Investopedia

It can be more difficult, but it’s still possible. Here is what you need to know.

Fact checked by Rebecca McClay

If you need a personal loan and are currently unemployed, you may face a few more obstacles than if you had a steady job and regular paycheck. But it is still possible to obtain a loan if you can offer lenders other evidence that you’re a good risk. Here is what you need to know and do.

Key Takeaways

• You may be able to obtain a personal loan even if you’re out of work and not receiving a regular income.
• However, getting approved for a loan could be more difficult.
• Without a current income, the lender is likely to focus heavily on your past credit history.
• You may also have alternatives to a conventional personal loan, such as a secured loan.

Can You Get Approved for a Personal Loan if You’re Unemployed?

Being out of work doesn’t automatically make you ineligible for a personal loan. Lenders will consider not only your employment status but also other factors, such as your credit history and current credit score. Here are some steps that can improve your odds.

Calculate How Much You Actually Need to Live On

It’s never a good idea to borrow more money than you need. That’s doubly true when you’re unemployed and aren’t sure how soon you’ll have more money coming in. So before you apply, try to arrive at a realistic number.

If you’re looking to take out a loan to cover your monthly bills and regular living expenses, add them up using your bank and credit card statements for reference. Then multiply that monthly amount by the number of months you think you might be out of work.

Also, consider any other income you might have that could cover at least some of your expenses and reduce your borrowing needs, such as unemployment benefits, severance payments, or investment income.

While you’re at it, take a hard look at any costs you could trim for at least the time being. That could also lower the amount you need to borrow.

Weigh Your Ability to Repay

Any lender you apply to will carefully weigh your ability to repay. You should be weighing that, too. For one thing, you don’t want to get into a position where you default on the loan, which can seriously damage your credit score—harm that could last long after you’re back at work.

In addition, if you’re already struggling with your cash flow, adding a new loan payment to the mix could put you in a tight squeeze, especially if you have to pay a high interest rate or borrow any more than absolutely necessary.

Check Your Credit Reports and Credit Score

Almost any lender you apply to, except possibly a loan shark, will review at least one version of your credit report and one or more of your latest credit scores. You should obtain these, as well, both to know where you stand and to correct any errors that put you in a bad light.

By law, you’re entitled to a free copy of your credit reports from each of the three major credit bureaus—Equifax, Experian, and TransUnion—at least once a year and sometimes more often. Their reports usually contain much the same information but can sometimes vary slightly. The official website for all three bureaus is AnnualCreditReport.com.

You can read and print out your credit reports online, so you don’t have to wait for them to come in the mail. When you go over a report, check for any errors, such as accounts you don’t recognize or bills that show up as delinquent that you are pretty sure you’ve paid. These kinds of errors can happen, and the credit bureaus must investigate them and report their findings back to you if you raise questions.

Your credit score is not included in your credit reports, although the information from your credit reports is what’s used to calculate it. You can often obtain your credit score free of charge from your bank or credit card companies. Scores can also be available from reputable online sources.

Because there are a variety of different credit-scoring models, you probably have several credit scores, and the lender may look at a score that varies somewhat from whichever one you obtain. However, they should be pretty close. If your credit score turns out to be abysmal, consider waiting a while before you apply for a loan, if at all possible, and using that time to try to improve your score.

Gather Your Paperwork

Lenders will indicate what sorts of documentation they expect you to supply. That might include bank and investment statements, a recent tax return or two, pay stubs, or other evidence of how much you made in your last job. (Even though you no longer have that job, this gives lenders an idea of your earning capacity.) Having all the necessary materials on hand before you apply can make the process go more quickly and smoothly.

Be Ready to Explain the Loan’s Intended Use in Your Application

Not all lenders will ask what you plan to use the loan for, but some will. Obviously, the more sensible your answer, the better. (Hitting the casinos, for example, would be a poor answer.)

Consider a Co-Signer

If you’re unable to qualify for a personal loan on your own, recruiting someone to co-sign for you could be an option. A cosigner might be a family member or close friend, and should be a person with a solid credit score.

Important

Co-signing isn’t a matter for either you or the co-signer to take lightly. If you’re unable to pay back the loan, for whatever reason, the co-signer is legally on the hook for it.

Consider Offering Collateral

Another option is to apply for a secured personal loan and put up some form of valuable collateral, such as a car, your home, or investments you own. While most personal loans are unsecured, secured ones are less risky for lenders, so they can be easier to obtain. Bear in mind, of course, that if you can’t repay the loan, the lender can seize your collateral.

Factors That Lenders May Use to Evaluate Your Loan Application

In most instances, lenders will look at your finances from several different angles in deciding whether to make a loan and for how much money. Three major factors are:

• Your credit score and credit history
• Your income
• Your current debt-to-income ratio, or DTI

Credit Score and History

As mentioned above, both your credit report and credit score can be of prime importance to lenders who are considering you for a personal loan, particularly an unsecured one. Obviously, the cleaner your report and the higher your score, the better your chances of approval. But nearly as important, the better you look from a credit perspective, the more likely you are to qualify for favorable terms, such as a larger loan, a longer repayment period, or a lower interest rate.

Income

Even though you might not have a regular paycheck at the moment, you may have other sources of income that will give lenders some confidence in your ability to make loan payments. Those can include:

• Unemployment benefits
• A spouse or other partner’s income
• Alimony or child support
• Social Security or veterans benefits
• Interest and dividends from savings and investments
• Rental income
• Any income from a side job or part-time work

Debt-to-Income (DTI) Ratio

Your debt-to-income ratio (DTI) is a common metric used by lenders when you apply for any kind of credit. It compares your current monthly debt payments to your available monthly income. The higher your DTI, the greater the risk you are assumed to be. In general, you’ll need a DTI of 35% or less to obtain a personal loan at a reasonable interest rate, although lenders will vary in their requirements.

Where to Apply for a Personal Loan While Unemployed

Personal loans are available from a range of sources, some of which have special programs for people with poor credit or who are facing financial emergencies.

Banks and Credit Unions

You might want to start with any bank or credit union where you currently do business. You are already a known quantity there, and they may look more favorably on your application. If you don’t belong to a credit union but are interested in joining, you can find one by using the National Credit Union Administration’s Credit Union Locator.

Online Lenders 

Online lenders have become an increasingly important source of personal loans. Some are affiliated with traditional banks, others do business strictly online. These lenders offer a relatively easy application process and often quick approval (or rejection). Their websites typically describe their income requirements, if any, so you can save yourself some trouble and apply only to those where you seem likely to qualify.

Alternatives to Personal Loans

A personal loan may not be your only, or even best, option if you’re unemployed. A few others to consider:

• A home equity loan or line of credit. If you own your home and have sufficient equity in it, you could be eligible for a home equity loan or home equity line of credit (HELOC). On the upside, they often have attractive interest rates. On the downside, they are secured by your home, so you’re putting it at risk if you can’t repay.
• A credit card cash advance. Credit card cash advances can be an expensive way to borrow money, but they’re one option in an emergency.
• A family loan. If you have family members who can help you get through a rough patch, borrowing from them could be a possibility. They might not even charge you interest. If you decide to go this route, most experts suggest putting the terms in writing to avoid any misunderstandings down the line.

