What Is Earnings Per Share & How to Calculate It

Knowing a stock’s earnings per share can be a valuable portfolio benchmarking tool. Think of EPS as GPS for where a public company is on the value map, based on how profitable it has been.

What is earnings per share? It’s a ratio arrived at by taking a company’s quarterly or annual net income and dividing it by the number of its outstanding shares of stock.

Knowing an investment’s EPS gives investors—and portfolio managers—a good indicator of a stock’s performance over a specific period of time and its potential share price performance in the near future.

What is Earnings Per Share?

The starting point for any conversation about the EPS ratio is the earnings report companies issue to regulators, shareholders, and potential investors.

Publicly traded companies must, by law, report their earnings quarterly and annually. Earnings represent the net income a company generates (after taxes and after expenses are deducted), along with an estimate of what profits or losses can be expected going forward.

Typically, investment analysts, money managers and investors look at earnings as a major component of a company’s profit potential, with earnings per share a particularly useful measurement tool when gauging a company’s financial prospects.

While a company’s earnings call represents a publicly traded company’s revenues, minus operating expenses, earnings per share is different.

EPS indicates a firm’s earnings for investors, divided by the company’s number of remaining shares. Earnings per share is perhaps most optimal when comparing EPS rates of publicly traded firms operating in the same industry.

evaluate a company’s stock price going forward.

Even a moderate increase in EPS may indicate that a company’s profit potential is on the upside, and investors may take that as a sign to buy the company’s stock.

Conversely, a small decrease in a company’s EPS from quarter to quarter may trigger a red flag among investors, who could view a downward EPS trend as a larger profit issue and shy away from buying the company’s stock.

Basically, the higher the EPS, the more attractive that company’s stock is to investors. But the higher a stock’s EPS, the more expensive it’s likely to be.

Once investors have an accurate EPS figure, they can decide if a stock is priced fairly and make an appropriate investment decision.

Earnings Per Share Ratio Considerations

Investors should prepare to dig deeper and examine what factors influence EPS figures. These factors are at the top of that list:

•  EPS numbers can rise or fall significantly based on earnings’ rise or fall, or as the number of company shares rises or falls.
•  A company’s earnings may rise because sales are surging faster than expenses, or if company managers succeed in curbing operations costs. Additionally, investors may get a “false read” on EPS if too many company expenses are shed from the EPS calculation.
•  A company’s number of outstanding shares may fall if a company engages in significant stock share buybacks. Correspondingly, shares outstanding may jump when a firm issues new stock shares.
•  A company’s profit margins are also a big influencer on EPS. A company that is losing money usually has a negative EPS number. (Then again, that may send a wrong signal to investors. The company could be on the path to profits, and that trend may not show up in an EPS calculation.)
•  A price to earnings ratio is another highly useful metric to evaluate a stock’s share growth potential. Investors can find a P/E ratio through a proper calculation of EPS (“P” is the price per share; “E” refers to EPS), though it’s easy to look up a P/E ratio on any site that aggregates stock information.

EPS can be reported for each quarter or fiscal year, or it can be projected into the future with a forward EPS.

How to Calculate Earnings Per Share

The most common way to accurately gauge an EPS figure is through an end-of-period calculation. Here’s a snapshot of how it works.

With Preferred Dividends

Investors can calculate EPS by subtracting a stock’s total preferred dividends from the company’s net income. Then divide that number by the end-of-period stock shares that are outstanding.

Basic EPS = (net income – preferred dividends) / weighted average number of common shares outstanding

For example, ABC Co. generates a net income of $2 million in a quarter. Simultaneously, the company rolls out $275,000 in preferred dividends and has 12 million outstanding shares of stock. In that calculation, knowing that shares of common stock are equal in value, the company’s earnings per share is $0.14.

(2,000,000 – 275,000) ÷ 12,000,000= 0.14

Without Preferred Dividends

For smaller publicly traded companies with no preferred dividends, the EPS calculation is more straightforward.

Basic EPS = net income / weighted average number of common shares outstanding

Let’s say DEF Corp. has generated a net income of $50,000 for the year. As the company has no preferred shares outstanding and has 5,000 weighted average shares on an annual basis, its earnings per share is $10.

50,000 ÷ 5,000= 10

In any EPS calculation, preferred dividends must be pared off from net income. That’s because earnings per share is primarily designed to calculate the net income for holders of common stock.

Additionally, in most EPS end-of-period calculations, a company is mostly likely to calculate EPS for end-of-year financial statements. That’s because companies may issue new stock or buy back existing shares of company stock.

In those instances, a weighted average of common stock shares is required for an accurate EPS assessment. (A weighted average of a company’s outstanding shares can provide more clarity because a fixed number at any given time may provide a false EPS outcome, as share prices can be volatile and change quickly on a day-to-day basis.)

