Invest

Apache is functioning normally

While there are plenty of benefits to going public, there are also some downsides to being listed on a major stock exchange. Public companies must abide by strict government compliance and corporate government statutes and answer to shareholders and regulatory bodies. Plus they’re subject to the whims of the broader stock market on a regular basis.

So, public companies can opt to go private and delist from a public stock exchange. What happens when a public company goes private? Here’s what you need to know about that process.

Table of Contents

What Is Going Private?

When a company goes from public to private, the company is delisted from a stock exchange and its shareholders can no longer trade their shares in a public market. It also means that a private company no longer has to abide by the Sarbanes-Oxley Act of 2002. That legislation required publicly-traded companies to accommodate expansive and costly regulatory requirements, especially in the compliance risk management and financial reporting areas. (The legislation was created by lawmakers to help protect investors from fraudulent financial practices by corporations.)

Going private may also mean less pricing and financial stability, as private company shares typically have less liquidity than a public company traded on a stock exchange. That can leave a private company with fewer financing options to fund operations.

Going private also changes the way a company operates. Without public shareholders to satisfy, the company’s founders or owners can control both the firm’s business decisions and any shares of private stock. Private companies can consolidate power among one or a few owners. That can lead to quicker business decisions and a clear path to take advantage of new business opportunities.

By definition, a private company, or a company that has been “privatized”, may be owned by an individual or a group of individuals (i.e., a consortium) that also has a specific number of shareholders.

Unlike traditional stocks, investors in a private company do not purchase shares through a stock broker or through an online investment platform. Instead, investors purchase private equity shares from the company itself or from existing shareholders.
💡 Quick Tip: Before opening an investment account, know your investment objectives, time horizon, and risk tolerance. These fundamentals will help keep your strategy on track and with the aim of meeting your goals.

What Is Privatization?

Privatization is the opposite of an initial public offering. It’s the process by which a company goes from being a publicly traded company to being a private one. A private company may still offer shares of stock, but those shares aren’t available on public market exchanges. There’s no need to satisfy public shareholders and the company has less governmental oversight into its governance and documents.

(Note that privatization is also a term used to describe when a public or government organization switches to ownership by a private, non-governmental group.)

What Happens if You Own Shares of a Company That Goes Private?

If shareholders approve a tender offer to take a public company private, they’ll each receive a payment for the number of shares that they’re giving up. Typically, private investors pay a premium that exceeds the current share price and shareholders receive that money in exchange for giving up ownership in the company.

This is the opposite of IPO investing, in which the public buys stock in a newly listed company, and private owners have a chance to cash out.

Why a Company May Go Private

Likely the biggest reason why a company would choose to go private are the costs associated with being a public company (largely to accommodate regulatory demands from local, state, and federal governments).

Those costs may include the following potential corporate budget challenges:

•   The legal, accounting, and compliance costs needed to accommodate company financial filings and associated corporate governance oversight obligations.

•   The costs needed to pay compliance, investor relations, and other staffing needs – or the hiring of third-party specialty firms to handle these obligations.

•   The costs associated with paying strict attention to company share price – a public company always has to keep its eye on maximizing its stock performance and on keeping shareholders satisfied with the firm’s stock performance.

In addition, going private enables companies to free up management and staff to turn their attention to firm financial growth, instead of regulatory and compliance issues or shareholder concerns. Some public companies struggle to invest for the long-term because they’re worried about meeting short-term targets to keep their stock price up.

Going private also enables companies to keep critical financial and operational data away out of the public record — and the hands of competitors. Privatization could also help companies avoid lawsuits from shareholders and curb some litigation risk.

How to Take a Company Private

Typically, companies that go private work with either a private-equity group or a private-equity firm pooling funds to “buy out” a public company’s entire amount of publicly-traded stock. This typically requires a group of investors since, in most cases, it takes an enormous amount of financial capital to buy out a company with hundreds of millions (or even billions) of dollars linked to its publicly-traded stock.

Often a consortium of private equity investors gets help financing with a privatization campaign from an investment bank or other large financial institution. The fund usually comes in the form of a massive loan — with interest — that the consortium can use to buy out a public company’s shares.

With the funding needed to close the deal on hand, the private equity consortium makes a tender offer to purchase all outstanding shares in the public company, which existing shareholders vote on. If approved, existing shareholders sell their stock to the private investors who become the new owners of the company.

The goal is that the private investors will take the gains accrued through stronger company revenues and rejuvenated stock, to pay down the investment banking loan, pay off any investment banking fees accrued, and begin managing the income and capital gains garnered from their investment in the company. While this can take some time, the process of going private is much less intensive than the IPO process.

