How to Become a Lifeguard and Make $10 to $30 an Hour

Grab your shades, sunscreen and whistle. A nationwide shortage of lifeguards has water parks, camps and municipalities scrambling to hire thousands to staff swimming pools, lakes and beaches. Some are offering free training, which takes 25 to 40 hours. Other employers are raising hourly pay to $10 to $30.

“We have raised wages at all our parks… Both lifeguard training and licence are free to each new and returning team member,” said Nick Paradise, director of corporate communications for Palace Entertainment, which owns 10 water parks across the country. Hourly wages vary by location but are $15 at Sandcastle Water Park near Pittsburgh and $18 an hour at Splish Splash in Long Island, N.Y.

The shortage is largely because lifeguards have to renew their lifeguard certification every two years and thousands haven’t been able to do so.

“In many parts of the country, there were long periods when people could not train, and staff and potential staff did not feel safe to train due to physical distancing guidance,” said Lindsay Mondick who oversees aquatics and other initiatives for the YMCA of the U.S.A. “Now that the vaccine is more readily available to potential lifeguarding candidates, we may see a slow return.”

It takes more than superior swimming skills to get a job as a lifeguard, however. Here are the requirements to become a lifeguard, the courses you’ll need and what the current job market looks like.

Here’s What Some Lifeguard Jobs Are Paying

Lifeguarding 2021 is no longer a minimum wage job in most cities and towns.

Job postings show employers are willing to pay more than previous summers. Check out these wages: in San Francisco: $22 to $30 and hour

The city of Ft. Lauderdale, Fla.: $18.93 to $29.33 an hour for waterfront lifeguards

Hyannis Harbor Hotel in Hyannis, Mass.: $25 an hour

The city of Durham, N.C.: $18 an hour

Sandcastle Water Park near Pittsburgh: $15 an hour

The city of St. Petersburg, Fla.: $13.25 to $21

Hiring Incentives for Lifeguards

Just as restaurant chains are offering cash for interviews and referrals, so are employers looking for lifeguards.

“Some of our parks are offering referral bonuses,” Paradise said. “One incentive we have offered at nearly all our parks is to provide four complimentary Basic Season Passes for the team member and immediate family if they applied and completed the hiring process by a certain date.”

Orange City, Iowa is paying a $20 referral bonus for a lifeguard who gets a friend to join the team at public pools. And the Parks and Recreation Department in Mesquite, Texas will pay $50 for one referral, $75 for two and $100 for three.

Mondick at the YMCA stressed that lifeguarding builds skills such as confidence, leadership and teamwork, which transfer well to any career and look great on a resume. Along with touting the crucial role lifeguards play, YMCAs across the country are trying various incentives such as referral and sign-on bonuses.

“Many YMCAs are also focused on non-traditional lifeguards, and engaging those who have retired, or those who formerly served their country in the military to now serve their community through lifeguarding positions,” she added.

Here are the Basics on How To Become A Lifeguard

It takes around 25 hours of training to be certified in all lifeguard requirements. Some organizations are teaching a combination of in-person and online classes and some are all in-person courses in swimming pools.

Private training schools, non-profit groups such as the American Red Cross and the YMCA, and employers themselves offer lifeguard training classes throughout the summer.

A lifeguard stands watch over an indoor pool.
Photo courtesy of YMCA

The American Red Cross is offering a 2-day or 4-day lifeguard training course around the country immediately. Here are some of the lifeguarding course requirements.

  • Minimum age: 15 years
  • Swim 300 yards continuously
  • Tread water for 2 minutes using only your legs
  • Complete a timed mock “rescue” within 1 minute and 40 seconds by starting in the water, swimming 20 yards, making a surface dive to a depth of 7 to 10 feet, retrieving a 10-pound object, returning to the surface and swimming 20 yards on your back to return to the starting point, then exit the water without using steps or a ladder.
  • Applicants must also show they can do CPR on a swimmer, administer first aid and use an automated external defibrillator, also known as CPR AED.

How to Become a Waterfront Lifeguard

Waterfront lifeguarding requires additional safety training, skills and abilities. It varies by employers, but most require you to:

  • Swim 500 meters or 550 yards in 10 minutes or less in open waters.
  • Run a mile in 8 minutes and 30 seconds or less.
  • Master certain swimmer surveillance techniques
  • Use equipment such as all terrain vehicles, rescue boards, buoys, kayaks, paddleboards, masks, fins and snorkels
  • Know water conditions such as rip tides and how to recognize dangerous wildlife

The Cost of Lifeguard Certification

Right now if you want to learn how to be a lifeguard, there’s a good chance it might cost you nothing. For example, the Sandcastle Water Park near Pittsburgh website opens with a page touting it’s raised its wages to $15 an hour and is offering free lifeguard certification. Many other employers including some YMCAs are doing the same.

If you are paying the cost varies greatly, but is well worth it. For example the city of Marion, Ohio, charges $25 for lifeguard certification courses. The American Red Cross courses range in price from $100 to $300 depending on the location.

Katherine Snow Smith is a senior writer for The Penny Hoarder.




How to Combat Revenge Spending and Preserve Your Savings

The weather is nice. Vaccinations are widely available. Now feels like the perfect time to go out and … spend money.

After a year of COVID-19 restrictions, the thought of returning to life as it used to be sounds wonderful. And for those who were able to keep working, cut expenses and save money during the pandemic, there’s a pent-up demand to spend.

With folks so ready to leisurely stroll through the aisles of their favorite stores, dine out in restaurants, attend live events and travel again, the potential for a wave of revenge spending lurks.

What Is Revenge Spending?

Revenge spending refers to an excess in spending in an attempt to make up for putting everything on hold in 2020. It’s overspending fueled by vengeance.

To make up for cancelled trips, you plan a lavish, overseas vacation. Since you had to celebrate your last birthday over Zoom, you decide to throw a catered bash at a fancy venue. The announcement to go back to the office triggers a shopping spree for a whole new wardrobe — even though you have work attire hanging in the back of your closet.

Airline travel and retail sales have seen increases in the first quarter of 2021 as restrictions drop, vaccinations roll out and stimulus checks hit bank accounts.

As nice as it is to return to some semblance of normalcy, blowing through all your savings as the result of unchecked revenge spending is not wise.

How to Prevent Revenge Spending From Derailing You Financially

First, let’s make one thing clear. There’s nothing wrong with treating yourself here and there — as long as you’re doing it responsibly.

If you’re current with all your bills, you have a solid emergency fund and you’re taking care of other financial priorities like paying down debt and saving for retirement, giving into an indulgence is perfectly fine.

However, if you’re struggling with excessive spending to the detriment of your financial health, here are a few things you can do.

1. Give Yourself a 7-Day Pause

When you think of something you want to buy, write it down instead of going out and purchasing it right away. If you still want that item after giving yourself a week to evaluate whether you can afford it, then you know it’s not just an impulse buy.

