ICO Investing: How to Purchase Initial Coin Offerings

ICO Investing: How to Purchase Initial Coin Offerings

Initial coin offerings, or ICOs, are like IPOs but in the crypto space. When new cryptocurrencies make their debut on the public markets, they go through the ICO process — which is more intricate and involved than many people may believe. Given that it can pay off big to “get in early” on investments, ICOs understandably capture the attention of many crypto traders and investors.

Read on to learn more about initial coin offerings, how to invest in ICOs, where to find ICO listings, and what you should take into consideration before betting on a new crypto.

What Is an Initial Coin Offering (ICO)?

As mentioned, ICOs are similar to IPOs (initial public offerings) which mark the first time that the public can purchase a stock on an exchange. The big difference is that ICOs concern the public sale of cryptocurrencies, while IPOs concern stocks.

And just as some investors take part in IPO investing, they can likewise participate in ICO investing. That basically means buying a stock, or a cryptocurrency, as soon as it hits the market, with the hope that it increases in value.

How an Initial Coin Offering (ICO) Works

Companies go public in an effort to raise money. They’re essentially selling pieces of their ownership for cash. The same logic applies to ICOs, which are crowdfunded efforts to fund a new cryptocurrency.

As such, ICO stands for “initial coin offering,” and allows crypto investors to get in on the ground floor of a cryptocurrency startup. These investors are among the first wave piling into new crypto, and as such, stand to potentially benefit the most if (and it’s a big “if”) the crypto in question appreciates in value.

As for how an ICO actually works? It’s different from an IPO, which has a very standard process involving multiple parties and regulators. Bringing a new crypto to the market is more of a do-it-yourself process. In short, the person or team behind a new crypto outlines their plans in a white paper, explaining what the crypto is and how it’ll work.

After that, the crypto creators focus on a marketing push to get people to invest and buy into the currency. Those who opt to participate and become investors will exchange money for the new project’s coin or token.

Cryptocurrency creators collect money from some investors by making the coin available pre-ICO for sale. During this period, they typically issue coins at a discounted value, often in order to get capital to continue building out the currency.

This is, of course, a basic overview — the process can get much more granular. But this should give you an idea of how ICOs work.

Types of ICOs

Initial coin offerings can use a variety of structures to achieve their end goal: Additional financing for a crypto project. Here are a few of the main types of ICOs:

Static Supply and Static Price

An ICO involving a static supply and static price has a specific funding goal. That means that each token being sold has a preset value, and that there is a fixed supply of tokens. The tokens are then sold at the predetermined price until the supply is exhausted.

Static Supply and Dynamic Price

An ICO utilizing a static supply and dynamic pricing model does not have a specific funding goal. There is a predetermined number of tokens, however, but the value or price of those tokens can change, and consequently, the total amount of funding raised at the end of the process.

Dynamic Supply and Static Price

An ICO with dynamic supply and static pricing is one in which tokens have a predetermined value or price, but the supply is not static. Again, this would mean that there is no set funding goal, and the total raised would depend on the number of tokens sold.

3 Types of ICOs

Static Supply & Price Static Supply/Dynamic Price Dynamic Supply/Static Price
Preset token value No preset token value Preset token value
Fixed token supply Fixed token supply Undetermined token supply
Predetermined funding goal Funding goal undetermined Funding goal undetermined

How to Value ICOs

IPO valuations typically reflect careful research into the underlying company’s books and performance. But the process of valuing ICOs is different, since there is no underlying company with financial records (or history) to comb through.

As such, hype and investor sentiment represents a big underpinning of ICO valuations. Crypto assets, in general, derive their value either from functioning as cryptocurrencies, or as security or utility tokens for specific networks and systems. That makes it difficult to determine a monetary value out of the gate.

Investors typically determine the value of an ICO value based on potential uses the coin may have in the future, which could lead to price appreciation. The more hyped investors get, the higher potential values can soar, but the reverse is true as well.

Negative investor sentiment can lead to negative first-day returns for an ICO, which can impact the performance of the currency for at least six months.

That makes ICOs a notoriously risky investment. Hype men and con artists can easily take advantage of investors with little knowledge of the crypto space, and government regulators have only recently started outlining potential regulations for the industry.

Factors to Consider Before Investing in ICOs

It bears repeating: ICOs are incredibly risky — they are the opposite of safe investments. Because of that, there are some key considerations to make before putting your money on the line.

First and foremost is that investors will have little, if any protection if an ICO goes awry. As the crypto space is still largely unregulated and investors aren’t afforded many of the same protections that those in the stock market may see, there’s a real chance you could lose your money.

Finally, know that you may not receive your tokens, even if you paid for them. There are no guarantees in crypto, at least not yet, so if you’re particularly risk-averse, then ICO investing may not be for you.

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How to Buy ICO Tokens in Five Steps

Wondering how to buy ICO tokens? Follow these five steps:

Step 1: Do Your Research on the ICOs

As a crypto investor, you should always be doing some homework and research on a specific token before putting your money on the line. As mentioned, this can be tricky in crypto, since there’s limited historical data and information related to many projects out there, but you should do the best you can.

In crypto, your research usually begins with the project’s white paper; you’ll want to learn everything you can about the development team behind it, and whether it has attracted much interest from other investors. If the white paper does not have details about token’s code or security features that’s a potential red flag that may require more due diligence.

Step 2: Register for the ICO

Once you’ve found an upcoming ICO that appeals to you, sign up to take part in it. This may require some legwork, but you can track down a pre-ICO list and ICO listings on numerous crypto-focused websites.

Be aware, though, that each ICO typically has different registration procedures. So, if you’re interested, poke around to learn the appropriate procedure, and follow it as needed.

