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New State Laws OK Wine Shipments, Ban Tiger Selfies

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New Laws Around The Country
Jae C. Hong/APCalifornia -- which suffered a shooting in Santa Barbara in May, where seven died -- will now search gun purchases as part of routine welfare checks.
By Andrew Welsh-Huggins

New state laws taking effect Thursday give livestock in California more living room, approve direct-to-consumer wine shipments in Massachusetts and levy the ultimate punishment on wannabe teen drivers in Nevada by denying them licenses if they skip too much school.

Other laws will allow Louisiana teens as young as 16 to register to vote, crack down on meth dealers in Michigan, end tax breaks for filmmakers in North Carolina and raise the minimum wage in Ohio, New York, Rhode Island and elsewhere.

Although it doesn't take effect until early February, a New York law captures this year's "Who knew?" prize by banning tiger selfies, which have been used by young men as profile photos on social media sites. A look at some of the new laws taking effect Jan. 1, in alphabetical order by topic:

Alcohol

Wine connoisseurs will be popping the cork over a new law taking effect Thursday that allows out-of-state wineries to ship bottles directly to consumers in Massachusetts. The drive for direct wine shipments had been stalled for years before getting a big boost from former New England Patriots quarterback Drew Bledsoe. Now a winemaker in Washington state, Bledsoe complained to lawmakers he could not send his products to Massachusetts residents, including fans and former teammates like current Patriots quarterback Tom Brady.

Animals

In California, a ballot initiative approved by voters in 2008 takes effect restricting the confinement of egg-laying hens, breeding sows and veal calves. The Humane Society of the United States says the law goes further than any in the country when coupled with a law signed by former Gov. Arnold Schwarzenegger that extends the space requirements for egg-laying hens to out-of-state suppliers.

In Utah, cities and towns can no longer ban specific dog breeds within their limits. At least 10 cities now have restrictions that ban ownership of breeds such as pit bulls.

Crime

In California, a "yes means yes" standard for sex between college students takes effect, requiring "an affirmative, conscious and voluntary agreement to engage in sexual activity," meaning silence or a lack of resistance can no longer be deemed consent.

In Michigan, rape evidence may be better organized and tracked under laws designed to help ensure kits aren't caught in the sort of backlog found when more than 11,000 untested boxes were discovered in a Detroit Police storage facility in 2009.

In Louisiana, law enforcement agencies must provide a tally of the number of untested rape kits on their shelves by Thursday, part of a law that took effect in August.

Drug Abuse

In Michigan, buying cough and cold medicines for the purpose of making methamphetamine will be illegal under another series of measures intended to crack down on meth makers. The laws also prohibit asking someone to buy the ingredients and require state police to add meth offenders to a national database.

Elections

In Louisiana, 16- and 17-year-olds will be able to register to vote when obtaining a driver's license, though they still won't be able to vote until they turn 18.

In North Carolina, individuals filing as a candidate in a party primary must have had an affiliation with that party for at least 90 days before filing a candidacy notice.

A Delaware law establishes new rules for allocating campaign contributions among joint account holders, such as when spouses submit a political contribution using a single check.

Environment

In North Carolina, home sellers will have to disclose whether they know if underground oil and gas rights have been sold.

In New York State, consumers must begin recycling old computers, televisions and video game consoles instead of throwing them in the trash.

In the face of a three-year drought, new California laws require water districts and other local entities to develop plans to manage their groundwater and allow the state to intervene if necessary.

Health

In Louisiana, smoking will be banned within 25 feet of public entrances to state office buildings, as a way to lessen exposure to secondhand smoke.

Hunting

In North Carolina, the state Wildlife Resources Commission faces new restrictions on how high it can raise fees on hunting, fishing and trapping licenses. Starting with the new year, the fees can't be raised beyond a widely used measure of inflation averaged over the previous five years.

Motor Vehicles

In California, drivers' licenses will be available for people in the country illegally.

In Nevada, students who are declared habitually truant could be delayed from obtaining a driver's license, or could have their license suspended.

In Florida, all children aged 4 and 5 will be required to sit in a child safety seat or booster seat instead of using just a car seat belt.

In Indiana, license plates will be required on motor scooters for the first time following complaints about unsafe driving by those who've lost their licenses because of drunken driving arrests or other offenses.

In Michigan, lawmakers closed a loophole so motorcyclists can no longer buy a temporary permit every riding season without taking a safety or skills test needed for a full endorsement.

Massachusetts will finally allow "hold open" clips on pumps at self-service gasoline stations, ending motorists' complaints - particularly in winter -- about being in one of the few states where the clips weren't allowed.

In Utah, police will be required to impound the vehicles of uninsured drivers instead of just having the option to do so.

Social Media

In New York in February, it becomes illegal to pose for a photo with a lion, tiger or other big cat. The measure, which specifically prohibits contact between members of the public and big cats at animal shows, passed after self-portraits with the animals started becoming more popular online, particularly with some young men on dating sites.

Taxes

In North Carolina, Republican lawmakers who approved an income tax cut also took away breaks to filmmakers. Expiring is a 25 percent tax credit for TV and film productions that in 2013 allowed producers to forego paying $61 million in state taxes. It's being replaced in 2015 by a grant program for video productions capped at $10 million.

In Virginia, drivers can expect to see a 5 cents-per-gallon increase in the cost of gas, while Maryland's gas tax is set to rise about 3.5 cents.

In Mississippi, totally disabled veterans and their surviving spouses who have not remarried would not have to pay property taxes on their primary residence.

Wages

The minimum wage goes up Thursday in several states, including Arkansas, Connecticut, Florida, Ohio, Maryland, Massachusetts and Rhode Island. A wage increase in New York takes effect Wednesday. In addition, troopers in Oklahoma get their first pay raise in seven years.

Weapons

In Pennsylvania on Jan. 5, a law takes effect that's designed to give the National Rifle Association, or any gun owner, a better chance at successfully challenging local firearms ordinances in court. In general, Pennsylvania bars its municipalities from enforcing firearms ordinances that are stronger than state law. But the NRA has complained that dozens of local ordinances go unchallenged in Pennsylvania courts by residents who can prove it harmed them.

In California, law enforcement agencies are required to develop policies that encourage officers to search the state's database of gun purchases as part of routine welfare checks. The bill was prompted by sheriff's deputies' failure to detect the danger posed by a man who weeks later embarked on a deadly rampage in May near the University of California, Santa Barbara.

 

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If At-Risk Companies Made New Year's Resolutions ...

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McDonalds Sales
Andy Wong/AP
It's time to make a change. The quest for self-improvement drives everything from gym memberships to improv class registrations higher in January, but why should humans have all of the fun?

Let's go over a few new year's resolutions that publicly traded companies would love to make for 2015.

McDonald's (MCD)

Things haven't gone well for the world's largest burger chain in 2014. Widening the menu hasn't widened the customer count. In fact, domestic comparable-restaurant sales have fallen in 12 of the past 13 months.

McDonald's is hoping to turn things around in 2015. It is eliminating some of its menu items to simplify its operations. It is also hoping that tech innovations and customized sandwiches boost in-store traffic.

Another big push at McDonald's for the year ahead will be quality. Its image took another hit early in 2014 when a Consumer Reports survey found the chain's signature burgers ranking dead last in terms of taste among the nearly two dozen leading chains.

Resolution for 2015: Win back the consumer.

Walmart (WMT)

The world's largest retailer started to show some positive signs as it wraps up its fiscal year. After a couple of years of negative comparable-store sales, it responded with flat comps through the first two quarters of fiscal 2015 before posting a 0.5 percent uptick in its most recent quarter.

It will have to do better than that, of course, but Walmart's improving performance was enough to lift the shares to an all-time high in November. Walmart will need to continue to improve on its store traffic. It will also need to conquer negative perceptions about the way it treats and pays its employees.

Resolution for 2015: Get comps to outpace inflation.

Tesla Motors (TSLA)

Tesla is the cool kid on the block when it comes to electric vehicles. There's no shortage of demand for Tesla's stylish Model S even with its stiff price tag. Elon Musk is on a pedestal as a visionary, and whether it's leading the way in space travel or residential solar power in other ventures, it seems as if there's little that he can do wrong.

The rub for Tesla is that after seeing its stock soar eightfold over the past three years, the stock's valuation can't be justified by the success of its high-end sedan. It will need to ramp up production, and that goes beyond the upcoming Model X crossover, which is priced similarly to the Model S. Musk has been promising a more affordable model coming out in a few years, and that will ultimately be the ticket to bigger gains.

Resolution for 2015: Lay out more concrete plans to take Tesla mainstream.

SodaStream (SODA)

One of 2014's biggest losers was SodaStream, the company behind the namesake beverage makers that turn ordinary water into flavored soda. It was a market darling when its product hit select retailers four years ago, but fickle consumers have turned on the appliance. Sales in the Americas plunged 41 percent in its latest quarter, and there was even a slight dip in its larger and more established European stronghold.

SodaStream is responding by repositioning its marketing message in 2015. It knows that soft drinks are falling out of favor, so it intends to market its machine as a maker of sparkling water. It's going to be a challenge, but SodaStream doesn't have much of a choice given the trend that started turning against it in the U.S. since the second half of 2013.

Resolution for 2015: Turn U.S. sales around and hope that Europe will follow.

Motley Fool contributor Rick Munarriz owns shares of SodaStream. The Motley Fool recommends McDonald's, SodaStream and Tesla Motors. The Motley Fool owns shares of SodaStream and Tesla Motors. 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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What Could Happen to Health Insurance in 2015?

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Giving a flu shot from a needle.
AZP Worldwide/Shutterstock

By RICARDO ALONSO-ZALDIVAR

WASHINGTON -- The fate of President Barack Obama's health care law again hangs in the balance as the Supreme Court weighs another legal challenge to the program, now covering millions of people. And a Republican-led Congress prepares for more votes to repeal the Affordable Care Act, ignoring threatened vetoes by the president. Five questions about health care for 2015:

1. What Does the Supreme Court Face?

The biggest health care news of 2015 probably won't come from Congress or the White House, but the Supreme Court. The court has agreed to hear another lawsuit that goes to the heart of Obama's strategy for providing health insurance to people who can't get coverage through their jobs. The case will be argued early in March, with a decision expected late in June.

The plaintiffs contend that the law as written only allows the government to subsidize coverage in states that have set up their own their own health insurance markets, or exchanges. With Washington currently running the markets in 37 states, much of the law's coverage expansion could unravel if the Supreme Court agrees. It would be a moment of truth for the law's opponents and its supporters alike.

