When your birthday rolls around, don't be distressed that you're another year older. Don't worry that you have another line on your face or a few (more) gray hairs. Instead, embrace the day as a golden opportunity to score freebies for yourself.
That's right, dozens of establishments will give you special treats on your special day. Here are 19 that offer you birthday freebies that truly are free -- you don't have to purchase anything to get them. Enjoy.
Au Bon Pain. You can get a free birthday lunch by signing up for the eClub. You also get a free travel mug when you join.
Baja Fresh. Get a free birthday burrito by joining Club Baja.
Barnes & Noble. Kids get a free cupcake on their birthday (and 30 percent off the list price of a kids' book or toy) by signing up for the Barnes & Noble Kids' club.
Baskin-Robbins. You can get a free 2.5-ounce scoop on your birthday (plus $3 off a birthday cake) if you sign up for the Baskin-Robbins Birthday Club at www.baskinrobbins.com.
Bruster's Real Ice Cream. Sign up for the Sweet Rewards e-club to get a free waffle cone on your birthday (as well as coupons and other offers throughout the year).
California Pizza Kitchen. Children receive a coupon for a free birthday CPKids meal by joining the CPKids Birthday Club (ask about membership at a California Pizza Kitchen location). Club members who celebrate their birthday at a California Pizza Kitchen receive up to 10 free meal certificates to give guests at their party and a free meal for themselves at the party. Even kids who aren't members of the CPKids Birthday Club get a free sundae on their birthday.
Captain D's. Kids 12 years old and younger get a free kids meal on their birthday if they sign up for the Kid's Birthday Club.
Red Robin. Sign up for the eClub to get a free burger on your birthday.
Ruby Tuesday. You can get a free burger on your birthday if you join Ruby Tuesday's So Connected program.
Spaghetti Warehouse. Get a free meal on your birthday by joining the eClub.
Starbucks. You can get a free birthday drink or treat (and a coupon for 15 percent off a purchase at StarbucksStore.com) by joining the My Starbucks Rewards loyalty program.
Zaxby's. Receive a free meal deal (an entree with fries and a drink) and a nibbler for your birthday by joining the Zax Mail Club.
Plenty of other restaurants, such as Applebee's and Red Lobster, offer unspecified birthday freebies for subscribing to their e-mail lists. And several restaurants offer freebies with a purchase. If you don't see your favorite establishment on the list, it doesn't mean that you can't get a freebie there on your birthday. Ask your server or the store clerk about birthday specials.
MyHabit.com
Love animals and yet want the look of fur? Better be careful, as the Humane Society of the United States keeps finding companies that claim to sell faux fur but ship the real thing. In December, Kohl's (KSS) was found selling real fur instead of fake for the second time, according to AOL Jobs.
The latest in the organization's continuing series of sting operations is MyHabit, a website owned by Amazon.com (AMZN) that offers "up to 60 percent off fashion, home & more," According to the HSUS report, MyHabit sold two products that claimed to use faux fur but included animal skins.
One was a pair of sarajane brand gloves that HSUS claims was purchased on Jan. 9, 2014. The screen capture from MyHabit shows the following description: "Sophisticated style accented with a button of faux fur; measures 9" from fingertip to cuff." The country of origin was China and the materials were supposedly 80 percent wool and 20 percent acrylic.
The same mixture was listed on the garment label, but testing showed that the button was actually an animal of the mustelidae family, a family of mammals that include badgers, weasels, ferrets, minks and wolverines. According to HSUS, the lab it used said the fur was possibly American mink.
The second item, purchased on Jan. 10, 2014, was a Walter Baker brand "Outerwear Maya Mixed Media Parka." Here's the description: "Zip-up coat with concealing snap plackets, removable hood with faux fur trim, faux leather and faux shearling detail, snap flap pockets." The country of origin was China. Fabric mix was supposed to be 100 percent polyester with a lining of 97 percent polyester and 3 percent Spandex. However, the garment label showed a mix of faux fur and rabbit fur.
Neither the report nor the press release explained why the Humane Society had purchased the items and presumably found them to use real fur back in early 2014 and yet said nothing until a year later. DailyFinance has sent a request for more information to the organization but heard nothing before publication.
Update: The Humane Society responded to DailyFinance's question, saying that it "wanted to give the Amazon-owned retailer ample opportunity to rectify the problem and demonstration how they intended to prevent such misrepresentation in the future." The organization said that "months of discussions" went by before it decided to make the issue public.
In addition, DailyFinance has asked Amazon.com about the allegations, which replied, "We take providing our customers with accurate product information very seriously." The company said that the two items are no longer listed as being on sale at MyHabit, but it didn't explain whether the items came off in the normal course of business or as a response to the criticism. Nor did Amazon say how such items came to be advertised as strictly faux fur products.
Push apart the fur and look at the material at the base of the hairs. If faux, the hairs will emerge from a visible threadwork backing. If the base looks like leather or skin, usually white or tan, then it's real fur. Warning, seeing the base might require breaking the stitching, in which case be sure you own the garment.
If animal fur hasn't been sheared or plucked, looking with a magnifying glass will often show that the hairs taper. This test, however, can result in false negatives as shearing or plucking might make the hairs look squarely cut. Also, there may come a manufacturing process that could make the faux hairs taper the way real ones can.
If you own the coat and really want to know whether it's faux or real, remove a few hairs, hold them with tweezers above a non-flammable dish or surface, and set fire to them. If real, they will smell like burning human hair.
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Tax planning is hard enough when you think you know the rules. But if you can't count on today's rules still applying tomorrow, trying to plan for the future becomes impossible.
That's the conundrum that many college savers find themselves in after the latest State of the Union address. Among the numerous tax proposals that President Obama included in his speech, one stands out as potentially having a big impact on the tax planning of parents trying to save toward their children's college education. With the administration threatening to take away the tax break on two popular types of college savings accounts, one question many Americans are asking is whether the government can actually change the tax rules even after millions of families have relied on those rules in their financial planning.
The Controversy Over College Savings Plans
The State of the Union address included provisions to expand tax credits for education, increasing their maximum amount for some families and simplifying the patchwork of different breaks available for college and other educational costs. To help pay for these additional tax breaks, the proposal would take away some of the current tax breaks on 529 college savings plans and Coverdell Education Savings Accounts. Under current law, if you use 529 plan or Coverdell ESA money to pay for education, then any income and capital gains that the money in the account earned between the time you contributed it and when you used it is entirely free of tax.
What wasn't immediately clear from the proposal is whether these changes would apply only to future contributions, or would be retroactively applied even to existing accounts. Interestingly, although many would see failing to grandfather existing 529 accounts and Coverdell ESAs as being unfair, there's legal precedent to support the idea that the government could indeed change the tax rules.
The History of Retroactive Taxes
Indeed, if the administration's proposal took the more aggressive approach, it wouldn't be the first time Americans faced a retroactive tax.
In August 1993, President Clinton signed a law raising tax rates on high-income earners and estates. The new rates applied back to the beginning of 1993, and although disgruntled taxpayers went to federal court seeking to have the retroactive application of the rules invalidated, those arguments proved fruitless.
In 1987, Congress passed laws retroactively repealing an estate-tax provision, a repeal which cost one taxpayer $2.5 million. The Supreme Court ruled that taxpayers have no right to rely on tax legislation being permanent, with the majority arguing that as long as lawmakers act with "a legitimate legislative purpose," retroactive application is constitutional. Even though one Supreme Court justice argued that the government had used "bait and switch taxation," he nevertheless concurred with the unanimous holding of the Court.
A 1976 tax-law change affected homeowners' ability to shelter capital gains from the sale of a home from taxation. One homeowner took advantage of rules that allowed half of all gains to be free of tax, but six months later, President Ford signed a law retroactively limiting the taxable amount. Just as it did more than a decade later, the Supreme Court upheld the law as being constitutional.
Beware of Public Opinion in Your Tax Planning
Even if retroactive legislation is constitutional, the more important question the government always faces is whether it's politically viable. In general, retroactive tax increases seem unfair, and public opinion will often prevent politicians from advocating such measures. With college savings plans, the administration is arguing that the accounts primarily help upper-income taxpayers, seeking to build political consensus to drive support for the measure and sweep any concerns over fairness under the rug of public opinion.
