financial education

KEY TAKEAWAYS

• Cryptocurrency-linked stocks are slumping in premarket trading Tuesday, after bitcoin dropped below $90,000 for the first time since November as investors steered clear of risk assets, including shares.
• Among those declining are Robinhood, Coinbase Global, and Strategy, formerly known as MicroStrategy.
• The declines in bitcoin and crypto assets come as economic uncertainty weighs on investors, with small-cap shares dropping further into correction territory Monday and major indexes down for the month.

Cryptocurrency-linked stocks are slumping in premarket trading Tuesday, after bitcoin (BTCUSD) dropped below $90,000 for the first time since November as investors steered clear of risk assets, including shares.

Shares in trading app Robinhood (HOOD), cryptocurrency exchange Coinbase Global (COIN) and Marathon Digital parent company MARA Holdings (MARA) are all falling around 4% to 5%. Bitcoin mining and infrastructure company Riot Platforms Inc. (RIOT) is falling about 5%.

Business intelligence and bitcoin treasury company Strategy (MSTR), formerly known as MicroStrategy, is down around 5%. The company said Monday it had again expanded its bitcoin holdings, acquiring nearly $2 billion more of the digital currency.

Bitcoin, which has traded within a relatively narrow range in recent weeks, was around $89,000 early Tuesday, well below its record high level of around $109,000 set last month.

The declines in bitcoin and crypto assets come as economic uncertainty weighs on investors, with small-cap shares dropping further into correction territory Monday and major indexes down for the month. Major U.S. indexes finished mostly lower on Monday, following a steep downturn last week.

Fact checked by Ariel Courage
Reviewed by Robert C. Kelly

In economics, price elasticity is a measure of how reactive the marketplace is to a change in price for a given product. However, price elasticity works in two ways.

While the price elasticity of demand is a reflection of consumer behavior as a result of price change, the price elasticity of supply measures producer behavior. Each metric feeds into the other. Both are important when analyzing marketplace economics, but it is the price elasticity of demand that companies look to when establishing sales strategy.

Key Takeaways

• Price elasticity measures how the marketplace reacts to a change in price for a given product, and it works in two ways.
• Price elasticity of demand measures the change in consumption of a good as a result of a change in price.
• Price elasticity of supply measures the change in production relative to a change in price.

Price Elasticity of Demand

Price elasticity of demand measures the change in consumption of a good as a result of a change in price. It is calculated by dividing the percent change in consumption by the percent change in price.

For example, if the price of a name-brand microwave increases 20% and consumer purchases of this product subsequently drop by 25%, the microwave has a price elasticity of demand of 25% divided by 20%, or 1.25. This product would be considered highly elastic because it has a score higher than 1, meaning the demand is greatly influenced by price change.

A score between 0 and 1 is considered inelastic, since variation in price has only a small impact on demand. A product with an elasticity of 0 would be considered perfectly inelastic, because price changes have no impact on demand.

Many household items or bare necessities have very low price elasticity of demand, because people need these items regardless of price. Gasoline is an excellent example. Luxury items, such as big-screen televisions or airline tickets, generally have higher elasticity since they are not essential to day-to-day living.

Price Elasticity of Supply

Companies use price elasticity of demand to establish their optimal pricing strategy, but the relationship among supply, price, and demand can be complicated. If a product has a high elasticity of demand, can a change in production levels help the company selling the item maximize profits?

The change in production relative to a change in price is called price elasticity of supply, and it is influenced by many factors. Primary among them are the duration of the price change, the availability of substitutes from other sellers, the company’s capacity for increased production and delivery, stock availability, and complexity of production.

For example, woolen socks are not an overly complicated product to manufacture. Production requires few raw materials, and the item is lightweight and easy to ship. Therefore, if a company knows it can stimulate a 30% increase in sales by reducing the price by 20%, it is likely to increase production to reap the maximum profit.

However, a small business that sells handmade furniture may have a harder time ramping up production or dealing with increased shipping and delivery activity, so an increase in supply may not be feasible, regardless of price elasticity.

What Is Demand?

Demand is an economic concept that relates to a consumer’s desire to purchase goods and services and willingness to pay a specific price for them. An increase in the price of a good or service tends to decrease the quantity demanded. Likewise, a decrease in the price of a good or service will increase the quantity demanded.

What Is Supply?

Supply is an economic concept that describes the total amount of a specific good or service that is available to consumers. Supply can relate to the amount available at a specific price or the amount available across a range of prices if displayed on a graph. 

How Are Supply and Demand Related?

The law of supply and demand combines two fundamental economic principles that describe how changes in the price of a resource, commodity, or product affect its supply and demand. Supply rises while demand declines as the price increases. Supply constricts while demand grows as the price drops.

The Bottom Line

Subscription-based products such as streaming services and gym memberships can be real-life examples of price elasticity of demand. Consumers may cancel or adjust their subscriptions if prices change or alternatives become available.

A real-life example of price elasticity of supply occurred in 2022 after Russia invaded Ukraine. Crude oil prices jumped to as high as $110 per barrel in March of that year, as Russia cut supplies in response to economic sanctions. Gas prices averaged $3.95 per gallon in the United States in 2022—an increase of more than 31% from 2021.

How the Controversial Ride-Sharing Company Came to Dominate Its Market Worldwide

It’s been a wild ride for Uber Inc. (UBER). The company says the idea for its service was cooked up by two computer engineers who found themselves unable to find a taxi on the streets of Paris. It quickly became the world’s most valuable startup, “disrupted” personal transportation and food delivery, and became an emblem of the arrival of the gig economy. By early 2025, 16 years after its launch, it had a market capitalization of $166 billion.

Along the way, there were sexual harassment scandals, numerous lawsuits, public online protests, customer data hacks and cover-ups, an initial public offering (IPO) that flopped, the ignominious departure of one of its founders as CEO, hundreds of millions of dollars in legal penalties across multiple jurisdictions, and allegations of stealing trade secrets from Alphabet Inc. (GOOGL), one of its investors.

Key Takeaways

• Uber’s early investors included Goldman Sachs Group, Inc. (GS), Jeff Bezos, BlackRock, Inc. (BLK), and Google (later Alphabet).
• The idea for Uber was so disruptive it was illegal in many cities, but the company pushed ahead with a global expansion anyway.
• The company burned through tens of billions of dollars before it reported its first profit five years after its IPO.
• By 2025, Uber’s share price had almost doubled from its 2019 IPO closing price, and the company launched a $7 billion buyback program.

