How to Find Felon-Friendly Apartments After Getting Out of Jail

Yes, you can rent an apartment as a felon — just do your research.

Do you have a felony on your record and happen to need a new place to rent? Well, it may seem daunting to try and find a place that won’t require a background check but it is possible to find felon-friendly apartments.

No background check apartments are rarer but they do exist and are a great option for renters with a not-so-appealing stain on their background. Let’s dive into how to find felon-friendly apartments if you have a record.

Can I rent an apartment if I have a felony record?

Apartment for rent sign.

The short answer is yes, you can rent an apartment with a felony record. However, renting an apartment with a felony record is tricky because almost every landlord or apartment complex runs background checks on future tenants.

They’ll often check everything from your credit score to your criminal history, so it’s best to share with the landlord that you have a felony — it will definitely show up. Unfortunately, landlords can reject your application on the spot if they see a felony.

While some may do this, there are some landlords that will look past it.

How to find apartments that accept felons

Starting the search for apartments that accept felons is overwhelming. It’s difficult to know where to look, what to put on your application, what to leave out of your application and how much to disclose.

The best thing to do is to educate yourself and know where to start looking and how to best prepare for the application process. Here are four tips for finding felon friendly apartments:

1. Search for no background check apartments

Criminal background check.

A great place to start is by searching for apartments that don’t run a background check. While many apartments include a background check as part of the standard application process, not all do. This is great news for you as you’ll be able to apply for the rental without having to worry about your felony appearing on the background check portion of the application process.

You can also take the time to search for “second chance rentals.” Here, you’ll be able to find listings that don’t typically ask for background checks and are often felon-friendly apartments. Everyone needs a place to live and there are landlords who are willing to give felons that second chance they need to get back on their feet, find stable housing and have a place to call home.

2. Find an individual landlord

Another way to go about finding apartments that have no background check is to search for individual landlords or private renters as opposed to apartment complexes.

By having an individual landlord, you’ll be able to take the time to discuss your situation one-on-one. Be honest and upfront about your background check. By doing this, they may look past your felony as they get to know you personally and not purely based on your background check.

A realtor is also a good way to find places to rent. They have different resources and may already know where to look for you. Using a realtor may cost money compared to looking on your own, but, you’ll likely be able to find a place to rent more quickly and get settled into a new home right away.

3. Use local and national resources

There are many local and national resources that help those who have felonies get housing. Start by looking into your local non-profits and see if there are any programs that help people with felonies get back on their feet.

A great place to get help is with The U.S. Department of Housing and Urban Development aka HUD. They offer low-income housing to those in need and also have a list specifically for felon-friendly apartments.

Another place to seek help is with The Lion Heart Foundation. Their goal is to help give people the tools to restart their lives. On their website, they have a list of felon-friendly apartments in every state. Again, by starting your search with places that’ll work for you right away, you’ll save time and stress in the house-hunting process.

4. Be prepared for a more challenging application process

Handshaking over a contract.

Being prepared for the application process is crucial in finding apartments that accept felons. Here are some ways you can better prepare yourself:

  • Write a letter: Handwritten letters are personal and convey a sense of caring. Take the time to write the landlord your story. This way they can start to feel a personal connection. Also, telling your story about your felony and how you’ve changed might make it so they don’t reject your application right off the bat.
  • Have a character witness: Landlords want to make sure they’re renting to good tenants who pay on time and don’t cause trouble. Having someone else vouch for you and your good character is very helpful in convincing a landlord to rent to you.
  • Offer to pay more: Whether it’s a higher security deposit or maybe two months’ rent upfront, paying more might help you to rent an apartment. This also shows that you are serious about renting and can pay on time.

Finding a home

While finding a felon-friendly apartment is difficult, it’s not impossible. There are several different resources and tools to use when searching for a new home.

Having the knowledge of where to start and who to ask for help is the best place to start. By knowing what you’re getting into, the experience will be less stressful and daunting. Like anything, it might seem overwhelming but you can do it!

Source: rent.com

What Is a Carry Trade in Currency Markets?

Carry trade is a strategy used by some traders who invest in currency markets to take advantage of differences in interest rates. In a carry trade, an investor buys or borrows a security or asset at a low interest rate, and then uses it to invest in another security or asset that provides a higher rate of return.

Here’s what you need to know about how a carry trade strategy works and the risks associated with it.

What Is a Carry Trade?

In a carry trade, forex traders borrow money at a low interest rate in order to invest it in an asset with a higher rate of return. In the forex markets, the currency carry trade is a bet that one foreign currency will hold or increase its value relative to another currency. Of course, this strategy hinges on whether or not interest rates and exchange rates are in the traders’ favor. The wider the exchange rate between two currencies, the better the potential returns for the investor.

Recommended: What Is Forex Trading?

Even so, a carry trade strategy can be a relatively simple way to increase an investor’s returns, assuming they understand the difference in interest rates. In that way, it’s similar to understanding “spread trading” as they relate to stocks.

How Do You Execute a Carry Trade?

Carry Trade Example

Imagine that the US dollar has a 1% interest rate, but the British pound has a 2% interest rate. A trader could take 100 US dollars, and then invest that 100 dollars into the equivalent number of pounds (according to the exchange rate), and earn a higher return in interest. The discrepancy in interest rates allows traders to take advantage and earn higher returns.

This is a rather simplistic carry trade example, professional traders and investors can engage in complex carry trade strategies, and even employ the use of a carry trade formula to help them figure out expected returns, and whether the strategy is worth pursuing in a given situation.

Rather than simply buying one currency with another, traders often execute a carry trade that involves borrowing money in one currency and using it to purchase assets in another currency. In this scenario, traders want to borrow the money at the lowest possible interest rate, and do so using a weak or declining currency.

That can create higher profits when they close the deal and pay back the borrowed money. In general, carry trade is a short-term strategy, rather than one focused on the long-term.

Recommended: Short-Term vs Long-Term Investments

Is a Carry Trade Risky?

The concept of a carry trade is simple, but in practice it can involve investment risk. Most notably, there’s the risk that the currency or asset a trader is investing in (the British pounds in our previous example) could lose value. That could put a damper on a trader’s expected returns, as it would eat away at the gains the difference in interest rates could provide. Currency prices tend to be very volatile, and something as mundane as a monthly jobs report released by a government can cause big price changes.

The greater the degree of leverage an investor uses to execute a carry trade, the higher the potential returns–and the larger the risk. In addition to currency risk, the carry trade is subject to interest rate risk. Given the risks, carry trades in the currency markets may not be the most appropriate strategy for investors with a low tolerance for risk.

The Takeaway

Carry trades are one way for investors or traders to generate returns, although the approach involves some risks that aren’t present in other types of investment strategies. While the carry trade concept is straightforward, it can quickly get complex when institutional investors put it in place.

If you’re ready to start investing in less complicated investments, a great way to start is by opening an account on the SoFi Invest® brokerage platform, which allows you to buy or sell stocks, ETFs, trade crypto and more.

Photo credit: iStock/akinbostanci


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 . 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) Cryptocurrency is offered 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, please visit www.sofi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or pre-qualification for any loan product offered by SoFi Lending Corp and/or its affiliates.
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Source: sofi.com

25 Home Gym Decor Ideas for Your Apartment

Who needs a gym? Save some money with these apartment workout space ideas.

