Wall Street This Week: Focus on Banking, Homebuilding

January 11, 2015, 10:00 pm

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Filed under: Company News, Earnings, Market News, Housing Market, Banks

From a pair of leading real estate developers offering up metrics on new orders and cancellation rates to a chip giant surveying the consumer tech market with its latest quarterly report, here are some of the things that will help shape the week that lies ahead on Wall Street.

Monday -- The Art of Alumninum

Alcoa (AA) kicks off the trading week with its latest quarterly financials on Monday afternoon. The world's third-largest aluminum producer -- Alcoa stands for Aluminum Company of America -- pioneered the industry 125 years ago.

The past couple of years have been rough for some commodities, but aluminum has benefited from the increase in industrial demand as the global economy shows signs of life. Analysts see Alcoa generating nearly $6 billion in revenue for the quarter, up 7 percent from a year earlier. They also are expecting a big jump in profitability. Alcoa has actually blasted through Wall Street's bottom-line estimates for three consecutive quarters, so it's coming into Monday afternoon's report with plenty of positive momentum.

Tuesday -- On the House

The housing market's recovery has been strong, but there are signs of slowing. Housing starts and building permits actually declined in November, and with interest rates possibly heading higher, it will be a challenge for homebuilders to continue thriving.

We'll get a great snapshot of the industry this week. KB Home (KBH) reports on Tuesday. Lennar (LEN) follows a couple of days later. Analysts see a strong report out of both real estate developers: They see double-digit growth on both ends of the income statements. The future is the real concern. Investors will want to know about new orders, cancellation rates of existing orders, and any visibility that the homebuilders can offer.

Wednesday -- You Can Take It to the Bank

Earnings season kicks off in force on Wednesday with JPMorgan Chase (JPM) and Wells Fargo (WFC) reporting. The rest of the "too big to fail" financial icons will follow, with Citigroup (C) and Bank of America (BAC) chiming in on Thursday. Goldman Sachs (GS) reports on Friday.

The flurry of reports will give investors a great read on the state of big banking. The industry has been clawing its way out of the subprime mortgage mess that derailed not just the industry but the global economy several years ago. By the end of the week we'll have a good read on how the financial services sector is holding up.

Thursday -- Intel Inside

Intel (INTC) used to be the ultimate tech bellwether. If folks were snapping up PCs, you would be able to tell by checking up on Intel as the leading provider of microprocessors. Intel then found a feisty adversary in AMD (AMD), but more important, we saw smartphones and tablets explode in popularity at the expense of traditional desktops and laptops.

Intel has found ways to matter in the mobile computing revolution, and it's been generally working. Analysts see revenue climbing 6 percent at Intel, in line with how it has performed through the first three quarters of 2014.

Friday -- Fall in the Family

Netflix (NFLX) has started to pick up the pace with its proprietary content. January may seem like small potatoes sandwiched between last month's "Marco Polo" and next month's return of "House of Cards," but it's still a busy slate for the leading premium video service.

Friday will bring the second season of "The Fall," a BBC crime drama series set in Northern Ireland starring Gillian Anderson, to Netflix's growing catalog of available content. Netflix remains the undisputed top dog in this game, but naturally it needs to keep investing to keep its content fresh.

Motley Fool contributor Rick Munarriz owns shares of Netflix. The Motley Fool recommends Bank of America, Goldman Sachs, Intel, Netflix and Wells Fargo. The Motley Fool owns shares of Bank of America, Citigroup Inc, Intel, JPMorgan Chase, Netflix and Wells Fargo. Try any of our Foolish newsletter services free for 30 days. Is your portfolio ready for what the new year has to offer? Check out our free report for one great stock to buy for 2015 and beyond.​

 

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11 Items Where Walmart Doesn't Have the Best Prices

January 11, 2015, 10:00 pm

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Filed under: Shopping, Wal-Mart, Deals

By Cameron Huddleston

Walmart (WMT) is known for saving shoppers money -- often lots of money. It's tough to beat the prices the world's largest retailer charges on most things it sells, and it sells almost everything.

However, we did find a few products that can be purchased elsewhere for less. We compared regular (non-sale) prices at two Walmart stores with several of its competitors' regular prices. After also taking into account price-comparison research conducted by sites that specialize in finding deals, we identified 11 types of items that are generally cheaper at retailers other than Walmart.

 

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What Will Be the Most Hated Company in America for 2015?

January 11, 2015, 10:00 pm

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Filed under: Company News, Market News, Scandals and Lawsuits, Investing

There's a lot of venom out there for bad actors in the corporate space, and in two months we'll get to weigh the collective displeasure. That's when Consumerist will start pitting 32 companies against one another to see which one is crowned Consumerist's 2015 Worst Company in America.

There are no official oddsmakers out there tracking the potential sultans of vile, but we can probably get a good read of the playing field by considering some of last year's contenders and some of the companies that have stumbled in the eyes of consumers over the past year.

Comcast (CMCSK) (CMCSA)

Comcast is the reigning champ, and it's a strong contender to repeat this year. Video customers continue to defect from the company ridiculed for its outages and crummy customer service. Things are so bad on that front that Comcast bragged about only losing 81,000 net pay TV subscribers in its most recent quarter, its best third-quarter performance in seven years.

However, the world's largest cable TV and Internet provider threatens to grow even larger with its pending purchase of Time Warner Cable (TWC). Regulatory resistance has been holding that back, but Comcast has a long way to go if it wants to restore its brand image.

Monsanto (MON)

Last year's runner-up is the agricultural chemicals giant that's often blamed for the growing presence of genetically modified organisms -- GMOs -- in our food supply. The rallying cry against Monsanto is still there, but it doesn't seem as loud as it used to be. It's certainly not going to be a consumer darling anytime soon, but with the World Health Organization, American Medical Association, U.S. National Academy of Sciences and other organizations concluding that genetically modified crops aren't any less safe than crops modified by conventional harvest improvement techniques, it may not be as despised as it was in the past.

Walmart (WMT)

The world's largest retailer made the Final Four last year, and activists challenging the chain to provide higher wages and better benefits only intensified their protests this holiday shopping season. Walmart did win some accolades this past summer for hosting an event where hundreds of stateside suppliers pitched their products -- part of the discount department store chain's commitment to buy an additional $250 billion worth of American-made products through the next 10 years -- but it's still a brand that's reeling.

Walmart has tried to counter critics of its low starting wages by pointing out that 75 percent of its store management team started out as hourly hires, and now store managers are earning between $50,000 and $170,000 a year. However, that won't be enough to prevent Walmart from being a hot contender this year.

SeaWorld Entertainment (SEAS)

Like Walmart, SeaWorld made the Final Four last year. The marine-life theme park operator has been taken to task for having dolphins and killer whales in captivity. Its business practices have been called out in "The Cove" and "Blackfish" documentaries, and attendance has fallen as a result of the negative publicity.

SeaWorld may have won itself some relief late last year when it announced that it would be updating its orca habitats to feature much larger tanks, but since attendance has fallen sharply through 2014, it's a safe bet that consumers still think that something fishy is up at SeaWorld.