Company executives, meanwhile, can focus on growing the company. In many instances, newly-minted private companies may roll out a new business plan and prospectus that firm executives can share with potential shareholders, hopefully bringing more capital into the company. Sometimes private owners will plan to IPO the business again in the future.
💡 Quick Tip: Keen to invest in an initial public offering, or IPO? Be sure to check with your brokerage about what’s required. Typically IPO stock is available only to eligible investors.

Pros and Cons of Going Private

Taking a company private has both benefits and drawbacks for the company.

The Pros

In addition to lower costs, there are several other advantages to delisting a company.

•   Establishing privacy. When a company goes public, it relinquishes the right to keep the company private. By taking a company private, it makes it easier to operate outside of the public eye.

•   Fewer shareholders. Public companies don’t have to deal with external company sources that may make life difficult for company executives and may result in a loss of operational independence. Once a company goes private, the founders or new owners retain full control over the business and have the last word on all company decisions.

•   A private company doesn’t have to deal with financial regulators. A private company doesn’t need to file financial disclosures with the U.S. Securities and Exchange Commission and other government regulatory bodies. While a private company may have to file an annual report with the state where it operates, the information is limited and financial information remains private.

The Cons

There are some disadvantages to taking a company private.

•   Capital funding challenges. When a company goes private, it loses the ability to raise funds through the publicly-traded financial markets, which can be an easy and efficient way to boost company revenues. Yet by privatizing the company, publicly-funded capital is no longer an option. Such companies may have to borrow funds from a bank or private lender, or sell stock based on a state’s specific regulatory requirements.

•   The owner may have more legal liability. Private companies, especially sole proprietorships or general partnerships, aren’t protected from legal actions or creditors. If a private company is successfully sued in court, the court can garnish the business owner’s personal assets if necessary.

•   More powerful shareholders. While there are not as many shareholders at a private company, new owners, such as venture capitalists or private equity funds, may have strong feelings about the operational business decisions, and as owners, they may have more power over seeing their wishes carried out.

The Takeaway

Going private can be an advantage for companies that want more control at the executive level, and no longer want their shares listed on a public exchange. However, taking a company private may impact the company’s bottom line as corporate financing options thin out when public shareholders can no longer buy the company’s stock.

If a company you own stock in goes private, you will no longer own shares in that company or be able to buy them through a traditional broker. For investors, having different types of assets in an investment portfolio may be helpful in case something happens to or changes with one of them.

Ready to invest in your goals? It’s easy to get started when you open an investment account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

Invest with as little as $5 with a SoFi Active Investing account.

FAQ

Is it good for a public company to go private?

Going private can have benefits for a public company, including lower costs related to legal, accounting, and compliance obligations, as well as costs associated with maximizing stock performance and keeping shareholders happy. In addition, going private may allow a company’s staff to focus more fully on financial growth, and keep critical company data out of the public record (and the hands of competitors).

However, there are potential drawbacks as well. For instance, a company may face capital funding challenges once it goes private since it can no longer raise funds through publicly-traded financial markets.

What happens to my private shares when a company goes public?

Once a company goes public (typically done through a process called an IPO, or initial public offering), your private shares become public shares, and they become worth the public trading price of the shares.

How long does it take for a public company to be private?

How long it takes for a public company to become private depends on the time it takes to complete the steps involved. For instance, the company has to buy out all of its publicly-traded stock; it usually works with a group of private investors to do this since the process is costly. Once they have the founding secured, a tender offer is made to purchase all outstanding shares in the public company, which the existing shareholders vote on. If that is approved, the shareholders sell their stock to the owners of the company. How long all this takes generally depends on the company and the specific situation.

Photo credit: iStock/Olezzo

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SoFi Invest®
INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE
SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below:
Individual customer accounts may be subject to the terms applicable to one or more of these platforms.

1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.

2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.

For additional disclosures related to the SoFi Invest platforms described above please visit SoFi.com/legal.

Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.

Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.

Investing in an Initial Public Offering (IPO) involves substantial risk, including the risk of loss. Further, there are a variety of risk factors to consider when investing in an IPO, including but not limited to, unproven management, significant debt, and lack of operating history. For a comprehensive discussion of these risks please refer to SoFi Securities’ IPO Risk Disclosure Statement. IPOs offered through SoFi Securities are not a recommendation and investors should carefully read the offering prospectus to determine whether an offering is consistent with their investment objectives, risk tolerance, and financial situation.

New offerings generally have high demand and there are a limited number of shares available for distribution to participants. Many customers may not be allocated shares and share allocations may be significantly smaller than the shares requested in the customer’s initial offer (Indication of Interest). For SoFi’s allocation procedures please refer to IPO Allocation Procedures.