If it’s a big-ticket item, you may want to increase the time to a 30-day reflection period. As you add multiple items onto your wish list, rank them in order of what you truly want so you’re not spending money on the stuff that doesn’t matter as much.

Giving yourself time before you buy also will give you the opportunity to search for a better deal, which brings me to my next tip.

2. Be a Smart Shopper

Rather than splurging on something full price, try to find it for less.

Browser extensions such as Rakuten or Honey will help you find deals if you’re shopping online. Cash-back apps like Ibotta or Fetch Rewards can help you save money when shopping at stores. When shopping in person, also be on the lookout for store-wide promotions or item-specific deals.

If you don’t necessarily need the item to be brand new, consider second-hand stores or local buy-nothing groups.

Take advantage of credit card points when planning a vacation, and be smart about when you book your flights. If you’re looking to spend money on an experience, like a spa treatment or an evening at a nice restaurant, check out deals on sites like Groupon.

3. Find a Cheaper Alternative

Adjusting your expectations a bit may be the key to enjoying yourself post-pandemic — while staying on budget.

If you’re itching for a change of scenery, consider a vacation in a city within driving distance rather than going on a cross-country trip. Pack your own groceries to take to your Airbnb so you don’t have to eat out for every meal.

If you’ve been missing catching up with your friends in person, opt for free yoga in the park followed by a nice walk rather than paying $50 for brunch.

This list of free things to do can help you think of alternatives to do something fun without spending money.

4. Establish No-Spend Days

You don’t have to shed all of the habits you picked up over the pandemic.

Challenge yourself to reserve a handful of days out of the month when you don’t spend any money — outside of necessities like bills or groceries, of course.

Set your number of no-spend days so it’s not overly restrictive. Because you’ve gone without spending during coronavirus quarantines, you may find it’s not all that difficult to follow through.

5. Budget for Fun Money

Another way to prevent giving into revenge spending is to create room in your budget specifically for your wants.

This is automatically built into a 50/30/20 budget, but if you don’t follow that budgeting method, it’s still nice to carve out room in your budget for indulgences. That could mean setting aside money every payday to get a manicure or contributing to a sinking fund every month to save up for your next big trip.

Specifically budgeting for fun will allow you to satisfy your desires without wrecking you financially.

Rethink Your Spending Post-Pandemic

It might take some time to adjust to post-pandemic life, and that’s okay.

It’s also okay to come out of all that’s happened over the past year and want to treat yourself to a nice getaway or a splurge that makes you feel good.

As long as you’re being conscious of your spending and not making rash decisions based on a feeling of vengeance, you should be in good shape.

Nicole Dow is a senior writer at The Penny Hoarder.




Is Now a Good Time to Invest? Four Ways to Know

Here’s a provocative question: Is this a good time to invest in stocks?

It’s a good question, too. After all, the stock market this year has been shooting up and down like a roller coaster. It’s been volatile. Unpredictable. Wild. We can understand if you might feel reluctant before wading in.

So we asked a certified financial planner for advice. Robin Hartill, a CFP who’s also an editor and financial advice columnist for The Penny Hoarder, weighed in.

Her advice: Take the long view. The stock market will grow your money over time, so you might as well get started sooner rather than later.

“The timing of your investment matters much less than how much time you have to invest,” Hartill says. “The S&P 500 has delivered inflation-adjusted returns of about 7% per year on average for the past 50 years. The cost of waiting for the perfect time to invest is high. You’re missing out on long-term growth.”

Again, you have to take the long view here. That’s what investing is all about.

“If you were hoping to make a quick buck off the stock market, now may not be a great time,” she says. “We’re still in a recession, but the stock market has recovered. But true investing isn’t about making a quick buck. It’s about growing your money over time.”

How to Start Investing — and a CFP’s Recommended Strategy

Not sure how to get started? You could start small.

Investing doesn’t require you to start throwing thousands of dollars at full shares of stocks. In fact, with an app called Stash, you can get started with as little as $1.*

Stash lets you choose from hundreds of stocks and funds to build your own investment portfolio. It makes it simple by breaking them down into categories based on your personal goals.

Plus, you’re investing in fractions of shares, which means you can invest in stocks you wouldn’t normally be able to afford.

For instance, Amazon stock has been doing pretty well, but a single share of Amazon stock costs more than $3,000. With Stash, it’s easy to buy a piece of Amazon if you can’t afford a whole share.

Hartill recommends budgeting a certain amount of money to invest each month, no matter what.

“Rather than trying to time investments based on what the market is doing, the best way for most investors to build wealth is to practice dollar-cost averaging,” Hartill says. “Budget a certain amount each month to put in stocks and automatically invest it, regardless of whether the market is up or down.

“Some people may not like this approach because they’re hoping to pinpoint the exact moment the market has bottomed out, but it rarely works out that way. Instead, people miss out on the best days of the market that often follow a crash and often wind up overpaying for stocks. Consistency is a much better strategy than market timing.”

If you sign up for Stash now (it takes two minutes), Stash will give you $5 after you add $5 to your investment account. Subscription plans start at $1 a month.**

*For Securities priced over $1,000, purchase of fractional shares starts at $0.05.

**You’ll also bear the standard fees and expenses reflected in the pricing of the ETFs in your account, plus fees for various ancillary services charged by Stash and the custodian.




What Is a Good Credit Score – Understanding Credit Ratings & Ranges

When it comes to your credit, it’s important to know how you stack up. Do you have good credit? Excellent credit? Poor credit? How can you find out?

In most cases, the easiest way to determine the health of your credit is to look at your credit score, a numerical value that reflects a mathematical analysis of your debt, your payment history, the existence of liens or other judgments, and other statistical data collected by the credit bureaus.

In other words, your credit score is the compact, simplified version of your entire credit history, all rolled up into one tidy three-digit number.

If you are unsure what your credit score is, you can check it for free with Credit Karma.

Why Do You Need Good Credit?

The importance of having good credit can’t be overstated. From helping you get a loan, to qualifying you for a great job, good credit simply makes life easier and less expensive.

In the eyes of lenders, employers, insurance agents, and a host of other people and entities, the state of your credit represents how responsible you are in general.

For example, lenders look at your credit score to determine not only your ability, but your willingness to repay a loan. Insurance companies view an individual with a good credit score as someone who is trustworthy and less likely to commit insurance fraud. Even many employers run a credit check to determine if a candidate is likely to be a responsible employee. (However, it should be noted that employers only have access to a modified version of your credit report that omits some personal information including your account numbers and year of birth.)

Bad credit can prevent you from being able to purchase a home, disqualify you from work in certain industries, and will wind up costing you a bundle in higher interest rates and fees whenever you borrow money. However, if you understand what hurts your credit score, you can make an effort to fix bad habits and improve your credit rating.

