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Dividend stocks have a reputation for being conservative, slow-growth companies that don't have much in the way of future prospects. Traditionally, sectors like the utility industry and the consumer goods business have appealed to dividend investors because of their high yields and the stable business models of the companies in those sectors.
Recently, though, demand for solid dividend-paying investments has climbed so high that many of the traditional havens for dividend stocks have gotten more expensive than usual. By contrast, one area of the investing world where dividends historically weren't available has surfaced as a vital breeding ground for solid payouts. Let's take a look at the technology sector and why more dividend investors than ever are looking to tech stocks as viable income-producing options in their portfolios.
Why Tech Dividend Stocks Are Such a Shock
For a long time, the concept of a technology-sector dividend stock would have seemed like an oxymoron, as very few of the hottest tech stocks paid any dividend at all. During their heyday in the 1990s, up-and-coming growth companies in the tech sector, including Microsoft (MSFT), Cisco Systems (CSCO) and Oracle (ORCL), never paid any dividends at all. Even those that did, such as Intel (INTC), typically made only minimal token payments to make their shares eligible for purchase by money managers who were required by their fund charters to buy only income-producing investments.
The reason tech companies were so stingy with their money was that they had huge growth potential and needed every dollar of available capital to plow back into their businesses. By voraciously using up all the cash flow that their businesses generated, tech stocks were able to accelerate their growth without resorting to high-priced loans or other sources of capital.
After the 2000-02 tech bust, many tech companies realized that their business models were stable enough to support regular dividend payments. Microsoft implemented a regular dividend for the first time in 2003, and slowly but surely, other companies followed suit. Apple (AAPL) made its first dividend payment in 17 years in 2012, and Oracle and Cisco joined the crowd by implementing regular dividends in 2009 and 2011, respectively.
No Shortage of Great Dividend Yields
What's even more surprising than tech stocks paying dividends is just how high the yields are that many of these stocks pay. Many big-name tech stocks pay yields that are higher than the overall stock market average, showing just how much disposable cash these companies have available to distribute to shareholders.
For instance, Microsoft and Intel both have yields of roughly 2.5 percent, and those numbers were actually substantially higher until both stocks recovered so sharply over the past year. Cisco Systems has a yield that approaches 3 percent. Apple's yield was similarly impressive until its huge bull-market run in 2014, yet even now, a payout of 1.6 percent is a nice bonus on top of the roughly 60 percent gains in Apple's share price since the end of January.
One big reason tech stocks have become dividend powerhouses is that they've grown so large that they no longer have as many potential investments upon which to deploy their huge cash hoards. Although tech stocks often implement stock buybacks to return unneeded capital to shareholders, the demand for dividends has led them to adopt the new approach toward their capital. Moreover, these companies are far from stodgy, no-growth businesses -- they have the capacity to produce growing cash flow over the long run.
In addition, if you go a bit further afield, you can find tech stocks with even higher yields. Seagate Technology (STX) is well known for its hard-disk-drive products, and it has benefited from the renaissance in the PC market in 2014. Yet Seagate has also moved into solid-state-drive products, and that could give it some solid growth to match its high dividend yield.
Look to Tech Stocks for Dividend Security
Industries that are perceived as being safer will always have appeal to some risk-averse investors, and relying on top consumer goods and utility stocks to provide income won't go out of style anytime soon. But if you haven't taken a look at tech stocks lately, you might be surprised to discover the rich dividends that are available even from the sector's best-known companies.
Motley Fool contributorDan Caplingeralways likes to find great things in hidden places. He owns shares of Apple. You can follow him on Twitter@DanCaplingeror onGoogle+.The Motley Fool recommends Apple, Cisco Systems, and Intel. The Motley Fool owns shares of Apple, Intel, Microsoft, and Oracle.To read about our favorite high-yielding dividend stocks for any investor, check outour free report.
WASHINGTON -- Sign-up season for President Barack Obama's health care law is off to a stronger start this year, even as Americans remain skeptical that the government's newest social program is right for the country.
As one major enrollment deadline was passing Monday, other second-year milestones quickly approached. The administration seems well on the way to its goal of 9.1 million customers enrolled for private coverage through government-sponsored online markets. But it's not there yet.
Public attitudes toward Obama's signature law are only slightly less chilly than before the congressional midterm elections that saw Republicans, still clamoring for its repeal, win both chambers of Congress.
An Associated Press-GfK poll earlier this month found an uptick for the Affordable Care Act, with 29 percent saying they support it, compared with 25 percent in October. Opposition to "Obamacare" was stable at 41 percent, while the rest were on the fence.
In nearly every state, Monday was the deadline for new customers to pick a health plan to take effect Jan. 1, and for current enrollees to make changes that could reduce premium increases before the new year. Open enrollment season doesn't end until Feb. 15, for coverage that takes effect March 1. Current customers can still make plan changes through that date.
Based on early numbers from the administration, it's looking like the majority of the 6.7 million current customers have opted to stay in their current plans and be automatically renewed on Jan. 1. Making sure that happens as smoothly as it's been advertised is the administration's next major challenge.
In Des Moines, Iowa, Cheryl James said she and two of her adult nieces helped each other and managed to sign up without too much trouble. James, who is studying early childhood education, found out she qualified for almost no-cost insurance under Iowa's Medicaid expansion, financed through the health care law.
"We are pretty satisfied with the coverage," said James, who's in her late 40s. "It took a couple of tries, but we weren't frustrated. It wasn't difficult."
Like Iowa, Tennessee has a Republican governor. On Monday it became the 28th state to accept the health care law's Medicaid expansion. Even as congressional Republicans are still vowing to overturn the law, 10 GOP governors have initiated expansions in their states.
As Monday's deadline for Jan. 1 coverage approached, HealthCare.gov and state health insurance websites saw a jump in traffic. Wait times at the federal call center stretched to 20 minutes and longer. The federal government is running the insurance markets in 37 states. Also known as exchanges, the markets offer subsidized private plans to people who don't have coverage on the job.
Consumers have different motivations for signing up. Enrollment counselors say they are starting to see more people worried about incurring fines for remaining uninsured. The fines are going up substantially in 2015, to a minimum of $325, from $95 this year.
"We are seeing a surge of folks coming back with questions," said Nita Carter of UHCAN Ohio, an advocacy group promoting sign-ups. "We are also seeing a surge of uninsured people who understand they will have to pay a penalty, and they want to get insurance."
Too Many Plans?
Health insurance companies can no longer turn people away because of health problems, but picking a plan still is daunting for many. Consumers also have to navigate the process of applying for or updating federal subsidies, which can be complex. Many returning customers are contending with premium increases generally in the mid-to-high single digits, but much more in some cases.
Last year's open enrollment season turned into a race to salvage the reputation of the White House by fixing numerous technical bugs that crippled HealthCare.gov from its first day. With the website now working fairly well, sign-up season this year is a test of whether the program itself is practical for the people it is intended to serve.
The administration's next big logistical challenge is making sure that millions of current customers will have a smooth transition to 2015. The plan is for their existing coverage to renew seamlessly, but it's the first time the government has attempted to coordinate that transition.
Most current customers who do nothing will be automatically renewed Jan. 1 in the plan they now are in, and that still may be a good idea for many consumers who missed Monday's deadline for Jan. 1 changes.
But staying in their current plans also may mean getting locked into a premium increase and missing out on lower-priced plans for 2015. It also means keeping the 2014 tax credit, which may be less than what enrollees legally would be entitled to for next year.
-Associated Press Director of Polling Jennifer Agiesta contributed to this report.
NEW YORK -- Oil prices slumped to 5½-year lows on Monday, pulling down emerging market assets and boosting demand for the safe-haven yen, while global equity markets fell further after last week's rout amid nagging worries about worldwide growth.
Stocks retreated as crude oil prices gave up early gains after the Organization of the Petroleum Exporting Countries restated its determination not to cut output despite a global energy glut.
Major European stock indexes fell more than 2 percent, while the Nasdaq fell 1 percent, with the Dow and S&P 500 also losing ground after earlier falling about 1 percent each.
The ruble hit record lows and Russian assets plunged on concern about possible new U.S. sanctions over Ukraine, weak oil prices and one-sided bets that the currency would extend its slide.
A rise in yields on U.S. Treasuries was limited by persistent concerns about weakening growth and inflation globally. U.S. stocks fell even as U.S. manufacturing output posted its biggest gain in nine months in November as production expanded across the board, pointing to underlying U.S. economic strength.
The continued free-fall in crude is the main thing here.