The most commonly used EPS share model calculation is the “trailing 12 months” formula, which tracks a company’s earnings per share by totaling its EPS for the previous four quarters.

The Takeaway

Earnings trends, up or down, make earnings per share one of the most valuable metrics for assessing investments. Four or five years of positive EPS activity is considered an indicator that a company’s long-term financial prospects are robust and that its share growth should continue to rise.

A careful EPS calculation can help clarify a short- or long-term view of a company’s financial and share price potential, allowing an investor to make choices based on data and not assumptions.

Ready to put those stock-picking skills to use? Get started 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 . 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.

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

5 Tips to Hedge Against Inflation

To achieve financial freedom and grow wealth over long periods of time, it’s vital to understand the concept of inflation.

Inflation refers to the ever-increasing price of goods and services as measured against a particular currency. The purchasing power of a currency depreciates as a result of rising prices. Put differently, a rising rate of inflation equates to a decreasing value of a currency.

Inflation is most commonly measured by the Consumer Price Index (CPI) , which averages the national cost of many consumer items such as food, housing, healthcare, and more.

The opposite of inflation is deflation, which happens when prices fall. During deflation, cash becomes the most valuable asset because it can buy more. During inflation, other assets become more valuable than cash because it takes more currency to purchase them.

The key question to examine is: What assets perform the best during inflationary times?

Federal Reserve try to control inflation through monetary policy. Sometimes their policies can create inflation in financial assets, like quantitative easing has been said to do.

5 Tips for Hedging Against Inflation

The concept of inflation seems simple enough. But what might be some of the best ways investors can protect themselves?

There are a number of different strategies investors use to hedge against inflation. The common denominators tend to be hard assets with a limited supply and financial assets that tend to see large capital inflows during times of currency devaluation and rising prices.

Here are five tips that may help investors hedge against inflation.

1. Real Estate Investment Trusts (REITs)

A Real Estate Investment Trust (REIT) is a company that deals in real estate, either through owning, financing, or operating a group of properties. Through buying shares of a REIT, investors can gain exposure to the assets that the company owns or manages.

REITs are income-producing assets, like dividend-yielding stocks. They pay a dividend to investors who hold shares. In fact, REITs are required by law to distribute 90% of their income to investors.

Holding REITs in a portfolio might make sense for some investors as a potential inflation hedge because they are tied to a hard asset—real estate. During times of high inflation, hard assets tend to rise in value against their local currencies because their supply is limited. There will be an ever-increasing number of dollars (or euros, or yen, etc.) chasing a fixed number of hard assets, so the price of those things will tend to go up.

Owning physical real estate—like a home, commercial complex, or rental property—also works as an inflation hedge. But most investors can’t afford to purchase or don’t care to manage such properties. Holding shares of a REIT provides a much easier way to get exposure to real estate.

2. Bonds and Equities

The recurring theme regarding inflation hedges is that the price of everything goes up. What investors are generally concerned with is choosing the assets that go up in price the fastest, with the greatest possible return.

In some cases, it might be that stocks and bonds very quickly rise very high in price. But in an economy that sees hyperinflation, those holding cash won’t see their investment, i.e., cash, have the purchasing power it may have once had.

In such a scenario, the specific securities aren’t as important as making sure that capital gets allocated to stocks or bonds in some amount, instead of holding all capital in cash.

3. Exchange-Traded Funds

An exchange-traded fund (ETF) that tracks a particular stock index or group of investment types is another way to get exposure to assets that are likely to increase in value during times of inflation and can also be a strategy to maximize diversification in an investor’s portfolio. ETFs are generally passive investments, which may make them a good fit for those who are new to investing or want to take a more hands-off approach to investing. Since they are considered a diversified investment, they may be a good hedge against inflation.

4. Gold and Gold Mining Stocks

For thousands of years, humans have used gold as a store of value. Although the price of gold can be somewhat volatile in the short term, few assets have maintained their purchasing power as well as gold in the long term. Like real estate, gold is a hard asset with limited supply.

Still, the question of “is gold a hedge against inflation?” has different answers depending on whom you ask. Some critics claim that because there are other variables involved and the price of gold doesn’t always track inflation exactly, that it is not a good inflation hedge. And there might be some circumstances under which this holds true.

During short periods of rapid inflation, however, there’s no question that the price of gold rises sharply. Consider the following:

•  During the time between 1970 and 1974, for example, the price of gold against the US dollar surged from $240 to more than $900 for a gain of 73%.
•  During and after the recession of 2007 to 2009, the price of gold doubled from less than $1,000 in November 2008, to $2,000 in August 2011.
•  In 2019 and 2020, gold has hit all-time record highs against many different fiat currencies.

Investors seeking to add gold to their portfolio have a variety of options. Physical gold coins and bars might be the most obvious example, although these are difficult to obtain and store safely.

