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The 82 Best Subreddits for Business Owners, Professionals & Investors

Written by Ricky Nave in Marketing, Sales, and Community

Whether you have questions about how to start or grow a business, are looking for career advice, trying to find customers for your startup, or trying to learn copywriting skills to become a better marketer, Reddit has pre-established communities of people who have self-identified as the groups you need. Below are 29 of the best subreddit communities for different types of business owners, investors, and working professionals.

1. r/SmallBusiness

r/SmallBusiness is a place for questions about starting, owning, and growing a small business.

2. r/EntrepreneurRideAlong

r/EntrepreneurRideAlong is a place for entrepreneurs to ask questions and share tactics on how to validate business ideas, acquire customers, and grow companies.

3. r/SweatyStartup

The r/SweatyStartup subreddit is for hard-working small business entrepreneurs. Unlike r/Entrepreneur, you won’t find many dropshippers, social media marketers, crypto investors, or other “passive income” seekers here.

4. r/Startups

This community is for people building or trying to build fast-growing, Silicon Valley style startups.

5. r/OnlyFansAdvice

If you’ve ever been curious about the business side of running a profitable OnlyFans account, you’ll find the answers in r/OnlyFansAdvice. This subreddit only allows verified OF content creators to post or comment. That means the quality of the posts and comments is very relevant to and focused on business, marketing, finance, and operations questions for OF creator businesses. A similar subreddit that is still high-quality but is open to non-verified creator posts is r/CreatorsAdvice.

6. r/Advertising

This community describes itself as “Ground Zero for ad creators, students, copywriters, affiliates, and anyone else who is finely honing their reverse banner blindness for professional reasons.” Don’t try to advertise directly within the community itself though or you will be banned.

7. r/AskManagers

r/AskManagers is a high-quality subreddit for business managers of all industries to ask questions and give advice about how to deal with management problems and become a better manager.

8. r/Consulting

This subreddit has existed since 2009, has new posts every day, has over 210,000 members, and is focused on questions and discussions relevant to consultants.

9. r/IndieBiz

The r/IndieBiz community is for hustlers and entrepreneurs. Self-promotion is allowed as long as it is useful and relevant to others.

10. r/private_equity

This subreddit is a place to share news and discuss topics relevant to the private equity industry. You are not allowed to sell your services or fundraise in the community, but you can link your own informational blog articles so long as they are high-quality & relevant to private equity professionals.

11. r/Electricians

This community has over 330,000 members and is very active. Members are professional electricians or other people doing electrical work.

12. r/HVAC

r/HVAC is a community for HVAC professionals that currently has 121,000 members.

13. r/Plumbing

r/Plumbing is a place to ask plumbing questions and give plumbing advice. The community’s 181,000 members include many landlords, professional and aspiring plumbers, professional handymen, property managers, and home owners.

14. r/Truckers

r/Truckers is a community of over 150,000 professional truckers. Self-promotion is not allowed.

15. r/Construction

This community describes itself as “a place for professionals to discuss the construction industry. Anybody working in this field is welcome! Carpentry, concrete, steel, plumbing, HVAC, electrical, landscaping, equipment operators, etc.”

16. r/ConstructionFails

This niche subreddit of 22,500 members is for sharing pictures and videos of ‘construction fails’. The content niche means that most members are construction professionals.

17. r/Retail

This subreddit is a place to discuss the inner workings and trends of retail businesses. Members include retail business owners, managers, and employees.

18. r/Nursing

r/Nursing is a community of over 400,000 nurses and care providers.

19. r/LawyerTalk

r/LawyerTalk is “a place for lawyers to talk about lawyer things” including firm culture, amusing anecdotes, and the legal world.

20. r/Bookkeeping

r/Bookkeeping is a place for questions about bookkeeping. There are usually at least a few posts per day, and the posts are very relevant to bookkeeping.

21. r/Accounting

If you are an accounting professional (e.g. a CPA, bookkeeper, auditor, accounting entrepreneur, Big 4 employee, etc) or aspiring accounting professional, then r/Accounting is the subreddit for you.

22. r/CFO

r/CFO is a small community of just over 1000 members who serve as CFOs or other finance industry professionals. Self-promotion is allowed.

23. r/Sales

This community is a place to learn about sales, lead generation, prospecting, and closing. However, it frowns upon self-promotion so be subtle if you try to sell anything to other members or you’ll get yourself permanently banned.

24. r/SalesTechnology

r/SalesTechnology is a place for sales professionals to discuss CRMs, lead gen & lead nurturing tools, calling systems, proposal and presentation systems, sales engagement tracking & optimization software, and other technology to help you sell more.

25. r/SaaS

r/SaaS is a place to discuss and share useful links relevant to SaaS businesses and online business owners.

26. r/RealEstate

r/RealEstate is a discussion forum for real estate investors, landlords, home buyers, mortgage professionals, and other real estate professionals.

27. r/Landlord

The r/Landlord subreddit self-describes as “a community for landlords to come together to discuss anything landlord related. News, ideas, blog posts, websites, resources, etc. which can help a landlord are welcomed.”

28. r/RealEstateInvesting

This subreddit is similar to r/Landlord but with an audience skewed towards less seasoned real estate investors and more people trying to learn about how to start real estate investing.

29. r/Finance

This community is for sharing & discussing links related to finance and economic news as well as financial careers. The community currently has 1.7 million members with many working in finance.

30. r/AdvancedEntrepreneur

This community is supposed to be a place for established entrepreneurs to discuss strategies and tactics to take their businesses to the next level. In reality, there is enough of that to make the community valuable, but there are also plenty of upstarts who are in the early research phase of starting a company.

31. r/Entrepreneur

The r/Entrepreneur subreddit is a general forum for discussing side hustles, small businesses, venture-backed startups, and any other forms of money-making. The subreddit is NOT friendly to self-promotion, however, so you should look elsewhere if you are trying to promote your blog or consulting business.

32. r/DeFi

r/DeFi is a place to discuss, ask questions, and share links (within reason) related to DeFi (decentralized finance on blockchains).

33. r/DataScience

This community of 847,000 members describes itself as “a place for data science practitioners and professionals to discuss and debate data science career questions.”

34. r/MachineLearning

This subreddit is for machine learning engineers, researchers, and power users. The community currently has 2.6 million members.

35. r/Investing

The r/Investing subreddit is a place to discuss investment strategies. However, the moderators do NOT tolerate any self-promotion. You can’t even post a blog article that does a deep dive into a novel investment strategy.

36. r/investing_discussion

This community is more smaller, less policed version of r/Investing.

37. r/Stocks

r/Stocks is a place for discussing stock market investing and stock analyses, but self-promotion is not allowed.

38. r/StockMarket

r/StockMarket is a community of 2.6 million stock traders and investors. This community does not allow any self-promotion.

39. r/Options

r/Options is a community of almost a million members dedicated to discussing options trading fundamentals and strategies.

40. r/ValueInvesting

r/ValueInvesting is a community of almost 200,000 members dedicated to discussing value investing topics and strategies. Self-promotion of blog articles is allowed as long as the articles are highly useful and relevant to value investing.

41. r/Dividends

This community is for dividend portfolio investors. Posts include simple stock and ETF analyses, questions asking about tools and strategies for dividend investing, portfolio reviews, and other topics.

