What to Know About a Market Sell-Off

Often, the word sell-off is used in conjunction with market volatility, but you may wonder what, exactly it means, especially when it comes to your money. A market sell-off occurs when a large pool of investors decide to sell stocks. When they do this, stock prices fall as a result.

A market sell-off may be due to external events, such as when regional lockdowns were announced following the escalation of the COVID-19 crisis. But sometimes sell-offs can be triggered by earnings reports that failed expectations, technological disruption, or internal shifts within an industry.

During a market sell-off, stock prices tumble. That stock volatility might lead other investors to wonder whether they should sell as well, whether they should hold their current investments, or whether they should buy while stock prices are low.

There is no “right” answer for whether to buy, hold, or sell a stock during a market sell-off, but understanding the nature of a sell-off—as well as the purpose of your investments—can help investors decide on the right strategy for them.

Understanding Bull Market vs. Bear Market

Understanding the overall market environment (as well as common stock market terms) can help investors understand how sell-offs exist within the market.

It’s not uncommon to see references to a bull market and a bear market. A bull market is when the stock market is showing gains. There are no specific levels of increase that indicates a bull market, but the phrase is commonly used when stocks are “charging ahead”—and is generally considered a good thing. A bear market, on the other hand, is typically used to describe situations when major indexes fall 20% or more of their recent peak, and remain there for at least two months.

There are also “corrections.” This is when the market falls 10% or more from a recent stock market high. Corrections are called such because historically, they “correct” prices to a longer-term trend, rather than hold them at a high that’s not sustainable. Sometimes, corrections turn into a bear market. Other times, corrections reach a low and then begin to climb back to a more level price, avoiding a bear market.

What To Do During a Market Sell-Off

A sell-off can make news, and can make investors edgy. After all, investors don’t want to lose money and some investors fear that a sell-off portends more bad news, like a bear market.

portfolio diversification strategy may be different between investors, but the underlying anchor of any diversification strategy is, “don’t put all your eggs in one basket.” Since it’s not unusual for a sell-off to affect only parts of the market, a diverse portfolio may be able to better ride out a market sell-off than a portfolio that is particularly weighted toward one sector, industry, or exchange.

online ETFs that can help you build a more diverse investment portfolio to hedge against ups and downs.

Protecting a Portfolio From Sell-Offs

In addition to building a portfolio that’s less vulnerable to market volatility, investors have several options to further protect their portfolio. These preventative investment measures can remove emotion during a market dip or sell-off, so that an investor knows that there are stopgaps and safeguards for their portfolio.

Stop Losses

This is an automatic trade order that investors can set up so that shares of a certain stock are automatically traded or sold when they hit a price predetermined by an investor. This can protect an investment for an individual stock or for an overall market drop. There are several stop loss order variants, including a hard stop (the trade will execute when the stock reaches a set price) and a trailing stop (the price to trade changes as the price of the stock increases).

Put Options

Put options are another type of order that allow investors to sell at a set price during a certain time frame; “holding” the price if the stock drops lower and allowing the investor to sell at the higher price even if the stock drops further.

Limit Orders

Investors can also set limit orders. These allow an investor to choose the price and number of shares they wish to buy of a certain stock. The trade will only execute if the stock hits the set price. This allows investors freedom from tracking numbers as price points shift.

The Takeaway

A market sell-off is triggered when a large group of investors sell their stocks at once, causing stock prices to drop. A sell-off can be caused by world events, industry changes, or even corporate news.

There is no one smart way to react to a sell-off. Different investors will gravitate toward different strategies. But by researching companies and setting up a portfolio based on risk tolerance, an investor can feel confident that their portfolio can withstand market volatility.

Digital investing tools can help investors keep track of stocks. One such online investing platform is SoFi Invest®. SoFi lets users buy and trade stocks in an easy-to-use app, as well as access professional research, daily business news, and actionable market insights. Investors can also build a portfolio through automated investing, buying pre-selected groups of stocks curated by investment professionals.

Find out how SoFi can help you build and reach for your financial goals.


SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . The umbrella term “SoFi Invest” refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC Registered Investment Advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).

2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.

3) Digital Assets—The Digital Assets platform is owned by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.

For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, http://www.sofi.com/legal.

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.
Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.

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Source: sofi.com

The Cheapest Places to Live in Colorado

With its “300 days of sunshine,” Colorado is one of the sunniest — and most desirable — places to live in America.

People are moving to Colorado from all across the country. According to the Colorado Department of Transportation, the population will increase by 47 percent by 2040. Whether you choose to live in the city or a small town, it’s easy to find the cheapest places to live in Colorado.

Colorado state average rent prices

While average rent prices are above the national average, you can expect to pay about $1,797 for a one-bedroom apartment. Rent has slightly increased in 2020, up 0.16 percent year-over-year.

The cheapest cities in Colorado for renters

Although many people want to live in the mountain resort towns or the communities with the closest access to them, the rent prices in many areas are constantly on the rise. Instead of paying too much for a tiny space, you can opt to live in one of these cities. You’ll still have beautiful mountain views and plenty of sunshine.

These are the cheapest places in Colorado for rent prices.

10. Loveland

loveland colorado

  • One-bedroom average rent price: $1,522
  • Average rent change in the past year: 0.69%

Located 45 minutes from Denver and 35 minutes from Rocky Mountain National Park, Loveland is a great place for outdoor enthusiasts, art lovers, foodies and families. It’s a quieter town than many of the urban areas of the state and is one of the cheapest places to live in Colorado. Its main attraction, Boyd Lake State Park, is a water-sports haven with boating, fishing, camping, hiking and biking.

9. Aurora

aurora colorado

  • One-bedroom average rent price: $1,506
  • Average rent change in the past year: 0.04%

The third-largest city in Colorado, Aurora is a family-friendly community with plenty of affordable housing. Located just east of Denver, residents enjoy thousands of acres of open space, gorgeous reservoirs, trails and mountain sunsets. There’s plenty to do here because Aurora’s cultural art district, locally-owned boutiques and Colorado’s largest indoor marketplace offer endless shopping opportunities.

8. Arvada

arvada colorado

  • One-bedroom average rent price: $1,477
  • Average rent change in the past year: 7.16%

Conveniently located between Denver and Boulder, Arvada is the perfect suburban location with a small-town charm. Main attractions include the Arvada Center for Arts and Humanities, the Apex Center, the Cussler Museum and a historic shopping district. A highly educated workforce, low crime rate and access to outdoor adventures make this town a popular hometown for all ages.

7. Fort Collins

fort collins co

  • One-bedroom average rent price: $1,448
  • Average rent change in the past year: -2.05%

Situated at the base of the Rocky Mountain foothills of the northern Front Range, Fort Collins is a vibrant town with 19th-century homes, a vintage trolley, locally-run restaurants, pubs and boutiques.

West of the city, hiking and biking trails traverse Horsetooth Mountain Open Space, known for the peak’s distinctive rock formation and waterfalls. It’s a college town with Colorado State University located there, but it’s a quiet town with a low cost of living compared to larger cities in Colorado.

