What Is Lifestyle Creep? Lifestyle creep occurs when an individual’s standard of living improves as their discretionary income rises and former luxuries become new necessities. The rise in discretionary income can happen either through an increase in income or decrease in costs. A hallmark of lifestyle creep is a change in thinking and behavior that
What Is a Lifestyle Fund? The term lifestyle fund refers to an investment fund that manages a diversified portfolio across assets with varying risk levels. These funds determine the best assets for investors based on their risk tolerance, age, and investment goals. They are generally suited for long-term investing—especially for those who want a savings
What Is Lifestyle Inflation? Lifestyle inflation refers to an increase in spending when an individual’s income goes up. Lifestyle inflation tends to become greater every time an individual gets a raise and can make it difficult to get out of debt, save for retirement, or meet other big-picture financial goals. Lifestyle inflation is what causes people
What Is a Lifetime Cap? The term lifetime cap refers to the maximum interest rate allowable on an adjustable-rate mortgage (ARM). This cap applies to the entire duration of the mortgage. Lifetime caps limit the risks associated with the substantial interest rate increases over the life of the mortgage for the borrower, but can generate interest
What Is a Lifetime Payout Annuity? A lifetime payout annuity is a type of retirement investment that pays out a portion of the underlying portfolio of assets for the life of the investor. Such annuities are sold by insurance companies and some financial institutions. When an investor buys an annuity, they can pay a lump sum amount
What Are Lifetime Reserve Days Lifetime reserve days are the number of hospital days that an insurance policy will cover above the number of days allotted per benefit period. These days are capped at a certain number over the entire lifetime of the policy. They do not have to be used during a particular hospital stay.
What Is the London International Financial Futures and Options Exchange (LIFFE)? The London International Financial Futures and Options Exchange (LIFFE) is the former name of the largest futures and options exchange in London, England. It has been renamed the ICE Futures Europe after a series of mergers and acquisitions (M&A) left it under the ownership
What Is Last In, First Out (LIFO)? Last in, first out (LIFO) is a method used to account for inventory that records the most recently produced items as sold first. Under LIFO, the cost of the most recent products purchased (or produced) are the first to be expensed as cost of goods sold (COGS), which
What Is a LIFO Liquidation? A LIFO liquidation is when a company sells the most recently acquired inventory first. It occurs when a company that uses the last-in, first-out (LIFO) inventory costing method liquidates its older LIFO inventory. A LIFO liquidation occurs when current sales exceed purchases, resulting in the liquidation of any inventory not
What Is LIFO Reserve? LIFO reserve is an accounting term that measures the difference between the first in, first out (FIFO) and last in, first out (LIFO) cost of inventory for bookkeeping purposes. The LIFO reserve is an account used to bridge the gap between FIFO and LIFO costs when a company uses the FIFO method to track