Regardless of what happens with 529 plans and other education savings accounts, the lesson taxpayers need to heed is that tax laws that seem to be written in stone provide no guarantees of surviving future changes. With lawmakers having the right to rewrite tax laws at will, you must always remain mindful of possible revisions that can gut your financial planning.
Motley Fool contributor Dan Caplinger wishes he could do a lot of things retroactively. 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.
Marriage counselors say that trust is one of the most important elements of a successful relationship. When we talk about infidelity, we're usually referring to extramarital affairs, but cheating on your partner financially is another sign that your relationship could be in trouble. And a new report from CreditCards.com found that more than 7-million Americans -- mostly men -- have a hidden bank account or credit card account.
"These secrets are a recipe for disaster," says Matt Schulz, CreditCards.com's senior industry analyst. "If you and your significant other aren't honest with each other about what you're spending, you never really know how much money you have -- and that can lead to big problems."
The survey of married couples and people living with partners found that nearly 6 percent of the people in these committed relationships lead financial double lives by concealing financial assets or debts. It can cause problems, for example, when you apply for a mortgage and find out that your significant other has a credit card account that they missed a payment on and it hurts your credit rating. He said hardships -- loss of a job, a financial emergency or divorce proceedings -- often expose this covert life.
"It's another example of how important it is to communicate in relationships," according to Schulz. "If you're hiding a secret like this, it can make things really difficult in holding a budget together." He says hiding money from your significant other might indicate larger problems in a relationship .
The $500 Surprise
The survey also found that about 20 percent of the respondents were comfortable spending $500 or more without telling their partner. "If you're someone on a budget or living paycheck to paycheck like so many of us are, $500 is a lot of money. It can make a big difference," according to Schulz. He says buying a big gift for an anniversary or other special occasion might be OK. Your partner will know soon enough that you made the purchase. "Where you get in trouble is when it happens too often or it never sees the light of day. If you're buying things and hiding them long term, it can be a sign of trouble." He notes that men might be more guilty of this partly because they are often the primary bread-winners and control the purse strings. It also busts the stereotype that women are the big impulse buyers. Men do it too -- and their purchases often cost more.
"I think the real takeaway is that people need to do a better job of communicating with their partner about finances in general," said Schulz. "Many people are fine with their spouse spending $500 or more, but there are a lot who aren't. It can lead to a spouse wondering if there are other secrets too and that can open a whole can of worms."
The survey also found that younger people are much more likely to engage in financial infidelity. "It might be a case of inexperience in a relationship," said Schulz. "It might be something that you have learn the hard way. Maybe you develop that trust over the years by communicating about financial and other big issues."
Financial infidelity is as serious as any other breach of trust, financial and relationship experts agree. They say that separate accounts may be fine for some couples, but they have to be honest and open with each other and regularly discuss household finances. Worried this might be happening to you? There are ways to spot financial infidelity.
Some McDonald's workers who say they were fired because of their race are suing the fast-food giant, accusing it of dodging responsibility for the discrimination and harassment they say they endured.
The workers said in a federal complaint filed Thursday that about 15 African-American employees of some southern Virginia restaurants run by Soweva Co. were fired last May after several white employees were hired. Many of those fired were told by Soweva owner Michael Simon that while they were good workers they "didn't fit the profile" he was trying to build for the company, according to the complaint.
The employees said that McDonald's Corp. (MCD) controls nearly every aspect of how franchisees operate restaurants, but corporate officials did nothing when they were contacted about the dismissals and "blatant racial discrimination."
A statement from McDonald's Corp. said the company had not seen the lawsuit and couldn't comment on the allegations, but it and its franchisees "share a commitment to the well-being and fair treatment of all people who work in McDonald's restaurants."
Representatives of Soweva and Simon didn't return calls from The Associated Press seeking comment.
Demeaned Employees
The workers said in the complaint that before they were fired, restaurant supervisors frequently demeaned African-American workers by using terms like "ghetto" to describe them and by complaining that there were "too many black people in the store." The complaint also states that female employees were inappropriately touched by a male supervisor who also sent them naked photos and offered better working conditions in exchange for sex.
Former restaurant shift manager Katrina Stanfield said in a conference call with reporters that she faced "constant abuse" before she was fired last May, after Simon told her he would give her a reference for being a good worker. Stanfield wound up being unemployed for five months. She fell behind on her bills and couldn't buy school clothes for her children.
McDonald's must be held responsible for permitting this unconscionable mistreatment of its workers.
McDonald's advertises heavily in black neighborhoods but "turns its back" on its workers when they face discrimination, said the Rev. Kevin Chandler, president of the South Boston, Virginia, Chapter of the NAACP.
"McDonald's must be held responsible for permitting this unconscionable mistreatment of its workers," he said.
Franchisees operate the vast majority of McDonald Corp.'s more than 14,000 U.S. restaurants, and the case reflects a growing point of contention for the Oak Brook, Illinois-based restaurant chain.
The lawsuit comes a month after the National Labor Relations Board designated McDonald's Corp. as a "joint-employer" with franchisees. The NLRB, a federal agency that resolves employee-management disputes in the private sector, contends that the company and its franchisees are joint employers because the company wields extensive influence over how the franchisees operate.
The agency's general counsel office ruled in December that the company violated the rights of employees openly seeking better pay and working conditions. Hearings are set for March on whether to pursue disciplinary steps.
McDonald's has vowed to contest that designation.
Big Challenge
The plaintiffs in the discrimination lawsuit face a big challenge, according to Paul Millus, a New York lawyer who handles civil rights and employment issues. Millus, who isn't involved in the litigation, said the company that runs the restaurant is seen as the actual employer in these cases "almost as a matter of law."
"It is a separate entity, it has a separate existence ... except it is associated with a name that happens to come from a franchise agreement," he said, adding that he saw the lawsuit as more of a test case than viable litigation.
Over the past couple years, workers at McDonald's and other fast-food outlets in many cities have been engaging in brief "strikes" while calling for an increase in the minimum wage from the current $7.25 to $15 an hour and the right to unionize.
The discrimination and harassment alleged in the McDonald's lawsuit aren't isolated, said Kendall Fells, an organizing director of a worker-rights campaign called Fast Food Forward. He said that was one of the reasons employees are seeking better wages and union protection.
www.abullseyeview.com
Power to the plus-size blogger!
In August, Chastity Garner, a 30-something, plus-size blogger in California, wrote an open letter to Target (TGT), breaking up with store for ignoring the curvy girls. "I've been in this abusive relationship with you for far too long. ... I will be personally boycotting Target altogether. No more housewares, grocery shopping, electronics ... nothing. I'm done."
The blogger and the retailer have made up. Target on Wednesday announced a new line designed for the "plus-size woman who loves fashion and appreciates a good value," the store said on its website. Target also will extend its Lilly Pulitzer line into plus sizes up to 26W on Target.com.
Ava & Viv, the line of basics and statement pieces for $10 to $80, will be carried up to 4X. It will begin arriving in stores in mid-February and will be available online Feb. 22. Plus-size buyers make up 37 percent of consumers and represent a $17.5 billion market, says Fast Company.
Target recently invited Garner and bloggers Nicolette Mason and Gabi Gregg to its Minneapolis headquarters to preview the line and discuss their concerns about the curve. "My overall take on Ava & Viv is that it's a chic, versatile line with both basics and trendy pieces that fill the void of the affordable/trendy, non-junior size clothing," says Garner, who was paid for the consultation, on her blog.
Chuck Burton/AP
WASHINGTON -- Average long-term U.S. mortgage rates fell for the fourth straight week, with the benchmark 30-year rate again marking its lowest level since May 2013. The average for a 15-year mortgage, a popular choice for people who are refinancing, slipped further below 3 percent.
Mortgage company Freddie Mac said Thursday the nationwide average for a 30-year mortgage declined to 3.63 percent this week from 3.66 percent this week last week. The rate for the 15-year loan slipped to 2.93 percent from 2.98 percent last week.
A year ago, the average 30-year mortgage stood at 4.39 percent and the 15-year mortgage at 3.44 percent. Mortgage rates have remained low even though the Federal Reserve in October ended its monthly bond purchases, which were meant to hold down long-term rates.
The drop in mortgage rates has come as bond yields have hit record low levels. Mortgage rates often follow the yield on the 10-year Treasury note, which has fallen below 2 percent. Bond yields fall as prices rise.
