Fact checked by Yarilet Perez
Reviewed by Margaret James

America is known as a melting pot of nationalities and cultures, and it has quickly become one of the most innovative nations to date. With driven natural-born citizens and immigrants, the United States is one of the most successful countries in terms of entrepreneurship.

From older companies such as Standard Oil, Ford Motor Company, and Carnegie Steel Company, to more contemporary companies such as Meta (formerly Facebook) and Google, American entrepreneurs have reshaped how the world operates. The following are the top five most successful American entrepreneurs in terms of world impact.

Key Takeaways

• The United States is one of the most successful countries in terms of entrepreneurship.
• The top five most successful American entrepreneurs in terms of world impact are Andrew Carnegie, Henry Ford, Oprah Winfrey, Bill Gates, and Larry Page.
• Carnegie founded Carnegie Steel Company and Ford started Ford Motor Company, two of America’s older companies.
• Winfrey is a multimedia executive, actress, writer, producer, talk show host, and philanthropist.
• Gates co-founded Microsoft with Paul Allen, while Page co-founded Google (now Alphabet) with Sergey Brin.

1. Andrew Carnegie

Andrew Carnegie was an American entrepreneur who actually immigrated from Scotland. Born into the lower class, Carnegie and his family immigrated to Pennsylvania, where they lived a better lifestyle. Carnegie later founded Carnegie Steel Company, growing it to become one of the largest companies in U.S. history.

In addition to the success of his company, Carnegie became a very successful angel investor. Using the money made through his steel company, he invested in various car companies, messenger services, and land that contained oil reserves. Upon his death in 1919, Carnegie had an estimated net worth of $350 million, which, in 2024 dollars, would be worth nearly $6.7 billion.

2. Henry Ford

Unlike Andrew Carnegie, Henry Ford was a natural-born citizen who grew up in Michigan. Born into a family who originated from England and Ireland, he was well off, though not wealthy. Ford was a hardworking man and eventually completed an apprenticeship with the Detroit Dry Dock Company. In 1891, he met with Thomas Edison and told him about his concept of the automobile. Edison liked the idea and let Ford use his warehouse to develop and manufacture two prototypes.

Using the prototypes, Ford soon founded the Detroit Automobile Company. The company was short-lived, however, since the product did not meet Ford’s standards. He went on to found the Cadillac Motor Car Company, which also failed, before starting the Ford Motor Company for which he is famous. His third attempt at a car company made him very successful, and the company remains a going concern with annual sales of over 2 million vehicles.

Note

Andrew Carnegie, Henry Ford, Oprah Winfrey, Bill Gates, and Larry Page are among the most celebrated American entrepreneurs in history.

3. Oprah Winfrey

Oprah Winfrey is a shining example of an American success story. While she did not reveal her past until 1986, Winfrey was a victim of sexual assault at the age of 9 and became pregnant at the age of 14 before losing the child during childbirth.

These early trials and tribulations gave her the perspective and confidence that helped her land her first TV show in 1983. From there, Winfrey steadily grew her brand and her empire, founding Harpo Studios, a multimedia company, in 1988.

Winfrey, together with Discovery Communications, founded OWN (Oprah Winfrey Network) in 2008, another media company that attracts millions of television viewers. Winfrey, a TV personality turned entrepreneur, has a net worth of $3 billion as of Feb. 4, 2025.

4. Bill Gates

Bill Gates, one of the most well-known American technology entrepreneurs, is the eighth-richest person in the world with a net worth of over $106 billion as of Feb. 4, 2025. Gates grew up in Seattle, Washington, and began tinkering with personal computers at an early age with friends such as Paul Allen. Showing a ton of aptitude and promise, Gates enrolled in Harvard, where he met Steve Ballmer before dropping out to start Microsoft.

Gates, with the help of Allen, Ballmer, and others, built Microsoft, now valued at over $3 trillion based on its market capitalization, making it one of the world’s largest and most influential tech companies. In 2020, Gates stepped down from the board of Microsoft, to focus his personal efforts on the Bill & Melinda Gates Foundation.

5. Larry Page

Larry Page is the co-founder of Google, the world’s number one search engine. Google was started by Page and his co-founder Sergey Brin while they were doctorate students at Stanford University. With an initial investment of just $100,000, the two partners quickly grew Google into a multinational conglomerate. In 2015, Google was restructured to form the parent company Alphabet Inc., with Page serving as CEO. He stepped down as CEO in 2019 but remains a board member and a controlling shareholder.

Page is the sixth-richest person in the world and has a net worth of $169.4 billion as of Feb. 4, 2025.

What Is an Entrepreneur?

An entrepreneur is an individual who creates a new business, bearing most of the risks and enjoying most of the rewards. The process of setting up a business is known as entrepreneurship.

What Became of Carnegie Steel Company?

In 1901, Andrew Carnegie sold Carnegie Steel Company for $492 million ($9.4 billion in 2024 dollars) to a group of investors headed by J.P. Morgan. Carnegie Steel became the centerpiece of U.S. Steel, a trust controlling 60% of the country’s steel production.

How Do I Trade in These Entrepreneurs’ Companies?

U.S. Steel, which bought Carnegie Steel, trades on the New York Stock Exchange (NYSE) as X. Ford Motor Company trades on the NYSE as F. Microsoft trades on Nasdaq as MSFT. Alphabet (formerly Google) trades on Nasdaq as GOOGL (Class A shares) and GOOG (Class C shares). The Oprah Winfrey Network (OWN) is a joint venture between Harpo Studios (also known as Harpo Productions), Oprah Winfrey’s privately owned company, and Warner Bros. Discovery, which trades on Nasdaq as WBD.

The Bottom Line

The U.S., with driven natural-born citizens and immigrants, is one of the most successful countries in terms of entrepreneurship. Five of its most successful American entrepreneurs in terms of world impact are Andrew Carnegie, Henry Ford, Oprah Winfrey, Bill Gates, and Larry Page.

Reviewed by Ebony Howard
Fact checked by Timothy Li

What Are Tariffs?

Tariffs are taxes on imports that effectively raise the prices of imports, providing an edge to domestic companies in the same markets. Governments usually impose tariffs to boost domestic companies or to punish foreign competitors.

In February 2025, the Trump administration announced a set of tariffs against Canada, Mexico, and China. President Trump implemented the 25% additional tariff on imports from Canada and Mexico and 10% additional tariff on imports from China to “hold Mexico, Canada, and China accountable to their promises of halting illegal immigration and stopping poisonous fentanyl and other drugs from flowing into [the United States],” according to a statement released by the White House.

Key Takeaways

• Tariffs are a tax on imports paid by importing companies in the country that imposed the tax. These companies typically pass along the cost to the consumer.
• Tariffs are meant to protect domestic industries by raising prices on foreign products.
• Tariffs typically raise prices for consumers.

How Tariffs Are Used

Tariffs are often used to protect struggling domestic industries against foreign competition or unfair practices such as dumping and foreign government subsidies.

There are two basic types of tariffs.

• An ad valorem tax is the most common type and is levied as a percentage of the value of the good or service.
• A specific tariff sets a fixed fee by weight or number of items.

Tariffs are paid by the importing businesses to their government, with most costs passed on to consumers of those goods or services. Tariffs are not paid by foreign companies, the exporters, or the governments that produce the goods.

Important

The United States has an average import tariff rate of 2% on industrial goods, while one-half enter the United States duty-free.

Consumer Prices

Tariffs can have unintended consequences. In their attempt to promote domestic industries, tariffs hurt domestic consumers since a lack of competition increases prices. In 2018, the Trump administration imposed large-scale tariffs on several goods to protect U.S. manufacturers from foreign competition.

