Investopedia

Reviewed by JeFreda R. Brown

The last thing those living in co-ops want to hear at their annual shareholders’ meeting is that their co-op is in danger of defaulting. But for many people, this is a reality. Every year, co-ops are going bankrupt and leaving their “owners” in the cold.

Key Takeaways

• Co-ops can go bankrupt and leave their “owners” scrambling.
• Co-op defaults involve two commonly known types: technical defaults and mortgage defaults.
• Foreclosure—a lawsuit started by the lender to obtain legal title to the building—is the worst-case scenario when a co-op files for bankruptcy.
• The best advice for shareholders is to make educated decisions when shopping around and investigate the co-op before buying.

Types of Default

There are two commonly known types of default that involve co-ops: technical defaults and mortgage defaults.

1. Technical defaults are not terribly serious. Adam Leitman Bailey, Esq., a New York and New Jersey real estate lawyer and head of the New York City residential and commercial real estate firm Adam Leitman Bailey, P.C., says this type of default “consists of the failure to make repairs in violation of the mortgage agreement even though all monetary payments have been paid on time.” Usually, these types of defaults can be solved by arranging for the repairs to be completed or, at least, paid for.
2. Mortgage defaults are much more serious because the lender is not receiving payments for the building, as per the original agreement. This is a frustrating situation for shareholders who have diligently paid the monthly maintenance without missing payments. This is often the fastest route toward filing bankruptcy for co-ops. In this situation, the lender sends a notice of default to the building’s management, and if the mortgage default is not resolved, the foreclosure process begins.

Worst-Case Scenario: Foreclosure

Foreclosure is the worst thing that can happen when a co-op files for bankruptcy. A foreclosure is a lawsuit started by the lender to obtain legal title to the building. Stuart M. Saft, a partner at Dewey & LeBoeuf LLP, says that in New York, a foreclosure can take several years, but in the end, unless the co-op has a legitimate defense, a referee will hold an auction to sell the building, and the shareholders will revert back to being rental tenants and no longer “own” their apartments.

In the event that a co-op files for bankruptcy as a result of defaulting on its mortgage, the lender has the power to foreclose on the building and evict the shareholders. Bailey adds, “The lender of the underlying mortgage cannot go after each apartment shareholder because the building’s mortgage is not a personal guarantee by shareholders.” In a bankruptcy, the co-op’s bank will get paid before the shareholders.

So, any proceeds from the foreclosure sale of a bankruptcy will go to pay the bank. Shareholders who have obtained personal mortgages will be responsible for those payments even if they’ve lost ownership of the apartment shares.

In this scenario, shareholders don’t have many options. If the co-op chooses to file a Chapter 11 (a reorganization), the co-op mortgagee can move to convert it to a Chapter 7, which is liquidation, where the building is sold immediately.

In bankruptcy or foreclosure, the co-op shareholders remain as tenants if they are living there, but their proprietary lease is canceled. If they owe any mortgage on their apartment and don’t pay, “they may have adverse income tax consequences,” Saft confirms.

Co-operatives that may be in trouble of defaulting can try and catch up with payments by borrowing additional funds, raising the monthly maintenance fee, or adding an assessment. An assessment is a temporary increase in the monthly maintenance fee. This increase is designated for repairs or other expenses that the co-op needs covered.

What Can Shareholders Do?

Unfortunately for shareholders, there is not much that can be done if they’ve already purchased the co-op apartment. If they have purchased shares in a troubled co-op, they should seek advice from a qualified lawyer for guidance. The key is to make educated decisions when shopping around and investigate the co-op before buying.

Bailey says that when he represents a purchaser, he makes sure the building is stable by analyzing the building’s financials for the last two years. He compares the financial statement with any major structural improvements or needed repairs and looks for whether the building has solid cash reserves. Buildings that cannot afford to make mortgage payments or meet expenses are definite red flags.

Co-op apartment hunters can avoid falling into a “bad” co-op by asking for the financials themselves. Looking over a two-year history can provide a good glimpse of how well (or poorly) the building is doing. A low cash reserve, for example, could indicate the co-op will not have enough funds to cover emergency repairs. In this case, the co-op would need to acquire the funds from either the bank in the form of another loan or from shareholders.

Shareholders need to ask key questions when researching an apartment. For example, ask if the co-op has been making monthly mortgage payments. If they have missed payments, ask why. Ask if there are any other types of debt pending other than the mortgage, and if there are any upcoming major repairs—and if so, how the co-op is planning to pay for them.

Saft suggests some tips: “Look at the last financial statement to see if the accountant issued a clean audit letter; have your lawyer see if there are any liens filed against the building or the real estate taxes have not been paid. Try to find out from the managing agent if many shareholders are failing to pay their maintenance. Have your lawyer read the co-op’s minutes to see if there are any problems.”

What Is a Co-op?

Co-ops are housing arrangements where residents own a share of the legal entity, called a corporation. These shareholders receive a proprietary lease, or right, that allows them to live in one of the apartments or units.

Technically, the owner only owns shares in this corporation, not the real estate itself. The corporation owns the real estate. The owner of the shares pays a monthly maintenance cost that is used to cover building management expenses such as cleaning, heat, water, employee salaries, garbage removal, repair costs, taxes, insurance, and the building’s underlying mortgage.

How Many Housing Co-ops Are There in the United States?

A 2025 figure for U.S. housing co-ops is not readily available, but according to the Urban Homesteading Assistance Board, a national census conducted in 2015–16 with the support of the Ford Foundation found over 3,000 housing co-ops representing about 300,000 units of housing. Of these, 166,000 units were limited-equity, making them affordable for future generations.

According to the National Association of Housing Cooperatives, more than 1.2 million families live in U.S. housing co-ops, which are primarily located in urban areas such as Atlanta, Chicago, New York City, San Francisco, and Washington, D.C.

Are Co-op Bankruptcies Common?

Co-op bankruptcies are a rare occurrence. Saft says, “As far as we know, less than 10 co-ops have been foreclosed in NYC since World War II, so it is unlikely to occur now. However, it pays to be vigilant.” A technical default could lead to bankruptcy if all monies in the note become due as a result of a technical default, but this is unlikely.

The Bottom Line

The co-op board has a right to ask you, as a prospective buyer, about your financial history. It wants to make sure you will be able to meet the responsibility of monthly maintenance, in addition to your own personal mortgage payment. However, as a buyer, you also have the right to make sure the living space you will end up in is economically stable. Make sure you ask about every detail.

It’s your future, so exercise your rights.

Reviewed by Chip Stapleton

If you owe a debt that is significantly delinquent–usually 90 days or more past due–your lender may decide to either assign or sell your debt to a third-party debt collection agency. This is sometimes referred to as “charging off” the account. 

Sometimes collection agencies sell entire portfolios of debt accounts to each other. The reason for this is that the creditor might assume that you are never going to pay your debt; selling the debt to a debt collector or collections agency may help them recoup at least some of their money.

Key Takeaways

• If your debt is significantly delinquent–usually 90 days or more past due–your lender may decide to either assign or sell your debt to a third-party debt collection agency.
• This practice is sometimes referred to as “charging off” the account. 
• When your creditor decides to charge off your account, the charge off–in addition to the account closure–will appear on your credit report.
• The original delinquency date–when you missed your last payment–remains the same.
• Your credit history is not altered, and the statute of limitations on credit reporting or on legal collection practices does not reset.

Charge Off Appears on Your Credit Report

When your creditor decides to charge off your account, the charge off–in addition to the account closure–will appear on your credit report. A new account with the third-party debt collection agency will open up, and the date opened on the account is the date purchased from the original (or previous) creditor. In this sense, the previous account is written off by the selling creditor, and a new collection account is opened. From that point on, you owe the debt to the collections agency.