"The continued free-fall in crude is the main thing here," said Uri Landesman, president at Platinum Partners in New York.
Landesman said the benchmark S&P 500 could fall further and test 1,750, a decline that would mark the year's first correction as defined by a drop of 10 percent or more, despite several sharp sell-offs that never met the definition in 2014.
The Dow Jones industrial average (^DJI) closed down 99.99 points, or 0.58 percent, at 17,180.84. The Standard & Poor's 500 index (^GPSC) fell 12.7 points, or 0.63 percent, to 1,989.63 and the Nasdaq composite (^IXIC) shed 48.44 points, or 1.04 percent, to 4,605.16.
The benchmark S&P 500 has declined 4.3 percent since peaking at an all-time high on Dec. 5.
In Europe, the FTSEurofirst 300 index of top regional shares fell 2.35 percent to close at 1,290.65 while MSCI's all-country world index, which measures stock performance in 45 countries, fell 1.22 percent to 403.74.
The broad STOXX 600 fell 2.2 percent in Europe, and has dropped 7.9 percent over the past six sessions, wiping out about $710 billion in market capitalization.
"The drop in oil would normally be good news for the European economy, but in this case it's actually bad news because it seriously raises the risk of deflation," said Christian Jimenez, fund manager and president of Diamant Bleu Gestion in Paris.
MSCI's emerging markets index fell 1.7 percent, with Brazil's Bovespa index off 2.1 percent and Mexico's bolsa index down 3.3 percent.
Brent crude hit a five-year low near $60 a barrel before paring losses, settling down 79 cents at $61.06. U.S. crude for January settled down $1.90 at $55.91, a price last seen in May 2009.
Growth worries have supported bets the Federal Reserve might consider keeping its pledge to leave U.S. short-term interest rates near zero for a "considerable period" in its latest policy statement at the end of a two-day meeting on Wednesday.
The price on benchmark 10-year Treasury notes fell 4/32 in price, pushing the yield up to 2.1182 percent.
The euro was last down 0.21 percent against the dollar at $1.2434. The dollar was 0.90 percent lower against the yen at 117.70 yen.
-With additional reporting by Rodrigo Campos.
What to watch Tuesday:
Federal Reserve policymakers begin a two-day meeting to set interest rates.
The Commerce Department releases housing starts for November at 8:30 a.m. Eastern time.
These selected companies are scheduled to release quarterly financial results:
Alamy
Nothing in life is perfect. But when it comes to investment accounts, Roth individual retirement accounts and Roth 401(k) plans are as close as it gets. Roth 401(k) plans offer a combination of benefits and options that is unavailable with any other investment account type. There are at least seven reasons why you need a beg your employer to offer one, if it doesn't have one in place.
1. Tax-Free Withdrawals in Retirement
With a regular 401(k) plan, all the good news on income taxes happens on the front end. You get to deduct the amount of your contribution from your taxable income for each year that you put money into the account. That lowers your income tax liability each year that you make a contribution.
That arrangement works especially well if you're currently in a high tax bracket. The theory on tax deferral is that you take the tax break now -- when you're in a high tax bracket -- then withdraw the money in retirement, when presumably you'll be a lower bracket. Save big now, pay small later -- fair enough.
But where a regular 401(k) is concerned, you're merely deferring your tax liability, not eliminating it. Since your contributions to the plan were tax-deductible when made, and since all investment earnings accumulated in the account since inception have been tax-deferred, any and all withdrawals taken during retirement will be subject to income tax.
A Roth 401(k) is a remedy to this dilemma.
A Roth 401(k) is a remedy to this dilemma. Unlike a regular 401(k) plan, your contributions to the plan are not tax-deductible when made. But just like a regular 401(k) plan, any investment earnings that accumulate within the plan are tax-deferred. Based on these two facts alone, it appears that a traditional 401(k) plan is superior to a Roth 401(k).
But here's where a Roth 401(k) makes a radical departure from a regular 401(k): Money withdrawn from a Roth 401(k) plan is completely tax-free, not merely tax-deferred. The only requirements for this status is that you have to be at least 59½ when you begin taking distributions, and you have to have been a participant of the plan for a minimum of five years.
While the news on income taxes favors regular 401(k) plans prior to retirement, the advantage shifts entirely to a Roth 401(k) plan when you are retired. And that's the time that it will really count.
2. Income Tax Diversification
Tax deferral is probably the main reason why so many people take tax-sheltered retirement plans. It's a way to shield current income from high taxes and defer taxes on investment earnings within the plan.
But an often-overlooked strategy in retirement planning is income tax diversification. It's important to realize that the general assumption that you will be in a lower tax bracket when you retire may not be what happens. This is particularly true if you do have a variety of income streams. Consider the potential income sources you could have in retirement:
The annual distribution from your regular 401(k) plan, especially if it has a very healthy balance.
Any pension income that either you or your spouse have.
Rental real estate income.
Non-tax sheltered investment income.
Any income from employment, self-employment or passive income arrangements.
Taken individually, none of these income sources may be enough to put you in a higher tax bracket. But if you have several of these sources -- and chances are you will -- the possibility of being in a high tax situation cannot be ignored.
If that's the case, your cash flow will be helped immensely if at least some of your income is derived from non-taxable sources. Because withdrawals from Roth 401(k) plans are tax-free, these plans qualify as a form of income tax diversification for retirement.
This is even more important since Social Security is subject to income tax, based on your overall income. If your investment income is high, a greater percentage of your Social Security be subject to income tax. If a substantial amount of your income is tax-free, such as distributions from a Roth 401(k) plan, then less of your Social Security benefits will be taxable.
You won't be able to do much to change that arrangement by the time you retire. That's why it's important to do something now.
3. If You're In a Low Tax Bracket Right Now
If you are in a low tax bracket right now, say the 10 percent or 15 percent marginal rate on the federal, you should have even greater interest in participating in a Roth 401(k) plan.
When you're in a lower tax bracket, the benefit of income tax deferral from regular 401(k) plan contributions is minimal. For example, if you are in the 15 percent bracket, you'll save $1,500 this year by contributing $10,000 to your regular 401(k) plan.
Now everyone can use extra $1,500. But let's say that your retirement income turns out to be higher than your income during your working years, and you're in the 28 percent tax bracket. You will pay $2,800 on a $10,000 withdrawal from your regular 401(k) plan. That means that while you saved $1,500 when you made the contribution, you'll paid an additional $1,300 when you withdraw the money in retirement. ($2,800 - $1,500). Using a Roth 401(k), you'll pay the $1,500 in tax now, but save $2,800 in retirement.
The calculation is actually more complicated, because between the time you made the contribution and the time you withdrew money, you also invested the money and generated tax-deferred income. But the point still stands -- you'll be paying 28 percent on withdrawals of money that saved you only 15 percent at the time you made the contributions.
That's a negative exchange, even factoring investment income tax deferral. However if you have a significant amount of money in a Roth 401(k) plan by the time you retire, the distributions that you take have a plan could very well keep you out of that higher tax bracket in the first place. Not to mention that at least some of your income will be completely tax-free.
4. You'll Probably Still Get the Employer Match
Even people who do have a Roth 401(k) plan at work often fail to take advantage of it out of fear that they won't get the company matching contributions the way they would with a regular 401(k) plan. While it's true that not all employers provide the company match for a Roth 401(k) plan, some do. You need to investigate this.
Employers that do extend the company match to the Roth 401(k) plan typically place the match into the regular 401(k) plan. If they do that, it's OK. It will enable you to have all the benefits of a Roth 401(k), while also helping to expand contributions of your regular 401(k).
5. No Required Minimum Distributions
One of the lesser-known benefits to a Roth 401(k) plan is that it does not impose the required minimum distribution rule. On virtually every other tax sheltered retirement plan, you are required by the IRS to begin taking mandatory plan withdrawals -- subject to income tax -- no later than age 70½. The withdrawals are at least loosely based on your remaining life expectancy, and there are stiff penalties if you fail to take them.
We can think of this as the government's way of forcing money out of tax-sheltered plans, where it can finally be taxed as ordinary income. If you are trying to minimize your income tax liability by deferring withdrawals from tax-sheltered plans, that strategy will only work until you turn 70½.
The Roth 401(k) plan is exempt from RMDs. You can allow the money in the account to grow for the rest of your life, enabling you to pass the full amount of the account on to your heirs. That's an excellent estate planning strategy, and it also provides you with 100 percent control over all of the money and income that you have in the account.
6. More Flexibility for Your Life in Retirement
Having a well-funded Roth 401(k) plan gives you options for retirement.