6. Thornton

thornton co

  • One-bedroom average rent price: $1,433
  • Average rent change in the past year: -3.19%

Thornton is 10 miles northeast of downtown Denver and is one of the cheapest places to live in the heart of Colorado and welcomes new residents looking to live a simpler life. The town is one of the first fully-planned in the area and boasts about two dozen city parks. There’s great access to shopping, dining and outdoor recreation.

5. Longmont

longmont colorado

  • One-bedroom average rent price: $1,432
  • Average rent change in the past year: -5.10%

Longmont sits just north of Boulder, with more than 1,500 acres of parks and open space and a spectacular vista of the Rocky Mountains. It’s a perfect home base for outdoor enthusiasts and just 30 miles from Rocky Mountain National Park.

With many major employers, miles of trails, a thriving dining and beverage scene, Longmont is a growing community with a distinctive character.

4. Colorado Springs

colorado springs co

  • One-bedroom average rent price: $1,368
  • Average rent change in the past year: 12.47%

Colorado Springs is best known for its gorgeous scenery including Pikes Peak, Garden of the Gods Park and Cave Of The Winds Mountain Park. It’s also one of Colorado’s largest cities and home to the U.S. Air Force Academy and dozens of other attractions.

The city also frequently ranks on lists of cities with the cleanest air and residents who are healthy and happy. Surprisingly, the cost of living here is consistently below the national average.

3. Greeley

greeley colorado

  • One-bedroom average rent price: $1,349
  • Average rent change in the past year: -9.81%

Located in the High Plains of northern Colorado, Greeley was initially a small agricultural community. Today, it’s grown to an affordable community and home to more than 100,000 people.

It’s centrally located about one hour north of Denver, less than an hour from Fort Collins, and half an hour from Loveland. The Colorado Model Railroad Museum, the Poudre River Trail and Weldwerks Brewery are among the most popular attractions.

2. Northglenn

northglenn colorado

  • One-bedroom average rent price: $1,345
  • Average rent change in the past year: -2.66%

Built as a master-planned community, Northglenn lies just north of Thornton and off of I-25 and is a suburb of Denver. Northglenn combines breathtaking landscapes and parks with commercial, educational and shopping areas. Because of these amenities, this affordable community tends to attract young families.

1. Brighton

brighton colorado

  • One-bedroom average rent price: $1,285
  • Average rent change in the past year: 0.15%

The cheapest place to live in Colorado as a renter is Brighton, a small town located just north of the Denver International airport. Since it’s only located about 20 miles northeast of Denver, it has great access to urban amenities and outdoor adventures. Residents enjoy boating and fishing at Barr Lake State Park and viewing bison, prairie dogs and all kinds of birds at Rocky Mountain Arsenal Wildlife Refuge.

The 25 cheapest places to live in Colorado

While many of the cheapest cities in Colorado center around the largest urban centers, there are also many smaller towns scattered throughout the state with affordable places to live. The following chart will give you an idea of the average rent in other communities.

Methodology

Rent prices are based on a rolling weighted average from Apartment Guide and Rent.com’s multifamily rental property inventory of one-bedroom apartments. We pulled our data in December 2020, and it goes back for one year. Our team uses a weighted average formula that more accurately represents price availability for each individual unit type and reduces the influence of seasonality on rent prices in specific markets.

We excluded cities with insufficient inventory from this report.

The rent information included in this article is used for illustrative purposes only. The data contained herein do not constitute financial advice or a pricing guarantee for any apartment.

Source: rent.com

Amenities to Look for When Working From Home | Apartment Search

Man sitting at office desk sipping from a mug and looking at a computerWorking from home was still considered a bit taboo and somewhat of a privilege for many people until recently. According to this Gartner survey, at least 80% of surveyed company leaders plan to allow employees to continue remote work — at least part-time. Research has shown us that employee happiness and productivity seem to be highest when workers are allowed to stay at home rather than commute to an office. This trend isn’t likely to disappear anytime soon.

Alongside this, many people are relocating since they now have the flexibility to work from almost anywhere. Apartment communities are paying close attention to this boom and have begun offering additional incentives to potential tenants for choosing to rent a space within their community. So, what are some of the most popular amenities being offered to those who find themselves working from an apartment?

Enhanced Concierge Services

These add-on services are not necessarily a new thing for some higher-end properties. But now that more people are working from home, concierge services are quickly becoming more of an essential rather than a luxury. Having a service dedicated to tenants for things like fetching food orders, laundry, dog walking, and package retrieval is a perk that apartment communities may offer to accommodate their WFH tenants further.

Built-in Nooks

Many apartment complexes now offer work areas or small alcoves within the apartments themselves that can be used for a dedicated home office setup. These nooks sometimes come already equipped with a built-in desktop space or a collapsible desk shelf. They’re usually furnished with power outlets and added extras like USB plug-ins so that you can keep your devices charged and ready to go at all times.

Co-Working Spaces

Apartments with coworking spaces are already pretty commonplace in most newer apartment complexes. Still, some are offering computers, printers, larger open areas with desks, comfy couches, and conference-style rooms for tenants to work privately. This trend started as a way to encourage human interaction between people who work from home. It may still be offered in some communities, taking into account social distancing and health guidelines.

Garden-Style Apartments

Working from home may be less stressful than going to an office every day, but we all need to take time out for relaxation. Garden apartments are unique compared to concrete highrise apartments and may allow for a more zen-like work from home experience. They’re typically surrounded by lush greenery and sometimes genuine gardens that can provide a sense of calm after a long day of work.

Pre-Furnished Apartments

If you’re looking for the ideal pad for a digital nomad-lifestyle, finding furnished apartments or temporary furniture for your next short-term destination is a must! After all, without quality furniture, you won’t be comfortable in your temporary space, and buying new furniture after each move is a quick way to put a dent in your savings account!

Turn to CORT for help decking out your new, temporary digs with whole-apartment furniture rental. We’ll turn any place into a furnished space, setting up your stuff before you move in and picking it up at the end of the lease.

Upgrade Your WFH Lifestyle

Whether you’re working from home in a small apartment part-time or full-time, it’s essential to have a relaxing and comfortable living space. From built-in office nooks to dedicated co-working spaces, apartment complexes are finding new ways to get remote workers’ business. Find available apartment units that fit your needs with ApartmentSearch. Check out our free search tool today!

Source: blog.apartmentsearch.com

How to Transfer Your 401(k) When Changing to a New Job: 401(k) Rollover Guide

It’s easy to forget about old 401(k) plans when changing to a new job. Some people simply forget about it because the company that manages it never reminds them. Others didn’t forget about their old account, but they’ve been putting off the rollover because it sounds hard.

Many companies don’t make the process easy for customers to roll over their 401(k) accounts from previous jobs. But it can be worth the inconvenience.

By not rolling it over, you might be losing some serious cash. That’s right—losing money, so it’s easy to miss. Here are a few key reasons to prioritize a 401(k) rollover.

