Featured Napkin
Emergency Fund
Cash Cushion
An emergency fund is your stash of just-in-case money. Along with your insurance coverage, it’s a vital piece of your financial safety net.
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Risk Tolerance
Appetite for Destruction
Risk tolerance describes how much risk you can (or should) be taking on with your investments. Investing...
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Roth IRAs
Road to Retirement
A Roth IRA, or Individual Retirement Account, is one of the most common types of retirement savings...
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Credit Report
Good Marks
Your credit report is a detailed history of your past use of credit. It’s a bit like...
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How to Save More Money
Keep the Change
Like many good habits, saving more money is easier said than done. Once you’ve gotten into a...
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Cash Alternatives
Cash In
Cash alternatives are investment types that you can consider as alternatives to simply holding money in your...
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Getting Out of Credit Card Debt
Pay the Piper
Credit card debt can be overwhelming. As interest accrues, your balances may keep increasing even if you’re...
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Active vs. Index Investing
Pick Sides
Active and index investing are two different ways of choosing individual investments. With active investing, investors try...
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FICO vs. VantageScore
Settle the Score
FICO and VantageScore are two of the most common credit scoring models. Contrary to popular belief, you...
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Estate Tax
Death and Taxes
An estate tax is an amount that may be paid from your assets to the government after...
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Growth vs. Value Investing
Moves Like Buffett
Growth and value investing are two different approaches to investing in stocks. Growth investors aim to invest...
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P/E Ratio
At Any Price
The price-to-earnings ratio (or P/E ratio) is a way to evaluate whether a company’s stock is cheap,...
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Term vs. Permanent Life Insurance
Life Sentence
Term and permanent policies are the two main types of life insurance. With both types of policies,...
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Technical Analysis
Off the Charts
Technical analysis means using stock price charts to try to predict future stock price movements. It involves...
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HMO vs. PPO
Bill of Health
HMOs and PPOs are two different types of health insurance plans. HMO (or Health Maintenance Organization) plans...
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Sticking to a Budget
In It to Win It
Budgeting can be a lot like dieting. You start out with big hopes for dramatic changes in...
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Paying Off Student Loans
Take a Load Off
It might seem like there’s only one way to pay down your student loans (namely: slowly, painfully,...
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Paying For Retirement
Into the Sunset
Retirement may seem like an abstract, far-off goal (unless you’re already independently wealthy or a 401(k) ninja,...
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Game Theory
Roll the Dice
Game theory is an economic model for predicting people’s decisions in tricky situations.
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Financial Aid
Lean on Me
Financial aid can refer to any of a number of types of assistance that help students afford...
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Filing for Unemployment
Pink Slip
Unemployment insurance is a government program that gives you money if you lose your job. Sometimes, life...
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ESG Investing
Do the Right Thing
ESG investing means investing in companies that do good (or at least don’t actively do harm). With...
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Credit
Permanent Record
Credit is, simply put, your financial reputation. Your credit history describes your record as a borrower, including...
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Business Plan
Best-Laid Plans
A business plan is a document that outlines your vision for your business. It describes your big-picture...
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Paying Down Debt
Get Low
Paying down debt can make you more financially secure and give you more flexibility when deciding what...
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Venture Capital
Nothing Ventured, Nothing Gained
Venture capital (or “VC” for short) is a type of financing for startup companies. Venture capitalists invest...
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Target-Date Funds
Bullseye on Retirement
A target-date fund is an investment fund that’s based on your expected retirement date. These mutual funds...
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Market Capitalization
Size it Up
Market capitalization (or just “market cap”) is a measure of a company’s total value. If you ever...
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Medicare
Free for All
Medicare is a health insurance program for retirees that is sponsored by the federal government. It is...
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Income Taxes
Pay the Piper
Personal income tax is money the government collects from people based on how much they earned or...
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SBA Loans
Helping Hand
SBA-guaranteed loans (or just “SBA loans”) are business loans backed by the U.S. Small Business Administration (SBA)....
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Volatility
Rocky Road
Volatility describes how much an investment bounces around in price. More volatile investments zigzag in price more...
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Rollovers
Roll With It
A rollover is when you move funds from one retirement account into another, such as from a...
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Valuing a Company
What’s it Worth?
A company’s value is the dollar figure that it might sell for if a person or another...
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Hard vs. Soft Credit Inquiries
Extra Credit
Banks, lenders, and others use your credit report and scores to determine your creditworthiness. In other words,...
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Incorporating
Limited Liability
A corporation is one type of formal business structure that entrepreneurs can choose to use when starting...