Step 3: Set Aside Funds for Payment

Next, you’ll need to prepare to actually invest when you’re ready to put some money up. This means having money set aside in order to facilitate the investment.

You’ll need to have either fiat currency, such as dollars, or some other crypto ready to make an exchange, as needed (typically, either Bitcoin or Ethereum, the two biggest cryptos). You’ll also need to have money and or crypto standing by in a digital wallet so that you can make the trade.

💡 Recommended: How to Send Bitcoin to Another Wallet

And finally, be sure that you’ve joined the appropriate or correct crypto exchange for the ICO. Some exchanges only allow investors to trade certain cryptos. You’ll want to be sure the ICO you’re targeting is listed on the exchange you’re working on.

It’s also a good idea to do a little research on any platform that you plan on joining. There are factors that make a good crypto exchange, and not all are created equal.

Step 4: Make the Exchange

This part is pretty simple: Execute the trade! The specifics here will depend on the individual ICO, exchange, and procedures.

Step 5: Receive and Store Your ICO Purchase

Ideally, after the execution of the trade, your new coins will go right into your crypto wallet (whichever of the many types you choose) for safekeeping. From there, ICO investors are largely at the mercy of the market to dictate what happens with your new investment.

It may be worth it to closely watch the ICO and other news around the new crypto, so that you can make wise decisions about when or if you should sell. One upside to ICOs compared with IPOs is that there’s no IPO lock-up period preventing sales.

How to Buy Tokens After an ICO

After a crypto token completes an ICO, it’s now available for purchase on the open market. So, if you want to buy tokens that recently made their market debut, all you need to do is buy them on an exchange or through a brokerage. The key, though, is making sure you’re using an exchange that trades the token you’re looking for.

Similar to how stocks trade on the open market following an IPO, tokens are on the secondary markets following an ICO. It’s just a matter of investors making sure they’re on the right exchange to trade them.

The Takeaway

ICOs involving bringing new crypto tokens to the market, just like an IPO brings new stocks to the market. The ICO process varies from project to project, but ICOs give investors a chance to get in early on a new or emerging crypto asset. But investors should keep in mind that ICOs are risky, and do their homework before putting their money into this type of investment.

If you’re ready to start building your crypto portfolio with ICOs or existing cryptocurrencies, a great way to start is by opening an account on the SoFi Invest® brokerage platform. You can use the app to buy cryptocurrency as well as other types of investments such as stocks, exchange-traded funds, and even IPOs.

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Who can participate in an ICO?

For most projects, anyone can participate in an ICO granted they’re registered, and have a crypto wallet and cryptocurrencies to trade with. Depending on the specific ICO, prospective investors may need to join a certain exchange to facilitate the transaction, too.

What’s the difference between an ICO and an IPO?

The main difference between an ICO and an IPO is the asset that’s being debuted. ICOs involve crypto tokens or cryptocurrencies, whereas IPOs involve stocks, or shares of companies going public.

Who can launch an ICO?

Anyone can launch an ICO, granted they know what they’re doing. Because the ICO and crypto markets are lightly regulated in the U.S., anyone with a crypto project can bring a new crypto to the market.

Is an ICO legal?

Yes, ICOs are legal. But there are some considerations to make before engaging in one. Regulators in the U.S. may consider an ICO a securities offering, and as such, could enforce securities law on those engaging in an ICO. As always, it’s best to consult with a professional about the details.

What is an ICO used for?

An ICO’s primary purpose is to generate funding for a crypto project. The project sells tokens which generates money, which can then be reinvested in the project.

Photo credit: iStock/ismagilov

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Is a $40,000 Salary Good?

Is a $40,000 Salary Good?

To answer whether a $40,000 salary is good, you need to consider your perspective. For a recent grad in a small town where the cost of living is low, that might be an annual income that pays the bills. But a $40,000 salary is not typically enough for a household to live comfortably in most parts of the United States. To put it another way, a single person can live more comfortably on a $40,000 salary, but a family — with or without children — may find it more difficult.

Rising inflation has made it more challenging to get by on $40,000 in 2022, but this salary is still far above the United States Census Bureau’s poverty threshold for families of up to six people. The $40,000 figure represents earning more than the federal minimum wage ($7.25/hour).

So is $40,000 a good salary? Well, it depends. In this article, you’ll take a closer look and learn:

•   The current American median income

•   A breakdown of a $40,000 salary

•   The best and worst places to live on $40,000

•   Tips for living on a $40,000 salary

How Does a $40,000 Salary Compare to the American Median Income?

Here’s a look at how earning a $40,000 annual income compares to that of your fellow Americans.

•   According to the U.S. Census Bureau, the median household income in 2020 (when data was gathered) just surpassed $67,500.

•   More recently, the Bureau of Labor Statistics determined that the median weekly income of a full-time worker (salary or hourly) was $1,037, or nearly $54,000 a year.

While a $40,000 salary falls short of recent BLS definitions of the median personal income, it could successfully contribute to the Census Bureau’s picture of the median household income, when combined with a second income from a domestic partner.

Could this salary be considered good? Consider the following:

•   As an individual, you may find that $40,000 is a good entry-level salary.

•   Couples living the DINK lifestyle (which stands for dual income, no kids) and who each make $40,000 would be well above the median household income. Plus, they would have the additional costs of raising children as part of their budget.

$40,000 Salary Breakdown

It can be helpful to know what a $40,000 salary translates to as a monthly budget, weekly paycheck, or even hourly rate. This may help you compare career options and budget wisely, not to mention answer that question, “Is $40K a good salary?”

