Dow Jones vs. Nasdaq vs. S&P 500 – What Are the Differences?

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Wondering how “the market” did today?

When American investors refer to “the market” or “the stock market,” they’re usually referring to one of the three major U.S. stock exchanges: the Dow Jones, the Nasdaq, and the S&P 500. Or all three. 

But these indexes represent different stocks and market segments, so you should understand the differences before investing in stocks. 

The Dow Jones Industrial Average

The oldest U.S. stock exchange, the Dow Jones Industrial Average — or the DJIA, Dow, or Dow Jones for short — began in 1896 as a way to track the 12 largest industrial companies of the era. 

Today the Dow includes 30 blue-chip companies ranging from Microsoft to Coca Cola to Disney, and the index features all industries except for utilities and transportation. These market sectors have their own separate Dow Jones indexes. 

The DJIA doesn’t swap in or out companies often, and the criteria remains vague. Aside from being some of the largest companies in the country, the companies are expected to be leaders in their industry. A committee meets periodically to vote on keeping or replacing members of the index. 

Stocks in the Dow Jones are weighted by price, so stocks with higher prices make up a greater percentage of the total index. If a $100 stock rises by $10, and a $5 stock also rises by $10, both changes are weighted equally, even though that jump in price represents a much larger leap in value for the $5 stock. 

The Dow offers some insight into how the nation’s largest companies are performing. But with only 30 companies, it hardly represents the U.S. stock market as a whole. The price weighting also distorts the index’s performance, as a company’s share price tells you less than its market capitalization (market cap). 

Take the index’s movements with a grain of salt, and consider it more of an ultra-high cap bellwether rather than a definitive statement about U.S. stock trends.


The S&P 500

The S&P 500 index includes 500 U.S. companies rather than only 30, making it a broader indicator of U.S. large cap stocks. These companies include Alphabet (Google), 3M, Allstate, Amazon, and Microsoft. Note that companies can appear in multiple stock indexes, as Microsoft does. 

The number of companies included in the S&P has changed over time. Going back to 1927, the S&P has returned around 10% per year on average. That includes an era when the index only included 90 companies, before expanding to 500 in 1957. 

Like the Dow, the stocks making up the S&P 500 are determined by a committee. As of 2021, companies must have a market cap of at least $13.1 billion, have positive earnings for at least the last four quarters, maintain adequate liquidity based on price and trading volume, and at least 50% of shares must be owned by the public (known as public float).

Unlike the Dow, the S&P 500 is weighted by market cap rather than price. Market capitalization includes the total value of all a company’s shares: the share price multiplied by the number of outstanding shares. 

Imagine a company with shares priced at $1,000, but which only has 100 shares in circulation, for a total market cap of $100,000. In contrast, another company has 1 million shares in circulation, but each share is worth only $10, for a total market cap of $10 million. Which company has a higher market value? The one with a market cap of $10 million of course, which is why the S&P 500 weights by market cap rather than stock price.  

The S&P 500 offers a broader picture of how U.S. stocks are trending. Even so, the index represents the largest U.S. companies, and tells you nothing of how smaller companies have performed.


The Nasdaq Composite

First and foremost, understand that the Nasdaq is a stock exchange, and was in fact the first completely electronic stock exchange. The Nasdaq Composite is the stock index, which includes over 3,000 of the companies traded on the Nasdaq. The index includes all companies with common stock trading on the Nasdaq, but excludes preferred stock, exchange-traded funds (ETFs), and other types of securities. 

While investors tend to think of the Nasdaq as an exchange for technology stocks, stocks from all market sectors trade on the Nasdaq. Even so, the Nasdaq Composite index does disproportionately feature tech stocks. 

Example companies listed on the Nasdaq include Apple, Microsoft, Netflix, Tesla, and Intel. Many investors and pundits use the Nasdaq Composite as a barometer for the technology sector as a whole, even though it includes many non-tech companies (such as PepsiCo). 

Like the S&P 500, the Nasdaq Composite is weighted by market capitalization. 

Don’t confuse the Nasdaq Composite — which includes nearly every stock that trades on the Nasdaq — with the Nasdaq 100. The latter includes just 100 of the largest non-financial stocks that trade on the Nasdaq, such as Starbucks, Adobe, and Amazon. 


Which Index Should You Follow?

As a broad measure of the U.S. stock market, the S&P 500 serves as the most representative index. It includes companies in every industry, and is weighted by market cap. Even so, it includes only large-cap companies. 

For a more tech-oriented weathervane, follow the Nasdaq Composite’s movements. If you want a glimpse into small-cap stocks, check the Russell 2000. 

The Dow Jones may get the most attention from reporters, but it actually represents the U.S. market least well of the three major indexes. The sample size is too small, and being price-weighted further distorts its value.


Final Word

The three major stock indexes above only represent U.S. stocks, not international companies. 

For more global exposure, you can explore foreign stock market indexes such as the S&P Europe 350 Index or the Dow Jones Asian Titans 50 Index. 

Better yet, save yourself the stress and don’t bother following the stock market’s movements at all. Instead, automate your stock investments with a robo-advisor, and simply dollar-cost average your investments in index funds. Avoid emotional investing by ignoring the daily volatility of the market. 

While day traders need to stay glued to their stock tickers, you don’t. The stock market rises and falls, and over the long term it averages a strong upward trend. I sleep easily at night knowing that when it goes up, I enjoy a higher net worth. When it goes down, I get to buy stocks at a discount. No matter what happens, I win — because I participate in the market on autopilot, without letting emotions affect my investment decisions.

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Source: moneycrashers.com

What Can You Use Student Loans For?

To attend college these days, many students take out student loans. Otherwise, they wouldn’t be able to afford the hefty price tag of tuition and other expenses.

According to U.S. News & World Report, among the college graduates from the class of 2020 who took out student loans, the average amount borrowed was $29,927. In 2010, that number was $24,937 — a difference of about $5,000.

Student loans are meant to be used to pay for your education and related expenses so that you can earn a college degree. Even if you have access to student loan money, it doesn’t mean you should use it on general living expenses. By learning the answer to, “What can you use a student loan for?” you will make better use of your money and ensure you’re in a more stable financial situation post-graduation.

Recommended: I Didn’t Get Enough Financial Aid: Now What?

5 Things You Can Use Your Student Loans to Pay For

Here are five things you can spend your student loan funds on.

