Week's Winners and Losers: Troubles at Home and in the Cloud

September 5, 2014, 7:16 am

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Filed under: Company News, Earnings, Market News, Industry News, Investing

The Home Depot store exterior outside building — **Cassandra Hubbart/AOL**

There were plenty of winners and losers this week, with a mattress retailer making another shrewd acquisition and a luxury real estate developer posting a surprising slide in orders for new homes. Here's a rundown of the week's smartest moves and biggest blunders.

Toll Brothers (TOL) -- Loser

Homebuilder stocks took a step back after Toll Brothers reported quarterly results. It was a strong showing on both ends of the income statement. Revenue soared 53 percent on rising home prices and a 36 percent spike in delivered properties. Profitability more than doubled. However, the market was spooked by a surprising year-over-year decline in the number of contracts the homebuilder signed during the quarter.

Toll Brothers builds luxury homes: the average price of a home contracted in its latest quarter was $717,000. It also didn't help that the cancellation rate moved higher during the quarter. Weakness at Toll may not necessarily doom the rest of the industry. Home shoppers may simply be experiencing sticker shock at Toll's developments. However, slowing orders translates into weaker deliveries in the future.

Mattress Firm (MFRM) -- Winner

Shares of Mattress Firm moved 10 percent higher on Thursday after the company announced that it will be acquiring a smaller California chain in a $425 million deal. The move will add 310 Sleep Train stores to Mattress Firm's growing empire of specialty mattress retail outlets. Sector consolidation has been a big part of Mattress Firm's success since going public a few years ago. It's a retailing niche that's highly fragmented, making it easy for Mattress Firm to use cash and stock to scoop up regional faves.

The best thing about the deal is that it will be accretive to earnings. Mattress Firm expects the deal to pad earnings per share in the first full year after closing, and that's something you don't see in too many acquisitions.

Home Depot (HD) -- Loser

Customers shopping for new lighting fixtures or cans of paint at Home Depot may have gotten more than they bargained for this summer. Cybersecurity tracker Krebs on Security has reported that several banks were singling out the home improvement retailer as the source of a "massive" data breach of customer credit and debit card information. The report suggests that the breach was executed by the same Russian and Ukrainian hackers responsible for the data theft that soured Target's (TGT) holiday shopping season last year.

Home Depot's CEO said on Thursday that the store is still investigating the situation, promising that customers won't be liable for any fraudulent charges. It's the right thing to say, but anyone who has ever had their ID swiped knows that it's not just about the charges. Target still hasn't bounced back in terms of traffic since December's breach. Home Depot will need to make sure that customers can trust the superstore chain again.

Nevada -- Winner

Tesla Motors (TSLA) is tapping Nevada as the home of its new Gigafactory that will build batteries that can propel as many as 500,000 electric vehicles a year. Several states were vying for the plant, hoping to land the industrial jobs that are often in short supply.

It remains to be seen if Tesla will be able to make the most of the eventual plant's capacity. It's selling fewer than 3,000 cars a month at the moment, but a new model should boost its annual production closer to 100,000 a year by the end of 2015. Plug-in electric cars haven't been an easy sell for most automakers, but Tesla's been the blazing market darling. It's a good catch for Nevada.

iCloud -- Loser

The week kicked off with buzz over the weekend about nude celebrity snapshots leaked online. It seems as if the Apple (AAPL) iCloud accounts of stars including Jennifer Lawrence and Kate Upton were hacked, and they had taken some revealing shots that quickly spread online.

Apple responded on Tuesday, claiming that iCloud's security wasn't breached: It was the passwords of individual accounts that were successfully deciphered by hackers in a targeted attack. That may exonerate Apple, but it still sets back the cloud storage movement, especially since Apple prefers to have iPhone users save any snapshots they take to iCloud.

Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Apple, Home Depot and Tesla Motors. The Motley Fool owns shares of Apple and Tesla Motors. Try any of our Foolish newsletter services free for 30 days. For some winning dividend stock ideas, check out our free report.

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Work Begins on Massive Solar Power Plant in Nevada

September 5, 2014, 9:37 am

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Filed under: Energy, Green, This Built America

LAS VEGAS -- Construction has begun on a $1 billion solar power generating station in the Mohave Desert that officials say will produce enough electricity to power about 80,000 California homes when it is completed in 2016.

The 250-megawatt project, dubbed Silver State South, will capture solar energy with panels spread across almost 4 square miles of federal land south of Las Vegas, according to a fact sheet obtained Friday from a First Solar (FSLR) representative.

Executives with Arizona-based First Solar and Florida-based NextEra Energy Resources (NEE) put the cost of the project at $1 billion during a Wednesday ceremony with federal Bureau of Land Management chief Neil Kornze at the site off Interstate 15 near the Nevada-California state line.

Kornze said in a statement Friday that since 2009, the BLM has approved more than 50 renewable energy projects around the country.

"The Silver State South Solar Project is another step forward in using clean and abundant energy resources to make energy and create good-paying jobs," he said.

When completed, it would be the same size as the largest solar project in the state, a 250-megawatt plant that First Solar is building on Moapa Paiute tribal land along I-15 north of Las Vegas. That project broke ground in March.

First Solar is building the Silver State South array adjacent to a 25-megawatt Silver State North project the company completed in 2012 on almost 1 square mile of federal land near Primm.

A subsidiary of NextEra will own both plants.

Silver State North was the nation's first large-scale solar power plant built on public land. It sells power to NV Energy for use in the Las Vegas area.

Silver State South will provide power to Southern California Edison under a long-term contract.

"Renewable energy sources such as solar power play an important role in the future energy mix in this country," Armando Pimentel, NextEra president and CEO, said in a statement. "We look forward to working with First Solar and Southern California Edison to make this project a reality."

Several more solar power projects have been proposed in southern Nevada, where arrays are also under construction in the Eldorado Valley south of Boulder City and outside the Nye County seat of Tonopah.

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Market Wrap: S&P 500 Hits Record on Dividend Stocks, Ukraine

September 5, 2014, 10:01 am

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Filed under: Market News, Unemployment Rate, Job Market

Stocks Trade Higher, Pushing Dow Up — **Andrew Burton/Getty Images**

By STEVE ROTHWELL

NEW YORK -- A surge in dividend-rich utility stocks helped push the Standard & Poor's 500 index (^GPSC) to a record Friday.

Investors bought up the stocks after the government reported that U.S. employers added fewer jobs than forecast for August. That boosted demand for bonds and pushed down their yields. In turn, stocks with big dividends became more attractive to investors seeking income-paying securities.

The stock market also got a lift from a cease-fire agreement between Ukraine and Russian-backed separatists, aimed at bringing an end to nearly five months of fighting. Stocks had slumped at the beginning of August amid worries that the conflict in Ukraine would spiral out of control and inflame tensions between Russia and the West.

"That development is a positive," said Jerry Braakman, chief investment officer of First American Trust. "Further sanctions on Russia, and excluding them from the Western economies, sets global trade back."

The S&P 500 index rose 10.06 points to 2,007.7, surpassing its previous record close of 2,003.37, set Aug. 29. The index has now logged 33 all-time highs this year.

The Dow Jones industrial average (^DJI) gained 67.78 points, or 0.4 percent, to 17,137.36. The Nasdaq composite (^IXIC) gained 20.61 points, or 0.5 percent, to 4,582.90.

Stocks had started the day lower after a disappointing jobs report.

U.S. employers added 142,000 jobs in August, snapping a six-month streak of hiring above 200,000 and posting the smallest gain in eight months, the Labor Department said Friday. The unemployment rate fell to 6.1 percent from 6.2 percent, falling because more people without jobs stopped looking for one and were no longer counted as unemployed. Economists had expected employers to add 220,000 jobs.

Many analysts reasoned that, while the report was disappointing, the slowdown in the pace of hiring was not strong enough to suggest that the overall trend had changed. Friday's news was also at odds with reports earlier this week that showed the economy is still strengthening. Construction and the service industry, for example, were strong.

"I would avoid reading too much into one number," said Russ Koesterich, chief investment strategist at BlackRock. "This is an outlier.... the weight of evidence suggests that the U.S. is going to have a decent third quarter and will be relatively strong going into the end of the year."

Bond prices initially rose on the disappointing hiring news. The yield on the 10-year Treasury note, which moves in the opposite direction of price, dropped as low as 2.41 percent, before gradually giving up most of its gains throughout the day and edging up to 2.46 percent from 2.45 percent on Thursday. The yield has slumped from 3 percent at the start of this year.

The early drop in bond yields boosted demand for utility stocks. The lower bond yields are, the more attractive dividend-rich utilities appear to investors who are looking for an income. The slump in bond yields this year has helped make the utilities sector the second-best performer in the S&P 500 index, with a gain of 14 percent.

Among individual stocks making big moves Friday, Vertex Pharmaceuticals (VRTX) was the biggest gainer in the S&P 500 index.

The drugmaker's stock rose $3.49, or 3.8 percent, to $95.04 after analysts at Goldman Sachs raised their rating on the stock to "buy" from "neutral," citing the outlook for the company's cystic fibrosis treatment.

Michael Kors (KORS) was the biggest decliner in the index.

The clothing retailer fell $3.58, or 4.5 percent, to $76.39 after Sportswear Holdings, one of its principal founding stockholders, said it was selling its remaining shares in the luxury retailer. Sportswear Holdings had a 5.7 percent stake in the company.

