Kuntala Banerjee, Author at unremot.com

9 Best Metaverse platforms everyone should know about

The metaverse is a digital world that exists on the internet and outside of it. It’s where people can exist as themselves, as well as any other avatar they want to create with their imagination. In this article, we will learn about the best metaverse platforms that everyone should know of.

Best Metaverse Platforms

The year 2022 is believed to be phenomenal for witnessing the growth of metaverse platforms. Several global gaming firms are planning to expand their user base and create big communities by investing and focusing on the best metaverse platforms. Even startups are now concentrating on building innovative solutions with the metaverse.

Question is, How do I play in the metaverse?

In this article, we will help to answer the question by sharing the best metaverse platforms and epic games.

Also read – Hire a blockchain analyst

What is metaverse?

Metaverse is a virtual space, rich in graphics powered by virtual and augmented reality. You need to create a metaverse sign-up account to access the landing page of the best metaverse platforms. It essentially helps people to socialize by playing games, working, and even shopping. Media and entertainment are other areas that can be explored in the world of the metaverse.

Who owns the metaverse?

If you want to know, who owns the metaverse, then the main company is Meta. Along with it, there are about 9 more prominent companies that are developing a certain list of metaverse platforms or metaverse technology for the digital world.

Also read – Hiring Metaverse developer – All you need to know

Importance of Metaverse

The importance of metaverse is significant. It is believed to be the next internet, with a democratic architecture where people can gain ownership by claiming a stake in its cryptocurrency. The key reason behind investment into the best metaverse platforms. Be it VR Roblox games or any other gaming apps, users are now relying on metaverse for the same.

Metaverse future growth

Metaverse future growth is expected to be quite significant with its capability of transforming information using metaverse VR technology. Besides, it possesses the potential to change the professional and personal lives of people. The greatest advantage is it’s industry-agnostic be it gaming, work, or research work.

Also read – Best Defi Wallets 2022

How to join the metaverse?

It is crucial to be aware of how to join the metaverse and play games like atlas crypto, Roblox and others. You will either need a dedicated VR headset for accessing some of the best metaverse platforms whereas some platforms are accessible via laptop or a desktop PC.

How does metaverse work?

Here is a step by step guide on how metaverse works:

Create your own digital avatar before venturing into the virtual world. You can decide your hair, clothing, and eye color
Next is to teleport yourself into the space for exploring the activities available to you. Several characters may keep on appearing around you as you venture into the spaces.
The third step is to play games like atlas price game etc., by utilizing the wonder coins provided initially
Finally, you need to make friends for conversation and even go for multiplayer games

Besides you can customize your space or land as per your requirement and choice.

How to play in the metaverse

You have to know how to play in the metaverse, not very tough but it is good to know the rules and the techniques. All the users are provided with wonder coins or a Metahero token initially to start the game. You can select any popular games to start with. The more you mine it, the more money you make. Below we will discuss the best metaverse platforms and their features.

Also read – Hiring smart contract developer

9 Best Metaverse Platforms

One of the most promising developments in the world of social media is the future of metaverse platforms. Below is the list of the best metaverse platforms that you should know in 2022.

Hyperverse
Decentraland Metaverse
Sandbox
Roblox Metaverse
Nakamoto Metaverse
Epic Games
Bloktopia Metaverse
Metahero
Star Atlas

1. Hyperverse

Hyperverse is one of the prominent and best metaverse platforms. In this section, we will discuss Hyperverse, meta hero price, and Hyperverse crypto, one of the new names in the world of cryptocurrency.

What is Hyperverse

So coming to the question of what is Hyperverse. Hyperverse is comprised of millions of planets in the world of the metaverse. These planets make up a virtual world where the players are termed, voyagers. The voyagers can start their own businesses or they can create tokenized items in the meta hero universe world.

Hyperverse blockchain crypto

Hyperverse blockchain system provides a financial infrastructure that is decentralized for the users. Its crypto is a new name in the world of digital currency. The concept is based on time travel in Hyperverse Bloktopia crypto technology where the investors can explore the cosmos within the network.

2. Decentraland Metaverse

Decentraland Metaverse is one of the first-ever and best metaverse platforms. It was launched in February 2020 and is now widely popular especially due to its native token MANA. In the subsequent subsections, we will discuss more on Decentraland Metaverse, Bloktopia price, and how it works.

What is Decentraland?

To elaborate on what is Decentraland – it is essentially a virtual reality platform that is three-dimensional. It is built on the Ethereum blockchain and is one of the forthcoming and best Metaverse platforms. The Bloktopia token of Decentraland is Mana and Land.

Decentraland mana and land

Decentraland mana is the cryptocurrency used for buying and selling lands, services, and even virtual goods. It can be used to play meta Roblox VR games too.

Land is managed and maintained in an Ethereum smart contract and is a non-fungible digital asset.

How does Decentraland work?

Many have a question on how Decentraland works. It is run by the community, granting complete ownership to the investors, users, or players of their digital or virtual assets. Users can play games like Roblox VR games, buy and sell goods, services, or real estate, conduct trading activities and engage in entertainment.

What blockchain is Decentraland on or based upon?

The answer to what blockchain is Decentraland on or based upon is Ethereum blockchain. It has created an economic boom in the world of the metaverse. Its native sandbox token Mana created a major sensation by rising to 80% within a timeframe of 24 hours thus earning 2 billion USD worth of market capitalization.

Also read – Hire a blockchain analyst

3. The Sandbox

The Sandbox is also considered among the best Metaverse platforms. It is a Hyperverse app or platform intending to change the gaming market with innovative features and grant rewards for generating user-specific content. It is decentralized and community-driven.

What is sandbox

To understand what is sandbox, first and foremost you must know it is Ethereum-based. The sandbox metaverse alpha is created by Pixowl. In its gaming ecosystem, the players or the users can create, share and monetize the digital or virtual assets and enjoy unlimited gaming experiences.

Sandbox Metaverse Products

There are three Sandbox Metaverse products:

VoxEdit – for the creation and animation of 3D objects called assets
Sandbox marketplace – a venue for publishing and selling assets
Sandbox Game Maker – for creating 3D games for free

As of the current news, the sandbox price is USD 1.33 for a trading volume of USD 867,859,313 within the 24-hour time frame.

4. Roblox Metaverse

Roblox Metaverse is one of the most successful and best metaverse platforms. Such is its popularity as a Decentraland app that it has almost 9.5 million developers and 47 million active users daily. It was founded in 2004 and focused on building an immersive world leveraging existing gaming technology.

What is Metaverse Roblox?

The unique concept to understand in what is metaverse Roblox is that it does not work on the concept of artificial reality or virtual reality. It works on the basis of “shared fabric” where players create their avatar to meet new friends. It has its own sandbox metaverse land token or currency called “Robux” for buying, selling, and trading goods.

How to play Roblox Metaverse games?

To know how to play Roblox Metaverse games or sandbox games, you must possess “Robux”, the in-game currency. You can play solo or with multiple players in a virtual space. There are in-game purchases and also payments are made to the community developers.