Let's say that rather than waiting until 65 or 67 -- or what ever the Social Security Administration determines your age of normal retirement to be -- you decide that you want to semi-retire at 60, while you are waiting for Social Security benefits to begin. A Roth 401(k) plan can help you.
You can choose to live on a mix of part-time employment or business income, along with regular distributions from your Roth 401(k) plan. The tax-free nature of the withdrawals from the plan will be especially important since the portion of your income that is earned from a job or business will be subject to FICA taxes.
You can take distributions from a Roth 401(k) plan in lieu of Social Security income. You can also rely on Roth 401(k) distributions, so that you won't have to touch your regular 401(k) plan before you fully retire.
With people living longer than ever, worrying about out-living your money has become a common retirement concern. But a Roth 401(k) plan is one of the best solutions to that problem.
Since there are no RMDs, you can leave the money in a Roth 401(k) plan for as long as you want, and it will continue to grow. In the meantime, you can live primarily on your regular 401(k) plan, and when that begins to deplete, you can begin taking withdrawals from your Roth 401(k) plan -- at any age you decide upon.
You can think of it as a two-tiered retirement strategy, with one plan to cover you in the early stage of retirement, and the other -- the Roth -- continuing to grow so that it will take care of you in the later stages of your retirement.
7. Advance Protection From Widely Anticipated Income Tax Increases
A lot of experts predict that income tax rates will only get higher in the future, probably much higher. When you consider the size of the national debt -- now officially at nearly $18 trillion -- and the retirement of tens of millions of baby boomers -- higher taxes in the future are practically a given.
The current top federal income tax rate is 39.6 percent -- but additional taxes on high income earners push the effective rate into the mid-40s. But that rate is reasonable by historic standards. The top federal income tax rate hit 94 percent during World War II, and it remained no lower than 70 percent until 1981. A budget crisis or a swamping of the Social Security and Medicare systems could push tax rates much higher than we can imagine right now.
They may tax everything else you have -- but not your Roth 401(k) plan.
Once rates are increased substantially, it will be too late to do anything in reaction -- short of simply refusing to earn or accept additional income. The best strategy to deal with the anticipation of higher tax rates is preparation. A Roth 401(k) plan -- with its tax-free withdrawals -- represents exactly that. They may tax everything else you have -- but not your Roth 401(k) plan.
The combination of three benefits give you more flexibility with a Roth 401(k) plan than virtually any other plan you can have -- taxable or tax-sheltered:
Tax-deferred investment earnings.
Tax-fee withdrawals.
No required minimum distributions.
Once you have a Roth 401(k) plan up and running, you can do virtually anything you want with it. For that reason alone, a Roth 401(k) plan is a must have investment account.
That's why you need to beg your employer to offer a Roth 401(k). And if your begging doesn't work, you still may have the option of opening a Roth IRA. Here's a look at some of the best places to open your own Roth.
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Your budget has gone off the rails this month. Actually, it seems like it goes off the rails most months. Somehow, you just never seem to have enough to cover all of your expenses. What are you doing wrong?
There are several common causes of chronic budget failure, as well as several common remedies you can use to change course. Here's are five ways to set things right:
1. Use a System You're Comfortable With
If you hate budgeting and dread doing it, it's no wonder you're having trouble making it work. You need to find a system that feels intuitive and easy-to-use to encourage you to spend time working on it.
You may find you prefer using an Excel spreadsheet and entering in purchases from receipts you save. Maybe you'd do better with a program that automatically tracks your purchases for you and sorts them into preset categories. Or maybe you'd prefer to have a "two-category" budget: pull your savings from the top and spend the rest. There is no right or wrong system; all that matters is that yours works for you.
2. Start From Where You Are
You can't do anything now about your shortages in past months. All you can do is resolve to spend money more conscientiously in the future.
You may need to cut your budget categories for a few months to make up the difference, or you may need to get rid of few expenses so you can pay off any credit card balances you've incurred. You may not enjoy declaring a moratorium on all restaurants, cutting cable, and trading your 2-year-old car for an 8-year-old vehicle, but you need to be realistic about your current situation. You might be spending beyond your means.
Don't beat yourself up too much; you're on the right track now. Resolve to start living below your means, rather than above it, and keep your focus on the future.
3. Trim the Fat
Certain budget categories are more flexible than others. It's hard to lower your housing costs without a lot of hassle, but it's relatively easy to reduce your dining out budget or your clothes and shoes shopping. Reduce your spending in the easiest spots first.
You know you need to buy groceries, for instance, but can you cut the cost by shopping with a list, planning your meals in advance or using the same basic ingredients in multiple meals? Do you really need to eat out each weekend, or can you dine out every other weekend so this money can go toward other expenses?
Once you start trimming, you'll be surprised to find out how much extra room you really have.
4. Factor in Irregular Expenses
Unexpected expenses are the easiest way to derail a budget. Make sure your budget accounts not only for your regular monthly bills (such as your mortgage/rent, gasoline, utilities, etc.), but also for bills that come on a quarterly or annual basis, such as gym memberships, magazine subscriptions, association dues, club memberships or even the quarterly water and sewer bill.
Total up the yearly cost for these irregular expenses and divide by 12 to determine how much you should be setting aside each month for them.
5. Build Up Your Savings
You should have, ideally, three to six months of income saved in case you need to deal with a big sudden expense like an illness or an accident. Even if you can't set aside a ton right now, start building your cushion.
Try this: increase your savings by 1 percent this month. If you're currently saving nothing, save 1 percent. If you're currently saving 4 percent of your income, save 5 percent.
Spend a month adjusting to this new budget. I bet you'll hardly feel the difference.
Next month, increase that by another 1 percent. And the following month, add 1 percent more.
Within a year, you'll have increased your savings rate by 12 percent. That money can be used to pay off your debts, pay cash for your next car, make a down payment on a house, or build an emergency fund.
Congratulations. Your budget is now back on-track.
Paula Pant ditched her 9-to-5 job in 2008. She's traveled to 30 countries, owns six rental units and runs a business from her laptop. Her blog, Afford Anything, is a gathering spot for revolutionaries who understand that they can afford anything -- just not everything. Visit Afford Anything to learn how to shatter limits and live life on your own terms.
Getty ImagesLendingClub (LC) successfully raised $870 million in an initial public offering, which values the firm at about $5.4 billion. Since the company was launched in 2006, it has helped arrange more than $6 billion of personal loans. The business has a unique business model, which could transform the way banking and borrowing happens in this country.
Now that LendingClub has $870 million in its war chest, we can expect that its will become even more aggressive with marketing and growth. Whenever there is a successful IPO, we can expect copycats to appear. And the boring personal loan marketplace has become crowded with companies looking to be the next big thing. With these new entrants looking for customers, you can expect interest rates on personal loans to continue getting lower as they try to win your business. If you have credit card debt, it should only become easier to refinance that debt at a lower interest rate. But we should also expect growth in two other areas: small business lending and student loan re-financing. All of this is good for consumers.
Refinancing Credit Card Debt
There is more than $800 billion of credit card debt in the U.S. And, the average interest rate is a shocking 17 percent. In a recent interview, the CEO of LendingClub revealed that the average rate for a credit card refinance loan is 12.5 percent. If you have $10,000 of credit card debt and want to pay it off in five years, than you would need to pay $248 a month. At 12.5 percent, you only need to pay $225 per month. Over five years, you would end up paying $1,412 less interest. However, the real temptation with a credit card is the you spend more and pay less, sometimes only the minimum due. A credit card is just an enormous temptation. With a personal loan, you can't spend more, and you are forced to pay enough to be out of debt in three or five years, rather than 30 years with a credit card minimum payment.
LendingClub and Prosper were the original lenders looking to eliminate banks. But there are now some other players out there looking for business. Whereas Prosper's lowest rate is 6.73 percent and LendingClub's lowest rate is 6.78 percent, new entrants are going even lower. Vouch, a recent entrant to this space, starts at 5 percent. And CircleBack Lending, which starts at 6.63 percent, is just a bit lower than Prosper.
We are starting to see competitive pricing between the new entrants. Now 6.63 percent may seem like an odd price point, but it makes sense when you see that it wants to be lower than the market leaders. At MagnifyMoney, we have created a marketplace where the cheapest provider will always rise to the top. And the good news is that we see continued competition on pricing. If you have good credit and are looking to pay down credit card debt more quickly, you can dramatically reduce your interest rate and take years off your debt repayment.