2. Does Anybody Have a Plan B?

If the Supreme Court rules against Obama, both sides would need a fallback plan, and quickly. Opponents of the health care law would face the prospect of more than 4 million people losing federal subsidies that cover about 75 percent of their premiums. Most of those consumers would wind up uninsured again, and presumably none too happy.

The president would have to contemplate going hat-in-hand to the Republican leadership of Congress to ask for fixes to his signature legislation, possibly opening up other contentious issues in the law. Republican governors and state legislators would have a choice, too. They could establish insurance exchanges, or watch many of their constituents lose coverage.

3. What Is Congress Doing?

With the Senate and the House both under Republican leadership, expect dozens more congressional votes to repeal "Obamacare," whether in whole or in part. It's not clear that full repeal can get through the Senate, where Democrats retain sufficient strength to block legislation by using procedural maneuvers.

But some provisions of the law are also unpopular with significant numbers of Democrats, and bills to roll those back may emerge from Congress. Examples: a requirement that 30 hours per week counts as full-time employment, a tax on medical device manufacturers, and a Medicare cost control board.

4. What About My Taxes?

Obama's health care law uses the income tax system to deliver carrots and sticks. The subsidies that have made premiums affordable for millions are distributed as tax credits. And the penalties imposed on those who ignore the law's mandate to get health insurance are collected as additional taxes.

In 2015, the law's connection to the tax system will become clearer for most people. All taxpayers will have to report on their 2014 tax return whether or not they had insurance. Those who got subsidies will have to show they got the right amount. If they received too much, their refunds will get dinged. Those who remained uninsured will either have to pay the taxman, or show that they qualify for an exemption. Tax preparation companies are expecting lots of new business.

5. How Many Are Covered, Anyway?

At last count, about 6.7 million people got private coverage through the insurance exchanges in 2014. Another 9.7 million got on Medicaid, the insurance program for low-income people, expanded under the law by more than half the states. Some of those people would have switched from other coverage.

Still, the number of uninsured Americans has dropped significantly -- by more than 10 million people as of mid-2014. While the economic recovery doubtless contributed, Obama's law does seem to be delivering on a core promise.

 

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Why 2015 Will Be the Year of Solar Energy

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Men installing solar photovoltaic panels at sunset
Lester Lefkowitz
Whether you realize it or not, solar energy is becoming a more and more important part of our energy future. In 2013, 29 percent of new electricity-generating capacity in the U.S. was solar energy, and so far in 2014, 36 percent of new capacity is solar.

Falling costs and improving technology will drive wider adoption, and 2015 could be a tipping point, bringing the solar industry to new parts of the country.

The Year Solar Caught On in the U.S.

2014 has been the start of consumers and utilities alike understanding the positive impact solar can make. GTM Research expects about 6.5 GW of solar energy to be installed in the U.S. in 2014, enough to power nearly 1.1 million homes. But over half of those installations fall in a relatively small area in California and Arizona, so this isn't a nationwide trend -- yet.

You can see below that 10 states (not including Hawaii, where solar has long been cost-competitive) are now seeing residential solar systems cost-competitive with the grid, and by 2017 the estimated number jumps to 28 states. In 2015, a growing infrastructure from solar installers will bring solar to new states, expanding the industry's reach.

Union of Concerned Scientists

Expansion Plans Kicking into High Gear

The solar industry knows that more states are seeing competitive prices and is expanding quickly to fill the need, especially in the residential market. SolarCity (SCTY) and Vivint Solar (VSLR) install more than half of the residential solar systems installed in the U.S. today, and they both have big expansion plans in 2015.

SolarCity expects to grow from 168,000 customers in September 2014 to over 1 million customers by mid-2018. As the company showed in a recent presentation, its addressable market grows exponentially as it cuts costs. SolarCity's costs today, including sales and general costs, are $2.90 per watt, down 26 percent from just two years ago. If costs continue to fall at anywhere near that rate, the company should be able to keep growing.

SolarCity

Vivint Solar was founded just three years ago, but it's already grown into the second-largest solar installer in the country, with operations in seven states. Next year, it plans to open another 20 new sales and operations offices, growing beyond a high concentration in Massachusetts, New Jersey, and New York.

States to watch in the residential solar market next year include Nevada, Texas, and Florida, which have only been small players in residential and commercial solar until now but have high solar insolation and relatively high energy costs.

Rooftops Aren't the Only Place Solar Is Popping Up

Residential solar is getting most of the attention in the media, but it's actually large utility-scale projects where the biggest impact is coming. These projects account for over half of all solar installed, and states you'd never imagine are starting to see solar growth.

Minnesota, Colorado, North Carolina, and Oregon have made solar more cost-effective through policy that gives incentives for utilities to adopt solar and policies that make solar energy cost-effective and easy to connect to the grid. Growth in these states won't likely come on rooftops; it'll be ground-mounted small utility-scale projects that gain adoption, because they're lower-cost than residential solar.

And 2015 Is a Tipping Point

It's possible that 2015 will be the first year in which over half of new electricity generation capacity in the U.S. will come from solar. It's also likely that the industry will start to solve its intermittency issue, installing energy storage in a growing percentage of homes that decide to go solar. Both would be big milestones for the industry.

The potential growth for the solar industry isn't measured in billions of dollars, it's measured in trillions, and in 2015 we'll begin to see the industry's leaders take a larger role in our overall energy future and spread their wings across the country. Like it or not, solar energy is coming to a town near you.

Motley Fool contributor Travis Hoium has no position in any stocks mentioned. The Motley Fool recommends and owns shares of SolarCity. Try any of our Foolish newsletter services free for 30 days. Is your portfolio ready for the new year? Check out our free report on one great stock to buy for 2015 and beyond.

 

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Market Wrap: S&P, Dow, Nasdaq All Up for the Year

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Financial Markets
Seth Wenig/AP
By Ken Sweet

NEW YORK -- U.S. stocks ended a strong 2014 with moderate declines Wednesday. Even with the losses, the Standard & Poor's 500 index (^GPSC) finished the year with an 11.4 percent increase, its sixth straight year of gains. Oil, by contrast, had its worst annual performance since 2008, ending down 45 percent for 2014 after a sharp slump in the second half of the year.

The 11.4 percent rise in the S&P 500 was double what strategists expected for the market at the beginning of the year. "It turned out to be a great year for U.S. economic growth, which got us higher corporate profits as well," said Cameron Hinds, regional chief investment officer for Wells Fargo Private Bank.

U.S. markets will be closed Thursday for New Year's Day and will reopen Friday. Most strategists believe the stock market will also rise in 2015, but they expect more modest gains of between 4 percent and 6 percent.

There was no major catalyst for Wednesday's selling. Trading has been slow all week because of the holidays and most fund managers have closed their books for the year. However, some investors do reshuffle their portfolios in the last few days of the year for tax purposes. Roughly 2.6 billion shares were traded on the New York Stock Exchange, compared with the 3.6 billion typically traded on an average day.

A Hit in Energy

Energy stocks edged lower as the price of oil fell. Benchmark U.S. crude dropped 85 cents to $53.27 a barrel in New York. Oil has plunged since June amid abundant supplies and weak global demand. In total, the price fell 45 percent in 2014, the worst year for crude since the 2008 financial crisis.

Oil drillers fell the most Wednesday. Diamond Offshore (DO) was the biggest decliner in the S&P 500, declining 3.6 percent. The energy component of the S&P 500 is down 10 percent this year
"I think most of the selling you're seeing today is related to the fall in oil, as well as repositioning before the end of the year," Hinds said.

On Wednesday, the Dow Jones industrial average (^DJI) fell 160 points, or 0.9 percent, to 17,823.07. It ended 2014 up 7.5 percent, lagging behind the S&P 500 and Nasdaq (^IXIC). The Nasdaq lost 41.39 points, or 0.9 percent, to 4,736.05. The Nasdaq rose 13.4 percent in 2014. The S&P 500 fell 21.45 points, or 1 percent, to 2,058.90.

Prices for U.S. government bonds rose. The yield on the 10-year Treasury note edged down to 2.17 percent. Bonds were an unexpected strong spot for the market in 2014. The 10-year note started 2014 at around 2.99 percent. Bond yields fall as prices rise.

Gold fell $16.30 to $1,184.10 an ounce. The precious metal barely budged in 2014, falling 0.2 percent, compared with its drop of 28.3 percent in 2013. Silver fell 68 cents to $15.60 an ounce and copper fell three cents to $2.83 a pound.

What to Watch Friday:
  • The ISM manufacturing composite index is released at 10 a.m.

 

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5 Types of People Who Should Avoid Credit Cards

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stk96685corStockbyte Platinum(Royalty-free)   portrait of a young man destroying his credit card with a pair of scissors
Getty Images
By Jason Steele

Should you really be using a credit card? For people who manage their cards responsibly, the answer is probably yes. They enjoy the security and convenience of credit cards, while making use of helpful perks and even earning valuable rewards. But other people find credit cards detrimental to their finances for a variety of reasons. Here are five types of people who use credit cards but probably shouldn't.

1. The Disorganized Bill Payer

Do you know someone who waits to pay their phone or Internet service bill until their service is cut off? When it comes to these bills, you can usually get away with it by enduring an annoying service interruption and a late fee or reconnection charge. If you don't stay on top of your credit card bills, the consequences include larger late fees, high penalty interest rates, and severe damage to your credit history. And with damaged credit, you will have trouble qualifying for a home mortgage, car loan or even an apartment rental. At that point, you may wish you had never bothered with credit cards.

2. The Broke College Student

What do you get when you combine an inexperienced credit card user with a student on a tight budget? A broke college student who may be willing to rationalize an additional credit card charge. After a coffee here, a lunch there and few books on the required reading list, students can end up with a severe case of bill shock at the end of the month. Students and other young adults on tight budgets need to keep their spending within their available resources. Unfortunately, credit card use at this time is a great way for them to go beyond their savings and incur crippling debt that can take years to overcome, which is why the CARD Act of 2009 already made it harder for the under-21 crowd to qualify for a credit card without showing income.

3. The Credit Card Rewards Enthusiast With No Budget

When most responsible credit card users receive their monthly statement, they immediately look to their balance. On the other hand, some rewards credit card users are fixated on the points, miles, or cash back that they earn from spending. These cardholders can sometimes make unnecessary purchases, just to earn additional rewards, either by design or subconsciously. Of course, any rewards earned will add up to just a small fraction of what is charged in interest if you carry a balance from month to month, so don't overspend just to get 5 percent cash back.

