Financial Topics Archives | Page 558 of 784

Nov

2022

Sing and Save: Our Top Songs About Money

By Timothy Moore | Budgeting & Goals, Family Finances, money | Comments Off

Music offers a surprising array of benefits to listeners. Its primary aim is entertainment, but it also allows for artistic expression. Some songs are energizing, some are relaxing, and others, research suggests, can even improve physical and emotional health and manage pain.

But did you know music can also teach us about money? While you shouldn’t comb your Spotify playlists for stock market advice, you might find a few financial nuggets of wisdom embedded in your favorite songs.

Here’s a selection of songs from various eras and genres that are all about money, whether saving or spending it. They might nudge you to think more about your finances and relate to other people’s struggles and triumphs with their cash.

So if you’re like Rihanna and you’ve got your mind on your money, check out these 13 songs about finance that span the decades.

13 Songs About Saving Money

In each finance song on this list (arranged chronologically by release year), the artist shares a different viewpoint on personal finance. Some singers glorify money; others show us that there are more important things in life. Some singers tout the independence that money gives them and the hard work that got them there; others dream of making more.

No matter what money lessons you take from the music, one thing’s for sure: These 13 songs about saving money (or spending it) will be stuck in your head all day.

Recommended: Tips for Better Money Management

1. “Pennies from Heaven” by Bing Crosby (1973)

The oldest finance song on our list comes from the legendary Bing Crosby and the film of the same name. “Pennies from Heaven” reflects the general feelings of the time. Released during the Great Depression, the song yearns for the financial freedom of the Roaring ’20s yet provides hope that the country will weather the storm.

2. “Sittin’ in the Sun” by Louis Armstrong, Jack Pleiss, & His Orchestra (1953)

The next saving money song on our list comes from the legendary Louis Armstrong. “Sittin’ in the Sun” is so powerful that it made it on an album of his greatest hits. Armstrong paints a simple picture of sitting in the golden sunshine and counting one’s money. He speaks of the comfort of knowing what’s stored in his bank account.
Though Armstrong likely had a different point to make, his song is a reminder that having an emergency fund socked away is never a bad idea.

3. “Can’t Buy Me Love” by the Beatles (1964)

One of the Beatles’ biggest hits takes a more scathing view of money. Sure, it can buy you diamond rings, as Paul McCartney points out. But the one thing money can’t get you — no matter how much of it you have — is love. It’s a simple but crucial lesson: Money’s necessary for survival and can get you nice things, but the most important things in life can’t be bought.

Recommended: Common Misconceptions About Money

4. “Money” by Pink Floyd (1973)

A well-covered hit from the Dark Side of the Moon album, “Money” starts with the “ka-ching” and register sounds of retail transactions. It’s a haunting sound once you know the lyrics that soon follow: The song serves as a reminder that money and greed can be bad. The lesson to walk away with? While it’s important for your family’s safety, health, and comfort to have money, don’t forget to share with those less fortunate and to take time for more important things.

Quick Money Tip: If you’re saving for a short-term goal — whether it’s a vacation, a wedding, or the down payment on a house — consider opening a high-yield bank account. The higher APY that you’ll earn will help your money grow faster, but the funds stay liquid, so they are easy to access when you reach your goal.

5. “Money, Money, Money” by Abba (1976)

“Money, Money, Money” by Abba paints a picture of a girl who works hard but is still struggling with her bills.
She hopes to land a rich guy because it’s “always sunny in a rich man’s world.” But if that doesn’t work, she contemplates going to Vegas or Monaco and gambling her way to wealth. Perhaps not the wisest of financial plans, but with a fun rhythm and lighthearted lyrics, it’s easy to see why this song is one of Abba’s biggest hits.

Recommended: How to Get Caught Up on Late Payments

6. “The Gambler” by Kenny Rogers (1978)

An example of brilliant storytelling, “The Gambler” could have several deeper interpretations — and may spark a debate between listeners as to whether the titular gambler dies at the end. On the surface, though, it’s a killer song about two men on a train, one of whom is a gambler sharing important advice: “You’ve got to know when to hold ‘em, know when to fold ‘em, know when to walk away, and know when to run.”

7. “She Works Hard for the Money” by Donna Summer (1983)

One of the most popular songs by the Disco Queen is “She Works Hard for the Money.” It’s hard not to jump up and dance when this one comes on the radio, especially if you can relate to the protagonist: a woman who works day in and day out to provide for herself. The lesson here? People who work hard, no matter how much they make or what line of work they’re in, deserve respect and credit for what they do.

Recommended: 5 Ways to Achieve Financial Security

8. “If I Had $1,000,000” by Barenaked Ladies (1988)

This song doesn’t take itself too seriously — just as you’d expect from a group that calls itself Barenaked Ladies. But somewhere in all the silly lyrics, you’ll notice a theme: Though the singer may splurge on a limousine or, weirdly, John Merrick’s remains, he insinuates that money wouldn’t change him or his partner.
They’d still eat Kraft dinners, just more of them (and with fancy ketchup). The takeaway from this song is that money can change who we are, but we shouldn’t let it.

