By Emma Diehl |
Life & Career, relay |
Comments Off on 25 Easy Jobs That Make a Lot of Money With Little Work Without College
Attending a four-year university isn’t for everyone, but that doesn’t mean a high-paying job should be out of reach. There are plenty of roles that allow you to make a lot of money without a college degree. We’re not talking about brain surgery or rocket science — just normal jobs that pay well and may even be fun or cool.
Read on to learn more about various jobs that pay well and don’t require a college degree.
Key Points
• There are many high-paying jobs that don’t require a college degree, offering opportunities in health care, construction, and technology.
• Roles like radiation therapist, MRI technician, and claims adjuster are lucrative without needing a degree.
• Some jobs require certifications or on-the-job training, which are typically less costly than a four-year degree.
• Foregoing a college degree means you can enter the workforce earlier and avoid student debt, though some roles may be physically demanding.
• Networking and industry research can help you find these opportunities.
Why It’s Difficult to Know About Easy Jobs Without a Degree
When it comes to job searching, it’s hard to beat the power of networking. College students and graduates often have a leg up in this department. From alumni networks to on-campus job fairs, many institutions offer different ways to build important professional connections — and potentially learn about not-yet-posted job opportunities.
But you don’t necessarily have to go to college to create a professional network or find a job that doesn’t require a degree. Some strategies include attending industry events, engaging with social networks related to your area of interest, and requesting informational interviews with companies you’re interested in.
If you’re just starting out — or are considering a career change — you may also want to research growing industries that need workers. Certain roles may require some technical certifications or on-the-job apprenticeships. Still, they could offer competitive pay, coming close to or exceeding the annual expected salary for someone with a bachelor’s degree.
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• Don’t traditionally excel in an academic environment
• Don’t want to take on student debt
• Are eager to enter the workforce
• Have interest in a trade or technical job
25 Easy Jobs That Make a Lot of Money With Little Work Without College
Many jobs that don’t require a degree are minimum wage or low paying. However, there is a sweet spot where jobs that pay well but don’t expect a degree overlap. While some of the following call for certification or training, it’s unlikely to cost as much as a traditional four-year degree.
The following salary figures from the Bureau of Labor Statistics represent the national median, and the job growth outlook is for 2023 to 2033.
1. Power Plant Operator, Distributor, and Dispatcher
Description: Control and manage the electrical power systems of a plant.
Salary: $100,890
Job Growth: -8%
Requirements: High school diploma or equivalent
2. Commercial Pilot
Description: Fly commercial airplanes and other aircraft.
Salary: $171,210
Job Growth: 5%
Requirements: Flight school
3. Elevator Installer and Repairer
Description: Install, repair, and maintain elevators and escalators.
Salary: $102,420
Job Growth: 6%
Requirements: High school diploma or equivalent
4. Makeup Artist, Theatrical and Performance
Description: On-set makeup application in the entertainment industry.
Salary: $47,390
Job Growth: 9%
Requirements: On-the-job training or beauty school certifications
5. Fire Inspector and Supervisor
Description: Inspect buildings to ensure they meet local, state, and federal standards.
Salary: $71,420
Job Growth: 6%
Requirements: Experience as a firefighter; high school diploma or equivalent
6. Aircraft Mechanic
Description: Work on plane equipment, including maintenance and repair. While pilots tend to be extroverted high achievers, aircraft mechanic is a solid job for introverts.
Salary: $75,400 per year
Job Growth: 5%
Requirements: On-the-job military training or certification from an FAA-approved technician’s school
7. HVAC Technician
Description: Install, repair, and maintain HVAC systems in residential and commercial properties.
Salary: $57,300
Job Growth: 9%
Requirements: Technical school and/or an apprenticeship
8. Plumber
Description: Install and repair plumbing systems in homes, factories, or businesses. Plumber roles may include on-call emergency hours.
Salary: $61,550
Job Growth: 6%
Requirements: High school diploma or equivalent
9. Drafter
Description: Digitize and convert architecture and engineering drawings using software.
Salary: $62,530
Job Growth: -1%
Requirements: Associate degree or technical certification
10. Sales Rep, Wholesale and Manufacturing
Description: Sell goods, at wholesale, to businesses and organizations.
Salary: $73,080
Job Growth: 1%
Requirements: Depends on the industry. Technical sales roles may require certification beyond a high school diploma.
11. Physical Therapist Assistant
Description: PT assistants work alongside physical therapists in a medical setting to help patients regain mobility.
Salary: $58,740
Job Growth: 19%
Requirements: Associate degree, licensing, or certification
12. Radiation Therapist
Description: Administer radiation to patients in a hospital setting.
Salary: $98,300
Job Growth: 3%
Requirements: Associate degree
13. MRI Technician
Job Description: Operate the MRI machine to examine patients, and interpret scans.
Salary: $76,020
Job Growth: 6%
Requirements: Associate degree
14. Programmer
Description: Write and test code for a variety of programs and software across industries and verticals. Programming is considered a popular job choice for antisocial people.
Salary: $99,700
Job Growth: -10%
Requirements: Historically, roles have required a bachelor’s degree. Recently, employers are considering candidates with certifications or bootcamp training.
15. Postal Service Worker
Description: Process, collect, and deliver mail to homes and businesses.
Salary: $56,510
Job Growth: -4%
Requirements: High school diploma or equivalent
16. Claims Adjuster, Appraiser, Examiner, and Investigator
Description: Examine and appraise insurance claims, from automotive to residential or commercial building damage.
Salary: $75,020
Job Growth: -5%
Requirements: For most entry-level roles, a high school diploma or equivalent is required. In some industries, such as auto damage appraisal, a certification may be required.
17. Construction and Building Inspector
Description: Inspect residential and commercial buildings to ensure they adhere to local codes and specifications.
Salary: $67,700
Job Growth: 0%
Requirements: High school diploma or equivalent
18. Court Reporter and Simultaneous Captioner
Description: Create exact transcripts of exchanges, including courtroom proceedings, or live captioning on television.
Salary: $63,940
Job Growth: 2%
Requirements: Training or certification
19. Sound Engineering Technician
Description: Maintain sound systems for live performances, broadcasts, and other programming.
Salary: $59,430
Job Growth: 3%
Requirements: Varies but often includes technical certification
20. Police Detective
Description: Gather facts and investigate crimes. Some police departments are currently offering generous signing bonuses.