Pro tip: Typically, payment history on your utility bills is not factored into your credit score. When you sign up for a free account with Experian Boost, the agency will start using these on-time payments in your score’s calculation. The end result will be a higher credit score when these payments are made on time.

The Three Major Credit Agencies

Experian, Equifax, and TransUnion

There are three major credit agencies that provide consumer credit information (including credit scores) to the majority of interested parties such as credit card companies and other lenders: Equifax, Experian, and Transunion.

Each reporting agency collects information about your credit history from a variety of sources, including lenders, landlords, and employers. This information includes public records, current and past loans, your payment history, and other data. They then rate your performance using a proprietary scoring system to come up with a credit score.

Because each agency may access different information and has its own formula for calculating your creditworthiness, it is not uncommon for someone to have three different credit scores.

Understanding Credit Scores

Your credit score is a three-digit number that represents the state of your credit. If you know your score, you can get a sense of how lenders, insurance agencies, and interested employers view your credit.

There are many different credit scoring models out there. Each weighs different aspects of your credit report differently. One of the most popular is the FICO Score, which is used by most lenders in the United States.

Another popular score is the VantageScore, which many free credit score websites will let you view. There can be slight differences between your scores with different models, but if you know your score according to one model there’s a good chance you’re in similar credit score ranges with other models.

Nearly Perfect Credit: Credit Score Above 800

If your credit score is above 800, you have an exceptionally long credit history that is unmarred by late payments, collections accounts, liens, judgments, or bankruptcies. Not only do you have multiple credit accounts, but you have or have had experience with several different types of credit, such as a car loan, mortgage, or revolving lines of credit. You also likely have a high credit limit on your credit cards, mostly unused, which helps keep your credit utilization ratio low.

Simply stated, you are an A+ borrower in the eyes of all lenders big and small, and will have no trouble securing a loan of your choosing. Be prepared to receive the best interest rates, repayment terms, and lowest fees available.

Insurance companies love people like you because they’re confident you’ll pay your premiums on time and pose virtually no risk of insurance fraud. Plus, prospective employers love you because you have proven that personal and financial responsibility are of the utmost importance to you.

Excellent Credit: Credit Scores Between 750 and 800

If your credit score is between 750 and 800, you have an excellent credit score. That probably means you have a long and distinguished credit history that shows a responsible payment history and the ability to handle multiple types of credit responsibly.

As a matter of fact, for the most part, you are regarded in the same standard as borrowers with pristine credit history, with the exception that you may have a higher debt-to-income ratio or a few new credit accounts.

In the eyes of lenders, insurance companies, and employers, you’re just as good as anyone with near-perfect credit and, for the most part, will receive the same red-carpet treatment, including lower interest rates and easy approvals. Ultimately, having excellent credit will qualify you for some of the best deals in town.

Good Credit: Credit Scores Between 700 and 750

Having good credit means you have built a solid credit history by working hard to keep your accounts in good standing — however, there may be a late payment or two somewhere in your past. Things happen sometimes, but they are nothing you can’t handle. You might have had a collections account reported, but you’ve paid it. You probably carry credit card balances, but you’ve made strides to get them under control.

Generally, lenders will have no issues loaning money to someone like you. Your good credit score will land you competitive interest rates and low origination fees, although they certainly won’t be as generous as you could have gotten with a few more points on your score. You’ll also have no trouble getting an insurance policy for just about any need, but you should expect your premiums to be somewhat higher than for people with the best credit scores.

Furthermore, your good credit should not have any negative effect on your ability to get hired.

Fair Credit: Credit Scores Between 650 and 700

Having fair credit means that you’ve hit a few speed bumps in the past. Late payments, collections accounts, and maybe even an aged public record dot your credit history. Or, perhaps you simply have too much debt.

Regardless of the reason for your less-than-stellar score, you’ll have a harder time finding a lender willing to service a loan, especially if your low credit score is a result of slow payments.

You’ll represent a higher risk of default to a lender and may have to secure your loans with a down payment or with tangible personal property (otherwise known as “collateral”).

Furthermore, unsecured revolving credit will be difficult to come by. Insurance companies will tend to price insurance policies up for people in your credit category due to the potential for nonpayment of premiums or the higher-than-average risk for committing insurance fraud. Also, some jobs may not be available to applicants with fair credit, such as jobs in the financial sector.

Having fair credit means you have some work to do in order to get yourself back into good financial shape. It is imperative to take steps now to prevent any additional damage to your credit report, and get back on the road to good financial health. By reducing credit card debt, paying your bills on time every month, and paying off any open collections, your credit score will move enough during the next three to six months to get you back into the realm of a good credit rating.

Bad Credit: Credit Scores Between 600 and 650

Having bad credit is not a pleasant experience. You’ve had multiple credit issues in the past, most likely involving payment history on one or more accounts. You’ve also most likely had an account or two in collections, and could have possibly had a bankruptcy filing.

It’s going to be extremely difficult to find any lenders willing to lend to you without a significant down payment or collateral to secure the loan against default. Insurance agencies will still underwrite insurance policies for you, but the products will be limited and they are going to cost significantly more than the same products for customers with better scores. You may also have higher car insurance costs.

Some employers — particularly those in the financial, defense, chemical, and pharmaceutical industries — will not hire you if you haven’t built or maintained solid credit. They may believe you pose an above-average risk of employee theft or fraud, which could even make it difficult to change positions or get a promotion with your current employer.

Having bad credit means it’s time to roll up your sleeves and get real about your current financial situation. Though your current position may be of no fault of your own — thanks to a job loss, illness, or other unforeseen circumstance — it’s your responsibility to take the necessary steps to reverse the course you are on. Take a careful look at where you are in your life and take whatever steps you can to reverse the trends that led to your bad score.

Very Bad Credit: Credit Scores Below 600

If you have very bad credit, you are more than likely delinquent on more than one account. You have active collections accounts, and probably have at least one judgment, repossession, or bankruptcy in your file. If you have credit cards, they are maxed out or the credit card issuers shut them off for nonpayment.

This is as bad as it gets, and it will have many negative effects on your life. Lenders, with the exception of those who specialize in lending to borrowers with bad credit, will not approve you for any loan product, even if you can provide a sizable down payment or collateral, and insurance agencies will likely refuse you based on the risks you pose. Often, employers that check your credit will not hire you, whether there is another viable candidate or not.

Bad credit, no matter how bad it is, is still a temporary condition. Late payments will vanish from your records after seven years, and public records are purged after 10.

Although it can be tough to be patient, know that time is on your side when it comes to dealing with bad credit. Now is the time to start making good financial choices: pay accounts on time, pay off collections accounts, and refrain from taking on additional debt. In just a few years, you can say goodbye to your bad credit rating and hello to a world of financial possibilities.

Final Word

Your credit score is an extremely important part of your overall credit file, but it’s only one piece of the pie. Lenders, insurance companies, and some employers will place a lot of weight on the health of your credit when determining your worthiness.