SOIN0124064

Source: sofi.com

Apache is functioning normally

In a world where speed and convenience have been the siren song to consumers, there’s a movement toward buying more mindfully, sustainably, “slowly.”

You’ve heard of slow fashion. Slow food. Slow travel. And when it comes to the home, “slow decorating.”

A reaction against rooms filled with mass-produced “fast furniture,” slow decorating embraces a more deliberate approach that prioritizes a personal connection to the stuff we live with. It might mean giving new life to heirloom or found pieces. Or buying new things that have the quality to last.

The journey of creating a space is as important as the destination.

New York City designer Gideon Mendelson thinks the movement echoes the Japanese philosophy of “ikigai,” which centers around finding meaning and purpose. Applied to interiors, it’s about creating spaces that promote all-around well-being.

“To me, good design makes room for living and doing. Decorating with meaningful pieces isn’t about chasing an aesthetic, but curating spaces that resonate with authenticity and personal stories,” he says.

“It’s not just about how it looks; it’s about how you want to live.”

And you don’t have to spend a lot, he says. He framed some inexpensive yet eye-catching vintage deli signs, adding a playful element to the Hamptons dining room of a family of five.

The trend toward “slower,” more thoughtful interior design, Mendelson thinks, lies in subtleties: “The cherished heirlooms, and the intimate connection between a space and its inhabitants.”

TOSSING HAS BECOME TURNING

Fast furniture’s association with cheaper materials, excessive packaging and frequent replacement clashes with consumers’ growing interest in minimizing our lasting impact on the planet.

Now, we’re buying more mindfully, but we’re also having a lot of fun DIYing.

During the pandemic, slow assembly lines and stalled container ships meant a lot of brand-new homewares weren’t getting made or sent to market, so upcycling stuff we had or found became hobby, and often necessity.

If you could find a great credenza at a flea market or online reseller that just needed a little TLC, why not?

Not too long ago, decor trade shows would include a handful of studio labs offering reclaimed wood items and organic textiles. Today, at global fairs like Ambiente in Frankfurt, Salone in Milan and Paris’ Maison et Objet, hundreds of companies show new design made with environmental and social impact in mind. Fair trade manufacturing. Fast-growing renewables like hemp, bamboo and cork. Cushions made of soy-based foam instead of petroleum-based foam. Recycled glass and metal accessories.

Mid 20- and 30-somethings are seen as drivers of the slow design trend. TikTok and Instagram feeds are full of refinish-and-reveal videos, and modest abodes full of found treasures.

Stephen Orr, editor in chief of Better Homes & Gardens, says he’s spent the past couple of years renovating a 1760s house on Cape Cod.

“The first year was during the pandemic, so antiques and flea markets were a godsend considering all the supply chain disruptions,” he says.

“But during that process, we came to the realization that pieces with a patina of age better celebrate the house’s long history anyway.”

He also added some new, modern pieces “so it doesn’t look like we should be dressed in period Colonial Williamsburg costumes.”

SHOPPING TIPS

Furniture for sitting, sleeping and eating is where you should spend more money on quality, says Jillian Hayward Schaible of Susan Hayward Interiors.

“We encourage clients to invest in pieces like sofas/sectionals, beds, dining tables and upholstered items, because you can really feel the difference when these items are well-made,” she says.

Peter Spalding of the designer furniture sourcing platform Daniel House Club notes that imitations of Chippendale and other legacy-style pieces — think cabinets and wingback chairs, for example — were common in the ‘80s and early ’90s.

“Now, the imitations aren’t very valuable, but the originals remain highly sought after,” he says. “As you collect ‘slow furniture,’ buy the most authentic versions you can afford.”

Dan Mazzarini of BHDM Design and ARCHIVE echoes the advice.

“If you’re looking for a good investment, go straight to vintage. Things that have already stood the test of time often have another 50 years left in them! Side tables, desks, even cabinets are great pieces to look for,” he says.

Mendelson mentions a pair of vintage French plaster shell sconces in his Sagaponack, New York, home. He bought them 15 years ago “and they still feel fresh and relevant today.”

“I think a desire for one-of-a-kind and bespoke is at least starting a conversation about handmade,” he says. “Quality vs quantity. Living with intention.”

STORES ON BOARD

Many retailers are getting seats on the slow train. West Elm, for instance, was early among home retailers in joining Fair Trade USA, which ensures that suppliers maintain good workplaces and wages, and support their communities.

The global reforestation project One Tree Planted gets part of every purchase from furniture brand Joybird. Herman Miller’s rePurpose program gets used furniture to nonprofit organizations. And Ikea has initiatives like moving to bio-based glue, and instituting a buy-back/re-sell program that saw 230,000 items given a new life in 2022.