5. Nakamoto Metaverse

Nakamoto metaverse is one of the biggest and best Metaverse platforms. I was launched in October 2021 to build a sandbox platform ecosystem for playing blockchain games and earning through it. The objective was to create a gateway to several blockchain games.

The key concept behind Nakamoto games

Nakamoto games have been developed with the Unity game engine on the Polygon network. This enables low transactional fees and high throughput. Solidity, the programming language, will be leveraged for blockchain smart contracts. Just like other best metaverse platforms like the Decentraland game, NAKA is the native token used for transactions and other activities.

Also read: What to know before hiring a cryptocurrency consultant

6. Epicgames

Epic Games is one of the emerging and best metaverse platforms, with the vision of expanding its metaverse ambitions in near future. It’s a collaborative effort of Sony and KIRKBI that is helping to fund the Epicgames mana metaverse.

The emergence of Epic games metaverse

Epic games metaverse is based on the nebulous metaverse concept. It has brought in the idea of a connected virtual world similar to other best metaverse platforms like Decentraland VR etc. Through Fortnite and Unreal Engine game-making toolset, Epic Games is planning to bring about a boost in the virtual world.

Epic blockchain

A question has arisen will Metaverse succeed in the Epic blockchain network? Well, Epic Games has allowed the doors to blockchain game developers. Yet it has no NFT plans as such. Hence the gaming platforms are deliberating on the blockchain, NFT, or cryptocurrency.

7. Bloktopia Metaverse

Bloktopic Metaverse is one of the unique and best metaverse platforms. Increasing demand has been observed for the Bloktopia virtual world along with BLOK, its cryptocurrency. The Bloktopia Metaverse future price is said to help in earning 50% of returns in 2022 and maybe 5 times in 2025.

What is Bloktopia?

Now, what is Bloktopia metaverse based on? It is a metaverse technology or platform that is designed in the form of a skyscraper that has 21 floors. The users need to purchase the spaces defined inside the floor plan using BLOK. It is powered by a Polygon network and has an Ethereum platform that is decentralized.

The key concepts behind the Bloktopia game

Bloktopia game, the metaverse reality platform, is basically mining coins or tokens through the 21 levels in a skyscraper. You need to create customizable 3D Avatars to keep anonymity. It’s a good investment with a limited real estate concept, valuable for the buyers.

Also read – Hiring Defi developer – All you need to know

8. Metahero

Metahero metaverse is one of the widely used and best metaverse platforms. Based on metaverse AR technology, it grants users the privilege to create 3D avatars and other various digital objects which can be customized. Its cryptocurrency is called Hero.

What is Hero metaverse?

To answer what is hero metaverse, you must know that it leverages the 3D modeling and scanning mechanism. This mechanism is the underlying technology behind generating the avatars and other virtual objects metaverse example to be used in games, social media, and even in online fashion.

What Blockchain is Metahero on?

Binance smart chain or BSC is the answer to what blockchain is Metahero on. Its 3D scanning technology helps to analyze the objects in the real world for collecting data and rendering them in the digital world. The requirement of this particular metaverse hardware is essentially a VR headset.

Also read – Why are NFT Gas fees so high? | Deep dive into gas fees

9.Star Atlas

Start Atlas is one of the next-gen best metaverse platforms. It is based on the Solana blockchain, and Sandbox gaming metaverse platform. Several metaverse use cases have been utilized to check on the performance and credibility of the Star Atlas metaverse.

What is Star Atlas metaverse?

To understand what is Star Atlas’s metaverse, the key feature is it is built on Unreal Engine 5 graphics technology. To strengthen its metaverse ecosystem, the company has bought numerous NFT products from the market which are unique and has helped to earn several millions of revenue.

The key thoughts behind the Atlas game

The key thoughts behind the design of the Atlas game are to go for exploring space, territorial conquest, dominating the political arena, and many more. As per the latest metaverse predictions, investing in an atlas game is supposed to be a good option.

Kuntala Banerjee

Kuntala is a versatile writer with a focus on diverse areas around work, productivity, collaboration at work, hiring, management, HR, and training. Her background of past experience in technology and consulting helps in molding razor-sharp insights into the research and user-focused content she creates. Professionally she is an IT consultant in a sales role and also a writer of short stories and poems, travel blogger, and fashion influencer.

24 Best Freelancer tools in the Market | Meetings, Project management & productivity

Remote work

New to the amazing world of the gig economy? In this post, we share some of the best freelancer tools out there. Let’s take off!

Freelancer tools

Freelancing has taken quite a huge precedence in the professional world. The freedom of working at your own comfort has created a massive appeal among professionals in various sectors. But then to function efficiently, you need to be equipped with the best freelancer tools.

As a freelancer, one has to perform multiple functions like hiring for assistance, project management, planning, organizing, communication, and controlling the finances. These activities require faster completion and efficient execution. This is when the freelancer tools come into play.

In this article, we will focus on the best apps for freelancers, freelancing software, and prominent freelance management platforms.

Also read: 25 Highest paying remote jobs in 2022 | Best work from home jobs

Types of freelance tools in the market

Different types of freelance tools are available in the market for the effective functioning of the activities and tasks of a freelancer. The key ones are listed below:

Calendar Tools – For planning and scheduling activities
Freelance Project Management Tools – For planning and tracking progress
Social Media Management Tools – For social media freelance contract and other services
Communication Tools – For collaborating with customers and peers
Writing Tools – Tools for freelance writers
Time Tracking Tools – For time management and tracking
Finance Tools – For billing and invoicing
Tools for Design – For graphic designing and visual content creation
Tools for legal documentation – For paperwork and contract creation

Also read: How to invoice as a freelancer? | Quick guide to making invoice – with examples

Top 25 best freelancer tools

Now let’s discuss the top 25 best freelancer tools under each of the above-mentioned categories. These freelancer tools will aid you in your daily activities of work execution, management, communication, and collaboration with multiple stakeholders. You can select any of this freelancer software as per your requirements and use it following the freelancer tutorial.

1. Google Calendar – one of the popular tools for freelancers

One of the popular tools for freelancers, Google Calendar aids in managing and tracking appointments. It is a freelance software whose events can be shared easily with others. It lacks graphic beauty although.

Pricing: The business version is charged at USD 5 per month per user.

2. Google Drive – one of the commonly used freelance tools

Google Drive is one of the commonly used freelance tools. It provides a storage space of 15GB; one of the best freelance apps for collaboration. It has some risks in terms of access control.

Pricing: Monthly plans are USD 1.99 for 100 GB, USD 2.99 for 200 GB, USD 9.99 for 2TB and USD 49.99 for 10TB.

3. Unremot – one of the best freelance tools

Unremot is one of the best freelance tools when it comes to creating a virtual office-like platform. You can create your own personal office and can collaborate with multiple users virtually. Unremot is the best software for freelance aiding you to schedule and conduct meetings, manage communities, and scheduling and make payments. All in one space aptly termed as a business-in-one solution.