Washing machine tariffs revealed how import taxes can raise consumer prices on more than just the targeted imports. Research by the University of Chicago and the U.S. Federal Reserve found that while the washing machine tariffs brought in $82 million a year to the U.S. Treasury, the cost to U.S. consumers was $1.5 billion a year.

U.S. producers raised their prices on washing machines and other goods. The Fed concluded that the washing machine tariffs helped create about 1,800 manufacturing jobs, but the cost to the U.S. was about $817,000 per job.

Imposing Tariffs

Steel tariffs were imposed in 2018 to penalize China for unfair trading practices due to government subsidies that had enabled Chinese producers to export steel at low prices. Tariffs of 25% were imposed to protect the domestic industry, including factory jobs in states such as Pennsylvania.

Those tariffs helped U.S. steelmakers, but forced many U.S. companies that needed steel for their products, especially automakers, to pay higher prices, threatening products and jobs downstream.

Do All Countries Impose Tariffs to Protect Domestic Goods?

Most countries maintain at least small tariffs on some goods, especially ones of special domestic importance. The U.S., for example, still keeps a tariff of 25% on light pickup trucks, while the European Union maintains a 10% import tax on cars from the U.S. and other countries.

What Is an Example of a Tariff?

One example of a tariff is the set of tariffs announced by the Trump administration in February 2025 in response to “illegal immigration” and the flow of fentanyl into the United States, according to a White House statement. The Trump administration implemented a 25% additional tariff on imports from Mexico and Canada, and a 10% additional tariff on imports from China.

How Do Economists View the Use of Tariffs?

Most economists believe tariffs hinder trade and economic growth while raising prices for consumers in tariff-implementing countries.

What Are Trade Agreements?

Trade agreements between countries help to open markets, expand opportunities for employees and businesses, and help companies enter and compete in the global marketplace.

The Bottom Line

Tariffs have historically been a tool for governments to collect revenues and protect domestic producers. Many economists argue that tariffs create market distortions that can harm domestic consumers over time through increased prices and reduced competition. 

Reviewed by Charles Potters
Fact checked by Kirsten Rohrs Schmitt

A tariff is a tax that a governing authority imposes on goods entering or leaving the country. Tariffs typically focus on a specified industry or product, and are set in place in a controlled effort to alter the balance of trade between the tariff-imposing country and its international trading partners. For example, when a government imposes an import tariff, it adds to the cost of importing the specified goods. This additional marginal cost will theoretically discourage imports, thus affecting the balance of trade.

Governments may opt to impose tariffs for a multitude of reasons, including to protect nascent industries, to fortify national defense programs, to support domestic employment opportunities, to combat aggressive trade policies, and to protect the environment.

Key Takeaways

• A tariff is a specific type of tax that a governing body imposes on goods entering or leaving the country. 
• In theory, when a government initiates a tariff program, the additional costs saddled upon the affected items discourages imports, which in turn impacts the balance of trade.
• There are myriad reasons governments initiate tariffs, such as protecting nascent industries, fortifying national defense, nurturing employment domestically, and protecting the environment.

Infant Industries

Tariffs are commonly used to protect early-stage domestic companies and industries from international competition. The tariff acts as an incubator that theoretically affords the domestic company in question the ample runway time it may need to properly nurture, develop, and grow its business into a competitive entity. This is essential for startups, as more than 20% of businesses fail to endure past one year.

National Defense

If a particular segment of the economy provides products that are critical to national defense, a government may impose tariffs on international competition to support and secure domestic production. This can happen both during times of peace and during times of conflict.

Domestic Employment

It is common for a government’s economic policies to focus on fostering environments that provide its constituents with robust employment opportunities. If a domestic segment or industry is struggling to compete against international competitors, the government may use tariffs to discourage consumption of imports and encourage consumption of domestic goods, in hopes of supporting associated job growth, especially in the manufacturing sector.

Aggressive Trade Practices

International competitors may employ aggressive trade tactics such as flooding the market in an attempt to gain market share and put domestic producers out of business. Governments may use tariffs to mitigate the effects of foreign entities employing unfair tactics.

Important

There are potential downsides to tariffs. For example, they can trigger a spike in the price of domestic goods, which can reduce the buying power of consumers in the nation that imposes the tariffs.

Environmental Concerns

Governments may use tariffs to diminish the consumption of international goods that do not adhere to certain environmental standards.

What Is an Example of a Tariff?

One example of a tariff is the Chicken Tax. This tariff is a 25% tax levied on light trucks imported into the U.S. It was imposed in 1964 in retaliation against European tariffs on American poultry. The original Chicken Tax affected a range of imports, including potato starch, dextrin, and brandy. In the years that followed, the tariff was removed from most products with the exception of light trucks, which continue to face it today.

Another example is the set of tariffs implemented by the Trump administration in February 2025 on imports from Canada, Mexico, and China. For imports from Canada and Mexico, there’s an additional 25% tariff. For imports from China, there’s an additional 10% tariff.

What Is the Difference Between a Tariff and a Tax?

The terms “tariff” and “tax” are often used interchangeably. Broadly speaking, a tax is a general reference to any compulsory contribution to a government’s revenues. It can be imposed on individuals, for instance through income taxes, or on particular types of transactions, such as sugary drinks taxes. Tariffs are a type of tax applied on products that are being transported between two jurisdictions.

What Is the Average Tariff in the U.S.?

The average import tariff on industrial goods is 2%. Industrial goods includes all non-agricultural products, including cars, metals, clothing, and consumer goods, among others.

The Bottom Line

Governments may impose tariffs for a wide range of reasons, from protecting domestic industries to boosting national defense to responding to aggressive trade tactics, and more. Tariffs are usually tailored to a specified industry or product. They aim to manage the specific balance of trade between a country of import and a country of export. In theory, when a tariff is imposed on an imported product, it increases the cost of said product and theoretically reduces imports.

Fact checked by Suzanne Kvilhaug
Reviewed by Ebony Howard

Most Valuable Career Skills for 2025: An Overview

The job market is always evolving. As some occupations lose popularity, others gain an edge. Regardless of the field you’re in, having certain career skills can make a difference. Knowing which qualities are most in demand can be helpful as you carve out your career path. 

Key Takeaways:

• Healthcare is a field offering tremendous opportunities in terms of job growth.
• Sustainable energy and statistics are also fields where jobs are expected to increase through 2033.
• Tech skills such as computer programming and network engineering continue to be sought after by companies.
• Soft skills are also important.
• As artificial intelligence (AI) becomes more widespread, there will be a significant shift from labor jobs that have the potential to become automated.

Fastest-Growing Jobs Outlook

From 2023 to 2033, the fastest-growing occupation is expected to be wind turbine service technicians. This job is set to realize a staggering 60% growth rate, according to the U.S. Bureau of Labor Statistics (BLS).

After wind turbine service technicians, rounding out the top five are:

• Solar photovoltaic installers
• Nurse practitioners
• Data scientists
• Information security analysts

So, which career skills will improve your chances of success in these fields? 

Tech Skills Are Highly Valued Across Multiple Industries

Tech skills are hot commodities among employees, and their application isn’t limited to the tech industry. Tech-savvy workers are highly suited to most industries, including healthcare and finance. Possessing a technical skill set can lead to a higher-paying position.