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Buying a Home
Happy Homeowner, Happy Life
Buying a house is one of the biggest steps you can take in your life. But it’s...
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Futures
Looking Ahead
A futures contract is an agreement to buy a specific investment at an agreed-upon price on an...
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Forex
Hard Currency
The foreign exchange, or forex, markets are where investors go to buy and sell currencies. Unlike the...
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FHA Loans
Helping Hand
FHA loans are a type of mortgage loan that’s available to people who might not qualify for...
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Balance Transfers
Shell Game
Balance transfers are a way to move what you owe on one (or more) credit cards and...
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Retirement Savings for Contractors
Squirrel Away
If you’re a contractor, saving for retirement can be much more complicated than it is for employees....
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FSAs vs. HSAs
Health is Wealth
Health care FSAs and HSAs let you save money for out-of-pocket medical expenses (basically the things your...
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Asset Classes
Building Blocks
An asset class is a group of similar kinds of investments. It’s a generalization, not a detailed...
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Financial Advisors
Get Some Help
Financial advisors are experts who can provide financial advice and help you manage your money. Some people...
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Financial Planning
Ducks in a Row
Financial planning describes the process of mastering your money. It means figuring out where you actually are...
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E-Filing
Signed, Sealed, Delivered
E-filing means filing your taxes online. You’ll still need all the same documents you’d use to file...
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Asset Allocation
Divide and Conquer
“Asset allocation” is a way of describing what you own in percentage terms. If you’ve got $1,000...
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What Is an ICO?
The Wild West of Finance
An ICO, or Initial Coin Offering, is a way for startups to raise money by inventing and...
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IRA vs. 401(k)
Nest Eggs
IRAs and 401(k)s are two popular types of retirement savings accounts. Most people who work in the...
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Entrepreneurship
Change the World
Entrepreneurship is building a new business from the ground up. It means coming up with an idea...
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Budget
Nickels and Dimes
A budget is a plan you can use to better manage your spending and saving. When you...
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Debt
It All Adds Up
Debt is money that you owe to another person or a financial institution. When you borrow money,...
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Inflation
On the Up and Up
Inflation is when prices of things rise over time. For example, in 1980 you could buy a...
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Credit Cards
Swipe Right
A credit card lets you buy now and pay later, all without the hassle of counting out...
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Banks
Bank on It
Banks are institutions that take deposits, cash checks, and make loans. They are essentially home bases for...
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Tax Deductions
Cut Rate
Tax deductions, such as for donations to charity or interest on student loans, are amounts that you...
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Diversification
Spread Your Bets
Diversification is the practice of dividing your money among lots of different types of investments. It’s the...
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Cryptocurrency
Tales of the Crypto
Cryptocurrency is digital money that can be sent electronically anywhere in the world.
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Rebalancing
Move Your Assets
Know how self-help gurus are always talking about “finding the balance” in your personal life? That same...
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Revocable vs. Irrevocable Trusts
In Good Hands
A trust is a legal agreement allowing one person to transfer their assets to someone else via...
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Bitcoin
Not So Silky Road
Bitcoin is the world’s first type of digital money, or cryptocurrency. Unlike traditional paper money, Bitcoin only...
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Bull or Bear Market
Into the Wild
Wall Street may be a bit of a rodeo, but there are no literal bulls or bears....
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529 Plan
Higher Ed, Higher Returns
A 529 plan is a tax-advantaged college savings account sponsored by a state government or education institution....
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Savings
One Penny at a Time
Savings are funds that you put aside and don’t spend. Life can be full of surprises, both...
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Compound Interest
Make Bank
The most powerful force in the universe is compound interest. — Albert Einstein
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Interest
Pay Up
Interest is the cost of borrowing money. For a borrower, interest is the price of taking on...
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GDP
Grossly Underrated
Gross domestic product, or GDP, measures the size of an economy. In essence, it puts a dollar...
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Break-Even Point
Point Break
A company is at its break-even point when its revenue equals its expenses. It is neither making...
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IRR
Crunch the Numbers
The internal rate of return, or IRR, is a measure of an investment’s or a project’s profitability....
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Private Equity
Members Only
Private equity is money invested directly into a private company. Private equity funds pool money from many...
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Crowdfunding
Pound the Pavement
Crowdfunding is a way to raise money from many people, thanks to the power of the Internet....
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Robo-Advisor
Autopilot
A robo-advisor is an investment management company that uses a computer program instead of a live human...
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Long Term Care Insurance
Senior Moment
Long-term care insurance is a policy that helps cover the cost of assistance with daily activities if...
