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There were plenty of winners and losers this week, with the country's favorite premium coffee brewer pouring out another great quarter and a pioneer of electronic learning toys flunking out again over the holidays.
The baron of baristas continues to provide caffeinated blasts to the masses. Starbucks brewed another strong quarter this week, with comparable-store sales growth increasing 5 percent relative to the prior year's holiday period.
It's not a surprise to see Starbucks perform so well, with its stock hitting new highs on Friday. The economy's improving, and with the employment picture looking up, we're finding more morning commuters looking to perk up their days with premium java. There is also something to be said about the benefit of gasoline prices at a multiyear low, giving folks more spending money to spring for that mocha latte.
Several analysts soured on SanDisk after the flash memory giant provided uninspiring financials. Raymond James and Wedbush downgraded the stock. Stifel stuck to its rating but joined the other two firms in slashing their price targets for SanDisk.
Perhaps the most troubling aspect of SanDisk's report is the shifting scapegoat. Just a week earlier SanDisk was blaming weak retail sales for the weak showing during the holiday quarter, but now it's blaming supply constraints. What's the problem, SanDisk: demand or supply? The safe answer is probably to go with both.
Netflix needed a strong fourth-quarter report, and it got it. The leading premium video service bounced back from a dud three months ago with a blowout report, sending the shares sharply higher.
The reinvigorated dot-com darling blew Wall Street's profit forecast away, and it also topped its own earlier forecast for subscriber growth. Netflix now has 57.39 million subscribers worldwide. It also impressed the market by forecasting that its international expansion will be complete in two years, and that it will be posting an overall profit for its streaming platform overseas starting in 2017.
Shares of LeapFrog took a hit after it provided an update for its holiday quarter that falls woefully short of where it was guiding the market.
Weakness in tablet sales and delays in new products held LeapFrog back. It now sees net sales of roughly $145 million, well short of its earlier guidance of $220 million to $240 million. It also now sees a sharp loss during the seasonally potent holiday quarter. It was originally expecting to turn a profit.
The leading online retailer won a pair of Golden Globe awards earlier this month for its barrier-breaking "Transparent" series, and now it wants to make sure as many people as possible get to see its star attraction.
Amazon.com will be making all of the show's 10 episodes available to anyone on Saturday without having to be an Amazon Prime subscriber. Folks can fire up the Amazon Instant Video app and catch the shows. It's a promotional move with reasonable upside if it woos new viewers to its platform. Amazon is also discounting its Prime program to just $72 for the first year on Saturday.
Motley Fool contributor Rick Munarriz owns shares of Netflix. The Motley Fool recommends and owns shares of Amazon.com, LeapFrog Enterprises, Netflix and Starbucks. Try any of our Foolish newsletter services free for 30 days. Looking for a winner for your portfolio? Check out The Motley Fool's one great stock to buy for 2015 and beyond.
Forget Halloween. Every month has become vampire season. Energy vampire, that is. The average home is chock full of appliances and consumer electronics that, even when you think they're off, could be adding another 10 percent to your electric bill, according to MarketWatch. That can mean hundreds of dollars a year.
The reason you're sending extra money to the electric company for no apparent reason is that many electronic devices and appliances constantly consume power. If it has an electronic display that's always on, even if it's just showing you the time, you've got an energy vampire. Ditto if there's a remote control. Even if it's a battery charger, like for your mobile phone, left plugged into the wall, there's a constant drip, drip of power being wasted.
Take that charger, for a moment. The devices have a small power transformer, which takes household current and drops it to the low level the phone needs and then turns it into direct current, or DC, that is compatible with the battery. But so long as the charger is plugged in, the transformer is constantly working and consuming some power, even if the phone isn't connected to it.
According to Lawrence Berkeley National Laboratory, which is run by the federal government, the average phone power supply consumes 0.26 watts without the phone. It's a small amount but adds up. Even in the cheapest average power region in the U.S., according to U.S. Energy Information Administration, left plugged in all the time the charger costs 56 cents a year. Nothing, right? But leaving a charged phone connected ,and the power consumption jumps by 8.6 times.
Other common devices consume far more power. According to the Department of Energy, a cable box with DVR included left plugged in but off all year would cost $43.36 in power consumption. And how many people turn off their cable boxes?
What You Can Do
Combine the chargers, cable boxes and DVRs, coffee machines and microwave ovens constantly displaying the time, flat screen televisions ready to instantly turn on at the request of a remote control, video game consoles, tablets and computers and printers, and you're talking about a combined significant amount of cost.
There are steps you can take to reduce the unnecessary power consumption and keep some money in your pocket:
When your phone is charged, disconnect it and unplug the charger.
Plug the TV, cable box and other related always-on devices onto a single power strip and then turn off the strip button to stop the use of electricity when you're not watching something. If you're trying to record a show, put the DVR and cable box (if necessary for recording) on a separate power strip and leave them on.
Turn off computers and printers when not in use or, at least, make sure they go into sleep mode, which will reduce the power consumption.
Connect some strategic outlets to wall switches to conveniently regulate the power.
As the Environmental Protection Agency suggests, use a smart power strip that can tell when devices go into standby and then shut off the power to them or turn off when no one is around or on a timer.
APReal estate agent Sam Golkar, left, tours a home being sold by fellow agent Frank Ruan, in Cupertino, Calif.By JOSH BOAK
WASHINGTON -- More Americans purchased homes in December, yet total sales slipped in 2014 as first-time buyers struggled to find houses. The National Association of Realtors said Friday that sales of existing homes rose 2.4 percent last month to a seasonally adjusted annual rate of 5.04 million. But over the course of the entire year, sales fell 3.1 percent to 4.93 million.
Only 29 percent of sales went to first-time buyers last month, compared to a historic average of 40 percent. Prospective buyers were priced out of the market due to rising home values and relatively stagnant incomes. Still, affordability has improved in recent months as mortgage rates have plunged, leading to the possibility of stronger sales in 2015.
Sales will increase throughout 2015 as potential buyers feel more comfortable about the economic outlook and lenders are willing to make loans.
"Sales will increase throughout 2015 as potential buyers feel more comfortable about the economic outlook and lenders are willing to make loans," said Stuart Hoffman, chief economist at PNC Financial Services.