5. Better Understanding Inflation in the Market

Ultimately, no assets are 100% protected from inflation, but some investments might be better than others for some investors. Understanding how inflation affects investments is the beginning of growing wealth over time and achieving financial goals. Still have questions about hedging investments against inflation? SoFi credentialed financial planners are available to answer questions about investments at no additional cost to members.

Downloading and using the stock trading app can be a helpful tool for investors who want to stay up to date with how their investments are doing or keeping an eye on the market in general.

Learn more about how the SoFi app can be a useful tool to reach your investment goals.



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.
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.

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

What to Bring to College—The Ultimate Packing List

After the stress of submitting college applications and waiting for the results, an exciting task for preparing for college comes next: packing.

Of course, figuring out what to bring to college can cause some angst, but it’s also a liberating beginning to a brand-new chapter. Preparing for this new experience doesn’t have to be a struggle.

Here is a breakdown of things that college freshmen should plan on bringing with them.

School Supplies

Don’t be fooled into thinking that the only necessary supplies are a laptop and phone. Additional supplies can help students manage their college courses.

Writing information down can help you remember it better , and it can be less distracting having school information in a physical planner, away from all those social media apps.

When it comes to taking notes, some professors don’t want everyone on their computers during class, and some don’t mind. It’s a good idea to have a notebook for each class just in case, along with pens, pencils, and highlighters.

Check the specific course requirements as well. The syllabus for each class should be available early enough to read through and see if the professor lists any required materials. If you’re taking a math class, for example, a specific type of calculator may be required.

Depending on how many books students have to lug around campus, they may want to invest in a nice backpack or messenger-style bag. The most suitable bag will also depend on students’ schedule, how long they’re on campus, and how many classes they have in a row.

It might be good to wait to choose this item after you’ve selected your courses and can see what each day is going to require.

Shower Supplies

Students who choose to live in the dorms will need to bring shower supplies with them. Sharing a bathroom is going to be another adjustment in starting college. There are a few must-haves for a comfortable experience.

Shower shoes are one of these musts. A cheap pair of flip-flops will do the trick. These are shoes that are worn only while taking a shower. What’s the deal? They help to prevent athlete’s foot, a fungal infection that can result from public showers. Just make sure to rinse and dry off the shoes after each use.

A shower caddy is another essential. Most students will likely be walking from the dorm room to the shower, so they’ll have to bring all shower supplies with them. A portable container makes this much easier.

The caddy will have room for your shampoo, conditioner, body wash, and so on, and some of them also come with hangers, so they could potentially be hung up in the shower. In choosing a shower caddy, look for one that is waterproof and has holes in it so it doesn’t fill up with water.

Last, don’t forget the towels. At home, there’s always a stack of clean towels ready to be used. This won’t be the case in the dorms.

In addition to towels, it might be handy to have a robe that can be thrown on while walking from the dorm room to the bathroom and back.

Wardrobe

Hopefully, students already have a solid array of clothes to choose from. If they’re moving out of state for college, they definitely should check what the weather will be like all year in their new home. If students are used to living in a place where the weather doesn’t change much, they’ll have to add clothing to their wardrobe that’s appropriate for each season.

Dressing for college is more fun than high school for many because there isn’t a dress code. This is a great time for students to explore how they like to express themselves through clothing.

Some college students opt to be comfortable, rocking sweatpants to lectures. Others who are looking to make a good impression on professors—or romantic interests—may dress accordingly.

Don’t Forget Shoes

College campuses are much bigger than most high schools, so investing in a good pair of walking shoes is important. Classes may end up being a solid 15- to 20-minute walk away from each other.

It’ll take a toll on a student’s mood and physical comfort if they try to handle that walk in heels, unsupported sandals, or ill-fitting shoes.

Shoes take up a lot of space while packing, so trying to bring just the necessary pairs is wise. If your college is in a state that will experience cold or snowy winters, make sure to invest in some warm boots.

Bedding and Room Necessities

What else do students need to bring to a college dorm? Most dorm rooms will come with a bed but not sheets. Pack a couple of sets of sheets and a nice comforter. Some college students also recommend bringing a mattress pad and backrest pillow because you may spend more time in that bed than expected.

here’s a dorm room essentials list to figure out what else to bring. It’s vital to look into the school’s list of restricted items so you know what you should not bring to college. The college may also list the furnishings that come with the room. Check out your school’s website first so you don’t buy something that’s already there.

It can also be helpful for students to contact their roommates ahead of time and see if they’re planning to bring anything that could be shared.

It’s not a bad idea to pack on the light side. Most things you need can be ordered online anyway, so that way students won’t waste money.

Planning how to make the most of the small space provided in a college dorm is going to be great practice for when students are ready to move into apartments.

