Shubha Roy, Author at unremot.com

Small Business Titles | Top 10 epic titles for business owners, partners & founders of small businesses

Searching for the most trending and fancy small business titles. We have a list compiled for you. Read on!

Small Business Titles

What is a business owner? Business owners are individuals or partners that make monetary or operational level decisions in a company. They have ultimate control over the company. There are several synonyms for business owners. The business owner synonym may depend on the type of business. Popular synonyms are entrepreneur, retailers, wholesaler, CEO, and director under small business titles.

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What are small business job titles?

When you are a small business owner, you want to choose the title that fits your position. The business titles you choose should be consistent with the company’s goals. The title should reflect your role. But what is a business title? The business title is a corporate title given to employees to reflect their duties and responsibilities.

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Top 5 business owner titles

Now that you have decided to choose a business jobs titles for your company, we give you some options of small business titles. We have listed the top 5 business owner titles you can choose. Select the one which is best suited to your style.

CEO or Chief Executive Officer is a common title in the business world. The title will let people know, you are in charge of the company and coveys the company is well established. The title is not appropriate if the sole owner of a business.
President is a job title that conveys authority. It is ideal if you want to give your business a more established air. When choosing titles for your firm consider how you will add titles as your firm grows.
Owner is a title used when your firm has not completed the organizational documents. The small business title owner shows complete financial control. Owner is ideal if you own an LLC or sole proprietorship.
The Proprietor is a synonym for the business owner. The proprietor is an older term and is ideal if you retail business.
The Founder title has gained popularity in recent years. Several people consider it to be a synonym for a business owner. You are invested in your company’s growth and are involved in the day-to-day operations.

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Top 5 startup titles

Roles in startups are dynamic. The titles in small business owners have to respond. Regardless of the titles on business cards, people working in startups need flexibility. Small business titles list for startups determine the hierarchical structure. Some startup titles in business are,

Web Developers help to create the code for the website or digital application. They may handle the front-end work or back-end work. Other titles in business for web developers are Chief Technology Officer, Vice President of Engineering, and Tech Guru.
User Experience Designer or UX designers work on how users interact with the software, apps, or website. Other titles on business are User Interface Designer, User Researcher, and Product designer.
Product Manager or PM identifies opportunities for new products. They need to project management skills, market research, and business models. Other business development titles for business cards are Chief Product Officer, Product lead, etc.
Data analysts collect and organize data, check it and make recommendations.
A Marketer in start-up companies uses traditional marketing skills with new technologies. Small business titles for marketers are Chief marketing officer, director of marketing, etc.

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Top 5 partner titles

A partnership is a business arrangement between two or more people to manage a business and share profits. The partners share profits and liabilities. here are small business owner titles,

The Manager can oversee specific areas of the business like marketing or finance. A general manager is a perfect job title for small business owners that focus on business strategy. This is one of the common small business titles
The Administrator is an ideal title for small business owners. Administrators get involved in daily operations.
The Director of X is useful if the partners help to run the business. The job title for a small business owner can convey the job description.
Managing Partners are an ideal partnership title. It conveys you are one of the owners of the company.
The Principal that titles for small business owners show you are a key decision-maker.

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Top 5 LLC member titles

LLC or Limited liability companies have a more flexible structure. Owners of LLC are called members and are one of the commonly found small business titles. An LLC can have one or many members. Members or managers can run an LLC. While shortlisting LLC owner titles remember to choose a title that shows you are in control and ensure LLC titles are not misleading. Here are some business titles for LLC you can consider,

Owner is used on titles for business owners when there is only one member or a limited number of members.
Managing Members are great LLC ownership titles. They are involved in the running of the company and can represent the LLC.
CEO are popular LLC owners titles. Managing members can opt for corporate titles like CEO, President, or CFO.
Managing Director is used for LLC ownership titles. Some LLCs have a board of directors that meets to discuss company matters.
The Principal is used in LLC ownership titles. The principal member is a responsible member. They can represent the company in legal matters.

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Top 5 professional titles in small businesses

Job titles in business can vary from the standard (CEO, owners) to specific (head plumber, director of operations). Below we have compiled a small business job titles list.

CEO or chief executive office is a standard professional title used for small businesses. It shows you are in charge of the whole company. It helps your business look established.
President is a job title in business that conveys authority. People use president and CEO depending on the hierarchical structure.
The Principal is another job title for a business used to convey you are the person in charge. It sounds more formal than the owner.
A Founder is one of the ideal small business titles if you are the founder of the business. The small business position titles, show you know the business and are the person in charge.
Manager Directors are a great option for job titles in business when there are several owners.

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Top 5 clever job titles in startups

startups are new companies that have identified a gap in the market. They have created products or services to fill the gap. Funny job titles for a business card can help express the brand, show creativity, and progress. Creative business titles you can use among small business titles are,

Wizard of want (Marketing director) is a clever job title to convey, you want to sell products or services.
Number Ninja (Director of Accounts) are not very creative jobs. The job titles in business can add some excitement to the position.
#Mediamaster (Social media manager) is a very important job in a startup. The hashtag in their title is a nod to their job profile.
Boss of All things (CEO) is at top of the title hierarchy. Boss of all things is a fun way to refer to the CEO.
Creator of Opportunities can be used to describe the director of business development.

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Top 5 business titles for co-owners

You need to decide the title for the business owner when you start your business. This gets a little more complicated if there are multiple business owners. Here are some job titles for business owners under most commonly used small business titles,

C-Suite – Owners can use titles to specify the area of expertise. You can use small business CEO (chief executive officer), CFO(chief financial officer), CTO(Chief technical officer), OR COO (chief operating officer).
Owner Principal is ideal when you want one co-owner to have legal authority.
Director of X is used if your company is an LLC. Though members denote owners, it does not have a descriptive business owner title. Owners opt for a director of x depending on the role like the director of technology, creative director, etc.
Co-owner is a simple business owner title you can use. It shows you help in the company’s operation.
President also implies authority. You can use it as the owner of a company title. You need to be sure the co-owners are fine with the title.

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Top 5 startup founder titles

The term founder shows describe the relationship you have with the business. CEO titles among the common small business titles show the current business titles hierarchy. As a founder, you can be the CEO of the business. But, CEO can change as the business evolves. As a founder, it is important to convey your chief responsibility in the firm. Here are some startup founder titles you can use,

Founder CEO titles in the business show who has started the company and holds key positions in a small business.
President and Founder are common titles in the business. It shows you are focused on executing the business plans.
Director of X is ideal to show the role you play in the company.
Technical Director – Some small business titles may be director of operations or Technical director.
The Principal is a synonym for the owner of the startup. The principal titles in the business show you can represent the company in a legal capacity.
Managing Member shows you are one of the key persons making business decisions.

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Top 5 positions in a small company

Starting a company can be daunting. It is important to know your strengths and weaknesses. You can hire staff to fulfill the business position. Here are the top 5 positions in a small company which could be considered among small business titles,

General Manager is an important position in the management titles hierarchy. The manager oversees the business and works strategies to improve it.
Bookkeepers or accountants are vital business position titles. They maintain the record cash flow of the company. They help plan financial strategies and ensure compliance.
Marketing Managers are common business positions titles. They should be someone who can look after all aspects of marketing.
Administrative Assistants are a key business position. They work on the administrative part of the business and help you focus on getting more business.
Human Resource Managers are business position titles that hire and manage your staff.

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Top 5 business card titles for owners

As your business grows you need to focus on growth. Owner business cards need careful consideration. The right business card titles for owners will lend your business some credibility. The business card titles for owners let your employees and outsider know your role in the organization. Here are some options for what do you put on a business card as part of small business titles,

Founder implies that you built the business from the ground up. It shows you are the driving force behind the business. Businesses that have multiple founders can have a co-founder business card.
CEO or Chief Executive Officer are big thinkers. Founder and CEO business cards are popular options for owners. CEO are people who look after long-term plans and strategies for growth.
Chief [ insert title here] communicates the part of the business you supervise. Chief [insert tile] can be one of the best job titles in business for large corporations.
Managing Director/Partner/Member are other titles depending on the ownership pattern of the business. You can use a partner if your business is a partnership. Managing Director can be used for LLC titles for business cards.
General Manager or GM is another title for small business owners. It shows you are in charge of all aspects of your business.

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Founder vs Owner

The terms owner and founder are often used interchangeably among small business titles. In small companies, the owners and founders are the same people. The difference between founder vs owners is as follows – the owner is the person who owns all the equity in the company while the founder started the company. The separation between owner vs founder becomes significant if the ownership of the company changes. As the company grows it may have co-owners but founders remain constant.