Salary: $74,910
Job Growth: 4%
Requirements: Police Academy completion and on-the-job training
21. Electrician
Description: Repair, install, and maintain electrical systems.
Salary: $61,590
Job Growth: 11%
Requirements: High school diploma or equivalent
22. Brick Mason
Description: Use concrete, stone, or brick to build structures.
There’s a potential to earn a high salary in many jobs that don’t require a college degree. However, it may require some research and certifications beyond a high school diploma. Some jobs that pay well, don’t require a degree, and may even be enjoyable range from the medical field and construction to computers and insurance. If you know someone who’s a brick mason or a sonographer, take them out for coffee to get the inside scoop. You might even offer to shadow them at work to find out what their industry is really like.
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FAQ
What is the easiest job that pays the most?
One of the easiest jobs that pays well is working as a claims adjuster for insurance companies. A college degree isn’t usually required, but you may need to earn a license before you can start working.
What is the easiest job to get without a degree?
Depending on the industry, it can be relatively easy to get a job in sales with little to no prior experience. However, the role may include on-the-job training to get you up to speed.
What jobs pay a lot but are easy?
There are many jobs in the health care space that don’t require manual labor but pay well. This includes roles such as a radiation therapist or MRI technician.
Photo credit: iStock/damircudic
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Teaching can be a rewarding profession, but it typically isn’t a high-paying one. If you’re a teacher, it won’t surprise you to learn that 17.1% of teachers earn supplemental income from side jobs, according to a study by the Learning Policy Institute. The challenge is landing a gig that pays enough to make it worth your time and effort.
Not only do those positions exist, these days they can often be done online and on your own schedule. Read on for a look at some of the best-paying options for teachers looking for a side job in 2024.
• Many teachers seek side jobs to supplement their income due to the generally low pay in the profession.
• Online side jobs offer flexibility, allowing teachers to work around their existing schedules.
• Side gigs can range from tutoring and creating educational content to roles unrelated to teaching, like data analysis or graphic design.
• These positions not only provide extra income but also opportunities to develop new skills and potentially explore alternative career paths.
• It’s important for teachers to consider the impact of additional work on their work-life balance and personal well-being.
Qualities of a Good Side Job for Teachers?
Teachers need to consider a number of factors before committing to a side gig: How much stress could the second job cause? Will the hours fit with your current work schedule? And of course, do you plan to work a second job year-round or just during seasonal breaks?
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Things to Look for in a Year-Round Gig
• Hours that accommodate your teaching schedule.
• Workload and deadlines that won’t add to your stress level or lead to total burnout.
Things to Look for in a Summer Gig
• A fun environment or flexible schedule that makes you feel that you’re still getting a break?
• Something you can return to year after year — and maybe during other school breaks — so you don’t have to start over seeking a new job each summer.
• Could the work you’re doing damage your career as a teacher? (It can be a good idea to check with your employer to see if there are rules for outside jobs.)
• Can you build skills you’ll use as a teacher, or in another career you might be interested in pursuing?
Pros & Cons of Online Side Jobs for Teachers
Teaching is a challenging job that requires patience and preparation. If you choose to add a side gig, it’s important to have realistic expectations. As you decide whether to take on more work — and what that work might be — here are some pros and cons to keep in mind:
Potential Benefits of a Side Job
• Make extra money: It may take some searching to find a side gig that offers competitive pay — enough to make a difference in your financial situation. Even a few hundred a month can help cover day-to-day bills or finance a future goal, like paying off student loans. A free budget app can help, too.
• Develop a backup plan: Your side job can help fill a financial gap if you ever decide to transition to another career, or if you leave one teaching job and take a while to find another. You may even decide the side job is a better fit than what you’re currently doing.
• Acquire new skills: A side job can offer opportunities to network and socialize with new people, and learn or fine-tune skills.
Potential Downsides of a Side Job
• Undermines work/life balance: Teaching already takes up much of your day — even when you aren’t physically at work. If you put that same amount of time and effort into a second job, it could take your attention away from your family and other things you love and enjoy.
• Turns a passion into a pain: You might lose your love for your favorite hobby (photography, reading, writing, crafting, etc.) if you make it an obligation.
• Requires startup costs: You don’t need a money tracker app to discover that if you have to invest money in equipment to get your business going — even if it’s just a new laptop or phone — it may take a while before you start making money.
Why It Can Be Difficult for Teachers to Find Online Side Jobs
Even though opportunities to work remotely are increasing, it still may be hard to find a side job online that meets your needs. The skill set required for an online job might be quite different from what you’re used to as a teacher — and some jobs can require applicants to have specialized training. If you’re completing an application online, it may be tough to convince the employer you can do the job even if you don’t have the training.
It also can be challenging to separate legitimate remote side jobs for teachers from scams that require you to put in some of your own money upfront in order to get the job. (Don’t ever pay for an opportunity!) Employment ads that aren’t specific about pay, or that require a lengthy application process, can also be a turnoff.
Here are some steps that can help you along on your side-gig search:
Assess Your Skills
Think beyond the classroom as you consider the many marketable skills you can bring to a second job.
Consider Your Interests
You’ll be more engaged and confident if you’re doing something related to your areas of casual expertise or hobbies.
Do Your Research
You may have to learn a new lingo just to understand some online job postings — and respond to them appropriately. Don’t let what seems to be gibberish keep you from finding your fit.
Find a Mentor
If you know someone who has a successful side gig, ask for advice about how to get started. For example, if you’re obsessed with budgets, consider an apprenticeship with an experienced financial planner.
Update Your Online Profile
Take the time to update your profile on relevant social media platforms — whether that’s LinkedIn or Etsy.
Keep Your Priorities in Mind
Be prepared to start small. If you love the work, you can always grow your role over time. You may choose at some point to change careers, but you’ll want to make that decision on your terms, not because you were distracted from your duties as a teacher.
24 Best-Paying Online Side Jobs for Teachers, Part 1: Year-Round
The amount of money you can earn through an online side job varies widely, depending on how many hours you put in, and whether you’re starting at an entry-level salary or being compensated for your experience and skills.
Below are two dozen online side jobs for teachers that potentially offer higher earnings. Average wages and job growth outlook are based on data from the Bureau of Labor Statistics. Most side jobs pay an hourly rate vs. a salary, but we’ve included both.
