Jun
06
2023
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What Is Net Worth and Why Should You Know Yours?

By | Debt Payoff, Financial Independence, Growing Wealth, invest, Terminology | No Comments

A person’s net worth describes their total financial value, and is calculated by subtracting their liabilities from their assets. Though we generally discuss net worth in relation to very wealthy individuals, it can be important for people who aren’t billionaires to know their net worth as well.

A person’s net worth can be an important reference point in understanding one’s financial position. Net worth can be negative, especially early on in one’s careers. But net worth can help an individual figure out how much they need to save, how much spending they need to cut back on, or how much they’ve saved for retirement.

How to Calculate Net Worth

If you’re wondering how to calculate net worth, it’s actually a simple formula:

Assets – Liabilities = Net Worth

The hard part is usually determining a person’s assets and liabilities. And a person’s assets can go beyond what they have in their checking account. In fact, a person’s assets can include a whole host of things.

Assets

Assets basically boil down to how much money you have, as well as the value of things you own. In order to know one’s net worth, estimate the value of each asset below:

•   Money in savings accounts

•   Money in checking accounts

•   Money in investing or retirement accounts. Brokerage accounts or 401(k)s are in this bucket.

•   Physical cash

•   Value from insurance policies

•   Value from business ownership or stakes

•   Value of cars

•   Valuable personal goods, like jewelry or art

•   Value of real estate, including home

Calculating the value of a home can be a task in itself. It’s important to research the value of the homes around you, the size of your home, any deferred maintenance on the home, additional benefits like parking spots, backyard space, room count, etc. There are a number of home value calculators online, too.

Recommended: Understanding Property Valuations

There are other ways to think about assets:

•   Liquid Assets: Items like stocks, bonds, mutual funds, or ETFs that are easy to sell quickly and whose sale will not greatly affect their price.

•   Fixed Assets: These are items that would take a longer time to convert to cash. These assets are often deposited for extended periods of time in exchange for high interest accrual and thus cannot be cashed before their agreed-upon time frame is up.

•   Equity Assets: Equity assets include your shares in a company, either private or public.

Intangible Assets, such as brand recognition for a company or any other intellectual property like patents, trademarks or even goodwill, are trickier to factor into your net worth due to the complexity of measuring their value.

Liabilities

Liabilities are debts. The following categories are what most often make up liabilities:

•   Auto loans

•   Student loans

•   Personal loans

•   Business loans (personally guaranteed)

•   Credit card balances

•   Mortgages

While liabilities are on the negative side of the net worth equation, it doesn’t necessarily have to symbolize something negative about your finances. For example, student loans or mortgage loans are typically seen as necessary loans that individuals take on as they reach milestones in life, like going to college, graduate school or buying a home.

Meanwhile, knowing one’s total liabilities can help with figuring out a plan to start paying off debt that has higher interest rates, like from credit card balances.


💡 Quick Tip: All investments come with some degree of risk — and some are riskier than others. Before investing online, decide on your investment goals and how much risk you want to take.

Median and Average Net Worth in US

An individual or household’s net worth isn’t set in stone, and it ebbs and flows all the time. For that reason, it can be difficult to nail down median or average net worth figures for both individuals and households in the U.S. You can find some numbers if you search for them, but they’re often several years old, and may not be accurate given the time lapse.

For instance, the Federal Reserve tracks median and average net worth data in the U.S., but generally, they do so using survey data that it publishes once every few years. So, while data from a few years ago may be fine, large-scale world events–such as a pandemic, natural disaster, recession, or similar–may have led to large changes in those numbers.

This is all something to keep in mind if you seek out average net worth numbers. It’s not that they’re inaccurate, it’s simply that the data may be hard to capture and synthesize in a reasonable amount of time.

Remember, too, that it’s important to keep abreast of your net worth because this number may fluctuate depending on factors such as stock values, interest rates, real estate trends, and other tides of the financial world. It’s important to have an idea of overall trends so you can generally understand your financial health and have an idea of your true wealth.


💡 Quick Tip: Distributing your money across a range of assets — also known as diversification — can be beneficial for long-term investors. When you put your eggs in many baskets, it may be beneficial if a single asset class goes down.

The Takeaway

True wealth can be an important factor in knowing when you might expect to retire. It’s a good idea to focus on your gains year over year, rather than the number you get at the end of the equation. If you’re concerned about your net worth or are hoping to increase it, especially for future retirement goals, then it might be helpful to consider investing.

There are a multitude of things that can have an effect on your net worth. And focusing strictly on your net worth probably shouldn’t be your focus. If you’re concerned about it, though, it may be worthwhile to talk to a financial professional.

Invest in what matters most to you with SoFi Active Invest. In a self-directed account provided by SoFi Securities, you can trade stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, options, and more — all while paying $0 commission on every trade. Other fees may apply. Whether you want to trade after-hours or manage your portfolio using real-time stock insights and analyst ratings, you can invest your way in SoFi's easy-to-use mobile app.