Student Loans
Student loan debt is now bigger than credit card debt, and some new companies are looking to refinance student loan debt. These new players are also looking at things that traditional creditors ignore. Rather than looking at your credit score, some lenders are looking at where you graduated, what you studied, how long you have had a job and your total income level. If you are in financial difficulty, these loans are typically not for you. But, if you have a good job and are making good income, than you may be able to find a way to refinance your debt.
The company making the biggest splash is Sofi, who has decided to charge fixed interest rates as low as 3.63 percent. These are shockingly low interest rates. Competitors don't know how it does it. But, for a borrower, you don't need to worry about that. Just take advantage of the low rates. To get the best rates, you will need to appear very low-risk to Sofi, which means a great degree and a great job.
But if Sofi does not approve you, don't give up. There are a number of Sofi copycats, and even credit unions are dramatically expanding their student loan refinance business. We have put together a list of places where you can refinance student loans.
Small Business Loans
The same business model used by LendingClub has been brought to small business loans as well. There are a few new entrants that are trying to make it easier for small businesses to get the capital that they need to grow, while providing investors with better return on their investments. Two examples include FundingCircle and OnDeck.
Investors are looking for yield, and borrowers are paying too much for their loans. This problem has an almost obvious solution, and the fact that so many new entrants are looking to cut rates for borrowers is good news for consumers.
Nick Clements is the co-founder of MagnifyMoney, a price comparison website that helps you find the best deals in banking. He spent nearly 15 years in consumer banking, and most recently he ran the largest credit card business in the U.K.
In addition to wrinkles and graying hair, getting older brings on a less-visible change: diminished cognitive abilities, from simple math to making investment decisions, which can have a big impact on finances.
According to new research from Daniel Marson, a professor of neurology at the University of Alabama-Birmingham, adults in their 60s and 70s start to exhibit declines in financial abilities, including a vulnerability to potential telephone fraud, difficulty making change at checkout and having a harder time prioritizing bills. Those diminished abilities can make it a struggle to keep up with everyday financial management tasks.
The findings suggest several warning signs that family members can be on the lookout for. An untouched stack of mail, for example, could indicate that an older person is falling behind on bills . Another warning sign is having difficulty with basic math, such as calculating a tip in a restaurant or a medical deductible. Overlooking investment risks, and focusing too much on the benefits rather than the risks of a potential investment, can be another early sign of cognitive impairment, Marson says.
Some Silver Linings
Getting older isn't all bad. Marson notes some age-related improvements, including wisdom and pattern recognition. But those gains are offset by the struggle to perform basic math, keep up with bills and avoid fraud. Marson points out that Americans over age 65 hold about $18.1 trillion in wealth, and that money is at risk as a result of these kinds of impairments.
"We think [cognitive decline] is one of the biggest issues that we're facing around the whole concept of financial capability," says Ted Beck, president and CEO of the National Endowment for Financial Education, which funds cognitive decline research, including Marson's. "There's been a lot of work done around dementia, but little on just normal aging," he says. Given the aging American population, cognitive decline among otherwise healthy older adults could be an increasingly big issue when it comes to financial management, he adds.
Abuse and Fraud
That kind of difficulty also opens the way for financial abuse, which is a major problem among older adults. Speaking at the Gerontological Society of America's annual meeting in the District of Columbia this month, Naomi Karp, policy adviser at the Consumer Financial Protection Bureau Office for Older Americans, called financial abuse the most common form of abuse among older adults. She said older Americans with significant assets, like home equity, are particular targets, and it is an extremely underreported crime.
Perpetrators include contractors, scam artists, financial advisors and even family members, Karp says. Older Americans are especially vulnerable because of cognitive decline, isolation, disability, bereavement and health problems, she added. Like Americans of any age, older adults can submit complaints about financial products or services directly through the consumerfinance.gov website.
To prepare for your own inevitable cognitive decline as a result of the normal aging process, consider these five tips from Beck, which he suggests doing regularly starting at age 50:
Talk with your partner. "If you're married, sit down and talk about what you want the rest of your financial life to look like," Beck says, adding that he is always amazed to learn how few couples actually talk to each other about money.
Get your financial data in order. If you've moved around frequently or held many jobs with different retirement accounts, then it's time to consolidate or at least organize all that paperwork. That way, someone else could more easily step in and manage your financial affairs if necessary. Even passwords should be stored in a safe place, and trusted family members should know where to access accounts in an emergency.
Check your paperwork. Beck suggests making sure your will and power of attorney documents are up to date and valid in the state where you currently live.
Assign roles. Decide which family members you'll want to handle different tasks, including financial, health and social ones. "Isolation is a big deal," Beck says, and you might need someone to help you stay connected to the outside world. If family members aren't up to the task, then you can look for professional support, too.
Consider hiring professionals. Before hiring a financial adviser or lawyer, you'll want to check their references and qualifications, and make sure they haven't had significant complaints lodged against them. Taking all these steps early, in your 50s, before significant cognitive decline occurs, can help keep you in charge of your finances, even if you start allowing others to assist. "Everybody thinks they're Superman and that they'll never get sick, but we know that's not true," Beck says.
Kimberly Palmer is a senior editor for U.S. News Money and the author of the new book, "The Economy of You." She wrote this article through a Journalists in Aging Fellowship, a collaboration of New America Media and the Gerontological Society of America, with support from AARP.
When you apply for a credit card, you can be virtually assured the card issuer is pulling your credit file from one of the big three reporting agencies: Experian, TransUnion or Equifax (EFX). But what happens when you fill out an application to rent an apartment? Or apply for life insurance? Or try to write a check? Is anyone checking up on you then?
The answer may be yes. In all those cases, a business might be pulling a specialty report that could determine whether you get the apartment, the life insurance policy or the privilege of handing over one of your super-cute Hello Kitty checks. The Consumer Financial Protection Bureau has a comprehensive list of all the major organizations maintaining files on you. You might want to see what they know.
1. Medical Reports
Your doctor may not be the only person who has a medical file on you. Several companies also maintain reports that could contain bits of your medical information.
The most commonly used medical report may be the one from MIB, an organization previously known as the Medical Information Bureau. MIB reports are used by insurance companies offering individually underwritten life, health, critical illness, disability and long-term-care insurance products.
The organization doesn't maintain a full medical record on you but does compile data taken from insurance applications made in the past seven years. Information gleaned from MIB reports cannot be used to make coverage decisions but can be used to fact-check your applications and make sure you're not withholding information.
For example, if you're denied life insurance by Company A because of a pre-existing condition, the MIB file may note the condition. That makes it hard for you to conceal that information from Company B, lest you think you could get coverage by simply omitting that detail about your medical history.
You can get a copy of your MIB report free by making a request online or on the phone. MedPoint and IntelliScript are two other medical files you should know. Both may be reporting on your prescription drug usage. You can request your IntelliScript report by calling 877-211-4816. MedPoint will take your request at 888-206-0335. However, they will only send a free report if you applied for health insurance, and the insurer requested your file.
2. Insurance Reports
LexisNexis and Verisk Analytics are the two major players for insurance reports for property coverage such as homeowner or vehicle policies.
The LexisNexis CLUE Report comes in either an auto or personal property version. They contain seven years of data, including both claims and inquiry history. You can request one or both of the reports on the LexisNexis website.
Over at Verisk Analytics, A-Plus Property Reports cover a five-year period and include all forms of loss from burglaries to fire losses to medical payments. You can request a copy by calling 800-709-8842. There may be a small fee for the report unless an insurance company took adverse action against you because of the report (i.e,. denied you coverage because of information in the file). In that case, the form may be free as long as you file the request within 60 days of the adverse action.
3. Employment Data Reports
Employment reports may include this information:
Job title.
Salary.
Employment dates.
Disciplinary action, if publicly available.
Dozens of companies provide pre-employment screening services. Here's a sampling, along with links to their instructions on how to request your copy of their report:
Not every company will have a report on every employee. In some cases, a report will be available only if an employer previously requested a copy.
4. Tenant Reports
Just as you can't get away from your family medical history or a pre-existing condition when applying for life insurance, you may not be able to run away from that eviction you experienced when the economy tanked.
A piece of your rental history might end up on your credit report if you're sued for back payments, but a tenant report is more likely to show the whole picture. According to the New York State Bar Association, there are hundreds of screening agencies catering to landlords. These reports may cover these details or other information:
Credit information such as delinquent accounts, charge-offs and collections accounts.
Q) My applicant is claiming discrepancies in their tenant report and would like a copy of the credit report for their reference; do I need to supply them with a copy?
