Each year, millions of Americans enroll to take courses of higher learning from post-secondary educational institutions. However, the majority do not have the funds to pay for their education in cash, and must therefore take out one or more loans to cover the cost of tuition and other fees. As a result, student loans have grown to a multi-billion dollar industry that provides the means for students from all economic backgrounds to pay for higher learning and vocational training.
Prospective homeowners today have many options when it comes to getting a home loan. Banks, credit unions, mortgage brokers, and many financial planners now offer a range of products that can be used to purchase or refinance a home.
But not all loan officers are created equal. Some have taken the time to become Certified Mortgage Planning Specialists (CMPS), which effectively sets them apart from their competition in terms of education and expertise.
What Is a CMPS?
Certified Mortgage Planning Specialists are loan officers and brokers who have completed the requirements to carry the CMPS designation. They have completed 15 hours of coursework with exams that cover all of the major aspects of mortgage lending, including:
The subprime mortgage crisis of 2008 has made it harder than ever for many loan officers to make a living. Although the elimination of the entire subprime market has been partially offset by the drop in interest rates, the level of compensation for many originators has dropped substantially from what it was a few years ago.
Loan officers have therefore had to think up new ways to service their customers and still make a profit. One option they may want to consider is to become a Certified Mortgage Planning Specialist (CMPS).
Restricted stock and restricted stock units (RSUs) have become a popular choice for many firms that wish to reward employees with a share of ownership in the company without the administrative complexity of traditional stock option plans. Restricted stock plans have shown themselves to be more beneficial than their traditional counterparts in the sense that it is not possible for the stock to become worthless, as it is for options or rights.
But while restricted stock and RSUs are similar in many respects, most employers tend to favor RSUs. This is because they allow companies to defer the issuance of actual shares to participants for a period of time.
Most employee stock programs are designed to benefit either rank-and-file employees or all types of employees at a company. However, there is one type of stock option plan that is usually only available to executives and upper management.
Incentive stock options (ISOs), also known as qualified or statutory stock options, resemble their non-qualified cousins in many respects. However, they are the only type of option that allows the participant to report all profit between the exercise and sale price as capital gains, provided certain conditions are met. In return for this privilege, incentive stock options must adhere to several rules that do not apply to other types of plans.
There are several forms of stock option plans available that allow employees to purchase shares of their employer’s stock on a tax-advantaged basis. Perhaps none are better or more convenient than simply buying shares of the company inside their 401k plans.
However, this strategy comes with a level of risk that many employees do not understand – and may not learn about until it is too late.
Although there are many different types of stock-based compensation used by corporations in America and elsewhere, not all of these plans involve or require the use of stock itself. Some types of stock incentives substitute cash or hypothetical units for actual shares of the company.
This is done for a variety of reasons. Often, it can allow employers and employees to avoid certain tax or accounting limitations that come with the use of real shares of stock. Phantom stock and stock appreciation rights (SARs) are two types of plans in this category.
Companies frequently choose to reward their employees with shares of their stock instead of cash or other types of benefits, such as a 401k or other qualified retirement plans. This is done for many reasons: It can provide employees with an additional avenue of compensation that is buoyed by the open market (which means that it does not come directly out of the company’s pocket), and it can also improve employee loyalty and performance.
One of the most powerful benefits that any publicly traded company can offer its employees is the ability to purchase stock in itself. There are several ways this can be done, but perhaps the most straightforward method of employee stock ownership can be found in an employee stock purchase program (ESPP). These plans provide a convenient method for employees to purchase company shares and improve their cash flows or net worths over time.
There are several different types of plans available for employers that choose to reward their employees with shares of the company. However, there is only one type of stock purchase plan considered to be a qualified plan that is subject to ERISA guidelines: the Employee Stock Ownership Plan (ESOP).
Employers should not regard ESOPs as simply another means of rewarding employees with shares of stock – this unique form of employee stock ownership is fundamentally unlike any other form of stock option or qualified plan.
Investment companies were created to invest in a range of professionally managed securities or investments with the intent of accomplishing specific financial goals, such as capital growth or income. They have grown to become one of the main providers of asset management for millions of investors in the United States and around the world.
There are three main types of investment fund companies: open-end funds, closed-end funds, and unit investment trusts. But while they differ slightly in structure and characteristics, each provides investors with professional management and diversification, both inside and outside of IRAs and employer-sponsored retirement plans.
There are three main forms of compensation that most corporations pay to their employees. The primary type of compensation, of course, is cash, which comes in the form of hourly wages, contract income, salaries, bonuses, matching retirement plan contributions, and lifetime payouts from defined benefit plans.
The second method of compensation comes in the form of benefits, such as insurance (life, health, dental, and disability), paid vacations and sick days, tuition and child care assistance, and other miscellaneous perks, such as company cars and expense accounts.
Investors seeking decent returns on their money with minimal volatility have been frustrated in recent years with the low rates from CDs and treasury securities. Many have begun exploring other asset classes, such as corporate bonds, fixed annuities, and preferred stock.
But there is another alternative that has been around for decades, one that has paid steady dividends with moderate risk. Utility stocks have been one of the bellwether sources of dividend income for conservative and moderate investors since the early 1900s.
Conservative investors who are disappointed with the mediocre rates of interest offered on their local bank’s CDs may want to explore the world of brokered certificates of deposit. These unique instruments resemble those that are sold in bank lobbies in some respects, but there are critical differences between them.
Brokered CDs can be a valuable addition to any fixed-income portfolio as long as the purchaser understands how these instruments work – and their potential pitfalls.
By Mark Cussen
Conservative investors have been frustrated in recent years because low interest rates have left guaranteed instruments yielding virtually nothing. And while rates will undoubtedly rise again at some point, guaranteed instruments will never outpace inflation.
This creates a dilemma for many investors who seek a decent return on their money, but don’t want to risk losing their principal. However, there are several investment options paying higher rates of interest than CDs and treasury securities with a very reasonable amount of risk. Those who are willing to explore some of these options can significantly increase their investment income without having to lie awake at night worrying whether their money will still be there in the morning.