McDonald's (MCD)

The Big Mac daddy wasn't able to get beyond the second round in last year's survey, but 2014 has been a rough year for McDonald's. Sales are slipping at the individual restaurant level, and the same activists arguing for better pay at Walmart are protesting that McDonald's also doesn't pay a living wage to its employees.

McDonald's may not seem as despised as the other companies on this list, but reports have surfaced about the chain killing off a few menu items later this month in a push for simplicity. If some cult faves are nixed, you can be sure that the dissent will be vocal.

Villains Are Everywhere

These aren't the only five companies that stand a good chance to walk away with Consumerist's top "honor" in a couple of months. The country's largest wireless carriers, gas companies, airlines and the "too big to fail" banks are regulars on this list. There doesn't seem to be a shortage of companies worth hating.

Motley Fool contributor Rick Munarriz owns shares of SeaWorld Entertainment. The Motley Fool recommends McDonald's. Try any of our Foolish newsletter services free for 30 days. Check out The Motley Fool's one great stock to buy for 2015 and beyond.​

 

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Gas Prices Hit Lowest Levels Since April 2009

January 12, 2015, 12:18 am

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Filed under: Energy, Transportation, Gas Prices, Oil & Gas Industry, Economy

By Catherine Ngai

NEW YORK -- The average price of a gallon of gasoline in the United States fell 27 cents in the past three weeks, falling to its lowest level since April 2009, according to the Lundberg survey released Sunday.

Prices for regular grade gasoline fell to $2.20 a gallon in the survey dated Jan. 9 from the previous survey on Dec 19.

The recent drop has taken prices down more than $1.14 a gallon from the same period a year ago, a move caused by the oil price slump that started in June.

"The crude oil market was the driving force because of the ongoing supply and demand situations," said the survey's publisher, Trilby Lundberg.

U.S. crude futures have halved since the summer on the back of lackluster demand and over-supplied markets. On Friday, both Brent and U.S. crude continued their slide, hitting April 2009 levels and ending down for a seventh straight week.

The highest price within the survey area in the 48 contiguous U.S. states was recorded in San Francisco at $2.66 a gallon, with the lowest in Albuquerque, New Mexico at $1.76.

While both crude and gasoline prices have fallen, the discounts from U.S. refiners would have been deeper if not for the recent spike in ethanol prices, Lundberg added. Refiners are mandated by the government to add a certain amount of biofuel to gasoline and other products.

 

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FTC: Firm Falsely Claimed Supplements Could Treat Autism

January 12, 2015, 1:00 am

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Filed under: Health Care, Consumer Ally, Consumer Protection, Ripoffs & Scams

A company that claimed its pricey dietary supplements could cure autism spectrum disorders must stop making the claims and faces a judgment of $3.68 million, the Federal Trade Commission said on Friday.

NourishLife and owner Mark Nottoli -- who sold the Speak softgels, capsules and liquids for at least five years online and through distributors for more than $70 per bottle -- agreed to settle allegations they misled parents by claiming the supplements effectively treated speech disorders, including those associated with autism.

The company and owner are expected to pay $200,000, the FTC said. The remainder of the judgment was suspended due to the inability to pay, the agency said.

"This company took advantage of parents' trust," Jessica Rich, director of the FTC's Bureau of Consumer Protection, said in a statement that noted the supplements were also promoted at promoted to parents at autism conferences.

The FTC said the company failed to disclose that it controlled websites that featured endorsements of the products as well as supposedly unbiased research. Parents who endorsed the product, the agency said, were provided with free supplements.

 

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Top Reasons to Never Eat at a Hotel or Resort Restaurant

January 12, 2015, 1:00 am

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Filed under: Travel, Food & Beverage, Vacation Planning, Financial Education

By Robert McGarvey

Make this vow to improve your travels: I will never eat in a hotel restaurant. Say it loud, mean it and you will be rewarded with better meals, lower prices and richer travel experiences.

Aren't there exceptions? A few. If you are staying at Trump Central Park and you don't eat at Jean Georges, you missed a good meal. Ditto if you are staying at the Fairmont Princess in Scottsdale, Arizona, and you don't eat at Michael Mina's Bourbon Steak. In Las Vegas, much of the good eats in the town happen in hotels.

But for every exception -- and, always, these are celebrity chef operations where the "name" is known to be hands on -- there are literally thousands of bland, boring hotel restaurants that are better skipped. The only reasons to eat in a hotel restaurant is if you are lazy and, guilty as charged, I have done it myself more times than I wish to remember. Of course, it is also why I know there are much, much better choices in most towns.

1. High Cost

"They are generally too expensive," said frequent traveler Ian Aronovich, CEO of GovernmentAuctions.org. That is true. A charcuterie board that costs $22 at a downtown Phoenix hotel costs $14 at lively Postino wine bar in Phoenix's Central Avenue corridor. There honestly is no fathoming food and drink prices at most hotels, except to believe that the management thinks it has a captive audience and can price accordingly.

Travel writer Chris Backe, who blogs at One Weird Globe, weighed in similarly: "They're overpriced as all hell. F&B (hotel shorthand for food and beverage) is not only a revenue-driver, it's a money maker. More often than not, you can find the same or similar offerings outside the hotel for one-third the price -- and with far less pretentiousness."

2. Lack of Local Culture

"Locals never eat at a hotel restaurant -- so if you're planning to get some of the local culture, neither should you," said Wilko van de Kamp, a self-described professional traveler. Ask yourself this: if the people who live within walking distance of a particular hotel restaurant never eat there, what does that say?

Liz Dahl, founder of BoomerTravelPatrol.com, elaborated: "For me, the main reason to eat outside of the hotel is to be able to experience your surroundings and what the locals have to offer. If you don't explore, it is akin to staying on a cruise ship for all your meals while your ship is in port."

You are what and where you eat. You do not know Manhattan until you have had pastrami at Katz's. You don't know San Francisco until you have had cioppino at an unpretentious joint in North Beach. You don't know New Orleans until you have had a muffaletta at the Central Grocery. You don't know Berlin until you have stood outside on a freezing day and eaten a currywurst from a stand in Friedrichshain. You will eat with locals, you will pay what locals pay, and you will know: this is how to experience the place.

3. Bland, Predicable Food

Hotel restaurants put the accent on predictable, often bland food that will be eaten by those seeking safe meals in new locations. Said frequent traveler Stephen Richey, they "tend to stick to very middle of the road items that aren't going to scare off tourists, so it's become a matter of finding the same bland repetitious sandwiches, pizza, pasta and maybe a steak or pork chop. I don't mean this the way it may sound, but the feeling I get in most places, especially those like the Caribbean islands frequented by cruise ships full of American tourists, is that local culture and cuisine is often pushed aside in favor of the 'tastes of home.' "

"In general, travelers should get out of the hotel to dine, because hotel restaurants cater to the common denominator," Elaborated Dena Roche, who blogs at The TravelDiet. "In an effort to please everyone, they sacrifice originality and a sense of place."