Your Original Delinquency Date Stays Intact

This does not mean that your delinquency is wiped clean, however. The original delinquency date–when you missed your last payment–remains the same. It does not matter how many times the debt account changes hands. Your credit history is not altered, and the statute of limitations on credit reporting or on legal collection practices does not reset.

Collectors cannot legally restart the clock on the statute of limitations (seven to 10 years, depending on the debt) through any re-aging techniques or through the sale to a different debt collector. The Federal Trade Commission has shut down the operations of collection agencies for attempting to re-age debts.

This does not mean that nothing has changed, however. If your debt is moving from an original lender to a third-party debt collector, this new creditor’s collection efforts are regulated through the Fair Debt Collection Practices Act (FDCPA). The FDCPA is designed to protect you from unscrupulous or abusive debt collection techniques and generally only applies to third-party agencies.

Important

You can stop unwanted calls from collections agencies with a written notice to cease all contact. However, you will still owe any valid debts and the agency can still sue you for payment.

What You Should Do Next

If you are someone who has had your debt account sold to a third-party debt collection agency, you will likely be made aware of this; they will generally contact you (and sometimes aggressively) to ask for repayment. At any time, consumers can also review their credit reports to find out if one of their accounts has gone to collections. Your credit report will reveal all of your accounts and their statuses.

If a third-party debt collection agency reaches out to you, you have several options. But first, you should gather as much information as possible about the debt. Ask the agency about the original creditor, how much you owe, and if there are any fees that the agency has added on. You may also decide to contact the original lender to confirm that they have sold your credit account, and that the debt collections agency that is contacting you is the correct agency.

Once you have confirmed that the debt is yours, you have the option of working out an arrangement with the collections agency to settle the debt. The agency may offer you the option of setting up a payment plan for the debt.

It is important to keep in mind that, while it is illegal for collections agencies to restart the clock on the statute of limitations for your debt, if you make even one payment on the debt in the new account, the clock will start over.

What Is the Statute of Limitations for Debt Collection?

Each state has its own rules for how long a creditor has to collect a debt. For most states, the statute of limitations ranges from three to six years, with some states allowing as much as ten years for collection. It also depends on the type of debt; an oral promise may have a lower time period for enforcement than a written agreement.

What Do You Do If You Are Contacted by a Debt Collector?

Debt collectors can be frustrating, especially if you do not actually owe a valid debt. If you are contacted, do not apologize, promise to pay, or provide a “good faith payment.” Any acknowledgment of the debt could restart the clock on the statute of limitations. After being contacted, the first step is to send the debt collector a written letter contesting the debt, and requesting documentation of the amount that they believe you owe. The debt collector must stop trying to collect until they can validate the debt. After that, you can request that the debt collector stop contacting you, although you may still have to pay if the debt is valid.

How Do You Stop Unwanted Calls From Debt Collectors?

You can ask debt collection companies to stop contacting you at any time, regardless of the communications channel. However, they can still attempt to collect the debt by suing you. If they continue trying to contact you after a written notice to stop, you may be able to sue them under the Fair Debt Collection Practices Act.

The Bottom Line

Collections agencies are companies that seek to secure payment for past-due debt. Although their collections techniques can be frustrating, there are legal protections that you can use to your advantage.

Reviewed by Marguerita Cheng

Even in this charge-it world, there are times when having cash on hand is handy, especially when traveling out of the country. Sure, there are plenty of places waiting to make a currency exchange quick and easy. But that almost always means you will pay more for converting money than you should.

When it comes to exchanging currency sans fees, your bank will likely offer the best deal, unless you risk doing a private transaction with someone you find on Craigslist. 

By far, the best idea—both in terms of safety and advantageous rates—is to procure cash at a local ATM with a debit or credit card that doesn’t charge a foreign transaction fee. This will allow you to make purchases without incurring any more fees than you would when purchasing items in the United States. So before you go, make some calls and ask your banks and card companies about their terms.

Key Takeaways

• Having cash on hand can be especially important when traveling out of the country.
• While many venues exist for exchanging your home currency for foreign currency, some of the better ways include Travelex and credit cards, which both exchange currency for a small fee.
• The best option for most people looking to exchange currency is likely your own bank, which will often quote you favorable exchange rates.
• If you’re looking for a way to exchange currency without a fee, person-to-person transactions via Craigslist or other sites might be an option—though less secure than other choices.

What Are the Best Ways to Save on Currency Exchanges?

Let’s take a look at some of the best methods to cut back on pricy currency exchanges.

Your Local Bank

To avoid high fees, you can always go to your friendly local bank branch. But you’ll probably have to arrange for the money several days in advance.

“Most banks will allow you to order foreign currency prior to traveling internationally,” said Ileaa Swift, owner of the website Swift Travel Deals. “Banks such as Bank of America offer their customers the options to order currency online or in their banking locations by using Bank of America checking or savings accounts. If you do not have a savings or checking account with a particular bank, but have a credit card with the bank, visit the local branch and ask about onsite foreign currency exchange options.

Most banks even offer tips that will help you figure out how much foreign currency you will need to order and also offer options for cash advances. Most banks also have the option to print out currency exchange rates as wallet cards for you to take with you during your trip.” 

Travelex

If you have to have cash fast, an exchange firm is the easiest way. Travelex is probably the best-known company. You don’t have to order five days in advance (as you often do with your local bank), and you don’t have to deal with language barriers. Travelex will even deliver the money to your home or to your departing airport.

Of course, all of this convenience comes at a price: the service charge. If you wait until you get to an airport to exchange your currency, you’re probably going to pay a hefty foreign transaction fee.

Branch locations may be a little cheaper: Some Yelp customers (who generally give Travelex high marks) have commented that fees were waived if they checked in to a branch location online, and the company would take back any unspent money within 90 days of their trip, converting it back to U.S. dollars for no additional fees. Others comment that there are minimum amounts you have to exchange to avoid larger fees.

Think of Travelex as a concierge service. Like most anything else, you can always pay less if you’re willing to invest more of your valuable time doing the legwork on your own. But if you are taking an impromptu trip, waited too long, or just don’t want to go through the hassle, Travelex, and companies like it will make the process simple.

Warning

Be careful when withdrawing from ATMs overseas. Even if your bank does not charge a currency conversion fee, many ATMs have an additional surcharge for overseas debit cards.

Plastic

The plastic in your wallet isn’t a bad resource. But be careful: If you use your bank ATM card or a credit card, make sure it doesn’t charge a foreign transaction fee. If it does, be prepared to pay an extra 1% to 3%. If you plan to travel abroad regularly, consider getting a credit card with no foreign transaction fees. 

“Not only is the lack of a foreign transaction fee important but so is the exchange rate,” said Mike Scanlin, CEO of Born to Sell, a software development firm that creates covered call investment tools. “I did a test when I was in Japan. I used the same ATM machine first with a Bank of America debit card and then with a Capital One Visa card (with a cash advance feature).

Even though the transactions were done one minute apart, the Capital One [card’s] exchange rate was much better than the Bank of America [card’s] exchange rate. Plus, Bank of America charged a foreign ATM fee, where Capital One did not. Even though the Capital One [withdrawal] was treated as a cash advance (since it was a credit card and not a debit card), I was able to pay it off immediately with online banking, so there was no interest charge for the cash advance.

If you have multiple cards, you can do a similar test in a foreign country and then log onto the bank site to see what happened. Take out $100 with each of two or three different cards and see which cost you the most. Then use the best card for the rest of the trip.”

