Investopedia

Fact checked by Vikki Velasquez
Reviewed by Katie Miller

Corporate business travel involves the movement of individuals representing their organizations for work-related reasons. Whether it’s attending client meetings, industry conferences, or sealing business deals, this practice covers a range of activities essential for professional growth.

In the interconnected global business environment, where face-to-face connections matter, corporate business travel plays a central role in sustaining and expanding enterprises across borders. Businesses face challenges in optimizing this crucial element of their operations. Strategic considerations must be taken into account to use this element of business to its greatest potential.

Key Takeaways

• Corporate business travel can unlock new opportunities for business growth, offering the possibility of reaching new markets, connecting with a wider pool of prospects, or developing brand presence and reputation.
• Traveling for business has many benefits for individuals as well, providing them the chance to meet fellow employees, grow their careers by participating in different opportunities, and network within the industry, not to mention experience new destinations.
• Business traveler safety and security are top priorities during corporate travel.
• To ensure that travel goes smoothly and stays within budget, companies should implement corporate travel policies and best practices for employees traveling on behalf of the company.

Importance of Corporate Business Travel

There are many business-related reasons to travel. It can encourage team building, promote learning, offer different perspectives, provide connection to a wider network, open up new markets, and drive sales. And whether or not the trip is for a specific purpose (such as a conference or a retreat), the benefits for employees and companies alike can extend beyond the stated intent of the trip, building confidence, cultural competency, relationships, and company reputation.

Many employees consider the opportunity to travel for work a desirable job perk, as it can offer the chance to venture somewhere that they may not ordinarily go, or to have a trip paid for by their company. And although expenses are associated with travel from a corporate perspective, they may be well worth the return on investment in terms of potential leads or sales—plus, many travel expenses are tax deductible.

Types of Corporate Business Travel

Corporate travel can take many forms, including the chance for employees and executives to attend events, such as meetings, conferences, industry networking sessions, and fairs. Or a trip may take advantage of educational opportunities such as training sessions, seminars, and workshops. Retreats and guided trips can make for valuable team-building time in new contexts that unlock different perspectives and strengthen working relationships.

Businesses may send their employees to a different location to network, sell, teach, learn from, or generally connect with external contacts or internal employees in regional offices, or to act on behalf of the company in some way.

Additionally, from a client perspective, business travel may occur as a form of due diligence, ensuring that your vendors or suppliers are legitimate, legal, and compliant organizations—for example, traveling for regular audits to confirm that what you think is happening at your supplier organizations is actually happening.

Creating a Corporate Travel Policy

From a company perspective, travel can be a challenge to administer and manage. Costs can easily balloon out of control; travel logistics can be time-intensive to arrange; employees traveling on behalf of the company must be granted a great deal of trust; and like any form of travel, business travel can open up risks to safety, security, and health.

No matter the size of the business or the frequency or complexity of travel, a corporate travel policy can be a helpful tool for any company to set expectations for its employees, communicate guidelines and processes, keep expenses within budget, and streamline booking and logistics.

In creating a corporate travel policy, companies might consider the following for both domestic and international travel, as applicable:

• Purpose(s) of travel
• Which employees are eligible to travel
• Booking and expense approval processes
• Risks and liabilities of travel and how to manage them
• Expectations for employee behavior, including acceptable and secure uses of technology, personal vs. leisure time, communication, and entertainment while traveling
• Eligible expenses for employees while traveling, including per diem rates if applicable
• Determine if employees will be reimbursed for their expenses or given a corporate credit card to use
• Financial tracking, recordkeeping, and reimbursement processes
• Acceptable booking practices and costs, including preferred agents or vendors
• Travel insurance

Of course, policies must also be communicated and enforced to ensure compliance and fairness. Including a travel policy as part of a corporate handbook or reviewing it in an onboarding or training module can be a good way to ensure that all employees receive and understand the information. Making it easily accessible for future reference on a shared drive or company portal will encourage employees to refer to it often.

Note

Business travel managers estimate, on average, that spending on domestic and international corporate travel is at 77% and 74%, respectively, of where it was before the COVID-19 pandemic. And two-thirds (67%) of business travel professionals are optimistic or very optimistic about the industry outlook for 2025.

Corporate Business Travel Best Practices

There are many best practices that both employees and companies can keep in mind around corporate business travel to ensure that it is a successful experience. These encompass everything from administration and financing to employee behavior and well-being.

Booking Corporate Travel

Booking travel can be labor-intensive and time-consuming. To improve the booking process, save on costs, and streamline expense reporting, it can be helpful to designate preferred travel agencies, online platforms, vendors, and lodgings for employees and executives to book with. If the size of the company allows, it can also be helpful to hire an employee or team specifically to oversee and administer corporate travel, or designate this duty as part of an employee’s broader job description.

Managing Travel Expenses and Budgeting

There are many financial considerations when it comes to corporate business travel, and expenses and budgets must be carefully managed to keep costs under control. Many travel expenses are tax deductible and can be written off, representing potentially significant savings for a company. Setting a budget and clear guidelines for employees about what can be an expense and what cannot is a must, as is creating and enforcing policies and procedures around tracking and reporting expenses.

Many corporate credit cards offer travel rewards and cost-saving opportunities for business travel, as do many other vendors and suppliers in the corporate travel industry. Businesses can take advantage of these to reduce inefficiencies and save on costs.

Ensuring Traveler Safety and Security

As with any trip, business trips are not without safety and security risks, including the potential for political or civil unrest, crime, illness, injury, accidents, emergencies, natural disasters, cybersecurity breaches, or theft.

To protect their employees against unexpected and undesirable circumstances, at a minimum, businesses will want to have a travel insurance plan in place. It’s also helpful for businesses and employees to undertake some form of travel risk assessment to aid them in navigating potential risks, and outline safety and emergency preparedness guidelines within a corporate travel policy.

Employees should also know how to call if something goes sideways, such as hotel booking issues. A travel agent? A supervisor? If there’s a hurricane, you don’t have a car, and your flight is canceled, can you book another last-minute flight to get around the weather to get home? These details should be planned ahead for.

Maximizing Productivity During Business Trips

The overlap of business and leisure, sometimes referred to as “bleisure,” is one of the main draws of corporate business travel. However, there can also be pitfalls associated with this gray area. It can be difficult to stay productive while working remotely, whether due to the many distractions of a new environment (positive and negative), or because the trip entails an increased workload or time spent away from day-to-day job duties.

Employees looking to manage their time efficiently while away should get clarity on the intended purpose and expected outcome of their trip, and their employer’s and teammates’ expectations for their workload and communication frequency. They can also plan ahead to make the most of their travel time and downtime, and anticipate time zone differences to ensure smooth communication and adjustment to jet lag.

It’s important for employees to maintain work-life balance while traveling on behalf of work. Researching food, entertainment, and fitness options and preparing accordingly can pay off in terms of mental and physical wellness, especially for frequent travelers.

Tips for Business Travel Etiquette

Traveling anywhere, whether domestically or internationally, comes with responsibilities and expectations regarding employee behavior. Perception is one of the most important factors to remember when traveling as a representative of your company. You represent your company out in the public, so you need to ensure you’re displaying any key values that your company represents when interacting with vendors, clients, and peers.

This applies to cultural sensitivity as well. Travelers should do research in advance of their trip to ensure that they can be mindful of local customs and professional etiquette and behave with awareness and respect. Even the basics, such as learning appropriate forms of greeting or how to handle money and payment, and committing a few common words or phrases to memory can go a long way toward demonstrating good intentions and building a new relationship across cultures.