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What is another word for the owner?

The proprietor is another word for a business owner and also one of the commonly used small business titles. Other words for owners are entrepreneur, partners, or founders. They provide the capital and labor to produce products or services for profit. Owners are called partners in partnerships. The partners run the company and are responsible for debts and legal obligations. Founders start the business.

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What is the best job title for someone who does a little of everything?

Someone who does a little of everything is a generalist among small business titles. But no one wants to call Jack of all trades. One of the best jobs you can use is as a business analyst. It can describe a variety of skills and experiences. Businesses can narrow it depending on if they work on the financial side, technical side, etc.

What is the job title for someone who does multiple jobs?

In small companies, small business titles can be confusing because people do multiple jobs. Vendors and clients will respond to you based on your job title. In several situations, you will meet people in more than one capacity. In this situation, you can pick double tile like John Doe, Finance and operations, ABC corporations.

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What is the owner of an LLC called?

Owners of an LLC (A limited liability company) are called members under small business titles. The LLC can have one member or multiple members. The members of the LLC can be a sole proprietorship, partners, member managers, or passive members. A sole proprietorship has one member LLC. Federal tax laws consider LLC with more than one member to be a partnership.

Is the CEO the owner?

No, CEO or chief executive officer is one of the small business titles which is at the highest position in the organization. They are in charge of running the company and making decisions. The CEO is the public face of the company. The owner can have any role within the company. The role can change, depending on the need of the company. An owner is someone who owns 100% of the company.

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What is the difference between CEO and owner?

The difference between owner vs CEO is as follows,

The owner is one of the small business titles where the person who created the product or service of the company. The owner generally focuses on improving the product or service. The owner has major equity in the company. For the business to grow the owner must be willing to delegate. As the business grows the owner must hire executives to run key functions.

CEO or Chief Executive Officer is one of the small business titles and usually appointed by the board of directors. CEO sets long-term goals and handles strategic planning. To create and manage the strategic goals, the CEO must have a strong understanding of finance. They are the pubic face of the company. CEO needs to have a clear understanding of how the business operates.

Shubha Roy

Shubha writes blogs, articles, off-page content, Google reviews, marketing email, press release, website content based on the keywords. She has written articles on tourism, horoscopes, medical conditions and procedures, SEO and digital marketing, graphic design, and technical articles. Shubha is a skilled researcher and can write plagiarism free articles with a high Grammarly score.

Leadership weaknesses – 15 frequently seen leadership weaknesses and ways to fix them

Blockchain and Crypto

Want to refine your leadership skills? Becoming aware of your weaknesses is a good first step. In this blog, we deep dive into the 15 common leadership weaknesses.

Leadership weaknesses

Businesses fail to grow for several reasons. Leadership weakness can cause businesses to have slower growth and failure. Companies with weak leadership fail to grab opportunities and result in underperforming staff. As a leader, you need to consider the cost of poor leadership. Analyze your leadership style, and focus on leadership strengths and weaknesses areas of your leadership.

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15 Frequently seen leadership weaknesses

Leadership weaknesses are traits that can hurt your company’s bottom line or work environment. We view traits like micromanaging, overcritical, and inconsistentness as weaknesses. Leadership strength and weaknesses assessment can help you recognize areas you need to work on and improve your management skills. Here are 15 qualities of poor leadership.

1. Motivating employees areas of improvement for managers examples

Motivating your employees can be difficult. Improving motivation skills are areas of improvement for managers example. When employee morale is high, productivity and efficiency of the organization increases and the office environment improve. Managers should proactively work on creating a positive work environment.

They need to praise their staff and avoid micromanaging. They should be fair and treat team members with respect. A common leadership weakness is managers cannot accept criticism and negative feedback from others.

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2. Weaknesses of a leader by being overcritical

Being overcritical is seen as a sign of weakness of a leader. Some leaders always find something wrong in someone’s performance, productivity, initiative, or other aspects of work. Employees feel stressed and can lead to burnout.

These weaknesses of a manager may make the staff disrespectful of their management or lack the motivation to achieve company goals. Overcritical leaders often feel they are offering constructive criticism, but constant criticism increases the feeling of alienation and results in high employee turnover.

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3. Bad leadership examples by lack of transparency

People can sense when someone is misleading them. A leader who withholds information or misrepresents the truth is a sign of leadership weakness. Bad leadership example by lack of transparency can shatter trust. Employees can feel disillusioned and lose respect for their leader and organization.

The lack of transparency at the workplace breeds insecurity. Employees want transparency from the management, especially during crises. People praised Zoom CEO Eric Yuan, for his transparent response to the security breach.

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4. Micromanaging common weaknesses in leaders

Micromanaging refers to the tendency of leaders to constantly check up on the team or employee and is considered a common weakness in leaders. Leaders who micromanage may want to appear authoritative or may fear they are losing control of the situation. Micromanaging also shows a lack of confidence and trust in their team.

This weakness as a leader can frustrate your team members and make them demotivated. Experts recommend leaders should focus on outcomes and trust the team to follow through. They should have periodic checks to ensure progress.

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5. Poor qualities of a leader of excessive connectivity

We live in a world where we feel we need to be connected 24/7. One of the poor qualities of leaders seen nowadays is the need to connect constantly with their team. This approach of staying connected throughout the day or being omnipresent is bad for managers and their staff.

This tendency called hurry sickness can make your team work faster and multitask even it is not required. The leader often misses the big picture. On the other hand, one of the leadership weaknesses is over-commitment and excessive stress can make leaders inaccessible.

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6. Management weaknesses of stagnancy

Leaders are in danger of getting stuck in their ways leading to a management weakness of stagnancy. Even if the current methods are working, teams should avoid becoming complacent. Successful businesses can become static and lose the desire to innovate. They get stuck in a comfort zone and are unwilling to take risks.

Employees are demotivated and stop growing. Companies can stop changing with the times. Poor leadership style results in leaders stopping listening to feedback, even from clients.

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7. Leadership weakness of needing to be liked

It is natural if leaders want to be popular. Leadership weaknesses like craving to be liked can cloud their business judgment. They may want to make decisions that make them popular but may not be the best for business. Instead of striving to be popular, they need to be understood and respected.

They should be open and communicate with the team frequently. Leaders should explain the reason behind a decision that affects the future of their team or company.

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8. Weak manager characteristics of hypocrisy

Leaders set an example for their team. Hypocrisy is a frequent weak manager characteristic. Hypocrisy is an attitude – do what I say and not what I do. Leaders want to create a work environment but are unwilling to participate in the culture they are trying to build.

Leaders cannot hold their staff accountable if they are unwilling to work as hard as their staff. They need to be aware of their behavior and hold themselves to the same, if not higher standard.

9. Negative leadership traits of failing to set clear expectations

Employees prefer clear-cut instructions rather than figuring out what is required. The negative leadership traits of failing to set clear expectations make employees feel directionless. Unclear goals and objectives will weaken the team. Failing to set expectations includes setting clear boundaries of behavior.

It may lead to misunderstandings about expected norms. They feel demotivated and less productive. Employees want to know their work is meaningful and is contributing to the company goals. Leaders should communicate goals and objectives clearly.

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10. Operating with rules is an example of a weakness in bureaucracies

One of the examples of weakness in bureaucracies is always operating within a set of procedures. In business, it is hard to think of every eventuality. In unfamiliar scenarios, a bureaucratic leader does nothing. Leaders may think 80-20 thumb rule, where someone written procedures for 80% of circumstances.

The leader may have no idea what to do in times when there are no procedures. Leadership weaknesses like bureaucracies is that people are unwilling to make decisions using their judgment. They should try to brainstorm to find solutions.

11. Bad leadership styles of acting like a bully

Acting like bullies is a bad leadership style. A bad leader uses intimidation and fear to compel an employee to toe the line and complete the work assigned. They publicly berate their employees for personality or appearance rather than the work the employee is doing.

Employees who work for an organization, where the boss is a bully feel demoralized, and the organization has high employee turnover. Productivity of the organization suffers. Leadership weaknesses like bullying can lead to a stressful work environment and can be psychologically damaging.

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12. Lack of faith leadership weaknesses examples

Leaders who lack faith in their staff, will have an unhappy workplace. The leadership weakness examples include the lack of faith in their staff opinions and expertise. It is demoralizing and can affect professional growth. Leaders do not know how to deal with every aspect of the business. They need to delegate to take the business forward.

Leaders need to trust the employee to complete the assigned task. They are free to question them, but if the employee completes their assignment successfully. They should have faith in them and the process.