Median home prices increased 6 percent over the past 12 months to $209,500.
There were relatively few listings in December, as the supply of homes on the market dropped to 4.4 months from 5.1 months in November, the Realtors said. The supply was the lowest in two years.
Much of the gains in sales came from the West, with additional growth in the South. Sales slumped in the Northeast and Midwest.
"There are good supporting factors behind the housing market," said Jennifer Lee, a senior economist at BMO Capital Markets.
Strong job growth over the previous year has added nearly 3 million new paychecks to the economy. Mortgage rates have fallen sharply, and home values are rising at a slower clip, giving prospective buyers some financial leeway.
The Realtors expect sales will rise 8 percent this year to 5.3 million homes. Much of that growth will hinge on first-time buyers getting out of the rental market.
Jed Kolko, chief economist at Trulia (TRLA), predicts that much of the growth will occur in the suburbs.
For starters, the suburbs are more affordable, with prices rising 5.7 percent per square foot last year, compared to an 8.1 percent surge in urban neighborhoods. Secondly, urban populations have risen in recent years because of what Kolko calls a "demographic jolt" from twenty-somethings renting close to downtown, a pattern that will soon reverse itself.
"As millennials get older, many will follow a familiar path: They'll partner up, have kids, and move to the suburbs," Kolko said in a report released this week.
Analysts expect the resilient U.S. economy to provide a tail wind this year, too. Employers added an average of 246,000 jobs a month last year as the unemployment rate dropped from 6.7 percent to 5.6 percent. While average hourly wages grew only slightly faster than inflation, the additional number of paychecks coupled by younger workers who are starting to move up the career ladder should put more first-time buyers in a better position.
Borrowing costs have also plummeted. With growing signs of a weakened global economy, investors have sought to shelter their money in U.S. Treasurys. That has pushed down bond yields and mortgage rates. The average 30-year mortgage rate has fallen to 3.63 percent from 4.39 percent a year ago, the mortgage company Freddie Mac said Thursday.
That decline translates into savings about $880 a year in mortgage payments for a $210,000 house. 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.
A slowing rate in the growth of housing values will likely also help sales. Home values surged at a double-digit pace nationwide in 2013, pricing out many would-be buyers in 2014. Annual price growth has now slowed to 4.5 percent, as measured by the Standard & Poor's/Case-Shiller index, allowing more buyers back into the market.
NEW YORK -- At some point this will end, perhaps even soon. The price of gasoline won't fall to zero.
But for the first time since 2009, most Americans are paying less than $2 a gallon. Just three months ago experts were shocked when it fell under $3.
"It's crazy," says Michael Noel, an economics professor at Texas Tech University who studies oil and gasoline prices. "But for consumers it's very, very good."
Consumers and the economies of the U.S. and most of the rest of the world are basking in the lowest prices for crude oil and gasoline in six years. U.S. crude oil traded Friday just below $46 a barrel and the average price for a gallon of gas was $2.04.
While there are some losers, such as oil companies, the oil-producing states and the oil-exporting countries that benefited from $100 a barrel for four straight years, most economists agree that the good outweighs the bad.
More Cash In Pocket
The drop in gas prices is acting like an immediate tax cut for drivers, leaving them more money to spend on other things. The Energy Department predicts lower prices this year will save a typical household $750 compared with last year.
Julia Conner paid $1.98 a gallon Thursday near her home in Wesley Chapel, North Carolina. Lower prices have made her more willing to go out for lunch with co-workers at the animal care and control office in Charlotte where she works, or out for dinner with her husband.
Pump prices have declined for a record 120 straight days, according to AAA, though the size of the declines is shrinking and the streak may soon end. But even if the price rises this spring, as it typically does, driving during summer travel season should still cost less than it has in years.
Conner is hoping she can afford a 300-mile roundtrip to Asheville, North Carolina, or even further away, to Tennessee, this summer. "Even if it's not $1.98 that would definitely help as far as vacation goes," she said.
This is one thing that hits the masses, not just a minority of people. There's some benefit for almost everyone.
Diane Swonk, chief economist at Mesirow Financial, expects lower gasoline prices to help the U.S. economy to grow 3.3 percent this year, the highest since the economy grew at that pace in 2005. "This is one thing that hits the masses, not just a minority of people," she says. "There's some benefit for almost everyone."
It's also helping businesses with high fuel bills.
"We've been able to increase our net profits, which has allowed us to reward our employees with bonuses and also purchase three new vehicles to replace older ones," says Ricky Wingard, owner of Econ-O-Bug, a pest control company in Lexington, South Carolina. His fleet of 22 vehicles drive an average 1,600 miles a day.
Southwest Airlines (LUV) told investors Thursday that it expects to save $1.7 billion on fuel costs this year.
Other beneficiaries of low oil prices include some of the world's biggest economies, according to an analysis by Moody's: China, the eurozone, and Japan. Their gains will far outstrip the losses that are pinching the budgets of exporting countries such as OPEC nations, Russia, and Norway.
Big Layoffs
Oil drillers that fueled a boom in U.S. production will suffer, along with states such as Texas and North Dakota that rely heavily on drilling activity. Oil service companies have announced layoffs of thousands of workers just in the past week, and the analysis firm Wood Mackenzie expects drilling investment in North America to fall by $50 billion, or nearly 40 percent, over the next year.
But the oil exploration and production business, while sizeable, is small compared to the rest of the U.S. economy. And the U.S. still needs to import oil to meet its needs.
The big drop in oil prices, a result of rising production in the U.S. and elsewhere at a time when global demand growth is weak, means the U.S. is sending fewer dollars overseas.
And drivers are pumping fewer dollars into their gas tanks. The national average price is $1.25 less than a year ago, according to AAA. The national average is over $2 only due to high pump prices in Alaska and Hawaii -- $2.78 and $3.28, respectively.
Missouri drivers are paying just $1.79 a gallon, the cheapest in the nation. Texas, Kansas and Oklahoma are also paying less than $1.85. In the Lower 48, California drivers are paying the most, $2.47 on average, followed by New York at $2.46.
Seasonal Price Hikes
Gasoline prices rise nearly every year between late winter and early summer as refineries slow down for maintenance and switch to more expensive summer blends of gasoline to meet clean-air standards.