1. Data Scientist
Potential for Remote Work: Although full-time data scientists typically work in an office environment, much of their work is done online, which makes part-time remote work with flexible hours a possibility.
National Average Pay: $51.93 median hourly wage; $108,020 median annual wage
Job Growth Outlook: 36% (faster than most occupations)
Job Description: Data scientists create the algorithms and predictive models used to extract meaningful information used in making business decisions.
Job Requirements: Entry-level data scientists generally have at least a bachelor’s degree in mathematics, statistics, computer science, or a related field.
How to Get Started: Networking and attending in-person and virtual meetups can help get your foot in the door. Sites like Indeed and LinkedIn post data science jobs, and many companies post open jobs on their own websites.
2. English as a Second Language (ESL) Teacher
Potential for Remote Work: There are many opportunities for ESL teachers to instruct students virtually through video-conferencing platforms. Because learners come from around the world, teachers can put together a work schedule that fits their needs.
National Average Pay: $29.11 median hourly wage; $60,560 median annual wage
Job Growth Outlook: -13% (declining)
Job Description: ESL teachers tutor students who want to improve their English language skills.
Job Requirements: A bachelor’s degree (in English, communications, or a related field) and/or teaching certificate is typically required; good computer and communication skills are a big plus.
How to Get Started: Job sites like Indeed regularly post remote ESL teaching jobs. Other online platforms recruit ESL teachers, including VIPKid and Skooli.
3. Online Tutoring
Potential for Remote Work: There are all kinds of opportunities for teachers who want to tutor students online. One of the perks is that you can set appointments around your schedule.
National Average Pay: $19.01 mean hourly wage; $39,580 mean annual wage (pay varies based on subject and student needs)
Job Growth Outlook: 1%
Job Description: Duties might range from teaching toddlers their ABCs to offering test prep (SAT, ACT, LSAT, etc.) to high school and college students.
Job Requirements: Requirements vary based on subject and student age; a bachelor’s degree and/or teaching certificate may be required.
How to Get Started: You can find tutoring gigs on job boards or through platforms such as Care.com and Tutors.com. Or you may decide to set up your own tutoring business and advertise online.
4. Selling Lesson Plans
Potential for Remote Work: Thanks to the internet, teachers can now share learning materials they’ve created both locally and globally.
National Average Pay: Not available (varies by subject, grade, and amount of content sold)
Job Growth Outlook: Not available
Job Description: Create shareable lesson plans, flash cards, tests, etc., and sell them on your own website or an online platform.
Job Requirements: No set requirements, but you may be asked to prove your credibility when selling your content.
How to Get Started: Check out what others are doing on marketplace sites like TeachersPayTeachers or Etsy. Once you’ve created your content (be careful about copyright infringement), you can market your products on social media or through these platforms. Networking opportunities (attending conferences, etc.) can also help get the word out.
5. Editing / Proofreading
Potential for Remote Work: Content typically can be edited online and on your own schedule, depending on deadline needs.
National Average Pay: For editors, $36.07 median hourly wage, $75,020 median annual wage; for proofreaders, $23.45 mean hourly wage, $48,790 mean annual wage
Job Growth Outlook: For editors, -2% (declining); for proofreaders, -3%
Job Description: Editors plan, review, and revise content provided by writers; proofreaders check copy for errors.
Job Requirements: Good grammar and communication skills; some jobs may require a bachelor’s degree in English, journalism, or a related field.
How to Get Started: You can find editing and proofreading work on job boards or advertised by individual companies.
6. Freelance Writing
Potential for Remote Work: Because you generally can create content anytime and anywhere, freelance writing easily lends itself to remote working.
National Average Pay: $35.43 median hourly wage; $73,690 median annual wage
Job Growth Outlook: 5% (average for all occupations)
Job Description: Freelance writers provide content for print and online media.
Job Requirements: Good grasp of English language, spelling and grammar, and excellent communication skills. Some employers may require a bachelor’s degree in English, journalism, or a related field.
How to Get Started: You can pitch ideas to your favorite publications or look for work on job boards and platforms such as Upwork and Fiverr. Consider creating a website to showcase your talent. And networking (word of mouth) can be key. If you have a particular expertise (technical, travel, or food writing, for example), make that information known.
7. Creating Printables
Potential for Remote Work: This is another job you can do on your own time and almost completely online.
National Average Pay: Not available
Job Growth Outlook: Not available
Job Description: Create customized calendars, cheerful stickers, classroom decorations, etc.
Job Requirements: Creativity and good design skills are a must; you’ll also need the appropriate design software.
How to Get Started: Creators typically sell printables on sites like Etsy or their own website. Get the word out on social media and by networking and attending conferences for educators, organizational experts, etc.
8. Selling Artwork and/or Crafts
Potential for Remote Work: It may be easier to sell your goods in person at a local craft fair, but if you sell online, you can reach a wider audience and do it on your own time.
National Average Pay: $25.44 median hourly wage; $52,910 median annual wage
Job Growth Outlook: 3% (average)
Job Description: Selling your own creative works (paintings, photos, sculptures, etc.)
Job Requirements: Creativity and skill in your artistic niche as well as marketing, business, and computer skills.
How to Get Started: Check out e-commerce sites like Etsy and Society6 to see how others are marketing themselves and their products. You can use social media to get the word out, and you may want to develop your own e-commerce site to sell your goods. Be sure to check into whether a business license is required in your area.
9. Medical Transcriptionist
Potential for Remote Work: Because you’ll be working from recordings, you typically can do this work remotely and when it’s convenient for your schedule (deadlines may apply). This position may also be a low-stress option for introverts.
National Average Pay: $17.82 median hourly wage; $37,060 median annual wage
Job Growth Outlook: -5% (declining)
Job Description: Transcribe audio content into written content.
Job Requirements: May require certification. Employers may test for typing speed and accuracy. Discretion and some knowledge of medical terms and basic anatomy are a plus. You may have to purchase special equipment to do the job.
How to Get Started: Check out job boards and medical transcription sites. A transcription course (in-person or online) may offer career services.
10. Graphic Designer
Potential for Remote Work: Graphic designers can do most of their creative work on their own schedule, but you will have to find time to communicate with your clients. And deadlines may be a factor.