The Bottom Line

If you’re out of work, you aren’t necessarily out of luck when it comes to obtaining a personal loan. But, as with all loans, be sure to compare terms carefully and try not to get in too deep. With any luck, you’ll be back at work soon—and might even be able to pay back the loan ahead of schedule.

Reviewed by Margaret James
Fact checked by Suzanne Kvilhaug

What Are Business Ethics?

Business ethics are the moral principles and values that guide the operations of a company or business, and the behavior of management and employees.

Common issues that fall under this umbrella include employer-employee relations, discrimination, environmental issues, bribery, insider trading, and social responsibility.

Many laws exist to set basic ethical standards within the business community, but it is largely dependent upon the leadership of business to develop a code of ethics.

While practicing strong ethics keeps a business within the parameters of the law, it can also serve to build goodwill and brand equity.

That’s because popular social issues often drive business ethics. When different issues come to the forefront, organizations respond by bringing their ethical tenets in line with new social norms.

Key Takeaways

• Business ethics guide a company’s operations and employee behavior and deal with such things as environmental issues, social responsibility, and employee-employer relations.
• While laws related to business ethics exist, it is up to each business to establish a code of ethics.
• Business ethics saw a notable shift in the 1960s when more companies started embracing social responsibility.
• They saw another transition phase in the 1970s and 1980s when philosophy shifted from pure authoritarianism toward greater collaboration with employees.
• An important ethical consideration in the 21st century is maintaining consumer privacy as companies mine user information for valuable marketing data to use and potentially sell.

Business Ethics in the 1960s

The 1960s brought the first major wave of changes in business ethics. Cultural values were shifting, with individualism and fierce dedication to social issues such as environmentalism and world peace coming into vogue.

While young workers in the 1960s were idealistic and wanted to make the world a better place, employers found that their general work ethic, compared to that of previous generations, was lacking.

Drug use was rampant, and the new focus on individualism caused many workers to look upon their employers with disdain.

Companies responded to the changing times by beefing up human resources departments, establishing mission statements, and outlining codes of conduct.

However, in response to the changing desires of their employees, businesses also began embracing social responsibility at a level not previously seen.

In fact, the 1960s saw businesses trumpet environmental friendliness for the first time and companies also looked for new ways to give back to their communities.

Major Events in the 1970s and 1980s

During the 1970s and 1980s, two events shaped changes in business ethics: defense contractor scandals that became highly publicized during the Vietnam War and a heightened tension between employers and employees.

In response, the government implemented stricter policies governing defense contractors, and companies revamped contracts with employees to focus less on rigid compliance and more on values.

Popular management philosophy shifted from pure authoritarianism toward more collaboration with employees (and communities) and working on an equal footing.

Important

Business ethics change over time as the values of individuals and institutions change. They evolve to incorporate moral principles that reflect these specific changing values and may continue to deal with them despite the passage of years.

The 1990s and Environmentalism

The 1990s saw a rebirth of environmentalism, new heights in social responsibility, and graver legal ramifications for ethical missteps.

For example, tobacco companies and junk food manufacturers faced heightened scrutiny, along with several important lawsuits over the public health ramifications of their products.

Oil companies and chemical companies had to contend with increasing public pressure to answer for environmental damage. Class action lawsuits rapidly gained in popularity and, in response, businesses were forced to spend more on legal departments.

The Online Realm of the 21st Century

From the year 2000 onward, business ethics expanded to encompass the online realm. The big ethical dilemmas of the 21st century have centered on cybercrimes and privacy issues.

Crimes such as identity theft, almost unheard of 20 years before, are a threat to anyone doing business online.

As a result, businesses face social and legal pressure to take every measure possible to protect sensitive customer information.

The rise in the financial value and popularity of data mining and target marketing for businesses has forced companies to walk a fine line between protecting consumer privacy and using online activities to glean valuable marketing data.

Business Ethics in the AI Age

The emergence of artificial intelligence (AI) as a growing force in business has presented new challenges that people and companies are striving to deal with.

The many changes in business and society that could take place over the years as AI technology continues to develop may be highly consequential for businesses.

Companies Developing AI

According to a 2023 study conducted by the Markkula Center for Applied Ethics at Santa Clara University, a vast majority of Americans care that AI be ethical.

Approximately 86% felt that AI companies should be regulated and 82% felt the U.S. government should clarify those regulations.

And despite some businesses involved in AI development (such as IBM and Microsoft) having some clear degree of AI ethics focus, over half of Americans believe that companies haven’t been concerned with or by ethics as they’ve developed AI technology.

Companies Using AI

Business ethics must apply not just to the development of AI but also to its use by myriad businesses. Fairness, transparency, and accountability have become watchwords for such ethics.

Business ethics could play a large role in helping companies avoid business risks associated with AI and in creating positive social change, both major benefits for businesses.

When Did Business Ethics Start?

The term “business ethics” started becoming familiar to people in the 1970s, with the rise of the academic discipline at colleges and universities. The idea of ethics in the conduct of business could be understood to have started with the origin of business.

Why Do Business Ethics Matter?

They matter because, when practiced by companies, they inspire confidence and feelings of trust in customers, stakeholders, and the public. They help companies avoid mistakes that could hurt or ruin their chances of success. And because moral leadership plays an important, positive role in the health of societies and provides examples for others to follow.

What Are Some Major Concerns of Business Ethics?

Matters such as discrimination, harassment, data privacy, health and safety, and fraudulent accounting are major issues associated with business ethics.

The Bottom Line

Business ethics have evolved since the 1960s, as the important social and business issues that they address have changed.

The list of concerns has grown from such matters as workplace fairness, environmentalism, war, and social upheaval to include social responsibility, harassment, workplace and public safety, accounting transparency, and personal data privacy.

Reviewed by Somer Anderson
Fact checked by Vikki Velasquez

A profit margin is considered to be one of the most important indicators of a company’s viability. Many factors influence this financial metric—two of them being quantitative and qualitative. As such, they aren’t reflected in your calculation’s variables. Quantitative factors are easily identifiable because they can be measured while qualitative factors tend to be subjective because they are non-numerical.

Key Takeaways

• The most direct factor that affects profit margins is your net or gross profit.
• One of the easiest and fastest ways to adjust profit margins is to adjust the sale price of a product or service.
• While most margins can be explained quantitatively, external factors such as consumer sentiment, halo effect, and other emotional factors can factor in as well.

What Is a Profit Margin?

A profit margin is a profitability measure. It determines how much profit a company earns relative to its revenue. There are several types of profit margins, including operating, gross, and net profit margins. In this article, we’ll focus on net profit margin because many more factors influence net profits than gross or operating profits.

Net profit margin is the ratio of net income relative to revenues, calculated by simply dividing net profit by revenue or sales. This is a quick way to determine the percentage of your sale price your company keeps after accounting for the costs that went into the sale.

