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what does joint tenancy with right of survivorship mean | a joint tenancy with right of survivorship is a form of ownership where each party shares equal rights in a property if one of the owners dies their share of the property is not probated with their estate instead it is passed on to the other joint tenants | |
how many joint tenants are allowed in a single property | joint tenancy can have two or more joint tenants there is no legal limit to the number of co owners in a joint tenancy as long as all joint tenants have equal shares of ownership | |
what happens if one joint tenant stops contributing to the property expenses | each joint tenant has a legal responsibility to contribute to property expenses such as mortgage payments property taxes and maintenance costs in proportion to their ownership share if one joint tenant stops contributing the other joint tenants may need to cover their share to avoid default or financial issues if disputes arise legal action may be necessary to enforce the co ownership agreement can joint tenants add new co owners to the property generally joint tenancy requires all joint tenants to acquire their interests at the same time adding new co owners after the initial purchase would likely create a tenancy in common instead of a joint tenancy however joint tenants can sell or transfer their shares and new co owners can be added through this process can creditors pursue the property to collect debts from one joint tenant yes if one joint tenant has personal debts or judgments creditors may seek to place a lien on the property or force the sale of the property to collect the owed amount the creditor s action could affect the other joint tenants and the property s status as a joint tenancy the bottom linejoint tenancy is a legally simple way for two or more people to share equal interests in real estate or another form of property when one tenant dies there is no need to probate their share of the property with their estate instead the share belonging to the deceased tenant is simply passed on to the remaining joint tenants | |
what are joint tenants in common jtic | the term joint tenants in common jtic refers to a legal relationship in which two or more people own a piece of property or another asset where no rights of survivorship are afforded to any of the account holders if one owner dies the surviving owner doesn t necessarily acquire the rights of the deceased owner jtic gives individuals the opportunity to own a piece of property and share the costs associated with it understanding joint tenants in common jtic two or more people who own an asset together may be referred to as joint tenants in common assets may include real estate bank accounts brokerage accounts investment portfolios or other types of property joint tenants in a common arrangement could be established through a will left by the prior owner of a property to their heirs such as a parent who leaves their property to their four children the parent may allocate a specific percentage or equal ownership to each heir the member ownership in the account is generally determined on a pro rata basis this means each individual in the relationship owns a portion of the asset equal to their contribution someone who contributes 60 owns 60 of the asset in other cases individuals may enter into a relationship that gives them an equal share of the property joint tenants in common are entitled to mutually share in the property and do not have the right to deny each other access to it for instance an owner can t stop another tenant in common from making a withdrawal or from selling their stake in the property unlike other common legal relationships when one owner dies the surviving owner s does not automatically inherit their portion of the asset each tenant in the account can stipulate how their assets are to be distributed upon their death in a written will a deceased owner s portion of the asset can only be transferred to the surviving tenants if it is noted in the individual s will this kind of relationship may seem unusual but it is common when two or more people want to own property without having to bear the financial burden on their own two individuals may find it more affordable to own a home or a brokerage account by becoming joint tenants in common and split the cost the purchase price property taxes maintenance brokerage fees and other expenses related to the asset special considerationsan agreement to be joint tenants in common may be formed when more than one party puts their funding into the acquisition of property the percentage of the assets each party committed would typically be the basis for their ownership and share for example if one party committed 85 of the funds needed to acquire a property they would hold an 85 claim to it you can sell your individual stake even if the property is treated as a whole unit the property in question is usually treated as a whole unit rather than being subdivided among the joint tenants in other words each tenant has the right to use the entire property not just a portion based on the size of their claim depending on the local laws and type of account each tenant may have the right at their discretion to tap into resources associated with the joint property or account this can include withdrawals or even the sale of their interest in the property some states require signatures from all parties that can claim a portion of ownership in order for transactions to be conducted involving joint tenants in common accounts or property that would compel all parties to agree in order to complete a sale of the whole property each tenant could choose to sell their individual stake even if a tenant sold their portion of interest in the property it would still be treated as a whole unit and not subdivided | |
what are joint tenants with right of survivorship jtwros | joint tenants with the right of survivorship jtwros is a legal structure where two or more parties share ownership of a financial account or another asset when one of the joint owners dies their share automatically passes to the surviving co owner s each joint tenant has an equal right to the account s assets and is afforded survivorship rights if one of the account holder s dies the surviving member s inherit the total value of a deceased member s share upon the death of that other member regardless of any other will or heirs 1investopedia paige mclaughlinunderstanding joint tenants with right of survivorship jtwros contrary to what some people may believe the term joint tenant with the right of survivorship has nothing to do with being a lessee or tenant in a rental apartment jtwros is actually a legal concept that applies to individuals who own assets accounts or other types of property it is actually a form of co tenancy which is why this arrangement is also often called a joint tenancy co tenancy or joint tenancy is a concept in property law that is used to describe the various ways that a piece of property can be owned by two or more people at the same time a jtwros is one version of co tenancy that gives co owners equal rights to the asset in addition to the right of survivorship this means that both parties can freely use the asset as they please but if one tenant dies their ownership stake passes on to the surviving owner s 1a jtwros is most commonly used between married couples or between a parent and their child but it can also be established between parties who are not related as noted above this type of legal relationship can involve any number of financial accounts or assets such as this relationship can be broken if one or more of the parties involved sells their interest in the asset to someone else as such it becomes a tenancy in common tic which is a less restrictive form of joint ownership 23 | |
when a joint tenant dies their rights to the asset automatically pass to the surviving joint tenants regardless of any other will or directive from the deceased | requirements for jtwrosthe creation of a jtwros requires that the owners share what is known as four unities a jtwros cannot be created if any one of these four unities isn t established the parties are then treated as tenants in common 1the language must be extremely clear when a jtwros account is created for instance mr x and mrs y are to be designated joint tenants with rights of survivorship and not as tenants in common this is necessary because a joint tenancy is automatically assumed to mean tenants in common in certain jurisdictions all members of a brokerage account are afforded the power to conduct investment transactions within the account joint tenant with right of survivorship jtwros vs tenancy in common tic a joint tenant with right of survivorship differs from a tenancy in common while each party in a jtwros has a right of survivorship over the asset those in a tic do not have the same legal right unless otherwise indicated this means when a tenant dies their ownership stake is passed on to an heir or other beneficiary of their choosing while parties in a jtwros must have an equal stake in the asset or property tenants in common aren t bound by this rule instead this agreement allows parties to have different stakes in the property for instance three people may own a home together if one individual has a 75 claim in the house the other two are only able to have a 25 stake in the property 3unlike a jtwros there are several ways for parties to terminate a tic they include buying out the other party selling the asset and one or more heirs selling their stake creditors with claims against a deceased account owner s assets including a joint tenant with right of survivorship may be settled using any of their previously owned assets 4advantages and disadvantages of jtwrosthere are a number of benefits to entering into a jtwros despite these advantages this type of arrangement does come with certain drawbacks we ve listed some of the most common advantages and disadvantages of being a joint tenant with right of survivorship below entering into a jtwros avoids probate which is the legal process where a person s will is proven in court and accepted to be a valid legal document 5 the deceased owner s heirs cannot inherit their property once a jtwros is established this means that the last living owner of the property owns all of the assets they then become part of this individual s estate survivorship also provides the remaining party s with other benefits in addition to avoiding probate surviving parties are allowed to continue using the asset without any interference from outside parties including a deceased party s heirs each party in a jtwros must contribute to the property equally in addition to holding an equal share and equal access to it this means they must put in an equal share of any bills such as property taxes maintenance or repairs 1 this takes the burden off one individual and spreads it out between everyone in the relationship the most obvious disadvantage is that individuals can t pass or will their ownership stake to their heirs those who want to own property but don t want to give survivorship to the other owner s shouldn t consider this kind of agreement everyone should ensure they have a stable and solid relationship before they enter into an agreement like a jtwros if relations between parties go south it can impact the agreement individuals should be sure they can afford the asset before they enter into a jtwros financial strains can put a damper on the agreement especially when one individual is doing their part for instance if one individual can t keep up with their financial obligations to repair a home or make payments on a mortgage it could have a negative effect on the other party avoids probateallows survivors to use assets without outside interferencegives each party equal financial responsibility in addition to an equal stakeparties can t will their ownership stake to heirsrelationships can be strainedone party can be negatively impacted if the other doesn t live up to their responsibility | |
what is the difference between joint tenancy with right of survivorship and joint tenancy | the primary difference between a joint tenancy with the right of survivorship and a joint tenancy is that the former passes ownership to any surviving parties rather than to their heirs or other beneficiaries it also avoids probate and gives each party equal access and an equal stake along with equal responsibility for the property 51 | |
what are the dangers of joint tenancy | joint tenancy may lead to problems between parties if or when the personal relationship turns sour it can also negatively impact one party if the other doesn t live up to their financial obligations and it prevents owners from passing on their stake to someone of their choosing can a joint tenancy with right of survivorship sell their share a joint tenant can sell their share of the asset to someone else doing so nullifies the agreement turning it into a tenancy in common 31 | |
does right of survivorship override a will | the right of survivorship does override any wills that are in place that s because this kind of arrangement avoids probate 5 but if the last surviving party in a jtwros dies the agreement no longer applies which means the asset or property is included in their will and goes to their heirs the bottom lineowning property on your own can put a strain on your finances but you can lessen the burden by entering into a special agreement with someone else this agreement is called a joint tenant with the right of survivorship not only does it give you and your partner an equal share in the asset but you also share equal responsibility keep in mind though that your share goes to the surviving tenant if you die which means you can t leave your share to any of your heirs you may be better off becoming a tenant in common if you want to pass on your stake to someone else regardless of what route you take be sure to consult a financial and or legal professional to guide you correction april 26 2023 the article was amended to reflect that each owner in a jtwros structure must have an equal share not a percentage of the total assets expressed as 1 n where n is the total number of owners | |
what is a joint venture jv | a joint venture jv is a business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task this task can be a new project or any other business activity each of the participants in a joint venture is responsible for profits losses and costs associated with it however the venture is its own entity separate from the participants other business interests sydney burns investopediaunderstanding a joint venture jv although a joint venture is a partnership in the colloquial sense of the word it can be formed using any legal structure corporations partnerships limited liability companies llcs and other business entities can all be employed despite the fact that the purpose of a jv is typically for production or research one can also be formed for a continuing purpose jvs can combine large and small companies to take on one or several projects and deals here are the four main reasons why companies form jvs a joint venture can take advantage of the combined resources of both companies to achieve the goal of the venture one company might have a well established manufacturing process while the other company might have superior distribution channels by using economies of scale both companies in the joint venture can leverage their production at a lower per unit cost than they would separately this is particularly appropriate with technological advances that are costly to implement other cost savings as a result of a jv can include sharing advertising business supply or labor costs two companies or parties forming a joint venture might each have different backgrounds skill sets or expertise when these are combined through a jv each company can benefit from the other s talent another common use of joint ventures is to partner with a local business to enter a foreign market a company that wants to expand its distribution network to new countries can enter into a jv agreement to supply products to a local business thus benefiting from an already existing distribution network some countries have restrictions on foreigners entering their market making a jv with a local entity almost the only way to do business in the country image by sabrina jiang investopedia 2020 | |
how to set up a joint venture | regardless of the joint venture structure the most important document will be the agreement that sets out all of the rights and obligations of each party to the venture the objectives the initial contributions of the parties the day to day operations the right to the profits and the responsibility for losses are all set out in the jv agreement it is important to draft it with care to avoid risking litigation down the road advantages and disadvantages of a joint venturea joint venture gives each party the opportunity to exploit a new business opportunity without bearing all of the cost and risk joint ventures by nature are riskier than business as usual and coopetition and sharing the risk is a wise move if the right participants are involved the joint venture also starts out with a broader base of knowledge and pool of talent than any one party possesses on its own for example a joint entertainment venture set up by an animation studio and a streaming content provider can get off the ground quicker and probably with a better chance of success than either participant could alone embarking on a joint venture requires relinquishing a degree of control the vital decisions are being made by two or more parties the companies involved must go into the project with the same goals and an equal degree of commitment extreme differences between the participants company cultures and management styles can be a barrier to success will the executives of an animation studio be able to communicate in the same language as the executives of a digital streaming giant they might or they might line up in opposing camps setting up a joint venture multiplies the number of management teams involved if one party undergoes a significant change in its business structure or executive team the joint venture can get lost in the shuffle paying taxes on a joint venture | |