42. r/Portfolios

r/Portfolios is a community of about 25,000 members. The forum sees about 1 post per day with post topics asking about specific securities, investment strategies, 401k plans, and IRAs.

43. r/Bogleheads

r/Bogleheads describes itself as a “passive indexing community for long-term lazy investors.” The subreddit currently has 222,000 members.

44. r/Traders

r/Traders is the opposite of r/Bogleheads. It is a community of 111,000 active traders (some professional and some amateur).

45. r/EducatedInvesting

r/EducatedInvesting is a forum for deep dives on particular stocks.

46. r/TaxPros

This subreddit describes itself as “a community for Redditors who are tax professionals to discuss professional development, firm procedures, news, policy, software, AICPA/IRS changes, news/updates about law relating to any tax – U.S. and International, Federal, State, or local.” The community currently has over 58,000 members. Self-promotion isn’t explicitly banned in the rules, but the members are smart professionals so if you post something that seems promotional rather than useful, it will probably be downvoted and you might also be banned.

47. r/Tax

r/Tax is “Reddit’s home for tax geeks and taxpayers! News, discussion, policy, and law relating to any tax – U.S. and International, Federal, State, or local.” The community has 174,000 members. Self-promotion is not allowed.

48. r/YouTubers

r/YouTubers is a community of over 700k existing and aspiring YouTube creators. Self-promotion is not allowed.

49. r/Blogging

r/Blogging is a community of 117,000 bloggers and aspiring bloggers. Self-promotion is not allowed.

50. r/SEO

This subreddit of over 200,000 members is dedicated to SEO news, tips, and case studies.

51. r/GrowthHacking

r/GrowthHacking is a community of over 30,000 startup founders who are trying to grow their startups.

52. r/WebHosting

r/WebHosting is a community that has existed since 2008 and has over 84,000 members. The community describes itself as “a place to discuss everything related to web and cloud hosting. From shared hosting to bare metal servers, and everything in between. Post reviews of your current and past hosts, post questions to the community regarding your needs, or simply offer help to your fellow redditors.”

53. r/Wordpress

This community of 178,000 members is for discussing WordPress software.

54. r/web_design

r/web_design is a community of over 730,000 professional and amateur website designers.

55. r/WebDev

r/WebDev is a community of 1.5 million web developers discussing web developer things.

56. r/Quant

This niche community of 36,000 people is for discussions, resources, and research related to quantitative finance.

57. r/FinTech

“We are a community of fintech enthusiasts bubbling up new tools, technologies and platforms in various industries, including (but not necessarily limited to) banking, payments, insurance, investing, and lending.”

Self-promotion is allowed as long as the thing you have created is of value to the community and you mention that you created it at the beginning of the Reddit post.

58. r/Banking

This community is for discussing commercial and investment banking. Many members work at banks.

59. r/Excel

This community of over 600,000 members is for discussing excel and spreadsheet questions.

60. r/Marketing

r/Marketing is a subreddit with 465,000 members interested in marketing and advertising. The subreddit description is the following:

“For marketing communications + advertising industry professionals to discuss and ask questions related to marketing strategy, media planning, digital, social, search, campaigns, data science, email, user experience, content, copywriting, segmentation, attribution, data visualization, testing, optimization, and martech. Get advice, ask questions, or discuss any marketing-related topics. Our diverse /r/marketing community includes brands, businesses, agencies, vendors, and students.”

61. r/MarketingAutomation

This subreddit is for open discussion about tools and strategies for marketing automation and email marketing.

62. r/HubSpot

This subreddit is for discussing HubSpot (CRM and marketing automation) software questions.

63. r/Business_Ideas

r/Business_Ideas is a place to share and discuss business ideas.

64. r/BusinessAnalysis

r/BusinessAnalysis is a place to discuss “how to” and career questions of business analyst jobs. The community has over 38,000 members.

65. r/BusinessIntelligence

This community of 123,000 members is dedicated to discussions on business intelligence. That includes processes for utilizing organizational data, technology, analytics, and the knowledge of subject matter experts to create data-driven decisions via dashboards, reports, alerts, and ad-hoc analysis. Do not post here as if this was a generic “business” subreddit unless you want to get banned.

66. r/Visualization

r/Visualization is a place to share and discuss data visualization. Many members of r/BusinessIntelligence are also members of r/Visualization. r/Visualization has over 87,000 members.

67. r/PersonalFinance

This massive subreddit has over 17 million members and is dedicated to discussions of retirement accounts, investments, budgeting, saving, credit, and other personal finance topics.

68. r/LegalAdvice

r/LegalAdvice is a community of 2.3 million members asking simple legal questions and explaining legal concepts.

69. r/HomeImprovement

This subreddit has over 4 million members and is a great place for landlords, property managers, and home owners to ask questions about home improvement projects.

70. r/HomeAutomation

r/HomeAutomation is a subreddit focused on automating your home, housework or household activity (sensors, switches, cameras, locks, etc). It is a great resource for landlords, property managers, Airbnb hosts, and home owners.

71. r/FinancialCareers

This subreddit has over 620,000 members who are financial professionals or are interested in a finance career.

72. r/FinancialIndependence

r/FinancialIndependence is a subreddit dedicated to helping its 1.8 million members achieve financial independence and retire early.

73. r/WallStreetBetsNew

r/WallStreetBetsNew has 819,000 members who left to rebuild a new subreddit after the original Wall Street Bets subreddit was inundated with over 10 million new-to-reddit people during the GME stock squeeze. Like the origianl Wall Street Bets before it became mainstream, this new subreddit is dedicated towards calculated but risky strategies to win in the stock market.

74. r/SysAdmin

This subreddit has 772,000 members, many of whom are professional system administrators.

75. r/TalesFromTheFrontDesk

This is a community of 715,000 members who work or have worked on the front line at hotels, hostels, and other hospitality businesses. The subreddit itself is a place to post and discuss stories (usually funny or infuriating ones) from those hospitality workers.

76. r/TalesFromYourServer

This community of 520,000 members is similar to r/TalesFromTheFrontDesk but it is for restaurant servers rather than hospitality workers. It can be a useful place for restaurant owners and managers to study when they are deciding how to manager and motivate their employees.

77. r/WorkOnline

r/WorkOnline is a “place to talk about making an income online. This includes random jobs, online employers, sites that pay you and ways to monetize websites.” The community currently has 489,000 members.

78. r/Ecommerce

r/Ecommerce is a community of 261,000 entrepreneurs and aspiring entrepreneurs interested in ecommerce. Topics include ecommerce marketing, seo, products, checkout, conversions, etc.

79. r/FreelanceWriters

This is a subreddit of 115,000 freelance writers to discuss every facet of freelance writing.

80. r/Copywriting

This subreddit is a community of over 120,000 copywriters and aspiring copywriters. It is a great place to learn how to sell stuff.

81. r/AdPorn

r/AdPorn currently has 467,000 members and gets around 8,000 visits per week. Members share and discuss high-quality advertisements.

82. r/AdspaceMarket

r/AdspaceMarket is a community of 3,200 members interested in buying and selling digital ad space on niche websites.