The 10-year note traded at 1.87 percent Wednesday, up from 1.84 percent a week earlier but still at a historically low level. It dropped to 1.86 percent from 1.94 percent after Europe's central bank announced a plan aimed at reviving that region's struggling economy.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country at the beginning of each week. The average doesn't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.
The average fee for a 30-year mortgage was 0.7 point, up from 0.6 point last week. The fee for a 15-year mortgage rose to 0.6 point from 0.5 point.
The average rate on a five-year adjustable-rate mortgage fell to 2.83 percent from 2.90 percent. The fee remained at 0.4 point.
For a one-year ARM, the average rate was unchanged at 2.37 percent. The fee held at 0.4 point.
NEW YORK -- The S&P 500 and Nasdaq turned positive for the year as U.S. stocks rallied Thursday on the back of a larger than anticipated stimulus from the European Central Bank.
The ECB will buy 60 billion euros worth of assets a month, more than markets had been hoping for, in a program that will last through September 2016.
The choppiness seen early during the Wall Street session was due to some lingering questions about the effect of the announced measures on U.S. markets, said David Lebovitz, Global Market Strategist for J.P. Morgan Asset Management.
But as investors digested the details of the program it became more clear that the ECB was accomplishing exactly what it intended to.
"This is really the bazooka people had been looking for in the past years," Lebovitz said.
He said the sectors most likely to gain from the ECB move would be "anything that benefits from a stronger European economy," with bank and other cyclical stocks leading.
Banks led gains Thursday with the S&P 500 financials up 2.45 percent.
Wells Fargo (WFC) and Bank of America (BAC) rose 3.2 percent and 4.4 percent, respectively.
The Dow Jones industrial average (^DJI) rose 259.7 points, or 1.48 percent, to 17,813.98, the Standard & Poor's 500 index (^GPSC) gained 31.03 points, or 1.53 percent, to 2,063.15 and the Nasdaq composite (^IXIC) added 82.98 points, or 1.78 percent, to 4,750.40.
Shares in Europe jumped 1.6 percent to close at a seven-year high.
After the closing bell, Starbucks (SBUX) shares rose 3.2 percent to $85.41 after sales at established restaurants in its Americas region were slightly stronger than analysts' estimate.
American Express (AXP) was the largest points weight on the S&P 500, down 3.8 percent to $84.37, a day after it said it would cut more than 4,000 jobs this year as expenses and provisions for bad loans rose.
F5 Networks (FIVE) slumped 10 percent to $113.40. The network equipment-maker's revenue missed expectations for the first time in eight quarters. It also forecast current-quarter revenue and profit below estimates.
Avon Products (AVP) shares jumped as much as 20.1 percent after Dealreporter said the company was in talks with private-equity firm TPG Capital about a potential transaction, citing three industry sources. Avon shares closed up 14.6 percent at $8.66.
Volume was slightly above the norm with about 7.7 billion shares changing hands on U.S. exchanges, above the daily average of 7.27 billion so far this month.
NYSE advancing issues outnumbered decliners 2,428 to 651, for a 3.73-to-1 ratio; on the Nasdaq, 2,015 issues rose and 746 fell, for a 2.70-to-1 ratio.
The S&P 500 was posting 78 new 52-week highs and 5 new lows; the Nasdaq composite was recording 61 new highs and 73 new lows.
What to watch Friday:
At 10 a.m., the National Association of Realtors reports existing home sales for December, and the Conference Board releases leading indicators for December.
These selected companies are scheduled to release quarterly financial results:
There isn't enough time in the day for most of us to accomplish everything we need to. And if you're struggling to get a handle on your current tasks, chances are you've repeatedly longed to be more efficient and productive.
But with the emergence of smartphones and a host of useful apps, there's something out there to simplify each of our busy lives. If you have a particular need, well, there's probably an app for that. Here are 15 useful apps to help you get organized:
Finances
Check. Available on Android, iOS.No more overdrawn accounts, late payment fees or scrambling to find statements. This app lets you control your finances at the tap of a finger. You can schedule or make payments and receive pertinent alerts regarding account activity.
PowerWallet. Available on Android, iOS, Windows 8. You'll get a snapshot of your finances and receive automatic alerts along with graphs to help you track your progress and achieve your goals. Expenditures are automatically categorized to ease budgeting. PowerWallet is a Money Talks News partner.
Shoeboxed. Available on Android, iOS. This app is ideal for anyone who is on the go and needs a simple way to capture data from receipts or track mileage.
You Need a Budget. Available on Android, iOS, Kindle Fire. Budgeting doesn't get much easier than this. The app uses four principles to help you get your spending under control, build up a cushion and get out of debt.
Food Shopping
Grocery iQ. Available on Android, iOS. You can compare price points from various circulars for items on your list and redeem digital coupons at the register. Products on your list can also be sorted by aisle to make trips to the store more efficient.
Pepperplate. Available on Android, iOS, Windows 8, Nook, Amazon (AMZN). This menu planner app allows you to import recipes and organize meals, either weekly or monthly. It also automatically sorts grocery lists by in-store shopping patterns.
Scheduling
Sunrise. Available on Android, iOS, Mac Appstore. This free app puts a pleasant twist on traditional calendar tools with its edgy design. Sunrise sends reminders for Facebook as well as manually entered events, adjusts to your current time zone and displays the weather. And if you have a scheduled meeting with LinkedIn (LNKD) connections, their information and pictures will be displayed on your screen.
Timeful. Available on iOS. Timeful allows you to create a to-do list and then sends you scheduling suggestions derived from advanced algorithms to help you get through it all. The app also allows you to block out time each day for routine tasks and highlights positive behaviors on your calendar.
Project Management
Evernote. Available on Android, Chrome OS, iOS, Mac Appstore, Windows 8, Microsoft (MSFT) Windows, BlackBerry (BBRY), WebOS. If you're embarking on or are in the middle of a major project, Evernote will keep you organized so you can achieve your objectives in a timely manner. It allows users to insert notes, ideas, images and other helpful resources that can be accessed across devices.
Idea Organizer. Available on iOS. Did a useful idea pop into your head when you didn't have access to your notepad to record your thoughts? Use this productivity app to jot it down. You can also edit or send existing ideas to others and set important reminders.
Apparel
Cloth. Available on iOS. Cloth takes the hassle out of getting dressed by allowing you to take snapshots of your favorite combinations, save them to the app and share with friends for feedback. It's like Instagram for clothes. This app also notifies you of the most ideal apparel for the day based on the weather forecast.
Fitness
The Scientific 7-Minute Workout. Available on Android, iOS. Crunched for time? Choose from one of this free app's seven-minute workouts to stay fit amid the hustle and bustle. The app features animated illustrations of each exercise and a built-in timer. An advanced version is available for purchase.
News
FlipBoard. Available on Android, iOS, Windows 8, Blackberry. No need to scroll through a host of websites or buy a newspaper to keep up with current events. FlipBoard enables you to access stories from the most reputable news outlets and sorts them by topic, so you can view only the headlines that most interest you. Or you can read The Daily Edition, a collection of the most relevant stories of the day.
LinkedIn Pulse. Available on Android, iOS. Pulse delivers customized news feeds based on your interests, aggregating content from thousands of trusted sources, major publications, LinkedIn Influencers, blogs and more. Sign in with your LinkedIn account on any device and your articles are synced, so you can easily pick up where you left off. Pulse also allows you to download stories so you can read them offline.
Passwords
Last Pass. Available on Android, iOS, Windows 8, Blackberry. Losing passwords can be a problem if you need instant access to an important document. This app offers a secure way to store all your passwords in a central location. Money Talks News wrote about it in Here's a Simple Way to Make Hackers' Lives Harder and Yours Easier.
Do you have experience with any of these apps? Have they helped you become more organized? Please share your thoughts below or on the Money Talks News Facebook page.
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The ingenuity of the securities industry is truly remarkable. Players in it seem to have a special expertise for creating a seemingly endless supply of complex investment vehicles. Almost all of them share this common trait: They fatten the wallets of those selling them and deplete the assets of gullible buyers.