4. Bad Service

Complaints about service are common with hotel restaurants, according to OwnerListens data. They are second only to grumbles about high prices. Why? That's a tough call. Maybe diners at hotel restaurants are cranky, maybe they perceive a disconnect between the high prices and less than stellar service. Nobody knows. "Service is bad," said Adi Bittan, CEO of customer feedback company OwnerListens.

 

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Will Airfares Drop Because of Cheaper Oil?

January 12, 2015, 1:00 am

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Filed under: Travel, Gas Prices, Oil & Gas Industry, Travel Industry, Airfare

An unexpected gift consumers received at the end of 2014 was a steep drop in oil prices, which, as always, has led to declines in the costs of their derivatives. One big benefit consumers are enjoying from this movement is significantly lower prices for gasoline.

As part of the same trend, the cost of aviation gas is also sharply lower of late. So that means that airline tickets will soon be getting cheaper, right? Well...

Nosedive

The decline of oil was one of the big macroeconomic stories in the dying days of 2014. Since hitting its 2014 peak at over $115 per barrel this past summer, the spot price of Brent crude declined sharply and now changes hands a few dollars shy of $60.

That drop is going to save airlines an awful lot of money. Fuel is far and away the most significant cost item for air carriers, even ahead of salaries. Take United Continental Holdings (UAL), for instance. In the first nine months of 2014, the company spent $9.1 billion on fuel, compared to $6.7 billion for salaries and related costs.

Meanwhile, overall operating expenses amounted to $27.8 billion. In other words, fuel comprised nearly one-third of that total.

Data from the International Air Transport Association indicates that the fall in oil price will end up lifting the profit of the global airline industry to a record $25 billion for the entirety of 2015. That's 25 percent higher than the just under $20 billion expected for this year.

Hedged In

That rise in profit won't happen right away. Unlike consumers at the gas pump, airlines don't reap the immediate benefits from an oil price drop.

That's because the airlines typically "hedge" a chunk of their fuel expenses, agreeing to lock in certain prices with suppliers for a defined amount of time. This is a good-news/bad-news proposition, depending on the direction the oil price goes. If it rises, the hedger has successfully avoided the extra cost. If not, the unlucky airline pays more than the prevailing market rate.

Nearly all of the major, and quite a few secondary, carriers hedge their costs to some degree. The length and amount varies, and as a result the gain or loss from the activities can differ wildly. Delta (DAL), for example, reported a hedging loss of $238 million for its third quarter. That figure in the same period one year previously was a gain of $337 million.

Since hedging is rife in the industry, many carriers will continue to be on the hook for pre-decline oil prices for at least several months. One notable exception is American Airlines (AAL), which did away with hedging this past summer.

So even if they wanted too, most carriers would cut into their profit margin if they were to reduce prices immediately.

Ten-Four

Another key factor mitigating plane-ticket fire sales is that there is not an awful lot of competition in the business.

A little over a decade ago, 10 airlines ruled the skies over America. After a series of mergers, those 10 are now four: American (which includes the former USAirways, TWA and America West), Delta (Northwest), United (Continental) and Southwest (LUV) (AirTran).

Generally speaking, industries with more robust levels of competition tend to offer goods or services that are more advantageously priced for the consumer. This is because, of course, the fight for business is that much tougher, and the opportunities to compete on other factors more limited.

According to researcher IBISWorld, the big four airlines held an estimated 67 percent of the domestic market in 2014. And they tend to fly planes that are rather full; according to the most recent IATA data, domestic carriers boasted a load factor (i.e., the measure of how full the plane is) of 81 percent from last January to October.

In other words, demand remains high and supply is controlled largely by a handful of companies. In that sort of environment, there's not much incentive to cut prices.

Red-eye to Boise Now Boarding

Some industry observers expect carriers to plow their savings into service -- boosting their total numbers of flights, and offering increased service on less-traveled routes and off-peak flying times to various destinations.

Nevertheless, some research suggests that there will still be a bit of wiggle room left to shave fares -- the IATA anticipates that average fares in 2015 will be roughly 5 percent lower on a year-over-year basis. That isn't much, and it's likely the carriers won't be in a great rush to offer even that modest level of savings.

Motley Fool contributor Eric Volkman has no position in any stocks mentioned. Nor does The Motley Fool. 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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Last Week's Biggest Stock Movers: Novatel, J.C. Penney

January 12, 2015, 1:58 am

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Filed under: Company News, JC Penney, Market News, Investing

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

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

Novatel Wireless (MIFI) -- Up 57 percent last week

Nasdaq's biggest gainer on the week was Novatel Wireless, the company behind the MiFi mobile hotspot. There wasn't any material news driving the stock higher. Novatel did introduce MT 1200, a mobile tracking telematics solution, on Thursday, but most of the stock's gains had already materialized.

Novatel's been rolling in 2015. The stock has closed higher for seven consecutive trading days. The excitement here stems largely from Novatel trying to position itself as an "Internet of Things" play, connecting historically dormant devices to make them smarter.

Novatel shares were hot several years ago, but the stock plunged into the single digits after smartphone makers began incorporating mobile hotspots into their handsets. There may be a second act for Novatel after all.

J.C. Penney (JCP) -- Up 26 percent last week

There was good news out of the J.C. Penney camp, for a change. The struggling department store chain revealed that holiday comparable-store sales rose 3.7 percent. The strong showing through the seasonally potent months of November and December finds J.C. Penney forecasting comps to move 2 percent to 4 percent higher for the entire quarter that ends at the end of this month.

Ambarella (AMBA) -- Up 21 percent last week

Shares of Ambarella moved higher after a bullish analyst note was published on Tuesday. Canaccord Genuity's Matt Ramsay initiated coverage of the maker of chips that power high-def cameras with a buy rating and a $66 price target.

Ramsay feels that Ambarella can grow its business at a 20 percent to 25 percent annualized pace in the coming years just on the strength of its core businesses that include wearable cameras, security surveillance equipment, and auto-mounted cameras.

hhgregg (HGG) -- Down 20 percent last week

Consumer electronics retailers struggled through 2014, and the holidays were rough for hhgregg. The chain warned that comps declined 6 percent this season, held back by a brutal 35 percent drop in its computers and tablets category. Even appliance sales cooled off, flat with last year's holiday showing.

Apollo Education Group (APOL) -- Down 19 percent last week

The online educator flunked out after lowering its guidance. The company behind the virtual University of Phoenix campus warned that online glitches resulted in many enrolled students backing out after being unable to connect to their Web-based courses.

Five Below (FIVE) -- Down 12 percent last week

Shares of J.C. Penney may have moved higher after coming through with a better-than-expected holiday shopping season, but things went the other way for Five Below. The trendy and growing chain of discount stores where everything costs $5 or less announced that comps during the nine-week holiday shopping period rose 3.2 percent. That's in line with J.C. Penney's store-level performance, but Five Below investors were holding out for better.