3 Reasons to Transfer Your 401(k) to a New Job

There are three main reasons to rollover a 401(k):

1. To reduce fees. If the fees are too high with your previous employer’s 401(k), rolling over a 401(k) can be advantageous.
2. To maximize your money. If you aren’t happy with the investment options in your old 401(k) and your new employer accepts rollover 401(k)s, you might be able to save money while investing in a broader range of investment vehicles.
3. To streamline your investments. If you leave your 401(k) where it is, you may not think about it very often. It’s important to keep tabs on all of your investments so you can make sure they are on track and appropriate for your time horizon and goals.

You May Be Paying Hidden Fees

There are all sorts of fees that go into effect when you open a 401(k), including recordkeeping fees, maintenance fees, and fund fees. Expressed in a percentage, these fees inform the expense ratio of a plan.

Employers may cover those fees until you leave the company. Once you’re gone, that cost might shift to you without you even realizing it.

Fees matter: When you pay a fee on your 401(k), you’re not just losing the cost of the fee; you’re also losing all the compound interest that would grow along with it over time. The sooner you roll your plan over, the more you could potentially save.

You Might Be Missing Out on Better Investments

401(k) accounts grow at different rates depending on which assets you invest in. If the retirement savings plan at your new company—or an individual retirement plan (IRA)—offers a selection of stocks and bonds that better aligns with your financial goals, it might be time to initiate a rollover.

The money that’s sitting in your old 401(k) could potentially grow at a faster rate if you roll it over into a new plan or into an IRA—it’s certainly worth investigating the growth rates of each. Keep in mind that investors can lose money when investing, too, so it always makes sense to consider your personal risk tolerance when deciding how to invest your retirement accounts.

You Could Lose Track of the Account

It’s not your fault, it’s just logistics. It’s harder and more time-consuming to juggle multiple retirement accounts than it is to juggle one. Until you retire, you’ll be managing two (or more) websites, two usernames and passwords, two investment portfolios, and two growth rates for decades.

And if you leave this next job to go to a third (or a fourth, or a fifth), the 401(k) plans could pile up, creating even more tracking work for you. Plus, when you’re no longer with an employer, you might miss alerts about changes that may occur with an old retirement plan.

What to do With Your 401(k) After Getting a New Job

While it’s generally allowed to leave your account in your former employer’s plan when you switch jobs, there are other options.

•  Cash out the account. If you take this route and you’re younger than 59½ years old, you will owe taxes and might also owe early withdrawal penalties depending on how you use the money.
•  Roll over the 401(k) account. You could roll the account into your new employer’s retirement plan (if allowed) or into an IRA.

Cashing Out Early

Should you choose to cash out your 401(k), you will have to pay taxes on the money, and perhaps an additional 10% early withdrawal fee.

That said, there are some circumstances when the 10% fee is waived (but not the income tax), such as when the funds will be used for eligible education expenses, certain medical expenses, or expenses related to a first-time home purchase, among other circumstances.

Rolling Over a 401(k) to Your New Employer’s Plan

The process of rolling over a 401(k) might seem intimidating or inconvenient at first, especially if you’re moving onto your second job and this is the first time you’ll be rolling over a 401(k). In actuality, the actual process of rolling over a 401(k) isn’t too complicated once you’ve decided where your existing funds are going to go.

Advantages of Rolling Over Your 401(k)

Rolling over your 401(k) to a new plan can be advantageous to your overall financial plan. Here are a few ways this transition might be beneficial to your financial well-being.

One Place for Tax-Deferred Money

Transferring your 401(k) to your new employer’s plan can help consolidate all of your tax-deferred dollars into one account. Keeping track of and managing one account may simplify your money management efforts.

A Streamlined Investment Strategy

Not only does consolidating your previous 401(k) with your new 401(k) make money management easier, it can also streamline your investment strategies.

Financial Service Offerings

Some 401(k) plans offer financial services, such as financial advisor consultations, to help employees achieve their retirement goals. If your previous employer didn’t offer this service and your new plan does, taking advantage of this offering may help you achieve an investment plan that meets your exact goals rather than a standardized option.

Access to a Roth Option

An increasing number of employers are offering a Roth 401(k) option in addition to the traditional 401(k) option. With a Roth 401(k), the money you contribute is after-tax—it doesn’t minimize your taxable income. But when you take distributions in retirement, you won’t have to pay taxes on the withdrawal amount. As long as the account has been open for five years and you’re over 59 ½, you can receive tax-free distributions.

A Roth 401(k) option can be appealing if you feel your income in retirement will be higher than your current income. If your new employer offers this benefit and you think it will be advantageous to your financial situation, then rolling over your 401(k) to a Roth 401(k) plan may make sense.

How to Roll Over Your 401(k)

So, how do you transfer your 401(k) to a new job? If you decide to roll your funds into your new employer’s 401(k), you’ll most likely need to:

1. Contact the plan administrator to arrange the rollover. You may need to choose the types of investment you would like before you initiate the rollover. If not, you can take a lump-sum transfer and allocate the funds gradually to different investments of your choosing.
2. Complete any forms required by your employer for the rollover.
3. Request that your former plan administrator send the fund via electronic transfer or a check so you can move the funds directly to the administrator of the new plan.

It’s possible that you might have to wait until your employer’s next open enrollment period to complete the rollover, but you might consider using that time to research the plan’s investment options so you’ll be ready when the time comes.

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Rolling Over a 401(k) Into an IRA

If you choose to roll your 401(k) funds into an IRA that’s not employer-sponsored, a direct rollover is the method that takes most of the guesswork out of the transfer. This means that the funds will be taken from your previous account and rolled directly into the new account.

Doing it this way should avoid your previous lender sending you a check and resulting in any unforeseen early withdrawal tax situations.

Opening a new retirement account online is fairly straightforward, but there are some steps to opening an IRA that might be worth reviewing before you start. Once your funds are rolled over, you’ll be able to choose the investments that work for your retirement goals.

401(k) Rollover Rules

When requesting a transfer, you may either select a direct and indirect rollover. With a direct rollover, the check is made out to the financial institution (for your benefit). Because the funds are directly deposited into the new account, no taxes are withheld.

With an indirect rollover, the check is payable to you, with 20% withheld for taxes. You’ll have 60 days to roll over the funds (80% of your previous plan) into an IRA or other retirement plan. If you want to contribute the full amount of your previous plan, you can add money to bring the lump contribution back up to the balance before rollover. At that point, you’d be able to count the 20% withheld as taxes paid.

The Takeaway

There are many benefits to rolling over a 401(k) after switching jobs, including streamlining your retirement accounts and directing your money so that it suits your individual financial needs and goals. While some may view it as inconvenient, it’s actually a straightforward process whether you want to roll over a 401(k) into your new employer’s plan, or into an IRA.

Not sure which rollover strategy is right for you? SoFi Invest® offers retirement savings plan options. With a SoFi Roth or Traditional IRA, investors have access to a broad range of investment options, member services, and our robust suite of planning and investment tools.

Find out how to take control of your retirement options with SoFi Invest.


SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . The umbrella term “SoFi Invest” refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC Registered Investment Advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).

2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.

3) Digital Assets—The Digital Assets platform is owned by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.

For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, http://www.sofi.com/legal.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
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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Source: sofi.com

Retained Earnings vs. Net Income

Companies have several different types of earnings, each of which provide different information about their revenues and insight into their financial health. On a company’s balance sheet—which is a key piece of information in evaluating a company’s stock value—it will report details about its expenses and earnings, including retained earnings and net income.

Net income (NI), or net earnings, is the amount of money a company has left after subtracting operating expenses from revenue. Retained earnings goes a step further, subtracting dividend payouts to shareholders.

This article will cover how to calculate and interpret retained earnings and net income, the differences between them, and why they’re important for investors who are trading stocks online.

What is Net Income?

Net income (NI) is an indication of how profitable a company is. It is a basic calculation showing the difference between its earnings and expenses, which can include labor, marketing, depreciation, interest, taxes, operational expenses, and the cost of making products.

How to Calculate Net Income

Use the following formula to calculate the net income of a company:

Net Income = Revenue – Expenses

For example, if a company makes $50,000 in revenue during an accounting period and has $30,000 in expenses, their net income is $20,000.

Understanding Net Income

Net income is often referred to as the bottom line, since it appears on the bottom line of a company’s balance sheet and is the basic calculation of a company’s profit.

NI is used to calculate earnings per share, and is one of the key figures investors use when evaluating companies. When people talk about a company being in the red or in the black, they are referring to whether the company has a positive or negative net income.

It’s important to note that net income can be manipulated through the hiding of expenses and other means. It can be hard to figure out if this is happening, but investors might want to be wary of this and look into what numbers are being used in the net income calculation.

What Are Retained Earnings?

Retained earnings (RE) may also be referred to as unappropriated profit, uncovered loss, member capital, earnings surplus, or accumulated earnings.

paying out dividends to please shareholders. After a company completes dividend payouts, they retain the amount of earnings that are left, and may decide to reinvest them into the business to continue to grow, pay off loans, or pay additional dividends.

It’s useful to understand RE when looking into companies to invest in, because they show whether a company is profitable or if all of their earnings are going towards dividends. If a company’s retained earnings are positive, this means they have money available to invest and put towards growth.

On the other hand, if a company has negative retained earnings, it means they are in debt, which is generally not a good sign.

How to Calculate Retained Earnings

Use the following formula to calculate the retained earnings of a company:

Retained earnings = Beginning retained earnings + Net income or loss – Dividends paid (cash and stock)

All of this information is available on a company’s balance sheet. In order to find beginning retained earnings one will need to look at the previous period’s balance sheet.

For example, if a company starts with $8,000 in retained earnings from the previous accounting period, these are the beginning retained earnings for the calculation. If the company makes $5,000 in net income and pays out $2,000 in dividends to shareholders, the calculation would be:

$8,000 + $5,000 – $2,000 = $11,000 in retained earnings for this accounting period
Since retained earnings carry over into each new accounting period, profitable companies generally have increasing retained earnings over time, unless they decide to spend them.

Understanding Retained Earnings

The calculated retained earnings show a company’s profit after they have paid out dividends to shareholders. If the calculation shows positive retained earnings, this means the company was profitable during the specified period of time. If the retained earnings are negative, this means the company has more debt than earnings.

Companies can use this figure to help decide how much to pay out in dividends and how much they have available to reinvest.

Although negative RI isn’t ideal, investors should consider the company’s individual circumstances when evaluating the results of the calculation. There are some instances in which negative retained earnings are fairly normal and not necessarily a reason to avoid investing.

How to Assess Retained Earnings

When assessing the retained earnings of a company, the following factors should be taken into account:

•  The company’s age. If a company is only a few years old, it may be normal for it to have low or even negative retained earnings, since it must make capital investments in order to build the business before it has made many sales. Older companies tend to have higher retained earnings. If a company has been around for many years and has low or negative retained earnings, this may indicate that the company is in financial trouble.
•  The company’s dividend policy. Some companies don’t pay out any dividends, while others regularly pay out high dividends. This will affect their retained earnings. In general, publicly-held companies tend to pay out more dividends than privately-held companies.
•  The period of time used in the calculation. Some companies are more profitable at certain times of year, such as retail businesses. If one looks at retained earnings during the holiday season or other popular times for retail, the company may save up their profits from those times in order to get through slower times. For this reason, the same company might show different retained earnings depending on what time period is used in the calculation.
•  The company’s profitability. More profitable companies tend to have higher retained earnings.

What’s the Difference Between Retained Earnings and Net Income?

Although retained earnings and net income are related, they are not the same. While net income helps with understanding profit, retained earnings help with understanding both profit and growth over time.

At times, a company may have negative retained earnings but positive net income. This is what is known as an accumulated deficit. Or the opposite may occur. For example, if a company earned $60,000 in revenue and they have $40,000 in expenses, their net income is $20,000. If they then pay out $10,000 in dividends to shareholders, the retained earnings calculation would be:

$0 + $20,000 – $10,000 = $10,000 in retained earnings

If a company has a healthy net income and retained earnings, this may be a good time for them to reinvest some of their money into growing the business. In some cases, retained earnings and net income may be the same—as when a company doesn’t pay out dividends and has no retained earnings carried over from the previous period.

Why do Retained Earnings and Net Income Matter?

Investors are often interested in retained earnings and net income because they help show the long-term financial health of a company. Figures such as revenue and expenses vary with each accounting period, and they don’t give as accurate a picture of debt and opportunity for growth.

debt-to-equity ratio, which is a measure of how much debt it takes for a company to run its business.)

Retained earnings are also useful for companies to help determine how to spend their money. If retained earnings and/or net income are low, it might be best for the company to save their money rather than reinvesting it or paying out dividends. If the numbers are high, they can consider spending it.

The Takeaway

Net income and retained earnings are two useful calculations that can help investors assess a company’s health, and that can help a company decide what to do with their earnings. They’re a key part of a company’s overall financial picture.

The big difference between the two figures is that while net income looks at revenue minus operating expenses, retained earnings further deducts dividend payouts from NI. Both can help form an overall view of the profitability and risk of a company.

Investors ready to start buying and selling stocks might want to consider a SoFi Invest® account, which offers complimentary advice and other benefits that can help individuals set and work toward their personal financial goals.

Find out how to open a SoFi Invest account today.


SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . The umbrella term “SoFi Invest” refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC Registered Investment Advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).

2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.

3) Digital Assets—The Digital Assets platform is owned by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.

For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, http://www.sofi.com/legal.

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.
SOIN20226

Source: sofi.com

The Ultimate College Apartment Checklist [Downloadable]

Life in college this year has been a little… inconsistent. Current housing conditions seem to change campus to campus, semester to semester. All virtual. Hybrid learning. In person. No persons. Even 14-day quarantine shutdowns force students back to Zoom.