Sustainable and Responsible Business Travel

Recognizing that corporate travel can have a negative impact on the environment, many businesses and individuals are reexamining their travel practices and policies to see where they can make improvements. One example is reducing emissions by booking different means of transportation when possible. In general, seeking out vendors or companies that promote sustainable travel practices and responsible tourism, and that support local communities and ecosystems, can be a good first step to reduce environmental impact.

Technology and Tools for Corporate Business Travel

Software and technology tools can be immensely useful across all aspects of corporate business travel. Travel management and booking platforms; apps for tracking expenses, navigation, or converting currency; and translation and communication tools are all things that employees and businesses alike can take advantage of before, during, and after traveling.

When it comes to technology, it’s important to account for cybersecurity risks and only bring what is necessary to reduce the potential impact of damage, loss, or theft.

What Is an Example of Corporate Business Travel?

There are many work-related reasons to travel, but many businesses will have their employees travel for conferences, events, sales and networking, seminars, meetings, team building, retreats, and to open up new business growth potential.

How Does Corporate Business Travel Work?

Corporate travel is simply travel for business-related purposes, so the nature of the trip will depend on its length and purpose. Companies whose employees travel frequently on behalf of the business should consider creating a corporate travel policy with information and guidelines for their employees.

Who Handles Corporate Business Travel?

Some businesses employ internal teams or individuals to manage corporate travel and business trips. At other times, employees are responsible for making their own arrangements within guidelines laid out by the company. There are also corporate travel agencies that businesses can leverage to streamline and optimize their bookings and costs.

What’s New About Corporate Business Travel in 2025?

Corporate business travel trends for 2025 include travel planning assisted by artificial intelligence (AI), continuing growth in sustainable and responsible travel, inclusive travel policies, virtual tours of hotels and meeting spaces before booking, the New Distribution Capability (NDC) data interface, travel safety apps, continuing growth of in-person events, personalized travel experiences, and continuing use of travel apps and platforms.

The Bottom Line

Corporate business travel can be an invaluable path to both business growth and individual career development, building strong relationships and teams. No matter what form it takes, it’s prudent for companies to collect, implement, and communicate best practices for business travel to their employees in a company handbook or corporate travel policy. This should incorporate areas such as expense and booking management, safety and security, productivity, sustainability, technology, and employee behavior and etiquette.

Reviewed by Lea D. Uradu

Home Equity Loan vs. Personal Loan: An Overview

A home equity loan and a personal loan both offer one-time, lump-sum payments that are required to be paid back in installments over an agreed-upon period of time. However, the main difference is that home equity loans are a specific form of secured loan in which the borrower’s home is used as collateral. Personal loans, on the other hand, can be secured or unsecured by collateral and are a much broader and varied category.

As personal loans tend to have a less intensive approval process than that of a home equity loan, they can generally be quicker and more straightforward to obtain. While home equity loans usually will take longer to be approved, they tend to offer a lower interest rate than a personal loan and potentially a higher loan amount as well. Before pursuing either option, however, it’s important to consider the amount you need and the intended purpose of your loan. 

Key Takeaways

• Home equity loans and personal loans both offer lump-sum payments to be paid back in installments over a specified time period.
• A home equity loan is a type of secured loan in which the borrower’s home is used as collateral, whereas personal loans can be secured or unsecured by collateral.
• Personal loans tend to be quicker and more straightforward to approve, while home equity loans require a property appraisal and a lengthier application and approval process.
• Home equity loans usually offer a lower interest rate than personal loans, but both usually offer lower interest rates than credit cards. 
• Both loan types can be used for a variety of purposes, though home equity loans can offer larger amounts, depending on the borrower’s home equity.

Loan Structure and Purpose

In a home equity loan, money is borrowed using the value of your home (more specifically, your home equity) as collateral. The Federal Trade Commission (FTC) defines home equity as “the difference between what you owe on your mortgage and how much money you could get for your home if you sold it.” This is why a home equity loan is sometimes referred to as a second mortgage.

Many personal loans are unsecured, but secured personal loans, which can be backed by collateral like a certificate of deposit (CD), stocks, a vehicle, or savings, are also available.

Personal loans can be used for a variety of purposes, including consolidating credit card debt, paying off higher-interest debt, paying for large expenses (such as a major home appliance or a vacation), or even establishing or improving your credit score. 

Home equity loans also can be used for a range of purposes, such as debt consolidation, large one-time expenses, or educational or medical expenses. Keep in mind that a home equity loan is a lump-sum payment, so a home equity line of credit (HELOC) may be a better fit for situations (such as a lengthy home renovation project or starting a business venture) where a large amount of ongoing funding is required or money will be needed continually over a period of time. 

In considering which loan to access for financing in the specific case of home renovations or improvements, a home equity loan may be a better option than a personal loan. This is because in most cases, the interest paid on personal loans is not tax deductible; however, home equity interest payments are—on the condition that the home equity loan is used to “buy, build or substantially improve the taxpayer’s home that secures the loan.”

Loan Application and Approval

Personal Loan Application and Approval

When applying for a personal loan, the following usually will be taken into consideration by the lender:

• Your credit score and credit report
• Your income and employment status 
• Any debt you may have (specifically, your debt-to-income (DTI) ratio)
• The interest rate permitted by the applicable state law 
• Collateral (if applying for a secured loan)

The loan amount and the length of the repayment term are also important factors that will determine the loan’s interest rate.

Keep in mind that personal loans may also include fees such as:

• Origination fee
• Fees for processing documents and paperwork
• Credit insurance (optional)
• Disability insurance (optional)
• Non-filing insurance (for secured loans)
• Late penalty fees

Home Equity Loan Application and Approval

When you apply for a home equity loan, a lender will calculate your loan-to-value (LTV) ratio or combined loan-to-value (CLTV) ratio to consider how much money they will allow you to borrow. This calculation essentially answers this question: If the house is sold, would it cover the amount owed by your original mortgage and this additional loan, and by how much? It is also a large factor in determining the interest rate of your loan. Usually, the lower your LTV, the lower your interest rate. 

To determine the value of your home, there is usually an appraisal process similar to that of getting a conventional mortgage. This can entail various fees and closing costs. Your income and credit history also will be taken into consideration. The maximum amount that you can borrow is usually equal to around 80% of your home equity. Keep in mind that lenders may have a minimum amount that they will lend in this type of loan agreement.

Interest Rates and Payment Terms

The interest rate on a personal loan can be fixed or variable, and it can be lower than that of a credit card but usually higher than that of a home equity loan (especially in the case of unsecured personal loans). In general, evaluate a personal loan interest rate by comparing it to the national average: If it’s lower, that’s a good sign. Personal loan terms can range in length—it’s advisable to choose the shortest loan term for which you can afford monthly payments.

Home equity loan interest rates are usually fixed, and they tend to be lower than both personal loans and credit cards because the home is used as collateral. However, the risk here is that if the loan is not paid off, the lender can repossess and sell the home to cover the remaining debt. It also means that if the value of your home decreases, you may end up underwater—the amount that you owe may exceed the value of the home.

Other Considerations 

When considering any loan, it’s important to shop around and compare the terms and deals offered by different banks, credit unions, and financial companies. Under the Truth in Lending Act (TILA), lenders are required to disclose the following information before borrowers sign any loan agreement so that they can understand and compare different offers:

• The full amount you are borrowing 
• Repayment amounts and their due dates
• How much it costs to borrow the money (referred to as the finance charge and includes interest and any fees applicable to the loan)
• The annual percentage rate (APR) 
• Any penalties that may apply for late payments
• The consequence(s) of not paying back the loan and actions that the lender may take
• Any penalties that may apply for paying the loan back early

Try using a loan calculator to get an idea of how much you’ll end up paying. 

