Fact checked by Vikki Velasquez

Dry January is not a recent phenomenon. While social media and the rise of wellness culture have likely contributed to the trend of not drinking during the first month of the year, the Federal Reserve has noticed this pattern for several decades. January habitually has the most-pronounced downturn in alcoholic beverage sales, according to data from the U.S. Federal Reserve.

What began as Dry January appears to have staying power, with more and more people making long-term departures from alcohol consumption. Aside from its cancer-causing, sleep-depriving, ex-texting, hangxiety-inducing properties, alcohol is also a drain on your bank account. Removing booze from your rotation can potentially save you a lot of money. In fact, it was the third most popular reason for adults participating in Dry January this year, according to a new report from Morning Consult. But just how much money could you save by cutting out alcohol?

Key Takeaways

• While it gained traction through social media and wellness culture, the Federal Reserve has observed a consistent dip in alcohol sales every January, showing this trend has been around for decades.
• Going dry can save you anywhere from $50 to a few hundred dollars in just one month, depending on your habits and the cost of living in your area.
• Being intentional with your savings can be more motivation to stay dry. Track how much you save and put it into a separate account as a visual reminder.

How Much Can You Save?

In 2021, the most recent year in which data is available, Americans of drinking age consumed an average of 2.51 gallons of ethanol, equivalent to 535.5 standard drinks per year, according to the National Institute on Alcohol Abuse and Alcoholism.

The average price of an alcoholic beverage in the U.S. is about $1.81, according to the Fed; 535.5 of these would run you about $969.25. And that’s assuming you’re not doing the bulk of your drinking in bars and restaurants, where a drink will cost you considerably more than average.

Note

Everyone is different—for some, going dry may only mean skipping that bottle of wine with dinner every few weeks, freeing up some $50 per month. However, for more regular, social drinkers, even a month off can save you upwards of $300. 

There’s also a secondary layer of saving opportunity from the trickle-down spending moments that drinking often yields: rideshares and food orders. You may notice that you’re saving more than you expected by missing the ancillary expenses that come along with partying. 

Tracking—and Utilizing—Your Savings

Following your baseline spending on alcohol is the best way to figure out how much you’ll save while going dry. Some budgeting apps separate food and drink purchases for you; otherwise, a quick search of your favorite haunts in your banking app should yield a solid tally of your monthly alcohol expenditures. Don’t forget to factor in your Ubers and DoorDashes! 

Once you’ve identified how much you can expect to save in a month, you should think of a great way to use it. Perhaps you treat yourself to a nice dinner or pad your emergency savings account a bit more. You could also make an effort to put an equivalent amount into a high-yield savings account or retirement savings account. 

The Bottom Line

Alongside many physical and emotional perks, there are some very enticing financial benefits to cutting out alcohol. Depending on your habits, going dry can save you several hundred dollars over a few weeks. It’s an investment in yourself in many ways. 

Schwab CDs are worth considering if you want a new home for your money

Fact checked by Michael Rosenston
Reviewed by Samantha Silberstein

Schwab’s brokered CDs come with flexible terms and generous rates of up to 4.60%, making them a suitable option for many depositors. Brokered CDs differ slightly from bank CDs, but they offer both the benefits of FDIC insurance and (typically) higher-than-average rates. Learn more about Schwab CD rates as well as how they compare to other CDs with high interest rates.

Compare Charles Schwab CD Rates

Schwab CDs often have attractive rates, but brokered CDs aren’t for everyone, and it always pays to shop around. Explore more high-yield accounts below before making a decision.

Charles Schwab CDs: Key Features

Schwab CDs are brokered CDs, not bank CDs. Brokered CDs are similar to bank CDs, but they’re purchased through an intermediary (Schwab, in this case) instead of directly from the bank. Buying brokered CDs allows you to invest in CDs from several banks, instead of just one, and you’ll get FDIC insurance up to $250,000 from each bank.

Brokered CDs are generally more flexible than bank CDs, with wider term ranges. They can also be sold on the secondary CD market, which gives investors a way to get their money back (or at least some money back) without paying a withdrawal penalty.

Minimum deposits for brokered CDs may be higher than what you’d see with certain bank CDs. If you have a small sum of money to deposit, shopping around for CDs with a low minimum deposit requirement is a good strategy.

Pros and Cons of Charles Schwab CDs

Pros

• High APYs on short terms

• Access to higher FDIC insurance coverage limits

• No early withdrawal penalty

Cons

• Selling before maturity could result in a loss

• Long-term CDs not always available

• Minimum deposit is higher compared to some bank CDs

Pros Explained

• High APYs on short terms: Many banks and credit unions offer higher rates on longer CD terms, and Charles Schwab’s brokered CDs are no exception. However, Charles Schwab CD rates are often high even on the broker’s shortest terms, which can be helpful if you can’t afford to lock in funds for a year or longer.
• Access to higher FDIC insurance coverage limits: Schwab offers brokered CDs from multiple banks, so if you have more than $250,000 to save, you can buy multiple CDs and take advantage of a separate FDIC coverage limit for each account.
• No early withdrawal penalty: Brokered CDs can be sold on the secondary market before they mature, and there’s no early withdrawal penalty.

Cons Explained

• Selling before maturity could result in a loss: While there’s no penalty for selling your brokered CD before it matures, the price you’ll get depends on market conditions, and you may not get your original investment back.
• Long-term CDs not always available: Schwab doesn’t always offer long CDs. If you want to lock in a high APY for several years, you’ll need to look elsewhere. See our picks for the best 2-year CDs, 3-year CDs, and 5-year CDs.
• Minimum deposit is higher than some bank CDs: Schwab’s $1,000 minimum for CDs is lower than what some firms require, but it may still be too high for many. Some banks and credit unions, like Capital One, often offer CDs with no minimum deposit requirement.

How to Open a Charles Schwab CD

1. Open an eligible account: To open a Schwab CD, you first need to open a Schwab account, such as an individual brokerage, joint brokerage, Roth IRA, Traditional IRA, or Rollover IRA account. 
2. Enter your details: Enter your Social Security number or taxpayer identification number, your employer’s name and mailing address, your email address, and your mobile phone number. 
3. Fund your account: Schwab requires you to deposit at least $1,000 to open a CD. You can link your new account to an existing checking or savings account to fund the CD. 
4. Review available CDs: Once your account is open, log in to your online portal. Select the “Trade” button, and select “CDs.” The platform will list the available CDs, including their rates and terms. When you find one that fits your needs, select it and then select the “Buy” button.
5. Place order: Enter how much money you want to invest in the CD, which must be in multiples of $1,000, and select the “Place order” button.

Other Schwab Savings Options

While it’s best known for its investment products and services, Charles Schwab also offers banking products like savings accounts, checking accounts, and loans.

Schwab’s brokered CDs come with some impressive rates, making them worth considering if you have an existing account or want to create a new one. Schwab investors can also purchase shares of stock, ETFs, mutual funds, index funds, bonds, and cryptocurrency through their investment accounts.