4. The Serial Revolver

Credit card users who constantly revolve charges are those who routinely carry a balance on their credit card statement, just to pay for regular expenses. These cardholders might simply prefer to make a small monthly payment rather than a large one to pay off the debt entirely, but they will ultimately spend an increasing amount of money on interest charges. So long as they can keep up with their minimum monthly payment, these cardholders might be deluding themselves into thinking that they are behaving responsibly, but they are paying an inflated cost for everything they buy. Only by paying off their balances and using other forms of payment until they can get their spending on track can these serial revolvers finally gain control of their finances.

5. The Fine Print Ignorer

Credit cards are deceptively simple to make purchases with, but they do take some time and patience to understand and use responsibly. Sadly, there are many cardholders who, for one reason or another, can't be bothered to learn exactly how their cards work. They might not understand how interest charges are applied, how cash advances work or how to avoid fraudulent charges. But just as people shouldn't get behind the wheel without knowing how to drive, consumers should not be using credit cards if they have failed to learn the fundamental rights and responsibilities that all credit card accountholders have.

It's also important to remember that certain credit cards work better for certain kinds of borrowers. For example, if you have a bad credit score, a rewards credit card will be harder to qualify for and you may be better off looking for a simple credit card you can pay on time and in full every month, which will help build your credit score. (You can see two of your credit scores for free on Credit.com.)

 

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Are You Financially Compatible with Your Loved One?

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Anchorman reading the news into the microphone
ollyy/Shutterstock
Want to know if you'll have a happily ever after? You may not want to hear this, but one of the things that will determine your success as a couple is the way you handle your combined finances.

I know, how unromantic, right? But of all the things couples fight over, money is one of the issues that consistently makes the top the argument list. Ignore this arena, and you're just asking for trouble.

How can you tell if you and your beloved are on track for a happy financial future together? Follow these five tips.

1. Know Your Money Personality

We all have a money mindset that influences the way we feel about money and spending.

There are the classic types: the tightwad who hates to spend a dime, the shopaholic who spends with reckless abandon, the frugal fiend who just can't resist a good deal. These personality types guide the way we manage our money on a day-to-day level.

There are also different types of investment personalities, which dictate the way we chose to handle our money when we invest in things like stocks and bonds. The Vegas gambler, for instance, loves to "bet it all" on the next hot stock. The scaredy cat is terrified of too much risk and plays it cautious, sticking away from huge losses but also avoiding any huge gains. And there's a whole spectrum in between.

Understanding your core money personalities will shed insight into why you make the spending decisions you do. It can also help you to see where the other person is coming from.

You don't need to have the same personalities to build a solid future together, but you do need get to the bottom of what matters most to you both. Otherwise, you'll just keep butting heads over the same things without understanding why or how to resolve them.

2. Talk It Out

Communication is key. The only way you and your partner will avoid killing each other (or getting into some vicious standstills) over your finances when you have different money personalities is to talk openly and honestly about where you see yourselves in the future and how you plan on using your money to make that happen.

Ask yourselves the following questions, and work through them as a couple:
  • Where do you see yourself in five years? 10 years? 20 years?
  • What major life goals do you want to accomplish? Do you want to own a large house? Travel extensively? Send your kids to private school?
  • How do you feel about debt? Would you prefer to pay off the mortgage early or invest the extra cash?
  • How much of your income do you want to save?
  • What kind of investments are you interested in, and what is your risk tolerance?
  • If you're planning on having kids, how much do you want to save for their education?
  • What kind of retirement do you envision?
Don't wait until you find yourselves disagreeing before you raise these questions. Address them upfront to make sure you're both on the same page when decision time comes.

3. Prioritize Your Savings Goals

You probably won't be able to save for everything you want all at once, so focus on the two or three goals that are the most important at this stage in your life.

If you're just beginning your life together, this may include saving for a wedding or a down payment on a home. If you've got a growing family, it could include saving for your kids' braces or setting up their college funds. At all stages of the game, retirement savings should be among your top priorities.

Having just two or three big goals in mind will help make it easier to decide how to prioritize your savings and decide how to handle extra cash like a raise or holiday bonus.

4. Focus on Solutions

Stay away from finger-pointing, blaming and judgments. If one of you has accumulated debt, how will you pay it off-together? If one of you has made a foolish spending or investment decision, what will you do to set things back on track? If you disagree with your partner's point of view, how can you say it in a way that presents your viewpoint as different, not better?

Whatever financial baggage you each bring to the relationship, it's best to face it as a united team. Stop dwelling over past mistakes and focus instead on how you can solve them. Stop trying to be "right" and focus on finding compromise.

5. Do What Works for You

When it comes to combining finances, there are as many different paths as there are different couples. No one way is more effective or better than another; the most important thing is finding an arrangement that works best for you as a couple.

Do you want to combine everything or keep separate accounts? Will one person be the bill payer, or will you each pay certain bills? Will you live on one person's income and bank the other income for your savings goals?

Only you and your partner can answer these questions. Do whatever works best for your goals and makes you both feel the most comfortable.

Paula Pant quit her office job in 2008, traveled to 32 countries and became a successful real estate investor. Her blog Afford Anything is the groundswell of a rebellion against standard, tired old financial advice that says you should skip lattes and chain yourself to a desk for 40 years. Afford Anything is dedicated to crushing limits, creating riches and maximizing life.

 

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How to Make a Killing Trading on Insider Information - Legally

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Michal Kowalski/Shutterstock
In a perfect world, every investor would have access to all material information about a publicly traded stock. Investors could then collectively evaluate this information, resulting in a market price for the stock that would fairly reflect its current value.

Unfortunately, the world is not perfect. And to gain an unfair advantage, some traders, mutual funds and hedge funds game the system by obtaining insider information. The stakes can be very high, creating a meaningful incentive to do so.

I suspect most investors believe the use of insider information is illegal. If so, they are only partially correct. A recent decision by the U.S. Court of Appeals for the Second Circuit (United States of America v. Todd Newman, Anthony Chiasson et. al) will make it exceedingly difficult to prosecute a broad range of insider trading cases, even when insider information is used and huge profits are generated. Decisions by the Second Circuit are applicable to Federal courts in New York, Connecticut and Vermont.

Todd Newman and Anthony Chiasson were portfolio managers at different hedge funds. They allegedly used information obtained from a group of financial analysts, who in turn got it directly or indirectly from company insiders. Specifically, they learned of earnings numbers for two public companies (Dell and Nvidia (NVDA)) before they were released. Newman and Chiasson traded on this information and allegedly earned $4 million and $68 million, respectively, for their funds.

How would you feel if you were on the other side of these trades?

Newman and Chiasson Were Exonerated

Newman and Chiasson were convicted of securities fraud after a six-week trial. On appeal, their convictions were vacated.

The appeals court determined that simply using insider information is not illegal. In fact, the court found the government had an obligation in this case to prove beyond a reasonable doubt that the person conveying the insider information had obtained it from "an insider" at the public companies in question and that the insider did so in exchange for a "personal benefit."

Because the earnings information came from a group of financial analysts, the court concluded there was no evidence Newman and Chiasson either knew the source of the confidential information or that those insiders who disclosed it received any personal benefit in exchange for the disclosure.

How You Can Profit

Assuming that this opinion is not overturned by the Supreme Court and remains the governing precedent, maybe you can profit from it. If you have the good fortune to overhear a conversation at a posh restaurant between a CEO and an investment banker concerning the imminent takeover of a public company, you can trade on that information with impunity. Why? Because even if you know the information was coming from the CEO, the CEO did not disclose it in exchange for a "personal benefit."

Similarly, if you have a friend who is an attorney at a major law firm and he discloses confidential information about a publicly traded company that is a client of his firm, you can trade on that information as well. The lawyer presumably did not tell you where he got the information and he did not benefit from disclosing it to you. Of course, the lawyer violated both his legal obligation to his firm and his fiduciary obligation to his client.

Why This Is Unsettling

In an insightful article commenting on this decision, Robert Reich, a professor of public policy at the University of California at Berkeley and a senior fellow at the Blum Center for Developing Economies, noted that the use of inside tips is the "coin of the realm in securities markets." Reich observed: "Major players on Wall Street have been making tons of money not because they're particularly clever but because they happen to be in the 'realm' where a lot of coins come their way."

Most Main Street investors are not in the same "realm" as the big hitters on Wall Street. I also suspect many individual investors would find it ethically repugnant to profit from inside information at the expense of those on the other side of the trade. Wall Street is not constrained by an ethical compass.

At least you now know the new rules that govern the use of insider information. How you use them is up to you.

Daniel Solin is the director of investor advocacy for the BAM Alliance and a wealth adviser with Buckingham. He is a New York Times best-selling author of the Smartest series of books. His latest book is "The Smartest Sales Book You'll Ever Read."

 

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6 Costly Mistakes You Make When Taking Out Loans

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By Geoff Williams

Loans are inevitable for most adults. If you buy a house or car, use a credit card or go to college, you'll likely need to take out a loan. U.S. household debt stands at $11.7 trillion, according to a recent Federal Reserve Bank of New York survey that draws on information from 40 million individuals.

But taking out a loan doesn't always work out well, as anyone who has dealt with a debt collector can attest. So what mistakes are you most likely to make in the loan process? A good rule of thumb: If there's a chance your loan can destroy your marriage, business or send you into bankruptcy, you're about to make the biggest mistake of all: taking out the loan in the first place.

1. Not Reading the Fine Print

There are always important gems of information buried in all that legalese, so you owe it to yourself to take a good look at what you're signing up for, says Leslie Tayne, a financial attorney and debt specialist who runs the Tayne Law Group in New York City.

"Many people have a tendency to simply sign the dotted line, listening to the salesperson and not double-checking the agreement," Tayne says. "I see this all the time. A client will come in and tell me that they didn't know about something in the loan, such as a balloon payment or increase in interest rate." But if you sign the contract, you're telling the lender that you do know -- even if you don't -- which, of course, is the problem.

2. Taking Out a Loan for Someone Else

Co-signing is a mistake, but some people double that error by taking out a loan and giving the money to someone else. "You'd be surprised at how often this happens," says Michael Poulos, CEO of Michigan First Credit Union in Lathrup Village, Michigan. He says his staff has, on occasion, encountered loan scenarios such as parents coming in to borrow money for their children and customers needing money to bail out family members from jail.