Net Profit Margin = Net Income ÷ Sales

Net profit margin is a better representation of financial health than revenues alone. It is possible to increase your company’s earnings while decreasing your profit margin. This means that your company becomes relatively less efficient. When the company loses money, it ends up with a net loss instead of a net profit.

Note

Nearly all aspects of your company’s operations affect your profit margin. This includes your management, branding, marketing strategy, and even floor sales tactics affect your profit margin.

Quantitative Factors

The most obvious numbers that affect a company’s profit margins are broad and easily identifiable. These are:

• Net profits: Also called net income, this is the company’s bottom line. This figure is the company’s profits after deducting expenses, taxes, operating costs, and interest from its revenue.
• Sales earnings: This figure represents the total amount of money generated from sales before any costs or expenses are deducted.
• Merchandising costs: These are direct costs associated with producing and selling goods and services. They include shipping and insurance among others.

Look at net revenues and the cost of goods sold (COGS) on the income statement for a very general view of these major variables.

Inventory numbers matter, too. Even though inventory is recorded as an asset on the balance sheet, sales revenues aren’t recorded until the transaction takes place. Devalued inventory can hurt profit margins, so getting rid of inventory through increased sales can help profit margins.

Taxation is an underrated variable and one that can’t be controlled. That’s because taxes affect net income.

You can also dig a little deeper to get a better picture of a company’s net profit margin because sales prices become very important factors. Note that companies can increase their net profit margins by doing a good job of managing their merchandise costs. They can increase their sales prices at the same time.

Qualitative Factors

There are too many qualitative factors to list in a short article. Qualitative factors are non-numerical, which means they can’t be easily calculated. Rather, they are subjective, which means they rely on knowledge and insights to be determined.

Consider all of the elements that might affect the sale of any given product, such as market share, effective advertising, seasonal changes, consumer preferences, company leadership, sales reward programs, and employee training programs. These are just some of the qualitative factors that can have an impact on a company’s profit margins.

How Can Companies Increase Their Profit Margins?

Companies can take different steps to improve their profit margins. The first and most obvious way to do so is to cut down on costs. This can be as simple as eliminating waste and streamlining operations. Other ways to increase profit margins include improving relations with vendors and suppliers, taking advantage of bulk buying, and improving inventory management. If all else fails, they can also raise prices.

What Is Operating Profit?

Operating profit refers to the profit or net income a company generates from its core business operations. It deducts any operating expenses and excludes the deduction of taxes and interest. You can calculate a company’s operating profit by subtracting operating expenses, depreciation, and amortization from its gross profit.

What Are the Four Types of Profit Margins?

The four types of profit margins are gross profit margin, operating profit margin, pretax profit margin, and net profit margin. They reflect how much sales revenue a company gets to keep as profit after deducting relevant costs. Profit margins are generally expressed as a percentage

The Bottom Line

Many analysts and investors take profit margin so seriously because it can contain an enormous amount of information about a company into one efficient, easy-to-understand number. Companies can improve their net margin when the take certain actions. Actions include boosting sales, increasing the price of their product or service, and cutting costs.

Fact checked by Suzanne Kvilhaug

What Is Form W-9: Request for Taxpayer Identification Number (TIN) and Certification?

Form W-9, Request for Taxpayer Identification Number (TIN) and Certification, is an Internal Revenue Service (IRS) tax form that businesses use to collect information from independent contractors, freelancers, and other vendors. Businesses use this information to file paperwork with the IRS for tax reporting purposes.

When businesses pay a nonemployee, such as a freelancer or independent contractor, $600 or more in a year, they must file Form 1099-NEC, which is filled out using the information on Form W-9. Form W-9 can also be used to complete other versions of the 1099, such as the 1099-MISC, or Form 1098. Copies of the 1099 are then sent to both the IRS and the independent contractor; the independent contractor uses Form 1099 to complete their own tax return.

Key Takeaways

• IRS Form W-9 transmits taxpayer identification information between two parties.
• Form W-9 isn’t filed with the IRS; instead, it is used to complete Forms 1099 and 1098.
• Form W-9 asks taxpayers for their name, taxpayer identification number (TIN), address, and other information about them or their business.
• Form W-9 can be filled out by U.S. persons, including individuals, sole proprietors, trusts, corporations, and other entities.

Who Needs to Fill Form W-9?

The most common reason for filling out Form W-9 is having income paid to you that you didn’t receive as an employee. This could be income as an independent contractor or freelancer; it could also be things like royalties or speaker fees for an event.

Other reasons you could be asked to fill out a W-9 include:

• Some types of real estate transactions
• Mortgage interest payments
• Cancellation of debt
• Contributions to an individual retirement account (IRA)
• Abandonment or acquisition of secured property

Important

Form W-9 is only used to collect information from U.S. persons, including resident aliens. A U.S. person can be an individual, corporation, partnership, domestic trust, or estate.

How to Fill Out Form W-9

Form W-9 is available on the IRS website. It is filled out in three sections.

The first section of the form asks for seven pieces of information:

1. Name as it appears on your tax return
2. Any business name or “disregarded entity” name (such as a “doing business as” name) that is different from the name on your tax return. If you don’t do business under a different name, leave this section blank.
3. Federal tax classification. Check one box to choose individual/sole proprietor, partnership, C corporation, S corporation, trust/estate, limited liability company (LLC), or “other.” If you have never filed any paperwork to become a specific business entity, you are likely an individual/sole proprietor.
4. Exemptions you qualify for, which are listed by number code on page 3 of the form, including any exemption from Foreign Account Tax Compliance Act (FATCA) reporting. Most independent contractors and freelancers will leave this section blank.
5. Address for you or your business; usually the address that appears on your tax return
6. The name and address of the requester, which is optional but may be useful for your own records. (This section does not have a number.)
7. Account numbers, which may be necessary if the entity requesting your W-9 is a bank or brokerage. This section will not usually need to be filled out.

The second section, Part I, asks for your taxpayer identification number (TIN). This will be either your Social Security number (SSN) or employer identification number (EIN).

Finally, in Part II, you must certify under penalty of perjury that:

• You have given your real and correct TIN.
• You are not subject to backup withholding.
• You are a U.S. citizen or other U.S. person.
• You have correctly entered any FATCA codes.

If the IRS has notified you that you are subject to backup withholding, cross out Item 2 under the certifications list. If you willfully and incorrectly represent this or any other information on your W-9, you may be subject to criminal or civil penalties.

What Happens After You Complete Form W-9

If you complete Form W-9, you do not need to send it to the IRS. Instead, submit it to the business that requested it. Use caution when transmitting it: The information on a W-9 is sensitive and should be handled with care by both parties to prevent identity theft.

The business will then use the information on the form to fill out the appropriate Form 1099 or 1098. One copy of the 1099/1098 is sent to the IRS; the other will be sent to you. You will then use this information to complete your income tax return.

