How Do Dividends in a Roth IRA Work? What about REITs, MLPs, or ADRs?
When I first learned about Roth IRAs, I thought the whole point of them was to eliminate taxes. Well, in essence, pay the taxes first and then pay no taxes later. But then you have dividends. If you find yourself asking, “Are Roth IRA dividends taxable?” the answer is—probably not, but it depends. First let’s […]
Bond Valuation Overview (With Formulas and Examples)
Updated 6/4/2024 “An investment in knowledge pays the best interest.” Benjamin Franklin As investors learn more about their investments, we become better investors. One of the many things I enjoy about investing is the continual learning and the endless subjects to learn. In that vein, learning to value a bond is high on my list […]
Understanding Provision for Income Taxes and International Taxes
Provision for Income Taxes is a line item in a company’s Income Statement which tells investors how much a company pays in taxes for a given Fiscal Year. By looking closer in a company’s Notes to Financials, the investor can get clarity on additional details of the Provision for Income Taxes—such as which amount is […]
The Best Way to Invest in Insurance Companies: How to Analyze Their Stocks
Insurance, one of the necessary evils of today’s world, right? We all have to have it in case of that one day you will need it, health, life, auto, home, and on it goes. The big question is, how do I invest in an insurance company when I don’t understand how it works or how […]
Reach FI Faster With The Seven BEST Compound Interest Investments!
If you’re familiar with personal finance then you likely understand compound interest, but do you actually know how to apply that knowledge into your FI journey? It’s hard to take book knowledge and turn it into street knowledge, so that’s why I am here to tell you the best compound interest investments! Before we get […]
Valuing Young Companies: A Complete Guide Using a DCF (FCFF) Model
Updated 12/12/2023 Valuing a young company is one of the more difficult tasks in valuation. Trying to pin a value on a young company, startup, or idea business is difficult because of little or no revenues and large operating losses. Other challenges are the short financial histories of young companies, plus the dependence on outside […]
How Amortization of Intangible Assets Works; When it Unleashes Higher ROIC
The amortization of intangible assets can sometimes be hidden in the consolidated financial statements because amortization is grouped in with depreciation. But as the economy increasingly becomes more knowledge and intangible asset-based, investors need to more closely understand the accounting behind the amortization of intangibles. Depending on the intangible asset in question, a large amortization […]
Traditional Overdiversification Wisdom is Bunk. 15-20 Stocks= Not Enough.
Everything you’ve ever heard about diversification, and overdiversification, is wrong! The conventional wisdom is that any portfolio over 20- 30 stocks is overdiversified. This is wrong! The traditional idea about stock portfolio diversification is that anything more than 20 stocks, and your portfolio will track the market. In other words, if you’re buying more than […]
Building a DCF Using the Unlevered Free Cash Flow Formula (FCFF)
Updated 12/12/2023 “Intrinsic value can be defined simply: It is the discounted value of the cash that can be taken out of a business during its remaining life.” –Warren Buffett Cash is the lifeblood of all companies, and determining the fair value or intrinsic value is a matter of calculating what the future cash flow […]
Homebuilding Industry Breakdown: Revenue Drivers, Business Model
The homebuilding industry is easy to understand as a concept. Companies build new homes, and customers buy and live in them. But there are several moving pieces to consider for this industry, which are key for investors to understand if you are going to buy publicly traded homebuilder stocks. Homebuilder stocks have been out of […]