Opening and funding an Active Invest account gives you the opportunity to get up to $1,000 in the stock of your choice.¹


INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SoFi Invest is a trade name used by SoFi Wealth LLC and SoFi Securities LLC offering investment products and services. Robo investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser. Brokerage and self-directed investing products offered through SoFi Securities LLC, Member FINRA/SIPC.

For disclosures on SoFi Invest platforms visit SoFi.com/legal. For a full listing of the fees associated with Sofi Invest please view our fee schedule.

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.


¹Probability of Member receiving $1,000 is a probability of 0.026%; If you don’t make a selection in 45 days, you’ll no longer qualify for the promo. Customer must fund their account with a minimum of $50.00 to qualify. Probability percentage is subject to decrease. See full terms and conditions.

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Jun
05
2023
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How to Pay Off College Loans

By | Debt Payoff, Fresh Out of School, Student Loans, student_loan | Comments Off on How to Pay Off College Loans

If advice for paying off student loans were as simple as “Just keep paying those monthly payments,” over 43 million borrowers would have no concerns about wiping away more than $1.7 trillion in student loan debt.

But of course, many do stress about it and wonder how they can pay off their college loans. It’s best to first figure out exactly what you owe and what your interest rates are. From there, you can come up with a game plan to get your student loan debt under control.

Tips to Pay off College Loans

1. Set a Budget

Rather than feeling helpless, it’s better to remember that the path to paying off college loans is, at its core, about making a budget and sticking with it.

It’s best to resist the urge to momentarily feel better through retail therapy. If you do happen to slip up with spending or are caught unprepared for a bill, though, realize that living within your means is a challenge for many adults and learning from your mistakes is better than fixating on them.

The important thing is to create a budget you can actually follow. Give yourself enough flexibility that you’ll be able to stick to your goals and spend your money on what you really want to spend it on.

Recommended: Budgeting and Spending App to Get Your Finances Under Control

2. Pay More than the Minimum

There’s more to paying off college loans than paying the lowest amount required every month. A big reason to pay more than the minimum each month is that student loan repayment is structured around amortization, which is where a portion of your fixed monthly payment goes to the costs associated with interest and another portion goes to reducing your loan balance.

With amortization loans, you typically pay more in interest than principal at the beginning and the ratio gradually reverses as you keep paying your loan. Paying more than the minimum monthly payment means you can accelerate the reduction of the total amount you owe rather than covering the interest.

One plan of attack is to consider signing up for automatic payments. You can customize the payment amount to be withdrawn on its own, and there can be a discount for doing so. If you have a Direct Loan, you can get an interest rate reduction for participating in automatic debits. (As a side note, many federal and private student loan servicers offer a discount for enrolling in autopay, so it can’t hurt to ask and get that discount, if it’s available to you.)

One final tip: Try to get in touch with your lender before you make additional payments so you can verify that your extra cash is going toward paying down the loan principal.

3. Refinance Your Student Loans

If it ever reaches a point where making real progress on repaying your loans feels nearly impossible, and income-driven repayment and forgiveness options either don’t apply or aren’t the right fit, then refinancing with a private lender might be a good option.

When you refinance federal and/or private student loans, you’re given a new — ideally, better — interest rate on a single new private loan. A lower rate translates to total interest savings over the life of the loan. Further, you may be able to lower your monthly payments with a longer term or pay your loan off faster (with higher monthly payments) if you decide to shorten your repayment term.

Recommended: Student Loan Refinancing Calculator

Don’t forget: Refinancing federal student loans with a private lender means you’re no longer eligible for federal repayment programs, forbearance, loan forgiveness programs, and other protections and benefits extended to federal student loan borrowers.

4. Apply for Forbearance or Deferment

If you’re struggling with your loan payments, it might be time to grit down, pick up the phone, and call the loan servicer. Quite a few banks and lenders have forbearance and deferment programs, although they are mostly dependent on the customer reaching out and asking for help.

Federal student loans also offer student loan forbearance and deferment options. Forbearance can allow for decreased or delayed payments for a specific period of time, often up to 12 months.

Some lenders may offer to reduce the interest rate being charged on the debt, but there are no federal guidelines for terms for forbearance agreements across all industries (with the exception of federal student loans).

On the surface, this sounds positive, but be forewarned that these options can significantly affect credit history and credit scores. The effects on credit depend on the type of loan and the lender, and whether forbearance or other payment or rate adjustments are available or chosen.

Here’s to Stability

You’ve paid down whatever you’ve managed so far on your college loans, so what are your plans now? Are you happy with your current interest rates? Do you like your lender and/or servicer?

As you get more established with a financial track record and the start of a career, know that refinancing or consolidating can help either pay things down more quickly or help secure terms that fit where you are in life right now — and where you’d like to be in the near future.

If you’re thinking about refinancing, consider SoFi. SoFi offers a fast, easy online application, competitive rates, and no origination fees.

Prequalify for a refinance loan with SoFi today.