How Do People Use Personal Loans?

Investopedia commissioned a national survey of 962 U.S. adults between Aug. 14, 2023, and Sept. 15, 2023, who had taken out a personal loan to learn how they used their loan proceeds and how they might use future personal loans. Debt consolidation was the most common reason people borrowed money, followed by home improvement and other large expenditures.

What Is the Difference Between a Personal Loan and a Home Equity Loan?

The biggest difference between a personal loan and a home equity loan is the structure. A home equity loan is a specific type of secured loan that uses the borrower’s house as collateral. While both offer lump-sum payments, the amounts for each can vary, and the approval process is different (usually significantly shorter in the case of personal loans).

What Is the Downside of a Home Equity Loan?

Perhaps the biggest downside of a home equity loan is that your house is used as collateral. If you default on the loan, then your lender may be able to seize your home.

Does a Personal Loan Have Lower Interest Rates Than a Credit Card?

Personal loans can have lower interest rates than a credit card, but not necessarily. It will depend largely on the length and type of the loan (e.g., secured vs. unsecured) as well as the borrower’s credit history. 

The Bottom Line

In considering whether to pursue a personal loan vs. a home equity loan, it’s important to determine whether either option is best for your financial situation (or whether another type of credit, such as a line of credit or a refinancing option, might be more suitable). Use a loan calculator to get an idea of how much you will potentially be spending. Considering the purpose of the loan and the amount that you’ll need, shop around for the best options among various lenders, and ensure that you understand the entire agreement and any associated fees before signing anything.

Reviewed by Eric Estevez

Nike, Inc. (NKE) is a leading textile, apparel, footwear, and accessories company with a market capitalization of $107.4 billion as of March 2025.

Phil Knight, Chairman Emeritus, started the company by selling shoes from his car. Nike began as Blue Ribbon Sports in 1964 and was incorporated as Nike in 1971. It launched its initial public offering (IPO) in 1980. Nike operates in North America, Western Europe, Central and Eastern Europe, Japan, and China.

Key Takeaways

• Nike is a global brand that makes sneakers and athletic wear for sports professionals and retail consumers.
• Nike has steadily increased its annual dividend since its founding.
• Nike’s first quarterly dividend payout was $0.05.

Dividend Policy

Nike, Inc.’s annual dividend was $1.60 as of Mar. 13, 2025 with a yield of 2.17%. The average dividend yield of the consumer goods sector is 2.22%.

Nike has paid quarterly dividends ranging from $0.5 to $0.88 per share, adjusting for its stock splits. Nike’s dividend initially increased by an average of 15.8% annually. Two of Nike’s competitors include Under Armour and Adidas. UA does not pay shareholder dividends. Adidas’ annual dividend was $0.239 on Mar. 13, 2025 with a yield of 0.2%.

Note

In 2024, analysts projected Nike is poised to become an S&P 500 dividend aristocrat. A dividend aristocrat must have increased its dividend for 25 consecutive years and be included in the S&P 500 Index.

Earnings Trends

For quarterly and annual reports, Nike includes operating segments for the NIKE and Jordan Brands in North America, Europe, Middle East/Africa, Greater China, and Asia Pacific/Latin America. Converse is also a reportable operating segment and reports for the design, marketing, licensing, and selling of casual sneakers, apparel, and accessories.

For fiscal year (FY) 2024, annual revenues increased 1% to $51.4 billion from $51.2 billion in FY 2023. Footwear represented 68% of yearly revenue. The North America segment accounted for 43% of revenue.

Dividend Ratios

In FY 2024, Nike returned $6.4 billion to shareholders through share repurchases and dividends. The company reported an annual EPS of $3.73, a 15.48% increase from 2023. In the most recent data, Nike’s dividend payout ratio was 40.64% in 2023. The dividend payout ratio indicates the portion of EPS paid to investors in cash dividends.

Nike’s Future Outlook

Earnings results for the quarter ended February 2025 are expected to show a year-over-year decline in earnings based on lower revenues. Nike lowered revenue expectations for 2025 but continues to focus on innovation and franchises. In 2024, Nike introduced the AlphyFly 3 to basketball and the Sabrina 1, a shoe that works across genders. 

Risks in 2025 include a volatile global economy, including sustained high inflation and interest rates. Fluctuations in the markets and exchange rates for foreign currencies impact global markets. Nike depends on the availability and acceptable pricing for commodities and raw materials such as cotton or petroleum derivatives.

How Often Does Nike Pay Shareholder Dividends?

The company pays a quarterly dividend to shareholders in or around January 5, April 5, July 5, and October 5.

Has Nike Ever Had a Stock Split?

Nike has offered a 2 for 1 stock split to investors seven times from 1983 to 2015.

Who Is the CEO of Nike?

As of 2025, Elliott Hill is the President and CEO of Nike, Inc.

The Bottom Line

Nike, Inc. is considered a dividend leader and projected to be a “dividend aristocrat,” S&P stocks that have consistently increased shareholder payouts. Nike returned $6.4 billion to shareholders through share repurchases and dividends in FY 2024.

You could be saving too much if you do these things

Reviewed by Ebony Howard
Fact checked by Vikki Velasquez

Saving for retirement takes time and a lot of discipline. You also need to make sure that you’re setting aside enough money to maintain your lifestyle and do some of the things you couldn’t do during your working years. Failing to tailor your savings plan and overestimating how much you’ll need can be just as bad as not saving at all. That’s why you need to strike the right balance between saving so you’re not putting away too much.

Key Takeaways

• It’s possible to save too much for retirement if you rely on general assumptions to calculate how much you’ll need.
• Don’t overestimate your retirement income replacement rate or how much you will spend on housing.
• To save the right amount, figure out your timeline, don’t use the standard replacement rate, research living and medical expenses, and tally your expected retirement income.

Not Personalizing Retirement Planning

One big reason you may be saving too much is that retirement planning is too generalized. With the rise of online calculators and personal finance software, tech providers have built too many general assumptions into their technology.

But, not all assumptions work for all people. Everyone’s situation is different, so it cannot be easily packaged into a smartphone app or represented by a few numbers entered into an online calculator.

For example, it’s unlikely that any automated program will accurately predict how much of your pre-retirement income you will need and what the return rates, inflation, and spending will be throughout your retirement years.

Overestimating Your Replacement Rate

The replacement rate is the percentage of the pre-retirement income you need to maintain your standard of living in retirement. Overestimating your rate can cause you to save much more than you need for retirement.

A general rule often cited by researchers is to estimate that you will need 80% of your current income to maintain a comfortable lifestyle in retirement. But David Blanchett, head of retirement research at Morningstar, found that replacement rates vary when other factors are also considered, including different income levels and life expectancy.

His research concluded that the range of replacement rates is between 54% and 87%. If you plan for 80% and only need 55%, you’ll likely end up saving a sizable amount of money that you probably won’t need.

Important

The perils of saving too much for retirement include causing unnecessary financial stress, such as struggling to pay your mortgage or for one of life’s unexpected and costly emergencies.

Incorrect Housing Cost Forecasts

Where you live during retirement is one of the biggest costs you will face. How you plan for and manage this aspect of your life will have a big impact on how much you need to save for retirement.

“Spending on housing in retirement is extremely difficult to estimate,” says Mark Hebner, founder and president of Index Fund Advisors. “Most retirees will spend most of their retirement in their own home.”

If you plan to stay in your home as long as possible, your costs will be lower than if you move to an assisted living or continuing care facility. This is especially true if your mortgage is paid off.

