Amazon Rolls Out Kiva Robots for Holiday Sales Onslaught

December 1, 2014, 12:32 am

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Filed under: Company News, Amazon.com, Retail, Holiday Shopping, Transportation & Logistics

By Deepa Seetharaman

TRACY, Calif. -- Amazon.com (AMZN) has installed more than 15,000 robots across 10 U.S. warehouses, a move that promises to cut operating costs by one-fifth and get packages out the door more quickly in the run-up to Christmas.

The orange 320-pound robots, which scoot around the floor on wheels, show how Amazon has adopted technology developed by Kiva Systems, a robotics company it bought for $775 million in 2012. Amazon showcased to reporters on Sunday ahead of Cyber Monday, the biggest online shopping day of the year.

The robots are designed to help the leading U.S. online retailer speed the time it takes to deliver items to customers and better compete with brick-and-mortar stores, where the bulk of Americans still do their shopping.

The robots also may help Amazon avoid the mishaps of last year's holiday season, when a surge of packages overwhelmed shipping and logistics company UPS (UPS) and delayed the arrival of Christmas presents around the globe. Amazon offered shipping refunds and $20 gift cards to compensate customers.

Amazon deployed the robots this summer, ahead of the key holiday quarter, when the company typically books about one-third of its annual revenue. The updated warehouses are in five states -- California, Texas, Florida, New Jersey and Washington.

The move comes at a cost. Amazon estimated in June 2013 that it would spend about $46 million to install Kiva robots at its warehouse in Ruskin, Florida, including $26.1 million for the equipment, according to company filings to local government.

The Kiva robots have allowed Amazon to hold about 50 percent more items and shorten the time it takes to offer same-day delivery in several areas, said Dave Clark, senior vice president of worldwide operations and customer services.

At Amazon's warehouse in Tracy, California, workers stack goods in shelves carried by more than 1,500 Kiva robots, which use markings on the floor to navigate and form a "big block of inventory," Clark said.

Squeezing the racks of items closely together eliminates the need for workers to navigate aisles to collect items ordered by consumers. Now, a worker calls for specific items and the robot steers itself to their particular work station. Each robot can carry as much as 720 pounds.

In some cases, the robots have allowed Amazon to get packages out the door in as little as 13 minutes from the pick stations, compared to about an hour and a half on average in older centers.

"It's certainly proving out that it's justified itself," Clark said of the Kiva acquisition. "We're happy with the economics of it."

 

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Risky Bedding Too Common for Babies, Study Finds

December 1, 2014, 1:03 am

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Filed under: Consumer Protection

By Andrew M. Seaman

More than half of U.S. parents say their babies sleep with pillows, blankets and other loose bedding -- despite recommendations against their use from doctors and health officials, according to a new government study.

Removing loose bedding from a baby's sleeping environment is one way to reduce their risk of suffocation and sudden infant death syndrome, write the researchers, who are from the Centers for Disease Control and Prevention. "We have little understanding of how many infants in the U.S. are put into sleeping environments where soft bedding or blankets may be used," said Carrie Shapiro-Mendoza, the study's lead author and senior scientist in the CDC's Division of Reproductive Health in Atlanta.

The American Academy of Pediatrics recommends that babies be put to sleep on their backs on a firm sleep surface free of soft objects, including pillows, blankets and bumpers. Those recommendations are echoed by the Safe to Sleep program from the National Institutes of Health. "The danger is that thick blankets, quilt or pillows can obstruct the baby's airway, which would keep them from being able to breathe," Shapiro-Mendoza said in a phone interview.

Age, Education of Parents Affect Behavior

Recommendations about safe sleeping were first made in the mid-1990s. The researchers write in the journal Pediatrics that the rate of SIDS declined between 2000 and 2010. Meanwhile, the rate of sleep-related suffocation more than doubled from 7 cases per 100,000 newborns to about 16 per 100,000.

For the new study, the researchers used data on children younger than eight months, collected from 1993 to 2010 as part of the National Infant Sleep Position study.

The researchers write that about 86 percent of parents reported putting their babies to sleep with loose bedding between 1993 and 1995. That figure fell to about 55 percent between 2008 and 2010.

During the most recent period, the researchers found, teenage mothers and mothers with less than a high school education were most likely to use loose bedding.

Sleep Clothing Is All They Need

"It can be tricky for parents because they might see magazine and other images where they see babies with blanket and pillows," said Shapiro-Mendoza. "This may reinforce the idea that these activities are safe and that's the norm." "Parents are really well intentioned," she said. "They want to provide warmth and comfort to the baby, but all the baby really needs is infant sleep clothing." Baby sleep clothing keeps babies warm and does not entrap the child, she said.

Another recent study found about one in eight sudden and sleep-related deaths among infants occur when they're put to sleep on sofas.

Shapiro-Mendoza said parents need to know that the safest place for babies is on their backs on a firm mattress that's covered with a fitted sheet. "There's no need for other bedding," she said.

 

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5 Reasons to Resist Getting a Store Credit Card This Holiday

December 1, 2014, 2:03 am

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Filed under: Retail, Holiday Shopping, Personal Finance, Store Credit Cards, Financial Education

By Kathryn Tuggle

NEW YORK -- If you went shopping on Brown Thursday or Black Friday this year, at some point you were probably asked to open a store credit card. It's a last-minute cash register decision that often seems too tempting to pass up -- who wouldn't want to save 20 percent off the day's purchases or get a $100 in-store credit? Unfortunately, once you get past the initial incentive, store cards have a dangerous dark side. Here are five reasons you should avoid signing up for store cards this holiday season:

1. Higher interest rates. "In my experience, the interest rates for store cards are at least 6 percent higher than traditional credit cards," says William Waldner, an attorney in New York City. "So yes, you may save 10 percent off your purchase that day, but that will quickly be negated when you factor in the higher interest rate."

If its an impulse decision to get the card, then it's going to be trouble.

The current average interest rate for store credit cards is 23.72 percent, while personal rewards credit cards have an average interest rate of 16.08 percent, according to Alina Comoreanu, research analyst at WalletHub.com.

"If its an impulse decision to get the card, then it's going to be trouble," Waldner says. "If you want to go in, get the discount, and then pay off the balance immediately, then it's not a horrible decision. But you have to be strategic."

Waldner says that many of his clients have ended up paying three times more for items bought with a store card due to the high interest rates.

"I've seen those charges start out at $1,000, but you may end up spending $3,000 by the time you pay it off. It just doesn't make sense. The stores know you're going to go in and buy a bunch of stuff, and then they're going to generate a fortune from you as you try to pay it back."

2. Limited perks. Read the fine print. That 20 percent off discount may only be valid for 24 hours. After that, what will you get?

"After that initial discount they almost never offer anything else," Waldner says.

Although most store cards offer coupons sent to you throughout the year, the deals are often no better than any other sales the average shopper has access to, he says.

"They're fake. You'll get the same discount if you just ask," he says.

Also, rewards offered by store credit cards are redeemable only for merchandise from the respective store and aren't as lucrative as those offered by traditional rewards cards, Comoreanu says.

"Often the rewards offered by store cards are not an actual steady rewards programs, but just discounts users can apply to in-store purchases occasionally," she says. "These discounts almost always come with a cap, for example, up to 20 percent discount for a maximum amount of $100 back."

If you plan to sign up for a store card to get that initial discount, make sure to research all promotions the card offers, says Adam Levin, chairman and co-founder of Credit.com.

"You may be able to find coupons or coupon codes on the retailer's website or through email and social media promotions, without having to open up a new account," he says.

3. You'll spend more. "You may be lured in by the instant savings, but you may end up spending more because sometimes the new account discount will extend to purchases made within a limited time frame, encouraging you to binge shop to get the discount," Levin says. "You run the risk of spending more, instead of saving money."

Department stores will be aggressively offering store cards throughout the holiday season, Waldner says. They know that people are looking for discounts wherever they can find them.

"If you walk into store and they offer you a store-specific card, you're going to spend a lot more than if you just have a regular MasterCard or AmEx," Waldner says. "When you're holding onto a specialty card, it's easy to feel obligated. Customers feel like they've been handed access to money when they're told they get that discount."

4. Credit report concerns. One of the dangers consumers don't expect to run into when holiday shopping is a negative effect on their credit, Levin says. But it can happen.

"When opening a department store credit card, you may see a dip in your credit score because an inquiry is created when the card issuer checks your credit score," he says. "Also, if you fall behind on payments this can hurt your credit."

Applying for a store card is just like applying for any other line of credit. It's not a gift card or a prepaid card -- if you use the card and don't pay it off, it's going to reflect negatively on your credit report.