National Average Pay: $28.32 median hourly wage; $58,910 median annual wage
Job Growth Outlook: 2% (slower than the average for all occupations)
Job Description: Use design software to create visuals that convey your employer’s message.
Job Requirements: Knowledge of design software, creative skills, and an ability to collaborate with others; some employers may require a bachelor’s degree in graphic design or a related field.
How to Get Started: Job boards offer remote graphic design positions for a wide range of specialties. You also can build an online portfolio and use social media to generate interest.
11. Life Coach
Potential for Remote Work: Life coaches can manage client sessions by phone or with video conferencing.
National Average Pay: Not available
Job Growth Outlook: Not available
Job Description: Assist clients in reaching their full potential.
Job Requirements: No formal requirements exist for life coaches, but prospective clients may prefer that you have some type of training or credentials. A background in counseling and psychology is helpful. Important traits include empathy, patience, and creative problem-solving skills.
How to Get Started: It may help to work with an experienced life coach when starting out. Networking and social media can be a useful way to find clients.
12. Translator
Potential for Remote Work: Freelance translators typically can work from home using their own computer.
National Average Pay: $27.45 median hourly wage; $57,090 median annual wage
Job Growth Outlook: 2% (slower than the average for all occupations)
Job Description: Convert written content from one language to another.
Job Requirements: Must be proficient in English and at least one other language; some employers may require a bachelor’s degree.
How to Get Started: Check translation agencies and job boards, or you can solicit work through social media.
13. Digital Marketer
Potential for Remote Work: If you can collaborate with clients and coworkers without meeting in person, this job can be done remotely.
National Average Pay: Not Available
Job Growth Outlook: Not Available
Job Description: Promote individuals and businesses using social media, search engines, websites, and other online tools.
Job Requirements: Should be familiar with social media platforms. Creativity, patience, and strong communication and problem-solving skills are a plus. Some employers may require a bachelor’s degree in communications, marketing, public relations, journalism, or a related field.
How to Get Started: Networking — online and in person — can be a good way to get your foot in the virtual door; check job boards for listings.
14. App Developer
Potential for Remote Work: Developers often work independently.
National Average Pay: $44.59 median hourly wage; $92,750 median annual wage
Job Growth Outlook: 8% (faster than average)
Job Description: Create, test, and improve software applications.
Job Requirements: Collaboration, creativity, and tech savviness are important. Some employers may require a bachelor’s degree in information technology, computer science, or a related field.
How to Get Started: Taking courses in app development and networking with like-minded creative types Can help with finding a mentor and freelance gigs.
15. Creating Video Tutorials
Potential for Remote Work: You can produce videos on your own anywhere you like and on your own time.
National Average Pay: Not Available
Job Growth Outlook: Not Available
Job Description: Film tutorials and monetize them.
Job Requirements: Knowledge of your subject, technical ability to produce videos, and marketing savvy to build your brand. You’ll also need a good video camera and computer.
How to Get Started: Anyone can make an instructional video and upload it to YouTube. Building a strong portfolio and a reputation for solid content will help you monetize your videos.
16. Fitness Trainer
Potential for Remote Work: If you can find clients who prefer to exercise from home and can do their workouts when you’re available, you can teach them from your home.
National Average Pay: $22.35 median hourly wage; $46,480 median annual wage
Job Growth Outlook: 14% (much faster than average)
Job Description: Teach online classes in general fitness, yoga, strength training, etc.
Job Requirements: Though no degree is required, there are certifications available for personal trainers. You’ll also need good lighting, space to do your workouts, and video and computer equipment.
How to Get Started: If you’re a physical education teacher, coach, or a longtime gym-goer, you can spread the word on social media and through word of mouth.
17. Blogging
Potential for Remote Work: Blogging can be done at your convenience.
National Average Pay: Not available
Job Growth Outlook: Not available
Job Description: Entertain and inform an online audience with written and visual content.
Job Requirements: To make money from a blog, you’ll need to engage your audience and post frequently.
How to Get Started: You can start out by writing on a popular blogging platform, and then get the word out on social media. Network with others who may be interested in what you’re blogging about.
18. Test Scorer
Potential for Remote Work: Remote workers can score most types of multiple choice and essay exams.
National Average Pay: Not available
Job Growth Outlook: Not Available
Job Description: Grade tests and offer feedback to test-givers and test-takers.
Job Requirements: Subject expertise and attention to detail. Some employers may require a bachelor’s degree in education or a related field.
How to Get Started: Job boards frequently offer test scoring gigs, or you can query evaluation services like ETS and Measurement Incorporated.
19. Curriculum Specialist
Potential for Remote Work: Teachers typically can provide curriculum support online at their convenience, though you may have to meet with others in person or at scheduled online conferences.
National Average Pay: $35.87 median hourly wage; $74,620 median annual wage
Job Growth Outlook: 2% (slower than average)
Job Description: Develop curriculum and/or offer feedback to schools and other education services.
Job Requirements: Employers may require a bachelor’s or master’s degree as well as a few years of experience in teaching or a related field.
How to Get Started: Check job boards, but you may also find opportunities while networking with other educators.
24 Best-Paying Online Side Jobs for Teachers, Part 2: Seasonal / Summer
Because these jobs may require interacting with an employer or team members in person or remotely during the day, teachers may find it’s easier to put in their hours during seasonal school breaks.
20. Customer Service Representative
Potential for Remote Work: Customer service representatives often can work from home. However, you may have to attend some in-person training sessions before you get started, and you’ll have to find a work schedule that fits with your teaching job.
National Average Pay: $19.08 median hourly wage; $39,680 median annual wage
Job Growth Outlook: -5% (declining)
Job Description: Provide support to customers who require assistance.
Job Requirements: Patience and good communication and problem-solving skills are key. Some type of on-the-job training likely will be required. Some companies have requirements for the type of computer and phone you can use, and a strong Wi-Fi connection is a must. (Shy types need not apply, but there are plenty of jobs for antisocial people.)
How to Get Started: Customer service jobs are often listed on online job boards and through employment agencies.
21. Travel Agent
Potential for Remote Work: This job can be done remotely, but travel agents should be available to communicate with anxious clients who have questions and concerns.
National Average Pay: $22.79 median hourly wage; $47,410 median annual wage
Job Growth Outlook: 3% (as fast as average)
Job Description: Help clients choose and book work and leisure trips; provide assistance when problems arise.
