit on equity and borrowed money the owner also absorbs all the loss in equity |
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rapid re-score
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changing your credit report in 2-3 days
important because credit score affects your interest rate |
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What're the 3 most important things when buying a house?
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location, location, location
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escrow
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a 3rd party that hangles the money and papers
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condominium
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where you own the unit
want 90% ownership so that you don't have to pay too much for upkeep |
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When to buy and when to rent
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Don't buy if you intend on living there less than 5 years
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homeowner's insurance
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get it!
does not cover earthquakes includes liability insurance insures your belongings (including off premesis) additional living expenses structure of your home |
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home equity loan
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lump sum loan securied by the property
fixed interest equal monthly payments |
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Home equity line of credit (HELOC)
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revolving line of credit
secured by equity must be paid back upon default or sale of the property use it for something important |
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second liens
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include second mortgages
home quity lones home equity lines of credit must approve the short sale |
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refinancing a mortgage
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replacing the loan
to lower interest rate or monthly payment |
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prepayment penalty
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penalty for prepaying
ie to prevent refinancing? |
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fiked rate mortgages
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self explanatory
portion of mortgage going to interest decreases each month benchmark is 30 years with 20% down |
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adjustable rate mortgage (ARM)
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set rate of interest in the begining, rate is adjusted later
usually with a maximum |
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interest-only loans
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you pay interest only
no part of payment to pricipal monthly payment less only for 5 years or so loan never gets smaller though...so not a good idea |
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conforming loan
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up to 417k
lower interest rate |
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jumbo loan
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don't conorm to size maximum
higher interest |
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loan-to-value ration (LTV)
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amount of loan/value of home
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tax benefits to home ownership
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deduct mortgage interest
origination fees deductible can exempt up to 250k profit (500k if married) losses on a sale of a home not deducted |
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APR
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annual rate plus fees
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dual agent
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same agent can't represent both parties
can sometimes work with the same realtor but different agent |
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title search and title insurance
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guarantees clear ownership of the porperty
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joint ownership with rights of survival
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if one dies, the other automaticall inherits the property
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tenants in common
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each of you owns half the house
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Consumer Financial Protection Bureau (CFPB)
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by the feds
reviewing mortgage rules to ensure borrowers can repay their loans |
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How much should you spend on rent?
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25-35% of gross monthly pay
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subprime mortgages
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loans given to borrowers with FICO scores of 660 or less
usually ARMs pressured people into these |
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financial infedelity
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lying to your partner about money
up to 1/2 of couples have done this |
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what percent of divorces are about money?
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50%
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pre-nuptual agreements
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50% of marriages have these
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how to break a marriage contract
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filing papers and clock starts then
or orally breaking the contract |
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alimony
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legal obligation to provide financial support to one's spouse or ex spouse after separation or divorce
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child support
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payment made by a parent following divorce or separation to custodial parent or guardian for a care or support of child
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community property laws
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everything you accumulate during marriage is community property and joint responsibility
includes joint and separate debts doesn't include inheritances and gifts |
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Diversification
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super important
don't put more than 20% of your portfolio in one item |
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EPS
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earnings/share
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PE
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price per share/earnings per share
amount people are willing to pay in relation to earnings |
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PEG rate
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PE/growth rate
greater than 1 sell less than 1 buy |
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company cap sizes
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shares(price/share)
lareg cap more than 5b med cap 1-5 b small cap .25-1 b micro cap less than .25 b |
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bonds
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debts that have to be repaid
normally around 1000 dollars each if interest is increasing, bond devaluing if interest decreasing, bond increasing in value |
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federal bonds
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taxable at the federal level but not a the the state or local level
not guaranteed by the us government |
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corporate bonds
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loans to corporations
can be safe or junk depending on the company |
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municipal bonds
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issued by state and local governmental agenices
fund public projects exempt from federal antd some state taxes interest from some are not exempt from the amt |
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stock options
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free, usually given to employees
in the money: have increased in value out of the money: have decreased in value figure out tax laws immediately sell after exercising |
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bond premium
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the amt above face value the bond is valued at in the marketplace
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bond discount
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the amt paid below face value the bond is valued at in the marketplace
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coupon yield
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the fixed percentage rate of interest based upon the par value of the bond, does not vary
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current yield
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the annual interest payment divided by the market price of the bond, may be higher or lower than the coupon yield based upon the market price of the bond
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yield to maturity
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how much you will be paid if you hold the bond to maturity
includes interest and principal |
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us treasury bills
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mature in 90 days-1 year
no interest paid purchased at a discount |
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us treasury notes
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2-5-7 year maturities
interest paid twice a year |
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us treasury bonds
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mature in 10-30 years
exempt from local and state taxes |
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bid
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highest price a buyer will pay at the moment