A day before Five Below's warning, Jefferies analyst Daniel Binder reiterated his bullish stance, feeling that management had set the bar low, and forecasting that Five Below would beat its guidance, calling for a 4 percent increase in comparable-store sales. That's not likely to happen now.

Motley Fool contributor Rick Munarriz owns shares of Ambarella. The Motley Fool recommends Ambarella and Five Below. The Motley Fool owns shares of Ambarella and is short Five Below. 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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How to Build Your Retirement Savings Using a Credit Card

January 12, 2015, 2:36 am

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Filed under: Personal Finance, Credit Cards, Retirement Plans, Debt Assistance, Financial Education

By Juliette Fairley

NEW YORK -- Credit card consumers are missing out on some $240 a year in retirement savings by not directing cash rewards from credit card spending to a retirement account, according to a new study from Fidelity.

The Fidelity Investment Rewards American Express card, for example, earns debtors an unlimited 2 percent cash back on purchases when holders invest their rewards into an IRA or Fidelity-managed 529 college savings.

"While using cash rewards cards can be a great way to help manage daily expenses and near-term financial priorities, these cardholders may be missing an opportunity to boost their savings for the long term," said William McLimans, senior vice president of cash management at Fidelity.

That missed opportunity is so grave given that only 9 percent of Fidelity cardholders elect to invest cash rewards into retirement or college savings accounts, compared to 50 percent who use cash rewards for short-term purposes such as everyday spending and 45 percent that apply rewards to pay off existing credit card balances.

"As consumers consider financial New Year's resolutions, we encourage them to make smart moves that will have lasting impact, including choosing a cash rewards program that will help turn their everyday spending into long-term savings," McLimans said.

Since 2008, these Fidelity card holders who charge $1,000 a month could earn $240 a year in cash back that can be directed to an IRA or brokerage account that is hosted on Fidelity's platform.

With compound interest over 20 years, that $240 would grow to $10,729, according to a rewards calculator at Fidelity.com.

By contrast, straight cash rewards expire in five years if not used or if consumers haven't amassed enough to transfer the cash rewards.

"From quarterly sign-up requirements to expiration dates and devaluation, these restrictions are a hold-over from the credit card market's pre-CARD Act opacity," said Alina Comoreanu, a research analyst with CardHub.

The Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 is federal credit card reform legislation that was passed by Congress and signed by President Obama in May 2009.

Some one-third of $48 billion in dispensed loyalty rewards are never redeemed due to forgetfulness and hidden restrictions. That's why Fidelity allows its clients to automatically deposit their rewards.

"If cardholders do not want their points automatically deposited into their Fidelity account, they can choose to accrue points continuously and redeem them at any time they choose once they have reached the 5,000 point ($50) minimum," McLimans told MainStreet.

We just need to get our spending under control and use our access to credit responsibly.

With some $60 billion in credit card transactions expected this year compared to only 38.6 billion two years ago, the opportunity for cash back rewards is on the rise.

"We just need to get our spending under control and use our access to credit responsibly," said CardHub's John Kiernan.

Selecting credit cards with the best cash back reward programs is one way to use debt responsibly.

Credit cards issued by Capital One (COF) scored highest in all categories of a recent CardHub study examining the earning restrictions, redemption restrictions and expiration dates across the industry. For example, with the QuickSilver Capital One card, users receive a $100 bonus after spending $500 on purchases within the first three months and earn unlimited 1.5 percent cash back on every purchase any time; plus cash back never expires, and there are no rotating categories or sign ups needed to earn cash rewards.

 

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TGI Fridays to Roll Out Tablets Nationwide

January 12, 2015, 4:52 am

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Filed under: Technology, Computer Industry, Food & Beverage, Restaurants, This Built America

By Katie Little

Give a server a tablet, and diners will spend more. That's why TGI Fridays announced plans Monday to roll out the devices nationwide.

Wait staff will take orders and process checks using the tablets at people's tables-eliminating backups that often occur at a point-of-sale system and cutting the time it takes for servers to log orders.

During a six-city pilot test, the privately held casual dining chain saw tips and the average per-person order increase, said Tripp Sessions, TGI Fridays' vice president and chief information officer, in a phone interview. Higher sales of premium alcohol drove a big part of this improvement. Staff turnover also dropped.

Based on results we're getting, we think it's going to make big improvement to our bottom line.

TGI Fridays joins a long list of restaurants that are deploying tablets, including DineEquity's (DIN) Applebee's and Brinker International's (EAT) Chili's.

"We obviously believe it's fairly crucial," Sessions said. "Based on results we're getting, we think it's going to make big improvement to our bottom line."

While the company hopes to have the tablets rolled out nationwide, franchisees aren't required to opt into the program. It expects tablets to be in 80 additional restaurants by March. Eventually, Sessions expects the tablets to roll out internationally as well.

Following several payment breaches in retail stores and restaurants, the tablets also play into customers' desire to keep close tabs on their cards.

"There is a great benefit to people that the card is never leaving guests' hands," he said. "Having it never leave their sight is an additional measure of security."

TGI Fridays is deploying Dell tablets that use Microsoft Windows 8.1 and run a program from Oracle's (ORCL) Micros. It is one of many restaurant chains that Microsoft (MSFT) is currently working with to infuse more technology into the guest experience. It's worked withHardee's to test kiosk ordering and McDonald's (MCD) to deliver promotions to customers' phones based on proximity to one of its locations.

"One of the things we see happening across restaurants, retail ... is the question about which application of technology will win out," said Tracy Issel, Microsoft's general manager of worldwide retail, in a phone interview.

Meanwhile, TGI Fridays is exploring its options.

"I really look at technology as an accelerator for value creation," Sessions said. "We're working on a wide set of initiatives that are going to help us make more money."

 

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As Cheap Gas Shifts Car Buyers' Habits, Automakers Power On

January 12, 2015, 6:15 am

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Filed under: Transportation, Gas Prices, Automotive Industry, Manufacturing, This Built America

By JEFF KAROUB

DETROIT -- Inside the auto show here, automakers are showing off electric and other vehicles designed to cut our dependence on fossil fuels. Outside, car buyers are paying the lowest prices in years for carbon-based fuels.

That dichotomy has the industry scrambling to sell alternative vehicles and buyers making choices that seemed impractical just a short time ago.

Some of the cars that will tease visitors to the North American International Auto Show include a new all-electric Chevrolet Bolt, hybrid and plug-in versions of the Hyundai Sonata and other vehicles aimed at easing pain at the fuel pump.

But cheap gas prices across the country, driven by a surprising plunge in oil prices, are tempting potential buyers away from the small and economical and toward comparatively more gas-guzzling trucks and SUVs. That's leading automakers to take the long view, adjust production and hope big research and development bets still pay off on better mileage to meet stricter government emissions standards. They also want to appeal to consumers, who once were anxious about high gas prices.

People want to buy these cars and low gas prices give them the justification they need to do so.