With all the unpredictability surrounding the pandemic, you never know when a dorm will be open or if you can even stay on campus. Living in an off-campus apartment has always been a luxury option, but this year it may be a necessary option. Many are moving into neighborhood apartments at the beginning of the fall semester and many are deciding to do it for the spring. These days, it’s not unreasonable to even move to an apartment mid-semester.

College essentials you’ll need in your apartment

You have a lot on your mind, and the thought of inventorying every little thing you need to pack to move into a new apartment — or move back in for a new semester — might be a little overwhelming. Whether you’re a first-time renter or a veteran mover, having an easy-to-use college apartment checklist might help out an awful lot.

Below you’ll find a fairly comprehensive list of the college essentials you’ll need to pack up and move into your off-campus apartment. You can also download our checklist to reference whenever you want.

Just be sure to check in with your roommates to ensure you aren’t duplicating items you only need one of and that your styles match.

Jump ahead by room:

Living room

living room

Of all the rooms in your apartment, your living room is the one that will take the most coordination with your future roommates to keep from having two or three or four of everything. This mostly goes for furniture (everyone can’t have their favorite couch) and electronics (multiple TVs playing at once isn’t a great look).

Don’t forget: Your roommates might use the living room as their remote class workspace, so be sure to keep that in mind when decorating. Use the space you have available to the best for all parties. You can set up a study spot, a work spot, a binging spot and a lounging spot — or any spots you like — and then know how to appropriately pack and furnish it.

Keep it bright with lamps and roomy for relaxing. Cover floors with comfortable rugs and blankets because you’ll be sure to spend time spread out on the floor, and follow your lease guidelines for what you can place on the walls and how.

Furniture

  • Couch, seats and ottoman
  • Coffee and end tables
  • Decorative pillows and throw blankets
  • Entertainment center or TV stand
  • Floor lamps

Electronics

  • Smart TV with Chromecast, Amazon Fire Stick or Roku
  • Netflix, Hulu and Amazon Prime Video accounts
  • Speakers or sound bar
  • Laptop and smartphone
  • Chargers, extension cords, power strips and HDMI cables
  • Wi-Fi router and extenders
  • Gaming console
  • Blu-ray or DVD players (if you’re old school)
  • Google Home or Alexa
  • Printer and paper

Décor

  • Area rug
  • Curtains
  • Shelving
  • Dry erase board or bulletin board
  • Bookcase and books
  • Pictures and paintings, frames and hooks
  • Clock and calendar
  • Houseplants

Bedroom

college apartment checklist bedroom

Conversely, there will be no room more personal and personalized than your bedroom. Even if you have a roommate who is quite literally your bedroom-mate, you will be responsible for packing and filling the entire room with your stuff intended just for you. This is your spot to snag (hopefully more than four hours of) sleep. It’s your private study carrel. It’s where you explore the fringes of Hulu by yourself. And where you may have some sleepovers.

In general, buying cheaper or used furniture will save you some time and money, but in your bedroom, don’t skimp on your bed frame and mattress. Not only do you want the best night’s sleep, but it will likely follow you around for a few years. And try to create a work/study desk area that maximizes the ways you concentrate best for max productivity.

And don’t underestimate how important your closet and storage spaces are. There’s little doubt that you’ll pack too much and you’ll buy a lot of things over the semester, as well. Know where all of your college essentials will go.

Furniture

  • Bed with frame, box spring and mattress
  • Dresser
  • Nightstand
  • Desk and desk chair
  • Fan
  • Mini-fridge
  • Trash bin
  • Area rug

Accessories

  • Pillows
  • Lamp
  • Alarm clock
  • Full-length and hand mirrors
  • School supplies, scissors, tape, stapler, pens and markers
  • Lap desk

Linens

  • Sheets and pillow cases
  • Mattress pad
  • Blankets
  • Comforter
  • Duvet cover

Storage

  • Hangers
  • Shelving
  • Under-the-bed boxes
  • Closet organizer
  • Shoe rack
  • Laundry basket and hamper

Apparel

  • Clothing
  • Shoes
  • Jackets and coats
  • Rain gear
  • Winter gear

Bathroom

bathroom

The bathroom, however, is a terrible combination of shared common area and most personal space. Before you furnish your bathroom, make sure you discuss with roommates how much or how little you want to share.

Sharing toiletry and hair care items can save money and sharing hair dryers and towel sets can save limited space. But your bathroom routine is very personal, so no one can fault you for wanting to have your own stuff.

You’re most likely going to have a lot of personal college apartment checklist items from cosmetics to over-the-counter medicines to electric toothbrushes, so consider your storage options carefully and minimize space. And maybe if you buy the cleaning supplies, that means you can guilt a roommate into doing the actual cleaning.

Bath accessories

  • Bath towels, hand towels and washcloths
  • Bathmat and bathroom rugs
  • Shower curtain
  • Scale
  • Wall decorations

Personal items

  • Hand soap and bath soap
  • Shower gel, body wash and face wash
  • Shampoo and conditioner
  • Nail clippers
  • Razors and shave gel
  • Toothbrush and toothpaste
  • Hair brushes and hair products
  • Hair dryer, straightener and curling iron
  • Medicine, aspirin, vitamins, Band-Aids and feminine products

Storage

  • Shower caddy
  • Shelves
  • Drawer organizers
  • Towel and over-the-door hooks
  • Toothbrush holder
  • Soap dish

Cleaning

  • Toilet brush and cleaner
  • Plunger
  • Wastebasket
  • Toilet paper and tissues

Kitchen / dining room

college apartment checklist kitchen

How you set up your kitchen and dining area is going to depend on how much cooking you’re going to do. But even if you Uber Eats every night or have a campus meal plan, the odds are that you’ll spend more time cooking than you thought you would. That’s why you need to have a kitchen at least minimally stocked with both ingredient and utensil college essentials and appliances, even if you don’t know a colander from a potato ricer.

Give yourself enough equipment to at least reheat leftovers and mix up some study food better than a bag of ramen. Exploring how to cook is an important skill to learn. But if you’re already an apartment chef extraordinaire, you’re going to want to make sure you’re well stocked with all the stuff you’ll need to wow your roommates and neighbors.

And like in any other room, storage is at a premium. Be sure to coordinate with roommates so you each have enough pantry, fridge and freezer space for all the take-out containers, ice cream and bags of chips for everyone, as well as only one slow cooker and Instapot. And don’t forget to pack up any local foods from home you can’t get at school.