5. Traditional cards offer real rewards and incentives. Unlike store cards, traditional credit cards offer lower interest rates, rewards programs and fraud protection, Levin says. Most traditional cards also offer free insurance on car rentals and purchase protection for certain items.

"If you want frequent-flier miles or cashback rewards, then you need to rely on a traditional card," Waldner says. "All you're going to get with a store card is a discount on clothing or electronics. Any benefit you receive is contingent on you going back there and shopping. They're basically trapping you in their store."

 

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Last Week's Biggest Stock Movers: Taser, American Airlines

December 1, 2014, 2:04 am

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

Plenty of stocks go up and down in any given week. The gainers inspire us to keep investing. The decliners keep greed in check while reminding us about the risks of the equity markets.

Let's go over some of last week's best and worst performers.

Veeva Systems (VEEV) -- Up 17 percent last week

Shares of Veeva Systems soared after posting better than expected financial results. The provider of enterprise software solutions for pharmaceutical companies and emerging biotechs saw its revenue climb 52 percent for the quarter over the past year. Profitability grew even faster. As a cherry on top, Veeva's guidance is also nicely ahead of analyst forecasts.

American Airlines Group (AAL) -- Up 12 percent last week

Air carriers in general moved higher last week as jet fuel prices continued to head lower. Oil prices hit a four-year low. That's great news for travelers planning their holiday getaways, but it's even better for the airlines that stand to benefit from lower fuel since it's a major variable cost component of their operations.

Taser Systems (TASR) -- Up 11 percent last week

The violent incident in Ferguson, Missouri, has stirred up a lot of controversy, but one thing that both sides seem to agree on is that police officers can benefit from body cameras that provide an accurate depiction of what takes place in confrontations. Taser -- the company that's famous for its namesake stun guns -- also makes wearable cameras and runs the cloud-based Evidence.com platform that stores the recorded data.

Taser was already moving higher in light of the Ferguson incident, but the stock picked up some steam when the Winston-Salem, North Carolina, Police Department ordered 623 of TASER's Axon body cameras along with a five-year subscription to Evidence.com. The department made a smaller purchase of Axon cameras with a shorter Evidence.com subscription earlier this summer.

Goodrich Petroleum (GDP) -- Down 43 percent last week

The same plunge in oil prices that sent airlines higher naturally didn't go over so well with the companies exploring, developing and producing oil. Goodrich Petroleum was one of last week's biggest losers, shedding more than 43 percent of its value. The producer of oil and natural gas will be in for a world of hurt if oil prices remain low given its fixed extraction costs.

ReneSola (SOL) -- Down 17 percent last week

It wasn't just oil and gas taking a hit. Solar panel maker ReneSola slumped after posting weak quarterly results. The Chinese company experienced a 22 percent decline in shipments. There is a correlation between oil and solar energy. Interest in solar power spikes when fuel prices are on the rise. However, ReneSola has been a laggard within its own industry. It hasn't posted an annual profit since 2010.

Daktronics (DAKT) -- Down 11 percent last week

Investors know the score when they buy into Daktronics, the world's largest supplier of high-end electronic scoreboards and displays. Shares of Daktronics got sacked after serving up a soft financial report. Quarterly revenue inched higher, but operational challenges resulted in profitability going the other way. Daktronics has now missed Wall Street's profit targets in three of the past four quarters.

Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Veeva Systems. Try any of our Foolish newsletter services free for 30 days. Check out our free report on one great stock to buy for 2015 and beyond.

 

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Cyber Monday Gears Up to Get Online Shoppers Hyped

December 1, 2014, 3:01 am

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Filed under: Retail, Holiday Shopping, Economic Indicators, Internet, Consumer Issues

By MAE ANDERSON

NEW YORK -- Retailers rolled out discounts and free shipping deals on Cyber Monday, with millions of Americans expected to log on and shop on their work computers, laptops and tablets after the busy holiday shopping weekend.

But with retailers extending their online deals into "Cyber Week" and even "Cyber Month," some shoppers aren't quite seeing the jaw-dropping deals they were hoping for online.

Still, the day is expected to be the biggest online shopping day again, as it has been each year since 2010. As of noon, online sales rose 9.2 percent compared with last year, according to IBM Digital Analytics. That is good news for retailers after a Thanksgiving weekend that saw fewer shoppers and lower spending than last year, according to some estimates.

Courtney Lane Greenley, 25, from Alexandria, Virginia, was feeling regret Monday that she didn't buy a knife block and cutlery earlier in the week, when she saw better deals online. She saw a deal on Amazon, which has been running limited-time "lightning offers," for some Rachael Ray cookware on Friday that was under $100, but on Monday it cost more than $100.

"I should have pulled the trigger earlier," she said.

Jack Kananian, of Brunswick, Ohio, 31, was more satisfied with his purchase. He waited months to buy a computer because he wanted to wait for Cyber Monday deals. He found one on Hewlett-Packard's (HPQ) mobile site and bought it via his smartphone on Monday, a computer with a touch screen for $550 marked down from $800.

"I've been taking a look at different prices, but I bought it once I saw the deal, it was the best price I saw by far," he said.

Forrester (FORR) analyst Sucharita Mulpuru said that because people are expected to shop on Cyber Monday, retailers can play it safe.

"Cyber Monday offers aren't super compelling, but don't need to be," she said. "It's been the biggest shopping day of the year for the last few years, so they know that people are going to come."

Karen Manley, 44, of Bowling Green, Kentucky, took advantage of cyberdeals well before Cyber Monday. She started shopping online early last week, and snagged deals including puffer vests from Aeropostale (ARO) that she bought before Thanksgiving that were $46 marked down to $14, plus free shipping. She planned to hit Dillard's (DDS) and Forever 21 sites after work to look for Ugg shoes and sweaters for her three children age 13, 15 and 18, as well as free shipping offers.

"It's easier and more convenient to shop online," she said.

Research firm comScore said late Sunday that e-commerce spending for the first 28 days of the November and December shopping season totaled $22.7 billion, up 15 percent from last year. Sales jumped 32 percent to $1 billion on Thanksgiving Day and 26 percent on Black Friday to $1.51 billion.

The firm expects people to spend about $2.5 billion on Cyber Monday alone. The National Retail Federation predicts 126.9 million people will shop online this year, down 4 percent from last year.

ComScore (SCOR) Chairman Gian Fulgoni said the strong spending online so far stems from the "overall health in consumer spending, responsiveness to the strong deals being offered online, and perhaps some shoppers opting to stay home on Thanksgiving rather than head out to the stores that opened their doors early."

On Monday, Gap (GPS) and Banana Republic offered 40 percent off all purchases. Amazon.com (AMZN) offered up to 45 percent off some Samsung TVs and a deal later in the day for its Amazon Fire TV video streaming box marked down to $69 from $99.

Walmart (WMT) said it has doubled its Cyber Week deals to 500 compared with last year, including up to half off some TVs, tablets and toys with free-shipping offers. Walmart is also rolling out new deals later in the day in its so-called "Evening Edition" round of deals, including a Straight Talk Moto E Android Phone for $9.99, 90 percent off its regular price.

The name "Cyber Monday" was coined in 2005 by the National Retail Federation's online arm, Shop.org, to encourage people to shop online. After retailers revved up deals, it became the busiest online shopping day in 2010. The name was also a nod to online shopping being done at work, where faster connections made it easier to browse, less of a factor now.

Cyber Monday comes after a weekend that saw 5.3 percent fewer shoppers and 11 percent less spending, according to estimates by the National Retail Federation.

The National Retail Federation has forecast overall holiday sales will increase 4.1 percent to $616.9 billion in 2014.

Elsewhere in the world, like Asia and Europe, Black Friday and Cyber Monday have increasingly been used as marketing ploys by retailers, even though Thanksgiving isn't celebrated. Still, in Asia, Singles Day, which occurs on Nov. 11, is by far the biggest shopping day, with sales of $9.3 billion this year. That's bigger than sales of Thanksgiving through Cyber Monday combined.

 

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Have You Just Bought Some of These Dangerous Toys?

December 1, 2014, 4:31 am

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Filed under: Consumer Ally, Recalls, Shopping

In the midst of the annual holiday toy-buying frenzy, one of the nation's largest consumer advocacy groups identified two dozen toys it found for sale that could be dangerous, including some featuring popular characters.

In a report released on Monday, U.S. PIRG in its 29th annual "Trouble in Toyland" survey named 24 toys that appear pose danger to children and noted that those are just the ones they came across, and there might be more.