Here’s how it breaks down:

•   Monthly income: $3,333.33

•   Biweekly paycheck: $1,538.46

•   Weekly income: $769.23

•   Daily income: $153.85*

•   Hourly income: $19.23**

*Based on 260 working days a year
**Based on 2,080 working hours a year

And remember: That’s before taxes. If you are single and make $40,000 a year, your federal tax bracket is at 12%, but you may also owe state, city, and even school district taxes as well. It’s important to keep that in mind as you plan and assess how to pay bills and save with this salary.

Recommended: What to Do When You Get a Pay Raise: 12 Tips

Can You Live Individually on a $40,000 Income?

It is possible to live individually on a $40,000 income. In fact, you may be able to afford the average monthly expenses for a single person and work on your saving and investing goals.

Your location will have the largest impact on how far your dollars will stretch. Areas with a lower cost of living will likely be easier to afford for an individual on a $40,000 income.

As an individual, you can help your salary go further by looking for ways to save money, like:

•   Having a roommate or renting out a room in your house if you own one

•   Cooking at home instead of eating out

•   Buying a used car or, depending on where you live, relying on public transportation

•   Finding a higher-yield savings account, ideally over 1.00% APY

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Best Places to Live on a $40,000 Salary

If you can afford moving expenses and aren’t tied to a specific location for work, you can make your dollars go further more easily in certain locations in the United States. These are places with a lower cost of living. Here are the five cheapest cities to live in the U.S. this year, according to U.S. News:

•   Hickory, North Carolina

•   Green Bay, Wisconsin

•   Huntsville, Alabama

•   Quad Cities (Davenport-Bettendorf, Iowa and Moline-Rock Island, Illinois)

•   Fort Wayne, Indiana

However, there’s more to moving than just the expenses and the job. Before packing up a rental truck, consider whether you are comfortable leaving behind friends, family, and familiar places.

Recommended: Financial Moves to Make During a Job Transition

Worst Places to Live on a $40,000 Salary

A $40,000 salary might not go far enough in a city with a high cost of living. U.S. News research indicates these are the most expensive cities to live in:

•   Los Angeles, California

•   Miami, Florida

•   San Diego, California

•   Salinas, California

•   Santa Barbara, California

And if you were expecting to see New York City on this list, don’t worry: It’s not far behind, at number nine.

Tips for Living on a $40,000 Budget

So how can you (and possibly your family) live on a $40,000 budget? It’s important to cut costs, look for deals, pay down your debt, and build up savings for an emergency.

But living on a small salary doesn’t mean you have to completely give up entertainment. Remember that it’s OK to treat yourself to the nice things in life from time to time, as long as they are within reason. Everyone needs some fun in their life.

Here are some important tips for living on a $40,000 budget:

Carefully Tracking Your Expenses

First things first, get an understanding of your current spending habits. Your bank may offer tools that make this easy to analyze or you can download apps or check websites that make this easier.

Consider what bills you have every month, whether they are on auto pay, and, if so, when do they process? (This will help you schedule your bills and avoid getting hit with late fees.) Make a list of all your recurring expenses (mortgage or rent, student loans, car payment, phone, insurance, and utilities), and then analyze how much on average you’re spending on more variable expenses like groceries, gas, clothing, and entertainment.

What can you cut? What bills can you negotiate down? Where can you reallocate money toward savings?

Recommended: 20 Commonly Forgotten Monthly Expenses

Getting on a Budget

Now that you have an idea of what you’re currently spending, it’s time to design a budget around what you should be spending.

Start by plugging in necessary monthly expenses; these are things you must pay for each month, like your home, insurance, and food. Only once you can see that these basic needs are met should you begin to budget for things like dining out or new clothes, also known as wants vs. needs.

Not sure where to start? Do some online research on how to make a budget. There are different techniques including a line item budget and the 50/30/20 budget rule.

Getting Out of Debt

As you consider how to manage daily life on a $40,000 salary, it’s wise to pay attention to the role that debt plays in your personal finances. Mortgage and student loan debt are structured to be paid off over decades, and can be considered by some to be good debt, as the interest rates are often relatively low and timely payments build your credit history. The rates on credit card debt, however, can be high (currently over 20% on new offers and 16% on existing accounts) and therefore more detrimental to your finances (and mental health). If you have serious credit card debt, it is wise to cut back expenses as much as you can so you can focus on paying off your debt.

You can tackle your debt using the snowball method or the avalanche method. You may also consider a balance-transfer credit card or a debt consolidation program, depending on your situation. A debt counselor who works for a nonprofit, like the National Foundation for Credit Counseling (NFCC ), can be helpful as well.

Saving Your Money

If you are debt-free (house, car, and student loan payments aside) and still have wiggle room in your budget after accounting for necessary expenses and a little bit of fun money, you can allocate some of your $40,000 salary toward your saving goals. These might include vacations, a house down payment, renovations, or a wedding. An emergency savings fund is often a good place to start.

Recommended: How to Save Money from Your Salary

Investing Your Money

After you have gotten a handle on your expenses, designed a budget, and opened a savings account, you might consider if there is enough leftover from your $40,000 salary for investing. This may not be possible if you live in a city or state with a high cost of living.

How can you start investing? If your employer offers a 401(k) match, consider taking advantage of that. It’s basically free money, so contribute enough to snag it.

You can also look for automated investing opportunities so you don’t have to worry about building a portfolio from scratch.

Managing Finances With SoFi

If your $40,000 salary is paid via direct deposit, think about opening a high interest bank account. With direct deposit, you can get an array of perks from our Checking and Savings account. You’ll spend and save in one convenient place, plus you’ll earn a competitive rate up to 3.25% APY and pay no fees, which can help your money grow faster. What’s more, qualifying accounts can get paycheck access up to two days early.

Make the most of your money with SoFi.


Can you live comfortably on $40,000 a year?

Individuals can often live comfortably on $40,000 a year. Families, however, may struggle with this salary, especially in areas with a higher cost of living.