A critical component of the sales strategy for these investments is their names. Who can forget the "collateralized mortgage obligations" of a few years ago? It conjures up an image of protection and security through the combination a mortgage product made even safer by the reference to "collateral." As we know now, the reality was quite different. The complexity of these investments successfully hid meaningful risks to purchasers. The use of collateralized mortgage obligations and other collateralized debt is generally regarded as a precipitating factor in the 2007-2008 financial crisis.
Fortunately for the securities industry, investors have notoriously short memories. There continues to be a market for almost every kind of new, gimmicky investment. How else can you explain the continued appeal of hedge funds, despite their staggeringly poor record of underperformance?
A Really Bad Idea from Wall Street
Here's my new candidate for the dumbest investment ever: Non-transparent, active exchange-traded funds.
Think about that name for a moment. What do ETFs tend to represent in your mind? Most likely, your first thought is low cost, high liquidity and tax efficiency. Indeed, traditional ETFs permit you to track market indexes and capture the return of those indexes in an extremely cost-efficient way. These favorable characteristics have been primary factors in the phenomenal growth of assets under management invested in ETFs. By some estimates, more than $2 trillion is currently invested in ETFs, representing a massive increase from a minuscule $100 million in 2002.
Unfortunately for investors, non-transparent, active ETFs bear little resemblance to traditional ETFs. The combination of active management and lack of transparency is a double dose of potential poison.
Investors in actively managed ETFs are betting on the ability of the fund manager to engage successfully in stock-picking, market-timing and even short-selling or buying on margin in an effort to "beat the market." The track record of actively managed mutual funds should be a sobering reminder to investors considering a roll of the dice with actively managed ETFs. Over a five-year period, only 25 percent of actively managed mutual funds outperform their benchmark. Investors in the balance of actively managed funds would have achieved higher returns by investing in low-cost index funds (including ETFs) that simply tracked an index. Over longer periods of time, the odds of outperformance for actively managed mutual funds declines significantly. For example, over a 15-year period, only about 15 percent of actively managed U.S. equity funds actually beat the U.S. equity market.
They Want to Keep Trading Strategies Secret
There's no reason to believe the returns of actively managed ETFs will be any better than their mutual fund counterparts.
The lack of transparency should be another red flag for investors. "Non-transparency" means these ETFs will not have to disclose their portfolio holdings, making it impossible for investors to understand what fund managers are doing with their money and how much risk they are taking. Lack of transparency is justified by the claim that it permits fund managers to keep their trading strategies proprietary.
The problem with this argument, as noted by Wesley Gray, who holds a doctorate, is that the lack of transparency is being used to justify higher fees, and there is no evidence of a positive correlation to better returns. Gray believes the securities industry is "pushing [an] overpriced average performance product through their massive sales distribution pipelines." He could not be more right.
Some fund families have secured SEC approval to issue non-transparent ETFs, while approval has been denied to others. No doubt, the industry will persevere. If your broker recommends this new investment product, run for the door and don't look back.
Daniel Solin is the director of investor advocacy for theBAM Allianceand 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."
WASHINGTON -- Be prepared for the tax man to get even more personal this year -- with questions about your health insurance.
For the first time, you'll have to state whether you had health insurance, through an employer, one of the exchanges or purchased privately. And if you didn't, you could face a penalty. Also, if you got advance payments of the premium tax credit under the Affordable Care Act, even for only part of the year, there's a new form to file. You'll have to file it even if you only got tax credits for part of the year. And tax filers accustomed to using a 1040EZ will no longer be able to do that if they got a tax credit.
There's more. If you had life changes -- a new job with a higher salary, for example -- from the time those tax credits were approved, you could end up having to pay some or all of the money back. Conversely, if you lost your job and faced a long period of unemployment, you might now be eligible for the credit. "I see deer-in-the-headlights looks," said Dave Duval, TaxAudit.com's vice president of consumer advocacy. "These are new items. ACA has been on the books since 2010. We've ignored it, not looked at it, not paid attention to it. It's on the tax return that we're going to be doing for 2014."
Insurance Required for Most
The law requires individuals to have what the government calls minimum essential coverage unless they qualify for one of more than 30 exemptions. For those without insurance -- or an exemption -- there's a penalty stemming from the law's premise that health care coverage is a shared responsibility among federal and state governments, insurers, employers and individuals.
For 2014, the penalty is the greater of 1 percent of your household income above the threshold for filing taxes or what the Internal Revenue Service calls "your family's flat dollar amount" -- $95 per adult and $47.50 per child, with a family maximum of $285 in 2014.
However, the average penalty for the 2014 tax year is expected to be higher -- $301, according to Sacha Adam, health care team leader at Intuit, maker of TurboTax (INTU). Under the law, those fines will go up for people who remain uninsured in 2015, to about $590 on average. "Getting health insurance is a big decision for some folks," Adam said. "When it comes to reporting your health insurance on your taxes, it's going to be very straightforward."
A Box to Check On Your 1040
Reporting your health insurance coverage begins on line 61 of Form 1040. "For the vast majority of Americans, tax filing under the Affordable Care Act will be as simple as checking a box to show they had health coverage all year," Treasury Secretary Jacob Lew said in a statement. The Department of Health and Human Services estimated that more than three-quarters of taxpayers will need to do no more that.
"If you have it and you have the ability to demonstrate you had it, that should be it and you're not going to be subject to having the additional penalty assessed," said Greg Rosica, a tax partner at Ernst & Young.
People insured through the exchanges will get Form 1095a in the mail attesting to their coverage and how much of an advance premium tax credit they received. Employers are not required to provide proof of coverage for 2014.
New Forms to File
"A fraction of taxpayers will take different steps, like claiming an exemption if they could not afford insurance or ensuring they received the correct amount of financial assistance," Lew said. "A smaller fraction of taxpayers will pay a fee if they made a choice to not obtain coverage they could afford."
If you received a premium tax credit or might be entitled one, file Form 8962. That will determine whether you got too much of an advance credit payment and have to repay some of it, or if you didn't apply and might be eligible for the premium tax credit on your return.
For those who didn't have health insurance, there's yet another form -- Form 8965 -- which lists the possible exemptions and lets you claim the one that might apply. It's also where you figure out your penalty if you didn't have coverage for all or part of 2014.
"There's a lot to look for. It is kind of complicated," said Barbara Weltman, contributing editor to the tax guide "J.K. Lasser's Your Income Tax 2015." The good news, she said, is most people use a paid preparer or software to do their taxes, and they'll be walked through the questions that have to be answered for the health insurance section of the tax return.
Where to Go for Help
The IRS has a page devoted to the Affordable Care Act, you can access videos featuring IRS Commissioner John Koskinen, as well as new publications that provide information about health care and taxes.
Because of the complexity of the requirements, Koskinen told Congress last fall that he expects an increase in calls to IRS toll-free help lines about ACA and taxes. "Our ability to meet this demand may be strained due to ongoing budget constraints and the possibility of an additional increase in call volume related to the impact of tax extender legislation that may be passed later this year," he said.
TurboTax and H&R Block (HRB) are among the companies that provide guides to taxes and the Affordable Care Act on their websites, and the Tax Policy Center can help you estimate your penalty.
Daniel Acker/Bloomberg/Getty Images
You've probably seen the headline -- "Warren Buffett Tells You How to Turn $40 Into $10 Million." Who can resist a story about the legendary investor telling you how to turn what is basically pocket change into a multimillion-dollar fortune?
The $40 Stock Story
A few years ago, Berkshire Hathaway (BRK-A) Chairman and CEO Warren Buffett noted that if a person bought $40 in Coca-Cola (KO) stock when it went public back in 1919, it would now be worth more than $5 million, reflecting the growth in the price of the stock, stock splits and dividends. A few years later, in 2012, Coca-Cola's board of directors reported that the original $40 investment would be worth $9.8 million. Today, it works out to be $10.8 million.
Alas, while the story is true, it is nonetheless a sponsored post by The Motley Fool to get you take a look at other stocks that its staffers believe have similar potential. Are investments in those stocks the best money-making strategies the world has ever seen? Possibly, but the odds are against it.
The Difficulty of Duplicating the Coca-Cola Story
The odds of duplicating this incredible success story are large:
The Coke story "works" because it is an historic fact.
Other stocks that went public in 1919 didn't do nearly as well. Some no longer exist.
Few could have predicted that Coca-Cola would be around by the 21st century, let alone that it would be such a spectacular investment.