According to HRForecast, some of the hottest tech skills to have now include:

• Basic programming skills. The most popular programming languages in demand are Python, C++, Java, C, and C#.
• UI/UX design. UI/UX designers are skilled at creating digital products to meet consumer needs.
• Data engineering. Data analysts must have knowledge of Python and SQL, Java or Scala, cloud computing platforms like Amazon Web Services (AWS), and big data processing technologies.
• Data visualization. Data visualization skills are used in data analytics to help make information more easily digested and managed.

So how much can you expect jobs that rely on these skills to pay?

According to Robert Half, some of the highest-paying, in-demand tech jobs by average starting salary for 2025 include:

• Data engineer: $154,000
• Senior software engineer: $147,500
• Software developer: $130,750
• Network/cloud architect: $129,750
• Systems engineer: $119,250

While these tech skills are relevant to roles like network architects and software engineers, that’s only the tip of the iceberg. For example, data analytics is an increasingly significant component of healthcare as more healthcare providers move to digital record keeping. Software programmers and developers are also needed to create the software programs used to manage patient data and healthcare records.

Tech is also reshaping the finance industry, with demand rising for project managers, software operations specialists, application developers, business intelligence specialists, and statisticians. Data analysis and software skills are also essential in fields that don’t fit the tech mold, such as human resources.

What About Artificial Intelligence (AI)?

Artificial intelligence (AI) is transforming industries and organizations and has huge economic potential, according to a McKinsey & Company report. How might that affect your job prospects? What’s important is to understand the uses of AI in your specific line of work so that you can raise your skills and increase your work output and quality, applying AI appropriately. Depending on your line of work, skills that may be of use include understanding algorithms and neural networks, data analysis, programming, and understanding the ethical implications of AI, among others.

Soft Skills Still Carry Weight with Employers

While technical skills are important, employers typically don’t have tunnel vision when considering which workers to hire. Soft skills, which are often influenced more by personality than by education or training, are still a priority in the workforce.

The soft skills that may be most important in a changing job market, according to LinkedIn, include:

• Communication skills
• Customer service
• Leadership
• Project management
• Teamwork
• Problem-solving
• Adaptability

According to research by Peter Cardon, professor of clinical business communication at the University of Southern California Marshall School of Business, in the age of AI, the value of soft skills will be increasingly important to foster company cultures that are people-centered. Skills that stood out in his research of nearly 700 business leaders in the U.S. and across the globe included character-based traits such as integrity, the ability to inspire others, motivation, and drive.

Note

Different types of soft skills, such as time management, may be highly valued in remote or hybrid work positions.

What Will Be the Most In-Demand Jobs in 2025?

The most in-demand jobs for 2025 are in tech and renewable energy. In addition, demand for nursing and healthcare-related positions is expected to see a continued increase as the U.S. population ages. There is also a growing demand for jobs in veterinary medicine.

What Skills Will Be in Demand in 2025?

A mix of both hard and soft skills will be in demand in 2025. On the hard skills side, employers may be looking for candidates who possess advanced tech skills, including programming and coding skills. On the soft skills side, good communication skills and the ability to think critically and creatively are important.

What Jobs Will Disappear?

Automation, robotics, and artificial intelligence (AI) technology may make some jobs obsolete or significantly curb demand for them by 2035. Some of the industries that are most likely to be affected by automation include manufacturing, healthcare, transportation, agriculture, and service. Specific jobs that are projected to decline the most include word processors and typists, parking enforcement workers, hand cutters and trimmers, nuclear power reactor operators, print binding and finishing workers, and watch and clock repairers.

The Bottom Line

Developing both your hard and soft skills will boost your marketability to potential employers. It’s almost a certainty that tech skills will continue to be highly sought after, but other skills, such as being able to communicate effectively, being mindful of details, and staying organized, aren’t likely to go out of style anytime soon. The key to getting ahead is finding the right balance and targeting the skills that are most valued in your chosen field.

Reviewed by David Kindness
Fact checked by Vikki Velasquez

Many people may not know this, but Monaco is a sovereign country, and at less than one square mile, it is the smallest nation outside of Vatican City. The national language is French, which is probably why it’s often mistaken for a part of France.

Located on the Mediterranean near Italy, Monaco is just hours away from some of Europe’s major cities. It has a beautiful setting and high quality of life, not to mention superior cultural, educational, and medical programs.

There’s another plus to living in this sunny locale: very favorable tax laws. Many people choose to call this principality home because it’s a high-profile tax haven. The country’s personal and business tax laws and policies are relatively lax compared to those of many other nations.

In this article, we highlight some of the tax advantages of living in Monaco.

Key Takeaways

• Monaco is considered a tax haven because of its favorable tax laws and policies.
• To become a resident in Monaco, you must show proof of accommodation and sufficient financial resources.
• Monaco does not collect personal income tax or capital gains taxes.
• There are no property taxes in Monaco, but rental properties are taxed at 1% of the annual rent plus other applicable charges.
• Monaco eliminated taxes on dividends paid by local companies and does not charge a general corporate income tax.

Personal Income Tax

Monaco has not levied a personal income tax on its residents since 1869. An individual must intend to stay longer than three months a year to be considered a resident. Considering the strategic location of Monaco, which is easily accessible by airplane, boat, or train, it is very common for residents to work and even live in other countries in Europe.

For example, non-residents of the United Kingdom are allowed a 90-day stay. Many businesspeople who reside in Monaco work in the U.K. without exceeding the 90-day limit. This, in turn, makes them subject to Monaco tax laws, so any income earned in the U.K. avoids taxation in that country.

But there is a catch. Many countries in Europe consider this strategy tax evasion and try to impede it. For instance, French nationals residing in Monaco are subject to French income taxes, unless they became residents of Monaco before 1957.

Note

Monaco, Andorra, and San Marino aren’t part of the European Union (EU), but for many years they negotiated with the EU regarding an Association Agreement to participate in the EU’s internal market. In 2023 Andorra and San Marino successfully entered into an agreement with the EU, while Monaco and the EU suspended negotiations.

Capital Gains and Wealth Tax

A capital gain occurs when the value of a capital asset increases from its original purchase price when it is sold. Capital gains can be realized on any type of asset—for example, stocks, real estate, and other investments. Most countries, including the United States, impose a tax on capital gains. However, residents of Monaco do not pay capital gains taxes.

Similarly, Monaco also does not levy any net wealth taxes. Wealth taxes are charged on the net fair market value of someone’s assets. They are charged on a taxpayer’s assets less their liabilities. This tax is also called a capital tax or equity tax.

These rules don’t apply to current or prior French residents. These individuals may be subject to some amount of taxation. French citizens who transfer their residence or domicile to Monaco will have their worldwide property subject to France’s net wealth tax.

Property Tax

The real estate market in Monaco is open to residents and foreign investors alike. There are no restrictions on foreign ownership, and it’s fairly easy to buy or rent in the country. Keep in mind that buying or renting real estate is an important part of establishing residency in Monaco. According to the rules, you must own or rent a property for at least a year to become a resident.

If you own property in Monaco, it’s important to note that there are no property taxes in the principality. But that doesn’t apply to rentals. In fact, rental properties are taxed at 1% of the annual rent plus other applicable charges.

You will have to pay taxes if you sell your property. This tax is levied at a rate of 33.3% on any profits earned on the sale of real estate. However, losses on the sale of real estate can be carried forward for up to five years to offset any gains on other sales.

Business Taxation

Anyone who intends to operate a business must first apply for a permit. This includes anyone who intends to operate as a company, trade, sole proprietorship, or freelancer. Paperwork must be filed with the Welcome Office. The business owner must have a solid professional reputation and qualifications and must demonstrate the promise of stable business activity through a business plan.

Individuals must also understand the country’s business tax rules. There are favorable tax treatments for corporations. Companies with profits exceeding 25% from outside of Monaco are taxed at a rate of up to 33.3%.