13. Poor leader qualities of having clear favourites

The danger of poor leader qualities of playing favorites is that most leaders are unaware of is the tendency. Leaders may prefer a particular style of working, or method of communicating, or a problem-solving approach. There is nothing wrong with having preferences.

It is a leadership weakness if a leader ignores the contributions of some members while noticing the work of a select few. This tendency can ruin the dynamics of a team and lead to resentment.

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14. Areas of improvement for supervisors to become flexible

Areas of improvement supervisors can work on are becoming flexible. A good leader needs to respond to the changing circumstances in the workplace. They need to treat their staff as individuals. They should take the personal preferences of their staff into account.

An inflexible approach has taken the form of my way or the highway attitude to strict compliance to timelines. This approach can lead to a fractured culture and lower productivity. Supervisors should proactively consult with their team and be open to criticism.

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15. Common weaknesses of leaders are a lack of vision

Employees enjoy working for a leader with a clear vision and a well-defined way to get there. If the employee believes in the vision or the company has a future, they may be willing to settle for lower pay. A common weakness of leaders is a lack of vision.

It can be coupled with signs of weaknesses of leadership like, the lack of focus, inability to inspire or prioritize. If the leaders lack a sense of direction, their employees will not have it either.

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5 Steps to fix bad leadership qualities

Leaders need to remember no one is perfect. Addressing your leadership weakness starts with getting to the root of the problem. You need to admit to their team if you are not confident in a decision and ask for their inputs. You should be open to feedback regularly. Here are some steps you can take to fix bad leadership qualities.

1. Determine the cause

People are affected by factors beyond their workplace. Invite the person concerned if the problem in their personal life is affecting their work. Personal problems can cause a person to be distracted or unfocused. Avoid asking private questions, instead focus on the poor work performance. Address specific skills that need to improve.

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2. Evaluate areas that need to improve

It is impossible to improve multiple areas of weakness at once. Start with your leadership strengths and weaknesses list. Start by tackling one or two weaknesses.

3. Look for situations to practice your skills

Now that you have skills you want to improve, look for avenues to improve your skill. E.g. if you want to trust your team try to communicate more openly or delegate some responsibilities.

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4. Be honest about your progress

Review your progress weekly. If you are looking to eliminate your tendency of having favourites. Question yourself like – did I interact with all your team members? Did I give them constructive feedback or thank them. Over a period, your team will recognize you are trying to change.

5. Listen to feedback

In addition to self-evaluation, ask your superiors and team for feedback. It is tough to take constructive criticism. We advise you not to take it personally and keep an open mind. Keep notes on your self-evaluation and progress and review your growth over a period.

Shubha Roy

Financial consultant | Types, Licences & Job description

Finance

Want to learn more about what does a financial consultant do? In this post, we deep dive into types of financial consultants and how much they make, among other things. Read on!

Financial consultant

A financial consultant analyzes and audits your current financial situation and devices a strategy to reach your financial goals. Consultants usually cater to a clients’ specific needs and goals. They offer services like investment, tax preparation, retirement plans, and insurance service. In this blog, we explain what is financial consulting? What do consultants do?

What is finance consulting?

What is financial consulting? A financial consultant can work with firms or as a self-employed contractor. When a financial consultant meets a client, they evaluate the financial situation before making concrete suggestions. Ideally, clients should meet their advisor whenever there is a life change, to reevaluate their finances.

Consultants offer personalized advice to clients to increase their wealth. Financial consulting services may include – buying and selling investment products, financial product and insurance schemes, and financial planning to meet your financial goals. Depending on their qualifications they may offer services like business and divorce planning.

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Financial advisor vs financial planner

Differences between a financial advisor vs financial planner are as follows

Financial planners are professionals who help individuals meet their long-term financial goals. They adopt an integrated approach with budgeting, saving, investing, and retirement planning and rely on strategic portfolio allocations for investments. Financial planners may have different certifications e.g. fiduciary-based financial planners need to be Registered Investment Advisors.

Financial advisor is a broad term used to describe professionals who help people manage their money. Advisors may help people manage their investments, broker the sale and purchase of stock and funds, or manage the estate and tax plans. Registered financial advisors need a carry a Series 65 license to operate.

What is a financial advisor?

What is a financial advisor? Financial advisors strategize with individuals or companies and help them reach their financial goals faster. They help their clients create wealth, reduce costs, and eliminate debt, and their services can include – investment management, tax planning, insurance services, and estate planning. Advisors make a financial plan based on their client risk appetite. Registered advisors need a Series 65 license to operate and may require additional licenses, depending on the services they provide.

What is a financial planner?

What is a financial planner? A financial planner helps clients meet their current monetary requirements and make plans to meet their financial goals. They adopt a structured approach to help their clients make better financial decisions. Planners use their knowledge of – budgeting, taxation, and investment with various analytical tools to offer financial suggestions and help their clients make informed decisions. Financial planners may specialize in one area or have a more holistic approach.

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

What does a financial consultant do?

You may wonder what does a financial consultant do? A consultant role is not limited to investments but helps clients in savings, budgeting, insurance, and tax savings. The financial consultant takes a holistic view of the clients’ finances. They account for their client’s debts, assets, expenditures, and earnings and work with them to set financial goals and help them understand what it entails.

Financial consultant job description

The financial consultant job description can vary depending on their specialization. They help their clients achieve their financial goals and advice them on taxes, investments, retirement planning, and insurance. A financial consultant responsibilities include –

Analyze client information and strategize to help them achieve long and short-term financial goals.
Provide sound financial advice based on the income, risk appetite, and desired level of investment growth.
Evaluating how changes in life status and finances can affect their customer’s financial goals. Modify their advice and strategies to meet these changes.
Monitor financial markets and economic conditions
Research different investment options for clients.
Make financial reports for their clients and respond to any queries if any.
Meet statutory requirements.
Stay updated with the latest financial instruments and regulatory changes.
Look for new clients through emails, advertising, and cold-calling.

How much do financial consultants make?

Are you interested in learning how much do financial consultants make? The average annual salary of a consultant in 2020 was $89,330. The top 25-percent of financial consultants made $157,020 annually, while the bottom 25-percent made $59,450. The salary of a consultant varies by state and experience.

Entry-level consultants – $53,000 annually
Mid-level consultants – $ 77,000 annually
Senior consultants – $83,000 annually.

A freelance financial consultant earns $73690 a year.

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Day in the life of a consultant

The average financial advisor’s day generally starts early and can run late in the evening, especially at the beginning of their careers. The day in the life of a consultant will include –

At the start of their career financial advisors will spend some part of their day looking for new clients. They meet prospective clients, make cold calls or network.
Consultants need to spend a large part of their day servicing their customers. They review client portfolios, address queries, and attend to other business issues.
Consultants perform administrative chores – compliance reports, entering data, updating client records, and record-keeping.
Many securities and financial instruments require approval and may require further training. Advisors may spend time in continued training.

What does a consulting firm do?

What does a consulting firm do? Financial consultancy services include helping individuals and small businesses manage and increase their wealth. The role of a consulting firm is varied.

Financial forecasting based on present and future earning potential.
Assess the financial health of the companies.
Help firms define their goals by identifying opportunities and improved financial planning and targeted performances.
Advice on selling and buying bonds and stocks.
Ensure financial compliance.
Determine latest market trends
Identify risks and opportunities for investment.
Review day-to-day operations and recommend areas of improvement.
They may provide financial advisory consulting if required.

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

Types of financial consultant

Hiring a financial consultant is a great way to manage your money, set financial goals, and make retirement plans. While financial advisors must be registered with the US Securities and Exchange Commission or their state, other financial titles need not be registered. Investors must be careful while selecting a financial consultant. You need to identify the kind of advisor you need. We recommend you verify your financial consultant before hiring them. Here are some types of financial consultants available.

1. Personal financial consultants

A personal financial consultant gives financial advice and services to their clients. They provide customized solutions to their customer’s unique needs and help them mitigate risks and evade financial mistakes. They offer products and services based on your current and future requirements. Consultants either ask for a flat fee or take a commission from the sale of investments.

2. Financial strategy consultant

A financial strategy consultant assists businesses in defining financial strategies, taking into account industry trends. The consultant studies company operations and helps implement new financial target models. They help improve their client performance, reporting mechanisms and develop predictive models. Work with companies during mergers and acquisitions.

3. Investment consultant

An investment consultant is a financial professional who provides clients with investment products, advice, and planning. They make investment strategies for clients, monitor their investments, improve their finances, and help the clients meet their financial goals. Investment consultants may work for banks, investment firms, or independently. The consultants often develop long-term working relationships with their clients.