when forming a joint venture the most common thing the two parties can do is to set up a new entity as the jv itself isn t recognized by the internal revenue service irs the business form between the two parties helps determine how taxes are paid | as the jv is a separate entity it will pay taxes as any other business or corporation does however if it chooses to operate as an llc its profits and losses would pass through to the owners personal tax returns as with any other llc 1the jv agreement will spell out how profits or losses are taxed if the agreement is merely a contractual relationship between the two parties then it will determine how the tax is divided between them joint ventures vs partnerships and consortiumsa joint venture is not a partnership that term is reserved for a single business entity that is formed by two or more people jvs join two or more different entities into a new one which may or may not be a partnership the term consortium is sometimes used to describe a jv and there are similarities however a consortium is a more informal agreement than a jv for example a consortium of travel agencies can negotiate and give members special rates on hotels and airfares but it does not create a whole new entity the agencies still pursue their own businesses independently in a jv they would share ownership of the created entity jointly responsible for its risks profits losses and governance example of a joint venturein 2022 two large japanese companies sony and honda announced a joint venture to create an electric vehicle sony is one of the world s most prominent electronics companies and honda is one of the most prominent automobile companies 2the established joint venture seeks to bring an electric vehicle to market by 2026 by combining honda s skills in mobility development technology and sales with that of sony s expertise in imaging telecommunication networks and entertainment 23the joint venture is called afeela the company will be taking pre orders in 2025 with expected delivery in the u s in 2026 43 | |
why would a firm enter into a joint venture | there are many reasons to join forces with another company on a temporary basis including for purposes of expansion development of new products and entering new markets particularly overseas joint ventures are a common method of combining the business prowess industry expertise and personnel of two otherwise unrelated companies this type of partnership allows each participating company an opportunity to scale its resources to complete a specific project or goal while reducing total cost and spreading out the risks and liabilities inherent to the task | |
what are the primary advantages of forming a joint venture | a joint venture affords each party access to the resources of the other participant s without having to spend excessive amounts of capital each company is able to maintain its own identity and can easily return to normal business operations once the jv is complete jvs also provide the benefit of shared risk | |
what are some disadvantages of forming a joint venture | joint venture contracts commonly limit the outside activities of participant companies while the project is in progress each company involved in a jv may be required to sign exclusivity agreements or a non compete agreement that affects current relationships with vendors or other business contacts the contract under which a jv is created may also expose each company to liability inherent to a partnership unless a separate business entity is established for the jv furthermore while companies participating in a jv share control work activities and use of resources are not always divided equally | |
does a joint venture need an exit strategy | a joint venture is intended to meet a particular project with specific goals so it ends when the project is complete an exit strategy is important as it provides a clear path on how to dissolve the joint business avoiding drawn out discussions costly legal battles unfair practices negative impacts on customers and controlling for any possible financial loss in most jvs an exit strategy can come in three different forms sale of the new business a spinoff of operations or employee ownership each exit strategy offers different advantages to partners in the jv as well as the potential for conflict the bottom linea joint venture between companies can open the way for expansion into a new line of business by each participant at a relatively modest cost in fact it sounds ideal each company contributes its own expertise but the cost of the venture is split among them it s only ideal though if the companies have a shared vision and an equal commitment to the success of the joint venture | |
what is jointly and severally | jointly and severally is a legal term that is used to describe a partnership or any other group of individuals in which each individual shares responsibility equally for example if a judge rules that a number of people are jointly and severally liable for injuries suffered by a plaintiff any one of those people may be pursued for payment of the full amount of the judgment as the word severally implies the phrasing of some contractual agreements may specify that some parties have proportional liability for example a partner with a 10 stake in a business may have a liability that is proportional to that 10 investment jointly and severally is sometimes referred to as joint and several liability understanding jointly and severallyin a legally binding document the term jointly and severally clarifies the responsibility that is shared by each party to an agreement essentially it states that all of those named are obligated to perform all of the actions required under the agreement for example if a bank lends 100 000 to two people jointly and severally both of those people are equally responsible for making sure that the total amount of the loan is repaid to the bank if the loan is in default the bank may choose to pursue either for repayment of the entire outstanding balance in such cases the person who is forced to repay the loan will have some legal recourse against the other person named in the agreement but only after the bank is repaid in full joint and several liability is also cited in legal language for example employers are generally responsible for injuries suffered by their employees on the job if a construction worker ruptures a pipe in a house the homeowner and employer might be held jointly and severally liable for the damages under state law a partnership agreement or articles of partnership help detail the responsibilities of all the partners to avoid any confusion regarding obligations and other practices and to determine who is responsible when liabilities arise jointly and severally in the securities industrythe expression jointly and severally is commonly used in the securities industry in agreements for the underwriting of a new bond or stock issue in such cases the firm that agrees to sell a portion of the total issue is responsible for that agreed upon portion plus a corresponding portion of any unsold securities thus an underwriter who has jointly and severally agreed to be responsible for selling a 30 stake in a new issue must sell 30 of any remaining unsold portion each member of the syndicate is responsible for any leftover shares in proportion to the size of each stake | |
what does severally but not jointly mean in an underwriting | in underwriting severally means that members of an underwriting group agree to buy a specific portion of shares but do not agree on joint liability meaning that they are not responsible for the unsold shares of other members | |
what are the disadvantages of jointly and severally | one of the disadvantages of jointly and severally is that it can be unfair to some partners a partner who has a small degree of responsibility for an action may end up unfairly bearing a large burden of damages caused by other partners | |
what is severally liability | in severally liability each partner is responsible for their own obligations rather than equally being held responsible jointly if one partner is unable to remedy their obligations it does not fall on the other partners to do so the bottom linejointly and severally is a form of responsibility in a partnership whereby all partners equally share responsibility the language means that all members are responsible for liabilities actions and any other activities of a business it also means that each partner can equally be pursued by creditors for outstanding debts | |
what is the jones act | the jones act is a federal law that regulates maritime commerce in the united states the jones act requires goods shipped between u s ports to be transported on ships that are built owned and operated by united states citizens or permanent residents the jones act is section 27 of the merchant marine act of 1920 which provided for the maintenance of the american merchant marine 1understanding the jones actthe jones act was introduced by wesley jones the u s senator from the state of washington who designed the legislation to give his state a monopoly on shipping to alaska it was enacted by the united states congress to stimulate the shipping industry in the wake of world war i 2considered protectionist legislation the jones act focuses on issues related to maritime commerce including cabotage or the transport of people or goods between ports in the same country the act requires that goods shipped between u s ports be transported on ships built owned and operated by united states citizens or permanent residents this provision and its restrictions increase the cost of shipping to hawaii alaska puerto rico and other non continental u s lands that rely on imports 3the jones act is a piece of protectionist legislation that considerably increases the costs of shipping goods between two u s ports goals of the jones actjones act requirementsjones act waiverscriticism of the jones actthe jones act has been cited as a factor affecting puerto rico s economic and budgetary troubles by affecting trade with the island a 2019 report found that for puerto rico the differentials between u s and foreign flagged carriers range from about 41 to as high as 62 for bulk cargo and between 29 and 89 for containerized freight the additional costs caused by the act for the island s economy to be nearly 1 2 billion which comes to roughly 374 per resident 8the waiver of the act was implemented in 2022 only after hurricane fiona hit puerto rico the biden administration allowed a non u s flagged ship to transport fuel to puerto rico following pressure to waive the rule in the face of a fuel shortage to ensure that citizens could run generators needed for electricity and the functioning critical facilities 9opponents hope that a repeal of the act will result in decreased shipping costs lower prices and less strain on government budgets proponents of the act include states with owners of navy yards defense firms and shipping industries as well as the longshoremen and other personnel who work in ports in early 2022 the jones act made headlines for its potential role in the u s russia oil business following russia s invasion of ukraine in late february the u s banned russian oil and gas imports on march 8 10the u s has traditionally relied on imports from russia especially hawaii which imports russian crude oil per year accounting for up to a quarter of all russian oil shipments to the u s critics of the jones act suggest that it limits the viability of shipping oil and gas to remote areas like hawaii forcing the state to rely on imports from russia 11 | |
how does the jones act affect puerto rico | one consequence of the jones act is that it requires u s shipping for cargo between puerto rico and the u s mainland increasing the cost of development for the island s economy 5 | |
how does the jones act affect cruise ships | while the jones act does not cover passenger vessels a related law has a similar effect on cruise ships under the 1886 passenger vessel services act a foreign ship cannot transport passengers directly between two u s ports 12 this means that a foreign flagged cruise ship the vast majority of cruise ships must include foreign ports in any itinerary that begins and ends in a u s port this often results in confusion or even fines for passengers who disembark at ports that violate the jones act | |
how long can a waiver of the jones act be implemented | in 2020 congress eliminated the federal government s authority to issue long term waivers except in circumstances where a waiver is required to address an immediate adverse effect on military operations waivers that do not meet that standard must be reviewed on a case by case basis 9 | |
what is the jordanian dinar jod | the jordanian dinar is the national currency of jordan and its abbreviation or currency symbol is denoted by jod the dinar has smaller denominations or subunits in particular one dinar is equal to 10 dirhams 100 qirshes and 1 000 fils the dinar is also circulated on israel s west bank understanding the jordanian dinar jod the dinar became jordan s official currency in july 1950 it replaced the palestinian pound a currency that had circulated in the british mandate of palestine and the emirate of transjordan a british protectorate since 1927 after independence the country created the jordan currency board to issue and circulate currency the jordanian dinar is considered to be the fourth highest valued currency in the world the central bank of jordan cbj took over production and monetary policy in 1959 issued dinars have the official name of the country the hashemite kingdom of jordan printed on them the current fourth series of banknotes issued by the cbj have denominations of 1 5 10 20 and 50 dinars dinarian coins were denominated in arabic until 1992 and then changed to english the dinar has been pegged to the u s dollar since 1995 special considerationsthe country of jordan pegged its local currency to the u s dollar to create stability in its financial system typically if a country s currency exchange rate fluctuates wildly it s difficult to attract foreign investment and capital flows might leave the country in search of more stable investments by pegging the dinar to the dollar jordan gets the benefit of a stable currency regime meaning its local banks are likely to attract deposits a stable currency also leads to increases in foreign direct investment fdi into jordan the gdp of jordan in 2021 it is expected to increase to 47 5 billion in 2022 by pegging to the dollar however the jordanian central bank cannot try to affect the value of its currency on the open market in response to changing economic conditions such as a recession or overheated growth likewise if the u s dollar gains or loses strength due to american economic circumstances that can change the buying power of the dinar even though the situation in the jordanian economy may be quite different jod to usd pegthe jod is pegged to the u s dollar at a fixed exchange rate 1 usd is equal to 0 7090 jods for example let s say you were sending a wire transfer to jordan and wanted to convert 1 000 to dinars the exchange would result in 709 jordanian dinars because it is pegged this exchange rate will persist over time as opposed to currencies that float in the market and so change their exchange rate over time | |
is the jordanian dinar strong | yes the jordanian dinar is a strong currency because it is pegged to the u s dollar rather than the strength of its economy | |
why is the jordanian dinar so expensive | the jordanian dinar is expensive because its currency is pegged to the usd the country keeps fixed exchange rates and so its currency doesn t float from changes in supply and demand rather the government has a tight monetary policy that restricts the value of the currency | |
why is jod pegged against the usd | the primary reason jordan pegged its currency to the usd is for the same reason that any country would do so financial stability the usd is one of the most stable and widely circulated currencies as such its value does not fluctuate wildly by pegging its currency to the usd jordan stabilizes its currency and its financial system having a stable currency and financial system attracts more investment which grows a country s economy and the quality of life for its citizens | |
