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Alternate name: Personal savings rate The higher your savings rate, the more income you’re putting toward building a nest egg and securing your future. How Does the Savings Rate Work? You can calculate your savings rate once you determine your net income, or take-home pay, and how much you save, or your personal savings. Let’s say your take-home pay is $82,000 a year. You can then calculate your savings rate using this formula: Personal savings rate = personal savings / net income Going back to our previous example, let’s say you save $1,000 a month or $12,000 a year....

An ETF is a fund that owns securities like stocks, bonds, and mutual funds. Investors buy shares in the fund, but they don’t own the underlying assets. ETF shares are traded on a stock exchange. SPY is a popular ETF and is consistently one of the highest-volume trading vehicles on U.S. exchanges. Its average volume is typically over 70 million shares, although that does fluctuate over time. Many investors and hedge funds use SPY because it represents the S&P 500 index—a basket of 500 major U....

Alternate name: Blue-collar workers For example, let’s say a researcher classifies working-class workers as those who do not hold a college degree and are between the ages of 18 and 64 years old. Sally, who is 33 years old, works as a grocery store clerk, and did not go to college would be considered a member of the working class. How Does the Working Class Work? Many analysts use education level as an indicator of membership in the working class since educational credentials typically do not fluctuate as frequently as income....

Alternate name: Contractionary monetary policy Inflation is the rise in the price level of items, such as groceries or clothes, over time. To minimize or slow down inflation, a central bank could make it more expensive for consumers to spend money and businesses to borrow money by raising interest rates. This is a form of contractionary monetary policy—it restricts, or contracts, spending. Each central bank has monetary tools that it can use to influence inflation and money supply....

You Need More Than You Think Most Americans underestimate how much they need for retirement but recent data show that more Americans are setting themselves up for financial success in retirement. Average 401(k) balances reached $126,083 in the third quarter of 2021—4% higher than the fourth quarter of 2020. To put that in perspective, in 2010 the average balance was $69,700. Americans have nearly doubled their 401(k) balance in the past decade....

However, if you’ve hit the Roth IRA contribution limits and still have cash earmarked for retirement savings, there are other ways to invest it. Let’s explore what to do after maxing out your Roth IRA contributions. Roth IRA Contribution Limits Like traditional individual retirement accounts (IRAs), Roth IRAs have a maximum amount that can be contributed yearly, per the Internal Revenue Service (IRS). Unfortunately, the downside to Roth IRAs is that these annual contribution limits are relatively low....

What Is a Bank Stress Test? A bank stress test is an exercise that helps bank managers and regulators understand a bank’s financial strength. To complete the test, banks run what-if scenarios to determine if they have sufficient assets to survive during periods of economic stress. Stress tests assume that banks lose money and measure the expected effects on bank portfolios over time. In the U.S., banks use three different sets of conditions to estimate their capital levels: baseline, adverse, and severely adverse conditions....

What Is Schedule C? Schedule C is the business tax return used by sole proprietors and single-member LLCs. It’s used to report net income for a small business. This income is included in the owner’s income tax return along with other income. Who Must File Schedule C If you operate your business as a sole proprietorship (that is, you have not designated a legal business entity such as an LLC, corporation, or partnership), you must complete a Schedule C....

A felony conviction may even affect a person’s car insurance rate. The precise effects will depend on the type of crime they were convicted for, along with some other factors. But for the most part, people who have a criminal record end up paying higher insurance rates than those who don’t. The simple reason is because they’re thought to pose a higher risk. The risk factor is particularly true for people who were convicted for felonies related to driving....

Fund Variety Many investors diversify by buying different types of funds. Advisors recommend beginning with a broad-based index fund that merely tries to mirror the performance of the S&P 500. You can then complement that index fund with a few different ones of varying risk levels. These could include funds that: Purchase shares in overseas companiesConsist of shares of small growth companiesInvest in bondsBuy shares in real estate investment trusts (REITs)...

#1 Qualifier for Short Sale Is No Home Equity For starters, people who short sale have no equity. It means they owe more than their home is worth. It’s a mistake to presume that simply because your home has fallen in value that you can do a short sale. You can’t do a short sale if you have equity. Equity doesn’t just mean your mortgage balance is less than the sales price, resulting in equity....

Where else can you get guaranteed tax-deferred interest on a safe and liquid investment while knowing that if interest rates go up, yours will also likely go up? That is what makes I bonds an excellent choice for a safe cash investment. I Bonds Can Supplement Your Emergency Fund I bonds make a great second-tier emergency fund. They’re second-tier because you can’t sell them within the first 12 months of purchase, so you’d need other liquid funds to rely on while you build up a stash of I bonds....

Estate Planning Isn’t Dependent on Size Slightly less than half of American adults (46%) have a will in place, according to the polling firm Gallup. That means the majority of adults have not set any legal parameters on how they wish their assets to be passed on when they die. Regardless of how much or how little you think you have to bequeath at the end of your life, estate planning is important for everyone....

Currently a stay-at-home mother while she works toward a master’s degree in school counseling, Gardiner knows that in many ways she’s lucky. Her husband’s role in the Army landed her a discount on tuition, and with $50,000 in federal student loans deferred until she graduates, the family has enough to make payments on a car while also putting food on the table. But the 27-year-old Washington state resident also looks ahead with dread knowing her loans will come due next year, right about the time her husband transitions out of the military—making her the primary breadwinner....

Applying as an Overqualified Candidate There may be times when you are overqualified for a job but would still like to apply. This happens frequently when you are an older and experienced worker who is changing career fields or reentering the market. Also, when the job market is slow, there may be a shortage of jobs for which you are qualified. Even when unemployment is low, you might have personal reasons that make the move seem appealing....

Coinbase accountholders who use TurboTax to file their taxes can choose to deposit their refund into Coinbase, where it can be automatically converted to Bitcoin, Ethereum, or more than 100 other cryptocurrencies or stablecoins, or they can leave their refund money in dollars and trade with it when they want, the cryptocurrency exchange said in a recent blog post. There is no transaction fee from Coinbase, and the company is offering up to $20 off the TurboTax fee....

Social media helps create an “echo chamber” where like-minded retail investors share their views and interests, “thereby reinforcing their views, even if these views are speculative or biased,” the Fed said in its Financial Stability Report released this week. “More generally, social media platforms allow a single comment or post to reach millions of people and potentially affect market sentiment dramatically within a short period,” the Fed said. In January, individual traders on Reddit decided to gang up on hedge funds to buy shares in GameStop, a stock that major hedge funds had bet against....

Unlike promotional balance transfer offers that were dialed back significantly in 2020, 0% purchase APR deals haven’t changed much. In fact, The Balance found there are still a number of offers that let you pay zero interest on new purchases for 12 months or more. These deals may be appealing if you’re looking to spread out the cost of holiday expenses or a big purchase without paying interest. One change that did come about this year, though, is that some offers aren’t as easy to get as they were at this time last year....

Don’t just pay the minimum payment. Increasing your monthly credit card payment helps you pay off your balance sooner and at a lower cost. Falling behind by more than 30 days also impacts your credit score. If your payment is more than 60 days late, your credit card issuer may raise your interest rate to the highest penalty rate. Your billing statement is often the first alert to any fraudulent activity on your account....

How Estimates of 2009 GDP Changed The BEA revises its estimates when it gets new data, so even years after the fact, the GDP for any given year might be updated. In 2010, the BEA’s GDP estimate for 2009 was $14.119 trillion. That number was revised to $13.939 trillion in 2011 and $14.419 trillion in 2015. Below are the BEA’s 2018 revised GDP estimates for each quarter in 2009 with the prior estimates in parentheses:...