Craigslist

People who travel abroad sometimes end up with foreign currency they haven’t changed back into dollars. Place an ad on Craigslist, Facebook, or your local newspaper saying that they would like to exchange their currency. You avoid all fees and, depending on the other person, you can probably make the exchange at current exchange rates without any markups.

There are some caveats. First, you have to understand how to calculate exchange rates. There are online currency exchange rate calculators and plenty of articles to help with that. Second, any time money is involved, safety becomes a concern. Make the exchange in a public place and have somebody with you.

What Is the Best Place to Change Money?

Currency exchange shops tend to offer the greatest convenience, but they charge a high markup due to their overhead costs. For large amounts of cash, a local bank branch usually does not charge commissions or additional fees. But the best way to change money may already be in your wallet: If you have a credit card with no foreign transaction fees, that can get you a market-rate currency conversion without having to bring home change in foreign currency.

What Is the Best Credit Card for Traveling Abroad?

The best credit cards for traveling abroad are those that do not charge foreign transaction fees, since these can add up quickly over the course of a long trip. If you use a debit card, look for one without foreign ATM fees. After that, consider cards with reward programs for flights or hotel purchases. If you travel frequently, these benefits can be worthwhile.

What Is the Best Site for Forex Trades?

If you want to trade currencies as an investment, Investopedia ranks IG among the best forex brokers for overall experience. AvaTrade is also considered one of the best forex brokers for beginners, and XTB has the lowest costs.

The Bottom Line

Changing money was once a tedious ritual of international travel, requiring multiple visits to currency exchange shops to find the best rate. In today’s highly-connected world, the process is much simpler: You can change money online, or simply make purchases through a traveler-friendly credit or debit card.

Advancing the economic, political, and personal rights of women in the U.S.

Reviewed by Robert C. Kelly

Over time, there have been major advances in women’s economic, political, and personal rights in the United States. These include landmark legislation, the establishment of powerful and influential organizations, and Supreme Court decisions that affect gender equality. This timeline is an accounting of these moments in history. 

Key Takeaways

• Gaining the right to vote in 1920 was the most important milestone in advancing the position of women, according to about half of the 3,143 people polled for a Pew Research Center survey.
• Passage of the Equal Pay Act of 1963 and the Family and Medical Leave Act of 1993 were also cited as important by many adults surveyed.
• A majority of Americans say that feminism has had a positive impact on the lives of White, Black, and Hispanic women. About a quarter (24%) say feminism has helped wealthy women a lot; but only 10% say it’s been equally helpful to poor women. 

1848

The Married Women’s Property Act of 1848

This New York State law granted women the right to retain ownership of their property upon marriage. Section 1 of the law clarified that any property a woman owned at the time of her marriage, along with its earnings, would not be controlled by her husband, nor could it be used to settle his debts. A woman’s property would remain solely hers, as if she were unmarried. This legislation paved the way for similar laws in other states and contributed to the convening of the Seneca Falls Convention that same year.

Declaration of Sentiments

The Declaration of Sentiments, inspired by the Declaration of Independence, detailed the rights to which American women were entitled as citizens. Written mainly by Elizabeth Cady Stanton, the declaration was signed by 68 women and 32 men, notable among them the abolitionist Frederick Douglass, during the Seneca Falls Convention. When the document was made public, the intense ridicule and criticism it received made many eventually withdraw their names.

1890 

In September 1889, the Wyoming state convention ratified a state constitution that included a provision granting voting rights to female citizens. One year later Wyoming was admitted to the union, formally making it the first state to grant women the right to vote.

1900 

By the start of the 20th century, every state had passed Married Women’s Property Acts, granting married women the rights to own property and keep the wages they earned as well as the right to sue or be sued.

1912

Juliette Gordon Low founds Girl Scouts of America USA in 1912 in Savannah, Georgia, with just 18 girls. Girl Scouts of the USA began as an effort to empower girls to explore their abilities and aspire beyond the limits society placed on them. The movement championed girls’ right to pursue their interests and have a positive impact. Today, with 1.7 million members, it has grown into a worldwide community that encourages girls to reach their fullest potential.

1918

Margaret Sanger wins her suit in New York to allow doctors to advise their married patients about birth control for health purposes. The birth control clinic that Sanger founded two years earlier in Brooklyn, called Sanger’s Birth Control Federation of America, later became Planned Parenthood in 1942.

1920

The 19th Amendment, ratified in 1920, granted women the right to vote across all states and in federal elections. Because the fight for suffrage began in the 1800s, few of the original supporters lived to see the amendment’s passage. Throughout the struggle, suffragists faced harsh opposition, including heckling, physical assaults, and imprisonment. New York State’s adoption of women’s suffrage in 1917 and President Wilson’s eventual support were milestones. However, the fight for inclusivity continued, as Black women and other minorities faced ongoing discrimination in voting practices.

1942

Following the attack on Pearl Harbor on December 7, 1941, Congress passed legislation to create the Women’s Army Auxiliary Corps (WAAC) on May 14, 1942. The legislation was quickly signed into law by President Franklin D. Roosevelt, and Oveta Culp Hobby took the oath as its inaugural director on May 16. WAAC recruits more than 35,000 women for an anticipated 1,000 positions. In 1978, an act of Congress disestablished the Women’s Army Auxiliary Corps so that women could be assimilated more closely into the Army structure.

1963 

The Equal Pay Act is passed by Congress. This law makes it illegal for employers to pay women lower wages than men for work requiring the same skill, effort, and responsibility. Employees suspecting pay discrimination have legal routes for recourse, including contacting an Equal Employment Opportunity counselor or directly filing a lawsuit.

1964

The landmark Civil Rights Act is passed. Title VII safeguards employees and job seekers from workplace discrimination or unfair wage gaps due to race, color, religion, sex, or national origin. It applies to all employment-related activities, from hiring and firing to promotions and working conditions, ensuring equal treatment in every aspect of employment.

1965

In 1961, Estelle T. Griswold and Dr. C. Lee Buxton opened a birth control clinic in New Haven, Connecticut, violating a state law that banned the use of contraceptives, and aiming to challenge its constitutionality. Their arrest led to the Supreme Court case Griswold v. Connecticut in 1965, which not only overturned the law but also established a new constitutional right to privacy.

1966 

The National Organization for Women (NOW) was established on June 30, 1966, by activists, including Betty Friedan, to combat sex discrimination and advocate for women’s rights. Over the years, NOW has been pivotal in significant advocacy efforts, including marches for the Equal Rights Amendment and women’s reproductive rights. Today, it remains the largest women’s rights activist organization in the U.S.

1967

The Supreme Court strikes down the state of Virginia’s Racial Integrity Act, abolishing restrictions on interracial marriage across the United States. The suit was brought by Mildred Loving, of African American and Native American descent, and her White husband, Richard Loving. Arrested in 1958 for their marriage in violation of Virginia’s anti-miscegenation laws, the Lovings fought back. Their legal battle led to the landmark Supreme Court ruling that declared all laws prohibiting interracial marriage unconstitutional. It marked a significant moment for civil rights and altered marriage legislation throughout the country.

1969  

The first “no-fault” divorce law is adopted by California, allowing divorce by mutual consent.  This legislation was influenced by Governor Brown’s earlier call for reform, and removed the need to prove fault (such as adultery) in divorce proceedings. Instead, marriages could be ended due to “irreconcilable differences.” It sparked a nationwide overhaul of divorce laws.