What can I afford making $40K a year?

If you are an individual living on $40,000 a year in an area with a low to moderate cost of living, you can afford typical monthly expenses like food, housing, and utilities and still have enough for some fun expenditures, like entertainment. If you are frugal and build a budget, you may also be able to pay down debt, build your savings, and even invest a little.

Is $40,000 a year considered middle class?

According to Pew Research, a middle-class family of three makes between $56,000 and $156,000. Families of that size who bring in $40,000 a year would not be considered middle class. However, an individual making $40,000 a year would likely qualify as middle class.

Photo credit: iStock/Prostock-Studio

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SoFi members with direct deposit can earn up to 3.25% annual percentage yield (APY) interest on Savings account balances (including Vaults) and up to 2.50% APY on Checking account balances. There is no minimum direct deposit amount required to qualify for these rates. Members without direct deposit will earn 1.20% APY on all account balances in Checking and Savings (including Vaults). Interest rates are variable and subject to change at any time. These rates are current as of 11/3/2022. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet
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11 Ways to Make Money Online Without Selling Anything

11 Ways to Make Money Online Without Selling Anything

When you think about making money online, chances are, you visualize selling something, whether it’s beaded necklaces you make, electronics you don’t use anymore, or a cool product you cooked up. But there are many ways to make money without offering a product, which can eliminate a lot of barriers to entry, along with the hassles of order fulfillment and shipping.

It’s not a cinch, but if you have a clever idea or some expertise, you can make money online without selling anything. For example, if you have an Instagram account with loads of followers, you might earn cash by creating a YouTube channel sharing the secrets of your social media success.

Think about where your strengths and skills lie: Is it coding? Then you might consider building an app. Do you know how to reach out to people and coalesce them into an active, supportive community? Then you might succeed in building a membership website.

Ready to find out how to make money with a website without selling anything? There’s inspiration ahead.

Is It Possible to Make Money Online Without Selling a Product?

Fortunately, there are many ways to make passive income online without manufacturing and selling a product in the traditional sense. If you dread the idea of renting a warehouse or packing up and shipping items, this will be good news.

For example, many influencers on YouTube make money simply by providing informational videos that people find valuable. Once they have a following, they make money through YouTube ads that run on their channel. Did you know, for instance, that YouTuber Mr. Beast set a new high-earning record recently of $54 million? While that’s hardly a typical achievement, it does show that the sky is the limit, as the saying goes.

Beyond YouTube, there are plenty of other ideas for how to make money with a website without selling anything. You might translate your tech knowledge and experience into building an app, or you could create a blog based on your favorite hobby that resonates with a particular audience.

11 Ways You Can Make Money Without Selling Anything

Ready to dig into some specifics? From dropshipping to streaming, the following are 11 ways people make money online without actually manufacturing or selling products.

1. Start Dropshipping

Dropshipping is one way to make money with a website without selling anything. Dropshippers sell products to customers, but they do not own or stock them. For the dropship business model, a customer places an order, and the dropshipper forwards the order to the supplier for a fee. The supplier then takes care of the shipping.

In essence, the dropshipper is the middle man. You don’t need to buy any items or manufacture anything yourself. And it can help you bring in some cash: One recent survey showed that dropshippers earn almost $20 an hour.

Recommended: 11 Benefits of Having a Side Hustle

2. Launch a YouTube Channel

A YouTube channel can be lucrative once you have 1,000 subscribers. At that point, YouTubers can monetize their channel by accepting ads. How do you get 1,000 subscribers? By providing content that people want to see.

That could be showing off your cake decorating skills, your super cute Pomeranian puppy, or your ability to do your own taxes quickly and correctly. Choose a niche where you have expertise and create compelling content on that topic. Use clever headlines that will draw people to your channel, plus keywords to optimize them for YouTube searches and help you gain traction. Keep viewers engaged by producing a series of videos on a topic so that they continue to tune in.

Recommended: Can You Make a Living on Social Media?

3. Write a Blog or Podcast

Have ideas, intel, and opinions you’d like to share? Why not start a blog, which is similar to starting a YouTube channel. The cost of running a blog can be minimal, and it can be an exciting way to share your passions in life. You can create content on a niche topic that people are curious about and that you love. It could be travel, DIY advice, fashion, fitness, or finance.

If you are good, you can build a following. Once your following is big enough, companies will pay you to promote their products or services on your blog through ads and links. Brands may even sponsor you to write about them or invite you to write blogs for their own sites.

4. Create a Membership Website

If you find demand for your content, you could build a website for subscribers only and charge for the membership. The idea is to build a community of like-minded people who want to share knowledge and access exclusive content. A paid membership could offer videos, webinars, other educational products, and the ability to interact with other members.

Membership web-builder software can help you build a site and wrangle your followers, or you could use a third party to do it for you. The software allows you to register new members; process monthly dues, donations, and event payments; update member profiles; send emails to members about upcoming events, and send invites. A simple website builder will run from $20 to a few hundred dollars per month, and help you get your site up and running and hopefully growing.

Recommended: 25 Tax Deductions for Freelancers

5. Try Freelance Work

You probably have had some work-from-home experience due to the pandemic. You might want to transition even more to remote work. Some careers can be transferred to the digital environment. For example, writers, teachers, designers, and coders can all learn how to make money from home. There are marketplaces for freelancers, such as Fiverr and Upwork, and you can establish a website of your own to pull in work.

There are also many job boards for freelancers, such as Flexjobs.com. Freelancers need to build a portfolio of work, which may require taking on lower-paying jobs at first as you work your way up.