One of the more interesting cautionary tales about borrowing money for someone else came from a man who financed a loan to buy his girlfriend her own set of wheels. "But then his wife found out about the car," Poulos says. The man then decided he didn't want to pay for the vehicle, and the girlfriend broke up with him. The car was repossessed, and the man's credit score took a plunge.

3. Not Thinking About the Long Term

This new loan will probably be a big part of your budget for quite a while. So buddy up to those terms and get well acquainted with that loan before you commit.

"Applying for a loan, like any contract, means entering into a relationship. We actually call the members of our lending team 'relationship managers' because in any good relationship, there is honest communication and discussion," says Marty Gallagher, executive vice president and chief credit officer at Beneficial Bank (BNCL), headquartered in Philadelphia. "This is a process we're entering together, and we want to make sure there is a healthy conversation about goals so we can find a way to accomplish them responsibly."

Gallagher is right. The more desperate you are for the loan -- i.e., you're shoring up money to pay for surgery or your car is kaput and you need a replacement ASAP -- the more you should know how this loan will affect your month-to-month living expenses. The last thing you need to do is solve a problem and create another one.

4. Letting Emotions Fuel Your Borrowing Desires

Poulos says this is a classic error, and it dovetails with consumers not thinking about the long term. "People will find themselves in a crisis, or they'll become passionate about something, and they'll want a loan to fix everything. We've had customers take out a $1,000 loan so they can hire a limo and get a hotel room for a date, not thinking about the fact that they'll be paying for this amazing night for the next 12 months," Poulos says.

He says the bank staff has had people request loans for plastic surgery. They've even had people calling from a casino floor to take out a loan. That consumers do this may not be surprising, but that they admit it to the teller or bank manager might be. Then again, this is the era of oversharing. "You'd be surprised what they tell you," Poulos says.

5. Bungling the Paperwork

Errors in requesting loans are common. "One of the biggest mistakes we see is a lack of preparation," Gallagher says. "Some think that a loan is a simple form -- a quick application you can fill out when you're out running errands." True, Gallagher says the bank staff will help consumers so mistakes are minimized. But these professionals still depend on consumers to be focused enough that they read the paperwork.

When it comes to home loans, Melissa Cohn, president of GuardHill Financial, a residential mortgage company in Manhattan, says sometimes a married consumer will change her name -- but not legally. The bank, Internal Revenue Service and your driver's license may have one name while your Social Security card displays another. That can cause problems.

But it all works out in the end, right? Actually, the borrower can be turned away, but that's rare. "Ninety-nine percent of the time, a resolution is found the same day, but those eight-hour closings are rough," Cohn says.

"The No. 1 issue we see are incomplete applications," says Rob Beall, senior lending officer with Private Bank of Decatur in Decatur, Georgia. "The more information the lender gets, the more he or she can assist the applicant."

6. Lying

White lies are known for not hurting anyone, but in this case, they can hurt the borrower. "I see this happening a lot," Tayne says. "This goes back to the days of stated income where people would just say what they made but did not have to show proof, so often the income was overstated. In other cases, I see people not disclosing all of the debts they actually owe when completing loan applications."

Tayne has even seen borrowers use another family member's Social Security number without the other person knowing. "This eventually catches up to them and most often, where spouses are concerned, ends in divorce cases," she says.

 

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Does Choosing a Big Home Make You Richer?

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Home ownership has been one of the most reliable ways for many Americans to become wealthy over the long run. And as it turns out, size matters, as buying a bigger home has been more consistently profitable than owning a smaller home.

Through good times and bad, homes that are 4,000 square feet or larger have enjoyed greater growth rates in value than smaller homes, according to the latest figures from an FNC survey of residential home sales. With data going back to the year 2000, FNC concluded that although the gap between large-home appreciation and small-home appreciation narrowed during the worst years of the housing bust, large homes nevertheless kept their lead throughout the period. Over the long run, the 1-to-2-percentage-point gap means a lot of extra profits for owners of big homes.

Why Housing Prices Matter So Much

The biggest reason Americans have gotten so rich from their homes is that housing-related debt has essentially become a forced-saving system for many homeowners. By gradually paying off your mortgage and building equity in your home, you can effortlessly create a nest egg to tap later in life when your housing needs aren't as great.

Yet during the housing bust, many Americans found their net worth moving in the opposite direction. As home prices in many areas plunged, millions found themselves owing more than the current value of their homes.

Now, though, the housing market has largely recovered. The FNC survey found that the sales price of the typical American home has risen by 30 percent since 2011, climbing from $160,000 to $208,000 as of October 2014. Interestingly, though, FNC found that actual home values haven't risen nearly as much over that time frame, with its FNC Residential Price Index climbing 17 percent. That finding indicates that the rise in median sales prices reflects a change in the mix of homes being sold, with a greater number of higher-value homes on the market now than were up for sale three years ago.

In addition, as you'd expect, ordinary sales between willing buyers and sellers command much higher prices than sales related to foreclosure proceedings. Normal sales took place at about $120 per square foot, compared to just $73 per square foot on foreclosure sales. Foreclosed properties tended to be smaller and older than properties sold normally, and discounts to the home's estimated value tended to be much higher in foreclosure situations than in normal sales.

Even in foreclosure, large homes enjoyed a marked advantage compared to smaller homes. Foreclosed large homes that previously sold for more than $500,000 tended to carry just a 6 to 7 percent discount in foreclosure, compared to a much larger 17 to 19 percent discount for homes that previously sold for between $150,000 and $350,000. That disparity has stayed consistently wide since the financial crisis, with the spread between large homes and smaller homes climbing to as much as 15 percentage points in recent years.

Perhaps most important, the real-estate market has become less of a haven for house-flippers. Home turnover has decreased markedly, with relatively few homes being held for short periods of time. That suggests that more homeowners are looking at their homes as a long-term investment rather than a short-term source of cash. That bodes well for the recovery, supporting the idea that the rise in prices thus far hasn't pushed the real-estate market into bubble territory.

The Most Important Takeaway From Home-Price History

Although it's tempting to fixate on the differences between how prices of large homes have performed compared to those of small homes, the most important information from the FNC report is that in extremely broad terms, the housing market continues to generate gains across the board. For those homeowners who managed to make it through the financial crisis, that's unquestionably good news -- and something that should help your net worth in the future no matter what size of home you happen to own.

Rising home prices are always nice for homeowners. But in the long run, building equity in your home by paying off your mortgage will be the more important contributor to your financial health, and as long as real-estate market conditions remain favorable, you'll be able to use that home equity to help finance your retirement in the future.

Motley Fool contributor Dan Caplinger has a house that's sized just right. You can follow him on Twitter @DanCaplinger or on Google+. To read about our favorite high-yielding dividend stocks for any investor, check out our free report.

 

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Phallic Play-Doh Accessory Called Disturbing, Hilarious

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By Michelle R. Smith

PROVIDENCE, R.I. -- It was an embarrassing Christmas for Nivea Cabrera after she was accused by her fiance's mother of letting her 5-year-old granddaughter play with a sex toy. A mortified Carbrera asked the child where she got the penis-shaped plastic cylinder. "It's from my Play-Doh," the girl replied.
This undated photo provided by Nivea Cabrera shows the
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Hasbro, the Pawtucket-based toy company, is now doing damage control over the extruder tool in its Play-Doh Cake Mountain toy. The two-piece syringe-like tool, which includes a tube with corkscrew-type ridges around the outside and a dome-shaped top with a hole at the tip, can be used to squeeze Play-Doh to look like decorative cake frosting.

Complaints have been surfacing since at least November, when Tulsa, Oklahoma, TV station KTUL showed the tool to parents and asked them what they thought. The station blurred the image of the tool during the piece, saying it was due to parents' reactions. One woman told the station it was "a pretty phallic cake-decorating piece."

After Christmas, comments started pouring in to Play-Doh's Facebook page, including from Cabrera, of Lancaster, Pennsylvania. She said Hasbro called her after she posted a photo of the tool and asked about the shape on Christmas Day. She said the company offered to send her a replacement tool in a different shape, which she has not received.

'It Was Hysterical'

Erin Rivers, a mother of two from Melbourne, Florida, thought it was hilarious when she helped her 6-year-old daughter open the box. "I pulled out this extruder tool, and I just started cracking up at it, I couldn't help it. Then I immediately put the Play-Doh in it and took a picture of," she said.

Then, she posted it on Facebook. "My friends have just as dirty minds as I do," she said. "It was hysterical to me. And then I gave it my daughter to play with." She said her daughter and 4-year-old son don't notice anything strange about the toy.

Hasbro Inc. has received thousands of comments on the Play-Doh Facebook page pointing out the obvious. "We are in the process of updating all future Play-Doh products with a different tool," it said in a statement posted Tuesday. It also offered to replace the tool for anyone who has complaints.

Rivers, who works in a pediatric dental office, says she's not upset at all. But she is flabbergasted that the toy slipped past so many layers of people at Hasbro. "They have to have someone who creates it, someone who makes the plastic mold, someone who plays with it," she said. "I can't imagine that as many people that probably saw the toy, not one person said, 'Does anyone else think this looks like a penis?'"

 

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Bull Market for Stocks Keeps Going in 2014

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FILE - In this July 3, 2014 file photo, specialist Jay Woods is reflected in a screen at his post that shows five years of the Dow Jones industrial average, on the floor of the New York Stock Exchange. The Dow Jones industrial average jumped above 17,000 for the first time that day. The Standard & Poor�s 500 index climbed about 13 percent in 2014, hitting a record high a remarkable 51 times. (AP Photo/Richard Drew, File)
Richard Drew/APThis photo from the New York Stock Exchange shows five years of the Dow Jones industrial average on July 3, the first time it topped 17,000.

By Steve Rothwell

Stocks delivered again in 2014. Even after a poor start in January and wobbles in October and December, the U.S. market climbed 11.4 percent and ended the year close to record levels. The solid gain pushed the bull run for stocks into its sixth year, the longest such streak since the 1990s.

Investors have been encouraged by rising corporate earnings and a strengthening U.S. economy, which helped stocks overcome a brief winter chill in growth and tensions with Russia. The stock market also overcame worries about the impact of the end of the Federal Reserve's stimulus program.

Those who stuck out the market's ups and downs were rewarded with double-digit returns for the fifth year out of the last six. "Companies delivered and the ability to produce on the bottom line remained resilient," said Jeff Kleintop, Charles Schwab's chief global investment strategist. "Ultimately, that's what stocks track."

All the major stock averages are ending the year with respectable returns. The Standard & Poor's 500 index (^GPSC) has returned 13.7 percent including dividends, after a return of 32 percent in 2013. The stock market also experienced its biggest bout of volatility in more than two years. Stocks plunged as much as 9.8 percent in October on concerns about global growth and worries about the spread of the Ebola virus.