You can deposit money in a bank CD directly with an online bank, local bank, or credit union. Brokered CDs aren’t available through these channels. Instead, you can invest in a brokered CD through an investment account at a brokerage.

About Charles Schwab

Charles Schwab is a savings and loan holding company. Through its subsidiaries, it also offers wealth management and financial advisory services. As of the end of 2023, Schwab had nearly 35 million client brokerage accounts and nearly 2 million banking accounts.

The company is based in Texas, and it operates over 400 branches and operation centers throughout the country. It also has over 1,200 financial consultants to assist customers.

Schwab is known for its satisfaction guarantee. If you’re unhappy with your investment experience with Schwab, it will refund any eligible fees or commissions related to the issues you experienced.

Overall, Schwab has a strong reputation in the industry. It was established in 1971 and is a leading investment firm in the U.S. Account holders benefit from 24/7 customer service via live chat and accessible phone support. If you’re looking for the convenience of all-in-one banking and investing, Schwab may provide exactly what you need.

Alternatives to Charles Schwab CDs

A brokered CD from Charles Schwab may or may not be a good fit for you. Here are some alternatives to consider.

• Other CDs: Some banks offer CDs with longer terms than Schwab CDs or with no minimum deposit requirement. See the best CD rates available today to explore your other CD options.
• High-yield savings: The interest rates with savings accounts usually aren’t as high as CDs, and they can change at any time. But savings accounts offer more liquidity. Consider the top high-yield savings accounts for more returns.
• Money market accounts: Like with savings accounts, money market accounts may offer lower rates but you will have easier access to your funds.
• I bonds: If your goal of saving money is to make up for inflation, I Bonds offered by the U.S. government are specifically designed to accomplish that objective. However, current rates may be better or worse than CD rates. 
• U.S. Treasuries: U.S. Treasury bills, known as T-bills, are often considered to be risk-free because they’re fully backed by the U.S. government. Terms are for one year or less.

Warning

I Bonds don’t allow withdrawals within the first 12 months, even with a penalty.

Schwab CDs vs. Edward Jones CDs

Both Charles Schwab and Edward Jones offer brokered CDs, which are investments purchased through a securities account. You don’t earn interest until the settlement date of the trade.

Schwab may have higher rates than Edward Jones for some terms, but it has fewer CD term options. The maximum term for Schwab is 24 months, while Edward Jones has CDs with terms as long as 60 months.

Frequently Asked Questions (FAQs)

Does Charles Schwab Offer CD Accounts?

Yes, Schwab offers brokered CDs to its customers. You can open a CD with a minimum of $1,000 (or higher amounts in increments of $1,000) and choose a term from 3 to 24 months.

Are Schwab CDs Brokered?

Yes, Schwab CDs are brokered CDs. At the time of publication, the company did not offer bank CDs. You can invest in brokered CDs from multiple banks through Schwab, and sell them on the secondary market if you decide not to wait for them to mature.

Can You Withdraw Your Money Early From a Schwab CD Account?

It’s possible to withdraw your money early from a Schwab CD account, but doing so may result in a loss. If you’d like to withdraw your funds ahead of maturity, Schwab will sell your brokered CDs at the current market rate (which includes a transaction fee). If the current market rate is lower than your initial rate, you will likely take a loss. But if the current market rate is higher, it may result in a gain.

What Is the Minimum Deposit for a Schwab CD Account?

The minimum deposit for a Schwab CD account is $1,000. Schwab doesn’t mention a maximum deposit, though its brokered CDs are insured up to $250,000 per bank by the FDIC, which is important to keep in mind when you invest.

Are Schwab CDs FDIC-Insured?

Yes, Schwab CDs have FDIC insurance. Its brokered CDs are insured up to $250,000 per bank, which means if you get CDs from multiple banks, each bank will offer its own insurance. If you have more than $250,000 to deposit, splitting up your money this way—by getting multiple brokered CDs through a single brokerage—can be simpler and easier than opening accounts at multiple banks.

Does Schwab Charge Fees on CDs?

When buying a new-issue CD, selling concessions are included in the offering price. If you decide to sell your CD on the secondary market before it matures, there’s a transaction fee of $1 per bond, with a $10 minimum and a $250 maximum.

Why Does My Schwab CD Show a Loss?

Brokered CDs, such as Schwab offers, can be resold through the brokerage on the secondary market. If you want to sell your CD before it reaches its maturity date, the available price may be lower than the original price, causing you to lose money.

Are Schwab CDs Callable?

Some Schwab CDs are callable, meaning the CD issuer can redeem or “call” in the CD before its maturity date. The issuer may call the CD early if interest rates drop and it would be advantageous for the issuer to end the CD.

Your Guide to CDs

• What Is a Certificate of Deposit (CD)?
• What Is a Brokered CD?
• What Is a CD Ladder?
• Pros and Cons of CDs
• How to Invest With CDs
• How to Open a CD
• How to Close a CD
• CDs vs. Annuities
• CDs vs. Stocks
• CDs vs. Mutual Funds
• CDs vs. ETFs
• CDs vs. Savings Accounts
• Short-Term vs. Long-Term CDs
• CD Rates News
• Best 1-Year CD Rates
• Best 18-Month CDs
• Best Jumbo CD Rates
• Best 6-Month CD Rates
• Best 3-Month CD Rates
• Best Bank CD Rates

We independently evaluate all recommended products and services. If you click on links we provide, we may receive compensation.

Vanguard CDs have competitive rates and terms as long as 10 years

Reviewed by Michael J Boyle
Fact checked by Michael Rosenston

Vanguard is a large asset management firm that offers brokered certificates of deposit (CDs) to its customers. Brokered CDs are bought through an intermediary brokerage firm, like Vanguard. Banks sell them to brokerages, which in turn make them available to customers at competitive rates at a variety of terms.

Vanguard offers relatively high annual percentage yields (APYs) of up to 4.60% on its brokered CDs, which come with terms ranging from just one month all the way up to 10 years. 

Compare Vanguard CD Rates

Vanguard CDs offer some competitive interest rates, but you may find higher rates by shopping around. Compare all your options before determining which CD is best for you.

Vanguard CDs: Key Features

Vanguard’s CDs pay out simple interest, rather than compound interest, to your linked Vanguard money market account. Simple interest is calculated based on the principal amount only; it doesn’t include the interest you earn, as compound interest does. 

There’s no penalty for withdrawing your money early, but you might not make the full amount you were expecting if you close your CD prior to maturity. 

Vanguard’s brokered CDs don’t renew automatically when they reach maturity. Instead, your earnings will be transferred to your linked money market account and your CD will close.

You have the option of opening a CD directly from a bank or purchasing one from a seller, which is called a secondary trade. Newly issued CDs don’t come with a fee, while secondary trades come with a $1 transaction fee per $1,000 CD, up to a maximum of $250.

Vanguard’s brokered CDs may be a good fit for customers who have a short-term goal and a large amount to invest. Since a brokerage account can hold CDs from multiple banks, you can protect your deposits beyond the usual $250,000-per-customer FDIC limit.