Certain rules apply to businesses that operate within the principality. For instance:

• Monaco eliminated dividend taxes in 1963 for shares in local companies. This policy greatly increased the amount of foreign investment in the principality, as did the large availability of data privacy.
• The profits of Monaco-based companies are taxed if they engage in selling the licensing of trademarks, patents, manufacturing processes, or artistic copyrights.

Privacy

Monaco is known for its financial and professional secrecy laws. This means that it maintains a high degree of data privacy within its banking system, including the existence of wealth management and bank accounts and any related information like account balances and activity. Failure to abide by these standards results in punishment as per the Monegasque Penal Code. Keep in mind, though, that Monaco has signed transparency agreements with other countries of late.

Despite this, the government does have measures in place to counter money laundering and terrorist financing. The first anti-money laundering (AML) law was established in 1993 and continues to be amended as international standards change. This activity is monitored by the Financial Action Task Force, a global money laundering and terrorist financing watchdog.

Important

Monaco is known for financial secrecy but is increasing its transparency agreements with other countries.

Tax Havens Around the World

Monaco isn’t the only country in the world that attracts new residents and businesses because of its status as a tax haven. There are others that offer similar or other tax-based incentives, notably:

• Switzerland: Although banks can no longer operate anonymously, the country still registers high on the global privacy list because of its financial privacy laws. It continues to offer the wealthy a safe place to store their money and keep it there.
• Cayman Islands: This island nation doesn’t have a corporate tax. As such, it allows companies to set up subsidiaries to protect some or all of their income from taxation. Investors aren’t required to pay taxes on dividends or interest earned on investments, and the privacy laws are some of the strictest in the world.
• Panama: Companies incorporated in Panama that conduct offshore business aren’t subject to many forms of taxation, including corporate, withholding, income, and capital gains taxes. Panama has very favorable privacy laws that shield offshore corporations, trusts, and foundations.

How Does Monaco Make Money?

Monaco is a popular tourist destination because of its climate and casino. As such, the country relies heavily on the tourism industry to generate revenue. It also charges a value-added tax (VAT) of 20%, stamp duties on documents, and a 33.33% tax on corporations with profits exceeding 25% from offshore sources.

What Is the Cost of Living in Monaco?

The general cost of living in Monaco for a single individual is $1,858 a month. This figure doesn’t include accommodations and is about 106.3% higher than in the United States. Renting a one-bedroom apartment in the city center costs about $6,338 while renting one outside the city is $7,186. Rent costs are about 479.2% higher in Monaco than in the U.S.

Is Monte Carlo a Tax Haven?

Monte Carlo is an administrative area of Monaco. As such, it is considered a tax haven because of its favorable laws. For instance, individual residents aren’t taxed on personal income. The area also has a business-friendly tax structure because it only taxes profits on companies that earn 25% or more of their profits from overseas sources. They are charged at a rate of 33.33%.

The Bottom Line

Monaco has long been considered a tax haven because of its favorable personal and corporate tax rules. The country does not tax individuals on their income, and corporations within the country have favorable tax treatment.

If you’re thinking of moving because of these reasons, you must show proof of accommodation and that you’re able to sustain your lifestyle. As with any major life change, make sure you do your research before you take the plunge.

Reviewed by Samantha Silberstein

Homeownership may be a part of the American Dream—but in reality, roughly one in three American households (nearly 36%) lives in rentals, according to a 2020 report by the Joint Center for Housing Studies of Harvard University.

Renting has also become much more common among the age groups and family types that were traditionally more likely to own their housing. The report found—in fact, rentership rates for all age groups under 65 are at historic highs.

Since you’re dealing with something as vital and intimate as a person’s home—even if it’s only temporary—it’s important that everyone involved in the lease understands their legal rights.

Landlord-tenant laws generally fall under the jurisdiction of individual states. But since many state laws are very similar in scope, tenants and landlords throughout the U.S. should expect that no matter where they’re located, these are four things property owners should never do when they’re renting out a unit.

Key Takeaways

• Although landlord-tenant laws vary by state, there is generally some uniformity in certain areas.
• Landlords cannot enter tenanted properties without giving proper notice.
• Landlords cannot arbitrarily end someone’s tenancy before the lease expires.
• Arbitrary, mid-lease rent increases are not permitted unless specified in certain circumstances in the lease or by the municipality.
• The Fair Housing Act prohibits a landlord from discrimination in renting, representing properties, or providing services to tenants.

1. Enter Without Proper Notice

Even though the premises technically belongs to them, landlords can’t enter a rented home whenever they feel like it. According to many state statutes, they must provide at least 24-hour notice if they wish to enter an occupied property.

The notice must outline the reason for access and must be given in writing unless indicated otherwise by the tenant. (In some states, you must receive the tenant’s specific approval to provide notices electronically—that is, through email or text message.)

When a landlord gives proper notice, whether it is to make repairs, conduct a routine inspection, show the property to prospective future tenants, or carry out any other reasonable request, their tenant may have to invite them to the unit.

9 a.m. to 5 p.m.

The only hours that landlords can enter a renter’s unit in many jurisdictions: in other words, regular business hours on weekdays, from Monday to Friday.

A tenant cannot deny a landlord access to the property when proper notice is given, and the request is reasonable. However, the occupant may request to change the date or put in a clause in the lease to limit the number of times the landlord can enter the unit.

Exceptions and Violations

Even states that mandate advance-notice rules allow exceptions. There are two that usually apply: A landlord may enter the premises in an emergency, such as a fire or leak, or if they believe the tenant has abandoned the property.

A tenant who feels that their landlord violated the rules by entering their premises in a non-emergency without giving notice does have a few options. The first is to let the landlord know of the problem. If that doesn’t work, the tenant may be able to bring it to the attention of the local or state housing authority or file a trespassing claim with local police or the court system.

2. Unlawfully Evict Tenants

A landlord may evict a tenant for many reasons, but they must go through the proper legal channels and give the tenant due notice. The amount of days necessary for due notice varies by state and can range from nearly immediate to 30 days or more.

A landlord who does not follow the correct protocol generally faces an uphill legal battle if they end the rental agreement or a tenant’s occupancy before the lease expires. Landlords who abruptly lock a tenant out of the property without warning may fall within the definition of retaliatory eviction. Not only that but they may also be slapped with trespassing or burglary charges. Similarly, turning off utilities could be seen as intentionally putting a tenant in danger, especially if the local climate is prone to extreme heat or cold.

If a landlord violates housing laws, a tenant may be entitled to remedies, including monetary damages.

Important

On Sept. 1, 2020, the Centers for Disease Control and Prevention (CDC) issued an Agency Order, applying to residents earning less than a specified amount, the order banned evictions for nonpayment of rent. The order was extended several times due to an ongoing state of emergency due to the coronavirus pandemic. However, the federal ban ended on Aug. 26, 2021, and it was left up to the states to decide if to extend it.

3. Unjustifiably Raise the Rent

A lease is a legally binding contract. Once signed, there are very few circumstances under which the landlord can raise the rent. The only way the terms can be changed is if the increase meets a certain set of conditions in the lease itself. These may include:

• A new tenant joining the household
• The addition of a pet
• If the landlord significantly remodels part of the property

Landlords may also increase rent if the property is located in a city with rent-control or rent-stabilized ordinances that permit such changes. These ordinances define the circumstances under which the rent of qualifying properties—usually older ones—can be changed, and by how much. Increases might be tied to the rate of inflation, for example.