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Municipal Bonds
One for the Road
A municipal bond, or muni bond, is a type of bond issued by a state or local...
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Charitable Remainder Trusts
Big Love
A charitable remainder trust is a financial tool that can provide a steady source of income while...
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Tax Loss Harvesting
Cut Your Losses
Tax loss harvesting is a trading strategy investors can use to try to reduce their taxes. It’s...
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Collateral
Give and Take
Collateral is something that a borrower pledges to a lender to secure certain types of loans. If...
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Capital Gains Tax
The Taxman Cometh
If something you own goes up in value and you sell it, then you’ve made a profit....
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Carried Interest
In the Interest Of
Carried interest is a share of a private equity or hedge fund’s profits that is paid to...
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Wills
For Love or Money
A Last Will and Testament, or “will” for short, is a legal document that lets you transfer...
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Blockchain
Chain Gang
Blockchain is the recordkeeping technology that serves as the foundation for Bitcoin and some other types of...
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Saving for College
Pay Your Dues
Saving for college means setting aside funds for education expenses. It means making a dedicated investment in...
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APR
Another Day, Another Dollar
An annual percentage rate (APR) represents the annual cost of borrowing money, including fees. Because the APR...
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The S&P
Make the Market
The Standard & Poor’s 500 Index—also known as the S&P 500, or just the S&P—is an index...
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Business Insurance
Cover Your Bases
A business insurance policy is a contract between an insurance company and a business. In exchange for...
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Dividends
Show Me the Money
A dividend is a portion of a company’s profits that is paid to its shareholders in the...
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Options
Coming Attractions
An option is the right, but not obligation, to buy or sell an investment at a specific...
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Title Insurance
On the House
A “title” is a document listing the legal owner of a piece of property. Title insurance protects...
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Rent vs. Buy
Where the Heart Is
The choice between renting or buying a home may be one of the biggest decisions you make...
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EPS
Bang for the Buck
Earnings per share (EPS) is a financial metric that helps investors evaluate a company’s profitability. It’s calculated...
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Estate Planning
Bite the Dust
Estate planning is the process of figuring out what will happen to your stuff after you die....
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Index Funds
Copy That
An index fund is a professionally managed collection of stocks, bonds, or other investments that tries to...
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Foreclosure
Bottom Dollar
Foreclosure is a legal process that lets a lender seize possession of a house or other real...
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FICO
Score Some Points
Although you might hear the phrase “your credit score” tossed around, you actually have multiple credit scores—potentially...
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Car Insurance
Tighten Your (Seat) Belt
Car insurance is an agreement between you and an insurance provider. In exchange for regular payments from...
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Prepaid Card
Top Off
A prepaid card lets you spend money that you’ve already added to the card. It’s similar to...
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Reverse Mortgage
Can’t Take it With You
A reverse mortgage is exactly what it sounds like: instead of paying down a mortgage balance every...
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Deductibles
Cut Rate
A deductible is the amount of money you must spend out of pocket before your insurance company...
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Fixed vs. Variable Costs
At All Costs
Fixed and variable costs are types of expenses that businesses pay in order to operate.
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Convertible Note
Take Note
A convertible note is a type of short-term loan for a business. However, instead of being repaid...
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Equity
Own It
Equity is ownership. You can have equity—or an ownership stake—in any asset, meaning anything of value.
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Tax Refunds
Check’s in the Mail
If you pay more than your fair share in taxes over the course of a year, you’re...
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Liquidity
Cashing Out
Liquidity refers to how easily you can sell an investment or asset at a fair price.
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ROI
Many Happy Returns
Return on investment, or ROI, is a ratio for measuring the profitability of an investment. It puts...
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Improving Credit
Extra Credit
Your credit report and credit scores describe whether you have a good track record of repaying borrowed...
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IPO
Opening Bell
An IPO, or initial public offering, is when a company’s shares start trading on a stock exchange...
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Mutual Funds
Join Forces
A mutual fund is a professionally managed fund that pools lots of investors’ money in order to...
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Interest Rate
At Any Rate
Interest is what a lender charges you to borrow money. It is usually expressed as a percentage...
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Risk vs. Reward
Double Down
All investments come with risk. With financial investments, risk is usually tied to reward. That means investments...
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Bonds
Bonds, James Bonds
Bonds are essentially IOUs. When you buy a bond, you become a lender to whatever entity issued...
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Rule of 72
Crunch the Numbers
The rule of 72 is an easy, back-of-the-napkin way to figure out how long it will take...
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Philanthropy
Greater Good
Philanthropy is giving back. It’s paying forward the resources you have—whether your money, or physical goods, or...
