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Definition and Examples of a Non-Purpose Loan A non-purpose loan enables a borrower to use the value of securities they own, such as stocks or mutual funds, as collateral for reasons other than purchasing additional investments. TD Ameritrade’s Collateral Lending Program is an example of a non-purpose loan. Investors who have security holdings with TD Ameritrade can borrow against their investment account to cover a number of purchases, including: Business expenses Educational expenses Real estate purchases Luxury purchases Short-term cash-flow gaps...

But what are assets and liabilities? Your assets refer to all items you can easily convert to cash, including: Bank accounts Retirement accounts Investment balances Real estate Personal property with significant value, such as rare art collections, coin collections, antiques, and jewelry Your liabilities refer to all the debt you owe. They can be: Mortgages Student loans Credit card debt Car and boat loans Loans where you’re the co-signer Unpaid taxes Medical debt...

The “roll” can go in both directions. It is more often referred to negatively as a forward roll. A forward roll is when an account that was delinquent in one 30-day period is still delinquent in the next period. A backward roll is when an account moves to a lower level of delinquency, such as when a customer pays down the account. For example, a forward roll is when an account that was delinquent at 30 days past due and is still delinquent when it is 60 days past due....

An account statement provides important information, including fees charged by the vendor, a list of services provided, money owed by the client, and deposits made to the account. Because an account statement shows payments made by the client, it can result in a positive or negative ending balance. Alternate name: Account statement A non-business example of a statement of account is a bank statement. It lists all the transactions that happened during a specific time period, typically one month, which includes payments received and made....

Your tax home determines whether you’re eligible to some or all of your travel-related expenses as a business expense. You’re considered to be traveling away from home and you may be permitted a deduction for ordinary and necessary travel expenses you incur on a trip if you must travel away from your tax home for substantially longer than a typical day’s work. You must sleep or rest at this location to meet the demands of this work....

To better understand how that works, it may be helpful to first understand what a letter of credit is. This type of contractual commitment, often seen in trade finance, protects exporters and importers of goods in the business world. A letter of credit is considered to be a highly secure payment instrument but can be expensive and time-consuming to secure. Typically, letters of credit are a better fit for high-risk situations where a secure payment method is absolutely necessary....

Most states require wet closing by law; only a few allow its opposite, which is called dry funding: AlaskaArizonaCaliforniaHawaiiIdahoNevadaNew MexicoOregonWashington Alternate names: wet funding, wet settlement, table funding How Wet Closings Work If you’ve sold a home, you may have already experienced a wet closing, since they’re mandated in most states. Let’s say that you’re selling your property in Georgia, which is a wet funding state. You’ve already gotten an offer on your home and accepted it with a 30-day escrow....

Typically, both posted transactions, which are those your financial institution has fully processed, as well as pending transactions, which are transactions your bank has not fully processed, are indicated in your account history. Your running account balance after each transaction is usually indicated on the account history as well. In addition to the transactions list, your bank may allow you to see check images in your account history. Alternate name: Account activity...

Alternate name: stock fund How an Equity Fund Works An equity fund scheme boils down to investors giving money to a fund, which pools that money and invests it in stocks, enabling investors to reap the gains (or the losses). The fund selects the stocks based on the its objective and investment style, which can vary widely. For example, suppose that Fund A invests based on market capitalization and follows a growth investment style....

Shareholders who purchase ETFs don’t own the underlying assets but have indirect ownership through the funds. While similar to mutual funds, ETFs trade more like stocks but with lower fees and higher liquidity than shares of mutual funds. In other words, shares of ETFs can usually be bought and sold easily and with no delays in execution. ETF screeners—also called “ETF filters”—can help investors search for a particular type of ETF....

Capital assets are items that increase or decrease in value over time, like a house, collectible art, or equipment used in a business. These are generally expensive assets, so it isn’t always possible to pay for them all at once. The seller can break up the sale into installments, which acts to reduce the amount of taxes they pay in one year for any gains from the sale. For example, suppose you owned a backhoe and used it to clear out and level land as a business....

Don’t panic. Your claim will likely be paid by your state’s insurance guaranty fund, which pays out claims if an insurance company is insolvent. What Is a Guaranty Fund? A guaranty fund (or guaranty association) is an organization established by state law. Its purpose is to protect policyholders from insurer insolvencies. It pays claims an insurer would have paid had it not become financially impaired. The fund is typically governed by a board of directors elected by participating insurers....

With an interest-only loan, you pay only the interest on the loan, not the amount of the loan itself (also known as your “principal”). That results in lower monthly payments for a fixed period. Eventually, you’re required to pay off the full loan either as a lump sum or with higher monthly payments that include principal and interest. How Do Interest-Only Loans Work? Monthly payments for interest-only loans tend to be lower than payments for standard loans....

You might live in Pennsylvania, but own a piece of real estate one the New Jersey shore. That property can’t be probated in Pennsylvania. Ancillary probate can also apply to tangible personal property such as cars, boats, or airplanes that are registered and titled out of state. How Does Ancillary Probate Work? The executor of a “domiciliary” probate proceeding—that which takes place in the decedent’s state of residence and where their will has been admitted for probate—will initiate an ancillary probate proceeding when it becomes clear that the estate includes assets that are registered or titled out of state....

Once the cash value accumulates to an amount sufficient to borrow from, policyholders can take what’s called a “policy loan.” Importantly, they don’t borrow directly from their own cash value; rather, they borrow from the insurance company’s general fund using their cash value as collateral. This is important because the amount of funds they borrow is still sitting in their cash value account earning a fixed rate of return and dividends....

Learn what minimum requirements a plan must have to qualify as creditable coverage and why it matters. What Is Creditable Coverage? Creditable coverage is health insurance that meets or exceeds the drug coverage benefits provided by Medicare. You’ll often hear this term associated with Medicare Part D, which is prescription drug coverage. Prescription drug plans must pay, on average, at least as much as Medicare Part D toward prescriptions to be considered creditable coverage....

Definition and Examples of Debt Debt is money that one entity—a person, business, organization, or government—owes another entity. When you borrow money, you’ll typically make an agreement with the lender that you’ll repay the money on a schedule, sometimes with interest or a fee. Most people are familiar with common types of debt like credit cards and auto, student, and home loans. Good Debt vs. Bad Debt While all debt comes with a cost, you can generally classify any borrowed money as either good debt or bad debt based on how it affects your finances and your life....

Suppose that your health is waning, or you expect it to as you approach your senior years. You can work with an elder law attorney who specializes in disability planning to complete an advance medical directive with a durable power of attorney for healthcare. That is a document that allows you to name a healthcare proxy to make medical decisions on your behalf when you can no longer do so....

If your business is larger than a single individual, you may need to prepare a Statement of Retained Earnings, which is also called a Statement of Owners’ Equity. Additional documents, such as auditor reports and shareholder minutes, can also add to the value of financial reporting. How Financial Reporting Works Financial reporting documents must be prepared in the same order. They should also be prepared in the U.S. according to Generally Accepted Accounting Principles—or GAAP....

FINRA oversees more than 624,000 registered brokers across the country and it analyzes billions of daily market events. Learn how FINRA began and how it operates today to ensure registered brokers comply with ethical rules. Definition and Example of FINRA FINRA—the Financial Industry Regulatory Authority—is a nongovernmental organization that regulates the ethical activities of broker-dealer firms and registered brokers in the U.S. In July 2007, FINRA was created through the consolidation of the National Association of Securities Dealers (NASD) with the member regulation, enforcement, and arbitration operations of the New York Stock Exchange (NYSE)....