The Founding of Uber

According to the company, the idea for Uber was born in 2008, when computer engineers Travis Kalanick and Garrett Camp, attending a conference in Paris, were unable to hail a taxi. Originally, Camp wanted to focus on a high-end “black-car” service for professionals, but Kalanick didn’t like the idea of owning cars and garages. He only agreed to join Camp if the new venture focused solely on a ride-hailing app.

The two founded the company as UberCab in San Francisco in 2009 and began pitching it to investors as a faster, more luxe version of taxis that could be arranged via a mobile phone app. In July 2010, the company received its first ride request in San Francisco. The city’s transit authority quickly told the company to stop offering rides and threatened the company with fines and its people with prison time. In October of the same year, the company was renamed Uber and received $1.25 million in capital investment. Two months later, Kalanick became CEO, replacing Ryan Graves.

Note

From 2016 through early 2023, Uber piled up almost $30 billion in operating losses as it tried to capture market share. Its first annual profit as a public company, totaling $1.89 billion, came in 2023.

Uber’s Aggressive Expansion Up to Its IPO

Uber expanded rapidly in its first year, moving quickly to set up shop across the globe, which drove its valuation from $60 million in 2011 to $82 billion at its IPO just eight years later. There were plenty of scandals and controversies along the way—we’ve corralled them into a timeline below:

• 2011
• Uber launches in New York, taking on the city’s iconic yellow taxis, as well as in Paris, its first international market. It also closes two fundraising rounds: a Series A that raises $11 million, followed quickly by a Series B that raised $37 million, including from Goldman Sachs and Amazon founder Jeff Bezos.
• 2012
• People are now hailing Ubers across the U.S. and in several European cities. Uber introduced UberX, the lower-cost version of its service that became the company’s most popular offering.
• 2013
• Uber now operates in 40 countries, including China, India, and Russia, and it is valued at about $3.5 billion.
• Uber drivers file a class-action lawsuit to require the company to designate them as employees instead of independent contractors. This fight would drag on for years.
• 2014
• Uber announced that it operates in 250 locations worldwide. In December, the company raised $1.2 billion from investors, including BlackRock and Google Ventures, and is valued at about $40 billion.
• Uber faces large, disruptive strikes by taxi drivers in several European cities. In Paris, drivers burn tires and overturn cars.
• In November, an Uber executive was investigated for using its “God View” tool—designed to monitor customers—on a journalist. The company agreed to pay a $20,000 fine.
• Uber is banned in Delhi, India, after an Uber driver sexually violated a passenger, raising questions about Uber’s system of background checks for drivers.

Important

In 2016, journalists at BuzzFeed News determined that Uber drivers in three major U.S. cities earned less than $13.25 an hour after expenses. A 2025 study put Uber driver pay at about $23.33 ($0.90 per mile driven) for an average weekly gross of $513—figures that don’t account for expenses.

• 2015
• Uber is now in 300 cities. Its food-delivery service, UberEats, debuted in New York, Chicago, and Los Angeles.
• Authorities raid Uber offices in Amsterdam, saying the company is operating illegally. In France, anti-Uber protests turn violent, with taxi drivers attacking suspected Uber drivers.
• 2016
• Uber sold its China operations to Didi. It began an autonomous driving pilot program in Pittsburgh and San Francisco. The San Francisco pilot was quickly shut down because Uber had not sought, let alone received, city approval.
• An Uber driver was accused of killing six people in Michigan in his time off between picking up and dropping off passengers, bringing yet more attention to Uber’s background check system.
• 2017
• The #DeleteUber hashtag went viral after the company used surge pricing in an attempt to pad profits during a New York City taxi strike that was called to protest Donald Trump’s Muslim ban. Hundreds of thousands of users reportedly canceled their accounts.
• Uber agreed to pay $20 million to drivers across the country following a Federal Trade Commission complaint that it misled prospective drivers about their earning potential.
• In a blog post, former Uber engineer Susan Fowler alleged that her complaints of sexual harassment against her manager were largely ignored. Kalanick hires former U.S. Attorney General Eric Holder to investigate.
• After the law firm Perkins Cole investigated 215 staff complaints going back five years, 20 employees were fired.
• Holder recommends that Kalanick’s responsibilities be limited. Kalanick steps down as CEO. He is replaced by Dara Khosrowshahi.
• Google sued Uber, alleging that it stole trade secrets from its autonomous driving division.
• Uber posted a net loss of $4.5 billion.
• 2018:
• In May, Uber announced it had reached 10 billion total trips, more than double the total a year earlier.
• Uber settled Google’s trade theft claim for $245 million.
• Uber sold its Southeast Asia operations to Grab, a competitor.
• 2019:
• On May 10, Uber began trading on the New York Stock Exchange. Its share price closed 7.6% lower that day, the worst first-day loss in dollar terms in U.S. history. It posted a $5.2 billion loss for the quarter.
• In the following months, Kalanick sold more than $2.5 billion in shares, completely divesting from the company. By the end of the year, Uber shares were down by about a third from the initial listing price. Investors dubbed the situation a “horror show.”

Uber Turns the Corner

Uber achieved a remarkable turnaround in the years following its IPO. After burning through tens of billions of dollars to capture market share, the company under Khosrowshahi’s leadership sharpened its focus on core operations. While ride-hailing was hit hard by the pandemic, Uber Eats kept its customer base engaged, leaving Uber well-positioned to recover once the pandemic ended. It also cast off noncore businesses such as autonomous cars.

In addition, the company expanded advertising on the app and began offering grocery delivery and other travel services. Khosrowshahi also focused on attracting drivers by improving their experience, a shift for a company that has settled multiple driver lawsuits over the years.

In February 2024, a week after revealing its first annual profit ($1.89 billion), Uber announced a $7 billion share-buyback program.

By February 2025, Uber shares were trading near an all-time high and almost double the closing price on its first day of trading in 2019. In addition, Uber’s U.S. rideshare business market share had grown from 70% in January 2023 to 76% in December 2024.

Note

A 2025 study found that gratuities make up just 10.4% of earnings for rideshare drivers, while for those who deliver meals, such as drivers for UberEats, that goes up to a majority of earnings (53.4%).