For the past five years, the United Nations Refugee Agency’s MADE51 initiative has helped artisans partner with fashion and home accessories businesses worldwide to create sustainable, fairly traded goods.

—-

New York-based writer Kim Cook covers design and decor topics regularly for The AP. Follow her on Instagram at @kimcookhome.

For more AP Lifestyles stories, go to https://apnews.com/hub/lifestyle.

Source: apnews.com

Apache is functioning normally

Inside: Discover the secrets to earning $200k a year. Learn to choose industries, negotiate salaries, and balance life with high-income careers.

Achieving a $200,000 annual income is a financial milestone that many aspire to reach, but not everyone knows how to realistically attain.

Whether you’re starting from scratch or looking to elevate your current earnings, the blueprint to a $200K income is within your grasp. It all begins with a strategic approach that leverages both a steady job and an entrepreneurial spirit.

Achieving a $200k salary is not just about luxury—it’s about stability and security. With rising living costs, including student loans, mortgages, and everyday expenses, earning a high income is increasingly vital to maintaining a comfortable lifestyle.

By combining the stability of a well-paying career with the dynamism of a side hustle, you can fast-track your way to this lofty goal.

In this comprehensive guide, we dive deep into a method that suits everyone to make $200000 this year.

You’ll learn how to harness your passions, manage your time and expenses, and create a foolproof plan that caters to your strengths and circumstances.

How to Make 200k a Year

Achieving this level of annual income is a significant financial goal that necessitates a well-devised strategy combining steady employment with entrepreneurial endeavors.

This is possible for anyone to do. You have been making 10k a month for a while now and want to make the leap.

You just must be steadfast in pursuing your goals.

#1 – Identify high-income skills and industries

The first step toward making $200k a year is to recognize the skills and industries that command such salaries. Technology and finance are prime examples where hard work and expertise can lead to impressive earnings right out of college.

Specialized skills in software development, cybersecurity, data analysis, and AI are highly sought after. Additionally, roles in investment banking, private equity, and hedge funds are lucrative but come with intense competition and long hours.

Identifying these prospects involves understanding market needs, so be prepared to continually adapt to the latest industry trends. I cannot stress how important these high income skills are for your income.

  • Top Skills: Software Development, Cybersecurity, Data Analysis, Artificial Intelligence, Financial Analysis
  • Top Industries: Tech, Finance, Consulting, Healthcare, Legal

#2 – Degrees and Courses That Could Lead to 200K Jobs

If you’re seeking a high-paying career, focusing your education in specific areas is crucial. Advanced degrees, such as a doctoral degree in medicine, law, business administration (MBA), or specialized engineering can pave the way to high-paying roles.

For those with a penchant for academia, pursuing specialized courses that lead to becoming a medical lawyer, dentist, neurologist, psychiatrist, or gynecologist can be extremely rewarding. However, keep in mind that these paths generally require significant time and financial investment in education before reaping the financial rewards.

However, there are plenty of low-stress jobs that pay well without a degree.

  • Recommended Degrees: Medicine, Law, Engineering, Business Administration (MBA)
  • Valuable Courses: Specialized Medicine, Corporate Law, AI & Machine Learning, Financial Management

#3 – Start a Business

Embarking on entrepreneurship is a thrilling yet challenging path to reach unlimited annual income.

To start a business that prospers, it’s essential to identify a market need and create a clear business plan. Whether you’re selling a physical product, offering a service, or thriving in the digital market through online marketing, e-commerce, or app development, dedication, and strategic growth are paramount.

Investing both time and capital wisely, and adapting to market feedback can help you scale your business to meet and exceed your financial goals.

  • Investment Tip: Consider start-up costs carefully, and plan for lean operation.
  • Growth Strategy: Focus on customer satisfaction, scaling smartly, and marketing effectively.

#4 – Advance in your current career

Climbing the corporate ladder within your existing professional environment is a viable route to a higher salary.

To do this, focus on excelling in your current role, continuously improve your skills, and demonstrate the value you add to the company. Seek out leadership roles, ask for challenging projects, and take on responsibilities that align with the company’s revenue-generating activities.

Remember, promotions often come with significant pay raises, and it’s essential to communicate your career goals with your employer to align your trajectory with the available opportunities. Just watch the number of working hours you put in.

  • Key Strategies: Exceed performance expectations, take initiative, and pursue leadership roles.
  • Professional Development: Continued education, certifications, and networking are critical for advancement.

#5 – Invest in real estate for passive income

Real estate investment remains a cornerstone strategy for building wealth.