4. Discriminate Against Tenants

Unlike the other regulations, which stem from the states, the rules forbidding discrimination come from the federal government. The Fair Housing Act of 1968, also known as Title VIII of the Civil Rights Act of 1968, forbids anyone—including landlords—from refusing to rent to an applicant based on:

• Race
• Color
• National origin
• Sexual orientation
• Familial status
• Disability
• Gender

For example, you cannot advertise your rental property as being for families or individuals with no children allowed—yes, even families with children are protected under the FHA. Similarly, you cannot provide different terms or agreements for members of different protected classes than you do for other tenants.

The U.S. Department of Housing and Urban Development (HUD) ‘s Office of Fair Housing and Equal Opportunity (FHEO) acts as the chief enforcer of the FHA. On Feb. 11, 2021, HUD announced that it “will administer and enforce the Fair Housing Act to prohibit discrimination on the basis of sexual orientation and gender identity.”

Can My Landlord Evict Me?

Yes. A landlord may be within their rights to evict you but they must give sufficient notice and in most states, the owner must bring a court proceeding and obtain a judgment of possession from the housing court. Each state has its own set of landlord-tenant laws.

Can My Landlord Enter My Home?

Yes. A landlord can enter your home. However, the landlord must give proper notice to a tenant when they need to enter to conduct an inspection, show the property, or repair damage in the apartment.

Is It Hard To Be a Landlord?

If you want to become a landlord, you must be willing to put in the time and effort, it takes to be a good one. Being a landlord can be expensive, from purchasing a property to maintaining, plus it can be a risky venture, if tenants refuse to pay their rent or damage your property.

The Bottom Line

Property owners have to put in a lot of time, money, and effort if they want to become a landlord. And part of that effort means understanding what the law does and doesn’t allow them to do. Although a landlord may own a rental property, tenants have unique protections from discrimination, harassment, arbitrary rent increases, and wrongful eviction.

Aside from those dealing with discrimination, landlord-tenant laws vary by state, but as long as landlords maintain the home and leave tenants in peace—and tenants respect the property and pay their rent on time—chances are that neither will have to consult local statutes or complain to local authorities.

The widely followed Standard & Poor’s 500 Index is the standard by which stock market performance in the U.S. is often measured, as it tracks 500 of the largest and most stable publicly traded companies in the country. The index is weighted by market capitalization, which gives more significance to companies with larger market values. The top 25 stocks in the S&P 500 by weight are the largest, most influential companies in the index.

Key Takeaways

• The S&P 500 is widely considered to be one of the best measures of stock market performance and the health of the U.S. economy.
• The 500 stocks tracked by the index represent the nation’s largest, most economically significant companies
• The S&P 500 is weighted by market cap. The larger the company, the more influence its stock price has on the overall index.
• The top 25 stocks in the index are important to follow because of their strong influence on the performance of the index and the economy at large.

As of Jan. 27, 2025, the S&P 500 (SPY) had increased in value by 1.3% since the beginning of the year. In January, the index rallied to a new high before late-month selling took it back down again. The rise of the Chinese artificial intelligence startup DeepSeek led investors to dump other AI-related tech stocks, including Nvidia (NVDA), which lost nearly $600 billion in market capitalization.

How are Stocks Selected for the S&P 500?

To be included in the S&P 500, a company must:

• Be based in the United States and trade publicly on a major U. S. exchange
• Maintain a market capitalization of $20.5 billion and a float-adjusted market cap of at least 50% of the index’s total company-level minimum market capitalization threshold
• Have reported positive earnings in the most recent quarter, along with the past four consecutive quarters
• Have a float-adjusted liquidity ratio of 0.75 or greater.
• Have traded a minimum of 250,000 shares in the previous six months before evaluation

The S&P 500 reconstitutes each June. Companies removed from the index are not replaced until the next annual reconstitution.

Top Sectors in the S&P 500

The table below lists the S&P 500’s top sectors by weighting as of Jan. 27, 2025. The information technology, financials, health care, and consumer discretionary sectors carry a cumulative weight of about 68%. Meanwhile, the least-weighted sectors include energy, utilities, and real estate—which have a combined weight of just 7.87%.

Top 25 Companies by Index Weight

These are the top 25 companies by index weight. Since the S&P Global website fails to disclose the weighting of component stocks, we used the S&P 500 exchange-traded fund (ETF), the SPDR S&P 500 ETF Trust (SPY), in order to cite index weighting. The ETF’s holdings are a bit different, but SPY closely reflects the S&P weights.

As of Jan. 27, 2025, here are the largest SPY holdings by weight:

Why Are the S&P 500’s Top 25 Stocks Important?

The top 25 stocks in the S&P 500 by index weight are important to analyze because they can be used to gauge the health of the stock market and broader economy. These companies reflect the performance of key sectors and the benchmark itself.

The current period of outperformance by the technology sector, for example, shows how declining inflation, strong margins, and competitive positioning resulting in good cash flow can contribute to gains in the overall index.

How Do I Invest in the S&P 500 Index?

The simplest and easiest way to invest in the S&P 500 is to purchase the popular SPDR S&P 500 ETF (SPY), which reflects the minute-by-minute movements of the index. Other ETFs that also track the S&P 500 this way include the iShares Core S&P 500 ETF (IVV) and Vanguard S&P 500 ETF (VOO).

There are also index funds that reflect only the closing price at the end of the day, including the Vanguard 500 Index Fund (VFIAX) and Fidelity 500 Index Fund (FXAIX). For those interested in more complex strategies, options and futures are also available, such as E-mini S&P Futures contracts, although these are only for those wishing to speculate on the future value of the index.

Advantages and Disadvantages of Investing in the S&P 500 Index

The central advantage of investing in the S&P 500 is the wide diversification it offers across many sectors and industries. By investing in the index, an investor generally reduces the risk associated with buying individual stocks. Over the years, an investment in the S&P 500 can produce long-term growth for those willing to wait out the accompanying short-term volatility.

A disadvantage of S&P 500 investing is how concentrated the index is in the top-performing stocks, a factor that sometimes skews results and can result in increased volatility. Some investors prefer an S&P 500 Equal Weight Index, where each component has an equal weight without regard to the size of its market capitalization.

The Bottom Line

The S&P 500 index weights companies according to their market caps. Larger firms are more heavily weighted than small firms, which carries some risks. The tech sector, which includes giants like Apple, Microsoft, and Nvidia, has an enormous influence on index results. In general, the stock market’s health and that of the U.S. economy can be measured by analyzing the S&P 500’s top 25 components.

The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info.

As of the date this article was written, the author does not own any of the above securities.

Fact checked by Vikki Velasquez

When you start looking into life insurance plans, there are two main types: term and permanent. Term life only covers you for a limited period, while permanent can stay in place for the rest of your life. However, the options don’t stop there. Many types of permanent life insurance cater to different needs and preferences. You can opt for whole life, universal life, variable life, and more.

With so many options, it can be hard to know which life insurance policy or life insurance company is best for your situation. To help, here’s a breakdown of the main types, how they work, and when each is generally a good fit. 

Key Takeaways

• Term life insurance offers coverage for a set number of years.
• Permanent life insurance can cover you for the rest of your life.
• Permanent life insurance comes in various forms including whole life, universal life, and variable life. 
• You can modify and expand term or permanent coverage by adding riders.
• The best fit will depend on factors such as your budget, age, health, preferences, and the level of risk you are willing to tolerate. 

Main Types of Life Insurance

Interested in life insurance but not sure where to start? Here are the five main types to know.