In currency trading, the euro rebounded from a slump on Thursday, when the European Central Bank surprised markets by cutting interest rates and announcing a new stimulus program. Europe's single currency rose 0.1 percent to $1.2952 Friday. The dollar was at 105.07 yen after rising as high as 105.71 yen, the highest level since October 2008.

The price of oil fell further after slumping Thursday, when a report showed that U.S. crude supplies fell less than expected. Benchmark crude oil closed down $1.16, or 1.2 percent, to $93.29 a barrel in New York after falling $1.09 on Thursday. In other energy trading on the New York Mercantile Exchange wholesale gasoline dropped 1.7 cents to $2.583 a gallon, heating oil lost 1.7 cents to $2.819 a gallon and natural gas fell 2.6 cents to $3.793 per 1,000 cubic feet.

Most metals rose. Gold closed up 80 cents, or 0.1 percent, at $1,267.30 an ounce. Silver edged up 1.8 cents, or 0.1 percent, to $19.16 an ounce. Copper prices also gained, climbing to 1.8 cents, or 0.6 percent, to $3.17 per pound.

What to Watch Monday:

The Federal Reserve releases consumer credit data for July at 3 p.m. Eastern time.

These major companies are scheduled to release quarterly financial statements:

Campbell Soup (CPB)
Korn/Ferry International (KFY)

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23 Ways to Beautify Your Home for $50 or Less

September 5, 2014, 11:00 pm

≫ Next: When the Going Gets Tough, We Splurge on Little Things

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Filed under: Home & Garden

overhead view of woman painting new apartment standing on wooden floor — **Warren Goldswain/Shutterstock**

By Marilyn Lewis

Are you dreaming of improving your home, but you don't have the budget to do big remodeling? If so, there's still plenty you can do to scratch the home-improvement itch.

1. Declutter

Decluttering is deeply satisfying. It can make your home feel new and different -- and roomier. But it requires so many tough decisions: What stays? What goes? And what about all the stuff you don't use but can't get rid of?

Maryalene LaPonsie of Money Talks News has seven ingenious ways to get going. Here's one that helps you organize as you declutter: Every day find "12 items to donate, 12 items to throw away and 12 items that need to be returned to their proper location."

2. Do a Cheap Facelift

There's no quicker fix than a can of paint. Use it to give new life to dingy wood furniture. Try a new color in your bedroom or bathroom. HGTV has 50 ideas for DIY projects requiring just a single can of paint. Or just paint the ceiling a soft sky blue.

The DIY Network has more ideas plus tips for painting walls and ceilings, advice for painting like a pro, and 11 ideas for using chalkboard paint. If you can't afford to splurge on a can of paint, try these cheap sources for paint:

Find a Habitat for Humanity ReStore near you.
On your local Craigslist, search at the top left of the home page for "paint."
Join a local Freecycle group. The organization has more than 5,000 local groups and millions of members who connect online to recycle all kinds of items. Post your request in the "wanted" area.

3. Update a Bathroom Faucet

"This Old House" says replacing an old faucet with a shiny new one is an easy project that takes about two hours. The site has step-by-step instructions. To find a faucet within a $50 budget, do hunting and price comparisons online. Try searching by price at Overstock.com and Walmart.com (WMT). Or shop at a ReStore or thrift store. Go for a new faucet in the same finish, i.e., oil-rubbed bronze, chrome, satin nickel, as your other bathroom fixtures.

4. Make a Mason Jar Lamp

Mason jar lamps are trendy. A YouTube video by TheSorryGirls takes you step by step through the process of making one. Krylon, the maker of aerosol spray paint, gives instructions for painting Mason Jars for lamps.

If a single-jar lamp isn't enough challenge, and you have plenty of used Mason jars, look for instructions online for making a Mason jar chandelier. Stick to using found materials to keep your costs down.

5. Dress Up an Old Sofa

Give the couch new life by pulling a slipcover over its tired old self. This fall's upholstered furniture has its shirt tucked in, Associated Press says. Slouchy, sloppy slipcovers are out; the newest pieces tend toward trim and tight, but in comfy, soft fabrics.

Slipcovers run as low as $50 at Walmart. If you can't find a fitted slipcover that works on your sofa, don't worry. Done well, a loose fit is timeless. Check Overstock and elsewhere for machine-washable cotton duck covers in many colors for about $50.

With any remaining cash, jazz up your new couch by making or buying an accent pillow or two. "Pop culture from the '70s and '80s is showing up in vibrant retro-print pillows, furniture and accents," says AP.

6. Tackle Carpet Stains

Take a Saturday morning and give your carpets some TLC. Martha Stewart tells how to do it at virtually no cost.

For carpets stained beyond your powers of restoration, consider using a professional carpet cleaning service. Have only the most heavily trafficked room done if you need to keep costs below $50. Did you know that, as Oprah.com says, "Some manufacturers will void the warranty if you can't prove that you've had your carpets professionally cleaned every year?"

Angie's List explains how professional carpet cleaning services price their work (some charge by square foot, others charge by the room). In 2013, Angie's List members "reported paying an average of $45.68 per room with a general range of $43.18 to $48.18."

7. Make a Faux Tile Kitchen Backsplash

This is more than a simple painting job. A painted kitchen backsplash mimics the contemporary look of narrow horizontal stone and glass tiles. The project requires a lot of preparatory taping. But, judging from instructions and photos at the Sawdust & Embryos blog, it is worth the effort.

8. Reupholster an Ottoman

Grab a staple gun and a simple piece of furniture, like an ottoman, and give it new life. Brooke Ulrich, DIY blogger at All Things Thrifty, shows how to tackle reupholstery. Removing old fabric is one of the hardest parts of the job, and she offers plenty of additional tips and tricks.

Shop for fabric and a piece of furniture with simple lines at the ReStore, a thrift shop, Craigslist or Freecycle. Or search online for "fabric outlet" and "discount upholstery fabric." Another source: Jo-ann Fabric's frequent sales, discounts and coupons allow for big savings. Shoppers who sign up at the site get more discounts. Find a Jo-Ann store near you or shop online.

9. Rearrange Bookshelves

"Style" your bookshelves with artistic flair. Better Home & Gardens has inspiration. This is a fun, creative project, so spend some time and enjoy it. Among BHG's tips:

Treat each shelf as a display, and then stand back and make sure all shelves work well together.
Position some items off-center on a shelf.
Place some books in horizontal stacks and use the stacks as bookends for books shelved vertically.
For a designer look, cover the inside of a bookcase with fabric or wallpaper.
Don't pack treasures and collections on every shelf.
Pieces of pottery make nice, solid bookends.
Stack a pyramid of books and put one of your favorite objects atop the stack.
Use bookshelves as a gallery for framed photos or art.

10. Upgrade Cabinet Hardware

If your kitchen and bathroom look dated, and you can't replace the cabinets, replacing the cabinet hardware gives rooms a new look. Here are shopping tips:

Remove one handle or drawer pull to see how many screws it uses and how far apart they should be. Your new hardware will need to have this configuration.
Before shopping, take stock of your room's style. To avoid being overwhelmed by all the options, first browse home decorating magazines to identify the look of the hardware you want, for example: pulls or handles? Sleek and modern? Old world? Recycled and eclectic?
When you have a rough idea what to look for, do some price shopping online. Try Ikea, Overstock and local and chain hardware stores. But also do an online search for "cabinet hardware" to see what's available online.

11. Rearrange Furniture

Ask someone whose home styling skills you admire to help you see your home and possessions in a new light. Stay open to change and new ideas.

Last year I asked someone I know to spend an hour with me finding how to make better use of a difficult space in my home. She has a true genius for visualizing space. She spent two or three hours coming up with new configurations for my same old furnishings that somehow made the space roomier, more usable and much more attractive.

12. Brighten the Entry

Follow these three steps to revitalize the look of your home's entry with a little elbow grease and a can of exterior paint:

Start by taking everything off the front porch or deck and scrubbing it from rafters to floorboards.
Clean the front door and give it a new paint job. Consider a stylish color that complements your home's exterior, yet is a little brighter. Your local paint store will have paint chips and ideas. Browse Pinterest or Houzz for color schemes and inspiration.
Replace or repair damaged screens or storm doors. Polish metal doorknobs and fixtures.

13. Install a Front Door Kick Plate

A kick plate is a broad strip of polished metal used horizontally along the bottom edge of a front door to protect it from scratches, kicks and dog paws. Kick plates are decorative as well as functional. Brass is traditionally used, but popular finishes now include antique brass, pewter, antique bronze and black.

Change your old kick plate for a new one or install a kick plate if you haven't used one before. After choosing a metal finish you like, use the same finish on all of your exterior hardware.Handles, door knockers, mail slots and outdoor lamps should match, the San Jose Mercury News says. Note, however, that, just to make life frustrating, one manufacturer's interpretation of brushed nickel or antique bronze often differs from another's.

14. Paint Exterior Shutters and Trim

A fresh coat of paint (or two) on shutters and trim provides a quick, easy shot in the arm for your home's exterior. Paint all the trim or just the window trim. And if you are short on time or materials, repaint only the front-facing trim. It's safest to use a color that's already part of your home's exterior color scheme.