The plummeting pump prices -- now pegged by AAA at $2.13 a gallon on average, compared with $3.31 a year ago -- have had an "immediate impact on consumer psyche," according to Edmunds.com senior analyst Jessica Caldwell. According to the car-shopping site, SUVs and pickups outsold cars in 2014 for the first time in a decade. It helps that SUVs are now built on car rather than truck platforms and have vastly improved fuel efficiency compared with their forebears.

"People want to buy these cars and low gas prices give them the justification they need to do so," Caldwell said.

High gas prices and stricter fuel-economy rules forced the industry to improve existing gas-powered engines -- and to develop new vehicles that relied less on carbon for power, or not all. Hybrids came to prominence at the turn of the millennium with the Toyota (TM) Prius. But last year sales of Prius models dropped 11.5 percent, compared with the previous year.

It's tough to predict a turnaround. The lower gas goes, the longer it will take to make the purchase pay off for a higher-priced, better-mileage Prius instead of, say, a Corolla.

The Prius costs approximately $4,300 more than a comparable gas-powered vehicle. Back in July, when gas was around $3.60 a gallon, a Prius buyer could expect it to take about 8 years to recoup the extra cost in the form of gasoline savings. At current prices, the payback doesn't come for nearly 14 years.

Still, not all small cars have suffered. Caldwell says falling gas prices have given first-time buyers and others more comfort and confidence to buy a new car. Sales of the redesigned Honda Fit subcompact were up 40 percent in December, for example, while sales of the Nissan Sentra small car rose about 43 percent.

Alec Gutierrez, a senior market analyst for Kelley Blue Book, said temporarily cheap gas isn't enough to convince buyers to make extreme moves, like trading in a subcompact for a large SUV. But low prices are prompting buyers to kick the tires of something a little larger. People shopping for a small SUV like the Toyota RAV4 are now also considering the larger Toyota Highlander, for example.

Kristen Parker of Delta Township, Michigan, said her 2002 Pontiac Bonneville is on its last legs and she'll likely replace it with another sedan. But she's at least considering a smaller SUV.

"Had it been a year ago there is no way I would have looked at an SUV," said Parker, a public relations professional and mother of three whose other car is a minivan. "I thought if I can get myself into an SUV while the gas prices are lower ... I'm going to do it now."

Automakers, however, have to thing longer term. General Motors (GM) CEO Mary Barra told reporters Thursday the lower gas prices won't change the automaker's strategy to push for fuel-efficiency across its lineup but instead will adjust production to sales. And, she added, GM is prepared to make more trucks if necessary.

Caldwell said automakers learned their lesson when gas prices spiked in 2008. Many had focused more on trucks and SUVs. Most now have a complete lineup and a more flexible manufacturing process.

"It's insane for them to make a long-term strategy based on current gas prices," she said

Ford Motor Co. (F) benefits from low gas prices now by selling more Escape and Explorer SUVs. But CEO Mark Fields says gas prices will rise again, so automakers must stay focused on fuel economy.

"This doesn't change our planning," he said. "It's really important to make sure we don't just live in the day."

-AP auto writers Tom Krisher and Dee-Ann Durbin contributed to this story.

 

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McDonald's Walks Fine Line With 'Signs' Commercial

January 12, 2015, 7:34 am

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Filed under: Company News, McDonald's, Advertising & Marketing, Food & Beverage, Restaurants

By CANDICE CHOI

NEW YORK -- An ad by McDonald's (MCD) is testing the fine line companies need to walk when referencing national tragedies.

The ad by the world's biggest hamburger chain that aired during the NFL playoffs and Golden Globes on Sunday featured a montage of signs outside McDonald's restaurants, including messages of support after devastating events.

Among them were "We Remember 9 11" and "Boston Strong," a reference to the bombing at a marathon that killed three people. Other messages thanked veterans, or were more personal and wished individuals in the community a happy birthday.

The ad was set to a children's choir singing a version of "Carry On" by the rock band Fun.

The commercial provoked strong reactions, with some saying they were moved by it and others saying it's tacky for a company to use tragic events to burnish its image. The ad is part of a new campaign by McDonald's to highlight the "loving" in its "I'm Lovin' It" slogan and associate its name with that positive emotion.

Deborah Wahl, chief marketing officer for McDonald's USA, said the ad was intended to reflect the company's history in communities, through good times and bad. Leaving out the bad moments would've been dishonest, she said.

She noted that McDonald's gets a lot of attention no matter what it does because of its size, although the level of attention for the latest ad was surprising.

"Did we expect all this? No," she said in a phone interview.

She said it was too early to tell whether the ad was a success, but that the company is trying to engage more with customers and that "good advertising creates emotion."

Laura Ries, president of Ries & Ries, a branding consulting firm, said the ad hit a nerve in part because it was unusual for McDonald's, which typically features shots of its food.

She thought the intention was to celebrate the company's history in communities, and that it was effective because it did so by using the "iconic imagery" of the Golden Arches.

"It's something that everyone has seen on the roads growing up," Ries said.

Not everyone was moved, however. The Washington Post's Wonkblog referred to it as "tone deaf" and a "disarming minute of mushy corporate propaganda." For others, the reference to the Sept. 11 attacks and Boston Marathon bombing in a McDonald's ad were jarring, and some commenters on Facebook and Twitter called it crass and exploitive.

Other companies have faced even sharper backlash for trying to incorporate national tragedies into their marketing. In 2013, for instance, AT&T (T) was criticized for an ad that feted New York's recovery after the Sept. 11 attacks while showing off its new smartphones. Campbell Soup (CPB) also apologized that year for a tweet by SpaghettiOs asking followers to "Take a moment and remember #PearlHarbor with us." The tweet featured an image of its smiling cartoon mascot jauntily holding an American flag.

During an investor meeting last month, McDonald's USA President Mike Andres noted the company is working with franchisees to strengthen their ties in communities. The majority of the company's more than 14,000 U.S. restaurants are operated by franchisees.

"More than ever, people want to feel good about the businesses and the brands they do businesses with," he said.

During that same meeting, Andres and CEO Don Thompson highlighted the various ways McDonald's is working to re-energize its business in the U.S., where it has struggled to lift sales for about two years. The meeting came after the company reported a 4.6 percent decline in sales at established locations for November.

 

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Market Wrap: Stocks Fall Again, Following Oil Prices

January 12, 2015, 8:50 am

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Filed under: Market News, Stocks

By MATTHEW CRAFT

NEW YORK -- Falling oil prices dragged the stock market lower on Monday as Exxon Mobil (XOM), Chevron (CVX) and other big energy companies sank along with crude. The steep drop in oil prices over recent months has investors second-guessing expectations for the quarterly earnings season that starts this week.

Sam Stovall, the U.S. equity strategist at S&P Capital IQ, said that it seems that every day brings another drop in Wall Street's earnings forecasts. "What's happening is that we're seeing the very low bar for fourth-quarter earnings raising anxiety," Stovall said. "It's the continued decline in oil, but it's also that nearly half of the S&P 500's revenues come from overseas. Japan is in recession, and Europe is teetering on the edge of it."