SoFi Student Loan Refinance
Terms and conditions apply. SoFi Refinance Student Loans are private loans. When you refinance federal loans with a SoFi loan, YOU FORFEIT YOUR ELIGIBILITY FOR ALL FEDERAL LOAN BENEFITS, including all flexible federal repayment and forgiveness options that are or may become available to federal student loan borrowers including, but not limited to: Public Service Loan Forgiveness (PSLF), Income-Based Repayment, Income-Contingent Repayment, extended repayment plans, PAYE or SAVE. Lowest rates reserved for the most creditworthy borrowers. Learn more at SoFi.com/eligibility. SoFi Refinance Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.


Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

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.

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May
31
2023
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How Many College Students Are in Debt?

By | Debt Payoff, Fresh Out of School, Student Loans, student_loan | Comments Off on How Many College Students Are in Debt?

American students and their parents continue to take out student loans to pay for their undergraduate and graduate degrees.

People who are attending college are paying for tuition, room and board, books, and other necessities by taking out student loans or using credit cards.

Paying for college has become more expensive as tuition costs have continued to rise each year. For the 2022-2023 academic year, the tuition for full-time in-state students attending public colleges and universities was $10,950, according to the College Board. Tuition at private colleges and universities for the 2022-2023 academic year was $39,400.

The average federal student loan debt per person in 2023 is $37,338. Private student loan debt is almost $55,000 per borrower.

Americans now owe over $1.6 trillion in student loans. More than 43 million people, both graduates and their parents, have amassed a large amount of debt to pay for higher education.

Paying Down Student Debt Faster

Borrowers can maximize their financial resources and accelerate their repayment schedule in a few different ways.

Some options might include making extra payments by creating a budget, cutting expenses, getting a part-time gig, paying down other debt, and refinancing student loans.

Budgeting Effectively

Creating a budget can help borrowers see and understand all their expenses. A budget could make someone more aware of how much they are spending on eating out or entertainment each month.

Being able to refer to a budget can come in handy when you’re paying bills each month. There are plenty of options to choose from when it comes to budgeting and tracking spending.

After you have created a budget, examine your monthly expenses. One way to do this is to look at your expenses by different categories, such as bills, daily expenses such as parking, necessities such as groceries, and non-essential items such as entertainment.

Going through each category can help a consumer decide what is a priority. It can also help remind you of expenses you’re paying each month, but not using often such as a streaming movie or TV service.

Consider negotiating with the service provider, such as an internet or cable company, to see if there are less expensive options or if they are offering special deals currently.

Making Extra Payments

Making extra payments whenever borrowers can afford can help speed up the repayment process.

Neither federal or private student loans have prepayment penalties, which means borrowers won’t be penalized for making extra payments or paying their loan off ahead of schedule.

When making over payments, check in with the loan servicer to confirm how it will be applied to the loan or loans. For example, a borrower with multiple loans may choose to spread the extra payments evenly among each loan. Others may choose to concentrate on the loan with the highest balance or the highest interest rate.

Another note, lenders may first apply overpayments to the interest accrued on the loan. Borrowers may have to request the extra payment be applied to the principal balance of the loan. The important thing is to be sure you understand exactly where the payment is going.

Focusing on High Interest Debt

When it comes to students and debt, sometimes it’s more than just student loans. Paying down other debt, such as credit cards with higher interest rates or personal loans, can also lower your overall debt.

While some people prefer to pay off their debt with the lowest balance, other people prefer to start tackling the one with the highest interest rate.

Here are some ideas that could help someone pay off their credit cards or personal loans sooner.

•   Making more than the minimum payment. Even an extra $25 or $50 a month adds up.

•   Contacting the credit card company and asking for a lower interest rate.

•   Using automatic payments to avoid missing a payment and incurring a late fee.

•   Stopping using the credit card for additional purchases.

•   Obtaining another credit card with a lower interest rate and transferring all or a portion of the balance.

Some lenders may charge a prepayment penalty for some types of loans or credit, so double check the terms to be sure.

Getting a Second Job or Side Hustle

One way to help pay down student loans faster is to obtain a second part-time job. The additional income from the second job could go towards extra payments on the loan.

Finding a second job could be accomplished by asking your friends or co-workers for referrals. They might know of a small business or person who needs a helping hand or temporary work on a short-term project.

Depending on the gig, some of the work could be completed online or during weekends.

Checking job boards, social media, and with your current network could net you some temporary gigs such as babysitting, pet sitting dogs or cats, or running errands for a professional.

Another strategy is to sell any unused items that are sitting around in your home. Cleaning out your closet or garage could help people come up with some extra income that can be used to make an extra payment or two.

Selling musical instruments, electronics, clothing, or shoes online or at a resale shop is one way to sell the items quickly. Social media is another way to sell your unwanted guitar or electronic tablet that is just collecting dust.

Recommended: 23 Ways to Make Extra Income From Home

Making Lump Sum Payments

Sometimes, making consistent extra payments on a loan isn’t an option. In that case, consider making a lump sum payment whenever you get a larger amount of money from a tax refund, birthday gift, or bonus at work.