Job Requirements: Good communication, customer service, and organizational skills are important. Some employers or clients may expect you to have some type of certification. Lots of travel experience is a plus.
How to Get Started: Check job boards and local agencies. It may help to work for an agency first before starting your own business.
22. Tax Preparation
Potential for Remote Work: Tax services regularly hire seasonal workers to prepare returns from home.
National Average Pay: $23.56 mean hourly wage; $49,010 median annual wage (does not include accountants and auditors)
Job Growth Outlook: 4% (as fast as average)
Job Description: Work with individuals and businesses to prepare tax returns and assist in resolving tax issues.
Job Requirements: Must be well-versed in current tax code. May have to complete company training. Must maintain a Preparer Tax Identification Number and may need an Electronic Filing Identification Number (EFIN).
How to Get Started: Check job sites or go directly to companies like H&R Block, Intuit, or small local firms. Seasonal work (January through April) is easier to find, but some year-round opportunities may be available.
23. Appointment Generator
Potential for Remote Work: Working remotely should be doable, but it may be difficult to manage the work during off hours.
National Average Pay: Not available
Job Growth Outlook: Not available
Job Description: Handle cold calling and book appointments for real estate agents and other sales professionals.
Job Requirements: Strong communication and organizational skills.
How to Get Started: Check job boards and promote your services on social media; attend networking events.
24. Virtual Assistant
Potential for Remote Work: Many administrative duties can be handled online and after hours. If you’re required to do phone work, however, you may have to limit your work time to school breaks.
National Average Pay: $22.12 average median salary; $46,010 median annual salary (includes administrative assistants who work onsite)
Job Growth Outlook: 1% (slower than average)
Job Description: General administrative support may include organizing and answering emails, scheduling appointments, arranging travel, and making phone calls.
Job Requirements: Strong communication and organizational skills, attention to detail.
How to Get Started: Job boards are loaded with positions for different types of virtual assistants.
The Takeaway
If you’re a teacher looking to earn additional income, you’ll find there are many side jobs that fit your skills and schedule, and still offer a competitive paycheck. You can take on jobs that tap into your educational expertise: tutor, curriculum specialist, lesson plan developer, test scorer. Or you may prefer to pursue another passion, like selling your artwork or working as a virtual assistant for a nonprofit you admire. The keys are to avoid burnout and to make the most of the time you put in.
Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.
See exactly how your money comes and goes at a glance.
FAQ
How can teachers make extra money online?
Working remotely allows teachers to pursue a second job that fits their schedule and their skills. Many opportunities are available on job boards and freelance sites.
What are the best side jobs for teachers?
The best side jobs for teachers are those that allow them to earn a good paycheck while maintaining a healthy work-life balance. Remote freelance work is easy to find these days, and generally pays better than minimum wage. Check freelance job boards for ideas.
What are the most profitable side hustles?
Some of the most profitable side hustles are technology-oriented. Those jobs also can be a good fit for people who wish to work remotely. If you have skills or experience with computers, IT, or app development, you can parlay it into a well-paying side gig. Full-timers can easily make a $100,000 salary.
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SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Your credit score affects your financial future, so it’s important to know where your score comes from and the different ways it can be calculated. Most important, you should know that the score you’re seeing may not be the score your lender is seeing. Why is this, and what can you do about it?
Two major companies are responsible for billions of credit scores (this is no hyperbole) provided to lenders and consumers: FICO® and VantageScore® Solutions. The difference between VantageScore vs. FICO credit scores is subtle, reflecting each company’s special calculation.
We’ll explain what goes into score calculations. We’ll also tell you where to find your score, how to use it, and which score lenders use in their decisions.
Key Points
• VantageScore and FICO are major credit scoring models with different factors and weightings.
• FICO scores dominate lending decisions, though some lenders — especially credit card issuers — use VantageScores.
• FICO and VantageScore each calculate your score in a different way.
• FICO emphasizes payment history and amounts owed; VantageScore focuses on payment history and credit utilization.
• Free credit scores available via banks, credit unions, and finance apps, not free credit reports.
Why Credit Scores Are Important
Before we get into score calculation, let’s review why credit scores are so important. When you need to borrow money, you want to do it as cheaply as possible. This means you want a great interest rate and terms that help you repay your debt as efficiently as possible.
Generally speaking, the higher your credit score, the more likely you are to get the best interest rate and loan terms. Over the course of your life, a good credit score can save you a significant amount of money.
Knowing how to read a credit report and how your credit score is calculated can help you make moves to improve it. Take a look at how the two major players come up with your credit score.
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The Fair Isaac Corporation, more commonly known as FICO, developed the FICO Score in 1989. Scores range from 300 to 850. The higher the number, the better your score.
FICO scores are calculated based on how a consumer handles debt and weighted according to the following categories:
• Payment history: 35%
• Amounts owed: 30%
• Length of credit history: 15%
• Credit mix: 10%
• New credit: 10%
As you can see, FICO scores give the most weight to your payment history and amounts owed. FICO also considers your length of credit history, credit mix, and new credit.
FICO has multiple versions of their credit scoring models, much like software has multiple updates. FICO provides different scoring models to lenders that serve different needs. Credit card issuers, auto loan lenders, and mortgage originators may use different FICO scores to make lending decisions.
What’s calculated in a FICO vs. a VantageScore is subtly different.
VantageScore was developed in 2006 by the three main credit bureaus: Experian, Equifax, and TransUnion. Scores range from 300 to 850, just like FICO scores. However, even though the scores are calculated on the same scale, a VantageScore will be different from a FICO Score. That’s because the factors, and how they’re weighted, are a little different. VantageScore is based on:
• Payment history: 40%
• Depth of credit: 21%
• Credit utilization: 20%
• Balances: 11%
• Recent credit: 5%
• Available credit: 3%
Naturally, this results in a different score. Since many lenders use FICO Score and consumers often see VantageScores, some lending decisions can take consumers by surprise.
The most common VantageScore versions are VantageScore 3.0 and 4.0. (A new model, VantageScore 4plus™, was announced in May 2024.) While most lenders use your FICO Score when making lending decisions, some lenders — particularly credit card issuers — use VantageScore.
VantageScore vs FICO: The Differences
The major differences between VantageScore and FICO Score are outlined in the table below. These include the amount of time you have to shop for a loan, the number of categories factored into a score calculation, differences in weighted categories, and length of credit history.