1. Your Tuition and Fees

Of course, the first thing your student loans are intended to cover is your college tuition and fees. The average college tuition and fees for a private institution in 2021-2022 is $38,185, while the average for a public, out-of-state school is $22,698 and $10,338 for a public, in-state institution.

2. Books and Supplies

Beyond tuition and fees, student loans can be used to purchase your textbooks and supplies, such as a laptop, notebooks and pens, and a backpack. Keep in mind that you may be able to save money by purchasing used textbooks online or at your campus bookstore. Hard copy textbooks cost, on average, between $80 and $150; you may be able to find used ones for a fraction of the price. Some students may find that renting textbooks may also be a cost-saving option.

Recommended: How to Pay for College Textbooks

3. Housing Costs

Your student loans can be used to pay for your housing costs, whether you live in a dormitory or off-campus. If you do live off-campus, you can also put your loans towards paying for related expenses like your utilities bill. Compare the costs of on-campus vs. off-campus housing, and consider getting a roommate to help you cover the costs of living off-campus.

4. Transportation

If you have a car on campus or you need to take public transportation to get to school, work, or your internships, then you can use your student loans to pay for those costs. Even if you have a car, you may want to consider leaving it at home when you go away to school, because gas, maintenance, and a parking pass could end up costing much more than using public transportation and your school’s shuttle, which should be free.

5. Food

What else can you use student loans for? Food would qualify as a valid expense, whether you’re cooking meals at home or you’ve signed up for a meal plan. This doesn’t mean you should eat out at fancy restaurants all the time just because the money is there. Instead, you could save by cooking at home, splitting food costs with a roommate, and asking if local establishments have discounts for college students.

Recommended: How to Get Out of Student Loan Debt: 6 Options

5 Things Your Student Loans Should Not Cover

Now that you know what student loans can be used for, you’re likely wondering what they should not be used for as well. Here are five expenses that cannot be covered with funds from your student loans.

1. Entertainment

While you love to do things like go to the movies and concerts and bowling, you should not use your student loans to pay for your entertainment. Your campus likely offers plenty of free and low-cost entertainment like sports games and movie nights, so pursue those opportunities instead.

2. A Vacation

College is draining, and you deserve a vacation from the stress every once in a while. However, if you can’t afford to go on spring break or another type of trip, then you should put it off at this time. It’s never a good idea to use your student loans to cover these expenses.

3. Gym Membership

You may have belonged to a gym at home before you went to college, and you still want to keep up your membership there. You can, as long as you don’t use your student loans to cover it. Many colleges and universities have a gym or fitness center on campus that is available to students and included in the cost of tuition.

4. A New Car

Even if you need a new car, student loans cannot be used to buy a new set of wheels. Consider taking public transportation instead of buying a modest used car when you save up enough money.

5. Extra Food Costs

While you and your roommates may love pizza, it’s not a good idea to use your student loan money to cover that cost. You also shouldn’t take your family out to eat or dine out too much with that borrowed money. Stick to eating at home or in the dining hall, and only going out to eat every once in a while with your own money.

Student Loan Spending Rules

The federal code that applies to the misuse of student loan money is clear. Any person who “knowingly and willfully” misapplied funds could face a fine or imprisonment.

Your student loan refund — what’s left after your scholarships, grants, and loans are applied toward tuition, campus housing, fees, and other direct charges — isn’t money that’s meant to be spent willy-nilly. It’s meant for education-related expenses.

The amount of financial aid a student receives is based largely on each academic institution’s calculated “cost of attendance,” which may include factors like your financial need and your Expected Family Contribution (EFC). Your cost of attendance minus your EFC generally helps determine how much need-based aid you’re eligible for. Eligibility for non-need-based financial aid is determined by subtracting all of the aid you’ve already received from your cost of attendance.

Starting for the 2024-2025 school year, the EFC will be replaced with the Student Aid Index (SAI). The SAI will work similarly to the EFC though there will be some important changes such as adjustments in Pell Grant eligibility.

Additionally, when you took out a student loan, you probably signed a promissory note that outlined what you’re supposed to be spending your loan money on. Those restrictions may vary depending on what kind of loan you received — federal or private, subsidized or unsubsidized. If the restrictions weren’t clear, it’s not a bad idea to ask your lender, “What can I use my student loan for?”

If you’re interested in adjusting loan terms or securing a new interest rate, you could consider refinancing your student loans with SoFi. Refinancing can allow qualifying borrowers to secure a lower interest rate or preferable terms, which could potentially save them money over the long run. Refinancing federal loans eliminates them from all federal borrower benefits and protections, inducing deferment options and the ability to pursue public service loan forgiveness, so it’s not the right choice for all borrowers.

The Takeaway

Student loans can be used to pay for qualifying educational expenses like tuition and fees, room and board, and supplies like books, pens, a laptop, and a backpack. Expenses like entertainment, vacations, cars, and fancy dinners cannot generally be paid for using student loans.

If you have student loans and are interested in securing a new — potentially lower — interest rate, consider refinancing.

There are no fees to refinance a student loan with SoFi and potential borrowers can find out if they pre-qualify, and at what rates, in just a few minutes.

Learn more about student loan refinancing with SoFi.


SoFi Student Loan Refinance
IF YOU ARE LOOKING TO REFINANCE FEDERAL STUDENT LOANS PLEASE BE AWARE OF RECENT LEGISLATIVE CHANGES THAT HAVE SUSPENDED ALL FEDERAL STUDENT LOAN PAYMENTS AND WAIVED INTEREST CHARGES ON FEDERALLY HELD LOANS UNTIL THE END OF JANUARY 2022 DUE TO COVID-19. PLEASE CAREFULLY CONSIDER THESE CHANGES BEFORE REFINANCING FEDERALLY HELD LOANS WITH SOFI, SINCE IN DOING SO YOU WILL NO LONGER QUALIFY FOR THE FEDERAL LOAN PAYMENT SUSPENSION, INTEREST WAIVER, OR ANY OTHER CURRENT OR FUTURE BENEFITS APPLICABLE TO FEDERAL LOANS. CLICK HERE FOR MORE INFORMATION.
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Source: sofi.com

Solo 401(k) vs SEP IRA: Key Differences and Considerations

Self-employment has its perks but an employer-sponsored retirement plan isn’t one of them. Opening a solo 401(k) or a Simplified Employee Pension Individual Retirement Account (SEP IRA) allows the self-employed to build wealth for retirement while enjoying some tax advantages.