Focusing on location is key; properties in high-demand markets can yield substantial returns through rental income and appreciation. Paying with cash rather than financing can lead to better deals and avoid interest payments, as debt can eat into profits.

Moreover, platforms like Fundrise allow investors to start with as little as $10, which could be a smart move if you’re seeking a hands-off investment with a diverse real estate portfolio.

  • Investment Insight: Cash purchases may provide better deals, reducing financial risk.
  • Real Estate Tip: Choose high-demand locations for better rental income and property appreciation.

#6 – Maximize income through stocks or other investments

Investing in the stock market through individual stocks, mutual funds, or exchange-traded funds (ETFs) is another way to potentially earn $200k a year. Dividends from some of these investments can also serve as a consistent income stream.

Consider focusing on industries poised for growth or stable dividend-paying stocks, as these can offer a balance between growth potential and income reliability.

Additionally, alternative investments such as cryptocurrencies or option contracts can offer high returns, but come with high volatility. Always conduct thorough research or consult with a financial advisor before making significant investment decisions.

Learn how to invest in stocks for beginners.

  • Investment Strategy: Diversify your portfolio, focus on growth sectors, and consider enhancing your investment knowledge.
  • Cautionary Note: Be aware of market risks and do not invest more than you can afford to lose.

#7 – Gain Relevant Experience in High-Demand Fields

To command a $200k paycheck, it’s essential to gain experience in fields where the demand for your skills exceeds the supply.

Industries such as technology, healthcare, and specialized consulting are in constant need of experienced professionals. Work on projects that showcase your expertise and build a robust professional portfolio.

You can also consider a side hustle like freelancing or consulting to gain a broad range of experiences that can make you an attractive candidate for high-level positions.

  • Experience Building: Take on varied projects, freelance, or consult in your niche.
  • Portfolio Enhancement: Document your successes and gather testimonials or recommendations.

#8 – Continuous Learning and Adaptability to Stay Ahead

In the dynamic job market, staying complacent can mean getting left behind. Cultivating a habit of lifelong learning and adaptability is crucial. Did you know you are an appreciating asset?

This may involve updating your skill set to keep pace with technological advancements, attaining new certifications, or attending industry conferences and workshops. Remember that cross-skills, like project management or business analytics, are also valuable and can complement your primary expertise.

Embrace change and be willing to pivot when necessary to maintain your competitive edge and earning potential.

  • Professional Development: Seek out further education and certifications.
  • Adaptability: Stay open to industry shifts and be ready to pivot your skills accordingly.

Careers That Make 200K a Year is Common

In certain careers, a $200K annual salary is not an exception but rather a common expectation.

Positions in healthcare such as surgeons, specialists, and anesthesiologists often offer salaries exceeding this amount. Moreover, top-level executives, experienced lawyers, and investment bankers are typically in the higher income bracket due to the high stakes and demands of their industry. In tech, senior software engineers and IT executives with strong track records in hot markets like Silicon Valley can command these salaries, too.

Success in these careers requires a combination of advanced education, considerable experience, and sometimes, the right location.

  • Healthcare: Surgeons, Specialist Physicians, Anesthesiologists, Orthodontist
  • Corporate: C-level Executives, Investment Bankers, Senior Legal Counselors
  • Technology: Senior Software Engineers, IT Executives
  • Skilled Tradesperson: plumber, electrician, HVAC contractor, mechanic

Definitely a leap from jobs that pay $25 an hour.

Key Factors in Landing 200K Jobs

Now, you must learn the key components to secure that $200000 + job.

Factor #1 – Choosing the Right Industry for Maximized Earnings

To maximize your earning potential, it’s vital to choose an industry known for its high salary caps, which are listed below.

  • Tech Focus: Cybersecurity, AI, Machine Learning.
  • Healthcare Focus: Specialized Doctors, Medical Consultants.
  • Finance Focus: Investment Strategists, Financial Advisors.
  • Legal Focus: Corporate Lawyers, Litigators.

Within these industries, focus on roles that are crucial to core operations, innovation, or revenue generation.

For tech, this might involve AI, machine learning, and cybersecurity. In finance, investment strategists and financial advisors are in demand. In healthcare, specialized practitioners command higher salaries whereas, in the legal field, corporate lawyers and litigators typically earn more.

Just to note… taxes will take a substantial amount out of your paycheck. So, you want to aim for $200k as net income.

Factor #2 – Climbing the Ladder: From Mid-Level to Top-Tier Positions

Transitioning from a mid-level position to top-tier status demands a proactive career strategy. Aim for roles that impact the company’s bottom line, such as project management or strategic planning, which often lead to executive positions.