Besides, it allows you to check on your existing clients, find prospective opportunities and create your own community in its platform. If you are looking for guidance and assistance in any sector, then you can use Unremot’s platform to search for experts, look through their profiles and connect with them.

Hosted in a SaaS platform, it allows easy access for operating in a virtual and remote mode. It is better to sign up for keeping track of your meetings, connect with various experts, and leverage the personal space allotted to each user.

Pricing: Beginner plan offered free. Professional plan for USD 10 per month. Pemium plan for USD 30 per month. Platinum plan for USD 100 per month. You can avail 14 days free trial before availing of the paid pricing plans.

4. Boomerang – one of the best tools for freelancers for client communication

Boomerang is one of the best tools for freelancers to communicate. It has an efficient feature of managing and scheduling emails. It slows down the loading of gmails since it functions via the chrome extension.

Pricing: The Basic plan is free. The monthly plans are – Personal for USD 4.99, Pro for USD 14.99, and Premium for USD 49.99.

5. Hemingway App – best freelance software for writing

Hemingway App is the best freelance software for writing and grammar checking. Provides suggestions for paragraphs, consistency in the usage of active and passive voices. The free version of the app is only available online though.

Pricing: One of the best freelancer apps available for a one-time fee of USD 19.99

6. Bonsai – best software for freelancers for legal work

Bonsai is one of the best software for freelancers with regard to contract creation. It allows reviewing of contracts and e-signing them; benefitting a contract freelancer. It is only available in the English language.

Pricing: The monthly plans are – Basic for USD 19, and Advanced for USD 29.

7. Google Keyword Planner – one of the best SEO freelancer tools

Google Keyword Planner is one of the best SEO freelancer tools. It helps to find keywords for ranking websites, along with the estimated bids. The new version of the tool lacks the feature of broad and phrase match while searching.

Pricing: Free

Also read: 8 Best free Video Conferencing Software 2022 | Connect & Collaborate!

8. Tableau – Popular freelancer analytics tool

Tableau is a popular freelance analytics tool for data visualization. It captures raw data and transforms them into a readable format with the help of dashboards, and graphs. The prices are a bit high compared to others.

Pricing: For analytics freelancers, the price is USD 70 per month

9. Trello – a project management tool for freelancers

Trello is a project management tool for freelancers. It is one of the best freelancer tools for work management, allowing team members to ideate, plan, and organize work. But it is not suitable for handling big projects.

Pricing: There is a free plan. The paid monthly plans per user are – Standard at USD 5, Premium at USD 10, and Enterprise at USD 17.50.

10. EngageBay – free software to keep track of clients

EngageBay is a free software to keep track of clients. It is one of the best CRM freelance management software, aiding in deal management, and sales automation. For email templates, the drag and drop options are a bit stringent.

Pricing: It is a freelance management platform that offers a free plan and trial. Per-user monthly plans include – Basic for USD 10.79, Growth for USD 35.99, and Pro for USD 57.59.

11. Basecamp – a freelancer management software

Basecamp is a freelancer management software, widely used as one of the best freelancer tools. It is a project management software for freelancers for organizing projects, scheduling events, and assigning tasks. But it does not have a time tracking feature.

Pricing: It can be used free or upgraded to a Business plan for USD 99 per month

12. Cushion – one of the popular apps for freelance work

Cushion is one of the popular apps for freelance work. It helps to visualize schedules, track invoices, time and gain customer insight. The app is not 100% accurate in calculating fees.

Pricing: It is a freelancer management platform with 3 monthly plans – Subsidized at USD 10, Pro at USD 15, and Supporter at USD 20.

13. Hubstaff – freelancer tracker for managing teams

Hubstaff is a freelance tracker for managing teams. It is one of the best project management software for freelancers with features like time tracking, project budgeting, employee monitoring, and organizing work orders. Navigation in Hubstaff is a bit tough.

Pricing: Hubstaff is a freelance project management software with two per user monthly plans – Desk Starter for USD 5, and Desk Pro for USD 10.

Also read: Managing Remote Teams: 15 effective tips that will come handy in 2022

14. Scoro – freelance dashboard tool

Scoro is a freelance dashboard tool that helps to track sales and performance. Besides, it is also used for time management, project management, billing, and invoicing. Pricing is suitable for big businesses mainly.

Pricing: The per-user monthly plans are – Essential for USD 26, Standard for USD 37, and Pro for USD 63.

15. Zoho CRM – tool for marketing freelancers

Zoho CRM is a tool for marketing freelancers and is one of the top-rated freelancer marketing software. Its key features include sales enablement, omnichannel management, and performance management. You may experience some performance issues.

Pricing: It is one of the freelancing apps that can be used for free. The per-user monthly plans are Standard for USD 12, Professional for USD 20, and Enterprise for USD 35.

16. Canva – app for freelance designers

Canva is an app for freelance designers. It has an online video recorder, trim and split tool for video editing, and creating designs faster. It does not have a provision for local storage of data.

Pricing: If you want to set up freelance business, you can use it initially for free. Later, as per needs, you can upgrade to a monthly plan charging USD 12.99

17. Yoast SEO – best self employed software for writing and SEO

Yoast SEO is the most popular and best self employed software for SEO. It is very helpful in conducting business freelance; ranking websites through keywords and checking readability. However, Yoast SEO is not intelligent in understanding the intent of the content.

Pricing: USD 99 per year for the Premium plan.

18. Asana for freelancers

Asana for freelancers is a freelancer management system. It helps to manage projects, assign tasks, and track progress; one of the best project management tools for freelancers. However, it does not have a time tracking feature.

Pricing: The Basic plan is free. The Premium and Business plans per month per user are USD 10.99 and USD 24.99 respectively.

Also read: 50+ High income skills | Most profitable skills to learn in 2022

19. Skype – For freelancer live chat

For freelancer live chat with clients and team members, Skype is one of the best freelance management systems for communication. It allows audio and video calling, smart messaging, call recording, and screen sharing. Only sometimes picks up background noises.

Pricing: Subscription of USD 2.99 per month for unlimited minutes

20. Bitrix24 – Best CRM for freelancer

Bitrix24 is the best CRM for freelancer work. It is used for sales automation, collaboration for leads, deals, and contacts, creating quotes and online invoices. The support for the tool needs improvement.

Pricing: It has a free plan and three monthly paid plans – Basic, Standard, and Professional for USD 39, USD 79, and USD 159 respectively.

21. Harvest – a freelance tracker for time

Harvest is a freelance tracker for tracking time and then subsequently invoicing for the same. It creates visual reports for analyzing the progress and performance of teams. It needs some improvement in displaying the time cumulatively.

Pricing: Harvest software per freelance project is free and for unlimited projects, it is USD 12 per month.

22. PayPal – one of the best freelance invoice software

Paypal is one of the best freelance invoice software for money transfer and online payment. The best is you can make the payments on the go. Only that the chargeback fees are higher compared to other software.

Pricing: You only need to pay fees for online transfers and payments.

Also read: Free Invoice Software | Top 25 free invoice software that best suits your business

23. Square – a freelancer billing software

Square is a freelancer billing software. It is used for buying, selling, and sending money. The software may not be appropriate for handling a huge number of transactions.