A solo 401(k) or one-participant 401(k) is similar to a traditional 401(k), in terms of annual contribution limits and tax treatment. A SEP IRA, meanwhile, follows the same tax rules as traditional IRAs. SEP IRAs, however, allow a higher annual contribution limit than a regular IRA.

So, which is better for you? The answer can depend largely on whether your business has employees or operates as a sole proprietorship and which plan yields more benefits, in terms of contribution limits and tax breaks.

Weighing the features of a solo 401(k) vs. SEP IRA can make it easier to decide which one is more suited to your retirement savings needs.

Investing for Your Retirement When Self-Employed

An important part of planning for your retirement is understanding your long-term goals. Whether you choose to open a solo 401(k) or make SEP IRA contributions can depend on how much you need and want to save for retirement and what kind of tax advantages you hope to enjoy along the way.

Recommended: When Can I Retire? This Formula Will Help You Know

A solo 401(k) could allow you to save more for retirement on a tax-advantaged basis compared to a SEP IRA, but not everyone can contribute to one. It’s also important to consider whether you need to give some thought to retirement planning for employees.

If you’re hoping to mirror or replicate the traditional 401(k) plan experience, then you might lean toward a solo 401(k). Whether you can contribute to one of these plans depends on your business structure. Business owners with no employees or whose only employee is their spouse can use a solo 401(k).

Meanwhile, you can establish a SEP IRA for yourself as the owner of a business as well as your eligible employees, if you have any. It’s also helpful to think about what kind of investment options you might prefer. What you can invest in through a solo 401(k) plan may be different from what a SEP IRA offers, which can affect how you grow wealth for retirement.

Solo 401(k) vs SEP IRA Comparisons

Both solo 401(k) plans and SEP IRAs make it possible to save for retirement as a self-employed person or business owner when you don’t have access to an employer’s 401(k). You can set up either type of account if you operate as a sole proprietorship and have no employees. And both can offer a tax break if you’re able to deduct contributions each year.

In terms of differences, there are some things that set solo 401(k) plans apart from SEP IRAs. Under SEP IRA rules, for instance, neither employee nor catch-up contributions are allowed. There’s no Roth option with a SEP IRA, which you may have with a solo 401(k). Choosing a Roth solo 401(k) might appeal to you if you’d like to be able to make tax-free withdrawals in retirement.

You may also be able to take a loan from a solo 401(k) if the plan permits it. Solo 401(k) loans follow the same rules as traditional 401(k) loans. If you need to take money from a SEP IRA before age 59 ½, however, you may pay an early withdrawal penalty and owe income tax on the withdrawal.

Here’s a rundown of the main differences between a 401(k) vs. SEP IRA.

Solo 401(k) SEP IRA
Tax-Deductible Contributions Yes, for traditional solo 401(k) plans Yes
Employer Contributions Allowed Yes Yes
Employee Contributions Allowed Yes Yes
Withdrawals Taxed in Retirement Yes, for traditional solo 401(k) plans Yes
Roth Contributions Allowed Yes No
Catch-Up Contributions Allowed Yes No
Loans Allowed Yes No

What Is a Solo 401(k)?

A solo 401(k) or one-participant 401(k) plan is a traditional 401(k) that covers a business owner who has no employees or employs only their spouse. Simply, a Solo 401(k) allows you to save money for retirement from your self-employment or business income on a tax-advantaged basis.

These plans follow the same IRS rules and requirements as any other 401(k). There are specific solo 401(k) contribution limits to follow, along with rules regarding withdrawals and taxation. Regulations also govern when you can take a loan from a solo 401(k) plan.

A number of online brokerages now offer solo 401(k) plans for self-employed individuals, including those who freelance or perform gig work. You can open a retirement account online and start investing, no employer other than yourself needed.

If you use a solo 401(k) to save for retirement, you’ll also need to follow some reporting requirements. Generally, the IRS requires solo 401(k) plan owners to file a Form 5500-EZ if it has $250,000 or more in assets at the end of the year.

Solo 401(k) Contribution Limits

Just like other 401(k) plans, solo 401(k)s have annual contribution limits. You can make contributions as both an employee and an employer. Here’s how annual solo 401(k) contribution limits work for elective deferrals:

Solo 401(k) Contribution Limits by Age in 2021 (Elective Deferrals) Annual contribution in 2022
Annual Contribution Catch-Up Contribution in 2021 and 2022
Under 50 $19,500 N/a N/a
50 and Older $19,500 $6,500 $20,500

The limit on 401(k) contributions, including elective deferrals and employer nonelective contributions, is $58,000 for 2021 and $61,000 in 2022. That doesn’t include an additional $6,500 allowed for catch-up contributions if you’re 50 or older.

If you’re self-employed, the IRS requires you to make a special calculation to figure out the maximum amount of elective deferrals and employer nonelective contributions you can make for yourself. This calculation reflects on your earned income, or means your net earnings from self-employment after deducting one-half of your self-employment tax and contributions for yourself.

The IRS offers a rate table you can use to calculate your contributions. You can set up automatic deferrals to a solo 401(k), or make contributions at any point throughout the year.

What Is a SEP IRA?

A SEP IRA or Simplified Employee Pension Plan is another option to consider if you’re looking for retirement plans for those self-employed. This tax-advantaged plan is available to any size business, including sole proprietorships with no employees, and its one of the easiest retirement plan to set up and maintain. So if you’re a freelancer or a gig worker, you might consider using a SEP IRA to plan for retirement.

SEP IRAs work much like traditional IRAs, with regard to the tax treatment of withdrawals. They do, however, allow you to contribute more money toward retirement each year above the standard traditional IRA contribution limit. That means you could enjoy a bigger tax break when it’s time to deduct contributions.

If you have employees, you can make retirement plan contributions to a SEP IRA on their behalf. SEP IRA contribution limits are, for the most part, the same for both employers and employees. If you’re interested in a SEP, you can set up an IRA for yourself or for yourself and your employees through an online brokerage.

SEP IRA Contributions

SEP IRA contributions use pre-tax dollars. Amounts contributed are tax-deductible in the year you make them. All contributions are made by the employer only, which is something to remember if you have employees. Unlike a traditional 401(k) that allows elective deferrals, your employees wouldn’t be able to add money to their SEP IRA through paycheck deductions.

Here’s how SEP IRA contributions work.

