Float vs. outstanding shares

Q. Is a company’s “float” the same as its outstanding shares? — R.T., Erie, Colorado

A.

Not quite. The float, or floating stock, refers to just those shares that are available in the open market — not those held by insiders and controlling investors.

A company’s outstanding shares are all of those now owned by investors and others, such as company executives. (Any shares held in the company’s treasury, such as ones that have been repurchased, are not counted.) Many outstanding shares are traded frequently between buyers and sellers on the open market. Others may be held by insiders or others who don’t plan to sell anytime soon.

Outstanding shares figure in many calculations, such as earnings per share and market capitalization.

Note that a company may report both basic and diluted shares as outstanding. The “diluted” figure includes securities that could become shares, such as stock options, warrants and more, but that’s an area that gets complicated fast.

Q. I bought shares of a company a few years ago for around $90 each. They’re now trading below $10 per share. I don’t want to sell them for such a big loss, but I’m not sure what to do. Help? — D.L., Baton Rouge, Louisiana

A.

Look forward, not backward. Don’t focus on the difference between the price you bought at and the current price. Instead, compare the current price to what you think the stock is really worth. If it seems worth more due to your expectations of growth, consider hanging on. If you think the current price is fair or generous, sell. Remember that you can always try to make up what you lost in another, more promising stock.

Small sums can add up

We often underestimate how much money we could save — and put toward paying off debts or investing for college or retirement — by just cutting out some fairly small, regular expenses.

Sure, skipping one fancy coffee drink might save you only $5. But if you love your lattes and have one every weekday, forgoing them would save you around $25 — per week. Over the course of a year, that’s $1,300. Depriving yourself of things you love isn’t a great way to live, though, so maybe only skip every other one, for more than $600 in savings.

Similarly, if you have a lot of meals delivered each week, consider cutting back. Let’s say that delivery costs you $50 more each time than eating in, on average, and that you order three meals per week.

Reduce that to twice a week, and you’ll save $50 times 52, or $2,600. Another option is to go pick up the food and save $20 on delivery tips and fees each time.

Then there’s smoking, which has gotten very expensive, with packs costing between around $6 and $12 apiece, depending on where you live. If you smoke a $9 pack a day, that’s $3,285 per year. Imagine not spending that for the next decade: You’d keep more than $30,000 in your pocket.

Each of us has different things we might save money on. Take some time to track where your dollars go. Scrutinize your credit card and bank statements, and list every regular expense. Then see which ones you could most easily do without or at least cut back on.

You might even discover some regular expenses you didn’t realize you’re still paying — such as a $35-per-month membership for a gym you don’t use. Ending that expense would save $420 per year.

Changing other habits can save a lot of money, too. For example, instead of going out frequently with friends or your partner, try some game nights at home. A little exploration and a lot of determination might save you $1,000 or more annually.