A) All tenant reports requested through TenantReports.com are for our members to review to make a rental decision or new hire decision only. These reports are NOT available to distribute to the applicant. Applicants can get a free annual credit report through the Fair Credit Reporting Act once a year by visiting www.AnnualCreditReport.com. At this site they can dispute all discrepancies with the three bureaus and have the ability to make a permanent change to their credit report.
However, TenantReports.com provides information on its report, such as criminal records, that wouldn't appear on a credit report. That makes their answer seem, in my personal opinion, a bit more evasive than helpful. While not every tenant screening company is onboard with providing copies of its reports, you can request your file from these companies, among others:
If you're in love with your debit card and online banking, it may seem quaint to think some people still write checks. But they do. And there are some businesses that don't want to take those people's checks if they've written bad ones in the past.
Check writing reports may affect your ability to write checks and your chances of opening new accounts. For example, some reports may include whether you've ever had a bank close your account due to insufficient funds. In that case, a different institution may decline to let you open an account there. You may be able to request free check writing reports from these companies:
Nathaniel S. Butler via Getty ImagesCarmelo Anthony of the New York KnicksBy Fred Imbert
Holiday shoppers would think a purchased Carmelo Anthony plush-doll would look like, well, Carmelo Anthony.
If they bought it online at Walmart (WMT), they'd be mistaken.
The doll displayed at Walmart.com doesn't resemble the seven-time NBA All-Star and current New York Knick, but rather shares a remarkable likeness to Jeremy Lin. Although he once took a big spotlight for the New York team, Lin hasn't donned the New York Knickerbockers' uniform since 2012. He is currently the starting point guard for the Los Angeles Lakers.
NBA Legion first tweeted an image of the erroneous listing at 9:26 a.m. Monday. The doll's online listing also misspells Anthony's name by spelling it as "Anthony Carmelo."
"It is just a case of the wrong image being loaded when the item was set up. We're in the process of fixing it," Walmart said in a statement.
hazelnicholson/Flickr
We recently went over some of this year's biggest losers, but now it's time to check out a few of the top gainers that have more than doubled.
Build-a-Bear Workshop (BBW) -- Up 174 percent in 2014
It seemed as if Build-a-Bear Workshop was destined to be cast off to the Island of Misfit Toys a couple of years ago. Its mall shops where folks single out plush bear toys that are stuffed and outfitted as ordered lost their zing. Kids were no longer hosting their birthday parties there, and the once high-margin chain began posting losses.
Sales growth continues to be a challenge. Build-a-Bear will post another year of slightly lower sales despite starting to turn things around during the latter half of fiscal 2014. However, it's on track to post its first profitable year since fiscal 2010.
One of this year's biggest Internet stock winners hails from China. Vipshop runs a platform resembling Groupon (GRPN) specializing in deep discounts on branded apparel. This may sound like a novel model -- especially given the struggles that stateside daily-deals providers have been going through -- but Vipshop is making it work.
You can thank heady growth for the ascending stock chart. It's not just the stock that's more than doubled this year. Revenue is on pace to more than double this year as well, with profitability nearly tripling. Vipshop has also beaten Wall Street's profit targets by 14 percent or better in each and every quarter over the past year.
Strayer Education (STRA) -- Up 112 percent in 2014
The world of for-profit post-secondary education has been rocked in recent years. Student loan repayment rates are crummy, and there are concerns about the efficacy of the Web-based educators. Strayer Education is the parent company of Strayer University, offering campus-based as well as online college degree programs. It's been challenged along with its peers.
Revenue and total student enrollments have dipped slightly over the past year, but new student enrollments actually increased in its latest quarter. It's also been able to trim its costs to the point where operating profits and outright earnings are improving despite the uninspiring top-line performance.
Palo Alto Networks (PANW) -- Up 107 percent in 2014
Hackers are getting smart, so Palo Alto Networks has to be smarter. Palo Alto Networks offers cybersecurity protection for company networks. It went public at $42 in 2012, and it has gone on to nearly triple since then.
A good chunk of that spurt has come in 2014, naturally. Demand is growing quickly for Palo Alto Networks' security solutions, and analysts are following along. Stifel, FBR, Topeka Capital Markets, and Imperial Capital all boosted their price targets after last month's better-than-expected quarterly report.
Airlines have a volatile history as investments, but the industry's flying high this year as the plunge in oil prices is boosting profitability at a time when more people are taking to the friendly skies. American doesn't hedge its fuel costs, so it's benefiting from the sharp drop in kerosene.
JPMorgan (JPM) recently singled out American as its top airline stock for 2015. As long as oil jet-fuel costs stay low and the interest in travel remains high, JPMorgan will probably be right.
Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Palo Alto Networks. Try any of our Foolish newsletter services free for 30 days. Want to make 2015 a winning investment year? Check out The Motley Fool'sone great stock to buy for 2015 and beyond.
You may compare the price of an item at several stores to make sure you're getting the best bargain. But do you check a retailer's brick-and-mortar store price with what it's selling the item for online?
If not, you should.
There's no guarantee that a retailer offers items at the same price at its online and physical stores. In fact, according to ConsumerWorld.org, you can find dramatic price variations. And, contrary to what many shoppers believe, the online price isn't always cheaper.
A Wide Range of Variations
ConsumerWorld founder Edgar Dworsky said in a statement: "There is no universal rule of thumb that prices are always cheaper online compared to the retailer's own brick-and-mortar store. In fact, many times the prices are the same, but other times they could be either higher or lower on their website. You always have to check and compare both online and in-store prices if you want the best deal."
ConsumerWorld recently conducted a spot-check of items major retailers are selling both online and in the store. The price difference could be more than $100. Yikes. A few examples:
Sears (SHLD). The same Kenmore cookware was $79.88 online and $129.99 in the store.
Walmart (WMT). A Canon PowerShot camera was $99 online, versus $139 in the store.
Staples (SPLS). A desktop computer was $429.99 online and $600 at the store.
Kmart. An in-store clearance led to a $27 price tag on a barbecue grill, which was being sold online for $107.99.
Target (TGT). Tide pods rang up for $19.49 at the register, and sold online for just $17.99.
According to a report by Anthem Marketing Solutions, an analysis of prices for commonly purchased items found that about 70 percent of items are sold for the same price online and in-store. When there is a price difference, the online price is cheaper 65 percent of the time. However, Anthem said that "offline provided greater average savings when there was a price difference; the online channel averages 26 percent savings and the offline channel averages 32 percent."
Pablo Martinez Monsivais/APAn apartment building under construction last month in Washington, D.C.By MARTIN CRUTSINGER
WASHINGTON -- Construction of new homes fell slightly in November, reflecting weakness in construction of single-family homes.
Builders started construction at a seasonally adjusted annual rate of 1.03 million homes and apartments last month, the Commerce Department reported Tuesday. That was a decline of 1.6 percent from October when construction activity had posted a 1.7 percent gain.
The weakness last month came from a 5.4 percent fall in construction of single-family homes, which offset a 6.7 percent rise in the more volatile apartment sector.
Applications for building permits were also down in November, falling 5.2 percent to a seasonally adjusted annual rate of 1.04 million. Analysts are still looking for housing to regain momentum in 2015, believing that strong increases in employment will help boost home sales.
Economists called the November decline in construction disappointing but said part of the drop was probably caused by cold and snowy weather in many parts of the country. It was the coldest November in 14 years.
Jennifer Lee, senior economist at BMO Capital Markets, noted that October construction activity was revised up by 3.6 percent and that September, October and November all showed construction above the 1-million mark.
She said going forward strong job growth, low mortgage rates and easier lending standards should provide continued support for the housing market.
All regions of the country showed gains in November except the South, which accounts for almost half of all new home activity. That region saw a 19.5 percent drop in construction. Construction showed the biggest jump in the West, an increase of 28.1 percent, followed by gains of 14.4 percent in the Midwest and 8.7 percent in the Northeast.
Strong Job Gains
Analysts believe the strong gains in employment this year will give consumers the confidence to buy homes and translate into moderate housing gains in 2015. While still a long way from the boom years of the previous decade, housing has been posting a moderate recovery over the past two years.
Any reading above 50 indicates that homebuilders view sales conditions as good, rather than poor.
New home sales reached an annual rate of 458,000 in October, the highest point since May. Home prices continued to climb, increasing to a median price of $305,000 in October, up 16.5 percent from a year ago.
The gains in home prices have held back some activity, particularly among first-time home buyers. Many lack the savings and strong credit history needed to afford a home. Tighter credit standards for potential home buyers and flat wage gains have also acted to dampen home sales.