how do you calculate the jod exchange rate | you can calculate the jod exchange rate to any currency by using a currency converter such as at xe com the exchange rate of the jod to usd is fixed and so remains the same one usd is equal to 0 709 jods the bottom linethe jordanian dinar is the currency of the kingdom of jordan it has been pegged to the usd since 1995 and has since enjoyed a stable and strong currency by pegging its currency to the usd it has enjoyed financial stability however the country s economy is stagnant and has suffered from terrorism in the region as well as an inefficient public sector | |
josef ackermann is a swiss banker who served as ceo and chair of deutsche bank from 2002 to 2012 and the chair of the bank of cyprus from 2014 to 2019 he was a member of the group of thirty a washington based group of international economists and financiers who analyze global economic and financial issues | early life and educationjosef ackermann was born on feb 7 1948 in walenstadt canton of st gallen switzerland he attended the university of st gallen where he studied economics and social sciences and earned a ph d in economics ackermann began his career as a corporate banker with credit suisse in 1977 he remained at credit suisse for 25 years earning the positions of general director and board member deutsche bankin 2002 ackermann joined deutsche bank as its ceo and was tasked with making deutsche bank a global investment bank he spearheaded numerous mergers improved global operations introduced a new shareholder focused management style and increased the company s focus on investment banking during his tenure at deutsche bank ackermann was engaged in investigations by the u s justice department related to the bank s investment in subprime mortgages that contributed to the great recession of 2008 investigators found deutsche mislead investors about loans backing 1 4 billion in securities issued in 2007 leading to hundreds of millions of dollars in losses according to the fraud complaint 1a mortgage loan considered risky that is granted to individuals with poor credit scores at the same time ackermann served as chairman of the institute of international finance iif the global association of banks he was highly instrumental in helping to solve this crisis as well as the ensuing debt crisis in the eurozone 2josef ackermann earned 9 6 million in 2009 and 8 9 million in 2010 however when faced with sanctions from the u s justice department deutsche bank reportedly attempted to reclaim tens of millions of euros in bonuses paid to ackermann and other former ceos 3ackermann resigned from deutsche bank in 2012 notable accomplishmentsin 2014 josef ackermann was elected as the new chairman of cyprus largest lender the bank of cyprus at the time the bank faced an uphill battle to clear its toxic assets and resolve its balance sheets 4 ackermann led the bank of cyprus until 2019 ackermann has served on the boards of bayer deutsche lufthansa linde mannesmann siemens zurich financial services and royal dutch shell he has been a member of the washington based group of thirty or g30 established in 1978 as an independent global body comprised of economic and financial leaders from the public and private sectors and academia which aims to deepen understanding of global economic and financial issues | |
what is josef ackermann s business relationship with donald trump | donald trump relied on deutsche bank for financing and josef ackermann allegedly approved trump s financing even after trump had defaulted on loans in 2004 and 2008 however ackermann did not recall his involvement in the approvals 5 | |
has josef ackermann taught as a professor | josef ackermann has been a visiting professor of finance at the london school of economics and the johann wolfgang goethe university | |
what is the joseph effect | the joseph effect is a term derived from the old testament story about the pharaoh s dream as recounted by joseph the vision led the ancient egyptians to expect a crop famine lasting seven years to follow seven years of a bountiful harvest understanding the joseph effectthe joseph effect is a term coined by mathematician benoit mandelbrot and postulates that movements over time tend to be part of larger trends and cycles more often than being random mandelbrot drew his theories from the old testament story of joseph recounting the pharaoh s dream of seven fat cows being devoured by seven lean cows the interpretation was that following seven good years of crop harvesting seven bad years would follow seven good years are known as the joseph effect while the seven bad years are known as the noah effect interestingly the seven year cycle is commonly found in modern economic analysis as a predictor of recession timing the joseph effect and the noah effect are early examples taken from history showing that man was attuned to cycles in nature and wanted to become better able to predict future outcomes from recent experience human behavior is affected in great part by recent experience with a tendency to forget some of the more random and disruptive lessons of the distant past mathematicians set out to quantify these observed cycles into predictable formulas and mandelbrot quantified the joseph effect using the hurst component the hurst component quantifies regression toward the mean over time for any number of price movements at the heart of each term is the notion that trends tend to persist over time if an area of the world has been in a drought the odds are high it will remain in drought for some time to come a baseball team that has been winning recent games is likely to continue winning if a stock price has been rising steadily the likelihood of this continuing is strong technical analysts use trend lines to show this persistence principle the joseph effect and leading indicatorsthe joseph effect and the noah effect are just two of many mathematical trend analyses used by savvy investors for example chart analysis is an important tool in predicting future stock price movements investors look at volume trends price ranges momentum indicators leading indicators and lagging indicators leading indicators and lagging indicators are especially important to classify and understand commonly used leading indicators include the consumer confidence index the purchasing managers index and movements in bond yields especially when an inverted yield occurs corporate hiring plans are also a significant leading indicator | |
joseph alois schumpeter 1883 1950 was an austrian trained economist economic historian and author he is regarded as one of the 20th century s greatest intellectuals schumpeter is best known for his theories on business cycles and the development of capitalist economies and for introducing the concept of entrepreneurship for schumpeter the entrepreneur was the cornerstone of capitalism the source of innovation which is the vital force driving a capitalist economy | investopedia alison czinkotaearly life and educationschumpeter was born in moravia now the czech republic in 1883 to german parents he studied economics from the progenitors of the austrian school tradition including friedrich von wieser and eugen von bohm bawerk schumpeter served as minister of finance in the austrian government the president of a private bank and a university professor from 1925 to 1932 schumpeter held a chair at the university of bonn 1uncomfortable at the rise of the nazi party he moved to the united states to teach at harvard in 1932 fifteen years later in 1947 he became the first immigrant to be elected president of the american economic association 1by the early 20th century economic science in the united states and great britain had developed alongside static and mathematically oriented general equilibrium models schumpeter s work differed at times typifying the continental european approach more nuanced and less hypothetical although some of his theories were drawn from walrasian general equilibrium as well notable accomplishments and theoriesschumpeter made many contributions to economic science and political theory but he is best known for his 1942 book capitalism socialism and democracy which outlines the theory of dynamic economic growth known as creative destruction 2 he is also credited with the first german and english references to methodological individualism in economics schumpeter s most enduring legacy came from a six page chapter in capitalism socialism and democracy entitled the process of creative destruction 2in this chapter schumpeter offered a new unique insight into how economies grow sharply deviating from the traditional economic dictums of his day which held that markets passively tend toward equilibrium until profit margins are wiped out instead schumpeter argued economic progress is not gradual and peaceful but rather disjointed abrupt and sometimes unpleasant the economist used the term creative destruction to describe the dismantling of long standing practices in order to make way for new technologies new kinds of products new methods of production and new means of distribution existing companies must quickly adapt to a new environment or fail if it sounds somewhat darwinian it is schumpeter intimated a process of industrial mutation if i may use that biological term that incessantly revolutionizes the economic structure from within incessantly destroying the old one incessantly creating a new one as he wrote thisprocess of creative destruction is the essential fact about capitalism in many respects schumpeter saw capitalism as a sort of ongoing revolution that disrupts the current social and economic hierarchy and within this system the entrepreneur becomes the revolutionary upsetting the established order to create dynamic change schumpeter is believed to be the first scholar to introduce the world to the concept or at least the economic significance of entrepreneurship he came up with the german word unternehmergeist meaning entrepreneur spirit adding that these individuals controlled the economy because they are responsible for delivering innovation and technological change entrepreneurs are often the guiding force behind creative destruction because they advance the new products technology and or production methods that provide an impulse for change entrepreneurial innovation and experimentation constantly destroy the status quo and introduce new equilibria making possible higher standards of living these theories tie in with schumpeter s belief in the presence of business cycles in schumpeter s analysis the history of capitalism has been punctuated by long and short waves a long wave is prompted by a new set of technologies and industries coming into existence according to this theory major advances in innovation can be predicted to occur every 50 or 100 years barring very few cases in which difficulties arise it is possible to count off historically as well as statistically six juglars 8 10 year business cycles to a kondratieff 50 60 years and three kitchins 40 months to a juglar not as an average but in every individual case wrote schumpeter in his book the theory of economic development published in 1911 whenever an entrepreneur disrupts an existing industry it is likely that existing workers businesses or even entire sectors can be temporarily thrown into loss he said these cycles are tolerated he explained because it allows resources to be freed up for other more productive uses example of schumpetarian theorythe internet is one of the best examples of creative destruction the term that schumpeter coined to describe the dismantling of long standing practices in order to make way for new technologies new kinds of products new methods of production and new means of distribution existing companies must quickly adapt to a new environment or fail the advent of the internet rendered many products methods of production and means of distribution obsolete it also caused a drastic curtailing of many jobs including the roles of bank tellers secretaries travel agents and retail store employees with the rise of mobile internet technology publishers of printed material everything from magazines to maps also suffered the internet in addition to other innovations in the field of information technology the microprocessor the laser fiber optics and satellite technologies have all fundamentally altered the way that business is conducted joseph schumpeter vs john maynard keynesover his many years in public life schumpeter developed informal rivalries with the other great economic thinkers of the west including john maynard keynes irving fisher ludwig von mises and friedrich hayek his work initially was overshadowed by some of these contemporaries especially keynes although they were born just a few months apart the pair had radically different views in his early career schumpeter derided the use of statistical aggregates in economic theory likely a shot at keynes in favor of focusing on individual choice and action keynes viewed the economy as healthy when in static equilibrium schumpeter rejected this theory claiming that equilibrium is not healthy and that innovation is the driver of the economy both had contrasting views on government intervention too keynes believed that a permanent equilibrium of prosperity could be achieved by central bank monetary policies schumpeter argued that government intervention increased inflation destroying the economy the internet is one of the best examples of creative destruction the term that schumpeter coined to describe the dismantling of long standing practices in order to make way for new technologies new kinds of products new methods of production and new means of distribution existing companies must quickly adapt to a new environment or fail the advent of the internet rendered many products methods of production and means of distribution obsolete it also caused a drastic curtailing of many jobs including the roles of bank tellers secretaries travel agents and retail store employees with the rise of mobile internet technology publishers of printed material everything from magazines to maps also suffered the internet in addition to other innovations in the field of information technology the microprocessor the laser fiber optics and satellite technologies have all fundamentally altered the way that business is conducted | |
what is joseph schumpeter s history of economic analysis | at the time of his death in 1950 schumpeter was working on a new book history of economic analysis in the book schumpeter attempts a complete history of the field of economics from ancient greece to the present day the end of world war ii not just limited to economics the book also traced the history of political and philosophical ideas and served as a record of significant events although never fully completed history of economic analysis has gained recognition as an important work due to its broad scope and original examination of significant historical events some notable topics it addresses include the techniques of economic analysis contemporaneous developments in other sciences and the sociology of economics | |
what did joseph schumpeter believe would destroy capitalism | schumpeter believed that capitalism would ultimately be destroyed by its success he hypothesized that the economic system would eventually create a large intellectual class that survived by attacking the system of private property and freedom that was necessary for sustaining its own existence although schumpeter predicted the demise of capitalism he was an ardent supporter of it | |
what is joseph schumpeter s innovation theory of profit | schumpeter believed that the was to introduce successful well innovations the innovation theory of profit claims that the main function of an entrepreneur is to introduce well innovations which schumpeter defined as any new policy that reduces the overall cost of production or increases the demand for products any profit an entrepreneur receives from these efforts is a form of reward for their performance creating innovations was the first step on the path to success and economic profits for entrepreneurs 3 | |
what is schumpeterian growth | schumpeterian growth is economic growth that is driven by innovation and governed by the process of creative destruction formal economic models have been created that operationalize schumpeter s notion of creative destruction these models of growth help economists understand the role of competition firm dynamics and cross firm and cross sector reallocation the bottom linejoseph schumpeter s work initially received little acclaim due in part to the great popularity of his contemporary john maynard keynes that changed over time and he is now viewed as one of the greatest economists of modern times he introduced the concept of the entrepreneur and the influence of entrepreneurship on economic systems his theory of creative destruction has become the centerpiece for modern thinking on how economies evolve especially capitalist ones | |