4. Accounting consultant

Accounting consultants work with individuals or companies for financial management, auditing, and forecasting. The consultant helps to create and analyze financial documents and recommend areas for improvement. They help their clients predict future costs and revenues and ensure compliance with regulators. Accounting consultants require a background in finances, regulation, and accounting procedures.

Also read: Stock Consultant | How to become a stock consultant

5. E-trade financial consultant

E-trade financial consultants provide investment recommendations, portfolio building recommendations, and review and analyze your current investment with the latest tools.

They buy stocks, bonds, and securities on your behalf. Firms are increasingly going digital-first platforms and the e-trade financial consultant provides the human interactions and advice required on these platforms. Younger clients are getting attracted to the new platforms.

6. Corporate finance consulting

Corporate finance consulting role work in a client-facing role with corporate around the world. The consultant has expertise in the areas of finance and corporate strategy. Corporate finance consultants may work as a part of the due-diligence team in mergers and acquisitions team They may work in diverse areas like IP development, reconstructing, and marketing.

7. Loans consultant

Loan consultant assesses loan application. Their responsibilities include obtaining information from loan applicants by interviewing them. They analyze the applicant’s financial status and review loan agreements. The loan consultant informs the applicant about different loans and credit options. They typically work in financial institutions, businesses, and help clients with home, business, mortgage, consumer loans.

8. Business financial consultant

Business financial consultants in companies act as conduits between internal financial functions and frontline commercial teams. They translate internal financial data and targets into commercial insight. They participate in budget preparation activities, review accounting procedures, and recommend improvements.

9. Chartered financial consultant

Chartered financial consultants or ChFC have completed a comprehensive course of financial education, examinations, and practical experience. Some colleges grant the designation after a candidate has completed seven required courses and two electives. Charted financial consultants usually have at least 3 years of experience in finance. ChFC needs to continue education credits to maintain its credentials.

Also read: Liquidity Ratio | What are liquidity ratios, how are they calculated?

10. Financial planning consultant

Financial planning consultants take a holistic approach while providing financial advice to their clients. The planner includes budgeting, emergency savings, college funds, insurance, retirement plans, and estate planning. Financial planners may sell investment or insurance products. They can be Certified Financial Planners or CFPs who had extensive training and knowledge and cleared certification exams. CFPs work as fiduciaries for their clients and work on a fee.

11. Finance management consultant

Financial management consultants analyze data and transform it into actionable insights to help companies to operate more efficiently. They advise their clients and respond to strategic questions regarding financial and operational data. They analyze financial processes recommend improvements in operations to increase efficiency. Financial management consult helps their company undergo a lifecycle like M&A processes or reconstructing.

How to become a financial consultant?

Financial consultant works with their clients to make better financial decisions. After analyzing their client’s financial goals and needs, financial consultants make recommendations to achieve their goals. The financial consultant should be trustworthy and share a transparent relationship with their clients. If you are interested in becoming a financial consultant, you need to have a gift for numbers and enjoy analyzing financial markets. Here is how you can become a financial consultant.

Financial consulting career path

The financial consulting career path is challenging but rewarding. They typically have a bachelor’s degree in finance, statistics, economics, or other finance-related fields. Some firms require their consultants to have masters in business administration. Most certification programs require financial consultants to acquire some experience.

Most financial advisors start working in junior positions or internship positions. Bigger firms have a more robust training program. There are various specialization consultants can pursue. Some consultants reduce their interaction with their clients and concentrate on managing their accounts. Depending on the size of the firm, financial consultants may pursue management positions. Many advisors start their firms.

License to be a financial advisor

There are no specific licenses to be financial advisors, they need licenses to sell investment products. Here are some common licenses required by financial advisors –

Series 6 License – The Financial Industry Regulatory or FINRA administers the series 6 licenses. The license allows advisors to sell security packages like mutual funds and variable annuities.
Series 7 License – The FINRA also administers the series 7 licenses. It is considered to be a more comprehensive license and allows them to sell stocks, bonds, options, and futures.
Series 3 License – The license allows consultants to deal in commodities.
Series 63 License – Financial advisors need a Series 63 license to conduct business. Consultants must pass an additional exam to series 7 or series 6 exams.
Series 65 License – Financial advisors who charge a commission must obtain a series 65 license.

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

Financial consultant resume

The financial consultant resume section should ideally have the following sections –

Headers
Professional summary
Experience
Relevant Skill
Education
Certifications

While writing the resume you should mention the skills prove they are looking for. You should be able to demonstrate financial and investment expertise, excellent communication, networking skills, sale orientation, computer skills, and time management.

Independent financial consultants

The most common path to becoming independent financial consultants is working as an investment advisor representative or IAR at another firm. Consultants generally try to gain some valuable experience working under an experienced IA. Consultants generally try to work with some or all their existing clients in their new firm. Consultants have to build up a rapport with their clients and may like to continue to work with them. They can gradually increase their client base. It is essential independent consultants pass the Series 65 or Series 7 exam. We recommend you establish LLC to separate business or personal assets.

Starting a financial consulting business

Starting a financial consulting business can be daunting. Here are our top tips –

Starting any business is expensive. You need to factor in the costs of furniture, rent, advertising, technology, utilities, etc.
Financial consultants need to ensure they have the appropriate licenses to operate. You can consider professional designations like Certified Financial Planner. These credentials can give your business the required credibility.
You need to map out your business plan. These include – business goals, financial consultancy services you plan to provide, strategies you will adopt, the demographics of your clients, flexible market plan, and probable costs.
Establishing professional relationships is an essential part of the business. You may need partners- an attorney or CPA in your business. If you have just started you may need a mentor to guide you in the beginning. You will need an effective support team to help you operate.
Starting a business is risky, you need to know the risks and liabilities it entails.

Also read: Legal consulting | Top 7 types of legal consulting firms

Top 15 financial consulting firms in the world

Most of us have heard of the top financial consultant companies. Several other companies can give your career visibility. We have listed the top 15 financial consulting firms in the world below –

McKinsey
Boston Consultancy Group
Bain and Company
Accenture
Oliver Wyman
Grant Thornton LLP
Booz Allen Hamilton
Deloitte
PricewaterhouseCoopers
Ernst & Young
KPMG
L.E.K. Consulting
Roland Berger
FTI Consulting Inc.
Alvarez and Marshal

Financial consultants: Common questions

Whether you are interviewing for a job or by a prospective client or looking for a financial consultant of your own, it is important to be prepared. If you select the wrong consultant to manage your finances it can be disastrous. If you are unprepared for your interview you can lose a job. We have compiled some common questions for your convenience.

Do you need a license to be a consultant?

Are you wondering, do you need a license to be a consultant? The financial consultant requires specific licenses on products or services they provide. Some common licenses for a consultant are –

Series 6 license
Series 7 license
Series 63 license
Series 65 license
Series 3 license

You can explore additional certifications and become more competitive. The two common certifications are –

Certified Financial Planner
Certified Public Accountant

What is Chfc?

The American College of Financial Services offer Certified Financial Consultant certification. To get the certification students need to clear eight courses covering different facets of financial planning and require at least three years of relevant work experience. A Chfc certification is useful in insurance and finance sectors. They provide financial planning services including – income tax, retirement, risk management, estate planning and investment.

Shubha Roy

How to purchase a pre-foreclosure property? | All you need to know

Legal

Want to learn more before you purchase a pre foreclosure property? In this blog, we explain is what is pre foreclosure, and what it means to buy a house in pre foreclosure.

Pre-foreclosure

Most property buyers take home loans from financial institutions to buy property. Financial institutions or lenders have conditions like how much money needs to be paid every month. If the borrower defaults on three or mortgage payments, the lender issues a notice of default. The property is pre foreclosure, and the lender may reclaim it if the payment trends don’t improve.

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

What does pre foreclosure mean?

It is vital to understand what does pre foreclosure mean? Pre foreclosure is the legal proceeding that can conclude in a property being repossessed from default borrower. In pre foreclosure, the lender files a notice of default if the borrower has defaulted on payment for30 to 90 days. The notice informs the borrower owner, that the lender is pursuing legal actions towards foreclosure. The borrower has some options after they receive the notice. The lender may be willing to negotiate with them to avoid moving forward with foreclosure.

Pre foreclosure vs Foreclosure

Pre foreclosure vs foreclosure can be confusing but are very different. The difference between pre foreclosure and foreclosure is as follows.