1972 

The Education Amendments Act, Title IX, prohibits exclusion from participation or denied benefits on the basis of sex in any education program or activity receiving federal financial assistance.

1973

The Supreme Court ruling in Roe v. Wade makes abortion legal, which guaranteed a constitutional right to abortion. (On June 24 2022, in the  Dobbs v. Jackson Women’s Health Organization case, the Supreme Court overturned Roe v. Wade). In a separate ruling, Pittsburgh Press v. Pittsburgh Commission on Human Relations, the Supreme Court rules that a ban on sex-segregated “help wanted” advertising does not violate a newspaper publisher’s First Amendment rights, thus supporting this ban.

1974

Housing discrimination on the basis of race, color, national origin, disability, age, and sex is prohibited by section 109 of the Housing and Community Development Act. It expanded assistance for low-income families through various housing programs and introduced measures to improve mortgage and rural housing conditions. It also introduced the Community Development Block Grant program, allowing HUD to provide grant funds to local and state governments to be used to develop urban communities by creating more suitable living environments, expanding economic opportunities, and providing decent housing.

1975

States cannot systematically exclude women from juries, the Supreme Court rules in Taylor v. Louisiana. The Court emphasized that a fair cross-section of the community on juries is crucial for the integrity of the trial process, aligning with the principles of the Federal Jury Selection and Service Act of 1968.

1978

The Pregnancy Discrimination Act bans employment discrimination against women based on pregnancy, childbirth, or related medical conditions. The amendment excludes mandatory employer-paid health benefits for abortions, except in cases where the mother’s life is at risk or medical complications arise from an abortion, but does not forbid employers from offering such benefits.

1984 

The U.S. Supreme Court, in Roberts v. United State Jaycees, bans sex discrimination in membership for formerly all-male groups such as the Jaycees, Kiwanis, and Rotary Clubs.

1986

In Meritor Savings Bank v. Vinson the Supreme Court rules that sexual harassment and a “hostile environment” in the workplace constitute sex discrimination that is actionable under Title VII of the Civil Rights Act.

1989

The right of states to deny public funding for abortions and to prohibit public hospitals from performing abortions is affirmed by the Supreme Court. Further restrictions on abortion were imposed by the 2003 Partial-Birth Abortion Ban Act, the first law to ban a specific abortion procedure, upheld by the Supreme Court in 2007. However, in 2016, the Supreme Court struck down onerous abortion clinic regulations that were forcing women’s clinics to close.

1993

The Family and Medical Leave Act (FMLA) allows workers to take up to 12 weeks of unpaid leave to care for a newborn, newly adopted or placed child, or a seriously ill child, spouse, or parent or for their own serious health condition without fear of losing their jobs. Amendments extended the protections to workers with families in the military.

1994

The Violence Against Women Act funds services for victims of rape and domestic violence and allows women to seek civil rights remedies for gender-related crimes. Up for renewal every five years, in 2000 it created a legal assistance program for victims and addressed issues of dating violence and stalking. A bill to reauthorize the act in 2019 expired amid opposition from Senate conservatives. On March 15, 2022 the Violence Against Women Act Reauthorization Act of 2022 was signed into law by President Joe Biden as part of the Consolidated Appropriations Act of 2022.

2003

In Lawrence v. Texas, the Supreme Court strikes down state laws that make gay sex a crime. The effect of this decision is the striking down of all remaining state sodomy laws, thereby affirming the legal rights of lesbian, gay, and bisexual people in America.

2009 

The Lily Ledbetter Fair Pay Restoration Act extends the period during which a victim can file a pay discrimination complaint against an employer to 180 days after their last paycheck.

2014

The Supreme Court rules that the Constitution guarantees a right to same-sex marriage. The lawsuit, Obergefell v. Hodges, was brought by same-sex couples claiming that denying them the right to marry violated the 14th Amendment.

2017

In January 2017, 105 women (78D, 27R), making up 21% of the Senate and 19.3% of the House, held seats in the United States Congress, a new record. Currently, 151 women hold seats in Congress, including 125 in the House and 26 in the Senate, making up 28.7% and 26% of their respective chambers.

2020

The civil rights law that prohibits sex discrimination applies to discrimination based on sexual orientation and gender identity. This ruling by the Supreme Court came in three cases of employees being fired because they were gay or transgender: Bostock v. Clayton County, Georgia; Altitude Express Inc. v. Zarda; and R.G. & G.R. Harris Funeral Homes Inc. v. Equal Employment Opportunity Commission.

2021

Kamala Harris becomes the first woman to serve as Vice President of the United States, and also the first Black and Asian American person in this high office. The Biden administration chose a record number of women, including eight women of color, for Cabinet and other high positions.

2022

On May 12, the United States Senate confirms Admiral Linda Fagan as the first woman commandant of the U.S. Coast Guard, making her the first woman to lead any of the U.S. armed forces. On January 21, 2025, she was fired from her post by the second Trump administration.

2023

Claudia Goldin’s 2023 Nobel Prize in Economic Sciences marks a historic achievement, as she becomes the first solo woman to receive this honor, for her research on the challenges women face in achieving equal pay in the labor market.

Admiral Lisa Franchetti also makes history by becoming the first woman to lead the U.S. Navy, following the Senate’s approval of her appointment in November 2023. She also became the first woman to serve on the Joint Chiefs of Staff.

Expecting More

Dissatisfaction with the position of women in society has been growing. In a Pew Research Survey of 3,143 Americans, more expressed dissatisfaction with the state of gender equality than they did in a study conducted three years earlier. About half of Americans say gaining the right to vote in 1920 was the most important milestone in advancing the position of women. Some also cited the passage of the Equal Pay Act of 1963 and the Family and Medical Leave Act of 1993. A majority of Americans said feminism has had a positive impact on the lives of White, Black, and Hispanic women. About a quarter (24%) say feminism has helped wealthy women a lot; just 10% say it’s been equally helpful to poor women.

What Was the Most Important Historical Milestone in Gaining Gender Equality for Women in the U.S.?

According to about half (49%) of Americans polled by Pew Research, gaining the right to vote in 1920 was the most significant advancement of women’s rights in the U.S. in history. However, passage of the Equal Pay Act of 1963 and the Family and Medical Leave Act of 1993 were also cited as important by the majority of adults surveyed.

What Percent of Americans Favor Adding the Equal Rights Amendment (ERA) to the Constitution?

Nearly 8-in-10 U.S. adults (78%) favor adding the ERA to the Constitution, according to a Pew Research survey. Despite this, nearly half (49%) of those polled believe that adding the ERA to the Constitution wouldn’t make much difference when it comes to women’s rights.

What are Some Examples of Ongoing Gender Inequality?

Among forms of gender inequality often highlighted are:

• The fact that women work longer hours than men, especially in the home.
• In the workplace, women are paid less than men for performing the same type of work, resulting in a significant gender pay gap.
• Despite laws to the contrary, in practice women suffer from ownership inequality.
• Throughout the world education inequality is directed at women and girls.
• Worldwide, women also suffer from inequality when it comes to freedom of expression.

The Bottom Line

Despite great strides in women’s rights, from early laws that allowed women to own property to recent achievements like women leading in economics and the navy, the fight for complete gender equality is still ongoing. Our timeline highlights the successes along the way, but also points out the ongoing gaps and obstacles, especially regarding pay equity and leadership roles. The journey toward true gender equality will likely require more political activism, legislative support, and community involvement.

Reviewed by Samantha Silberstein

The price of oil is one of the most closely watched economic trends in the world. It affects the economies of every nation, and petrostates such as Venezuela are highly dependent on oil exports. Countries such as Venezuela, which depend highly on one resource for economic growth, rarely experience economic growth because they ignore other much-needed sectors and resources.