Pricing: It is a software freelancer users can leverage for free. There is a processing fee of 2.6% + 10 cents.

24. Zoom – online software for freelancers

Zoom is an online software for freelancers for phone, chats, webinars, meetings, and online events. It provides workspaces for collaboration. It is good to avoid discussing confidential information in Zoom.

Pricing: Its Basic plan is free. The yearly paid plans are – Pro for USD 149.90, Busines for USD 199.90, and Enterprise for USD 240.90.

Best way to use dropbox for freelance business

If you are looking for cloud storage, then it is the best way to use dropbox for freelance business. You can upload, and share photos, and videos. Although it lacks metadata search facilities.

Pricing: The basic plan is free. The monthly plan for the tool per freelance user, called Plus, is USD 9.99. While the Family plan is USD 16.99 monthly.

Kuntala Banerjee

How many stocks should I own for an ideal portfolio – Explained

Finance

Are you a beginner in stock market investments? If you are wondering how many stocks should I own, this is the post for you. Let’s see what an ideal portfolio look like.

How many stocks should I own?

People who are eager to invest in stocks prefer to have an ideal and smart portfolio. But then the question which they have in their mind is to understand how many stocks should I own.

The number of stocks one should maintain in a portfolio depends on various factors like the investment vehicles and the risk exposure. Though ideally, the answer to how many shocks should you own, is roughly 15 to 20.

Also read: What is float in Stock? | A comprehensive guide

How does buying shares work?

While referring to how does buying shares work, the activity can occur through a broker or can be done via a trading online portal. In either situation, the request or demand for buying shares is placed at the stock exchange. The stock exchange then looks for sellers for the same share. Once a seller is finalized, the price is agreed upon for executing the transaction. The stock exchange informs that the order has been confirmed; a step towards understanding how many stocks should I own.

What does it mean to own stock?

The concept of a person starting a company, buying shares in a well-established company, or buying a group of shares via a mutual fund explain what does it mean to own stock. In other words, you actually become one of the owners of a company. As owners, you are assigned ownership units called shares, from which you are paid dividends depending on the revenue earnings of the company.

How to build a stock portfolio?

To understand how many stocks should I own, first and foremost you must be acquainted with the fact of how to build a stock portfolio.

You must determine your goals to create stock portfolio. Then you must finalize how many stocks should I own and accordingly allocate the assets. While deciding on how many shares of stock should I buy, focus on a diversified portfolio to spread out the risk.

Also read: How do puts work | Your quick guide to put & call options

What is considered to be the ideal profile?

While trying to build up a smart portfolio, you must be wondering what is considered to be the ideal profile. It consists of varied types of investments which may be government bonds, mutual funds, stocks, pension plans, real estate, and physical assets like silver, gold coins, bars, etc.

How many stocks should be in a portfolio?

Now when we understand the meaning of an ideal portfolio, as a next step we must be aware of how many stocks should be in a portfolio.

A smart investor normally prefers to keep 15 to 20 stocks in a portfolio. The recommendation is while buying individual stock, focus on diversification across sectors and market cap groups.

How many individual stocks should I own?

If you are thinking of how many individual stocks should I own, then as per the experts, it is about 10 to 15 in number. The reason being it reduces the total cost of ownership since you no longer pay the annual management fees for the single stocks. Your motive on how many stocks should I own depends on how much you can diversify your stock holdings.

How much of your portfolio should be in one stock?

If you want to know how much of your portfolio should be in one stock, the recommendation is not more than 5 – 6 % of your entire portfolio. But the point to remember is, the stock selected must be in alignment with your preference and risk appetite.

Also read: 25 Essential questions to ask a financial advisor | Know your advisor

How to balance portfolio?

You must finalize your goals and check your risk tolerance when you think of how to balance portfolio. Ensure to diversify your holdings by maintaining a balance between stocks and bonds. Between stocks and bonds, it is recommended to go for a 50/50 or 60/40 balance. Depending on how many different stocks are there, you need to diversify.

How many stocks is too many?

It is recommended to keep the count of stocks within 30. Above 30 is the answer to the question of how many stocks is too many. You may be exposed to too much risk and may overshoot the diversification needed for a balanced portfolio.

How to calculate how many shares you can buy?

A common dilemma among people who are interested in stock trading is how to calculate how many shares you can buy. Well, the simple math is to find out the current share price. Divide it by the amount you have at hand to invest. You will get your answer, a significant act while deciding how many stocks should I own or how many shares should I buy.

Also read: How to double your money | 20+ Best ways to double your money!

What factors to consider when buying stock?

Let us now discuss what factors to consider when buying stock.

The time horizon like long term, medium-term or short term
Select the appropriate investment strategy like income, growth, or value
Check the fundamental financial ratios like price to earnings ratio, debt to equity ratio, and price to book value ratio
Compare the performance of the stock to its peers
Check the shareholding pattern to understand how many stocks should I own and
Finally check the size of the company to balance the risk

How long should you hold a stock?

How long should you hold a stock depends on whether you are opting for a long-term or short-term investment. It is normally 12 months for the long term and anything less than that is short term. But if you feel that the stock has reached its up-trending potential or the unrealized gains are not more than 20-25%, then it is good to sell the stock.

How much cash should I have in my portfolio?

To decide how much cash should I have in my portfolio, you need to calculate your living expenses for 6 months. In general, it is recommended to keep about 5% of your portfolio to cash which can extend up to 10 to 15 %. This is the best option if you are thinking of how much cash in portfolio to reserve.

Also read: How much money should I save before buying a house? | A financial guide

Frequently asked questions on creating a portfolio

While creating a portfolio and understanding how many stocks should I own, shareholders or beginners are often in a dilemma. In this section, we will be discussing some frequently asked questions for your reference and guidance.

When to buy more shares?

While deciding on when to buy more shares, do some research and analysis on the performance of the shares. If you feel there is a tendency for the price to increase then buy it and hold on to it till you are confident on the unrealized revenue.

Which are the stocks that will make you rich?

Trying to find out which are the stocks that will make you rich? Well, it is majorly the ones with an innovative mindset, adopting the modern trending technology or with products and services which are a necessity for the consumers.

What are the best stocks for Roth ira?

If you need a list on what are the best stocks for Roth ira, then here is it – Microsoft Corporation, Mastercard Incorporated, Apple Inc., Moody’s Corporation, Altria Group, Inc., The Coca-Cola Company, Verizon Communications Inc.

How many shares to buy for beginners?

Well on how many shares to buy for beginners, experts recommend 10 to 15 in number belonging to different individual stocks. And that also reduces the dilemma on how many stocks should I own, thereby diversifying the portfolio for proper balance.

How many shares does a company have?

To know how many shares does a company have or issue, it is good to know both the minimum and maximum limit. Issuing 1 share at a minimum is compulsory but there is no limit to the maximum count on the number of shares in a company.

Also read: How to become financially independent? | 10 Best ways to gain financial freedom

How many ETFs should I own?