The Takeaway

The packing list has been made and the shopping trip planned, so what’s next? Paying for everything. There are a lot of options for financing the entire college experience, and students can try to get help from more than one avenue if they need to.

Students seeking financial aid should look into scholarships and grants and then federal aid. If federal student loans do not cover the full need, or if a student is not eligible for federal aid, private loans may be an option.

Private loans are issued by private financial institutions. A co-signer is often necessary. Look for loans that don’t have origination fees and offer extra services like co-signer release and hardship deferment.

To learn more, here is a guide to private student loans. Be aware that all the aid given cannot add up to more than the cost of attendance.

Families that decide that a private loan could be useful can see what SoFi has to offer. SoFi private student loans come with competitive rates, flexible repayment options, and no origination fees, no late fees, and no insufficient-funds fees.

Interested in a SoFi Private Student Loan? Check your rate with ease.



SoFi Loan Products
SoFi loans are originated by SoFi Lending Corp (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see SoFi.com/legal.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs.
SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. SoFi Lending Corp. and its lending products are not endorsed by or directly affiliated with any college or university unless otherwise disclosed.

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.
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.

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Source: sofi.com

Tips for Taking Online Classes Successfully

A new semester is usually a fresh opportunity to collaborate and hobnob, but 2020 and beyond will be remembered as the time when learning largely went online.

As the coronavirus pandemic caused an increasing number of colleges to abandon or delay plans to open campuses, a scramble to adapt ensued.

But adapt everyone must. Welcome to the epic socially distant epoch of higher education. Can a collegian still thrive? Yes. A student can learn how to be successful in online classes.

Types of Online Classes

When trying to come up with a plan for not just taking but succeeding with online classes, the first step is to determine whether classes will be fully remote or a hybrid.

Hybrid Approach

A hybrid course is a mix of in-person instruction and remote learning. The exact schedule will vary by school, class, and instructor but may include several hours of live or prerecorded virtual learning per week with one in-person session.

For example, a chemistry course could include virtual learning and in-person lab work.

Hybrid courses offer the benefits of remote learning without fully abandoning in-person instruction, making it a prime choice for students concerned that online classes may not meet their needs.

Exclusively Virtual

Classes that are all virtual never meet in person. Instruction is given through live webinars, prerecorded video, and physical or digital material.

Depending on the format of the course, students can fit sessions into their schedule as they see fit, an option not provided by a hybrid or traditional class.

Benefits and Potential Pitfalls of Virtual Courses

While virtual learning is ideal for some students, it may be frustrating for others. Some degrees may not lend themselves to a virtual experience either. But for students who have taken the plunge into online learning, there are several benefits to talk about.

Pros of Online Courses

Flexibility. The ability to learn whenever and wherever is a priceless advantage for a student with a hectic schedule. Though there are still deadlines and due dates to abide by, learning can typically take place around work, social commitments, and personal preferences. While some courses may include live remote sessions, they’re typically recorded and available for preoccupied students to view at a later time.

Real-life experience. Online courses tend to put more responsibility on the student. Learning how to prioritize instruction in a flexible schedule can help prepare students for careers.

Potential savings. If a course was designed to be taught in person but has recently been adapted for online instruction, a discount may not be available.

But for courses originally built for virtual learning, students often find they can save on the average credit cost. An online degree also could have condensed schedules available, allowing a student to get through the courses faster.

There are other savings to consider. With online instruction, students don’t have to worry about paying for parking, gas, or lunch on the go (and there are ways to thrive as a commuter student).

If virtual learners can pursue an education while working full or part time, an option not always available to students bogged down by a schedule of in-person classes, they may be able to curb student loan debt.

Potential Cons of Online Courses

Minimal social benefits. One concern students might have when taking online classes is the lack of personal interaction. While some simply respond better to in-person learning, others worry that questions won’t be addressed as promptly or thoroughly in an online setting. Other students are motivated by interactions with fellow students and find themselves struggling to concentrate when learning virtually.

A lack of professional networking. Students often discover opportunities to build relationships with professors and assistants that can lead to careers. Virtual learning makes these relationships more difficult to find and develop.

Scheduling conflicts. While the flexibility of online classes is appealing to most, it can create scheduling conflicts. If students are challenged by time management, they may find themselves procrastinating and struggling to manage their workload and deadlines.

Tips for Online Classes

Here are some words to the wise for taking online courses, for both newbies and experienced virtual students.

•  Respect the course. Do you suspect that an online course has less value than in-person instruction? The educational value is the same. It’s just being delivered in a different fashion.
•  Think about time management. Even experienced virtual students can improve their time management skills. Review the syllabus at the start of the semester, note major assignments, and look for potential conflicts.
•  Try to avoid distractions. When taking online courses, it might be best not to set up in front of the TV, as tempting as it may be. Consider cobbling together a home office that blocks distractions and creates a productive environment.
•  Participate. While an online class can be an introvert’s dream, there are still opportunities to participate. Many online courses offer a forum for students and instructors to discuss course materials, comment on one another’s work, and ask questions as needed.