SEP IRA Contributions by Age

Annual Contribution Catch-Up Contribution
Under 50 Lesser of 25% of the employee’s compensation or $58,000 in 2021 and $61,000 in 2022. N/a
50 and Older Lesser of 25% of the employee’s compensation or $58,000 and $61,000 in 2022. N/a

The IRS doesn’t allow catch-up contributions to a SEP IRA, a significant difference from solo 401(k) plans. So it’s possible you could potentially save more for retirement with a solo 401(k), depending on your age and earnings. If you’re self-employed, you’ll need to follow the same IRS rules for figuring your annual contributions that apply to solo 401(k) plans.

You can make SEP IRA contributions at any time until your taxes are due, in mid-April of the following year.

The Takeaway

Saving for retirement is something that you can’t afford to put off. Whether you choose a solo 401(k), SEP IRA or another savings plan, it’s important to take the first step toward growing wealth.

If you’re ready to start saving for the future, one way to get started is by opening a brokerage account on the SoFi Invest investment platform. All members get complimentary access to a financial advisor, which can help you create a plan to meet your long-term goals.

Photo credit: iStock/1001Love


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Source: sofi.com

Cost of Goods Sold Formula: A Step-by-Step Guide

Cost Of Goods Sold Definition
Cost of goods sold (COGS) is the cost of producing the goods sold by a company. It accounts for the cost of materials and labor directly related to that good and for a designated accounting period.

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As a company selling products, you need to know the costs of creating those products. That’s where the cost of goods sold (COGS) formula comes in. Beyond calculating the costs to produce a good, the COGS formula can also unveil profits for an accounting period, if price changes are necessary, or whether you need to cut down on production costs.

Whether you fancy yourself as a business owner or a consumer or both, understanding how to calculate cost of goods sold can help you feel more informed about the products you’re purchasing — or producing.

What Is Cost of Goods Sold?

Cost of goods sold is the cost of producing the goods sold by a company. It includes the cost of materials and labor directly related to that good. However, it excludes indirect expenses such as distribution and sales force costs.

What Is the Cost of Goods Sold Formula?

Four illustrations help explain the cost of goods sold formula, which accounts for beginning inventory, purchases, and ending inventory.

When selling a product, you need to understand the production costs associated with it in a given period, ​​which could be a month, quarter, or year. You can do that by using the cost of goods sold formula. It’s a straightforward calculation that accounts for the beginning and ending inventory, and purchases during the accounting period. Here is a simple breakdown of the cost of goods sold formula:

COGS = beginning inventory + purchases during the period – ending inventory

How Do You Calculate Cost of Goods Sold?

To calculate cost of goods sold, you have to determine your beginning inventory — meaning your merchandise, including raw materials and supplies, for instance — at the beginning of your accounting period. Then add in the new inventory purchased during that period and subtract the ending inventory — meaning the inventory leftover at the end for your accounting period. The extended COGS formula also accounts for returns, allowances, discounts, and freight charges, but we’re sticking to the basics in this explanation.

Taking it one step at a time can help you understand the COGS formula and find the true cost behind the goods being sold. Here is how you do it:

Step 1: Identify Direct and Indirect Costs

Whether you manufacture or resell products, the COGS formula allows you to deduct all of the costs associated with them. The first step is to differentiate the direct costs, which are included in the COGS calculation, from indirect costs, which are not.

Direct Costs

Direct costs are the costs tied to the production or purchase of a product. These costs can fluctuate depending on the production level. Here are some direct costs examples:

  • Direct labor
  • Direct materials
  • Manufacturing supplies
  • Fuel consumption
  • Power consumption
  • Production staff wages

Indirect Costs

Indirect costs go beyond costs tied to the production of a product. They include the costs involved in maintaining and running the company. There can be fixed indirect costs, such as rent, and fluctuating costs, such as electricity. Indirect costs are not included in the COGS calculation. Here are some examples:

  • Utilities
  • Marketing campaigns
  • Office supplies
  • Accounting and payroll services
  • Insurance costs
  • Employee benefits and perks

Step 2: Determine Beginning Inventory

Now it’s time to determine your beginning inventory. The beginning inventory will be the amount of inventory leftover from the previous time period, which could be a month, quarter, or year. Beginning inventory is your merchandise, including raw materials, supplies, and finished and unfinished products that were not sold in the previous period.

Keep in mind that your beginning inventory cost for that time period should be exactly the same as the ending inventory from the previous period.

Step 3: Tally Up Items Added to Your Inventory

After determining your beginning inventory, you also have to account for any inventory purchases throughout the period. It’s important to keep track of the cost of shipment and manufacturing for each product, which adds to the inventory costs during the period.

Step 4: Determine Ending Inventory

The ending inventory is the cost of merchandise leftover in the current period. It can be determined by taking a physical inventory of products or estimating that amount. The ending inventory costs can also be reduced if any inventory is damaged, obsolete, or worthless.

Step 5: Plug It Into the Cost of Goods Sold Equation

Now that you have all the information to calculate cost of goods sold, all there’s left to do is plug it into the COGS formula.

An Example of The Cost of Goods Sold Formula

Let’s say you want to calculate the cost of goods sold in a monthly period. After accounting for the direct costs, you find out that you have a beginning inventory amounting to $30,000. Throughout the month, you purchase an additional $5,000 worth of inventory. Finally, after taking inventory of the products you have at the end of the month, you find that there’s $2,000 worth of ending inventory.

Using the cost of goods sold equation, you can plug those numbers in as such and discover your cost of goods sold is $33,000:

COGS = beginning inventory + purchases during the period – ending inventory
COGS = $30,000 + $5,000 – $2,000
COGS = $33,000

Accounting for Cost of Goods Sold

There are different accounting methods used to record the level of inventory during an accounting period. The accounting method chosen can influence the value of the cost of goods sold. The three main methods of accounting for the cost of goods sold are FIFO, LIFO, and the average cost method.

Two illustrations help explain the difference between FIFO and LIFO, which is an inventory method of accounting for the cost of goods sold.

FIFO: First In, First Out

The first in, first out method, also known as FIFO, is when the earliest goods that were purchased are sold first. Since merchandise prices have a tendency of going up, by using the FIFO method, the company would be selling the least expensive item first. This translates into a lower COGS compared to the LIFO method. In this case, the net income will increase over time.

LIFO: Last In, First Out

The last in, first out method, also known as LIFO, is when the most recent goods added to the inventory are sold first. If there’s a rise in prices, a company using the LIFO method would be essentially selling the goods with the highest cost first. This leads to a higher COGS compared to the FIFO method. By using this method, the net income tends to decrease over time.