Despite consumer protection laws, companies continue to produce and import toys that potentially present a hazard for children.

"We should be able to trust that the toys we buy are safe" said Sujatha Jahagirdar, U.S. PIRG Public Health Campaign director. "However, until that's the case, parents need to watch out for common hazards when shopping for toys."

Among the worrisome toys found include: Disney's (DIS) Doc Mcstuffins (a figurine set in which the heads regularly break off) and Jake and the Neverland Pirates (a tambourine set with chromium). Others, like a toy sheriff's badge (made with lead) can be found at dollar stores.

"Despite consumer protection laws, companies continue to produce and import toys that potentially present a hazard for children, putting them at risk of injury or even death," the report said.

The Toy Industry Association took issue with the report and the organization's methods.

"Independent monitoring and analysis by outside parties can help improve toy safety standards if these activities are carried out in a responsible manner, but groups like PIRG - who consistently disseminate incorrect and misleading information about the safety of toys - are not serving the interests and well-being of children and their families," association President and CEO Carter Keithley said in a statement. "Toys that do not present any safety hazard to children, and that provide fun and developmental value, are wrongly maligned by these spurious reports, making parents unnecessarily fearful and depriving children of the joy these toys can offer."

The Toy Industry Association noted that the toys highlighted by the group had not been recalled and neither had those named in prior reports.

Make It Safer for Your Kids

Despite that, the PIRG report noted that just last month a huge recall of McDonald's (MCD) Hello Kitty Happy Meal toy sets was conducted because a piece of a whistle in the set can be swallowed by small children. But not every toy that poses a potential hazard is recalled.

The people who develop the survey each year have these safety recommendations:

• Be sure the toys you buy are age-appropriate.
• Beware of choking hazards, such as broken balloons, watch-sized batteries and small balls. As a guide, no toy part for a child 3 or younger should be able to fit in the opening of a toilet paper tube. Keep broken parts of toys or small pieces away from small children.
• Don't allow children to play with toys that have magnets. The Consumer Product Safety Commission has reported incidents involving children, even older kids, who have swallowed strong magnets, causing severe damage to their gastrointestinal systems.
• Avoid overly loud toys. "If it sounds too loud, it probably is."
• Don't allow children to play with cords or strings that are more than a foot long.
• Beware of toys with toxic chemicals. Healthystuff.org lists chemical content ratings for more than 5,000 products. Among the hazards the site tests for include BPA, lead and arsenic.
• Check the CPSC for recall information, read incident reports filed by consumers and report product hazards you discover so that other consumers can read them.

The 24 Hazardous Toys

Toxic Hazards

• Badge playset.
• Dora the Explorer backpack.
• Hello Kitty bracelet and hair clips accessory set.
• Jake and the Neverland Pirates tambourine.
• Leopard pattern rubber duck.

Ingestion Hazards

• Buckyballs: Illegal to sell in the U.S, but was available for purchase online. Product has been recalled.
• Sonic Sound Sizzlers noise magnets.
• Zen Magnets mini set: Manufacturing is fighting against a recall by the CPSC.

Choking Hazards

• Cherubic Cetacean (toy has been recalled in Australia).
• Disney Junior Doc McStuffins figurine playset.
• Disney Piglet figurine.
• Edushape 80-pieces textured blocks.
• Favors Surprises (spiral drawing pieces).
• Grow Color Changers.
• Grow Metallix Mega Gro-Bot.
• Magic Towel (baseball shape).
• Magic Towel (football shape).
• Mega value pack 16 latex punch balloons.
• Mix & Co. headband.
• Our Generation: Sydney Lee and "Stars in Your Eyes."
• Princess party favors surprises.
• Rubber bouncy ball.
• Shopping cart playset.
• Wind-up Fun (a fish).

 

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Operation HOPE Strives for Financial Dignity Across America

December 1, 2014, 5:30 am

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Filed under: Personal Finance, Entrepreneurs, Professional Development, Education, This Built America

Last year, 45 million Americans, or 14.5 percent of the population, were below the poverty line. While declining, that percentage still represents a life-defining crisis that hinders millions. Furthermore, the "Teetering Class," or Americans who are essentially surviving paycheck to paycheck, constantly risks falling below the poverty line as well. But one movement, Operation HOPE, aims to change lives through financial dignity.

Operation HOPE is a leading nonprofit that aims to empower individuals through financial literacy in a bid to eradicate poverty. John Hope Bryant established Operation HOPE in the aftermath of the Rodney King riots in South Central Los Angeles in 1992. Bryant, an entrepreneur since childhood, teaches these methods through the "Silver Rights Movement," a series of books that tackles important subjects facing Americans today. His latest book, "How the Poor Can Save Capitalism," delves deeper into these topics.

With a focus on individuals of all ages, Operation HOPE aims to keep goals high through attainable methods. The first goal of Operation HOPE is to educate. "We have to demystify the economy, first and foremost," explains Bryant. "Replace the myths with facts. The facts are very inspiring." Additionally, the movement strives for results that are seen by the individual and community -- something Operation HOPE sees as a key for the movement. "People need to see change right in front of them," Bryant says.

Project 5117

Operation HOPE's major initiative is Project 5117, a four-step approach to educating and empowering all ages from middle school up. It's supported by the U.S. Consumer Financial Protection Bureau, the FDIC, the American Bankers Association, President Bill Clinton and SunTrust banks (STI), to name just a few.

Young people are idealists and want to change the world. You can't have a movement in the world without young people.

Project 5117 is a large, yet feasible project that hopes to empower five million young people with financial literacy education, as well as HOPE Business in a Box Academies in 2,000 of "the worst schools in America," a distinction Bryant doesn't agree with. Gallup has formed a 100-year partnership to track the progress of each school from fourth to twelfth grade, dubbed the Gallup-HOPE Index. Each school will need to invest $10,000 a year for the project to operate.

One million of the students will then be chosen to become entrepreneurs to start their own business for under $500. They are chosen after giving two-minute pitches to their schools.

"Think 'Shark Tank' for kids," explains Bryant. The students will receive their seed money in a bank account, as well as mentorship from local business leaders. That's when the change takes effect in the child.

"At that point, the endorphins are kicking in the right side of the kid's head," Bryant elaborates. "By then it doesn't matter if they become an entrepreneur or not. They take their lives back and become leaders."

For the other four million students, Operation HOPE strives to provide graduating students with internships in prominent companies to introduce them to the professional business world.

Furthermore, Operation HOPE will add 1,000 HOPE Inside units spread throughout the country, which will serve as certified financial literacy centers. "We're going to become the national private banker for the working man for the first time in America's history," states Bryant. Much of the movement derives inspiration from Abraham Lincoln's Freedman's Savings Bank and Martin Luther King Jr.'s work at the time of their assassinations.

Lastly, Project 5117 hopes to educate individuals to achieve a credit score of 700 or greater, a goal they intend to achieve through the courses at their HOPE locations. With that, Operation HOPE aims to motivate entrepreneurs to invest in their communities by owning local businesses that stimulate positive spending and employment, as well as real estate investment.

Focus on Small Business

Bryant points to the post-World War II Marshall Plan as the "bold, audacious move" that spurred American trade after rebuilding the Axis nations. "We need a Marshall Plan for today," he elaborates. "I call it 'The HOPE Plan."

A key focus of the plan is on small business. Bryant cites the confusion people have when looking for employment. He points to the low number of businesses that employ more than 10,000 employees. With that in mind, he emphasizes that small business is the way to go. Whether it's creating a business or finding employment in one, the creation of 1 million small businesses a year will help boost the GDP and economy of the area.

"Young people are idealists and want to change the world," he says. "You can't have a movement in the world without young people." This includes getting at least five percent of communities to become role models, which will help stabilize their neighborhoods through work and contributions in the community.

"You don't need a majority to change the world. Hope is so powerful. You can have a minority that's so focused and targeted it can change everything."

Operation HOPE and Bryant understand that they're in for a massive undertaking -- but even with that knowledge, they remain undeterred. Like former home run king Hank Aaron, you have to take a swing to connect with the ball. As for Bryant? "I'm going to swing this bat everyday," he says.

 

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The Best 2014 Cyber Monday Deals -- Savings Experiment

December 1, 2014, 5:30 am

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Filed under: Holiday Shopping, Savings Experiment

If you missed out on those Black Friday deals, you can still cash in on big holiday savings. Today is the day to shop online with Cyber Monday sales in full effect. Feeling overwhelmed by your inbox? Here's a roundup of where to get the best deals around the web.