joseph stiglitz is an american new keynesian economist known for his research on information asymmetry risk aversion and monopolistic competition stiglitz received the 2001 nobel prize in economics he is currently a professor at columbia university and chief economist of the roosevelt institute 1 | stiglitz is the author of many books and publications including measuring what counts the global movement for well being and rewriting the rules of the european economy an agenda for growth and shared prosperity investopedia lara antalearly life and educationjoseph stiglitz was born in gary indiana on feb 9 1943 he earned a bachelor s degree from amherst college in 1964 and became a research fellow at the university of cambridge as a fulbright scholar stiglitz earned a ph d from the massachusetts institute of technology in 1967 he has taught at stanford princeton and mit under president clinton stiglitz served as chair of the president s council of economic advisers cea he was chief economist and senior vice president of the world bank from 1997 to 2000 1information asymmetryjoseph stiglitz helped create an area of study known as information economics a branch of microeconomics that studies how information and information systems affect an economy and economic decisions his research on information asymmetry helped earn stiglitz the 2001 nobel prize in economics 2information asymmetry is an imbalance of information between players in a market one party in an economic transaction may have more information than another a buyer may possess more knowledge than a seller or a borrower may know his repayment ability more than the lender joseph stiglitz is credited with his screening technique a method used to extract the missing information needed to complete an efficient market transaction stiglitz s screening technique is a frequent tool used by insurance companies and lenders insurance companies screen subscribers and sort them into high risk or low risk categories in order to charge appropriate premiums lenders use screening to sort borrowers by risk of repayment and assign higher interest rates accordingly 3according to stiglitz screening is the process of discrimination of distinguishing among things which in the absence of screening would for economic purposes be treated the same even though it may be known that they differ in perhaps some important ways 4risk aversionjoseph stiglitz s study of risk aversion helped define how individuals make decisions to save and spend money according to stiglitz when uncertainty exists in a situation economic consequences depend on whether one course of action is riskier than another or if one individual is more risk averse than another 5 his theories explain the consequences of risk aversion when applied to portfolio investments individual savings and business production decisions 6monopolistic competitionstiglitz defined the theory of monopolistic competition as a market structure where many companies are present in an industry that produce similar but differentiated products none of the companies enjoy a monopoly and each company operates independently without regard to the actions of other companies in monopolistic competition advertising and branding are key and can contribute to barriers to entry for new firms 7 industries like restaurant chains clothing and sportswear follow this model honors and awardsjoseph stiglitz has received extensive recognition for his work in economics in 1979 joseph e stiglitz received the john bates clark medal an award given to economists under forty who have made substantial contributions to the field of the economic sciences in the united states in 2001 he was awarded the nobel prize in economics for his work on the theory of information asymmetry he is a shared recipient of the 2007 nobel peace prize as a member of the intergovernmental panel on climate change stiglitz was appointed to the pontifical academy of the social sciences and named chair of the u n commission on reforms of the international monetary and financial system by the president of the united nations in 2009 time magazine named stiglitz one of the 100 most influential people in the world in 2011 and in that same year he was named president of the international economic association 1stiglitz serves on numerous boards including the acumen fund and resources for the future 1 | |
what was joseph stiglitz s contribution to the world bank | joseph stiglitz challenged the policies of the international financial community stiglitz criticized the conventional wisdom that dominated policymaking at the world bank the international monetary fund and the us treasury department his opinions covered such topics as the failure of shock therapy and transition economics and the limits of capital market liberalization 8 | |
what is the institute for new economic thinking | since the 2008 financial crisis stiglitz has played an important role in the creation of the institute for new economic thinking inet which seeks to reform the economic discipline so it is better equipped to find solutions to the great challenges of the 21st century 1 | |
how did joseph stiglitz bolster the ideas of research development | in the 1980s he helped revive interest in the economics of r d stiglitz specifically addressed that the speed of research and development in an industry directly increases the total level of innovation in an industry 1the bottom linejoseph stiglitz is a renowned economist who defined information economics his theories in information asymmetry risk aversion and monopolistic competition have created tools used by industry and policy makers | |
what is a journal | a journal is a running record of all of a business s financial transactions it is used to reconcile accounts and is transferred to other accounting records such as the general ledger the journal states the date of a transaction which accounts were affected and the dollar amounts usually in a double entry bookkeeping method understanding a journalfor accounting purposes a journal may be a physical record or a digital document stored as a book a spreadsheet or data entered into accounting software when a transaction is made a bookkeeper records it as a journal entry if the expense or income affects one or more business accounts the journal entry will detail that as well journaling is an essential part of objective record keeping journals are straightforward to review and easily transferred later in the accounting process journals in addition to the general ledger are often reviewed as part of a trade or audit process information that is recorded in a journal may include sales expenses movements of cash inventory and debt the information is best recorded immediately for the sake of accuracy an accurate journal is critical to business planning budgeting and tax preparation using double entry bookkeeping in journalsdouble entry bookkeeping is the most common system of accounting every business transaction is made up of an exchange between two accounts thus every journal entry is recorded with two columns for example if a business owner purchases 1 000 worth of inventory using cash the bookkeeper records two transactions in a journal entry the cash account will show a credit of 1 000 and the inventory account which is a current asset will show a debit of 1 000 using single entry bookkeeping in journalssingle entry bookkeeping is rarely used in accounting and business it is the most basic form of accounting and is set up like a checkbook in that only a single account is used for each journal entry it is a simple running total of cash inflows and cash outflows if for example a business owner purchases 1 000 worth of inventory with cash the single entry system records a 1 000 reduction in cash with the total ending balance below it separately another line indicates that 1 000 has been deducted from the cash account it is possible to separate income and expenses into two columns so a business can track total income and total expenses and not just the aggregate ending balance the journal in investing and tradinga journal is also used by those in the investment finance sector for an individual investor or professional money manager a journal is a comprehensive and detailed record of trades in the investor s accounts and can be used for tax evaluation and auditing purposes traders use journals to keep a chronicle of their trading activities and to learn from past successes and failures over time a trader can sometimes spot the errors emotional decisions or divergence from investing strategy that caused a loss the investor s journal typically has a record of profitable trades unprofitable trades watch lists pre and post market records and notes on why an investment was purchased or sold | |
what information must be recorded in a business journal | every entry in a business journal must contain all critical information about a transaction in double entry accounting this means the date of the transaction the amount to be credited and debited a brief description of the transaction and the business accounts that are affected by it depending on the business the journal may make room for other entries such as the tax implications or the impact on a subsidiary | |
what are the types of journals | the word journal has a number of meanings but all of them refer to a running record of events a personal journal is to record and reflect on events in a person s life over time a published journal is devoted to reporting news and events some are specialized publications devoted to scientific medical professional or trade interests a business journal is used to record business transactions as they occur | |
what is the cambridge judge business school | the cambridge judge business school is the graduate business school at cambridge university located in cambridge in the united kingdom founded in 1990 it is widely regarded as one of the most prestigious business schools in the world 1the cambridge judge business school is known for its connections to the united kingdom s technology startup sector commonly referred to as silicon fen due to its location in the english fenlands it is also known for its friendly rivalry with oxford university s sa d business school history and programspreviously known as the judge institute of management the school became known as the cambridge judge business school in 2010 the school is named in recognition of sir paul and lady judge whose donations were instrumental in funding various campus development projects between 1991 and 1995 1in 2022 cambridge judge business school was home to 210 students along with 76 full time faculty members admission to the school is notoriously competitive with an average applicant gmat rating of 690 in 2022 23at the faculty level cambridge judge business school is home to world renowned experts in a variety of fields including finance and accounting business strategy organizational psychology and public policy the cambridge judge business school is also known for providing a highly diverse program with students and faculty hailing from all across the world the 2022 mba cohort for instance included 46 nationalities and 47 of the students identified as female 3in addition to the full time mba program which lasts for 12 months the school also offers an executive mba program designed for students who wish to study on a part time basis while continuing to work in their careers graduates and employmentwith an annual tuition of roughly 64 000 graduates of the cambridge judge business school saw an average base salary of 75 198 for the 2021 2022 class and 94 of their graduates received their offers within three months of graduation historically these grads have found employment principally in the technology and consulting sectors with amazon amzn bain and mckinsey being among their largest individual employers 45rankings and recognitioncambridge judge business school has received many accolades and awards it ranked first in the business and management studies category by times higher education the mba program at the school was ranked 23rd in the world and first for one year programs in the u k by financial times the school s master of finance mfin program ranked second in 2022 by financial times and the executive mba program ranked 36th in 2022 by financial times | |
what is the acceptance rate of cambridge judge business school | the cambridge judge business school has an acceptance rate of approximately 31 this rate will fluctuate slightly from year to year 6 | |
what gpa do you need for a cambridge mba | you will need a gpa of at least 3 6 approximately to be granted acceptance into cambridge judge business school to obtain an mba this is not necessarily a specific number as acceptance depends on a variety of factors not just gpa 7 | |
what is the most competitive degree at cambridge | the most competitive degrees at cambridge university are computer science medicine architecture economics law and engineering 8the bottom linethe cambridge judge business school at cambridge university is one of the best business schools in the world with a rich history and legacy the school is extremely difficult to get into but offers top notch education and connections graduates find employment quickly and are offered high starting salaries at some of the most respected firms in the world | |
what is a judgment | judgment is a court decision spelled out in a court order that adjudicates a dispute between two parties by determining the rights and obligations of each party a judgment may require monetary compensation or transfer of property from one party to another judgments can also have non monetary requirements such as instructing one party to perform a service for the other understanding a judgmentjudgments are classified as judgments are usually monetary but can also be non monetary specific types of judgmentsthere are countless types of judgments that more specifically break a judgment between financial monetary or non financial non monetary more specific types of judgments include special considerationsmost of the time a judgment will be for a sum of money because money is the most appropriate form of compensation for the harm as of 2018 judgments are no longer reported on a debtor s credit report 5 this official policy came after a settlement between the major credit bureaus experian equifax and transunion and 30 state attorneys general since this did not come from a law it could change in the future for the winner of a lawsuit a court judgment is only the first step in getting the money they are owed actually collecting the money from the debtor can be a long arduous and not always successful process however judgments are legally enforceable so if the debtor does not voluntarily pay the judgment the creditor can take steps such as conducting a debtor s examination seizing bank accounts putting a lien on the debtor s property or hiring a debt collector 6winning a court judgment may be only the first step to collecting a debt obligation while judgments are legally binding collecting payments is an expensive and often fruitless process example of a judgmentfor example if a borrower does not repay a loan or a credit card debt the lender or creditor can obtain a judgment to force the borrower to pay as another example a landlord who evicted a tenant for not paying the rent might file a lawsuit to collect the unpaid rent and if the landlord won the lawsuit it would result in a judgment against the tenant in a regulatory context many corporate defendants seek to reach a negotiated settlement rather than risk a costly and unpredictable litigation process when wells fargo employees were discovered to have defrauded millions of customers to improve their own performance metrics the bank ultimately agreed to pay 3 billion in fines in order to resolve their civil and criminal liabilities they were also forced to enhance their compliance measures and eliminate senior managers who had been overlooked the scale of the fraud 7the scandal which first came to light in 2016 was a severe blow to the bank s floundering reputation and an even bigger blow to its share price although wells fargo stock rose with the rest of the market over the following five years the bank continued to pay out civil penalties with shares tumbling with each new enforcement action in addition to regulatory actions the bank is also facing litigation from investors who believe that they were defrauded by wells fargo s management 89while creditors can seize property in the collection of a judgment most states offer exemptions for certain types of property such as a primary home or personal vehicle 10civil judgments vs criminal judgmentscourts in the united states distinguish between two different types of actions civil and criminal civil actions represent disputes between two individuals or organizations for example a customer may seek a civil judgment against a company for a breached contract or two neighbors may seek legal remedies in a property dispute these types of judgments typically result in monetary compensation to the injured party but they may also involve additional fines or penalties in comparison a criminal judgment seeks punishment for violations of criminal law such as theft or fraud whereas civil cases are usually between private individuals criminal cases are launched by attorneys representing the government itself in addition to monetary fines and penalties criminal judgments may also entail imprisonment or loss of certain legal rights or privileges 11 | |
what is a summary judgment | a summary judgment is a judgment made by a court or judge without conducting a full trial either party in a legal dispute may move for summary judgment provided that there is no disagreement about the material facts of the case this allows both litigants to avoid the expense of a full trial however if a party moves for summary judgment the judge will always examine the facts in the light most favorable to their opponent for this reason most parties to a lawsuit will avoid summary judgment unless they believe that the law is firmly on their side 12 | |