Substitute Form W-9

The IRS allows someone requesting a W-9 to create and use their own version of the form rather than the one provided by the IRS, as long as it satisfies certain requirements. This is referred to as a substitute Form W-9. The substitute Form W-9 must be substantially similar to IRS Form W-9, including certifying under penalty of perjury that:

• The payee’s TIN is correct.
• The payee is not subject to backup withholding.
• The payee is a U.S. person.
• Any FATCA code entered is correct.

The Bottom Line

IRS Form W-9 is used to share taxpayer information between two parties, often between a business and an independent contractor, freelancer, or vendor. It is used to ensure that any payments a business makes are properly recorded on Form 1099 or 1098 and then reported to the IRS as income.

A W-9 must be certified under penalty of perjury. Deliberately including false information on a W-9 could result in civil or criminal penalties. If you are unsure about how to correctly fill out your W-9, talk to an accountant or other financial advisor.

Retail sales in North America are the biggest sales driver but cloud services bring in the most operating income

Reviewed by David Kindness

Amazon.com Inc., the world’s largest online retailer, has grown rapidly in a broad range of businesses, including its core e-commerce operations, cloud services, and digital advertising. It also sells products such as the Alexa personal assistant and ecosystem, Kindle e-reader, Fire TV, and movies and television shows through its Amazon Prime Video platform. Amazon’s rivals include Walmart Inc. (WMT) and Alibaba Group Holding Ltd. (BABA).

Key Takeaways

• Amazon makes money through retail, subscriptions, and web services, among other channels.
• Retail remains Amazon’s primary source of revenue, with online and physical stores together accounting for the biggest share.
• Amazon Web Services (AWS) currently generates the majority of Amazon’s operating income and is growing at a robust pace.
• Amazon announced that its AWS segment will offer new AI certifications for people looking to improve their skills in AI and machine learning to remain competitive in the job market.

Amazon’s Financials

For Q1 2024, Amazon (AMZN) posted total net sales of $143.3 billion; an increase of 13% from the same period in 2023. The company posted a net income of $10.4 billion; an increase of 228.8%. The increase in net income comes from a growth in net sales without as large of a growth in operating expenses; in short, the company was able to grow net sales while keeping operating expenses down.

Amazon’s Business Segments

Amazon divides its business into three segments: North America, International, and AWS (Amazon Web Services). The first two of these segments, North America and International, refer to geographical breakdowns of Amazon’s retail business. They generate revenue from retail sales in North America and the rest of the world, as well as from subscriptions, advertising, and export sales for those areas. The AWS segment consists of Amazon’s cloud services business.

Retail can be broken down further into online stores, comprising the bulk of sales, and physical stores. Company-wide, online stores accounted for $54.7 billion in sales in Q1 2024, while physical stores generated $5.2 billion in sales.

North America

The North America segment consists of retail sales from consumer products, advertising, and subscription services in North America-focused online and physical stores.

Amazon’s North America segment dominates its net sales, bringing in $86.3 billion for Q1 2024. That is a 12% increase from the same period in 2023. North America net sales made up about 60% of the company’s total net sales in Q1 2024. The segment posted an operating income of $5 billion; an increase of 455% year-over-year (YOY). The segment made up 32.6% of the total company operating income for the quarter.

International

Amazon’s International segment consists of Amazon’s retail business for consumer products, advertising, and subscriptions for internationally focused online stores.

The International segment brought in sales of $31.9 billion for Q1 2024; an increase of 10% YOY and making up 22% of company net sales. The segment had an operating income of $903 million, which was a significant increase from the $1.2 billion loss from the same period in 2023. The segment made up 5.9% of the company’s operating income for Q1 2024.

Amazon Web Services (AWS)

Amazon Web Services (AWS), launched in 2006, provides cloud services to businesses, government agencies, and academic institutions to store information and deliver content. AWS provides an infrastructure platform in the cloud for a variety of solutions such as hosting applications and websites, providing enterprise information technology (IT), and content delivery.

Amazon controls about a third of the global cloud market, substantially more than its next closest competitor. AWS’s biggest rivals are Microsoft Corp.’s (MSFT) Azure and Alphabet Inc.’s (GOOGL) Google Cloud.

Amazon’s AWS segment generated net sales of $25 billion for Q1 2024; an increase of 17%. It accounted for 18% of total net sales. Operating income for the segment was $9.4 billion; an increase of 84%. The segment accounted for 61.5% of operating income in Q1 2024.

Amazon’s Recent Developments

From telehealth to cancer research, Amazon has made a push into healthcare since 2018 by amassing healthcare businesses and launching Amazon Pharmacy.

The subscription service, called RxPass, launched on January 24, 2023, and provides access to commonly prescribed generic medications that treat more than 80 health conditions. The company reports that Amazon pharmacists or support staff will be available at all times to discuss medications and coordinate with a patient’s doctor.

In June 2024, Amazon announced that AWS would be providing two AI certifications, focused on AI and machine learning, so individuals can grow those skills and be competitive in the marketplace for jobs.

In June 2024, Amazon announced that its Counterfeit Crimes Unit (CCU) took action to dismantle illegal online schemes that were intended to evade Amazon’s product approval process. The unit filed six lawsuits against these perpetrators.

What Is Amazon’s Main Business?

Amazon divides its business into three segments: North America, International, and AWS (Amazon Web Services). “North America” and “International,” refer to geographical breakdowns of Amazon’s retail business. These two business segments generate revenue from retail sales, subscriptions, and export sales. AWS provides cloud services to businesses, government agencies, and academic institutions to store information and deliver content.

Is Amazon the Biggest Company in the World?

Amazon ranks as one of the world’s largest companies by market cap and revenue. As of March 2025, Amazon has a market capitalization of $2 trillion and reported $575 billion in revenue (TTM as of December 31, 2023), making it the second-largest company by revenue and the fourth by market cap. For context, some of the largest companies in the world have market caps of trillions of dollars. This makes these companies larger and more valuable than some countries’ entire economies.

How Does Amazon Make Most of Its Money?

Retail is Amazon’s primary source of revenue, with online and physical stores together accounting for the biggest share. In Q1 2024, Amazon reported $143.3 billion in retail sales. Of that, $86.3 billion belongs to its North America business segment and $31.9 billion to its International business segment.

The Bottom Line

Amazon ranks as one of the world’s largest companies by market cap. It dominates the retail space and has grown significantly since its founding as the Internet boomed and people began shopping online. While Amazon started by selling books, it has branched out into selling almost every type of consumer product, as well as offering media services, cloud services, and more.

Nvidia’s Compute and Networking segment supercharges revenue growth

Reviewed by Thomas J. Catalano

Nvidia (NVDA), a multinational technology company, introduced and innovated the graphics processing unit (GPU). A GPU is a hardware component originally designed for a specific purpose: to render and display images, videos, and animations. Now, they are used in a wider range of applications, including creative production. machine learning, and artificial intelligence (AI). Nvidia has continued to deliver leading-edge graphics developments through its groundbreaking GPU efforts.