It is about 5 to 10 in number to understand how many ETFs should I own. Besides the ETFs must be spread across geographies, asset classes, and others for diversification. In a different concept, the count of ETFs should be 30% of bond investments and 40% of stock investments.

Can you make money off 1 share of stock?

If you are thinking if you can become rich or can you make money off 1 share of stock, then it is a bit unlikely. But if the company’s performance is trending upwards or some stocks could blow up, then there are chances of achieving 10 times gain on the share price. Use the fractional share calculator for understanding the math.

What does buy-in mean?

In a stock-trading business, it is crucial to understand what does buy-in mean. It is essentially buying the shares of a company by any individual or a group, other than employees; thus gaining control over it.

How many stocks should I own with 10k?

If you are still thinking about how many stocks should I own with 10K, then you must start investing in stocks soon. It is good to start with 10 in number and think of diversifying your portfolio and increasing portfolio size. Also, check on how much do stocks cost before the purchase.

Can you buy stock in a company you work for?

As an insider, if you are trying to understand can you buy stock in a company you work for or what happens when you invest in a company you are employed to. The answer is Yes. But you need to register the transactions appropriately with the SEC.

Also read: Reddit personal finance | 21 Best Subreddits on Personal Finance

What percentage of portfolio should be in one stock?

Normally it is 5% as to what percentage of portfolio should be in one stock. And the calculation is applicable only if your portfolio consists of 20 stocks in number. This neutralizes the risk and the risk tolerance.

How much money can you make with stocks?

If you are wondering as to how much money can you make with stocks, it can be lots depending on the strategy you adopt. Also if you can judge your intraday metrics then can increase your earnings. And your capability to understand how much is few or how many are a few.

Why are single stocks high risk?

You must be thinking single stocks earn good results and are of high potential; then at all why are single stocks high risk? They can bring in greater loss too if the company fails to perform as desired.

How many different stocks can I buy in a day?

For the question on how many different stocks can I buy in a day or how many stocks should I own in a day, there is no limit as such. The restrictions applied by FINRA are only for a 5-day period of buying and selling the same stock.

How many portfolios should I have?

If you are a beginner and wondering how many portfolios should I have, then it is advisable to have only one. Once you are earning enough and are an expert, then you can think of having separate portfolios for trading, retirement, college fund as an example.

What does buying portfolios mean?

Buying portfolios mean investing in a portfolio as an asset that will eventually earn good profits with good future growth. But while you invest in portfolios, think of the risk factor and the time horizon.

Kuntala Banerjee

What is Contingent Beneficiary | Everything you need to know

Legal

When setting up your insurance, will or trust you are likely to come across the term Contingent Beneficiary. In this post, we’ve put together everything you need to know before choosing a contingent beneficiary.

Contingent Beneficiary

Contingent Beneficiary is common terminology used in the insurance sector, related to a will or trust of a person after demise. In this article, we will discuss elaborately both contingent and beneficiary, the different types of beneficiaries with their distinguishing characteristics and some frequently asked questions on the contingent beneficiary.

What is a beneficiary?

Firstly, let us try to understand what is a beneficiary. A beneficiary can be a person or a legal entity in an insurance deal or agreement; entitled to receive the death benefits in the form of money or any other medium. The person or legal entity received the amount as a contingent beneficiary after the demise of the primary beneficiary.

Also read: Estate planning attorney | Top things know before hiring an estate planning attorney

What is contingent? with example

In the literal sense, if you want to understand what is contingent. Then it implies being dependent on certain conditions being fulfilled. For example when we speak of the contingent beneficiary, then it implies the payment of insurance to the beneficiary only on the death of the primary beneficiary; provided the name of the beneficiary is mentioned in the will or trust. The payment is also made to the beneficiary if the insured person is missing or cannot be traced.

What is a contingent beneficiary?

Now let us focus on what is a contingent beneficiary.

The contingent beneficiary definition states that the entity is a beneficiary of the payouts or payments or proceeds in the event of death of the primary beneficiary. The payment is also made to the contingent beneficiary if the primary beneficiary is untraceable or refuses to accept the payment. But it is crucial that the name of the contingent beneficiary for life insurance must be mentioned clearly in the will.

Primary Beneficiary

In a life insurance policy or will or trust, the primary beneficiary is the first person to receive the benefits or the payments in case of the death of the insured person. It is usually the immediate family member like a spouse, children, or any other family member. If the primary beneficiary is also deceased, then the benefits are passed on to the secondary beneficiary. There can be multiple primary beneficiaries in a will as specified by the insured person.

Also read: How to write a will | All you need to know about preparing a will

Secondary Beneficiary

A secondary beneficiary is also referred to as the contingent beneficiary.

Now, what is a secondary beneficiary?

The person’s name must be specified in the will or trust and can receive the money or the benefits of life insurance only based on certain conditions. The conditions are the death of the primary beneficiary, absence of the primary beneficiary or even refusal of acceptance of payment by the primary beneficiary within a certain time limit.

Tertiary Beneficiary

In the event of death or absence of both the primary and the secondary or contingent beneficiary, the benefits of the insurance or the money go to the tertiary beneficiary. An insured person may or may not name the tertiary beneficiary in the will or trust. Without the name, the legal department tries to access the immediate beneficiary after the primary and second beneficiaries and grants the amount accordingly.

Insurance Beneficiary

An insurance beneficiary is a person who receives the benefits or money from a life insurance policy only on the demise of the insured person. The name of the beneficiary is mandatorily mentioned in the policy documents by the insured person. It’s good to mention both primary and secondary beneficiaries named in a life insurance policy. That helps to smoothly carry out the legal proceedings in the future.

What does contingent mean in life insurance?

If you want to understand what does contingent means in life insurance, it is almost the same as that of any other sector related to will, trust, or retirement account. It is the situation in which both the insured and primary beneficiary ceases to exist due to death or demise. The contingent beneficiary is granted the benefits or money in turn. For a life insurance beneficiary minor, a legal guardian is assigned or named in the will. That’s what does contingent means for beneficiaries.

Why should you name contingent beneficiaries?

You may be often in a dilemma as to why should you name contingent beneficiaries. It is a good practice to name a contingent beneficiary to avoid probate expenses and time after the death of the insured person. Without a name in the will or trust, a legal process is needed for the distribution of the assets belonging to the deceased person. Besides, it is good to mention certain conditions related to age while maintaining a contingent listing of names.

Trustee vs beneficiary

While talking about trustee vs beneficiary, we need to understand the underlying concept of the terms.

A trustee is a person, who can be an attorney, accountant, a trusted company, a panel of banks, etc, entitled to be in complete charge of the beneficiaries’ assets. He or she is required to best utilize the assets for the beneficiary.

A beneficiary is the person or group of persons whose name is mentioned in the Trust deed and is/are benefitted by the trust earnings.

Primary vs contingent beneficiary

Let us now focus on primary vs contingent beneficiary, two very important concepts in a life insurance policy, trust or will.

A primary beneficiary is the first person entitled to receive the benefits and the money after the demise of the insured person.