9. “Mo Money Mo Problems” by Notorious B.I.G. (1997)

Perhaps the clearest finance lesson from these songs that talk about money hails from this hit from Notorious B.I.G. The takeaway, after all, is right there in the title. As we hear in the song, “It’s like the more money we come across, the more problems we see.” Money can solve a lot of problems, but don’t forget that it can bring on new problems you might not be expecting.

10. “Bills, Bills, Bills” by Destiny’s Child (1999)

How could we put together a list of songs about saving money without featuring Beyoncé? This song, which came out when Bey was still in Destiny’s Child, is all about female empowerment. In it, the protagonist is in a relationship with a man who is using her for her money — and she’s having none of it. The song is a healthy reminder that, while it’s OK to treat friends, family, and partners to nice things, you shouldn’t let yourself be taken advantage of.

11. “Billionaire” by Travie McCoy feat. Bruno Mars (2010)

“Billionaire” is a song that many of us can relate to. Most people will never become a billionaire, but it’s fun to imagine what we’d do if we had that much money. While the song is playful and isn’t packed with useful tips, it’s a reminder that it’s OK to have big financial dreams. Some may be unrealistic, but you need a big dream to keep you motivated and working hard.

Recommended: The Importance of Saving Money

12. “Thrift Shop” by Macklemore & Ryan Lewis feat. Wanz (2012)

Macklemore’s brand of humor is on full display in “Thrift Shop.” In it, the rapper criticizes spending money on designer clothes when there are so many better finds in thrift shops. Sure, it’s OK to splurge on yourself now and then, but being frugal — whether it’s shopping at thrift stores, packing a lunch, or borrowing books and movies from the library — is a great way to save money and build your wealth.

13. “Budapest” by George Ezra (2014)

The final entry on our list of songs about saving money comes from George Ezra and carries a message similar to “Can’t Buy Me Love.” In “Budapest,” Ezra promises his love interest that he would abandon all his wealth and belongings if it means he could be with the one he loves. This song is yet another reminder that possession may be nice but our relationships with people are even nicer.

Recommended: How to Get Better with Money

The Takeaway

Music can entertain us, energize us, relax us, and even heal us. But it can also teach us — about life, about love, and yes, even about money. These 13 songs about finance are just the tip of the iceberg. So turn on the radio or dig through your music streaming service, and put in those earbuds the next time you’re working on your budget. You just may learn something useful.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall. Enjoy up to 4.60% APY on SoFi Checking and Savings.

Photo credit: iStock/Talaj

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. ©2023 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

SOBK1022019

Nov

2022

How to Invest and Profit During Inflation

How to Invest During Inflation

By Brian O'Connell | Growing Wealth, invest, Investing | Comments Off

Inflation occurs when there is a widespread rise in the prices of goods and services. The inflation rate, or the rate at which prices increase, was rising throughout 2022 at the fastest pace in 40 years. That has an impact on both consumers and investors. High inflation makes common goods like groceries, gasoline, and rent more expensive for consumers, meaning paychecks might not go as far if wages don’t rise along with prices.

For investors, high inflation can also affect the financial markets. Traditionally, rising inflation has tempered stock market growth, as consumers have less money to spend, and the Federal Reserve may step in to check rising inflation by making loans and credit more expensive with higher interest rates. What’s an investor do when inflation is on the upswing? Often, it means adjusting investment portfolios to protect assets against rising prices and an uncertain economy.

Investing & Inflation: How Are They Related?

Inflation’s Impact on Stock and Bond Investments

Investing during inflation can be tricky. It’s important to know that inflation impacts both stock and bond markets, but in different ways.

Inflation and the Stock Market

Inflation has an indirect impact on stocks, partially reflecting consumer purchasing power. As prices rise, retail investors may have less money to put into the stock market, reducing market growth.

Perhaps more importantly, high inflation may cause the Federal Reserve to raise interest rates to cool down the economy. Higher interest rates also make stock market investments less attractive to investors, as they can get higher returns in lower-risk assets like bonds.

💡 Recommended: How Do Interest Rates Impact Stocks?

Also, when inflation rises, that puts pressure on investors’ stock market returns to keep up with the inflation rate. For instance, consider a stock portfolio that earns 5% before inflation. If inflation rises at a 6.0% rate, the portfolio actually loses 1.0% on an inflation-adjusted basis.

However, some stocks and other assets can perform well in periods of rising prices, which can be a hedge against inflation. When inflation hits the consumer economy, companies boost the prices of their goods and services to keep profits rolling, as their cost of doing business rises at the same time. Consequently, rising prices contribute to higher revenues, which helps boost a company’s stock price. Investors, after all, want to be in business with companies with robust revenues.

Overall, rising inflation raises the investment risk of an economic slowdown or recession. That scenario doesn’t bode well for strong stock market performance, as uncertainty about the overall economy tends to curb market growth, thus reducing company earnings which leads to sliding equity prices.

Inflation and the Bond Market

Inflation may be a drag on bond market performance, as well. Most bonds like U.S. Treasury, corporate, or municipal bonds offer a fixed rate of return, paid in the form of interest or coupon payments. As fixed-income securities offer stable, but fixed, investment returns, rising inflation can eat at those returns, further reducing the purchasing power of bond market investors.