However, other factors also come into the decision-making process. If you have good to excellent credit, make sure that you take the necessary steps to protect it by repaying your loans on time each month, refraining from obtaining more debt than is necessary, and keeping your other bills paid on time to avoid collections accounts.

If you have bad credit, don’t despair — try to snowflake your debt, strive to pay off collections accounts, and make certain to pay all your accounts on time each month.


The Cost of Living in San Diego in 2021

San Diego’s gorgeous beaches, luxe dining and exciting attractions are enticing — but they come at a premium.

San Diego offers the best of both worlds: It is a major metropolitan city, but it avoids the hustle and bustle of its northern neighbor, Los Angeles.

The eighth-most populous city in America, San Diego typically ranks around the same tier for its cost of living compared to other major cities in the country. Overall, the city comes in at 60.1 percent above the national average when it comes to the cost of living.

While that may seem steep, it’s important to consider that the minimum wage in San Diego is $14 an hour, which is nearly double the average minimum wage of $7.25. Additionally, the median household income is $79,673, which is $10,990 more than the national average.

Below we break down the costs of living in San Diego to help you discover if “America’s Finest City” is a fit for you.

San Diego.

Housing costs in San Diego

Housing in San Diego doesn’t come cheap. In fact, the uninitiated may experience sticker shock at first glance. Overall, housing costs are a whopping 124 percent higher than the national average.

The average rent for a one-bedroom apartment in San Diego is about $2,358 per month, and a two-bedroom is around $3,026 per month. Those prices fluctuate depending on the neighborhood and amenities.

Trendy North Park, with its vibrant restaurant and nightlife scene, is the most expensive neighborhood in the city, with rental prices running around $4,647 per month on average. But rest assured: There are plenty of areas offering apartments for a fraction of that price.

Case in point: College East, located on the east side of San Diego State University, the least expensive neighborhood in the city, offers apartments for $1,463 per month on average. There is also Bay Park, ranked San Diego’s “most livable neighborhood,” which averages $1,621 a month.

If you are looking to buy a home, the average cost of a single-family home in San Diego is $797,634 — more than 53 percent higher than the national average of $370,902. That price tag is reflective of a highly competitive market. Most homes in San Diego sell within just nine days, so if you have the means, you need to act fast.

San Diego farmers market.

Food costs in San Diego

San Diego is famous for its diverse culinary scene. Whether you’re more inclined to try a pasta dish in Little Italy or some chile rellenos at an authentic Mexican restaurant in Old Town, your bill will range around $13 per person.

Of course, most people don’t eat out for every meal. With dozens of quality supermarkets and plenty of neighborhood farmer’s markets, meal planning is easy.

Keep in mind: Groceries in San Diego run 14.4 percent higher than the national average. You’ll pay extra for certain staples like milk ($2.19 for a half-gallon), eggs ($2.88 for a dozen), bread ($3.67 for a 24-ounce loaf) and ground beef ($4.58 per pound).

Utility costs in San Diego

San Diego is known for its beautiful weather. Locals thrive under these conditions; average temperatures hover at around 75 degrees Fahrenheit for most of the year. Still, seasons change and rainy days will happen as well as the occasional cold front.

Some summer days are scorchers, leading locals to crank up the A/C. As a result, overall utility costs are 25.8 percent higher than the national average. Expect your total energy costs of around $247.56 per month.

San Diego hosts a variety of internet providers, so your bill will change depending on which you choose for your household. For example, if you’re a Spectrum customer, you can expect to pay a median price of $73.50 a month for a median download speed of 65 megabits per second (Mbps). Meanwhile, AT&T customers pay a median price of $60 per month for a median speed of 24 Mbps.

San Diego transportation.

Transportation costs in San Diego

One of the many luxuries about life in San Diego is that the freeways are much calmer than those of Los Angeles. Many people choose to live in San Diego because of this factor alone.

Traffic is tame during most hours of the day, although it gets a bit congested around common commute times. Still, prices are slightly higher than those in Los Angeles and 36.1 percent higher than the national average.

Drivers can expect to pay about $3.24 per gallon of regular unleaded at the pump. Parking typically costs $70 per month or $2 per day.

For those who choose to forgo driving altogether, San Diego offers an accessible public transportation system. The San Diego Metropolitan Transit System provides bus and trolley services across San Diego County. Bus and trolley fare are equal; one way will cost $2.50 for able-bodied adults/youth and $1.25 for disabled people/seniors.

The trolley and bus services cover a majority of San Diego County. Routes begin right by the border near Tijuana and extend to the northernmost or easternmost parts of San Diego County. The city’s public transportation services have earned a score of 44.

San Diego’s layout makes it ideal for those who enjoy walks — it’s also convenient for bike enthusiasts. The city has a walk score of 71 and a bike score of 54.

San Diego skyline.

Healthcare costs in San Diego

Healthcare is a primary concern in most people’s minds, and in San Diego, you can expect to pay slightly more in this category — about 8.3 percent above the national average.

A visit to a doctor will cost you about $125 while a dental checkup will run you around $107.18. You can also expect to pay a bit more for medications. A bottle of Ibuprofen costs about $11.90, more than $2 above the average cost nationwide.

Calculating average healthcare costs for everyone is difficult. Everybody has different needs for their body and healthcare routines vary drastically. As a result, you should consider your typical healthcare routines when creating your budget, factoring in your medicine regimens and insurance coverage.

Goods and services costs in San Diego

As important as it is to factor in everything covered above into your budget, you must also consider goods and services.

This category includes things like a session at a yoga studio ($22), movie tickets ($14.42 each), dry cleaning ($14.55) and a trip to the beauty salon ($64.57).

Overall, goods and services in San Diego cost 10.4 percent more than the national average.

San Diego.

Taxes in San Diego

Since taxes vary by location, it’s easy to get confused when it comes time to budget accordingly. Sales tax in San Diego is 7.75 percent with the state tax rate landing at 6 percent and the San Diego County rate landing at 0.25 percent.

If you spend $1,000 on a brand-new computer, you will pay $77.50 on sales tax — totaling $1,077.50.

If you drink soda frequently, expect to pay a CRV (California Refund Value) fee on your cans and bottles.

How much do I need to earn to live in San Diego?

Earlier, we discussed the fact that housing costs quite a bit more in San Diego than in other locations.

Experts generally recommend you allocate at least 30 percent of your budget towards your monthly rent. Renting a standard one-bedroom apartment would cost $28,296 per year, which would require an income of $94,320 by these standards. A standard two-bedroom apartment would cost you $36,312 per year, so your household would need to make $121,040 per year collectively to live comfortably.

Our rent calculator can show you exactly how much you can afford.

Living in San Diego

San Diego is a wonderful place to live if you love warm beaches, temperate climates, great food and a lively club scene. It’s no wonder 35 million people visit each year. Whether those people choose to plant roots depends a lot on budget.