Apply all or a portion of the extra money to a payment. Making extra payments applied to the principal can help reduce the amount of interest paid in the long term.

Refinancing Student Loans

Making changes to your budget, slashing your expenses, and getting another gig could help you pay down your student loans faster. Focus on the improvements you have made and create both short-term and longer term financial goals. Refinancing is another option that could potentially help a borrower speed up their repayment.

Student loan refinancing could help qualified borrowers secure a lower interest rate, which also means that more of the money paid each month will go towards the amount that was originally borrowed — the principal value.

This could help students and their parents finish paying off their student loans sooner. A lower interest rate could also reduce the amount of money spent in interest over the life of the loan.

Refinancing can also help make monthly payments more affordable, which could be helpful to people with a tight budget.

However, getting a lower monthly payment when refinancing could be a result of extending the repayment term, which would ultimately mean the loan costs more in the long run.

Refinancing also allows borrowers with multiple loans to combine them into a single loan. This can help streamline the repayment process, since the borrower will be repaying a single loan with a single lender, instead of making multiple payments each month, sometimes to different lenders.

A student loan refinancing calculator can help give you an idea of the amount of your new monthly payments. Any extra money saved each month could be used to pay for other debt such as credit cards or towards your savings for an emergency, a down payment for a car or house, or other goals such as a vacation.

SoFi gives people the option to refinance both federal and private loans. Before you refinance your federal student loans, consider whether keeping the repayment benefits that they offer, such as forgiveness programs or income-driven repayment plans, could be useful to you in the future. When you refinance with a private lender like SoFi, those benefits are no longer available.

The application process at SoFi can be completed easily online and there are absolutely no hidden fees.

Find out if you prequalify to refinance with SoFi, and at what rate, in just a few minutes.

SoFi Student Loan Refinance
Terms and conditions apply. SoFi Refinance Student Loans are private loans. When you refinance federal loans with a SoFi loan, YOU FORFEIT YOUR ELIGIBILITY FOR ALL FEDERAL LOAN BENEFITS, including all flexible federal repayment and forgiveness options that are or may become available to federal student loan borrowers including, but not limited to: Public Service Loan Forgiveness (PSLF), Income-Based Repayment, Income-Contingent Repayment, extended repayment plans, PAYE or SAVE. Lowest rates reserved for the most creditworthy borrowers. Learn more at SoFi.com/eligibility. SoFi Refinance Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.


Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

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.

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May
31
2023

What Is a Financial Crisis?

By | invest, Investing, Terminology | Comments Off on What Is a Financial Crisis?

A financial crisis is a situation in which the financial sector and economy of a country, or the world, is thrown into a state of temporary upheaval. A financial crisis can have several causes, whether stock market crashes, political instability, and even global pandemics.

Financial crises are also not a new phenomena, and the United States has experienced many in its history.

Financial Crisis Definition

During a financial crisis, asset prices drop rapidly, usually over the course of days or a few weeks. This drop is often accompanied by a stock market crash as investors panic and pull money from the market. It may also be associated with bank runs in which consumers withdraw assets for fear they will lose value if they remain in the bank. This type of downturn may signal the beginning of a recession.

Recessions are a general period of economic decline during which unemployment may rise, income and consumer spending may fall, and business failures may be up. (To stay up-to-date on the current financial crisis and possible recession visit SoFi’s Recession Help Center.)

Common Causes of Financial Crises

There are a number of situations that can cause a financial crisis, including the bursting of financial bubbles (such as the dotcom bubble), defaults on debt, and currency crises.

Stock market bubbles occur when stock prices rise precipitously, often driven by speculation and investors overvaluing stocks. As more people jump on the bandwagon and buy stocks, prices are driven higher, a cycle that is not based on the stock’s fundamental value. Eventually, the situation can become unsustainable, and the bubble bursts. Investors sell and prices drop quickly.

A failure to meet debt obligations can also lead to a financial crisis. For example, a country may be unable to pay off its debts. This may happen as a country starts to face higher interest rates from lenders worried that the country may not be able to pay back their bonds. As lenders require higher bond yields to offset the risk of taking on a country’s debt, it becomes more and more expensive for that country to refinance. Eventually, the country could default on its debt, which can cause the value of its currency to drop.

A currency crisis occurs when a country’s currency experiences sudden volatility as a result of factors such as central bank policies or speculation among investors. For example, a currency crisis may occur when a country’s central bank pegs its currency to another country’s floating currency (one whose value depends on supply and demand) and fails to maintain that peg.

Examples of Financial Crises

Financial crises date back hundreds of years, and perhaps the first was the South Sea Bubble of 1720. Here’s a look at a handful of other well-known financial crises that have happened in the United States and around the world:

America’s First Financial Crisis

The United States’ first financial crisis occurred in 1790. At that time, the U.S. had few banks, and Alexander Hamilton wanted to model the U.S. financial system after the systems that existed in Britain and Holland. He created the first central bank, known as The First Bank of the United States (BUS). To get the bank off its feet, the public could buy shares in the bank with a mixture of cash and government bonds.