Thousands of companies have come and gone since 1919, and only a very tiny percentage have seen anything even close to the results for Coca-Cola.
The incredible returns on Coca-Cola stock have developed over substantially more than the average human lifespan.
A lot of financial experts claim to know what the next Coca-Cola will be, but in the way that reality works, almost none of them will be right.
Even if it were possible to know now what the next Coca-Cola would be, none of us have 100 years to wait around to find out if the stock will play out in that way. If you are very young, you may have a 50-year investment time horizon, but the vast majority of us have something considerably less.
The compounding effect of money has its greatest impact in the later years. For example, if a stock investment doubles from $1,000 to $2,000 in the first decade, that won't be nearly as impressive as a doubling from $1 million to $2 million between years 90 and 100. The greatest gains by dollar value will occur in the last few decades.
You could invest in 20 stocks, each reputed to be "the next Coca-Cola," but not a single one rises to that level. It's the chance that every investor takes with any investment. There's simply no way to know for certain that any stock will perform up to its expectations. But there is a way to invest in stocks that can help you to reach financial freedom, even if it doesn't enable you to turn $40 into $10 million.
Using Mutual Funds to Get Similar Results
The average return on stocks has been somewhere between 9.60 percent and 11.53 percent between 1928 and 2014. Let's use 10 percent as a rough midpoint of the average return we can expect over the very long term. Assuming that you have a 50-year time horizon, and an annual stock market return of 10 percent, an investment today of $1,000 -- in an S&P 500 index (^GPSC)) fund -- could grow to about $117,000. Now if you had 100 years to invest, the investment could grow to over $10 million. But since no one has a 100-year investment horizon, it's a moot point.
Still, growing your money by a factor of over 100 in a completely passive investment is an outstanding deal. And you can do just that with an index fund and at least 50 years, and do so with relative certainty.
What Can We Learn From This
Beyond investing in mutual funds, there are some solid lessons from the Coca-Cola story.
Look for strong products. Coca-Cola has proven to be such a successful investment because it is an excellent product. The company had grown considerably before it even went public and continued to grow after 1919, despite the Great Depression, World War II and all of the changes and competition that have come up since. You have to find a company with similar prospects if you hope to come close to duplicating the Coca-Cola investment return.
Be a long-term investor. Buffet noted that the investment in Coca-Cola would have resulted from buying the stock all the way back in 1919 and holding onto it ever since. Few investors have that kind of patience. (And for the record, Buffett wasn't born until 1930.) It is likely that there were times when Coca-Cola stock went in the tank and experts considered it to be finished. You have to hold through such episodes, and few people do.
Diversification is the order of the day. The likelihood that you'll find the stock that will have a similar performance is close to zero. The only way you could even hope to do so would be to invest in a portfolio of stocks that have similar potential. That might be a mix of 10, 20, 50, or even 100 stocks, in the hopes to just a few of them will fulfill the promise. If you're going to buy that many stocks, you may as well invest in a mutual fund.
At least in theory, it's possible to identify and invest in the next Coca-Cola. But you may not have the time horizon or the patience, and it's quite possible that the would-be star stock ends up crashing and burning.
But you can invest in an index fund, step back, relax and trust that the historic returns of the market will apply in the future. That might not make you a multimillionaire, but it can still make you awfully comfortable.
Located in a small corner of a giant country, it's home to a series of massive casino resort hotels. Millions of visitors flock there every year in the hopes of winning big money, having the time of their lives -- or both.
Las Vegas? No, Macau. This Asian enclave has been -- until recently, anyway -- a red-hot market for gambling and associated tourism over the last decade, and it's helped fill the coffers of more than one U.S.-based operator.
China's Turn at the Table
Like nearby Hong Kong, Macau spent several centuries as a colony of a European nation before being handed over to the Chinese government in 1999.
Macau's gambling scene, which stretches back to 184, since 1962 had been controlled by one company -- privately held STDM -- under license from the Macau government.
One of China's first significant moves as Macau's new overseer was to change that situation once the license expired. In 2002, it opened the casino market to competition.
In a very short time, several American companies that had grown rich from their operations in Las Vegas won Macau concessions via subsidiaries, typically in partnership with Asian concerns. These were Las Vegas Sands (LVS), MGM Resorts International (MGM) and Wynn Resorts (WYNN), joined by Hong Kong-based operator Melco Crown Entertainment (MPEL).
Showing Their Hand
Among those companies, Las Vegas Sands was the quickest to establish itself in Macau, opening its Sands Macao resort in 2004.
The company built aggressively, rapidly establishing a commanding presence in Cotai (a government land reclamation project in the enclave), christening its stretch of properties there the Cotai Strip. Three of the company's four existing Macau resorts are on the Strip, and it's building another.
The Cotai Strip is getting as crowded as its Las Vegas progenitor. In addition to the existing Las Vegas Sands properties, the stretch is also home to Melco Crown's City of Dreams and Studio City, plus the Galaxy Macau, operated by Hong Kong-listed Galaxy Entertainment.
Both Wynn and MGM (currently operators of one resort apiece in Macau) are, like Las Vegas Sands, busy constructing new projects on the Strip.
Streaky Performance
At first, those companies must have felt like the lucky winners at the blackjack table. The broader Chinese economy grew powerfully, and as a result the money started to roll into Macau. From 2009 to 2011 alone, gaming revenue leaped from 121 billion patacas ($15 billion in today's dollars) to 269 billion patacas ($33 billion).
Along the way, Macau began to loom larger in importance for the concession holders. Ironically, Las Vegas Sands' net revenue from its Macau resorts now far eclipses that from its Las Vegas holdings -- $2.3 billion versus $381 million in the company's third quarter.
But like a gambler laying a big bet on a single play, Macau's casino players are playing a risky game --and that action isn't so hot these days. The Chinese government recently cracked down on corruption, with a major part of that effort directed at the rather loosely controlled VIP segment of the Macau casino market.
As a result, high rollers have been spooked away from the table, and their loss hurts. Macau's gaming revenue fell by 2.6 percent on a year-over-year basis in 2014 -- the first annual decline since the concessions were issued. Worse, the enclave experienced a 30 percent year-over-year drop for December.
This trend has badly impacted the share prices of the U.S.-listed casino operators active in Macau. Las Vegas Sands' stock lost 27 percent of its value across 2014, while Melco Crown did even worse (down 37 percent). Meanwhile, Wynn saw a 25 percent drop, and MGM declined 10 percent.
Down, but Not Out
So is it game over for these operators and their pet Asian market?
Probably not. Although the VIP segment has taken a hit, there is plenty of potential in the mass market -- the casual gamers who don't concentrate on high-stakes play. In spite of the crackdown, total visitor numbers continue to grow, advancing by 15 percent year over year this past November.
The Cotai Strip properties tend to cater to the mass market. The sprawling resorts there feature a great many non-gaming activities, with retail outlets and conference facilities bringing in money.
Considering that, we can expect that once the Macau casino industry pivots away from VIPs, the overall casino business there will halt its slide and return to its former healthy growth. And the market's big players -- particularly those busy Western companies -- will again take a big share of the winning action.
Motley Fool contributor Eric Volkman has no position in any stocks mentioned, and tends not to be successful when gambling. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. Looking for a winning play for your portfolio? Check out The Motley Fool's one great stock to buy for 2015 and beyond.
WASHINGTON -- U.S. home rental prices continued to climb at a modest pace in December, but rapidly escalating costs in cities such as San Francisco and Denver suggest that apartment dwellers are facing more financial pressure.
Prices rose 3.3 percent in December compared with 12 months earlier, real estate data firm Zillow (Z) said Friday. Although that increase is less than the recent appreciation in home values, a surge in apartment costs in several of the hottest markets indicates that renters who aspire to buy homes face mounting financial challenges.
We do not have the affordable rental housing resources to meet.
The share of Americans who own their homes has slipped to 64.4 percent from a peak of 69.2 percent in 2004, the result of the housing market crash that triggered the Great Recession in late 2007 from which the U.S. economy is still recovering more than seven years later. Because fewer Americans can afford to buy a home, demand for apartments and rental houses has pushed up prices at a time when newly graduated millennials are starting to leave their parents' homes.
"We do not have the affordable rental housing resources to meet" the demand, said Barry Zigas, director of housing policy at the Consumer Federation of America, at an industry conference this week.
