The mortgage interest tax deduction is one of the most cherished American tax breaks. Realtors, homeowners, would-be homeowners and even tax accountants tout its value. In truth, the myth is often better than the reality.
Most Homeowners Get Nothing
The Tax Cuts and Jobs Act (TCJA), passed in December 2017, changed everything. Prior to its passage, 54% of taxpayers who paid interest on their mortgages received a tax…
The debt-to-equity (D/E) ratio is a metric that provides insight into a company’s use of debt. In general, a company with a high D/E ratio is viewed as a higher risk to lenders and investors because it suggests that the company has financed a larger amount of its growth through borrowing. What is considered a high ratio can depend on a variety of factors, including the company’s industry.
Calculating the D/E Ratio
A real estate mogul, an aspiring fashion icon, a reality TV staple… For the self-styled “patriarch of perfection,” multimillionaire Todd Chrisley has had a career path wrought with false starts and monumental resets. Born in 1969, Chrisley has been through a $45 million bankruptcy, plotted of a potential reality empire and made innumerable contradictory claims pertaining to his net worth and financial status. Chrisley’s…
A warrant is like an option, except it is issued by a company. The warrant gives the holder the right to buy stock from the company at a specified price within a designated time period. When an investor exercises a warrant, he or she buys stock from the company and those proceeds are a source of capital for the firm. While warrants aren’t that common, it’s important to understand what they are, and how to value them, incase a…
Inflation can happen if the money supply grows faster than the economic output under otherwise normal economic circumstances. Inflation, or the rate at which the average price of goods or serves increases over time, can also be affected by factors beyond money supply.
The theory most discussed when looking at the link between inflation and money supply is the quantity theory of money (QTM), but there are other theories that…
Many elements of mathematics and statistics are applied to evaluate stocks. Covariance calculations show how two stocks might move together in the future. Looking at historical prices, covariance helps the investor to determine if the prices tend to move with each other or against each other. This can predict the potential price movement of a two-stock portfolio.
An investor might even be able to select complementary stocks,…
Marriage is a big step for two people. Not only will you be sharing a life together, you’ll also be sharing one very important thing: money. And with money comes the concept of credit.
There are some couples that never seem to worry about money, but many have to rely on credit in order to make their dreams come true. These may include buying a home, going on vacations, having a family. But let’s face it, sometimes you can’t…
Investors are always seeking ways to compare the value of stocks. The price-to-sales ratio utilizes a company’s market capitalization and revenue to determine whether the stock is valued properly.
How the Price-To-Sales Ratio Works
The price-to-sales ratio (Price/Sales or P/S) is calculated by taking a company’s market capitalization (the number of outstanding shares multiplied by the share price) and divide it by the…
Former Starbucks Corp (SBUX) CEO Howard Schultz plans to run for president as a “centrist independent” in 2020.
Schultz, a self-described “lifelong Democrat,” said he wants to get into politics because U.S. politicians are no longer representing the interests of American people.
“We’re living at a most fragile time,” he told CBS. “Not only the fact that this president is not qualified to be the president, but the…
Operating leverage and financial leverage are two different metrics used to determine the financial health of a company.
Operating leverage is an indication of how a company’s costs are structured and is used to determine the break-even point for a company. Financial leverage refers to the amount of debt used to finance the operations of a company.
Operating leverage measures the extent to which a company or specific…