15. Install New Doorknobs

Put attractive new knobs or handles on interior doors and closets. For family members who are aging, arthritic or disabled, make life easier by replacing knobs with easier-to-grasp door levers like these at Home Depot (HD).

16. Make a Headboard

Craft a new headboard for your bed or refurbish your old one. If you scrounge for free and cheap materials, you can do it for less than $50. A few ideas:

Make a new headboard from recycled doors.
Sunset magazine tells how to attach new upholstery fabric to an old headboard.
DIY Network has 15 ideas and photos for upgrading headboards.
Martha Stewart (MSO) tells how to make a padded headboard in nine steps (with video) using a hollow-core door, batting and fabric.

17. Shine a New Light

Lighting plays an important role in home decor. New lights, or even changing the wattage, can change the look and mood of a room.

"After years of work, LED lighting companies have finally achieved their goal of producing a good replacement for the common 60-watt incandescent bulb," says MIT Technology Review's article, "How to Choose an LED Light Bulb." Some bulbs are rated to last 25,000 hours, or up to 25 years, depending on the use.

The article tells how to choose among the various brightness options and select bulbs for shape, function, color and light quality. For the consumer, the main benefits of LED fixtures are clear: They're energy-efficient, can last for more than 20 years and, in many cases, give off good light. The prices have gone down steadily as well, as the LED components have dropped in price and lighting companies introduce better designs.

When investing in new LED bulbs, consider changing the fixture itself, too. Look for used fixtures online, at thrift shops and ReStores.

18. Add Drama with Light

For a fun project that delivers instant drama for less than $50, install flexible LED ribbon lighting atop or under cabinets. For less than $50, you can get, for example, an 8-foot length of Armacost RibbonFlex Pro RGB LED tape light. Armacost has installation instructions and project photos and ideas. Find how-to installation videos at YouTube.

19. Change Light Switch Covers

Here's how to give grimy old light switch covers new life: Toss them out and treat yourself to new ones. For a fun project, cover some of them with decoupage.

20. Add Container Plants

New plants dress up your home's porch and garden and give great curb appeal. You can start plants from seeds in spring or in a greenhouse. In autumn, dig a few of the more vigorous and prolific perennials from your garden or a friend's and install them in pots. Ivy, a pest in gardens, looks terrific trailing down sides of planters, for example. Your local garden store or nursery may have a half-price area from which it sells castoffs. Often, watering and care is all they need.

The Micro Gardener has loads of ideas and photos for garden containers made from furniture, kitchen equipment, bathroom fixtures, toys, baskets, boxes and even clothes and shoes for use as outdoor planters. Check out her vertical garden made from a hanging cloth shoe rack.

21. Install Kitchen Utility Hooks

For a quick kitchen upgrade that you'll enjoy daily, install a wall-mounted row of sturdy utility hooks. Use them for everything from dish towels and potholders to utensils and measuring cups. You might even slip a recipe you're using into a plastic ring-binder sleeve, add a ring clip and hang it for ready access. "This Old House" suggests using polished chrome "double robe" hooks, at $8 to $9 a piece.

22. Install New House Numbers

Change your old house numbers. Find them with an online search, at hardware stores or shop for handmade numbers at Etsy.

23. Give Your Home (and You) a Deep Cleaning

If you're considering spending money on a shrink, first try using Oprah.com's checklist, timeline and instructions for deeply, thoroughly cleaning your home in eight hours. Oprah.com calls it "spring cleaning," but don't let that stop you from doing it now. The psychological benefits of a really clean home are immense, and you'll feel wonderfully virtuous for doing it.

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When the Going Gets Tough, We Splurge on Little Things

September 5, 2014, 11:00 pm

≫ Next: A Penny Saved Is Far Easier Than a Penny Earned

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Filed under: Spending

spa massage — **Subbotina Anna/Shutterstock**

It's easy to think of the economy as one massive entity that either grows or shrinks as a single unit. In reality, things are much more complicated. Many products do sell like crazy when the economy is booming and move slower than molasses in January when times are tight. Still, there are some products that can do better when the economy is soft.

A classic example is the automobile industry. The industry is very cyclical, and during boom times, new cars can practically fly out of dealers' inventories, while during recessions, a new car is a purchase that can be put off. On the flip side, as people keep their cars longer during bad economic times, those cars generally need more maintenance and repairs as they age. That means that companies that sell car parts, like Genuine Parts (GPC), for instance, could do better when times are tough.

Splurging With Everyday Luxuries

As consumers put off buying big-ticket items, they often turn to smaller discretionary purchases instead. During the recent Great Recession, simple luxuries like chocolate, craft beer and even video games did well even as bigger-ticket luxury items like travel suffered. Even today, as we emerge from that economic malaise, spending on affordable luxuries like personal care items was up far faster in July than overall spending.

According to data from the National Retail Federation, consumers generally cut back on discretionary spending this July. Despite that general pullback, spending at health and personal care stores increased. Sales were up in those channels by 0.4 percent vs. June and 7.2 percent vs. last July. Compared to the negative 0.1 percent change vs. June for purchases at electronics stores, the spending at health and personal care stores was substantially stronger.

In reality, electronics, similar to cars, are often large-dollar purchases that can be easily postponed. When the going gets tough, they're often good candidates for people cutting back their spending. On the flip side, personal care goods like and services like massages, spa treatments and pedicures - while still not typically strictly necessary -- can often do well in mild recessions.

There are many economic theories behind why people may spend more on such items when times are tough, but one of the simplest is the "substitution effect." In essence, people are viewing those items as cheaper substitutes for more expensive experience-oriented entertainment.

It can be substantially cheaper, for instance, to drive to a nearby spa for a day of pampering than it is to spend thousands on a traditional vacation to an exotic locale. When all is said and done, though, that cheaper day trip may very well provide nearly as much relaxation and recuperation -- with the added benefit of a smaller post-trip financial hangover.

What Can You Do About It?

If you're feeling financially pinched, it makes a ton of sense to cut back on expenses that aren't absolutely necessary. However, basic levels of entertainment and stress relief remain important. To the extent you can find cheaper ways to recuperate and recharge your own personal batteries when times are tough, it's a great idea.

Simple luxuries like personal care items and services just might be a great way for you to get that entertainment and stress relief for less. Just remember, though, that no matter how you recharge, it always feels better if you're not stuck with a debt payment to cover the costs once you're done. In that respect, simple luxuries may very well be better luxuries.

Motley Fool contributor Chuck Saletta owns shares of Genuine Parts. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days.

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A Penny Saved Is Far Easier Than a Penny Earned

September 6, 2014, 2:06 am

≫ Next: Did the Labor Department Drastically Undercount August Payrolls?

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Filed under: Interest Rates, Savings Accounts, How to Save Money, Saving

retirement savings jar coins money piggy bank clear — **RTimages/Shutterstock**

The saying "A penny saved is a penny earned" has often been misattributed to Benjamin Franklin." He didn't say it quite like that, but whomever first coined the now-famous version of the phrase is even more on the money today. These days, the reality is that you need to earn far more than a penny in order for it to be worth the same as a penny you manage to save.

Considering taxes, commuting and other costs associated with working, your boss has to fork over far more than 1 cent for you to wind up with a penny's worth of spending power.

Just How Much Does It Take?

Every dollar you earn through work is subject to Medicare taxes, and unless you're earning above $117,000, you pay Social Security tax on all your earned income, too. Add in federal, state and local income taxes, and the amount your boss has to pay for you is far in excess of what you see in your bank account on payday. Once you spend that money, sales tax may further increase the cost to you -- and make it that much more expensive for your boss to hand you useful incremental spending power.

Let's start with a $100 goal. Well, to buy $100 worth of stuff, you may really need $107 in your pocket, to account for typical sales tax. Say your marginal tax bracket is 1 percent at the local level, 5 percent at the state level and 25 percent at the federal level, and that you don't itemize. Take those taxes and add in both your half and your employer's half of Social Security's 12.4 percent and Medicare's 2.9 percent tax rate, and the tax costs climb.

And, of course, it costs you money to work. Your costs will vary based on your commute, need for child care, ability to brown-bag your lunch, clothing norms in the office and many other factors. For the sake of simplicity, let's estimate that most of your costs of working are already covered, but 2 percent of your incremental salary goes toward the extra costs you'll incur by working more. It could be more meals out because you have less time to prep; it could be commuting costs; it could be a lot of things.

Put it all together, and your boss very likely has to pay you more than $201 so you can buy $100 worth of stuff. The table below shows the details:

Employer pays	$201.62
Employer half of Medicare	($5.36)
Employer half of Social Security	($11.46)
Marginal salary	$184.80
Employee half of Medicare	($5.36)
Employee half of Social Security	($11.46)
Marginal federal taxes (25%)	($46.20)
Marginal state taxes (5%)	($9.24)
Marginal local taxes (1%)	($1.85)
Incremental cash to your checking account	$110.70
Incremental costs of working (2%)	($3.70)
What's left	$107.00
Merchandise that amount buys (with a 7% sales tax)	$100.00

Table from author's calculations based on assumptions in the text.

Why Saving Money Is Easier

That table shows just how difficult it is to earn additional money. For every incremental penny you want to use to buy something, your boss essentially needs to pay two on your behalf. That makes earning money a far more difficult proposition than it may initially appear.

Once you've earned your money, however, if you're able to save some of it, it gets far easier to build your purchasing power.