If you have the financial wherewithal, there are plenty of great San Diego apartments and homes just waiting for you.

Cost of living information comes from The Council for Community and Economic Research.
Rent prices are based on a rolling weighted average from Apartment Guide and’s multifamily rental property inventory of one-bedroom apartments in April 2021. Our team uses a weighted average formula that more accurately represents price availability for each individual unit type and reduces the influence of seasonality on rent prices in specific markets.
The rent information included in this article is used for illustrative purposes only. The data contained herein do not constitute financial advice or a pricing guarantee for any apartment.


The Best Neighborhoods in Salt Lake City

One of the most family-friendly cities in the west, Salt Lake City has more to offer than many might think. While it’s not an extremely large city, it’s definitely not small — and it’s growing. A lot.

It’s slowly becoming a new hub for tech companies, creating an abundance of jobs and drawing in the crowds from out of state. Although people are coming in droves, rent prices went down last year and you can typically find a one-bedroom apartment for between $1,200 and $1,300.

With prices like that, there’s no better time than now to find the perfect neighborhood for you in Salt Lake City.

Sugarhouse in Salt Lake City. Sugarhouse in Salt Lake City.

Photo source: Apartment Guide / 21 and View

Sugarhouse offers the best of everything — a quaint suburban feel, lots of fun, independently-owned restaurants and it radiates an eclectic feeling. Not to mention that it’s near the mouth of Parley’s Canyon, making it easy to find hikes nearby or hitting the slopes in Park City.

It’s also a really safe area, which is why there are so many people always looking to move to Sugarhouse. There are many parks, notably Sugarhouse park, which has plenty of wide-open grass fields, pavilions for public use, basketball courts and a pond.

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The Avenues in Salt Lake City. The Avenues in Salt Lake City.

The Avenues is a fairly affluent area — home to lots of historic buildings and houses built in the 1920s and 1930s. Although it’s a little more expensive here, it’s for good reason.

It has the old charm, but with new, vibrant residents that have given new life to the neighborhood over the last decade or so.

The neighborhood is safe and beautiful and it’s easy to walk to restaurants and shops in the area.

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Salt Lake City. Salt Lake City.

Downtown is right in the middle of everything — it’s truly the heart of Salt Lake City. There’s a good mix of the old and the new, with historical sites and beautiful architecture.

There’s also lots to see and do, whether you’re wanting to try a great restaurant or shop at the massive City Creek shopping center.

You can walk most places, but you’ve also got the TRAX and FrontRunner trains that not only will get you around downtown but will get you to other outlying parts of the valley quickly (and you don’t have to deal with the traffic).

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Capitol Hill in Salt Lake City. Capitol Hill in Salt Lake City.

The area surrounding the state capitol building, fittingly named Capitol Hill, is one of the most desirable neighborhoods. Not too far from downtown, you are in close proximity to endless entertainment.

As noted by the name, it’s right on top of a hill, which overlooks the entire Salt Lake valley for some of the best views you can get. Furthermore, one of the favorite local activities every year is strolling through the cherry blossom trees that line the capitol building.

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Yalecrest in Salt Lake City. Yalecrest in Salt Lake City.

Photo source: Apartment Guide / the New Broadmoore

Safe, diverse and historic are three words that perfectly describe Yalecrest. Here, you’ll find incredible homes — many larger Tudor-style homes that make you feel like you’re in another century.

You’re right by many trendy restaurants and food markets, not to mention you’ve got both Sugar House Park and Liberty Park nearby.

A simple neighborhood walk through Yalecrest is a treat — the mature landscaping and exposed wood beams on homes never grow boring.

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Wasatch Hollow salt lake cityWasatch Hollow salt lake city

Photo source: Redfin / 1838 E Kensington Ave

Wasatch Hollow feels like many other city suburbs. It’s quiet and fairly safe but has a diverse crowd of residents to set it apart from other neighborhoods.

Many young families are settling down in the area since it’s close to grocery stores and good schools. While it’s not quite Yalecrest, full of beautiful Tudor-style homes — it’s pretty close to it with fully matured tree-lined streets and well-kept homes.

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Central City in Salt Lake City. Central City in Salt Lake City.

In Central City, you’re about as close to Downtown as you can get without actually being downtown. The age of the area is easily noticed — but in a good way.

Expect a mixture of old historic homes from different times and architectural periods and lots of restaurants with decades of history, along with newer bars and coffee shops.

The area attracts lots of young professionals who work downtown and don’t mind having a little less square footage to live in. Even with the smaller living quarters, the distinct indie vibe of Central City is well worth it if you’re looking for an interesting day-to-day life.

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Rose Park in Salt Lake. Rose Park in Salt Lake.

While it didn’t always have a great reputation, Rose Park is now an up-and-coming neighborhood. It’s a fairly peaceful and quiet area that’s seeing a revival — more and more people are flocking to it.

Couples and young families are turning Rose Park into a more youthful area. More restaurants are opening up to accommodate the crowds.

Soon, it’s expected that the area will be one of the most lively in the valley.

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East Bench in Salt Lake City. East Bench in Salt Lake City.

Settled into the hills of the mountains to the east of the Salt Lake valley, you’ll find East Bench. This neighborhood is full of single-family homes and well-established, older residents.

Most of the homes are large and spacious here — unlike many other neighborhoods in the lower valley with smaller and tightly packed streets.

There are no grocery stores or shopping centers in the actual East Bench neighborhood, but there’s plenty nearby, — so you’re not missing out on anything important.

Despite being further from local amenities, the view from the neighborhood is an exceptional one.

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Poplar Grove in Salt Lake City. Poplar Grove in Salt Lake City.

Photo source: Apartment Guide / Cornell Street Apartments

One of the larger neighborhoods within Salt Lake City, Poplar Grove lies just east of downtown. And like some of the other neighborhoods, it’s been given new life in recent years.

It’s maintained a diverse demographic throughout the years, which is part of what makes the neighborhood great. Being so close to downtown means there’s no shortage of things to do, restaurants to eat at and shopping spots to explore!

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In People’s Freeway, you’ll find it’s full of laid-back restaurants and activities. Smith’s Ballpark is in the neighborhood, where you can catch Salt Lake’s minor league baseball team, the Bees.

Most residents in this area live in apartments or condos, which have drawn in more young professionals and young couples, rather than full families. And the neighborhood caters to those young professionals and couples — with plenty of chill bars and affordable restaurants around, it’s easy to meet new people in the same stage of life.

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Fairpark in Salt Lake City. Fairpark in Salt Lake City.

Fairpark, given its name for the fairgrounds in this neighborhood, is a truly eclectic area of Salt Lake.

Full of great ethnic cuisine, Fairpark offers up some of the best Mexican and Asian restaurants in the city. Furthermore, if you’re one who likes to cook cultural foods at home — there is a surplus of ethnic markets so you can buy anything you need for authentic dishes.