Average Cost Method

The average cost method is when a company uses the average price of all goods in stock to calculate the beginning and ending inventory costs. This means that there will be less of an impact in the COGS by higher costs when purchasing inventory.

Considerations for Cost of Goods Sold

When calculating cost of goods sold, there are a few other factors to consider.

COGS vs. Operating Expenses

Business owners are likely familiar with the term “operating expenses.” However, this shouldn’t be confused with the cost of goods sold. Although they are both company expenditures, operating expenses are not directly tied to the production of goods.

Operating expenses are indirect costs that keep a company up and running, and can include rent, equipment, insurance, salaries, marketing, and office supplies.

COGS and Inventory

The COGS calculation focuses on the inventory of your business. Inventory can be items purchased or made yourself, which is why manufacturing costs are only sometimes considered in the direct costs associated with your COGS.

Cost of Revenue vs. COGS

Another thing to consider when calculating COGS is that it’s not the same as cost of revenue. Cost of revenue takes into consideration some of the indirect costs associated with sales, such as marketing and distribution, while COGS does not take any indirect costs into consideration.

Exclusions From COGS Deduction

Since service companies do not have an inventory to sell and COGS accounts for the cost of inventory, they can’t use COGS because they don’t sell a product — they would instead calculate the cost of services. Examples of service companies are accounting firms, law offices, consultants, and real estate appraisers.

salary, business owners should have a well-rounded view of the costs associated with their goods sold. Following this step-by-step guide to learn how to use the cost of goods sold formula is a good starting point. As always, it’s important to consult an expert, such as an accountant, when doing these calculations to make sure everything is accounted for.

Sources: QuickBooks

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How to Talk to Your Children About Student Loans: 6 Key Points

Many parents lecture — er, talk to — their teenagers about being responsible. Don’t text and drive. Do try to spend that summer job money wisely. As children approach college, talking about student loans might be a smart idea.

For one, the topic is pretty complicated.

And second, even if you plan to help repay any student loans, most qualified education loans are taken out in the student’s name, and there’s usually no escape: Even bankruptcy rarely erases student loan debt.

Maybe your student-athlete or scholar is counting on a full ride. While confidence is a wonderful thing, full rides are exceedingly rare.

Here are six student loan concepts you can discuss with your aspiring college student.

1. Here’s What We Think We Can Contribute

It might be uncomfortable to talk frankly about your family finances, but they almost always determine the amount and types of financial aid your child may qualify for.

It can be important for parents to discuss what they’re able to contribute in order to help their young adults wrap their heads around the numbers, too.

2. Let’s Forge Ahead With the FAFSA

The first step to hunt for financial aid is to complete the FAFSA®, the Free Application for Federal Student Aid. It takes most people less than an hour. Students helping their parents fill it out will get a look at the expected family contribution: the family’s taxed and untaxed income, assets, and benefits.

Based on financial need, a college’s cost of attendance, and FAFSA information, schools put together a financial aid package that may be composed of scholarships and grants, federal student loans, and/or work-study.

Awards based on merit (scholarships) or need (grants) are free money. When they don’t cover the full cost of college, that’s where student loans can come in.

If your income is high, should you bother with the FAFSA? Sure, because there’s no income cutoff for federal student aid. And even if your student is not eligible for federal aid, most colleges and states use FAFSA information to award nonfederal aid.

About 400 colleges and scholarship programs use the CSS Profile, a financial aid application in addition to the FAFSA. It determines eligibility for institutional scholarships and grants.

3. Interest Rates: Fixed and Not

Your soon-to-be college student may not know that there are two types of interest rates: fixed and variable.

Fixed interest rates stay the same for the life of the loan. Variable rates go up or down based on market fluctuations.

You can explain that all federal student loans borrowed after July 2006 have fixed interest rates, which are set each year, and that private student loan interest rates may be variable or fixed.

4. Federal vs Private Student Loans

Around now your young person is restless. But press on.

Anyone taking out student loans should learn that there are two main types: federal and private. All federal student loans are funded by the federal government. Private student loans are funded by some banks, credit unions, and online lenders.

If your child is going to borrow money for college, it’s generally advised to start with federal student loans. Since federal student loans are issued by the government, they have benefits, including low fixed interest rates, forbearance and deferment eligibility, and income-based repayment options.

Private student loans have terms and conditions set by private lenders, and don’t offer the generous repayment options or loan forgiveness programs of federal loans, but some private lenders do offer specific deferment options.

Private student loans can be used to fill gaps in need, up to the cost of attendance, which includes tuition, books and supplies, room and board, transportation, and personal expenses. A student applicant often will need a cosigner.

5. Another Wrinkle: Subsidized vs Unsubsidized

Financial need will determine whether your undergraduate is eligible for federal Direct Subsidized Loans. Your child’s school determines the amount you can borrow, which can’t exceed your need.

The government pays the interest on Direct Subsidized Loans while your child is in college, during the grace period (the first six months after graduation or when dropping below half-time enrollment), and in deferment (postponing repayment).

With federal Direct Unsubsidized Loans, interest begins accruing when the funds are disbursed and continues during grace periods, and the borrower is responsible for paying it. Direct Unsubsidized Loans are available to both undergraduate and graduate students, and there is no requirement of financial need.

Borrowers are not required to pay the interest while in school, during grace periods, or during deferment (although they can choose to), but any accrued interest will be added to the principal balance when repayment begins.

There are annual and aggregate limits for subsidized and unsubsidized loans. Most dependent freshmen, for example, can borrow no more than $5,500.

6. Soothing Words: Scholarships and Grants

It’s important to not overlook the nonloan elements of the financial aid package. They can (hooray) reduce the amount your student needs to borrow.

Scholarships and grants are essentially free money.

While some schools automatically consider your student for scholarships based on merit or other qualifications, many scholarships and grants require applications.

You may want to assign a research project to your college-bound young adult to look into all of the scholarship options they may qualify for.

The Takeaway

Debt isn’t the most thrilling parent-child topic, but college students who will need to borrow should know the ins and outs of student loans: interest rates, federal vs. private, subsidized vs. unsubsidized, and repayment options.

If federal aid doesn’t cover all the bases of college, your student can consider a private student loan with SoFi.

SoFi Private Student Loans come with competitive rates, flexible repayment options, and no fees. A student can apply entirely online, with or without a cosigner.