Money you save can be invested -- and potentially earn a decent rate of return.
The money you earn on your investments is typically taxed at a much lower rate than money you earn from working. Most people don't pay Social Security or Medicare taxes on their investment incomes, and both qualified dividends and long-term capital gains are generally taxed at lower rates than salaries.
While every dollar you earn as salary is taxed when you earn it, capital gains are only taxed when you sell the assets that generated them. It's possible for you to hold on to an appreciated asset for years before paying a dime in capital gains taxes.
Once you've saved the money, it's yours. You've earned it, paid your taxes on it and already covered the costs of working for it. Consistently save a bit from each paycheck, and soon you'll build up a decent pile of money, even before considering the potential for capital gains and dividends.

If you've never saved money before, getting yourself in the position to start saving may seem difficult. But once you've made the commitment and figured out how to get started, you'll soon find out just how much easier saving can be than earning your money in the first place.

Chuck Saletta is a Motley Fool contributor. For more on ensuring a comfortable retirement for you and your family, Motley Fool retirement experts give their free insight on a simple strategy to take advantage of a little-known IRS rule to boost your retirement income.

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Did the Labor Department Drastically Undercount August Payrolls?

September 6, 2014, 7:30 am

≫ Next: 5 Costs Not to Overlook in Your Retirement Budget

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Filed under: Economy

job_dissatisfaction_2 The U.S. Labor Department issued its August Employment Situation report on Friday, and the numbers were so weak that many investors and economic watchers must be wondering if the numbers were simply wrong. After all, weekly jobless claims and monthly payrolls reports come with revisions at the next report more often than they do not.

There is the notion that the Bureau of Labor Statistics (BLS) computer systems upgrades in the past led to many off-reports and wide revisions. Amazingly, there doesn't even have to be accusations of negligence, manipulation or conspiracy to wonder if the Labor Department was just wrong in its payrolls calculations.

Nonfarm payrolls for August were listed as having risen by only 142,000, far less than the Bloomberg estimate of 230,000. This was down from July's reading of 209,000 and much further south than the 298,000 in June and 229,000 in May. Private sector payrolls came in at only 134,000, down from the estimate of 220,000 and down from the previous month's 198,000.

The question may not be about what happened to all the new hiring, but whether the number was wrong or whether it was so weak due to exceptional circumstances. Could the BLS simply have been wrong or had a lag on its reporting?

READ ALSO: America's Disappearing Jobs

Note that both June and July have had revisions of a positive 15,000. It is at least possible that those revisions acted as a "take away from the next report" in comparison.

One issue that may have played a role was Labor Day coming on September 1 this year. That means that all those travelers who took the traditional week's vacation ahead of the holiday, many of whom may have been the bosses or hiring agents, missed a full calendar week of August rather than just two or three days of the month.

Another exception could have been that August is traditionally not the strongest month for new hiring efforts. Too many people are cramming in last-minute vacations from the pool of applicants and those in charge of hiring decisions. It is also affected by back-to-school trends.

Another issue is that August is generally the end of seasonal issues around auto sector rotation. The BLS said specifically: "Motor vehicles and parts lost 5,000 jobs in August, after adding 13,000 jobs in July. Auto manufacturers laid off fewer workers than usual for factory retooling in July, and fewer workers than usual were recalled in August."

Another issue was that retail trade employment was down by 8,000 in August. The BLS also signaled that food and beverage stores lost 17,000 jobs, but said, "this industry was impacted by employment disruptions at a grocery store chain in New England."

There are many things to account for why the August payrolls were so weak. Some of the issues don't even have to have any negligence or conspiracy attached to them.

When we first saw the payrolls numbers on Friday morning, we assumed immediately that it was going to be great for the stock market. After all, it was growth, but weak enough that it would not act as any impetus for Janet Yellen and the other Fed members in the FOMC to begin their potentially bloody rate hike cycle any sooner than expected.

The DJIA futures had been down around 50 points and the S&P 500 futures were down more than five points ahead of the reports. It turns out that the S&P 500 Index closed up 10 points at 2,007.71 and the DJIA closed up almost 68 points at 17,137.36.

READ ALSO: The Best Economies in the World

Filed under: Economy

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5 Costs Not to Overlook in Your Retirement Budget

September 6, 2014, 11:00 pm

≫ Next: 5 Stocks That Hit New Highs This Summer

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Filed under: Health Care, Family Money, Personal Finance, Travel, Retirement Living

Pink piggy bank on a beach in a deck chair wearing sunglasses with golden sand a blue ocean and vivid blue sky — **Duncan Selby/Alamy**Don't forget to budget for the travel and hobbies you will finally have time for in retirement.

By Dave Bernard

Most people accept that retirement won't be cheap. But just how expensive will it be? Visions of the ideal retirement range from the extravagant pursuit of everything we have dreamed of to frugal plans calculated to stretch the buying power of our hard earned savings. Whatever course we set, we need to accurately estimate and budget for our future. While the final tab will vary depending on your lifestyle, some expenses are shared across-the-board and need to be budgeted for.

Health care costs. Health care costs will be one of the biggest expenses you must deal with in retirement. A 65-year-old couple retiring in 2013 will need $220,000 to cover health care costs during retirement, according to calculations by Fidelity. This figure is based upon average life expectancy data. If you are lucky enough to live longer, those costs can be even more. And these numbers do not account for long-term care expenses. The U.S. Department of Health and Human Services predicts that 70 percent of those age 65 and older will require some type of long-term care services. The cost of care varies depending on whether you receive it at home, in adult day care, at an assisted living facility or in a traditional nursing home. The average cost for a private nursing home is about $90,000 per year, assisted-living facilities average $3,477 a month and hourly home care rates average $46 for a Medicare-certified home health aide, according to MetLife. Failure to account for this significant expense means you may not be able to afford the care you need.

Basic living expenses. Some expenses go away in retirement. Most education loans and mortgages have been paid off, or at least significantly reduced. And retirees no longer need to set aside money to build a nest egg. But other expenses will stubbornly continue. It is reasonable to expect basics like gas, electric, water, TV, Internet and garbage bills to remain relatively unchanged with the exception of normal rate increases over time. Food bills should also remain relatively stable unless you decide to upgrade your lifestyle to gourmet status. You will need to include the cost of various insurance programs you subscribe to, potentially including health, home, automobile, liability and long-term care coverage. And even if you own your house outright, depending on where you live you may have to pay property taxes that can amount to 1 percent or more of your assessed value.

Recreational expenses. No one looks forward to a retired life spent doing nothing. Instead, we see ourselves engaging in activities and adventures we could not undertake while mired in the working world. Since this is our time to do what we want, we need to budget for recreational expenses to take advantage of our new freedom. Many retirees hope to travel more and spend longer periods of time at various destinations. My wife and I like to focus our travel on the destination rather than the accommodations. It is easy to spend a fortune on fancy lodging and big meals. But with a little effort you can spend time in faraway places without ruining your budget. A little frugality can allow you to visit more destinations while building quality memories along the way. Whatever your retirement recreation choices, it is important to have sufficient savings to fund your efforts.

Unforeseen expenses. Over the years we have had to deal with many unexpected bills. A family member needs to move home "for awhile" to get back on his feet, the transmission in the car goes out or an unexpected illness necessitates a hospital stay. A single emergency can have a significant impact on carefully laid retirement plans. You can add to your peace of mind by setting aside a monetary cushion for possible expenses that might suddenly materialize in retirement.

Miscellaneous expenses. Do you like to collect vintage automobiles, take luxury cruises or visit top rated restaurants? While these things may boost the quality of your retirement experience, they can also add to expenses. You don't want retirement to be a time when you are forced to set aside the unique interests you have been waiting for so long to explore. If you can make the right preparations and set aside the necessary funds there is no reason you can't feed your fancies as a retiree.

Dave Bernard is the author of "I Want To Retire! Essential Considerations for the Retiree to Be." Although not yet retired, he focuses on identifying and understanding the essential components of a fulfilling and meaningful retirement. He shares his discoveries and insights on his blog Retirement-Only The Beginning.

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5 Stocks That Hit New Highs This Summer

September 6, 2014, 11:00 pm

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Filed under: Company News, Earnings, Market News, Industry News, Investing

Games-E3-Originality — **Activision/AP**

Buy-and-hold investors have gotten the last laugh on the "Sell in May and go away" adage pumpers. The market has rallied to hit new highs during the historically sleepy summer months, leaving market timers baffled.

Naturally, it's not just the major market indexes hitting fresh levels. Let's go over a few prolific companies that delivered all-time highs this season.

Apple (AAPL)

It's fitting that the world's largest consumer tech company should hit new highs this summer, just as it's gearing up to introduce the iPhone 6 and other potential game changers. The last time that Apple set a new high was two years ago, the day that the iPhone 5 hit retailers.

Apple meandered after that. Growth began to slow, and margins started to contract. Apple isn't perfect. We've seen iPod sales slide for a couple of years, and even the once-hot iPad has suffered back-to-back quarters of year-over-year declines. However, the tablet's fall from grace has coincided with PCs coming back in favor, and Apple is there to make the most of it with its line of Macs and MacBooks.

Either way, the iPhone and Mac are pushing sales higher, and unlike last year, profitability is moving higher in the process.