Still, even a typical rise of 60 to 65 cents over the next few months would produce a springtime high of around $2.70 -- far beneath even the lowest prices of recent years, according to Tom Kloza, chief oil analyst at the Oil Price Information Service. The lowest national average price in 2013 was $3.18 a gallon.
Cheap gas prices are giving some consumers the confidence to buy a bigger car or even a home further from work. But some analysts warn that, eventually, high gas prices will return.
"The longer these decreases last, the longer people think they will stay around," says Texas Tech's Noel. "It's a dangerous thought to have. It won't be like this forever."
-AP business writer Joyce Rosenberg contributed to this story.
NEW YORK -- Apparently, airline passengers aren't buying enough garden gnomes, superhero pajamas and heated cat shelters. SkyMall has filed for bankruptcy.
The quirky in-flight shopping catalog has been a mainstay on airlines for more than three decades. Passengers with nowhere to go would pull it from the seatback and flip through the pages. While flying high over Iowa, they could dream about owning a $16,000 multisensory home sauna or maybe just a grill spatula with a built-in flashlight for $29.95.
But in recent years, passengers have found other distractions. More planes have seatback TV screens. The federal government now allows us to keep Kindles and iPads on during the entire flight. And most jets in the U.S. now have Wi-Fi meaning passengers can chat with friends back home or actually do work.
Not only is it full of germs but travelers today have all the information they need at their fingertips.
"Nobody's bored anymore. They don't have a captive audience," says John DiScala, who runs the travel advice site JohnnyJet.com "Not only is it full of germs but travelers today have all the information they need at their fingertips."
So Thursday, SkyMall's parent company, Phoenix, Arizona-based Xhibit Corp. (XBTC), filed for Chapter 11 protection in U.S. bankruptcy court. In the filing, the company said it has $1 million to $10 million in assets but $10 million to $50 million in liabilities.
Its biggest creditors are airlines. The company owes American Airlines (AAL) $1.6 million, Delta Air Lines (DAL) $1.5 million, Southwest Airlines (LUV) $400,000 and United Airlines (UAL) $300,000. It also has debts with UPS (UPS), specialty retailer Hammacher Schlemmer and American Express (AXP).
Many companies -- including airlines -- emerge from bankruptcy to survive for many more years. SkyMall must find a way to stay relevant to passengers who are no longer a captive audience. It will also need to convince airlines to keep filling their planes with the magazine. Fewer airline seats now have seatback pockets to hold a magazine. And airlines are much more aware of the added fuel cost for carrying the heavy publication -- a recent holiday version had 170 pages.
Delta stopped carrying the magazine in the fall.
Over the years, SkyMall has taken on a cult-like following. Travel news website Gadling, for instance, used to have a SkyMall Monday feature, highlighting some of the more unusual items for sale.
If the magazine were to shut down, there's nothing else to fill that niche. The beauty of SkyMall -- after all -- is that it highlights items passenger never thought they needed. Where else can you order a remote controlled tarantula while flying at 35,000 feet?
Do these cold, short days have you dreaming about summer vacation? While you are reading travel site reviews, comparing car rentals and shopping for airline tickets, start a dedicated savings account right now so you can pre-pay part or all of your vacation costs. "The key is to start small but start soon," says Money Talks News founder Stacy Johnson.
1. Hold a Yard Sale
Savings: $250.
Make room in your closet by decluttering. No need to make it a big project. Just ask yourself as you move around your home, "Can I get rid of this?" Put several boxes in an easily accessible spot and toss in what you find for your super sale. At Get Rich Slowly, J.D. Roth says he and three others made about $2,500 on a yard sale. But let's say you net $250.
2. Cancel Your Gym Membership
Savings: $196 ($49 a month).
The average gym membership costs $49 a month, according to CNBC. And that's not counting the initiation fee. Check out cheap options at your local community center or pool. Or, for the cost of a pair of sneakers, go outdoors and walk or run.
3. Sell Your Old Smartphone
Savings: $20 or more.
While you're decluttering, ditch your old phone. At Apple's (AAPL) Reuse and Recycling Program, I found an estimated value of $30 for an old 16GB iPhone 4, locked with AT&T (T), in average condition. (Apple reimburses with gift cards, not cash.) Plenty of other sites offer cash, including Gazelle, NextWorth and Glyde. Or list your products on Craigslist or eBay (EBAY). But don't expect much money. NBC News tells of a consumer who got an offer from one site for $133 for her old phone. They gave her just $20, though, after she sent them the phone. Before selling, erase all personal data from a mobile phone. Lifehacker tells how to securely wipe various types of phones.
4. Get a Cheaper Cell Plan
Savings: $300 or more.
Consumer Reports says the average customer of a "big-four" (Sprint (S), T-Mobile (TMUS), AT&T and Verizon Wireless (VZ)) carrier pays $90 a month for an individual cellphone plan, $111 for iPhones. But competition among carriers is escalating, meaning potential savings for consumers. Before comparison shopping, check service maps on companies' websites to be sure you'll get the reception you want. Andy Reppe of New Richmond, Wis., who has five people on his mobile plan, told Minnesota Public Radio he saved $75 a month by dropping his $270-a-month Verizon plan for T-Mobile. Or consider a contract-free prepaid service, or one of the discounted or free cellphone service providers.
5. Trim Your Cellphone Data Use
Savings: $60.
Downscale your data service for more savings. You may find that dropping just one tier from your current plan will save $15 a month, or $60 total in four months. See Consumer Reports' tips on how to avoid the biggest data hogs on a phone. For example: "Shooting it out with other players in high-octane online games is costly. Figure 1MB of data per minute of play."
6. Be a Mystery Shopper
Savings: $1,600.
At The Penny Hoarder, Kyle Taylor tells how to be a mystery shopper. He describes his experience: "I'm usually paid $8 to $25 per mystery shop, plus reimbursement for my purchases. There have been months where I earned more than $5,000, but most months I earn an extra $400 to $500 a month for mystery shopping. Making $400 a month would net you a nice $1,600 in four months."
7. Raise Insurance Deductibles
Savings: $130 or more.