Two problems arose: The demand for government bonds to buy shares led some investors to try and corner the bond market by borrowing widely to buy bonds, and the BUS quickly grew, becoming the nation’s largest lender. Investors, flush with credit, began to use their newfound cash to speculate in futures contracts and short sales markets.

In spring of 1792, the BUS ran low on hard currency and cut lending. The BUS’ leadership was forced to take on new debt to pay off old debt, and tightening credit, led U.S. markets on a downward spiral.

With the system on the verge of collapse, Hamilton was forced to use public funds to buy back U.S. bonds and prop up the price of those bonds. Additionally, he had to direct money to failing lenders, and allowed banks with collateral to borrow as much as they wanted with a penalty rate of 7%. Not only was this America’s first financial crisis, it was also the first instance of a government bailout, setting a precedent for future financial crises.

The Stock Market Crash of 1929

Perhaps the granddaddy of financial crises, the 1929 stock market crash came at a time when stock speculation led to booming markets. At the same time, however, consumer prices were falling and some established businesses were struggling, creating tension within the economy.

The Federal Reserve raised interest rates, in an effort to slow the overheated markets. Unfortunately, the hike wasn’t big enough to slow the economy. It ended up further hurting already weakening businesses, and industrial production continued to fall.

The market crashed on October 28 and October 29, 1929. The 29th came to be known as Black Tuesday. By mid-November, the market was down 45%. By the next year, banks began to fail. Customers began withdrawing cash as fast as they could, causing bank runs.

The crisis devastated the economy, forcing businesses to close and causing many people to lose their life savings. It also sparked the Great Depression, the worst recession in U.S. history, and the Dow wouldn’t climb to its previous heights for 25 years.

The crash led to a number of financial reforms. The Glass-Steagall legislation separated regular banking, such as lending, from stock market operations. It also gave the government power to regulate banks at which customers used credit to invest.

The government also set up the Federal Deposit Insurance Commission (FDIC) to help prevent bank runs by protecting customer deposits. The creation of the FDIC helped stabilize the financial system, because individuals no longer felt they needed to withdraw their money from the bank at the slightest sign of economic trouble.

The 1973 OPEC Oil Crisis

In October 1973, the 12 countries that make up the Organization of Petroleum Exporting Countries (OPEC) agreed to stop exporting oil to the United States in retaliation for the U.S. decision to offer military aid to Israel. As a result of the embargo, the U.S. experienced gas shortages, and oil prices in the U.S. quadrupled.

Though the embargo ended in March of 1974, its destabilizing effects are largely blamed for the economic recession of 1973–1975. High gas prices meant American consumers had less money in their pockets to spend on other things, lowering demand and consumer confidence.

Other factors beyond the embargo, including wage-price controls and the Federal Reserve’s monetary policy, exacerbated the financial crisis. Wage-price controls forced businesses to keep wages high, keeping them from hiring new employees. In a series of monetary moves, the Federal Reserve quickly raised and lowered interest rates. Businesses unable to keep up with the changes protected themselves by keeping prices high, which contributed to inflation.

The period’s high unemployment, stagnant economic growth, and inflation came to be known as “stagflation.”

The Asian Financial Crisis of 1997–1998

The Asian financial crisis began in Thailand in July 1997. It spilled over to other East Asian nations and eventually had ripple effects in Latin American and Eastern Europe.

Before the crisis began, Thailand had pegged its currency to the U.S. dollar. After months of speculative pressure that depleted the country’s foreign exchange reserves, Thailand devalued its currency, allowing it to float on the open market. Malaysian, Indonesian and Singapore currencies were devalued as well, causing high inflation that spread to East Asian countries, including South Korea and Japan.

Growth fell sharply across Asia, investment rates fell, and some countries entered into recession.

The International Monetary Fund (IMF) stepped in, providing billions of dollars of loans to help stabilize weak Asian economies in Thailand, Indonesia, and South Korea.

In exchange for its loans, the IMF required new rules that led to better financial regulation and oversight. Countries that received the loans had to raise taxes, reduce public spending, and raise interest rates.

The Global Financial Crisis of 2007–2008

The origins of the global financial crisis of 2007 and 2008 are complicated. They started with government deregulation that allowed banks to use derivatives in hedge fund trading. To fuel this trading, the banks needed mortgages and began lending to subprime borrowers who had questionable credit. When interest rates on these mortgages reset higher, borrowers could no longer afford their payments.

At the same time, housing prices dropped as demand for homes fell, and borrowers who could no longer afford their payments were now unable to sell their homes to cover what they owed on their mortgage. The value of the derivatives collapsed and banks stopped lending to each other, resulting in a financial crisis and eventually the Great Recession.