See your interest rate in three minutes. No strings attached.


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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.

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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.
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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Buying Options vs Stocks: Trading Differences to Know

Stocks and options are two of the popular investment types that investors might include in their portfolio. There are reasons to invest in each, and they both come with their own risks, timelines, pros, and cons.

When deciding whether to invest in stocks vs. stock options, or any type of security or asset, it’s important to consider your personal investing goals, experience, risk tolerance, and timeline.

What Are the Differences Between Options and Stocks?

Stocks Options
Type of Investor Beginners and long-term investors Experienced and active traders
Potential Downsides Risks, Taxes, Fees Risks, Costs, Effort
Type of Investment Equity Derivative

Options

Options, or stock options, are a type of derivative investment. Rather than buying shares of stock, options traders give investors the right to buy or sell shares at a specified price, (known as the strike price in options terminology,) on a particular date in the future.

With call options, traders typically are not obligated to buy, so they can make a decision based on how the market moves. The investor does not have any ownership in the company unless they choose to exercise the option and buy the shares.

Over the time period of the option, it gets exponentially less valuable. This is known as time decay. A purchase of an options contract is known as a call, and a sale is known as a put.

Recommended: Call vs Put Option: The Differences

Some investors exercise the right to buy or sell and use that option trading strategy to make a profit. Others never exercise the right to buy, instead focusing on trading the options contracts themselves for a profit. Options trading strategies can get complicated, involving buying and selling multiple options on the same underlying security.

Recommended: A Guide to Options Trading

Stocks

Stocks are portions of ownership in companies, also known as shares. Investors can buy shares in companies and become fractional owners of that company in proportion to the number of outstanding shares that company has. For instance, if a company has 100,000 shares and an investor buys 10,000, they own 10% of the company.

Investors who purchase stocks typically hope to buy them at a lower price then sell them later at a high price to make a profit. There are also other ways investors can earn profits on stocks. For instance, some stocks pay out dividends to owners. Every month, quarter, or year, an investor can earn money based on the number of shares they own.

Recommended: How to Start Investing in Stocks

5 Key Differences in Stocks vs Options

Both stocks and options are popular investments, and there can be a place for both of them in a diversified portfolio. Here’s a look at some of of the differences to keep in mind when it comes to trading options vs. stocks:

1. Risk

Both stocks and options come with risks. For stocks, the risk is that the value of the security will fall lower than the investor expected. For options, there are additional risks, including the risk that they will expire without being exercised.

2. Ownership

When an investor buys stock, they become partial owners of that company. When they buy options, they only have the right to buy or sell stock, but not actual ownership of shares.

3. Quantities

When buying stock, the number of shares an investor buys is the total number they have and control, and they can purchase any number of shares, including fractional shares. When buying options, each contract represents 100 shares of stock.

4. Timeline

Options are contracts that are only valid for a certain period of time until the expiration date. They lose value over time until they are worthless when the contract expires. When an investor buys stock, they can hold it as long as they want.

5. Time Commitment

Investors can buy stock and hold onto it without doing much work, whereas options traders are often hands-on and prefer an eye on the market for the duration of the contract.

When to Consider Trading Stocks

There are several reasons to consider trading stocks, depending on your goals, timeline, and risk tolerance. Like any asset, stocks come with their share of risks and downsides. Some of the pros and cons of stocks include:

Pros

It can be relatively easy to start investing in stocks. There are several other benefits as well:

•   Investors don’t have to sell their stocks on any particular date, so they can choose the best time to sell.

•   Some stocks pay out dividends to investors.

•   Stocks are easier to research than options since they have market history.

•   Being an owner of a company allows you to vote on certain corporate issues that can affect their investment.

•   Stocks typically have more liquidity than options, meaning it’s easier for traders to buy and sell them at any given time.

Cons

Like all securities, there are risks involved with investing in stocks. Those include:

•   Whether you buy and sell stocks quickly as a day trading strategy or hold onto them for years, you will need to pay short or long-term capital gains taxes if you sell for a profit.

•   While trading stocks can be very profitable, it’s generally best as a long-term strategy, which means it can take many months or years.

•   It can be emotionally challenging to watch the market, and one’s portfolio, go up and down in value over months or years.

•   Making a big profit on stocks can require a large upfront investment.

•   When investing in stocks, traders risk losing all the money they put in. With options, they only risk the upfront premium.

•   If investors short a stock, they can lose much more money than they even put into the investment.

•   Stocks in certain companies are very expensive, making it difficult for smaller traders to even buy one.

When to Consider Trading Options

There are several reasons investors choose options trading vs. stocks trading. But like stocks or any investment, options come with their share of risks and downsides. Some of the main pros and cons of trading options are:

Pros

Options trading can be complicated, but once you understand how it works, there’s significant upside potential. Other benefits include:

•   Options may be an inexpensive way to participate in the market without tying up as many funds as stock trading requires.

•   Options provide investors with leverage. Essentially the investor has some control and access to shares worth more than the money they put into the contract.

•   Options can provide an investor with a certain degree of predictability about their investment, since they know the strike price and expiration date of the contract. This makes the investor’s decision whether to exercise the option or sell it easier.

•   Some investors prefer a hands-on trading strategy, and options are a good choice for that type of investing.

•   Options can act as a hedge against market volatility

Cons

Since fewer traders buy and sell options than stocks, there can be lower liquidity making it difficult to get out of an options contract. Other drawbacks include:

•   If an investor buys a stock option, they must pay a premium to enter into the contract. If the stock doesn’t move the way they hope it will and they choose not to exercise the option, they lose that premium they had put in.

•   Trading options requires an understanding of the market and more in-depth research into the particular contract, the underlying asset’s fundamentals, and what the market looks like within the timeframe of the contract.

•   Options lose value over time.

•   Trading options may require a margin account with a certain amount of money in it at all times.

•   Trading options requires more ongoing management than stocks

•   Options are not as liquid as stocks, making them harder to buy and sell.

•   Not every brokerage offers options, so you’ll need to open an account at a broker that does.

The Takeaway

Stocks and options are two popular types of investments traders use to earn profits and build a diversified portfolio. Depending on your investment strategy, you might invest in just stocks, just options, or a combination of the two.

If you’re interested in starting to trade and build a portfolio with stocks, one great way is using the SoFi Invest® stock trading app. You can add your other investment accounts to easily see all your financial information in one simple dashboard.