Pre foreclosure	Foreclosure
Pre foreclosure means when the owner defaults on their mortgage payments and is at risk of being foreclosured upon.	Foreclosure properties are those which have been reclaimed by financial lenders. Once it is back in the lenders possession it is often listed for sale.
Pre foreclosure properties are listed higher price because the property has still not been foreclosed. Real investors can get a good deal from seller.	Lenders have a vested interest in selling the property quickly. The properties are listed at a lower price.
Pre closure properties are generally better maintained.	Foreclosure properties can be abandoned and may be deteriorating. Foreclosure process may take months and the property will not be inhabited or maintained for months.
Real estate investors interested in buying a pre foreclosure houses look at renting properties or Airbnb investments. Investors will not have to spend on repairs or upgrades.	Real estate investors looking to flip properties often prefer foreclosure properties. Investors purchase the property at low cost and they can use the money saved on repairs.

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

Preforeclosure process

Preforeclosure is the first step to the foreclosure process. While the pre foreclosure notice is serious, there are ways to prevent foreclosure of your home. Pre foreclosure process encompasses of a few steps, and begins when the borrower misses their mortgage payment and lender issues a notice of default. The notice means the lender has begun the legal process.

How do pre foreclosures work?

If you have received a pre foreclosure notice, you may want to know how do pre foreclosures work. The legal requirements may vary depending on where you reside, but preforeclosure process is fairly consistent. The steps are as follows –

Mortgage default – Pre-foreclosure can begin 90 days after the borrower misses their first mortgage payment, or they have not made three consecutive monthly payments. The borrower is in default on the loan.
Notice of default – The pre-foreclosure notice begins after the lender sends the borrower a certified letter that they plan to begin the foreclosure procedure within 30 days.
Public notice – In several states the lender is required to issue pre-foreclosure notice and the borrower’s name is posted to a public listing of individuals whose properties have been foreclosed.

How long does the foreclosure process take?

A foreclosure occurs when homeowner defaults on a mortgage payment, but how long does the foreclosure process take? The length of the foreclosure process depends on state laws and factors like whether the borrower and lender are negotiating to stop or stall the foreclosure procedure. The entire foreclosure process can take anywhere from 6 months to more than a year.

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

Buying pre foreclosures

The easiest way of buying a pre-foreclosure home is to help the seller make up the pending mortgage to the lender and then buy their home. Some sellers are unwilling to sell their homes. If a seller is willing to sell their home, it can be profitable because the seller may be unaware of how much their property is worth. Top tips for buying pre foreclosure property are –

When you start looking for a preforeclosure home, contact a lender to get a preapproved loan, it will give you an edge in a competitive market. Preapproved loans mean you have got your finances from a vendor. Sellers like seeing preapproved letter because it lends credibility to your offer.
Earnest money is the deposit you offer along with the purchase and is the easiest way to prove you are earnest. Good faith deposit or earnest money deposit shows you are serious about buying the property. Earnest money is usually 1% to 3% of the purchase price.
You should get the property inspected. Having a comprehensive report on the property can help you determine if the property is worth it and do a title search to know if there are potential liens of the property.
When you and your agent check everything and are satisfied and the homeowner is willing to sell. You can negotiate terms favorable to both parties, you can purchase the property.

Also read: Purchase and sale agreement | Everything you need to know

How to find homes in pre foreclosure?

Pre foreclosure investing is become popular. Buying pre foreclosure can be tricky but rewarding if you do your research well. How to find homes in pre foreclosure? There are many options you can explore, and the strategy you use will depend on the time you are ready to invest. The best places to find homes in pre foreclosure are –

Online Directories are the best place for foreclosure leads. You get the listings of several properties in one place containing descriptions and photographs. Real estates websites such as Zillow, Trulia, Realtor.com, Homes.com, Movoto, and LoopNet list preforeclosure properties. You may have to pay a small fee to use the services.
Accredited real estate agents can access multiple listing services (a database for homes for sale). Your real estate agent can access the MLS to find a pre-foreclosure listing. Agents can help you get appointments with property owners and negotiate deals on your behalf. They can research properties and find information such as property tax, property prices in the area, and the previous sale price.
The county record office maintains pre foreclosure listing. In the public record section, you can look for Notice for Sale, Lis Pendens, or Notice of Default.
Local newspapers provide pre foreclosure leads.
Real estate attorneys represent people whose property is in pre-foreclosure and can provide leads. Some attorneys charge you a referral fee for every pre foreclosure lead.

How to negotiate a pre foreclosure?

Owners prefer pre foreclosure sales to prevent their property from going into foreclosure. They prefer pre-foreclosure sales to protect their credit ratings. Their ratings would be severely affected if their property is foreclosed. How to negotiate a pre foreclosure? Under pre foreclosure sale the owner usually accepts less than the remaining balance on the property. Investors prefer negotiating directly with the seller.

We recommend you consult an attorney before making an offer. Factors like – the condition of the home and present property prices in the area affect the property price. It is advisable to get it professionally inspected to know any underlying problems with the property.

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

Preforeclosures listings – where to find them

Investors can preforeclosure listing through online directories, real estate agents, public records, local newspapers, attorneys, and real estate wholesalers. The top 5 places to find pre foreclosure listings are –

Online Directories provide preforeclosure and foreclosure listings along with property details like the condition of property and pictures.
Real estate agents help you find preforeclosure deals.
County record sections maintain public records of pre-foreclosed properties in the area.
Local newspapers publish the address of homes at different stages in the foreclosure process.

How to find out if a home is in foreclosure?

As a new investor, you may want to invest in a foreclosed property, but you are unsure where to begin. There are unverified websites that maintain inaccurate or outdated records. Here are some resources you can use to find if a home is in foreclosure.

Foreclosure real estate agents specialize in foreclosed properties.
Visit your local county’s record office. They have information on all homes in the community. You can search for the property with the owner’s name, and the records may be in print or digital form.
Check the public auction listing are available online or in newspapers and your county’s record office.
Websites like MLS or online real estate databases like Zillow have accurate listings.
Bank websites often maintain an inventory of foreclosed properties on their website.
Tour neighbourhoods you like and look for signs similar to real estate signs, and you may see some properties marked foreclosure or bank repo.

Also read: How long does it take to build credit? | Build credit fast

Should I buy a foreclosed home?

As an investor, you may be wondering should I buy a foreclosed home. The biggest advantage to buying a foreclosed home is that most foreclosures are at a sizeable discount lower than market value. You can make additional savings in reduced down payments, lower interest rates, or elimination of appraisal fees and certain closing costs.

There are some risks of buying foreclosed homes.

The homes are sold in as-is condition, and the property condition can be grim.
You may need to spend on repairs and maintenance to make the property livable.
Auctioned properties often have back taxes and liens attached to them.
Foreclosed properties are complicated may mean extra paperwork.
Other interested parties may increase the price of the property.

Common questions on Preforeclosure

Preforeclosure gives the homeowners some options to stay in their homes before a foreclosure. As a homeowner, the jeopardy of losing your home can be devastating. Understanding what is a preforeclosure, and a foreclosure is vital. Real estate owners can get a great deal in preforeclosure property. In this section, we answer common questions on preforeclosure.

What is a pre foreclosure auction?

Many new real estate developers ask What is a pre foreclosure auction? And what is a pre foreclosure sale? When the defaulting borrower and lender cannot work out a repayment plan, the lender may allow a short sale as a last resort.

Foreclosures are expensive, and the lender agrees on a short sale, or pre foreclosure sale. The homeowner lists the home as they try to recoup the loan amount as much as possible, and the lender will let him off the hook. The house may be sold at a pre foreclosure auction.

Can you buy a pre foreclosure home with an FHA loan?

Can you buy a pre foreclosure house? Yes. Are you wondering, can you buy a pre foreclosure home with an FHA loan? Yes, you can buy a preforeclosure home with an FHA loan. Even if your credit score is less than perfect, you can get an FHA mortgage with low down payments (as low as 3.5%). FHA mortgage has more stringent property requirements compared to a mortgage loan. Buyers can buy a pre foreclosure home assuming that the house meets the FHA standards.

Should I buy a foreclosure for my first home?

If you are wondering, should I buy a foreclosure for my first home? Yes, the main benefit of buying a foreclosed home is savings. Depending on present market conditions, you can purchase a foreclosed home for a lower amount than you would pay for a non-foreclosure home.

There are some risks you take when you purchase a foreclosure home. Foreclosure homes are sold in “as-in” condition, and you generally cannot walk through the property before purchase. The homes may have been unoccupied for years before the sale, or the past owners neglected or vandalized the property. You may need to spend on repairing the property.