Make sure to seek mentors who can offer guidance, and build a reputation for reliability and innovation. Networking within your industry can uncover hidden opportunities and give you a competitive edge.

  • Strategic Positioning: Focus on profit-impacting roles and responsibilities.
  • Career Growth: Network, seek mentorship, and demonstrate leadership capabilities.

Always aim to bring value to your organization, as this will be your leverage when seeking promotions and negotiating salary increments.

Factor #3 – Negotiation Tactics for a High Paying Salary

Securing a salary of $200k often hinges on your ability to negotiate effectively.

Begin the negotiation process by researching the standard salary for your position in your industry and region. Articulate your value by enumerating your accomplishments, experiences, and the results you can deliver.

Prioritize non-salary benefits that may be equivalent to a higher income, such as bonuses, commission, stock options, or flexible work arrangements. When discussing figures, aim higher to give room for negotiation.

  • Research: Know industry salary benchmarks.
  • Value Proposition: Clearly communicate your potential contribution.

Remember, negotiation is a dialogue, so listen carefully, be respectful, and maintain a professional demeanor throughout the process.

Factor #4 – Building Professional Relationships That Open Opportunities

Fostering robust professional relationships is key to unlocking high-paying roles, as connections can lead to opportunities that aren’t publicly advertised.

Networking is an art. It goes beyond just asking the question, “What do you do for a living?“

Actively engage with peers at industry events, be genuinely interested in others, and offer help before you ask for it. Maintain a positive online presence on platforms like LinkedIn, where you can connect with like-minded professionals and hiring managers.

  • Networking: Engage in industry events and platforms like LinkedIn.
  • Relationship Management: Nurture connections and seek meaningful interactions.

Don’t forget to nurture existing relationships – a recommendation from a trusted colleague can provide a significant edge in landing a coveted position.

Factor #5 – Cities and Regions with the Best High-Paying Job Markets

If you’re eyeing a lucrative salary, it’s strategic to consider the geographic landscape of high-paying jobs.

Major economic hubs like New York City, San Francisco, and Boston have dense concentrations of Fortune 500 companies and start-ups that offer competitive salaries, especially in finance and tech. However, these cities come with higher costs of living.

Comparatively, cities like Austin, Seattle, and Denver have burgeoning tech and business sectors with a more balanced cost of living.

  • Economic Hubs: New York City, San Francisco, Boston.
  • Balance Seekers: Austin, Seattle, Denver.

Consider looking for cities that have a vibrant job market in your industry, but a reasonable cost of living to maximize your income-to-expense ratio.

Factor #6 – Remote Work: A Gateway Being Global

The rise of remote work has opened a world of possibilities for professionals seeking higher salaries. You can work in a low cost of living country and still get a good income and save the rest.

With remote positions, you’re not limited by location and can work for companies with higher pay scales in stronger economies, practicing geographic arbitrage to your advantage. Sectors like tech, marketing, and design are ripe with remote opportunities that pay well.

  • Geographic Arbitrage: Tap into stronger economies and work remotely.
  • Global Accessibility: Utilize online platforms to access high-income roles worldwide.

To capitalize on this, enhance your digital presence, showcase your skills online, and engage with global job platforms. Also, consider the time zones and cultural work patterns of employers to ensure a smooth collaboration.

FAQs About Securing a 200K Job

A salary of $200k is relatively rare, with only a small percentage of U.S. households earning at this level.

According to recent statistics, 11.9% of U.S. households had an annual income over $200,000.1

However, this figure can vary significantly by industry, location, and level of experience.

This is 100% possible with the rise of technology and the internet.

To do this, you must focus on industries that value skills and experience over formal education.

Professions like real estate brokering, high-level sales, business entrepreneurship, or becoming a skilled tradesperson. You just need strong persistence.

The likely answer is typically one needs a grad degree or extensive experience in high-paying fields like medicine, law, engineering, or business.

However, specialized certifications, proven expertise, exceptional skills, or entrepreneurship can also be your ticket to this income level without traditional qualifications.

What Jobs Pay 200k a Year Interest You?

Now that you’re equipped with knowledge about reaching a $200k salary, consider which roles resonate with your skills and passions.

Maybe you’re intrigued by the challenge of a tech startup, or the idea of saving lives as a healthcare specialist is what drives you. Perhaps the strategic element of financial planning appeals to your analytical side, or the autonomy of forging your path as an entrepreneur is a calling.

Remember, selecting a profession that not only offers financial rewards but also aligns with your interests and values is crucial for long-term satisfaction and success. High tech degrees are highly sought after right now.