Dining supplies

  • Dining table and chairs
  • A variety of plates
  • Cereal and soup bowls
  • Silverware
  • Glasses and plastic cups
  • Coffee mugs
  • Napkins and paper towels
  • Salt and pepper shakers
  • Placemats
  • Coasters

Cooking supplies

  • Large and small pots
  • Non-stick frying pan
  • Baking pans and trays
  • Measuring cups and spoons
  • Mixing bowls
  • Knife set and cutting board
  • Whisk and wooden spoons
  • Can and bottle openers
  • Tongs
  • Ladle
  • Pizza cutter
  • Ice cube trays

Ingredients

  • Flour and sugar
  • Baking powder and baking soda
  • Spices, salt and peppers, garlic powder and onion powder
  • Cinnamon and nutmeg
  • Cooking oils and non-stick spray
  • Vinegar
  • Condiments, ketchup and mustard

Appliances

  • Microwave
  • Blender
  • Coffeemaker and tea kettle
  • Toaster or toaster oven and oven mitts
  • Slow cooker or crockpot
  • Instapot
  • Portable electric grill
  • Brita filter

Cleaning and storage

  • Dishtowels
  • Sponges and dish soap
  • Drying rack
  • Dishwasher detergent or pods
  • Kitchen trash can and bags
  • Reusable grocery bags
  • Storage containers
  • Aluminum foil, plastic wrap and Ziploc bags
  • Paper towels and holder

Closets

college apartment checklist closet

If you haven’t picked up on the theme yet, storage is a big consideration when creating your college apartment checklist. Hopefully, your place comes with ample designated storage areas, such as a front closet, linen closet, extra drawers and under-sink spots, as well as maybe even a water heater closet, under-stair storage and attic.

These are the areas where you’ll need to store everything that doesn’t go somewhere else, including laundry items, extra towels and sheets, Tupperware, coats, cleaning sprays and hardware accessories. There are a number of college essentials that stay out of the way until you need them to keep your place clean and safe.

Cleaning items

  • Laundry detergent or pods and fabric softener
  • All-purpose spray cleaner
  • Glass cleaner
  • Broom, Swiffer duster, mop, Dustbuster and vacuum
  • Flatiron, handheld steamer and ironing board
  • Stain remover and wrinkle release spray
  • Lysol wipes, Lysol spray, hand sanitizer, masks

Accessory items

  • First-aid kit
  • Sewing kit
  • Tool kit with hammer, screwdrivers, wrench, nails and screws
  • Fire extinguisher and smoke and carbon monoxide detectors
  • Batteries
  • Lightbulbs
  • Flashlight
  • Doorstops
  • Stepladder
  • Copies of your lease
  • Travel bags and backpacks

Customize your college apartment checklist

As comforting and turnkey living in a dorm is, most college students live off-campus. In fact, as of 2016, nearly 90 percent do, a number that was likely to have gone up this year.

For many of you, this will be your first time living in your own place, having to furnish, decorate and occupy your own space. Even for those that have lived off-campus before, remembering and coordinating all the college essentials to bring without downloading a comprehensive college apartment checklist is daunting.

From big items like couches and boxsprings to appliances like coffeemakers and hair curlers to small items like scissors and cereal bowls, there are a slew of college essentials to remember to mark off your checklist. Just be sure to include tools, cleaning supplies and electronic cords, and coordinate with your roommates to have exactly as much of everything as you need.

Source: rent.com

Should You Invest With Friends?

Investing with friends might 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.

What To Talk About Before You Invest With Friends

Before pooling resources, it may be a good time to talk a little about how you each approach the market.

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 the investment as a way to diversify their portfolio.

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

•  What if this investment loses money?
•  What if one of us needs the money for an emergency?
•  What if more people want to invest in the future?

And 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 Invest With Friends

There are a few different ways to invest with friends.

Set Up a Brokerage Account

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

Start an Investment Club

Another option is to start what’s called an investment club. Depending on the circumstances, the club may have registration requirements so the SEC can regulate the club. Circumstances can vary by state. Some circumstances include having passive members who do not decide how the money is invested (ie, if partners or spouses input money but are not involved in investment decisions) or if there is a member providing investment advice or making investment decisions on behalf of the group. Because securities laws operate on both the state and federal level, it may be a good idea to make sure everyone fully understands state and federal regulations.

In some cases, an investment club may have to register with the SEC as an investment company. And someone who takes the lead on investment decisions without input from all members may also need to register with the SEC as an investment advisor. Your club also may need to write bylaws, create a legal partnership, and set up any necessary software.

Better Investing , a national nonprofit, has resources and sample club materials you can peruse to see if an investment club may be right for your friends.

Start a Casual Investing Club With Friends

Some people find investing with friends easier when they’re not actually poolings funds. There are investment clubs where members share experiences, invite financial advisors to speak, and otherwise talk portfolios—without sharing money and making joint investment decisions. This can be a way to dip your toe into the world of investing with friends, or help expand your knowledge on popular investment trends, like cryptocurrency or impact investing, that you’ve been curious about but have not yet had a chance to explore.

limited liability company (LLC) for the purpose of raising and investing cash, as well as to make 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.

The Takeaway

Some people see the benefits in investing with friends: the shared wisdom and experience, the mutual financial goals, and in some cases the pooled funds that may result in profitable returns.

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, there are other ways to enjoy that group dynamic while retaining full control of your money and your financial decisions.

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.

Find out how you can follow your friends’ investments with SoFi Invest®.


SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . The umbrella term “SoFi Invest” refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC Registered Investment Advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).

2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.

3) Digital Assets—The Digital Assets platform is owned by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.

For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, http://www.sofi.com/legal.

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.
Crypto: Bitcoin and other cryptocurrencies aren’t endorsed or guaranteed by any government, are volatile, and involve a high degree of risk. Consumer protection and securities laws don’t regulate cryptocurrencies to the same degree as traditional brokerage and investment products. Research and knowledge are essential prerequisites before engaging with any cryptocurrency. US regulators, including FINRA , the SEC , and the CFPB , have issued public advisories concerning digital asset risk. Cryptocurrency purchases should not be made with funds drawn from financial products including student loans, personal loans, mortgage refinancing, savings, retirement funds or traditional investments.
External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
SOIN20267

Source: sofi.com

Is a Reverse Stock Split Good or Bad?

A stock split allows companies to increase the number of shares offered to investors, without changing shareholder equity. Rather than issuing new shares, companies may split stock to reduce prices.

stock exchange.

Reverse stock splits don’t affect a company’s market capitalization, which represents the total number of a company’s outstanding shares multiplied by its current market price per share. But by consolidating existing shares into fewer shares, those shares can become more valuable.

Do You Lose Money on a Stock Split?

Avoiding losses is part of investing strategically, and it makes sense if investors wonder how a forward stock split or a reverse stock split could impact them financially.

A stock split itself doesn’t cause an investor to lose money, because the total value of their investment doesn’t change. What changes is the number of shares they own and what each one of those shares is priced at.

For example, if you have $1,000 invested before a forward stock split or a reverse stock split, you would still have $1,000 afterward. But depending on which way the stock split moves, you may own more or fewer shares and the price of those shares would change correspondingly.

If you own a stock that pays stock dividends, those dividend payments would also adjust accordingly. For instance, in a forward two-for-one split of a stock that’s currently paying $2 per share in dividends, the new payout would be $1 per share. If you own a stock that pays $1 per share in dividends, then undergoes a reverse stock split that combines five shares into one, your new dividend payout would be $5 per share.

Is a Reverse Stock Split Good or Bad?

Whether a reverse stock split is good or bad can depend on why the company chose to initiate it and the impacts it has on the company’s overall financial situation.