Tesla Motors (TSLA)

One of last year's biggest winners was Tesla, the company behind the all-electric Model S sedan. The stock more than quadrupled in 2013 and, defying accusations and determined short-sellers arguing that it was one of this year's most overvalued investments, has nearly doubled in 2014.

Tesla stock may seem as expensive as its luxury sedan. A $35 billion market cap is more than a bit rich for a company that delivered just 7,579 cars in its latest quarter. However, the real buzz for Tesla is the future. The Model X crossover hits the market next year, and Tesla expects to be delivering cars at an annualized pace of 100,000 a year by the end of next year. In a couple of years the more affordable Model III is expected to roll out, and Tesla is leading the way to be an early adopter in the promising field of self-driving cars.

Netflix (NFLX)

The world's leading video streaming service was another hot stock in 2013. In fact, it was the S&P 500's best performer. However, it too was tagged to tumble this year. Naysayers felt that a company with billions -- $7.7 billion to be exact -- in streaming content obligations would be vulnerable if subscribers begin defecting.

Why would they leave? With its global subscriber base now topping 50 million, it can afford to outbid anybody for content. It has momentum. It's also become a place where content creators come to seek exclusive deals for original content. It's funny what a few Emmys will do for your street cred in Tinseltown.

Netflix isn't cheap. Even looking out to 2015 we find it trading for more than 70 times Wall Street's profit estimates. As long as there are no legitimate challengers on the horizon, Netflix should continue to thrive.

Baidu (BIDU)

China's leading search engine has stormed back into "market darling" fancy. It seemed vulnerable two summers ago when a leading online security and Web browser provider launched its own search engine. It gained traction at Baidu's expense, but Baidu was able to still grow its base of marketers and expand into new areas including online travel, smartphone app marketplaces, and streaming video.

Baidu will always have the challenges associated with operating in a country with restrictive policies, but investors are finding it hard to stay away. When you're the top dog in the world's most populous nation -- a country that's growing a lot faster than the planet on average -- good things happen.

Activision Blizzard (ATVI)

The country's largest video game publisher is winning the gamer game this summer. Activision Blizzard was slumping not too long ago. Die-hard gamers had tired of building out their game libraries for their Xbox 360 and PS3 consoles. On the PC front, its once-dominant World of Warcraft franchise peaked in 2010 when it treated 12 million players to its virtual realm.

The video game industry has turned things around since the November launch of the Xbox One and PS4. Most of the gains have happened on the hardware end, but software companies are starting to enjoy the fruits of the upgrade cycle and the high-margin merits of digital delivery. Activision Blizzard has blown through Wall Street's profit targets in each of the past four quarters.

Activision Blizzard investors are winning -- and the same can be said of those who owned Apple, Tesla, Netflix and Baidu during this lucrative summer for growth stock investors.

Motley Fool contributor Rick Munarriz owns shares of Netflix. The Motley Fool recommends and owns shares of Activision Blizzard, Apple, Baidu, Netflix and Tesla Motors. Try any of our Foolish newsletter services free for 30 days. Our analysts have put together a free report on a group of high-yielding stocks that should be in any income investor's portfolio.

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3 Ways to Cash In on Fantasy Football Without a Winning Team

September 6, 2014, 11:00 pm

≫ Next: How Did 'Sell in May and Go Away' Work This Summer?

≪ Previous: 5 Stocks That Hit New Highs This Summer

Filed under: Consumer Goods, Sports, Investing

NFL Labor Fantasy Football — **Al Behrman/AP**Fantasy football participants at Buffalo Wild Wings.

A new NFL season is kicking off, and it's not just about rooting for your favorite team. For an estimated 41 million fantasy football players in the U.S. and Canada, the next few months will be spent trading players, drafting free agents and wondering if it will be Jamaal Charles, Matt Forte or Adrian Peterson who'll lead the league in rushing yards.

The Fantasy Sports Trade Association predicts that nearly $1.7 billion will be spent on league fees for fantasy sports this year. From office productivity slipping to the dilemma of having to root for players suiting up with your local team's archrivals when your own fantasy match is on the line, fantasy football creates some unusual experiences. Whether participants are playing for bragging rights or a cash prize, they devote a lot of time building teams of skilled position players and scoring points based on how they perform.

You can profit from fantasy football, even if you wound up drafting Josh Gordon and Wes Welker as your wide receivers. There are plenty of publicly traded companies with some serious skin in seeing this national obsession continue to expand. Let's check them out.

1. Go for the Dot-Com Score

The three largest fantasy football websites are all publicly traded. Yahoo (YHOO), CBS' (CBS) CBSSports.com and Disney's (DIS) ESPN.com combine to attract 38 percent of this year's participants, according to industry watcher IBIS World.

All three sites offer both free and premium leagues, but the fun doesn't end there. Many players also seek out fantasy football news across third-party sites, hoping to gain an edge on sleeper picks and waiver-wire ideas that their more passive competitors aren't checking out. The result is the average player spending 8.7 hours a week consuming news, adjusting rosters and fielding trade requests. The entire Internet wins because that's a lot of online advertising being consumed as 41 million players surf for morsels of gridiron information.

2. TV for the TD

Fantasy football would be nothing without real football, and that's where broadcasters come in. We've already covered CBS and ESPN parent Disney. However, the real TV star for fantasy football buffs is DirecTV (DTV). It's the only satellite or cable television provider offering access to every NFL regular-season game in its entirety. DirecTV's NFL Sunday Ticket has been a real difference maker for the satellite television leader, likely explaining why it hasn't suffered the same kind of "cord cutter" defections that traditional cable providers have experienced in recent years.

Other premium providers are offering access to the NFL's RedZone Network, which is a single channel that covers scoring opportunities during the day, but DIirecTV is the platform of choice for channel-surfing fantasy football buffs.

3. The Crowd Goes Wild

We can't say that fantasy football players put their lives on hold during fantasy football season, though wives -- 80 percent of players are male -- and co-workers may see it that way. They still go out and have fun. However, Sunday outings are often limited to sports bars. Buffalo Wild Wings (BWLD) operates the country's largest chain of family-friendly sports bars, with more than 1,030 locations across the country. Most of the year it's best known for its wide variety of signature chicken wings, but during the NFL season, it's a place where folks can watch several games at the same time across the various mounted screens.

Buffalo Wild Wings knows that fantasy football is a big draw, and last month it offered to host draft parties for leagues of eight or more players, complete with complimentary draft boards, stickers and coupons for future visits. On Tuesday it unveiled GameBreak, a multiplatform gaming experience whereby customers can play fantasy-style games for weekly prizes.

Tough luck on drafting Gonzalez or getting stuck with Matt Schaub as your starting quarterback. Your fantasy football season may be all but over, but you can still make it back on top by investing in the companies cashing in on the booming trend.

Motley Fool contributor Rick Munarriz owns shares of Walt Disney, and he's the defending champion of one of his two fantasy football leagues. He's also a Miami Dolphins fan, so he needs all the fantasy he can get. The Motley Fool recommends and owns shares of Buffalo Wild Wings, Walt Disney and Yahoo. Try any of our Foolish newsletter services free for 30 days.

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How Did 'Sell in May and Go Away' Work This Summer?

September 7, 2014, 11:00 pm

≫ Next: 5 Ways to Financially Prepare to Go After Your Dream Job

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Filed under: Stock Picks, Investing Basics, Index Funds, Stock Markets, Investing

Is there any validity to the strategy of selling in May and going away? More importantly, how would following this old saying have affected your portfolio this year?

The saying originated as "Sell in May and go away. Stay away till St. Leger's Day," and it was based upon the concept that in England, the financial movers and shakers didn't return to the market until the end of horse racing season, traditionally St. Leger's Day, in mid-September.

Over the years, the concept became Americanized by dropping the "St. Leger's Day" reference and creating a narrative that involved brokers and money managers going to the Hamptons for summer vacation and not returning until after Labor Day as its underlying rationale.

Five Decades of Analysis

As investors, we're always looking for ways to improve our returns, so how has this strategy performed? Surprisingly well, as least since 1950. A consistent strategy of being out of the market during the summer far outperforms a strategy of being invested for a full 12 months out of the year.

In the last 10 years between the first market day of May and the first market day after Labor Day, the market was down 60 percent of the time, either flat or slightly up 30 percent of the time, and significantly up only 10 percent of the time.

But as they say, there are exceptions to every rule, and 2014 was definitely an exception. By almost any metric, you would have lost out on some hefty gains by sitting out the summer this year.

During that period, the exchange-traded funds SPY (SPY) and QQQ (QQQ) -- which track the S&P 500 (^GPSC) and Nasdaq (^IXIC) indexes respectively -- were stellar performers. SPY rose 6 percent, and QQQ was up a whopping 14 percent during the "stay away" period. Looking at individual stocks, it only gets worse, or better, depending on how you invested.

You would be hard-pressed to find any stock from the Most Widely Held list that didn't rise significantly between May 2 and Sept. 2 of this year, with Bank of America (BAC) adding 8 percent, Ford (F) 10 percent, Disney (DIS) 15 percent, Apple (AAPL) 25 percent and Netflix (NFLX) a staggering 45 percent. Even among the few losers, the losses were small, such as Exxon's (XOM) barely 2 percent decline.

Consider the Industries

If you do find stocks that declined significantly during that period, it is most likely that they, or the industries they are in, had already been in longer-term down trends, and their summer losses were just continuations of those larger moves.