Working out in an apartment is tricky. While some complexes have shared fitness centers, you may not always want to leave the house to do your fitness routine. And on the other hand, trying to have some form of a gym inside your apartment is difficult and limiting when you’re renting. However, there are still plenty of home gym decor ideas that will make your workout space both beautiful and functional — even in an apartment.

Here are some ideas you can incorporate into your home gym decor.

1. Dual-function loft

home gym decor ideas

Photo source: Fitness Design Group

When you’ve got only one large space to work with rather than separate rooms, you may not want to dedicate it only to either a sitting room or a gym. Here, Fitness Design Group made sure there could be both by making a distinct separation between the function of each area.

2. Spin office

home gym decor ideas

Photo source: Love to Know

There’s no need to choose between having a home gym or an office — put them in the same space! You can even create a small separation between the two like Love to Know shares — placing a mat underneath your office area and a separate one for your workout area divides the room based on function.

3. Work(out) from home

working out from home.

Due to the recent pandemic, many people are working (and working out) from home. Working from home brings its own set of challenges, but avoiding the gym doesn’t need to become a hassle. A little side gym, connected to a home office, creates a seamless transition from work to workout at any point in the day, making your home office a functional place before, during and after work.

4. Bright and airy home gym

home gym decor ideas

Photo source: On Design Interiors

No matter the location or size of your home gym, there’s no reason for it to feel dark and dingy. These bright floors and light walls, brought to life by On Design Interiors, make this small space feel large and spacious. Not to mention how simple and chic the design is — it’s not over-the-top and creates a calming environment for exercising after a long, stressful day.

5. Mirrored weight room

home gym decor ideas

This simple, yet effective, basement setup shows just what you can do in a small space. This weight room isn’t very big, but a full wall of mirrors gives the illusion that it’s double the size. Even if you’re in a studio apartment, simply adding a large mirror on the wall near where you practice yoga or do a small-space workout routine will help it feel bigger.

6. Home office with modern wall designs

home gym decor ideas

Gyms don’t need to look boring, especially if it’s part of the place where you live. And it doesn’t take a lot to make your home gym look modern and appealing! Simple wall tiles or decals can quickly upgrade your gym without compromising its functionality. Even in a rental like an apartment, you can use peel-and-stick tiles and wall decor that can easily be removed without damaging the walls.

7. Jungle gym

home gym decor ideas

Photo source: Devon Grace Interiors

Adults aren’t the only ones that need to get their exercise in! Kids living in an apartment may feel a little limited at times without a full private yard to play in, so Devon Grace Interiors added a place for the kids to get their energy out.

The light-colored wood of the jungle gym doesn’t draw too much attention and keeps things muted, while still being a fun place for kids to play.

8. Sleek modern luxury home gym

home gym decor ideas

Making your home gym feel luxurious and modern is a simple matter of color and lighting. Adding a couple of backlit mirrors and incorporating metallics are what the Infinity Design Studio recommends.

9. Traditional CrossFit

home gym decor ideas

Photo source: DNLUD

This home gym by DNLUD is about as close as you can get to a typical CrossFit gym. For some, feeling like they’re at a gym rather than at home helps them get their minds into their workout. The mirrors are black gym mat flooring really gives it an out-of-home feeling.

10. Modern rustic home gym

home gym decor ideas

Photo source: Gambrick

Gambrick didn’t want to detract too much from the natural landscape and kept this in mind when they designed this gym for a modern rustic cabin-stile home in the mountains of Colorado. The deep oranges give just enough color while maintaining the integrity of the outdoors—no matter where you live, your apartment doesn’t have to feel separated from its surroundings.

11. DIY basement upgrade

home gym decor ideas

There are easy ways that anyone can upgrade their basement into a functioning gym. A little peel-and-stick wallpaper, mirrors and foam puzzle flooring turned a dark basement into a bright little workout space that can easily be removed if needed.

12. Spare bedroom fitness renovation

home gym decor ideas

An extra bedroom is already a luxury that not everyone has and instead of turning it into a seldom-used guest room, put it to better use. Light flooring and white walls with natural wood hanging hooks to keep equipment off the floor keep this room looking chic and clean—great for when you’re in a small apartment with not much room to spare.

13. Disguised cycle home gym

home gym decor ideas

You may only need one piece of equipment to get a full-body workout in. A stationary bike is perfect for requiring only a small corner—and that corner might be right in your kitchen! One Instagrammer disguised her bike in her kitchen area by placing a pretty painting and plants around it to blend it into the area.

14. Space-saving yoga grid

home gym decor ideas

When you don’t have room for a full yoga studio, a wall might be all you have. Higashi Fushimi recommends that it’s time to make your storage grid look good—like it’s an intentional part of your apartment’s design, with blended metal rods that both look good and function like any other storage.

15. Vertical storage in your home gym

home gym decor ideas

Choosing equipment and storage racks that work vertically rather than horizontally can keep your gym equipment from taking up too much space in your apartment. Lela of Organized-ish utilizes pegboards for small equipment storage and choose a multi-function vertical workout setup that only takes up a few feet of space in the corner.

16. Aesthetically-pleasing home gym equipment

home gym decor ideas

No need for your gym equipment existing as an eyesore. In fact, it is a beautiful addition to the main area of your apartment. See how Sunny Circle Studio chose wooden multi-use wall bars to provide function and design for a high-end vibe.

17. Upgraded garage

home gym decor ideas

If you’re lucky enough to have access to a garage, you can turn it into a chic and stylish workout room. Celebrity trainer Erin Oprea has even done it herself — add some peel-and-stick wallpaper and affordable vinyl flooring that mimics wood, and you’ve pretty much given yourself a whole new space!

18. Dual-function, hidden equipment home gym

home gym decor ideas

A coffee table that converts into a bench press, a lamp that doubles as a dumbbell and even a foam roller vase that looks and works both like exercise equipment and living room items. Swedish storage company 24Storage invented pieces of workout equipment that aren’t stored in the traditional manner — they’re functioning pieces of your living room! See what fits best in your living room.

19. Balcony home gym

home gym decor ideas

Get some fresh air by exercising on your balcony. Put your bike, treadmill or other machines outside so it doesn’t take up your indoor space. See how Merrick’s Art did with their balcony.

20. Home yoga studio

home gym decor ideas

Turn any open floor space into a yoga area. Keep storage baskets, like Manduka suggests, for your mat and other equipment nearby so when it’s not in use, you can keep your items out of the way.

21. Funky and fun home gym

home gym decor ideas

Don’t just hide your home gym — turn it into the main attraction! Decorilla emphasizes that having fun patterns and colors can both give you energy and help you relax — which is what your workout space should do.

22. Black on black home gym

home gym decor ideas

Having an all-black gym may not feel as light and airy as one with brighter colors, but it can change your mood when you workout. It may help you get more serious, which is beneficial when you’re doing a heavyweight routine or really want to push your limits — which is why Vogue highlights it in a luxury spread.

23. Walking desk as a home gym

home gym decor ideas

Make your work time (and space) the same as your workout! MyMove shows that a treadmill or stationary bike that allows you to use your computer at the same time will save you both time and space as a home workout alternative.

24. Bright home gym yoga space

home gym decor ideas

Use bright colors and neutrals for a calming yoga session. Stick with natural tones and materials, as LDA Architecture & Interiors recommends, and you’ll be feeling calm and serene every time you practice.