If you agree to pay more out of pocket when making an insurance claim, you can save lots on your premiums. The average auto policy runs $1,439 a year, says CarInsurance.com. You'll save about 9 percent by raising a $500 deductible to $1,000 (more or less, depending on where you live), according to a study by InsuranceQuotes.com. That's $130. You can apply the same concept to your homeowners policy, increasing your savings.
8. Save Your Pocket Change
Savings: $120.
You probably watched your parents do it. Now you should do it: Empty your pockets or purse every day. You're sure to find at least $1, which adds up to $120 over four months.
9. Get a Smaller Cable TV Package
Savings: $292.
The average monthly cable TV bill is going up at a rate of 6 percent a year and is expected to reach $123 a month in 2015, says Money. Now cable companies are offering smaller packages that can save you money. Money says:
Verizon's Select HD no-sports package costs $15 a month less than its $65-a-month standard Prime package.
Time Warner Cable's (TWC) Starter TV, which offers 20 premium channels plus HBO for $29.99 a month, is 40 percent less than 200 channels with no HBO.
Cox Communication's TV Starter package runs $24.99 a month for 155 channels, compared with $49.99 for the 220-channel Advanced package.
You'd save $73 a month by dropping from $123 a month to a $50-a-month package.
10. Cut the Cable Completely
Savings: $427.
Going cable-free is no longer radical. Home Media Guy says: "The easiest streaming option with a little money is an outdoor antenna mounted in your attic or outside, depending on your location and geography. Simply go to www.tvfool.com and find out what stations are available based on your address." Commercial-free cable alternatives include:
Netflix (NFLX) Basic. About $8 a month for unlimited streaming of movies and TV shows.
Amazon (AMZN) Prime Instant Video. It's $99 a year for an Amazon Prime subscription, which includes free shipping for many products and unlimited streaming of movies and TV, as well as other services.
Note: HBO and ESPN have plans for online streaming services that don't require a cable or satellite subscription. The average cable bill for four months is $492. Subtract $50 for an antenna and $16.25 a month for Netflix and Amazon Prime, and you've saved $377 in four months, and more after, since the antenna will be paid for.
11. Open a Bank Account
Savings: About $100.
Banks want your business, says Money Crashers, adding that some are offering cash to entice you to open an account. Money Crashers lists signup bonuses for several new accounts, including bonuses of $50, $100 and $200. Read the fine print. Typically there are lots of hoops to jump through to claim your reward.
12. Quit Buying Bottled Water
Savings: About $289.
Writes Business Insider: "At an average cost of $1.22 per gallon, consumers are spending 300 times the cost of tap water to drink bottled water." It's about $7.50 a gallon when you buy it in single-use bottles, 2,000 times the cost of a gallon of tap water, the article says. A 24-pack of Dasani purified water costs $15 at Office Depot (ODP) online. If a family of four uses one bottle a day per person, that's five cases -- $75 -- a month. The comparison: Four months of home-filtered water costs $11 for a simple filter pitcher vs. $300 for Dasani.
13. Drink Tap Water at Restaurants
Savings: $80.
For the four months of your savings program, order tap water in restaurants instead of other drinks. If you dine out once a week, spending $5 for a beverage each time, you'll save $80 in four months.
14. Automate Savings
Savings: $160.
One of the marvels of online banking is your ability to set up and change automatic savings deposits on the fly. Establish a small transfer from your checking to savings -- $10 a week, for example. You'll have $160 in four months, and here's a promise: You won't notice the money is gone.
15. Get a Part-Time Job
Savings: $800.
Not forever. Just to scrape up some savings. If you net $10 an hour for 20 hours a month, you'll have $800 saved when your four months are up.
16. Sell Clothes on Consignment
Savings: $60 to $80.
Give closets an early spring cleaning, and take clothes in good shape to a consignment store. You probably won't make a fortune, but $15 to $20 a month isn't out of the question.
What are your favorite ways to save money for a special goal? Tell us by posting a comment below or on Money Talks News' Facebook page.
mhaithaca/Flickr
From a tofu-minded promotion by a rock-star burrito roller to a toy maker hoping to gets its sluggish doll sales back on track, here are some of the things that will help shape the week that lies ahead on Wall Street.
Monday -- Focus on Tofu
Lines will be a bit longer than usual at Chipotle Mexican Grill (CMG) on Monday, as the chain is handing out vouchers for a free burrito, bowl, salad, or order of tacos to anyone ordering a Sofritas item on Monday.
Sofritas is the seasoned tofu protein that Chipotle began testing in 2013 before rolling it out nationwide last year. This move will draw attention to the meatless dining option at the fast-growing burrito roller, and it will also encourage repeat visits because the vouchers can't be redeemed until the following day through most of February.
At a time when Chipotle is suffering from a shortage of its pork carnitas and commodity prices for meat are volatile, hooking more people on Sofritas as a salad topper or burrito ingredient sounds like a smart approach. The vouchers will be handed out all day after folks pay for their Sofritas order.
Tuesday -- Purple People Eater
Yahoo (YHOO) reports on Tuesday. The dot-com pioneer has been a hot investment since Marissa Mayer came over as CEO. However, most of the stock's gains are tied to the soaring value of its stake in China's Alibaba (BABA); its 15 percent stake in the e-commerce giant is worth roughly $38 billion.
Yahoo!'s actual financial performance under Mayer's watch hasn't been very inspiring on the top line, with largely flattish growth. The Alibaba windfall could help Yahoo! in many ways, and anything it can do to pick up its stagnant online advertising business is appreciated.
Wednesday -- Sealed With a Lid
Wednesday will be one of this earnings season's busiest days, and one company hoping to stay fresh is Tupperware (TUP). The company behind the namesake containers that are staples in many kitchens has been falling out of favor lately, and that should be on display when it reports results. It's not likely to be pretty. Analysts see a 7 percent decline in revenue from the prior year's fourth quarter, with profits taking an even bigger hit.
This is traditionally when Tupperware has increased its dividend, but that may be a challenge this time. A few years ago it moved to reset its payouts annually, based on its financial performance. There was enough growth to merit the declaration of dividend hikes in each of the three prior fourth-quarter reports, but declining profitability in 2014 and Wall Street eyeing a flat 2015 may put an end to that streak.