Additionally, the Federal Reserve’s response to inflation — higher interest rates — can lower the price of bonds because there is an inverse relationship between bond yields and bond prices. So, bond investors and bond funds may experience losses because of high interest rates.

💡 Recommended: How Does the Bond Market Work?

What to Invest in During Inflation

Investors can take several steps to protect their portfolios during periods of high inflation. Choosing what to invest in during inflation is like selecting investments at any other time — you’ll need to evaluate the asset itself and how it fits into your overall portfolio strategy both now and in the future.

1. Retail Stocks

Investors might consider stocks where the underlying company can boost prices in times of rising inflation. Retail stocks, like big box stores or discount retailers with a global brand and a massive customer base, can be potential investments during high inflation periods. In that scenario, the retailer could raise prices and not only cover the cost of rising inflation but also continue to earn profits in a high inflation period.

2. Consumer Goods Stocks

Think of a consumer goods manufacturer that already has a healthy portion of the toothpaste or shampoo market and doesn’t need excess capital as it’s already well-invested in its own business. Companies with low capital needs tend to do better in inflationary periods, as they don’t have to invest more cash into the business to keep up with competitors — they already have a solid market position and the means to produce and market their products.

3. Commodities

Investing in precious metals, oil and gas, gold, and other commodities can also be good inflation hedges. The price growth of many commodities contributes to high inflation. So investors may see returns by investing in commodities during high inflationary periods. Take the price of oil, natural gas, and gasoline. Businesses and consumers rely highly on oil and gas and will likely keep filling up the tank and heating their homes, even if they have to pay higher prices. That makes oil — and other commodities — a good portfolio component when inflation is on the move.

💡 Recommended: Commodities Trading Guide for Beginners

4. Treasury Inflation-Protected Securities (TIPS)

Treasury Inflation-Protected Securities (TIPS) can be a good hedge against inflation. By design, TIPS are like most bonds that pay investors a fixed rate twice annually. They’re also protected against inflation as the principal amount of the securities is adjusted for inflation.

5. I Bonds

During periods of high inflation, investors may consider investing in Series I Savings Bonds, commonly known as I Bonds. I Bonds are indexed to inflation like TIPS, but the interest rate paid to investors is adjustable. With an I bond, investors earn both a fixed interest rate and a rate that changes with inflation. The U.S. Treasury sets the inflation-adjusted interest rate on I Bonds twice a year.

Inflation Basics, Explained

Inflation is primarily defined as a continuing rise in prices. Some inflation is okay — historically, economic booms have come with an annual inflation rate of about 1% to 2%, a range that reflects solid consumer sentiment amidst a growing economy. An inflation rate of 5% or more can be a different story, with higher rates associated with an overheated economy.

Inflation rates often correlate to economic growth, which is sometimes good for consumers. When economic growth occurs, consumers and businesses have more money and tend to spend it. When cash flows through the economy, demand for goods and services grows, leading food and services producers to raise prices. That triggers a rise in inflation, with the inflation rate growing even more as demand for goods and services outpaces supply.

💡 Recommended: Is Inflation a Good or Bad Thing for Consumers?

Conversely, prices fall when demand slides and supply is abundant; the inflation rate tumbles as economic growth wanes.

The main barometer of inflation in the United States is the Consumer Price Index (CPI). The CPI encompasses the retail price of goods and services in common sectors such as housing, healthcare, transportation, food and beverage, and education, among other economic sectors. The Federal Reserve uses a similar index, the Personal Consumption Expenditures Price Index (PCE), in its inflation-related measurements. Economists and investors track inflation on both a monthly and an annual basis.

The Takeaway

Investors should proceed with caution when inflation rises. It may be tempting to readjust your portfolio because prices are rising. However, massive changes to a well-planned portfolio may do more harm than good, especially if you are investing with a long time horizon. Periods of high inflation usually wane, so throwing a long-term investment plan out the window just because inflation is moving upward may knock you off course to meet your long-term financial goals.

If you’re ready to build a solid portfolio to meet your long-term financial goals, a great place to start is with a SoFi Invest® online brokerage account. With SoFi, you can trade stocks and exchange-traded funds (ETFs) with no commissions for as little as $5.

Take a step toward reaching your financial goals with SoFi Invest.

Photo credit: iStock/pondsaksit

SoFi Invest®
INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE
SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below: Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.
For additional disclosures related to the SoFi Invest platforms described above please visit SoFi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.

SOIN1122037

Nov

2022

Should You Invest With Friends?

By Anna Davies | Growing Wealth, invest, Investing | Comments Off

Investing with friends can seem like an intriguing concept. Instead of being the sole decision maker, you can share financial and knowledge-based resources to come up with a compelling investment strategy that serves your collective goals.

Investing with friends may also be a way to make a substantial impact in a cause you believe in, such as raising funds to invest in a friend’s startup or business venture.

And investing is something you’re likely already using as a way to connect. According to SoFi’s research, 70% of SoFi Invest members talk about investing with friends, family, or colleagues at least once a week. So it might make sense to some people to pool that passion and capital and begin investing together.

Of course, investing with friends also comes with some particular concerns you’ll want to consider in advance:

• Who controls the investment account and how are investment decisions made?

