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Like-Kind Exchange
William found someone to buy his rental property in Maine. Which of the following properties that William would like to purchase as rental property would allow him to complete a like-kind exchange? A golf course rental property in Arizona that William identified 30 days after selling his Maine property. A beach rental house at the…
CFP Professionals Highly Satisfied With their Career
CFP® Board Updates A 2023 Survey of CFP® Professionals shows overwhelming satisfaction with their career choice. Furthermore, they fully believe the certification has a positive impact on their career. 87% of CFP® Professionals are satisfied with their career 89% are satisfied with their decision to pursue CFP® Certification An overwhelming 86% would recommend others pursue…
Interest Rate Risk in a Bond
Course: Investment PlanningLesson 10: Fixed Income Securities Analysis Student Question: I’m not clear why holders of long-term bonds are subject to interest rate risk. If a 20-year bond is purchased at par with a coupon rate of 6.25% ($62.50/year), it seems to me that the investor would still receive $62.50 a year regardless of interest rate changes. What…
Tax Saving Strategies
Dan and Karen Burles have 2 children, Coy (age 12, student) and Roger (age 21, student). Dan and Karen own a security equipment sales and installation business, an LLC. Dan and Karen are in the highest income tax bracket. They have a portfolio with $130,000 of municipal bonds (annual income $5,200), $80,000 of corporate bonds…
Relationships, Psychology, and Financial Issues
Good to Know CFP Board’s focus on the psychology of financial planning led to a new domain topic- The Psychology of Financial Planning. Our focus in today’s article is on financial tensions in relationships. According to The Practitioner Resource Guide (Guide) offered by CFP Board, three common relationship tensions include Financial Enabling, Financial Control, and,…
Internal Rate of Return Calculation
Course: Fundamentals of Financial PlanningLesson 5b: Using the HP 10bII Calculator Student Question: In Example 2, the solution given has 6 years (including CF0) instead of 5. I believe the first year of Carl’s coin purchase should be CF0, but the fifth year – which includes a purchase and a sale – should be CF4.…
Refinance Payment Calculation
Jim refinanced his home mortgage to a 30-year fixed mortgage with biweekly payments. How much is each payment if he owed $450,000 at the time of the refinance and the interest rate is 6%? $923 $1,244 $1,412 $2,592 CLICK TO REVEAL ANSWER Expand B is the answer. Brandon pays his mortgage every two weeks which…
CFP Board Supports Expansion of Fiduciary Duty
CFP® Certificants in the News The Employee Retirement Investment Security Act of 1974 (ERISA) pioneered desperately needed reforms for employer provided retirement plans. As just one example of pre-ERISA abuses, some employers required lengthy vesting requirements and-in a flagrantly deplorable practice-terminated employees before they became vested to avoid paying pensions. Fifty years ago, ERISA rode…
Risk Premium versus Intrinsic Value
Course: Investment PlanningLesson 5: Fundamental Equity Analysis Student Question: After reading the following, I’m confused about the amount a participant is allowed to take out as a loan from a qualified plan. Would it be up to $50k of vested account balance or only up to $10k? Text states: As a general rule, a participant…