So should you incorporate the "sell in May" strategy into your investing? The answer seems to change based upon the type of overall condition of the market. In the case of a bear market, or even a flat market, it seems as if statistically speaking you should exit in May, or at least pare down your holdings, and re-enter after Labor Day.

But in a bull market, especially like the raging bull market we have been experiencing for the last few years, it seems as if the better strategy is to stay invested during the summer. The odds say that at worst you will be flat or down slightly, but the overall bullish nature of the market may actually cause you to continue to get a good return on your stocks.

For example, the current bull market is generally considered to be about five years old, beginning after the S&P 500 bottomed in March of 2009. If you had "sold in May" in the years since, the periods where you were out of the market would have been either flat, slightly up, or slightly down -- in essence negligibly effecting your return -- for four out of five of those years. But by being out of the market this summer, you would have missed the massive run alluded to previously, which would have added substantially to your overall return.

The Lund Loop is a free once-weekly curated slice of what I am writing, reading and hearing about in the stock market, finance and tech.

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5 Ways to Financially Prepare to Go After Your Dream Job

September 7, 2014, 11:00 pm

≫ Next: Wall Street This Week: New iPhones, Old Cars

≪ Previous: How Did 'Sell in May and Go Away' Work This Summer?

Filed under: Personal Finance, Labor, Career Change, Job Search, Planning

**www.annemcdaniels.com**Anne McDaniels used to work for Fortune 100 company. Now she's a model and actress.

Anne McDaniels' life sounds almost like a Hollywood cliche: Beautiful Midwestern girl moves to California to become an actress. Except McDaniels , who works as a model and actress in Los Angeles and New York, didn't have to ride a bus to California or take work as a waitress while waiting to be discovered.

In her search for her dream job, McDaniels left the financial cushion of a full-time job at the Fortune 100 company that had hired her after she graduated from college. She was giving up an $85,000 annual salary -- a lot more than young, aspiring actresses can hope to earn when starting their acting careers. The pay cut was worth it, she says, because it ultimately led to her dream job.

While not everyone who searches for their dream job has to leave a high-paying, steady job, leaving a job and its benefits -- like medical insurance, paid vacations, a company car and a retirement plan -- is a sacrifice worth considering when moving to Plan B.

Whether you're quitting to become an entrepreneur or want to leave a dead-end job so you can work part-time elsewhere and spend more time with your family, quitting a steady job is a risk. In the search for the job of your dreams, you need to ask yourself if it's worth the financial risk and if you'll be making more or at least the same amount of money as your previous job. And if you're happy at a new job that pays less, can you make the lifestyle changes needed to pay for that happiness? Here are five financial aspects of a dream job search to consider before sending out your résumé:

1. Set Aside Some Savings

McDaniels put some money into savings before leaving her job in marketing and finance at General Mills (GIS) in Minnesota so she could cover her expenses if she didn't immediately find work. She had worked at the company for four years and was also a Minnesota Vikings cheerleader, and knew she was ready to leave.

She started modeling in New York and later moved to Hollywood after getting the lead role in an independent film. "I've never had to have a waitressing job or anything like that," McDaniels says.

Barry Maher, an author and motivational speaker in Corona, California, says that long before he quit his job earning five figures a month in the corporate world, he was setting aside "FU money" so he could walk away from it if he ever needed to. He quit after an argument with his boss.

"At age 50, I had a very successful career which was keeping me from the life I wanted," Maher says. "What's worse, I was on the verge of deciding that I was just too old to pursue my dream." After he quit, it took him about a year and a half to get back to and surpass what he'd been earning before.

2. Know the Price of Your Happiness

If you're going into a field that pays less than your current job or has seasonal ups and downs, plan for it and know that you're leaving so that you'll be happier in a more fulfilling job.

McDaniels, for example, had a comfortable, steady and enjoyable job at General Mills, but it wasn't a job she saw herself in for a lifetime. "If I stayed at General Mills, I'd probably be making more money but I wouldn't be as happy," she says.

While she's now making more than she did at her corporate job, McDaniels says her work comes and goes in waves, and she sometimes misses the steadiness of her old job. "Every day of my life, I'm never comfortable," she says.

3. Cut Expenses

At least initially, dream job searchers say they earn less money than they did in their previous job, and that cutting expenses is part of their everyday life for at least awhile.

For Kimberly Ferguson, of Burlington, New Jersey, getting to her dream job of providing training and development and coaching services required accepting a $15,000 to $20,000 a year income decline from her previous jobs in publications and education. She's closing the gap with the help of her family.

"As a mother and wife, I didn't want my decision to leave a secure job to adversely impact my family," Ferguson says. "I didn't want my two children to have to stop their extracurricular activities. Initially, I tightened the belt regarding my own interests. I went out to eat less, didn't travel much last year."

In 2013 at age 29, Kate Holmes of Las Vegas left her six-figure position at a firm that worked with rich individuals and qualified retirement plans. Eventually, she become a certified financial planner and started Belmore Financial so she could work for herself. Holmes is earning a lot less money, she says, but it has been worth cutting her expenses substantially, she says. She put all of her belongings in storage and is working from the road.

"My income is nowhere near the prior six figures, and I'm not striving for it to be," Holmes says. "I've realized how little I honestly need and how much more important experiences are. I've built a business that allows me to live life now, rather than working like crazy, buying crap I don't need and waiting to enjoy life decades from now."

4. Don't Forget Retirement and Other Costs

Depending on the path you take, you may not have a company retirement plan in your dream job. "I would love to have the 401(k) back," McDaniels says.

If you work for yourself, you can still contribute to a SEP IRA, for example, to save money for retirement. Without setting money aside, you'll be further behind your peers in planning for retirement.

Kary Oberbrunner of Columbus, Ohio, left his job as a pastor -- along with its retirement plan and other perks -- to write a book about how to move from a day job to a dream job and to become a coach and speaker. He stared a SEP account and had to deal with a host of other issue common to self-employed workers, such as paying quarterly taxes and getting health care for his family.

5. Be Prepared to Take Any Job

Even if you have a cushion set aside as you start on your path toward your dream job, it can quickly get spent, leaving you needing to take on any low-paying job you can swing so you can pay the bills. Dan Nainan, who left his job as an engineer at Intel (INTC) to pursue his dream job as a comedian, says it took him two years to make his first $5 at a comedy show. He got by working as a barker for a business in Times Square, earning $1 for each person he persuaded to go inside.

He's now making more than double what his salary was at Intel. "More importantly, there's a tremendous amount of satisfaction with what I do," Nainan says. "I'm essentially a paid tourist, and I don't have to work too hard, and I love what I'm doing."

That, in a nutshell, should be the definition of success in finding a dream job.

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Wall Street This Week: New iPhones, Old Cars

September 7, 2014, 11:00 pm

≫ Next: Chick-fil-A Founder S. Truett Cathy Dies

≪ Previous: 5 Ways to Financially Prepare to Go After Your Dream Job

Filed under: Company News, Apple, Earnings, Industry News, Investing

Pep Boys Unveils 23 Newly Remodeled Stores in Greater Chicago — **Business Wire/Getty Images**

From an iconic auto parts retailer hoping to shift into reverse after a streak of negative quarters to the world's most valuable consumer tech giant showing off its new gadgetry, here are some of the things that will help shape the week that lies ahead on Wall Street.

Monday -- Pep Rally

The new trading week kicks off with Pep Boys (PBY) reporting quarterly results. The auto-parts retailer and provider of car maintenance and repair services has 800 locations across the country.

This has historically been an all-weather niche for investors. When the economy's smoking, drivers spruce up their rides. When the economy's in the tank, drivers hold on to their cars longer, requiring more money invested in maintaining and repairing their vehicles. This doesn't mean that investors should be expecting a strong report. Analysts see flattish earnings and sales growth. Making matters worse, Pep Boys has fallen short of Wall Street's profit targets in each of the four previous quarters. The trend suggests that Pep Boys may earn less than the 17 cents a share that the pros are forecasting.

Tuesday -- The Big Apple

We will finally get our first look at the iPhone 6 on Tuesday. Apple (AAPL) has scheduled a media event for Tuesday, and this is the time of year when the world's most valuable consumer tech company refreshes its smartphone line. Everything is pointing to a larger device. Sources have been telling tech blogs that we're also looking at a scratch-resistant screen and a chip-based transaction platform.

We may get more than just a shiny new smartphone out of Apple. Some have suggested that Apple will finally make its big splash into wearable computing. Apple could also update some of its other product lines or shock the world in a good way by entering into a brand-new product category.

Wednesday -- Retailers on Parade

A handful of retail chains will be updating the market with fresh quarterly reports. Wet Seal (WTSL), Five Below (FIVE) and Men's Wearhouse (MW) are just some of the store operators checking in with new financials.

Five Below and Men's Wearhouse are expected to check in with strong double-digit sales growth, but Wet Seal is going the wrong way: Analysts see another loss on declining sales. There always seems to be winners and losers in retail. The mall apparently isn't a level playing field.

Thursday -- Makeup Exam

Vanity is still a good business. Ulta Beauty (ULTA) runs a chain of 696 namesake retail outlets that offer a broad array of beauty care products while also providing a full slate of salon services.