• What is the process if one person wants to remove their portion of the investment?

• How will any returns be distributed?

• Does the investment have a set length of time, or will it continue in perpetuity, or until all parties have decided to withdraw or buy out their investment?

Talking through scenarios like this can be helpful. It can also be helpful to come up with some sort of contract that outlines contingencies, so you know everyone is on the same page.

Pros and Cons of Investing With Friends

There are a number of upsides to investing with friends, but also some reasons to be cautious.

Pros	Cons
Friends can enjoy trust and similar POVs	Friends may rely on an honor system rather than proper procedures
May be able to reach compromises more easily	Strong emotions can lead people to make impulsive money choices
Friends add enthusiasm and support

Pros

When you invest with your friends, you enjoy a certain amount of trust and, often, similar values and perspectives on life. This can make it easier to explore new opportunities and set goals together.

Friends may have the ability to overcome disagreements and reach necessary compromises — a big plus when it comes to managing money.

Last, friends can cheer each other on, and pool enthusiasm as well as funds to generate momentum, and sustain commitment.

Cons

On the flip side, being friends sometimes leads people to rely on a “handshake” or honor system for doing business, rather than setting up proper protocols, paperwork, and protections.

This is understandable — you want to believe your friends have your back in all cases — but financial endeavors often function better with firewalls in place. That’s because, as much as you may like your friends, they’re only human. They may drop the ball, forget important details, or put their own interests ahead of yours.

In a similar vein, the camaraderie of good friends can generate a lot of enthusiasm for certain ideas or investment choices. But when it comes to money, as many behavioral finance studies have shown, emotions around money can lead people astray. It’s usually smarter to have a few guardrails in place, to guide any group.

What to Talk About Before You Invest With Friends

Before pooling resources, it may be wise to talk a little about how you each approach investing.

Maybe one friend is a Warren Buffett aficionado, while another is eager to invest in crypto.

Maybe one friend is eager to hit a specific financial goal while another is looking at investing with friends as a way to start an investment club to diversify their portfolio.

Before pooling resources, it’s a good idea to talk about how you each approach the market.

It can also be a good time to talk through all the what-ifs you can think of, including:

• What if our investments lose money?

• What if one of us needs the money for an emergency?

• What if more people want to invest in the future?

Finally, make sure your goals are aligned. Are you looking for specific investment opportunities?

Some friend groups get together for what is called impact investing, or socially conscious investing — investing in companies that have positive social, environmental, and environmental impact on the world.

Other friends may pool their money to gain access to investment opportunities that may have a minimum investment threshold, such as private investments and alternative investments like venture capital.

Once you’re all on the same page, you can then assess different methods of investing as a group of friends.

How Do You Start Investing With Friends?

There are a few different ways to start investing with friends.

Set Up a Brokerage Account

One way to invest with friends is to designate someone as the account holder, and have them open a brokerage account online with your group’s pooled resources. But that method may not allow for safeguards to protect your capital, or empower each individual investor with decision-making power.

Opening a brokerage account for your pooled funds may work for groups where there is one designated, trusted leader who manages the execution of trades, and where everyone involved agrees about the group investing style, whether active investing or some other strategies.

💡 Recommended: How to Open a Brokerage Account

Create an LLC

You may also choose to invest with friends as a show of faith for a mutual friend or family member’s startup or business venture. In this case, it can be helpful to create a limited liability company (LLC). And LLC can provide a structure for raising and investing cash, as well as making sure there is an agreement laid out as to potential returns on the investment and whether investors will have any power in the direction and decisions the company makes.

In creating an LLC, it may be helpful to seek legal advice to help create a contract so that everyone is on the same page and there is no confusion as to how money is used and what the return on investment will look like for investors.

Investing in Real Estate With Friends

Real estate can be expensive, so pooling your resources with friends may make sense.

There are a number of different ways to invest in real estate with friends. Among the most common:

• You might buy a long-term investment property, like a rental property.

• You could buy a short-term investment property, where you renovate and flip a home, for example.

• You could invest in a shared property where you and your friends live, or a property where one or more friends might live, with an agreement to sell it at a certain point, ideally for a profit.

However you approach your joint real estate venture, be sure to do research into the different types of business arrangements and real estate agreements that might suit your aims. Given how expensive and complicated real estate can be — even owning a shared home — and how many legalities could come into play, it’s best to get professional advice.

Investing in a Friend’s Business

While history abounds with successful businesses started by friends, think carefully before investing your own funds in a friend’s new venture. Ideally, you want to approach the question of whether to invest in your friend’s enterprise with your business hat on, so to say.

• Wait to be asked. Just because your friend is on fire about their new startup doesn’t mean they want you or your money involved. If they ask for your advice, rather than money, that could be a lower-stakes way to provide support.

• Kick the tires. If your friend does want you to invest, pretend you work on Wall Street. Read their business plan. Ask hard questions: how they’re raising capital, what kind of audience they’ve identified, and so on. Before deciding to put your own money into a project, you want to know it’s solid.

• Sign on the dotted line. Don’t attempt to do business with friends over a beer and a handshake. Lay out all the terms and expectations in a contract that protects all parties.