Funding the Virtual Voyage

Even though some online classes are more affordable than their in-person variations, tuition costs may cause a bit of sticker shock. Consider the following options when determining how to pay for virtual classes, keeping in mind that certain institutions may have rules limiting payment methods.

Federal Loans

By filling out the FAFSA®, approved students can obtain federal funding for their education. Known for low and fixed rates, federal student loans don’t typically require payments to begin until graduation.

Private Loans

With a good credit rating and a little patience, students can find private student loans through private lenders, if needed. Though they often come with repayment plans that start right away, they are an option for students denied federal aid or whose costs are not completely covered by federal aid.

Federal student loans offer benefits that don’t typically accompany private loans. It’s generally thought that students and parents should exhaust federal student loan options before considering private loans.

Paying à la Carte

Online courses are designed to fit a working student’s schedule (though being employed certainly isn’t a requirement). Many students who enjoy online classes take them as they’re financially able, paying for them with their own money at the time payment is due, either upfront or through a college’s payment plan.

During this time of great adjustment, don’t let finances become another worry. Consider a private student loan from SoFi to jumpstart the virtual college experience.

Many students have found SoFi Private Student Loans to be affordable and convenient, thanks to flexible repayment options and no fees—no origination fees, late fees, or insufficient-funds fees.

A private loan can cover up to 100% of the cost of school-certified attendance, both for in-person and online courses. A SoFi Private Student Loan can help cover additional costs after federal aid or become a lifeline for those denied government assistance.

Interested in a private student loan? Apply for one with SoFi today.



SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs.
SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. SoFi Lending Corp. and its lending products are not endorsed by or directly affiliated with any college or university unless otherwise disclosed.

SoFi Loan Products
SoFi loans are originated by SoFi Lending Corp (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see 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.

SOPS20041

Source: sofi.com

7 Tips for Finding College Housing

Packing up and heading off to college is an absolutely thrilling time in a young person’s life. However, with all the fun comes a lot of responsibility. One of the first, and perhaps most important, choices a college student must make is exactly where they want to live.

Here are a few things to consider on your journey to finding college housing.

1. Start With a Budget

determining a budget. How much rent can the student actually afford month-to-month while also maintaining enough funds to pay for tuition, food, and other living expenses? Figuring out a personal housing budget is a wholly unique process for each student.

Students should sit down and map out all monthly expenses either alone or with a loved one to figure out just how much they can afford and go from there.

2. Decide on On-Campus or Off-Campus Housing

After figuring out expenses it’s time to answer another big question: On-campus housing or off? This is a major consideration for many students and can be budget-dependent.

It can also be dependent on what year the student is as many colleges require students to live on campus during their freshman year. But, after that, it’s likely up to students. Each choice has its merits and its pitfalls so weigh each option before deciding.

On-campus Housing

For those who want to live on-campus there are likely a number of options available at their school. This can include residence or dorm halls. Think of these as apartment buildings, but smaller. Some dorms require students to share rooms with another student, and often only come with one bathroom per floor (though there are a lucky few who may be able to snag a private bath).

Dorms often do not come with private kitchens, though they may have a shared space. This often means students will likely also purchase a meal plan, so make factor that in when budgeting.

Beyond dorms, students may also be able to live on campus in fraternity or sorority housing. These homes are typically maintained by private Greek organizations and admittance to the frat or sorority is usually required in order to live in the house. Room styles in Greek housing can vary greatly, along with availability, even as a member.

Note that some fraternity or sorority housing options are considered off-campus housing so you may need to check the housing program at your university.

Older students may also want to look into graduate housing, family housing, or co-op living on their university or college campus.

Off-Campus Housing

Off-campus housing may vary depending on where you go to school. The first option may be to just remain living at home with parents or guardians. Though this may not be the college dream for many, it can be one way to cut expenses in both housing and food.

renters insurance. Those living in a dorm may be covered by their parents’ home or renter insurance policy if you are listed as a dependent. Renters insurance may protect a person’s things if they are lost, damaged, or stolen from the home.

For example, if a pipe bursts while a student is in class and their home is flooded, renters insurance could cover the cost of replacing their damaged items. And, renters insurance could even cover temporary living expenses if their home becomes unlivable.

Paying for Student Housing

No matter where a student lives, things can most certainly get expensive. But, rather than stress about how they’ll pay for their newfound freedom, students should plan instead. And that begins by looking into all their financial options, including a SoFi private student loan.

Students, along with their parents or guardians, can apply for a private student loan with SoFi in minutes and get on their way to finding the perfect housing option for them.

The private student loan from SoFi comes with no origination fees, no late fees, and no insufficient fund fees, which could be used to help a student pay for their living expenses at school.