Key Takeaways

• Venezuela relies heavily on its oil exports and experiences economic swings that coincide with oil prices.
• Venezuela’s government faces sanctions from many countries that impact its ability to export oil.
• The country’s oil-producing and energy infrastructure is failing, making it dependent on allies for repairs and products needed for production.

The Effect of Oil Prices on Venezuela

Countries that rely on oil exports to drive their economies (while not ranking among the world’s largest oil consumers) experience a different relationship between oil prices and economic health. While oil prices maintain a complex relationship with the U.S. economy, the price of oil and Venezuela’s economy move pretty much in lockstep.

When oil prices are high, Venezuela enjoys economic growth. When oil prices drop, the country experiences magnified economic downturns because it relies too heavily on oil exports.

Oil Is Major Part of Venezuela’s GDP

Oil comprises more than 80% of Venezuela’s exports and more than 17% of its gross domestic product (GDP), so high prices provide a boon to the country’s economy. The period from 2006 until the first half of 2014, save for a brief dip in late 2008 on the heels of a global recession, saw oil prices mostly hover between $100 and $125 per barrel. During that time, Venezuela used its revenues from high oil prices to fund its budget and wield political power. By providing subsidized oil to as many as 13 neighboring Latin American countries, most notably Cuba, Venezuela extracted political favors and attempted to build a coalition against rival nations, namely the U.S.

Its oil giveaway program became more of a burden than a boon for the Venezuelan economy as oil prices collapsed toward the end of 2014. Venezuela was giving away over 200,000 barrels of oil per day (half of which went to Cuba), reducing the amount it had available to export for profit. When oil prices were over $100, Venezuela received enough margin from exporting oil that the lower volume didn’t harm its economy. When oil dropped significantly below that price level, the country’s margins were squeezed to the point where it did not meet its spending, resulting in ballooning debt.

In early 2015, Venezuelan president Nicolas Maduro, facing record low approval ratings brought on by the country’s crumbling economy, embarked on a world tour to implore other nations with heavy influence on the oil market to push the price back to $100 or more. Maduro’s desperate actions at the time serve as a testament to oil’s grip on the Venezuelan economy.

Venezuela’s Oil Situation as of 2025

By 2018, Venezuela was experiencing an economic crisis and shortages of food, medication, and basic necessities. The crisis continued, and by May 2024, more than 7.7 million people had fled the country. This mass migration diminished the workforce, including those in the oil industry.

As a result of this lack of labor, economic sanctions, and other issues, Venezuela’s oil production fell to its lowest point in more than 70 years. In 2023, production fell to 742,000 barrels per day, a 70% drop from its 2013 production level. However, the U.S. Office of Foreign Asset Control (OFAC) lifted sanctions on Venezuela’s energy sector in 2023, and OFAC granted Chevron waivers to resume exporting crude from Venezuela beginning in January 2023.

Advisor Insight

Venezuelan oil production increased to 772,000 barrels per day in 2024.

Because the country’s economy is closely tied to its oil production, it will need to find a way to attract workers and foreign oil companies like Chevron to increase production while dealing with sanctions. Additionally, the country’s refineries suffer from years of neglect, and much of its infrastructure is more than 50 years old. Since 2022, state-owned oil company PDVSA has been collaborating with Iran on repairing refineries and its oil infrastructure. However, an explosion in November 2024 caused “catastrophic” damages to the Muscar gas complex, requiring even more downtime and repair work. The production of diluents used by PDVSA was affected, which reduced its ability to dilute heavy crude and transport it.

But refinery repairs won’t be enough to get Venezuela back up and operating at full capacity. The U.S. Energy Information Administration expects the country to increase production but at a very limited capacity due to power grid failures and a lack of diluent. A diluent is a light hydrocarbon used to thin heavy crude oil for transportation in pipelines.

How Is the Economy In Venezuela?

As of February 2025, Venezuela’s economy is in a bad state. It depends highly on oil—and sanctions, old infrastructure, corruption, and poor economic decision-making in the past, which have caused the country to collapse.

What Caused Venezuela’s Economy to Collapse?

Venezuela’s collapse is a product of many issues stemming from poor government and economic management, political corruption, sanctions, hyperinflation, and over-reliance on one resource.

What Caused the Hyperinflation in Venezuela?

Hyperinflation in Venezuela was the result of many years of poor decision-making, such as printing money to finance the government and implementing price controls in attempts to reign in its downward spiraling economy.

The Bottom Line

Venezuela has the world’s largest proven reserves of oil, but its political and economic environment and collapsing infrastructure, as of February 2025, prevents it from reaching the production capacity it needs to reinvigorate its economy. It’s uncertain what the country will need to do to recover, but what is clear is that there is lots of work to do to put the country on the path to recovery.

Xiaomi Sells Smartphones, EVs, and Lifestyle Products

Reviewed by Somer Anderson

Xiaomi is a Chinese technology company that manufactures smartphones, wearable devices, and smart home devices, which it calls lifestyle devices. Lifestyle devices include products for outdoor, office, health and fitness, and tools.

Xiaomi’s stated corporate strategy is to connect humans to cars, home products, and devices for an electronically integrated lifestyle in what it calls “Human x Car x Home.” Its proprietary operating system, HyperOS, powers the ecosystem it has designed, which “…proactively serves your needs and flows as you wish.”

Key Takeaways

• Xiaomi is a Chinese-based tech and electronics company.
• Xiaomi posted impressive results for the third quarter and first nine months of 2024.
• Xiaomi’s product lines include smartphones, electric vehicles, tools, home products, and more.

Xiaomi Financials

As of this writing, Xiaomi’s 2024 annual report had not been published, so results from the third quarter 2024, and nine months ended Sep. 30, 2024, are used. Results are in renminbi (¥):

• Quarterly Net Profit: ¥5,340 million
• Quarterly Net Profit Nine Months Ended Sep. 30, 2024: ¥14,583 million
• Growth in Net Profit: 5.3%
• Growth in Net Profit Nine Months Ended Sep. 30, 2024 (YoY): 14.4%
• Adjusted Net Profit (Non-IFRS): ¥6,252 million
• Adjusted Net Profit (Non-IFRS) Nine Months Ended Sep. 30, 2024 (YoY): ¥18,918 million
• Growth Adjusted Net Profit: 1.2%
• Growth Adjusted Net Profit Nine Months Ended Sep. 30, 2024 (YoY): 31.7%
• Quarterly Revenue: ¥92,506 million
• Revenue Nine Months Ended Sep. 30, 2024: ¥256,901 million
• Growth in Revenue: 4.1%
• Growth in Revenue Nine Months Ended Sep. 30, 2024 (YoY): 29.9%

Xiaomi experienced record revenue in the third quarter of 2024, shipping 43.1 million smartphones, a 3.1% increase from the previous year, and increasing its ecosystem’s monthly active users to 685.8 million, a 10.1% increase from the previous year. The company’s Internet of Things (IoT) and lifestyle products sales increased 26.3% year-over-year, and its artificial intelligence-enhanced IoT platform users reached 861.4 million.

Xiaomi’s share price on the Hong Kong Exchange tripled between August 2024 and February 2025, from a closing price of HKD 16.08 on Aug. 5, 2024, to HKD 51.70 on Feb. 17, 2025.