Ulta Beauty reports quarterly results on Thursday, and it should be another period of encouraging growth. Back in June, Ulta offered up robust guidance for the quarter. At the time, it saw net sales growing from $601 million a year earlier to as much as $717 million. Brisk expansion and a forecast for comparable-store sales to climb between 5 percent and 7 percent -- on top of the 8.4 percent comps spike a year earlier -- suggest that beauty products and treatments are beautiful to investors.

Friday -- When You're Here, You're Family

Fridays are usually quiet on the earnings front, but that won't stop Olive Garden parent Darden Restaurants (DRI) from posting its quarterly results. Darden finally sold its Red Lobster chain for $2.1 billion this summer, but it also recently delayed its annual shareholder meeting.

With Olive Garden's comparable-restaurant sales in a funk, there's pressure on Darden's other chains to carry the load despite being a lot smaller than the Italian casual-dining restaurant. With activists angling for more say in the boardroom, it will be important for the struggling restaurant operator to deliver reasonable results in its final quarter before its rescheduled annual shareholder meeting.

Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Apple, Five Below and Ulta Salon, Cosmetics & Fragrance. The Motley Fool owns shares of Apple and offers a look at the company of what could be its next smart device. The Motley Fool is short Five Below. Try any of our Foolish newsletter services free for 30 days.

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Chick-fil-A Founder S. Truett Cathy Dies

September 7, 2014, 11:18 pm

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Filed under: Company News, Food & Beverage, Restaurants, CEOs

US Obit Chick fil A Founder — **John Amis/AP**Chick-fil-A founder S. Truett Cathy, left, walks out of a Chick-fil-A in Atlanta with former Secretary of Commerce Carlos Guiterrez in this 2006 photo.

ATLANTA -- S. Truett Cathy, the billionaire founder of the privately held Chick-fil-A restaurant chain that famously closes on Sundays but also drew unwanted attention on gay marriage in recent years because of his family's conservative views, died early Monday, a company spokesman said. He was 93.

Chick-fil-A spokesman Mark Baldwin told The Associated Press that Cathy died at home surrounded by members of his family. Funeral plans had not yet been finalized, he said.

Cathy opened his first postwar diner in an Atlanta suburb in 1946 and by 1967 he had founded and opened his first Chick-fil-A restaurant in Atlanta. Over ensuing decades, the chain's boneless chicken sandwich he is credited with inventing would propel Chick-fil-A expansion to more than 1,800 outlets in 39 states and the nation's capital. By early 2013, the company says on its website, annual sales topped $5 billion as the chain offered up a taste of the South that went beyond chicken to such offerings as sweet tea, biscuits and gravy.

Under the religiously conservative founder, the chain gained prominence for its Bible Belt observance of Sunday -- none of its hundreds of restaurants are open on that day, to allow employees a day of rest. Its executives often said the chain made as much money in six days as its competitors do in seven.

Those religious views helped win Cathy and his family loyal following from conservative customers, but also invited protests when Cathy's son denounced gay marriage.

Cathy's son, Dan, who is currently chairman and president of the chain, had told the Baptist Press in 2012 that the company was "guilty as charged" for backing "the biblical definition of a family." Gay rights groups and others called for boycotts and kiss-ins at Cathy's restaurants. The Jim Henson Co. pulled its Muppet toys from kids' meals, while politicians in Boston and Chicago told the chain it isn't welcome there.

The controversy later subsided.

The family-owned company has said it has had 46 consecutive years of positive sales growth. Cathy's $6 billion fortune as the founder of Chick-fil-A puts him on the yearly Forbes magazine list of the wealthiest Americans in the country. The company has listed him on its website as its chairman emeritus after he left day-to-day operations to younger generations.

Truett Cathy began his career in the restaurant business by opening with his brother in 1946 an Atlanta diner called The Dwarf Grill, which was named for the short and stout shape of the restaurant.

He has attributed his hardworking nature -- even as a little boy he made money by selling six bottles of Coca-Cola (KO) for a quarter -- to growing up poor.

"I've experienced poverty and plenty and there's a lesson to be learned when you're brought up in poverty," he said in 2007. "I had to create some good work habits and attitude."

Even well into his 80s, Cathy was actively involved in the chain's operations, including setting up a contract with his children that said they may sell the privately owned chain in the future but the company must never go public.

"Why would I retire from something I enjoy doing?" Cathy said in a 2007 interview. "I can hardly wait to get here."

An opportunity in 1961 led to the development of the restaurant chain's trademark chicken sandwich when a company that cooked boneless, skinless chicken for airline meals wanted to sell him pieces that were too big for the airline customer's needs. Cathy took those pieces and cooked them in a pressure cooker and served them in buttered buns.

The sandwich was sold at independent restaurants for a few years before he opened his first Chick-fil-A restaurant at an Atlanta shopping mall in 1967.

Philanthropy

Cathy also was known for his efforts to help youth. In 1984 he created the WinShape Foundation to help "shape winners" through youth support programs and scholarships. He also created a long-term program for foster children that has foster care homes in Alabama, Georgia, Tennessee and Brazil.

His sympathy for children was demonstrated in August 2008 when he worked out a deal with the parents of two girls who were accused of causing $30,000 in damage to a home he owned in New Smyrna Beach, Florida. The girls were banned from watching TV and playing video games. They also had to write "I will not vandalize other people's property" 1,000 times.

He told the Daytona Beach News-Journal that he didn't want to have them prosecuted and left with a criminal record.

As the author of several books, his 2007 book "How Did You Do It, Truett?" outlined his strategy for success that included setting priorities, being courteous, cautiously expanding a business and not being burdened with debt.

"There's really no secret for success," he said then. "I hope it will open eyes for people. They don't have to follow my recipe but this is what works for me."

Cathy is survived by his wife of 65 years, Jeannette McNeil Cathy; sons Dan T. and Don "Bubba" Cathy; daughter Trudy Cathy White; 19 grandchildren and 18 great-grandchildren, according to a company statement.

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GE Finally Finds a Buyer for Its Household Appliance Unit

September 7, 2014, 11:30 pm

≫ Next: America's Wealth Gap 'Unsustainable' -- and May Worsen

≪ Previous: Chick-fil-A Founder S. Truett Cathy Dies

Filed under: Company News, Mergers & Acquisitions, Consumer Goods

Electrolux AB Buys General Electric Co.s Home Appliances Unit For $3.3 Billion — **Patrick T. Fallon/Bloomberg via Getty Images**General Electric appliances at a Lowe's store in Torrance, California.

By KARL RITTER

STOCKHOLM -- Sweden's Electrolux is buying the appliances business of General Electric (GE) for $3.3 billion, boosting its presence on the North American market, the companies said Monday.

The acquisition is the largest ever for Stockholm-based Electrolux, ranked as the world's second biggest home appliance maker after U.S. rival Whirlpool (WHR).

Electrolux shares rose 7 percent to 200.50 kronor ($28.27) in early trading in Stockholm.

GE confirmed last month it was in talks to sell its appliances division -- maker of the first electric toaster more than 100 years ago -- as part of its effort to focus on selling more complex and profitable industrial equipment.

Electrolux CEO Keith McLoughlin said the move, which needs regulatory approval and is expected to be completed in 2015, "takes our company to a new level in terms of global reach and market coverage."

Electrolux plans a rights issue corresponding to about 25 percent of the purchase after the acquisition is complete.

Headquartered in Louisville, Kentucky, GE Appliances' products include refrigerators, freezers, cooking products, washers and dryers and air conditioners. The division, which has 12,000 workers at nine factories, earned $381 million on $8.3 billion in sales last year, for a profit margin of 4.6 percent.

"GE Appliances' people, valuable home appliances brand, products, distribution, and service capabilities make it a perfect fit with Electrolux and its goal of accelerating growth in the U.S.," GE Chief Executive Jeff Immelt said in a joint statement from the two companies.

Other than its own brand, Electrolux sells under the Zanussi, AEG, Frigidaire and Eureka trademarks. In July it posted a second-quarter net loss of 92 million kronor ($13.5 million), citing large restructuring charges, but said demand in Europe and the United States was picking up.

Electrolux has more than 60,000 employees, including 10,000 in North America. Its North American operations are headquartered in Charlotte, North Carolina.

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America's Wealth Gap 'Unsustainable' -- and May Worsen

September 8, 2014, 12:28 am

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Filed under: Health Care, Labor, Education, Economy, People

Inequality creative words concept — **Andrii Kondiuk/Alamy**

By Richard Valdmanis

BOSTON -- The widening gap between America's wealthiest and its middle and lower classes is "unsustainable," but is unlikely to improve any time soon, according to a Harvard Business School study released Monday.

The study, titled "An Economy Doing Half its Job," said American companies -- particularly big ones -- were showing some signs of recovering their competitive edge on the world stage since the financial crisis, but that workers would likely keep struggling to demand better pay and benefits.

"We argue that such a divergence is unsustainable," according to the report, which was based on a survey of 1,947 of Harvard Business School alumni around the globe, and which highlighted problems with the U.S. education system, transport infrastructure, and the effectiveness of the political system.

Some 47 percent of respondents in the survey said that over the next three years they expected U.S. companies to be both less competitive internationally and less able to pay higher wages and benefits, versus 33 percent who thought the opposite.

The results marked an improvement from a 2012 Harvard Business School survey of its alumni showing 58 percent of respondents expecting a decline in U.S. competitiveness, according to the survey.