25. Neon home gym

home gym decor ideas

Give your workout space an edge with neon lighting. You can either do it all around the room and frame certain pieces, such as mirrors, with neon lights. Or you can add a motivational quote in the form of a neon sign to keep yourself going!

Functional and tasteful

Your home gym doesn’t have to look run-down or ugly. And you don’t need to get rid of it altogether, either! Using these home gym decor ideas, you can create a space that’s both beautiful and functional.

Source: rent.com

Paying Taxes on Stocks: Important Information for Investing

Just as you owe taxes on money that you earn by working, you may also owe taxes on money that you earn through investments.

That’s important for investors to understand, so that they can plan for the tax implications of their investment strategy. Understanding how your investments could impact your taxes better prepare you for tax season and allow you to make more informed investment decisions.

Some investments may not look as appealing after you’ve factored in the potential impact of taxes, and taxes could impact both your returns and your payback period. That’s why it’s important to know the answer to the question: How are stocks taxed?

Before we get into it, we just want to say up front that we don’t provide tax advice. We can outline a few tax guidelines that you should pay attention to but, to fully understand the implications, you’ll want to consult a tax professional.

When Do You Pay Taxes on Stocks?

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There are several scenarios in which you may owe taxes related to the stocks you hold in an investment account. The most well known is the tax liability incurred when you sell a stock that has appreciated in value since you purchased it. The difference in value is referred to as a capital gain. When you have capital gains, you must pay taxes on those earnings.

You owe capital gains taxes only on your investments’ growth, based on the increase in value from when you bought them until when you sell them. That’s important to consider, whether you’re purchasing IPO stocks or buying blue chip established companies.

There are two types of capital gains tax:

Short-term Capital Gains

Short-term capital gains tax applies when you sell an asset that you owned for a year or less that gained in value. These gains would be taxed at the same rate as your typical tax bracket (here they are for the 2021-2022 tax year), so they’re important for day traders to consider.

Long-term Capital Gains

Long-term capital gains tax applies when you sell an asset that gained in value after holding it for more than a year. Depending on your taxable income and tax filing status, you’d be taxed at one of these three rates: 0%, 15%, or 20%. Overall, long-term capital gains tax rates are typically lower than those on short-term capital gains.

Capital Losses

If you sell a stock for less than you purchased it, the difference is called a capital loss. You can deduct your capital losses from your capital gains each year, and offset the amount in taxes you owe on your capital gains.

You can also apply up to $3,000 in investment losses to offset regular income taxes.

Taxes on Investment Income

You may have taxes related to your stock investments even when you don’t sell, if the investments generate income.

Dividends

You may receive periodic dividends from some of your stocks when the company you’ve invested in earns a profit. If the dividends you earn add up to a large amount, you may be required to pay taxes on those earnings. Each year, you will receive a 1099-DIV tax form for each stock or investment from which you received dividends. These forms will help you determine how much in taxes you owe.

There are two broad categories of dividends: qualified or nonqualified/ordinary. The IRS taxes nonqualified dividends at your regular income tax bracket. The rate on qualified dividends may be 0%, 15%, or 20%, depending on your filing status and taxable income. This rate is usually less than the one for nonqualified dividends, though those with a higher income typically pay a higher tax rate on dividends.

Interest Income

This money can come from brokerage account interest or from bond/mutual fund interest, as two examples, and it is taxed at your ordinary income level. Municipal bonds are an exception because they’re exempt from federal taxes and, if issued from your state, may be exempt from state taxes, as well.

Net Investment Income Tax (NIIT)

Also called the Medicare tax, this is a flat rate investment income tax of 3.8% for taxpayers whose adjusted gross income exceeds $200,000 for single filers or $250,000 for filers filing jointly. Taxpayers who qualify may owe interest on the following types of investment income, among others: interest, dividends, capital gains, rental and royalty income, non-qualified annuities, and income from businesses involved in trading of financial instruments or commodities.

Recommended: Investment Tax Rules Every Investor Should Know

When Do I Not Have to Pay Taxes on Stocks?

Again, this should first and foremost be a discussion you have with your tax professional. But there are a few situations you should know about where you often don’t pay taxes when selling a stock. For example, if you are investing through a tax-deferred retirement investment account like an IRA or a 401(k), you won’t have to pay taxes on any gains when you buy and sell stocks inside the account. However, if you were to sell stock in one of these accounts and then withdraw it, you could owe taxes on the withdrawal.

How to Pay Lower Taxes on Stocks

If the answer to “Do you have to pay taxes on stocks?” is “yes” for your personal financial situation, then the question becomes how to pay a lower amount of taxes. Strategies can include:

•  Holding on to stocks long enough for dividends to become qualified and for any capital gains tax to be in the long-term category because they are typically taxed at a lower rate

•  Offsetting your capital gains with capital losses

•  Putting your investments into retirement accounts or other tax-advantaged accounts

•  Avoiding the temptation to make early withdrawals from your 401(k) or other retirement accounts.

The Takeaway

The tax implications of your investments will vary depending on the types of investments in your portfolio and the accounts you use, among other factors. That’s why it may be worthwhile to work with an experienced accountant and a financial advisor who can help you understand and manage the complexities of different tax scenarios.

Many investment banks offer investing advice and guidance tailored to your needs. Some even offer advanced online tools to help you balance your investments and stay on target to reach your goals. Research and compare accounts to find an investment bank that meets your needs.

The SoFi Invest® brokerage platform offers convenient, easy-to-access investing options when you buy stocks online that pair the best of automated investing with custom advice from financial professionals. The platform allows you to get started investing by easily purchasing stocks, exchange-traded funds, and crypto currencies.


Choose how you want to 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 . 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) Cryptocurrency is offered 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, please visit www.sofi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or pre-qualification for any loan product offered by SoFi Lending Corp and/or its affiliates.
IPOs: Investing early in IPO stock involves substantial risk of loss. The decision to invest should always be made as part of a comprehensive financial plan taking individual circumstances and risk appetites into account.
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.
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Source: sofi.com

Renters Rights Privileges You Can Expect as a Tenant

Renting an apartment, condo or even a house entitles you to certain rights. While some specifics will vary by state, there are key rules in place that govern everything from your living space to the property manager’s responsibilities.

Combined into a series of federal, state and local laws, your specific renter’s rights get dictated by where you live. They’re in place to prevent things like housing discrimination and rent gouging. These basic rights ensure you have a safe, clean place to live as well as detailed courses of action when things are going wrong.

Landlord-tenant law helps you live peacefully in your rental. Do you know your tenant’s rights?

Fair housing

renters rights

Before even taking a tour of a potential apartment, it’s your right to have fair access to housing. This means your rental application will not get rejected based on:

  • Race
  • Color
  • Religion
  • Age
  • Sex
  • National origin
  • Family status
  • Mental or physical disabilities

Your renter’s rights in this case receive protection at the federal level by the Fair Housing Act. State and local laws may reinforce the Fair Housing Act and even add more categories to this list to ensure everyone has equal access to apply for housing.

Not only can your rental application not get refused based on these factors, but, if you have a disability, landlord-tenant law requires they make reasonable accommodations for you to access the apartment. This could mean installing ramps or making a unit on a lower floor available.

Legal documentation

renters rights

Another piece to your renter’s rights is the lease. It’s the responsibility of the property manager to give you a legal rental contract to sign that abides by all laws.