Recommended: 15 Low-Cost Side Hustles

6. Become a Writer

Being a writer is an aspiration for many people, and there happens to be a huge market for website content. Many companies want to create informative blogs with SEO-optimized articles that will drive traffic to their websites. If you have expertise and knowledge in a niche area, you could write engaging articles for companies in that niche. Companies want ghostwriters, but there are also opportunities for bylined articles. Look for writing jobs on job boards like Flexjobs.com and Upwork.

7. Be a Product Tester

This is a fun one: You can make money online without selling by being a product tester. Brands often need people to try out their products to see how they rate with consumers. In return for their time and feedback, product testers may receive payment in the form of cash, merchandise, and gift cards.

Popular products for testing include toys, food, electronics, beauty products, household products, baby products, clothes, and websites. These gigs may pay about $25 an hour and can sometimes feel like play time.

You might also take surveys and provide feedback on marketing ideas online, as well. Sign up with a market research firm like I-Say by Ipsos, Opinion Outpost, and Branded Surveys to get started.

8. Accept Micropayments

Looking for more ways to make money online without selling stuff? Let’s say you write a blog that benefits a community. For example, you might be someone on the autism spectrum and blog about your experiences for a supportive audience. You can use a free app like “Buy Me a Coffee” to accept micropayments on your blog; this allows people who want to show their appreciation to send you a bit of money. Readers click on a widget on your blog to donate a few dollars to your site.

9. Set Donation Requests

One step up from accepting micropayments is to request donations directly. An example is Wikipedia, which intermittently asks its visitors to donate to fund the site’s research. Another example is virtual tip jars that appear on websites. Basically, it’s a way to monetize a website. You can collect feedback from engaged users at the same time to better understand what visitors would like to see on your site.

10. Create an App

Even if you are not a coder or app developer, you might have a great idea for an app that would make people’s lives simpler, better, or just more fun. Once you have an idea, a market that you’re targeting, and a brand concept, you can hire an app creator to do the coding for you. Once you have the app, add it to the App Store or Google Play. Start with a free app, and if it is a success, you can offer add-ons or premium features for a fee.

Recommended: How to Pay for Coding Bootcamps

11. Monetize a Twitch Channel

Chances are, you’ve heard of Twitch, the streaming platform that has expanded from gaming to a variety of content types, such as sports and entertainment. Still, gaming is its heartbeat, and Twitch streamers can monetize their love for the platform by sharing their gameplay with fans and subscribers who can hear and watch them live.

Streamers can gain a sizable following by providing consistent entertainment, and they can then sell products and Twitch ads. They can also land brand sponsorships, obtain fan donations, and sell subscriptions. Of course, not everyone will be a success at this, but those with the right skills and personality can thrive. For those who gain a real following, earnings can be in the $3,000 to $5,000 a month range if working 40 hours a week.

How Making Money Online Can Help You on Your Financial Journey

You might not become a billionaire by choosing an online gig, but you can certainly supplement your day job or help with your college expenses. Making money online is flexible, and you can leverage your expertise and your niche. Start small and see where it leads.

Recommended: How to Earn Residual Income

The Takeaway

How to make money online without selling anything comes down to creative thinking and a will to experiment. It’s actually a very accessible marketplace for anyone; you can avoid the typical startup costs en route to making a profit. Plus, you can work from home and tap your particular skills, whether that means creating fitness videos or developing an app.

3 Money Tips

  1. When you overdraft your checking account, you’ll likely pay a non-sufficient fund fee of, say, $35. Look into linking a savings account to your checking account as a backup to avoid that, or shop around for an online bank that doesn’t charge you for overdrafting.
  2. If you’re faced with debt and wondering which kind to pay off first, it can be smart to prioritize high-interest debt first. For many people, this means their credit card debt; rates have recently been climbing into the double-digit range, so try to eliminate that ASAP.
  3. When you feel the urge to buy something that isn’t in your budget, try the 30-day rule. Make a note of the item in your calendar for 30 days into the future. When the date rolls around, there’s a good chance the “gotta have it” feeling will have subsided.
Better banking is here with up to 3.25% APY on SoFi Checking and Savings.


Is it hard to make money online?

How to make money online without selling products is not difficult as long as you pick the right niche. It helps to choose an activity where you have an interest and skills. You also need to be creative if you want to scale. Some tenacity and determination will help when you experience a lull or want to get to the next level and grow organically.

What is a great way to learn skills to make money?

There are so many online and offline resources where you can learn skills. If you are interested in programming, you can learn coding languages online. If you are interested in marketing, you can take a course and get certified in Google Analytics and Google Ads. YouTube and webinars can help you train up; just do your research and make sure the so-called expert has solid credentials.

Do donation requests work?

Donation requests work if people value what you are doing. There are quite a few scams out there, and people are becoming more wary. However, if you can establish a following and provide content of value, you’re onto something. The trick is to engage people by connecting them to a community that means something to them.

Photo credit: iStock/Eva-Katalin

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2022 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
SoFi members with direct deposit can earn up to 3.25% annual percentage yield (APY) interest on Savings account balances (including Vaults) and up to 2.50% APY on Checking account balances. There is no minimum direct deposit amount required to qualify for these rates. Members without direct deposit will earn 1.20% APY on all account balances in Checking and Savings (including Vaults). Interest rates are variable and subject to change at any time. These rates are current as of 11/3/2022. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet

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13 Great Haggling Tips

13 Great Haggling Tips

In the United States, people tend not to bargain too much: A price is a price, period. Yes, when you are bidding on a house or negotiating the price of a car, there is typically a bit of give and take, but otherwise, not so much. In other parts of the world, however, haggling in shops and markets is an indelible part of the culture.

Maybe American consumers should borrow this global tradition. Even here in the States, haggling can result in significant savings on electronics, household goods, hotels, and clothing. Also, haggling is really about the art of negotiation, and successful haggling can work wonders for your confidence and business savvy.