FICO
VantageScore
Shopping Window
45 days
14 days
Categories
5
6
Weighting
Amounts owed weighted more
Payment history weighted more
Who Tends to Use VantageScore?
Some banks and credit card issuers supply VantageScores to their customers for free. Scores are provided largely for consumer education, meaning to help people understand what factors affect their credit score, rather than for lending decisions.
Consumers who want to purchase a credit score will find Equifax and TransUnion both advertise a credit monitoring service that uses VantageScore 3.0 as their model. If you’re comparing Transunion VantageScore vs. FICO, you’ll see that Experian sells a FICO score 8 model.
Who Tends to Use FICO?
FICO claims that FICO Scores are used in 90% of lending decisions. Consumers who visit the Experian website will see that the credit score monitoring service it offers uses the FICO Score 8 model. You can also purchase your FICO Score directly from FICO.
FICO and VantageScore credit scores are used by a variety of sources to consider your credit history and credit score. These can include lenders, landlords, employers, and insurance companies. (Read more about how credit checks for employment work.)
It’s also possible to get a tri-merge credit report, which combines data from the three credit bureaus in one report.
Which Credit Score Costs the Least to Check?
Many people don’t know how to find out their credit score for free. While you are entitled to a free credit report each year from AnnualCreditReport.com, that report won’t include a credit score.
Here are some ways you can find your credit score without having to pay for it:
1. Bank or credit union. Many financial institutions provide credit scores to their members. The score is often found by accessing online accounts.
2. Credit card issuer. Many credit card issuers provide credit scores to their customers.
3. Finance apps. A money tracker app or a similar business provides credit scores to their users.
The two main credit score companies are FICO Score and VantageScore. Each company calculates your score in a slightly different way. Checking your credit is a great way to stay on top of your financial health. Although you may not know exactly which credit score your lender uses to make decisions, you can get a pretty good idea of your range.
A number of businesses can provide your credit score free of charge, including banks and credit unions, credit card issuers, and finance apps. Obtaining a credit score from either FICO or VantageScore can help you identify your strengths and the areas where you need to improve.
Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.
See exactly how your money comes and goes at a glance.
FAQ
Does TransUnion use FICO or Vantage?
TransUnion uses the VantageScore 3.0 model.
Which is more accurate: VantageScore or FICO?
Both VantageScore and FICO Score are used to make lending decisions, so the score that is most accurate is the one your lender is planning to use. According to FICO, 90% of top lending institutions use their score to make lending decisions.
Which credit score is better: FICO or TransUnion?
TransUnion provides credit scores from the VantageScore 3.0 model. Both FICO and VantageScore can provide insights into a consumer’s behavior with credit.
Photo credit: iStock/nattanapong
SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
In some ways, net worth and wealth can be tricky terms to define. To some people, the phrases are synonymous. As others acknowledge, the perception of wealth is influenced by a variety of factors, including where you live, your career, and your age.
Here’s a deep dive into how to calculate individual net worth and some of the factors that may influence our perception of wealth.
Key Points
• Net worth is calculated by subtracting liabilities from the total value of assets, including real estate and investments.
• Assets like cash, life insurance, household items, and jewelry contribute to overall wealth.
• A positive net worth results when assets exceed liabilities, indicating financial health.
• Lifestyle creep can hinder wealth accumulation as higher incomes often lead to increased discretionary spending.
• Middle-income families earn between $56,600 and $169,800 annually, defining economic classes.
How to Calculate Individual Net Worth
An individual’s net worth is the value of all of their combined assets minus any liabilities (that is, outstanding debts). If your assets are worth more than your liabilities, you have a positive net worth. If you owe more than you own, your net worth is negative.
Assets you may use as part of your net worth calculation can include:
• Real estate. Your home, second home, rental property, commercial real estate, or other holdings.
• Cars and other vehicles. Note that automobiles are typically subject to depreciation in value over time.
• Investments. Stocks, bonds, mutual funds, and retirement accounts.
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What Is the Difference Between Net Worth and Income?
Net worth and income don’t necessarily go hand in hand. Income is the money that is reported on a tax return, while a high net worth results from owning valuable assets. High net worth could be a result of careful saving, inheriting money, or hanging onto highly appreciated assets.
For example, let’s say someone bought a house in a once-undesirable neighborhood decades ago. Today, that neighborhood is super popular and the house is worth much more. Even if they don’t sell, the homeowner has increased their net worth without a boost in income. (It can be useful to see how net worth changes by age and location.)
On the other hand, a professional with a high salary who carries a lot of debt could have a relatively low net worth, especially if they also maintain a costly lifestyle. That said, various types of income certainly can have a big impact on how much wealth a person is able to accumulate.
Income is also one way that researchers sort individuals into economic classes, though the income ranges that delineate class can vary from year to year and by research methodology.
What Salary Is Considered a Middle-Class Income?
Pew Research Center defines middle-income Americans as those whose annual size-adjusted income is two-thirds to double the median size-adjusted household income. (Size-adjusted household income refers to the number of people within the household.)
A middle-income family of three earned $56,600 to $169,800 in 2022, the most recent information available from Pew Research.
What Salary Is Considered an Upper-Class Income?
Upper-income individuals earn more than double the median size-adjusted household income. This means a family of three may earn more than $169,800.
Wondering how your income compares? It can be helpful to look at the median income for a three-person household in each income tier.
Income Tier
Median Income in 2022
Upper Income
$256,920
Middle Income
$106,092
Lower Income
$35,318
Source: Pew Research Center
Why Wealth Is Relative Person to Person
The definition of “wealthy” differs depending on a person’s background, geography, and age. Consider a law student who earns very little money each year and carries hundreds of thousands in student debt. While their current wealth may be low, their potential future earnings may be quite high, and could catapult them into the wealthiest classes.
Consider, too, that where you live has a big impact on how far your wealth will stretch. A middle-income earner in an expensive city like San Francisco or New York may find it more difficult to make ends meet than someone in a small town in Oklahoma with a lower cost of living.
Ways to Measure Wealth
Wealth and net worth can be considered synonymous in some cases. But there are other factors that play into the perception of wealth and a person’s ability to accumulate it. Examples include demographic differences and potential return on investment, which may not have an immediate impact but can increase future wealth.