The Bottom Line

Uber has always been controversial, partly because of its willingness to flout local laws forbidding it to operate. As one senior communications executive put it in an internal email in 2014: “…sometimes we have problems because, well, we’re just (expletive) illegal.” Uber is still banned in some countries.

But Kalanick and Camp’s vision of disrupting urban mobility has been at least partly realized, and under Khosrowshahi’s leadership, the company is on solid footing and finally turning a profit.

A Beginner’s Guide to Smart Investing with Index Funds

For investors seeking a proven approach to building long-term wealth, index funds have become the cornerstone strategy for both retail and major institutional investors.

“One of the most significant headwinds to profitable investing is management fees. By taking a passive, index-based investment approach, an investor can keep fees low while diversifying the portfolio across industries, sectors, and geographies,” said David Tenerelli, a certified financial planner at Values Added in Plano, Texas. “This results in the investor being able to benefit from broad economic growth regardless of the fortunes of individual companies.”

This guide explores what you need to know about index funds, from their fundamental principles to practical implementation strategies.

Key Takeaways

• Index funds replicate the performance of a specific index, offering a passive investment strategy.
• They are lower in cost due to lower management fees and taxes than actively managed funds.
• Index funds offer broad diversification across several sectors and asset classes, reducing overall investment risk.
• Potential drawbacks include a lack of flexibility and limited upside potential during some periods.

What Is an Index Fund?

An index fund is an investment vehicle, usually a mutual or exchange-traded fund (ETF), that tracks the performance of a specific market index, such as the S&P 500 Index or the Dow Jones Industrial Average. Unlike actively managed funds, where portfolio managers make specific investment decisions to buy or sell certain assets, index funds employ a passive investment strategy to simply mirror the holdings and performance of their target index.

When you invest in an S&P 500 index fund, therefore, you’re essentially buying small portions of all 500 companies included in that index. This means your investment is diversified across hundreds of companies with each share.

Index investing emerged in the 1970s when John Bogle, founder of Vanguard, introduced the first index mutual fund for individual investors. At its launch in 1976, the Vanguard 500 Index Fund was initially met with skepticism and dubbed “Bogle’s Folly.” However, the fundamental idea behind index investing–that most active managers fail to outperform the market after accounting for fees–has proven durable.

From humble beginnings of just around $10 million in assets, U.S. index funds have grown to command more than $16 trillion as of year-end 2024, representing a fundamental shift in how both institutional and individual investors approach the market.

Types of Index Funds

Index funds track different indexes or market segments:

Broad Market Index Funds

These funds track comprehensive market indexes like the total U.S. stock market or global stock market. They provide very wide diversification and are often recommended as core portfolio holdings.

Examples include the following:

• iShares Russell 3000 ETF (IWV)
• Vanguard Total World Stock ETF (VT)
• Fidelity ZERO Total Market Index Fund (FZROX)

Large-Cap Index Funds

These funds track major indexes like the S&P 500 and offer exposure to America’s biggest corporations.

Examples include the following:

• SPDR S&P 500 Index ETF (SPY)
• Vanguard Mega Cap ETF (MGC)
• Fidelity 500 Index Fund (FXAIX)

International Index Funds

These funds track non-U.S. markets, allowing investors to gain global exposure. They might track developed markets, emerging markets, or both, offering geographical diversification.

Examples include the following:

• iShares Core MSCI EAFE ETF (IEFA)
• Vanguard FTSE Emerging Markets ETF (VWO)
• Fidelity International Index Fund (FSPSX)

In addition to broad international funds, there are also many ETFs that track single-country foreign indexes.

Sector-Specific Funds

These specialized funds track specific industry sectors, such as technology, healthcare, or real estate.

Examples include the following:

• Technology Select Sector SPDR (XLK)
• Vanguard Health Care ETF (VHT)
• Vanguard Real Estate Index Admiral Fund (VGSLX)

Important

Sector funds are typically used to complement core holdings rather than as primary positions.

Fixed Income/Bond Index Funds

Rather than tracking an equity index, fixed-income index funds and ETFs track bond market indexes.

Most broad bond market indexes, like the Bloomberg U.S. Aggregate Bond Index, focus on investment-grade securities, including a mix of government bonds, corporate bonds, and mortgage-backed securities.

Examples include the following:

• iShares Core U.S. Aggregate Bond ETF (AGG)
• Vanguard Total Bond Market ETF (BND)
• Fidelity U.S. Bond Index Fund (FXNAX)

Important

Bond index funds often have slightly higher tracking error than equity funds due to the complexity of the bond market and difficulty in perfectly replicating bond indexes.

The Advantages and Disadvantages of Index Funds

Pros

• Very low fees

• Lower tax exposure

• Passive management tends to outperform over time

• Broad diversification

Cons

• No downside protection

• Cannot take advantage of opportunities

• Lack of flexibility

• Lack of professional portfolio management

Advantages

Cost

One of the most compelling advantages of index funds is their comparatively low cost. Since they don’t require teams of analysts and portfolio managers to select investments, they typically charge much lower fees than actively managed funds. While an actively managed fund might charge an expense ratio of 1% or more, many index funds charge less than 0.15%. This difference in fees can translate to significantly higher returns over long periods.

On a $100,000 investment over 30 years, assuming an 8% annual return, the difference between a 0.10% and 1.00% expense ratio amounts to over $220,000 in saved fees.

Tax Efficiency

Because index funds typically have low turnover (they only buy and sell securities when the index composition changes), they have fewer taxable events. This characteristic can result in lower capital gains distributions.

Broad Diversification

Index funds inherently provide broad diversification across many securities. Diversification helps protect against the risk of any single holding’s poor performance bringing down your portfolio.

Transparency

Investors always know exactly what they own since the fund simply tracks a published index. This clarity contrasts with actively managed funds, where holdings may change based on the manager’s decisions.

Disadvantages

Market Dependency

Index funds are designed to match market performance, not beat it. During market downturns, these funds will naturally decline along with their underlying index. And unlike actively managed funds, index fund managers can’t take defensive positions or hedge during periods of market turbulence.

Limited Flexibility

The passive nature of index funds means they must hold securities in proportion to their index weightings, regardless of the individual merits of specific companies. This inflexibility can sometimes result in overexposure to overvalued sectors or companies.

For example, in 2025, the so-called magnificent seven tech companies—Apple Inc. (AAPL), Amazon.com Inc. (AMZN), Alphabet Inc. (GOOGL), Meta Platforms, Inc. (META), Microsoft Corporation (MSFT), NVIDIA Corp. (NVDA), and Tesla, Inc. (TSLA)— make up almost a third of the index, meaning any downturn in that sector would be a problem for investors in S&P 500 index funds.