Photo credit: iStock/fizkes


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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.
Options involve risks, including substantial risk of loss and the possibility an investor may lose the entire amount invested in a short period of time. Before an investor begins trading options they should familiarize themselves with the Characteristics and Risks of Standardized Options . Tax considerations with options transactions are unique, investors should consult with their tax advisor to understand the impact to their taxes.
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Glassdoor vs. Indeed: 2021 Comparison

There are so many job boards out there in the world — some being a better choice than others, depending on your needs. So let’s compare two of the top job search engines out there — Glassdoor vs. Indeed — to help you make a decision on which one you should be using, whether as a job seeker or an employer looking to post job listings.

Glassdoor and Indeed are owned by the same holding company, but they operate as separate entities. They both function as a way to improve recruiting and hiring, but they can serve different purposes. Many companies find success using both websites to complement their recruiting efforts.

Another website that addresses many of the options on both sides, in one location, is ZipRecruiter. If neither Indeed nor Glassdoor has everything job seekers or employers need, it may be a better choice to find qualified candidates or land your next role. Read on to understand which job board will help you achieve your professional goals.

What is Glassdoor?

Glassdoor goes beyond the typical job board and features employer branding solutions for companies in the hiring process and gives job seekers the ability to research companies before applying to the jobs posted. In addition to seeing job postings, job seekers can read more about potential companies, including their benefits and salary information. Employers can post photos of the office and from events, too, to give potential candidates a better understanding of what the company culture is like.

A particularly unique feature of Glassdoor is that current and former employees (as well as people who have only interviewed with them) can leave employee reviews for other candidates to see. Pros, cons, feedback on the interview process and what can be done to improve all help job seekers get a more in depth look into the company.

As for size, there are 50 million unique monthly users on Glassdoor, nearly 20 million less than Indeed.

What is Indeed?

Indeed is the largest job-searching website in the world — there are tens of millions of employers posting jobs and hundreds of millions of applicants hoping to find their next role. It’s main and only focus is as a job-search engine.

There are more than 70 million monthly users coming to Indeed to search for their next role, twice what Glassdoor has. With such a large audience, it’s a great option for employers to upload free job postings and for applicants to find plenty of job openings.

How Does Glassdoor Work for Employers?

When looking to hire for more niche roles, Glassdoor is a great solution for employers looking to showcase their business and company culture. The ability to create a brand that job seekers are interested in can be a huge advantage during the recruiting process.

Companies can create a brand page for free, as well as utilize the insights that Glassdoor provides to improve employee and interviewee experiences.

With a paid membership, hiring managers can use premium features on Glassdoor like competitor comparisons, branded advertising to get in front of more qualified candidates, and review analysis.

Because Glassdoor’s main focus isn’t the job search, but instead a branding site for companies, there aren’t as many features for recruiters to utilize as there are on a job site like Indeed or ZipRecruiter. There’s no applicant tracking system, nor can employers conduct a resume search.

How Does Indeed Work for Employers?

Employers can post a basic job opening for free on Indeed, making it an ideal platform for hiring managers working on a budget. But as great as the free option is, that also means the competition is stiff to get your job posting seen. How many other employers are competing for the eyes of qualified candidates?

Indeed’s solution to that problem is a paid job post. For as little as a few bucks a day, employers can post sponsored jobs and make sure the job postings get in front of the most applicants. When you pay for a post, you can invite people to apply for your job after finding resume matches.

Other free solutions for employers include adding screener questions and the ability to message and virtually interview candidates. It’s not possible to repost jobs from other websites onto Indeed.

Indeed also simplifies the screening process by grouping qualified applicants to the top of a dashboard, automatically declining applicants and helping to schedule interviews all within their website.

The Differences and Similarities for a Job Seeker: Glassdoor vs. Indeed

For job seekers, Glassdoor is a window into what it will be like to work for a company. When perusing the job board, they’ll be able to see not only the job postings, but an estimated salary range, company description and company reviews plus the benefits that are offered.

The uniquely detailed insight into an employer brand isn’t a feature that exists on Indeed, but if using both Glassdoor and Indeed together, candidates can pop back and forth between the two websites to get the information they need before applying on either website.

Another difference is the amount of available jobs and competition from other job seekers. Glassdoor jobs tend to be more niche, but there are  about 20 million less users searching for jobs on the site each month as there are on Indeed. On the flip side, Indeed can be overwhelming with the amount of available jobs to search through.

Glassdoor’s job board requires an account for all job seekers to be able to view jobs, salaries and reviews from previous and current employees — but it’s free to use.

Indeed is free for every job seeker and doesn’t necessarily require an account to search for job postings  and apply for jobs. Job seekers can create an account to post their resume and make it easier for recruiters to contact them, but it’s not necessary.

The job search engines on both sites let job seekers filter their search results by job title or keyword and location. Plus, they can get email job alerts when a job posting that matches their search is added to the website.

Can’t Decide Between Glassdoor vs. Indeed? Try ZipRecruiter

If you’re comparing Indeed vs. Glassdoor to decide which job board to use, a third option is ZipRecruiter. It’s a more streamlined way to post jobs and recruit top talent without being behind an account wall — or having to flip between two different sites — and it also happens to be the No. 1 job search engine online.

ZipRecruiter has a free trial for companies (it’s always free for people looking for new opportunities), then prices start as low as $16 per day for one reusable job post. The features that come with the cost make it worthwhile, if you’re serious about filling your positions quickly.

Each job posting can be syndicated to more than 100 other job boards, multiplying the number of qualified job seekers that will see your listing. Employers can also conduct a resume search and see potential candidates’ employment history before inviting them to apply to a specific position instead of waiting for future employees to find them.

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Source: thepennyhoarder.com

Comparing ZipRecruiter vs. Glassdoor for Employers

With millions of unfilled job openings and a serious shortage of workers, businesses across the country are struggling to recruit the employees they need.

Is your business struggling to find qualified job candidates? In that case, you’ve no doubt considered using a popular online recruitment platform like ZipRecruiter or Glassdoor. But what’s the difference between the two? Which one is best for your needs?

In this guide, we’ll go in-depth and do a side-by-side comparison between these two platforms — how they work, what they cost and what audiences they’re aimed at.

Let’s start with an overview of each:

ZipRecruiter: Post a Job on Multiple Job Boards

ZipRecruiter is useful if you need a job opening to be posted widely so you can hire someone quickly. ZipRecruiter isn’t a job board itself. Instead, it’s a marketplace that allows employers to post a job opening to multiple online job boards at the same time.