Pros and Cons of Vanguard CDs

Pros

• Variety of term options

• No early withdrawal penalty

Cons

• Higher minimum deposit

Pros Explained

• Variety of term options: Vanguard offers a range of CD terms of up to 10 years, which can provide flexibility.
• No early withdrawal penalty: Unlike many CDs, you will not face an early withdrawal penalty with Vanguard CDs.

Cons Explained

• Higher minimum deposit: Many CDs have a minimum deposit requirement, although some are lower than others. With Vanguard, your required to put down at least $1,000.

About Vanguard 

Vanguard is an online brokerage firm that offers a variety of investment products, including mutual funds, money market accounts, stocks, and bonds. Founded in 1975, Vanguard provides various investments, retirement tools, and personalized financial advice. 

Vanguard customers can open a brokered CD through their online account or over the phone with a Vanguard representative. The firm’s CD rates are quite competitive compared to other banks, although the lack of compound interest could be a turn-off for many.

Important

Vanguard CDs earn simple interest, rather than compound interest, so your earnings may not be as high as they would be on a compound interest-earning CD. It’s worth comparing your options to the best CD rates available today to see which account would give you the best return on investment. 

Alternatives to Vanguard CDs

• High-yield savings accounts: If you’re willing to open an online savings account elsewhere, you may be able to earn higher rates than what Vanguard CDs offer. See the best high-yield savings account rates to compare how much you could earn.
• High-yield checking accounts: You may find relatively high rates with some checking accounts. Be aware of their requirements and limits. The best high-interest checking accounts give you easy access to your money.
• Certificates of deposit (CDs): You can also choose from a range of CDs from other financial institutions.
• Money market account: Money market account can also provide a return on your savings. Check the best money market account rates to see how it compares.
• Treasury securities: These government-backed bills, notes, and bonds sometimes offer even higher rates than CDs and may be more liquid.

Frequently Asked Questions (FAQs)

What Are the Benefits of Opening a CD Account at Vanguard?

Vanguard offers brokered CDs with competitive APYs and a wide range of flexible terms. It also doesn’t charge penalties for early redemption, though you’ll have to pay a fee for secondary trades, and for buying a CD from a seller. Newly issued CDs don’t have a fee. 

Another benefit of opening a CD with Vanguard is the ability to increase your FDIC insurance beyond $250,000. If you open multiple CDs with different banks, you’ll get $250,000 in FDIC insurance from each bank.

Does Vanguard Have an Early Withdrawal Penalty for CDs?

Vanguard doesn’t charge an early withdrawal penalty for CDs, but it doesn’t guarantee the original face amount of the purchase if you sell your CD prior to maturity.

Is Vanguard FDIC-Insured?

Vanguard’s CDs are brokered through other banks, allowing you to get more than the typical $250,000 in FDIC coverage you get at a single bank. With Vanguard, you’ll get up to $250,000 in coverage from each bank that sells you a brokered CD.

Is There a Maximum Deposit for Vanguard CD Accounts?

Vanguard does not indicate a maximum deposit for its CD accounts. Each account requires a minimum deposit of $1,000, and you must make additional purchases in increments of $1,000. Learn more about opening a CD account.

Your Guide to CDs

• What Is a Certificate of Deposit (CD)?
• What Is a Brokered CD?
• What Is a CD Ladder?
• Pros and Cons of CDs
• How to Invest With CDs
• How to Open a CD
• How to Close a CD
• CDs vs. Annuities
• CDs vs. Stocks
• CDs vs. Mutual Funds
• CDs vs. ETFs
• CDs vs. Savings Accounts
• Short-Term vs. Long-Term CDs
• CD Rates News
• Best 1-Year CD Rates
• Best 18-Month CDs
• Best Jumbo CD Rates
• Best 6-Month CD Rates
• Best 3-Month CD Rates
• Best Bank CD Rates

We independently evaluate all recommended products and services. If you click on links we provide, we may receive compensation.

Reviewed by Lea D. Uradu
Fact checked by Vikki Velasquez

A charitable private foundation set up by a family can provide benefits to both the charities it supports and the family members who direct the foundation’s activities. However, private family foundations are subject to complex tax regulations, which, if violated, can result in steep penalties and even revocation of the foundation’s tax-exempt status. 

If you are interested in forming a family foundation or are already part of one, it is good to be aware of these Internal Revenue Service (IRS) rules. Below are the basics about family foundations along with some practices that may incur problems with the IRS.

Key Takeaways

• Establishing a family foundation can be a great way to increase your philanthropy and reduce your taxes.
• Family foundations, however, can be abused for the purpose of sheltering taxes and so are highly scrutinized by the IRS.
• Understanding the rules and potential red flags for running a family foundation can reduce your chances of an audit and keep your charitable giving above board.

How Does a Private Family Foundation Work?

The most common form of a private family foundation is a nonprofit organization (NPO) that is tax-exempt under section 501(c)(3) of the Internal Revenue Code (IRC). The foundation can be established by an individual, a family, or a private business to support one or more charitable activities.

The foundation is funded by its creator(s), who receive tax deductions for their contributions. These funds form the foundation’s endowment, which is invested in ways that will generate income to finance the foundation’s charities into the future. The foundation must annually distribute at least 5% of its assets toward its charitable endeavors. A foundation generally distributes funds as grants to individuals or other charities, while a public charity funds specific charitable endeavors directly.

Important

Unlike a family foundation, an independent foundation manages operations without the benefactor or their family.

Benefits of Family Foundations

The benefits of family foundations are greater than those of simple charitable cash gifts. Here are half a dozen of them.

1. Because family members retain control of the foundation, there is sustained continuity of charitable giving.
2. The foundation can receive tax-deductible contributions from third parties that can fund the program beyond the family’s own contributions.
3. Managing the foundation can unite family members while instilling in them a spirit of community service.
4. Having a family member act as administrator keeps management responsibilities within the family and administrative costs low.
5. The foundation creates a visible and lasting public legacy for the family.
6. Establishing a family foundation is less expensive and requires a smaller endowment than many people would think.

Potential Stumbling Blocks

One of the greatest difficulties in managing a family foundation might be trying to unravel the complicated rules that the IRS sets for them. These rules are meant to avert potential conflicts of interest that could arise when family members work together closely to manage their foundation’s assets.

Not being aware of the rules could get you into trouble with the IRS, which has an entire section on its website devoted to private foundations. If you are interested in establishing a private family foundation, it’s also important to seek professional guidance—for example, from a tax lawyer who specializes in foundations.

IRS Rules for Family Foundations

The list below is not exhaustive but includes some of the more common sticking points of section 501(c)(3) with regard to family foundations. View these topics as red flags if you’re involved in a foundation or thinking about creating one.

“Self-Dealing” with “Disqualified Persons”

Central to all of the regulations below is a concept that prohibits self-dealing between a foundation and its disqualified persons. Although self-dealing can take many forms, it basically refers to an individual who benefits from a transaction.

Although the IRS’s definition of a disqualified person is complicated, it generally means anyone who is a substantial contributor to the foundation; the foundation’s managers, officers, and family members; and any affiliated corporations and their family members. 