As a result of the financial crisis, the government took over mortgage giants Fannie Mae and Freddie Mac, and bailed out investment banks on the verge of collapse. Additionally, Congress passed the Dodd-Frank Wall Street Reform Bill to prevent banks from taking on too much risk again in the future.

The European Sovereign Debt Crisis

The European Sovereign Debt Crisis followed swiftly on the heels of the global financial crisis in 2007 and 2008. The crisis largely began in Greece in 2009 as investors and governments around the globe realized that Greece might default on its national debt.

At that point the nation’s debt had reached 113% of its GDP. Debt levels within the European Union were supposed to be capped at 60%, and if the Greek economy slowed down it might have trouble paying off its debt. By 2010, the E.U. discovered irregularities in the Greek accounting system which meant that its budget deficits were higher than previously suspected. Bond rating agencies subsequently downgraded the country’s debt.

Investors were concerned that similar events might spread to other members of the E.U., including Ireland, Spain, Portugal and Italy, which all had similar levels of debt. In response to these concerns, investors in sovereign bonds from these countries demanded higher yields to make up for the increased risk they were taking on. That meant the cost of borrowing rose in these countries. And because rising yields lowers the price of existing bonds, eurozone banks that held these bonds began to lose money.

Eurozone leaders agreed on a €750 billion rescue package that eventually reached €1 trillion by 2012.

Investing During a Financial Crisis

Investing during a recession or financial crisis may not sound like a good idea. Watching stock prices plummet can give even the most seasoned investor reason for pause. But keeping an investment plan on track during a crisis is critical to future success. In the face of a financial crisis, there are a few considerations to make.

First, watching a market fall may inspire panic, tempting investors to pull their money out of a stock. However, that may be exactly the wrong instinct. Bear markets are typically followed by a recovery, although not always immediately, and selling assets may mean that investors lock in losses and miss out on subsequent gains.

Second, some investors engage in a strategy that involves buying more stock when markets are down. Purchasing stock when prices are low during a bear market may provide the opportunity for increased profits as the market turns around, though there are no guarantees.

The Takeaway

A financial crisis can have many causes, but usually leads to falling stock market prices, and often, a recession. There have been many financial crises around the world over the years, and in all likelihood, there will be more in the future. Down markets can be a good opportunity for investors to stress-test their risk tolerance, or to embrace more conservative strategies.

If you have questions about building a portfolio, allocating your wealth or how market conditions will affect your financial situations, it can help to talk to a financial professional.

Ready to invest in your goals? It’s easy to get started when you open an Active Invest account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

Opening and funding an Active Invest account gives you the opportunity to get up to $1,000 in the stock of your choice.¹

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Top 10 Fun Things to Do When Visiting Las Vegas

By | Budgeting & Goals, credit card, Money & Life | Comments Off on Top 10 Fun Things to Do When Visiting Las Vegas

Las Vegas is known for many things, typically its world-famous casinos and that legendary nightlife. There’s a reason they say, “What happens in Vegas stays in Vegas.”

For some people, those features of Las Vegas are exactly what they want. But not everyone loves to play the slot machines, try their luck at roulette, or sip those fancy cocktails. The good news is you don’t have to: There are countless things to do in Las Vegas, and only a small fraction involve drinking and gambling.

Here, learn about the best things to do when visiting Las Vegas because this Nevada town has a lot going on!

Best Times to Go to Las Vegas

The best times to visit Las Vegas can depend on your personal preferences. What do you want to do while you are there? Here are some things to keep in mind:

•   Weather: Las Vegas can be very hot if you opt for summer travel. Temperatures can exceed 100 degrees Fahrenheit during that time. So, if you prefer not to be covered in sweat, the best time to visit in terms of weather is usually in the fall (September to November) or spring (March to May), when temperatures are milder. However, if you are planning a visit that involves nothing but casino time, seeing shows, and hitting the pool, you can travel pretty much whenever.

•   Events: Las Vegas hosts many events and festivals throughout the year, including the Electric Daisy Carnival music festival in May, the World Series of Poker in the summer, and the National Finals Rodeo in December. If there is a particular event you want to attend, that could influence when you decide to go.

•   Crowds: Las Vegas is a popular destination all year, but certain times of year tend to be busier than others. The winter holidays and New Year’s Eve are typically the busiest times, while weekdays in the summer can be quieter.

Generally, the best time to visit Las Vegas depends on what you want to do and see. If you want to avoid crowds and extreme heat, consider visiting in the shoulder seasons of spring and fall. If you want to attend a specific event, plan your trip around that. Also, consider travel insurance to give yourself peace of mind in case you hit any obstacles before or during your trip.

Bad Times to Go to Las Vegas

Again, the bad times to visit Las Vegas are subjective and depend on your preferences. For most people, though, here are times of the year that might be less enjoyable:

•   Summer: As mentioned, temperatures can exceed 100 degrees Fahrenheit in the summer. That could make it an uncomfortable time to visit for many.

•   Major holidays: Las Vegas is a popular destination on many major holidays, including New Year’s Eve, Memorial Day, Fourth of July, and Labor Day. During these times, hotels and attractions can be crowded, and prices might be higher than usual.