Thursday -- Big G on the Clock
Google (GOOG) (GOOGL) steps up with its quarterly results two days after rival Yahoo peels back the curtain. Google's the undisputed global champ when it comes to search and online advertising. Its Android is also the planet's most popular mobile operating system.
Despite Google's growth, the stock took a step back, declining slightly in 2014. It hopes to start 2015 on the right foot with well-received results. Analysts see revenue climbing nearly 10 percent over the prior year, with earnings growing even faster. However, Google has missed Wall Street's profit target in each of the past four quarters. It will have to reverse that trend this year if it wants to woo investors.
Friday -- Mattel Sick
Another company that has fallen short of analyst profit forecasts in each and every quarter over the past year is Mattel (MAT), and it, too, gets a chance to end that unfortunate streak later this week.
Mattel's been in a funk. Folks aren't buying its iconic dolls and playthings the way that they used to. Mattel shocked the market three months ago by reporting a 21 percent plunge in worldwide sales for Barbie. Even the American Girl doll line that was holding up well against Barbie's slump declined. And it wasn't just dolls betraying Mattel: Its Fisher-Price line also suffered a double-digit decline. Mattel investors had better hope that the toy maker can turn things around with the seasonally potent holiday quarter. We'll know the answer on Friday morning.
Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Chipotle Mexican Grill, Google (A and C shares), Mattel and Yahoo. The Motley Fool owns shares of Chipotle Mexican Grill, Google (A and C shares), Tupperware Brands and Yahoo. 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.
According to Accounting Web, 80 million Americans pay a tax preparer each year. And while the Internal Revenue Service began to register those preparers in 2010 and had plans to implement competency testing and continuing education requirements, a 2014 court case ruled the agency didn't have the legal authority to do so.
That means the current tax preparation landscape is something like the wild, wild West. Virtually anyone can slap on the label of "tax preparer" and set up business, regardless of whether they have any training in tax laws. To help you avoid being taken for a ride by an inexperienced or incompetent tax preparer, Money Talks News finance expert Stacy Johnson spoke with Tom Sawyer, a certified public accountant with Sawyer & Latimer PA in Fort Lauderdale, Florida.
Before you even think about paying someone for tax preparation services, see if you're entitled to it for free. There are two IRS-sponsored free tax preparation programs: Volunteer Income Tax Assistance or VITA, and Tax Counseling for the Elderly. These programs give eligible individuals free tax preparation assistance from trained volunteers. The VITA program is open to these groups:
Individuals with incomes of $53,000 or less.
People with disabilities.
Elderly individuals.
Those with limited English-speaking ability.
The TCE program is aimed at those age 60 and older, although people of any age may be able to receive guidance from program volunteers. You can search for VITA and TCE sites in your area by visiting the IRS website. Also see: "8 Ways to Get Free Help Preparing Your Taxes" for details.
2. Consider Using Software
If you're not eligible for free in-person tax preparation services, the next best thing may be to use a tax prep software program.
Depending on your income, you may be able to use software for free through the Free File program. If your adjusted gross income is $60,000 or less, head to the IRS Free File site to find software providers that will let you prepare and file your taxes for free using their programs. Make more than that? The IRS offers free electronic forms for everyone.
But even if you're not eligible to file a free tax return, you may still want to use software to prepare your own forms. Remember, most preparers are simply entering your information into a software program of their own. Rather than pay hundreds to someone else, you could spend a lot less and use a program offered by TurboTax (INTU), TaxAct or H&R Block (HRB), among others, to do it yourself.
That said, there is still an argument to be made for paying a professional tax preparer. As Sawyer tells Johnson in the video above, software isn't necessarily going to ask probing questions to ensure your return is as complete and correct as possible.
3. Interview Several Preparers
Let's assume you're not eligible for free tax prep assistance and you've decided not to go the DIY route. It could be you have a complex tax situation, or you're simply more comfortable with a human touch. You start finding the right pro by not stopping at the first preparer you come across. Tax preparers come with various backgrounds, personalities and education. Try to talk to at least three preparers before settling on the one who seems right for you.
4. Check for a PTIN and Continuing Education
While the courts did take the wind out of the IRS plans to test tax preparers, the agency still registers them. On the government website, the IRS says that everyone who gets paid to file someone else's taxes should have a preparer tax identification number. That doesn't mean much because there are no education requirements or competency testing to go along with that number. In other words, while you want to make sure your preparer is properly registered with the government, don't stop there.
You should also ask how they keep up on annual changes to the tax code. Your tax preparer doesn't necessarily need a degree, but if the extent of their experience is filing returns for Cousin Jimmy the last two years, I suggest you keep looking.
5. Look for Bad Reviews and Disciplinary Action
Along with your interviews, head online to check up on potential preparers as well. In some cases, a simple search of the preparer's name may be enough to bring up reviews. For others, you may have to dig a little deeper. Websites to try include the following:
Also, if a preparer has a professional license or credential, check with your state licensing board to see if they have been subject to any disciplinary action. For preparers who are enrolled agents, you can also check with the IRS to verify their status.
6. Ask About E-Filing
Although there is nothing wrong with filing via snail mail, look for someone who will file electronically. Doing so will significantly reduce the amount of time you have to wait for your refund to arrive. It may also eliminate the potential for delivery problems or misdirected paperwork. The IRS requires paid tax preparers who file more than 10 returns on behalf of clients each year to e-file their forms.
7. Find Out What Happens If There's an Audit
Finally, you want to pick a tax pro who isn't going to be MIA in the event you get tagged for an audit. Not all tax preparers can represent you in front of the IRS. Be sure to find out what, if any, services your preparer is willing and able to provide.
Even if you don't get audited, you don't want a preparer who is going to file away their paperwork and hang the "gone fishing" sign April 16. Make sure your preparer will be available to answer questions and provide guidance even after the filing deadline has come and gone.
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A mobile home, pianos, furniture and TVs are just some of the treasures available for free on sites like Craigslist, yerdle.com, freelywheely.com, ReUseitnetwork.org and The Freecycle Network. These sites -- sometimes nicknamed "FreeBay" -- are a boon to those needing to declutter, struggling financially or seeking the unusual. Like Forrest Gump's proverbial box of chocolates, you never know what you're gonna get.