Can you buy a pre foreclosure home with a loan?

Can you buy a pre foreclosure home with a loan? Yes, you can get a loan for pre-foreclosure, but if there are many offers for the house, a cash buyer will get the first preference. We recommend prequalifying for the loan before you make an offer. You will know how much you can spend on the property and repairs. Banks are willing to offer loans on unlisted properties.

What happens after the foreclosure sale date?

As a homeowner, you do not want to think about losing your home. If you are unable to pay the mortgage, your property heads for foreclosure. What happens after the foreclosure sale date? After the foreclosure sale date passes you go from owner to tenant, as the title deal passes to the new owner.

Some owners may agree to rent the property, but most of them want to take possession of the property. States have their laws about foreclosure, including the amount of time you are entitled to vacate the property. If you are unwilling to move out legally, you may need to be evicted from the property.

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

Is it bad to buy a foreclosed home?

Many homeowners wonder, is it bad to buy a foreclosed home? Buying a foreclosed home is a good idea if you have some extra financial resources. If you are not worried about potential problems or repair costs foreclosed properties are a worthwhile investment. You may have to spend between 1 to 4% on repairs.

If you are not in a hurry to move into the house it can be a great idea. Repairs are time-consuming, and if you do not have any time constraints, you can purchase a foreclosed property. Foreclosed homes can be a nightmare if you have a tight budget and want to move into the home quickly.

How long does a foreclosure take?

How long does a foreclosure take? A foreclosure can take anywhere from six months to several years. Some milestones are –

For missed mortgage payments, the lender contacts the borrower encouraging them to get their payments back on track. If the borrower misses four consecutive payments, the mortgage is in default.
The lender sends a legal notice indicating they will begin the legal foreclosure procedure in 90 days.
If the borrower fails to make payments, the lender approaches the courts to begin foreclosure. The court appoints a trustee to oversee the auction.
Several weeks before the auction, the trustee posts signs and publishes local news giving details about the property and auction.
The trustee puts the property for auction with a minimum base price, and the highest bidder takes ownership of the property.
As soon as the property is sold, occupants are issued an eviction notice.

How long does foreclosure stay on your credit report?

If your property has been foreclosed, you may wonder, how long does foreclosure stay on your credit report? A foreclosure has a major negative impact on your credit report and can lower your credit score, impacting your ability to qualify for credit or apply for new loans.

A foreclosure entry remains on your credit report for seven years after the first missed payment that led to the foreclosure. After seven years, it is removed legally from your report. If it persists longer, you can approach the credit bureau to remove it.

How long can you not pay your mortgage before foreclosure?

If you are behind in your mortgage payment, you may wonder how long can you not pay your mortgage before foreclosure. Under federal law, the lender cannot start foreclosure proceedings until the borrower is more than 120 days overdue on mortgage dues. The 120 day pre foreclosure period gives the homeowner two options –

A grace period to get caught up on the loan
Apply for and work out loss mitigation options like mortgage modification.

Applying for a foreclosure avoidance option can delay the start date by 120 day period.

If my house is foreclosed do I still owe the bank?

After your property is foreclosed you may wonder, if my house is foreclosed do I still owe the bank. It is a common misconception, that you do not owe your lender anything after foreclosure. The lender is obligated to apply the sale price of your home to the mortgage debt.

If your house is sold for less than the mortgage amount, you owe the lender the remaining money after the sale. The remaining debt is called a deficiency. The lender can sue you to recover it. If the deficiency amount is large, many borrowers opt for bankruptcy to protect their assets.

Shubha Roy

What is float in Stock? | A comprehensive guide

Finance

New to the stock market jargon? In this post, we deep dive into what is float in stock along with examples & types.

What is float in stock?

Let us address what is float is stock? Float of stocks refers to the shares released or issued by the company for public trading. We calculate it by subtracting the outstanding shares from the restricted shares. Restricted shares are held by insiders but cannot be traded by them. In this blog, we learn more about float in stock, what do shares outstanding mean? What is a public float? What is short float?

Stock float example

Let us stock float example – In June 2020, General Electric GE had 8.75 billion shares outstanding. Insiders hold 0.13% of the shares, and institutions held 63.61% and are not available for public trading.

Shares held by institutions = 8.75×63.61/100 = 5.57 billion shares

The floating stocks available = 8.75 -5.57 = 3.18 billion shares

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

What is the volume in stocks?

What is the volume in stocks? We count volume in stocks as the total number of shares traded or shares bought and sold during the trading time or specified period. It measures the total turnover of shares. Traders can trade shares in multiple numbers, and we count the volume in each transaction.

How does stock float work?

Floating stocks are the number of stocks available for trading. Shares can fluctuate over time due to various reasons. We express stock float in an absolute figure like 10 million shares, or as a percentage of the total outstanding shares of the company.

For example – A company ABC may have 100 million outstanding shares and 75 million shares may be available to the public. So the float is 75 million or 75% of outstanding shares.

Stocks excluded from the float are –

Stock held by insiders
Stocks held in the company’s books such as Treasury Stock
Restricted stocks limit the ability of the owner to sell them for some time.

When stocks are classified as float, investors adjust their calculation based on parameters like –

An investor who holds a certain number of shares is required a quarterly filing with the Securities and Exchange Commission, usually 5% of outstanding shares.
A long-term investor or an insider has held shares for a long time and does not want to sell them.

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High float Vs. Low float stocks

The difference between high float vs. low float stocks

High Float Stock	Low Float Stock
A stock float is considered high if there large number of shares for trading.	A stock float is considered low if there a small percentage of shares are available for public trade.
It is easier for investors to buy or sell these stock because demand	The supplies of shares are low and acquiring the shares can be difficult.
Institutional investors like mutual funds and insurance companies prefer investing high float stock because they can buy a large number of shares without manipulating stock prices.	A float may increase when a company issues new shares to raise capital. Float can decrease if insider buys up shares or increases if they decide to sell.

How to calculate floating stock?

Floating stock refers to the company’s shares that are freely bought and sold public without any restriction or the number of shares available for trading.

The floating stock formula = outstanding shares – [shares owned by institutions + restricted shares (management + insider shares) + ESOPs]

Where,

Outstanding shares are the shares the company issues and sell to outsiders.
Restricted shares are temporarily restricted from trading because of the lock-up period after the initial public offering. They are non-transferable stocks of the company. Closely-held shares are shares held by management, insiders, and staff.

Also read: How long does it take to build credit? | Build credit fast

Short float

Short float is the percentage of shares that investors are shorting relative to the total available shares or float shares. During the shorting of a share, investors borrow shares from their broker, sell at a market price, and agree to buy back the shares at a specific time. The short float of a share indicates investors are betting that the shares will fall.

What is short float?

What is short float? Short float tells you how many shares of the float short-sellers are borrowing or the shares traders have borrowed to sell short. Active traders use short float to earn profits by trading these shares. The strategy is placing bets that the share price will go down before they bo and sell them at a high price.

What is the percent of float shorted?

Percent of float shorted is the percentage of a company’s stock that has been shorted by institutional investors compared to the number of shares of a company’s stock that are available to the public. The short percentage of shares is the short-sellers who have borrowed from the float.

What is a short interest float?

A short interest float is the total number of shares of a particular share that has been sold short by investors but has not been covered or closed. Short interest is the number of shortened shares divided by the number of shares outstanding. E.g. A stock with 2.5 million shares sold short and 25 million shares has a short interest of 10%.

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

What is free float stock?

What is free float stock? Free float stock or public float refers to the shares investors can trade publicly and describes the number of shares available to the public for trading in the secondary market. It excludes promoters shares, government/strategic holding, and other locked-in shares that are not traded in the market.

How to calculate free float?

Free float is the method of calculating the market capitalization of the stock market index of underlying companies. Investors calculate market capitalization using the free float methodology by taking the equity price and multiplying it by the number of shares available in the market.

FFM = Share Price x (Number of Shares Issued – Locked-In Shares)

What is a free-float market cap?

Traders calculate standard market capitalization by determining the total number of outstanding shares, including private and public-owned ones. The Free Float market cap method is the valuation of a company that relies on outstanding shares held publicly. We exclude shares held by private parties like promoters, trusts, or the government. We calculate the free-float market cap by multiplying the shares traded publicly with the shares price.

What is the difference between total float vs. free float?

The difference between total float vs. free float is as follows –

Free float is a method of calculating marketing capitalization. Free float shares are those shares that can be traded effectively in the open market and are not secured shares of any nature.