In addition to specifics about the property, and breakdowns for processes like requesting repairs, using common areas and more, a lease must clearly indicate the leasing period and your monthly rent. It should also have your name, and any roommates, on the document.

The lease should also include a series of general disclosures. The law requires these, although it varies by state which specific ones must get listed. A few common disclosures you may see in your lease if they’re applicable to the rental unit, include:

  • Notice of mold
  • Lead-based paint disclosure
  • Notice of sex offenders, recent deaths and any potential health or safety hazards

Living space

renters rights

A variety of rules govern your living space when you’re a renter. This ensures you have somewhere to live that’s actually livable. Tenants’ rights, when it comes to your actual apartment get pretty involved, so make sure you know the highlights.

Habitable housing

It’s not enough for a property manager to provide you with an apartment; the apartment must be safe for you to live in it. This means more than a lack of dangerous conditions. Your renter’s rights entitle you to a home with usable utilities, including heat, electricity and water.

This area of your renter’s rights also means you have a home that’s safe and livable in other ways. Specifics within these guidelines require an apartment to have functioning locks on doors and windows, smoke detectors and a dedicated way to escape in case of fire.

Repairs

This area of landlord-tenant law requires action on both sides. To ensure you have a habitable home, it’s up to you to report any maintenance issues using the process that’s outlined in your lease. Find out the best way to report issues like this to your landlord (such as through email or an online portal).

On the management side, their responsibility is to complete repairs in a timely manner. Your lease will define what this means, but different repairs rank higher in priority. For example, failure to repair a heater in winter can quickly lead to an uninhabitable living space for safety reasons, whereas a garbage broken disposal doesn’t create that serious of an impact.

If your property manager fails to make repairs in a timely manner, you have additional rights. Check with state and local laws about what’s within your rights.

Privacy

Although you’re only renting a home, and someone else owns it, your rights as a tenant mean a certain level of privacy. Once your rental agreement is in place, a property manager cannot come into your home without proper notice.

Notice is also required for more than just repairs. If you’re getting ready to move, and the property manager wants to start showing your unit to prospective tenants, for example, they must give you notice each time.

Security deposit refund

renters rights

Each state usually handles security deposits differently as far as how much you’re required to put down. It’s normal for you to pay a security deposit though since that protects the property manager from having to pay out-of-pocket for any damages you may cause while living in your rental.

As far a payment goes, some states set caps on how much a property manager can ask for. They also can’t impose a higher deposit for your rental, when compared to other units in the building, without a specific reason, like having a pet.

It’s also within your renter’s rights to get the security deposit back, in a timely manner, if it’s not covering any damages. Most state laws set the time frame at 30 days, and you’ll not only receive your security deposit back but any interest that accrued as well.

If any of your deposit is withheld, you can ask for written documentation of the damages it’s paying for, and the property manager must comply.

Eviction

renters rights

The situations where your property manager has the right to evict needs clear stating within your lease. Make sure to review them before you sign it.

Standard landlord-tenant law states that you can get evicted if you break your lease in specific ways, such as:

  • Failing to pay rent
  • Allowing prohibited animals to live with you
  • Having roommates that aren’t on your lease
  • Committing a crime on the premises

As a renter, your tenant rights enable you to address evictable issues within a specified time frame before an eviction can take place. You will receive notice of a pending eviction from your property manager. If you fail to fix the issue, they can then file an eviction with the courts resulting in legal removal from your rental.

State-specific renter’s rights

Although you’ll find many standard regulations associated with renting if you move between states, expect additional laws everywhere you go. Since renter’s rights get regulated on both the state and local level, if you’re relocating to a different part of the country — familiarize yourself with local tenant laws.

Some unique landlord-tenant laws include:

  • In Hawaii, security deposits with no deductions must get returned within 14 days
  • A property manager must give 48 hours notice before entering your apartment in Delaware
  • West Virginia has no minimum notice required for a rent increase on month-to-month rentals
  • In North Carolina, two month’s rent is the required minimum for a security deposit on a one-year lease
  • A lease can get terminated once rent is only five days late in Arkansas

As you can see, some states have pretty extreme rules. Being aware of them can help you maintain a positive relationship with your property manager while also protecting your own rights as a renter.

Know your renter’s rights

No matter how great, or rocky, your relationship is with a property manager, you should always follow the law as it pertains to your situation. This not only protects you, but it ensures your property manager gets held accountable when anything isn’t up to par.

Familiarize yourself with state and local landlord-tenant laws, read your lease thoroughly before signing and do your research when faced with a potential issue. Protect yourself by knowing your tenant’s rights.

The information contained in this article is for educational purposes only and does not, and is not intended to, constitute legal or financial advice. Readers are encouraged to seek professional legal or financial advice as they may deem it necessary.

Source: rent.com

What Is UCITS?

Undertakings for Collective Investment in Transferable Securities (UCITS) are a category of investment funds designed to both streamline and safeguard investment transactions. UCITS are usually structured like traditional mutual funds, exchange traded funds, or a money market fund

European Union (EU) regulates UCITs, but they are widely available to non-EU investors. U.S. investors, for example, can buy shares of UCITS through U.S.-based fund managers, although local, EU-based money managers run the funds.

Collectively, they hold €18.8 trillion in assets under management, or nearly $23 trillion. Because they undergo a high level of regulatory scrutiny, many view UCITS as a relatively safe investment.

What Is a UCITS Fund?

UCITS funds are a type of mutual fund that complies with European Union regulations and holds securities from throughout the region. They emerged as part of an effort by the European Union to consolidate disparate European financial investments into one central sector, governed by the EU, with a “marketing passport,” that enables financial services firms across the EU to invest in multiple countries under a common set of rules and regulations.

The EU launched UCITS for two primary reasons:

1.   To structure a single financial services entity under the EU umbrella that allowed for the cross-sale of mutual funds across the EU, and across the globe.

2.   To better regulate investment asset transactions among all 28 EU member countries, giving investors inside and outside of the EU access to more tightly regulated investment funds.

Fundamentally, UCITS funds rules give EU regulators a powerful tool to centralize key financial services issues like types of investments allowed, asset liquidity, investment disclosures, and investor safeguards. By rolling the new rules and regulations into UCITS, EU regulators sought to make efficient and secure investment funds available to a broad swath of investors, primarily at the retail and institutional levels.

For investors, UCITS funds offer more flexibility and security. Not only are the funds widely viewed as safe and secure, but UCITS funds offer a diversified fund option to investors who might otherwise have to depend on single public companies for the bulk of their investment portfolios.

According to the European Union, UCITS comprise 75% of all European Union investments by individual investors. Data from the European Fund and Asset Management Association notes that, through 2020, UCITS funds have $11.7 trillion (in euros). That’s approximately 62% of all Euro-based investment funds. Additionally, there were about 34,000 UCIT funds at the end of 2020.

A Brief History of UCITS

The genesis of UCITS funds dates back to the mid-1980’s, with the rollout of the European Directive legislation, which set a new blueprint for financial markets across the continent. The new law introduced UCITS funds on an incremental basis and have been used as a way to regulate financial markets with regular updates and revisions over the past three decades.

In 2002, the EU issued a pair of new directives related to mutual fund sales – Directives 2001/107/EC and 2001/108/EC, which expanded the market for UCITS across the EU and loosened regulations on the sale of index funds in the region.