Xiaomi’s Business Segments

Xiaomi’s business model is broken into two segments: smartphones and AIoT, and Smart EV and New Initiatives. Smartphones and AIoT is further categorized into the following subsegments:

• Smartphones
• IoT and Lifestyle Products
• Internet Services
• Other

Smartphones

Xiaomi continues to earn most of its revenue from phones, which generated ¥47,452 million in revenue for the third quarter. Mainland China accounts for 56.6% of its smartphone sales, with the rest sold in India and Europe.

The smartphone segment generated ¥5,547 million in income in the third quarter of 2024, down 20% from the same period in 2023. Smartphones accounted for 51% of Xiaomi’s total revenues.

IoT and Lifestyle Products

Internet of Things and Lifestyle Products include products such as smart lighting, home wireless products, health and fitness products, tools, and outdoor equipment and devices. This segment is Xiaomi’s second-largest revenue-generating segment. It generated ¥26,102 million in revenues and brought in ¥5,418 million in income in Q3 2024, a 47% increase from the same period in 2023. This segment accounted for 28.22% of Xiaomi’s total revenues.

Internet Services

Xiaomi’s third-largest revenue generating segment is its Internet Services, which provides apps, gaming, and content and services to users of its products. Internet services generated ¥8,463 million in revenues and ¥6,555 in income in Q3 2024, a 13.6% increase from Q3 2023. The Internet Services segment accounted for 9.15% of Xiaomi’s total revenues.

Other Related Business Activities

Xiaomi uses this segment to account for installation services, product repair services, and materials sales. Other Related Business Activities generated ¥792 million in revenues but experienced a loss of ¥299 million in income, an 8.11% loss from Q3 of 2023. Other Related Business Activities account for 0.86% of Xiaomi’s total revenue.

Smart Electric Vehicles (EV) and New Initiatives

Smart EV and New Initiatives is one of Xiaomi’s new endeavors, as it launched its first smart EV in March 2024. The new initiatives section of this segment is EV related activities and research. This segment generated ¥9,697 million in revenues and ¥1,660 million in income in Q3 2024 accounting for 10.48% of total revenues.

Xiamomi’s Recent Developments

In March 2024, Xiaomi launched its highly anticipated SU7 series of vehicles. Through the end of Q3 2024, the company produced 100,000 vehicles (in 230 days) and delivered 67,157. In 2024, it added more than 3,000 physical stores in mainland China, where consumers can purchase EVs and other products.

Xiaomi continues to add and upgrade products that connect with its AIoT (AI and Internet of Things) ecosystem, and its popularity is growing. In Q3 2024, one million users with five or more devices were added to the platform, bringing the total number of AIoT users with more than five connected devices to 17.1 million.

Examples of these devices are washing machines, air conditioners, refrigerators, wearables, tablets, and more.

In October 2024, Xiaomi launched its high-performance EV, the SU7 Ultra, reportedly capable of speeds of up to 350 km/h (217 m/h) and accelerating to 100 km/h (62 m/h) in 1.98 seconds. On October 29, the SU7 Ultra Prototype completed a lap challenge at Nürburgring Nordschleife in 6 minutes, 46.874 seconds (the current lap record for production super sports cars is 6 minutes, 29.09 seconds).

Is Xiaomi Sold in the US?

Several Xiaomi products are sold in the U.S., but many products are not.

Why Is Xiaomi Not Available in the US?

Xiaomi was temporarily added in early 2021 to the U.S. government’s blacklist of alleged Chinese military companies, but was removed in mid 2021. Some products are available in the U.S.

Who Is Better, Xiaomi or Samsung?

Both companies are similar in the products they manufacture. Xiaomi has ventured into the electric vehicle manufacturing industry, while Samsung has signed agreements with vehicle manufacturers to supply electric vehicle batteries. Each company is successful in what it does.

The Bottom Line

Xiaomi is a Chinese-based electronics manufacturer with a global presence. As far as tech companies go, it has only been around since 2010. Its youngness and success indicate the abilities of its founders and leadership, and it will be interesting to see where they take the company.

Reviewed by Eric Estevez

What Is the Limit on Bills of Lading?

The shipping industry standard is three original bills of lading, but you can have more than three as long as the number of originals is documented on each bill.

Key Takeaways:

• A bill of lading is a legal document issued by a carrier to a shipper that details the type, quantity, and destination of the goods being carried.
• For air shipments, an airway bill acts as the bill of lading. However, an airway bill is not a document of title.
• Typically, there are three bills of lading: one for the shipper, one for the consignee, and one for the banker, but there is no limit to the number of bills of lading issued.
• Additional bills of lading increase the risk of fraud, theft, or the unauthorized release of goods.

How a Bill of Lading Works

A bill of lading is a legal document issued by a carrier to a shipper that details the type, quantity, and destination of the goods being carried. It acts as a document of title, a receipt for shipped goods, and a contract between a carrier and shipper. The document must accompany the shipped goods and be signed by an authorized representative from the carrier, shipper, and receiver. If managed and reviewed correctly, a bill of lading can help prevent asset theft.

Typically, three bills are issued—one for the shipper, one for the consignee, and one for the banker, broker, or third party. There is no restriction on the number of bills of lading that can be issued, but the number issued must be stated on each bill. Because the bill of lading is a document of title, it is valuable. For security purposes, it is advisable only to request as many bills of lading as you actually need. If more bills of lading are issued, there is an increased risk of fraud, theft, unauthorized release of goods, or release to the wrong person.

Types of Bills of Lading

There are three ways to ship: land, sea, and air. Each mode has its own bills of lading: the ocean bill of lading, the inland bill of lading, and the airway bill, and there are different types used depending on various conditions. Determining which mode of shipping to use depends on time. Air travel is reserved for shipments that are time-sensitive or on a tight deadline, and it is usually more expensive. Travel by ocean and land is slower but more economical, which is why they are used more frequently. BOLs come in two general categories: negotiable and non-negotiable. Some of the types of BOLs are:

• Straight Bills of Lading: Non-negotiable, and must be marked as such. It can only be released to the person named on the bill.
• Order Bills of Lading: Negotiable, outlines any conditions that have been imposed by the shipper. A common example is when payment has been secured by a letter of credit, and the terms must be met before the delivery is accepted.
• Clean Bills of Lading: Given when everything in the shipment is in perfect order. Should any shortages of products or damages occur, a clean bill is not issued.
• Onboard Bills of Lading: Issued when the goods are loaded onto the ship and signed by the ship’s master. This type of ocean bill of lading is rendered when payment is contingent on a letter of credit.

Ocean Bills of Lading

Ocean bills of lading are used when shipments must be made via ship to international destinations. This BOL serves as the carrier’s receipt and a collection document.

Inland Bills of Lading

Inland bills of lading are used in the trucking and railway shipping industries. Often, shippers ship over land to a port of shipping, where goods are loaded onto a ship or plane. Inland bills of lading are not consigned directly to foreign buyers but to a third party, such as a forwarder or packaging company, to be shipped to an international carrier.

Airway Bills of Lading

The airway bill is issued by the air carrier of goods on receipt of goods after completion of export customs formalities. The shipper obtains the airway bill once the cargo is transferred to the air carrier. Since the transit time for air cargo is much less than the transit time for sea shipment, a set of airway bills is sent along with the cargo for immediate reference on transit and for import customs clearance at the destination port by the importer.

Once customs formalities are completed at the loading port customs location, the cargo transfer manifest (CTM) is issued by an International Air Transportation agent along with an airway bill and other required documents for transportation. Original airway bills are issued in quintuplicate, one for the carrier, importer, shipper, and additional copies. The main difference between a bill of lading and an airway bill is that an airway bill is not a document of title.

How Many Original Bills of Lading Can be Issued?