Rental prices have risen 52 percent since 2000, while incomes for renters have only increased 25 percent, said Stan Humphries, chief economist at Zillow. The higher costs make it difficult for renters to save for a down payment, which then causes them to rent for a longer period of time and delay any potential home purchases.
"You don't have to be a housing economist to see that there is a problem there," Humphries said.
Additional construction has yet to significantly limit price growth nationwide. Builders broke ground on 376,000 apartment complexes last year, a 10.2 percent increase from 2013, the Commerce Department reported Wednesday. By contrast, single-family house construction rose just 1.4 percent last year.
Rents jumped 15.4 percent in the San Francisco area to a median monthly cost of $3,031, an increased mirrored by San Jose where prices were up 14.5 percent to $3,187 a month. Rents climbed 10.5 percent in Denver to $1,817 a month. Kansas City also notched a substantial 8.5 percent gain to $1,204 a month.
Still, tenants are catching a break elsewhere. In Chicago, Minneapolis, Philadelphia, Baltimore and Washington, D.C., rents rose by less than 2.2 percent. Rents in Minnesota's Twin Cities area ticked up a mere 0.1 percent this past year to $1,501.
NEW YORK -- McDonald's isn't lovin' it, and it's going to do something about it.
The world's largest hamburger chain reported falling earnings and sales for its fourth quarter on Friday and says it is going to take action this year to save money and bring customers back. This includes slowing down new restaurant openings in some markets.
It's also making changes to its menu and looking to offer customers more options to customize their burgers.
But the fast-food giant said its problems won't be fixed overnight: It expects sales to remain weak through the first half of this year while it deals with the fallout from a food-safety scandal in China, global economic uncertainty and shifting tastes among diners.
While it works to rev sales back up, it's cutting major investments. McDonald's plans just over 1,000 restaurant openings this year, down from 1,300 last year.
"We believe this lower level of capital spending is prudent while we work to regain our business momentum and improve the sales and profitability at our more than 36,000 restaurants around the world," he said.
Worldwide sales at locations open at least 13 months edged down 0.9 percent on weaker traffic.
In the U.S., the metric declined 1.7 percent on fewer customer visits, tough competition and increased expenses. The performance was an improvement though, as the figure fell 3.3 percent globally and in the U.S. in the third quarter.
The Oak Brook, Illinois-based company is dealing with competition on a number of fronts, including convenience stores that are selling more food and smaller chains such as Chipotle Mexican Grill (CMG) that market themselves as being of higher quality.
In hopes of changing negative perceptions about its food, McDonald's recently invited customers to ask questions about its ingredients and sourcing. It also launched a new marketing campaign intended to play up the "loving" in its "I'm Lovin' It" slogan and associate its name with that positive emotion.
We know that when our customers feel good about us and about eating at McDonald's they visit us more often.
McDonald's also wants to provide more menu choices at the local level and give customers multiple ways to order -- whether it be at a self-order kiosk or with a mobile device.
"We know that when our customers feel good about us and about eating at McDonald's they visit us more often," President and CEO Don Thompson said during a conference call with investors and analysts.
In Europe, sales at locations open at least 13 months fell 1.1 percent, hindered by softness in France and Germany and consumer confidence issues in Russia and the Ukraine.
The figure dropped 4.8 percent in the Asia-Pacific, Middle East and Africa segment because of the impact of a supplier issue on sales and profitability in China, Japan and some other markets.
Last year an undercover TV report in China showed one of McDonald's major suppliers repackaging meat that was alleged to be expired. The claim has not been publicly confirmed by the supplier or the government. The plant stopped operations, and many of McDonald's restaurants in the country were left unable to sell burgers, chicken nuggets and other items. The chain's reputation took a hit as well.
Chief Financial Officer Peter Bensen said that the company estimates it will take at least three to six more months for McDonald's business in China to return to a normalized level. The executive said Japan has taken longer to recover. Worsening perceptions are expected to hurt Japan's results for "the foreseeable future."
Drop In Earnings
Overall, for the period ended Dec. 31, McDonald's earned $1.1 billion, or $1.13 a share. That compares with $1.4 billion, or $1.40 a share, a year earlier.
Excluding 9 cents a share for a supplier issue, earnings were $1.22 a share.
The results beat Wall Street expectations. The average estimate of analysts surveyed by Zacks Investment Research was for earnings of $1.20 a share.
Revenue fell to $6.57 billion from $7.09 billion. This fell short of the $6.73 billion that analysts polled by Zacks expected.
Shares of McDonald's Corp. (MCD) fell 90 cents to $89.99 in afternoon trading.
How many times have you been told to act your age? Typically, it's used in the pejorative sense because you're being immature and someone wants you to just, well, grow up. But in other cases, not acting your age can be a good thing -- especially when it comes to avoiding negative money stereotypes.
Think 20-somethings who still live with the 'rents, yet can't dig out from under consumer debt. Or 30-somethings who give little thought to financial stability -- spending all their disposable income on the good life. In these cases it could be a good thing to buck the trend.
To prove our point, we've rounded up four examples of people who refuse to give in to negative ageist money stereotypes, from the 20-something who's been saving for retirement since high school to the 50-something who has no plans to stop working. Their stories show that there's no one way to live your money life -- in fact, there are times when it's OK not to follow the crowd.
Justin and Erica LugbillJustin Lugbill, 29, and Erica Lugbill, 28, of Chicago.In Their 20s, Debt-Free and Laser-Focused on Retirement
"Erica and I met in high school and got married young, when she was 20 and I was 21. Even then, we were thinking about our futures and didn't want to start our lives with debt -- including student loans.
Erica was responsible for her own college costs, so she attended a community college. I went to a private college my freshman year, which my parents paid for, but then transferred to Indiana University South Bend in order to be closer to Erica and save money. I knew chances were good we'd get married before I graduated, at which point I'd be responsible for my own tuition. We both had jobs in college to avoid debt. Erica worked for an interior design firm, while I started a business reselling books online, which I later sold.
We own our condo, have two Roth IRAs, a 401(k), CDs and rent out our first home.
Since then, we've become small business owners together. We have a design/build firm in Chicago, which Erica primarily manages. And I spend most of my time running an online marketing firm that I founded.
We've already started on our nest egg, even as we invest back into our companies. We own our condo in Chicago, have two Roth IRAs, a 401(k), CDs and rent out our first home in South Bend -- a reflection of the wisdom our parents instilled in us. They always told us to stash away half our earnings; in fact, I opened my first Roth IRA back in high school.
We also make sure to pay off our credit cards each month, and use rewards to buy the things we need, like the furniture in our home. I think many others view credit as a way to get what they want in the heat of the moment -- and worry about how to pay for it later -- but that's never been our philosophy.
In fact, that's probably the biggest difference we have with others in our age group: We spend intentionally, on the things that matter. Our focus is on building a solid future through hard work and investing, which we've been blessed to be able to achieve so far. We know that is what will pay off in the future."
Thomas NitzscheThomas Nitzsche, 35, of St. Louis.In His 30s and Immune to Lifestyle Inflation
"As a former counselor at a nonprofit credit counseling agency, I worked with clients who routinely stretched past their financial limits. The experience led me to reject the notion that debt was inevitable -- and that striving to own more stuff was a healthy goal.
My desire to live a simpler lifestyle was what, in part, motivated me to move back in with my mother last year. It was a big change for me, since I've lived on my own since I was 18 and still own a home where I used to live in Atlanta, which I now rent out.
Money should be used to make you feel as safe as possible, not as a tool to purchase -- or finance -- as much as you can.
I could easily live on my own, but I enjoy helping my mom maintain her 150-year-old farmhouse in a rural part of St. Louis, which is also where I grew up. After she became a widow, she became increasingly uncomfortable with the idea of living alone, so I help take care of her five acres of property. This saves her a few hundred dollars a month, and I like that I can make it easier for her to stay in the home she loves.
When I returned to St. Louis, I started working again for the credit counseling agency as a media relations manager. Because my mom owns her home outright, I only have some utilities to pay, along with some maintenance costs for my Atlanta home. These lower costs have really helped me to be aggressive with my student loan debt -- I pay nearly 10 times the minimum payment, which is about 25 percent of my take-home pay. I also boosted my retirement contributions by $50 a month, and started a 529 for my niece, to which I contribute $100 a month.