The fund initiative accelerated in 2009 and 2010, when the Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 clarified the use of UCITS in European investment markets, especially in coordination of all laws, regulations, and administrative oversight. The next year, te European Union reclassified UCITS w as investment funds regulated under Part 1 of the Law of 17 December 2010.

In recent years, “Alt UCITS” or alternative UCITS funds have grown in popularity, along with other types of alternative investments.

How Does a UCIT Fund Work?

Structurally, UCITS are built like mutual funds, with many of the same features, regulatory requirements, and marketing models.

Individual and institutional investors, who form a collective group of unit holders, put their money into a UCIT, which, in turn, owns investment securities (mostly stocks and bonds) and cash. For investors, the primary goal is to invest their money into the fund to capitalize on specific market conditions that favor the stocks or bonds that form the UCITS. UCTIS funds may provide one way for American investors to get more international diversification within their portfolios.

A professional money manager, or group of managers, run the fund, and they are singularly responsible for choosing the securities that make up the fund. The UCITS investor understands this agreement before investing in the fund, thus allowing the fund managers to choose investments on their behalf.

An investor may leave the fund at any point in time, and do so by liquidating their shares of the fund on the open market. American investors should know that the Internal Revenue Service may classify UCITS as passive foreign investment companies, which could trigger more onerous tax treatments, especially when compared to domestic mutual funds.

UCITS Rules and Regulations

UCITS do have some firm regulatory and operational requirements to abide by in the European Union, as follows:

•  The fund and its management team are usually based on a tax-neutral EU country (Ireland would be a good example.)

•  A UCITS operates under the laws mandated by the member state of its headquarters. After the fund is licensed in the EU state of origin, it can then be marketed to other EU states, and to investors around the world. The fund must provide proper legal notification to the state or nation where it wants to do business before being allowed to market the fund to investors.

•  A UCITS must provide proper notice to investors in the form of a Key Investor Information Document, usually located on the fund’s website. The fund must also be approved.

•  A UCITS must also provide a fund prospectus to investors (also normally found on the fund’s web site) and must file both annual and semiannual reports.

•  Any time a UCITS issues, sells, or redeems fund shares, it must make pricing notification available to investors.

The Takeaway

UCITS may be an interesting type of investment for U.S. investors looking to diversify their portfolios. As with any investment, investors must conduct thorough due diligence on the UCITS, which should include a review of fund holdings, past performance, management stability, fees, and tax consequences. Before steering money into a UCITS fund account, talk with a financial advisor well-versed in UCITS in particular, and with diversified fund investments in general.

If you’re interested in other investment opportunities, a great way to build your portfolio is by opening a SoFi Invest® brokerage account. You can open an Active Investing Account and build your own portfolio of investments including stocks, bonds, exchange-traded funds, and cryptocurrency. Or, you can opt for an automated account, which selects and monitors investments on your behalf.

Photo credit: iStock/kupicoo


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 . 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) Cryptocurrency is offered 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, please visit www.sofi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or pre-qualification for any loan product offered by SoFi Lending Corp and/or its affiliates.
Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.
SOIN0421164

Source: sofi.com

How to Gift a Stock

Stocks are a unique gift that have the potential to keep on giving over time. They can be given to family members, friends, charities, and others. Gifting stock is easy to do and can have benefits for both the giver and the receiver—though it’s worth noting there can be tax implications for the receiver.

The Benefits of Gifting Stocks

There are several upsides to giving (and receiving) stocks:

•  If you’re giving the gift of stocks to kids, it can begin their investing education and provide them with an asset that will grow over time.

•  For anyone receiving stock, there’s potential that the value of the gift will grow over time. (Though it must be said, the value could also diminish over time.)

•  If the giver already owns stock in the company, they may benefit on their taxes by transferring some or all of that stock to someone else. If a stock has appreciated in value, the owner would normally owe capital gains if they sell it. However, if they gift it, they don’t have to pay the taxes. Those gains do get transferred to the receiver—but depending on their tax bracket, they won’t owe any taxes when they sell. In that case, both the giver and receiver would avoid paying the capital gains.

8 Ways to Gift Stocks

There are several ways that stocks can be gifted.

Set Up a Custodial Account for Kids

Parents can set up a custodial brokerage account for their kids and transfer stocks, mutual funds, and other assets into it. They can also buy assets directly for the account. When the child reaches a certain age they take ownership of it.

This can be a great way to get kids interested in their finances and educate them about investing or particular industries. Teaching kids about short and long term investments by giving them a stock that will grow over time is a great learning opportunity. However, keep in mind that there is a so-called “kiddie tax” imposed by the IRS if a child’s interest and dividend income is more than $2,200.

Set up a DRiP

Dividend Reinvestment Plans, or DRiPs, are another option for gifting stocks. These are plans that automatically reinvest dividends from stocks, which allows the stock to grow with compound interest.

Gifting to a Spouse

When gifting stocks to a spouse, there are generally no tax implications as long as both people are U.S. citizens. A spouse can either gift a present interest or a future interest in shares, meaning the recipient spouse gets the shares immediately or at a specified date in the future.

According to the IRS , If the recipient spouse is not a U.S. citizen, there is an annual gift tax exclusion of $159,000. Any amount above that would be taxed.

Virtual Transfers and Stock Certificates

Anyone can transfer shares of stock to someone else if the receiver has a brokerage account. This type of gifting can be done with basic personal and account information. One can either transfer shares they already own, or buy them in their account and then transfer them. Some brokers also have the option to gift stocks periodically.

Individuals can also buy a stock certificate and gift that to the recipient, but this is expensive and requires more effort for both the giver and receiver. To transfer a physical stock certificate, the owner needs to sign it in the presence of a guarantor, such as their bank or a stock broker.

Gifting Stock to Charity

Another option is to give the gift of stocks to a charity, as long as the charity is set up to receive them. This can benefit both the giver and the charity, because the giver doesn’t have to pay capital gains taxes, and as a tax-exempt entity, the charity doesn’t either. The giver may also be able to deduct the amount the stock was worth from their taxes.

For givers who don’t know which charity to give to, one option is a donor-advised fund . While the giver can take a tax deduction on their gift in the calendar year in which they give it, the fund will distribute the gift to the charities over multiple years.

Passing Down Wealth

Gifting stocks to family members can be a better way to transfer wealth than selling them and paying taxes. For 2021, up to $15,000 per year, per person, can be transferred through gifting of cash, stocks, or a combination. This means a couple can gift $30,000 to one individual, free of the gift tax.

If a person wants to transfer stocks upon their death, they have a few options, including:

•  Make it part of their will.
    Recommended: How to Create An Estate Plan

•  Create an inherited IRA.
    Recommended: 8 IRA Rollover Rules to Know

•  Arrange a transfer on death designation in a brokerage account.

It’s important to look into each option and one’s individual circumstances to figure out the taxes and cost basis for this option.

Gifting Through an App

Another option is to find an investing app that has stock gifting features.

Gift Cards

It may be surprising to hear, but stocks can be given via gift cards. These may be physical or digital gift cards.

Thing to Consider When Giving a Stock Gift

Gifting stocks is relatively straightforward, but there are some things to keep in mind. In addition to the $15,000 per year gifting limit and the capital gains tax implications of gifting, timing of gifts is important, and gifting may not always be the best choice.

For instance, when gifting to heirs, it may be better to wait and allow them to inherit stocks rather than gifting them during life. This may reduce or eliminate the capital gains they owe.