At first glance, a reverse stock split can seem like a red flag. If a company is trying to boost its share price to try and attract new investors, that could be a sign that it’s desperate for cash. But there are other indicators that a company is struggling financially. Poor earnings reports or a diminishing dividend could also be clues that a company is underperforming.

In terms of outcomes, there are two broad paths that can open up following a reverse stock split.

A Reverse Stock Split Could Create Opportunities

Path A creates new opportunities for the company to grow and strengthen financially, but this is usually dependent on taking other measures. For example, if a company is also taking steps to reduce its debt load or improve earnings, then a reverse stock split could yield long-term benefits with regard to pricing.

A Reverse Stock Split Could Result in Losses

On the other hand, Path B could result in losses to investors if the new price doesn’t stick. If stock prices fall after a reverse stock split, that means an investor’s new combined shares become less valuable. A Path B scenario may be likely if the company isn’t making other efforts to improve its financial situation, or if the efforts they are making fail.

Should I Sell Before a Stock Split?

There are many factors that go into deciding when to sell a stock. Whether it makes sense to sell before a stock split or after can depend on what other signs the company is giving off with regard to its financial health and how an investor expects it to perform after the split.

Investors who have shares in a company that has a strong track record overall may choose to remain invested. Even though a split may result in a lower share price in the near term, their investments could grow in value if the price continues to climb after the split.

price to earnings (P/E) ratio, earnings per share (EPS) and other key ratios that may be gleaned by reading the company’s earnings report, can give you a better idea of which direction things may be headed.

The Takeaway

A reverse stock split itself shouldn’t impact an investor—their overall investment value remains the same, even as stocks are consolidated at a higher price. But the reasons behind the reverse stock split are worth investigating, and the split itself has the potential to drive stock prices down.

Stock splits are something investors may encounter from time to time. Understanding what the implications of a forward or reverse stock split are and what they can tell you about a company can help an investor develop a strategy for managing them.

Investing in stocks alongside other securities can help an investor create a diversified portfolio over time, and make it easier to balance risk. With SoFi Invest®, members can build a portfolio that includes individual stocks, exchange-traded funds (ETFs) and cryptocurrency.

Find out how easy it is to start investing with SoFi.


SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . The umbrella term “SoFi Invest” refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC Registered Investment Advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).

2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.

3) Digital Assets—The Digital Assets platform is owned by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.

For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, http://www.sofi.com/legal.

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.
Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.
SOIN20300

Source: sofi.com

The Cheapest Places to Live in Oregon

Seems like everyone wants a slice of the Oregon pie these days. With diverse career options, abundant nature and good quality of life, it’s no secret why so many people are choosing to move here.

Finding your new home in this scenic Pacific Northwest state doesn’t have to break the bank. While most people set their sights on Portland, Oregon also boasts of many up-and-coming cities that are far more affordable. With rental options to suit all budgets, these are the cheapest places to live in Oregon.

Oregon average rent prices

With more and more people moving to Oregon in recent years, average rental rates have been on the rise. The state-wide average for a one-bedroom apartment currently clocks in at $1,667. However, that average is down 2.6 percent since last year.

The cheapest cities in Oregon for renters

Although Portland is by far Oregon’s most well-known city, many other more affordable towns are on the upward swing. Offering excellent rates alongside perks like intriguing cultural and food scenes, these are Oregon’s cheapest places to live.

10. Wilsonville

wilsonville oregon

  • One-bedroom average rent price: $1,486
  • Average rent change in the past year: 4.98%

Located just 20 minutes outside of central Portland, the historic city of Wilsonville in Clackamas County has much to offer. The area’s highlights include a well-regarded school system, family-friendly neighborhoods and urban green areas.

And for work, there are great career opportunities at regional facilities for national brands like Xerox. Rent prices have also held mostly steady over the past year, so that’s another plus.

9. Tualatin

taulatin oregon

  • One-bedroom average rent price: $1,454
  • Average rent change in the past year: N/A

With miles of walking paths and luscious city parks, Tualatin has it made in the shade for nature lovers. Willamette Valley wine country is also just a quick drive away. And there’s plenty of shopping, dining and entertainment at local malls like Bridgeport Village, so you’ll always find something to do.

8. West Linn

west linn oregon

  • One-bedroom average rent price: $1,416
  • Average rent change in the past year: 25.84%

West Linn is a thriving cosmopolitan center with plenty of great work opportunities and plenty of community activities. The community sits where the Willamette and Tualatin Rivers meet, so the area is also a hotspot for boating and fishing.

Rental prices are soaring throughout the Portland metropolitan area, and as a result, there’s a high demand for West Linn’s affordable rates.

7. Clackamas

clackamas oregon

  • One-bedroom average rent price:$1,362
  • Average rent change in the past year: 1.24%

The laid-back Portland suburb of Clackamas has long been a popular option among renters. It has easy access to the city, while still offering a convivial small-town atmosphere. In addition to all the comforts of suburbia, the outdoorsy charms of the Willamette Valley are also right next door.

6. Salem

salem oregon

  • One-bedroom average rent price: $1,342
  • Average rent change in the past year: 7.81%

Located an hour south of Portland, Oregon’s capital city is a family-friendly community full of history, excellent dining and lush parks. Salem’s steady and budget-friendly rental rates are increasingly attracting residents from nearby higher-priced spots like Portland or Eugene.

5. Gresham

gresham oregon

  • One-bedroom average rent price: $1,223
  • Average rent change in the past year: -7.80%

The city of Gresham is so much more than a suburb of nearby Portland. This culture-and-nature-focused city is a bonafide destination in its own right. Arts and culture are big here, so residents enjoy events like the Mt. Hood Jazz Festival.

There’s an abundance of beautiful city parks, and Mount Hood and the Columbia River Gorge are a short drive away. Rental rates are down, so people are swooping in to take advantage of everything this community-oriented city has to offer.

4. Milwaukie

milwaukie oregon

  • One-bedroom average rent price: $1,019
  • Average rent change in the past year: -19.10%

Rental rates in the Portland suburb of Milwaukie have dropped significantly in the past year. This decrease is sure to attract renters looking to experience the relaxed quality of life and suburban amenities.

With many urban green areas and riverside parks, as well, it’s a perfect city for walkers and outdoor lovers. The city is especially well-known for its many dogwood trees — it’s even called the “Dogwood City of the West.”

3. Springfield

springfield, oregon

  • One-bedroom average rent price: $1,007
  • Average rent change in the past year: 6.98%

This central Oregon city is often overshadowed by its sister city Eugene, but no longer. Springfield is truly coming into its own. An increasing number of renters are flocking there for the low rental rates and welcoming small-town vibes.

From local restaurants and breweries to exploring the historic Main Street and downtown, there’s plenty to do in town. But the beautiful Cascade Mountains are also right next door for hiking and other outdoor fun.