Income
As mentioned above, high income does not necessarily lead to high net worth — but it can. High earners may use their income to acquire assets that maintain equity, such as a home. These people may also use their earnings to invest within retirement and brokerage accounts.
Personal Savings
Your personal savings may refer to the cash you have on hand in checking and savings accounts, certificates of deposit, and money market accounts. It may also refer to the savings you have invested in brokerage and retirement accounts.
Ideally, these investments will appreciate over time, increasing net worth and providing a future source of income to maintain your standard of living after you stop working. As you build up your savings, tools like a money tracker app can help you keep tabs on your money.
Investment Rate of Return
An important factor in accumulating wealth is the rate of return (ROR) on your investments. Investment returns are not guaranteed. Stock prices rise and fall according to various trends in the market. Even bonds, which are relatively safe, are subject to default from time to time.
In the past, the stock market tended to rise over the long term. In fact, since 1926, the average annual rate of return for the stock market has been about 10%, surpassing potential returns for other major types of investments, including bonds.
Investors who save more, and hold more of their investment portfolio in stocks, may be better positioned to take advantage of these potential future returns.
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Real Estate Assets
One way to think about wealth is as the maintaining of assets. Real estate can be a good place to build equity, and it can appreciate in value. Returns can vary widely depending on what type of real estate you buy — whether a home or commercial property — and where the property is located. Historically, the rate of return on real estate has been close to stock market returns. In the U.S. market, the median return on real estate investment is 8.6% annually, per the S&P 500 Index.
Age and Family Status
Demographic factors can have an impact on how much money you earn and the wealth you can accumulate. For example, median weekly earnings vary by age and gender.
Perhaps unsurprisingly, men and women ages 16 to 24 have the lowest median weekly earnings, with men earning $771 per week and women earning $695 in the second quarter of 2024, according to Bureau of Labor Statistics data.
Men age 35 and over enjoyed the highest median weekly earnings:
• 35 to 44: $1,379
• 45 to 54: $1,470
• 55 to 64: $1,361
Women earned less overall than men:
• 35 to 44: $1,114
• 45 to 54: $1,151
• 55 to 64: $1,048
The number of people in a household has a different impact. More people under one roof may require a larger home and more money spent on things like groceries, clothing, and transportation. As a result, a single individual usually requires less wealth to maintain a certain lifestyle than a family of five.
Good Credit Score
While not exactly a measure of wealth, a good credit score is a measure of financial health. It suggests that you have not taken on more debt than you can handle, and that you are able to make your payments on time.
A good credit score can also help you leverage your wealth to achieve financial goals. For example, lenders will look at your credit score when you apply for a loan to determine your creditworthiness. A good score can help you qualify for loans with lower interest rates. Individuals with bad credit, on the other hand, may be seen as a risk, and lenders may charge higher interest rates to compensate.
As a result, a good credit score can help you qualify for loans, such as a mortgage, at affordable rates that can help you build wealth.
Difference Between Material Wealth vs Spiritual Wealth
Material wealth is dependent on the physical and financial assets that you own and the debts you carry. Spiritual wealth, on the other hand, is not based on tangible items. Rather, it’s based on things like a sense of well-being and happiness.
Are material wealth and spiritual wealth linked? In a 2023 paper, authors Daniel Kahneman, Matthew A. Killingworth, and Barbara Mellers discovered an overall connection between larger incomes and increasing levels of happiness. But they also found that happiness peaks at $100,000 a year and then plateaus in people who are already unhappy.
Appreciating What You Have
One of the reasons that higher income doesn’t always translate into greater wealth is a phenomenon known as “lifestyle creep.” This occurs when increasing income leads to an increase in discretionary spending. A certain amount of lifestyle creep can result from trying to “keep up with the Joneses” — a tendency to accumulate material goods to compete with others in one’s perceived social class.
For example, as a person earns more, they might buy a bigger house, a more expensive car, pricey clothes, and start sending their kids to private school. These costly habits can mean that the individual may not be able to save more than when their salary was lower.
Try to avoid lifestyle creep by putting off grand lifestyle changes, like buying a large home, and putting off big purchases until absolutely necessary. Build and stick to a budget that includes wealth-building line items, such as saving in retirement funds. Track your progress with a budgeting app.
Practice appreciating what you already have, and you may find that some of the upgrades you desire are just wants — not necessities.
Net worth and wealth are inextricably linked. Measuring net worth helps people assess how many assets they currently have at their disposal. Accumulating wealth is about acquiring and maintaining assets that hold their value or increase in value. Doing so often requires careful saving and investing, as well as constant monitoring to ensure you stay on track.
Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.
See exactly how your money comes and goes at a glance.
FAQ
What salary is considered middle-class income?
Middle-income Americans have annual incomes that are two-thirds to double the median income, according to Pew Research. For example, a middle-income family of three will earn $56,600 to $169,800.
What salary is considered upper-middle class income?
An upper-middle class income is at the high range of middle class income. According to the U.S. Census Bureau’s “Income in the United States: 2022” report, that’s an average annual income of $94,001 to $153,000.
What salary is considered lower-class income?
Low-income Americans are anyone earning less than two-thirds of the median household income. Per Pew Research Center, that means a family of three would have a household income of less than $56,600.
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SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
When people are starting a business, it’s likely that they’ll consider the tax benefits of different company structures. In some cases, founders may create a limited liability company (LLC) specifically for its tax benefits.
Here, we’ll delve into the tax benefits of LLCs for business owners, as well as other pros and cons.
Key Points
• LLCs offer flexibility in choosing tax classification, such as sole proprietorship or partnership.
• Pass-through taxation allows LLC income to be taxed once at the individual level, avoiding corporate taxes.
• Members report income and losses on personal tax returns, potentially lowering overall tax liability.
• LLCs can opt for S-Corp taxation, retaining pass-through benefits while potentially reducing self-employment taxes.
• Tax benefits vary by state, so consulting a tax professional is recommended for specific advantages.
An LLC is a type of business structure available in the United States. A kind of hybrid, it combines some characteristics of corporations with others from a partnership or sole proprietorship.
According to the IRS, LLC owners are called “members.” Depending on the state in which you set up the LLC, members may be individual people, other LLCs, or corporations. There is no maximum number of members that a company can have, and most states allow LLCs with just one member. Check your state for specifics.
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Tax Benefits of Forming an LLC
As mentioned above, company founders may choose an LLC structure especially for its tax benefits. Here, we go into detail about what those benefits are.