The Economics of Super Bowl Ads

Written by Ricky Nave in Business tactics, strategy, and management,Investment & Trading Insights

“69% of companies that bought 2022 Super Bowl ads underperformed the S&P 500 over the next year, so why are companies like Google, Amazon, and DraftKings willing to shell out $7 million for a 30-second ad slot in 2023?”

FTX, Quiznos, Blockbuster, Pets.com, Ameriquest — These are just a few of the dead or dying Super Bowl advertisers from the last two decades. Much like stadium naming rights, Super Bowl ads tend to be a low-ROI use of marketing dollars. That hasn’t always been the case, however, as evidenced by the chart below which shows how the average cost per thousand impressions (CPM) for Super Bowl ads has grown 6-fold from 1968 to 2022 (that’s AFTER adjusting for inflation).

(The CPM values shown are inflation-adjusted 2022 dollars)

For reference, YouTube pre-roll ads (the ads that play before a YouTube video begins) have an average CPM around $3-8 which is TEN TIMES CHEAPER than modern Super Bowl ads on a cost-per-view basis.

Alternatively, you can buy 60-second podcast ad slots for around $23 CPM which is one third the cost and double the length of a Super Bowl ad slot while also arguably being more effective since the ad is delivered to a narrower audience. If you really think you need to reach a general audience across the U.S. (most businesses don’t), you can can run a low cost digital display ad campaign with a CPM around $5 or less. You could even run normal cable TV ads with CPMs of $20-30. There are SO MANY better, more cost-effective options than Super Bowl ads.

However, perhaps one Super Bowl ad view actually is 10x more valuable than one YouTube ad view because the person watching the Super Bowl ad is paying more attention to it. It’s reasonable to question whether Super Bowl ads might actually be worth a 5-10x higher CPM just because of higher audience engagement.

To address that question, we will forget about CPMs altogether and just look at how well the the stock of publicly-traded companies that advertise on the Super Bowl have performed relative to the overall stock market. If expensive Super Bowl ads are not a rip-off, then we should expect the stock of Super Bowl advertisers to perform at least as well as an average stock on the NYSE or NASDAQ.

The table below summarizes the 1-year total return (from February 11, 2022 until February 10, 2023) of the 36 publicly-traded (in the U.S.) companies that advertised during the 2022 Super Bowl. For reference, the table also lists the total returns of the market-cap-weighted S&P 500 (SPY) and an equal-weighted version of the S&P 500 (RSP).

The carnage is clear. Of the 36 Super Bowl advertisers, 25 underperformed the S&P 500 over the 1-year period that followed the 2022 Super Bowl. That means 69% of Super Bowl advertisers underperformed the market. If we use RSP rather than SPY as our benchmark, then 29 Super Bowl advertisers (81%) underperformed the market.

Over that 1-year period, the S&P 500 returned -5.85%. The median performance of a Super Bowl advertiser was -18.37%. If we constructed a portfolio by buying an equal amount of stock of each Super Bowl advertiser, our portfolio would have returned -22.83% over that period.

Still, one year is a relatively short time in the stock market. It’s possible that the underperformance we are looking at is just a statistical anomaly (perhaps due to the once-in-four-decades macroeconomic conditions that affected the economy in 2022). To determine if Super Bowl ads really are a bad investment of marketing dollars in more normal economic conditions, we need to look at how Super Bowl advertiser stocks perform over longer time spans. (By the way, if you are enjoying this article, consider subscribing to my free newsletter to get more like it.)

How do Super Bowl advertiser stocks perform over 10 years?

Using this archive of past Super Bowl ads, I determined there were 14 companies that both (1) advertised in the 2013 Super Bowl and (2) have been publicly listed in the U.S. for the entire period of time from February 1, 2013 (just before the 2013 Super Bowl) until February 10, 2023 (the last trading day before the 2023 Super Bowl). The 10-year total returns and annualized returns for each stock (as well as for the S&P 500 and RSP benchmark ETFs) are summarized in the table below.

Of the 14 Super Bowl advertisers from 2013, 11 underperformed the S&P 500 over the next 10 years (79%), and the average annualized return of all 14 Super Bowl advertisers over that decade was a pitiful 6.67% (versus 12.47% for the S&P 500). That consistent underperformance over a decade is even more impressive when you consider that when advertisers bought Super Bowl ads in 2013, the average inflation-adjusted CPM for those ads was only $44.52 versus $64.29 in 2022. That means companies that bought Super Bowl ads in 2013 were making bad decisions, and companies that bought Super Bowl ads in 2022 made decisions that were 44% worse.

Moral of the Story: If you are an executive or director of a company, don’t buy Super Bowl ads unless you have VERY good data suggesting that your company will actually get a good ROI on that marketing spend. And if you are an investor, then stay clear of companies that buy Super Bowl ads unless you have a very specific reason not to. If you are a sophisticated investor, consider a long-short portfolio strategy that involves shorting Super Bowl advertisers while going long ETFs of peer groups of those stocks. I will be sharing more detailed models & data for how to implement such strategies in this month’s Axiom Alpha Market Intelligence newsletter on February 28, 2023.

How Much are TikTok Coins, Roses & Diamonds Worth? [The TikTok Economy Explained]

Written by Ricky Nave in Media & Content Businesses

TikTok has a four-stage internal economy: (1) users can buy “coins” in exchange for real money, (2) users can spend their coins to buy & send virtual gifts (e.g. TikTok roses) to other TikTok users, (3) the TikTok users who received those virtual gifts can then trade those gifts for some quantity of “diamonds”, and (4) TikTok users who own diamonds can trade them for real money that is deposited to a bank or PayPal account.

TikTok uses this complexity to obscure the fact that most of the money spent on a virtual gift goes to TikTok rather than the content creator who received the gift. Depending on whether coins are bought in-app or on the TikTok website and also depending on whether virtual gifts are purchased and gifted on a Live stream or on a standard short-form video, each $1 of coins purchased can be worth anywhere from $0.35 to $0.94 to the creator who receives virtual gifts purchased with those coins.

In the most common situation where coins are purchased in-app and gifts are purchased during Live streams, $1 of coins will end up as only $0.35 of value to the gift-receiving content creator.

How much are TikTok coins worth?

Each TikTok coin is worth about 1.4 cents. However, the exact cost to buy a coin depends on how many coins you buy at a time and whether or not you buy coins through the normal TikTok mobile app or through the TikTok website.

The most common way to buy coins is through the “recharge” option built into the app. The recharge pricing for each package of coins is summarized in the table below.

Number of CoinsPricePrice per Coin
5$0.071.4000 ¢
70$0.991.4143 ¢
350$4.991.4257 ¢
700$9.991.4271 ¢
1,400$19.991.4279 ¢
3,500$49.991.4283 ¢
7,000$99.991.4284 ¢
17,500$249.991.4285 ¢

As you can see, TikTok actually offers a reverse bulk discount (i.e. they charge you slightly more per coin when you buy more coins at a time) which is definitely unusual.