How To Invest in Index Funds

Step 1: Choose a Brokerage Account

The first step is opening a brokerage account if you don’t already have one. Major brokers all offer a wide selection of index funds, often with no commission fees for trades.

Step 2: Determine Your Investment Goals

Before selecting specific index funds, set out your investment objectives, time horizon, and risk tolerance.

Step 3: Select Your Index Funds

When choosing specific index funds that fit your goals, consider these key factors:

• Expense ratio: Look for funds with the lowest possible expense ratios while still tracking your desired index effectively.
• Tracking error: Compare how closely the fund has historically tracked its target index.
• Assets covered: Ensure your chosen funds provide exposure to your desired market segments.
• Trading volume: Higher trading volume typically means better liquidity and tighter bid-ask spreads—meaning you can trade them quickly at a lower cost.
• Assets under management (AUM): While not always a red flag, funds with small AUM may have a higher risk of closure or comparatively higher costs because they haven’t achieved efficiency of scale.

Step 4: Implement Your Strategy and Stick with It

The most important part of an indexing strategy is to continue to hold it for the long term, even through bear markets or unfavorable conditions. Consider implementing a dollar-cost averaging strategy by investing fixed amounts at regular intervals. This approach can help cut the impact of market volatility on your investment returns.

“It takes discipline to continue to buy investments during a market downturn,” Tenerelli said. “But a shift in mindset can help—rather than fearing financial loss, an investor can reframe as buying stocks ‘on sale.'”

The chart below shows the results of using dollar-cost averaging by putting $50 aside each month in an S&P 500 index fund for 20 years.

The Bottom Line

Index funds offer a compelling investment option for both novice and experienced investors. Their combination of low costs, broad diversification, and simplicity makes them an excellent foundation for long-term investment success.

While they may not offer the excitement of picking individual stocks or the potential for market-beating returns, index funds have proven a reliable path to building wealth over time.

Fact checked by Vikki Velasquez

One of the most pressing questions individuals face is: How much money will I need to maintain a comfortable lifestyle once I stop working? To answer that question, you have to understand the average monthly expenses of retired individuals and evaluate whether your savings will be enough.

Generally speaking, on average, you’ll need around $5,000 per month after retirement.

Key Takeaways

• The average retired household spends around $5,000 per month, with housing, healthcare, and food being the largest expense categories.
• With a median 401(k) balance of $210,724, retirees relying on the 4% withdrawal rule and Social Security benefits often face a shortfall in covering monthly costs.
• Retirees can bridge the gap by boosting savings, delaying retirement, cutting discretionary expenses, or exploring additional income sources like part-time work or rental properties.

Average Monthly Expenses for Retirees

The U.S. Bureau of Labor Statistics (BLS) provides valuable insights into spending patterns of retired households. According to data from the Consumer Expenditure Surveys (CES), the average retired household spends approximately $5,000 per month. Note that this information is based on data collected on 2023 spending and is the most recent available. This includes, in its total, but is not limited to:

• Housing. Costs include mortgages, property taxes, utilities, and maintenance. Retirees who have paid off their mortgages generally face lower monthly costs.
• Healthcare. Even with Medicare coverage, a retiree’s budget can be strained by out-of-pocket premiums, co-pays, prescription drugs, and long-term care.
• Food. Food spending tends to decline slightly in retirement compared to preretirement years. However, dining out and special dietary needs can influence individual costs.
• Transportation. While commuting expenses drop, retirees can still spend on vehicle maintenance, insurance, fuel, and recreational travel.

Will Your Savings Be Enough?

One benchmark to assess your retirement readiness is your total savings and investment portfolio. Data from Empower reveals the median 401(k) balance for individuals ages 60 to 69 is $210,724. Perhaps more important is data that shows the average balance for this age range was $573,624.

It’s important to consider how this balance decreases by age. For example, Empower also reported the median balance for those in their 70s was $106,654. This is a function of (1) individuals leaving a workforce and rolling over their retirement savings to other retirement accounts and (2) needing to draw down their retirement accounts. Consider the statistic above about needing $60,000 per year (all while perhaps not having income other than retirement benefits).

A commonly used retirement planning rule is the 4% withdrawal rule, which suggests withdrawing 4% of your savings annually to provide a steady income while preserving your principal.

Strategies to Bridge the Gap

If your current retirement projections indicate a shortfall, don’t panic. There are actionable steps you can take to ensure financial security:

1. Maximize 401(k) Contributions. For 2025, the Internal Revenue Service (IRS) allows individuals ages 50 and older to contribute up to $31,000 annually to their 401(k).
2. Contribute to IRAs. Beyond employer-sponsored plans, individuals can save $7,000 (or more in certain circumstances) in traditional or Roth individual retirement accounts (IRAs).
3. Increase Social Security Benefits. Each year you delay claiming Social Security past your full retirement age, your benefits increase by 8%, up to age 70.
4. Evaluate Retirement Spending. Consider what you will need to spend money on in your post-career period. Decreasing costs can be just as good as increasing income.

The Bottom Line

The average retired household in the United States spends approximately $5,000 per month, covering expenses like housing, healthcare, food, transportation, and discretionary spending. With the median 401(k) balance for individuals ages 60 to 69 at $210,724, applying the 4% withdrawal rule provides about $702 per month—which, when combined with the average monthly Social Security benefit of $1,976, still falls short of covering typical expenses.

If you find yourself in this boat, consider some techniques to increase your savings or decrease your expenses.

Reviewed by Akhilesh Ganti
Fact checked by Yarilet Perez

Today’s biggest, best-known companies are mostly mere teenagers in the history books of business—not least because their main activities have become possible only since the industrial revolution. Microsoft, for example, was not born until the relatively recent 1975. We know that corporate longevity is highly unusual. An estimated one-third of the companies featured in the 1970 Fortune 500 disappeared by 1983, either due to merger, acquisition, bankruptcy, or dissolution.

Of course, it is difficult to accurately calculate the exact age of companies. We cannot always say with absolute certainty whether the companies are really old, continuous businesses, or newer firms that were once trade associations, state organizations, or the result of mergers or acquisitions.

Complex date calculations aside, we will have a look at a handful of the companies that have withstood the test of time, both at home and abroad.