how can you avoid paying a judgment | while a judgment should not be ignored there are ways to protect some property from being collected most state laws offer exemptions that protect certain types of property such as a primary home or vehicle as long as the value of that property is below a certain limit 10in addition some types of personal property can be protected under a chapter 7 bankruptcy allowing debtors to discharge their obligations without giving up their basic property 13 | |
what is a judgment lien | a judgment lien is a court ruling that allows one party to take possession of another s property usually in satisfaction of a debt or similar obligation a judgment lien allows the creditor to take over the debtors real or personal property such as houses vehicles or other personal property 14the bottom linethe court system consists of various levels including trial courts appellate courts and the supreme court in these courts evidence is presented and decisions are made by judges or juries called judgments judgments may result in financial or non financial implications for a debtor to make the creditor whole and appeals can be made on these judgments | |
what is a judgment lien | a judgment lien is a court ruling that gives a creditor the right to take possession of a debtor s property if the debtor fails to fulfill their contractual obligations this lien may be made against an individual or a business and allows the creditor to access assets such as the debtor s business personal property and real estate to satisfy the judgment | |
how judgment liens work | if you owe money to a creditor and don t pay they may sue you for the balance if the court rules against you the creditor can file a judgment lien against you a judgment lien is considered a nonconsensual lien because it is attached to a piece of property without the owner s consent or agreement a plaintiff who obtains a judgment is referred to as a judgment creditor while the defendant becomes a judgment debtor in most states the judgment creditor must record the lien via a county or state filing in a few states if a court enters a judgment against a debtor a lien is automatically created on any real estate the debtor owns in that county once a judgment lien is filed with the appropriate authority it becomes attached to the debtor s personal or real property personal property refers to assets such as cars appliances or furniture real property on the other hand refers to things like homes and other buildings or land the property must be registered in the debtor s name so if they have a debt that goes unpaid the judgment lien cannot be attached to their spouse s property if they do not own any property at the time the lien is filed it can be attached to any future acquisitions provided the lien doesn t expire in the meantime one drawback of liens on personal property is that a large portion of someone s personal property has no title therefore liens are not officially recorded against that property and it could be sold off to a third party who is unaware of the lien s existence judgment liens do not appear on an individual s credit reports according to the credit bureau experian | |
what debtors can do | there are a few ways a debtor can satisfy or avoid a lien altogether the first and most obvious option is to repay the debt if they pay off their obligation the creditor will remove the lien this is done by filing a release through the same place the lien was recorded the county or state it is also possible to avoid a nonconsensual judgment lien on a property or vehicle in bankruptcy referred to as lien avoidance if the following conditions hold true using lien avoidance can be an advantage to the debtor if and when it s available this can be particularly beneficial if a lien can be fully wiped out although it s still helpful in the case of partial lien avoidance examples of judgment liensif one person injures another person or their property in an accident through negligence the injured person may decide to sue for damages if insurance does not cover the injured party s required reparations a judgment lien may be placed against the negligent person s property the creation of this judgment lien secures payment of the claim if the debt is not paid the judgment creditor has the authority to take additional steps these could include seeking enforcement of the judgment by garnishing wages and potentially seizing bank accounts here s another example a judge may place a lien on a debtor s car for nonpayment of a car loan in this scenario if the debtor does not pay the creditor within a certain time period the car would be used to pay off the remaining debt if there s a balance left over the debtor is on the hook for that this example extends to trucks motorcycles or other motor vehicles as well judgment liens vs property lienswhile judgment liens are awarded by courts without the consent of the debtor property liens are different these liens are permitted by the debtor who agrees to give up the right to their property if they are unable to pay what they owe so unlike judgment liens property liens are considered consensual if you borrow a large sum of money such as to buy a home or a car the lender may require some form of security or collateral in that case the creditor may have a lien on that property by doing so the creditor knows it can foreclose on or repossess the property if you default on the loan and get at least some of its money back | |
what is a statutory lien | a statutory lien is a type of lien that is based on legal statutes rather than common law or a contractual agreement two common examples are mechanic s liens and tax liens | |
what is a mechanic s lien | a mechanic s lien is a type of lien often used in construction projects it is also called a construction lien if the property owner fails to pay a contractor for their work the contractor can put a lien on that property until the debt is settled | |
what is a tax lien | a tax lien is a type of lien imposed by the federal state or local government on a person or business as a result of their failure to pay taxes they owe as the internal revenue service irs explains it the lien protects the government s interest in all your property including real estate personal property and financial assets the irs says it will release its lien within 30 days after the debt is paid off the bottom linejudgment liens are imposed by courts in an attempt to force debtors to pay off their creditors when a debtor receives a judgment lien it s usually best to pay off the debt if that s at all possible | |
what is judgment proof | judgment proof or judgement proof refers to a person who does not have enough income or assets to pay a court judgment against them a debtor who is broke and unemployed can be considered judgment proof as can one whose only assets or income fall into certain legally protected categories 1understanding judgment proofwhile the law can vary from state to state in general a person must meet two criteria to be considered judgment proof the first is the absence of adequate income someone who is unemployed or working in a job that pays them barely enough to survive may fit into this category certain income including court ordered child support and alimony social security unemployment benefits and disability payments is generally exempt from garnishment by creditors or debt collectors the second of the two criteria is a lack of assets such as bank accounts or real estate that could be turned over to creditors to help satisfy the judgment in many states the person s home and certain other possessions are shielded from collection 1 | |
when a person is judgment proof creditors are unable to collect any money they are owed this status is considered temporary until the individual is able to earn an income large enough to start paying off their debts assuming they ever do | most lawyers advise debtors not to respond to debt collectors if they believe they are judgment proof unless they are sued in that case they should answer the lawsuit and tell the court that they are judgment proof the legal aid society of new york city offers this additional warning be careful a company or their attorney can and may try to get you to voluntarily agree to enter an agreement also known as a stipulation of settlement payment plan or settlement agreement to pay an alleged debt if all your income is judgment proof you do not have to make or agree to a settlement payment plan or other types of agreement because all your income is supposed to be protected by law 2being judgment proof is not permanent judgments can be valid for many years and creditors can continue to try to collect what the judgment allows long after they win a lawsuit against a delinquent borrower judgments can also remain on the individual s credit report for many years even beyond the time limit for normal debts judgment proof is also referred to as collection proof that may be a more apt name as it doesn t protect the person from judgments against them but instead prevents creditors from collecting what they are owed state laws determine the amount of wages and the specific assets that cannot be collected from a debtor despite a court judgment against them example of judgment proofsuppose a person let s call them charlie becomes too sick to work and uses a credit card to pay their living expenses and medical bills for a year they recover from their illness and go back to work but they can t afford to repay the debt they accumulated the credit card company fails in its debt collection efforts and then sells charlie s unpaid debt to a collection agency the collection agency contacts charlie repeatedly but they don t pay them anything they re struggling to hang onto their house buy groceries and keep the lights on as a last resort the collection agency sues charlie and obtains a judgment against them for the unpaid debt the agency now has a court order requiring charlie to repay a sum the court has determined to be valid however because charlie barely earns more than the minimum wage their wages can t be garnished and because they live in a state that protects their primary residence from creditors the collection agency can t place a lien on their house charlie has no money in the bank and they don t own a car or any other assets that can be seized and sold to repay their debt in some states they could keep one car charlie is currently judgment proof if charlie s financial circumstances improve next year and they start earning significantly more the collection agency might then be able to garnish a percentage of their wage to start recouping what they owe because judgments can remain valid for a long time and be renewed once they expire creditors may be able to collect on charlie s debt many years down the road can you declare bankruptcy if you re judgment proof you can file for bankruptcy if you re judgment proof but there is little reason to do so if most of your assets are already off limits to debt collectors or you don t have any assets to speak of however if your financial situation improves to the extent that you re no longer judgment proof and you do have assets you want to protect bankruptcy could become an option worth exploring with a knowledgeable lawyer bankruptcy also has the advantage of finality while a judgment can hang over your head for many years bankruptcy however can have a significant negative impact on your credit score a debt relief company or credit counseling service could be a better option in the long term while this may still damage your credit it won t be as bad compared to declaring bankruptcy | |
how do you file for bankruptcy | you can file for bankruptcy by submitting a petition to a federal bankruptcy court you don t need a lawyer to do so but the government says it s strongly recommended because bankruptcy has long term financial and legal consequences 3 | |
what are the types of bankruptcy for individuals | individuals most often file for chapter 7 or chapter 13 bankruptcy in a chapter 7 bankruptcy many of the filer s assets except certain exempt ones will be sold off by a court appointed trustee after which most of their remaining debts will be discharged in a chapter 13 bankruptcy the person can keep more of their assets but must agree to a court supervised plan to repay their debtors over a certain period often three to five years 3the bottom linejudgment proof is a bit of a misnomer it doesn t protect a debtor from judgments against them but from creditors who attempt to seize their property or garnish their income however debtors should be aware that judgment proof isn t a permanent condition and if their financial situation improves sufficiently they can be required to repay their debt | |
what is judgmental credit analysis | judgmental credit analysis is a method of approving or denying credit based on the lender s judgment rather than on a particular credit scoring model judgmental credit analysis entails evaluating the borrower s application and using prior experience dealing with similar applicants to determine credit approval this process avoids using any algorithms or empirical processes to determine approvals breaking down judgmental credit analysisjudgmental credit analysis is used mostly by smaller banks whereas large banks often have more automated credit processes due to the volume of applications they receive smaller banks will use judgmental credit analysis as it is not economical for them to develop a credit scoring system or hire a third party to establish credit scores the judgmental credit analysis is unique in its approach and is based on traditional standards of credit analysis such as payment history bank references age and other elements these are scored and weighted to provide an overall credit score which the credit issuer uses different types of credit scoresthough judgmental credit analysis works well for smaller banks most people are more familiar with the concept of a credit score and most commonly associate it with the fico or the fair isaac corporation which created the most commonly used credit score model larger scale banks and lenders utilize a credit score model that uses a statistical number to evaluate a consumer s creditworthiness lenders then use credit scores to evaluate the probability that an individual will repay his or her debts a person s credit score ranges from 300 to 850 the higher the score the more financially trustworthy a person is considered to be while there are other credit scoring systems the fico score is by far the most commonly used a credit score plays a key role in a lender s decision to offer credit for example those with credit scores below 640 are generally considered to be subprime borrowers lending institutions often charge interest on subprime mortgages at a rate higher than a conventional mortgage in order to compensate themselves for carrying more risk they may also require a shorter repayment term or a co signer for borrowers with a low credit score conversely a credit score of 700 or above is generally considered good and may result in a borrower receiving a lower interest rate which results in them paying less money in interest over the life of the loan every creditor defines its own ranges for credit scores but when calculating a credit score a credit bureau uses five main factors payment history total amount owed length of credit history types of credit and new credit consumers can possess high scores by maintaining a long history of paying their bills on time and keeping their debt low | |
what is a judicial foreclosure | judicial foreclosure refers to foreclosure proceedings on a property in which the mortgage lacks a power of sale clause in this case the foreclosure proceedings are settled through the courts power of sale is a clause written into a mortgage in the event of default it authorizes the lender to sell the property in order to repay the mortgage debt in this way legal proceedings can be sidestepped power of sale is permitted in many states as part of a lender s rights to seek a foreclosure 1understanding judicial foreclosurejudicial foreclosure refers to foreclosure cases that go through the court system foreclosure occurs when a home is sold to pay off unpaid debt the procedure is carried out according to the laws of the jurisdiction in which the property is situated which is almost always state law 2 many states require foreclosures to be judicial but in some states foreclosures can be either nonjudicial or judicial 1if the court finds that the mortgage debt is in default an auction can be scheduled for the sale of the property in order to acquire funds to repay the lender this differs from nonjudicial foreclosures which are processed without court intervention 1many states require judicial foreclosure to protect the equity that debtors may still have in the property judicial foreclosure also serves to prevent strategic disclosures by unscrupulous lenders in instances where the auction does not generate enough funds to repay the mortgage lender the former homeowner will still be held liable for the remaining balance 3the amount of time a borrower must be in arrears on a mortgage before a lender is allowed to begin the foreclosure process 4 | |