The cost of housing was 32.9% of annual income, according to the Bureau of Labor Statistics. Assuming your household earns $50,000 a year and spends 30% of that annually on housing, you would reduce your costs by about $15,000 in retirement if your mortgage is paid off. If you factor that in over 30 years in retirement, you’ll need to save a lot less money than you had planned.

Note

As many as one in five Americans over 50 may not be saving enough money for retirement, while 61% of people say they may not have enough money to support themselves after they leave the workforce, according to a survey from AARP.

How to Save the Right Amount

So how do you know if you are saving too much or not enough? Taking these steps will help you save the right amount.

Figure Out Your Retirement Timeline

The first step is to determine how far from retirement you are. If you are more than 10 years out, it’s likely best to save a generic percentage. That’s because the further away from retirement you are, the harder it is to get the numbers exactly right. Experts often recommend between 10% to 15%.

If you are within 10 years of quitting work for good, you can do some more detailed planning that will shape how much you need to save in the years just before you retire.

“The easiest starting point is to assume the same standard of living in retirement as in one’s working years,” says Hebner. “Chances are, most will not spend that much money since they will no longer have to save for retirement, probably pay less in taxes, and also have certain costs like transportation go down significantly.”

Don’t Use the Standard Replacement Rate

Don’t just use the 80% of income as a replacement rate. Calculate how much you spend now, subtract expenses you will no longer have, and add in new expenses that will occur in retirement.

For example, you may relocate or, in the early years, travel more than you currently do. You may still have children in college or the early stages of their careers when you’re ready to retire. Or you may have grandchildren or other relatives you’re helping to support.

Once you have a realistic estimate of expenses, you can use that to figure out how much you need to save to be able to pay for them.

Research and Plan for Healthcare Expenses

Research and create plans for healthcare expenses. Since this is the biggest unknown in your budget, understanding your options will help you estimate the right amount to save. Research Medicare, long-term care insurance, assisted living costs, and in-home care costs. 

Tally Expected Retirement Income

Finally, tally up what you expect to receive from pensions if you have one, and Social Security. The more you have from these resources, the less you will need to save in retirement accounts.

What Is the Average Retirement Age in the U.S.?

The average retirement age in the United States is 64, according to Madison Trust Company. But, the age varies by state, ranging from 61 to 67. The normal retirement age, calculated by the Social Security Administration (SSA) is 67 for people born in or after 1960.

What Factors Should I Consider as I Save for Retirement?

There are some important factors you must consider when you save for retirement. They are:

• The age at which you plan to retire
• Your desired lifestyle
• Where you intend to live
• Your health

Understanding these points can help you determine how much you’ll need to set aside for your retirement. You may want to speak to a financial professional to help you plan.

Is It too Late to Save for Retirement in Your 40s?

No. Although you have less time to grow your nest egg and may have to save more than you would have if you started in your 20s, it’s never too late to start saving for retirement. Keep in mind that you may not be able to tolerate risky investments because you don’t have time to recover if market volatility eats away at your returns.

The Bottom Line

Planning how much you need for retirement is not an easy task. There are many variables to consider. With a little extra time and effort, you can figure out the amount to save that’s right for you. And remember: If it turns out that you’re saving too much, you could consider retiring sooner or using some of that money now instead. Make sure you’re also saving enough for emergencies.

Reviewed by Somer Anderson
Fact checked by Suzanne Kvilhaug

Recessions are difficult times for most individuals and businesses. Some people suffer financially, and even more worry that they might become subject to the negative aspects of an economic slowdown.

But for a select group of professionals and businesses, a recession may actually be an opportunity to thrive and grow. Here are nine examples.

Key Takeaways

• Not all businesses and industries feel the same pain during economic downturns.
• Some businesses benefit as consumers cut back on various products and services. These companies may offer cheaper alternatives to luxuries or discretionary purchases.
• Other businesses that do well during recessions provide the consumer staples that are needed by most people and which they must continue to buy.
• There are also fundamental services that consumers can’t do without, even in hard times.

1. Accountants

No matter what the economy is like, individuals and businesses have to pay taxes and keep their finances in order. In fact, these responsibilities can be even more important in tougher economic times.

Accountants are likely to experience an increase in business during a recession. That’s because many people and small businesses may require the help of a professional to ensure that they’re making use of all of the tax benefits that are available to them. They may need professional guidance that ensures that they have a clear understanding of their income and expenditures as cash flow tightens.

Also, it has become common for new government benefit programs, loan guarantees, and financial regulations to be rolled out, updated, or expanded during recessions and other economic crises. Accountants can help people understand and navigate the new requirements and benefits of these changes for their businesses and personal finances.

At the very worst, some people may require the services of an accountant if they’re forced to file for bankruptcy.

2. Healthcare Providers

If any industry can be said to be recession-proof, it’s healthcare. People get sick in good times and bad, so the healthcare sector isn’t likely to have the same level of cutbacks or job losses that other sectors may experience.

3. Financial Advisors

People who have substantial assets or assets that are crucial to their well-being want to ensure that their money and property are well taken care of, especially during a recession.

Financial advisors often see an increase in demand for their work as people become concerned about the stability of their investments and seek guidance on how to protect their assets.

Beyond matters of personal finance, businesses also seek advice and insight regarding current and future economic trends or paths to recovery.

Economic Uncertainty

When the future of the economy is in doubt, demand for financial and economic advice from a range of professionals goes up.

4. Auto Repair and Maintenance Technicians

In tough economic times, people are less likely to purchase a new car. Instead, they’ll repair their current car. Auto repair and maintenance shops can do quite well during a recession.

One counterexample, however, is the Cash for Clunkers program that was instituted during the Great Recession, which spurred a modest spike in new car sales.

5. Home Maintenance Stores

Many people will choose a do-it-yourself (DIY) home renovation or upgrade rather than consider selling and moving during a recession. Depending on credit conditions, borrowing to buy a new home is usually not an option for most people during a recession.

Companies in the business of providing tools and materials for home improvement, maintenance, and repair projects are likely to see stable or even increasing demand during a recession. So do many appliance repair service people.

New home builders, though, do not get in on the action. They are among the worst hit as bank lending gets tighter, demand for new homes dries up, and home sales slump.

6. Home Staging Experts

It can be difficult to sell a home during a recession, but some people have to do it. People who specialize in home staging thrive as the housing market becomes increasingly competitive.

Home staging specialists might be real estate agents or interior design professionals, or both. A staging expert increases the appeal of a home—and the likelihood of a sale—by furnishing and decorating it to look its best to potential buyers.

7. Rental Agents and Property Management Companies

People who may not be able to afford to buy a home during a recession, and people who were forced to sell for financial reasons, still need a place to live. The answer for many, at least in the short term, is a rental.

Rental agents, landlords, and property management companies can thrive during a recession, when renting is likely to become a more appealing housing option.

Roommates

Recessions often lead to an increase in shared living arrangements. Many people move in with parents or extended family members.

8. Grocery Stores

For many, dining out during a recession becomes a financial extravagance at a time when money may be short. Supermarkets often see an increase in sales as people choose to cook more meals at home and entertain their friends at home more often. 

9. Bargain and Discount Stores

People cut back on luxuries during a recession, but that doesn’t mean they avoid spending on items that aren’t strictly necessary. There’s even a tongue-in-cheek economic theory called the Lipstick Index, which argues that sales of cosmetics will always rise during bad times because they’re a relatively affordable luxury.

When a recession reduces sources of income or threatens livelihoods, people look for less expensive products, whether they are discretionary or not. Importantly, for products considered staples—those items needed every day by individuals—bargain and discount stores offer solutions.