Term Life Insurance

Term life insurance policies offer coverage that is limited to a set period—often 10, 20, 30, or even 40 years. You select a term and coverage amount and pay a periodic (usually monthly, quarterly, or annual) premium to keep coverage in force. If you pass away during the term in a way that doesn’t violate the contract, your beneficiary receives the plan’s death benefit. If you outlive the term, your coverage will end unless you opt for renewal.

Features

• Coverage for a set number of years
• Pays death benefit to the beneficiary if you die during the term
• May have a renewal option

Pros

• Affordable premiums
• Premiums do not increase during the term
• Insurers may allow renewals

Cons

• Doesn’t last for life
• Renewals bring premium increases
• No cash value component 

Ideal for:

Term life insurance is typically best for those who need affordable coverage during a period when they have large financial responsibilities. For example, if you’re the breadwinner of your family, you may want coverage while your children are growing up and you’re paying off your mortgage. Once it’s no longer needed, you can terminate the policy or let it lapse.

Whole Life Insurance (Permanent)

Whole life insurance policies offer coverage for the rest of your life—as long as you pay your premiums. They come with a fixed death benefit and a fixed monthly premium. (You can also opt for paying premiums less frequently, such as annually, which typically brings a slight cost reduction.) Premiums and death benefits are established when you initially sign up and stay the same as long as you keep the policy active. When you pass away, your death benefit will be paid to your named beneficiary.

Tip

Life insurance premiums are based on factors as age and health. The younger and healthier you are when you sign up, the lower the rate you can lock in for life.

In addition to a fixed death benefit, whole life policies come with a cash value savings component. Every time you make a premium payment, part of the payment goes toward your cash value. Interest then accrues on that money according to a fixed rate.

You can withdraw from or borrow against your cash value account during your life. However, that amount will be deducted from your beneficiary’s death benefit. You could choose to pay back a cash value loan and return to the original death benefit.

Features

• Permanent policy
• Cash value component, which can be used for loans, withdrawals, or to pay premiums
• Fixed premium and death benefit
• Guaranteed cash value growth

Pros

• Predictable premium payments
• Guaranteed death benefit amount
• Coverage for life
• Can borrow against or withdraw from cash value, or use it to pay premiums

Cons

• Initially much more expensive than term life
• Cash value may grow slower than with other policies
• No flexibility to adjust the premium or the death benefit

Ideal for:

If you’re looking for a predictable and low-maintenance life insurance policy that’ll cover you for the rest of your life, whole insurance can be a good fit. It helps you leave behind a sizable amount of tax-free money to your loved ones and gives you access to money during your life. On the downside, it does initially come at a much higher cost than term life insurance. However, the premiums will not increase as you get older as they do with other types of insurance, including term insurance renewal.

Universal Life Insurance (Permanent)

Universal life insurance is another type of permanent policy that’s designed to cover you for the rest of your life, as long as you pay the premiums and don’t deplete your cash value.

Like whole life insurance, it has a cash value savings component. However, unlike whole life, your premium and death benefit won’t be fixed. You can adjust them up or down to better suit your financial needs and budget throughout your lifetime.

You must pay enough to cover the policy’s underlying insurance cost, which goes up as you age. By design, you’re supposed to pay more than the insurance cost to build cash value when you’re younger, which helps cover the rising insurance costs as you get older. Otherwise, your premiums will go up.

Another difference between whole life and universal life is that interest on the cash value of a whole life policy accrues at a fixed rate, while interest on a universal policy accrues according to market interest rates. As a result, you can earn more when the market is up but can also earn less when the market is down. That said, many insurers have minimum performance guarantees for the cash value interest rate.

Features

• Permanent life insurance policy
• Adjustable premiums and death benefit
• Cash value component, which can be used for loans, withdrawals, or to pay premiums
• Cash value interest accrual linked to market interest rates

Pros

• Permanent policy
• Cash value can go toward loans, withdrawals, or premiums
• Flexible premiums and death benefit

Cons 

• Requires budgeting to maintain coverage
• Premiums go up if not enough cash value is saved 
• Cash value is more exposed to risk

Ideal for:

Universal life insurance can be a good fit for those who want permanent coverage but also want more flexibility when it comes to their premium payments. It’s also a good fit for those who are comfortable with a bit more risk due to the cash value being linked to market interest rates. 

Variable Universal Life Insurance (Permanent)

Variable universal life insurance is another type of permanent life insurance with a cash value savings component. The difference with this policy is that you invest your cash value into assets such as mutual funds. As a result, your cash value’s growth will depend on the performance of your investments.

However, many insurers let you allocate part of your premium to a fixed account with a guaranteed rate of return to limit your risk. This type of policy also offers flexibility when it comes to your death benefit and premium amount. 

Features

• Permanent policy
• Cash value growth tied to investments
• Flexible premiums and death benefit

Pros

• Permanent policy
• Flexible payments
• Cash value component, which can go toward loans, withdrawals, or premiums
• Investment options can help you grow your cash value faster
• Gives you control over how your cash value is invested
• Part of cash value can have a fixed rate of return 

Cons

• Risk of poor cash value growth and even losses
• Investment losses could lead to a reduced death benefit
• More fees and charges than other permanent policies 
• More complex than other life insurance types

Ideal for:

A variable universal life insurance policy is best for investment-savvy people who want more control over their cash value’s growth. You’ll be the one deciding where to allocate the funds so it’s important to have some investment know-how, as well as understanding the risk and reward potential at play. It can be a good fit for people who’ve already maxed out their retirement contributions and want to build additional savings for retirement.

Final Expense Life Insurance (Permanent)

Final expense insurance, also known as burial insurance, is designed to cover end-of-life expenses such as a person’s funeral. You don’t normally need to undergo a medical exam to get approved unless you have a serious pre-existing medical condition. Insurers may offer guaranteed acceptance for people in a certain age group. For example, Mutual of Omaha guarantees acceptance for applicants between the ages of 45 and 85 with up to $25,000 in coverage available.

In exchange for having no medical exam, final expense insurance charges higher premiums versus policies that do require a medical exam. Final expense policies also have low maximum coverage amounts. This is what keeps monthly premium payments relatively low. However, they’re likely to be even lower if you can get a small whole life policy that requires a medical exam.

Features

• Permanent coverage
• Medical exam may not be required
• Lower coverage amounts 
• Higher premiums for the amount of coverage offered
• Some offer guaranteed acceptance for certain age groups
• Cash value component, which you can borrow against, withdraw, or use to pay premiums

Pros

• Low coverage amounts keep monthly payments relatively affordable
• Sometimes guaranteed for elderly age groups
• No medical exam is required in many cases
• Permanent coverage
• Cash value component can go toward loans, withdrawals, or premiums

Cons

• Lower maximum coverage amounts
• Higher premiums than policies that require medical exams
• May not be available over a certain age (e.g. 85)
• Medical exams may be required for severe health conditions

Ideal for:

Final expense insurance is often a good choice for people who find other insurance policies inaccessible. It can provide a way to get coverage for your funeral, burial, and final bills if you’re getting toward the end of life and don’t have other resources to cover those expenses.  

Other Types of Life Insurance

In addition to the main types of life insurance, here are a few other variations you may come across when shopping around.

Short-Term Life Insurance

Short-term life insurance provides coverage for a very short period, such as one year. It’s designed for those who want loved ones to receive a death benefit if they pass in the near future. For example, Progressive offers one-year policies up to $200,000 that don’t require a medical exam.

Note

You might consider short-term life insurance to fill a temporary gap, such as if you’re in between jobs.

Variable Life Insurance

Variable life insurance is permanent coverage that lets you invest your cash value in a portfolio of sub-accounts, the same as variable universal life insurance. The key difference is that the premiums on variable life insurance are fixed. You cannot adjust them up and down.