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Fiduciary Duty
Your Best Interest
A fiduciary duty is a legal obligation to act in another person’s best interest.
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Trustee
Handle With Care
A trustee can be an institution or an individual that is given the power to manage and...
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Tax Withholding
To Have and Withhold
Tax withholding is money your employer takes out of your paycheck each pay period. Your employer then...
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Hedge Funds
Hedge Your Bets
Hedge funds are investment funds that pool many investors’ money and then hire one or more professional...
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Refinancing
Cash in Your Chips
Refinancing is getting a new loan to replace an old one. Borrowers usually refinance in order to...
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EBITDA
How You Slice It
EBITDA (pronounced “ee-bit-tah”) stands for “earnings before interest, taxes, depreciation, and amortization.” It’s one measure of a...
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Escrow
In Good Hands
Escrow is an arrangement in which a trusted third party temporarily holds onto some kind of asset,...
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Building Credit
Bit by Bit
Credit is money that’s available to you to borrow whether through a credit card, mortgage, car loan,...
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Profit Margin
Margin of Error
A company’s profit margin measures the portion of its total sales that it gets to keep as...
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Buy vs. Lease a Car
Joy Ride
When you need a car, you have two options: buy or lease. If you buy a car,...
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The Stock Market
Greed Is Good
The stock market is the collection of physical and electronic markets where buyers and sellers come together...
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CDs
On Principal
Certificates of Deposit, or CDs, are low-risk investments that pay interest. You can think of them as...
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Financing a Start-up
Sink or Swim
If you’re trying to get a start-up off the ground, chances are you’ll need some cash to...
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Annuities
Nest Egg
An annuity is a series of regular payments made over a set period of time. Annuities can...
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REITs
Take Stock
A real estate investment trust, or REIT, is a company that owns, manages, or finances real estate....
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Appraisal
For All it’s Worth
An appraisal is an estimate of how much something is worth. People may get appraisals for real...
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Power of Attorney
More Power to You
A power of attorney is a document you can create if you want to give someone else...
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Short Selling
The Big Short
Short selling is a way to bet that a stock will fall in price. Normally, an investor...
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Mortgages
Home Sweet Home
A mortgage is a type of loan that people use to help them buy a house or...
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1099 vs. W-2 Employee
Bring Home the Bacon
1099s and W-2s are both types of tax forms. If you’re a contractor, you should receive one...
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Form W-2
Company Man
The W-2 is a tax form your employer must complete at the start of each year to...
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Insurance
Cover Your Assets
Insurance is financial protection. Along with your emergency fund, insurance makes up your safety net so that...
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Social Security
Safety Net
Social Security is a government program that takes in taxpayer dollars and pays out benefits to older...
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Tax Returns
Not-So-Happy Returns
Most people pay taxes throughout the year. When you file a tax return, you calculate how much...
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Trusts
Pennies From Heaven
A trust is a legal document that allows a person (the trustee) to hold the assets of...
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Investing
Piece of the Pie
Investing is putting your money to work in the hopes of earning a return. You probably already...
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Opportunity Cost
Fork in the Road
Opportunity cost is the return or benefit you miss out on by choosing one option over the...
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ETFs
Jack-of-All-Trades
Exchange-traded funds (ETFs) are investment vehicles similar to mutual funds. Like mutual funds, ETFs are professionally managed...
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Student Loans
Old College Try
A student loan can be any kind of borrowed money that’s used to pay for education. Although...
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FAFSA
Aid and Abet
The Free Application for Federal Student Aid, or FAFSA, is a form that college and grad students...
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Paying for College
Higher Education, Higher Costs
Going to college can lead to better jobs and bigger paychecks. But it comes at a high...
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How to Start a Start-up
Go Big or Go Home
Although plenty of start-ups fail, the ones that succeed can do so wildly. Beyond a financial payoff,...
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Stocks
Buy Buy Buy
Stocks are pieces of ownership in companies. If you bought one stock of, say, Amazon, and Amazon...
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Independent Contractor
Free Agent
An independent contractor is someone who is self-employed and works for clients as a nonemployee. Independent contractors...
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Blue Chips
Steady Eddy
A blue chip is a company that is financially sound and well established. These companies usually sell...
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Securities
Market Maker
“Securities” is the term used to describe stocks, bonds, mutual funds, and other types of financial investments....
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Life Insurance
Beyond the Veil
Life insurance is a contract with an insurance company. In exchange for periodic payments, the insurance company...
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Real Estate
Location, Location, Location
Buying real estate—whether on your own or by pooling your resources with other investors—is one possible way...
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