Note that private student loans aren’t appropriate for every student, and are generally relied on after a student has explored other options including federal student aid and scholarships. Upon graduation, students can choose one of SoFi’s repayment options, paying back the loan on a timeline that works for them.

Learn more about how SoFi Private Student Loans can help you make ends meet in college.



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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.
SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs.
SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

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

Understanding the Margin of Safety Formula

The margin of safety formula provides a way for investors to calculate a safe price at which to buy a security. This method derives from the value investing school of thought.

According to value investing principles, stocks have an intrinsic value and a market value. Intrinsic value is the price they ought to be trading at, while market value is its current price.

Figuring out the difference between these two prices, typically expressed as a percentage, is the essence of the margin of safety formula. Using it correctly can help protect investors from painful losses.

What is a Margin of Safety?

Making profitable investment decisions is largely about investment risk management. The risk involved in a trade needs to be balanced with the potential reward. In financial markets, taking greater risks often gives the potential for greater rewards but also for greater losses–a concept known as the risk-reward ratio.

both institutional and retail investors–all don’t always make the right call.
To try and correct for this possibility, value investors can determine their margin of safety when entering a position.

Expressed as a percentage, this figure is intended to represent the amount of error that could go into calculating the intrinsic value of a stock without ruining the trade. In other words, the percentage answers the question, “By what margin can I be wrong here without losing too much money?”

Who Uses the Margin of Safety Formula?

The margin of safety is typically used by investors of value stocks. Value investors look for stocks that could be undervalued, or trading at prices lower than they should be, to find profitable trading opportunities. The method for accomplishing this involves the difference between market value and intrinsic value.

The market value of a stock is simply what price it’s trading for at the moment. This fluctuates constantly and can extend well beyond intrinsic value during times of greed or fall far below intrinsic value during times of fear.

Intrinsic value is a calculation of what price a stock likely should be trading at based on fundamental analysis. There are several factors that determine a stock price and the analysis considers both quantitative and qualitative factors. That might include things like past, present, and estimated future earnings, profits and revenue, brand recognition, products and patents owned, or a variety of other factors.

After determining the intrinsic value of a stock, an investor could simply buy it if the current market price happens to be lower. But what if their calculations were wrong? That’s where a margin of safety comes in. Because no one can consider all of the appropriate factors and make a perfect calculation, factoring in a margin of safety can help to ensure investors don’t take unnecessary losses.

The margin of safety formula is also used in accounting to determine how far a company’s sales could fall before the company becomes unprofitable. Here we will focus on the definition used in investing.

How to Calculate Margin of Safety

The margin of safety formula works like this:

Margin of safety = 1 – [Current Stock Price] divided by [Intrinsic Stock Price]

Example Calculating Margin of Safety

Let’s look at a hypothetical case.

An investor wants to buy shares of company A for the current market price of $9 per share. After a thorough analysis of the company’s fundamentals, this investor believes the intrinsic value of the stock to be closer to $10. Plugging these numbers into the margin of safety formula yields the following results:

1 – (9/10) = 10%.

In this example, the margin of safety percentage would be 10%.

The idea is that an investor could be off on their intrinsic value price target by as much as 10% and theoretically not take a loss, or only a very small one.

How to Use Margin of Safety

Now an investor has determined their margin of safety. How might they use this figure?

To provide a substantial cushion for potential losses, an investor could plan to enter into a trade at a price lower than its intrinsic value. This could be done using the calculated margin of safety.

In the example above, say an investor decided that 10% wasn’t a wide enough margin, and instead wanted to be extra cautious and use 20%. They would then set a price target of $8, which is 20% lower than the stock’s estimated value of $10.

The Takeaway

In investing, the margin of safety formula is a way for investors to be extra careful when selecting an entry point in a security. By determining a percentage and placing a discount to a stock’s estimated value, an investor can find a mathematical framework with which they can try to be safer with their money.

how to value a stock, the margin of safety formula has a large subjective component, even though it’s meant to be rooted in math.

SoFi Invest makes it easy for investors to buy and sell stocks and exchange-traded funds (ETFs). Investors can try to apply the margin of safety formula to their own trades, while learning from educational tools and taking advantage of a user-friendly interface.

Try SoFi Invest and learn the basics 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.

Disclaimer: The projections or other information regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results.
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

Are Home Warranties Worth It?

Congratulations on the new home. But hang on. The garbage disposal isn’t working as it should. The hot water doesn’t seem to be hot anymore. A home warranty can ease the headaches and financial strain of fixing or replacing appliances and home systems, but any contract will require much more than a glance.

A policy can be purchased directly from a home warranty company at any time, not just upon a move-in. In some cases, the seller may provide a home warranty with the sale of the home.

Home warranties can help protect new homeowners and existing owners from troubles here and there, but is a home warranty really worth it?

