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The Senate Finance Committee questioned Trump's nominee about his plans for the beleaguered agency and promotion of dubious tax credits.
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Jim Cramer sends blunt message on US debt risk to stocks TheStreetMoody's downgrades JPM, BofA and Wells Fargo after US credit rating cut ReutersMoody's downgrade ripples through bond market, causes worries for stocks Yahoo FinanceA short history of the long slide into federal fiscal insanity The Hill
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Billy Long's effort to promote the credit, along with his pushing of a fraud-ridden pandemic-era tax break, will be under close scrutiny during his Senate confirmation hearing.
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Moody's downgrade of U.S. credit on Friday helped put into focus the U.S. government's ballooning budget deficit and President Donald Trump's hopes to add trillions more to the national debt.
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Strategists warned the move, announced after the market close on Friday, could spark some near-term selling in stocks and Treasurys.
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Most people view debt as something to be avoided at all costs. But that's because most people don't use debt properly. A prime example of improper debt use is the credit card. People charge too much, fail to pay the card in full at the end of the month, then find themselves unable to pay down the debt without also paying exceedingly high interest, often for years.
However, some kinds of debt, such as a securities-backed line of credit, or SBLOC, can be helpful. They can even save or earn you money. SBLOCs are rolling lines of credit based on the value of assets in your accounts. They're excellent ways to use debt to your advantage.
How Securities-Backed Lending Works
Borrowing money by collateralizing securities held in after-tax investment accounts is called securities-backed lending. The interest rate will often be lower than other types of loans, and you'll generally get access to funds in just a few days.
SEE MORE 3 Dated Rules of Thumb Retirees Should Think Twice About
However, as with almost anything, there are caveats to taking out an SBLOC. While you can keep buying and selling securities in the collateralized account, you can't use the loaned money for other securities-based dealings, such as trading or buying. And setting up an SBLOC will make it more challenging to move those collateralized assets to a different firm.
As an example of how SBLOCs can benefit you, suppose you need $75,000 for a one-time purchase of a car or a once-in-a-lifetime vacation. A typical way to acquire it would be to sell assets in a retirement account. That presents a number of drawbacks:
First, your income for that year would increase by $75,000 and could put you in a
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