Fairpark is close to downtown, but a bit quieter. You still feel like you’re in the city but in a lesser-known part. You’re far from the hustle and bustle of the big city and can explore this hidden gem of a neighborhood in peace.

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Liberty Wells in Salt Lake City. Liberty Wells in Salt Lake City.

Full of restaurants, coffee shops and bars — the Liberty Wells neighborhood attracts some of the most interesting, eccentric people in the valley. Most are young professionals, so it’s no wonder the area maintains a vibrant atmosphere.

There’s not too much traffic and you can walk most places in Liberty Wells. Local businesses offer everything from handmade postcards to imported cheese — you’re always bound to find something interesting and unexpected around every corner.

If you’re wanting to meet new people, this is one of the friendliest neighborhoods where you can grab a drink and chat with almost anyone.

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Bonneville Hills in Salt Lake City.Bonneville Hills in Salt Lake City.

Bonneville Hills is your typical suburb — quiet, safe and beautiful in its own right.

With great K-12 schools in the area and the University of Utah close by, lots of families, college students and young professionals enjoy living in the neighborhood.

There are parks around every corner and you’re minutes away from many hikes and canyons, so there’s no shortage of outdoor activities right outside your front door.

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Glendale in Salt Lake City. Glendale in Salt Lake City.

Established during World War II, Glendale is one of the friendliest neighborhoods you’ll find. Its close sense of community attracts families and couples looking to settle down for a while.

With such an engaging community, Glendale brings in plenty of diversity, blending together Hispanic, Polynesian and Native American cultures — along with many others.

Plus, it’s one of the more affordable areas close to downtown, which certainly doesn’t hurt.

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Which Salt Lake City neighborhood is best for you?

There are so many wonderful neighborhoods in Salt Lake City, it’s hard to choose where to live. No matter which neighborhood draws you in, you’re sure to find that Salt Lake is a wonderful, diverse city that you’ll fit into quickly.

So check out Salt Lake City apartments to rent or homes to buy to get started with your move!




The Next Silicon Valley Must-Have? A Private Foundation

While the pandemic might have shuttered businesses across the country, Silicon Valley tech companies have defied the odds. In 2020, IPO capital raising hit its highest level in a decade. Start-up valuations soared, and blockbuster IPOs, like the one for Airbnb, created a bumper crop of wealth. But unlike previous iterations of newly minted money, the beneficiaries of this recent boom are forsaking the traditional private-island-and-jet splurge. Their new acquisition of choice could be a more charitable one.

Last year my company helped set up more new foundations than at any other time in our 20-year history – many for tech entrepreneurs and business owners planning for a liquidity event. And we expect that the ongoing wave of IPOs could fuel a surge in private foundation philanthropy, even as Brookings, NPR and others have documented a decline in spending among America’s most affluent households during the past year.

What, No Gold-Plated Yacht?!

Boom times in Silicon Valley used to be marked by lavish displays of excess, including the now-legendary wedding of Napster co-founder Sean Parker whose 2013 “Lord of the Rings” nuptials cost $4.5 million and featured a 9-foot-high cake and guest apparel by the film’s costume designer. So, why aren’t the beneficiaries of the current boom acquiring sharks with laser beams and other accessories for Bond-villain subterranean lairs? 

One possibility is that economic uncertainty has put a damper on lavish displays of conspicuous consumption. As recently reported in The Wall Street Journal, the so-called “smart money” is bearish on companies that have gone public through special purpose acquisition vehicles (SPACs). Short-sellers have increased their bets to more than triple their value at the start of the year, rising from $724 million to about $2.7 billion. And broadly speaking, no one is sure whether the post-COVID economy will be characterized by unprecedented growth or inflation and sluggish employment rates.

Other factors, however, may be inspiring Silicon Valley’s latest crop of millionaires to seek gratification in philanthropy instead of consumerism:

Heightened awareness of increased need: While the gap between America’s haves and have-nots has been widening for decades, the gulf grew even wider during the pandemic. The weight of the crisis fell unequally on the vulnerable, with millions of Americans unable to afford or access even essentials such as food, health care, housing and broadband. Against a backdrop of endless lines for food pantries — even on military bases — extravagant displays of wealth may seem insensitive as well as immoderate. 

An attitude of gratitude: Aaron Rubin, a partner at Werba Rubin Papier Wealth Management, told The New York Times that this boom feels qualitatively different from previous ones. In addition to experiencing unease about the economy, his clients are expressing “more gratitude” and making more plans for charity.

Social crisis: In addition to COVID, racial equity, social justice and the political environment were at the fore of our national conversation. These topics got people thinking about how they could use their assets to influence society positively.

Generational generosity: Many Silicon Valley “techies” are Millennials. Fidelity Charitable’s survey, Entrepreneurs as Philanthropists, shows that in comparison to other generations, Millennials are relatively more philanthropic, more concerned about using their social capital and purchasing power to improve the world, and more interested in aligning their actions with their ideals. And they’ve been very responsive to the increased need as of late.

Additionally, nearly three-quarters of Millennials have sent financial aid to family or friends or donated to a nonprofit since the pandemic began, according to payment app Zelle’s September Consumer Payment Behaviors report. That’s the highest rate among any of the generations polled. 

The Tesla of Charitable Vehicles

It’s easy to see how the next wave of entrepreneurial business IPOs could fuel an explosion of interest in philanthropy; what’s less clear is how that interest will manifest. Although Silicon Valley has a very robust community foundation that serves the surrounding vicinity, not all of its Millennial philanthropists are likely to be content with solely meeting need locally. Nor may they be satisfied with giving only through a donor-advised fund (DAF), which, while popular for its tax advantages and ease of set-up, does not offer donors much say over their giving.

Consider these critical insights to how Millennials approach their giving, noted by the Fidelity Charitable survey:

  • While they are more likely than other generations to see giving as part of their identity, they also may have lower levels of trust in the nonprofits they support and are more likely to want to be actively engaged in the direction and use of their financial support.
  • Younger entrepreneurs see charitable giving as a way to build their reputation, with 84% saying they value giving as an opportunity to demonstrate leadership in the community.
  • Seventy-four percent value having their contributions recognized publicly, compared to only 19% of Boomers.
  • Millennial business owners are already planning their charitable legacies; nearly two-thirds plan to leave money to charity after they’re gone, versus 46% of Boomers.

The same study also notes that “Younger entrepreneurs are going beyond simple cash donations — both personally and in their businesses — and are giving in increasingly sophisticated ways.”

For all these reasons, a private foundation, which confers complete donor control and offers an almost limitless toolbox for creative giving, might emerge as the preferred charitable vehicle for this new class of donors who crave hands-on, out-of-the box philanthropy.

