Blog

Definition of a Divestiture A divestiture is the sale, transfer, or disposal of a company asset, business unit, subsidiary, or investment. It’s the opposite of an acquisition. While companies often grow by acquiring more, a divestiture is about trimming the fat, refocusing, or raising cash. Think of it as a business shedding a layer it no longer needs—like a snake slipping out of old skin so it can grow.

Definition of Limited Liability Company (LLC) A Limited Liability Company (LLC) is a type of business structure in the U.S. that blends the simplicity of a sole proprietorship or partnership with the protection of a corporation. Think of it as the middle ground—like ordering a fancy burger but skipping the extra calories from fries.

modify, amend, or cancel it—except under very rare circumstances and usually only with court approval or the beneficiaries’ consent. This is the key difference from a Revocable Trust, which you can tweak or dissolve whenever you like. With an irrevocable trust, the assets are no longer legally yours—they belong to the trust, managed by a trustee for the benefit of your chosen beneficiaries.

Due diligence is all about doing your homework before making a financial decision. Think of it as a deep dive into the details.

Debt-to-income ratio is a financial benchmark used by creditors to gauge a borrower’s ability to manage monthly payments and repay debts.

Annual Percentage Rate (APR) is a measure that captures the total cost of borrowing, expressed as an annual percentage.

Bankruptcy is a legal procedure for individuals or businesses that cannot repay their outstanding debts.

Foreclosure is the legal process in which a lender takes possession of a property when the homeowner fails to make their mortgage payments.

A Credit Score is a number that tells lenders how likely you are to pay back money you borrow, based on your past financial behaviors.

A balance sheet millionaire is an individual whose net worth, or total value of their assets minus liabilities, is at least $1 million.

A mortgage is a financial bridge that lenders offer to help you buy your home now, allowing you to pay it off over 15 to 30 years.

A recession is a significant decline in economic activity that lasts for months or even years.

Deflation is a decrease in the general price level of goods and services. It's the opposite of inflation.

Your FICO score is a numerical summary of your credit report, a snapshot of your creditworthiness.

Debt is money borrowed by one party from another. Think of it like a financial IOU.

Credit is the ability to borrow money or access goods or services with the understanding that you'll pay later.

Equity represents your share or interest in an asset after all debts associated with that asset are paid off.

Net Worth is the difference between what you own (your assets) and what you owe (your liabilities).

Liabilities are just the debts or IOUs we owe to other folks or companies.