The market also managed to climb despite a big drop in oil prices that hit energy companies. Geopolitical tensions flared as Russia seized Crimea, war broke out in eastern Ukraine and the Islamic State group seized swaths of territory in Iraq and Syria. These were some of the biggest themes in the financial markets in 2014:

A Resilient Economy

The backdrop for the stock market's gains was a gradually strengthening U.S. economy. Hiring and consumer confidence continued to improve. Despite a big contraction in the first quarter caused by an unusually harsh winter, the economy kept growing. The average pace of growth climbed to 2.7 percent by the end of the year, up from 2.3 percent a year earlier.

Don't Count Out Bonds

A widely forecast demise for bonds failed to materialize. Bonds had been expected to slump as the Fed neared the end of its bond-buying stimulus program and economic growth accelerated. Instead, they rallied as investors became more pessimistic on the outlook for global growth as economies overseas weakened.

Bonds also gained because they looked attractive to overseas investors. Their yields, while close to historically low levels, are still higher than in countries like Germany and Japan. The yield on the 10-year Treasury note ended the year at 2.17 percent, after starting 2014 at 3 percent. The Barclays Aggregate Index, which measures the performance of a broad range of bonds, returned 5.9 percent, its best year in three.

Still Looking for Income

The biggest beneficiaries of lower bond yields were companies that pay rich dividends as investors looked to them as an alternative source of income. "Investors still want bond-like returns," said Krishna Memani, chief investment officer of OppenheimerFunds. So "the more bond-like parts of the equity market have done quite well."

Those sectors included utilities and real estate investment trusts. The utilities sector is the year with a gain of 24 percent, the best performance of the 10 sectors that make up the S&P 500 index. Utility companies in the index have an average dividend yield of 3.4 percent. U.S. REITs pay about 3.6 percent.

Deal Revival

It was also a good year for deal-making. The value of global mergers and acquisitions rose to the highest point since 2007, while the number of initial public offerings was the highest since the technology bubble days of 2000.

Among the notable tie-ups announced were Actavis' (ACT) agreement to buy fellow drugmaker Allergan (AGN) for $66 billion in November, and Comcast's (CMCSA) deal to buy Time Warner Cable (TWC) for $45.2 billion in February.

In IPOs, China's e-commerce giant Alibaba (BABA) raised $25 billion in its stock market debut in September, making it the biggest U.S.-listed IPO in history. Strong demand for the stock sent the market value of the company beyond that of Amazon (AMZN), eBay (EBAY) and Facebook (FB).

Keep the Growth Coming

U.S. companies, benefiting from low interest rates and a gradually improving economy, have become adept at driving their profits higher since the recession. Those rising earnings are underpinning the rally in stocks.

Earnings at S&P 500 companies are projected to reach a record of $116.97 per share for 2014, an increase of almost 8 percent from a year earlier, according to S&P Capital IQ.

"If you look at the cash flow and profitability of companies today, especially in the U.S., it is just darn impressive," said Seth Masters, chief investment officer for Bernstein Global Wealth Management.

Cheap Oil Isn't All Good News

Fears of weak growth overseas and worries of a supply glut combined to push oil down 50 percent in six months. After trading at a peak of $107 a barrel in June, oil ended the year at $53.27.

Falling oil prices lead to lower gas prices, which is a good thing for consumers. But there are also losers when crude slumps. Energy stocks, which account for about 10 percent of company earnings in the S&P 500 index, plunged.

As the losses in oil accelerated this fall, investors also worried about the wider implications. If prices stay low, some producers could go out of business, costing workers their jobs and prompting defaults in the bond market. The fall in oil also created the year's biggest winners and losers.

Transocean, a provider of offshore drilling services to the energy industry, was the year's biggest loser among S&P 500 stocks as demand for its services was expected to fall. The stock price slumped 63 percent. Airlines, which are heavy users of fuel, were big beneficiaries of the slump. Southwest Airlines' stock has climbed 125 percent, the biggest gain in the S&P 500.

Central Banks Go in Opposite Directions

The Fed ended its bond purchases in October and is inching closer to its first rate increase since 2006. At the same time, other central banks around the world started to introduce more stimulus as growth in their regions slowed.

The Bank of Japan stepped up its efforts to revive that country's economy, as did the European Central Bank. China also lowered a key interest rate.

Investors debated whether the U.S. will pull the rest of the world up, or be dragged down by it.

Stocks Aren't Cheap Anymore

After big gains in recent years, stocks are no longer a bargain. At the same time, they haven't yet reached vertiginous levels that would keep investors up at night.

The average price-earnings ratio for S&P 500 companies, which measures the price of a stock against the company's expected earnings over the next 12 months, climbed to 16.5, from 15.3 at the start of the year. That's above the 10-year average of about 15, according to FactSet data, but still a long way off from the levels seen during the technology boom fifteen years ago, when the average ratio was as a high as 27.

The slight rise in valuations suggests that investors have moved from being skeptical to being "pragmatically optimistic," said Anastasia Amoroso, global market strategist for J.P. Morgan Funds.

 

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Why Do Hotels Put That Big 'Hold' on Your Credit Card?

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By Christopher Elliott

It's like an episode of "Unsolved Mysteries" that plays itself endlessly for travelers. It happened to Judith Searcy when she stayed at the Portland Marriott Downtown Waterfront in Oregon this summer. If you check your credit card statement, you may find that it has happened to you, too.

For Searcy, the mystery was a $518 pending charge to her card after she checked out of the Marriott. "I had not been told of this charge, nor did I have any documentation for it," says Searcy, a retiree who lives in Austin. She phoned Marriott, which asked her to leave a voice mail for a manager.
Days later, the $518 charge disappeared.

Identifying this mystery is easy, but solving it isn't. There's an explanation for these charges, and a valid reason for having them. But they can also be frustrating to hotel guests, especially those who receive unexpected alerts from their credit card companies. And they raise the question: Is there a better way?

What's the Explanation?

Unlike most other travelers, who might have been content with the reversal, Searcy asked for an explanation. She finally received one after reaching Tiffany Bush, the hotel's general accountant. Turns out the charge was a routine credit card "hold." "This charge happened at check-in when your card was first swiped and our system automatically authorizes for possible incidental charges," Bush wrote in an email. "Our system will continue to check that the card has enough funds as you add charges to your room."

Marriott, like other hotels, discloses the hold at check-in. "Credit card holds are typically released within 24 hours of checking out," says Marriott spokesman John Wolf, who notes that holds are an industry-wide practice, common among hotels and car rental companies.

Most hotels place a hold on your credit card, according to Dale Blosser, a lodging consultant. The amount varies, but as a rule, it's the cost of the room, including tax, plus a set charge of between $50 and $200 per day. "That basically establishes a line of credit for typical items that the guest might charge to the room, such as room service, restaurant or bar charges, gift shop merchandise or valet parking fees," Blosser says.

There's another reason for a hold: It's a security deposit of sorts, in case you trash the room. "It's a way to [ensure] against damage or loss," says Kari Luckett, a financial expert who edits the credit card website CompareCards.com. The more expensive the room, the greater chance you'll experience a generous hold, she adds. "It's usually from five-star hotels and hotels that pack the room with food and drinks or offer room service or concierge."

But that's just one part of the mystery. The other is what happens behind the scenes with your credit or debit card.

How It Works

The hotel is asking your bank to post a charge against your account, in banking terms, it's called an "authorization request." The hotel then has about a week to make a deposit request, which is the actual transfer of money from your account. On some cards, notably debit cards, that initial authorization request looks like a charge, which is what Searcy saw.

Some hotels just pre-authorize $1, says Scott Tivey, a credit card payment expert with CNP Solutions. "They expect at some point in the near future that the same merchant will send in the deposit transaction to actually capture the funds," he says.

And that's how it happens: The hotel withdraws the charge after you check out. Except when it doesn't. Kelly Merritt's experiences with credit card holds serve as a cautionary tale. Merritt, a frequent hotel guest and travel guidebook author, says these routine authorizations represent her "biggest pet peeve" about the lodging industry.

"What infuriates me most about this is the song and dance," she says. "When I've protested exorbitant authorizations, some front desk staffers have responded with, 'Oh, your card isn't being charged, we're only authorizing it.' That still means those funds will be unavailable to cardholders, and for traveling families on a tight budget, or people like me who often have to stay in a different hotel every night, it can be a problem."

How to Get Around It

You can take steps to avoid the hold. Merritt always asks about the per-night authorization amount when she checks in. And in the case of excessive holds, she has requested the hotel not to authorize her card for more than the room and tax. If it insists, she tries to negotiate a smaller amount.

One of the easiest ways to prevent a hold is to avoid using the card, says Harrine Freeman, a credit card expert and financial adviser. "Use an alternative payment method," she says. "Carry travelers' checks or pay with cash." However, some hotels accept only credit cards, so ask before you try this.

If you use a credit or debit card, make sure you keep close tabs on the authorizations. Freeman and other experts strongly recommend that you sign up for automatic notifications from your bank. That way, you know exactly when a hotel authorizes your card and when the money is no longer on hold.
"Completing the transaction is the best way to remove the hold," says credit card expert Kevin Haney of A.S.K. Benefit Solutions. "The merchant charges the account for the final amount. The bank then releases the hold."

Perhaps the biggest mystery of all is why this needs to be explained to travelers in the first place. Hotels should disclose the amount, reasons and estimated duration of a credit card hold long before you check in, upfront and in plain English. Too often, hotels reveal these holds at the check-in desk, on signage that guests rarely bother to read.

Christopher Elliott's latest book is "How to Be the World's Smartest Traveler."

 

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Does Your Credit Card Issuer Know How Much You Make?

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By Gerri Detweiler

It was awkward to say the least: I was standing at the cash register when the clerk asked me how much money I make. Normally that's not a question I'd answer for a complete stranger, but I was applying for a department store card and she had to key in a number. I told her, and minutes later, I had the card, which led me to wonder, do they verify that information at all?

As a result of the CARD Act of 2009, issuers are required to assess an applicant's ability to repay the debt. Yet, income data isn't a part of standard credit reports, so how do they do that? There are a variety of ways issuers can approach it, says Brannan Johnston, vice president of consumer information Services at Experian (EXPN).