The great part about making this amount of money is you can increase your savings rate, but that doesn’t mean you should leave beyond your means.

There are plenty of avenues that will have you making over six figures quickly.

Source

  1. Statistic. “Percentage distribution of household income in the United States in 2022.” https://www.statista.com/statistics/203183/percentage-distribution-of-household-income-in-the-us/. Accessed February 28, 2024.

Know someone else that needs this, too? Then, please share!!

Did the post resonate with you?

More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!

Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.

Source: moneybliss.org

Apache is functioning normally

Sell-to-open and sell-to-close are two of the four order types used in options trading. The other two are buy-to-open and buy-to-close. Options contracts can be created, closed out, or simply exchanged on the open market.

A sell-to-open order is an options order type in which you sell (also described as write) a new options contract.

In contrast, a sell-to-close order is an options order type in which you sell an options contract you already own. Both types of options, calls and puts, are subject to these order types.

Key Points

•   Sell-to-Open involves selling a new options contract, while Sell-to-Close involves selling an existing options contract.

•   Sell-to-Open profits from decreasing option values, while Sell-to-Close profits from options that have increased in value.

•   Sell-to-Open can increase open interest, while Sell-to-Close can decrease open interest.

•   Sell-to-Open writes a new options contract, while Sell-to-Close closes an existing options contract.

•   Sell-to-Open benefits from time decay and lower implied volatility, but can result in steep losses and be affected by increasing volatility. Sell-to-Close avoids extra commissions and slippage costs, retains extrinsic value, but limits further upside before expiration.

What Is Sell-to-Open?

A sell-to-open transaction is performed when you want to short an options contract, either a call or put option. The trade is also known as writing an option contract.

Selling a put indicates a bullish sentiment on the underlying asset, while selling a call indicates bearishness.

When trading options, and specifically writing options, you collect the premium upon sale of the option. You benefit if you are correct in your assessment of the underlying asset price movement. You also benefit from sideways price action in the underlying security, so time decay is your friend.

A sell-to-open order creates a new options contract. Writing a new options contract will increase open interest if the contract stays open until the close of that trading session, all other things being held equal.

How Does Sell-to-Open Work?

A sell-to-open order initiates a short options position. If you sell-to-open, you could be bullish or bearish on an underlying security depending on if you are short puts or calls.

Writing an option gives the buyer the right, but not the obligation, to purchase the underlying asset from you at a pre-specified price. If the buyer exercises that right, you, the seller, are obligated to sell them the security at the strike price.

An options seller benefits when the price of the option drops. The seller can secure profits by buying back the options at a lower price before expiration. Profits are also earned by the seller if the options expire worthless.

Pros and Cons of Selling-to-Open

Pros Cons
Time decay works in your favor A naked sale could result in steep losses
Benefits from lower implied volatility Increasing volatility hurts options sellers
Collects an upfront premium Might have to buy back at a much higher price

An Example of Selling-to-Open with 3 Outcomes

Let’s explore three possible outcomes after selling-to-open a $100 strike call option expiring in three months on XYZ stock for $5 when the underlying shares are trading at $95.

1. For a Profit

After two months, XYZ shares dropped to $90. The call option contract you sold fell from $5 per contract to $2. You decide that you want to book these gains, so you buy-to-close your short options position.

The purchase executes at $2. You have secured your $3 profit.

You sold the call for $5 and closed out the transaction for $2, $5 – $2 = $3 in profit.

A buy-to-close order is similar to covering a short position on a stock.

Keep in mind that the price of an option consists of both intrinsic and extrinsic value. The call option’s intrinsic value is the stock price minus the strike price. Its extrinsic value is the time value.

Options pricing can be tricky as there are many variables in the binomial option pricing model.

2. At Breakeven

If, however, XYZ shares increase modestly in the two months after the short call trade was opened, then time decay (or theta) might simply offset the rise in intrinsic value.

Let’s assume the shares rose to $100 during that time. The call option remains at $5 due to the offsetting changes in intrinsic value and time value.

You decide to close the position for $5 to breakeven.

You sold the call for $5 and closed out the transaction for $5, $5 – $5 = $0 in profit.

3. At a Loss

If the underlying stock climbs from $95 to $105 after two months, let’s assume the call option’s value jumped to $7. The decline in time value is less than the increase in intrinsic value.

You choose to buy-to-close your short call position for $7, resulting in a loss of $2 on the trade.

You sold the call for $5 and closed out the transaction for $7, $7 – $5 = $2 loss.

Finally, user-friendly options trading is here.*

Trade options with SoFi Invest on an easy-to-use, intuitively designed online platform.

What Is Sell-to-Close?

A sell-to-close is executed when you close out an existing long options position.