Another thing that is unusual is that TikTok offers substantially cheaper pricing when you log into TikTok through a web browser on your laptop or desktop computer to buy coins rather than buying coins directly on the mobile app. Those cheaper prices are summarized in the next table:

Number of CoinsPricePrice per Coin
70$0.741.0571 ¢
350$3.701.0571 ¢
700$7.401.0571 ¢
1,400$14.801.0571 ¢
3,500$371.0571 ¢
7,000$741.0571 ¢
17,500$1851.0571 ¢

How much is a Diamond on TikTok?

TikTok actually has two types of Diamonds. Diamonds received during a Live stream are redeemable for half a cent while Diamonds received on a standard video are redeemable for a full cent.

However, ByteDance (the company that owns & controls TikTok) has included in their terms of service that they are free to change the exchange rate between Diamonds and dollars as they see fit, and they have already used this power to change the value of Diamonds from what they were in the past.

How much is a rose on TikTok worth?

It costs 1 coin to buy & send a TikTok rose to someone. If that coin is bought in-app, it will cost about 1.4 cents. Once the rose is received by someone, it converts into 1 diamond which can be redeemed for either 0.5 cent if the rose was received during a Live stream or 1 cent if the rose was received on a standard video.

In other words, a TikTok rose costs 1.4 cents to the person who gifts it but is only worth 0.5 cent or 1 cent (depending on whether it was received on a Live stream or a standard video) to the person who receives it.

How much is a TikTok Universe?

It costs 34,999 coins to buy & send a TikTok Universe virtual gift to someone. If you buy coins at the bulk “recharge” rate within the TikTok app, that equates to a cost of $499.97.

However, if you instead buy coins at the much cheaper rate available through the TikTok website, those 34,999 coins would only cost you $369.99.

Either way, the TikTok Universe is still one of the most expensive virtual gifts available in the app. There is also a “Soccer Universe” gift which also costs 34,999 coins and a “Holiday Universe” gift which costs even more at 41,999 coins.

How much is a TikTok Lion?

It costs 29,999 coins to buy & send a TikTok Lion virtual gift to someone. If you buy coins at the standard recharge rate of 1.4 cents per coin, then the cost of a TikTok Lion is equivalent to $419.99.

However, if you buy coins at the discounted rate available through the TikTok website, then the cost of those 29,999 coins is only $317.13.

There is also a “Winter Lion” virtual gift available, and the Winter Lion also costs 29,999 coins.

How many followers do you need to receive gifts?

You need 1,000 followers on TikTok to be able to receive gifts on your Live streams, but you need 100,000 followers to be able to receive gifts to your standard videos.

References

How much do TikTok virtual gifts cost?

You can find the cost (in coins) to purchase any virtual gift by navigating to any TikTok LIVE, clicking on the “gifts” icon, and then scrolling through the gifts until you find the one you are looking for.

Once you find the cost of that gift in coins, multiply by 1.4 and then divide by 100 to get the cost in dollars.

How much does it cost to buy 1 million coins on TikTok?

If you buy coins in bulk inside the TikTok app, then it would cost $14,285 to buy 1 million coins. However, if you buy coins on the TikTok website, then it would only cost $10,571 to buy 1 million coins.

How much are 1 million coins worth to a TikToker receiving gifts?

If a TikToker’s fans buy them 1 million coins worth of virtual gifts during a LIVE, then that TikToker’s gifts will be converted into diamonds that can be redeemed for $5,000.

If a TikToker’s fans buy them 1 million coins worth of virtual gifts on a standard video, then that TikToker’s gifts will be converted into diamonds that can be redeemed for $10,000.

How much are 10,000 diamonds worth on TikTok?

If you receive 10,000 diamonds during a TikTok Livestream, then you can redeem those diamonds for $50. However, if you receive 10,000 diamonds on a standard TikTok video, then you can redeem those diamonds for $100.

How much is a rocket on TikTok?

There are currently two types of rocket virtual gifts on TikTok: The “Shuttle” and the “Spaceship”.

The TikTok Shuttle gift costs 20,000 coins ($280.00), and the TikTok Spaceship costs 13,999 coins ($195.99).

The parenthetical dollar amounts shown are calculated using the in-app exchange rate of 1.4 cents per coin.

How much is a TikTok galaxy worth?

There is no virtual gift called a “Galaxy”, but there is an “Interstellar” gift that costs 10,000 coins ($140), a “Planet” gift that costs 15,000 coins ($210), and a “TikTok Universe” gift that costs 34,999 coins ($489.99).

The parenthetical dollar amounts are again calculated using the exchange rate of 1.4 cents per coin. As such, the actual dollar costs of those gifts could be higher or lower depending on whether the coins are purchased in bulk or not and whether the coins are purchased in-app or on the TikTok website.

How to Select a Target Market: 156 Niche Markets to Build a Business Around

Written by Ricky Nave in Business Ideas, Opportunities, and Risks,Markets,Media & Content Businesses

“Building a product or producing content before identifying your target market is like building a boat without deciding whether it is for fishing in the Everglades or sailing between Miami and Mexico — at best, the result will be uncomfortable for the people who use it, and at worst, the result will be so useless that no one even looks at it.”

Whether you are starting a blog, creating a new YouTube channel, starting a new business, or niching down your existing business, the first thing you need to do is select a target market. Your target market is the set of people who will be your customers, readers, or viewers. There are 3 reasons why investing time upfront to select a specific target market has a high ROI:

  1. Product Quality. Knowing exactly who is in your target market allows you to build products and content that are specifically tailored to those people’s needs and interests.
  2. Cheap & Effective Advertising. A well-defined target market allows you to advertise to the people in that target market both more cheaply and more effectively than if you were advertising to a more general group of people.
  3. Maximum Profit. Most businesses, YouTube channels, and blogs fail. Of those that survive, most are not as profitable as they could be. One of the main causes of both business failure and subpar profits is that entrepreneurs unwittingly create products or services for people who don’t have money. That leads to lots of wasted time, money, and frustration. The simple solution to avoid all of that is to work backwards: start by selecting a target market that is big enough & has enough wealthy members to support a healthy business, and ONLY THEN start creating products and content for them.

A target market is just a subset of all the humans on Earth which we want to serve. There are 6 common types of target markets:

  1. Geographic target markets — Groupings of people based on location such as country, state, city, neighborhood, rural/urban, and climate zone/seasonality/weather/temperature (e.g. “people living in the U.S.”, “people living in Florida”, “people living in Miami”, or “people living in tropical climates”)
  2. Demographic target markets — Groupings of people based on age, sex, ethnicity, relationship status, socioeconomic status, income, education, and/or cultural membership (e.g. “Men aged 18-24”, “white women over 50”, “adults aged 25-40 who didn’t go to college”, or “childless single women over 50 with a net worth of at least $1 million”)
  3. Psychographic target markets — Groupings of people based on their attitudes, interests, hobbies, personality, fears, ambitions, values, opinions, and/or lifestyle (e.g. “Republicans”, “adults who enjoy bird-watching”, “people who subscribe to a libertarian philosophy in life”, or “people who are paranoid about losing their wealth because they grew up in a poor dysfunctional family”)
  4. Firmographic target markets — Groupings of people based on the type of organization they work for and/or their role within that organization (e.g. “CEOs”, “CMOs of publicly listed construction companies”, “owner-operators of companies making $2-5 million in annual revenue”, “grant writers at non-profits that were founded more than 2 years ago”, or “HR professionals working at manufacturing companies with 10-50 employees”)
  5. Anthropometric target markets — Groupings of people based on their body shape and size (e.g. “people who are in the top 20% of heaviest people their age”, “people over 6 feet tall”, “people with flat feet”, or “people with a hunchback”)
  6. Behavioral target markets — Groupings of people based on buying, consumption, or engagement behaviors (e.g. “people who usually ask their friends for advice before making a consumer purchase decision”, “people who always buy their mom a gift for mother’s day”, “people who go on a spending spree as soon as they get a paycheck”, “people who only purchase fair-trade products”, “people who prioritize price in every purchase decision”, “people who prioritize safety in every purchase decision”, “people who use tiktok for at least an hour a day on average”, or “people who like at least 30% of the the Rock’s instagram posts”)

For most entrepreneurs and content creators, their target market will be formed by combining and intersecting two or more different target markets of the types just described.