• Set emotional boundaries. You’re friends first, so have some rules in place that help you navigate when and where to talk business.

The Takeaway

For many people, there are tangible benefits to investing with friends: shared wisdom and experience, supporting each other’s financial goals, and in some cases the profits that may come from your joint venture. But there are disadvantages as well. It can be tempting to trust friends to do the right thing, when having a contract might provide more structure and clearcut consequences if an investment project goes awry.

There are many things to consider before investing with friends, and many different ways to go about it. In some cases, you might want to create an LLC with friends, to safeguard your own interests and make sure everyone is in agreement on the details of the arrangement.

If you’re not quite ready to invest your money directly with other people, and you want to gain more experience and wisdom on your own, you can start by actively trading stock with SoFi Invest.

SoFi’s investing platform has a feature available for Active Investing members that allows them to opt-in to share their investment portfolios, so you can see how your friends are doing and the market moves they’re making. Dollar amounts are hidden, but you can follow the holdings of friends who also have opted-into this feature, look at watchlists, and comment on trades.

You can also see you and your friends on a dynamic leaderboard with other members. This is a seamless way to see your friends’ investing behaviors, ask questions, and connect on investment decisions — while still keeping your finances separate.

Take a step toward reaching your financial goals with SoFi Invest.

FAQ

Is it a good idea to invest with a friend?

Investing with friends can offer some distinct advantages, including the power of combined finances, similar values, and basic trust. On the downside, though, friends might be tempted to do business with a handshake, rather than spelling out details and expectations clearly in an agreement or contracts that protects everyone involved.

Can a group of friends invest in stocks?

Friends can invest in stocks together in a few different ways. A set of friends can form an investment group or club, where they pool money and agree on a stock-picking strategy. It’s also possible for friends to invest in fractional shares.

How do I start an investing group with friends?

There are many different books and websites that can offer steps and guidelines for setting up an investment group with your friends.

Nov

2022

Best Self-Employed Jobs for Extra Income

By Jacqueline DeMarco | Family Finances, Life & Career, relay | Comments Off

When life gets expensive (which is often), it can make sense to take on a side-job to earn extra money. If you have skills you can put to work on a part-time basis (like writing, landscaping, or driving), you can generate enough income to help pay down debt, build up emergency savings, or to get some breathing room in your budget.

What are the best self-employed jobs? Keep reading to find out.

Recommended: Does Net Worth Include Home Equity?

What Are Self-Employed Jobs?

Being self-employed means working for yourself. For tax purposes, you may be considered a sole proprietor or an independent contractor. You can be self-employed on a full-time basis or part-time on the side.

Check your score with SoFi

Track your credit score for free. Sign up and get $10.*

Reasons for Getting a Self-Employed Job

These are some great reasons to get a self-employed job:

• Earn extra money

• Gain experience and improve skills

• Expand your professional network

• Make your own schedule around other responsibilities

Pros and Cons Of Getting a Self-Employed Job

Of course, there are advantages and disadvantages associated with self-employed jobs and side hustles, including:

Pros:

• Flexible hours

• Choose your work environment (home, cafe, office)

• Great learning opportunities

• Chance to pursue a passion

Cons:

• Less collaboration

• Starting a business can require long hours

• Fluctuating earnings (having a budgeting app can help here)

• A lot of responsibility

Recommended: What Trade Makes the Most Money?

What To Expect From Self-Employed Jobs

It can be hard to know what to expect from self-employed jobs since they don’t come with a job description or HR department. Some jobs can be done on a work-from-home basis, whereas others require showing up in-person.

Self-employed workers know to “expect the unexpected”: Don’t assume that your workday or client roster will be consistent or predictable, as it is with a full-time job. It’s normal for there to be speed bumps along the way to a more steady routine.

Self-Employed Job Tips

Now let’s look at some tips for making self-employment easier.

• Focus on a passion. Having a second job or working as an entrepreneur is hard. But if you choose a field or mission you’re passionate about, it can be easier to stay motivated and on track.

• Develop industry expertise. To really stand out and impress clients, it’s important to have a deep knowledge of the industry and skills required to do the job well.

• Learn from mistakes. Mistakes happen, but they aren’t a reason to give up. Try to learn from mistakes and improve.

16 Best Self-Employed Jobs 2022

What are the best self-employed jobs? Let’s take a look at 16 options, considering how much they pay and the skills they require. All of these jobs can be done on a part-time basis to generate supplemental income. They also have the potential to turn into full-time opportunities.

1. Writer

National average pay: $24.11 per hour

Job growth outlook: 4%

Job description: Write articles, books, scripts, advertising copy, and other materials.

Requirements: Strong understanding of grammar, communication skills, professional or academic writing experience.

Duties:

• Write short-form or long-form copy

• Edit written copy

• Craft headlines and campaign slogans

2. Business Consultant

National average pay: $44.71 per hour

Job growth outlook: 11%

Job description: Consult businesses on how they can improve their performance.

Requirements: Business experience and good communication skills.

Duties:

• Help a business perform better in chosen area(s) of focus

• Measure and report business performance

• Create strategy and present that strategy to key stakeholders

3. Videographer

National average pay: $31.82 per hour

Job growth outlook: 12%

Job description: Capture video content and edit it for clients.