The Standard & Poor's 500 index (^GPSC) lost 16.55 points, or 0.8 percent, to close at 2,028.26. The Dow Jones industrial average (^DJI) slid 96.53 points, or 0.5 percent, to 17,640.84, and the Nasdaq (^IXIC) composite lost 39.36 points, or 0.8 percent, to 4,664.71.

Oil Prices Predicted to Plummet

In a wide-ranging note to clients, Goldman Sachs (GS) slashed its forecast for oil prices. It now estimates that that crude will average $50.40 a barrel this year, far below its previous forecast of $83.75. It also trimmed its forecast for Brent crude, a type used in international markets, to $70 a barrel from $90.

Oil prices extended their slide, with U.S. crude losing $2.29 to settle at $46.07 a barrel. Brent lost $2.68 to $47.43. Both trade at their lowest levels since March of 2009. "I think we're going to see plenty more volatility in the coming days as pressure mounts on oil producers to scale back production before prices get dangerously low," said Craig Erlam, market analyst at Alpari.

Monday also marked the unofficial start to the fourth-quarter earnings season as Alcoa (AA) turned in its latest quarterly results after the closing bell. The aluminum producer reported stronger earnings and revenue than Wall Street expected, pushing the stock up 20 cents, or 1 percent, to $16.38 in extended trading. Analysts expect big corporations to turn in modest results for the fourth-quarter, forecasting earnings growth of 4.6 percent, according to S&P Capital IQ. Overall sales are expected to be meager, rising 2.3 percent, largely the result of sliding revenue for oil companies.

Traders are also looking ahead to Greece's general election on Jan. 25. Opinion polls show the Syriza party on track to win the election. Syriza wants to change the terms of the country's bailout agreement with lenders, but few think it will be able to govern without the support of other parties. Diminishing fears that Greece will drop the euro currency have helped take some pressure off the country's bond market. Major markets in Europe climbed. Germany's DAX gained 1.4 percent, while France's CAC-40 added 1.2 percent. Britain's FTSE 100 closed flat.

Tiffany Tarnished

Back in the U.S., Tiffany & Co. (TIF) cut its outlook for annual profits and posted weaker sales in the holiday season, partially the result of a stronger U.S. dollar pinching results. The jewelry retailer's stock fell $14.44, or 14 percent, to $89.01, the biggest drop in the S&P 500.

AmerisourceBergen (ABC) announced plans to buy MWI Veterinary Supply (MWIV) for roughly $2.5 billion, or $190 a share. The deal would give the prescription-drug distributer a foothold in the growing business of veterinary medicine. MWI's stock jumped $14.35, or 8 percent, to $190, while AmerisourceBergen sank $2.07, or 2 percent, to $90.93.

In the bond market, prices for Treasurys rose, pushing the yield on the 10-year Treasury note down to 1.91 percent from 1.95 percent late Friday. In commodity trading, the price of gold gained $16.70 to settle at $1,232.80 an ounce, and silver rose 15 cents to $16.56 an ounce. Copper fell three cents to $2.73 an ounce. In other futures trading on the New York Mercantile Exchange:

• Wholesale gasoline fell 4.8 cents to close at $1.275 a gallon.
• Heating oil fell 4.9 cents to close at $1.654 a gallon.
• Natural gas fell 15.1 cents to close at $2.795 per 1,000 cubic feet.

AP business writer Pan Pylas contributed to this story from London.

What to watch Tuesday:

• The Labor Department releases the job openings and labor turnover survey for November at 10 a.m. Eastern time.
• The Treasury Department releases the federal budget for December at 2 p.m.

These selected companies are scheduled to release quarterly financial results:

• CSX (CSX)
• KB Home (KBH)

 

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With Oil Prices So Low, Are Oil Stocks a Good Investment?

January 12, 2015, 10:00 pm

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Filed under: Energy, Commodities & Futures, Oil & Gas Industry, Stocks, Investing

Most of us have spent the past few years grimacing while standing at the gas station, watching the fuel pump digits go higher and higher as we fill up our tanks. This morning, however, I was smiling while filling up my tank because gas is now a bargain.

Are oil stocks also a bargain? And if they are, should you fill your portfolio with them?

In this article I explain just a few of the many ways you could invest in oil-related securities, if appropriate for your risk tolerance and investment objective, which is a conversation you should have with your financial adviser.

The Price of Oil Stocks Has Dropped Dramatically

If you are looking for stocks that you can "buy low," the oil sector warrants some attention. Over the past six months, Energy Select Sector SPDR (XLE) -- an exchange-traded fund focused on the energy sector -- has declined about 21 percent, while the S&P 500 (^GPSC) has increased nearly 5 percent. The Fidelity fund invests in more than 40 companies -- including Exxon Mobil (XOM), Chevron (CVX) and Schlumberger (SLB) -- that primarily develop and produce crude oil and natural gas and provide drilling and other energy-related services. Over the same period, SPDR S&P Oil & Gas Exploration & Production ETF (XOP), which invests in oil and gas exploration and production companies, fell more than 41 percent.

Finding Companies That Are Financially Robust

Some companies in the oil sector, including Seadrill (SDRL), have eliminated their dividends, which is often a sign of financial distress. Exxon Mobil and Chevron, in contrast, have paid and increased dividends for more than 25 years. Currently Exxon Mobil yields 3 percent, while Chevron yields 4 percent. Energy Select Sector SPDR yields 2.5 percent. So when considering whether to buy shares of an oil company or an ETF, make sure you understand the risk/reward trade-off of each option.

A Substitute for Trading Oil Futures Contracts

In addition to buying individual stocks or an ETF that invests in individual stocks, investors can also buy United States Oil ETF (USO), which tracks the price of light, sweet crude oil, as measured by the changes in price of the futures contracts traded on the New York Mercantile Exchange. The security has fallen more than 50 percent during the past six months.

When Will Oil Prices Hit Bottom?

How low can the price of oil go? And what will cause the price to go back up? I'm not an oil supply and demand expert, so my guess isn't relevant. Some brave souls are predicting the future price of oil while others are urging investors to stay away from certain oil stocks. As usual, there will always be bulls and bears.

If you own a mutual fund or ETF that mirrors the S&P 500, you already have exposure to energy stocks in your portfolio. It is your decision if you want to add more exposure while prices of such stocks are low. Just remember that when you increase your concentration of any individual sector, you increase your probability of increasing your return and your probability of a loss. That's what asset allocation and diversification is all about. Time is also a consideration. If you believe that oil prices will go up over the next few years and the oil stocks you choose won't go bankrupt while you wait, you might just gas up your portfolio by putting oil in it.

The information contained herein is strictly for educational and illustrative purposes, providing commentary, analysis, opinions and recommendations, and should not be considered investment advice for any specific subscriber or portfolio or an offer to sell or a solicitation to buy any security.