Read on to learn:

•   How to haggle

•   Where to haggle

•   The pros and cons of haggling

Then, read 13 clever tips for getting what you want at the price you want to pay.

What Is Haggling?

Haggling is a way to bargain. It’s a process of negotiation between the buyer and the seller. While almost everyone would agree on the importance of saving money, different cultures have different approaches to haggling. For example, westerners are often unaccustomed to haggling, but in less developed countries of Southeast Asia, for example, bargaining and haggling is expected. Locals will engage in a back and forth on price for everything from fresh food in markets to hotel prices in order to save money.

Haggling can take some practice because it requires a measured approach and a strategy. The more you haggle, the more successful and confident you become at it. What’s more, as you build your haggling skills, you’re likely to unlock more discounts. In fact, many people enjoy haggling and find it to be an easy way to save some money.

Recommended: 15 Creative Ways to Save Money

How Does Haggling Work?

If you’re wondering how to haggle successfully, let’s consider a specific example. Imagine you have your eye on a new car. The price of the car is $25,000, but you only have a budget of $22,000. To try to negotiate a price of $22,000, first determine if $22,000 is a fair price for that car. Look up the make, model, and year in Kelley Blue Book and check to see at what price other sellers are listing the same exact car.

If you determine that $22,000 is a fair price, a savvy haggler would offer a somewhat lower price, perhaps $20,000. At the same time, the buyer would make a case as to why their offer is fair. They might point out damage to the paintwork or worn tires. The seller may counter the buyer’s offer with $24,000, to which the buyer responds with $21,000. Eventually, the two parties may meet somewhere in the middle and agree to the price of $22,000. At least, that’s the theory of how haggling works.

Places Where You Can Haggle

Haggling, or negotiating, is acceptable in many contexts, not just when buying a car, a home, or in salary negotiations. Here’s a list of other places to haggle:

•   Uncommercialized markets and craft fairs

•   Retailers

•   Suppliers

•   Resale platforms and dealers

•   Appliance repairs

•   Home improvement services

Places Where You Likely Cannot Haggle

Haggling is not socially acceptable in many commercial enterprises. Here’s where you typically should not to haggle:

•   Many commercialized businesses

•   Restaurants

•   Supermarkets

That said, if you were at a Target or a department store, and were trying to buy an item that is a floor sample, is damaged (scratched or torn, say), or has some other reason that might merit a price reduction, it’s fair to politely try to haggle your way to a discount.

Advantages of Haggling

The obvious advantage of haggling is paying less for something you want, but there are a couple of other pros as well.

•   For sellers, haggling may allow them to sell more products and yield better returns.

•   Haggling is a way to practice negotiation skills and build confidence.

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13 Money Saving Haggling Tips

Now, dive into the details on how to haggle. Here are 13 more tips on how to approach haggling that can help you save money.

1. Adopt a Strong Mindset

Learn to control your compulsive or impulsive spending. If you feel as if you “have to have” an item, be it a car or a handbag, it will be even harder to resist a high price or a bad deal.

Adopt a strong money mindset and know the difference between needs and wants. Tell yourself you won’t overpay, regardless of how badly you want the deal to work out. You can always find something similar at a better price.

2. Do Your Research

What is a good price for a purchase you’re planning on making? Before you enter into negotiations, you should know the item’s market value. Look up other similar items to see what they are going for. In the case of a car, refer to the Kelly Blue Book. For other items, an online search should yield comparable items with prices to inform your decision.

3. Consider Other Factors and Items in Your Haggling

How to bargain effectively can call for creative thinking. For example, if you are buying a car, you could offer cash to the seller instead of paying in installments. Or you might consider trading an item you have with a seller in order to secure the item you want.

4. Have a Target Price in Mind

It can help to know your haggling limits in advance. In the example of a car negotiation given earlier, the buyer had a target price in mind that they kept under wraps. They attempted to reach agreement at the desired price with the seller by first offering a lower price than they were really willing to pay. Then, they and the seller gradually came to a mutually satisfactory price. Having a strategy like this when haggling can help you avoid the risk of paying more than you want to.

5. Let the Seller Know Your Budget

Alternatively, a haggling tactic can be to let the seller know your budget at the outset. For example, you might say, “I love that rug but I see that it’s $750, and I can only pay $600. Is a deal possible?” That way, you are taking control of the situation, and the seller can take it or leave it.

6. Find Out the Condition of the Item

Just because you’re haggling, it doesn’t mean that you drop all of your usual smart-shopper moves. Don’t hesitate to inquire about the item in detail; it’s important to ask questions before making a purchase. Its condition is critical to the item’s value. You may be able to use any blemishes or wear and tear to negotiate a lower price.

7. Be Confident

Be direct about the fact that you are negotiating and are looking for a discount. Approach the seller with confidence, rather than apologizing for trying to get a better price. This can give the impression that you know what you are talking about and are serious. A seller may well be more likely to consent to a confident buyer’s request or offer.

8. Avoiding Insulting the Seller; Don’t Lowball

When haggling, always respect the other party. Lowballing a seller can be insulting because the implication is that you are not taking them seriously or you think their merchandise is wildly overpriced. Have a good idea of the market value of an item before you make your lowest offer by researching other similar items and their prices.

One rule of thumb is not to expect a discount of more than 25% when haggling. However, there are some forums (like eBay’s “Best Offer” listings or on Poshmark) where you might get lucky with an offer of closer to 33% off the listed price.

9. Time it Right

Many salespeople have monthly sales quotas, and, as the end of the month approaches, they may be more inclined to accept a lower price. To find the best deals, hold off on haggling until the end of the month. Also, sellers may want to move inventory at the end of a season or if the item is going out of style. If your seller wants to get rid of inventory, you are more likely to get a better deal.