Stated Income

Most issuers rely on the income that applicants state on their credit card applications. But that doesn't mean you can make up anything you want. First, you don't want to set off alarm bells by stating income you don't receive. "It has to be reasonable," says James K. Simon, Jr., senior vice president and chief lending officer for TCM Bank, and must make sense in the context of the borrower's employment and financial situation. Fortunately, issuers typically allow you to count a wide range of sources of income, including your spouse's income if it's available to pay your debt, as well as income from investments, pensions, Social Security benefits, etc.

The other reason you don't want to pull a figure out of thin air: It's illegal to provide false information on a credit application. Though rare, there are situations where consumers have been prosecuted for lying on credit card applications. So don't put down a six-figure salary if you don't earn one.

Income Models

These models estimate monthly income based on a variety of factors, including credit report data. "If you have a mortgage with a certain monthly payment and an auto loan with a certain monthly payment and you make those on time it's reasonable to assume you have an income of XX," says Johnston. In other words, the model can infer how much you likely make based on payments you make toward your debt each month. Lenders can purchase them from credit reporting agencies such as Experian, similar to the way they purchase credit scores.

Income Verification

When full-blown income verification is needed, lenders can ask applicants to authorize the lender to obtain their tax return data directly from the IRS. Again, the lender may use a service such as the one Experian provides to process this request. "Full checks tend to be expensive," says Johnston, "so it would only make financial sense to do for very significant lines of credit." Applying for a mortgage is an example of a situation where the lender may request tax return data.

Of course, lenders can always request proof of income such as pay stubs from the borrower, but again, that's more likely to happen in the context of an auto loan or mortgage. It's time-consuming and costly to have employees verify that information, and even pay stubs can be forged fairly easily.

At least as it stands today, most card issuers will rely on the figure you provide in the "income" field when you apply for a credit card. What they do verify, however, is your credit score. (It's a good reason to check your credit scores, which you can do for free.) They know that all the income in the world won't matter if you don't pay your bills. So they want to see a good credit score, which demonstrates a track record of paying bills on time. And that's something you can't fudge.

Gerri Detweiler is Credit.com's director of consumer education.

 

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Is Your Bank Ready to Age With You?

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By Kimberly Palmer

Banks can be daunting places for older adults, especially those with cognitive, physical or hearing impairments. The glass barrier that typically separates a customer from a bank teller can make it difficult for older adults to hear clearly, and if they have to stand in a long line and then remain standing to talk to the teller, it can be taxing. Older adults with caregivers often face other hurdles, since many banks don't yet offer specialized financial products aimed at caregiver relationships.

AARP notes that banks should pay attention to the concerns of their older customers, who represent a growing customer base. Americans over age 50 own 67 percent of bank deposits and control 70 percent of the nation's assets, according to AARP. With the population of those age 65 and over set to double within the next 30 years, the deposits owned by older adults are also poised to balloon.

"Banks are now seeing a business reason to be involved," said Judith Kozlowski, chief counsel at FINRA, an industry self-regulatory organization, at the Gerontological Society of America's 2014 meeting in the District of Columbia. As a result, some banks, including Bank of America (BAC) and Wells Fargo (WFC), have launched initiatives to make sure they offer this older demographic the services they need.

Cognitive Decline?

Even adults in their 60s and 70s who are otherwise healthy start to face cognitive declines when it comes to managing their finances, including difficulty in spotting potential fraud or managing their bills, according to research by Daniel Marson, a professor of neurology at the University of Alabama-Birmingham.

"Your banker might notice before anyone else in your life that you're facing cognitive decline," says Debra Whitman, AARP's executive vice president of policy, strategy and international affairs, speaking at the GSA conference. That's why she says it's important for bank tellers to be trained to spot potential fraud targeting older adults as well as help customers who might need extra assistance.

Making financial management easier and more transparent for caregivers is also important, according to Elizabeth Costle, director of the AARP Public Policy Institute's consumer and state affairs team. At the conference, she highlighted research showing that many caregivers find the financial management component of caregiving difficult and stressful. But when properly supported by financial institutions, she says caregivers can better help loved ones make financial decisions and also be on the lookout for scams.

Since many banking customers stick with the same bank throughout adulthood, it's not too early to check if your bank is prepared to age with you, even if you are still decades off from needing extra assistance. Here are five signs your bank is ready to age with you:

1. Extra Fraud Alerts

Some banks, like Wells Fargo, have launched internal units to crack down on fraud aimed at older customers. They have systems in place to alert family members if there are concerns about fraud on an account, and bank tellers are trained to spot suspicious behavior, like large withdrawals. Some banks also offer real-time alerts to family members about unusual transactions and delay money transfers to provide more time to investigate suspicious requests. Some banks even check in with older clients if they go long periods without hearing from them. "Social isolation is part of the problem," says Kozlowski, referring to why seniors are so vulnerable to fraud.

2. Physical Space that Is Friendly to Older Adults

When you walk into your bank, is there a place to sit while talking to bank tellers? Is the area well lit and do the tellers speak loudly, with the option of communicating without the glass partition in place? Do they offer to write account balances in large font if necessary?

"It goes well beyond ADA compliance," Whitman says, referring to the Americans with Disabilities Act. It means fostering an age-friendly culture, she adds. Even simple changes from banks, such as training tellers to write account balances in large numbers, talking louder or more softly as needed and making it possible for people to sit down instead of stand while conducting business at the bank can help older customers, she says.

3. Providing Services Outside the Bank

Sometimes, older customers find it much easier to conduct business outside the bank, from home or another location. Notary services in particular should be offered outside the bank's walls, Whitman says. That way, if older clients need help with something like finalizing wills, they can do so from the comfort of their own home.

4. Caregiving-Specific Products

Banks that make it easy to add a name to an account for monitoring, without transactional authority, can help older adults avoid fraud. Having a second or even third pair of eyes observing all transactions offers a line of defense against scam artists, Costle says. Banks can also make it easier to pay bills from someone else's account, so a caregiver can more easily handle bills and prevent commingling of funds, she adds. Some banks also offer educational programs and information to caregivers who take over financial management for their loved ones.

There are other new products, like the prepaid Visa (V) debit card True Link, that are designed to help seniors and their caregivers avoid fraud. A caregiver can put money on the card and then set spending limits for different categories, add real-time alerts, turn the card on or off and even block specific stores. If an older adult has overspent on a certain charity or retailer in the past, then the caregiver can use a blocking feature so the card won't work for a particular expense.

5. Sensitivity to concerns and needs of older clientele

A general awareness and sensitivity to the issues that come up for older banking customers can go a long way toward providing age-friendly services, said Marie-Therese Connolly , a senior scholar the Woodrow Wilson International Center for Scholars and former director of the Department of Justice's Elder Justice and Nursing Home Initiative, at the GSA conference. Bank tellers trained to notice red flags, like when a new spouse or caregiver attempts to withdraw large amounts of money from an account, can help prevent fraud and abuse.

"We can't investigate or prosecute our way out of this problem. We have to prevent it," she says, adding that it's not just money that's at stake. Financial exploitation among older adults is associated with an increase in morbidity and likelihood of family members sending their relatives to live in a nursing home. "Elder abuse tips over lives. They become less independent and more dependent on caregivers," she says.

 

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How Military Personnel, Spouses Can Avoid Financial Failure

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American Soldier in his office
Mie Ahmt
Do you feel a financial collapse coming? Take cover and make a plan.

As an Iraqi combat veteran, I've learned that to avoid danger, it's not enough to merely step out of harm's way -- you must proactively plan how you'll stay safe going forward. Following my time in Iraq, I obtained my certified financial planner certification and got to work helping military personnel and spouses build a better financial future, specifically in my book, "Soldier of Finance."

If you're struggling financially, don't panic. Panicking is one of the worst things you can do and will probably lead to a financial collapse sooner rather than later. So take a few deep breaths and learn four crucial techniques to win on the battlefield of life.

1. Create a Battle Plan

Every mission must have its objectives -- and the same is true for a financial plan. So, what are your financial objectives? Here are a few foundational goals you might want to accomplish:
  • Build an emergency fund.
  • Get out of debt.
  • Start saving for retirement.
To accomplish these goals, you need to talk with your spouse. My wife and I regularly discuss our financial goals. One of the quickest ways to fail a mission is to have your teammate follow an entirely different objective. Once you know and agree on your current objectives, look at your available resources -- a soldier might call these their "sensitive items." Such sensitive items include your:
  • Income.
  • Expenses.
  • Potential additional income.
  • Potential ways to save money.
Thinking through these factors with your spouse is one of the best ways to avoid a financial collapse -- it starts you off on a better path.

2. Dodge This All-Too-Common Mistake

It's a mistake many military personnel make once they earn some money -- and I almost made it myself. The mistake is buying stuff you don't really need.

Did anyone say, "new car?" Vehicles are probably one of the most tempting expenses -- and one of the most damaging. I remember when my "Nanny" passed away, I inherited her 1998 champagne-colored Chevy Lumina. Sweet ride, huh? Ha, not so much. But still, instead of selling it and buying the BMW of my dreams, I decided to drive this car and use the payments I would have been making to fund my 401(k) and Roth IRA.

Many soldiers don't realize how easily they would accumulate hundreds of thousands of dollars by the time they are ready for retirement -- just by contributing $200 a month into an investment like their Thrift Savings Plan or Roth IRA. Imagine the smile on your face when you reach retirement age and actually have a retirement to enjoy.

3. Get Professional Advice

Would you hire a plumber to fix your car? Would you hire a football player to fly your private jet? Would you hire a general contractor to milk your farm cows? You need to hire the right person for the job. And the same is true when you're looking for financial advice. Military personnel and their spouses should seek financial advice from financial professionals.

There are a number of financial credentials out there. You could hire someone like me, a certified financial planner, or even certified public accountant. You could also hire someone a little less formal, like a financial coach -- there are some good ones. Don't take the advice of someone who hardly knows anything about personal finance. I like to call these people "blue falcons."

In basic training, a blue falcon was the soldier who didn't care about what happened to everyone else. Bad behaviors could include talking in formation, falling asleep during guard duty or not properly securing a weapon. Such breaches in protocol usually required an uncomfortable number of pushups (to say the least). Blue falcons include those who say stupid things like:
  • "Why not spend some money on a brand new car?"
  • "Why not blow some money on a new set of rims -- you deserve it!"
  • "Making a financial plan doesn't allow for spontaneity -- you have enough self-control to make decisions in the moment!"
You get the idea. These people frustrate me. To avoid a financial collapse, avoid these people and their advice - which can lead to thousands of dollars in debt vs. the accumulation of thousands of dollars of wealth.