Key Takeaways

• Energy firm Con Edison began in New York City over 200 years ago and is still a thriving business today.
• Insurance marketplace Lloyd’s began in London 338 years ago and remains active.
• IBM was founded in New York 113 years ago and remains a technology powerhouse today.
• Tuttle Farm in New Hampshire was the oldest continually operating family farm in the U.S., for 381 years, before it was bought by another local farm in 2013.
• Like Tuttle Farm, Kongo Gumi has ceased trading, as of 2006, but for 14 centuries, it was the world’s oldest continuously operating family business, building Buddhist temples and later coffins.

1. Consolidated Edison

Con Edison—Con Ed to generations of New Yorkers—started way back in 1823, when its earliest corporate entity, the New York Gas Light Company, received a state charter to install natural gas lines in lower Manhattan, replacing the whale oil lamps that dated back to the 1760s.

In 1824 New York Gas Light was listed on the New York Stock Exchange (NYSE), and it holds the record for being the longest listed stock on the NYSE. In the early years of the 20th century, the firm expanded into electricity, and in 1936 was renamed the Consolidated Edison Company of New York. Today, Consolidated Edison provides gas and electricity to about 3.6 million customers in New York City and Westchester County.

2. Lloyd’s

Today, Lloyd’s is the world’s leading insurance market, housed over the pond in London, England. However, its beginnings lie in the more modest surroundings of a 17th-century coffee house. London was growing in importance as a global trade center, which in turn led to increasing demand for ship and cargo insurance, and in 1688 Edward Lloyd’s Coffee House became the place to purchase marine insurance. Lloyd’s has grown and expanded over the 338 years to become the world’s leading market for specialist insurance in a wide range of areas.

But in America, perhaps Lloyd’s most famous moment came as a result of the San Francisco earthquake of 1906. After the earthquake, Lloyd’s underwriter, Cuthbert Heath said: “Pay all of our policy holders in full irrespective of the terms of their policies.” This message has since passed into insurance legend because the San Francisco disaster cost Lloyd’s dearly—more than $50 million—a staggering sum in those days, the equivalent to more than $1 billion in today’s terms. Lloyd’s faced an enormous bill. But they honored it, and Lloyd’s good faith was soon rewarded.

3. IBM

A comparatively newer company—that is about to celebrate its 113th birthday—is IBM. International Business Machines—or its predecessor, the Computing-Tabulating-Recording Company—was founded on June 16, 1911, by the financier Charles Ranlett Flint. It was renamed International Business Machines in 1924.

IBM has had a colorful 113 years, acting as a pioneer in both the American “New Deal” on social security and in civil rights, yet also being accused of providing equipment to the Nazi regime during the Second World War.

For decades it was the biggest technology company in the world, but the firm suffered a near disaster in the 1980s when it failed to keep up with others’ innovations. However, a new CEO, Louis V Gerstner, turned the company around during the 1990s, coinciding with the rise of the internet. Gerstner retired in 2002, leaving the company once again one of the top computing firms in the world. As of April 2024, Arvind Krishna is the new CEO.

4. Tuttle Farm

Tuttle Farm in New Hampshire has been an inspiring case of a withstanding American family business. Although it is no longer family-owned, after selling to and becoming a part of nearby Tendercrop Farm in Massachusetts in 2013, prior to the sale, it was run by one family for 381 years.

Run in its last incarnation by the 11th generation of the family, the farm was for many years the oldest continually operating family farm in the United States. It all began in 1632 when John Tuttle arrived in the New World bearing a land grant from King Charles II.

The farm saw many changes over the more than 381 years of its existence, especially in the last 50 or so with the rise of the supermarket and the closing of many “mom and pop” businesses. Although able to thrive for many years, by 2010 the fruit-and-vegetable farm was put up for sale. In 2013, it was sold to the owner of Tendercrop Farm for a little over $1 million.

5. Kongo Gumi

Although they have now ceased trading, no piece about historical firms would be complete without at least mentioning the Japanese temple builder Kongo Gumi. This business had been trading for 14 centuries and was, until 2006, the world’s oldest continuously operating family business.

One of the secrets of Kongo Gumi’s 1,428-year run was its flexibility. For example, when the temple building business suffered during World War II, the company responded and switched to building coffins.

Kongo Gumi’s success also suggests that it’s a good idea to operate in a stable industry. Few industries could be less volatile than Buddhist temple construction—where the belief system has survived for thousands of years and has many millions of followers.

Unfortunately, even these factors could not protect this historic firm from the downturn in Japan’s economy. When the company’s borrowings had ballooned to $343 million in 2006, the firm was acquired by Takamatsu, a large Japanese construction company, and Kongo Gumi was absorbed into a subsidiary.

What Company Existed the Longest?

There’s many different directions and records that could point to one company over another. Very generally speaking, the oldest company in the world is usually recognized as Kongo Gumi, the Japanese construction company that was founded in 578 AD. It operated operated continuously for over 1,400 years until it was absorbed by another firm in 2006.

How Old is the New York Stock Exchange?

The NYSE was founded in 1792. Though the format of exchange has changed and many of the companies still do not exist, the exchange remains.

What Is the Outlook for the Oldest Companies?

A study by the International Institute for Management Development and McKinsey found the average life-span of companies listed on the S&P in 1958 was 61 years. Nearly 60 years later, the average life-span was 18 years. History may indicate that it may be more difficult for old companies to thrive, though this is obviously a case-by-case basis.

The Bottom Line

Some of the world’s oldest companies have endured for centuries, defying the odds against corporate longevity. Among them are Con Edison, founded in 1823, Lloyd’s, established in 1688, IBM, tracing its origins to 1911, Tuttle Farm, operated by one family for 381 years, and Kongo Gumi, which thrived for 1,428 years until its closure in 2006.

Fact checked by Ryan Eichler
Reviewed by Doretha Clemon

The right of eminent domain is used by a government entity when a home or other property is seized to make way for a public project like a new road, bridge, or school. The takings clause of the Fifth Amendment to the U.S. Constitution requires that the owner must be justly compensated for the loss. Courts have held that to mean that the property owner must be paid the fair market value of the property.

In a typical mortgage, the amount may be enough to pay for a new home, because the homeowner’s equity increases as they make mortgage payments. However, if the homeowner has taken out a reverse mortgage, then they may only receive sufficient compensation to pay back their loan.