• Hiring family members/disqualified persons: A family foundation is permitted to employ family members and other disqualified persons; however, their roles must be deemed reasonable and necessary for the foundation’s purpose.
• Offering compensation: Pay for disqualified persons should be in line with comparable data for similar positions. If the IRS believes that you’re paying a disqualified person more than the going rate for a job, then that person would be penalized 25% of the excess monetary benefit they received.
• Selling or leasing: The IRS does not permit sales or leases between foundations and their disqualified persons. For example, if a family member were to sell the foundation a piece of office equipment that is worth $10,000 but receives only $1,000 for it, then the IRS still would consider it an act of self-dealing. The same would apply if a disqualified person were to rent the foundation a car for only $100 per month when the actual price for renting the same car is $1,000 per month.
• Granting loans: Extending loans or credit either way between the foundation and a disqualified person is considered an act of self-dealing by the IRS, even if the loan or credit agreement is fully secured and made via fair-market terms.
• Providing facilities, goods, and services: The IRS does not allow these kinds of transactions between a foundation and its disqualified persons in exchange for payment; however, if these transactions are freely given, then they are allowed, as long as the disqualified person does not benefit.
• Traveling: Bringing disqualified persons on a trip for foundation business and having the foundation pay for their travel costs is generally an act of self-dealing; however, this doesn’t include providing reasonable and necessary lodging and meals to a foundation manager.

What Is a Private Family Foundation?

A private family foundation is a charitable organization set up and controlled by a family to promote specific philanthropic causes. It is funded by an endowment, which is invested to generate operating funds, and it usually has nonprofit status under section 501(c)(3) of the Internal Revenue Code.

How Does a Private Foundation Distribute Funds?

A private foundation gives grants of money to individuals or organizations aligned with its philanthropic goals. This differs from a public charity, which directly funds its charitable pursuits.

Can a Private Family Foundation Employ Family Members?

Yes. However, their compensation must not be excessive; that is, it must be in line with what others are being paid in similar positions. In addition, the job must be necessary and reasonable with respect to the foundation’s purpose.

What Are the Pitfalls of Running a Private Family Foundation?

It is important to avoid conflicts of interest. In particular, it is necessary to understand the concepts of self-dealing and what constitutes a disqualified person in order to comprehend the tax regulations.

The Bottom Line

A family foundation can be an excellent way to achieve long-term charitable objectives while enjoying the process of giving and creating a lasting legacy for your family. However, if not done correctly, a family foundation can be an all-consuming, frustrating, and costly enterprise. In general, it’s usually wise to employ a tax lawyer for guidance when creating and running a private family foundation.

President Trump’s social media platform went public in 2024.

Fact checked by Suzanne Kvilhaug
Reviewed by David Kindness

Truth Social, an alternative social media platform started by President Donald Trump, makes money from advertising. According to Trump Media & Technology Group (TMTG), the company believes free and open communication, particularly political speech, is essential to self-government and democracy.”

After its initial public offering (IPO) in March 2024, TMTG was valued at nearly $8 billion at market close on the first day of public trading.

Key Takeaways

• Truth Social is a social media platform created by Donald Trump as an alternative to platforms such as Facebook, Instagram, and X.
• Truth Social generates revenue by offering paid advertising.
• Trump Media & Technology Group (TMTG) went public in March 2024.

Truth Social’s Business Model

Like Facebook, Instagram, and X, Truth Social generates revenue by displaying digital advertisements on its users’ feeds. The site seeks to grow its user base to “drive more unique content, which in turn will drive the viral, organic promotion of content on Truth Social, thereby attracting more platform partners and advertisers.”

Truth Social does not track “traditional key performance indicators, such as signups, average revenue per user, ad impressions and pricing, or active user accounts including monthly and daily active users.” It tries to attract users and advertisers who seek an alternative online forum to mainstream media. 

In March 2024, TMTG, the owner of Truth Social, had its IPO and was valued at around $8 billion on its first day at market close. Before the public offering, TMTG’s operations were funded primarily through “loans or offerings of securities exempt from the registration requirements of the Securities Act.”TMTG notes that its success will align with “the reputation and popularity of President Trump” and that the “value of TMTG’s brand may diminish if the popularity of President Trump were to suffer.”

Truth Social’s Financials

Truth Social initially launched for iOS in April 2022, was released as a web app in May 2022, and supported by Android in October 2022. It became available internationally in June 2023. The adjunct video service Truth+ enables users to watch the news, shows, and movies.

According to the 2024 Annual Report filed with the Securities and Exchange Commission (SEC), all of Truth Social’s 2023 revenue was derived from advertising. However, the company reported a net loss of approximately $58.2 million, down 215% compared to the net income reported in 2022, of $50.52 million. Truth Social incurred considerable interest expenses, approximately $39.43 million in 2023, relating to convertible promissory notes.

Under the “Risk Factors” section of its 2024 10-K report, TMTG states that it “expects to incur operating losses for the foreseeable future,” citing its efforts to “improve its business model by developing its technology as an early stage company.”The report states “There is limited operating history upon which to base any assumption as to the likelihood that TMTG will prove successful, and TMTG may never generate sufficient operating revenues to achieve profitable operations. If TMTG is unsuccessful in addressing these risks, its business will most likely fail.”

Note

Devin Nunes serves as the CEO of TMTG, the company that controls Truth Social.

Company Outlook

In Nov. 2024, Donald Trump was elected president of the United States, defeating his opponent Kamala Harris. Since his inauguration on Jan. 20, 2025, President Trump has continued to use Truth Social as his social media platform under the handle @realDonaldTrump to address domestic and global issues.

In Jan. 2025, Trump Media and Technology Group Corp.’s board of directors approved a financial services and technology strategy to launch the FinTech brand Truth.Fi.

How Many Active Users Does Truth Social Have?

As of 2024, Truth Social’s active user count is unknown and does not adhere to traditional key performance indicators. It also notes that “since its inception…it has not been maintaining internal controls and procedures for periodically collecting such information, if any.”

Is Truth Social Free to Join?

Truth Social is free to join. However, users must be at least 18 years old to create an account.

Where Is Truth Social Listed?

Trump Media & Technology Group, which owns Truth Social, is listed on the Nasdaq under the ticker symbol DJT, the initials of President Donald Trump.

How Truth Social Faced Any Legal Battles?

The company has had a history of legal issues. Trump sued the co-founders of Truth Social right before the IPO in March 2024, alleging that they mismanaged the setup and public offering of the company. The lawsuit was in response to one that the co-founders filed against Trump in February 2024, claiming that he and other company leaders were trying to deprive them of a stake in the company potentially worth hundreds of millions of dollars.

The Bottom Line

Truth Social aims to make money from advertising revenue and increase its product offerings and services. It will also “actively seek out opportunities” to acquire and partner with entrepreneurs who cater to “conservatives across various industries.”

Fact checked by Suzanne Kvilhaug
Reviewed by Charlene Rhinehart

Life insurance can help you protect your loved ones from financial strain, but it’s also a major investment. Over a period of years, a lower premium can yield major savings. When you’re pricing life insurance policies, you’ll want to consider the major factors that insurers use to calculate the cost of your premiums.