•   Convention weekends: Las Vegas is a popular destination for business conferences and conventions, and hotel rates can be higher during these times. You might also find that the city is more crowded than usual.

As you can see, the worst times to visit Las Vegas also depend on your personal inclinations. If you want to avoid crowds and high prices, it’s best to avoid major holidays and conventions. If you can’t handle the heat, staying away during the summer is best.

Average Cost of a Las Vegas Vacation

The cost of a Las Vegas vacation can vary widely depending on factors such as the time of year, duration of your visit, accommodations, dining and entertainment options, and your budget for spending. It might help if you already have a travel fund, but it depends on how much you will spend. Here is a general breakdown of common expenses for a one-person and couple’s vacation:

One-Person Vacation:

•   Accommodations: A mid-range hotel room can cost around $100-$200 per night; luxury hotels in Vegas will of course typically be more, but you may be able to use hacks that will lower that cost and help you save money on hotels.

•   Flights: Round-trip flights generally cost around $200-$500, depending on the departure city and time of year.

•   Transportation: Taxis, Ubers, and public transportation can add up to around $50-$100 or more. Of course, they might cost you more money depending on how often you use them.

•   Food and drink: Meals can cost around $20-$50 per day, depending on where and what you eat, plus drinks and snacks can add another $20-$50 per day.

•   Entertainment: Shows, attractions, and activities can range from free to several hundred dollars per person. Tickets to those high-profile residencies can get quite pricey.

Total: A one-person vacation to Las Vegas can cost anywhere from $500 to $2,000 or more, depending on the above factors. Also consider things like traveling with pets, which will increase your costs as hotels typically add a charge and you might have additional transportation costs getting to pet-friendly parks.

Couple’s Vacation:

•   Hotels: A mid-range hotel room can cost around $100-$200 per night or more for a luxury hotel.

•   Flights: Round-trip flights can cost around $400-$1,000, depending on the departure city and time of year. However, you can save money or get extra perks with an airline credit card or cash back rewards credit card.

•   Transportation: Taxis, Ubers, and public transportation can add up to around $100-$200. Again, it depends in part on how much you use them.

•   Food and drink: Meals can cost around $40-$100 per day for two people, depending on where and what you eat. Drinks and snacks might add another $40-$100 per day.

•   Entertainment: Shows, attractions, and activities can range from free to several hundred dollars per person.

Total: A couple’s vacation to Las Vegas might cost anywhere from $1,000 to $4,000 or more, depending on the above factors. Naturally, how much you can afford will have an effect on your budget.

10 Fun Must-Dos in Las Vegas

Las Vegas is one of the best places in the country for all kinds of entertainment. Whether young or old, you are never more than a few steps away from something interesting. This list of the best things to do in Vegas is culled from top-rated attractions on popular review sites, as well as insider intel from savvy travelers.

The good thing about taking a trip to Las Vegas is that the Strip is generally the focal point. So, if you stay near the Strip, you are sure to find many attractions that are accessible. Just be sure to wear comfortable walking shoes, as traversing the Strip takes more steps than you might realize.

1. Visit the Las Vegas Strip

As the main attraction in Vegas, the Strip has numerous shops, restaurants, and shows. Of course, you can visit the casinos if you prefer, but even the Strip has plenty to do that doesn’t involve gambling. Admire the Bellagio’s fountains and the artwork inside the casino, or visit the Eiffel Tower at Paris Las Vegas. Visit the city’s museums, or enjoy some performances by the city’s various street performers. The Strip offers endless entertainment for all kinds of people. visitlasvegas.com/las-vegas-strip/

2. See a Live Show

Seeing a live show is one of the best things to do in Las Vegas. The city is home to many spectacular shows, including Cirque du Soleil, Blue Man Group, and magic shows. All the best shows are usually on the Strip, so catching a show is convenient, too.

3. Explore Fremont Street

This is the old downtown area of Las Vegas, with vintage casinos, bars, and the famous light show on the overhead canopy. While the Strip is generally the main attraction in Last Vegas these days, many people insist Fremont Street is the “real” Vegas experience. Today, Fremont Street is home to unbeatable experiences like the Viva Vision Light Show, an indoor zip line, and the vintage Golden Nugget casino. vegasexperience.com/

4. Ride the High Roller

Even if you aren’t a high roller in the casinos, you can feel like one in the High Roller observation wheel. This 550-foot-tall Ferris wheel is the world’s tallest observation wheel, offering a stunning view of the Las Vegas skyline. Because the High Roller is so tall, the seats are completely enclosed in glass to keep passengers safe. The High Roller is located in the heart of the Strip, on the property of the LINQ Hotel and Casino. Daytime tickets for a 30-minute ride are typically $8.50 for youth; $23.50 for adults; nighttime is $17.50 for youth, $34.75 for adults. caesars.com/linq/things-to-do/attractions/high-roller