Bargain and discount stores see a great deal of traffic in a tough economy. People from all economic classes, including those who otherwise would never step into a dollar store, rethink their shopping habits when a recession hits.

How Can I Invest in Rental Properties as a Recession Opportunity?

You can start by investigating real estate investment trusts (REITs). REITs invest in multiple structures and holdings that may perform better in tough times. In particular, you may want to focus on rental real estate, where rental income is stable and perhaps high, given the need for people to have a roof over their head after they’ve sold their previous dwelling.

How Can I Invest in the Healthcare Sector?

Consider exchange-traded funds (ETFs) that contain a variety of healthcare holdings, from hospital companies to medical supply companies. Diversity is key, as some sectors—for example, elective surgeries—will likely underperform due to recessionary conditions.

How Can I Take Advantage of the Turn to Do-It-Yourself (DIY) Products and Retailers?

Look into an ETF that covers the home improvement sector, with investments in companies such as The Home Depot, Inc. (HD) or Lowe’s Companies, Inc. (LOW). Beware of any home building companies, such as Lennar Corporation (LEN) or Hovnanian Enterprises, Inc. (HOV), which are likely to bear the brunt of any downturn as new home sales slump during a recession.

The Bottom Line

Not every company is affected to the same degree by an economic downturn. On the one hand, some companies and sectors that are reliant on household disposable income may suffer during a recession as households tighten their belts and reduce discretionary purchases. But on the other hand, some businesses will thrive, or at least not suffer as much as the rest of the market.

Among the latter group are companies that provide basic necessities and can be seen as recession-proof compared to the rest of the market. Companies that cater to low-cost spending, such as dollar stores or DIY home improvement stores, can actually retain a positive outlook.

For investors, ETFs that cover recession-proof sectors may offer attractive returns and diversify holdings at the same time.

You can save on interest—but you’ll also put your home at risk

Reviewed by Ebony Howard

If you have large outstanding balances on your credit cards and struggle to pay them off, a home equity loan can help consolidate your debt at a much lower interest rate and lower your monthly payment. If you can only afford to make the minimum monthly payments on your credit cards, the high interest rates can compound the interest charged to you, increasing your debt over time.

If you have sufficient equity in your home or own your home outright, a home equity loan can help save you money in the long term. However, you’ll also want to consider the risks and some possible alternatives.

Key Takeaways

• A home equity loan can consolidate high-interest credit card debt, saving money and potentially lowering your monthly payment.
• Home equity loans generally charge much lower interest rates than most credit cards.
• A risk associated with home equity loans is that the lender could repossess or foreclose on your home if you are unable to make the payments.

What Is a Home Equity Loan?

A home equity loan is a second mortgage. It allows you to borrow against the equity accumulated in your home over the years. It’s based on the value of the home minus your outstanding mortgage loan balance. For example, if you own a home that’s currently worth $300,000 and you owe $200,000 on your mortgage, you have $100,000 in equity.

Based on your available home equity, a bank, credit union, or other lender may approve you for a home equity loan equal to a portion of your equity. You will need to apply for a home equity loan through the lender of your choice. Loan approval will be determined by factors other than your equity, including your income and credit score.

Most lenders require borrowers to have some form of income, a credit score of 600 or higher, and equity of at least 15% to 20% of their home’s value. However, if you don’t meet these requirements, you may still qualify but might get charged a higher interest rate.

A home equity loan does not get added to your mortgage, meaning you’re taking on additional debt on top of your mortgage and will be required to make two monthly payments for both the mortgage and the home equity loan.

Important

Many people take out home equity loans to repair and renovate their homes.

Advantages and Disadvantages of Paying Off Debt With a Home Equity Loan

Advantages

Using a home equity loan to pay off multiple credit cards can help simplify your finances since you’ll make one monthly loan payment instead of several. Also, the loan payment could be lower than the total of your monthly credit card payments. As a result, you can have extra funds in your monthly budget, which will allow you to save or pay down other debts.

Another advantage of using a home equity loan to pay off credit card debt is that the loan’s interest rate will likely be much lower than the rate on your credit cards. For instance, the average interest rate on a home equity loan can range from 6.92% to 8.24% as of Dec. 31, 2024, while the average credit card in Investopedia’s database charged approximately 24%.

Warning

One former advantage of home equity loans has been suspended, at least for some time. At one time, the interest you paid on a home equity loan was tax-deductible, while credit card interest was not. As a result of the Tax Cuts and Jobs Act (TCJA) of 2017, the interest on home equity loans is deductible only if you use the loan to “buy, build, or substantially improve” the home that secures the loan. That provision is slated to remain in effect at least until 2026.

Disadvantages

The major downside to taking out a home equity loan, whether that’s to pay off debt or for any other purpose, is that you’ll be putting your home on the line. Because your home serves as collateral for the loan, just as it does for your original mortgage, the lender could seize and sell it if you are unable to pay your loan back—a process called foreclosure.

When you can’t repay credit card debt, you’ll also face serious financial consequences, of course, especially for your credit score. However, since credit card debt is not secured by your home, you’ll be at far less risk of losing it. Even if you have to declare bankruptcy because of your debts, you can often keep your principal residence.

As noted above, a home equity loan adds to your debt because it is a separate loan, meaning you must make your mortgage payment in addition to the home equity loan payment each month.

Pros

• Lower interest rate

• One bill to pay off each month

• Less in total monthly payments

Cons

• Securing your loan with your home can be risky

• May impact your credit score

• Additional payment on top of your mortgage payment

Other Ways to Pay Off Credit Card Debt

A home equity loan is not your only option when it comes to paying off credit card debt. There are a few others you might consider.

Low-Interest Credit Card

Some credit cards allow you to transfer your balances over from other cards. This can make sense if you’re able to obtain a significantly lower interest rate on the new card.

Many balance transfer credit cards also offer promotional periods of six to 18 months for which they charge 0% interest on the transferred balance. Of course, moving a balance from one card to another won’t eliminate the debt. But it can help you pay it off faster—especially if you get a really great rate.

Debt Consolidation Loan

A debt consolidation loan from a bank, credit union, or other reputable lender could provide the money you need to pay off your credit card balances. This allows you to pool together a number of different debts into one. So, if you have multiple credit cards, loans, or any other outstanding debts, you can get a larger loan to pay them off.

Debt consolidation loans tend to charge significantly lower interest rates than credit cards. And you also have the added benefit of making one monthly payment to a single creditor rather than many payments to different lenders.

Borrow From Your 401(k)

Some 401(k) plans allow you to borrow from the money you’ve accumulated in your account. If your plan comes with a loan provision, you may be able to borrow as much as $50,000. What’s more, the interest you pay on the loan goes back into your account. Loans from a 401(k) do have a few caveats.

Keep in mind that you should only use this as a last resort. For one thing, the money you’ve pooled is intended for your retirement and should be kept for that purpose. If you withdraw the money, you’ll lose out on compounding, which is when you earn interest on your interest.

Typically, you must repay a 401(k) loan within five years or sooner if you leave your job. For another, if you’re unable to repay the loan, it will be treated as a withdrawal, subjecting you to income taxes and a possible 10% penalty on the unpaid balance.

How Long Does It Take to Get a Home Equity Loan?

The process of getting a home equity loan, from application to approval, depends on a few factors. In general, it can take a few weeks to a couple of months. The process could go smoothly and quickly if you’re prepared with all the required paperwork. However, there may be certain holdups that are beyond your control, including the underwriting process, the timing of the appraisal, and the closing.

