Investing Strategies & Tax Implications
Putting money into an asset with the expectation of earning a future benefit income and or growth
What is an investment?
How suitable someone is to receive credit
What is creditworthiness?
money borrowed that must be paid back with interest
What is debt
A widely accepted medium of exchange used to buy goods/services now
What is cash?
You lend money and earn interest eg: bonds
What are lending investments?
Legal process for people who cannot repay debts (stays 7–10 years)
What is Bankruptcy?
This allows you to benefit from the asset during the repayment period
What is maintaining ownership?
the ability to borrow based on trustworthiness your “permission” to use someone else’s money now and repay later.
What is credit?
A wealth transfer not a strategy you control but it affects financial planning and sometimes taxes
What is inheritance?
How much you owe compared to what you earn
What is Debt-to-income ratio(DTI)?
Financing a $20000 car over 5 years over depleting savings
What is spreading payments over time?
Money that must be accepted to pay debts under U.S. law generally U.S. coins and currency.
What is legal tender?
Digital assets potentially high upside but often high volatility regulatory uncertainty and security risks
What is cryptocurrency?
Affects how much you can borrow, your interest rate... etc.
Why creditworthiness matters?
Reduce savings for emergencies and retirement
Cause financial stress and anxiety
Limit money for necessities like groceries, gas, or healthcare
What is debt reducing cash flow?
pulls money from your checking account immediately or within a short processing window.
What is a debit card?
Primarily risk protection and income replacement.
What is Life insurance policy?
Keep usage under 30%
What is the credit card rule?
keep debt payments under 20% of annual income and 10% of monthly income
What is the 20/10 rule?
send money to people; may allow instant transfer for a fee
What are P2P apps?