Also, there is a lifetime gift exclusion for federal estate taxes, which was $11.58 million in 2020, which can be used to shelter giving that goes over $15,000. However, this is not a great tax option, due to the ways gifts and inherited stocks are taxed.

Generally a better way to give a substantial amount of money to someone is to establish a trust fund.

Tax Implications of Gifting Stocks

There are some tax ramifications of giving stock as a gift.

Capital Gains Tax

There are a few things to be aware of with the capital gains taxes. If the stock is gifted at a lower value than it was originally purchased at, and sold at a loss, the cost basis for the recipient is based on the fair market value of the stock on the date they received it.

However, if the price of the stock increases above the price that the giver originally paid, the capital gains are based on the value of the stock when the giver bought it. In a third scenario, if the stock is sold on the date of the gift at a higher than fair market value, but at a lower value than the giver’s cost basis, no gain or loss needs to be recorded by the recipient.

•  Tax implications for giving: When gifting stocks, the giver can avoid paying capital gains tax. can sometimes be a way for the giver and the receiver to avoid paying capital gains taxes.

•  Tax implications for receiving: The recipient won’t pay taxes upon receiving the stock. When they sell it, they may be exempt from capital gains taxes if they’re in a lower tax bracket (consider, for example, a minor or retired individual). Otherwise, if they sell at a profit, they should expect to pay capital gains tax. If the annual gifting limit is exceeded, there may be taxes associated with that and the giver will need to file an estate and gift tax return.

Recommended: What Are Capital Gains Taxes?

The Takeaway

Gifting stocks is a unique idea that may have benefits for both the giver and the receiver. As you plan for your future, you may decide to build up a portfolio of stocks that you intend to give to your children, parents, or others as you grow older.

You can easily start investing online with SoFi Invest®. The app lets you quickly buy and sell stocks right from your phone. You can also research and track specific stocks, and see all of your investing information in one simple dashboard.

Find out how to get started with SoFi Invest.

Photo credit: iStock/akinbostanci


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 . 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) Cryptocurrency is offered 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, please visit www.sofi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or pre-qualification for any loan product offered by SoFi Lending Corp and/or its affiliates.
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.
SOIN21101

Source: sofi.com

Compound Finance (COMP) in DeFi, Explained

What Is Compound Finance?

Compound Finance is a marketplace used by crypto investors to lend and borrow their digital assets. Compound crypto is a decentralized protocol, or dApp, built on a blockchain.

Users can also vote on the governance structure of the Compound protocol using the COMP token.

Compound is part of a new system of decentralized finance enabled with the invention of blockchain technology. It’s built by the open-source software development company Compound Labs.

Before diving into the details of Compound Finance, let’s explore the topic of decentralized finance. This will help with understanding how Compound fits into the picture.

Compound Crypto and Decentralized Finance (DeFi)

DeFi is an important term in the crypto ecosystem. The philosophy behind DeFi is to decentralize the full suite of financial services available to individuals and businesses. These include insurance, taxes, lending, borrowing, credit, and more. In decentralized finance, there is no need for a centralized body or intermediary such as a bank to hold money, facilitate, or validate transactions. Decentralization can also apply to the way cryptocurrencies are created and governed.

Many DeFi services are built on the Ethereum blockchain. The blockchain allows anyone to build decentralized applications (dApps) with their own unique cryptocurrencies. These applications can utilize smart contracts which allow for complicated transactions, lending, borrowing, and other functionality.

Blockchain technology has enabled the decentralization of money, payments, and financial services. For example individuals and companies all over the world can mine Bitcoin, and it isn’t held or controlled by any central authority. Anyone who holds Bitcoin can send it to someone else without using the services of a bank or even an exchange. In order for changes to be made to the functionality of the Bitcoin blockchain, miners vote. Changes require a majority.

Despite the growth in DeFi and cryptocurrency there are still many financial services left to be decentralized, such as lending and borrowing. Compound is a liquidity pool that allows cryptocurrency owners to lend and borrow their digital assets.

Recommended: A Guide to Decentralized Finance (DeFi)

How Does Compound Finance Work?

Compound is a dApp that gives users the ability to crypto stake their digital assets and lend or borrow certain cryptocurrencies. Supported assets on Compound include:

•  Ether (ETH)

•  Dai (DAI)

•  Ox (ZRX)

•  Tether (USDT)

•  USD Coin (USDC)

•  Wrapped BTC (WBTC)

•  Sai (SAI)

•  Augur (REP)

•  Basic Attention Token (BAT)

Anyone who owns those assets can engage in crypto lending or borrowing using Compound without dealing with traditional financial institutions. Compound has gained significant popularity in recent years, there are more than $12.4 billion in assets on the platform.

cTokens

When a user locks in funds on the lending side of the Compound protocol, they receive cTokens, or digital assets representing the amount that they have deposited. cTokens are an ERC-20 token built using the Ethereum blockchain protocol. There are different cTokens for each crypto on the Compound platform, including cETH, cBAT, and cDAI. Users receive the token associated with the crypto they deposited.

Owners of the tokens can transfer, trade, or use them on other dApps. The tokens will continue to earn interest on the Compound protocol while they are being used throughout the DeFi ecosystem. cToken holders control their public and private keys just as they would with Bitcoin or another cryptocurrency. Ultimately the cToken can only be redeemed for the particular crypto that it represents.

Interest Rates

The Compound protocol automatically calculates and issues interest rates based on the liquidity available for each cryptocurrency offered on the platform. The rates fluctuate based on supply and demand in the market and change constantly. If there is a lot of money held in the Compound wallet, the interest rates are low. This is because there is a lot of money available for borrowers, so lenders don’t earn very much in exchange for adding more to the pool.

However, if the pool of money for a particular cryptocurrency is small, the interest rates are higher. This creates an ongoing incentive for users to lock funds into pools that contain less funds, so that they will earn a higher rate. It also incentivizes borrowers to borrow from large pools and to repay borrowed funds into smaller pools so that they will pay lower interest rates.

The Compound dashboard shows an annual interest rate which is what users get quoted. Every 15 seconds, any cTokens held by a user increase by 1/2102400 of the quoted annual interest rate for that particular moment. That fraction is the number of 15 second blocks there are in a year.

Compound Finance Transactions

Lending and borrowing transactions occur instantly using the protocol. There are no intermediary requirements or costs involved, it’s only required that borrowers have deposited funds on the lending side. The decentralization and automatically executionable smart contracts make the process easier, faster, and less expensive than going through a traditional financial institution.

Lending

Those who own these cryptocurrencies can lend any amount of them, also referred to as locking, sending, or depositing. This is similar to depositing fiat currency into a savings account that starts earning interest immediately. However, unlike depositing into a bank account, the Compound dApp is decentralized, and the money goes into a large pool along with other investor’s deposits of any particular cryptocurrency. Whichever crypto the lender deposits is the currency in which they’ll receive payments.

Borrowing

The other main feature of the Compound protocol is the ability to borrow against deposited and locked funds. Any user who puts part of the cryptocurrency portfolio into the Compound pool can immediately borrow against those funds without any credit check or additional requirements. The amount a user can borrow depends on how much they deposit, and each cryptocurrency has different rates.