Should I Get a Home Equity Loan or Refinance?

A home equity loan differs from refinancing. A home equity loan is an additional loan for your existing mortgage, meaning you’ll make two monthly payments. A home equity loan can provide additional cash for whatever you wish, such as a renovation or paying off other debts. A refinancing, on the other hand, pays off your existing mortgage with a new mortgage with different terms, such as a lower interest rate. In some cases, you can refinance and add the value of additional equity into your new loan.

How Can You Use a Home Equity Loan?

Home equity loans can be used for any purpose. If you meet your lender’s requirements and are approved, you can use the money to make improvements or repairs to your home, pay off other debt, or pay for other expenses. Keep in mind that you must make your monthly mortgage payment in addition to the one for your loan.

The Bottom Line

A home equity loan can be a good way to pay off high-interest credit card debt as long as everything goes according to plan. In deciding whether it’s a viable option, consider the strength of your financial situation. If you have a secure job (and/or a spouse with one) and are confident that you’ll have no trouble keeping up with the payments, it could make sense. However, a home equity loan could be risky if your job is on shaky ground and you have no emergency fund to fall back on. Remember, it can cost you your home in the worst-case scenario.

Tips from a financial advisor

Estate planning used to mean drawing up a will, designating beneficiaries, and making sure enough life insurance was in place. However, that is only half the battle in today’s digitally driven world. Clients now own online bank accounts, digital wallets, music and media subscriptions, and social media profiles that carry both financial and sentimental value. 

Ignoring these digital assets can lead to headaches, lost resources, and even legal complications for their families when their loved ones pass away. That’s why I’m advising all my clients—regardless of age or wealth—to make digital estate planning an essential part of their overall strategy.

Key Takeaways

• Digital estate planning is now a must-have, not an afterthought.
• Preparing a full inventory of online accounts (usernames, passwords, and access keys) is critical for a seamless transition.
• Naming a digital executor ensures someone can legally and efficiently manage and distribute digital assets.
• Clear directives on what should happen to social profiles, cryptocurrency holdings, and online subscriptions reduce confusion and stress.
• Collaborating with an estate attorney can help integrate digital provisions into existing wills and trusts.

So much of life has moved online. It’s no longer just tech-savvy millennials who must worry about digital estate planning. I’ve worked with retirees with investment accounts they manage on digital trading apps, families collecting royalties through online publishing platforms, and individuals storing significant holdings in cryptocurrency. If something were to happen to them and no one had the necessary login credentials or legal authority, these assets may become inaccessible—or worse, lost entirely.

Furthermore, digital platforms each have their own policies. Facebook, for instance, allows someone to memorialize or remove an account. Google has an Inactive Account Manager feature, and many cryptocurrency wallets have unique recovery processes. Clients incorrectly assume that their loved ones can “figure it out” when the time comes. However, accessing online assets can be incredibly time-consuming and even impossible without prior planning.

What I’m Telling My Clients

1. Create a Comprehensive Digital Inventory

I encourage clients to build a secure, detailed list of all their digital assets, including the platform name, web address, usernames, passwords, and any two-factor authentication methods for accessing accounts. This inventory should also outline how they want each asset handled—whether it’s deactivating a social account, transferring cryptocurrency to an heir, or continuing a subscription for ongoing services.

Warning

According to a survey from Bryn Mawr Trust, 76% of respondents reported having little or no knowledge of digital estate planning.

2. Designate a Digital Executor

While the executor of a will might oversee financial matters broadly, I recommend naming a tech-savvy individual who understands how to navigate platforms and carry out the client’s wishes. This “digital executor” may need the authority to close accounts, transfer funds, or communicate with tech companies.

3. Include Digital Clauses in Legal Documents

Working closely with estate attorneys, I ensure that digital assets and directives are explicitly mentioned in the will or trust. This can speed up the process and prevent disputes or legal snags down the road. 

Important

Additionally, many states now have legislation governing digital assets, so aligning with local laws helps protect the client’s interests.

The Bottom Line

Digital estate planning is no longer optional; it’s a core component of safeguarding a modern legacy. By setting up a secure plan for their online accounts and appointing someone to handle those assets, clients can protect not only their monetary wealth but also their memories and personal content.

From social media to online investments, being prepared ensures loved ones won’t have to scramble for access or lose valuable assets. In my practice, I’ve found that integrating digital estate provisions into a broader financial plan offers both my clients and their families greater peace of mind.

Reviewed by Somer Anderson
Fact checked by Suzanne Kvilhaug

A monopoly and a monopsony signify conditions of imperfect competition, where a single entity influences a free market that should operate under the laws of supply and demand. An individual seller controls a market monopoly, while a single buyer dominates a market monopsony.

Key Takeaways

• A monopoly or a monopsony can influence and distort a free market.
• In a monopoly, a single seller controls or dominates the supply of goods and services.
• In a monopsony, a single buyer controls or dominates the demand for goods and services.
• Both a monopoly and monopsony are considered illegal because they inhibit competition.

Monopoly

A monopoly exists when a single entity is the sole provider of a particular asset or service. Monopolies are a form of extreme free-market capitalism in that, absent any restriction or restraints, a single individual, company, or group becomes large enough to own all or nearly all of the supply of goods, commodities, facilities, amenities, or support systems.

Monopolies effectively eliminate economic competition for a particular good, including possible substitutes. Other firms cannot enter the market. Monopolies also prevent external influences on the selling price for goods or services. In this way, they circumvent the natural economic laws of supply and demand. A monopolistic company can set prices and change them for any reason, resulting in higher profits than if it had competition.

Important

Monopolies and monopsonies are regulated through antitrust laws.

Monopsony

A monopsony controls the market through which specific goods or services are purchased. Monopsonies arise when individuals, corporate groups, or other entities position themselves as the sole purchasers for a particular good or service. A monopsonistic company uses competition among suppliers or wholesalers to its advantage, driving down the selling or asking price for the given good or service.

Monopsony is seen in labor markets when a single employer has an advantage over the workforce. When this happens, the suppliers—in this case, the potential employees—agree to a lower wage because of factors resulting from the buying company’s control. This wage control drives down the cost to the employer and increases profit margins.

Anti-Competition Examples

Walmart, known for its high-growth business model, has been called a monopsony of the discount retail market as the primary buyer for low-cost goods. Walmart’s tendency to swallow or outpace its competitors has affected the supplier markets.

The so-called “Walmart effect” may keep employee productivity high and consumer prices low, but can reduce wages and competition. Often, the arrival of a Walmart in a region drives out other retail businesses, so Walmart becomes the only employer in the town for unskilled or semi-skilled workers, which allows it to set wages and benefits.

In 2023, the Federal Trade Commission and multiple state attorneys sued Amazon.com, Inc. for monopolistic activity. The lawsuit claimed Amazon’s structure prevents rivals and sellers from lowering prices, degrades product quality, overcharges sellers, stifles innovation, and thwarts competition.

How Is Antitrust Legislation Enforced in the U.S.?

The Federal Trade Commission oversees cases of suspected monopolistic behavior. The first antitrust law, the Sherman Act, was enacted in 1890. Congress passed the Federal Trade Commission Act and the Clayton Act in 1914. These laws regulate competition and company mergers to ensure a fair marketplace.

What Is a Natural Monopoly?

The oil industry is an example of a natural monopoly because of the scarcity of its products. Standard Oil, founded by John D. Rockefeller, was considered one of the largest monopolies in U.S. history.

How Does a Monopoly Affect Product Quality?