If you're shopping for a tech-savvy family member, they'll love iCreation's wireless Bluetooth iPhone dock, which is available for just $49.99 right now. That's a deep 80 percent discount, plus the company is offering free shipping.

Whether you want to upgrade the size of your TV or are looking for a great gadget to gift a loved one, head over to Best Buy for all of your entertainment needs. The retailer is holding a site-wide sale that shouldn't be missed.

Those who want to stay in shape at home are in luck this season, as Bowflex is offering its Xtreme SE Home Gym for $499, down from $1,299, with the code CYBERMON14.

For fashion lovers that don't mind a second-hand item, RueLaLa is the site to hit for big brand discounts of up to 70 percent off handbags and accessories. If you're still in need of a great gift, we recommend heading to CyberMonday.com for all of the best deals in one place. Happy shopping!

 

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Rising-Rate CDs Are a Downer for Investors

December 1, 2014, 7:00 am

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Filed under: Banking, Personal Finance, CDs, Credit Unions, Interest Rates

The only thing investors love more than certainty is a guaranteed win, which is why rising-rate certificates of deposit seem like such a great idea. Safely invest your money and even if conditions should suddenly change, you can get some of that upside rather than being locked in with a traditional CD. Such an arrangement may sound enticing at a time when experts caution that interest rates will likely soon be on the rise.

But a new Bankrate.com study of rising-rate CDs at 150 banks and credit unions suggests that you shop carefully. Most of the rising-rate mechanisms make up for that convenience with returns on your investment that might pay you only half of what a top-yield traditional CD of the same maturity term would. Even top-yield online savings accounts are a better bet.

"Appealing concept aside, we found that by and large you're giving up too much return on the front end just for the option of increasing your rate at some point during the term," said Bankrate.com Chief Financial Analyst Greg McBride. Unfortunately, many investors don't shop around for the best deal and so might settle for someone that pays them far less than they otherwise might see.

There are four basic types of rising-rate CDs to compare against traditional two-year CDs (top yield of 1.5 percent) and online savings accounts (top yield of 1.05 percent).

Liquid/No Penalty

The consumer can get access to some or all of their money before the end of the term. In theory, you could pull your money out of a low-performing CD and put it into a higher-return vehicle. Bankrate found that top performers in this category of CD paid only half of what top traditional CDs offered. "If you truly need liquidity, you have the availability of online savings account," McBride said. "Or you could split the money between online savings accounts and a traditional CD."

Bump-Up

"It sounds great because it means you have the option of increasing your rate at some point during the term if interest rates increase," McBride said. " The reality we found is the yields offered were not only less than what you would get on a traditional CD on the same term, but often times so much less that you couldn't possibly bump up to a high enough rate to make up the difference."

Step-Up

Step-ups take out the guesswork and specifically note when rates would rise and by how much. Again, the deal isn't good for the person who researches first. "The options we found here started lower and ended lower than what you would get on a top-yielding traditional CD of the same maturity," McBride said.

Callable

In a callable, the bank can call the CD if interest rates change and reissue the CD if it wishes. McBride calls this the worse deal of the lot. "It's a heads-I-win-tails-you-lose proposition," he said. "If rates go down, they call in your CD so they can reissue it at lower rates. If rates go up, then they're not going to call your CD."

McBride said that rising-rate CDs will appear like umbrellas on a rainy day. "This is the environment that you're going to start seeing more of these rising rate products," he said. "Investors should be aware of their other options and not just jump at a rising rate product because the concept is appealing."

 

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Feds: Mercedes Violated Labor Law at Alabama Plant

December 1, 2014, 7:16 am

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Filed under: Labor, Automotive Industry, Manufacturing, This Built America

By ERIK SCHELZIG

The National Labor Relations Board has upheld a ruling that Mercedes violated federal labor laws by stopping United Auto Workers union supporters from handing out literature inside its Alabama plant.

The ruling by the three-member NLRB panel requires Mercedes to update its employee handbook to say that workers are allowed to discuss union issues during non-work times and that they can solicit their colleagues in mixed-use areas like team centers and atriums.

Mercedes must also post notices at the plant near Tuscaloosa to acknowledge the violation and to reaffirm that management won't "interfere with, restrain, or coerce" workers seeking to unionize the plant.

[I]t's unfortunate that Mercedes-Benz had to be ordered to simply allow workers to discuss their right to organize.

Kirk Garner, who has worked at the Mercedes plant since 2000, was a witness in the NLRB case and is a member of the newly formed UAW Local 112 that is trying to gain representation at the factory.

"We appreciate the ruling by the National Labor Relations Board," Garner said in an email Monday. "Still, it's unfortunate that Mercedes-Benz had to be ordered to simply allow workers to discuss their right to organize."

"We're hopeful it can be a turning point for honoring workers' rights in Alabama, as Daimler does elsewhere in the U.S. and around the world," he said of the ruling, issued late Wednesday.

Mercedes parent Daimler has long declared that it is neutral on union questions. Jason Hoff, the plant's president and CEO, told reporters in September that the dispute didn't reflect an anti-union position by management.

"We clearly feel there are certain places in the plant that are work places, and not places where we would want materials like that being distributed, regardless of whether that's for or against the union," Hoff said at the time. "It has nothing really to do with being against or for the UAW or any other union."

The UAW has been ramping up its efforts at Mercedes and at fellow Volkswagen's plant in neighboring Tennessee. Under German law, half of both companies' boards are made up of worker representatives who are putting pressure on management because the U.S. plants stand alone among either company's global factories without formal labor representation.

Organizing foreign-owned auto plants has been seen as key for the UAW to revive its fortunes. Union membership stood at about 391,000 at the start of this year -- a far cry from its 1979 peak of 1.5 million.

The Alabama plant this summer began producing Mercedes' bestselling C-Class -- making Mercedes the first German automaker to assemble a luxury Sedan in the United Sates. The company is adding 1,400 full-time positions at the plant in connection with the production of the C-Class and a new SUV.

The plant, which opened in 1997, employs about 3,400 workers, though company officials declined to break down how many of those are temporary or outsourced workers. The U.S. is Mercedes' biggest market, with 312,534 vehicles sold in 2013.

 

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Market Wrap: Stocks Slip on Weak Retail Sales, China Slows

December 1, 2014, 8:48 am

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Filed under: Earnings, Retail, Market News, Economic Indicators, China

By MATTHEW CRAFT

NEW YORK -- Mounting signs of weakness in the global economy and a poor start to the holiday shopping season knocked the stock market lower Monday.

Earlier sales, a shift to online shopping and stagnant wages meant fewer Americans showed up to stores over the Thanksgiving weekend, the National Retail Federation said Sunday. The trade group estimated that total spending for the four days totaled $50.9 billion, down 11 percent from last year.

Major retailers slumped in response. Macy's (M) lost $1.72, or 3 percent, to $63.19 and Target (TGT) fell $1.25, or 2 percent, to $72.75. Best Buy (BBY) lost $2.15, or 6 percent, to $37.26.

New reports of slowing manufacturing in China as well as in the three largest economies that use the European currency -- Germany, France and Italy -- also gave investors little reason to cheer.

The Standard & Poor's 500 index (^GPSC) fell 14.12 points, or 0.7 percent, to close at 2,053.44. The losses were widespread: General Electric (GE) and other industrial companies led eight of the ten sectors in the index down.

The Dow Jones industrial average (^DJI) dropped 51.44 points, or 0.3 percent, to 17,776.80, while the Nasdaq composite (^IXIC) fell 64.28 points, or 1.3 percent, to 4,727.35.

It was a weak start to what has been the stock market's best month on average. Since 1950, the S&P 500 has ended December with a typical gain of 1.7 percent, according to the "Stock Trader's Almanac." But after a strong 11 percent run this year, the market looks relatively expensive. The S&P 500 index trades at 17.6 times its profits over the past 12 months, well above the long-term average.

Peter Cardillo, chief market economist at Rockwell Global Capital, said more reports of slow economic growth around the world and falling oil prices could drive the market down in the coming weeks. But he thinks any setback will likely prove temporary. "Maybe the weakness in the global economy will take some of the starch out of our economy," he said. "It probably will, just not so much that it really hurts corporate earnings."

A survey by HSBC (HSBC) showed Chinese manufacturing activity lost steam in November, adding to signs of an economic slowdown. HSBC said its purchasing managers' index edged down to 50 from 50.4 the previous month. On the index's 100-point scale, numbers below 50 indicate contraction. China's economic growth slowed to a five-year low of 7.3 percent in the latest quarter.

"The November PMIs confirm that growth in China's industry remains under downward pressure," Louis Kuijs of Royal Bank of Scotland wrote in a report to investors.