My biggest personal splurge is travel -- last year alone, I visited eight U.S. cities -- but I don't have many other indulgences. I recently bought a 2-year-old Chevy Volt, but that was only to replace my 15-year-old SUV, which had 200,000 miles on it.
I think the biggest difference between myself and others my age is that I don't feel compelled to live to the highest level that my income will afford. My philosophy is that money should be used to make you feel as safe as possible, not as a tool to purchase -- or finance -- as much as you can."
Scott NicholsScott Nichols, 44, of Wilsonville, Oregon, and his family.In His 40s and with a Scaled Back Work-Life Balance
"I landed my first job as a management trainee with a major car rental company right out of college. It was a career that required frequent moves -- I lived in four different places -- but I had received multiple promotions, with opportunity ahead.
My wife, Colleen, and I got married about two years into the job, and we now have three kids. The company provided a tremendous life for us: We lived in a gated community, could afford weekend trips, and stayed in nice hotels when we traveled.
My compensation was in the six figures, but I worked hard for it. My salary was less than a quarter of my take-home pay. The rest was commission -- and that drove me to work harder. As a result I spent little time with my family. When I wasn't traveling, I was clocking in long hours. There were days when I didn't see my family at breakfast or dinner.
When I was 39 I visited my hometown in Oregon to see my dad, who was undergoing surgery. I thought back fondly on the fact that he'd been to every sporting event when I was growing up -- and I realized I was missing that with my kids.
I thriving in my new career, but I've been able to invest time in my family.
Several months later I resigned -- without a job lined up. Colleen and I discussed moving back to Portland because she knew work was taking a toll on me, and we wanted to be closer to our families.
So I started the job hunt, and after a few months, I found a position at a health care company in the Portland area that offered a flexible schedule and opportunities to work from home -- although I was taking an initial 30 percent pay cut. But that was OK with us. With that, we moved across the country.
We were living in a cheaper market, and had downsized to a smaller home. We were also watching our spending by, for instance, thinking twice before eating out, and taking on chores that we used to outsource, like mowing the lawn.
It was admittedly scary to make the decision to leave my old job and life behind, but I was confident that my work experience would land me on my feet. And it paid off: Not only am I thriving in my new career, but I've been able to invest time in my family.
Plus, my wife and I knew that to be happy we didn't need to make the kind of money I was making before. I now have the flexibility to coach my kids' teams and be there for every game and school performance. You can't put a price on that."
Susie WyshakSusie Wyshak, 50, of Oakland, California.In Her 50s and with No Plans to Slow Down
"Since high school I've lived my life with an eye toward financial freedom. For me that meant being able to pursue whatever I wanted personally and professionally, and I knew that the better money decisions I made, the more flexibility I would have.
Even when I was making just $18,000 after college, I saved by not going out to bars, not buying a lot of material things and investing in stocks. I was always on the lookout for ways to grow my money, whether that was through the markets or high-interest accounts that would let my money compound.
After surviving a bout with cancer in 2004, I decided I never wanted to retire because I still had a long bucket list of things I wanted to accomplish.
When I do splurge, I always think about how I can optimize my spending. For instance, on my sister's birthday, I offered to take her to the renowned restaurant French Laundry -- until we realized we could go to Italy for the same price.
Professionally I've straddled two worlds: the online marketing space and the artisanal foods industry. Initially, my day job was in tech, while I explored the San Francisco culinary scene on the side. At one point I had wanted to retire at 50.
But after surviving a bout with cancer in 2004, I decided I never wanted to retire because I still had a long bucket list of things I wanted to accomplish -- and several of them were career-related.
So a few years later, while thinking about what made me happiest, I combined my interests to create my dream job: helping new food crafters promote themselves and sell products online.
Proactively managing my investments to produce income has helped me make that shift. I also bring in extra money by renting out half of my duplex through Airbnb, which offsets my mortgage -- plus I meet interesting people from all over.
Part of my strategy for never retiring is to keep pursuing new business ideas. Last fall I released a book called "Good Food, Great Business: How to Take Your Artisan Food Idea From Concept to Marketplace," and I recently acquired a vintage Airstream trailer that I plan to turn into a rental on a lavender, fruit and olive farm -- a chance for me to build a culinary travel business.
I love working, and my role models are great business leaders. I can say that I've created a flexible, variety-filled life full of friends, family and adventure -- which is exactly what I had hoped for."
LearnVest Planning Services is a registered investment adviser and subsidiary of LearnVest, Inc., that provides financial plans for its clients. Information shown is for illustrative purposes only and is not intended as investment, legal or tax planning advice. Please consult a financial adviser, attorney or tax specialist for advice specific to your financial situation. Unless specifically identified as such, the people interviewed in this piece are neither clients, employees nor affiliates of LearnVest Planning Services, and the views expressed are their own. LearnVest Planning Services and any third parties listed, linked to or otherwise appearing in this message are separate and unaffiliated and are not responsible for each other's products, services or policies.
Rick Gayle Studio/Fuse
It's National Pie Day, which celebrates of one of America's deepest food traditions -- a tradition that has been traced back to as far as ancient Egypt.
National Pie Day is also a celebration of loved ones and togetherness. As the American Pie Council suggests, "slow down and share heartfelt gratitude with loved ones over a delicious slice of pie."
While the day's focus is on the dessert, in earlier eras, pie were mostly meat-based options. And it also took a while for people to eating the crusts, too.
While America may still be an apple pie nation, other tastes are starting to emerge. Flavors like pumpkin, cherry and lemon meringue are making their way on to more dinner tables. The graphic below shows which states have had the heaviest hand in filling our pies over the past few years.
Design Pics/Leah Warkentin
For most people, the death of a spouse is the most traumatic event imaginable. Nevertheless, as bad as the emotional trauma can be, the financial trauma is often equivalent -- and can last for much longer -- if widows and widowers don't take the right financial steps in the immediate aftermath of their spouse's death.
Here are eight critical financial steps that should generally be taken after the death of a spouse:
1. Gather important documents and meet with each of your professional advisers. Your attorney, financial planner and accountant will each play essential roles in helping you make important financial decisions in the weeks and months to come. Before meeting with them for the first time, you should gather all the important legal and financial documents that will be needed to formulate your immediate plan. These usually include:
Your and your spouse's last will and testament, durable power of attorney and health care proxy.
Recent tax returns and W-2 forms.
Bank, brokerage, credit card, retirement account and mortgage statements.
Insurance policies.
2. Probate your deceased spouse's will. If you are the executor of your spouse's estate, you may be responsible for probating his or her will. This is usually done by filing a petition for probate of a will at your county courthouse. The probate process can take as little as a few weeks, or as long as a few years, depending on how complex your spouse's estate is. Your attorney can provide assistance with the probate process.
3. Contact your life insurance company. If you are the beneficiary of a life insurance policy purchased by your spouse, contact the insurance company right away to find out what you need to do to collect your benefits. The company will likely require a death certificate to prove that your spouse is deceased, as well as other documentation and paperwork. Life insurance proceeds may constitute the bulk of your future income, so be sure to follow the company's instructions to the letter without delay.
4. Apply for any other benefits to which you may be entitled. In addition to life insurance, you might also be entitled to Social Security death and retirement benefits, veteran's benefits, and benefits (including health and life insurance) from your spouse's employer. Contact the Social Security Administration, the Veteran's Administration and the HR department of your spouse's former employer to find out about and apply for any of these potential benefits.
5. Re-examine your budget and make necessary adjustments. If your spouse was working, his or her death will obviously affect your income situation -- especially if he or she was the family's primary earner. It will also impact your ongoing expenses, so it is a good idea to sit down with your financial adviser and adjust your budget to reflect this new reality.
Depending on how much life insurance and other survivor benefits you may be entitled to, how much money you are earning (if you're working) or how much you can earn if you go back to work, and the amount of your fixed monthly expenses, you may have to make some difficult lifestyle adjustments. This might include downsizing your home in order to reduce your expenses. However, you should try not to make drastic decisions like this in the immediate aftermath of your spouse's death, if possible.
6. Re-title accounts and cancel memberships and automated payments. Any bank, brokerage or investment accounts that are jointly held by you and your deceased spouse will need to be re-titled in your name only. Contact the appropriate financial institutions or brokerage firms -- they will help you through the process of re-titling these assets. Also contact organizations where your spouse may have had memberships that are billed automatically (like a gym or country club) to cancel these memberships and the automated payments.