What Exactly Is a Home Warranty?

A home warranty—different from homeowners insurance—covers specific items such as home systems (things like the HVAC system), washers and dryers, kitchen appliances, pool equipment, garbage disposals, and exposed electrical work.

Homeowners insurance covers theft and damage to a home from perils like fire, wind, and lightning strikes.

While homeowners insurance is typically required by a mortgage company, home warranties are optional.

Price of a Home Warranty

The cost of a home warranty can range from about $350 to $600 a year, or more for coverage for items not on the stock home warranty list. Extras may include pool systems and septic systems.

Those who purchase a home warranty will pay that annual premium, but if they do call in a service provider they will likely have to pay a fee for service calls, too.

Depending on the extent of the issue, the service call may cost anywhere from $60 to $125.

Pros of a Home Warranty

resale value. When selling a home, homeowners with a home warranty may be able to transfer the warranty to the new owner, which could be a bargaining chip for those attempting to sell an older home. (Some home warranties are non-transferable, so it’s up to sellers to do their due diligence when adding this to the deal.)

Cons of a Home Warranty

A downside of a home warranty is that it can be complicated to understand. That’s why it’s up to every purchaser to carefully read the contract before signing and ask all the questions they need to in order to understand the warranty.

For example, a home warranty may come with a financial limit per repair or per year. So if someone ends up having one heck of a year with the appliances, some of those repairs may not be covered.

You may need to request additional coverage for appliances that are considered optional or replaced frequently. And will your Sub-Zero fridge and Wolf range be covered if they go kaput? (Not likely.) Most warranty companies list excluded items on their sample contracts.

Ask: Will the plan repair or replace a broken item? If a repair is considered too expensive, the provider might offer to replace the broken item—but give you only the depreciated value.

Claims can also be denied by the warranty company for a variety of reasons, including if it believes an appliance hasn’t properly been maintained. The warranty company can also ultimately decide if a problem is worth fixing or not, despite how the homeowner feels about the situation.

Home warranties also cannot guarantee timeliness. If something breaks, homeowners may have to wait longer than they’d like to get it fixed.

Home warranties will also likely not cover preexisting conditions. If a person moves into a home with a termite problem, the warranty will likely not cover the cost to repair issues. Before you sign the warranty, the company will probably come inspect all the items covered, and could deny coverage for certain items.

Choosing the Right Home Warranty

This really comes down to personal choice and research. It’s important to look into each contract to see what is covered, what isn’t, the cost of services, and more.

While searching the internet for the right home warranty, it may be best to go beyond online reviews. Rather than looking on public listings, head over to websites like the Better Business Bureau and search for individual companies.

There, would-be home warranty buyers can search for companies to read the vetted reviews, alongside any potential complaints.

Is a Home Warranty Really Worth It?

A home warranty could be the right call for people who are not up for having to perform repairs themselves or don’t have time to hire technicians.

home’s inspection report. If there are red flags about a home’s condition, it may be a good idea to purchase a home warranty to cover any additional expenses that crop up.

Alternatives to Home Warranties

If homeowners are worried about protecting their investment but aren’t sure a home warranty is right for them, there is an alternative: Build up an emergency fund.

Homeowners can start stashing away cash into an emergency savings fund that they can dip into whenever they need repairs done. This acts as their own “home warranty” without having to pay a premium to a company.

To take it one step further, homeowners could also create a spreadsheet with the names of repair workers when they need something fixed.

The Takeaway

Are home warranties worth it? Anyone looking into purchasing one will want to take a close look at the annual cost, the charge for service calls, exactly what is and isn’t included, and how much of a replacement item is covered. Convenience is a benefit, but an alternative is to self-insure with an emergency fund.

Buyers might face another decision: choosing the right home loan lender. Looking into a SoFi mortgage is a great place to start.

House hunters can check their rate in a snap.

SoFi members can save a chunk of change on loan processing fees and enjoy all of the other benefits of membership.

Shopping for a home? See how a SoFi mortgage sizes up.



SoFi Loan Products
SoFi loans are originated by SoFi Lending Corp (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see SoFi.com/legal.

SoFi Home Loans
Terms, conditions, and state restrictions apply. SoFi Home Loans are not available in all states. See SoFi.com/eligibility for more information.

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.
Third Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.

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Source: sofi.com

The Ultimate Guide to Studying in College

College is a place for learning new things, preparing for a career, expanding one’s point of view, making new friends, and, odds are, partying. But putting more emphasis on a good time than on academics can lead to bad grades and worse.

One way that students can ensure they thrive in school is a no-brainer: to study.

Self-discipline is the key, and self-awareness is a first step in improving self-control. You can try to recognize and avoid temptation, either by steering clear of it or distracting yourself from it.

For students who could use some help, here are study tips for college they can try.