Currently, Nvidia’s greatest source of revenue is its Compute and Networking business segment, which includes artificial intelligence (AI). The company has become a full-stack (from front-end to back-end) computing infrastructure company that is reshaping a diverse range of complex computing processes.

In addition to the GPUs that Nvidia designs and manufactures for gaming, cryptocurrency mining, and other professional applications, the company also creates chip systems for use in vehicles, robotics, and other tools.

Key Takeaways

• Nvidia (NVDA) introduced and innovated the graphics processing unit (GPU), which is a key component of PC architecture and large-scale applications.
• Nvidia designs and sells GPUs for gaming, cryptocurrency mining, and professional applications; the company also sells chip systems for use in vehicles, robotics, and more.
• Nvidia’s Compute and Networking business segment, which includes artificial intelligence (AI), is the company’s biggest revenue generator.
• The Graphics business segment is Nvidia’s second largest revenue generator.

Nvidia’s Industry

Nvidia is a leading company in the semiconductor industry and is part of the greater information technology sector.

The company’s goal is to offer technology solutions for increasingly complex computational challenges. AI has been a major focus for years, and this focus has intensified in recent years as AI technology has made significant developments—and public interest in the potential uses and impact of AI has grown.

According to its 10-K filing, Nvidia believes that the market for its products faces intense technological change and changing industry standards.

It is also an extremely competitive market, where performance, product offerings, and access to customers, partners, and distribution channels are critical factors. Other key issues it must address are software support, the ability to conform to industry standard APIs, manufacturing strengths, processor pricing, and total costs.

Competitors

It has a variety of competitors in different areas of the industry. Some of them are hardware and software suppliers and licensors, such as Intel Corp. (INTC), Advanced Micro Devices (AMD), and Huwei.

Cloud services companies also engaged in designing AI computing functionality—including Alibaba Group (BABA), Alphabet Inc. (GOOG), Amazon Inc. (AMZN), and Microsoft (MSFT)—are also major competitors.

Nvidia’s Financials

As of March 2025, Nvidia’s market capitalization was $2.89 trillion.

In February 2024, Nvidia announced its financial results for the 2024 fiscal year (FY). In May 2024, the company announced its financial results for the first quarter (Q1) of the 2025 FY, the three-month period ended April 28, 2024.

file:///Users/katelynpeters/Downloads/NVIDIAAn.pdf

https://nvidianews.nvidia.com/news/nvidia-announces-financial-results-for-first-quarter-fiscal-2025

Revenue

For the entire 2024 fiscal year, revenue was $60.9 billion, up 126% from the previous fiscal year result. They had a record quarterly revenue of $26.0 billion, up 18% from Q4 and up 262% from a year ago.

Net Income

It had a net income of $14.8 billion, a growth of 21% over the previous quarter.

Operating Income

At $16.9 billion, Nvidia’s operating income, which is a profitability metric for its business segments.

Revenue From Primary Markets

The chip company serves five primary markets—data center, gaming, professional visualization, automotive, original equipment manufacturer (OEM) and other.

Its most noteworthy business results were derived from the first four markets:

• Data center revenue was a record $22.6 billion in the first quarter, up 23% from Q4 2024 and 427% YOY.
• Gaming revenue was $2.6 billion in the first quarter, down 8% from the previous quarter and up 18% YOY.
• Professional visualization revenue was $427 million in the first quarter, down 8% from Q4 and up 45% YOY.
• Automotive revenue was $329 million, an increase of 17% from Q4 and down 11% YOY.

Company Chief Executive Officer (CEO) Jensen Huang reported that “Accelerated computing and generative AI have hit the tipping point. Demand is surging worldwide across companies, industries and nations that demand for its AI solutions.”

Revenue From Business Segments

Nvidia reports business results for two business segments: Compute and Networking and Graphics.

Compute and Networking

According to Nvidia’s Form 10-K for the fiscal year 2024, the Compute and Networking segment is made up of:

• Data Center accelerated computing platforms and end-to-end networking platforms including Quantum for InfiniBand and Spectrum for Ethernet
• NVIDIA DRIVE automated-driving platform and automotive development agreements
• Jetson robotics and other embedded platforms
• NVIDIA AI Enterprise and other software
• DGX Cloud software and services

The Compute and Networking segment delivered revenue of $47.4 billion in FY 2024, up 215% from FY 2023. The segment accounted for almost 78% of Nvidia’s total revenue.

Operating income, at $32.01 billion, grew 530% YOY.

Graphics

Nvidia’s graphics segment is comprised of:

• The GeForce GPUs for gaming and PCs, the GeForce NOW game-streaming service and related infrastructure, and solutions for gaming platforms
• The Quadro/NVIDIA RTX GPUs for enterprise graphics design
• Virtual GPU (vGPU) for cloud-based visual and virtual computing
• automotive platforms for infotainment systems
• Omniverse Enterprise software for the construction and operation of metaverse and 3D internet apps

The Graphics segment delivered revenue of $13.51 billion in FY 2024, up 14% from FY 2023. The segment accounted for slightly over 22% of Nvidia’s total revenue.

Operating income, at $5.84 billion, grew 28% YOY.

Equity Holdings

Nvidia’s Form 13F includes the following equity holdings and associated values, as of December 31, 2023:

Company	Value
ARM HOLDINGS PLC	$147,343,114
NANO X IMAGING LTD	$379,856
RECURSION PHARMACEUTICALS INC	$75,984,739
SOUNDHOUND AI INC	$3,669,472
TUSIMPLE HLDGS INC	$3,041,904

Historic

On Thursday, February 22, 2024, Nvidia’s market capitalization jumped by $272 billion, the largest change ever seen in such value in a single day.

History and Leadership

Nvidia Corporation was founded in 1993 by Jensen Huang, Chris Malachowsky, and Curtis Priem. It is headquartered in Santa Clara, California.

Huang has led Nvidia as President, Chief Executive, and member of the Board of Directors. Before starting the company with Malachowsky and Priem, Huang worked at LSI Logic and Advanced Micro Devices.

Co-founder Malachowsky is a Nvidia senior technology executive who helped spearhead Nvidia’s growth from startup to accelerated computing standout. Prior to Nvidia, he worked at HP and Sun Microsystems. He is an expert in integrated-circuit design and methodology.

Co-founder Priem was Nvidia’s Chief Technology Officer for 10 years. He left Nvidia in the early 2000s.

Nvidia has more than 27,000 employees worldwide and more than 7,500 patents in force and pending.

Recent Developments

In early March 2024, Nvidia and HP Inc. announced their intention to integrate NVIDIA CUDA-X™ data processing libraries with HP AI workstation solutions. This will drive generative AI development through data preparation and processing work.

In November of 2023, Nvidia connected the world’s leading AI computing platform with its new NVIDIA HGX™ H200. The platform features the NVIDIA H200 Tensor Core GPU with advanced memory. It is designed to manage enormous amounts of data for generative AI as well as complex and demanding computing workloads.

In August 2023, Nvidia provided a major upgrade for its Omniverse platform. Omniverse is used with 3D tools and applications. The upgrade “accelerates the creation of virtual worlds and advanced workflows for industrial digitalization.”