 

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Marriage Penalty: 4 Tax Laws That Hit Couples Harder

January 12, 2015, 10:00 pm

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Filed under: Taxes, Marriage

Getting married involves major financial changes, and the U.S. tax system is one of the most important aspects of marital financial planning. Although some married couples benefit from tying the knot as far as their tax returns are concerned, many couples end up paying more than they would if they remained unmarried and each filed their own tax return.

This phenomenon is known as the marriage penalty, and it rears its ugly head in several parts of the tax laws. Let's take a look at some of the most common provisions in which married couples get the short end of the tax stick.

1. Two-Earner Couples Pay Higher Taxes Faster

Married couples have to combine their earnings in order to determine their gross income, and the tax brackets that apply to various income levels differ for married couples compared to single filers. For one-earner couples, the higher incomes for the brackets for a particular rate result in a marriage bonus. But for two-earner couples who earn roughly the same amount, the fact that the tax brackets for married filers at the 25 percent rate and above have income limits that less than double those of single filers means that they can end up paying extensive marriage penalties.

For instance, the 33 percent tax bracket kicks in for singles at $186,350 and for married couples at $226,850. So if two people earning $150,000 got married, they'd be well into the 33 percent bracket, even though when they were single, they were in the lower 28 percent bracket. For higher-income couples, the disparities are even more egregious, making bracket structure one of the biggest marriage-penalty provisions in the tax laws.

2. Standard Deductions Are Higher for Unmarried Parents

The tax bracket situation above gets even worse when kids enter the picture. Tax law allows one of the unmarried parents of a child to claim head of household status, which comes with an additional $2,900 standard deduction compared to singles. That means that unmarried parents can claim a total of $15,300 in standard deductions in 2014, compared to just $12,400 for married couples.

In addition, unmarried individuals have the option of having one parent itemize deductions while the other takes a standard deduction. Married couples, on the other hand, don't have that option. If one itemizes, the other has to as well -- even if that spouse has no itemized deductions at all.

3. New Surtax Rules Have Considerable Marriage Penalties

The Medicare and Net Investment Income surtaxes impose additional income taxes of 0.9 percent and 3.8 percent, respectively, on various types of income. The 0.9 percent Medicare tax applies to earnings above $200,000 for singles and $250,000 for married joint filers, while the 3.8 percent Net Investment Income provision imposes tax on interest, dividend, and other investment income to the extent that it falls above the same $200,000 and $250,000 income limits. Two individuals earning just under $200,000 wouldn't be subject to the provision at all, but if they married, they'd be well over the threshold and owe substantial amounts of tax.

4. Tax Benefit Phaseouts Can Hurt Couples More Quickly

Many favorable tax provisions have income limits above which their benefits slowly phase out and eventually disappear. In many cases, combining two individuals' incomes is enough to phase out beneficial tax breaks even if neither one alone would have been a problem.

One example involves the income level at which personal exemptions and itemized deductions begin to phase out. For singles, income above $250,000 triggers provisions to start phasing out those tax breaks, while married joint filers face a $300,000 limit. Again, the simplest example involves two people who each earn $200,000 -- alone, neither would have a problem, but together, they'd lose considerable amounts of their exemptions and deductions and thus pay a lot more in tax liability.

Motley Fool contributor Dan Caplinger never likes getting penalized. 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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Cleaning Your Financial House: 4 Items to Keep, 4 to Shred

January 12, 2015, 10:00 pm

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Filed under: Identity Theft, Personal Finance, Home & Garden, Planning, Financial Education

By Geoff Williams

Somewhere nestled between your resolution to lose 20 pounds and the one to finally clean out your basement is probably a resolution to organize your home office. If you're staring at piles of paperwork and wondering what's safe to destroy and what you should hang onto, here are some guidelines.

What to Keep

1. Tax returns. Save your returns for at least the past three years, and maybe more. "If you file your return on time every year by April 15, then you would need the records for 2014, 2013, 2012 and 2011," says Ernie Almonte, chairman of the National CPA Financial Literacy Commission. The reason? You'll need them if you're audited. If you think (or know) you underreported a lot of income, keep six years' worth of tax returns, he advises. He adds that generally during an audit, the Internal Revenue Service will request the extra returns if you've underreported income by more than 25 percent. And if you employ any domestic help, such as a nanny or a full-time housekeeper, "you should keep the employment records for four years after the tax was due and paid," he says, adding, "There may be reasons other than tax reasons for keeping your records for a longer period. You should consult with an attorney if you have any ongoing or potential litigation." In other words, unless your taxes are simple and you know that there's no chance of serious errors, hang onto your tax returns for at least a decade.

2. Investment records. Not forever, but retain them at least as long as you own the investment, says Jake Loescher, a financial adviser at Savant Capital Management in Rockford, Illinois. "Until you sell the fund, stock, bond or other security, it will be helpful to maintain these records to determine gain or loss upon sale, which ultimately determines the tax ramifications." Of course, you may not need to keep paper copies of your records if your brokerage firm allows you to view them electronically.

3. Pay stubs. Some people trust that the system involving employer, payroll company and IRS works, and usually, it does. But if you don't receive your checks via direct deposit, keep those pay stubs around for a year, Loescher suggests. "It's helpful to double-check your total income received on a pay-period basis against the income reported to the IRS on your annual W-2."

4. Mortgage-related papers. Bought a house? All of the paperwork you received at closing should live at your home, too. "Any documents related to property you have purchased, including loan documentation, should be kept until you no longer own the property," says Melinda Kibler, a certified financial planner in Fort Lauderdale, Florida, with Palisades Hudson Financial Group. And keep home improvement receipts, Kibler and Loescher say. Someday you may want to show them to a potential homebuyer.

What to Shred

1. Most receipts. Plenty of receipts can just be tossed in the trash rather than jammed in a shredder or ripped into pieces -- because they don't have your Social Security number or complete credit card number on them. But ideally, and if you're methodical about your finances, you'll keep all of your receipts for about a month before discarding them. "For bank account, ATM and credit card transactions, I recommend holding onto the receipts until the transactions are reflected on your statement. You can reconcile your statement against your receipts, and if reflected properly, then you can go ahead and shred the receipts," says Kibler. But there are exceptions. For instance, if you've purchased something big enough to insure, like a wedding ring, hang onto the receipt.

2. Some of your junk mail. As if junk mail isn't annoying enough, you should destroy some of it rather than tossing it in the trash or recycling bin, says Brian Berson, founder and CEO of FileThis Inc., an app that finds and organizes personal documents from your computer and some mobile devices. In particular, Berson recommends shredding preapproved credit card applications. Otherwise, typical junk mail can go into the round file as usual.

3. Bills. There are some exceptions, Loescher says. If you're running a business out of your home, you may need the bills for tax purposes. Otherwise, you don't need to keep these once they're paid. Just remember to shred them so some enterprising identity thief won't happen upon them.

4. Digital media. Don't forget your old laptop or the smartphone you're replacing -- those devices can have just as much important, financially attractive information to a criminal as your paperwork. You can't push an old computer through a personal shredder, but Berson says you could hire a professional service to destroy your old devices. "These days, most shredding services can destroy digital media," he says. You could, of course, use a hammer to mangle the device enough to discourage an identity thief from extricating your personal information, but using an electronic product recycling service is the more environmentally responsible way to go. It just isn't as much fun.