Key Takeaways

• Eminent domain cases on reverse-mortgaged properties are rare, but they can happen and can cause complications for borrowers.
• Unlike in traditional forward mortgages, a homeowner’s equity decreases in reverse mortgages, potentially leaving little more than what is needed to repay the loan and not enough for a new home, even if the fair market value is received for the condemned property.
• Two critical factors are the amount of the home’s value that is borrowed against, and whether values are appreciating in a particular home market.

How Eminent Domain Works

Eminent domain is the power of a government, whether federal, state, or municipal, to take private property for public use, following the payment of just compensation. This practice occurs in many different countries under different names. It may not seem fair to the owners of the property, and eminent domain legal cases—especially when the owners feel that they have not been justly compensated—are fairly common.

Eminent Domain and the Reverse Mortgage

The compensation payment, when combined with the equity in the home, may be enough to pay for a new home or at least provide for a down payment on a new mortgage. However, if the homeowner has a reverse mortgage, then the homeowner may not have enough remaining equity in the home to pay off the loan and buy a new residence using the compensation payment. 

The chances may be more favorable if the homeowner has significant equity in the property. The home may have increased in value since the reverse mortgage was obtained, or the homeowner may have maintained significant equity in the home by borrowing only a limited amount.

The worst-case scenario occurs when the homeowner has taken a substantial amount of the property value in reverse mortgage payments and has not had enough time (or enough luck) to enjoy a substantial increase in the property’s value. In such cases, the government payment may fall well short of the cost of replacement.

Important

Homeowners may face added costs, such as for appraisals and relocation, which are not necessarily covered in all eminent domain cases. 

Home Value

The problem arises when the amount borrowed leaves the homeowner with little equity in the property and thus little actual cash from the settlement with the condemning authority.

In a case in 2012, an Oregon homeowner was offered just enough money to repay her reverse mortgage when the state’s Department of Transportation needed her home for a road project. The state agency eventually agreed to let the woman, then in her mid-80s, live in an agency-owned home rent-free for as long as she needed it.

In a time of rapid home appreciation, such situations are less likely. A home’s value is likely to exceed the amount borrowed years before, notes David Henson, managing partner of Henson Fuerst of Raleigh, N.C., a specialist in eminent domain and related property law.

However, downward swings do happen in housing markets. While the law varies among states, condemning authorities and the courts aren’t likely to consider the homeowner’s debt.

Property Value vs. Debt

“The relevant factor truly is what’s the value of the property before they take it and what are the damages that result,” Henson says. “The debt is immaterial as to how the damages are either negotiated or tried if it goes in front of a jury.”

Many homeowners in such a situation face added costs, such as appraisal fees and relocation expenses, which aren’t necessarily covered in eminent domain cases. 

As in traditional forward mortgages, the language of the relevant loan agreement is crucial. It should spell out what happens in case of a condemnation of the property. It should also state that the proceeds are to go to the homeowner, although the lender will have to approve the ultimate arrangement.

How Does Eminent Domain Work?

Eminent domain is the right of a local, state, or federal government to acquire property deemed needed for the public good. The Fifth Amendment to the U.S. Constitution requires that owners of such property be justly compensated. That generally is held to mean that the property owners will be paid fair market value.

How Does an Eminent Domain Proceeding Affect a Reverse Mortgage?

The impact is largely the same as on a traditional, or forward, mortgage: The government pays the property owner, who will then have to pay any outstanding balance on the home loan.

In the best-case scenario, an owner who has significant equity in the property can replace it, using the government’s payment.

In a reverse mortgage, the owner’s equity has been reduced by the amount borrowed plus interest and other repayment costs. In such cases, the equity and the government payout combined may not be enough to buy a replacement home.

How Can I Protect My Property From Eminent Domain?

Property owners don’t have many options to protect their property from eminent domain, as it typically isn’t possible to anticipate the future needs of the public or the government.

The Bottom Line

An eminent domain condemnation can severely complicate the financial and housing situations of homeowners using a reverse mortgage, particularly if a large proportion of the home’s equity has been withdrawn.

Reverse mortgages can come with hidden fees and obligations

Fact checked by Ryan Eichler
Reviewed by Lea D. Uradu

Reverse mortgages can be a good way for older adults to access the money tied up in their homes. A reverse mortgage is a loan for homeowners who are 62 or older and have considerable home equity. It allows these seniors to borrow money against the value of their home and receive funds as a lump sum, fixed monthly payment, or line of credit. The entire loan balance becomes due and payable when the borrower dies, moves away permanently, or sells the home.

If you think that sounds like an attractive proposition, you’re not alone. Reverse mortgages are also becoming more popular, with 32,991 issued in 2023 (the most recent statistics available). You should be aware, however, that reverse mortgages come with risks, obligations, and costs—and that sometimes these are hidden or hard to calculate before you finalize your reverse mortgage. In this article, we’ll take you through five of these issues.

What You Need to Know

• Sometimes the risks, obligations, and costs of a reverse mortgage are hidden or hard to calculate before you finalize your reverse mortgage.
• Lenders that use high-pressure sales tactics can be a red flag.
• There are lots of extra fees, which are often rolled into the loan, so they are not immediately apparent.
• You should add your spouse as a co-borrower where appropriate.
• A reverse mortgage does not mean your expenses end: You must keep paying property tax and homeowners insurance or else you could face foreclosure.
• Other ways of accessing your home equity might be more cost-effective in the long term.

Important

There are three types of reverse mortgages. The most common is the home equity conversion mortgage (HECM). The HECM represents almost all of the reverse mortgages that lenders offer on home values below $1,209,750 (the loan limit for 2025), so that’s the type that this article will discuss. However, if your home is worth more, you can look into a jumbo reverse mortgage, also called a proprietary reverse mortgage.

Some Lenders Use High-Pressure Sales Tactics

The first thing you should know is that reverse mortgages have a reputation for attracting predatory practices and lenders. Some seniors have been targeted with high-pressure sales tactics on reverse mortgages. You should be especially skeptical if a salesperson suggests how to spend the money from your reverse mortgage, particularly if they suggest putting the money into another financial product.

However, this doesn’t mean that a reverse mortgage is always a bad idea. For many people, a reverse mortgage can be a good way of providing themselves with a regular, dependable income in retirement. Just make sure you understand all of the complexities of the mortgage you take out.