For example, the target market of a downtown Mexican restaurant in New York City might be single adults in white collar jobs making $150-300k per year (demographic target), who live in Manhattan (geographic target), who typically go on at least one casual date each week (psychographic target), and who always buy lots of drinks on dates (behavioral target).

Remember: You want to be sure you select a target market that is both big enough (i.e. has enough people) and rich enough (i.e. has enough money) to support a business of the size you want to build.

In the table below, I list 156 target markets (i.e. niche audiences) that you might want to target, together with the size and wealth of each market. Each market listed is a subset of Americans unless otherwise noted.

MarketMarket SizePer Capita Wealth or IncomeTotal Wealth or Income
1Homeowners (not counting duplicate ownership if more than 1 person is on the title)83 Million$73,000 median household (not individual) income

$255,000 median household wealth		$6.059 Trillion annual income

$21.165 Trillion total wealth
2Independent landlords (with rental income)10.6 Million$97,000 average annual income for landlords (total, not just rental)$1.028 Trillion annual income (total)
3Independent landlords who manage their own properties4.77 Million$97,000 average annual income$463 Billion annual income
4Independent landlords who graduated college7.0 Million$97,000 average annual income$679 Billion annual income
5Gun-owning households54 Million$100,000+ median income$5.4 Trillion annual income
6Motorcycle-owning households10 Million$65,000 median income$650 Billion annual income
7Adults aged 25+ whose highest degree is a Masters degree24 Million$64,000 median income$1.5 Trillion annual income
8Adults with a doctoral degree4.7 Million$71,000 median income$333 Billion annual income
9Employees in the U.S.139 Million$65,000 average (not median) income$9 Trillion annual income
10Adults259 Million$71,000 median household (not individual) income$18 Trillion annual income
11Adults who own stocks145 Million––
12American families who own stocks65 Million$40,000 median stock portfolio value$2.6 Trillion total stock wealth
13American families who own stocks directly

(i.e. not counting index funds, mutual funds, or retirement accounts)		18.6 Million––
14Individuals that own at least one traditional IRA49 Million$189,000 average total traditional IRA assets$9.3 Trillion in traditional IRA assets
15Individuals that own at least one Roth IRA22 Million$46,000 average total Roth IRA assets$1.0 Trillion in Roth IRA assets
16Individuals that own at least one SEP IRA3.1 Million$158,000 average SEP IRA assets$491 Billion in SEP IRA assets
17Individuals that own at least one SIMPLE IRA3.2 Million$46,000 average total SIMPLE IRA assets$146 Billion in SIMPLE IRA assets
18Individuals that own at least one IRA (of any type)63 Million$175,000 average IRA assets$11 Trillion in total IRA assets
19Retired workers receiving social security benefits47 Million$19,000 average annual social security income (not total income)$893 Billion annual social security income
20American households (not individuals)124 Million$73,000 median household income$9.05 Trillion (using median) annual income
21Dog-owning households69 Million$79,000 median household income$5.45 Trillion (using median) annual income
22Bird-owning households10 Million––
23Horse-owning households1.6-2 Million (estimates vary in this range)$60,000 – $100,000 median income (estimates vary widely in that range)$120-160 Billion annual income (estimated using median)
24Adults legally taking prescription stimulants16 Million––
25Adults who are vegetarians (excluding vegans)15.5 Million$35,000 median income$543 Billion annual income
26Adults who attend a Christian church every week55 Million––
27Jews by religion4.2 Million$100,000 median household (not individual) income$420 Billion annual household income
28Adults who believe astrology is real

*More precisely, adults who responded “yes” to the question: “Do the positions of stars and planets influence people’s lives?”		70 Million––
29Americans aged 18-29 who believe astrology is real19.6 Million––
30Adults who are “unsure” if astrology is real

(i.e. adults who responded “uncertain” to the question: “Do the positions of stars and planets influence people’s lives?”) 		57 Million––
31Adults who believe in ghosts103-168 Million (40-65% of the U.S. adult population)––
32People aged 13+ who identify as transgender1.6 Million––
33Americans aged 6+ who play golf on a golf course each year25 Million––
34Americans aged 18-34 who play golf on a golf course each year6 Million––
35Producers & directors (for film, TV, stage, and other productions)138,000$102,000 average income$14 Billion annual income
36Real estate brokers & agents224,000$67,000 average income$15 Billion annual income
37Graphic designers204,000$60,000 average income$14 Billion annual income
38Preschool & kindergarten teachers512,000$43,000 average income$22 Billion annual income
39Elementary & middle school teachers1.933 Million$67,000 average income$130 Billion annual income
40High school teachers999,000$62,000 average income$62 Billion annual income
41Postsecondary teachers (e.g. community college professors, university professors, trade school instructors)1.34 Million$95,000 average income$127 Billion annual income
42Postsecondary health teachers260,000$120,000 average income$31 Billion annual income
43Doctors in U.S. (actively practicing)1.073 Million$232,000 median income

$260,000 average income		$279 Billion annual income
44Dentists125,000$178,000 average income$22 Billion annual income
45Dental hygienists207,000$81,000 average income$17 Billion annual income
46Dental assistants347,000$42,500 average income$15 Billion annual income
47Registered Nurse (RN)4.2 Million$75,000 median income

$80,000 average income		$336 Billion annual income
48Nurse Practitioner (NP)235,000$118,000 average income$28 Billion annual income
45Chief executives200,000$213,000 average income$43 Billion annual income
49Financial managers681,000$155,000 average income$106 Billion annual income
50Financial analysts
(including investment analysts, personal financial advisers, insurance underwriters, financial risk specialists, etc)		717,000$106,000 average income$76 Billion annual income
51Loan officers340,000$81,000 average income$28 Billion annual income
52Compliance officers334,000$76,000 average income$25 Billion annual income
53Management analysts

(the largest category of management analysts are consultants)		768,000$93,000 median income

$101,000 average income		$78 Billion annual income
54HR specialists741,000$71,000 average income$53 Billion annual income
55Accountants and auditors1.32 Million$84,000 average income$110 Billion annual income
56Bookkeeping, accounting, and auditing clerks1.5 Million$45,000 average income$67.5 Billion annual income
57Insurance sales agents423,000$69,000 average income$29 Billion annual income
58Lawyers in the U.S.1.328 Million$127,000 median income

