What Is Downgrade Risk?
Downgrade risk affects both bond and equity investors. Different entities issue ratings for bonds and stocks. But the net effect of a downgrade is similar for both bonds and stocks. Investors who hold either of these investments are always exposed to downgrade risk. In this article, we’ll discuss what downgrade risk is.
What Is Legacy Planning, and Why Is It Important?
Legacy planning is the process of protecting and transferring assets from the current generation to the next. Careful planning can help preserve the value of your future bequests, assist your heirs with forming their investment strategies, and assist with managing tax obligations. Legacy planning may also include the inclusion of value considerations.
What Is Tax Assessed Value, and How Do You Calculate It?
Paying taxes is unavoidable in making money, whether you earn income through wages or investments. However, investors can seek to manage their tax liabilities through various means, including deferral. One valuable tool is understanding the different taxes, how they apply to your investment holdings, and how the tax amount is determined.
What Is the BRRRR Method in Real Estate?
Mention the words “real estate investment” and what might come to mind is buying a property, finding quality tenants, and generating potential cash flow from rents. There is also the possibility of asset appreciation, meaning you could generate capital gains on the sale of that property.
How Is Legacy Planning Different from Estate Planning?
Some people scoff at the notion that there is a fundamental difference between estate planning and legacy planning. After all, both refer to a plan for distributing your assets after your death, plus related concerns like end-of-life issues. In addition, both types of planning usually involve preserving wealth, sharing good fortune with your heirs, and possibly safeguarding family keepsakes.
Can Unsystematic Risk Be Reduced or Eliminated?
Unsystematic risk is the flip side of the two primary risks investors face. The other risk is called systematic risk. Understanding the difference between these two risks means understanding why some risks can’t be reduced/eliminated from a portfolio while other risks can.
What is a Replacement Property?
Insightful real estate investors use tax-deferred exchanges to help build wealth through the deferral of capital gains taxes. To take advantage of this tax law, investors must use the proceeds of property sales to purchase a replacement property.
What Is Currency Risk?
Globalization and the internet have expanded investment opportunities. Depending on your investment appetite, you could invest in a German broad market index or tap into an authorized agent to acquire a United Kingdom government bond.
What Are the Rules for Doing a 1031 Exchange on a Rental Property?
Capital gains taxes can eat into the profits a real estate investor makes when he or she decides to sell the property. However, it's possible to avoid paying taxes on your capital gains if you implement the right strategy while investing in real estate. One of these tactics is a 1031 Exchange, which allows real estate investors to exchange one investment property for another.
What Is Inflation Risk?
Several things occurred in 2021. COVID-19 variants continued to mutate and spread, even as vaccines were more available. Climate change generated extreme weather events worldwide, from raging storms to drought to wildfires. And inflation in the United States pushed to a 40-year high.