ChatGPT, powered by the NVIDIA DGX™ AI supercomputer, launched in late November 2022. In two months, users numbered 100 million. It instantly became the fastest-growing app in history.

What Happened With Nvidia’s Intended Purchase of Arm?

In February 2022, Nvidia announced that it was terminating its agreement to purchase U.K.-based semiconductor design firm Arm from SoftBank Group Corp. due to significant regulatory challenges.

Is Nvidia Still a Graphics Company?

Due to the rise of AI and the enormous success of ChatGPT, powered by Nvidia’s AI supercomputer, CEO Jensen Huang, shifted Nvidia’s major focus from graphics to AI in late 2023.

How Much Does a Share of Nvidia Stock Go For?

On August 27, 2024, Nvidia shares were trading in the neighborhood of $128 per share.

The Bottom Line

Nvidia Corporation is a global technology company that was founded in 1993. It introduced the graphics processing unit (GPU) for accelerated computing tasks such as graphics rendering, gaming, and video editing.

In late 2023, its primary focus moved from graphics to artificial intelligence due to the massive success of ChatGPT, which is powered by Nvidia’s GPUs, and the resulting demand for its products.

If you own a property with tenants—or rent your lake cottage—get this

Reviewed by Julius Mansa
Fact checked by Suzanne Kvilhaug

Landlords renting out a residential property (house, vacation cottage, apartment) might be surprised to learn that their homeowners insurance will not cover all the costs in the case of a natural disaster, accident, or another damaging event. As a result, landlords will typically need landlord insurance.

Key Takeaways

• Homeowners insurance will not cover a dwelling that is not owner-occupied, which is why you need landlord insurance.
• The core coverages of landlord insurance include property damage, liability protection, and rental income lost due to a tenant’s inability to rent.
• Additional riders—or add-ons to policies—can be purchased to cover income lost when a tenant misses a rent payment and flood damage.
• Certain policies can also cover expenses incurred from repairing a building following damage.

Why You Need Landlord Insurance

Typically, your current homeowners insurance policy only covers owner-occupied homes. If you start renting out to someone else, the coverage no longer applies.

Renters are generally not held liable when a large appliance malfunctions or a person suffers an injury on the property (through no fault of the tenant). Also, if a forest fire damages or destroys your home or burglars rob the place, you could be left out to dry for these or other misfortunes caused by humans or Mother Nature.

The cost of a home improvement loan to repair or renovate a property following a disaster can be significant. Landlord insurance can help, but these policies come in all shapes and sizes. Before you begin price shopping, consider what you need to specifically address and protect against in your rental property.

What Does Landlord Insurance Cover?

A good, comprehensive landlord insurance policy will have three core protections:

• Property damage: This is coverage in the event that the real estate or furnishings suffer from a natural disaster, fire, electric/gas malfunction, earthquake, vandalism, or irresponsible tenants. If possible, try to get a policy that offers replacement costs instead of the actual cash value (especially if fixtures and furnishings are old) or a predetermined lump sum of cash.
• Lost rental income/Rental default insurance: Should something cause your property to be totally uninhabitable (severe mold, termites, a rat infestation, or a sinkhole), this feature provides temporary rental reimbursement to cover the rent money you’d otherwise receive if tenants could be occupying the property.
• Liability protection: This is coverage for the medical or legal costs that might ensue if a tenant or visitor suffers injury due to a property maintenance issue (such as icy walkways, architectural collapse, or an out-of-control hive of bees).

You might also see underwriters refer to different packages as DP-1, DP-2, or DP-3 (DP stands for “dwelling property”). Each of these refers to varying levels of coverage, with DP-1 being the most basic and DP-3 representing the most comprehensive.

Important

If you hire a property manager, beware of the red flags that might indicate property manager fraud against a landlord, including frequently paying the collected rent late, not providing proper documentation for expenses, or conflicts of interest such as hiring maintenance workers who are related to the property manager.

Additional Coverage

There are several common riders that can come with landlord insurance policies. They’re not as vital as the key provisions mentioned above, but they could come in handy and save you some money in the long run.

• Guaranteed income insurance: This covers the landlord if a tenant comes up short and misses the rent payment for one month (or doesn’t pay at all).
• Flood insurance: As many landlord insurance policies don’t include flood damage related to natural disasters or municipal plumbing, this coverage is worth adding if the property is in a flood-prone zone.
• Emergency coverage: In the event a tenant calls you out to fix something, such as a leaking dishwasher, or because they were accidentally locked out of the house, this feature can help cover some or all of the costs you incurred to travel to the property and resolve the issue.
• Additional construction expenses: This will cover expenses incurred bringing a building up to code after it has been damaged.

15%

The amount by which landlord insurance is generally more expensive than homeowners insurance

How Much Does Landlord Insurance Cost?

According to a 2023 (latest information) Policygenius analysis, the average cost of homeowners insurance is $1,754 in every U.S. state and zip code, though prices can vary significantly based on several factors, including your location and the age of the property.

However, as rental properties are more prone to damage and incidents, you can expect to pay about 15% more for landlord insurance on the same property, according to the free real estate investment tracking site Stessa.com.

Short-Term Rentals

There is an inverse relationship between the price of your premiums and the length of time the property is in service. For example, expect to pay nearly double in annual premiums if you rent out your home for only 12 weeks instead of an entire year. The reasoning behind the higher premiums is that short-term renters:

• Are less likely to notice (or mention) maintenance issues
• Can be more careless
• May not understand the layout of the house and the location of the plumbing, load-bearing supports, or electrical wiring

All this can increase the probability of problems and the insurer’s risk.

Important

Landlord insurance does not cover a renter’s belongings, so it’s wise to counsel your renter to consider getting renters insurance.

Bundled Policy

When shopping for policies, be sure to ask your homeowners insurance provider about bundle options. If you sign up for homeowners and landlord insurance through the same company, you may receive a discount.

What Do You Need to Insure as a Landlord?

The basic level of landlord insurance typically covers property damage, liability protection in case someone gets injured on the property, and lost rental income.

How Is Landlord Insurance Different From Homeowners Insurance?

Homeowners insurance provides property and liability insurance for owner-occupied residences. If you rent out the property, you’ll need landlord insurance since your homeowners policy will not cover the rental unit.

Is Renters Insurance the Same as Landlord Insurance?

Renters insurance provides coverage for the tenant’s personal belongings in case they are damaged or stolen, and liability in case someone is injured. Conversely, landlord insurance covers the property owner renting out the unit for damage and liability.

The Bottom Line

Before renting out a property, review your homeowners insurance policy since it may not cover damages and liabilities while you’re not living there. If you want to protect your home and rent it out as well, landlord insurance is a must. You might also want to suggest that your tenants take out a renters insurance policy so that their own personal effects will be covered in the event of an accident.

Reviewed by Amy Drury
Fact checked by Suzanne Kvilhaug

What Is Intellectual Property in Terms of a Capital Asset?