Requirements: Video and editing skills.

Duties:

• Shoot and direct video content

• Edit video content using professional software

• Plan video shoots

4. Social Media Specialist

National average pay: $13.92 per hour

Job growth outlook: 10%

Job description: Plan social media marketing strategy, create and post social content, and engage with audience.

Requirements: Marketing analytics and social media marketing knowledge, including paid social media.

Duties:

• Plan social media campaigns: organic and paid

• Create written and visual content

• Interpret metrics to understand strengths and weaknesses

5. Makeup Artist

National average pay: $20.32 per hour

Job growth outlook: 11%

Job description: Apply makeup on models, individuals for special events, or actors for movies and red carpet events.

Requirements: License in cosmetology and strong cosmetic skills.

Duties:

• Apply makeup to professional or individuals

• Consult on beauty looks before big events

• Design and apply special effects makeup for the film industry

6. Graphic designer

National average pay: $18.23 per hour

Job growth outlook: 3%

Job description: Design graphics such as logos and advertisements using digital tools.

Requirements: Understand design and color theory and be adept at digital design programs

Duties:

• Use software to create visuals for digital or printed materials

• Edit photographs

• Create company branding

7. Career Coach

National average pay: $14.70 per hour

Job growth outlook: 10%

Job description: Help clients set professional goals and guide them as they work toward them. Coaching can be a rewarding way to make money from home.

Requirements: Strong understanding of job market and active listening skills.

Duties:

• Help clients complete job applications effectively

• Assist with cover letter and resume writing

• Practice interview scenarios

8. Software Developer

National average pay: $52.41 per hour

Job growth outlook: 25%

Job description: Developers write computer code in order to create applications, websites, and other digital products or to update existing ones. Coding is considered the quintessential job for introverts.

Requirements: Knowledge of coding languages.

Duties:

• Write computer code

• Design and install programs and applications

• Create or update websites

9. Event Planner

National average pay: $23.79 per hour

Job growth outlook: 18%

Job description: Plan corporate events, weddings, and parties.

Requirements: Plan and execute events, from compiling guest lists and booking the venue to selecting a caterer and choosing decor.

Duties:

• Plan events from start to finish, from concept to tiny details

• Run and manage the event day-of

• Connect clients with vendors

10. Hairstylist

National average pay: $10.01 per hour

Job growth outlook: 11%

Job description: Cut, color, and style hair for clients, as well as providing other beauty services.

Requirements: Cosmetology license (most states)

Duties:

• Cut and color hair

• Style hair

• Educate clients on hair care and products

11. Photographer

National average pay: $14.45 per hour

Job growth outlook: 9%

Job description: Take photographs of places, objects, and people for business clients or individuals who want a special moment or event recorded.

Requirements: Digital photography and photo editing.

Duties:

• Plan photoshoots

• Take digital photographs

• Edit photos in post-production

12. Transcriptionist

National average pay: $13.71 per hour

Job growth outlook: 1%

Job description: Listen to recorded or live speech and transcribe it into text. (Transcribing is a good job for antisocial people.)

Requirements: Active listening, typing, and spelling and grammar skills.

Duties:

• Accurately transcribe audio into text

• Edit transcripts for proper spelling and grammar

• Work for businesses or transcription services

13. Driver

National average pay: $14.43 per hour

Job growth outlook: 12%

Job description: Pick up and drive passengers to desired locations safely.

Requirements: Valid driver’s license and good driving record. If driving for a company, you may have to pass a driver’s test and own a car.

Duties:

• Pick up passengers at desired location

• Drive passengers to their location safely

• Provide ride-share services or private driving services

14. Landscaper

National average pay: $12.84 per hour

Job growth outlook: 5%

Job description: Plan and plant landscaping and maintain existing plantings to ensure garden health and aesthetic appeal.

Requirements: Knowledge of landscaping best practices.

Duties:

• Plant grass, flowers, trees, and shrubs

• Maintain health of plants

• Mow grass, trim and prune plants, and water landscaping

15. Nanny

National average pay: $13.03 per hour

Job growth outlook: 6%

Job description: Take care of children: Cook for, clean up after, play, with and transport them to and from school and social activities.

Requirements: Childcare experience; some parents prefer safety certifications such as CPR.

Duties:

• Keep children safe, clean, and fed

• Play with children and help them with their homework

• Assist with household chores

Recommended: Should I Sell My House Now or Wait?

16. Personal Trainer

National average pay: $20.24

Job growth outlook: 19%

Job description: Help clients master workout routines and make physical health progress. While this used to be an in-person job exclusively, many trainers now work from home, coaching and leading classes via web-cam.

Requirements: Education in kinesiology or exercise science.

Duties:

• Create custom workout routines for clients

• Help clients set fitness goals

• Instruct clients on how to properly perform exercises and monitor their physical progress

The Takeaway

The best self-employed job for you depends on your skills and passions. There are many self-employed job opportunities across various industries that can help you earn extra money. Benefits include flexible hours and schedules, your choice of workplace, and the opportunity to expand your knowledge and skills. Disadvantages include fluctuating income, unpredictable workdays, and total responsibility.