2. Boardman

boardman or

  • One-bedroom average rent price: $877
  • Average rent change in the past year: -3.91%

If you crave wide-open spaces, Boardman on the shores of the Columbia River is just the ticket. The region’s thriving agricultural industry, plus a bustling Tillamook cheese and dairy factory, offer ample opportunities for work. But there’s plenty to do for fun as well, like boating and fishing.

Among Oregon’s cheapest places to live, this is one of the few not located around Portland or in the Willamette Valley. So, if you’re looking for something more off-the-beaten-path, Boardman is a great option. Plus, the scenic views of the surrounding plains and meandering river are hard to beat.

1. Corvallis

corvallis oregon

  • One-bedroom average rent price: $838
  • Average rent change in the past year: 5.56%

Topping the list of the cheapest places to live in Oregon is Corvallis in the heart of the Willamette Valley. As the home of Oregon State University, there’s always something fun going on in the energetic social scene.

And, when you need a break from all the excitement in town, the coast or the mountains are nearby. All that, plus with an average rental rate of just more than $800, what’s not to love?

The five most expensive places to live in Oregon

Many of Oregon’s most expensive cities are actually located right next door to some of its more affordable. This makes it easy to find budget-friendly homes that are close to job opportunities and urban amenities. From long-time favorites like Portland to burgeoning spots like Beaverton, these are Oregon’s five most expensive places to live.

Methodology

Rent prices are based on a rolling weighted average from Apartment Guide and Rent.com’s multifamily rental property inventory of one-bedroom apartments. We pulled our data in December 2020, and it goes back for one year. Our team uses a weighted average formula that more accurately represents price availability for each individual unit type and reduces the influence of seasonality on rent prices in specific markets.

We excluded cities with insufficient inventory from this report.

The rent information included in this article is used for illustrative purposes only. The data contained herein do not constitute financial advice or a pricing guarantee for any apartment.

Source: rent.com

Understanding Cash in Lieu of Fractional Shares

It’s not uncommon for publicly-traded companies to restructure based on changing market conditions or share prices. When companies merge, split their stock, or acquire competitors, it can raise the question of how to consolidate or restructure the company’s stock.

If such a corporate action generates fractional shares, the company’s leadership has a few options for how to proceed: They could distribute the fractional shares, round up to the nearest whole share, or pay cash in lieu of fractional shares.

What is Cash In Lieu?

stock price, or both.

There are several company events that can lead to investors receiving cash in lieu of fractional shares.

Stock Split

A stock split occurs when a company’s board of directors determines that their company’s strongly performing stock price may be too high for new investors. To make the stock price look more attractive to more investors and gain more liquidity and marketability, a stock split is executed to artificially lower the stock’s price by issuing more shares at a fixed ratio while maintaining the company’s unchanged value.

Depending on the predetermined ratio, a stock split could cause fractional shares to be generated. For example, a three-for-two stock split of a stock worth $111 would create three shares for every two shares each investor holds. Thus, a stock split would cause any investor with an odd number of shares to receive a fractional share.

However, if the company’s board isn’t keen to hold or deal with fractional shares, they will distribute investors’ whole shares and liquidate the uneven remainders, thus paying investors cash in lieu of fractional shares. The ratio or cash rate as set by the company performing the stock split can be located on the company’s corresponding SEC 8-K document.

reverse stock split because a stock’s prices are too low and they want to artificially raise them. If stock prices get too low, investors may become fearful to buy and the stock risks being delisted from exchanges.

When a stock undergoes a reverse stock split, each share is converted into a fraction of a share but higher-priced shares are issued to investors according to the reverse split ratio . For example, a stock valued at $3.50 may undergo a reverse one-for-10 stock split. Every 10 shares is converted into one new share valued at $35.00. Investors who own 33 shares or any number indivisible by 10 would receive fractional shares unless the company decides to issue cash in lieu of fractional shares.

Companies may notify their shareholders of an impending reverse stock split on Forms 8-K, 10-Q, or 10-K as well as any settlement details if necessary.

Merger or Acquisition

Company mergers and acquisitions (M&As) can also create fractional shares. When companies combine or are absorbed, they combine new common stock using a predetermined ratio, which often results in fractional shares for investors in all involved companies.

In these cases, it’s rare for the ratio of new shares received to be a whole number. Companies may opt to return whole shares to investors, sell fractional shares, and disburse cash in lieu to investors.

Spinoff

If an investor owns shares of a company that spins off part of the business as a new entity with a separately-traded stock, shareholders of the original company may receive a fixed amount of shares of the new company for every share of the existing company held.

How Is Cash in Lieu of Fractional Shares Taxed?

Just like many other forms of investment profits, cash in lieu of fractional shares is taxable , even though it was acquired without the investor’s endorsement or action. The stock’s company may send investors a check followed by an IRS Form 1099-B at year-end with a “cash in lieu” or “CIL” notation.

Some investors may simply report the payment on the IRS Form 1040’s Schedule D as sales proceeds with zero cost and pay capital gains tax on the entire cash settlement. However, the more accurate and tax-advantageous method would apply the adjusted cost basis to the fractional shares and pay capital gains tax only on the net gain.

Looking to Trade Fractional Shares?
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How to Report Cash in Lieu of Fractional Shares

Calculating the cost basis for cash in lieu of fractional shares is a little tricky due to the change of share price and quantity. The new stock issued is not taxable nor does the cost basis change, but the per-share basis does.
Consider the following example:

•  An investor owns 15 shares of Company X worth $10.00 per share ($150 value).
•  Investor’s 15 shares have a $7.00 per share cost basis ($105 total cost basis).
•  Company X declares a 1.5 stock split.

The investor is entitled to 22.5 shares valued at $6.67 each but the company states they will only issue whole shares. Therefore, the investor receives 22 shares plus a $2.73 cash in lieu payment for the half share.

The investor’s total cost basis remains the same, less the cash in lieu of the fractional shares. However, the adjusted cost basis now factors in 22 shares instead of 15, equaling a $4.66 per share cost basis and a $2.33 fractional share cost basis. Finally, the taxable “net gain” for the cash payment received in lieu of fractional shares equates to $2.725 – $2.33 = $0.39.

The Takeaway

It’s not always possible to anticipate a company being restructured and how it will affect shareholders’ stock. In the event the company doesn’t wish to deal with fractional shares, it’s important for shareholders to understand the alternatives such as cash in lieu of fractional shares, and how it affects them. While cash in lieu can be burdensome, investors can be made whole and can then proceed on their own accord.

There are many reasons investors consider fractional shares worth buying to add to their investment portfolio. For individuals looking to invest in fractional shares with the help of a simple account setup and no fees, SoFi Invest® can help.

Find out how SoFi Invest can help you reach your financial goals.


SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . The umbrella term “SoFi Invest” refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
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For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, http://www.sofi.com/legal.

External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
Stock Bits
Stock Bits is a brand name of the fractional trading program offered by SoFi Securities LLC. When making a fractional trade, you are granting SoFi Securities discretion to determine the time and price of the trade. Fractional trades will be executed in our next trading window, which may be several hours or days after placing an order. The execution price may be higher or lower than it was at the time the order was placed.

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Source: sofi.com