10. Make Life Easy for the Seller

Here’s another trick for how to bargain effectively: Let the seller know that you can make the deal easy and quick for them. Explain that you’ll take possession of the item immediately, or that you can pay cash. The less work the seller has to do to move inventory and the less a transaction costs them, the more inclined they will be to accept your offer.

11. Turn on the Charm

A little flattery works wonders. Believe it or not, part of knowing how to negotiate a better deal involves being as polite and friendly a customer as possible. Be interested in the person you are talking to and compliment them on their business. Another good strategy is to listen more and talk less. Rather than asking questions that require a yes or no answer, ask open-ended questions. For example, instead of asking “Can I make you an offer?” ask “How flexible are you to negotiation?” In addition to getting the seller to engage, you learn more about their needs and are in a stronger position to bargain.

12. Know When to Walk Away

Haggling won’t always work in your favor. Be prepared to throw in the towel if the seller does not agree to your final offer. There’s no point going in circles or thinking if you wait long enough, the seller will relent. And don’t let any frustration or temper come into play.

Sometimes, it’s best to just walk away. And you never know: Some sellers may see you leaving and wind up taking your best offer after all, rather than lose the deal.

13. Don’t Take Things Personally

Haggling is simply business. It is not a reflection of the buyer or the seller. If you don’t reach agreement on a price for an item, chalk it up to experience. People don’t always agree on things, and nor should they. Don’t let feelings of failure creep into the picture.

The Takeaway

Haggling is the process of negotiating a price for an item or service. Except for situations like negotiating a house purchase or bargaining down the price of a new car, when some back-and-forth is a given, Americans tend not to be hagglers. However, there may be plenty of situations when you can haggle and get a better deal, whether on a floor model at a big box retailer or a vintage chair at an antiques fair. By knowing the right polite haggling moves, you may be able to snag some satisfying discounts.

Better banking is here with up to 3.25% APY on SoFi Checking and Savings.


Is haggling illegal?

Haggling is not illegal, but in the United States, there are contexts where haggling is not socially acceptable. These include commercial businesses, such as restaurants and supermarkets.

Is haggling frowned upon?

Haggling isn’t necessarily frowned upon, provided it’s done politely and in the proper context. In some cultures, it is even expected and part of the buying experience. However, lowballing is universally considered insulting. A rule of thumb for how to bargain is to never offer less than 25% percent of the price tag.

Can you return something you haggled over?

If an item does not meet your expectations, even if you managed to get it at a discount price, you can try to return it.The terms of the sales agreement, if any, will outline the legal obligations of the seller. If there is no written agreement or receipt with returns stated, the seller is under no obligation to accept the return or to give you your money back.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
SoFi members with direct deposit can earn up to 3.25% annual percentage yield (APY) interest on Savings account balances (including Vaults) and up to 2.50% APY on Checking account balances. There is no minimum direct deposit amount required to qualify for these rates. Members without direct deposit will earn 1.20% APY on all account balances in Checking and Savings (including Vaults). Interest rates are variable and subject to change at any time. These rates are current as of 11/3/2022. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet
SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2022 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.

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What Is a Luxury Item and Tips for Budgeting for One

What Is a Luxury Good?

Luxury goods are sometimes called the finer things in life. Think about those fancy sports cars, watches, handbags, shoes, and jewelry that can cost a mint. Those beautiful objects of desire are not at all necessary to support basic human needs, but they may make life a lot more enjoyable.

Demand for luxury goods is typically driven by perceived value (that is, being a status symbol) as much as product quality and design. Brand awareness is an important aspect of the luxury market. These high-end items from exclusive brands are expensive, putting them out of reach of many consumers, which can add to their allure.

If you’re simply curious about luxury goods or contemplating buying some, read on to understand what makes them special. You’ll learn:

•   What is a luxury good?

•   What makes luxury items different from other goods?

•   Examples of luxury goods.

•   The pros and cons of buying luxury items.

•   How to afford luxury goods.

What Makes a Luxury Good ‘Luxury’?

Luxury items are defined by their exclusivity and higher cost, which limits access to them. To put it simply, they are expensive! Once a luxury item becomes more readily available at a lower price point, it may lose its appeal, and demand wanes.

Different cultures around the globe have varying tastes about what luxury goods are. That is, what is considered a highly desirable luxury good in one society may not be as valuable in another. However, there are brands that have become international icons of living well; you’ll learn more about them shortly.

Luxury goods are linked to the economics term “conspicuous consumption,” which occurs when consumers buy higher priced goods to display their wealth and class status. People who want to publicly communicate their economic and social status will buy luxury goods that signal that message. Purchasing luxury goods is typically tied to a consumer having more expendable cash. The item may not exactly be affordable given their income, but it could be more accessible as a splurge as their earning power rises.

Recommended: Questions You Should Ask Before Making an Impulse Buy

Examples of Luxury Items

What exactly is a luxury item? There are lots of examples in the $300 billion industry. Luxury products have traditionally included aspirational items, such as:

•   Yachts

•   Top-of-the-line cars

•   Fine and antique furniture

•   Art

•   Furs

•   Watches

•   Jewelry

•   Designer clothing and handbags

•   Wine

•   State-of-the-art electronics

•   Cosmetics and fragrances

You’ll likely see some familiar names in the luxury goods market. Many companies have established themselves as luxury brands with their exclusive products.

Some of the top, recognizable luxury brands include:

•   Porsche

•   Ferrari

•   Chanel

•   Hermes

•   Balenciaga

•   Alexander McQueen

•   Louis Vuitton

•   Burberry

•   Gucci

•   Cartier

•   Tiffany & Co.

•   Rolex

•   Dior

•   Prada

•   Bulgari

When you see those names when shopping, you probably are looking at what are known as luxury items.