Once you start making extra money, you may need help making the most of it. This is where SoFi can help. Our money tracker lets you connect all of your accounts on one mobile dashboard. Get free credit score monitoring, track your debts, keep tabs on your cash flow, and find ways to save.

Get a clearer picture of your finances with SoFi.

FAQ

How can I make $1,000 a month passively?

Passive income takes work to set up, but it can be rewarding once the initial labor is done. Investing is a good example of passive income. It takes time and money to build a strong investment portfolio, but once you do, you can earn money passively each month with little effort.

What self-employed jobs make a lot of money?

Personal trainer, event planner, software developer, business consultant, videographer, and makeup artist are some of the best paying self-employed jobs. But many different types of jobs can generate good income once you have some experience.

Which career is best for self-employed?

As they say, one person’s heaven is another’s hell. And so it is with self-employed jobs. Think carefully about what you’re good at, your industry knowledge and experience, and the type of role you’re passionate about in order to find the right self-employed job for you.

Photo credit: iStock/dusanpetkovic

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

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.

SORL1022005

Nov

2022

What Is After-Hours Trading?

By Rebecca Lake | Financial Independence, Growing Wealth, Investing | No Comments

After-hour trading is stock trading that occurs after the normal close of the trading session. Ordinarily, stock trading begins at 9:30 am ET and ends at 4 pm ET, Monday through Friday. The after-hours trading period begins following the close of regular trading at 4 pm and ends at 8 pm. Trading after hours may appeal to investors who have limited time to trade during the day or want to take advantage of overnight market movements.

If you’re new to trading stocks or even if you know some of the investing basics, aftermarket trading can still be a confusing concept to understand. Understanding what happens with the stock market after hours can help answer those questions.

Why Is Access to After-Hours Trading Important?

After-hours trading allows investors to respond to news and events that occur after regular stock market hours. This can be important because it will enable investors to take advantage of opportunities that may not be available during regular trading hours.

For example, if a company announces a significant acquisition after the markets have closed, investors who can trade after-hours will be able to buy shares of the company before the news is reflected in the stock price during regular trading hours.

Market Hours Schedule

Stock exchanges operate on a regular schedule during which investors can buy and sell securities. The New York Stock Exchange (NYSE) and Nasdaq are open between 9:30 am and 4 pm ET. Most stock trading occurs during these normal business hours.

After-hours trading does not follow this schedule.

How Does After-Hours Trading Work?

After-hours trading is what it sounds like: buying and selling stocks after the stock market has closed. However, unlike standard hours trading, after-hours trading is conducted through computerized trading systems called electronic communications networks (ECNs). Traders generally access ECNs through their preferred brokerage.

After-hours trading generally lasts four hours, from 4-8pm ET on weekdays. However, the precise time of after-hours trading depends on the brokerage that an investor uses.

Pre-Market Trading

Pre-Market trading occurs from 4 to 9:30 am ET on weekdays. After-hours and pre-market trading is sometimes called “extended-hours trading.”

Some online brokerages take after-hours trading a step further and offer 24/7 stock trading. This allows investors to make trades during the gap between after-hours trading and pre-market trading. The advantage of 24/7 trading is that investors are not bound by the regular market hours schedule for making trades.

Get up to $1,000 in stock when you fund a new Active Invest account.*

Access stock trading, options, auto investing, IRAs, and more. Get started in just a few minutes.

*Customer must fund their Active Invest account with at least $25 within 30 days of opening the account. Probability of customer receiving $1,000 is 0.028%. See full terms and conditions.

Potential Advantages of After-Hours Trading

After-hours trading provides investors with several advantages over regular trading alone.

Convenience

One of the benefits of trading later in the day is convenience. If you’re busy with other pursuits during business hours or live in a different time zone, this might be a more optimal time to buy and sell stocks.

Leveraging New Information

Another potential advantage is the opportunity to take action based on new information, such as a company’s earnings report or a major news event, without having to wait for the market to reopen.

Potential for Cheaper Prices

Investors can sometimes find lower prices for individual stocks or exchange-traded funds (ETFs) during after-hours trading. This may reflect lower competition since fewer people are trading, but it’s far from guaranteeing you’ll get better prices.

Cons of After-Hours Trading

Buying and selling stocks outside regular trading hours come with risks and disadvantages.

Fewer Transactions Happen After-Hours

There are fewer transactions happening after-hours than while the stock market is open, which can affect the market’s liquidity.

Since there are fewer people buying and selling stocks, finding someone who wants to trade at the price you have in mind can be challenging. Likewise, getting a hold of a stock you want can be hard when trading volume is low. The trade will be canceled if there is no counterparty available for a trade you want.

Prices Are More Volatile

Another drawback is that prices are more volatile after-hours. Although it’s normal for the stock market to fluctuate, you tend to see much wider swings in price after-hours than during the typical trading day.

This is partly a result of lower liquidity: Since fewer people are participating in the market, trades may significantly affect a stock’s price due to wider bid-ask spreads.

Stock price volatility can also result from many people reacting quickly to major news or announcements. A company’s share price can climb in response to a news event after-hours and then fall dramatically as soon as markets open. Prices adjust after more information becomes available, or investors get the chance to digest it more thoroughly. And with major ups and downs, of course, comes greater risk and potential for losses.