4. Take Advantage of Military-Specific Financial Benefits

Military personnel can take advantage of a number of financial benefits to help them avoid financial collapse. One such benefit is the Thrift Savings Plan. For active duty personnel, the Thrift Savings Plan is great because you can have money directly pulled out of your paycheck for retirement. Contributions are made with pre-tax dollars, which reduces the amount of taxable income in the year contributions are made. Remember though, because contributions are made with pre-tax dollars, the distributions from the Thrift Savings Plan will be taxed. A Roth TSP option is great for younger service members who want tax-free money at retirement.

Having money automatically deducted from your paycheck to fund your retirement account is a fantastic idea. Out of sight, out of mind -- that typically leads to more money being invested and a larger portfolio at retirement.

Another great benefit is Servicemembers Group Life Insurance, which provides low-cost term life insurance coverage to:
  • Active duty members of the Army, Navy, Air Force, Marines or Coast Guard.
  • Commissioned members of the National Oceanic and Atmospheric Administration or the U.S. Public Health Service.
  • Cadets or midshipmen of the U.S. military academies.
  • Members, cadets or midshipmen of the Reserve Officers Training Corps engaged in authorized training and practice cruises.
  • Members of the Ready Reserve or National Guard scheduled to preform at least 12 periods of inactive training per year.
  • Service members who volunteers for a mobilization category in the Individual Ready Reserve.
Having such affordable life insurance that will take care of your spouse if something happens to you whether in training or on a mission will help your family avoid financial collapse.

I'd like to leave you with two words: awareness and action. To avoid financial collapse, you need to have awareness of your financial situation, your objectives and your resources. Second, you need to take action to accomplish your mission.

You can do it.

 

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Does Social Security Discriminate Against Women?

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A portrait of a happy senior couple at home
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The American Academy of Actuaries recently testified before the Senate on the issue of women and Social Security, in a hearing called "Is a Key Foundation of Economic Security Working for Women?" It's an interesting question for which there's no easy answer. On one hand, the law as written is gender-neutral, providing workers and their spouses benefits based on their work history without regard to their gender. On the other hand, women's direct benefits are generally lower than men's, due to a variety of factors, including that women often spend more years outside the labor force to care for children.

The academy's conclusion was that "the current Social Security law is gender-neutral and contains spousal and subsidized benefit provisions that mitigate, but do not eliminate, factors that produce lower benefits for women." Or, in other words, the law doesn't directly discriminate against women, and to the extent women's benefits are lower, the gap is smaller than it would have been if the system purely based benefits on contribution levels.

What's Really Fair?

Like much in the political arena, Social Security is a complex topic where legislative sausage-making leads to compromises that are ideal for none but acceptable to enough legislators to get a law through. Take one of the mitigating factors that help reduce the gap between what men and women receive: the "bend" points in the benefit scale. The chart below shows your potential Social Security benefit based on your qualifying income, with two key bend points, where your benefit growth starts slowing, shown where the slope on the chart changes.

This chart by the author is based on Social Security Administration data.
Your benefit amount and thus the bend points are based on your highest 35 years of average indexed monthly earnings over your career. By giving a higher weight to the "first dollars" earned, those who have less time in the workforce get a better return on their Social Security taxes than someone who paid into the system for 35-plus years.

On one hand, that helps women in the aggregate, as women are more likely to leave the workforce for a period. On the other hand, it also means that those with longer careers -- generally, men -- will pay some taxes into Social Security for either no or a very small incremental benefit, thus getting a substantially worse return on the taxes they paid. In a sense, you could argue that those who worked an unbroken career are essentially subsidizing the benefits for those who took time off.

So what's fair? Is it fair that women generally receive less in benefits than men, due to a shorter work history? Or is it fair that men generally receive a poorer return on their tax payments than women, due to the bend points in the Social Security benefit structure?

What Can You Do About It?

In reality, it doesn't really make much of a difference whether you consider Social Security's rules to be completely fair. The rules are what they are, and as the American Academy of Actuaries indicated, they don't change based on a person's gender. Your energy will be far better spent understanding what Social Security's payment rules mean to you in your particular situation -- and what you need to do in light of them in order to have a comfortable retirement.

After all, Social Security on average will only replace around 40 percent of a typical retiree's income. Even the Social Security Administration acknowledges that the program -- no matter what its payment rules -- isn't enough on its own to provide you with a comfortable retirement. Spending too much time focusing on whether the program's generally equitable payment rules are precisely fair to you misses the bigger picture: Those payments simply aren't enough on their own to cover your hopes for your retirement.

So no matter whether you're single, a stay-at-home parent, or a member of a high-powered, dual-income couple, your retirement plan should include more than just Social Security. If you spend your time, effort, and resources on developing and executing that end-to-end plan, you'll likely wind up far better off in your golden years. And isn't that what really matters?

Motley Fool contributor Chuck Saletta has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. To read about our favorite high-yielding dividend stocks for any investor, check out our free report.

 

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Why Customer Service Matters More Than an Online Discount

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young depressed couple in bed   ...
Hugo Felix/Shutterstock
By Susan Yoo-Lee

We all love to save a few bucks, but how should we prioritize when shopping online to get the best experience? After encountering customer service several times during this holiday shopping season, I've come to the conclusion that customer service should be on the top of your list.

After prices, shipping, coupons and taxes, most items from varying competitors will come out to be roughly the same price. Of course, there are a few exceptions from time to time. So sweating a few bucks here and there shouldn't be your deciding factor.

Customer service, on the other hand, can be the key to a good or bad shopping experience. I've gone through a handful of excellent to horrible experiences and everything in between just in this past month. As a result, I've learned that price isn't king and customer service is.

Sleepless Nights

One example stood out. At the end of November, I purchased a bed online, with a 25 percent discount, from a big national brand. It was listed as "ready to ship" and the retailer said it would be delivered within a week. I didn't receive the bed until three weeks later. During that time, I was in constant contact with customer service because we had five guests arriving for the holidays and I wanted to make sure they would have a place to sleep.

The weekend before Christmas, they gave me a window when the delivery guys would show up. Surprisingly, they actually arrived early. I sat in my bedroom watching the guys set up the bed and after a click here and a screw there, it was almost done. They only had to place the slats on the frame and I could taste the finished the product.

Well, the slats ended up being too short for the king size bed. One of the delivery men mentioned he thought it had looked kind of short when he picked it up from the warehouse. With the bed in disarray in my bedroom, the delivery men confirmed with his supervisor that the store would have to arrange to deliver the correct slats the following day.

Silence About the Slats

When I called to follow up, customer service had no update for me and the slat delivery plans were in limbo and certainly not happening in the next day or two. Meanwhile, my husband and I had to sleep on the hardwood floors because we didn't have space to put down our king-size mattress with the half-constructed new bed in the room. I grew more and more anxious because it was almost Christmas and on top of it, my husband and I were not getting the best sleep possible.

I called the customer service team, went on social media to vent, and I felt like I was out there alone, swimming in a large ocean with no view of land. Even though another customer had expressed the same problem of getting the wrong slats, I still felt like no one would help me and all I would get is the suggestion to contact the customer service team over email.

Christmas went by and a few days after, the delivery team called saying it would pick up the half-delivered bed so that my husband and I could at least sleep on a mattress. They would redeliver the bed when the slats came. But they wouldn't be able to come for another week, which meant another week of sleeping on the floor.

Time for a Refund

After going back and forth with four customer service representatives, I finally asked when the slats would get to the warehouse and they said in about three weeks. That made the total delivery time around six weeks. The bed was not "ready to be shipped" as it had been listed. At this point, my patience had run out, so I asked the company for a refund. I finally got it. For the entire holiday season, my husband and I had to sleep on the hardwood floor, which is not an experience I recommend to anyone.

As a customer, I shouldn't have had to call customer service over 25 or so times to get answers. On top of that, if they say they'll call you, they should. I never got a call back. After this experience, I realized how important customer service is and it's now on the top of my priority list when shopping.

Had they had good customer service to guide me through the ordeal, I would have been patient and willing to give them another chance. But being bounced from department to department with everyone giving me different answers and solutions, I lost trust in the retailer's ability to deliver.

Retailers need to know that while offering low prices is important, it's essential to offer high-quality customer service. Next time you shop, check out the customer service reviews online (especially Facebook (FB) or a site like yelp.com) and it will help you avoid having an experience like mine.

 

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Why HBO Is Streaming Into China for 2015

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TV-Game of Thrones
Macall B. Polay/HBO/AP
HBO, the star cable channel in Time Warner's (TWX) portfolio of media assets, has planted a big stake in the Chinese market. This past November it inked an exclusive content deal with one of that nation's Internet giants, Tencent (TCEHY), to stream its shows online.

Details and pricing of the arrangement were not made public. Regardless, we can safely assume that the amount is big. And no matter what, we can be certain that the move is a giant step into the Asian market for the famed cable network and its parent -- even though it might have to jump a hurdle or two on the way.

A Big Living Room

The Chinese market is home to around 460 million online video viewers, according to iResearch. What's more, that number is expected to climb to 700 million by 2016. That's an immense audience, and it's being fought over by some of the biggest names in the Chinese online world.

These Internet video streaming purveyors include Youku Tudou (YOKU) -- roughly speaking, the YouTube of the country -- which these days is partially owned by Internet titan Alibaba Group (BABA). Other players are Sohu.com (SOHU) and iQiyi, which is controlled by another online behemoth, Baidu (BIDU).

All are opening their wallets to pay for content. In less than two years, that trio has spent $1 billion on films and TV shows from established foreign markets such as the U.S., the U.K. and South Korea.

The uptake has been swift. For example, as of mid-November, Youku Tudou had a library of nearly 1,500 TV seasons from producers in those nations.

'You Win or You Die'

With that level and intensity of competition, any streamer hoping to claw its way to success has to distinguish itself on quality.

And the good stuff is already starting to go to determined buyers: This past July, Alibaba Group inked a deal with American movie and TV producer Lions Gate Entertainment (LGF) to make its content available on the Asian company's set-top boxes. That's quite a catch, considering that the haul includes the wildly popular "Twilight" series of film adaptations and the well-regarded TV period drama "Mad Men."

Shortly thereafter, a unit of 21st Century Fox (FOX) and Sohu.com signed an agreement to bring the seemingly immortal animated comedy "The Simpsons" to the latter's streaming video service.

HBO enjoys a reputation for delivering prestige TV as the originator of celebrated series like "The Sopranos" and "Game of Thrones." Chinese consumers are well aware of this -- after all, those shows are already big hits in their market.