Recommended: 39 Passive Income Ideas to Build Wealth in 2023

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Pros of Purchasing Luxury Goods

If you’re looking at purchasing a luxury item for the first time, there’s more to it than its price tag. Purchasing a luxury item can bring other benefits. These can include:

•   Status

•   Better quality products

•   Better service at retail locations or service centers

•   Better resale value than other goods

•   Strong value appreciation in some goods (such as jewelry or art)

•   Exclusivity

Recommended: Different Ways to Earn More Interest on Your Money

Cons of Purchasing Luxury Goods

Conversely, purchasing a luxury item isn’t always a good idea. Some of the downsides to purchasing luxury goods include:

•   High cost

•   Money used to purchase a luxury good could be used elsewhere

•   Can lead to more conspicuous consumption

•   Depreciation on certain goods may be high

•   Can undermine confidence; some people wind up feeling inauthentic (as if they are “faking it”) after spending a lot of cash on luxury items

Quick Money Tip:When you overdraft your checking account, you’ll likely pay a non-sufficient fund fee of, say, $35. Look into linking a savings account to your checking account as a backup to avoid that, or shop around for an online bank that doesn’t charge you for overdrafting.

Luxury Goods vs Normal Goods: What’s the Difference?

Buying normal goods means you are buying items whose cost increases at the same rate as your income increases. If you, say, shopped for clothing at garage sales to save money at the beginning of your career, and now you spend money on clothing at a traditional retailer, your consumption increased to the higher-priced clothing at the same rate as your income increased. These goods are within a reasonable range given your earning power.

Compare that with what is a luxury good. In this case, the cost of consumption increases, but not at the same rate as income. The price tag for a luxury item is often exponentially more than could be afforded by one’s salary raises.

Luxury Goods vs Inferior Goods: What’s the Difference?

According to the principles taught in economics class, an inferior good is one whose consumption decreases as a consumer’s income increases. If you ate ramen in college, for example, but no longer consume them now that you’re making more money in your career, that pack of noodles is an example of an inferior good. Your consumption of it decreased as you made more money.

Typically, with luxury goods, consumption increases with a higher income; with an inferior good, consumption decreases with a higher income.

Tips for Affording a Luxury Item

If you’re gunning for that aspirational luxury item and you weren’t born with a hefty trust fund, you’ll need to adopt some stellar financial habits to snag one (or more) of these pricey items. You can learn how to afford luxury items without paying full price for them. Here are some tactics to try.

Saving for a Luxury Good

Saving up for a luxury item and then paying in cash can be a good strategy. Whether the object you’re craving is a handbag or a sports car, you won’t feel guilty about spending money when you’ve stashed the money away for it and can pay without creating credit card debt. If you automate your savings for the luxury item, you may well reach your goal without too much effort.

Waiting for Sales

Even luxury goods can go on sale, though perhaps less often than with lower-priced items. Even if you miss their sales, you may be able to find some premium items discounted at outlet stores.

Recommended: Tips for Overcoming Bad Financial Decisions

Avoiding Trends

When saving for that luxury item, it can be wise to avoid trendy luxury products. Those probably won’t stay in style for long, and if you’re making a major purchase, it can be smarter to spend your money on things that will last.

Recommended: Tips to Stop Overspending

Renting Luxury Items Over Buying

You might want to consider renting a luxury item rather than paying loads of money to own it. For instance, you could lease a luxury car for a while and see if you truly love it. And there are many businesses that rent designer clothing and handbags, such as Rent The Runway and Bag Borrow or Steal. That can give you a taste of luxury at a more affordable price point.

Lowering Your Other Expenses

If you’re really set on affording a luxury item, see where else you can cut back on spending. Knowing you’d rather own a luxury car than go out every weekend can help you feel more motivated to cut back on dining and entertainment expenses.

Buying Pre-Owned

Another way to afford luxury items is to buy ones that have been pre-owned. From BMWs to Louis Vuitton handbags, there’s a large marketplace for gently used posh goods. How to afford luxury items can be a matter of being the second owner rather than the first of the item you desire.

The Takeaway

Now that you know what a luxury good is, you probably realize that such items are usually quite costly. They can also be of superior quality and retain their value better. Owning them can also be an ego boost and a source of pride.

Saving to obtain luxury goods can help you cultivate good financial habits, which in turn can help you reach other goals and build wealth.

Better banking is here with up to 3.25% APY on SoFi Checking and Savings.


Why do people buy luxury goods?

Luxury goods can signal exclusivity, wealth, and a higher social status. People who buy luxury goods typically want to communicate this to themselves and others. Also, luxury items are often very well made and can last for many years.

Do luxury goods have high resale value?

Luxury goods, especially when in excellent condition, can have a high resale value. Some brands, such as Chanel and Hermes, have a better resale value than others. Jewelry by well-known brands (like Tiffany & Co.) tend to hold their value well too.

Does luxury always mean expensive?

A luxury item is typically highly desirable and very exclusive, which is usually tied to the amount of money it costs to obtain it. However, many luxury brands produce cheaper alternatives of their signature products to sell to more consumers at a more affordable cost. The Coach outlet stores are one example that luxury items don’t always have to be expensive, and the Mercedes A220 starts at about $35,000.

Photo credit: iStock/MoustacheGirl

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2022 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
SoFi members with direct deposit can earn up to 3.25% annual percentage yield (APY) interest on Savings account balances (including Vaults) and up to 2.50% APY on Checking account balances. There is no minimum direct deposit amount required to qualify for these rates. Members without direct deposit will earn 1.20% APY on all account balances in Checking and Savings (including Vaults). Interest rates are variable and subject to change at any time. These rates are current as of 11/3/2022. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet

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