Some factors considered for life insurance are beyond your control, such as your age. However, you can take steps to lower your life insurance premium in other ways, including making lifestyle changes and improving your health.

Key Takeaways

• Life insurance is a financial tool that helps you provide for your loved ones after your death, but it’s also a significant investment.
• Many factors contribute to the cost of your premium, whether you qualify for discounts, and even whether you can be covered by a given carrier.
• Age is the most important factor in determining your premium cost. The younger you are, the lower your payments.
• Gender is also a key factor in life insurance costs, as women generally live longer than men.
• Insurance companies also consider your health, lifestyle, family medical history, driving record, whether you smoke, and more.

1. Age

The primary factor affecting the cost of life insurance premiums is age. Life insurance policies are less expensive for younger people with longer life expectancies and less likely to get ill. In some cases, you may not even qualify for life insurance if you are over a certain age.

Typically, the life insurance premium cost increases from 8% to 10% on average for every year of age. Essentially, the longer you wait to buy life insurance, the more you will have to pay for premiums. With term life insurance, your premium remains the same every year. However, after your term life insurance expires, should you buy insurance again, your premium will likely be higher because you are older and your health status may have changed.

The premiums for whole life insurance should stay the same throughout the policy, although they will usually be higher than the rates for a term policy with the same death benefit. Qualifying medical exams are likely to get more stringent as you age.

2. Gender

Gender is also a significant factor in the price of life insurance. Insurance carriers use statistical models to approximate how long someone with a specific profile will be around. Women, on average, live nearly five years longer than men, so they have lower rates.

3. Smoking

Smoking puts you at a higher risk for many health problems. Thus, life insurance companies charge more to insure smokers. In fact, smokers may pay more than twice as much as non-smokers for comparable coverage.

An insurance company may classify you as a smoker even if you occasionally smoke cigarettes, cigars, or vapes.

Warning

If you lie to your insurance company about your smoking habits and get caught, your policy could be canceled.

4. Health 

The underwriting process for most carriers includes a medical exam in which the company records your height, weight, blood pressure, cholesterol, and other vital metrics. It may also require an electrocardiogram (ECG or EKG) to check your heart.

It’s important to manage serious conditions such as high cholesterol and diabetes before searching for coverage to ensure a competitive rate. Some companies offer “no exam” policies, but expect to pay more for this coverage.

5. Lifestyle

If you lead a risky lifestyle with hobbies such as racing cars, scuba diving, or rock climbing, you’ll probably have to pay substantially more for insurance. Some companies also charge more if you have a relatively dangerous profession, such as police officer or miner.

6. Family Medical History

Having a family history of stroke, cancer, or other serious medical conditions may predispose you to these ailments and result in higher life insurance rates.

Carriers are usually interested in any conditions your parents or siblings have experienced, especially if they have contributed to a premature death. Some life insurance companies factor in your family’s health history more than others.

7. Driving Record

Many life insurance companies will look at your driving record during the underwriting process. Whether or not they ask about violations on the application, they can access your Department of Motor Vehicles records to find out if you have any concerning violations.

Remember that the last three to five years carry the most weight. So, if you’ve improved your driving habits since then, you may benefit from a more favorable price.

What Is the Age Limit for Life Insurance?

Each life insurance company and policy will have its own age limit for applicants to qualify for life insurance. Generally, the older you are, the more difficult it will be to get life insurance. Many life insurance companies do not offer life insurance policies after you reach a certain age (such as 85).

How Does Gender Affect Life Insurance Premiums?

Men generally pay more for life insurance than women because they have a shorter life expectancy. However, gender is not the only factor that determines premium prices. Other factors, such as lifestyle and age, can make one policy more expensive than another for different people.

What’s the Best Age To Get Life Insurance?

The younger you can purchase a life insurance policy, the more affordable it will be. When you buy life insurance, you’ll also want to consider your income and coverage needs.

The Bottom Line

Life insurance is a common financial tool that can provide security for your loved ones who depend on you. A life insurance policy can give you peace of mind that your beneficiaries won’t face financial hardships if you die. However, life insurance can also be a significant expense and is not necessarily ideal for everyone.

Familiarize yourself with different types of life insurance, such as term, whole, and variable life insurance. Then, consider consulting with a financial professional to determine which life insurance may be right for your situation and goals and how to reduce your premium costs.

Reviewed by Eric Estevez
Fact checked by Suzanne Kvilhaug

To discount cash flow properly, you first need to be familiar with how to calculate the smaller components of the formula—notably, free cash flow to the firm (FCFF). FCFF is simply the cash flow available after the firm pays all operating expenses, taxes, and other costs of production. In this article, we look at why it’s so important and how to calculate it. We also look at another key component of the discount cash flow formula, which is the weighted average cost of capital (WACC).

Key Takeaways

• Free cash flow to the firm is the cash flow that a company has after accounting for expenses and investments.
• FCFF can be used to determine a company’s financial health and well-being.
• Discounted FCFF should be equal to the sum of a company’s cash inflows and outflows
• Although there are different formulas to calculate FCFF, the easiest method starts with EBTIDA.
• The weighted average cost of capital, which is another component of the discounted cash flow formula, estimates the weighted cost of all capital sources.

What Is Free Cash Flow to the Firm (FCFF)?

Free cash flow to the firm is the cash flow from operations that is available to distribute after distribution, expenses, taxes, working capital, and investments are deducted. Put simply, it measures a company’s profitability after accounting for any expenses and reinvestments. Investors and analysts typically use it as a way to determine a company’s financial well-being.

Discounted FCFF should be equal to all of the cash inflows and outflows, adjusted to present value by an appropriate interest rate, that the firm can be expected to bring in during its lifetime. It’s a form of time value analysis – how much an investor would pay today to have the rights to all future cash flow.

Note

Free cash flows aren’t readily available. Financial analysts have to interpret and calculate free cash flows independently. Keep in mind that FCFF is distinct from free cash flow to equity, which does not account for bond creditors and preferred shareholders.

Calculating Free Cash Flow to the Firm (FCFF)

Several competing formulas exist for FCFF. A relatively simple version starts with earnings before interest, taxes, depreciation, and amortization (EBITDA). It can be written as:

$begin{aligned} &text{FCFF = EBITDA}timestext{(1}-text{ TR) + DA }timestext{ TR + WC }-text{ CE}\ &textbf{where:}\ &text{EBITDA = Earnings, before interest, taxes, and depreciation}\ &text{TR = Tax rate}\ &text{DA = Depreciation & amortization}\ &text{WC = Changes in working capital}\ &text{CE = Capital Expenditures}\ end{aligned}$​FCFF = EBITDA×(1− TR) + DA × TR + WC − CEwhere:EBITDA = Earnings, before interest, taxes, and depreciationTR = Tax rateDA = Depreciation & amortizationWC = Changes in working capitalCE = Capital Expenditures​

Weighted Average Cost of Capital (WACC)

As noted above, another key component of discounted cash flow is the weighted average cost of capital. Firms rely on the WACC to estimate the weighted cost of all sources of capital. This includes a company’s stock (common and preferred shares), bonds, and other debt. It’s a way to allow managers to see how efficiently they finance operations.