How Freecycling Works
Membership is free, and guidelines are fairly simple. For The Freecycle Network, it's as simple as posting what you want or are giving away. In general, luck favors those responding to offers of free items rather than those seeking a particular item. I recently sought bookcases on two local freecycle Yahoo (YHOO) groups -- but nary a nibble. However, I posted to get rid of some items when I moved last summer, and people picked up the items promptly and gratefully. Let's look at some sites:
Craigslist may have more outrageous items -- like the mobile home listed near where I live -- but in general is more a site to use at your own risk. Make contact during the day, preferably at a public spot rather than your home and preferably with a friend.
The Freecycle Network is well established, with 9 million members. It has volunteer local moderators who keep up standards and weed out troublemakers.
ReUseit Network is a guide to free recycling groups. Sites are often popping up -- and sometimes just as quickly shutting down.
Yerdle works slightly differently in that the more you give, the more credits you earn to get something for free. It has the advantage of having a mobile app and is more social-media-oriented.
I have experimented with smaller membership sites like freelywheely, but offerings can be sporadic.
The Etiquette of Free
Money should never should change hands or be a condition of listing.
It is common courtesy to add a thank you in a wanted listing.
Just because you respond to an offer for an item to be given away does not mean you will get it. The donor has the discretion to decide among multiple responses. A recent offer for kids' bikes on freelywheely netted 50 responses.
Show up at the place and time arranged if you have agreed to take something.
If you are offering items, don't let the recipient know when or if you will be home but rather put the items in a designated place outside, such as your front porch.
In general, if you pick up an item, it is supposed to be for your personal use and not for resale, although some groups allow resale if it's mentioned upfront in a wanted listing.
Drugs, guns, alcohol are almost always prohibited.
My Experience
After watching these sites for several weeks, I can conclude that the most frequently items listed have been sofas, television sets, exercise equipment and children's clothing. I have picked up a few things -- like Christmas ornaments, my personal obsession -- but all these sites are very much hit or miss. Setting up an alert might help you score a great catch.
Some altruistic individuals or nonprofits also use the sites to collect diapers, books or other items for a church drive or to help out a school or family. These tend to generate a very positive response.
When the days are cold and snowy and your kids have been stuck inside for what feels like forever, you're likely to hear the above (often several times in one day). And can you blame your kids? There are still months left before temperatures rise.
If your kids have started invoking that complaint, here are 10 fun ways to keep them entertained during the winter months -- without spending a fortune.
The winter days may seem endless, but a little creativity and these fun ideas can help you keep your kids entertained, without breaking the bank. And if you need help with the bank, check out this free guide to teaching your kids about money.
Paula Pant ditched her 9-to-5 job in 2008. She's traveled to 32 countries, owns seven rental units and runs a business from her laptop. Her blog, Afford Anything, is a gathering spot for revolutionaries who understand that they can afford anything -- just not everything. Visit Afford Anything to learn how to crush limits, create wealth and live life on your own terms.
Shannon Stapleton/Reuters
DALLAS -- AT&T (T) is buying Nextel Mexico from NII Holdings (NIHDQ) for about $1.88 billion, minus the company's debt. AT&T shares slipped 5 cents to $33.32 in premarket trading about two hours before the market open Monday.
The deal will give AT&T Inc. companies that operate under the name Nextel Mexico and hold all of the wireless properties in Mexico held by NII Holdings Inc. That includes spectrum licenses, network assets, retail stores and about 3 million subscribers. Nextel Mexico's network covers approximately 76 million people.
AT&T said Monday that it plans to create the first North American Mobile Service area covering more than 400 million consumers and businesses in Mexico and the U.S. This will include Nextel Mexico's subscribers.
AT&T plans to combine Nextel Mexico with lusacell, a Mexican wireless provider it agreed to acquire in November. The company said that this will help it to more quickly improve and expand its mobile Internet service to those in Mexico, particularly to individuals who live outside major metropolitan areas.
The acquisition is subject to a bankruptcy auction and approvals by the U.S. Bankruptcy Court for the Southern District of New York, which is currently overseeing the restructuring of NII Holdings. The company, based in Reston, Virginia, sought bankruptcy protection in September. The deal, expected to close in mid-2015, is also subject to regulatory approval by Mexico's telecom regulator Instituto Federal de Telecomunicaciones.
Julia Ewan/The Washington Post/Getty Images
Cereal maker Post Holdings (POST) said it would acquire privately held rival MOM Brands for about $1.15 billion to expand in the growing bagged and hot cereal categories, sending its shares up as much as 9 percent on Monday.
The maker of Raisin Bran and Honey Bunches of Oats will pay $1.05 billion in cash and issue 2.5 million shares to the owners of MOM Brands. MOM Brands -- whose ready-to-eat cereals and hot wheat and oatmeal products include Malt-O-Meal, Frosted Mini Spooners, Golden Puffs, Better Oats and Three Sisters -- had net sales of $760 million in the year ended Dec. 27. The 95-year-old company is owned by the descendants of its founder John Campbell.
U.S. sales of bagged cereals grew 5.6 percent annually in the past four years, even though overall sales of cereals fell, Post said, quoting data from Nielsen. Post said the combined company would have an 18 percent share of the U.S. ready-to-eat cereals market. Kellogg (K) had a 32 percent market share in 2014 and General Mills (GIS) had 31 percent, according to Nielsen data.
Post, which was spun off from Ralcorp Holdings in 2012, has been aggressively pursuing deals to diversify, buying small companies ranging from peanut butter maker Golden Boy Foods to dietary supplements company Premier Nutrition. Post bought egg and dairy producer and distributor Michael Foods for $2.45 billion last year. ConAgra Foods (CAG) acquired Ralcorp in January 2013. acquired Ralcorp in January 2013.
Post also estimated net sales of about $1.07 billion for the first quarter ended Dec. 31, in line with the average analyst estimate, according to Thomson Reuters I/B/E/S. The transaction is expected to close by the third quarter of 2015, Post said.
Glen Wilson/Universal Pictures/AP"Neighbors," which stars Zac Efron, was Universal's highest-grossing movie in 2014.
It's an article of faith that the big Hollywood movie studios spend much of their capital and energy making huge, bloated tentpole films. By and large that's still true, but last year there was one notable exception.