Though new homes represent only a fraction of the housing market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenues, according to NAHB data.
www.youtube.com
Cellphone service provider Sprint (S) sure knows how to push a sale. Earlier this month, the company unveiled its new "Cut Your Bill in Half" promotion with TV ads featuring people actually slicing their bills with various implements: a saw, a chainsaw and arguably the best of all, a weed whacker.
The delivery was attention-getting, but the message was basic: Sprint wants to poach you as a customer if you're currently signed with either AT&T (T) or Verizon (VZ) (not T-Mobile U.S. (TMUS)) and will reduce your current cellphone bill by up to 50 percent, guaranteeing the new bill in perpetuity under certain conditions (e.g., as long as you stay on the same device).
It's a bold move to win market share for the struggling provider. But it's resulting in a renewed fight for customers, particularly from Sprint's closest peer.
Meeting Not Quite Halfway
Sprint's offer has some fine print. The half-off deal covers the calling, text, and data part of the contract -- not the hardware. AT&T and Verizon defectors are required to trade in their existing phones and buy or lease their new devices from Sprint.
This requirement makes a difference. One analysis has it that a family of four with one phone line apiece, a 10 GB data plan, and switching out two premium and two mid-range smartphones would get their bill reduced from AT&T's $284 or so to around $210 at Sprint.
Those figures for Verizon clients jumping ship to Sprint would amount to just under $265 on a Verizon plan to $220 under the new Sprint plan.
So it's not quite half off; in fact, Sprint's CFO was quoted at a Merrill Lynch conference as saying that with Cut Your Bill in Half, most customers "are still probably getting a 20 percent sort of discount."
Regardless, 20 percent is a nice, chunky piece of savings. Soon after the initiative's launch, independent tech and telecom analyst Jeff Kagan maintained that he has been "hearing strong and positive opinions from customers in the wireless marketplace" about it.
Call for Help
Sprint needs that strong and positive buzz to bring in new customers. Out of the four incumbent cellphone service providers, it's been the laggard for years.
Over the past decade, the company (and its predecessor) has posted an annual net profit merely twice, in 2005 and 2006. Revenues haven't improved much; in 2013 on a year-over-year basis they saw a slight drop to $35.3 billion. That, by the way, is significantly below the $40 billion-plus it recorded in both 2006 and 2007.
Contrast that with the one-two punch of AT&T and Verizon. Over the past five fiscal years, the former has added to its top line in each of those time frames, posting a net profit every time. The latter, meanwhile, has grown its revenue by 12 percent across that span, also landing in the black in each of those years.
Discounter Dust-Up
In a way, AT&T and Verizon aren't really Sprint's peers; that honor would fall to T-Mobile. That's because Sprint and T-Mobile feature coverage that is less extensive (and less dependable, according to industry tracker RootMetrics) than that of the two giants. Their plans are accordingly cheaper.
Which is probably the key reason that Sprint deliberately excluded T-Mobile customers from Cut Your Bill in Half. According to the analysis mentioned above, that model family of four would spend $210 or $220 per month coming to Sprint from AT&T or Verizon. Meanwhile, a comparable setup is already at that level (roughly $213) at T-Mobile. Cutting such a bill in half would bleed money for Sprint.
For its part, T-Mobile isn't letting Sprint hog the special-promotion glory. Days after the launch of Sprint's initiative, it unwrapped its Simple Choice plan, which starts at $100 per month for two lines with unlimited calls, text, and data. Up to eight additional lines are $40 apiece.
T-Mobile's new scheme has one big advantage over Sprint's: Certain existing T-Mobile customers may opt into it, while the latter company's Cut Your Bill in Half is exclusively for those jumping ship from AT&T and Verizon.
Taking a Few Bruises
What's good for the customer in the form of lower prices can hurt the companies involved. A few days after Cut Your Bill in Half was announced, Verizon warned that it expects that the impact of its own promotions "will put short-term pressure" on profits.
Can Sprint and T-Mobile keep up that pressure with their discount pushes? The former's new initiative will apparently run until Jan. 15; no word yet on whether the company will extend it. T-Mobile did not provide a termination date for Simple Choice, saying only that it's available for "a limited time." Either way, it seems as if these types of promotions are already affecting the market. The fight will rage on.
If you have a lot of snow, you'll love the Snow Joe Telescoping Snow Broom with Ice Scraper ($17-$20), a simple snow mover that clears your car in a jiff.
Snow Joe, which you may have seen on TV, is not really a broom, because it has no bristles. It's a snow shover -- a large rectangle of thick polystyrene on the end of a metal, telescoping wand.
The only tricky thing about assembling the Snow Joe is unlocking the telescoping feature. To unlock, first you must locate the little black tab that hides under the ice scraper, which is a bear to yank off the bottom of the wand. Then, you must pound the tab with a hammer so it disappears into the hollow wand, which releases the extension mechanism that lets the wand stretch from 30 to 49 inches.
That took 30 minutes and a call to Snow Joe customer service to figure out.
Last, twist on the blue "broom," and you're good to go.
The Test
We haven't had much snow yet in Virginia. But we did have a pre-Thanksgiving squall that dumped about an inch of wet snow on my SUV, so I could give the Snow Broom a whirl.
And, it worked just fine. The large head easily shoved aside the wet snow on the windshields and the roof, which is always the hardest place to clear. The ice scraper got rid of whatever frozen gunk remained.
I'm sure the broom could have removed more snow, especially the light, fluffy kind. My only concern is how long the polystyrene head will last -- my guess about one snowy season.
Saving up to buy a home might not be as much of a challenge as it used to be, now that the Federal Housing Finance Agency will allow some first-time homebuyers to make down payments of as little as 3 percent.
The change went into effect Saturday with the goal of making homeownership more accessible to Americans than it has been in a tight post-recession mortgage market. These low-down-payment loans apply to 30-year, fixed-rate mortgages guaranteed by Fannie Mae and Freddie Mac. The agency regulates Fannie and Freddie, which guarantee the majority of U.S. mortgages.
What does this mean for you? Well, if you want to buy a home but don't have a ton of cash on hand for a down payment and closing costs, you might be able to qualify for an affordable home loan. Keep in mind lenders will require you to pay private mortgage insurance if you pay less than 20 percent upfront, a cost homebuyers often overlook when determining how much they can pay -- you can figure out how much house you can afford using this free calculator and watch how your monthly payments change with different down payments.
How to Lower Your Payments
Even with a low-down-payment mortgage, you can find ways to make the monthly payments more affordable. One of the first things you'll want to look at before applying for a home loan is your credit score. Your credit standing not only affects the mortgage rate you qualify for, it also impacts how much you must pay in PMI. You can also get rid of PMI after you've built a certain amount of equity in your home, among other requirements, but it's on you to go through the process of removing PMI from your loan.
With the new directive from the FHFA, buying your first home may be more attainable, but the decision requires just as much careful thought as it would if you needed to put down 20 percent of the home's value to get a mortgage. Consider the overall impact on your life of buying a home, and make sure your credit is in good shape before applying for a mortgage. You're entitled to free annual credit reports from each of the major credit reporting agencies, and you can get two of your credit scores for free every 30 days on Credit.com.
WASHINGTON -- Trying to head off a new round of consumer headaches with President Barack Obama's health care law, the insurance industry said Tuesday it will give customers more time to pay their premiums for January.
America's Health Insurance Plans, the main industry trade group, says the voluntary steps include a commitment to promptly refund any overpayments by consumers who switched plans and may have gotten double-billed by mistake.
Though the HealthCare.gov website is working far better this year, the industry announcement highlights behind-the-scenes technical issues between the government and insurers that have proven difficult to resolve. Last year's enrollment files were riddled with errors, and fixing those has been a painstaking process. As a result, renewing millions of current customers isn't as easy as it might seem.
The industry "wants to do everything we can to make sure consumers have greater peace of mind about their health care coverage and support them throughout the open enrollment process," Karen Ignagni, head of the trade group, said in a statement.
The health care law offers subsidized private insurance to people who don't have a health plan on the job. Renewing coverage each year is standard operating procedure for the industry, but 2015 is the first renewal year for the health law. The process involves a massive electronic data transfer from the government to insurers, happening right around the holidays. Insurers then have to use that data to generate new cards for their customers.
Normally, premiums for January would be due by Dec. 31. The industry's grace period for 2015 could vary among different carriers, so consumers should check with their plan. Insurers say they also plan to help customers who have problems filling prescriptions or getting medical care at the start of the year.
Last-Minute Extension
Midnight Monday, Pacific time, was the deadline for new customers in most states to pick a health plan to take effect Jan. 1. It was also the deadline for current enrollees to make changes that could reduce premium increases before the new year. The administration announced a last-minute extension for some people unable to get through to the jammed federal call center.