A contingent beneficiary is a person who comes next in line to the primary beneficiary and receives the benefits only if the primary beneficiary is deceased, missing or refuses to accept the entitled amount.

Also read: 25 Essential questions to ask a financial advisor | Know your advisor

How does contingent beneficiary work?

It is very important to understand how does contingent beneficiary work.

In the event of inheriting assets, a person usually names his or her spouse as the primary beneficiary who received 100% of the assets. And in addition, can name a person or a group of persons as contingent beneficiaries or beneficiaries in case of death of the primary beneficiary. In the majority of the cases, child or children are named as contingent beneficiaries and are allotted contingent percentage based on the details mentioned in the will.

The insured person can name a non-profitable organization as the contingent beneficiary and the organization receives the beneficiary percentage as mentioned in the will. In the case of a minor, the name of the legal guardian needs is mentioned.

Pros and Cons of Contingent Beneficiaries

Here are the pros and cons of contingent beneficiaries for you to take note of.

Naming a contingent beneficiary in a will or trust is helpful while paying out the benefits in the absence of the primary beneficiary. Else the legal proceedings demand a process of probate for determining to whom the assets need to be transferred.

The disadvantage is that, if there is any potential beneficiary to any will or trust then there can be cases of disappointment due to the appointment of a contingent beneficiary. Often the contingent beneficiary may not be an appropriate person in receiving the benefits.

Also read: Reddit personal finance | 21 Best Subreddits on Personal Finance

Frequently asked questions on Contingent beneficiary

Often there are multiple queries on the contingent beneficiaries. In this section, the frequently asked questions have been conglomerated in a single place for your quick reference and guidance.

1. Who should be contingent beneficiary?

If you want to know who should be contingent beneficiary, then it should be the immediate family members. It can be one or multiple persons. Besides you can also select close family members or friends as a contingent beneficiaries.

2. What is the primary percentage/contingent percentage?

Primary percentage/contingent percentage is the percentage of proceeds that are paid to a primary or contingent beneficiary. 100% of the benefits go to the primary beneficiary. In the absence of whom, the full % of the proceeds is granted to the contingent beneficiary

3. How many beneficiaries can you have?

If you want to know how many beneficiaries can you have, it’s multiple. But it is recommended to decide the number of beneficiaries depending on the assets you have. The reason is you need to mention a noticeable amount of % to be granted to each beneficiary.

4. What happens if one primary beneficiary dies?

Now, what happens if one primary beneficiary dies. Its the secondary beneficiary who received the benefits or the proceeds of the asset. But if there is no mention of a secondary or contingent beneficiary, then there needs to be a probate to decide the person inheriting the assets.

5. What information is a beneficiary of a will entitled to?

Receiving the assets entitled to, the income, expenses, and distributions from the proceeds, receiving the information about the administration and management of the assets. These are the details you will receive and are obliged to be acquainted with if you want to know what information is a beneficiary of a will entitled to.

6. What is estate beneficiary?

A person who is entitled to be benefitted from an estate after the demise of the insured person; that’s what is estate beneficiary or can also be called a trust or will beneficiary. There are primary and contingent beneficiary who can be named in the will of the estate.

7. What is a contingent beneficiary for 401k?

It is very important to know what is a contingent beneficiary for 401K. Well, it’s the spouse of the insured person who should be the contingent beneficiary 401K. The child or any other family member can also be assigned but the spouse would need to sign an agreement to it.

Also read: 5/1 ARM – What is it and is it a good idea for you?

8. What Happens if There is No Contingent Beneficiary?

You need to undergo the process of probate if you want to know what happens if there is no contingent beneficiary. Through the legal proceedings, the assets are distributed to the determined beneficiary; be it a life insurance contingent, retired account contingent, etc.

9. Can the Same Person be My Primary and Contingent Beneficiary?

If you are in a dilemma as to, can the same person be my primary and contingent beneficiary? Yes, they can be. This includes spouse, child, immediate family members, relatives, and even friends.

10. Can a beneficiary be a trustee?

As an answer to the question, Can a beneficiary be a trustee, it is Yes. But the trustee cannot involve in actions that violate the trust, by placing personal interests above the entitlement requirements of the beneficiaries.

Kuntala Banerjee

Data Analyst Career Path | A Comprehensive Guide

Career

In this article, we will discuss extensively the data analyst career path & how to get into data analytics. It is indeed a respectable job with specialized skill sets.

Data analyst career path

Data analysis is one of the happening jobs in the world. it’s no wonder that data analysts are high in demand drawing a handsome salary.

What does a data analyst do?

Gathering, cleansing, analyzing, and interpreting data is the answer to what does a data analyst do. The main objective is to act as a guard for the company’s data and leverage it for arriving at strategic business decisions. These points are essential to remember while pursuing a data analyst career path.

What is a data analyst job description?

A data analyst job description involves the following:

Gathering data through surveys, questionnaires, or purchasing datasets
Cleansing the data by eliminating duplicates, errors, and outliers for improving the data quality
Creating a data structure and model to create relationships and categories
Analyzing and interpreting the data to derive trends and patterns using various tools and software
Communicating and presenting the data through graphs, charts, and reports

Also read: How to find the best remote data analyst jobs? Insights on top salaries, qualifications

How to become a data analyst

In this section, we will focus on how to become a data analyst. The following sub-sections will deal with the key criteria behind pursuing a data analyst career path like qualifications, skills, and related jobs. A data analyst needs to be conversant on both technical and analytical skills.

Data analyst qualifications

Data analyst qualifications include:

Bachelor’s in statistics, maths or computer science
Appear for certain professional certifications which preferably do not require prior experience
Check for learning courses and training programs for data analyst career path and enroll in them
Self-study of data analysis related concepts for acquiring additional knowledge other than the curriculum in colleges and universities
Join any small firm as a trainee or a junior data analyst to acquire hands-on knowledge

Data analyst skills

The different data analysts skills are as follows; crucial for a data analyst career path

Competent in programming languages like Python, R
Knowledge of visualization tools like Tableau, Jupyter Notebook, and Excel
Expertise in maths and statistics
Proficient in usage of database tools
Excellent problem-solving capability
Sound industry knowledge
Good in both verbal and written communication

Entry level data analyst jobs

Entry level data analysts jobs involve gathering, managing, and interpreting the data using various statistical tools and data analysis software. They perform research on improving the performance of a company by focusing on data analytics and defining the trends in the particular industrial sector. You need to possess critical thinking capability, presentation skills, and the concepts of machine learning.

Also read: Guide to conducting & attending Remote Interviews

Data analyst portfolio

To create or build a data analyst portfolio, you need to

Host your credentials on a professional platform like LinkedIn, and participate in communities like GitHub
Include about me, and the projects you have been involved in
Interact and collaborate with experts for gaining knowledge and exposure
Share your ideas and thoughts on data analysis in the forums for better visibility
Write blog posts on data analysis to share your knowledge and thesis

Sample resume data analyst

A sample resume data analyst for your reference:

Name & Contact

Education

Skills

PL/SQL
Tableau
Python
Google Sheets

Work Experience

Data Analyst in XYZ Company (From – to Year)

List out roles and responsibilities

Data Analyst in ABC Company (From – to Year)

List out roles and responsibilities

Remote data analyst jobs

There are plenty of remote data analyst jobs available all over the world. Data analysts are in high demand and companies are willing to hire them to work remotely. This enables harnessing skills and talents from different regions in the world. You can also work as a part-time data analyst or as a contractor. Thus you can pursue a data analyst career path by being present within your comfort location and working remotely.