The formula for WACC can be written as:

$begin{aligned} &text{WACC}=frac{text{VE}}{text{SEDV}}timestext{CE}+frac{text{VD}}{text{SEDV}}timestext{CD}timesleft(1-text{CTR}right)\ &textbf{where:}\ &text{VE = Value of equity}\ &text{SEDV = Sum of equity and debt value}\ &text{CE = Cost of equity}\ &text{VD = Value of debt}\ &text{CD = Cost of debt}\ &text{CTR = Corporate tax rate}\ end{aligned}$​WACC=SEDVVE​×CE+SEDVVD​×CD×(1−CTR)where:VE = Value of equitySEDV = Sum of equity and debt valueCE = Cost of equityVD = Value of debtCD = Cost of debtCTR = Corporate tax rate​

Simple Approach to Discounted Free Cash Flow to the Firm (FCFF)

One simple definition of the value of a firm (and one taught in CFA courses) is equal to the endless stream of free cash flows discounted by WACC. However, much depends on the estimated growth of the firm and whether that growth will be stable.

A single-stage, steady-growth estimation of discounted FCFF can be expressed this way:

$frac{text{FCFF}}{text{WACC }-text{ Growth Rate}}$WACC − Growth RateFCFF​

Multistage models are considerably more complex and best performed by those comfortable with calculus.

Forecasting Future Cash Flows

Predicting future growth and net cash flows is an inexact science at best. There are two common approaches in the financial literature: applying historical cash flow and predicting changes in the underlying components of cash flow.

• It’s easy to use the historical method. If firm fundamentals are solid and not expected to change in the foreseeable future, analysts can apply the historical free cash flow rate.
• The underlying components method isn’t as easy. Revenue growth is matched to the expected returns and costs of future capital expenditures, which include fixed capital replacement and expansion, any depreciation, and changes in working capital.

Do not confuse physical fixed capital, such as machines and factories, with capital financing from debt and equity.

How Do You Read Free Cash Flow to the Firm?

Free cash flow to the firm is the cash flow from a company’s operations that is available for distribution after accounting for depreciation, expenses, taxes, working capital, and investments. It is commonly used to determine the value of a company’s stock.

If a company has a positive FCFF, you may assume that the company has capital available after deducting its expenses. A negative value, on the other hand, means the firm didn’t generate enough money to pay for its costs and investments. As an investor, you’ll want to do more research to understand why there may be a deficit.

What’s the Difference Between Free Cash Flow to the Firm and Cash Flow?

Free cash flow to the firm is the money a company has after accounting for things like expenses, taxes, depreciation, amortization, and investments. Put simply, FCFF is the capital a firm has available after accounting for expenses and capital expenditure. Cash flow, on the other hand, is the amount of money that moves into and out of a company over a certain period. Cash flow is positive when more money moves in, while a negative cash flow is the result of more outflows.

Why Should Investors Care About a Company’s Cash Flow?

Cash flow represents the amount of money that moves in and out of a company within a certain period. It is an indicator of its financial health and well-being.

The Bottom Line

There are many metrics you can use to analyze whether a company is financially viable or is in distress. The free cash flow to the firm indicates what money a company has left over after accounting for its expenses and investments. Keep in mind that it’s always important to use multiple metrics when making your investment decisions. And be sure to compare them to similar companies across the same industry so you make more sound judgments.

Fact checked by Vikki Velasquez

ChatGPT, the powerful AI chatbot launched in 2022 by OpenAI, can support your wealth-building goals by helping you evaluate the market and potential new revenue ideas. Below, we walk through four of the many ways you can use ChatGPT to make money.

Key Takeaways

• ChatGPT’s strengths for investors include its ability to quickly compile background information on potential investment targets and generate guidelines for investing thoroughly and thoughtfully.
• AI platforms may not always have access to the latest data and news, so cross-check other sources.
• ChatGPT is adept in devising and planning marketing and social media campaigns, which can help small businesses and entrepreneurs.
• As a generative AI tool, ChatGPT can instantaneously create written content to aid a business, including blog posts, articles, how-to guides, investor letters and appeals, and much more.

1. Background Research

When it comes to investing, knowledge is key to generating returns. Investors can employ ChatGPT to do crucial background research on potential investment targets—including earnings and revenue trends, key product launches and developments, newsworthy company updates, and much more. 

Warning

ChatGPT does not necessarily have access to all of the most recent information, so verify facts before proceeding.

2. Investment Planning

ChatGPT can help you save time and ensure you’re on track for investment success by providing a step-by-step guide. It can also assist in thoroughly assessing your financial goals, time horizon, risk tolerance, and portfolio diversification, as well as preparing side-by-side comparisons of brokerages.

Important

Keep in mind that ChatGPT is not a tax professional or a certified financial advisor; all information gathered from ChatGPT should be confirmed directly for accuracy when possible.

3. Marketing and Social Media Management

ChatGPT can save entrepreneurs time identifying target audiences, generating marketing copy and other materials, and planning social media campaigns. These efforts may translate into additional clicks, website visits, and even sales for small business owners. For the greatest success in these efforts, consider using ChatGPT to generate a template that you then tweak and personalize to match the tone and style of your business.

4. Content Creation

As a generative AI platform, ChatGPT can help create customized written content. Entrepreneurs may put ChatGPT to work to help write blog posts and articles, generate how-to guides, complete surveys and fundraising appeals, and much more. But everything will need to be edited by a human to ensure accuracy. The potential applications of ChatGPT to assist with content for your business are limitless.

Warning

If you’re using ChatGPT to help generate content, be sure to edit, fact check, and adjust in your own voice.

The Bottom Line

The beauty of ChatGPT as a tool to build wealth is that it is incredibly versatile. This platform can help to brainstorm ideas, quickly generate written material, and gather, consolidate, and summarize information. Investors looking to incorporate ChatGPT into their work are limited only by their own imaginations.

Reviewed by JeFreda R. Brown
Fact checked by Kirsten Rohrs Schmitt

The market for fully electric vehicles is growing. The reasons are many, including new regulations on safety and vehicle emissions, technological advances, and shifting customer expectations. But much of the mainstream acceptance and excitement for electric cars can be attributed to Tesla Motors Inc. (TSLA) and its unique business model.

Tesla founder and CEO Elon Musk launched the company with the mission, “to accelerate the advent of sustainable transport by bringing compelling mass-market electric cars to market as soon as possible.” This mission is the backbone of Tesla’s successful business model. 

Key Takeaways

• Tesla’s business model is based on direct sales and service, not franchised dealerships.
• Tesla’s business model pays particular attention to rolling out charging stations. That may be the biggest obstacle to the mass adoption of electric vehicles.
• Tesla has stretched the business model to encompass energy storage systems for homes and businesses.

Tesla’s First Product

Tesla took a unique approach to establish itself in the market. Instead of trying to build a relatively affordable car that it could mass-produce and market, it took the opposite approach, focusing instead on creating a compelling car that would create a demand for electric vehicles.