Indexed Universal Life Insurance (IUL)

Indexed universal life insurance is a variation of universal life that allows your cash value component to earn interest by tracking a stock market index chosen by your insurer. You can enjoy flexible premiums along with the chance to earn more interest. However, there’s also the chance you’ll earn less. These policies have more return upside and risk than whole life but less than variable and variable universal life. 

Supplemental Life Insurance 

Supplemental life insurance is an option for additional coverage that some employers offer. If you find that the life insurance benefits your employee provides for free fall short of your needs, but supplemental life insurance is available, you could consider adding it at your own expense.

Remember, the policy types available will vary from one insurer to the next. To find the best deal, shop around and browse the offerings and pricing from at least three reputable life insurance companies.

How to Choose the Right Life Insurance Plan

Choosing the right life insurance plan for you and your loved ones depends on a variety of factors. Thinking about why you want the policy is a good place to start. What do you hope to achieve from the death benefit, and for whom?

For example, do you want to cover your end-of-life expenses or pass on an inheritance? Do you want to ensure your family is supported financially if you unexpectedly pass? Your answers can help to point you in the right direction.

Beyond that, other factors to consider include:

• What you can qualify for: Life insurance requires you to fill out an application and undergo an approval process. Your ability to qualify for coverage will depend on factors such as your age, lifestyle habits, and medical history. You’ll want to find out if any plans that aren’t available to you.
• Your budget: How much can you spend on a life insurance policy monthly and yearly? The costs will vary greatly by the plan type and coverage amount you choose. Term life policies start as the most affordable but have a set expiration date, while permanent plans carry long-term growth potential if you can maintain the premiums. 
• Whether you prefer predictability or flexibility: Term and whole life policies offer fixed premiums and death benefits, while other policies such as universal life allow more flexibility. You’ll want to weigh the options to decide which is best for your budget and goals. 
• If you want to build cash value: Are you looking to build cash value that you can withdraw or borrow against? If so, that rules out term life policies. 
• If you need to modify standard coverage: Both term and permanent policies typically offer you a number of riders that you can use to customize your coverage. Common types of riders include ones that pay your premium if you become disabled, pay you monthly if you must stay in a long-term care facility, provide a death benefit if one of your children dies, or offer accelerated death benefits that enable you to receive cash advances if you are diagnosed with a terminal illness. 
• If you want control over your cash value’s growth: You’ll also need to consider how you want your cash value funds to be managed. Would you prefer a fixed rate of return? Then, a whole life policy would be best. If you want it attached to market interest rates, universal life would be the way to go. Further, variable life gives you a more hands-on situation where you can invest in a portfolio of sub-accounts.

By identifying your needs and understanding what the different types of life insurance policies offer, you can weigh your options to find the best fit for your situation. Then, you’ll be ready to shop around to find the best deal. 

What Is a Life Insurance Annuity?

If you die while covered by a life insurance policy, your beneficiary has options on how to receive the death benefit. If they are worried about budgeting the money all at once from a lump-sum distribution, they could instead select a life insurance annuity. The insurance company then splits the death benefit funds into payments guaranteed for a set number of years or even for the rest of the beneficiary’s life—the beneficiary will determine the plan. Annuity payments include accumulated interest.

What Type of Life Insurance Can You Borrow From?

You can borrow from life insurance policies that have a cash value component, which includes most permanent policy options. Part of each premium you pay goes to the cash value savings account, which accrues interest over time. You can then withdraw from it or borrow against it during your lifetime.

Can You Cash in Life Insurance While Still Alive?

Policyholders can cash out their life insurance policies while alive. One way to do so is to surrender the policy. In this case, you can take the surrender value cash payment, which is often subject to surrender fees. If your policy has accumulated cash value, you can also opt to keep it in place and borrow against it or withdraw funds. However, doing so will reduce future death benefits.

The Bottom Line

Life insurance can help you financially support loved ones after you pass away. Whether you want to cover your end-of-life expenses, pay off a mortgage, replace your income, or something else—it provides a way to do so.

However, the best life insurance plan for you will depend on various factors. It’s not one-size-fits-all. Now that you understand how the main types of life insurance work, you can weigh the features, pros, and cons to decide which will be most beneficial for your situation. If you still have questions or concerns, you can reach out to a financial advisor or insurance agent.

These are the top AI stocks based on best value, fastest growth, and most momentum.

Artificial intelligence (AI) bulls were caught off guard in January when Chinese startup DeepSeek launched a free AI assistant that quickly disrupted the market. The model showcased logic and reasoning capabilities comparable to ChatGPT but was developed at a fraction of the cost.

Shortly after its debut, DeepSeek overtook OpenAI’s ChatGPT as the top app on Apple’s App Store, sparking concerns about OpenAI’s dominance. Its unexpected rise came on the heels of a high-profile announcement by President Trump, outlining a $500 billion dollar joint venture between OpenAI, SoftBank, Oracle (ORCL), and MGX, to bolster U.S. AI infrastructure and promote American leadership in the sector. It remains to be seen how the AI race will play out, but 2025 is shaping up to be a pivotal year for groundbreaking developments.

Below is an analysis of the top AI stocks for February 2025, screened for best value, fastest growth, and most momentum.

All stocks are listed on the Nasdaq or New York Stock Exchange.

All data are current as of Feb 3, 2025.

Best-Value AI Stocks

Value investing is about finding stocks trading below their true worth, with the expectation that the market will eventually correct the mispricing and the stock price will rise. Investors often use price-to-earnings (P/E) ratio to find stocks that are undervalued, as a lower P/E ratio can indicate that a company is valued at less than its fundamental value.

However, it may take multiple quarters or years before a turnaround materializes.  Some stocks may also remain cheap for a reason, falling into a “value trap,” continuing to underperform despite appearing undervalued. Moreover, the P/E ratio should not be viewed in isolation. Investors should ask why a stock is trading at a discount to its peers and whether that gap is likely to close due to a business recovery, or the market recognizing the value opportunity.

• Yiren Digital Ltd.: A fintech company based in China, Yiren Digital operates a financial marketplace connecting investors with borrowers. It offers payment processing, loan services, insurance products, and ecommerce products. Overall, the company continues to ramp up its AI initiatives, deploying new technologies to increase operational efficiency. To reinforce the AI narrative, Yiren recently joined the China Artificial Intelligence Industry Alliance (AIIA), signaling its commitment to innovation.
• I3 Verticals, Inc.: i3 Verticals specializes in developing and acquiring software solutions for the public sector and health care markets. I3 has leveraged AI in multiple use cases, such as increasing customer engagement for its utility partners.
• Perion Network Ltd.: Perion is a global digital advertising company based in Israel. It leverages AI to enhance ad campaigns through its proprietary solutions, SORT and WAVE. SORT enables AI-driven targeting using real-time signals, while WAVE employs generative AI to create dynamic audio ads that adapt to context, behavior, and demographics.

Fastest-Growing AI Stocks

Growth investors look for companies with increasing revenue and earnings per share (EPS), believing these metrics signal strong business fundamentals and potential for value appreciation. However, relying on just one of these indicators can present an incomplete picture, as factors like tax law changes, mergers, or one-time gains can distort the numbers.

For a more balanced assessment, we screen AI growth stocks by looking at the most recent year-over-year percentage growth for both revenue and EPS, giving each equal weighting. We also excluded companies with growth rates in either category of 1,000% or more on the grounds that these are likely outliers.