 

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12 Things Where You Can Save Big by Buying Used

January 12, 2015, 10:00 pm

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Filed under: Shopping, Home & Garden

By Cameron Huddleston

You can save a lot by buying used rather than new. Think "used" for products that:

• Will have a short lifespan in your possession. If you expect to discard an item soon, why pay top dollar for a shiny new model?
• Likely saw limited use by their previous owners. Think of these products as "almost new" rather than "used."
• Have been refurbished by trusted manufacturers to operate like new.
• Will get dinged and dirty in your possession. Who cares about an existing scratch or two on something that you'll beat up on your own?

There are many ways to find used items -- at consignment shops specializing in used items, at retailers selling both new and used wares, and from strangers at yard sales or online. One popular source for is Craigslist.org., but beware that scammers can use the site to take advantage of people looking for deals. Remember: Any deal that's too good to be true probably is.

 

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6 Reasons to Prep for Retirement in Your 20s and 30s

January 12, 2015, 10:00 pm

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Filed under: Personal Finance, Retirement Plans, 401K, IRA, Financial Education

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If you're in your 20s and 30s, how often do you think about the financial security and stability of your retirement? Not much, I bet, because it's a fuzzy concept with lots of time between then and now.

But it's important that millennials spend some time thinking about saving for the future. Let's walk through a few pieces of good retirement advice for members of Gen Y:

1. Open an Account and Take Advantage of the Match

Many workers have access to 401(k), 403(b) or TSP retirement plans. Determine if your employer offers matching contributions. A match means your employer contributes a set percentage to your retirement account as long as you contribute a specified amount. This is free money on the table.

If you don't have access to a employer-sponsored retirement plan, open an IRA (Roth or traditional) and contribute up to $5,500 in 2015. Or if you're self-employed, you can open a Solo 401(k) or SEP IRA.

2. Understand the Power of Time and Compound Growth

When you're young, time is on your side as far as saving goes. The sooner you start, the less you must put away each month and year to reach those big goals. It's important for you to understand how compound growth is your friend when we're talking investments and savings. Let's look at an example:

If you decide to make an initial investment of $5,000 that's compounded annually at a 7 percent, you'll have earned $350 in interest that first year, for a total of $5,350. In the second year, you'll be earning interest on $5,350: that's your original investment plus the interest you earned. If you earned 7 percent interest again, your total would grow to $5,724.50. Over 10 years, your balance would grow to $9,835.76 -- even if you didn't contribute anything else, thanks to compound growth.

If you were to contribute $5,000 annually to your savings, under those same terms, at the end of 10 years your balance would be $83,753.75. Compound growth is powerful.

3. You Can Guard Against Market Downturns

As a general rule, investing over a long period allows your nest egg to recover from periods of market turmoil. Those who wait until the last second to start investing might not have the flexibility to ride out severe market volatility.

4. Maxing Out 401(k) Cuts Your Taxes Today

Contributions to accounts like 401(k)s lower your taxable income, which results in a lower tax bill every April. While contributing more money to your retirement account means less money in your paycheck, it also means more money in the future, and less of a tax burden in the present.

5. Balance Spending, Paying Off Debt and Saving

If you're struggling with student loan debt, you may not think you can handle saving for retirement on top of your loans. But you can strike balance between saving, investing and paying off debt.

Start by contributing at least enough to retirement to get a match from your employer if you're offered one. After that, focus on creating a debt payoff strategy. One strategy could be to break down your financial goals into percentages. Put 10 percent of your income to retirement savings, then divide the rest of your discretionary income between building an emergency savings account and repaying your debt.

6. Your Retirement Is Up to You

Be prepared to take your retirement into your own hands. If you don't understand something, speak up and ask. Do research or speak with a financial professional to help you figure out a plan to meet your financial goals. Even though you're young, you should be thinking about proper retirement planning. Work out a balanced approach to saving, investing, and paying off student loans (if you have them). Your future self will thank you for it!

Mary Beth Storjohann is a certified financial planner and money coach. She created Nine Steps to Workable Wealth to help you make smart choices with your money.

 

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Easy Ways to Save Money on Prescriptions

January 12, 2015, 11:46 pm

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Filed under: Health Care, Retail, Shopping, Drug Companies, Financial Education

By Kimberly Lankford

Your insurer's $10 co-payment for a 30-day supply of drugs might sound like a good deal. But sometimes the cash price for generic drugs is less -- much less if you haven't reached your deductible.

Several pharmacies, including Walmart (WMT) and Target (TGT), charge as little as $4 for a 30-day supply of some generic drugs, or $10 for a 90-day supply. Costco (COST) tends to have an even longer list of low-cost generics and doesn't require a membership to use the pharmacy, says David Belk, a physician in the San Francisco Bay Area, who lists prices at his site, TrueCostofHealthcare.org. You could also get a discount by signing up for a pharmacy's loyalty program.

Before you hand your insurance card to the pharmacist, use your insurer's or employer's tools to check your out-of-pocket costs for your medications based on whether you have reached your deductible. Compare that with the pharmacy's cash price. This strategy often saves money on generics, but it may not pay with brand-name drugs. "You may not be getting a better deal with cash, especially with the more expensive drugs, because the plan has negotiated a rate," says Jim Yocum, executive vice-president at DRX, which develops online tools to compare drug costs.

There are some exceptions. Belk points out that a few brand-name drugs are sold over-the-counter, but certain sizes or generic equivalents require a prescription. Paying cash for the over-the-counter version of Nexium, for example, can cost a lot less than using your insurance for the prescription version, he says. You may also be able to get a coupon from the drug manufacturer that reduces the brand-name cost by 30 percent to 40 percent if you pay cash, says Yocum. Ask your doctor about any special deals.

 

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It's Back: Burger King Revives Chicken Nugget War

January 13, 2015, 12:04 am

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

By Katie Little

Maxed out the plastic this holiday season? You're in luck. Burger King (BKW) is reviving the chicken nugget price wars and selling them for less change than you likely have in your couch cushions.

The fast-food chain is bringing back the 10 pieces for $1.49 deal after its earlier promotion ended in November. This undercuts McDonald's (MCD) deal of 50 McNuggets for $9.99.

That promotion is a local option for franchisees, McDonald's spokeswoman Lisa McComb said in an email. McDonald's franchisees can choose whether to offer it and when to do so.

"Due to the unprecedented demand, we sold out earlier than even we expected -- in general, not a bad problem to have," Eric Hirschhorn, Burger King's chief marketing officer for North America, said in a statement.

That was a departure from what Burger King had told CNBC late last year.

In mid-November, when the first promotion ended, the chain said it would "conclude as originally planned" after performing "well" and "in line" with its expectations. The company was not immediately available for comment on the discrepancy.

Both the McDonald's and Burger King nugget promotion come amid sky-high beef prices -- making advertising chicken especially appealing.

 

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