There are three bills of lading issued, but there is no limit on how many can be. However, the number of original bills must be documented on the bills.

What Is Legally Required on a Bill of Lading?

Generally, a bill of lading should have the shipper’s name, list any consignees, who the freight forwarder is, the name of the carrier, shipping date, purchase order number (or reference number), HS codes, shipping and payment terms and conditions, any special instructions, signatures, a description of what’s being sent, and a declared value.

Can I Make My Own Bill of Lading?

You can make and use your own bill of lading as long as it has all the required sections. Templates are available online. However, in some cases, you might need to purchase a bill of lading.

The Bottom Line

Bills of lading detail the type, destination, and quantity of the goods being shipped. A bill of lading acts as a document of title and a receipt for shipped goods and represents the contract between a carrier and shipper. You can have as many originals as you want, but they must be numbered on the bill.

Reviewed by Charlene Rhinehart

Widely regarded as the founder of value investing, Benjamin Graham’s principles have impacted scores of individuals, from Warren Buffett to Bruce Berkowitz. His 1937 book, “The Interpretation of Financial Statements,” guides the reader through the insights that can be gleaned from financial statements and financial ratios.

Here are seven key points of advice and the specific financial ratios in this essential guide to investing.

Key Takeaways

• Benjamin Graham is regarded as the founding father of value investing and mentored many famous value investors, such as Warren Buffett.
• Graham’s philosophy was to closely examine a company’s financial statements to identify undervalued opportunities.
• Graham notes key ratios and items, such as a company’s working capital ratio, current ratio, intangible assets, cash, notes payable, liquidation value, net asset value, and margin of profit.

Working Capital Ratio

Working capital is calculated by subtracting current liabilities from current assets. This ratio indicates the ability of a company to pay its expenses in the near future. This requires particular attention because, as Graham points out, it is useful in determining the strength of a company’s financial position. A healthy working capital number shields the company from being unable to meet demands, fund emergency losses, and helps with the prompt payment of bills.

Graham further advises that observations of working capital must be made over several years to watch its corresponding inclining or descending levels.

Current Ratio

The current ratio can be calculated by dividing quick assets (current assets minus inventory) by current liabilities. This ratio is also known as the quick ratio or acid test. Regarding current assets and liabilities, Graham states, “When a company is in a sound position the current assets well exceed the current liabilities, indicating that the company will have no difficulty in taking care of its current debts as they mature.”

Note

Each industry is different regarding what makes up a decent current ratio.

Intangible Assets

When looking at intangible assets on a company’s balance sheet, you should pay particular attention to how a company presents this figure. It should be recognized how high the value of goodwill is presented—if it is presented at all. Graham further explains that companies vary dramatically in how they present goodwill on their balance sheet. Often, companies exaggerate the value attached to the goodwill figure because it is difficult for analysts and auditors to determine—this can be telling. Conservative accounting practices can be revealed by presenting a low goodwill figure.

Essentially, Graham advises the reader not to look at the balance sheet valuation of intangibles but at their contribution to the company’s earning power.

Cash

It is noteworthy to observe how companies organize their cash accounts. In these cases, the key is to examine how the cash account is being represented.

In some cases, companies may liquidate a large portion of the inventory and receivable portion of their assets to store more cash in their cash account. If a company has a significant cash account, this can prove to be very attractive to some investors who believe large cash positions are good for a company. Why do they believe this? This excess cash may be distributed to the stockholders or invested back favorably into the business. However, if the company does not publish its intended uses for excess cash or it sits idle over long periods, it should raise a flag for the analyst.

Notes Payable

Graham informs the investor that notes payable is the most important item to watch among the current liabilities. Here, notes payable tend to represent bank loans or loans from other companies or individuals. In the case that the notes payable have increased at a faster rate than sales over the years, it could be bad for the company because it signals a possible overreliance on borrowings from the bank.

Liquidation Value and Net Current Asset Value

A high percentage of current assets over fixed assets can be a good sign when assessing a company’s liquidation value or net current asset value. The net current asset value is calculated by subtracting a firm’s total liabilities and preferred shares from its current assets.

This is important because fixed assets tend to suffer a greater loss than easily liquidated cash or cash equivalents in the current asset category.

Graham reminds the reader: “When a stock is selling at much less than its net current asset value, this fact is always of interest, although it is by no means conclusive proof that the issue is undervalued.”

Margin of Profit

As a crucial part of value investing, the margin of profit (also known as the margin of safety) can be calculated by dividing the operating income by sales. The margin of profit is significant because it informs you how efficiently the company is operating. For example, a ratio of 74% shows that the company would have $0.74 left for every dollar paid after paying all operating expenses. Here, you would be purchasing a $1 company for $0.74. A strong margin of profit is beneficial and adds a competitive edge to the company.

This is perhaps one of the most essential principles underscoring Graham’s investment principles. It not only helps minimize the downside risk of an investment but has been shown to produce higher-than-average returns as the market eventually realizes the fair value of the company.

Seth Klarman, another legendary value investor, has said, “There are only a few things investors can do to counteract risk: Diversify adequately, hedge when appropriate and invest with a margin of safety. It is precisely because we do not and cannot know all the risks of an investment that we strive to invest at a discount. The bargain element helps to provide a cushion for when things go wrong.”

What Were Graham’s 2 Rules of Investing?

Benjamin Graham published several rules for investing, some of which were to expect volatility and profit from it and always invest with a margin of safety.

Did Warren Buffet Know Benjamin Graham?

Buffet was a student at Columbia University, where Graham taught him value investing.

Is The Intelligent Investor Still Relevant?

Graham’s book “The Intelligent Investor” is still recommended by investors to investors for its principles on value investing.

The Bottom Line

When analyzing financial statements, the key figures to look for in determining the strength of a company are its earning power, asset value, how the company compares to its industry, and the company’s earnings trends over several years. The goal of “The Interpretation of Financial Statements” is to demonstrate how to assess these factors with the objective of achieving intelligent and reasonable results.

Reviewed by Amy Soricelli

Higher education costs in the United States have outgrown the rate of inflation, and getting an MBA has associated tuition expenses, along with rent and book costs. MBA graduates, especially those who attended private or well-known business schools, can accumulate between $100,000 and $200,000 in debt and expenses in about two years. Fortunately, those highly motivated to secure an MBA can explore alternative options to receive the degree and try to minimize the costs.

Key Takeaways

• MBAs offer the potential for career flexibility, enhancement, and advancement opportunities but can also come with a steep price tag.
• MBAs from private and public business schools can cost between $100,000 and $200,000 in debt and expenses in just two years.
• A part-time or evening MBA program can allow you to retain your full-time job.
• Some companies, especially Fortune 500 corporations, might assume partial or the entire cost of an MBA program.

MBA Costs Are More Than Just Tuition

Business schools market their programs in order to jockey for competitive positioning, mostly by way of attempting to secure higher rankings among peer groups. You might view the degree as a way to achieve greater career flexibility or as a way to open doors for new functions or industries. However, you should never assume that an MBA automatically means anything for your career. To be a meaningful investment of your time and money, it must enhance your experience and abilities, be an established step or boost in your industry and career, or be from a top school employers want to hire grads from.

Thus, it is important to assess a program beyond only tuition rates. Many schools have started publishing estimates of total attendance expenses to allow prospective students to financially, professionally, and personally prepare for their programs. For example, Harvard Business School provides expense estimates for single, married, and married students with children. The school estimates that a single MBA student attending Harvard could expect to pay about $118,800 per year in total expenses, of which about $76,400 is tuition (for the 2024-2025 year). Stanford, the University of Pennsylvania (Wharton), the New York University (Stern), and the University of Chicago (Booth) are even more expensive.