Reverse Mortgage Fees Are High

The costs you will pay to take out a reverse mortgage can be very high compared with other forms of borrowing against your home equity. Borrowers must pay an origination fee, an upfront mortgage insurance premium, ongoing mortgage insurance premiums (MIPs), loan servicing fees, and interest. The federal government limits how much lenders can charge for these items, but the origination fee, in particular, can be high—it’s capped at $6,000.

These fees might not be immediately obvious to borrowers contemplating a reverse mortgage, since they are often paid from the money you borrow. This means that you won’t necessarily receive the money and then have to pay it to the lender, which can hide the fact that you are paying it. In practice, this process means that fees and interest are taken out of your home equity.

Important

Make sure you understand the residency rules of reverse mortgages and your other obligations. If you move away from your home for more than 12 consecutive months, even for medical reasons, you may be forced to sell your home. Similarly, your lender may foreclose on you if you fall behind with your homeowner’s insurance premiums.

You Should Add Co-Borrowers

It’s also important to pay attention to the residency rules when you take out a reverse mortgage. A reverse mortgage must be taken out against your principal residence, which is the place where you spend the majority of the year. If you leave this residence for six or 12 consecutive months, even for medical reasons, your lender may end your reverse mortgage and demand that you sell your home to pay off your debt. Lenders also might have rules about renting out all or a portion of your home.

This can be a particular problem for married couples who live together but only one of whom has their name on the reverse mortgage documents. In this case, the spouse may be forced to sell their home to pay back this debt while they are still living in it. To avoid this outcome, you should make sure that you add your spouse as a co-borrower, or at least make sure you can prove they qualify as an eligible non-borrowing spouse.

You Have Obligations

When you are working out whether a reverse mortgage can support you in retirement, you should factor in the cost of property tax and homeowner’s insurance. Most reverse mortgage lenders require borrowers to stay up to date on both of these. That’s because your house is their collateral for the loan, and it may not sell at the fair market price if it is damaged, which means the lender won’t get their money back.

In other words, after taking out a reverse mortgage, you will have obligations to your lender. And if you don’t fulfill them, your lender may foreclose on your loan. This is a real issue with reverse mortgages. According to a 2019 Brookings Institution paper on reverse mortgages, 18% of reverse mortgages ended in foreclosure. Sometimes it’s because the property taxes hadn’t been paid. but typically it was because the homeowners no longer lived in the home.

There Are Other Options

Understandably, a lot of reverse mortgage lenders won’t tell you that there are other—and potentially cheaper—ways of accessing the equity you’ve built up in your home.  

These alternatives include:

• A cash-out refinance: If you’re looking to access a large amount of home equity at once, a cash-out refinance can help with that. Doing this will mean you must make monthly payments to a lender. However, in the long term, you may preserve more of your equity compared to a reverse mortgage.
• A home equity loan or a HELOC: A home equity line of credit (HELOC) provides homeowners access to home equity. Unlike a reverse mortgage, home equity loans and HELOCs require borrowers to make payments. On the other hand, they may come with fewer fees and can be a less expensive alternative to a reverse mortgage.

The best option for you will depend on your reasons for seeking a reverse mortgage. Contacting a HUD counselor can be useful if you are still unsure what to do.

What Are the Downsides of Getting a Reverse Mortgage?

Mainly the costs. Reverse mortgages have expenses that include lender fees (origination fees are capped at $6,000 and depend on the amount of your loan), FHA insurance charges, and closing costs. These costs can be added to your loan balance; however, that means you will have more debt and less equity.

Do Reverse Mortgages Take Advantage of Seniors?

Sometimes, but not always. There have been reports that reverse mortgage lenders have targeted older adults with aggressive sales tactics. However, for some borrowers a reverse mortgage can be a great way to unlock the value of their home and provide a reliable source of income in retirement.

How Much Money Do You Get From a Reverse Mortgage?

The proceeds that you’ll receive from a reverse mortgage will depend on the lender and your payment plan. For a HECM, the amount that you can borrow will be based on the youngest borrower’s age, the loan’s interest rate, and the lesser of your home’s appraised value or the FHA’s maximum claim amount, which is $1,209,750 as of 2025.

The Bottom Line

A reverse mortgage can be a good way for older adults to access the equity they have built up in their homes. However, reverse mortgages may have hidden costs and obligations. It’s important to understand these before you agree to anything.

Fact checked by Skylar Clarine
Reviewed by Doretha Clemon

A reverse mortgage is a loan that can be taken out against the value of a home. Applicants for reverse mortgages must be at least 62 years old and have considerable home equity. Reverse mortgages allow homeowners to borrow against the value of their home and receive funds as a lump sum, fixed monthly payment, or line of credit. The loan balance becomes due and payable when the borrower dies, moves, or sells the home.

Key Takeaways

• Reverse mortgages require that applicants be at least 62 years old and own a significant amount of equity in their home. 
• Applicants typically need 50% equity to qualify for a reverse mortgage. 
• There are no credit score or income requirements for reverse mortgages.
• HUD requires all reverse mortgage borrowers to complete a counseling session.

Types of Reverse Mortgages

• A single-purpose reverse mortgage is offered by state, local, and nonprofit agencies and is the least expensive option. 
• Home equity conversion mortgages (HECMs) are federally insured by the U.S. Department of Housing and Urban Development (HUD) and may carry high initial costs. 
• Jumbo reverse mortgages are proprietary reverse mortgage loans that allow homeowners to borrow up to $4 million.  

Important

The most common type of reverse mortgage for U.S. homeowners is the HECM. In 2023, borrowers can access up to $1,089,300 with a Home Equity Conversion Mortgage.

Reverse Mortgage Requirements

Age

Reverse mortgages are designed to allow older homeowners without other sources of retirement savings to access the equity they’ve built up in their homes. Applicants and any co-borrowers, such as a spouse, must be at least 62 years old to qualify for a reverse mortgage.

Equity

Applicants must own a significant level of equity in their home, commonly 50%. The property must be a house, condominium, townhouse, or manufactured home built on or after June 15, 1976.

Under Federal Housing Authority (FHA) rules, cooperative housing owners cannot obtain reverse mortgages since they do not own the real estate in which they live but rather own shares of a corporation. New York, where co-ops are commonplace, once prohibited reverse mortgages in co-ops. As of 2022, the state allows them only in one- to four-family residences and condos as HECMs insured by the federal government or proprietary reverse mortgages.

