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Financial Planning Archives - Wealthspire

A happy couple meeting financial advisor and shaking hands

When Is the Right Time to Hire a Financial Advisor?

By Blog
Many people think you shouldn’t hire a financial advisor until you have accrued a great deal of assets.  However, that’s not necessarily true. In reality, it’s never too early to start securing your financial future. That said, there are certainly some milestones that strongly indicate it’s time to partner with a financial advisor and begin planning your path to long-term financial freedom. Keep reading to learn five key indicators that may mean it’s time to look for a financial advisor.  1. You have disposable income. Maybe you recently paid off your student debt or car loans and suddenly have more…
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incentive stock options ISO

What Are Incentive Stock Options (ISOs)?

By Blog
All of today’s largest, blue-chip companies began as the small start-ups of yesterday. Some created entirely new industries, like Google and Netflix, or drastically altered them, like Tesla and Rivian. Most, if not all, grew to become the names we recognize today through equity-based compensation, enriching their founders, executives, and early employees alike (along with investors). A key part of equity compensation, particularly for earlier stage companies, is incentive stock options (ISOs). Incentive Stock Options (ISOs) – Defined ISOs give employees the right, but not obligation, to purchase company stock at a hopefully lower grant price, compared to the fair…
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Rate of Return

Financial Dictionary
What Is Rate of Return? The rate of return measures the performance of an investment. Rate of return is calculated by dividing any gain or loss by an investment’s initial cost, or the percentage change of the investment’s value in a given period. Rates of return usually account for any income received from the investment in addition to any realized capital gains. What Is the Internal Rate of Return (IRR)? The internal rate of return is used to estimate the profitability of potential investments. More specifically, IRR is the exact discount rate that makes the net present value (NPV) of…
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Liquidity

Financial Dictionary
What is Liquidity? Liquidity is the ease and speed with which an asset or security can be bought or sold. What Does Liquidity Mean in Finance? Financial liquidity refers to how easily assets can be converted to ready cash without affecting its market price. Assets like stocks and bonds are very liquid and can be converted into cash within days. Larger assets and tangible items such as property and equipment are often not as liquid since they need to be sold before you can use and spend the cash that they are worth, which can take weeks or months. Cash…
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Net Worth

Financial Dictionary
What is Net Worth? Net worth is the total value of a company’s or individual’s assets, minus the liabilities, or anything that the company or individual owes. What is My Net Worth? To find your net worth, simply add together the value of all of your assets and subtract the amount you owe in liabilities. This total will give you your net worth. What is an Example of Net Worth? Calculating net worth is done by subtracting what you owe from what you own. For example, if the value of your house, car, and investments adds up to $500,000, and…
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Benchmark

Financial Dictionary
What Is a Benchmark in Finance? Financial benchmarking involves running financial analyses in order to compare business practices and the standards of a firm to other firms within the same industry. A benchmark is a standard, or a baseline, that’s used for comparative purposes when assessing a portfolio or mutual fund. What is a Benchmark in a Portfolio? Benchmarks are used to analyze and manage allocation, risk, and the given returns of a portfolio. They can also be used to assess how a portfolio is performing against different market segments. To track the performance of an asset group, companies use…
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Dividend

Financial Dictionary
Dividend Definition A dividend is a portion of a company’s profit paid to common and preferred shareholders. They provide an incentive to own stock in stable companies even if they are not experiencing much growth. Companies are not required to pay dividends. How do Dividends Work? Dividends are payments a company makes to its shareholders to share its earnings and can be thought of as rewards paid to shareholders for their investments. There are many reasons why companies pay dividends, including the intent to increase investors’ faith in the company and signal optimism about future growth and earnings. Dividends are…
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Yield Curve

Financial Dictionary
What Is a Yield Curve? A yield curve is the relationship between interest rates and time, and is determined by plotting the yields of bonds with equal credit quality against their maturities. What Does the Yield Curve Tell You? By looking at the yield curve of bonds having equal credit quality but differing maturity dates, the slope of the curve will give you a good idea of the future interest rate changes and economic activity. Yield curves can take the form of three shapes: normal (upward sloping curve), inverted (downward sloping curve), and flat. A normal yield curve shows yields…
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Living Will

Financial Dictionary
What is a Living Will? A living will provides instructions to your healthcare provider in the event that you are unable to communicate. A living will dictates whether or not you wish to receive medical treatment to prolong your life if you suffer irreversible or terminal injury. Why is it Important to Have a Living Will? Having a living will cuts down on the uncertainty of your wishes by spelling out how you would like to proceed with the use of life-saving measures if the situation arises. A living will should always be a part of your estate plan. If…
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incentive stock options ISO

Stocks

Financial Dictionary
What Is a Stock? A stock is a long-term, growth-oriented investment representing ownership in a company; also known as ‘equity.’ How to Invest in Stocks When investing in stocks, you don’t necessarily need a lot of money to get started – you can invest with as little as $50. You can also decide whether to pick and choose stocks individually, have an expert to manage the process, or use your employer’s 401(k). Once you start to invest in stocks, you might want to open an IRA or a brokerage account. This allows you to have some options and determine what…
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