how judicial foreclosure works | judicial foreclosures can last anywhere from six months to around three years depending on the state to begin the foreclosure process the mortgage servicer or the company to which mortgage services are paid must wait until the borrower is delinquent on payments for 120 days 4 at this point the servicer will notify the foreclosing party with a breach letter letting the debtor know they are in default on their mortgage in most cases the debtor then has 30 days to cure the default and if they are not able to the servicer will move forward with foreclosure proceedings the foreclosing party next files a lawsuit in the county where the property is located and requests the court to allow the home to be sold to pay the debt as part of the lawsuit the foreclosing party includes a petition for foreclosure that explains why a judge should issue a foreclosure judgment in most cases the court will do so unless the borrower has a defense that justifies the delinquent payments depending on the state the foreclosing party may also be entitled to a deficiency judgment a deficiency judgment allows the house to be sold at a foreclosure sale for less than the outstanding mortgage debt the difference between the debt and the foreclosure sale price is the deficiency in most states the foreclosing party can get a personal judgment against the borrower for the deficiency 3 mortgage lending discrimination is illegal if you think you ve been discriminated against based on race religion sex marital status use of public assistance national origin disability or age there are steps you can take one such step is to file a report to the consumer financial protection bureau or with the u s department of housing and urban development hud | |
what is judo business strategy | a judo business strategy is a plan for managing a company by using its speed and agility to mitigate the effect of its competitors the strategy anticipates and leverages changes in the market through new product offerings the judo business strategy consists of three components understanding judo business strategythe strategy is drawn from the principles of judo a japanese martial art and was used as a metaphor in the book judo strategy 2001 by david b yoffie and mary kwak the origins could go further back to judo economics a term coined by economists judith gelman and steven salop to describe a strategy when starting a company in a sector dominated by a large competitor one of the major aspects of judo is using the size of a larger opponent against itself as a business strategy it is designed to give smaller companies an advantage by using their nimbleness and ability to respond more quickly to market changes as a competitive advantage small companies can use their firm footing with a core product and its power to challenge a larger competitor | |
how judo business strategy works | startups and other small businesses might seek to put this strategy to work when contending with larger rivals in their market the principles and tactics within the strategy include a focus on the core business that is being developed rather than ancillary ideas this scenario is much like judo practitioners squaring up and finding firm footing as a match begins another principle is to stay on the offensive without getting caught up in one direct attack this offensive is an effort to wear down the opponent by shifting the points of attack quickly without allowing the opponent to lock into a solid defense or push directly back by altering where and how leverage is applied a judo practitioner seeks to break the footing of their opponent and to divert any counterattacks the opponent might launch from a business perspective a smaller business could use its flexibility and capacity to change its points of attack through quick decision making to confuse a larger competitor that may have rigidly solidified its operations in certain directions and has difficulty adapting and reacting southwest airlines managed to gain market share with its bags fly free strategy but larger airlines couldn t match the strategy because they rely on baggage fees as income in the short term however in the long term this has the effect of reducing consumer goodwill preparing and planning to pivot from a judo perspective means using situational and spatial awareness to think through where and when to alter offensive moves this allows a company to take advantage of a new opportunity to attack startups in particular must remain aware of their position condition and prospects to advance by adopting new approaches sometimes the initial plan does not result in the success that was originally envisioned by looking at opportunities that have arisen the company can better position itself with a new approach this is why the term pivoting is commonly used in a positive connotation in the startup circles | |
julian robertson was an american investor and former hedge fund manager best known for founding tiger management in 1980 which grew to be one of the most prominent hedge funds of its generation | robertson closed the doors at tiger in 2000 and went on to mentor younger hedge fund managers and philanthropic ventures focusing on higher education and medical research during the 1980s and the early 90s robertson was often referred to as the father of hedge funds and the wizard of wall street investopedia julie bangearly life and educationjulian robertson was born in salisbury north carolina on june 25 1932 to julian hart robertson sr an executive of a textile company and homemaker blanche spenser robertson after graduating from episcopal high school in his hometown he went on to the university of north carolina and graduated in 1955 2following two years in the navy robertson joined the new york office of kidder peabody co as a retail broker in 1957 he climbed the firm s ranks and eventually took the helm of its asset management division known as webster securities robertson departed kidder peabody co for a year long sabbatical in new zealand in 1979 3notable accomplishmentswhile in new zealand robertson hatched the idea for a new fund he founded tiger management one of the first hedge funds upon his return to new york in 1980 robertson used initial assets believed to be approximately 8 million tiger s assets grew to 22 billion over the next two decades the fund s success is credited to robertson s ability to identify investment opportunities within the framework of a global macro trading strategy robertson frequently employed a long short strategy loading up on the best stocks he could find while shorting those he considered the worst 4julian robertson is credited with being the first major hedge funder and his success spawned numerous successful hedge fund investors in the late 1990s robertson was also known for his avoidance of tech investments during the buildup of internet stocks in the late 1990s this avoidance was a double edged sword for tiger management the fund performed well during the eventual collapse of the tech bubble but suffered from a drain of capital as investors took their money to silicon valley an additional stressor came from a significant investment in u s airways which did not go well for robertson 5 u s airways filed for bankruptcy protection in 2002 and again in 2004 6robertson liquidated the tiger management fund in 2000 following poor performance 7 he wrote that tiger s success had been based on a rational approach to valuation and trading this strategy had proven less effective alongside the irrational growth of internet stocks 8in the years that followed robertson focused his efforts on mentoring and investing with a slate of up and coming hedge fund managers known as the tiger cubs prominent members of this group include john griffin of blue ridge capital ole andreas halvorsen of viking global chase coleman of tiger global management and steve mandel formerly of lone pine capital 9101112wealth and philanthropyrobertson was active in philanthropic activities after turning away from fund management he founded scholarships at his alma mater and duke university and committed to the giving pledge a campaign launched by bill gates and warren buffet 13 robertson was also active in new zealand purchasing a handful of luxury lodges throughout the country 14forbes reported that robertson donated 1 3 billion to charitable causes among them include environmental protection charter schools and medical research as of april 5 2022 robertson was reportedly worth 4 8 billion 15 julian robertson died on august 23 2022 at the age of 90 at his home in new york who is the wizard of wall street julian robertson was a billionaire who made his money in hedge funds and was nicknamed the wizard of wall street due to his investment acumen | |
is julian robertson alive | julian robertson passed away on aug 23 2022 at the age of 90 at his home in new york following his retirement robertson spent much of his time as an active philanthropist who donated over 1 billion to charitable funds 15who were the tiger cubs the phrase tiger cubs referred to the young hedge fund managers who worked at julian robertson s tiger management fund firm many of them became successful hedge fund operators after moving on from tiger management where they were trained under robertson the bottom linejulian robertson was a former hedge fund manager who founded tiger management a highly successful hedge fund in the eighties and nineties the fund was one of the most well known hedge funds of its generation before it closed in 2000 robertson was known for his business acumen generous philanthropic work and mentoring young investors interested in operating hedge funds | |
what is a jumbo certificate of deposit cd | a jumbo certificate of deposit is a cd that requires a higher minimum balance obligation than that required by traditional cds in return the jumbo cd pays a higher interest rate a cd is a type of savings account that pays a fixed or variable interest rate in exchange for depositors leaving their funds in the account until a specified maturity date understanding jumbo cdstraditional cds typically offer a higher rate of return than standard savings accounts or interest bearing checking accounts and a jumbo cd will typically pay an even higher rate than traditional cds jumbos have a higher rate because they require a larger minimum investment than the standard cd most jumbo cds start at 100 000 but some financial institutions offering them may have a few products with lower entry points jumbo cds are considered risk free investments as they re insured up to 250 000 by the federal deposit insurance corp fdic 1 credit unions also offer jumbo cds and these funds find protection under the national credit union administration ncua 2investors receive the premium based on the fixed interest rate as compensation for not having access to their money over the life of the account a one year jumbo cd that pays 1 5 interest for example may require that the funds remain locked up in the account for one year jumbo cds can have term lengths as short as a few days or as long as a decade however the standard range is three months to five years and the longer the term the higher the interest rate returned on the funds invested upon maturity of the cd the financial institution returns the investor s principal early withdrawals may be possible depending on the terms of the product purchased however the investor will pay a penalty for early termination of the contract the amount up to which the fdic insures cds 1advantages of jumbo cdslarge institutional investors are the typical customers for jumbo cds these large institutions include banks some large corporations and pension funds primarily this is due to the high minimum balance requirements these customers use jumbo cds as a temporary investment vehicle as some issuers have tenures for as little as seven days the short term maturities allow institutional investors and companies to earn interest on idle money for short periods before rolling the funds into other ventures these jumbo cds are instruments for treasury management of large corporations and money market instruments for large investors other than being paid to park their funds in these products large investors use them as instruments to reduce their portfolio s market risk exposure market risk arises when prices in the stock market fluctuate over time as a result stock portfolios can earn high returns but they can also incur large losses the steady interest paid on jumbo cds helps offset and reduce the risk of negative returns that can happen from holding stocks a business seeking a loan or other type of financing from a bank can pledge its jumbo cd as collateral which is an asset held by a lender as security for a loan in case the borrower falls behind or defaults on the loan payments if the borrower defaults on timely payments the lender can seize the collateral to recoup any losses however cds held in retirement accounts cannot be pledged as collateral for loans jumbo cds can be used as collateral for loans disadvantages of jumbo cdsalthough jumbo cds have positive aspects of higher rates and fdic or ncua protection there are disadvantages to investing in them historically jumbo cds have paid a much higher rate than traditional cds and savings accounts nevertheless the differences between those returns have narrowed in recent years making a jumbo cd a less compelling investment jumbo cds don t typically keep up with inflation if the inflation rate in the economy is 2 for example and the interest rate on the cd is 2 5 then the investor is only earning 0 5 in real terms to make an investment in a jumbo cd worthwhile investors would need to lock in their funds for longer terms resulting in a higher rate | |
should the holder need these funds before the jumbo cd matures withdrawing them would result in a financial penalty which could be a fee assessed by the bank for the loss of interest earned to date each bank will have specific rules and guidelines for early withdrawals if the funds likely might be needed before the cd s maturity then investors might be better off investing the funds in an account that doesn t have withdrawal restrictions such as a high interest savings account | another worry for jumbo cd investors is interest rate risk this comes when current market interest rates rise above the rate offered by the jumbo cd if interest rates rise while investors are holding a jumbo cd they miss out on the higher rates they could have had if these funds had been available to invest elsewhere conversely if interest rates fall during the holding period the investor may not be able to reinvest the funds at maturity at a rate comparable to the cd this hazard is known as reinvestment risk although jumbo cds pay a higher rate at the onset than other products investors must weigh the pros and cons to ensure they don t have a lower return in the long term jumbo cds offer a steady rate of interest for the length of the holding term jumbo cds typically pay a higher interest rate than traditional cds or savings accounts do the steady interest paid on jumbo cds can partly offset the portfolio s market risk of negative returns from holding stocks jumbo cds carry a guarantee of up to 250 000 per account by the fdic or the ncua jumbo cds pay a lower return than many other fixed rate investments such as bonds in a rising interest rate environment jumbo cds face interest rate risk as investors might hold a cd paying a lower rate jumbo cds don t typically keep up with inflation meaning prices could rise faster than the cd s rate of return investors cannot access their funds in jumbo cds before maturity without incurring an early withdrawal penalty jumbo cds can have high minimum balance requirements examples of jumbo cdsveridian credit union founded in waterloo iowa in 1934 offers many types of cds including jumbo cds examples of the jumbo rate as of june 21 2024 include the interest rates being offered can change anytime for new cds and might be different depending on the state where the depositor is located frequently asked questions faqs | |
what is the shortest term for a jumbo cd | jumbo cd terms can be as short as a few days but these extremely short terms are hard to find more commonly the minimum term for a jumbo cd is three months | |
do jumbo cds earn a higher interest rate than a normal cd | since jumbo cds require a much higher minimum deposit banks and credit unions typically reward savers with higher interest rates than for smaller accounts longer terms also earn higher interest rates those higher rates are an incentive to reduce the liquidity of your savings | |
how much of my jumbo cd is fdic or ncua insured | the fdic or ncua insures up to the first 250 000 in each account at an affiliated bank or credit union 12the bottom linejumbo cds are a very safe place to hold money banks are willing to offer attractive interest rates for savers in exchange for fixed terms while jumbo cds are safe they may not be the best place to earn money in a volatile interest environment if interest rates are rising and you re locked into a long term cd you may miss out on the opportunity to invest at a higher rate consider your term length carefully before deciding | |