Income and Credit

Reverse mortgages do not have income or credit score requirements and differ from a home equity loan or a home equity line of credit (HELOC). Both loans provide homeowners access to home equity, but home equity loan and HELOC applicants are reviewed for income and credit score and required to make monthly payments if approved.

Counseling

Reverse mortgage applicants for an HECM must complete a counseling session sponsored by the U.S. Department of Housing and Urban Development (HUD). This counseling session instructs borrowers on the pros and cons of taking out a reverse mortgage, how to access funds and the effects of the loan on Medicaid and Supplemental Security Income (SSI) eligibility.

Costs

Borrowers must pay an origination fee and an up-front mortgage insurance premium. These costs can be paid from the loan disbursement. The up-front costs of reverse mortgages are high, and borrowers must decide to pay out of pocket or from the equity of the property.

Consequences

Borrowers will continue to pay for property taxes and homeowners insurance with a reverse mortgage. If these payments are missed, or the borrower moves to a long-term care facility for medical reasons, the loan must be repaid, which is usually accomplished by selling the house.

Note

A reverse mortgage is one way of accessing the equity you’ve built up in your home during retirement. Other options include a cash-out refinance or a home equity loan.

What Disqualifies Applicants From Getting a Reverse Mortgage?

Borrowers must live in the home as their primary residence for the life of the reverse mortgage and be at least 62 years old. Vacation homes or rental properties are not eligible.

What Percentage of Equity Is Needed for a Reverse Mortgage?

To qualify for a reverse mortgage, borrowers must own their home outright or have significant equity, commonly 50%. The specific percentage varies by lender and the type of reverse mortgage.

What Is the Most Common Type of Reverse Mortgage?

The Home Equity Conversion Mortgage (HECM) represents almost all of the reverse mortgages that lenders offer.

The Bottom Line

Reverse mortgages allow homeowners to access the equity in their homes during their retirement years. Applicants must be at least 62 years old and own a significant amount of equity in their home. There are no credit score or income requirements for reverse mortgages.

Reviewed by Marguerita Cheng

Oil and gas operations are capital-intensive businesses, yet most oil and gas companies carry relatively small amounts of debt, at least as a percentage of total financing. This can be seen in their debt-to-equity (D/E) ratios.

When considering an oil company’s D/E ratio, there are a couple of things to keep in mind:

• An oil company’s degree of indebtedness tends to go up when oil is cheap and down when oil is expensive. The cash flowing in when oil prices rise makes it easy for a company to pay down debt acquired in less favorable times.
• The average or acceptable D/E ratios of oil companies vary depending on their roles in the industry. A company’s position along the supply chain is a factor in its D/E ratio.

Key Takeaways

• Oil and gas companies tend to take on more debt when prices are low, and pay it down when prices rise.
• An investor should compare a company’s D/E ratio to its peers in its sub-sector.
• Oil and gas companies are categorized as upstream, midstream, or downstream, but some big companies operate across categories.

The Debt-to-Equity Ratio

The D/E ratio reflects the degree to which a company is leveraged. In other words, it shows how much of the company’s financing comes from debt as opposed to equity.

Generally speaking, higher ratios are worse than lower ratios, though higher ratios are more tolerable in certain industries.

A company’s D/E ratio is calculated by dividing total liabilities by total owner’s equity. This information is available in the financial statements of public companies.

Note

8% of U.S. GDP is derived from the oil and gas industry. according to the American Petroleum Institute.

Trends in the Oil and Gas Industry

Many oil companies shrank their D/E ratios during the mid-2000s on the strength of ever-rising oil prices. Higher profit margins allowed these companies to pay off debt and rely less heavily on additional debt for future financing.

Starting around 2008-2009, oil prices dropped dramatically. There were three main reasons:

1. Fracking brought in new oil reserves in an economical way
2. Oil and gas shale production exploded, particularly in North America
3. A global recession placed downward pressure on commodity prices

Profit margins and cash flow fell for many oil and gas producers. Many turned to debt financing as a stop-gap; the idea was to keep production flowing through low-interest debt until prices rebounded.

As a result, this pushed up D/E ratios across the industry. Before the financial crisis of 2008, common D/E ratios among oil and gas companies fell in the 0.2 to 0.6 range. As of September 2022, the range clusters between 0.1 and 0.4 with crude oil prices trading at around $85 per barrel.

D/E By Industry Segment

In February 2025, with oil prices at about $71 per barrel, the D/E ratios in the industry ranged from about 0.46 to 0.97.

Average D/E ratios vary with the segment of the industry that the company inhabits. Current average D/E ratios in these segments are as follows:

• Oil and gas drilling: 0.46
• Oil and gas exploration and production: 0.50
• Oil and gas equipment and services: 0.52
• Oil and gas integrated: 0.61
• Oil and gas midstream: 0.97
• Oil and gas refining and marketing: 0.74

(An integrated oil and gas company has multiple divisions across industry sectors.)

Oil and gas companies might also use volumetric production payments (VPPs) to fund pre-exports and increase cash flows. VPPs allow the owner to maintain ownership while monetizing a field or proven orders.

What Are the Main Segments Within the Oil and Gas Industry?

The oil and gas industry is vast, and can be roughly broken down into three segments: upstream, midstream, and downstream.

• Upstream companies locate oil and gas sources and recover them.
• Midstream companies transport the raw product from wells to refineries.
• Downstream companies refine and distribute the product.

Integrated companies like ExxonMobil and BP are involved in all these segments.

What Are the Risks of Investing in Oil and Gas?

As every consumer knows, oil is subject to wild swings in price depending on geopolitics and the state of the economy. The price of a barrel of crude oil crashed from $201.46 in June 2008 to $62.14 the following January.

The industry sector thrives when prices are high but may struggle when prices drop.

Then there’s the potential, still unrealized, of a green revolution to alternative energy sources. Oil may be an industry in decline.

What Are the World’s Biggest Oil Companies?

None of the three biggest oil companies are based in the U.S. In terms of revenue, they are Saudi Aramco, China Petroleum & Chemical Corp., and PetroChina Corp. Ltd.

Number 4 on the list is ExxonMobil Corp.

The Bottom Line

A company’s degree of indebtedness is an important piece of information to its prospective investors. However, it must always be seen in relation to its industry, some of which need to rely on debt more than others. In the case of the oil and gas industry, look further to the average D/E ratio of company’s in its sub-sector.