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ask
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lowest price seller will sell for at the moment
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market order
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buy or sell at whatever the best price you can is
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growth investing
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look for 15% growth
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value investing
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broken stock not broken companylooking out 6-18 months
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dividend/income investing
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4.4% dividend
good growth AND good dividends higher yield than that of a 10 yr treasury bill |
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dollar cost averaging
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do not put in money you will need in 5 years
putting in a set amount of money each month if prices are low, this just means you have more shares |
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an investment operation
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safety of principal and adequate return
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life cycle funds
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stocks when younger
bonds when older |
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simple interest
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earn interest only on principal
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compounded interest
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earning interest on interest
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rule of 72
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72/interest rate is the number of years it will take you to double your money
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sole proprietorship
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a business owned by one person
need liability insurance file schedule C with 1040 |
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partnership
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2+ peopel
can get people with a diverse set of skills general partner runs business limited partners as well get sent a K-1 this is added to taxable income |
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corporation
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chartered by the state
deleware is the best staet for this investors have limited liability and can pass things on to beeficiareies corporations file tax returns pay dividends to shareholders (you have to pay tax on this), not all companies pay these |
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C-Corp
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chartered by the state
owned by shareholders who purchase shares have tax returns, corporate rate limited liability, share part of their estate |
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S-Corp
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chartered by the state
owened by shareholders profits and losses are passed through to the shareholders and reported on their individual tax returns no dividends |
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LLC
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chartered by the state
limited liablity no dividends profits and losses passed through to the owners and individually accounted for on their individual tax returns |
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IPO
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initial public offering
secondary public offering can be more or less |
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mutual fund
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big pot of money professionally managed
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open end mutal fund
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buy shares and sell back to fund
value establisehd at the end of the day via the net asset value high commissions need a prospectus |
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closed end mutal funds
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likea stock
limited number of shares sold to other people pay baesd on market value, not NAV low fees |
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EFTs
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exchange tarded funds
tracks like an index, trades like a stock |
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sector funds
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only in one segment of the market, like energy (XLE)
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money market fund
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not FDIC insured
mutual fund that invests in short term debt passes the interest received onto its shareholders safe and liquid |
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equivalent yield
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taxable interest vs non-taxable interest as it pertains to your tax bracket
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Certificates of Deposit (CD)
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interest earning deposits in a bank
guaranteed by the FDIC upt to 250k independent of the federal government |
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money market accounts
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not money market funds
to compete with money market funds insured by FDIC |
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stock exchange
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a place where investors buy or sell their shares
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commodity exchanges
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physical place where commodity futures contracts trades
risky for individuals |
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NASDAQ/OTC
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electroninc exchange conducetd by some 500 private marketing firms that provide quotes and transact the trading of shares
operate all over the world |
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limit order
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specific price you set at which you are willing to buy or sell
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Where does the government get its tax revenues
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individual income taxes
social security/medicare (17% each) corporate income taxes excise and other taxes/fees estate taxes |
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W-4 form
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fill it out when you start a job
tells your employer how much to deduct for taxes |
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dependent
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can be you, your spouse, kids, relative, or cohabitor
must provide over half the individual's support |
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tax filing statuses
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single
married filing jointly married filing sepaprately hoh widow |
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personal exemptions
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reduces taxable income
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earned income
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wages
salary boneses commisions tips evidenced by a W-2 form |
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total income
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earned plus unearned
taxable interest, ordinary and qualified dividends, alimony received, business profits or losses , capital gains or losses, pension receipts, tax refunds, social security benefits, unemploment compensation, individual retirement account distributions, real estate activities, partnership income |
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qualified dividends
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taxed at 15%
reported on schedule b |
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capital gains tax
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tax on profit or loss on teh sale of an asset
schedue d |
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long term captial gain
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more than 12 months
15% tax |
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short term capital gain
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0-12 months
profit added to your income |
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wash sale rule
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must be more than 30 days apart
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agi
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adjusted gross income
subtract specific deductions from total income |
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standard deduction
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single: 5950
married and filing jointsy: 11900 |
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itemized deductions
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schedule A
proof may be required by the IRS |
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charitable deductions
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tricky
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common tax credits
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subtracted from tax liability
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federal gift tax
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to prevent people from avoiding estate taxes
up to 14k/person/year |
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excise taxes
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taxes paid when purchases are made of a specific product
luxuries |
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estate tax
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to discourage aristocracy
to get taxes from rich peeps |
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alternative minimum tax
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designed to get high income people to pay more
not indexed for inflation, oops... if you make over 51900! |
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quarterly estimated taxes
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for rich peeps
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