what is a jumbo loan | a jumbo loan also known as a jumbo mortgage is a type of financing that exceeds the limits set by the federal housing finance agency fhfa unlike conventional mortgages a jumbo loan is not eligible to be purchased guaranteed or securitized by fannie mae or freddie mac 1jumbo mortgages are designed to finance luxury properties and homes in highly competitive local real estate markets and have unique underwriting requirements and tax implications these kinds of mortgages gained traction as the housing market recovered following the great recession advantages of a jumbo loanthe primary advantage of a jumbo loan is that it allows borrowers to take out a mortgage that exceeds the limits put in place by the fhfa this limit varies by state and even by county the fhfa sets the conforming loan limit size for different areas on an annual basis the limit for 2024 is set at 766 550 for most of the country this is an increase of 40 350 from the 2023 limit of 726 200 the baseline limit for counties with higher home values is 1 149 825 or 150 of 766 550 2the fhfa has a different set of provisions for areas outside of the continental united states for loan limit calculations as a result the baseline limit for a jumbo loan in alaska guam hawaii and the u s virgin islands as of 2024 is also 1 149 825 that amount may be even higher in counties that have higher home values 2if you have your sights set on a home that costs close to half a million dollars or more and you don t have that much sitting in a bank account you ll probably need a jumbo mortgage and if you re trying to land one you ll face much more rigorous credit requirements than homeowners applying for a conventional loan that s because jumbo loans carry more credit risk for the lender since there is no guarantee by fannie mae or freddie mac there s also more risk because more money is involved | |
how a jumbo loan works | like traditional mortgages minimum requirements for a jumbo mortgage have become increasingly stringent since 2008 to get approved you ll need a stellar credit score 700 or above and a favorable debt to income dti ratio as of 2022 the dti is tied to the price of the property and its lien position although they are nonconforming mortgages jumbos still must fall within the guidelines of what the consumer financial protection bureau considers a qualified mortgage a lending system with standardized terms and rules 3you ll need to prove you have accessible cash on hand to cover your payments which are likely to be very high if you opt for a standard 30 year fixed rate mortgage specific income levels and reserves depend on the size of the overall loan but all borrowers need 30 days of pay stubs and w 2 tax forms stretching back two years 4 if you re self employed the income requirements are greater two years of tax returns and at least 60 days of current bank statements the borrower also needs provable liquid assets to qualify in addition to cash reserves equal to six to 12 months of the mortgage payments all applicants must show proper documentation on all other loans held and proof of ownership of nonliquid assets like other real estate jumbo loan rateswhile jumbo mortgages used to carry higher interest rates than conventional mortgages the gap has been closing in recent years today the average annual percentage rate apr for a jumbo mortgage is often par with conventional mortgages and in some cases actually lower as of december 29 2023 wells fargo for example charged an apr of 6 328 on a 30 year fixed rate conforming loan and 6 464 for the same term on a jumbo loan 5even though the government sponsored enterprises gses can t handle them jumbo loans are often securitized by other financial institutions since these securities carry more risk they trade at a yield premium to conventional securitized mortgages however this spread has been reduced with the interest rate of the loans themselves down payment on a jumbo loanfortunately down payment requirements have loosened over the same time period in the past jumbo mortgage lenders often required homebuyers to put up 30 of the residence s purchase price compared to 20 for conventional mortgages now that figure has fallen as low as 10 to 15 6 as with any mortgage there can be various advantages to making a higher down payment among them to avoid the cost of the private mortgage insurance pmi that lenders require for down payments below 20 who should take out a jumbo loan | |
how much you can ultimately borrow depends of course on your assets your credit score and the value of the property that you re interested in buying these mortgages are considered most appropriate for a segment of high income earners who make 250 000 to 500 000 a year this segment is known as henry an acronym for high earners not rich yet basically these are people who generally make a lot of money but don t have millions in extra cash or other assets accumulated yet | while an individual in the henry segment may not have amassed the wealth to purchase an expensive new home with cash such high income individuals do usually have better credit scores and more extensively established credit histories than the average homebuyer seeking a conventional mortgage loan for a lower amount they also tend to have more solidly established retirement accounts they often have been contributing for a longer period of time than lower income earners don t expect a big tax break on a jumbo loan the cap on the mortgage interest deduction is limited to 750 000 375 000 if married filing separately for new mortgage debt secured after 2017 7these are just the sorts of individuals whom institutions love to sign up for long term products partly because they often need additional wealth management services plus it s more practical for a bank to administer a single 2 million mortgage than 10 loans valued at 200 000 apiece image by sabrina jiang investopedia 2020special considerations for a jumbo loanjust because you may qualify for one of these loans doesn t mean you should take one out you certainly shouldn t if you are counting on it furnishing you with a substantial tax break for example you re probably aware that you can deduct the mortgage interest you paid for any given year from your taxes providing that you itemize your deductions but you probably never had to worry about the cap that the internal revenue service irs places on this deduction a cap that was lowered by the passage of the tax cuts and jobs act anyone who got a mortgage on dec 14 2017 or earlier can deduct interest on up to 1 million in debt which is the amount of the old cap but for home purchases made after dec 14 2017 you can only deduct the interest on up to 750 000 in mortgage debt if your mortgage is larger you don t get the full deduction if you plan to take out a 2 million jumbo mortgage that accrues 80 000 in interest a year for example you can only deduct 30 000 the interest on the first 750 000 of your mortgage in effect you only get a tax break on 37 5 of the mortgage interest 7this means that you should borrow with care and crunch the numbers carefully to see what you can truly afford and what kinds of tax benefits you will receive with the state and local tax deduction limited to 10 000 a year due to the same tax bill a highly taxed property will also cost you more to own one other strategy compare terms to see if taking out a smaller conforming loan plus a second loan instead of one big jumbo might prove better for your finances in the long haul | |
what are the jumbo loan requirements | to get approved you ll need a stellar credit score 700 or above and a very low debt to income dti ratio although they are nonconforming mortgages jumbos still must fall within the guidelines of what the consumer financial protection bureau considers a qualified mortgage a lending system with standardized terms and rules 3 | |
what is the down payment on a jumbo loan | in the past jumbo mortgage lenders often required homebuyers to put up 30 of the residence s purchase price compared to 20 for conventional mortgages now that figure has fallen as low as 10 to 15 6 | |
what are considered jumbo loans | a loan is considered jumbo if the amount of the mortgage exceeds loan servicing limits set by fannie mae and freddie mac currently 766 550 in 2024 for a single family home in all states except hawaii alaska and a few federally designated high cost markets where the limit is 1 149 825 2the bottom linea jumbo loan also known as a jumbo mortgage is a type of financing that exceeds the limits set by the fhfa and cannot be purchased guaranteed or securitized by fannie mae or freddie mac homeowners applying for a jumbo loan must undergo more rigorous credit requirements than those applying for a conventional loan approval requires an excellent credit score and a very low dti ratio the average apr for a jumbo mortgage is often on par with conventional mortgages while down payments are approximately 10 to 15 of the total purchase price | |
what is a jumbo pool | a jumbo pool is a pass through ginnie mae ii mortgage backed security mbs that is collateralized by multiple issuer pools these pools combine mortgage loans with similar characteristics and are more massive than single issuer pools the mortgages contained in jumbo pools are more diverse on a geographical basis than are those in single issuer pools understanding jumbo poolsjumbo pools are groups of mortgage loans from multiple lenders that are securitized by selling shares of the pools on the open market to investors the investors who purchase these securities receive an aggregate principal and interest payments from a central paying agent usually yearly or every six months interest rates on mortgage loans contained within the jumbo pools may vary within one percentage point this limited variation of interest makes the principal and interest payments received by investors predictable and less volatile because multiple issuers back these pools they are typically considered a safer form of mortgage backed security mbs investment creation of a jumbo poolthe creation of a jumbo pool starts when an approved lender applied for a commitment from ginnie mae that guarantees the securities the lender originates or acquires the mortgage loans assembling them into a mortgage pool during the creation phase the lender will compile sets of mortgages from different geographical locations versus the more location specific nature of single issuer pools once this is done the lender chooses who they will sell the security to submitting the required paperwork to ginnie mae to a specialized pool processing agent the agent once approved prepares and delivers the securities to the investors designated by the lender the lender is ultimately responsible for selling the securities as well as servicing the underlying mortgages 1benefits of jumbo poolsin general jumbo pools tend to bear less risk than traditional mortgage pools while all mortgage backed securities carry some risk diversifying the pool by geography tends to mitigate many of the reasons debtholders default on their loans regionally mortgage holders may default on notes due to a natural disaster in the area or the closure of localized industries loss of job has a statistical probability for any given debtholder but economies tend to vary regionally so defaults because of loss of employment follow local economic downturns thus jumbo pools have less risk associated with local economic conditions than do pools of mortgage loans from a single lender jumbo pools due to their diverse nature consist of loans that are guaranteed at several different levels by the government risk associated with jumbo poolspotential risks to investors include early payment of one or more of the mortgage loans in the jumbo pool mortgage holders may make extra payments to pay off their mortgages early or sell their houses and pay off the entire amount at one time when interest rates fall mortgage holders may refinance their loans at a lower rate and pay off the entire mortgage to do so another risk to investors in jumbo pools is the natural shrinking of the principal payment as the loans in the jumbo pool are paid down this shrinking of the size of the principal owed decreases the size of the corresponding interest payments for instance if the principal is 10 000 and the rate is 6 the interest will be 600 if the amount of payment or prepayment on the pool s principal is 100 then the next interest payment will be on the smaller dollar amount 6 of 9 900 594 these risks to investors of early payment of a loan and shrinking of the principal are not specific to jumbo pools and affect all investors in mortgage backed securities | |
what is the difference between a jumbo mortgage and a regular mortgage | jumbo and regular mortgages differ first by the property being purchased a jumbo will typically be used to purchase an expensive property whereas a conventional mortgage is more common for the average homebuyer buying a home with a lower price tag regular mortgages fall within the federal housing finance agency fhfa restrictions on loan size | |
what is a pass through security | a pass through security is a pool of fixed income securities that are backed by a package of assets typically mortgages each security in the pool represents a large number of debts these pools can represent hundreds or thousands of debts such as mortgages or car loans | |
what are the different types of mortgage backed securities | there are two common types of mortgage backed securities pass through securities and collateralized mortgage obligations known as cmos pass through securities are structured as trusts the mortgage payments are collected and passed on to investors cmos are made of pools of securities called tranches which are given specific credit ratings and rates that are returned to investors the bottom linejumbo pools are large pass through securities that are collateralized by multiple issuer pools they tend to be safer than single issuer pools because they consist of more diverse mortgages that are not geographically linked although they are open to the same risks as singe issuer pools namely early payment risk and the shrinking of the principal they are still considered a less volatile investment | |
what is the jumpstart our business startups jobs act | the jumpstart our business startups jobs act is a piece of u s legislation that was signed into law by president barack obama on april 5 2012 that loosens regulations instituted by the securities and exchange commission sec on small businesses it lowers reporting and disclosure requirements for companies with less than 1 billion in revenue and allows the advertising of securities offerings it also allows greater access to crowdfunding and greatly expands the number of companies that can offer stock without going through sec registration 12understanding the jumpstart our business startups jobs actthe jobs act is meant to make it easier for startups to raise capital secondarily it is meant to allow retail investors to invest in startups proponents of the legislation contended that sec rules were preventing startups from raising the capital they needed to expand opponents contended that sec regulations exist to provide oversight and transparency which prevent people from defrauding investors the jobs act establishes the category of emerging growth companies which the sec defines as a company that is issuing stock with a total annual gross revenues of less than 1 07 billion during its most recently completed fiscal year 3 the jobs act lessens reporting and oversight requirements for these companies before the jobs act in most cases only accredited investors could invest in startups 1special considerationsthe jobs act allows retail investors to invest in startups in two ways first it lets startups raise up to 1 million via crowdfunding which is a form of investing by many small investors pooling their resources 1 this is different than crowdfunding websites such as kickstarter where people donate money and do not receive equity for their contributions secondly it greatly expands a category under a rule called regulation a or reg a which allows companies to offer stock without going through the process of registering with the sec under the jobs act the expanded reg a often called reg a allows companies to offer up to 50 million in stock each year without needing to meet normal registration requirements retail investors can invest up to certain amounts using both of these methods allowing them access to relatively risky venture capital investments 41history of the jobs actthe purpose of the jobs act is to make it easier for startups and small businesses to access capital primarily because small business activity had decreased during and after the financial crisis when the law was passed with the ability to access financing the jobs act allows businesses to grow and hire more workers which helped put americans back to work after the financial crisis the jobs act rolled back financial regulation in relation to small businesses and obama signed the law in 2012 most small businesses start and grow in the early stages either through personal savings money from family and friends or money from small banks because of the financial crisis many families had little savings and many of the small community banks had disappeared the jobs act seeks to make access to capital more democratized with greater efficiency by providing new and easy means to access funding the internet has allowed small banks to reach investors in a way that only large corporations could before combined with the advent of technology the jobs act removed or adjusted the regulation that made it difficult for smaller businesses to access capital advantages and disadvantages of the jobs actthe primary advantage of the jobs act is that it removed regulatory hurdles for entrepreneurs allowing them to access capital in a more efficient manner and more readily the jobs act removed the solicitation ban allowing entrepreneurs to market their businesses and utilize the internet to reach thousands of potential investors without geographical limitations the same benefit applies to investors as well it allows investors to reach more potential investments without geographical restrictions the primary disadvantage comes from the advantage less regulation with less regulation and decreased requirements for disclosures the potential for fraud is greatly increased for investors this includes purposeful fraud as well as accidental fraud which means less experienced business owners may inaccurately describe their business opportunities decreased regulationeasier access to potential investorsno geographical constraints for entrepreneurs and investorsincreased options for investorsmore accessible and efficient means of accessing capital for entrepreneursdecreased regulationpotential for fraudwho wrote the jobs act the house majority leader at the time eric cantor introduced the jobs act to congress the act was approved with bipartisan support | |