Monopolies benefit from little or no competitive pressure. Because of this, they lack incentive to improve a product’s quality or innovate. Monopolists may produce inferior products because customers cannot find an alternative product or service.  

The Bottom Line

Monopolies and monopsonies affect the free market, supply and demand, and a consumer’s choices. The Federal Trade Commission implements regulations through antitrust legislation to discourage companies from cornering the market for products or services.

The stock market isn’t as boring and complicated as you might think

Fact checked by Suzanne Kvilhaug
Reviewed by Khadija Khartit

When the stock market comes up in conversation, it is usually accompanied by jargon. The repeated use of technical words such as margin and volume makes the stock market seem super complicated and can put people off learning about it, especially an easily bored or distracted teenager.

For the sake of their financial futures, it’s important that they don’t fall into that trap. The stock market is a great way to learn many values such as discipline and patience, and also where they might make a good return on the money invested.

And when explained in simple terms, it’s a really interesting topic. Finally, investing, not trading, might also feel like a game to teenagers while watching the stocks go up and down with the market conditions and news and anticipating certain moves, while staying invested in the long run. This keeps them engaged and interested in economic matters.

Key Takeaways

• The stock market is like an online supermarket, only you are buying stakes in companies, prices fluctuate throughout the day, and it’s possible to sell as well as buy. 
• When people talk about the stock market, they are often referring to an index: a representative portion of the marketplace for stocks.
• The stock market is made up of two main components: the primary market and the secondary market.
• You can invest in the stock market via your computer or phone with a few clicks of a button.
• Teenagers younger than 18 cannot set up their own accounts to invest in the stock market, but they can get an adult to do it on their behalf.

What Is the Stock Market?

The stock market is a place where small portions of ownership in companies, called shares, can be bought and sold. Think of it as an online supermarket, only:

• You are buying stakes in companies rather than groceries or home goods
• Prices fluctuate throughout the day
• It’s possible to sell as well as buy

This supermarket is open Monday through Friday during working hours and essentially functions as a matchmaker, pairing interested buyers with sellers and vice versa.

Indexes

At this point, you may be wondering what the media mean when they say the stock market is up or down. When people talk about the stock market in that way, they are referring to a representative portion of the marketplace for stocks, otherwise known as an index.

An index is essentially a list of stocks grouped together because they share something in common—similar to aisles in a supermarket. That could be something really specific, such as selling the same type of product, or much broader things, such as being from the same country or continent or simply being shares. 

Here is a list of some of the most well-known indexes. They are viewed as barometers of business conditions in their respective nations and, in many cases, the rest of the world.

• S&P 500: The 500 biggest companies in the U.S. stock market
• Dow Jones Industrial Average: Thirty big U.S. companies considered to be leaders in their industry
• Nikkei 225: Japan’s 225 largest listed companies
• FTSE 100: The 100 largest public companies in the United Kingdom
• Euro Stoxx 50: The 50 largest public companies in continental Europe

How Does the Stock Market Work?

The stock market is made up of two main components: the primary market and the secondary market.

Primary Market

One of the ways that companies raise money is by issuing shares. Either they put together the necessary funds within the circle of people whom they know and remain a private entity, or they reach out to the general public and ask for money in return for stakes in the business. 

The shares are first issued directly from the company as part of an initial public offering (IPO). A particular amount of shares will be made available at a specified price, and those interested will buy them, hoping that they increase in value.

Secondary Market

After the IPO, the shares that were issued are free to change hands repeatedly. This time, the company has no involvement. It’s individual investors buying and selling among themselves.

Important

Rather than buy shares directly from companies, most investors buy them secondhand from other investors.

Stock Exchanges

When companies begin selling slices of ownership to the public, they do so on a specific stock exchange. Almost all countries have at least one venue where it is possible to buy and sell company shares.

The United States has several major exchanges, including the New York Stock Exchange (NYSE), which is home to the likes of Home Depot, Visa, and Berkshire Hathaway, and the Nasdaq, which is where shares in Apple, Amazon, and Microsoft trade.

Companies generally choose which stock exchange to sell their shares on. Collectively, these various exchanges constitute the stock market.

1602

The year when the world’s first stock exchange was launched.

How to Invest in the Stock Market

It’s not possible to call up a stock exchange and buy or sell stocks directly. You need a stockbroker to transact and act as a middleman. That could be a real human being or a website.

Fortunately, the Internet has made this process really easy. Gone are the days of calling up a broker, negotiating prices, and placing orders over the phone. Now, you can simply set up an account with one of the many online brokers out there, deposit money, and then buy and sell as you please on your phone, tablet, or computer. 

Once you have cash in your account, shares in companies all around the world can be purchased with a few clicks of a button.

Important

You must be at least 18 years old to invest in the stock market. Anyone younger will need an adult to do it for them.

Fluctuating Prices

When you go to a regular shop, the price you pay on Monday is usually the same the following Friday. The stock market doesn’t work that way, though.

A value is ascribed to each share, and that value fluctuates throughout the day, with buyers and sellers haggling over prices in response to new information and general demand. Either you accept the quoted price, or you place an order to buy or sell when the shares in question reach a specified price of your choice. With the latter option, there are no guarantees that your demands will be met.

What Makes the Stock Market Move?

Individual shares jump up and down in value for a variety of reasons largely linked to investors’ expectations for future profits.

To move the whole market, an event capable of impacting the amount of money that numerous companies make needs to occur, such as new regulations, a pandemic, or surprising economic figures and the government’s reaction to them.

Of course, not all companies in the stock market are the same. For example, a pandemic like COVID-19 could benefit pharmaceutical companies and simultaneously hurt retailers and restaurants.

Likewise, some companies struggle much more during an economic downturn than others, generally because they are in the business of making or selling nonessential stuff like luxury goods.

The Economy and the Stock Market

The stock market is one of the most effective ways for companies, the backbone of the economy, to raise money.

These businesses provide the goods and services that we rely on every day and pay salaries to the majority of the population. If they were to be starved of the cash that the stock market provides, then it wouldn’t be good news for the economy.

The stock market also affects the economy in other ways. For example, many people invest their savings or retirement funds in the stock market and hope for their money to grow. If that weren’t to happen, then consumer spending would fall, governments would have to dedicate more resources to propping up the population, and everyone would suffer the consequences.

Key Terms to Teach Your Students

The stock market, much like cars and computers, has a language of its own that can be confusing to understand for an outsider. Here’s a list of some of the most common terms and what they actually mean.

• Ask price: The lowest price at which a seller will sell shares
• Bid price: The highest price a buyer will pay to buy shares
• Bearish: Expectations that prices in the stock market will fall
• Broker: A person or company that buys and sells shares on your behalf
• Bullish: Expectations that prices in the stock market will rise
• Capital gain: When you sell an investment for more than you initially paid
• Dividend: A portion of company earnings distributed to some or all of its investors
• Earnings: The money generated by a business after accounting for expenses
• Liquidity: Converting shares of a company into ready cash without affecting its market price
• Margin: Money borrowed from a broker to purchase an investment 
• Securities: Any financial asset that has value and can be traded
• Ticker symbol: A shorthand way to identify a company’s shares
• Trading volume: The number of shares transacted during a particular time period
• Volatility: When a market or stock experiences periods of unpredictable price movements
• Yield: A return measure for an investment over a set period of time

Tools for Teaching About the Stock Market

There are plenty of resources to boost knowledge and interest in the stock market. Like with any subject matter, the key is to make things as relatable as possible. An angle that might grab a teenager’s attention, other than the prospect of making money, could be discussing specific companies that match their passions.