Some types of intellectual property are considered capital assets and may be recorded on a company’s balance sheet as intangible assets.

Intellectual property is a fairly broad term and can take many different forms. Examples of intellectual property include patents, trademarks, copyrights, trade secrets, or unique ideas. While some of these assets are recorded on a company’s balance sheet, the true market value of this type of property is often difficult to determine.

Key Takeaways:

• Some types of intellectual property, such as patents, copyrights, industry knowledge, and trade secrets are considered capital assets and may be recorded on a company’s balance sheet.
• Because such assets are often intangible, their market value is often difficult to determine.
• Some intangible assets are protected legally and granted intellectual property protection rights.

Understanding Intellectual Property

A capital asset is typically a significant piece of property such as a house, a car, or an investment in the form of stocks, bonds, and even collectibles. These assets are all physical, or tangible, which makes them relatively easy to value. Intellectual property that is considered a capital asset can include human capital, know-how, and industry knowledge, which is intangible and difficult to value as an asset.

Warehouses and factories are increasingly replaced by digital solutions as companies rapidly advance in technological capability. Thus, innovative ideas and R&D investment are a growing source of income for companies worldwide. The race for ideas and the pursuit of knowledge for creativity are emphasizing the increasing role of intangible assets and the need to quantify them.

Some intangible assets are protected legally where they meet the criteria for intellectual property protection and rights. Intellectual property rights are often granted for innovative products and processes (through patents); cultural, literary, or data software works (copyrights); designs, trademarks, microchips, and trade secrets.

Accounting for Intellectual Property in Financial Statements

Accounting principles require that intangible assets be recorded in financial statements at cost or less. Internally developed intellectual property such as trade secrets or ideas most likely are not recorded on the balance sheet because they have no directly associated costs or clear value.

Patents, trademarks, and copyrights generally have associated costs and are capitalized as assets on the balance sheet. These must be amortized over the useful life of the asset. When intellectual property is purchased from another business, it is recorded on the balance sheet at cost and amortized over the remaining useful life of the asset.

Accounting standards require that intellectual property be recorded separately on the balance sheet from goodwill, which is another type of intangible asset.

Note

Corporate goodwill is also considered a capital asset.

Valuing Intellectual Property

Since accounting standards dictate that cost or less be used to record intellectual property in a company’s financial statements, a realistic market price for certain forms of intellectual property is hard to determine. Often, an industry expert must perform an in-depth valuation study to determine a reasonable market price for intellectual property when one company is considering buying this type of property from another.

How Is Intellectual Property Valued?

Because intellectual property is an intangible asset, it can be difficult to assign a dollar value. Accountants and auditors will typically use the expected income and cash flows to arrive at an estimated value for intellectual property assets.

What Are the Four Types of Intellectual Property?

The main categories of intellectual property are trademarks, patents, copyrights, and trade secrets. Each has its own regime of legal protections, so it is important to file them with the appropriate agency to protect your intellectual property.

How Is Intellectual Property Recorded on a Balance Sheet?

Accountants typically record intellectual property as an “intangible asset” on corporate balance sheets. It is recorded at initial cost, and amortized over the useful life of the asset.

The Bottom Line

Some types of intellectual property are considered capital assets. Some patents, trademarks, copyrights, and trade secrets can all be used to generate income for a company, and are therefore recorded as capital assets in financial statements.

Secured loans are backed by collateral, while unsecured loans aren’t. This presents different levels of risk for the lender, which results in different eligibility criteria and loan terms for you as the borrower. Generally, secured loans are easier to qualify for and offer better rates, whereas unsecured loans are harder to get and often cost more in interest.

Key Takeaways

• Secured loans require you to put something down as collateral, which the lender can seize if you default on your loan.
• Unsecured loans don’t require any collateral but often come with lower loan limits and higher interest rates.
• Home and auto loans are most often secured, with the property they’re used to buy acting as collateral. If you don’t want to put your assets on the line, look for an unsecured loan.

How Secured and Unsecured Loans Work

Both secured and unsecured loans let you borrow money, provided you agree to repay the debt with interest according to an agreed-upon schedule. To qualify for either loan type, you must also submit to a hard credit check and provide personal financial documents that show you’re able to repay your debt, such as income statements.

However, a secured loan requires that you put down an asset as collateral for the loan. In other words, should you default, the lender may take possession of the asset to compensate for their loss.

What Is a Secured Loan?

A secured loan is a type of personal loan backed by collateral. Auto loans are one of the most common examples. In this case, the collateral is the vehicle being financed. Other kinds of secured loans include home equity loans, home equity lines of credit (HELOCs), secured credit cards, savings-secured loans, and other vehicle loans.

Pros & Cons of Secured Loans

Pros

• Lower credit score requirements

• Higher borrowing limits

• Lower interest rates

Cons

• Risk of property loss

• Asset tied up

• Loan use restrictions

Pros Explained

• Lower credit score requirements: Lenders are usually more willing to approve borrowers with poor credit if there’s collateral to fall back on.
• Higher borrowing limits: The more valuable the collateral, typically the greater the amount of money that a lender will let you borrow.
• Lower interest rates: Secured loans tend to have lower interest rates because the collateral offsets the borrower’s credit risk.

Cons Explained

• Risk of property loss: If you default on the loan, you’ll lose your collateral, which could be worth more than the loan balance. 
• Asset tied up: If you put down your savings or home equity as collateral, you may be unable to access it for the duration of the repayment period.
• Loan use restrictions: Many secured loans limit how you can use the loan funds. For example, a mortgage can only be used to pay for real estate.

What Is an Unsecured Loan?

Unlike secured loans, unsecured loans aren’t backed by any collateral. As a result, lenders who issue them typically weigh your credit and financial stability more heavily, and the amount you can borrow is usually lower. Common examples of unsecured loans include credit cards, lines of credit, personal loans, and student loans.

Pros & Cons of Unsecured Loans

Pros

• No collateral required

• Faster approval

• Fewer use restrictions

Cons

• Stricter eligibility requirements

• Lower loan limits

• Higher interest rates

Pros Explained

• No collateral required: You don’t need to put an asset on the line (though if you default, a lender can still sue you).
• Faster approval: Since there’s no collateral (or appraisal) involved, the loan approval process tends to be quicker. In some cases, you can walk away with a loan the same day you apply.
• Fewer use restrictions: You can get an unsecured personal loan for nearly anything (except things like gambling and illegal activities).

Cons Explained

• Stricter eligibility requirements: Compared to their secured counterparts, unsecured loans can be harder to qualify for if you have poor credit.
• Lower loan limits: Most unsecured loans are only available in amounts of up to $50,000, though some lenders may lend up to $100,000 in certain cases.
• Higher interest rates: To offset the lack of collateral, lenders tend to charge a higher interest rate, resulting in higher overall loan costs.

How to Choose Between Secured and Unsecured Loans

The right type of personal loan for you will depend on your goals, financial situation, and risk tolerance. For example, if you need a lump sum to pay for a variety of expenses, an unsecured personal loan may be the way to go because it gives you flexibility in how you can use it. Similarly, if you don’t own any assets, an unsecured loan may be the better (and potentially only) option.