When you sell-to-close, the contract you were holding either ceases to exist or transfers to another party.

Open interest can stay the same or decrease after a sell-to-close order is completed.

How Does Sell-to-Close Work?

A sell-to-close order ends a long options position that was established with a buy-to-open order.

When you sell-to-close, you might have been bullish or bearish an underlying security depending on if you were long calls or puts. (These decisions can be part of options trading strategies.) A long options position has three possible outcomes:

1.    It expires worthless

2.    It is exercised

3.    It is sold before the expiration date

Pros and Cons of Selling-to-Close

Pros Cons
Avoids extra commissions versus selling shares in the open market after exercising There might be a commission with the options sale
Avoids possible slippage costs The option’s liquidity could be poor
Retains extrinsic value Limits further upside before expiration

An Example of Selling-to-Close with 3 Outcomes

Let’s dive into three plausible scenarios whereby you would sell-to-close.

Assume that you are holding a $100 strike call option expiring in three months on XYZ stock that you purchased for $5 when the underlying shares were $95.

1. For a Profit

After two months, XYZ shares rally to $110. Your call options jumped from $5 per contract to $12.

You decide that you want to book those gains, so you sell-to-close vs sell-to-open your long options position.

The sale executes at $12. You have secured your $7 profit.

You purchased the call for $5 and closed out the transaction for $12, $12 – $5 = $7 in profit.

2. At Breakeven

Sometimes a trading strategy does not pan out, and you just want to sell at breakeven. If XYZ shares rally only modestly in the two months after the long call trade was opened, then time decay (or theta) might simply offset the rise in intrinsic value.

Let’s say the stock inched up to $100 in that time. The call option remains at $5 due to the offsetting changes in intrinsic value and time value.

You decide to close the position for $5 to breakeven.

You purchased the call for $5 and closed out the transaction for $5, $5 – $5 = $0 in profit.

3. At a Loss

If the stock price does not rise enough, cutting your losses on your long call position can be a prudent move. If XYZ shares climb from $95 to $96 after two months, let’s assume the call option’s value declines to $2. The decline in time value is more than the increase in intrinsic value.

You choose to sell-to-close your long call position for $2, resulting in a loss of $3 on the trade.

You purchased the call for $5 and closed out the transaction for $2, $5 – $3 = $2 loss.

What Is Buying-to-Close and Buying-to-Open?

Buying-to-close ends a short options position, which could be bearish or bullish depending on if calls or puts were used.

Buying-to-open, in contrast, establishes a long put or call options position which might later be sold-to-close.

Understanding buy to open vs. buy to close is similar to the logic with sell to open vs sell to close.

The Takeaway

Selling-to-open is used when establishing a short options position, while selling-to-close is an exit transaction. The former is executed when writing an options contract, while the latter closes a long position. It is important to know the difference between sell to open vs sell to close before you start options trading.

If you’re ready to try your hand at options trading, you can set up an Active Invest account and, if qualified, trade options from the SoFi mobile app or through the web platform.

And if you have any questions, SoFi offers educational resources about options to learn more. SoFi doesn’t charge commissions, see full fee schedule here, and members have access to complimentary financial advice from a professional.

With SoFi, user-friendly options trading is finally here.

FAQ

Is it better to buy stocks at opening or closing?

It is hard to determine what time of the trading day is best to buy and sell stocks and options. In general, however, the first hour and last hour of the trading day are the busiest, so there could be more opportunities then with better market depth and liquidity. The middle of the trading day sometimes features calmer price action.

Can you always sell-to-close options?

If you bought-to-open an option, you can sell-to-close so long as there is a willing buyer. You might also consider allowing the option to expire if it will finish out of the money. A final possibility is to exercise the right to buy or sell the underlying shares.

How do you close a sell-to-open call?

You close a sell-to-open call option by buying-to-close before expiration. Bear in mind that the options might expire worthless, so you could do nothing and avoid possible commissions. Finally, the options could expire in the money which usually results in a trade of the underlying stock if the option is exercised.

Photo credit: iStock/izusek

SoFi Invest®
INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE
SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below:
Individual customer accounts may be subject to the terms applicable to one or more of these platforms.

1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.

2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.

For additional disclosures related to the SoFi Invest platforms described above please visit SoFi.com/legal.

Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.

Options involve risks, including substantial risk of loss and the possibility an investor may lose the entire amount invested in a short period of time. Before an investor begins trading options they should familiarize themselves with the Characteristics and Risks of Standardized Options . Tax considerations with options transactions are unique, investors should consult with their tax advisor to understand the impact to their taxes.
SOIN0323021U

Source: sofi.com