Asia, Europe Markets Move Lower

In Asia, Hong Kong's Hang Seng index plunged 2.6 percent, while the Shanghai Composite Index slipped 0.1 percent. Japan's benchmark stock index Nikkei 225 added 0.8 percent.

Major stock markets in Europe closed with slight losses. Germany's DAX sank 0.2 percent, and France's CAC 40 dropped 0.3 percent. Britain's FTSE 100 slid 1 percent. Russia's RTS index lost 1.6 percent.

Back in the U.S., DreamWorks Animation (DWA) slumped after its latest movie, "Penguins of Madagascar," had a weaker box-office opening over the Thanksgiving weekend than analysts had expected. The sequel to its popular "Madagascar" movie took second place to the newest installment of "The Hunger Games" series. DreamWorks' stock plunged $1.33, or 6 percent, to $22.51.

In the bond market, the yield on the 10-year Treasury note rose to 2.23 percent from 2.16 percent late Friday. High demand for U.S. government bonds has kept yields low.

Precious metals surged. Gold jumped $42.60 to settle at $1,218.10 an ounce, while silver surged $1.14 to $16.69 an ounce. Copper rose five cents to $2.90 a pound.

Oil posted its biggest percentage gain in more than two years, stemming a rout that had knocked about $40 off the price of a barrel of crude since June. Analysts still expect oil prices to remain weak given OPEC's decision last week to maintain its current production targets. That, combined with rising production in the U.S., has created an oversupplied oil market. Benchmark U.S. crude jumped $2.85, or 4 percent, to close at an even $69 a barrel on the New York Mercantile Exchange.

In other trading on the NYMEX:

• Wholesale gasoline rose 5 cents to $1.88 a gallon
• Heating oil rose 5 cents to $2.21 a gallon.
• Natural gas fell 8 cents to $4.01 per 1,000 cubic feet

-AP Business Writer Joe McDonald contributed from Beijing.

What to watch Tuesday:

• Automakers report U.S. vehicle sales for November.
• The Department of Commerce reports construction spending data for October at 10 a.m. Eastern time.

 

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Why Travel Leads to a Healthier, Livelier Retirement

December 1, 2014, 10:00 pm

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Filed under: Retirement

By Tom Sightings

The secrets to a long and healthy life are often thought to be diet and exercise. But you might also want to add travel to that list. While many people travel simply for enjoyment or the desire to do something different, along the way they also broaden their horizons, relieve day-to-day stress and improve their outlook on life in general.

Factor travel into your retirement budget. If your budget is tight, challenge yourself to find ways to cut financial corners without shortchanging your experience. For example, you don't have to fly to popular vacation spots like Florida or Hawaii to reap the benefits. Most people report that their most rewarding trips are not to far-off destinations, but to reunions with family and friends. You can go on vacation off season, take advantage of senior discounts, travel with a social club or alumni organization or volunteer to help plan a trip with a youth group from church or school.

Here are four ways that travel improves life, especially for retirees.

1. More Activity

You hustle through the airport, lug your bags into the hotel, then walk around the city streets, stroll through the museums, swim in the ocean or hike along mountain paths. Many of the extra activities you do on vacation involve physical exercise, which lowers your risk of heart disease, high blood pressure, stroke, diabetes and cancer. Need more proof? The famous Framingham Heart Study of women ages 45 to 64 found that women who vacationed at least twice a year enjoyed a significantly lower risk of heart disease than women who hardly ever took a vacation. A separate study showed that taking vacations reduced the risk of death from heart disease in men as well.

2. Social Benefits

Travel can help you deepen relationships with family and friends, and offers opportunities to meet new people as well. Visiting grandma is an age-old custom that cements family ties, not only between generations but among cousins and other far-flung relatives. And with the upsurge in interest about ancestry brought on by Internet sites and DNA research, the family reunion has enjoyed renewed popularity. Group travel, with friends from home or people brought together by travel sites like Road Scholar, helps build social ties which promote good mental health. In addition, travelers can hardly avoid being introduced to new people, often with different backgrounds and different perspectives, and research shows that active social participation, especially later in life, brings positive benefits for our emotional well-being.

3. Cognitive Rewards

You can go on an educational vacation through an organization like Road Scholar, or attend a cultural week at a place like the Chautauqua Institution. But no matter where you travel, you will be meeting new people, steering through unfamiliar places and trying out different things - all activities that stimulate and challenge the brain, which in turn promotes good cognitive function. Travelers who search out different environments are exposed to unfamiliar cultures, which stretches their imaginations and forces them to puzzle out new problems. The novelty of travel - especially the kind that involves navigating in unfamiliar territory - is a key to boosting your brain power. One study even found that regular participation in activities such as travel was associated with a lower risk of dementia later in life.

4. Improved Mood, Lowered Stress

A 2013 survey sponsored by the Transamerica Center for Retirement Studies found that the majority of travelers (86 percent) said travel "improves their mood and outlook" about life in general. And most respondents also agreed that travel relieves stress and contributes to physical and mental well-being. While many people are aware of the benefits of taking a vacation, they don't always appreciate that the effects of stress relief and general satisfaction linger on long after they get home. According to the Transamerica report, "Travelers are significantly more likely than non-travelers to feel satisfied about their overall mood and outlook, and retiree travelers are notably more likely than non-retirees to feel satisfied with their ability to get things done."

Tom Sightings blogs at Sightings at 60.

 

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How to Harden Your Home Security for Next to Nothing

December 1, 2014, 10:00 pm

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Filed under: Home & Garden, Saving

By Marilyn Lewis

How secure is your castle? The FBI says Americans lost $4.5 billion to burglaries last year, and residential properties made up 74 percent of the total reported.

The good news: It takes a lot less than you may think to install sophisticated security equipment yourself, and you'll save plenty over the cost of a professional alarm company. Even better, there are tons of easy, no-tech ways to improve your home's security for free or next to nothing.

Most burglars work the daytime shift, just like most of us do. They decide whether to hit your home based on appearances: Is it easy to crack or not worth the trouble? The most effective improvements are the ones that persuade a burglar to move on to the next guy's home.

Easy and Free Ideas

1. Enlist local police. Local police departments typically will send a trained officer to your home to do a walk through with you, pointing out your vulnerabilities and suggesting simple fixes. Check your police department's website for crime statistics and tips. For example, the Los Angeles Police Department's offers detailed list of home-security tips for residents. Remember to alert police when you'll be out of town.
2. Chat up the neighbors. Join the local Neighborhood Watch program or start one. Chatting with neighbors updates you on local crime problems and enlists allies who'll watch your home while you're away. Neighbors are terrific watchdogs. My retired neighbor up the hill who likes peering out his window through a giant telescope spotted and chased a pre-dawn intruder from my garden once.
3. Use your locks. Even if your neighborhood feels safe, make locking up a habit. Burglars often test a home by knocking on a door and, if no one answers, opening it. Keep every exterior door and window locked, including the door between the garage and house.
4. Fake it. Install dummy security cameras (about $5). Pretend to have a dog. Buy a couple of "Beware of Dog" signs at a hardware store and put them up. When a stranger is at the door, make a show of putting the "dog" in the other room before you open the door.
5. Keep the place looking lived in. Rotate lights on timers when you're gone. Sign up for USPS' Hold Mail service, reschedule expected deliveries and get friends to drop by randomly to water plants or just walk around.
6. Trim shrubs. Bushy trees and shrubs provide cover for bad deeds. Keep foliage well-trimmed.
7. Use your head. Don't open the door -- and don't let kids open the door -- to uninvited strangers. Stay home when workers are in or around your home. Don't put keys in obvious places like fake rocks and under pots and doormats. Train children (especially teens) to keep key locations, alarm codes and other family security information private.