And

Total float refers to the number of shares issued by the company for public trading. All public shares issued by the company are considered float.

Shares outstanding vs. float

The difference between shares outstanding vs. float is as follows-

Shares outstanding refer to all the shares held by the shareholders, it includes insiders, institutional investors, and the general investing public. Market capitalization is the product of a company’s outstanding shares times the share price.

And

Floating stock is the total outstanding share minus shares individuals and corporations associate with the company hold. The free-float market cap is the product of floating shares times the market price per share.

Also read: What happens if you don’t file taxes on time | Next steps, Penalty, Filing Exempt

Float vs. authorized shares

The difference between float vs. authorized shares is as follows –

Authorized shares are the maximum number of shares that a company can issue investors. The company specifies this number in the articles of incorporation. We can see the number of authorized shares in the capital account section of the balance sheet.

And

Float shares are the shares available in the open market, and it represents the number of outstanding stocks or shares available to the public for trading and does not closely-held shares or restricted stock.

Authorized shares vs. outstanding shares

The difference between authorized shares vs. outstanding shares is as follows –

We define authorized shares as the maximum shares that a company is legally allowed to issue to investors. The article of incorporation ( company’s legal formation document) specifies the maximum number of shares.

And

Outstanding shares are shares sold or issued to investors. Investment banks that implement the company’s initial public offering or IPO set up the outstanding shares.

What are shares outstanding?

What are shares outstanding? Outstanding shares are shares held by shareholders, they include shares held by institutional investors, restricted shares by the employees, and insiders. We can see the outstanding shares under capital stock in the balance sheet. We use outstanding shares to find metrics such as the company’s market capitalization, earnings per share, and cash flow per share.

Public float vs. shares outstanding

Shares outstanding and public float are different measures for the number of shares in the market. The difference between public float vs. shares outstanding is as follows –

Public float represents the number of shares issued that are available to the public for investors for trade.

And

Shares outstanding are the total number of shares issued and actively held by stockholders – both outside investors and corporate insiders.

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

Why is floating important for investors?

Investors study a company’s float number to estimate how many shares are available to be bought and sold by the public. Low float indicates fewer shares in the market, and there is a barrier to active trading. They find it difficult to enter or exit stocks that have limited float.

Institutional investors like mutual funds and insurance companies avoid trading in companies with small float because there are fewer shares to trade, leading to limited liquidity, and wider bid-ask spread. They prefer buying bulk stocks, when they buy high float stocks and make a large purchase, the price impact will be minimal.

Common Questions on Floating stock

By now, we know float share is the number of outstanding shares available for trading. The number of floating shares available indicates the volatility and liquidity of the stock. If you want to start trading in floating stocks, you must understand the fundamentals. Here are some common questions on floating stocks-

How does float affect stock price?

You must be wondering how does float affects stock price? Float shares are the number of outstanding shares a company issues minus restricted shares. It provides value to shareholders and the company. When companies issue IPO or initial public opening, companies have the opportunity to establish prices. When insiders sell shares, the free float shares increase, and prices may drop for some time.

How to find low float stocks?

Low float stocks usually have 10-20 million available shares and are held by company directors and employees. Many investors prefer low float stocks because of their volatility. How to find low float stocks? Low float stocks are available on various platforms like – TradeIdeas Stock Scanner, Thickorswim, and Benzinga.

How many shares of common stock are outstanding?

How many shares of common stock are outstanding? The number of shares outstanding for a company is the number of shares issued minus the number of shares held in the company treasury. When a company buys back shares the repurchased shares are called treasury stocks. The number of outstanding shares fluctuates over time.

What is a good volume for stocks?

A common investor question is what a good volume is for stocks? Financial experts recommend stock volume should not be more than 5 to 6% of your portfolio. You can build a diversified portfolio by buying 10 to 30 stocks.

How to check float?

Here is how to check float? Investors calculate company floating stock by subtracting restricted stock and closely held stock by the total number of outstanding stocks. Floating stocks are dynamic, and they change when new shares are issued. We can buy back shares, or insiders or major shareholders may buy or sell their shares.

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

What is the average volume in stocks?

A new trader may wonder what is the average volume in stocks? Average daily trading volume (ADTV) is the average number of shares traded within a day of any given stock. Daily stock is the number of shares traded in a day but this can be averaged out over a period to find the average volume in stocks.

How does market cap affect stock price?

You may wonder how does market cap affects stock price? A company’s worth is its total market value or market capitalization. We calculate the market cap by multiplying the company’s stock price by the number of shares outstanding. The stock price is relative and is proportional to the company’s worth.

How to read stocks numbers?

Reading stock charts, or quotes is crucial if you want to understand how the stock is performing. Knowing the basics can help investors make better decisions. Here is how to read stock numbers?

Stocks have quoted pages or charts that give detailed information. The chart shows – open, high, low, previous closes, market cap, price to earnings ratio, dividend yield, and 52-wk high and low.

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How many shares of a stock should I buy?

If you are new to the stock market, you may wonder how many shares of stock should buy? The answer will depend on factors like how much money you have to invest and the commission you need to pay your broker? Are you looking to diversify your portfolio? Considering your broker does not charge a commission on every transaction, it is a three-step process-

Find the price of the share you want to obtain?
Divide it by the amount you have to invest in the stock market.

The result is the number of shares you can buy the answer may differ depending on services offered by your broker. You can buy fractional shares, or buy shares by rounding the number to the nearest whole number.

Shubha Roy

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

Finance

New to stock market investing? In this post we take you through the basics from how do puts work to what are calls. Understand strike price, buying & selling puts and more. Let’s get started!

How do put options work?

Investments are inherently risky, and you never know how the market will react. Investors use options to protect their portfolios from losses and they can buy the stock at a lower value than the current market value and increase profit. The two types of options – Put and call options. In this blog, we explain how do put options work.

What is a put option?

We discuss two key concepts, what are put options and what are call options. Put options explained as a contract that gives you the right to sell equity shares at a fixed price called the strike price before a certain date. If you choose or exercise your right to sell your stocks, the writer must purchase the shares from you. Similarly, with call options, the contract holder has the right to buy shares at the strike price before the expiration date.

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What are calls in stocks?

What are calls in stocks? Call and put options are derivative investments. An investor with options gets the right to buy or sell the financial asset as per the terms of the derivative contract. If you own call stock, you have the right to buy financial instruments at a specific price before the expiration date. Stock in call and puts options are called underlying assets. Traders purchase calls option when they expect the price of the asset to rise.

Call vs put option

An options contract gives investors the right to buy or sell their assets at the strike price on or before a specific date in the future. Call vs put option – call option gives the holder the right to buy a stock, while a put option gives the holder the right to sell a stock. The answer to questions are options are better than stocks is yes options are less risky for the investor and have great leveraging power.

What is a strike price?

What is a strike price? A strike price is a fixed price at which a derivative contract can be bought or sold. The strike price is also called exercise price, or grant price is a key component for derivatives. The strike price is

established when the contract is signed and tells the investor the price of the asset before the strike price is invoked. The value of derivatives can be financial contracts like stocks, bonds, indexes, or commodities.

Options limit risks by hedging, buying time to decide if the stock is worth it.

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How do options work?

You can trade in the future value of the market with options. You pay a premium for the right to trade at a set price before the option expires. How do options work? Stock options are part of the underlying stock, and the price is tied to the movement of the underlying stock. The options premium is affected the buyer’s price and seller’s price.

Two common options are in the money and out of the money. When the strike price is above the market price, it is referred to as – in the money. When the strike price is below the market price, it is referred to as “out of the money.” You need to read the options document carefully to safeguard your interests.

Buying puts

When to comes to answering how do puts work, you also need to know about buying and selling puts.

Buying puts option gives you the right to sell a stock at a price. If you want to buy the puts option, you need to open an account with an options broker. Your broker will assign you a trading level based on your experience, financial resources, and risk tolerance. You need to select a strike price to purchase a put option.

The strike price is usually lower than the current market price. Select the expiration date and decide how many contracts you want to purchase, each option that contains 100 shares of stock. When you purchase a contract, you will have to pay the premium listed and the brokerage fee. You should monitor the stock prices and decide if you should exercise the option.

Selling Puts

Selling puts options gives you to potentially own the underlying security at both future dates at an agreed-upon price. When you sell put options, you agree to buy a stock at an agreed-upon price is called shorting a put. You lose money if the stock price falls. You buy the stocks at the strike price but sell them at a lower price. You make money when the stock price rises because the buyer is unlikely the exercise the option. The put seller pockets the fee.