$154,000 average income		$205 Billion annual income
59Paralegals and legal assistants336,000$58,000 average income$19 Billion annual income
60Software engineers, developers, and programmers in the U.S.4.4 Million$110,000 median income$484 Billion annual income
61Computer user support specialists654,000$58,000 average income$38 Billion annual income
62Network and computer systems administrators317,000$91,000 average income$29 Billion annual income
63Actuaries, mathematicians, statisticians, operations research analysts, and data scientists265,000$104,000 average income$28 Billion annual income
64Construction companies

(There are at least as many construction company owners)		730,600$3.28 Million average revenue$2.4 Trillion revenue
65Residential property remodeling companies

(There are at least as many residential property remodeling company owners)		114,500$157,000 average annual payroll

(note: this is payroll not revenue)		$18 Billion annual payroll

(note: this is payroll not revenue)
66Employees of residential remodeling companies388,000$46,400 average W2 income from residential remodeling work$18 Billion annual income

(JUST from remodeling work W2s, not including any other income)
67Electrical and wiring installation contractor companies

(There are at least as many owners of such companies)		74,650$66,000 average annual payroll


(note: this is payroll not revenue)		$59.3 Billion annual payroll

(note: this is payroll not revenue)
68Plumbing, heating, and AC contractor companies

(There are at least as many owners of such companies)		101,400$63,000 average annual payroll

(note: this is payroll not revenue)		$69 Billion annual payroll

(note: this is payroll not revenue)
69Manufacturing businesses

(There are at least as many owners of such companies)		243,000$9.5 Million average revenue$2.3 Trillion annual revenue
70U.S. small business owners32.5 Million$66,000 average income$2.145 Trillion annual income
71U.S. small businesses that are at least 51% owned by one or more women

(There are at least as many female owners of such businesses)		11.5 Million$66,000 average income$759 Billion annual income
72Owners of U.S. small businesses run from home16 Million$66,000 average income$1.056 Trillion annual income
73Businesses with at least one employee (not counting self-employed individuals)

(There are at least as many owners of such businesses)		6.1 Million$1.24 Million average payroll expense

(note: this is payroll not revenue or income)		$7.43 Trillion annual payroll

(note: this is payroll not revenue)
74Wall Street Journal total subscribers (total, not just U.S.)3.6 Million$1,633,000 average household net worth of WSJ reader$5.9 Trillion total net worth

(note: net worth, not revenue)
75Wall Street Journal digital subscribers (total, not just U.S.)2.9 Million$1,633,000 average household net worth of WSJ reader$4.7 Trillion total net worth
76Morning Brew total subscribers (total, not just U.S.)Over 4 Million$100k+ median income$400+ Billion total income
77Active duty U.S. military personnel1.2 Million$63,000 median income$76 Billion annual income
78U.S. military reservists778,000––
79U.S. military veterans18 Million$66,000 median income$1.2 Trillion annual income
80Social workers in the U.S.677,000$58,000 average income$39 Billion annual income
81Life, Physical, and Social Scientists (in roles as such) in the U.S.1.274 Million$81,000 average income$103 Billion annual income
82Life scientists305,000$93,000 average income$28 Billion annual income
83Environmental scientists & geoscientists107,000$87,000 average income$10 Billion annual income
84Industrial engineers294,000$95,000 average income$28 Billion annual income
85Aerospace engineers57,000$123,000 average income$7 Billion annual income
86Architects (excluding naval & landscape architects)100,000$92,000 average income$9 Billion annual income
87Civil engineers304,000$95,000 average income$29 Billion annual income
88Mechanical engineers278,000$97,000 average income$27 Billion annual income
89Assembly & fabrication workers1.8 Million$39,000 average income$70 Billion annual income
90Machinists333,000$49,000 average income$16 Billion annual income
91Welding, soldering, and brazing workers428,000$48,000 average income$21 Billion annual income
92Public relations specialists243,000$73,000 average income$18 Billion annual income
93Writers & editors186,000$79,000 average income$15 Billion annual income
94Aircraft pilots & flight engineers124,000$170,000 average income$21 Billion annual income
95Flight attendants97,000$62,000 average income$6 Billion annual income
96Heavy and semi truck drivers1.9 Million$50,000 average income$95 Billion annual income
97Commercial light truck & van drivers1 Million$43,000 average income$43 Billion annual income
98Industrial truck and tractor operators758,000$41,000 average income$31 Billion annual income
99Passenger vehicle drivers
(includes bus & shuttle drivers, taxi drivers, etc)		697,000$40,000 average income$28 Billion annual income
100Railroad workers
(not including train engineers or operators)		119,000$68,000 average income$8 Billion annual income
101Firefighters317,000$55,000 average income$17 Billion annual income
102Detectives and criminal investigators108,000$90,000 average income$10 Billion annual income
103Police officers669,000$71,000 average income$47 Billion annual income
104Security guards1.057 Million$36,000 average income$36 Billion annual income
105Building cleaning workers (janitors, maids, etc)2.78 Million$31,000 average income$86 Billion annual income
106Landscaping & groundskeeping workers892,000$35,000 average income$31 Billion annual income
107First-line supervisors of sales workers (total)1.387 Million$55,000 average income$76 Billion annual income
108First-line supervisors of retail sales workers1.143 Million$47,000 average income$54 Billion annual income
109First-line supervisors of non-retail sales workers244,000$92,000 average income$22 Billion annual income
110Securities, commodities, and other financial services sales agents427,000$93,000 average income$40 Billion annual income
111Wholesale & manufacturing sales reps for technical & scientific products266,000$103,000 average income$27 Billion annual income
112Wholesale & manufacturing sales reps (total)1.51 Million$78,000 average income$118 Billion annual income
113Customer service representatives2.8 Million$39,000 average income$109 Billion annual income
114Postal service workers527,000$53,000 average income$28 Billion annual income
115Shipping, receiving, and inventory clerks795,000$38,000 average income$30 Billion annual income
116Secretaries and administrative assistants3.1 Million$45,000 average income$140 Billion annual income
117Executive secretaries and assistants467,000$67,000 average income$31 Billion annual income
118First-line supervisors of construction trades and extraction workers666,000$75,000 average income$50 Billion annual income
119Construction trades workers4.4 Million$54,000 average income$330 Billion annual income
120Electricians651,000$64,000 average income$42 Billion annual income
121Plumbers, pipelayers, pipefitters, and steamfitters451,000$62,000 average income$28 Billion annual income
122Automotive technicians and repairers783,000$48,000 average income$38 Billion annual income
123Android users120 Million––
124iPhone users121 Million––
125Voters registered with the Libertarian Party720,000––
126Hair, nail, and skin care service business owners101,000$52,000 median income$5.3 Billion annual income
127Child day care business owners61,000––
128Exam prep & tutoring business owners8600––
129Landscaping business owners105,000––
130Janitorial service business owners58,000––
131Veterinary business owners28,000––
132Custom software development business owners61,000––
133Engineering service company owners>50,000––
134Accounting, tax prep, bookkeeping, and payroll service company owners>115,000––
135Insurance agency & brokerage business owners>120,000––
136Finance & insurance (entire industry) small to medium business owners>220,000––
137Owners of investment-related businesses excluding brokers, dealers, exchanges, commercial banks, and investment banks