Other common reasons to get an unsecured loan include consolidating debt, covering emergency expenses, funding major life events, and renovating your house. But remember, you can only borrow so much.

For higher-ticket purchases, a secured loan is often a better choice. For example, you’re unlikely to get a loan for a house—especially for a 30-year term—without offering the house as collateral. The same goes for a car. Plus, if you have poor credit, you’ll have a better chance of qualifying for a secured loan compared to an unsecured one. Other reasons to get a secured loan include locking in a lower interest rate or building your credit with a secured credit card. 

Important

Always consider whether putting an asset on the line is worth the risk. For example, if you get an auto loan and default, you could lose your only way to get to work, putting you in even more dire financial straits. In this case, a cheaper car that you could purchase with cash or a more affordable loan would likely be safer.

The Bottom Line

Secured and unsecured loans are two different ways that you can finance a variety of potential purchases. Carefully weigh the pros and cons of each to determine which best suits your situation before taking on this kind of debt.

If you’re relocating for business, moving to another city, or simply planning a vacation, you might be curious about the most expensive cities in the United States. Understanding how much it costs to live in a town, and why, can make or break a decision to move.

Not surprisingly, New York and California cities dominate the list of America’s priciest cities. All figures are updated as of June 2024, unless otherwise specified.

Key Takeaways

• Cities offer a variety of employment opportunities along with cultural, sports, dining, and entertainment activities.
• New York City’s Manhattan borough is the most costly place to live, followed by Honolulu, Hawaii, and San Jose, California.
• Housing and taxes contribute to the high cost of living in major cities.

1. Manhattan

New York City’s Manhattan borough is the most expensive city in the United States. Out of the estimated 8.26 million people who call New York City home, about 1.60 million live in Manhattan. The cost of living in Manhattan is more than twice the national average.

Seemingly everything costs more in New York City, from groceries to housing. As of 2024, Manhattan’s median sold home price is $1.2 million compared with a national median of about $357,138. The city’s unemployment is 4.8% compared with a national unemployment rate of 4.0%. The city’s unemployment is 5.5% compared with a national unemployment rate of 4.1%.

2. Honolulu

Honolulu is the second most expensive place to live in the U.S. The U.S. Census Bureau estimated a population of nearly one million in the island city with an unemployment rate of 2.7%.

Groceries run about 24% higher than the national average, while utilities cost over twice as much. In 2023, the median household income in Honolulu is about $104,264, higher than the national median of about $78,538 but falling short of a median household income of about $141,446 for San Francisco.

3. San Jose

San Jose is in California’s Bay Area with number 4 on this list, San Francisco. It has a population of about 970,000. Home values hover around $1.5 million, according to Zillow. The median household income for the city is about $141,565 as of 2023.

4. San Francisco

The city’s estimated population is about 809,000 as of 2023. San Francisco’s staggeringly high cost of living and out-of-reach housing prices make median home prices nearly $1.3 million inside the city. Major industries include tourism, IT, and financial services.

San Francisco ranks among the top five most expensive cities for groceries and utilities. Grocery items cost roughly 23% above the national average, and utilities cost about twice the national average in 2024. Unemployment is at an estimated 4.0%.

5. Brooklyn

Brooklyn is the second borough of New York City on this list. The area is known for some key attractions, including Coney Island and Prospect Park.

The population in Brooklyn is higher than the more expensive Manhattan, with nearly 2.6 million residents.The median home value of Kings County is $854,797.The average rent in the borough is around $3,695, or a total of $44,340 for the entire year in 2025.

Note

Housing and taxes are two major contributors to the high cost of living in most of the expensive cities in the United States.

6. Orange County

If you plan to call this area home, you’ll join about 3.2 million other people. This California region includes Newport Beach, Laguna Beach, and Huntington Beach with a big concentration of Fortune 500 companies. Home values here top $1.1 million. The median household income is about $113,702 as of 2023. The unemployment rate is 4.1%.

7. Los Angeles

Los Angeles brings to mind movie stars, but the movie and television industry plays a small role in the city’s booming economy. The city’s shipping industry also plays a part, as the Port of Los Angeles is one of the busiest ports in the world. A bustling manufacturing sector and a noteworthy start-up scene contribute to the city’s high cost of living. Certain ZIP codes like the famous 90210, drive up housing costs.

About 3.8 million people are living in the city in 2023. The median home value in Los Angeles is about $973,393. The median household income is around $80,366. A family of four with two working adults would need a pre-tax income of roughly $140,000 to make ends meet in Los Angeles. Finally, 16.5% of the city’s residents live below the poverty line, compared with 11.1% nationally.

8. Queens

Queens is the third borough of New York City to be featured on this list. As the largest borough, it is home to the city’s two airports, John F. Kennedy International Airport and La Guardia Airport.

About 2,250,000 people live in Queens with a median household income of around $85,000. The borough has a median home value of about $712,439 in 2025. 13.8% of the borough’s residents live in poverty.

9. Washington, D.C.

As the center of the country’s political power, Washington, D.C. boasts a high cost of living. Government and private-sector jobs abound in the city, thanks to numerous federal agencies, think tanks, lobbying firms, and a robust tourism sector.

About 702,250 people call the area home. Median home values are approximately $602,135, and the median household income is about $106,287 in 2023. A family of four with both adults working needs about $143,000 in income before taxes to make ends meet in Washington, D.C.

10. Boston

Approximately 654,000 people live in Boston. Utilities and healthcare costs exceed the average national cost by 49% for utilities and nearly 24% for healthcare in 2024. Boston enjoys a robust higher education environment, a booming tech scene, and historic sites.

The unemployment rate is 3.9% in Boston and the surrounding areas as of 2024. The median home value hovers around $748,243. Household income is about $94,755, a little over half of what a family of four needs in pre-tax income (about $165,000) to make ends meet.

Tip

Are you curious about more affordable U.S. Retirement Destinations? Check out these spots.

How Are Statistics Compiled To Determine the Most Expensive Cities in the U.S.?

The Council for Community and Economic Research publishes quarterly updates about the cost of living in the most and least expensive cities.

Why Are Cities So Expensive?

Various factors affect the cost of living in cities, especially major metropolises, such as the cost of housing and whether you choose to rent or buy. Other considerations include the cost of gas and transportation, taxes, child care, insurance, and utilities. Supply and demand tend to dictate prices, and when more people want to live in a certain place, the more expensive it will be.

What Are the Least Expensive Cities to Live in?

According to the Council for Community and Economic Research, the three least expensive cities in 2024 are Decatur, Illinois; Ponca City, Oklahoma; and Edinburg, Texas.

The Bottom Line

City living can be expensive. According to the Council for Community and Economic Research, three New York City boroughs and four areas in California made the top 10 list of most expensive cities during the first quarter of 2024. Median incomes are relatively lower compared to the cost of housing, food, gas, and taxes. The overall cost of living in these 10 cities is higher than the national average.