Comcast's (CMCSA) Universal, one of the oldest of the old-line Hollywood movie houses, didn't have a single monster-budget film in release in its fiscal 2014, which traditionally runs from January to December. In spite of that, Comcast says the division is on track to record its most profitable year ever.
Once in a Century
It's quite a feat to claim that all-time record. That's because, in one form or another, Universal has been in the film business for over a century.
Comcast's definition of "profitability" is a bit loose -- specifically, it's referring to operating cash flow (i.e., the money generated by its normal business activity). On a year-over-year basis, that metric more than doubled in the first nine months of last year, rising to $634 million from the previous $291 million.
Regardless, that winning effort helped lift Comcast's adjusted net profit by 11 percent to $1.9 billion. More impressively, the film unit's win also came in a down year for movies generally, with total annual domestic gross ticket sales coming in at $10.4 billion for the industry. That was down by 5 percent from the previous year's figure, and represented the lowest level since 2011.
Cheap and Cheerful
None of Universal's 2014 releases made it on the list of top 10 domestic box office grossers for the year. In fact, the studio barely made the top 20, with the comedies "Neighbors" and "Ride Along" coming in at No. 19 and 20, respectively.
Comparing the gross of the former with the year's No. 1 -- Lions Gate's (LGF) release "The Hunger Games: Mockingjay -- Part 1" -- is almost unfair. "The Hunger Games" inhaled over $333 million in U.S. ticket sales, while "Neighbors" rang up $150 million. Considering that, if even a few of the 14 movies Universal released last year had had tentpole budgets, the unit very likely would have ended up in the red. That it didn't is, to a great extent, due to cost savings.
Comedies (since they rely on laughs rather than bang-bang action or special effects) are typically cheaper to produce than other types of films. The two aforementioned studio offerings were both inexpensive relative to their grosses; "Neighbors" cost about $18 million to make to earn that $150 million, while the numbers for "Ride Along" were a respective (and very respectful) $25 million and $135 million.
In fact, only two of Universal's 2014 releases crossed above the $50 million budget mark -- the Angelina Jolie-directed World War II drama "Unbroken," a clear hit, and the rather unsuccessful vampire saga "Dracula Untold."
Those were small change in terms of budget compared to the tentpoles released by others. "Guardians of the Galaxy," from Walt Disney's (DIS) Buena Vista, had a budget of around $170 million. And that was a relative bargain: "The Hobbit: The Battle of the Five Armies," from Time Warner (TWX) unit Warner Bros., cost around $250 million.
By Design or Accident?
At first blush, it seems like a clever, basic strategy from Universal -- film low and sell high. But its non-tentpole 2014 might be due more to timing than anything else.
That's because it fell between major tentpole release years for the studio. In 2015, it will unspool a big-budget sequel, "Jurassic World." Ditto for two other follow-ons, "Furious 7" (the latest in the apparently endless "Fast & Furious" car-thief franchise) and "Minions," the new offering in the "Despicable Me" series. The previous installments of the former two films were both released in 2013.
No matter: Going the modest route worked for the studio last year, better than a traditional tentpole approach did for certain rivals. Viacom (VIA), the parent company of Paramount, saw a 12 percent year-over-year decline in operating income for the filmed entertainment segment in its fiscal 2014. Meanwhile Lions Gate eked out gross income growth of only 6 percent across that same time span.
A Sturdy Structure
But we shouldn't expect the death of the tentpole. There are still truckloads of money to be made from big bets, after all. Exhibit A: Disney, which in its fiscal 2014 released a hard-to-believe four high-budget box-office champions (although it should be kept in mind that Disney's fiscal year ends Sept. 30, as opposed to Comcast's January-December time frame). Among these was "Frozen," grossing over $1 billion in global ticket sales.
That sort of number, plus Hollywood's tendency to hew to tradition and not change particularly quickly with the times, will ensure that the tentpole status quo remains. But if one or several studios ever face a lean period, perhaps they'll take heart from Universal's quirky 2014 and realize they can live without those king-size budgets they love so much.
Motley Fool contributor Eric Volkman not only owns shares of Lions Gate Entertainment and Walt Disney, and he also lives in Hollywood. The Motley Fool recommends and owns shares of both Lions Gate Entertainment and Walt Disney. Try any of our Foolish newsletter services free for 30 days. To read about our favorite high-yielding dividend stocks for any investor, check outour free report.
Gabriela Bustelo could not handle Facebook (FB) anymore. The 52-year-old journalist for a London-based news agency wrote for Spanish Vogue for six years. Naturally, many in her social-media circles worked in the high-flying fashion industry. Whenever Bustelo logged on to Facebook, she was confronted with an array of five-star images: Luxury vacations, designer clothes, Michelin-starred restaurants.
"Facebook is a big factory of envy," Bustelo says. "It's kind of related to fashion magazines, in the overwhelming visual display of lives, homes, clothes, and possessions." She had no interest in spending herself into the poorhouse just to keep up with the extravagant images in her news feed. So one day she logged off the site for good.
That could be good news for her pocketbook, according to experts. One study by academic researchers found that frequent Facebook users tend to have higher levels of credit-card debt and lower credit scores. Why so? Social media can discourage self-control, says Andrew Stephen, an assistant professor at the University of Pittsburgh and the study's co-author.
After all, envy is a natural reaction to photos of your contacts vacationing in Mustique with their smiling kids frolicking on the beach. Especially vulnerable are parents anxious to give their own children the best life has to offer. "If your friends are doing all these cool things and going on these fun vacations, you might feel that to remain a part of that social group, you have to participate in those things as well," Stephen says.
See It, Buy It
Just look at all the spending sparked by social-media sites. Every 30 seconds Facebook generates a whopping $5,483 in sales, followed by Pinterest with $4,504, according to New York City e-commerce analytics firm Ever Merchant. Pinterest in particular, as a visual and shopping-oriented platform, seems to whet consumer appetites for pricey goods. The average click-through purchase in 2012 was $179.36, more than double that on Facebook, according to data crunched by Fast Company.
No wonder social media seems to loosen one's hold on the purse strings. When the University of Pittsburgh's Stephen had survey respondents participate in an online auction for an iPad, those who had just been on Facebook bid higher than others who had been merely browsing the Internet.