(e.g. financial advisors, trust administration, and custody service businesses)		55,000––
138Brewery owners>4000––
139Law firm owners>161,000––
140Adult residents of Florida17 Million$63,000 median household (not individual) income

$90,000 average household income		$767 Billion annual household income
141Adult residents of Texas21 Million$67,000 median household (not individual) income

$94,000 average household income		$1.0 Trillion annual household income
142Adult residents of Washington state5.9 Million$84,000 median household (not individual) income

$116,000 average household income		$352 Billion annual household income
143Adult residents of California29.5 Million$85,000 median household (not individual) income

$121,000 average household income		$1.6 Trillion annual household income
144Adult residents of Oregon3.3 Million$72,000 median household (not individual) income

$96,000 average household income		$163 Billion annual household income
145Adult residents of NYC (the 5 boroughs)5.5 Million$71,000 median household (not individual) income

$108,000 average household income		$352 Billion annual household income
146Adult residents of Miami-Dade County, FL2.1 Million$59,000 median household (not individual) income

$89,000 average household income		$85 Billion annual household income
147Adult residents of Harris County, FL (~Houston)3.4 Million$64,000 median household (not individual) income

$95,000 average household income		$165 Billion annual household income
148Adult residents of Los Angeles County, CA7.5 Million$77,000 median household (not individual) income

$109,000 average household income		$369 Billion annual household income
149Adult residents of Cook County, IL (~Chicago)4.0 Million$72,000 median household (not individual) income

$104,000 average household income		$215 Billion annual household income
150Adult residents of Maricopa County, AZ (~Phoenix)3.4 Million$76,000 median household (not individual) income

$103,000 average household income		$177 Billion annual household income
151Adult men with who always keep a full beard42 Million––
152Adult men who report that their inability to grow a beard makes them feel less masculine30 Million––
153Individual millionaires22 Million>$1,000,000 net worth>$22 Trillion total net worth
154Individual millionaires in California9.5 Million>$1,000,000 net worth>$9.5 Trillion total net worth
155Individuals with a net worth of at least $5 million3.5 Million>$5,000,000 net worth>$17.5 Trillion total net worth
156Individuals with a net worth of at least $50 million95,000>$50,000,000 net worth>$4.8 Trillion total net worth

NOTE: Much (but not all) of the data above is derived from Census, IRS, BLS, and other government data sets. However, sometimes government data sources conflict, and other times no government sources were available and various private data sources were used. Interpret the data provided above as the output of “napkin math” calculations which can go a long way towards putting you on the right path but shouldn’t be taken as exact.

Still having difficulty picking a niche? Find inspiration from these niche business & website examples:

What is the legal meaning of “in consideration of the foregoing”?

Written by Ricky Nave in Law

Many contracts contain the phrase “in consideration of the foregoing”, but what does that phrase mean?

The word “foregoing” means whatever was just mentioned or stated.

The phrase “in consideration of the foregoing” means “in return for whatever was just mentioned”. For example, a contract that says “Bob will give Amy his piano, and in consideration of the foregoing, Amy will pay Bob $50” means the same thing as “Bob will give Amy his piano, and in return, Amy will pay Bob $50.”

Let’s look at an example paragraph taken from a real contract:

“In consideration of the foregoing and during the life of this agreement, the Hospital agrees not to lock out or cause to be locked out any employee covered by this Agreement.”

– Page 10 of St. Mary’s Hospital’s union contract

The two “foregoing” paragraphs of the quoted paragraph (i.e. the two paragraphs which came directly before the quoted paragraph) were written promises that the Union would not strike or boycott the Hospital. So the meaning of the quoted paragraph can be rephrased as:

“In return for the Union promising not to strike or boycott the Hospital, the Hospital promises not to lock out any Union employees.”

Can the phrase “in consideration of the foregoing” be ignored?

Yes, the phrase “in consideration of the foregoing” can essentially be ignored when you are reading a contract because it does not add or modify any obligations for either party. Think about it by comparing two example contracts:

Contract 1:

“Bob will give Amy his piano.

Amy will pay Bob $50.”

Contract 2:

“Bob will give Amy his piano.

In consideration of the foregoing, Amy will pay Bob $50.”

The two contracts have the same meaning. It is implicit that as long as benefits are prescribed for both parties in the contract, then each party’s benefits are each “in consideration of” the some or all of the other’s.

What is the legal meaning of “subject to the foregoing” in a sentence?

“Subject to the foregoing” is another phrase which is common in contracts.

The phrase “subject to the foregoing” means that the statement which comes after it is dependent upon, superseded by, or otherwise subject to the statement(s) that came before it.

More specifically, if we have:

Statement A.

Subject to the foregoing, Statement B.

Then that means Statement B is only valid if the conditions of Statement A are met, or that the rules of Statement A should supersede any conflicting rules specified in Statement B. I know that sounds abstract, so let’s take a look at an example:

“The property will be transferred in the name of the purchaser, only after the sale deed has been executed and the full amount paid.

Subject to the foregoing, the sale can be executed.”

In that example, the statement “the sale can be executed” must be interpreted as conditional: the sale can only be executed if first the full amount is paid and then the property is transferred in the name of the purchaser.

Let’s look at another example:

“The Partnership will employ or offer employment to all employees of Exchange International (a division of AT&T’s Cable Business) that were hired pursuant to the Sale Agreement.

Subject to the foregoing, the Partnership may, but shall have no obligation to employ or offer employment to all employees of AT&T’s Cable Business.”

At first glance, the second paragraph appears to say that the Partnership may choose to not offer employment to any employee of AT&T’s Cable Business. However, since the second paragraph is “subject to the foregoing” (i.e. subject to the preceding paragraph in this case), we see that the Partnership must still at minimum offer employment to any employees of AT&T’s Cable Business who work in the Exchange International division.

NOTE: Unlike the phrase “in consideration of the foregoing”, the phrase “subject to foregoing” CANNOT be ignored when reading a contract because it materially changes the meaning of whatever statement follows it.

What is the legal meaning of “notwithstanding the foregoing” in a sentence?

The phrase “notwithstanding the foregoing” is probably the most confusing “foregoing” phrase that is commonly found in contracts.

The phrase “notwithstanding the foregoing” means that whatever immediately follows is enforceable “despite” or “in spite of” whatever came before. In essence, whatever comes after “notwithstanding the foregoing” trumps whatever came before that phrase.

Let’s take a look at an example excerpt from a real contract:

“This Trust Agreement may be amended by a written instrument executed by the Trustee and the Company. Notwithstanding the foregoing, no such amendment shall conflict with the terms of the Plans or shall make the Trust revocable after it has become irrevocable in accordance with Section 1.2 hereof.”

The meaning of the excerpt is that mutually agreed upon written amendments to the Trust Agreement are allowed ONLY IF they do not conflict with the terms of the Plans and do not make the Trust revocable after it has become irrevocable.

When should you use “the foregoing” provisions in a contract?

It’s actually not a good idea to use the phrase “the foregoing” when drafting contract provisions because it is an ambiguous reference. For instance, in our earlier example from the St. Mary’s Hospital union contract, I said that “the foregoing” referred to the two preceding paragraphs about unions being prohibited from striking or boycotting. But how do I know that “the foregoing” referred to the previous 2 paragraphs instead of the previous 1 or 3 paragraphs?