Data analyst certification for beginners

Here is the list of top data analyst certifications for beginners; reliable learning courses for a data analyst career path

Google Data Analytics Professional Certificate – There are 8 courses for a duration of 6 months
Data Analyst with Python by Datacamp – Time for completion is 62 hours
IBM Data Analyst Professional Certificate – It also has 8 courses for a duration of 11 months
Beginner Statistics for Data Analytics from Udemy – It is a 3-hour course for beginners
Intro to Data Analysis by Udacity – The duration of the course is 6 weeks
Excel to MySQL: Analytic Techniques for Business Specialization – A 7 months course including 5 learning programs

Also read: Best resume software | Give the finest first impression

Data analyst career – Mid-level to senior

Various roles can be taken up in a data analyst career progression. In this section, we will share the key roles that one can take up from mid-level to senior in a data analyst career path. We will briefly discuss their roles and responsibilities.

Data analytics manager

Data analytics manager leads a team of data analysts, guiding and coordinating their jobs and activities.
They plan and monitor to develop processes for ensuring effectiveness and efficiency in data analysis and reporting.
They also need to ensure accuracy in the analysis and interpretation of data by the team.

Senior data analyst

A senior data analyst provides better insights into the business operations by expertise in data analysis
Suggests best practices for resolving the business issues
Performs advanced data analysis and interpretation by leveraging data mining, machine learning techniques, predictive data modeling, and so on

Data analytics consultant

A data analytics consultant provides guidance on data governance and management
Carve out data models for business strategic predictions
Creating reports, dashboards, and visualization tools using the data gathered
Examine the data and the related business processes for evaluation of the potential problems and other business issues

Data specialist

A data specialist collects the necessary information and collates them electronically
Converts the data into a format and shares the findings to the relevant stakeholders in the business
They bring in innovative ideas and the latest technologies to analyze and interpret data

Also read: How to accept a job offer? 10 things to note before accepting a job offer!

Data analyst career path: Different Industries

A data analyst career path varies with different industries, depending on the type of data being leveraged for the proper functioning of the business. In this section, we will discuss the roles played by data analysts in various industries; good for deciding the data analyst career path to select from.

Financial analyst

A financial analyst is responsible for preparing the financial reports by churning in the relevant data. The reports are circulated to the management for providing financial insights and analytical information, allowing the company to adopt accurate and appropriate business decisions.

Business analyst

A business analyst evaluates and analyzes current and past data related to a company’s business. The main objective is to improve the decision-making capability of the organization. They apply the data science methods to interpret and analyze the data to ascertain the effectiveness of the data.

Big data analyst

The key role of a big data analyst is to assist businesses to realize and understand the potential of big data and how they can influence business decisions positively. They collect data from various sources for analysis and prepare reports, charts, graphs, etc. that are beneficial to the business.

Healthcare data analyst

A healthcare data analyst or a clinical data specialist is responsible for gathering data from various sources like electronic health records, cost reports, etc., and interpreting the same. They maintain the database where the healthcare data is collected and stored. The data is retrieved to prepare dashboards and reports for the different stakeholders in the healthcare sector.

Tech data careers

Tech data careers are mainly about using technical skills to analyze and interpret data. The analysis is used to report insights and information that is critical for the smooth running of business operations. They use SQL skills to pull up the data and programming skills for data analysis and interpretation.

Marketing data analyst

A marketing data analyst essentially helps companies and businesses to understand and finalize which products and services to sell. They utilize the qualitative and quantitative market analysis methods to determine the market statistics and report the findings. Their analysis help to find out the impact of the marketing strategies.

Product analyst

A product analyst helps in evaluating and determining if a product is able to cater to a company’s future and current needs. They provide ratings and review the products. They compare the company’s products with others and analyze the industry trends to ensure the products are profitable and appropriate for the business.

Sales data analyst

A sales data analyst analyzes industrial data to evaluate and identify trends in sales. Their responsibilities include gathering and analyzing the data to prepare intelligent reports and dashboards for the management and the teams. They have a good understanding of the sales funnel and help in providing good customer insights.

Also read: Top 30 technical Interview Questions

Data analyst salary for different Levels

The average data analyst salary is approximately USD 66K per annum; a very crucial piece of information to note in a data analyst career path.

So how much do data analysts make as per their experience level?

For less than 1 year, a data analyst or a data scientist salary is near to USD 62K per year. For an experience between 3 to 5 years, the salary is almost USD 69K per year. If the experience is more than 10 years, the annual salary is USD 77K.

If you are a master in data analytics salary offered may be a bit higher than the rest.

Also read: 50+ High income skills | Most profitable skills to learn in 2022

Data analyst career path: Frequently asked questions

Let us now check out some of the frequently asked questions, related to the data analyst career path. These will assist in understanding the data analyst job outlook.

Is data analyst a good career?

If you are eager to know is data analyst a good career, the answer is Yes. It’s one of the highly demanding jobs and highest-paid compared to other IT professionals. Thus if you want to pursue a data analyst career path, then you are assured of a promising career.

How to become a data analyst without a degree?

There are certain things to remember if you want to understand how to become a data analyst without a degree. You need to learn data science through learning courses and training programs. Next, you may be thinking is data science hard? With proper training and certifications, you can succeed. Besides, without a data analysis degree, you must try to participate in hackathons and build a convincing portfolio.

Business analyst vs data analyst

While discussing business analyst vs data analyst, the main difference is in the way they use the data. Business analysts leverage the data gathered to arrive at strategic business decisions. Data analysts collect the data and analyze it to extract useful information and insights.

Kuntala Banerjee

5/1 ARM – What is it and is it a good idea for you?

Finance

Choosing the right home loan will help you in the long run. In this post we do a deep dive on 5/1 ARM to help you make the best decision. Let’s get started!

5/1 ARM

While buying a house, many times you are in need of a loan. To ease your understanding, in this article we will be discussing ARM, specifically 5/1 arm – the definitions and how it works. It’s a type of loan which has both fixed and variable interest rates at its disposal.

What is an ARM?

What is an ARM or What does ARM stand for?

ARM stands for Adjustable Rate Mortgage Loan. It is the loan where the interest rate is adjusted based on the market index as per the credit market. There is an initial interest rate that is fixed for a certain adjustment period. The mortgage is governed and regulated by the Federal government. The interest rates are dependent on certain indices like the LIBOR, COFI etc. There are interest-only arms, hybrid arms, convertible arms etc.

Adjustable Rate Mortgage Vs Fixed Rate Mortgage

Here are the key points to understand in adjustable rate mortgage vs fixed rate mortgage loan types.