ZipRecruiter uses artificial intelligence to decide where to post your job vacancies, and it uses its matching technology to analyze millions of data points to find the best potential matches for your job.

ZipRecruiter for Employers

It’s free for employers to try for four days. After that, there are various packages you can buy, depending on your needs. ZipRecruiter offers three different monthly plans, based on how many jobs you want to advertise.

You can pay extra for sponsored posts to give your job postings premium placement on job sites. There’s also a “traffic boost” option that allows you to send out job postings via email, attracting more applicants. You can also sort through resumes on your ZipRecruiter dashboard.

Once you post jobs, ZipRecruiter’s AI can promote your listings and send job alerts to candidates who are more likely to be interested and qualified. The AI tools can also help you right-size your recruitment efforts to keep your spending efficient and on budget.

The platform can also help you keep track of applicants, and it’ll help you integrate your current applicant tracking system into its platform.

ZipRecruiter for Job Seekers

If you’re on a job search, the site is free for job seekers. You can search for job posts based on factors like desired salary, location or various keywords.

You can post a profile on the site that potential employers can see. You can post your resume, references, social network handles or a profile picture, among other things.

Glassdoor: Employees Rate Employers

Glassdoor launched in 2008 as a company ratings site where employees and former employees could review the companies they worked for, and post their salaries for comparison. It has since expanded its offerings, and now attracts roughly 50 million visitors per month.

Glassdoor for Employers

You can claim your company on Glassdoor’s website and create a company profile for free. It’s a good way to build your brand. The free version allows you to post basic information about your company and what it does. Glassdoor’s paid plans offer more customization options.

For job listings, Glassdoor sends you to its sister website, Indeed.com, one of the biggest online job boards around for employers and job hunters alike. You can post up to 10 jobs free for seven days. Beyond that, though, you’ll need to pay.

Indeed’s hiring platform helps employers tap into that job board to find qualified candidates who are available. Recruiters can expedite the screening process, automatically moving candidates forward who indicate they meet preset conditions in hiring questionnaires.

Like ZipRecruiter, Indeed lets you pay to bump up the placement of your job posting in search results, and you can create targeted ads to advertise to more qualified candidates.

Glassdoor for Job Seekers

Glassdoor is free for job seekers, and the company profiles are useful in your job search. You can also read employees’ and former employees’ unvarnished reviews of each company, and guess what? Not all the reviews are positive! In fact, some of the reviews tend to be scathing. Reading them can be quite educational.

Two people work in an office cubicle.
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ZipRecruiter vs. Glassdoor: Pros and Cons

Each of these popular recruitment platforms have their pluses and minuses, depending on what you’re looking for:

ZipRecruiter’s Pros and Cons

Pros Cons
Artificial intelligence helps you scale your recruiting efforts Free trial only lasts four days
Can reach more than 100 job boards No ability to post a company page
Has customizable job description templates for employers to use Can be more expensive than other options

Glassdoor’s Pros and Cons

Pros Cons
Offers some basic job listings for free The actual job listings are on a different site, Indeed
You can create a company profile with information you want prospective recruits to see Prices aren’t posted online

ZipRecruiter vs. Glassdoor: Applicant Tracking

Does your company use an applicant tracking system like Bullhorn, ClearCompany or Greenhouse? Both ZipRecruiter and Glassdoor work seamlessly with dozens of third-party applicant tracking systems.

Using ATS integration, these online platforms can help ensure that your job posts are up-to-date, eliminating friction for job seekers and making the interview process more efficient.

Both ZipRecruiter and Glassdoor’s ATS integration can also generate valuable data for employers, from monitoring job posting quality to helping you tap into a resume database. The analytics can show you how well candidates respond to your job alerts or job ads and help you uncover ways to improve them.

ZipRecruiter vs. Glassdoor: What It Costs

This is the most challenging part for job posters like you to grapple with, because there are so many different pricing options, and not all the prices are posted online. In some cases, you’ll need to ask each company’s sales department for a quote.

Free options are few. Both recruiting platforms offer free trials: ZipRecruiter lets you post jobs for free for four days. Glassdoor lets you post up to 10 job openings for free for seven days.

ZipRecruiter’s Pricing

ZipRecruiter has three monthly plans — Standard, Premium and Pro. Prices are based on how many jobs you need to post and how many job boards or job sites you want your job opportunities to be posted on. Prices start as low as $16 per day for one reusable job post.

“First we work with you to understand your specific hiring goals, strategy and budget,” ZipRecruiter says on its website. “From there, we customize your campaign based on the number of jobs you have, the type of jobs you need to fill, the location, and industry. Plans can be tailored for a monthly subscription or pay-for-performance depending on your hiring goals.”

Glassdoor’s Pricing

Through Glassdoor, you can post up to 10 jobs for free for seven days on its sister site, Indeed. Beyond that, though, you’ll need to pay for premium job placements.

Glassdoor has two paid plans — Standard and Select. For prices, you have to contact Glassdoor’s sales department.

With the Standard package, you can customize your company profile and do a keyword analysis of your company’s reviews, among other things. With the Select package, you get industry benchmark reports and audience targeting insights.

ZipRecruiter vs. Glassdoor: Customer Support

With ZipRecruiter, you can reach customer service via the phone, live chat or email. The website also has a thorough FAQ as well as “how to” guides.

Glassdoor has a “Contact Us” page on its website where you can send the company queries. There’s also a search bar that can help you find answers to your questions.

Resume Search

Want to do a resume search? ZipRecruiter has a vast resume database and provides unlimited resume searches for clients who purchase one of its premium plans. If you’ve purchased the cheapest plan, you’ll have to buy resume searches.

Glassdoor’s sister site, Indeed, also offers screening solutions to expedite the hiring process, without letting an unqualified candidate smooth-talk you into an interview.

The Bottom Line

If you’re an employer looking for an effective place to post a job, these are two solid options.

Glassdoor allows you to create a detailed company profile and assert some control over your brand. It also allows you to post jobs through its sister site, Indeed.

However, ZipRecruiter offers you the ability to get your job posting out to more than 100 job sites. Also, hiring managers and HR directors can take advantage of how ZipRecruiter’s AI streamlines the process of creating job postings, reaching qualified talent and tracking candidates.

Either choice can find you the employees you need.

Mike Brassfield ([email protected]) is a senior writer at The Penny Hoarder.

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Source: thepennyhoarder.com