Borrowers must deposit more than they intend to borrow to ensure that their funds are collateralized. This means there are funds available to pay off the loan if the user doesn’t pay back the installments and interest. Cryptos also fluctuate in value, so if the collateralized amount decreases in value, the borrower cToken smart contract automatically closes when the value gets close to the borrowed amount. If this occurs, the borrower keeps the cTokens they borrowed but they lose the collateral they deposited.

Just like if they borrowed from a bank or other financial institution, borrowers must pay interest on the amount of funds they borrow. The Compound protocol automatically determines and implements the interest rates, which varies with each cryptocurrency on the platform.

How Does Compound’s Governance Work?

The Compound protocol also has a decentralized governance system in which users can participate, depending on the amount of COMP tokens they hold. COMP tokens are governance tokens, and all lenders and borrowers receive a particular amount of them every 15 seconds when an Ethereum block is mined. The amount users receive is related to the interest rates of each crypto asset and the number of transactions that they partake in using the protocol.

When a user owns 1% or more of the total supply of COMP tokens, they can participate in the governance system by submitting and voting on any proposals to make changes to the Compound blockchain system. Every COMP token counts for one vote.

The Takeaway

The DeFi ecosystem is constantly expanding to include more options for decentralized financial services, including Compound Finance. DeFi is a complicated system of decentralized exchanges that provide an opportunity for some crypto investors to lend or borrow their digital assets.

If you’re interested in starting to invest in cryptocurrencies, one simple way to get started is using the SoFi Invest® crypto trading platform. The investing platform lets you research, track, buy, and sell popular cryptocurrencies right from your phone. You can see your portfolio information in one simple dashboard. In addition to crypto, SoFi allows you to also invest in stocks and other assets all in one place. If you need help getting started, SoFi has a team of professional financial advisors available to answer your questions and help you create a personalized investing plan.

Photo credit: iStock/ijeab


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.
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 . 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) Cryptocurrency is offered 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, please visit www.sofi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or pre-qualification for any loan product offered by SoFi Lending Corp and/or its affiliates.
SOIN21120

Source: sofi.com

Guide to Investing in Your 30s

Turning 30 marks the start of a new chapter in life and it can bring a shift in the way you approach your finances. Investing in your 30s can look very different from the way you invest in your 20s or 40s, based on your goals, strategies, and needs.

At this stage in life you may be working on paying off the last of your student loan debt while focusing more on saving. Your financial priorities may revolve around buying a home and starting a family. At the same time, you may be hoping to add (or increase the amount that you’re) investing for retirement into the mix as you approach your peak earning years.

Finding ways to make these goals and needs fit together is what financial planning in your 30s is all about. Knowing how to invest your money as a 30-something can help you start building wealth for the decades still to come.

5 Tips for Investing in Your 30s

1. Define Your Investment Goals

Having clear financial goals in your 30s or at any age matters. Your goals are your end points, the destination that you’re traveling toward on your financial roadmap.

So as you consider how to invest in your 30s, think about the end result you’re hoping to achieve. Focus on goals that are specific, easy to measure and best of all, actionable.

For example, your goals for investing as a 30-something may include:

•  Contributing 10% of your income to your 401(k) each year

•  Maxing out annual contributions to an Individual Retirement Account

•  Saving three times your salary for retirement by age 40

•  Achieving a net worth of two times your annual salary by age 40

These goals work because you can define them using real numbers. So, say for example, you make $50,000 a year. To meet each of these goals, you’d need to:

•  Contribute $5,000 to your 401(k)

•  Save $6,000 in an IRA

•  Have $150,000 in retirement savings by age 40

•  Grow your net worth to $100,000 by age 40

Setting goals this way may require you to be a little more aggressive in your financial approach. But having hard numbers to work with can help you motivate you forward.

2. Don’t Be Afraid of Risk

If there’s one important rule to remember about investing in your 30s, it’s that time is on your side.

When retirement is still several decades away, you have time to recover from the inevitable bouts of market volatility that you’re likely to experience. The market moves in cycles; sometimes it’s up, others it’s down. But the longer you have to invest, the more risk you can generally afford to take.

The best investments for 30 somethings are the ones that allow you to achieve your goals while taking on a level of risk with which you feel comfortable. That being said, here’s another investing rule to remember: the greater the investment risk, the greater the potential rewards.

Stocks, for example, are riskier than bonds but between the two, stocks are likely to produce better returns over time. If you’re not sure how to choose your first stock, you may have heard that it’s easiest to buy what you know. But there’s more to choosing stocks than just that. When comparing the best stocks to buy in your 30s, think about things like:

•  How profitable a particular company is and its overall financial health

•  Whether you want to invest in a stock for capital appreciation (i.e. growth) or income (i.e. dividends)

•  How much you’ll need to invest in a particular stock

•  Whether you’re interested in short-term trading or using a buy-and-hold strategy

Past history isn’t an indicator of future performance, so don’t focus on returns alone when choosing stocks. Instead, consider what you want to get from your investments and how each type of investment can help you achieve that.

Recommended: 6 Investment Risk Management Strategies

3. Diversify, Diversify, Diversify

Investing in your 30s can mean taking risk but you don’t necessarily need or want to have 100% of your portfolio committed to just a handful of stocks. A diversified portfolio with multiple investments can spread out the risk associated with each investment.

So why does portfolio diversification matter? It’s simple. A portfolio that’s diversified is better able to balance risk. Say, for example, you have 80% of your investments dedicated to stocks and the remaining 20% split between bonds and cash. If stocks experience increased volatility, your lower risk investments could help smooth out losses.

Or say you want to allocate 90% of your portfolio to stocks. Rather than investing in just a few stocks, you can spread out risk by investing and picking one or more low-cost ETFs instead.

Exchange-traded funds are similar to mutual funds, but they trade on an exchange like a stock. That means you get the benefit of liquidity and flexibility of a stock along with the exposure to a diversified collection of different assets. Your diversified portfolio might include an index ETF, for example, that tracks the performance of the S&P 500, an ETF that’s focused on growth stocks, a couple of bond ETFs and some individual stocks.

Recommended: ETFs vs Mutual Funds: A Further Look

This type of strategy allows you to be aggressive with your investments in your 30s without putting all of your eggs in one basket, so to speak. That can help with growing wealth without inviting more risk into your portfolio than you’re prepared to handle.

4. Leverage Tax-Advantaged and Taxable Accounts

Asset allocation, or what you decide to invest in, matters for building a diversified portfolio. But asset location is just as important.

Asset location refers to where you keep your investments. This includes tax-advantaged accounts and taxable accounts. Tax-advantaged accounts offer tax benefits to investors, such as tax-deferred growth and/or deductions for contributions. Examples of tax-advantaged accounts include:

•  Workplace retirement plans, such as a 401(k)

•  Traditional and Roth IRAs

•  IRA CDs

•  Health Savings Accounts (HSAs)

•  Flexible Spending Accounts (FSAs)

•  529 College Savings Accounts

If you’re interested in investing for retirement in your 30s, your workplace plan might be the best place to start. You can defer money from your paychecks into your retirement account and may benefit from an employer-matching contribution if your company offers one. That’s free money to help you build wealth for the future.

You could also open an IRA to supplement your 401(k) or in place of one if you don’t have a plan at work. Traditional IRAs can offer a deduction for contributions while Roth IRAs allow for tax-free distributions in retirement. When opening an IRA, think about whether getting a tax break now versus in retirement would be more valuable to you.