But Harvard wrote, respondents of the 2014 survey "were much more hopeful about the future competitive success of America's firms than they were about the future pay of America's workers."

Harvard called on corporate leaders to help solve America's wealth gap by working to buttress the kindergarten-to-12th-grade education system, skills-training programs, and transportation infrastructure, among other things.

"Shortsighted executives may be satisfied with an American economy whose firms win in global markets without lifting U.S. living standards. But any leader with a long view understands that business has a profound stake in the prosperity of the average American," according to the report.

"Thriving citizens become more productive employees, more willing consumers, and stronger supporters of pro-business policies," it said. "Struggling citizens are disgruntled at work, frugal at the cash register, and anti-business at the ballot box."

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Campbell Swings to Quarterly Profit Despite Sluggish Sales

September 8, 2014, 1:52 am

≫ Next: Hertz Chairman and CEO Frissora Steps Down

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Filed under: Company News, Earnings, Consumer Goods, Food & Beverage

Campbell Swings to Quarterly Profit Despite Sluggish Sales — **Justin Sullivan/Getty Images**

By Anjali Athavaley

Campbell Soup (CPB) reported lower-than-expected quarterly sales Monday, as markets for its soup and snack products remained sluggish.

Shares of Campbell, which owns healthy food brand Bolthouse Farms as well as Pepperidge Farm snacks, were down 3.2 percent at $43.12 in trading before the market opened.

The company said sales rose to $1.85 billion in the fourth quarter ended on Aug. 3 from $1.72 billion a year earlier. Analysts on average were expecting $1.87 billion, according to Thomson Reuters I/B/E/S.

Organic sales, which exclude the effects of acquisitions and currency, fell 5 percent in the U.S. simple meals business, which includes Campbell's soup.

Chief Executive Officer Denise Morrison said the company continued to expect fiscal-year growth below its long-term targets. For fiscal 2015, Campbell expects sales growth of 1 percent to 2 percent and earnings per share of $2.45 to $2.50, excluding special items.

Fourth-quarter net income was $137 million, or 43 cents a share, compared with a year-earlier loss of $158 million, or 50 cents a share.

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Hertz Chairman and CEO Frissora Steps Down

September 8, 2014, 2:08 am

≫ Next: If You Love Pasta, Olive Garden Has a Deal for You

≪ Previous: Campbell Swings to Quarterly Profit Despite Sluggish Sales

Filed under: Company News, Transportation & Logistics, Travel Industry, CEOs

Hertz Chairman and CEO Frissora Steps Down — **Mitchell Zachs/AP Images for Hertz**Hertz CEO Mark Frissora, right, poses with a customer during a recent company promotion.

NEW YORK -- Hertz Chairman and CEO Mark Frissora has stepped down from his posts for personal reasons. He had had served as CEO since January 2007.

The car rental company said Monday that Brian P. MacDonald, president and CEO of Hertz Equipment Rental, will serve as interim CEO of Hertz Global Holdings MacDonald has served as president and CEO of Hertz Equipment Rental since June.

Hertz (HTZ), based in Park Ridge, New Jersey, said that it has started the search process for a permanent CEO.

MacDonald has led turnarounds at companies including Sunoco (SUN) and Isuzu Motors.

Hertz in in the process of trying to turn its business around. In June, the company said it needed to review and correct financial statements from the last three years because of accounting errors. It has delayed its second-quarter filing as a result.

In late August Hertz withdrew its guidance for 2014, saying it would come up far short of expectations. That same month it was disclosed that activist investor Carl Icahn had taken an 8.5 percent stake in the company.

Hertz said Monday that it is still committed to the planned separation of its equipment rental business into a separate, publicly traded company and expanding its off-airport rental business, among other initiatives.

Independent lead director Linda Fayne Levinson has also been named independent non-executive chair of the board. She's been a Hertz board member since 2012.

Hertz's stock rose $1.24, or 4.4 percent, to $29.75 in premarket trading about 45 minutes ahead of the market open.

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If You Love Pasta, Olive Garden Has a Deal for You

September 8, 2014, 2:28 am

≫ Next: 6 Ways to Help Renters Reach Their Down Payment Goal Faster

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Filed under: Advertising & Marketing, Food & Beverage, Restaurants, This Built America

By Hayley Peterson

Olive Garden is trying a new tactic for drawing in customers.

The struggling Italian chain is offering a "Never Ending Pasta Pass" for $100 that buys seven weeks of unlimited pasta, breadsticks, salad and Coca-Cola beverages, USA Today reports.

There are only 1,000 passes and they will be sold on the company's website beginning at 3 p.m. If a customer uses the pass once every day for the 49-day period, they would effectively be paying about $2 per meal.

The chain's pasta dishes average around 1,000 calories for a single serving.

"What we're trying to do is get some attention," Jay Spenchian, Olive Garden's executive vice president of marketing, told USA Today. "It's sure to provoke a reaction."

Olive Garden's same-store sales dropped 1.3 percent in the most recent quarter.

The new promotion is running at the same time as its "Never Ending Pasta Bowl" offer, which lets customers eat unlimited pasta for $9.99.

This is the latest in a string of promotions offering unlimited food by struggling casual dining restaurants.

TGI Fridays launched a $10 "Endless Appetizers" deal in July and Red Lobster is currently offering "Endless Shrimp" for $15.99.

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6 Ways to Help Renters Reach Their Down Payment Goal Faster

September 8, 2014, 2:54 am

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Filed under: How to Save Money

Couple in Paint Store with Armful of Supplies bxp133315,people,person,x collection,streetstock images,indoors,male,man,female,wo — **Jupiterimages**

According to Trulia's February Rent Vs. Buy Report, it's still cheaper to buy a home than rent in all 100 of the country's largest metropolitan areas. In Detroit, for example, it's 66 percent cheaper to buy than rent.

But while mortgage loan rates are still relatively low compared to the period before the recession -- or, frankly, almost any time in U.S. history -- it's hard to save money for a down payment while paying rent to keep a roof over your head. (America's median monthly rent is $756.) So how can renters -- including many of the 4 million people who suffered through full foreclosures in recent years -- acquire that down payment?

Saving up a standard 20 percent down payment for your next home will likely require extreme effort. You'll need $42,000 for the down payment for the average $212,000 U.S. home. Here are some ideas:

1. Cut the Cost of Where You Rent

To alleviate finances each month, consider a smaller or cheaper apartment. You could go a step further by getting a roommate, which would cut your rent by half, saving you hundreds of dollars each month that you could target toward your down payment. Go even further by moving in with your parents or other relatives for reduced or free -- depending on your family dynamics -- housing.

2. Get a Deal from a Bank

Some banks' programs for first-time home buyers allow you to make a much smaller down payment than the standard 20 percent. "Banks need to -- and are -- playing a role in providing sustainable homeownership by working with housing groups and agencies about opportunities that are available," said Malcolm Hollensteiner, director of retail lending at TD Bank (TD).

TD Bank's Right Step mortgage program provides qualified buyers with financing of up to 97 percent of the purchase price, without the private mortgage insurance requirement that traditional FHA mortgage loans have. But the biggest draw is a low 3 percent down payment option.

3. Get Help from Your State

Some states offer home buying assistance programs to residents whose incomes qualify. The New Jersey Housing and Mortgage Finance Agency, for example, assists first-time homebuyers with a low, fixed-rate mortgage and down payment or closing cost assistance. Such state programs may have limits beyond income. The U.S. Department of Housing and Urban Development has a directory of state programs.

4. Cut Extra Expenses

Advancing toward your goal of owning a home might require cutting corners on everyday purchases, too. (DailyFinance articles regularly offer ideas for household budget trimming.)

Anytime I shop online, for example, I always search for coupon codes in advance. By spending two minutes looking for a discount code, I saved over $50 on my last online purchase. Whether you downgrade your car or your cable, there are a host of practical ways to dedicate more of your income to building up your down payment.

5. Lower Your Debt

"Saving a down payment has always been one of the primary challenges for home ownership, especially with millennials who have student loans and consumer debt," said Hollensteiner.

Those who carry consumer debt, such as balances on their credit cards, can reduce the amount spent on high interest rates by consolidating and transferring that debt onto a zero-interest credit card. However, there are a couple caveats to this approach.

Always make sure you consider how much money you'd truly save by taking advantage of a credit card promotion. Zero-percent credit card offers that encourage you to transfer existing balances may require a transfer fee, based on a percentage of your total balance. Furthermore, always be aware of when promotional zero-percent interest rate offers expire and determine what your standard interest rate will be beyond the limited time offer.

6. Consider Private Mortgage Insurance

Home buyers who don't meet low-income requirements for special mortgage programs and don't have the 20 percent down payment can get private mortgage insurance. Lenders use PMI to protect themselves if borrowers default on their mortgage loan payments.

PMI is based on the loan amount and the size of the down payment provided. Typically, the PMI rate ranges between 0.5 to 1.15 percent of the loan -- a considerable expense each month. The estimated PMI cost for a $212,000 home with a $20,000 down payment, for example, would eat up about $93 monthly ($1,116 per year) from a borrower's budget. Opting to pay a PMI premium is an alternative to fronting a standard 20 percent down payment; however, it's important to remember that the lenders are the sole beneficiary of this added expense, and buyers ultimately pay more for their home purchase.

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Table from author's calculations based on assumptions in the text.

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