Some of this is due to airings on broadcast TV, but much of it derives from the black market. As with other parts of the world, piracy of movies, TV shows -- really, any form of entertainment available digitally -- is rampant in the country. One Chinese entertainment fan site recently featured over 100,000 consumer reviews of "Game of Thrones" -- which, until the Tencent deal kicks in, still isn't available legitimately online. Those evaluations, by the way, were only for the show's first season.

Here Comes the Censor

Piracy might be the only way for people to continue to access such series, at least for a while. The government's State Administration of Press, Publication, Radio, Film and Television has served notice that content featuring what it considers to be excessive sex or violence should be removed by the streamers.

According to media reports, this currently unofficial oversight will become more formalized sometime in 2015, with the Administration granted a direct mandate to screen full seasons of foreign shows for such objectionable content.

HBO's material would be a primary target of such an initiative. The channel's shows can be dark and racy -- "Game of Thrones," for instance, features copious nudity, and a number of its characters meeting gruesomely violent ends. When the show was aired on Chinese broadcast TV in April, it was heavily edited to conform with existing standards -- a move that was met with a firestorm of criticism from the viewership.

Even if the new shows make it through this filter, it might be some time before they show up in the stream. Local media reports have it that the Administration might take up to six months to fully review a series.

Hungry Eyes

But the country's appetite for Western series is big and still unsatisfied. And companies like Tencent and its giant online colleagues are notable contributors to the national economy, not to mention popular destinations for Chinese entertainment seekers -- who obviously don't like when censors chop and slice the shows they like.

So we can assume HBO's offerings like "True Detective" and "Boardwalk Empire" will, in some form, make it through Tencent's stream to reach a great many of the country's viewers.

That's a massive audience ripe for advertisers. After all, there's nothing like feeding a big market famished for quality content.

Motley Fool contributor Eric Volkman owns shares of Lions Gate Entertainment, and finds series like "Mad Men," and "Game of Thrones" highly entertaining. The Motley Fool recommends Baidu, Lions Gate Entertainment, and Sohu.com, and owns shares of Baidu and Lions Gate Entertainment. Try any of our Foolish newsletter services free for 30 days. Is your portfolio ready for the new year? Check out our free report on one great stock to buy for 2015 and beyond.

 

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The 25 Best Ways to Improve Your Finances in 2015

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Pile of one hundred dollar bills in bundles
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By Kimberly Palmer

If the new year has you feeling motivated to up your financial game, then you've come to the right place. Below, you'll find our 25 best personal finance tips from the year rounded up into bite-size pieces, ready for you to apply to your life. They'll help you save more, spend smarter and keep your money safe.

1. Protect Your Phone

Our phones hold an incredible amount of personal information about us, including financial details. To make sure yours doesn't fall into the wrong hands, be sure to activate password protection, disable your phone from automatically connecting to public Wi-Fi hotspots, avoid announcing that you're on vacation publicly via social media and stay away from online stores (and people) that aren't familiar.

2. Use Apps Wisely

Many of us use apps for everything from tracking our fitness routines to checking the weather. They can do a lot to boost our finances, including helping us find the best deals and tracking our money. But they can also make it too easy to shop mindlessly from bed, waste time scrolling through Facebook (FB) updates and put our private information at risk if we don't take steps to protect it (see previous tip).

3. Launch a Side Business

Given the lack of job security that many Americans face, one of the best ways to augment your current income -- and increase your overall financial stability -- is to earn a second stream of income. One way to do that is by launching a side businesses. Websites such as Etsy, Fiverr, Elance and Freelancer.com make it easy to set up an account and offer your products or services to paying customers.

4. Join a Credit Union

While more than 96 million Americans use credit unions, which tend to offer higher savings rates and lower fees than traditional banks, many people who are eligible still opt to park their money in traditional banks instead. You can check your eligibility at mycreditunion.gov, and shop around for your best options.

5. Think About Your Future Self

If you think about your future self, then you're more likely to put money aside for that future self to one day use. That's one insight from the research of Oleg Urminsky, an associate professor of marketing at the University of Chicago Booth School of Business. He also suggests stopping yourself before splurging, even on small luxury items like a cup of coffee, to ask yourself if you would prefer to grow that money in a retirement savings account.

6. Cultivate Patience

Being impatient isn't just rude, it can also be costly. Research by Stephan Meier, a Columbia Business School associate professor, has found that people with less patience also tend to have lower credit scores, which can make it more expensive to take out loans. Your future self comes into play here, too: You can cultivate a greater degree of patience by thinking more about the long term than the short term and focusing on long-term values and goals.

7. Help Others With Their Money

Whether you're at the stage of helping your aging parents handle their finances or coaching your children how to manage money (or perhaps you're facing both tasks simultaneously), you might benefit from simply having more conversations about money. Children who talk more frequently with their parents about saving tend to practice better financial habits when they're older. Similarly, adult children can help their aging parents by asking them key money questions about their long-term care and retirement plans.

8. Save More Money

Having enough emergency savings stored away to handle unexpected expenses, from a root canal to a car accident, can prevent those kind of events from sending you deep into credit card debt. To begin building your nest egg, start small by saving just $5 a day and slowly ramp that up over time. To make it easier, consider automating transfers into savings accounts each month.

9. Calculate Your Retirement Number

Most people don't bother crunching their retirement number -- the amount they need to save by retirement to maintain their lifestyle -- but doing so can be helpful and may provide motivation to increase monthly savings into retirement accounts. Online calculators make it easy to generate an estimate; you can also multiply your current salary by 12 for a quick ballpark figure.

10. Protect Your Children's Privacy

Children aren't always aware that the accounts they create and photos they share on social media could stay on the Internet forever. Parents can help them with techniques like sticking to fake names and limiting photo postings. Setting ground rules about what is and isn't appropriate online is an essential conversation to have before your child makes his or her first Facebook, Twitter (TWTR) or Instagram post.

11. Trim Your Tax Bill

Putting money into tax-advantaged accounts, like 401(k)s and 529s, is one of the easiest ways to reduce your tax burden.These accounts also have the added benefit of boosting your overall savings rate. Launching a business also opens up the possibility to deduct certain expenses, and parents can claim certain child care-related tax deductions. Certain medical expenses, charitable contributions and mortgages are also tax deductible.

12. Avoid Common Tax Mistakes

Many taxpayers forget to update their household status, file on paper instead of electronically, file late and make math errors on their returns. Those kind of mistakes can lead to refund delays and even overpayment. Filing electronically can reduce the chances of some of these errors, and careful double checking can help with the rest.

13. Reduce Your Energy Costs

To make sure you're minimizing your heating costs in the winter and cooling costs in the summer, check up on your home's insulation and plug any holes. Keep shades closed in the summer so the sun doesn't heat up the room, and use an adjustable thermostat in both seasons so you can pay less while you're out of the house. You'll also want to get regular professional checkups of your air conditioning and heating systems, and clean filters once a month, too.

14. Avoid Buyer's Remorse

Buyer's remorse -- that unwanted feeling of regretting a splurge -- is relatively common when purchasing expensive and luxury items, but research published in the Journal of Consumer Research suggests ways to avoid it. Most importantly, paying more attention to price, and even heightening attention to it by counting out bills ahead of time, can help, along with thinking more about the potential long-term value of the item.

15. Get Smart About Credit Cards

Making sure you have the best credit card for you starts with some comparison shopping. Websites such as IndexCreditCards.com, Bankrate.com and CreditCards.com makes it easy to compare the relative pros and cons of each piece of plastic. Consumers should pay attention to extra perks, including extended warranties, travel insurance and rewards points, but anyone carrying debt should opt for a card with a low interest rate to make it easier to pay off that debt, and minimize fees and interest over time.

16. Share Money Decisions with Your Partner

If you don't enjoy tracking spending or investing, then it might be tempting to hand off financial management duties to your partner. But research suggests that couples are more confident and satisfied with their finances if they share responsibilities, instead of handing them off to one person. One problem with handing the reins to just one person is that in the event of death, the survivor may struggle to catch up, in addition to managing grief.

17. Make Your Paycheck More Meaningful

Looking for work that resonates with your personal values early on in your career can help you find satisfaction in the work world. Sometimes, a commitment to workplace satisfaction might mean leaving a comfortable job for a position in a different field, even if it means starting over again at a lower salary.

18. Trim Your Monthly Costs

Some of the easiest costs to trim include dining out and personal care expenses like hair cuts. Clothing is another prime target. Other monthly expenses ripe for trimming include gym membership fees, cable, your landline and any unused entertainment subscriptions, like Netflix (NFLX).

19. Check Your Credit Score

It's never been easier to obtain your credit score for free. You've long been able to access your credit report once a year through AnnualCreditReport.com at no cost, but now you can also get your credit score through a variety of commercial websites, including Mint.com, CreditKarma.com and CreditSesame.com.

20. Light an Abundance Candle

Flames and a pleasant smell might not exactly end cash flooding out of your bank account, but some financial experts say that simple rituals, including lighting a candle or creating a "money magnet jar" to gaze at, can help you make better financial decisions. At the very least, it helps remind you of your financial goals.

21. Spend Less On Your Kids

It's no secret children are expensive, but some of those costs can be minimized with careful planning. Buying gender-neutral toys and clothes can make it easier for siblings to share, for example, and sometimes it's possible to borrow big-ticket items, such as cribs and toddler beds, from friends or relatives.

22. Boost Your Financial Literacy

Many Americans struggle with even basic financial literacy, including calculating compound interest and understanding the benefits of using tax-advantaged accounts like 401(k)s. Educating yourself about some of the basic principles, including always earning more than you spend and diversifying investments, can pay off.

23. Buy Life Insurance

While taking out life insurance can be a burdensome and lengthy process, complete with a health care checkup, it's an essential one -- especially for anyone who has dependents like children. For young, healthy professionals, the cost of life insurance is relatively low, and locking in a 30-year rate now on term life insurance can be a smart financial move.

24. Go On Cheaper Dates

Romance doesn't have to be expensive. Taking advantage of local community events, free museum days and urban hikes can all help keep the price down. Instead of a movie and dinner, pack a picnic or frequent local food trucks. For a third or fourth date (or for married couples), you could even cook at home.

25. Embrace frugality

Cooking at home, shopping at grocery stores on Wednesdays to get first access to new deals, checking coupon apps before buying and using price comparison tools like browser add-ons are just a few of the ideas suggested by the U.S. News Frugal Shopper bloggers. Putting a little effort into research before making any purchase can significantly cut down your costs.

 

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