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Put option example

To understand how do puts work, let’s take a look at an example. In this put option example, we consider you want to invest in S&P 500 index portfolio, you can purchase the put option. If you are apprehensive about market conditions in the future and are unwilling to lose more than 10% of your position in the S&P 500 fund index.

If the fund is presently trading at $2,500, you can purchase a put option giving you the right to sell the index at $2250 in the next two years. If the market crashes by 20%, you can sell the indexes at $2250 when it is sold at $2000 at a combined loss of 10%.

Most successful options strategy

Traders often try to trade options without understanding the strategies available. Options trading is not a game of luck or chance. Successful trading requires knowledge, practice, and patience. You can learn how to trade options successfully. Here are some of the most successful options strategies.

1. Naked call option

Naked call option strategy involves the investor selling their call option in the open market without owning the underlying security. They can generate a premium without directly selling the underlying security. They take short side call options to deliver shares of the underlying security if the option is exercised before the expiration date.

2. Married put

Married puts is a strategy where a long investor purchases put options, that usually will have the strike price lower than the current price. The investor who owns the puts and stock is protected against the stock value going below the strike price. It is insurance against the stock decline.

3. Covered put option

Covered put option is similar to the covered call strategy. Investors sell the put option contract of stock that they have shortened. When an investor sells the put option, they limit their profits by locking the price of the asset and earning a premium from the sale. They use the option when they expect the price to fall.

4. Bull call

A bull call spread has one long call with a lower strike price and one short call with a higher strike price. Both calls have the same stock and expiration date. The strategy behind a bull call is for net debit or costs and profit when the stock prices rise. The profits are limited if the stock price rises.

5. Long call option

A long call option is when the buyer has the right, not the obligation to buy the stock at the strike price on or before the expiration date. Investors using the long call strategy can buy stocks at a lower price. They purchase the long call option pay the premium or fee for the option itself.

6. Bear put

Bear put spread is a type of options strategy where the investor expects a moderate-to-large decline of the asset and wants to reduce the cost of holding the options trade. Investors purchase put options while selling the same number of puts on the same stock with the same expiration date at a lower strike price.

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7. Short put

Short put is a sale of the put option. A short put is also called a naked put or uncovered put. When a trader sells the put option, they sell the right to sell the underlying stock later and before the expiration date. They hope to earn profits from the premium earned without the risk of the options being exercised.

Stock options for dummies

Stock options are contract between two parties. To get the best returns from any investment for risks management and trading profits you need to understand trading concepts clearly. You should strategize after understanding risks and rewards. Study the markets for some time before investing. Stock options for dummies explain some simple concepts.

Writing put options

Investors use the puts to generate income or buy stocks at reduced prices. When writing put options, the writer agrees to buy the stocks at the strike price if the contract is exercised. In this case, writing means selling a put contract to open a position. The writer receives a premium for the puts options but will have to purchase the stocks at the strike price.

Buy to open vs buy to close

The difference between buy to open vs buy to close is as follows –

Buy to open means the trader is buying or opening up a pull or a call option. When a trader wants to open an option and pay the premium to secure the position. They have the option of doing something later.

Buy to close means the trader is closing or selling a pull or close option. The trader trades a portion of an existing option to remove themselves from the contract and closes their position and risk.

In-the-money put

Investors say a put option is in-the-put when the current market price of the stock is below the strike-out price of the put. They call it in-the-money because the holder has the right to sell the stocks above the market price. The investor will profit if they exercise the in-the-money put option.

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Cash covered put

Cash covered put is a 2-part strategy that involves selling the out-of-money put option while simultaneously setting aside some capital to purchase the underlying stock if it hits the option’s strike price. The investor aims to acquire the stock at a lower price than the market’s offering price if they can buy options.

AMC margin call

A margin call occurs when the value of an investor’s brokerage accounts falls below the broker’s required amount. The margin call indicates that the assets held in the account have decreased in value. When a margin call occurs the investor must add funds to the account or liquidate assets in that account. According to market analysts, the AMC margin call is close.

GME call options

Investors of controversial video game retailer GameStop Corporation (GME) have made bids for the share price before GME declared their earnings. There has been substantial interest in the puts options and nearly double the interest in GME call options. Traders sell call options when they anticipate poor earnings.

High strike trading

The internet has opened up the stock market, it is no longer limited to professional traders. High Strike Trading is one of the largest communities of traders in the world. The school focuses on helping traders make money from the stock market regardless of location or level of experience.

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Stock options FAQ

Stock options give investors the right and not the obligation to buy or sell at a predetermined price and date. The two stock options are – put options and call options. Options are a contract to buy or sell the stocks. In this section, we address some common stock options FAQs.

What does buy to cover mean?

What does buy to cover mean? Buy to cover refers to placing a market order to close a short position, restoring the borrowed shares used for the transaction to the lender. Investors place buy to cover orders with their broker or representatives or give privileges to purchase the shares.

What is an option contract?

What is an option contract? An option contract is an agreement between two parties for a possible transaction. The purpose of an option contract is to buy or sell an underlying asset like a stock, at a predetermined price set when they signed the contract. The transaction can take place till the expiration date of the document.

What happens when options expire?

You may be wondering what happens when options expire. When options expire they are worthless. Before the expiration date, you have two choices – sell the options to lock in the value, or choose to buy (if the holding is put) or sell (if the holding calls).

What happens if my call option expires in the money?

What happens if my call option expires in the money? An investor will automatically have the stock purchased on their behalf at the strike price. The investor can then sell those shares at the current market price, which is usually higher than the strike price.

What happens when options expire out of the money?

Are you wondering what happens when options expire out of the money? A call option has no value if the security trades below the strike value on or near the expiration date. A put option does not have value when the security trades above the strike value, or near the expiration date. You can always buy the shares (if have call options) sell the shares (puts option) or lock in the value.

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When should you exercise a call option?

When should you exercise a call option? You can exercise a call option in the following circumstances –

To get dividend – When the time value is less than the dividend payable of the underlying security.
At or before the expiration to own the stock- If you are bullish and you may want to exercise the options contract to own the stock.
To offset a short or long position – you might use options to offset losses from an existing position.

How to exercise a call option?

Exercise is putting into effect the right to sell or buy financial instruments. How to exercise call options? You inform your broker that you wish to exercise the option in your contract. Your broker will initiate an exercise notice, which informs the seller or writer of the contract about your decision to exercise the option. The notice is forwarded to the Options Clearing Corporation (OCC). The seller is obligated to fulfill the terms of the contract.

What makes stock prices go up?

Do you know, what makes stock prices go up? The stock prices change due to market forces or because of supply and demand. If more people want to purchase shares of a company the prices go up. Share prices are indicative of investor sentiments and expectations about the company. Earnings and profits of the company also affect stock prices.

How to sell a stock at a certain price?

Now that you have purchased stock, you wonder how to sell a stock at a certain price. You can place a limited order at a certain price. The limit order will not be filled till the price specified by you is reached. However, you can set a limit order below the current market price.

What happens to stock when a company is bought?

Shareholders benefit when a company is bought as the share prices increases. The acquiring company pays more than the current price to encourage traders to sell their shares. When a buyout announcement is made the traders try to purchase the shares increasing the stock value.

When you sell a stock who buys it?

Do you wonder when you sell a stock who buys it? Stock markets match buyers and sellers. When you want to sell your stocks first inform your broker to sell, your order will go into the market as a market order or limit order. The market order does not specify the price at which the stocks will be purchased while the limit price has a set price.

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When does the options market open?

When does the options market open? We can trade stock options are traded during regular stock trading hours, from 9.30 am ET to 4.30 am ET. Most stock options do not have premarket and after-hours because of lower interest. We can trade options based on indexes from 8.00 am to 4.30 pm ET.

How to decide when to sell a stock?

It can be difficult how to decide when to sell a stock? You need to consider several factors before you decide to sell them. Factors to sell a stock are –

Adjusting your portfolio is a common reason to balance your investment portfolio. Diversifying your portfolio and investing in multiple sectors.
If you need money or capital
If the stock reaches your target price

Selling options for income

Traders need to strategize how to manage their investment while trading in stocks. You can either be bullish (someone who buys a call and sells puts) or bearish (someone who buys puts and sell calls). Take your time to research before selling your options. There are advantages of selling options for income –

You can have a steady and consistent income stream using options selling. You need to be patient and avoid emotional decisions.
Remember to use the idea of volatility and complexity to your advantage and examining the price patterns over a period is the best way to determine the performance of the stock.
If you sell options at the right time you can transform your portfolio.

Shubha Roy