In addition to granting to publicly supported nonprofits, the type of giving permitted with a DAF, a private foundation is empowered to:

  • Give directly to individuals in need.
  • Make loans to charitable organizations and use the proceeds from the repayments to make other programmatic investments.
  • Invest in for-profit businesses to further a charitable purpose.
  • Conduct its own charitable programs and activities.
  • Give awards and prizes to spur progress.
  • Enter into binding agreements with grant recipients to ensure they use the funds as intended.
  • Dictate naming rights as part of a grant agreement and enforce adherence.
  • Deliver grant checks in person (e.g., at a fundraising gala).
  • Follow any investment strategy that complies with prudent investor rules.

Moreover, because a private foundation can be established to exist in perpetuity, handed down from one generation to the next, it might have a special appeal for techies who are intent on building an enduring personal legacy associated with lifelong philanthropy and social impact.

For some great examples of charitable efforts made through private foundations, visit here.

Foundation Source is the nation’s largest provider of management solutions for private foundations. We empower people and companies to create a better world with their philanthropy through a configurable suite of administrative, compliance, and advisory services complemented by purpose-built foundation management technology and private foundation experts.   As we celebrate our 20th year of service, Foundation Source supports nearly 2,000 family, corporate and professionally staffed foundations of all sizes and has enabled more than $7 billion in charitable grants. ©2021 Foundation Source Philanthropic Services, Inc. All rights reserved.

Chief Marketing Officer, Foundation Source

Hannah Shaw Grove is the chief marketing officer of Foundation Source, founder of “Private Wealth” magazine and author of 11 data-based books and hundreds of reports and articles on topics relating to the creation, management, disposition and transfer of wealth. Hannah has previously been the chief marketing officer at Apex Clearing, iCapital Network and Merrill Lynch Investment Managers and is a cum laude graduate of Harvard University. She holds the FINRA Series 6, 7, 24, 26 and 63 licenses.


Stock Float Definition – Pros & Cons of a High vs Low Number of Shares

As you invest, you’ll quickly find that there’s always something new to learn. Moreover, every time you learn something new, you have a new tool in your toolbox to help generate profits in the market.

One of the most important of these tools to consider is a stock float. The float of a stock tells you whether or not you can expect to see volatility, what the ownership structure of the company is, and how much say you will have as a shareholder when votes come to the table.

A stock float important to the active trader who earns profits through high-volatility stocks. It’s also important to buy-and-hold investors who want a say in the companies they invest in long-term.

What Is a Stock Float?

In the stock market, the term float refers to the number of shares of a publicly traded company that are available for trading in the open market. The float of a stock is figured out by subtracting the number of restricted shares from the total number of outstanding shares of a stock.

For example, say company ABC has 100 million outstanding shares.

It paid 10 million shares to its management team and other key employees as bonuses and compensation. It has another 2 million restricted shares that were given to service providers as payment. Finally, the founder and CEO of the company owns 30 million shares.

In this example, the stock float would come to a total of 58 million shares, meaning that 58 million shares are available to be traded by the general public.

An easy way to remember the definition of a stock float is to think about the number of shares that are floating around, waiting to be bought or sold.

Understanding Types of Shares

Pay attention to share structure, as a float can change. Here are a few key share-structure terms to understand that affect the float of a stock:

  • Outstanding Shares. Outstanding shares represent the total number of all shares, including restricted shares, that have been issued by the company. Essentially, if you own 100% of the outstanding shares of a publicly traded company, you own 100% of the company.
  • Restricted Shares. Restricted shares are a type of shares that are provided to insiders, either through a purchase or as an incentive. These shares generally have time restrictions as to when they can be sold, which gives rise to the name “restricted stock.”
  • Authorized Shares. Authorized shares represent the total number of shares of stock that a publicly traded company can issue. The number of authorized shares is generally set in place prior to the company’s initial public offering (IPO) and can only be changed via shareholder vote. Companies are not required to issue all authorized shares. Moreover, any time a company seeks to increase its number of authorized shares, it’s a cause for concern, because the only reason to increase this number is to raise money through a dilutive offering of common stock.

All of these factors are important. Outstanding and restricted shares are key to calculating the float of a stock. Keeping tabs on the number of authorized shares a company has available to issue gives you an idea of whether or not there is room for dilution.

Furthermore, it’s important to keep the number of authorized shares in mind because newly issued shares will ultimately change the float of a stock, and therefore the trading and investing dynamics associated with it.

Pro tip: Earn a $30 bonus when you open and fund a new trading account from M1 Finance. With M1 Finance, you can customize your portfolio with stocks and ETFs, plus you can invest in fractional shares.

What a Stock Float Tells You

There are three classifications for stocks based on the float: low-float, medium-float, and high-float stocks. Each of these classifications tells you something important about the stock.

Low-Float Stocks: Stocks With Less Than 10-Million-Share Floats

Low-float stocks, or stocks with less than 10-million-share floats, are highly volatile. Because there is a small number of overall shares to trade, every trade has a larger impact on the value of the stock.

This can lead to wide swings in price and generally large bid/ask spreads — the difference between the price at which a share of stock can be purchased and the price at which a share can be sold.

Due to the dramatic volatility involved in investing in low-float companies, there’s a higher level of risk when investing in these stocks.

Moreover, it’s important to look into the number of outstanding shares of stocks with low floats to get a better understanding of these companies’ share structure.

If a float is low because the majority of shares are owned by insiders, that means the general investing public has little say when it comes to matters that require votes.

So, if you’re looking to own a piece of a company that you can have a meaningful say in, low-float stocks aren’t best for you.

Medium-Float Stocks: Stocks With Between 10- and 15-Million-Share Floats

Medium-float stocks are stocks that currently have between 10 million and 15 million shares available for trading. At this level, share structure and voting power may still be a concern, but it’s less likely.

In terms of volatility, medium-float stocks can still take you on a pretty wild ride. Although they won’t be quite as volatile as low-float stocks, they are known for wide movements in one direction or another and still come with an added level of risk when compared to high-float stocks.

Nonetheless, medium-float stocks are far more predictable than low-float stocks, while still offering the potential to take advantage of dramatic runs in value, making them a favorite among day traders.

High-Float Stocks: Stocks With More Than 15-Million-Share Floats

Finally, high-float stocks are stocks that have more than 15 million shares within their float. High-float stocks tend to be larger companies.

The higher the float, the lower the volatility will be because each share purchase will represent a smaller percentage of the overall company.

Companies with higher stock floats may also have lower levels of insider ownership. This in and of itself can be a pro and a con.

While a low level of insider ownership means that the general shareholder has more say in how the company is run, it also could mean that insiders in the company haven’t bought in because they don’t expect to see meaningful growth ahead.

So, even if a high float is there, stable gains may not be the outcome.

And, not all high-float stocks have low levels of insider ownership. Large companies that trade with large market capitalizations generally have a larger number of shares and just about always fall into the high-float stock category, regardless of insider ownership levels.