Making matters more confusing, open enrollment actually runs for another two months, until Feb. 15. People enrolling by that date will get coverage starting March 1. Current customers can still make plan changes through Feb. 15.
Based on early numbers, it's looking like the majority of the roughly 6.7 million current customers have opted to stay with the plans they have now and be automatically renewed Jan. 1.
Assuring that happens as smoothly as it's been advertised is the administration's next major challenge. The insurance industry announcement provides a safety valve for the administration. It mirrors similar steps the industry took last year to soften the consequences of the botched rollout of health insurance markets around the country.
The favorite political scapegoat of the White House during the battle to pass the health care law, insurers keen on signing up millions of new taxpayer-subsidized customers have turned into indispensable allies.
If you're trying to get in shape for the new year, you're not alone. However, when the average cost of a gym membership is nearly $700 a year, you might be feeling a crunch in your budget as you work those abs. Here a few great alternatives that can help you get fit for free.
If you're looking for a variety of workouts you can access anywhere, anytime, give Sworkit a try. From strength and cardio to yoga and Pilates, this free app has lots of great routines to choose from. Simply select which program you want to do, set your workout length and let the video guide you though your routine. The best thing about these exercises is that they only use your own body weight as resistance. No extra equipment or costs are required.
For those of you who want to work out with a familiar face, check out the BeFit channel on YouTube. Here, you'll find over 2,000 videos to choose from, each one featuring celebrity trainers and fitness experts guiding you though a wide range of yoga, strength and body sculpting routines. With new videos being released every few days, you'll definitely have enough fresh content to keep you interested.
Lastly, if you tend to be short on time or just have a short attention span, Seven by Perigee might be for you. Using nothing more than a chair, a wall and your own body weight, this app is no frills, easy to use and best of all, only 7 minutes long.
So remember, with a little dedication, effort and time, you can have a great workout whether you're at the gym or in your own home. Try out these tips and before long, you'll be burning off a few calories without your budget breaking a sweat.
NEW YORK -- T-Mobile (TMUS) will now let customers carry over their unused cellular-data allotments.
U.S. wireless carriers have been pushing consumers into larger data plans, but they typically lose what they don't use at the end of their billing month. Under T-Mobile's plan announced Tuesday, customers would be able to stash what they don't use for up to a year. It's reminiscent of the days before wireless companies offered unlimited voice calls; some carriers were offering to rollover unused minutes into future months.
T-Mobile says that with its plans, customers won't have to guess how much data they might need. If they buy too much, they can save it. This approach also helps customers who might not use the same amount of data each month. Watching video while traveling -- without the benefits of Wi-Fi at home or work -- can quickly use up the data allotment, as a two-hour movie can easily consume more than a gigabyte.
The program is open only to customers on Simple Choice plans with at least 3 gigabytes for a smartphone or 1 gigabyte for a tablet. Eligible customers won't need to do anything to participate. Customers will also get a one-time free allotment of 10 gigabytes when the program starts next month.
T-Mobile likened the practice of losing unused data to a grocery store clearing out what you don't eat each month.
T-Mobile, the nation's No. 4 wireless carrier, billed the new program as the company's latest "Un-carrier" move. It's a term T-Mobile uses to describe programs and plans that shatter longstanding industry practices. Past announcements have included replacing two-year service contracts with phone installment plans and letting customers upgrade phones more frequently than every other year. Rivals have since adopted parts of those programs.
But T-Mobile isn't alone in offering data flexibility. Other carriers do it by letting families share a collective pool of data within a given month -- so Mom can be a data hog one month, while Junior uses a lot of data the next. T-Mobile doesn't offer data-sharing plans, and its family plans require each person to manage a separate allotment of data.
Nati Harnik/AP
The "Good Hands" people at Allstate have figured out a shady, possibly illegal, way to push up insurance rates, according to the Consumer Federation of America, which said Tuesday it discovered a letter from the insurance giant that is a "smoking gun."
And the group, one of the most influential consumer advocacy groups in the nation, said the implications to American consumers over what Allstate (ALL) is doing is huge and can impact anyone with car insurance.
If regulators don't block this scheme immediately, American consumers will pay a huge price.
"This is a watershed moment in the history of insurance consumer protection," J. Robert Hunter, CFA's Director of Insurance and the former Texas Insurance Commissioner, said in a statement. "If regulators don't block this scheme immediately, American consumers will pay a huge price. While we are forced by law to buy these companies' insurance products in order to drive, there seems to be nothing stopping them from targeting millions of unsuspecting customers with unnecessary and unjustified price hikes."
The CFA said Allstate created a new way to calculate rates that creates sometimes sharply higher rates aimed at consumers who are "unlikely shop around to find a better price."
Among the ways the new surcharges and policy adjustments are unfair, the CFA said, includes a random price adjustment based on the month someone was born. As an example, a 46-year-old man with a good driving record who was born three months after another 46-year-old man with a good driving record could be charged 30 percent more on his premium, the CFA said.
Allstate issued the following statement in response to the CFA report:
"Allstate is committed to operating with absolute integrity. The Consumer Federation of America's allegations are inaccurate. The primary allegation in the news release regarding date of birth is grossly mischaracterized and does not take into account all of the risk characteristics for these two individuals. Our rating plans, including Complementary Group Rating Plan, have been and continue to be risk-based.
"Marketplace considerations, consistent with industry practices, have been appropriate in developing insurance prices, and we are open and transparent with regulators. The Complementary Group Rating Plan meets customer needs in the market place, and our success in increasing new customers and renewing more existing customers in the competitive insurance environment is evidence of this."
Allstate is just one company, the CFA said, that has worked with consultants to create a broad array of pricing tables intended to push up profits. The price differences are determined using "marketplace considerations," which doesn't involve risk, and can result in anything from "a 90 percent discount off the standard rate to increasing his or her premium by 800 percent, depending upon Allstate's analysis of the individual policyholder's 'marketplace considerations.' "
The Consumer Federation sent a letter regarding its findings to every state's insurance commissioner.
"Allstate's insurance pricing has become untethered from the rules of risk-based premiums and from the rule of law," Hunter said. "Unfortunately, we believe that Allstate is not alone in using this new and patently unfair approach to auto insurance pricing, they are just the first to be unmasked."
Winter in Hawaii means big wave surf. And on a sunny Tuesday in early December, throngs of fans, tourists and fellow surfers watch as expert watermen charge monster barrel waves, the trademark of the Pipeline break on Oahu's famed North Shore.
It's the first day of trials for the annual Billabong Pipe Masters. Sixteen miles away, inside a small, cramped office, Craig Sugihara, Travis Hashimoto and Glenn Pang huddle around Pang's computer. They are intently watching live coverage of the contest. The guys just have to know how things are going. After all, some of those pro surfers are shredding it on boards the three of them made.
Sugihara started T&C Surf Designs Hawaii 43 years ago in Pearl City, a town in central Oahu located half way between the big town of Honolulu and the country -- which is what the "T" and "C" stand for.
Today, the surfboards are made in the former plantation town of Wahiawa, the gateway to Oahu's North Shore. Hashimoto cuts and Pang shapes polyurethane foam into boards inside the 2,500-square-foot factory tucked at the end of Wahiawa Industrial Complex's row of concrete and cornflower blue sheet metal warehouse buildings. Together they help produce a few thousand surfboards each year for what has become a more than $7 billion global surf industry.
But no matter how big the sport has grown, the Islands are still the soul of surfing.
Surfing's roots stretch back to the ancient Native Hawaiians who rode the waves using wood boards that were often more than 15 feet in length. The sport was especially popular among Hawaii alii (Hawaiian royalty, pronounced ah-lee-ee). In the 20th century, Native Hawaiian Olympic swimmer Duke Kahanamoku popularized the sport through his national and international travels and he is considered the father of modern surfing.
Sugihara, who was born and raised in central Oahu, grew up hearing stories of Duke and watching innovative Waikiki beach boys ride the waves at the surf breaks like the Queen's or Publics. Like many young locals, Sugihara spent countless days after school, and every weekend, riding the swells. Unlike most, he turned his passion for the surf into an international company.
Credit: Reid WatanabeChapter One: A Barbershop Beginning
"I've always liked working with my hands," Sugihara says. At the University of Hawaii, he studied industrial arts and planned on becoming a shop teacher. Fate had a different idea.