what does the jobs act do for companies | the jobs act allows companies to access funding in ways that were not allowed before due to securities regulations it reduced regulation including oversight and reporting removed certain barriers and allowed for new ways of accessing capital it makes it easier for entrepreneurs to start businesses or grow their current businesses | |
is crowdfunding regulated by the sec | yes crowdfunding is regulated by the sec the sec requires that all transactions take place through an sec registered intermediary limiting the amount a company can raise in a year to 5 million through crowdfunding limiting the amount of non accredited investors and requiring certain disclosures of information 5 | |
what is a reg cf offering | reg cf is part of the jobs act that allows private companies to raise up to 5 million from any american 5 prior to the passing of the act private companies could only raise capital from accredited investors the bottom linethe jumpstart our business startups jobs act was passed by president obama in 2012 with the goal of revitalizing the small business sector in the united states after the financial crisis the act would do this by allowing entrepreneurs easier access to capital to start businesses or to grow them by removing regulations surrounding how small businesses can access capital with small businesses growing this would result in them hiring more workers putting americans back to work after the crisis | |
what is a junior accountant | a junior accountant maintains and compiles financial reports and statements in compliance with government regulations and requirements the junior accountant may analyze balance sheets manage general ledger accounts update financial statements maintain accounts receivable and accounts payable pay monthly payroll and prepare financial reports accountants auditors and junior auditors typically work full time overtime hours may be required during tax season or at the end of the fiscal year duties and responsibilities of junior accountantsthe duties and future career prospects for a junior accountant depend on the situation and the abilities of the candidate a junior accountant holds an entry level position in the accounting department of an accounting or auditing firm or the government junior accountants have an interest in finance accountants learn the ins and outs of the industry in which they work because they are privy to all the expenses revenues and investments that are involved in a business entity the duties and responsibilities of a junior accountant would vary within the organization but would include accounting for all business transactions with journal entries updating financial statements preparing monthly financial reports calculating payroll taxes and auditing and maintaining accounts receivable and accounts payable all of this would be performed under the supervision of the manager as the junior accountant learns the business of accounting and the intricacies of different client situations the median pay for a qualified accountant in 2023 was 79 880 according to the u s bureau of labor statistics bls 1requirements for junior accountantsa bachelor s degree in accounting and a high level of attention to detail are prerequisites for this position other desirable attributes include mathematical aptitude analytical ability an ability to keep documents well organized and an interest in finance a junior accountant uses accounting software so the ability to use and learn new computer systems is essential the outlook for junior accountantsthe junior accountant position would suit those who enjoy mathematics and are interested in finance junior accountants have above average earnings potential and access to wide ranging client le the accounting profession is likely to see sustained demand because corporations and small businesses require accounting services on an ongoing basis if a junior accountant wishes to climb the career ladder they could become a certified public accountant cpa a certified management accountant cma or a certified internal auditor cia by undertaking and passing the exam series growth in the accounting profession is expected to average around 4 per year from 2022 to 2032 according to the u s bureau of labor statistics 1 employment growth in the accounting field is linked to the overall economy in a growing economy more accountants are required | |
where does a junior accountant work | a junior accountant works at entry level in the accounting department of an accounting or auditing firm or the government | |
what are the prerequisites to become a junior accountant | someone who wants to be a junior accountant should have | |
how much does an accountant make | according to u s bureau of labor statistics statistics for 2023 the median pay for a qualified accountant was 79 880 the bottom linea junior accountant maintains and compiles financial reports and statements in compliance with government regulations and requirements the job would suit those who enjoy mathematics and are interested in finance | |
what is a junior accountant | a junior accountant maintains and compiles financial reports and statements in compliance with government regulations and requirements the junior accountant may analyze balance sheets manage general ledger accounts update financial statements maintain accounts receivable and accounts payable pay monthly payroll and prepare financial reports accountants auditors and junior auditors typically work full time overtime hours may be required during tax season or at the end of the fiscal year duties and responsibilities of junior accountantsthe duties and future career prospects for a junior accountant depend on the situation and the abilities of the candidate a junior accountant holds an entry level position in the accounting department of an accounting or auditing firm or the government junior accountants have an interest in finance accountants learn the ins and outs of the industry in which they work because they are privy to all the expenses revenues and investments that are involved in a business entity the duties and responsibilities of a junior accountant would vary within the organization but would include accounting for all business transactions with journal entries updating financial statements preparing monthly financial reports calculating payroll taxes and auditing and maintaining accounts receivable and accounts payable all of this would be performed under the supervision of the manager as the junior accountant learns the business of accounting and the intricacies of different client situations the median pay for a qualified accountant in 2023 was 79 880 according to the u s bureau of labor statistics bls 1requirements for junior accountantsa bachelor s degree in accounting and a high level of attention to detail are prerequisites for this position other desirable attributes include mathematical aptitude analytical ability an ability to keep documents well organized and an interest in finance a junior accountant uses accounting software so the ability to use and learn new computer systems is essential the outlook for junior accountantsthe junior accountant position would suit those who enjoy mathematics and are interested in finance junior accountants have above average earnings potential and access to wide ranging client le the accounting profession is likely to see sustained demand because corporations and small businesses require accounting services on an ongoing basis if a junior accountant wishes to climb the career ladder they could become a certified public accountant cpa a certified management accountant cma or a certified internal auditor cia by undertaking and passing the exam series growth in the accounting profession is expected to average around 4 per year from 2022 to 2032 according to the u s bureau of labor statistics 1 employment growth in the accounting field is linked to the overall economy in a growing economy more accountants are required | |
where does a junior accountant work | a junior accountant works at entry level in the accounting department of an accounting or auditing firm or the government | |
what are the prerequisites to become a junior accountant | someone who wants to be a junior accountant should have | |
how much does an accountant make | according to u s bureau of labor statistics statistics for 2023 the median pay for a qualified accountant was 79 880 the bottom linea junior accountant maintains and compiles financial reports and statements in compliance with government regulations and requirements the job would suit those who enjoy mathematics and are interested in finance | |
what is a junior company | a junior company is a small company that is developing or seeking to develop a natural resource deposit or field a junior company is like a startup in that it is either looking for funding to help it grow or it is looking for a much larger company to buy it out understanding a junior companyjunior companies are typically small cap with a low market capitalization usually under 500 million and have thin daily trading volumes of 700 000 and under they are most likely found in commodity exploration such as oil minerals and natural gas junior companies are believed to be interesting businesses for those who can afford to take the risks associated with them the costs involved in starting a junior company have grown significantly but so has the reward for being successful the first thing many juniors will do is to acquire properties they believe have a big probability of resource deposits the company will then conduct a resource study once that has been completed it will either provide the results to shareholders or to the public to prove there are assets available if the study provides positive results the junior company will raise capital to go ahead with exploration or partner up with a bigger company to cut down on costs in some cases it may also attempt to be bought out by a larger company characteristics of a junior companya lot of junior companies are venture capital recipients that are looking for financing for their own operations for example a junior gold mining company may not own its mining operation instead it may look to secure capital in order to undertake this part of the business junior companies also come with a lot of risks if the company undertakes exploration and cannot find any resources before its debt is due it will suffer financially and may have to declare bankruptcy juniors are also sensitive to commodity prices meaning their share prices fall directly in line with the commodity with which they are associated so the share prices for gold juniors will be affected by the price of gold just like oil and gas juniors will be affected by energy prices juniors will have management teams that provide some expertise in the field of exploration and can navigate any local governmental and environmental regulations the companies will also have highly trained personnel on staff including engineers and geophysicists so when the properties show promise they can help bring the resources into production investing in a junior companyinvesting in junior companies often comes with more risk than companies that are bigger and more established this is because juniors may still be exploring and at times may not find any resources at all investors who are interested in smaller up and coming companies like these should remember to diversify in order to minimize their risk and get the maximum return on their investments a greater degree of interest in juniors will typically come from individual investors because they usually invest based on emotions institutional investors such as mutual funds or hedge funds will normally invest in senior companies with a greater track record the best places to find juniors are the toronto stock exchange tsx and the tsx venture exchange tsxv both have hundreds of mining companies listed real world examplenexus gold headquartered in vancouver canada is one example of a junior mining company as of sept 2 2020 the company had a market cap of 14 5 million with a daily trading volume of about 253 000 putting it firmly within the small cap parameter the company is listed as an exploration and development company with operations in west africa and canada currently nexus has six projects in canada and five projects in west africa so it is further along the development line than completely new junior companies though these projects have only shown historical samples or prospective new samples meaning that the mines are not in full development as yet | |
what is junior debt | junior debt refers to bonds or other forms of debt issued with a lower priority for repayment than other more senior debt claims in the case of default because of this junior debt tends to be riskier for investors and thus carries higher interest rates than more senior debt from the same issuer junior debt is synonymous with subordinated debt and it may refer more generally to any second tier of debt paid immediately following the repayment of senior debt junior debt has a somewhat smaller probability of being paid back in default since all higher ranking debt will be given priority understanding junior debtgenerally the corporate debt market is less regulated than the equity market thus corporations have more flexibility obtaining capital through debt a corporation may work with a bank to obtain a loan they may also work with an underwriter who leads a loan syndicate with multiple investors investing in a loan deal a corporation may also issue bonds with varying repayment terms junior debt is a classification that is important for fixed income investors to understand when understanding the various bond issuances of a firm repayment priorities for a business are a part of the firm s capital structuring and these distinctions will matter if an issuer experiences a credit event such as a default companies can issue a wide variety of securities to raise capital from investors and the structuring of these products is typically done by an underwriter the priority of repayment will generally follow the order of senior debtholders followed by junior debtholders preferred shareholders and finally common stockholders different from equity capital institutional debt is typically issued in the primary market involving direct interaction between corporations and investors following primary market issuance loans and bonds can then be traded over secondary markets with trades facilitated through various trading groups in the secondary market senior debt continues to carry less risk than subordinated debt debt repayment termsan important repayment term for all types of credit is their repayment seniority loans and bonds can be issued as senior debt or subordinated debt senior debt is repaid first if the borrower encounters a default or liquidation it is usually secured debt with collateral however it can also be unsecured with specific provisions for repayment seniority subordinated debt follows senior debt and has its own repayment terms generally senior debt requires lower interest payments and bond coupons since it has a lower risk with subordinated debt investors are willing to take on the higher risk of lower seniority payments in default by being compensated with higher rates of interest generally junior debt and subordinated debt is unsecured debt that is not backed by collateral subordinated debt in tranchesin some situations corporations may issue junior debt bonds junior debt can also be common in structured products where investors have the option to invest in varying bond tranches as part of bond issuance repayment terms are often a key factor that can influence coupon rates on a bond the junior debt repayment procedures in the case of default will be clearly delineated by the underwriter in the terms disclosing the investment details of a bond investment so that investors have a clear understanding of the priority the bonds are given in the case of default for instance in many structured products the z tranche is the slice of the security that is repaid only after all other tranches have received repayment in full | |
what is junior equity | junior equity is stock issued by a company that ranks at the bottom of the priority ladder in terms of ownership rights its owners are the last in line to receive certain payouts such as dividends or reimbursements in cases of bankruptcy common stock is a type of junior equity it is considered subordinate or junior to preferred stock |
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