Larger, established companies with decent levels of insider ownership and high floats that make their movements in the market more stable are strong picks for the risk-averse investor.

High-Float Stock Pros & Cons

Some of the best-known names on the stock market are high-float stocks. Amazon and Walmart both have incredibly high floats. However, not all high-float stocks are created equal, and investing in them comes with pros and cons.

High-Float Stock Pros

There are several benefits to investing in stocks with high floats. Some of the most important of these benefits include:

  1. A History. Most stocks in the high-float category are large companies that have a high number of shares in order to make the per-share value of their stock affordable for the average investor. Many of these companies are massive with a long history of dominance in their respective markets. This strong history of success is a great indicator of future success.
  2. Stability. Investors looking for stable growth without a high risk of significant single-session losses love high-float stocks, as these tend to be slow, steady movers.
  3. A Say. Some investors like investing in stocks that make them feel as though their opinion matters. It is extremely rare that insiders will own more than 50% of a high-float stock, meaning that important shareholder votes at companies with high-float stocks usually follow along the lines of what the investing community wants to see, as they hold the majority of the company’s shares.

High-Float Stock Cons

There are plenty of benefits to investing in high-float stocks. However, there is no reward without risk in the stock market. There are a few drawbacks to investing in high-float stocks that you should consider before diving in.

  1. Less Opportunity for Momentum. Due to the nature of high-float stocks, volatility isn’t often seen. This means there’s less potential for significant short-term runs in value, as are often seen with low-float stocks.
  2. Low Insider Ownership. Unless you’re looking at a well-established blue-chip stock, a low level of insider ownership should appear as a big red flag. If insiders don’t believe enough in the company to put their own skin in the game, why should you? So, when investing in high-float stocks, it’s important to look for well-established companies, rather than companies that the insiders just don’t believe in enough to invest in. Unfortunately, it can be difficult for beginner investors to make that distinction.
  3. Your Vote Isn’t as Valued as You Think. Some investors like high-float stocks because the lower levels of insider ownership mean the investing community has a say in what happens with the company. However, on a singular level, your vote may not be as valuable as you think. That’s especially the case when your vote would go against the grain. Remember, a high-float stock has at least 15 million shares available for trading. To have any real voting power as a singular voter, you would have to own a significant portion of that multimillion-share float.

Pro tip: Before you add any stocks to your portfolio, make sure you’re choosing the best possible companies. Stock screeners like Stock Rover can help you narrow down the choices to companies that meet your individual requirements. Learn more about our favorite stock screeners.

Low-Float Stock Pros & Cons

High-float stocks are great in their own right, but they aren’t the be-all and end-all. Low-float stocks can certainly entice a large portion of investors as well. Here are some pros and cons to consider in low-float stocks:

Low-Float Pros

As is the case with high-float stocks, there are plenty of benefits to investing in low-float stocks. Some of the most important include:

  1. Momentum Opportunities. Due to the highly volatile nature of low-float stocks, it’s common to see dramatic short-term runs in value in these stocks. So, if you’re comfortable with higher levels of risk and looking for large short-term opportunities, low-float stocks are a great place to look.
  2. High Levels of Insider Ownership. Although this isn’t always the case, sometimes low-float stocks have low floats because insiders believe so much in the future of the company that they have purchased a large percentage of outstanding shares. When insiders have a high level of skin in the game, it’s a strong indication that the company is moving in the right direction.
  3. Any Catalyst Can Trigger High Demand. By nature, low-float stocks have a limited supply of shares available. As a result, any news — even the smallest announcement — has the potential to trigger an increase in demand, leading to a dramatic increase in the stock’s price.

Low-Float Cons

Although there are plenty of reasons to consider low-float stocks for your portfolio, the grass isn’t always green on this side of the fence. There are a few drawbacks to consider before diving into the low-float-stock swimming pool.

  1. Volatility Is Dangerous. The high levels of volatility in low-float stocks can lead to dramatic gains. However, losses have the potential to be just as significant. So, low-float stocks are not appropriate investment vehicles for the risk-averse investor.
  2. Lesser-Known Companies. Low-float stocks tend to represent lesser-known companies. These companies are far from household names, and while they may have built an exciting new business, often these businesses present more questions than answers. When investing in low-float stocks, it’s important to do extra research to make sure that you’re getting involved in a company with solid prospects for the future.
  3. Liquidity Risk. Sometimes, low-float stocks can be in high demand, and the value of the stock will fly. On the other hand, these lesser-known stocks may not have much demand at all, making them difficult to sell once you own them.

Who Should Consider High-Float & Low-Float Stocks

Determining whether you should invest in low-float, high-float, or medium-float stocks is a simple process. Consider the following when making your decision.

What Is Your Appetite for Risk?

When investing, it’s important to know your appetite for risk. Investing isn’t supposed to be scary and shouldn’t make you uneasy. If it does, you’re venturing far beyond your comfort level in terms of risk, which will lead to making emotion-driven and loss-generating decisions.

Determine your appetite for risk. If you believe that you have a high risk appetite, investing larger percentages of your portfolio in low-float stocks is the way to go. If you have a moderate or low appetite for risk, you’ll want to invest in medium- to high-float stocks.

Are You Looking for Momentum or Stable Growth?

High-float stocks are best known for the stable movement that is seen in their price. This stability helps to reduce risk and produce long-term gains.

Conversely, low-float stocks are known for high-momentum moves in the market. This increases risk but also increases the potential for strong short-term returns.

So, if you’re looking to invest in stocks that will grow over time, high-float stocks are best for you. However, if you want an investment that has the potential to create strong short-term profits, low-float stocks are where you should be.

Think About a Mix Between the Two

A properly balanced portfolio doesn’t focus on a single stock, type of stock, or sector. Instead, a well-diversified portfolio should be considered to maximize potential gains while mitigating risk.

As a result, it’s best to consider mixing high- and low-float stocks. If you are looking for a low-risk portfolio, consider investing 5% or so of your investing dollars into the higher-risk, low-float stocks in an attempt to add to your gains while keeping risk at bay.

On the other hand, if you’re looking for a high-risk portfolio that has the potential to generate tremendous gains, consider investing 65% of your stock allocation in your portfolio in low-float stocks to take advantage of the momentum they offer.

The other 35% of your stock allocation should be invested in high-float stocks to add some stability and protect you from risk.

Final Word

Stock floats tell investors quite a bit. They are a gauge of potential risk, potential reward, and ownership structure, all of which are very important to investors.

Of course, the more you know about any investment you consider making, the better your chances are of generating the returns you’re looking for. So, it’s pertinent to pay attention to the float of any stock you’re interested in.

Always keep in mind that stock floats have an inverse relationship with risk: high-float stocks generally come with lower levels of risk while low-float stocks come with high levels of risk. Keeping this fact in mind will further help you to balance the risk vs. reward within your investment portfolio.