In a post on Tesla’s website, Musk said this about the company’s mission: “If we could have [mass-marketed] our first product, we would have, but that was simply impossible to achieve for a startup company that had never built a car and that had one technology iteration and no economies of scale. Our first product was going to be expensive no matter what it looked like, so we decided to build a sports car, as that seemed like it had the best chance of being competitive with its gasoline alternatives.”

So, Tesla delivered to the market the first high-performance electric luxury sports car, the Tesla Roadster. The company sold approximately 2,500 Roadsters before ending production in January 2012. That’s not a number that would fray any nerves at General Motors.

The Next Stage

Once Tesla established its brand and produced and delivered its concept car to the marketplace, it reinforced its business model. Tesla’s business model is based on a three-pronged approach to selling, servicing, and charging its electric vehicles.

Direct Sales

Unlike other car manufacturers who sell through franchised dealerships, Tesla sells directly to consumers. It has created an international network of company-owned showrooms and galleries, mostly in urban centers.

By owning the sales channel, Tesla believes it can gain an advantage in the speed of its product development. More importantly, it creates a better customer buying experience. Unlike car dealerships, Tesla showrooms have no potential conflicts of interest. Customers deal only with Tesla-employed sales and service staff.

Including the showrooms, Service Plus centers (a combination of retail and service center), and service facilities, Tesla has 1,359 locations around the world as of the end of 2024. Tesla has also made use of internet sales—consumers can customize and purchase a Tesla online.

Home Services

In some areas, Tesla employs Mobile Service Support (formerly called Tesla Rangers)—mobile technicians who make house calls. In some cases, the service is delivered remotely. The Model S can wirelessly upload data, so technicians can view and fix some problems without ever physically touching the car.

Supercharger Network

Tesla has created its own network of over 60,000 Global Superchargers where drivers can charge their Tesla vehicles in about 15 minutes for a quarter of the price of gasoline. The purpose, of course, is to speed up the rate of adoption of electric cars by making it cheaper and easier to keep them running.

Tesla’s Models

Tesla entered the market with the sporty Roadster. When it introduced its Model S sedan in June 2012, it stopped producing the Roadster.

Tesla began delivering its first SUV, the Model X, in September 2015. In 2025, its base price is $81,880.

The first Model 3 deliveries kicked off in July 2017 as Tesla’s entry into the category of affordable cars. In 2025, its base model starts at $44,130.

In 2020, Tesla began producing the Model Y, a compact crossover SUV based on its Model 3. In 2025, its base model starts at $46,880. Tesla is also promising to deliver a redesigned Model Y in March 2025, with a base price of $61,630.

In 2023, Tesla introduced the Cybertruck, a pickup truck with a body design resembling low-polygon modeling, consisting of flat stainless steel sheet panels. In 2025, its base model starts at $82,235.

$200,000

The base price of the 2026 supercharged Tesla Roadster, touted as “the quickest car in the world.”

Tesla has combined many of its sales centers with service centers, including charging stations. They believe that opening a service center in a new area corresponds with increased customer demand. Customers can charge or service their vehicles at the service centers or the Service Plus locations.

Tesla also produces a fully electric Semi. The semi-trailer truck boasts an energy consumption of less than 2 kilowatt-hours (kWh) per mile. The company claims it can go 400 miles on a 30-minute charge now, and it’s working on stretching that to more than 600 miles in the future. UPS was among the companies that put in preorders for the truck, introduced in 2019. Production and delivery began in 2022.

Tesla’s latest model is a supercharged version of the original Roadster, which the company claims is the “quickest car in the world,” capable of going 0–60 in 1.9 seconds. Deliveries of the new Roadster were expected in 2023, with a base price of $200,000. But the 2023 deadline was missed, and in October 2024, Musk failed to confirm whether the Roadster will arrive in 2025.

Interested individuals can reserve a new Roadster for a $5,000 initial card payment and a $45,000 wire transfer, which is due within 10 days after making the initial payment.

Other Tesla Products

If you recall, part of Tesla’s mission is “to accelerate the advent of sustainable transport.” To that end, Tesla sells powertrain systems and components to other auto manufacturers.

In April 2015, it introduced a line of home batteries, called the Powerwall, that serve as energy storage systems in homes or businesses. They are meant to connect with a solar energy system and can be used as backup power when power is interrupted or peak demand is high. Tesla also sells solar panels and full solar roofing, which is a roof made up of solar panels that still looks like a roof.

Like its rival automakers, Tesla offers financial services including vehicle loans and leases. For some of the loan programs, it used to offer a resale value guarantee provision. This provided some downside protection on a vehicle’s value should the customer want to resell it.

Is Tesla a Tech Company?

Many financial analysts and investors see Tesla as a technology company rather than a car company. At least, that’s how they justified the growth of its stock price starting in 2013, when it shot up by more than 300% within a single year.

Publications scrambled to find similarities between Tesla and companies from the technology sector, which had similar growth rates. Online publication Slate even ran a piece that compared Tesla to Apple Inc. (AAPL) and Alphabet Inc. (GOOGL and GOOG).

Back then, Morgan Stanley analyst Adam Jonas, who had been a Tesla bull since the company’s early days, gave the stock a price target of $103 “at full maturation.” By May 25, 2022, TSLA was trading at $661.58. As of Feb. 4, 2025, TSLA stood at $392.21.

There are several points of similarity between Tesla and the tech sector. Tesla has embraced the disruption credo of the tech sector. Much like other tech companies, Tesla is intent on changing existing business models within the stodgy automotive industry by selling directly to consumers. Its product pipeline and founder evoke a loyal following similar to those for iconic tech companies such as Apple.

And investors in Tesla, like investors in many technology companies, stayed patient through a long period of quarterly losses. They were finally rewarded: Tesla recorded its first yearly profit in fiscal year 2021.

What’s Next for Tesla?

Tesla founder and CEO Elon Musk has been promising robo-taxis, a self-driving car that operates for a ride-sharing company. The robo-taxis would require fully autonomous capabilities. Musk had said they would be out in October 2024, after a set of delays. That deadline was missed, but in January 2025, Musk said robo-taxis would debut in June 2025 with a paid ride-hailing service in Austin, Texas.

How Did Tesla Do Last Year?

In 2024, Tesla delivered 1.78 million cars worldwide, keeping its position as the top-selling electric vehicle (EV) brand globally. However, this was a slight decline from 2023, when Tesla delivered 1.8 million cars worldwide.

What Is Tesla’s Market Capitalization?

Tesla’s market capitalization is $1.26 trillion as of Feb. 4, 2025. Market capitalization, or market cap, represents the total dollar market value of a company’s outstanding shares of stock. Investors use this figure to determine a company’s size instead of sales or total asset value.

The Bottom Line

This is the biggest obstacle to the mass adoption of electric vehicles: It can’t happen without the infrastructure to charge on the go. Tesla plans to continue adding to its network of Supercharger stations in the United States, Europe, and Asia.