• Sportradar Group AG.: Sportradar Group AG is a global sports technology company that provides data analytics, betting solutions, and media services to sports organizations, media outlets, and sportsbooks. Its core businesses include real-time sports data collection, AI-driven betting and gaming solutions, fan engagement tools, and integrity services that monitor and prevent match-fixing.
• Duolingo, Inc.: Duolingo is the world’s leading mobile learning platform, with over 113 million active monthly users learning new languages around the world. With technology at the core of its business, the company announced major AI-powered innovations at Duocon 2024 in September, including Video Call, which enables real-time language practice with an AI character.
• ODDITY Tech Ltd: ODDITY is a consumer tech company leveraging AI and data science to create digital-first beauty and wellness brands, disrupting traditional offline markets. The company currently boasts 50 million users and recently announced the acquisition of the intellectual property and research team of AI fintech, Fionic. 

AI Stocks With the Most Momentum

Momentum investing is a strategy that seeks to capitalize on existing market trends by investing in stocks that have recently outperformed their peers or the broader market. The core idea is that stocks on an upward trajectory are likely to continue rising as long as the fundamental drivers
behind their growth remain intact.

The momentum strategy has become synonymous with AI, owing to the fast growth of this sector. AI names can generate returns that far outpace established tech names, driven mostly by investor sentiment. While it’s a viable strategy for those with a higher risk tolerance, investors should also focus on the company’s underlying financials to ensure the anticipated growth prospects will materialize.

Here are the AI stocks with the highest total return in the last 12 months.

• Quantum Computing, Inc.: Quantum Computing is an integrated photonics and quantum technology company focused on developing accessible and affordable quantum computing solutions. While there is controversy around the commercial viability of quantum computers, the company has secured significant partnerships, including with NASA for applications in space missions.
• SoundHound AI, Inc. SoundHound’s proprietary technology offers fast, accurate voice recognition across various industries, including automotive, TV, Internet of Things (IoT), and customer service. Recently SoundHound announced a partnership with Rekor Systems to integrate voice-controlled AI with advanced vehicle recognition technology in police and emergency vehicles. This feature will allow police officers to receive real-time vehicle alerts and control critical in-car systems hands-free.
• Palantir Technologies, Inc.: Palantir provides advanced software platforms for data integration, analytics, and decision-making, for both government and commercial sectors. In December, Palantir Technologies extended its partnership with the U.S. Army in a $619 million agreement to enhance the Army Data Platform (ADP) with AI-driven data solutions for improved decision-making and operational efficiency.

Advantages of AI Stocks

Mass Disruption

AI is a rapidly evolving sector with applications across nearly every industry, from health care to finance and cybersecurity. As adoption accelerates, AI companies have significant room for revenue expansion and market dominance. Furthermore, ongoing advancements in research and development are enhancing AI models’ reasoning and adaptability, unlocking even greater disruptive potential.

Innovation

AI-driven automation enhances efficiency, leading to reduced costs for businesses. Companies leading in AI development can secure long-term competitive advantages, making them attractive investments in both the short and long term.

Investor Enthusiasm

AI stocks often experience strong investor enthusiasm, driving rapid price appreciation. With ongoing advancements in machine learning, automation, and generative AI, market sentiment remains highly bullish, fueling momentum-driven gains.

Disadvantages of AI Stocks

High Valuations and Market Speculation

Many AI stocks trade at high valuations due to investor enthusiasm and growth expectations. While the AI sector has strong long-term potential, some companies may be overvalued, leading to the risk of significant price corrections. Speculative investments, particularly in early-stage AI companies, can result in inflated valuations that may not be supported by actual revenue or profitability.

Regulatory Risks

AI technology is increasingly facing scrutiny from governments and regulatory bodies worldwide. Concerns over data privacy, algorithmic bias, job displacement, and national security risks could lead to stricter regulations that impact operations and growth prospects. The legal landscape around AI is still in its early stages, and new laws around transparency, intellectual property rights, and ethical AI development are being fleshed out.

Stiff Competition

The AI industry is highly competitive, with major players such as Alphabet (GOOGL), Microsoft (MSFT), Nvidia (NVDA), and OpenAI continuously advancing their technologies. This rapid pace of innovation means that companies that fail to stay ahead may become obsolete. Additionally, emerging AI startups such as DeepSeek can disrupt established players seemingly overnight, making it difficult for investors to predict long-term trends.

The Bottom Line

AI stocks offer significant growth potential, fueled by rapid technological advancements and strong investor enthusiasm. However, high valuations, regulatory uncertainties, and intense competition pose risks that investors must carefully navigate. While AI remains a compelling long-term investment, careful scrutiny of a company’s financials and thorough risk management are essential to avoid speculative bubbles and hype.

The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info.

As of the date this article was written, the author does not own any of the above securities.

Tax season happens every year, yet it somehow always sneaks up on us. Tax season isn’t, in fact, a seasonal event. You can organize and prepare for taxes all year round so that when those deadlines arrive, you’ll be first in line to call it done.

Key Takeaways

• Prepare for tax season year-round to ensure a smoother and less stressful filing process.
• Work with your tax professional to develop a clear checklist covering income, deductions, credits, and other relevant financial details. Keep it updated to avoid last-minute scrambling.
• Upload and organize your tax-related documents into a secure digital system (like Box.com) throughout the year, sorted by categories from your checklist.
• Partner with a CPA and CFP who focus on proactive tax strategy to help minimize your tax burden year-round rather than just preparing your return at the last minute.

What I’m Telling My Clients

1. Work From a Check List

Work with a tax professional who provides a clear checklist of what you’ll need to hand over when it’s tax time. With that same checklist in mind, make sure you’re keeping track of your documents so you’re not caught off guard the next time tax season rolls around. 

With a clear checklist, you won’t have to work from memory–and you won’t be reinventing the wheel each year. Your checklist should be broken down into buckets like:

• Income (W2 wages, equity compensation, retirement plan withdrawals, real estate sales, interest received from your savings, income from your investments, etc.)
• Deductions (tax-advantaged retirement contributions, donations, interest payments like your mortgage, etc.)
• Credits (education and childcare expenses, energy improvements, estimated taxes, etc.)
• Other (gifts, rental property, business ownership, etc.)

2. Use a Digital Filing System

Throughout the year, upload relevant documents for each of your accounts/actions into a secure digital filing system. (We like Box.com at Hendershott Wealth Management.) 

For simplicity’s sake, you can start a folder labeled “2024 Tax Docs” (or whatever year you’re preparing for). 

Tip

Keep your folders organized into the same buckets as your checklist so you know exactly where all the relevant documents are.

Not only will you skip scouring your email and web portals for donation receipts at tax time, but when you file things appropriately throughout the year, you’ll also help avoid the number one issue that leads to inaccurate tax returns: not giving all of the relevant data to your CPA. 

3. Work With Tax Savvy Professionals

Good financial oversight means knowing what you’ll owe (or be owed) come tax time.

Working with a CPA and CFP who focus on tax strategy, which is proactive, rather than just tax preparation, which is reactive, can help you save on your taxes throughout the year. They can help you understand and strategize around various topics you might not be as familiar with, such as minimizing capital gains taxes, understanding contribution limits, the Tax Cuts and Jobs Act (TCJA), and more. 

Warning

 If you choose to work with a financial advisor, do your research to make sure they understand taxes.

The Bottom Line

Benjamin Franklin wasn’t wrong when he said, “Nothing is certain except death and taxes.”

While we can’t predict the circumstances of our passing, we can bring predictability to our taxes. With organization, preparation, and a team of financial professionals you trust, your tax bill can be minimized, and your tax prep stress can quickly become a thing of the past.