The answer is that I had to use my human judgement to determine how far back “the foregoing” referred to. Unfortunately, human judgement isn’t always the same from one human to the next, which is why people go to court.

To avoid costly litigation, simply number your paragraphs and then use phrases like “in consideration of section 6.2” or “subject to section 3.01” instead of “in consideration of the foregoing” or “subject to the foregoing”. Or if “the foregoing” refers to just the last sentence, then say “the last sentence” instead.

How much should you pay for a financial advisor?

Written by Ricky Nave in Individual Finance

A personal financial advisor is someone who will help you manage your personal finances.

In general, the cost of hiring a financial advisor is either an hourly cost of $100-500 per hour or a yearly cost of 0.5-2.0% of the total money they manage for you. For example, if you have $100,000 in your brokerage account, a financial advisor might charge you $1,000 per year (1% of $100,000).

However, there is a HUGE variation in exactly what a financial advisor will help you with (e.g. simple budgeting advice? investment recommendations? tax planning? estate planning?). There is also a HUGE variation in quality of advisors. That means there is also a HUGE variation in the cost of hiring a financial advisor.

The Different Types of Financial Advisors

On one end of the spectrum, you have “financial coaches” who may charge $100/hour to teach you about general personal finance topics such as what percentage of your income you should spend on rent, what percentage of your income you should save or invest, how much money you should have saved in a bank account before you start putting money into the stock market, how to create a budget, etc. These coaches are mostly not worth paying for.

On the other end of the spectrum, you have “wealth managers” who typically work with a team of experts to serve wealthy clients with a complete package of services that includes:

  • Advising you on what stocks, bonds, and other assets to invest in, and possibly making some of those decisions for you so that you don’t even have to think about them
  • Helping you plan which types of retirement accounts to use and how to best use them
  • Helping you plan & implement business and investment strategies to minimize your tax bill
  • Preparing & filing your taxes and estimated taxes
  • Helping you identify and buy the types and amounts of insurance you need (e.g. medical insurance, car insurance, home insurance, real estate umbrella insurance, etc)
  • Helping you find synergies between managing your money and using your money (e.g. if you want to give some money to charity and you also want to pay as little tax as possible, then you might time certain charitable donations to offset taxable income as much as possible)
  • Helping you with estate planning (e.g. creating a will, creating trusts, strategicially starting to give some money to your kids each year before you die, etc)
  • Helping you retain good lawyers and manage any lawsuits against you
  • Helping you build credit and find low interest rate loans when needed

In general, financial advisors offer one or more of the following core services:

  • Investment advice (i.e. recommending what stocks, ETFs, bonds, etc to invest in, and possibly making those investments directly on your behalf)
  • Tax preparation & filing
  • Tax planning (e.g. helping you get a loan against your stock portfolio so that you can access money tax-free instead of selling a portion of your stock portfolio which would incur capital gains taxes)
  • Retirement planning (e.g. helping you decide which retirement account types to use, how to use them to get the maximum tax benefit, how much of your income to invest each year to retire by the age you want, etc)
  • Estate planning (e.g. helping you create wills and trusts, helping you plan how to minimize the taxes on your inheritors after you die, etc)
  • Elder care planning (i.e. planning where and how you or a loved one will live once you or they reach an age where help is needed to perform daily living tasks)
  • Budgeting assistance (e.g. helping you create and stick to a budget)
  • Debt management (e.g. helping you get the best terms possible on any loans you take out, helping you develop a plan to pay off any undesired debts, helping you strategize about whether or not taking on new debt is a good idea, etc)
  • Insurance management (e.g. helping you decide what types and amounts of insurance to buy for all aspects of your life and investment portfolio)
  • School & college planning (e.g. helping you find, save for, and get your kids into good private schools and universities)

The Hidden Fees of (Some) Financial Advisors

The core service of most financial advisors is managing your investments. If you see a financial advisor quote that they charge 1% of assets each year, that most likely refers to their price for investment management. Sometimes there will be other services included in that price too. However, sometimes there are hidden yet fees that you will also incur. Some of the most common hidden fees include:

  • Fund management fees for the ETFs, mutual funds, hedge funds, private equity funds, or individually managed accounts that the financial advisor chooses to buy on your behalf
  • CPA fees for tax preparation & filing
  • Broker-dealer transaction fees on some or all of the trades that the financial advisor executes on your behalf
  • Commissions that are charged on insurance or mutual fund products that you buy on advice of the financial advisor or that the advisor simply buys on your behalf
  • Miscellaneous administrative expenses incurred by the financial advisor in order to manage your investments

It’s a good idea to ask a financial advisor about any such hidden fees before you sign a contract to hire them.

The Costs of Different Financial Advisors

Below are several examples of the prices and services offered by real financial advisory companies.

CompanyAdvice TypeServicesPricing
Edward JonesSeparately Managed Allocation (SMA)Active investment management of whatever money is in the account [Minimum of $25,000]

(i.e. they invest your money for “growth” or “income” without requiring you to make decisions about particular trades)		0.20% to 0.40% depending on the particular SMA investment strategy

+ brokerage fees for any transactions executed by a non Edward Jones broker-dealer

+ ETF and Mutual Fund fees for any ETFs and Mutual Funds held by the account
Edward JonesUnified Managed Account (UMA)Portfolio level active investment management [Minimum portfolio value of $300k to $500k]

(i.e. they keep your investments balanced between different SMAs, mutual funds, and ETFs)		“Sum of Program + Portfolio Strategy Fees “
– 1.54% on first $250k of assets
– 1.49% on next $250k
– 1.43% on next $500k
– 1.17% on next $1.5M
– 0.92% on next $2.5M
– 0.69% on next $5M
– 0.59% on assets over $10M

+ SMA, ETF, and Mutual Fund fees for any SMAs, ETFs, and Mutual Funds that are part of the UMA portfolio

+ brokerage fees for any transactions executed by a non Edward Jones broker-dealer
VanguardPersonal Advisor ServicesActive investment management of any accounts (e.g. normal brokerage accounts or IRAs) that you choose [Minimum of $50,000 total]

(i.e. they invest your money for “growth” or “income” without talking to you about particular trades)		Advisory fee
– 0.30% on first $5M of assets
– 0.20% on next $5M
– 0.10% on next $15M
– 0.05% on assets over $25M

+ Possible transaction, fund management & account-establishment fees
Facet Wealthn/a– 4 meetings per year for you to ask an advisor questions about marriage, children, divorce, healthcare, inheritance, buying a home, elder care planning, employee stock option plans, career changes, the stock market, tax law changes, tax planning, charitable giving, social security, and/or retirement

– Digital dashboard of financial planning tools

– Active investment management of non-retirement brokerage accounts, Roth, traditional, SEP, rollover, and SIMPLE IRAs, solo 401(k)s, and trusts

– Specific investment recommendations for investment accounts Facet does not manage directly (such as 401(k)s and other workplace retirement plans and stock option plans)		Advertises a “flat fee”, but the flat fee actually changes according to an opaque internal pricing system.

Fees start at $2,000/year and go up from there