More Ideas That Cost a Bit

1. Light the night. Install bright, motion-triggered security lights outside the front and back of your home. Battery-powered lights start around $10 each. Hard-wired products start around $50.
2. Replace the door ... or don't. The best entry doors are solid wood ($100 and up) or 16-gauge minimum steel ($120 and up), says the Los Angeles Police Department. Use non-removable hinge pins and avoid doors with glass windows unless the glass is burglar-resistant. Consumer Reports' test of entry doors found, however, that a strong door frame may count more than the door: "All [doors] eventually failed because the doorjamb split near the lock's strike plate, though we also found that beefed-up locks and strike plates can greatly increase a door's kick-in resistance."
3. Install a high-quality deadbolt -- or two. Whatever you do, don't rely on a simple knob lock (built into the door handle) alone. Install a deadbolt above a knob lock. Use a solid core or metal door for all entrance points. Use a quality, heavy-duty deadbolt lock with a 1-inch throw bolt. Use a quality, heavy-duty knob-in-lock set with a dead-latch mechanism Use a heavy-duty, four-screw strike plate with 3-inch screws to penetrate into a wooden door frame. Use a wide-angle 160-degree peephole mounted no higher than 58 inches. Consumer Reports tested deadbolt locks: "Many of the dead-bolt locks we tested don't provide the level of protection you might expect." CR recommends the Medeco Maxum 11WC60L lock in brushed nickel (brass tarnishes), found online for less than $200. This Old House's video demonstrates how to install a keyed deadbolt.
4. Replace the strike plate. Consumer Reports also found that a strong strike plate makes a big difference: "All locks come with a strike plate that attaches to the door frame. But as we've reported in the past, far too many of those are flimsy. Except for the Assa M80 [lock], $95, the kick-in resistance of most locks improved dramatically when we replaced the strike plates with a Mag High Security Box Strike, $10."

Home Security Systems

There's a wide range of home security products. Here's the lowdown on the wired type: "Basic home security systems, or burglar alarms, are typically wired to a central control panel in the home that will activate when windows or doors are opened while the system is armed," says The Chicago Tribune.

Most DIY systems, however, use wireless technology. They're easier to install and can save you a bundle over a wired setup, says The DIY Network, reviewing pros and cons of both. These products begin under $100.

Professional alarm companies may charge little to install a system, but they'll make up for it with monitoring fees. Some, but not all, wireless systems let you hire a professional service for monitoring, so you can comparison shop for price. Or monitor your wireless system yourself, through your computer or smartphone.

Says Fox News, in a review of products: "Log in online, and you can get live video feeds from all over your home, text alerts when anything moves, and even adjust the thermostat that you forgot to program before you left."

Video Surveillance and More

Many DIY systems include a video monitoring option. Or you can purchase cams separately. Think nannycams, but at the front door. Cameras are typically engaged by a motion sensor and allow you to monitor the video feed with an Android or iOS app on a high-speed mobile device.

Something new, trying to raise money on Kickstarter and reviewed by CNN, substitutes a listening device for cameras. Point "combines microphones with environmental sensors to detect anything out of the ordinary in your home while you are away."

Have you tried installing any of these or other improvements in your home? We'd love to hear about it. Post your comments below or on the Money Talks News Facebook page.

 

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How to Safely Lend Money to Family and Friends

December 1, 2014, 10:00 pm

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Filed under: Family Money, Personal Finance, Loans

By AJ Smith

We hear all the time that you should not loan money to friends, but yet friends and family are the most important parts of life. So what do you do, when a family member or close friend has nowhere else to turn for their financial needs? If you feel like you can't (or don't want to) say no, there are some steps you can take to make sure the loan doesn't turn into lingering hard feelings. At the very basic level, it's important to get everyone (spouses, significant others, etc.) on board before you make a deal, consider the impact of this decision and try to look beyond the loan.

1. Lend Only What You Can Afford to Lose

Despite the best efforts of everyone involved, there is a risk you will not be repaid on your loan. It's a good idea to go into this with the mindset that you will not see the money again and then decide how much you are able to loan. Getting the money back may happen more slowly than planned or not at all since the borrower is likely "high risk" if they are turning to you rather than getting a personal loan from a bank or credit union because they have bad credit. (You can check your own credit scores for free on Credit.com.) So it's important to keep that in mind and be ready and willing to forgive in the worst-case scenario.

2. Keep It Professional

There are two ways to handle this - one is to not ask any questions about where the money is going and not worry about it. This can be hard if you then see the person making what you feel are financially irresponsible decisions. The other is to know exactly where the money is going -- whether it's to fund the down payment on a home, pay off credit card debt or something else. While it may seem awkward, you have the right to know where your cash is going so you can decide if this is a worthy loan.

Joking and avoiding details is not part of the negotiation -- be sure you are open about the details like the amount being loaned, formal repayment method and schedule, interest rate and possible late fees right away to avoid future miscommunication and confusion. And, of course, get it in writing. Often overlooked but extremely important, you want an agreement with details and signatures so both parties are clear on the contract. This should include consequences for late or missed payments.

3. Charge Interest

It may seem unnecessary to expect family and friends to pay interest, but it is the fairest way to protect yourself. If you are loaning out a big amount of money, you could be earning interest through investments or even a savings account. A fair interest rate will inspire your borrower to pay back in a timely manner and help you avoid gift taxes. While the exact percentage is up to you, I suggest you charge a competitive rate that borrowers could get from a traditional lender while maintaining the guidelines from the Internal Revenue Service.

4. Communicate Regularly

Having a plan is integral to the process, but it cannot always account for every possible situation. It's a good idea to let the borrower know from the onset that you want them to come to you if they run into trouble with payments. You may want to set up weekly or monthly phone conversations to discuss financial health and loan progress. While proactive and transparent, this also keeps your relationship from being overshadowed by the loan -- normal activities together do not need to be dominated by the talk of finances since you have a specified time to go over that.

Remember that if you are not comfortable or financially able to lend, you can say no. Don't let guilt guide you into unsafe personal financial conditions. It is nice to help when you can, but it is always your decision and one you should make carefully.

 

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How to Max Out Your Retirement Accounts in 2015

December 1, 2014, 10:00 pm

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Filed under: Retirement, Personal Finance, 401K, IRA, Roth IRA

By Emily Brandon

Contributing to retirement accounts allows you to build wealth, capture valuable employer contributions and qualify for tax breaks, all at the same time. But few savers are able to capture all of the advantages that 401(k)s and individual retirement accounts offer. Here's how to make the most of your retirement accounts in 2015.

Max out your 401(k). You can contribute up to $18,000 to a 401(k) plan in 2015, $500 more than in 2014. To be on track to max out your 401(k), you will need to contribute $1,500 per month or $750 per paycheck if you are paid twice per month. If you were already maxing out your 401(k) plan in 2014, you can reset your monthly contributions about $42 higher to take advantage of the higher contribution limit. "Adjust your deferral slightly upward to make sure you don't miss out on maximizing your 401(k)," says Michael Hollars, a certified financial planner for Client First Finance in Sunnyvale, California. A worker in the 25 percent tax bracket who contributes the maximum possible amount to a 401(k) in 2015 will save $4,500 on his 2015 tax bill. Taxes won't be due on that money until it is withdrawn from the account.

Remember to make catch-up contributions. Workers age 50 and older can contribute $24,000 to a 401(k) account in 2015, $6,000 more than younger workers. Older workers need to save $2,000 per month or $1,000 per bimonthly paycheck to take maximum advantage of their 401(k) account. Older workers who manage to max out their 401(k) will reduce their income tax bill by $6,000.

Get your employer match. An employer match or other types of company contributions will help you grow your retirement account balance even faster. The most common employer match is 50 cents for every dollar saved up to 6 percent of pay, according to Vanguard data. For a worker earning $60,000 per year, this employer match could be worth as much as $1,800.

Max out your IRA. Workers can contribute up to $5,500 to an IRA in 2015 or $6,500 if they are age 50 and older. Saving this amount requires a contribution of $458 per month or $542 for people age 50 and older. However, savers who have a workplace retirement plan and a modified adjusted gross income between $61,000 and $71,000 for individuals and $98,000 to $118,000 for couples in 2015 are ineligible for part or all of the tax deduction for making a traditional IRA contribution. Spouses without a workplace retirement plan who are married to someone who has one won't get the full tax deduction for an IRA contribution if the couple's income tops $183,000 or any deduction if it's over $193,000 in 2015.

Consider a Roth account. Contributions to a Roth account don't get you a tax break in the year you make the contribution, but withdrawals in retirement, including the earnings, are tax-free. Roth IRA eligibility phases out for individuals earning between $116,000 and $131,000 and couples bringing in $183,000 to $193,000. However, workers earning more than this are still eligible to convert traditional IRA assets to a Roth. "Although you could be above the income limits, you can get around it by doing a backdoor Roth," says Kevin Brosious, a certified financial planner and president of Wealth Management Inc. in Allentown, Pennsylvania. "You contribute to a nondeductible IRA, and then you can convert that nondeductible IRA to a Roth IRA."

Get the saver's credit. In addition to a tax deduction on your 401(k) and IRA contributions, some workers can claim the saver's credit. Workers with an adjusted gross income under $30,500 for singles, $45,750 for heads of household and $61,000 for couples in 2015 can claim the saver's credit, which can be worth as much as $1,000 for individuals and $2,000 for couples.