Fixed rate mortgage charges an interest rate that does not change throughout the entire time period of the loan.
Adjustable rate mortgage charges an initial interest rate which rises as the loan period proceeds further
Fixed rate mortgage is easier to understand and has less variations whereas adjustable rate mortgage are bit complex to understand and calculate
Advantage of fixed rate mortgage is that there is protection from any high increase in mortgage payments due to rise in interest rates
Advantage of adjustable rate mortgage is that it is cheaper at least for the initial 3, 5 or 7 years

What is a 5/1 arm?

An answer to the question, “What is a 5/1 arm?”

A 5/1 arm is a type of ARM loan which has a fixed interest rate for the first five years. After 5 years, the interest rate is adjustable for the rest of the 5/1 arm loan term. Often the lenders mention caps on the limit of the interest rate increase. It is a rule not to exceed those cap limits while fixing the interest rate.

5/1 arm rates

While paying off a 5 1 arm in 5 years, you need to understand 5/1 arm rates, and the caps mentioned by the lender.

What does that cap mean?

For example, 2/2/5 indicates the initial cap as not to exceed 2%, the next adjustments cannot go beyond 2% and on a lifetime the interest cap cannot exceed 5%.

Also read: Reddit personal finance | 21 Best Subreddits on Personal Finance

Most common ARM Intervals

Let us now focus on the most common ARM intervals other than 5/1 arm. The intervals help to understand for how many years an interest rate will remain fixed and the number of adjustments that will be done in the subsequent period of time. Let’s discuss them in details:

3/1 arm interval

When it comes to 3/1 ARM interval, the interest rate remains fixed for the first initial three years of the loan term. And then the adjustment to the interest rate is made at an interval of 1 year for the rest of the term period of the loan.

7/1 arm interval

So, what is a 7/1 arm? In the 7/1 ARM interval, the interest rate remains fixed for the first initial seven years of the loan term. And then the adjustment to the 7-year arm rates is made at an interval of 1 year for the rest of the term period of the loan.

10/1 arm interval

In the 10/1 ARM interval, the interest rate remains fixed for the first initial ten years of the loan term. And then the adjustment to the interest rate is made at an interval of 1 year for the rest of the term period of the loan.

Read: Estate planning attorney | Things know before hiring an estate planning attorney

What to look for while choosing a 5 1 ARM?

When we have understood about the 5/1 arm loan, let us try to check out: What to look for while choosing a 5 1 ARM?

In the subsequent subsections, we will discuss the salient features of the loan.

1. Periodic rate

Periodic rate is an important parameter for 5 1 ARM loan. It is the interest rate which will be charged as fixed during the initial five years. The rate is decided as per the market indices. It varies at an interval of 1 year by way of adjustment. You need to check out the initial periodic rate while confirming on the 5/1 arm loan, whether it is within your affordable limits.

2. Arm caps

The arm caps help to determine the threshold limit of the interest rates to be adjusted in the subsequent loan time period after the first 5 years. The first initial cap is for the first adjustment interest rate. The next is the threshold for the subsequent adjustments in the interest rate. The last is the threshold to the lifetime interest rate that can be adjusted in the entire loan period.

3. Adjustment intervals

The adjustment intervals help to determine how often the interest rate can be adjusted, basically at which intervals. In 5 1 arm loan, the interest rates are adjusted at intervals of one year as specified by number 1.

Also read: 25 Essential questions to ask a financial advisor | Know your advisor

How does a 5/1 arm work?

To understand how does a 5/1 arm work, let us consider a fixed-rate mortgage example.

Loan amount = USD 250,000

Loan period = 30 years

Fixed rate mortgage = 4%

Say, you are availing a 5/1 ARM loan with caps as 2/2/5 and the starting interest rate being 3.5%.

With a fixed rate mortgage, the payment per month is approximately USD 1194. But with ARM, the monthly initial payment comes to USD 1123 approximately. So the monthly savings is USD 71 for the initial 5 years. This will be eventually adjusted in the next year depending on whether your interest rate goes up than what is defined in the cap. You can use a 5/1 arm calculator for the calculations.

Adjustable rate mortgage example

A typical adjustable rate mortgage example using 5/1 arm mortgage calculator is as follows:

Say the loan amount is USD 275000, the initial interest rate is 3.7% and the loan period is 30 years. For the initial first adjustment of 5 years, the monthly payout of principal and interest is USD 1167.65. After 5 years, the payment will vary depending on the interest rate.

Also read: How to become financially independent? | 10 Best ways to gain financial freedom

Adjustable rate mortgage pros and cons

In this section, we will discuss adjustable-rate mortgage pros and cons. This will clear the dilemma on whether to opt for fixed rate mortgage or an adjustable-rate mortgage when you avail of a home loan. Let’s focus on the subsequent sections to understand the pros and cons in detail.

What is the advantage of an adjustable-rate mortgage?

The answers to – What is the advantage of an adjustable-rate mortgage?

Payment is low at the initial few years depending on whether it is 3/1, 5/1 or 7/1 arm rates
There is flexibility to sell off your home at the end of the fixed period before availing the adjustable payments
Payments may reduce depending on the caps, the market index and the adjustable interest rates

Why is an adjustable rate mortgage bad?

The answers to – Why is an adjustable-rate mortgage bad? are as follows:

The calculations, structures, fees and rules are complex and complicated for borrowers to properly understand and follow
There is a prepayment penalty associated with an ARM. The penalty is the fee charged for either selling or refinancing the loan
Difficulty in managing the interest rates and payments and hence the financial planning
Payments may increase if the interest rates increase

Also read: How can you reduce your total loan cost | Paths to debt-free life

Fixed rate mortgage pros and cons

Here are the fixed rate mortgage pros and cons.

Pros

The rate of interest is fixed for the loan period and hence worries are less for variations
The monthly payments are consistent and hence financial planning is easier
There is no prepayment penalty charged for selling or refinancing loan

Cons

The rates may be initially higher compared to adjustable rate mortgage
Consequently monthly payments may be higher with interest rates being more
Not very good and efficient for short term homeowners

Is a 5/1 arm a good idea for you?

A common question among borrowers – Is a 5/1 ARM a good idea for you?

5/1 ARM is good for you if the difference in the savings with the fixed rate mortgage loan is good enough. If the initial interest rates are not too low and the monthly payments are not comparatively less, then availing 5/1 ARM loans may not be very beneficial.

Besides, if you want to sell your house, then check out the prospective selling option within 5 years of the fixed interest rate period. The more you delay, you may not receive the same valuation and sell benefits. Further, there may be fluctuations in the economy leading to lowering of real estate demands.

Interest only arm

Interest only arm is a type of financing arm where the borrower only pays the interest for a certain period of time. The interest is paid monthly and the duration varies from few months to years. No principal needs to be paid at this time period.

Convertible arm

Convertible arm is a type of arm where you have the option to convert it to a fixed rate mortgage loan. But there is a certain period of time after which you can opt for the conversion. You will be charged a certain fee for converting from ARM to fixed rate.

Kuntala Banerjee