One day, Sugihara noticed his neighbor's old, yellowing board abandoned in the backyard. "He gave it to me and I stripped the fiberglass off and made a smaller board out of it," he says. At 23, Sugihara crafted his first surfboard.
He was hooked. In between class, Sugihara would head over to Surfboards Makaha in Honolulu and spend hours watching the craftsmen make boards. "I thought maybe if I went there often enough, I'd get a job sweeping the floors, but they never asked me," says the 68-year-old with a soft laugh.
But his determination did pay off with a job at Greg Noll Surfboards, followed by a stint at the now-closed Mystic Surfboards in Waianae on Oahu's west side.
Three years later, Sugihara knew how to cut, shape, laminate -- known in the industry as glassing -- and sand a quality surfboard and he was itching to do it on his own. He had found a location in a shuttered barbershop in Pearl City. He scraped together $2,000 and his father gave him an additional $1,000. In 1971, just four years after refurbishing his neighbor's board, Sugihara founded Town & Country Surf Shop.
That's the greatest joy when someone comes back and tells you your board works really good and you did a great job. It's rewarding.
"I wanted to build a good product," says Sugihara, sporting a T&C Surf Designs Hawaii t-shirt and boardshorts. "That's the greatest joy when someone comes back and tells you your board works really good and you did a great job. It's rewarding."
Making top-notch boards meant long hours for Sugihara in the early days of Town & Country, sometimes all-nighters. For a brief time the shop doubled as his home. "I built a loft above my retail store," he says. "It was a way to have no rent!"
Today, T&C Surf Designs Hawaii has grown into an international company, with seven retail stores, surfboard licensees on both U.S. coasts and company partners in France, South Africa and Australia. Sugihara credits the brand's diversity for the success.
He has branched out from surfboards and sells bodyboards, skateboards, apparel and accessories. Some of its most popular products bear the original logo, the Tao symbol yin and yang. "It means balance," says Sugihara. "In surfing, balance is everything." He says it also represents Oahu's two shores: town, the South Shore and country, the North Shore.
Despite its global success, the Hawaii company still has a small business feel. Sugihara's oldest son Ryan, 36, is the men's buyer and his younger son Gareth, 33, helps part time with sales in the Wahiawa factory. Sugihara's wife Linda formerly ran the apparel division and is now semi-retired. "The boys went to a lot of trade shows growing up and because of our partner in France, my wife got to see the Eiffel Tower," says Sugihara, smiling.
While Sugihara no longer cuts, shapes and glasses the boards, instead overseeing the licensing these days, surfboards remain the heart of the company he started in a modest barbershop. And surfing is still his passion. "I surf with my best friend Allen Wicklund every weekend," he says. "I've been doing that for 40 something years."
Chapter 2: From Blanks to Boards
When Glenn Pang started shaping short surfboards in the mid-1970s, it was a labor intensive and sometimes dangerous profession. "I was doing everything by hand. It was a lot of wear and tear on the body," says the 57-year-old, who grew up on Oahu and lives a few miles from the factory in Wahiawa. After measuring roughly shaped surfboard foam boards, called blanks, Pang used an electric planer to cut the blanks into surfboards and then sand them. "It's this big blade that's spinning," he says, "and pretty heavy, like eight pounds."
Credit: Reid WatanabeGlenn Pang
Things have since become a bit easier. In 2007, Pang bought software and a surfboard cutting machine for $70,000. (He shares the equipment with the Town & Country factory; Pang also shapes boards independently.) Now instead of cutting the surfboards by hand, Pang designs them on the computer using a 3-D design software program. He puts in length, width, volume and other measurements. Average shortboards range in length from five feet to six-and-a-half feet for adults.
Hashimoto then feeds the blanks into the cutting machine, where it shaves the form down according to the design data. T&C Surf Designs Hawaii uses blanks made in Mexico from the California-based company Arctic Foam.
Hashimoto cuts the blanks into shortboards in 20 minutes. The rest is done by hand; the surfboard making process hasn't changed much since the 1950s because no matter the use of computers, a shaper's hands are still important to finishing a board. Pang deftly smoothes out the thin grooves the machine left behind and finishes the board with sandpaper. Like fresh snow on the ground, fine dust from the foam boards piles at his Croc-strapped feet. Pang wears a mask while working and cleans the boards, and himself, with an air compressor.
Pang can shape about 10 boards each day after honing his craft for the past 40 years. He made his first board at 13. "I watched one of my friend's brothers make a board. I thought, 'that looks fun'," he says. "I was making them in my garage and then started working for Craig in the early '80s. He showed me the ropes." Pang still has the electric blade he once used to cut blanks hanging from one of his workspace's cobalt blue walls, but it's dusty from lack of use.
Credit: Reid Watanabe
After Pang is done, the boards go next door to Monstah Glass Hawaii, a full service contract surfboard fiberglass factory for the finishing touches -- glassing and sanding. T&C Surf Designs Hawaii works with the laminating company to finish its boards.
The bright glassing room is lined with sticky, cardboard pieces, as a Monstah glasser delicately wraps a freshly shaped board in fiberglass cloth and applies a thin coat of resin, supplied by Fiberglass Hawaii. The fiberglass gives the board its strength, while maintaining the form. The board then sits to dry on a sawhorse for the next four hours. Next, a crew member from Monstah will seal the lamination during what's called a hotcoat process; it's also when cups for the leash and boxes for the fins are inserted. Lastly, sanders buff off the resin and polish the board, without compromising its strength and integrity. Now it's ready to be sold.
Hashimoto's favorite customers are the beginners. "I like to interact with them and share my knowledge," says Hashimoto, his desk littered with custom orders. "To sell them their first surfboard and they come back and they're super happy about it, it's the best feeling."
But it's the professional surfers who make the most of T&C Surf Designs Hawaii boards. Paddling into intense waves of 10 feet or more, they can break several boards in the process. During the surf season, Pang estimates that surfers competing in the Association of Surfing Professionals circuits cycle through 40 to 50 boards each season. "I think the majority of the good guys get their Hawaii boards from Hawaii shapers," Pang says. "We know the waves." Right now, seven professional surfers ride and represent T&C Surf Designs Hawaii in contests in the Islands.
Credit: Reid Watanabe
Hashimoto started with the company as one of its youth team athletes. Then, in 1997, he began working in the shop because making boards, not just riding on them, captivated him. "I was in school and people asked me what I wanted to do. Being a part of the surfing industry was always one of those things," says Hashimoto, who also is the factory manager. "Cutting makes me feel a part of the board process. You get dusty, but it's a great feeling."
Still he hasn't given up riding waves. He's been a shop team rider ever since he rode for the company's team. And that also means getting out on the water a few times a week with the rest of the factory team at T&C Surf Designs Hawaii. "We get to test out the boards," Hashimoto says. "We have to know what it's about for us to sell it!"
Chapter 3: The Surfer's Stoke
It's not just about the pros for Sugihara. He wanted to give Hawaii's children, or keiki (pronounced kay-key), the opportunity to surf and get their first taste of tournament surfing. So in 1997, he helped start T&C Surf Designs Hawaii Grom Contest (grom is a term for a young surfer).
Sugihara wanted the children to feel the surfer's stoke, he says, and instill a passion for surfing that will last from riding a wave for the first time to a Saturday afternoon session at 68 years old. "When you have parents come up and thank you personally and you see the children have a good time, it's so rewarding," he says. The annual competition is held at Queen's surf break at Kuhio Beach Park in Waikiki and in 2014, approximately 300 groms participated.
Hashimoto was once one of those groms. Born and raised in Ewa Beach on Oahu's West side -- he still lives there and makes the 30-minute commute to the factory -- Hashimoto grew up at the beach. "I bodyboarded, I fished and then when my uncle gave me a surfboard as a kid," he says with a big smile, "I was there everyday."
Hashimoto fondly recalls his experience being recognized as a top keiki surfer with the T&C Surf Designs Hawaii team. "It felt like I made it surfing-wise," he says. He became part of a lifelong community, he says. "Surfing is a big industry and yet we're a small tight knit family; everyone knows each other." As a shop team surfer, Hashimoto has traveled to Japan, Nicaragua, Bali and other exotic surf locales, representing T&C Surf Designs Hawaii. "Town & Country boards are all I know. In the '80s and early '90s it set the trends of what surfboards were all about. Nowadays there's so much competition, but we're still making Hawaii-made surfboards."
Tiffany Hill is a freelance writer based in Honolulu, Hawaii. She has been published in magazines across the state and on the West Coast where she writes about traveling to the Islands, local businesses, education and Native Hawaiian culture and issues. For more, visit www.tiffanyhill.net.
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