Note

Many schools have financial assistance programs or even full-time scholarships for certain students. It helps to investigate all MBA programs and schools to see what they have available.

You may want to find an MBA program with more acceptable costs. Programs at lesser-known public universities may offer a less expensive option. Exploring the full menu of public school MBAs allows you to cut your debt in half, especially if your state university has a business school. For example, the University of Georgia Terry College of Business’s tuition was $34,236 for non-residents and $13,918 for residents for the 2024-2025 school year. The full-time MBA (a two-year program) was more than $71,000 in tuition and fees (for a non-resident, plus any living expenses).

In comparison, its online MBA was more affordable for non-residents, at about $56,000 in tuition and fees for a 17-, 20-, or 22-month program.

Lost Salary or Wages

One of the least-often mentioned expenses of attending an MBA program is the time you’ll need to take away from earning to attend a full-time program. If you can’t afford not to work and go to school full-time, you’ll need to find a part-time program.

Part-Time Programs

You might be able to find a part-time or evening MBA program that allows you to retain your full-time job. These programs typically take three or more years to complete, but some online, executive, or professional MBA courses have compressed timelines. For instance, the Terry College of Business offers part-time programs of 20+ hours per week, split between in-person and distance learning. You can also choose from program durations of 17-, 20-, or 22-months. Many other schools will have similar program choices.

Your Company May Pay Help With the Costs

Some companies are willing to assume some of the costs of an MBA program. A few might even pay the full tuition. Others might pay for or contribute to a master’s degree in accounting or finance or help with the costs of attaining a CPA or CFA license.

Concerns About MBAs

If you have a family, you should exercise caution in undertaking a full-time job as well as an intensive part-time MBA program. It can be challenging to find time and attention for loved ones, household duties, and the curveballs life throws. With a family, your success depends on their support and understanding—you could easily dedicate 70+ hours per week to work and academics.

One risk of pursuing a graduate degree is that the lost wages and increased debt may not help you get a better-paying or more rewarding job. That’s why it’s essential to fully understand how an MBA is viewed in the field you’re in or want to get into and whether it will help you achieve your goals.

What Is the Total Cost of Getting an MBA?

It depends on the school you choose. Tuition and the cost of living in different areas vary, but generally, you’ll pay between $100,000 and $200,000 in tuition to attend the most reputable schools. It is much higher if you factor in the living expenses, lost wages, and fees.

Is an MBA Worth It Financially?

Many top businesses require prospects to have MBAs from top-rated business schools, which cost more. However, pay at a Fortune 500 company is much more lucrative than at other companies. Again, it depends on the school you attend, how much you pay, where you end up, and what you do with the degree after graduating.

Is an MBA Worth It After 40?

It can be, depending on what you have accomplished professionally. You’ll need to be confident that the benefits you receive from achieving an MBA outweigh the costs, such as a salary or employment timeframe that allows you to pay off any student debt and achieve the standard of living you prefer. Additionally, you should consider the lost opportunity cost to your retirement savings, if any—the money you spend on an MBA at 40 might be put to better use in your retirement accounts, depending on your circumstances.

The Bottom Line

Given that an MBA program is a capital-intensive endeavor, exercise the same level of diligence as if you were purchasing a home—it costs that much after combining expenses, lost wages, and tuition.

You can choose from various schools and programs tailored for working adults or online MBA programs that can lessen the scheduling demands. Consider the schools in your state, as they might charge you much less than a school in another state where you’d pay non-resident tuition.

Reviewed by Chip Stapleton

What Is an Impaired Asset?

In the United States, an asset is considered impaired when its fair market value unexpectedly drops to less than the book value, or net carrying value, recorded on the balance sheet.

If the loss is permanent, it must be reflected on the balance sheet and recorded on the income statement.

Impairment can occur for a variety of reasons including changes in market conditions, regulations, technology, environmental conditions, and more.

If any such change damages an asset, makes it obsolete, or otherwise causes a reduction in its value below book value that can’t be recovered, the asset is impaired.

Key Takeaways:

• An asset is considered impaired when its fair market value drops below book value permanently.
• The impairment must be reflected in the financial statements if the loss can’t be recovered.
• Impairment recognition and measurement are jointly regulated by the Internal Revenue Service (IRS), the Financial Accounting Standards Board (FASB), and the Governmental Accounting Standards Board (GASB).
• Tangible asset impairment might result from regulatory or technology changes or shifts in the market or usage rates.

Determining if an Asset Is Impaired

To determine, or test, whether an asset is impaired, a company:

1. Calculates an accurate fair market value for the asset
2. Compares that value to the asset’s book value recorded on the balance sheet

A value below the book value indicates an impairment while a value equal to or above the book value does not.

Importantly, the general threshold for impairment, as described under generally accepted accounting principles (GAAP), is the inability to recover the book value amount.

If the asset is determined to be impaired, it can be written down unless otherwise excluded by the Internal Revenue Service or GAAP.

Assets must be properly valued (fair market value) in accordance with GAAP. Groups of similar assets should be tested together, with the testing set at the lowest level of identifiable cash flows considered independent of other assets. 

FASB Statement No. 144

Long-term, tangible asset impairments are addressed in FASB Statement No. 144: Accounting for the Impairment or Disposal of Long-Lived Assets.

FASB 144 discusses the application of goodwill allocation to long-term assets, suggests a preferred method for estimating cash flow (probability-weighted), and recommends when assets should be held for sale.

Important

Impairment recognition and measurement are regulated by the Internal Revenue Service (IRS), the Financial Accounting Standards Board (FASB), and the Governmental Accounting Standards Board (GASB).

Identifying Assets to Value

As pointed to above, tangible asset impairment might result from regulatory changes, technology changes, significant shifts in consumer preferences or community outlook, a change in the asset’s usage rate, or other forecasts of long-term non-profitability. 

Intangible asset impairment is less clear. Many types of intangible assets are covered in FASB 144 and FASB 147.

It is often impractical to simply value every single asset for profitability in every accounting period.

Instead, businesses should take such action if an event or circumstantial change, such as those mentioned, signals a possibility of impairment and the prospect that a particular net carrying amount might not be recoverable.

Note

Long-term tangible assets are the assets most likely to become impaired. But it can occur to accounts receivable and intangible assets, as well.

Additional Signs of Impairment

Other more direct signs can point to potential impairment.

For instance, a business should test for impairment when accumulated costs are higher than amounts needed to construct or acquire an asset. In other words, when it is more expensive than once thought to obtain a business asset.

Other signs are correlative; an asset might be associated with a history of current period losses or operating cash flow losses. Perhaps the asset shows a pattern of declining market value.

In addition, adverse changes in legal factors and general economic conditions are both grounds for measuring an asset’s value (despite a broad range of possible interpretations of adversity).

What Kinds of Assets Become Impaired?

Many kinds. For example, machinery, equipment, trucks and other vehicles, land, facilities, systems hardware and software can all become impaired.

Does an Impairment Loss Always Get Recorded?

No, it’s only recorded on a company’s financial statements if the amount of the loss cannot be recovered.

What Can Alert a Company to Potential Impairment?

If a company experiences events that it suspects could damage the market value of an asset, such as seriously bad weather or natural disasters, changes in market conditions, a loss of asset functionality, new regulations, or innovative new technology, then it should be prepared to determine impairment.

The Bottom Line

Companies determine asset impairment by accurately measuring the fair market value of an asset and comparing it to the book value on the balance sheet. If the fair market value is less than the book value, then the asset is impaired.