Best Prices May Differ

Another thing to consider is that you might not be able to confirm the best available price during after-hours trading. During regular hours, brokerages must offer the best possible price at that time. However, this doesn’t extend into after-hours, and the share price you see in one place may differ from the one you see in another.

After-Hours Trading vs Standard Trading

After-Hours Trading	Standard Trading
Trading occurs between 4 and 8 pm ET	Trading occurs between 9:30 am and 4 pm ET
Trades conducted through ECNs	Trades conducted through stock exchanges and market makers
Trades may not be completed due to low volume and liquidity	Trades are generally executed quickly because of large trading volume and liquidity
Only certain stocks and ETFs available for trading	A wide range of assets, like stocks, ETFs, mutual funds, and options, are available for trading

Is After-Hours Trading the Same Thing as Late-Day Trading?

Investors should be aware that after-hours trading differs from late-day trading. Late-day trading is an illegal practice in which mutual fund managers allow hedge funds to record some trades made after-hours as having happened right before closing during regular hours.

Late-day trading pushes up the mutual fund’s net asset value, which summarizes how much the fund is worth at the end of the trading day. When the net asset value (NAV) increases the following day to reflect those late-day trades, the hedge funds can sell the shares they bought at a higher price.

After-hours trading itself is considered ethical and is legal.

💡 Recommended: What Is Market Manipulation?

Access to Features When Trading After-Hours

After-hours trading typically only allows limit orders. Limit orders generally protect investors from unexpectedly bad prices, which are more likely to occur during after-hours trading than standard trading.

Stop, stop-limit, or orders with special instructions are not usually accepted. Moreover, orders are typically only good for the after-hours trading session in which they’re placed; if a trade is not executed during the session, it is usually canceled.

Additionally, only certain stocks and ETFs are available for after-hours trading. Trading bonds, mutual funds, and options are not allowed during after-hours.

Is It Bad to Trade After Hours?

Trading stocks after hours is neither bad nor good. But whether it makes sense for you to engage in after-hour trading can depend on your risk tolerance and investment goals.

As mentioned, the stock market after hours can be more volatile than regular trading hours. You could expose yourself to greater risk by trading stocks after the closing bell. Increased volatility can also make it more difficult to gauge how likely limit orders are to be executed.

Pricing risk could also cause you to pay more for securities after hours than during the regular trading day. In that scenario, you’d get less value for your investment dollars. So it’s important to consider how much of your time you’re willing to devote to watching the after-hours market and how much risk you’re willing to accept.

Specialist recommend that only highly active traders participate in after-hours trading — not average investors who intend to hold onto their stocks for a long time. Most everyday investors would be wise to remember the old adage: “Time in the market beats timing the market.”

Does After-Hours Trading Affect Opening Price?

After-hours trading can affect a stock’s opening price. Buying and selling activity can influence a stock’s price during normal market hours. The same is true for aftermarket trading.

A stock could close at one price point during regular trading hours but have a different open price once the new trading day begins. Whether this price difference is negligible or significant depends on how much trading activity occurred after hours and what motivated the activity.

For example, price fluctuations between the regular day’s closing and the next day’s opening could be more substantial if investors get wind overnight that a company is planning a merger or has a scandal brewing. Likewise, if a company’s earnings miss expectations or the Federal Reserve makes an announcement about interest rates, those things could affect stock pricing after hours.

💡 Recommended: What Determines Stock Price?

Is After-Hours Trading a Good Indicator of Market Sentiment?

After-hours trading activity could help investors gauge where the market will start on the next trading day. But it’s important to remember that this is a short-term prediction at best, as pricing can change at a moment’s notice.

Investor attitudes and behaviors can quickly shift the market’s momentum and stock prices along with it. Again, something as simple as the release of an earnings report or the announcement of an acquisition could affect a stock’s price. So rather than focusing on aftermarket trading as a sole indicator of what a stock may do next, it’s important to look at the bigger picture.

If you’re primarily a day trader, learning some technical analysis basics can help you become more attuned to market trends and how to interpret them when making investment decisions.

💡 Recommended: Day Trading Strategies

The Takeaway

If you are a hands-on investor and want to experiment, exploring after-hours trading may be an additional way to make trades. However, for most investors who don’t actively manage their investments and want to minimize risk, there may be better strategies than after-hours trading. Instead, they may want to feel confident that they’re investing their money with less risk, building wealth for long-term financial goals.

A great way to start building a portfolio to meet long-term financial goals is by opening an online brokerage account with SoFi Invest®. With SoFi, you buy and sell stocks and ETFs with no commissions for as little as $5.

For a limited time, opening and funding an Active Invest account gives you the opportunity to get up to $1,000 in the stock of your choice.

FAQ

When does after-hours trading for SoFi start?

SoFi offers extended-hours trading, where investors can place limit orders during after-hours starting at 4 pm.

When does after-hours trading for SoFi end?

SoFi offers extended-hours trading, where investors can place limit orders after-hours ending at 8 pm.

What are the benefits of trading after-hours?

Some benefits of trading after-hours include the convenience of trading when the markets are closed and having the opportunity to make trades right after an important news event breaks.