A price markdown is the reduction, or lowering, of the original selling price of a product. A price markdown is a lot like a retail sale – “50% off all Ferraris this month only!”
Archive for the ‘Daily Definition’ Category
A Markdown (Price Markdown) is…
Friday, June 5th, 2009A ROTH IRA is…
Friday, May 29th, 2009A ROTH IRA is like a traditional IRA, but the initial investment is with after-tax dollars. This means that you don’t pay taxes when you take the money out after retirement. This makes sense for people who have a low current tax rate but plan to make more money in the future. It also is a good complement to a traditional IRA for people who want to save more, versus less, for retirement.
A Ponzi Scheme is…
Friday, May 15th, 2009A Ponzi scheme (named after Charles Ponzi) is an investment scam that promises investors high returns that aren’t actually real profits. Instead, each time a new investor signs on with the money manager, he uses their new funds to pay the high ‘returns’ to his older clients. Ponzi schemes fall apart because the manager eventually will fail to find new clients or regulators catch on – it’s generally just a matter of when.
Deflation is…
Friday, May 15th, 2009Deflation occurs when an entire economy of people stop buying as much as they once did, forcing the price of goods to drop. In numbers, an economy enters a state of deflation once the inflation rate (normally 3%) drops below zero.
A Fiscal Year is…
Friday, May 1st, 2009A fiscal year is any 12-month period used by businesses for accounting purposes, usually divided into four 3-month-long quarters. A fiscal year can begin in any month, not necessarily January (e.g. October 1, 2008-September 30, 2009).
Diversification is…
Saturday, April 25th, 2009Diversification is a way to reduce risk by creating a portfolio with a wide mixture of different investments. In basic terms, it means “don’t put all your eggs in one basket.”
A Portfolio is…
Tuesday, April 14th, 2009A portfolio is a collection of investments owned by an individual or institution.
A 501(c)(4) is…
Tuesday, April 7th, 2009A 501(c)(4) is a nonprofit organization that is exempt from paying federal income taxes but still has an unlimited ability to lobby and participate in political campaigns and elections. Donations to 501(c)(4)s are not tax-deductible.
An IRA is…
Monday, March 16th, 2009An IRA is an investment account that has tax advantages; IRAs permit you to put in pre-tax dollars for investment. When you take the money out, you are taxed at the prevailing tax rate. Thus, it makes sense for people to wait to withdraw the money until they retire and have a lower tax rate (because they are earning less than they used to).