7. Update your will and estate plan. Your last will and testament and estate plan will most likely require significant changes after the death of your spouse. You should work closely with an experienced estate-planning attorney to ensure that these documents are properly revised so that your wishes will be fulfilled after you pass on.
8. Review and change beneficiary designations. If your spouse was the sole beneficiary of insurance policies or trusts owned by you, you will need to change these beneficiary designations. You may also need to update your health care proxy and durable power of attorney to assign another loved one the responsibility of making life-sustaining and/or financial decisions if you are unable to do so.
The days and weeks following the death of a spouse are emotionally gut-wrenching, and there are many logistical tasks and to-do's that need to be accomplished. In the midst of all this, don't forget about these and other important financial steps that need to be taken to help protect yourself from financial loss during this difficult time.
When Ken Goodhue graduated with a master's degree from Texas A&M last year, he and his wife Kirsti set out on a new life, leaving their home state of Texas and moving to an alien culture in Boston. He took a job at a large consulting firm while she went back to complete college after taking some time off to work while Ken pursued his degree.
"The difference is pretty drastic," according to Ken. "For the amount I pay in rent in Boston for a studio, I could get a two-bedroom in Houston, and in College Station (the home of Texas A&M), it would be ridiculous." The Goodhue's are paying nearly $4,000 a month for that studio apartment in South Boston, but still feel as though they're getting a pretty good deal. "We haven't felt that we stretched too much," said Ken. "We budgeted pretty well. Actually, we may have been too conservative."
They are part of the huge millennial generation, which is now starting to have a significant impact on the nation's housing market. However, millennials have been slow to buy their own homes, instead preferring to rent. As a result, demand for rentals has been rising steadily, and so have the costs.
Moving out of your parents home or a college dorm and into your first real apartment has lots of unanticipated expenses that can blow up a young person's attempt to budget responsibly. There are lots of other payments you will need to make that go beyond just the basic monthly rent, so you need to anticipate the cost of everything from utilities to parking, and from furniture to renters insurance.
There are all sorts of miscellaneous costs that go along with moving into a new place, especially if it's your first apartment. Remember, you don't have to go overboard and buy everything all at once, and you don't have buy the top of the line of everything.
But let's start with the basic cost of the apartment itself. The rule of thumb is that you don't want to spend more than 30 percent of your paycheck, after taxes are taken out. Let's say you are taking home $500 a week, or about $2,000 a month. Using the 30 percent rule, you should plan to spend about $600 a month on rent. That's not a lot, even for a studio apartment, especially if you live and work in a major city. The first thing to consider is finding a roommate or two. If all three of you can spend $600 a month, as a team you can now look for a place that costs $1,800 a month.
Next, really examine what you're getting for your $600 each month. Some rentals include some or all utilities, while others don't. Paying for your own heat, air conditioning, water, sewer, Internet, trash collection and more can amount to a huge chunk of change (and make you appreciate why your parents kept yelling at you to close the door and turn out the lights).
Rebecca Rego and her long-time boyfriend graduated college in the Chicago area last year and moved to Washington, D.C. They pay $2,430 a month to live in a newly rebuilt apartment building in what's considered an up-and-coming downtown neighborhood. She works in a congressional office and doesn't get paid a whole lot, so "most of my budget every month goes toward the apartment," said Rego, "but it's hard to find anything reasonable in a good neighborhood." She says a lot of her friends choose to live across the river in Virginia because the rents are cheaper, "but we think we made a smart choice." They make up for some of the added rental expense by saving on transportation, and they live in a much more exciting and vibrant area.
Other costs that many people don't anticipate are security deposits and realtor or agent fees. In Boston, the Goodhues had to pay a realtor one month's rent and then put up another month's rent for a security deposit. Rego, in Washington, paid just $500 as a security deposit, and felt lucky. "I have friends, especially in New York, that had to put up three months of down payments. That's thousands of dollars," she said, "and what 23-year-old has that kind of money."
While the pace of technological change can be mind-boggling, the ideas behind the most innovative consumer products boil down to a few basic questions. Will it make your life easier? Does it solve a basic but vexing problem? And definitely this one: Will it inspire envy in your friends? These eight innovative items do.
1. This Smartphone Outsmarts Data Diggers
After the Edward Snowden leaks, privacy became a big deal for Americans everywhere. Enter the Blackphone, the first smartphone that keeps your data from getting into anyone's hands. Each Blackphone is built with PrivatOS, a custom-designed operating system that combines cryptology and security technology with mobile phone convenience. The makers sound like crusaders when they proclaim, "We believe that privacy is a right." They also sound like capitalists, as the Blackphone sells for $629. But just think: If certain disgraced politicians had used a Blackphone, they might still be in office ... which is either a good thing or a very bad thing.
2. A Lock That Looks After Your Bike
The upcoming ULOCK is perhaps the most intelligent bike lock ever invented. Developed by an Italian company, it works via smartphone app and does all sorts of nifty things, from closing the lock remotely if you forget to lock up, to giving you a map location so you remember where you've parked. It should be available online in the first half of 2015. Now of course -- and we're assuming they thought of this -- you wouldn't want to butt dial your ULOCK app and set your bike free.
3. No More Whining Over Warm Wine
The website Quirky is a crowdsourced hub that helps everyday inventors bring their products to life and sell them. And from there comes Icecap. At $34.99, it's the creation of Peter Provart of Southern England. You place the Icecap in the freezer, then atop your wine glass like a funnel; it cools any beverage by up to 20 degrees in seconds. It will not keep your hotheaded dinner guests chill, though you could always dump some wine from your Icecap in their lap.
4. That'll Do, Piggy Bank, That'll Do
Also on Quirky, the Porkfolio is a $20 piggy bank that works with a smartphone. It wirelessly connects to an app on your mobile device to track your balance and set financial goals from afar. Its nose lights up in celebration every time a U.S. coin is inserted, and it holds up to $100 in quarters.
5. The Key to Charging Your Phone
A project successfully funded on Kickstarter should bring this prototype phone charger to the marketplace very soon. The Plan V 9-volt battery smartphone recharger is a dongle you keep on your keychain. When your phone quits, you click a 9-volt battery onto it and get back about four hours of talk time. It's the first of its kind because unlike other battery backups -- which must be recharged -- Plan V will always work so long as you carry (or can buy) a 9-volt battery.
6. Throw Your Beer in a Hole in the Ground
Sometimes, the best technology is the absence of it, and this new device is about as primitive as they get. We can only assume that the four guys from Denmark who created this contraption got the idea while sitting around outside, drinking beer. The eCooler beer cooler works by burying your brew (up to 24 cans worth) on a vertical conveyor belt in the ground, where natural insulation keeps it chill. A hand crank then brings the cans back up to you when desired. The lads who sell the eCooler for $369 sure are cheeky: "It's advised to use a garden drill, but can be installed with a shovel as well, if you're a real man." Well, a real sober man.
7. Tearin' It Up on the Drive
How about a USB drive that tears off a sheet with all the ease of a paper towel? That's the clever idea behind Gigs 2 Go, a flash drive that's molded into a pulp enclosure made from 100 percent post-consumer recycled paper. That might sound like something you could accidentally crumple, but these drives come with a memory chip that is shockproof, waterproof, and does not require a cap for protection. They especially come in handy if you have to hand off notes or presentations on the fly. Alas, we're told the tear-off laptop is still a few decades away.
8. Take This Seat Sitting Down
Do you want to sit more comfortably and ergonomically wherever you go? No ifs, ands or butts, eh? It doesn't get much more portable (and fun) than the Backjoy SitSmart. Resembling a squashed, overgrown Wiffle Ball with an attitude, the SitSmart ranges in price from $39.99 to $59.99 for a memory foam version. While it smartly takes your mind off of seating discomfort, the SitSmart can't do all the thinking for you. Thus it won't help you if some office joker leaves a thumbtack on it.
Not everyone can concoct something practical (though your tinkering Uncle Al may insist otherwise). But you can still show a practical streak by taking advantage of new products that make you look smart -- and even inventive. Consumers are always looking for ways to save time and stay ahead of the curve, and maybe that's something at which you excel. Truly, if you can't be a clever inventor you can always be an early adopter.