Specific tools to help educate teenagers about the stock market include:

Online Stock Market Games

Everyone likes a game, and there are a fair few out there devoted to the stock market. They include:

• The Investopedia Stock Market Simulator
• The Stock Market Game
• HowTheMarketWorks
• Fantasy Stock Exchange
• Build Your Stax

Books

If a teenager begins to show some interest in the stock market, consider giving them a book to read on the topic. There are plenty out there that specifically address this demographic. Good examples include:

• “I’m a $hareholder Kit: The Basics About Stocks—For Kids and Teens”
• “How to Turn $100 into $1,000,000: Earn! Invest! Save!”
• “Growing Money: A Complete Investing Guide for Kids”
• “Blue Chip Kids: What Every Child (and Parent) Should Know About Money, Investing, and the Stock Market”

Investment Classes

There are also tons of investment classes, many of which are free and accessible from anywhere in the world. Examples include Investopedia’s educational content, Morningstar’s Investing Classroom, and Khan Academy’s online learning platform.

Can Teens Invest in the Stock Market?

You usually need to be at least 18 years old to participate in the stock market. However, there are some ways around that. Adults can open a custodial account with a brokerage on behalf of a child and then, in the role of custodian, invest in the stock market for them, with or without the teenager’s input.

This is just temporary. As soon as the child is old enough to no longer be considered a minor, the account and the funds in it automatically become theirs to invest as they please.

What Is the Minimum Age to Invest?

In most places, brokers won’t let anybody younger than 18 open an account that permits them to invest in the stock market. If you’re younger, you’ll have to get a parent or guardian to open an account on your behalf. As soon as you reach the required age, this account will automatically become yours.

Which Investment Is Best for a Child?

That depends on individual circumstances. Generally, to keep the child engaged, it would be smart to invest in something that interests them, such as the company behind the products they are into. Beyond that, it really depends on how much risk you are willing to take and the financial objective. If the money is needed soon, you may want to avoid investing in the stock market.

The Bottom Line

The stock market really isn’t that complicated. It’s essentially an online supermarket where you can buy or sell slices of ownership in companies throughout the day at varying prices.

Once you get past the jargon, it’s actually a very interesting topic. Most teenagers will be keen to learn how to make some extra money without breaking much sweat on how their favorite companies operate. If you can find the right hook to get them engaged, they’ll likely thank you later.

If you’re an estate planner—or need one—learn about these certifications

Reviewed by Margaret James
Fact checked by Vikki Velasquez

If you’re a finance, accounting, or legal professional and are considering a career in estate planning or want to hire an estate planner, consider some of the specific certifications associated with the role. Some of the most common include the chartered trust and estate planner (CTEP), accredited estate planner (AEP), certified trust and fiduciary advisor (CTFA), and other related designations.

Key Takeaways

• Becoming an estate planner requires financial, tax, and accounting knowledge. 
• Estate planners typically have law, accounting, or finance degrees and certifications.  
• Common certifications estate planners may hold include chartered trust and estate planner, accredited estate planner, and certified trust and fiduciary advisor.

Role of Estate Planners

Estate planners typically work with individual investors, family offices, business owners, and high-net-worth individuals (HNWIs). Their role is complex and involves many moving parts.

An estate planner works with clients to formulate and implement a tax-planning strategy to efficiently pass assets to heirs and other beneficiaries, according to the client’s wishes. Other aspects of estate planning range from bequeathing charitable contributions to choosing life insurance.

Some major estate-planning providers integrate their practice with financial advisory and wealth management services. Wealth managers, trust officers and trust administrators, investment officers, lawyers, accountants, and financial planners all could have an interest in pursuing certifications.

Important

Earning an estate planning certification typically requires training courses in ethics, financial planning, tax law, compliance, and the regulatory environment.

Chartered Trust and Estate Planner (CTEP)

The Global Academy of Finance and Management is the certifying body for the chartered trust and estate planner designation, which has an emphasis on professionals who serve HNWIs. Earning a CTEP requires at least three years of experience in estate planning or trusts.

Candidates must also have:

• A post-secondary degree (undergraduate, graduate, or doctorate) in finance, tax, accounting, financial services
• Work experience
• Five or more approved and related courses
• A certification training course
• Annual continuing education (CE) requirements, which vary

Accredited Estate Planner (AEP)

The AEP designation is awarded by the National Association of Estate Planners & Councils. Candidates must be or have the following:

• An active practice in accounting, insurance/financial planning, law, philanthropy, and trust services for at least five years
• Spending 1/3 of your time doing estate planning
• Three professional references from people who engaged you for estate planning services
• Membership in a local estate planning council
• Two graduate courses through the American College of Financial Services

Candidates should also be designated as one or more of the following::

• CAP
• Chartered financial analyst (CFA)
• Certified financial planner (CFP)
• ChFC
• Chartered life underwriter (CLU)
• Certified public accountant (CPA)
• CPWA
• CSPG
• Certified trust and fiduciary advisor (CTFA)

The association also requires candidates to have an active license to practice law, MSFS, and/or MST.

Certified Trust and Fiduciary Advisor (CTFA)

The CFTA is awarded by the American Bankers Association (ABA). The requirements include:

• A minimum of three years of experience in wealth management and completion of one approved wealth management training program
• An ethics statement
• Passing an exam

To maintain the designation, 45 credits of continuing education are required every three years.

Related Wealth Management Advisory Certifications

There are also different certifications related to estate planning that may be useful. These include the following:

• Chartered wealth manager
• Chartered asset manager
• Chartered portfolio manager
• Chartered compliance officer

Estate Planners Education and Experience

Most estate planners have law, accounting, or finance degrees and certifications—and for good reason. Estate planning is a complicated maze of federal and state laws, Internal Revenue Service (IRS) rulings, and judicial interpretations.

These affect how assets and income are treated for tax purposes based on a wide array of types of transactions, transfers, triggering events, individual profiles—age, single or married, etc.—and entities. Creating and managing these transactions requires understanding fiduciary duties and responsibilities.

Constantly changing laws, as well as shifts in the judicial and political climate, make estate planning a highly dynamic field in which advisors engineer transactions that must hold water with authorities. Certain practices and insights can have a short shelf life.

In addition to various advanced financial degrees, law degrees, and certifications—a master of business administration (MBA), MPA, JD, CPA, and CFA—the specific, complex, and constantly changing nature of the field makes special certifications helpful. Having one or more of these certifications also gives estate planners added credibility, which provides clients with an extra degree of trust and helps in growing their business.

How Much Do Estate Planners Earn?

The average salary for an estate planner in the United States was $61,134 as of March 2025, according to ZipRecruiter. Although the Bureau of Labor Statistics (BLS) doesn’t categorize estate planning separately, it does fall under the role of a personal financial advisor. This position had a median annual salary of $99,580 in 2023.

Do I Need to Have a Certain Amount of Money to Hire an Estate Planner?

No. Estate planning isn’t just for the wealthy, which means you don’t need to have a minimum net worth to use this service. Everyone should have an estate planner to plan for the future, especially if you have assets and/or dependents. If you die without having a plan, your assets may not be distributed the way you intended.

Can I Do Estate Planning Myself?

You can generally do some estate planning on your own. But because of the complexities involved and the potential for mistakes, you’d be better off hiring a professional. Consider hiring a certified estate planner, lawyer, or financial advisor to help you plan how your assets will be distributed after you die along with anything you’d like for your funeral and what plans you have for your dependents.

The Bottom Line

Becoming an estate planner can be difficult and requires experience and a breadth of knowledge, including law, accounting, and finance. Earning an estate planning certification enhances the skills of estate planners and their credibility, especially in the eyes of potential clients.