Minimize fees. The fees you pay on your investments or to maintain the account reduce your retirement account balance. "Try to look for some low-cost investments within your 401(k). Index funds typically have the lowest fees," says Colleen Weber, a certified financial planner in Chanhassen, Minnesota. "The employee can keep more of the returns for themselves when they have the lower fees."

Avoid penalties. There are penalties if you withdraw money from your retirement accounts too early or too late. You will typically trigger a 10 percent early withdrawal penalty if you take distributions from traditional retirement accounts before age 59½. There's also a 50 percent penalty if you fail to take annual distributions from your traditional retirement accounts after age 70½. Roth IRAs offer more flexibility because withdrawals aren't required in retirement.

Emily Brandon is the senior editor for Retirement at U.S. News. You can contact her on Twitter @aiming2retire, circle her on Google Plus or email her at ebrandon@usnews.com.

 

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The New Organizational Structure for Estate Planning

December 1, 2014, 10:00 pm

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Filed under: Estate Planning

Nobody wants to contemplate their own mortality, but just like taxes, death is an inevitability that we all have to face. Yet studies have shown that more than 50 percent of Americans don't have even the most basic estate planning documents needed to protect themselves and their heirs in case of an unexpected demise.

Those that do often have physical documents squirreled away in filing cabinets or safe deposit boxes with no mechanism in place to alert the appropriate people of their existence when needed.

A new company -- Estate Assist -- aims to change that by allowing customers to create a secure, cloud-based digital safe deposit box where they can upload, organize and automatically distribute all the critical information and documents related to their estate. Such as:

• Financial assets. Bank, brokerage and retirement accounts.
• Digital assets. Email, Facebook, Twitter and other social media accounts.
• Life documents. Wills, powers of attorney, life insurance policies, birth certificates and deeds.

The came to Estate Assist founder and CEO Woody Levin on the heels of a family tragedy. "I watched my father struggling to find paperwork after my grandmother passed away," said Levin. "I decided there had to be a better way for all of us to organize our assets. Then it occurred to me that it's not just end-of-life critical to have fast access to key information -- it's day-to-day critical for all of us, at any age, to have one safe place to store our assets and important documents."

Smart Planning

To be sure, other companies offer secure online safe deposit boxes, but they generally provide only "dumb" storage, where the customer essentially dumps their documents without any structure or action plan.

By contrast, Estate Assist provides simple onboarding tutorials that prompt users as to what types of documents they may want to secure, who they want to designate to receive those documents and the time and circumstances in which those designees will gain access. The cost is $4.95 a month.

This process has been made even easier by a partnership with Intuit. Estate Assist users can input their main bank account information into their dashboard, and Intuit's powerful API will search and locate other financial accounts to be added to the digital safe.

One question that immediately comes up is security. How can you trust that all your important information is safe after being uploaded into the cloud? The company has gone to great lengths to ensure that the private details of their users stays private. All data transfers to and from the site are protected by 256-bit encryption technology, the same type used among financial institutions. Once in the cloud, documents are stored according to Health Insurance Portability and Accountability Act compliance standards developed by the government to safeguard individual's health and medical records.

Organizing and Documenting as It Happens

Levin says that users can also upload videos, photos and personal communications that can only be accessed after they pass. This gives Estate Assist an added dimension that goes beyond just storing financial documents, allowing users to create a virtual time-capsule of memories and messages.

The most obvious demographic for the product are baby boomers who have already entered the life stage where estate planning is one of the foremost financial considerations. But Levin also thinks that the product will have an appeal to millennials who have grown up with technology and are comfortable using it in all aspects of their lives.

In either case, the company hopes that users will also adopt Estate Assist for organizing and documenting significant life events in real time. "Whether it's marriage, a new baby, retirement, a work transfer overseas or military deployment," said Levine, "the most important thing each one of us can do is to keep our financial assets, digital assets, and important documents safe and secure -- and when we want, make those documents easily accessible to our loved ones."

The Lund Loop is a free once-weekly curated slice of what I am writing, reading and hearing about in finance, tech, music, pop culture, humor and the good life. But not sports or knitting ... ever!

 

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FBI Warns of 'Destructive' Malware in Wake of Sony Attack

December 2, 2014, 12:02 am

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Filed under: Identity Theft, Company News, Sony, Computer Industry, Internet Fraud

By Jim Finkle

BOSTON -- The Federal Bureau of Investigation warned U.S. businesses that hackers have used malicious software to launch a destructive cyberattack in the United States, following a devastating breach last week at Sony Pictures Entertainment.

Cybersecurity experts said the malicious software described in the alert appeared to describe the one that affected Sony, which would mark first major destructive cyberattack waged against a company on U.S. soil. Such attacks have been launched in Asia and the Middle East, but none have been reported in the United States. The FBI report didn't say how many companies had been victims of destructive attacks.

"I believe the coordinated cyberattack with destructive payloads against a corporation in the U.S. represents a watershed event," said Tom Kellermann, chief cybersecurity officer with security software maker Trend Micro Inc. "Geopolitics now serve as harbingers for destructive cyberattacks."

The five-page, confidential "flash" FBI warning issued to businesses late Monday provided some technical details about the malicious software used in the attack. It provided advice on how to respond to the malware and asked businesses to contact the FBI if they identified similar malware.

The report said the malware overrides all data on hard drives of computers, including the master boot record, which prevents them from booting up.

"The overwriting of the data files will make it extremely difficult and costly, if not impossible, to recover the data using standard forensic methods," the report said.

The document was sent to security staff at some U.S. companies in an email that asked them not to share the information.

The FBI released the document in the wake of last Monday's unprecedented attack on Sony Pictures Entertainment, which brought corporate email down for a week and crippled other systems as the company prepares to release several highly anticipated films during the crucial holiday film season.

A Sony spokeswoman said the company had "restored a number of important services" and was "working closely with law enforcement officials to investigate the matter."

She declined to comment on the FBI warning.

Severe Breach

The FBI said it is investigating the attack with help from the Department of Homeland Security. Sony has hired FireEye's (FEYE) Mandiant incident response team to help clean up after the attack, a move that experts say indicates the severity of the breach.

While the FBI report didn't name the victim of the destructive attack in its bulletin, two cybersecurity experts who reviewed the document said it was clearly referring to the breach at the California-based unit of Sony (SNE).

"This correlates with information about that many of us in the security industry have been tracking," said one of the people who reviewed the document. "It looks exactly like information from the Sony attack."

FBI spokesman Joshua Campbell declined comment when asked if the software had been used against the California-based unit of Sony, although he confirmed that the agency had issued the confidential "flash" warning, which Reuters independently obtained.

"The FBI routinely advises private industry of various cyber threat indicators observed during the course of our investigations," he said. "This data is provided in order to help systems administrators guard against the actions of persistent cybercriminals."

The FBI typically doesn't identify victims of attacks in those reports.

Global Hacks

Hackers used malware similar to that described in the FBI report to launch attacks on businesses in highly destructive attacks in South Korea and the Middle East, including one against oil producer Saudi Aramco that knocked out some 30,000 computers. Those attacks are widely believed to have been launched by hackers working on behalf of the governments of North Korea and Iran.

Security experts said that repairing the computers requires technicians to manually either replace the hard drives on each computer, or re-image them, a time-consuming and expensive process.

Monday's FBI report said the attackers were "unknown."

Yet the technology news site Re/code reported that Sony was investigating to determine whether hackers working on behalf of North Korea were responsible for the attack as retribution for the company's backing of the film "The Interview."

The movie, which is due to be released in the United States and Canada on Dec. 25, is a comedy about two journalists recruited by the CIA to assassinate North Korean leader Kim Jong Un. The Pyongyang government denounced the film as "undisguised sponsoring of terrorism, as well as an act of war" in a letter to U.N. Secretary-General Ban Ki-moon in June.

The technical section of the FBI report said some of the software used by the hackers had been compiled in Korean, but it didn't discuss any possible connection to North Korea.

-With additional reporting by Lisa Richwine.

 

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CoreLogic: Home Prices Get a Boost in October

December 2, 2014, 12:20 am

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Filed under: Mortgages, Real Estate, Housing Market, Inflation, Home Buying

By JOSH BOAK

WASHINGTON -- U.S. home prices rose at a faster year-over-year pace in October than in September, snapping a seven-month slowdown.

Real estate data provider CoreLogic (CLGX) said Tuesday that prices increased 6.1 percent in October compared with 12 months earlier. That was up from September's year-over-year increase of 5.6 percent.

Still, home values are rising more slowly than they were earlier this year, when 12-month gains were averaging nearly double their current pace.