Tesla did not invent the electric car or even the luxury electric car. But Tesla did invent a successful business model for bringing compelling electric cars to the market. Part of the strategy was building a network of charging stations to solve one of the greatest obstacles facing the adoption of electric vehicles: refueling on long trips. Tesla’s unique business model, which includes keeping control over sales and service, is one reason its stock soared since its initial public offering. 

Reviewed by Somer Anderson

As with most other professions, individuals in the employee benefits field often seek to obtain various designations to demonstrate their level of knowledge of retirement planning. However, as with other professions, not all employee benefit designations are created equal.

Professionals must ensure that they choose designations to satisfy their objectives. For this article, we use the term “employee benefit” to refer to retirement plans, such as 403(b) arrangements, 457 plans, individual retirement accounts (IRAs), and other qualified plans.

Key Takeaways

• Like experts in many fields, employee benefits experts can move ahead in their careers or expand their client bases by seeking out and receiving various designations.
• An employee benefits expert might seek a designation if they are new in the field, looking to earn a promotion or change jobs, looking to gain expertise in a specific area, or increase their marketability.
• In choosing a designation, consider the educational institution’s reputation, whether the designation meets basic requirements, includes continuing education (CE) requirements, and all costs.

Why Get a Designation?

There are many employee-benefit professionals who are experts in their fields and don’t need to take a course to further educate themselves in these areas. In fact, some of these individuals are knowledgeable enough to teach professional designation courses.

However, obtaining a designation may still be necessary, depending on your goals and objectives. For someone who is new to the field, designations can be important, as the path to obtaining the designation usually provides much of the technical knowledge that’s needed to be an expert in their field.

Below are some examples of cases where a professional designation can help.

Looking to Change Jobs

Someone who’s been working with one employer for an extended period likely would have garnered enough knowledge to be considered an employee-benefits expert. However, while the individual’s current employer and colleagues may be well aware of this person’s expertise, it may not be as apparent to a potential employer, who might need to validate their expertise beyond what is stated in their resume.

Although recommendations from former supervisors and employers can help, a professional designation is often a more acceptable means of assessing an individual’s level of knowledge.

For example, an employer seeking someone to perform third-party administrative services may be more apt to hire a candidate with the Qualified Pension Administrator (QPA) designation, versus someone who is a Certified IRA Services Professional (CISP). This is because the American Society of Pension Professionals & Actuaries (ASPPA), which issues the QPA, requires more in-depth courses about the practical aspects of third-party administration.

On the other hand, a firm that provides support for general IRA topics may find the CISP designation, issued by the American Bankers Association (ABA), more suitable for its business needs.

Seeking a Promotion

When seeking professional advancement, obtaining a professional designation may help to set an individual apart from the competition, especially when other qualified individuals have similar education and experience. The professional designation not only shows dedication to improving oneself professionally, but it also helps to confirm that the individual is an expert in their field can handle critical related issues.

Continuing Education (CE)

Completing the courses necessary to obtain a professional designation is one of the best ways to learn about the rules and regulations that govern employee benefits plans. Most courses cover a specific area’s fundamental rules and regulations and guide the student through complex material that usually leads to a better-than-average understanding of the subject matter.

Choosing a Designation Provider

It is becoming increasingly common for organizations that provide retirement education and information to offer their own designations. And while many of these involve completing relevant course material and examinations, they may not provide as much influence with employers and clients as those offered by the better-known educational organizations.

The table below cites some designations offered by reputable, well-established organizations. You may view the details, including costs and continuing education (CE) requirements by clicking on the hyperlinks.

Some of these organizations go beyond providing education, which helps to enhance their reputations. For instance, ASPPA is often involved with influencing legislative and regulatory developments in the employee benefits field.

Choosing a Designation

In addition to choosing an educational institution with a good reputation, professionals should ensure that the designation meets certain basic requirements.

Objective

If the professional’s objective is to obtain a designation that provides and/or demonstrated expertise in IRAs, the CISP may be the most suitable. For a more advanced course, with material that provides education on investment and retirement planning strategies, the CRC may be a better choice.

For courses that focus on the practical aspects of qualified plan administration, relevant courses include the CPC, QPA and the APA.   The CEBS includes content relating to retirement plans, as well as health and human resources. Before deciding on a designation, prospective students should review the course outline and description to make sure that it covers the desired areas.

Continuing Education Requirements

Designations with continuing education (CE) requirements are usually more valuable than those with no CE requirements. Failure to satisfy CE requirements usually results in loss of the professional designation.

As such, if the designation requires CE, interested parties will know that the designee not only successfully completed the course and examinations, but that the relevant professional knowledge is kept current by meeting CE requirements.

Costs

The costs for completing the courses, taking the exams, and maintaining CE requirements vary among designations. For those courses with CE requirements, there is usually an annual fee, plus the cost incurred for the CE courses themselves.

Some employers will pay all related expenses, but individual designees are often required to bear the costs themselves. Although it may look good on a resume to have multiple designations if money is an issue it may be practical to choose one or two to satisfy the designee’s objectives.

Fringe Benefits

Organizations that provide professional designations in the employee benefits field often offer other for their designees, too. These can include free newsletters, free magazines, discounts for conference fees, and memberships to other professional organizations with which they have relationships. Prospective designees should evaluate the benefits provided by each organization to determine their value and relative importance.

Special Considerations

Some organizations offer affiliations to individuals who have not completed the requisites to receive a professional designation but have an interest in the field and meet certain predefined requirements. For instance, ASPPA offers the Associated Professional Members (APM) membership to pension professionals holding degrees in law, accounting, actuarial science, financial science, insurance, or related disciplines, if they have a minimum of three years’ experience in pension-related employment.

What Is the Most Recognized Designation for Financial Planners?

Many consider the Certified Financial Planner (CFP) certification to be the most widely recognized certification for financial planners. To earn a CFP, candidates must have a bachelor’s degree from a college or university, and either 6,000 hours of financial planning experience or 4,000 hours in a structured apprenticeship program. CFP candidates must also pass an ethics and background check and the CFP Certification Program before receiving this designation.

What’s the Hardest Retirement Planning Designation to Get?

According to most industry professionals, the Chartered Financial Analyst (CFA) designation is considered the most difficult financial planning designation to obtain. The CFA is so difficult because it requires the completion of three tests and over 4,000 hours of relevant work experience. On average, it takes between 2 and 5 years for professionals who achieve the designation to complete all the requirements.

What Is the Oldest Financial Planning Designation?

Introduced in 1927, the Chartered Life Underwriter (CLU) designation is the oldest financial professional designation in the industry.

The Bottom Line

A professional designation is like a college degree in some ways. Having one does not necessarily mean that the designee has a current working knowledge of the area in which the designation was given. It simply means that the individual was able to study for, and pass, the exams and likely attended required classes or covered course material. However, professional designations can make a difference in getting hired for a job or winning business from a potential client.

For prospective employers and clients who are not familiar with the designee’s experience and are unable to assess his or her level of expertise, a professional designation, especially one with CE requirements, can provide that extra detail needed to make the designee’s case.