If you’re not earning a lot in your 30s but expect to be in a higher tax bracket when you retire, then a Roth IRA could make sense. But if you’re earning more now, then you may prefer the option to deduct what you save in a traditional IRA.

Don’t count out taxable accounts either for investing in your 30s. With a taxable brokerage account, you don’t get any tax breaks. And you’ll owe capital gains tax on any investments you sell at a profit. But taxable accounts can offer access to investments you might not have in a 401(k) or IRA, such as individual stocks, cryptocurrency or the ability to trade fractional shares.

5. Prioritize Other Financial Goals

Retirement is one of the most important financial goals to think about in your 30s but planning for it doesn’t have to sideline your other goals. Financial planning in your 30s should be more comprehensive than that, factoring in things like:

•  Buying a home

•  Marriage and children

•  Saving for emergencies

•  Saving for short-term goals

•  Paying off debt

As you build out your financial plan, consider how you want to prioritize each of your goals. After all, you only have so much income to spread across your goals, so think about which ones need to be funded first.

That might mean creating a comfortable emergency fund, then working on shorter-term goals while also setting aside money for a down payment on a home and contributing to your 401(k). If you’re still paying off student loans or other debts, that may take priority over something like saving for college if you already have children.

Looking at the bigger financial picture can help with balancing investing alongside your other goals.

The Takeaway

Your 30s are a great time to start investing and it’s important to remember that it doesn’t have to be complicated or overwhelming. Taking even small steps toward getting your money in order can help improve your financial security, both now and in the future.

An easy way to start investing is by opening an account on the SoFi Invest® brokerage platform, you can add individual stocks and ETFs to your portfolio, test the waters with cryptocurrency or invest in small amounts with fractional shares. The sooner you get started investing in your 30s, the more time you’ll have to mold and perfect your financial plan.

Photo credit: iStock/katleho Seisa


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 . 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) Cryptocurrency is offered 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, please visit www.sofi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or pre-qualification for any loan product offered by SoFi Lending Corp and/or its affiliates.
Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.
Exchange Traded Funds (ETFs): Investors should carefully consider the information contained in the prospectus, which contains the Fund’s investment objectives, risks, charges, expenses, and other relevant information. You may obtain a prospectus from the Fund company’s website or by email customer service at [email protected] Please read the prospectus carefully prior to investing. Shares of ETFs must be bought and sold at market price, which can vary significantly from the Fund’s net asset value (NAV). Investment returns are subject to market volatility and shares may be worth more or less their original value when redeemed. The diversification of an ETF will not protect against loss. An ETF may not achieve its stated investment objective. Rebalancing and other activities within the fund may be subject to tax consequences.
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Source: sofi.com

What is a Margin Call?

Margin calls are demands for additional money made by the brokerage firm. Margin calls occur when the value of an investor’s trading account dips below a required level.

In a cash account, all transactions are made with the funds investors have available. Meanwhile, in a margin account, investors can make trades with their own money and with money that is borrowed from their broker.

Hence, brokerages often require investors to maintain a fixed level of cash. Margin calls are designed to protect both the brokerage and the client from bigger losses. Here’s a closer look at how margin calls work, as well as how to avoid or cover a margin call.

Rules Around Margin Calls

Under Federal Reserve Board Regulation T, stock brokerage firms can only lend their customers up to 50% of the initial margin, or the total purchase price for a new purchase.

In addition, the Financial Industry Regulatory Authority (FINRA), a self-regulatory organization, requires investors deposit at least $2,000 in a margin account. For day trading, the minimum deposit amount goes up to $25,000.

FINRA also says that the maintenance margin level should be at least 25% of the market value of all securities in the account.

Recommended: How Does a Margin Account Work?

Example of Margin Call

Here is how a margin trade works. Suppose an investor wants to buy 200 shares of a stock at $50 each for an investment that totals $10,000. He or she puts up $5,000 while the brokerage firm lends the remaining $5,000.

FINRA rules and your broker require that the investor hold 25% of the total stock value in his or her account at all times—this is the maintenance requirement. So the investor would need to maintain $2,500 in his or her brokerage account. The investor currently achieves this since there’s $5,000 from the initial investment.

If the stock’s shares fall to $30 each, the value of your investment also drops to $6,000. The broker would then take $4,000 from the investor’s account, leaving just $1,000. That would be below the $1,500 required, or 25% of the total $6,000 value in the account.

That would trigger a margin call of $500, or the difference between the $1,000 left in the account and the $1,500 required to maintain the margin account. Normally, a broker will allow two to five days for the investors to cover the margin call. In addition, the investor would also owe interest on the original loan amount of $5,000.

Margin Call Formula

Here’s how to calculate a margin call:

Margin call amount = (Value of investments multiplied by the percentage margin requirement) minus (Amount of investor equity left in margin account)

Here’s the formula using the hypothetical investor example above:

$500 = ($6000 x 0.25%) – ($1,000)

Investors can also calculate the share price at which he or she would be required to post additional funds.

Margin call price = Initial purchase price times (1-borrowed percentage/1-margin requirement percentage)

Again, here’s the formula using the hypothetical case above:

$33.33 a share = $50 x (1-0.50/1-0.25)

How to Cover a Margin Call

When investors receive a margin call, here are their options to fulfill the demand.

1.   They can deposit cash into the margin account so that the level of funds is back above the maintenance margin requirement.

2.   Investors can deposit securities that aren’t margined.

3.   Investors can also sell the securities that are margined in order to meet requirements.

How Long Do I Have to Cover a Margin Call?

Brokerage firms are not required to give investors a set amount of time. As mentioned in the example above, a brokerage firm normally gives customers two to five days to meet a margin call. However, the time given to provide additional funds can differ from broker to broker.

In addition, during volatile times in the market, which is also when margin calls are more likely to occur, a broker has the right to sell securities in a customer’s trading account shortly after issuing the margin call. Investors won’t have the right to weigh in on the price at which those securities are sold. This means investors may have to settle their accounts by the next trading day.

How to Avoid a Margin Call

Here are some steps investors can take in order to avoid a margin call.

1.   Investors can understand how margin trading and margin calls work and be aware of their broker’s maintenance requirements.

2.   Investors can monitor the volatility of the stock or asset that they are investing in.

3.   Investors can set aside money for a margin call and calculate the stock’s lowest price at which their broker might call them for a margin call.

4.   Investors can use order types that may help protect them, such as limit orders.

Recommended: Tips for Investing Long Term

The Takeaway

As many investors turn to margin trading to boost their investments, rules on initial deposits and maintenance can also help reduce systemic risk in the market. Borrowing by margin traders has steadily climbed higher in 2020 and was at $654.3 billion in September. That’s near the all-time high of $668.9 billion reached in May 2018.

While margin trading allows investors to amplify their purchases in markets, margin calls could result in the investor paying more than he or she initially invested. Margin calls occur when the level of cash in an investor’s trading account falls below a fixed level required by the brokerage firm.

Through SoFI Invest®, investors can pick and choose company stocks, exchange-traded funds (ETFs), and fractional shares through the Active Investing platform. For those who want a more hands-off approach, the Automated Investing service builds and manages portfolios for members.

Check out Active or Automated Investing with SoFi Invest 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 . 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) Cryptocurrency is offered 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, please visit www.sofi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or pre-qualification for any loan product offered by SoFi Lending Corp and/or its affiliates.
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Source: sofi.com