The price momentum began to tail off in the middle of the year as home values in more cities and states neared the record highs last seen shortly before the Great Recession began in late 2007.

Higher prices have reduced affordability, especially because the incomes of many would-be buyers have yet to match their pre-recession levels. Lending standards also remain comparably tight.

Previous price increases led investors to pull back from the home market, and first-time buyers have yet to fill the void created by their departure.

Price growth will likely remain mild as a result, CoreLogic said. The firm projects that home values will rise 5.1 percent over the next 12 months. Roughly half the country's homes will match or surpass their pre-recession prices by mid-2015, it predicts.

Every state reported a price gain in October. CoreLogic said prices reached new highs in Colorado, Louisiana, Nebraska, New York, North Dakota, South Dakota, Tennessee, Texas and Wyoming. In 27 states, home values are within 10 percent of their previous peaks.

There are still pockets of the country -- including parts of Texas, Seattle and Denver -- where prices are rising faster than in the rest of the country because of their relatively strong job markets, incomes and home prices, said Sam Khater, deputy chief economist at CoreLogic.

Other real estate companies have forecast a sharper slowdown in price gains next year.

Zillow (Z), the online home marketplace, released estimated Tuesday that home values will rise a mere 2.5 percent nationwide in 2015. That slowdown should ultimately help bring more buyers into the market and increase sales, said Stan Humphries, Zillow's chief economist.

Humphries said he thinks more homes will be listed for sale as prices edge closer to their previous peaks, giving buyers more options. At the same time, rental prices are expected to rise 3.5 percent. That should give people an additional incentive to buy.

"As renters' costs keep going up, I expect the allure of fixed mortgage payments and a more stable housing market will entice many more otherwise content renters into the housing market," Humphries said.

 

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Apple App Store No Longer Labels Free Apps as 'Free'

December 2, 2014, 12:25 am

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Filed under: Google, Apple, Mobile Technology, Cell Phones

By Krystal Steinmetz

The Apple (AAPL) app store has swapped its "free" button with a "get" button in an effort to be more transparent about the potential costs of in-app purchases. According to The Christian Science Monitor: "The [European Commission] says that the free labeling misleads consumers, since small transactions for power-ups and add-ons can quickly pile up. The EC is trying to get app sellers to stop inadvertent in-app purchases." Even apps with no in-app purchase options are no longer labeled "free."

Google (GOOG) made a similar change in its European app store last summer, labeling its free-to-download apps with an "install" button instead of a "free" button, the Monitor said. Apple's changes are worldwide.

According to Re/code, critics of the free-to-play business model, where the initial app download is free but in-app purchases often follow, are likely celebrating the change. It wrote: "Free-to-play is the dominant business model in mobile app stores, representing 92 percent of all revenue on iOS and 98 percent of revenue on Google Play in 2013. But critics say free-to-play games can be designed in ways that hurt the gaming experience or, more seriously, manipulate players into making unnecessary purchases.

An Issue for Parents

As part of a settlement with the Federal Trade Commission earlier this year, Apple agreed to refund a minimum of $32.5 million to customers for their kids' unauthorized in-app purchases, which sometimes totaled hundreds of dollars. The FCC also sued Amazon (AMZN) for similar reasons.

App Annie vice president Marcos Sanchez told Re/code he doesn't know if Apple's change will impact consumers' buying habits. "I'm not completely sure, but one could argue that it is a more 'action' oriented, pro-active word, which could have a positive effect as a call to action," Sanchez said. "Small changes can sometimes have a positive impact."

Before I download an app on any of my devices, I check to see if it offers in-app purchases, especially if I'm getting an app for my 4-year-old to use. I prefer to pay a few dollars upfront to purchase and download an app that doesn't have any follow-up purchases. At least that way I know its true costs.

I've also required that my Kindle ask for a password before any purchases can be made. That way I avoid my kids trying to buy added features without my knowledge or approval.

What do you think of Apple's change to its "free" apps? Share your thoughts below or on the Money Talks News Facebook page.

 

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Black Friday Sales, Gas Prices Boost U.S. Auto Sales

December 2, 2014, 1:25 am

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Filed under: Automotive Industry, Consumer Goods, Manufacturing, Transportation & Logistics, This Built America

By DEE-ANN DURBIN and TOM KRISHER

DETROIT -- American shoppers passed on the malls and headed to the car dealerships over Thanksgiving weekend.

Black Friday promotions -- coupled with falling gas prices, low-interest loans and hot new vehicles -- drove U.S. auto sales higher in November, kicking off what's expected to be a strong holiday season.

Chrysler (FCAU) led the major automakers in sales gains, with a 20 percent rise to nearly 171,000. It was Chrysler's best November in 13 years. General Motors (GM), Toyota (TM), Honda (HMC) and Volkswagen also reported gains. Ford (F) and Nissan sales fell.

According to the National Retail Federation survey of 4,000 shoppers, sales were down 11 percent to $50.9 billion over the four-day holiday compared to a year ago. A move by retailers to discount merchandise in the days and weeks before Thanksgiving appeared to cut down on store traffic over the holiday weekend.

But that wasn't the case with cars. Car buying site Kelley Blue Book estimated that 25 to 30 percent of November's new vehicle sales happened over the holiday thanks to a flurry of Black Friday promotions. Because the holiday came late in the month, buyers also benefited from dealers' usual month-end sales push.

The TrueCar.com auto pricing site predicts total November U.S. sales will reach 1.3 million, up around 4 percent from a year ago and the fastest pace since August.

Sales are on track to end the year at around 16.5 million, said Jesse Toprak, a senior analyst with Cars.com. That's up 6 percent from 2013.

In November, buyers looking for really good deals could still find outgoing 2014 models, while others snapped up 2015 models that are just arriving in dealerships, like the new Ford Mustang and Toyota Highlander.

The sales were fueled by deals, like zero-percent financing on new Chevrolets and a $3,500 credit on a new BMW. But automakers still made healthy profits as buyers loaded their vehicles with extras like navigation. As of mid-November, buyers were spending an average of $30,874 per vehicle, or $165 more than the previous record of $30,709 in October, according to consulting firms J.D. Power and LMC Automotive.

SUVs Make Sales Gains

Low gas prices accelerated a trend toward SUVs. Gas prices fell 23 cents in November to a four-year low of $2.76 a gallon, according to AAA. Sales of the new Nissan Rogue small SUV jumped 44 percent, while the Jeep Cherokee was up 67 percent. The Honda CR-V saw its best November ever, with sales up 38 percent to more than 32,000. Even big SUVs saw gains; sales of the eight-passenger Lincoln Navigator jumped 88 percent.

Cars struggled to get noticed. Ford Fusion sales dropped 11 percent, while Nissan Altima sales were down 7 percent. For the most part, only new cars like Volkswagen's Golf subcompact and Chrysler's 200 midsize sedan saw sales increases.

"You have to be new to make progress in the car market right now," said Michelle Krebs, a senior analyst with AutoTrader.com.

The industry expects more of the same in December, which is always a big month for luxury sales. Trucks and SUVs normally get a seasonal boost in the winter, Toprak said, but this year that boost will be bigger than usual because of low gas prices.

"It will probably the best December in many, many years," Toprak said.

Hits and Misses

GM's sales rose 6 percent to 226,000. Cadillac sales dropped 19 percent, but Buick and GMC both saw double-digit gains.

Toyota's sales rose 3 percent to 183,346 as its luxury Lexus brand posted its best November sales ever. But Prius hybrid sales dropped 13.5 percent, a victim of lower fuel prices.

Ford's sales dropped 2 percent to 187,000. Ford's SUV sales were up 15 percent, but sales F-150 pickup sales fell 10 percent to 59,000 as older inventory dwindled and the new 2015 model began to trickle in to dealerships. Ford won't be producing the new model at full capacity until early next year.

Ford's rivals took advantage of the lag time. Ram pickup sales jumped 21 percent to nearly 36,000, while GM sold nearly 69,000 Chevrolet Silverado and GMC Sierra trucks. Sierra sales were up 57 percent over last November.

Other automakers said Tuesday:

• Honda's sales rose 5 percent to 121,814. Honda's car sales fell 2.5 percent, but sales of the CR-V and Pilot SUVs were strong.
• Nissan's sales fell 3 percent to 103,188. Truck and SUV sales were up but were dragged down by weaker car sales. Sales of the electric Leaf were up 34 percent despite low gas prices.
• Volkswagen's sales rose 3 percent to 31,725 on strong sales of the new Golf subcompact, which was up 78 percent.

 

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