Limited Liability
An LLC, as its full name implies, provides limited liability to its members. This means that, if the company fails, the owners’ and investors’ private assets are not at risk and can’t be seized to repay company debts.
Flexible Membership
As noted previously, an LLC can have one member or many, and those members can be individuals or companies. This business structure gives owners significant freedom when starting their company.
Management Structure Options
LLCs can be managed by a member (owner) or by a hired manager. A member-managed LLC may be chosen if the company has limited resources or few members. An owner may select a member with management experience to oversee the business, or they may want all members to actively participate in the company’s operations.
A hired manager is someone who is not a member but has the appropriate experience and skill sets to run the LLC. An accountant or financial advisor can go into detail about the tax benefits of member-manager vs. hired manager approaches. (Here’s what to know if you’re filing taxes for the first time.)
Pass-Through Taxation
LLC member-owners have some control over how their business will be taxed. If there is only one member, it will automatically be treated like a sole proprietorship, and if there is more than one, like a partnership. In those cases, business income will pass through the business to the member-owners, and they’ll only get taxed once. Members will report income and losses on their personal tax returns, while the LLC itself is not taxed. (Learn how business income differs from other types of income.)
Because income and losses are reported as part of members’ personal financial pictures at tax time, taxes will be owed at each member’s personal tax rate.
Alternatively, the LLC owners may decide to be taxed as a corporation. If they choose an S-Corp structure, pass-through taxation still applies.
When someone opens an LLC, it shows that they’ve gone beyond just hanging a shingle. Instead, they went through the decision making and paper filing processes involved in setting up the LLC.
Limited Compliance Requirements
According to the U.S. Small Business Association (SBA), another form of business structure — the corporation — has the strictest requirements. In contrast, LLCs have some but fewer.
In general, an LLC should maintain a current operating agreement, hold annual meetings, ensure that they have appropriate shares recorded for each member, and keep records if membership interests transfer. (Find out if you can use a personal checking account for your business.)
So far, the LLC sounds like the ideal low-maintenance company structure. However, there are several caveats to be aware of.
Cost
Forming an LLC can cost a few hundred dollars, which may be more than what a small business wants to spend. (An online budget planner can help business owners set budgets and track spending.) The company will also need to file annual reports along with annual fees and taxes. These taxes and fees may cost a miniscule amount or several hundred dollars annually.
No Stock Ownership
When a corporation wants to raise funds, they sometimes issue shares of stock. An LLC cannot issue stock.
Some states may require that an LLC be dissolved if there is a change in ownership. If the people starting the business expect to take in outside investors over the years, a corporation might be a better choice.
How to Form an LLC
Once you’ve decided to start an LLC, you’ll want to choose and reserve a company name that doesn’t conflict with currently existing ones. Typically, an LLC must have what’s called a registered agent — someone who will handle official documents for the company.
Then, you’ll need to document the nuts and bolts of the operating agreement that describes the structure of the company. This can include who owns what portion of the company and who gets to vote on which issues. You’ll detail how profits and losses will be addressed, how the company will be managed, when meetings will be held, and how to handle the business if a member leaves the company or dies. This document should also describe what should happen if the company goes out of business.
How LLCs Are Different From Other Business Entities
An LLC is formed to be a legal entity that’s separate from its owners and is responsible for its business debts. Here’s how an LLC differs from other company structures.
LLC vs Sole Proprietorship
Profits in an LLC are only taxed once because of the pass-through taxation structure. This is reported on and addressed through owners’ personal tax returns by filing a Form 1040, Schedule C, listing profits or losses. As an LLC owner, you may be taxed as a sole proprietor, a partnership, or a corporation.
A sole proprietorship is owned by one person and is the simplest structure available. A sole proprietorship also involves pass-through taxation with the business owner paying taxes on the business’s profit. There isn’t as much flexibility in filing as a sole proprietor as there is with an LLC.
LLC vs S-Corp
An LLC is a business structure. An S-corp, meanwhile, is a tax classification. Many businesses decide to have their LLC taxed as an S-corp. The nuances can be complicated, so it makes sense to consult your personal accountant or other professional before making this decision.
LLC for Rental Property
If you create an LLC to buy rental homes, you’ll have the benefits of no personal liability and pass-through taxation. There can be a flexible ownership structure, personal anonymity, and fairly simple reporting.
However, it may be harder to finance rental property as an LLC. There can also be significant fees to get the LLC up and running. LLCs for rentals can be more complex at tax time, and property transfers can also be more complicated.
Consider how simple or complex your proposed business will become. Do you plan to basically run the business yourself, or will it ideally turn into something bigger? What kind of legal protections will you need based on your business plans?
Entrepreneurs should also weigh the tax benefits of LLCs and sole proprietorships. The two structures, along with partnerships and S-corps, feature pass-through benefits, meaning that profits are taxed only when they’re paid to the company owner(s). A C-corp, meanwhile, is taxed as a company as well as when shareholder payouts are made.
Consult your accountant or financial advisor for specifics on your situation.
No matter what business structure you choose, it’s important to keep track of your finances. SoFi’s spending app provides you with an easy-to-use online budget planner so you can stay on top of your finances.
The Takeaway
Limited liability companies (LLCs) come with plenty of advantages and a few disadvantages. As its name implies, the owners’ and investors’ private assets are not at risk if the company should struggle financially. Owners of the LLC are referred to as members. Membership may range from one individual to multiple individuals to other companies.
A major benefit is pass-through taxation, where income passes through the company to its members, who report it on their personal taxes. One disadvantage of LLCs for very small businesses is the startup cost and annual fees, which can run to several hundred dollars a year. Consult a professional to find out whether an LLC is the right fit for your business plan.
Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.
See exactly how your money comes and goes at a glance.
FAQ
What are the tax benefits of having an LLC?
With an LLC, you’ll have flexibility in deciding the structure under which your company will be taxed. There are more tax benefits of an LLC, including pass-through taxation, which means you’ll only get taxed once at your individual tax rate.
What are the benefits of a limited liability company?
They can include limited liability, meaning that owners aren’t personally responsible for company debts; flexible structures; pass-through taxation; more credibility; and fewer compliance requirements compared to a corporation.
What is the best tax option for an LLC?
Each situation is unique, so consult your accountant or financial advisor for specifics.
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SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.
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