5. Visit the Hoover Dam

Las Vegas has endless things to do, but sometimes, you just need an escape. Located just outside Las Vegas, the Hoover Dam is a marvel of engineering and a great place for a day trip. You can reach the Hoover Dam in about one hour by car from the Strip, so getting there isn’t too time-consuming. It was built between 1931 and 1936 during the Great Depression. It serves several purposes, including controlling flooding of the Colorado River, irrigating over 1,500,000 acres of land, and providing water to 16,000,000 people. Tickets are $10 for a self-guided tour; $30 for a guided tour. usbr.gov/lc/hooverdam/service/

6. Go Shopping

If you’re a shopping fiend, few places are better than Las Vegas. The city is home to many high-end shopping destinations, including the Forum Shops at Caesars Palace and the Fashion Show Mall. There are also indie shops, other malls on the Strip, and outlets. That includes Las Vegas North Premium Outlets, where you’ll find deals on designer brands like Versace, Paige, and Michael Kors. This could also be a great opportunity to earn credit card rewards.

7. Visit the Neon Museum

Be sure to check out The Neon Museum Las Vegas to see a visual representation of Vegas’s history. This outdoor museum is located just north of the Strip and showcases vintage neon signs from Las Vegas’s past. The museum provides guided tours of signs from Vegas, some of which are from famous landmarks from the 1930s to today. General admission is $10 for children, $20 for adults, and tours are available. neonmuseum.org/

8. Play Miniature Golf

Adults and children of all ages can enjoy some amazing mini-golf courses in Las Vegas. The city has several miniature golf courses, including the Twilight Zone by Monster Mini Golf and KISS World featuring KISS Mini Golf. Both courses feature mesmerizing glow-in-the-dark mini-golf. Las Vegas is undoubtedly one of the coolest places to play mini-golf, so be sure to check these out.

9. Go on a Helicopter Tour

Experience the stunning views of Las Vegas and its surrounding areas from above with a thrilling helicopter tour. Several helicopter tour options are available in Las Vegas, ranging from short sightseeing flights to longer tours that take you to nearby attractions like the Grand Canyon or Hoover Dam. Some helicopter tours are as brief as 10 minutes, while some can last several hours. Keep in mind that helicopter tours in Las Vegas can be expensive, ranging from around $100 to several hundred dollars per person. The cost depends on the length of the tour and the attractions included. Book now, pay later travel can help, though these services can have caveats, including incurring high-interest debt.

10. Visit the SkyPod

Visiting the Skypod at the Strat Hotel and Casino is a must-do activity when you’re in Las Vegas. This iconic tower offers stunning views of Las Vegas and an array of thrilling rides, including the SkyJump and Insanity. You can also see the surrounding mountains and desert from the observation deck. The tower stands 1,149 feet tall, making it the tallest freestanding observation tower in the United States. There are several dining options, including the award-winning Top of the World restaurant, which is located on the 106th floor of the tower and offers 360-degree views of the city while you dine. thestrat.com/attractions

Getting Around Town

Las Vegas doesn’t have a wide array of public transit options, but it does have the Las Vegas Monorail that runs along the strip. Unfortunately, the Monorail isn’t exactly cheap, but a 7-day pass might save a bit if you use it multiple times daily. There is also the Las Vegas Loop to transport you between convention halls. Tickets are a reasonable $4.50 per day. Renting a car is always an option as well.

Dining Details

Las Vegas is a great food city. The hotels are packed with amazing options from household-name chefs. You can also stray from the Strip and find local favorites offering affordable tacos, BBQ, and more. Research your favorite kinds of foods, and then let your tastebuds guide you.

The Takeaway

Las Vegas is known for its casinos, but there is much more to Vegas than just gambling. With world-class live performances, incredible dining, fantastic museums, and mesmerizing mini-golf, there is something for everyone in Las Vegas.

SoFi Travel is a new service exclusively for SoFi members. Through a partnership with Expedia, we make it easy to find the lowest rates and book your reservations — for flights, hotel rooms, car rentals, and more — all in one place. Earn 2x rewards when booking with your SoFi Mastercard or debit card. And when you redeem your SoFi rewards for travel, you get a 25% bonus: $100 of reward points are worth $125.


Wherever you’re going, get there with SoFi Travel.

FAQ

How do I get the most out of my Vegas vacation?

You can do many things to get the most out of your Vegas vacation. For example, you can stay on the Strip or at least nearby so you are centrally located and can easily move between destinations. You should also wear comfortable shoes and enjoy free things to do in Las Vegas, like the fountain shows at the Bellagio.

What is Las Vegas best for?

There are many things Las Vegas is great for, including the Strip, Fremont Street, live performances, and museums. Obviously, there are great shows, gambling, and all kinds of delicious dining options, too.

How much money should you take to Vegas?

How much money you should take to Vegas depends in large part on what you plan to do. An individual on a tight budget might be able to skate by on as little as $500 for a week-long stay. But a couple planning a luxury vacation might need as much as $4,000 or perhaps more.

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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.

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