Get Enough Sleep

fatty fish that contain omega 3s , dark chocolate, blueberries, pumpkin seeds, nuts, eggs, oranges, and green tea, according to Healthline.

Drinking water and tea instead of soda and sugary fruit juices is also a good idea.

Get a Study Partner

A good study partner can hold you accountable as well as keep you focused.

If students have a tough time sitting down and reading from a book or computer all night, learning with a study partner may be easier and ensure that the information actually sticks.

Find a Quiet Space

Many people are unable to concentrate when they’re in a noisy environment. Unfortunately, a college dorm room can be loud because it’s where social gatherings often take place. Plus, there are so many students crammed into one area, nobody has any personal space. That’s why the hunt for a quiet study space is advised.

Quiet spaces on campus could include a library, where students might be able to reserve a private room; a secluded place outside; the campus cafe when it’s not busy; or an empty classroom.

If students have a car, they can drive off campus to a park, uncrowded eatery, or public library.

Put on Some Focus Music

Listening to music is one of the best study tips for college students. As long as the music isn’t distracting, students can log on to Spotify, Pandora, or YouTube and find focus music for free.

According to research cited by Business Insider, the best types of focus music include nature sounds, songs without lyrics, songs played at medium volume, and songs with a specific tempo.

Students can also listen to their favorite upbeat bands that make them excited, as it may help them study and get their work done faster.

Don’t Wait Until the Last Minute

Practitioners of the fine art of procrastination often pay a price.

Procrastination may lead to bad grades , higher levels of stress, and negative feelings, Psych Central notes. Procrastinators are likely to not have a great study session because they are rushed.

To stop postponing the inevitable, students can put reminders on their phones and notepads that tell them when to study and how to minimize stress before a test.

A study partner can help put feet to the fire. If students procrastinate over and over again, perhaps it’s a sign that they are not interested in their studies and may want to pursue a different major.

Procrastinating may also be a sign of ADHD, so students could make an appointment with their doctor to see if that’s the case and if there is treatment available.

Get Organized

If students’ papers are scattered everywhere, they don’t know where their important books or files are, or they forget when their tests are scheduled, they could use a few simple tips to get everything in order.

They can set up a Google Calendar and put every test, class, and appointment in there. They can set reminders that will show up on their computer or phone when they need to study.

They could also clean their room at least once a week, filing papers in folders, putting books in a neat pile, and storing backpacks, clothes, and other items in closets. Students could also purchase storage systems from places like IKEA and the Container Store so they have a place for everything.

They can also create ongoing to-do lists and check off each task as they complete it. The night before they go to class or in for a test, they can organize their backpack and put everything they need into it instead of rushing the morning of the test.

Shut Out Distractions

The noise in a dorm room or on a college campus can be distracting. Social media, text messages, and emails also take focus away from studying.

To buckle down, students could log out of social media and email and put their phones on do not disturb, only allowing emergency contacts to reach them.

If they are addicted to their phones or social media, they can install apps like SPACE, QualityTime, and Flipd that turn off distractions and track how much time they’re spending on their phones.

Put Together a Study Schedule

Studying isn’t just going to happen. That’s why one of the most important study tips is to put together a study schedule that is realistic.

For instance, if students like to go to bed at 2 a.m., they can’t plan to study at 6 a.m. the day they have a test because they’ll be exhausted. Instead, they can plan to study the evening before the test.

They should also schedule a time when they can find a quiet place to study or when their dorm room is going to be less noisy. They will likely not be able to concentrate on a Friday or Saturday night in their dorm because of surrounding shenanigans. They could block out time on a calendar when the dorm is quieter and make sure they stick to it.

Take Breaks

Studying for hours without a break could learn to burnout. Instead, pause to walk around, get some fresh air, or grab a glass of water or a healthy snack.

The most productive people focus on intense work for 52 minutes and then take a 17-minute break, a Reader’s Digest article notes.

getting good grades—a stepping stone to a fulfilling career.

Students focusing on their studies are better off not adding worries about paying all of the costs associated with college. After exhausting federal aid, a private student loan from SoFi can come in handy. There are no fees, which some other lenders charge.

Students can easily apply online, with or without a co-signer. Co-signing may help a student qualify for a lower rate and may help their chances of approval.

SoFi also offers private parent student loans. Parents with strong credit and income may find lower rates than they would with federal parent PLUS loans, which involve fees, though the federal loans come with generous deferment and forbearance availability.

Learn more about private student loans with SoFi today.



SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs.
SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. SoFi Lending Corp. and its lending products are not endorsed by or directly affiliated with any college or university unless otherwise disclosed.

SoFi Loan Products
SoFi loans are originated by SoFi Lending Corp (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see 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.
Third Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. A hard credit pull, which may impact your credit score, is required if you apply for a SoFi product after being pre-qualified.

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Source: sofi.com