So how can you resist this deep human instinct to try to match, or one-up, your friends' glittering social-media feeds? One tip: Remember that what you are seeing on Instagram or Facebook or Pinterest is not a full and true representation of people's lives.
Time to Take a Break
"It's basically a highlight film," says Tonya Rapley, a Brooklyn money coach and financial educator at MyFabFinance.com. "Your friend may have been in Dubai this week and Thailand last week, but you don't see the sacrifices that went into those purchases, or the debt someone has gone into." Take an occasional break with a social media fast. "It might be for a day, or a week, or a month," Rapley says. "But it lets me pull back and think, 'What am I doing here?' "
Life is not an experiential arms race. Having a more modest social-media feed does not make you less of a person than someone posting about a villa in St. Bart's. "Look for other options," suggests Rapley. "For instance, you might not be able to take a week long all-inclusive trip to the Dominican Republic like some of your friends. But maybe you can work a weekend in Miami into your budget."
Another tip: The University of Pittsburgh's Stephen suggests maintaining relationships outside of social media. Calling, e-mailing or going out to dinner with buddies gives a much fuller picture of what's really going on in their lives. Bustelo, fore example, remains on Twitter (TWTR), which she does not find to be such an orgy of conspicuous consumption. But she has zero regrets about her social-media downsizing.
www.geappliances.com
Your refrigerator may soon be able to do more than just make ice cubes or keep leftovers cool. General Electric (GE) is teaming up with Keurig Green Mountain (GMCR) to put out the first fridge that also brews cups of coffee.
It won't come cheap, and it may not come easy for either company, but let's not burst the caffeinated bubble for java junkies so quickly. The fridge itself will be cool.
The high-end GE Cafe line of refrigerators raised the bar a few years ago by offering a feature on French-door models that dispenses filtered hot water as well as cold water from the front door. GE surveyed owners of those appliances -- and two-thirds expressed interest in producing hot beverages.
At that point it only made sense for GE to explore the possibilities with Keurig Green Mountain. Keurig is the undisputed champ of one-cup servings of premium warm beverages. Its K-Cup platform has hundreds of varieties of coffees, teas, hot cocoa and warm ciders available. Keurig is the only one that has distinguished itself in this niche, and folks weren't going to pay up for a luxury refrigerator backed by a fledgling beverage platform.
That Pop Was a Flop
The fridge won't hit the market until this summer -- and you might also want to start saving up. The stainless steel, French-door refrigerator with single-serve Keurig K-Cup brewing system has a suggested retail price of $3,300. Is the convenience or the ability to free up some counter space that important to consumers?
It probably doesn't help that the last beverage-making fridge that hit the market at a similar price point didn't set the world on fire. SodaStream (SODA) teamed up with Samsung two years ago to roll out the first refrigerator that uses SodaStream technology and CO2 refills to deliver carbonated water from the dispenser. The $3,900 price tag proved too steep, and even though Samsung (SSNLF) hasn't given up on the appliance, it now sells closer to $3,000 at the outlets that still stock them.
That may seem to be a bad omen for GE and Keurig Green Mountain, but let's not assume that just because one fridge making specialty beverages at a price north of $3,000 didn't fare well the same scene will play out here. Premium coffee has a higher perceived value than soda. The popularity of hot beverages is also growing. Starbucks (SBUX) -- a Keurig partner -- has posted 20 consecutive quarters of positive comparable-store sales growth. This comes at a time when soft drink sales in this country continue to decline.
It also should work in favor of the new fridge that Keurig has partnered with most of the leading coffee brands to back its Keurig platform. The same can't be said about SodaStream, which most of the top soft drink brands view as a competitor.
Then again, Keurig brewers are relatively cheap. Replacing one would probably cost less than repairing a high-tech function on an appliance door. We'll find out soon enough if the market is ready for baristas in the fridge door. Given the country's fascination with premium coffee, we can't dismiss its chances.
Motley Fool contributor Rick Munarriz owns shares of Keurig Green Mountain and SodaStream. The Motley Fool recommends Keurig Green Mountain, SodaStream and Starbucks. The Motley Fool owns shares of General Electric Company, SodaStream and Starbucks. Try any of our Foolish newsletter services free for 30 days. Want to make 2015 a winning investment year? Check out The Motley Fool'sone great stock to buy for 2015 and beyond.
Some welcome protection for American consumers struggling with health care costs has arrived. New federal regulations call on nonprofit hospitals to establish written financial assistance policies (also known as charity care policies), limit the amount billed to patients who qualify for assistance and screen patients for such assistance prior to pursuing aggressive collection actions.
The final regulations were released Dec. 29 by the Department of Treasury and the Internal Revenue Service after a period of scrutiny for medical debt. In early December, the Consumer Financial Protection Bureau issued a report that found 43 million American consumers have medical collections on their credit reports.
Millions of Americans have only medical collections on their reports and half of them have otherwise clean credit, meaning they have no serious delinquencies and show no other signs of financial distress. The agency also found that most credit scoring systems penalize consumers who have medical collections on their credit reports.
Investigative reporters from ProPublica and NPR issued a report in early December focused on debt collection practices of nonprofit hospitals. These charitable hospitals benefit from generous tax exemptions. But the reporters found that certain nonprofit hospitals use aggressive collection actions such as going to court and getting wage garnishments. Several low-income people featured in the story had wages garnished; they claimed that they were never informed of financial assistance.
Creating a Policy and Being Transparent
Enter the Department of Treasury and the IRS. They were directed to establish rules governing the community benefit to be provided in exchange for the tax subsidies received by charitable hospitals. These new requirements, included in the Affordable Care Act, were intended to promote transparency of nonprofit hospitals' assistance policies and protect patients from aggressive collection actions if they were eligible for such assistance.
Though it has been nearly five years since passage of the Affordable Care Act, these final regulations only now clarify the requirements. Highlights:
Hospitals must establish financial assistance policies that clearly describe eligibility and the level of assistance provided, for example, whether free or discounted care is available.
Policies must include the information and documentation required to make an eligibility determination, and no one can be denied eligibility based on documentation not clearly referenced in the policy.
Each hospital must make its financial assistance policy, application and a plain language summary available on its websites.
Information on assistance must be conspicuously posted in the emergency room and admitting sites.
Hospitals must proactively inform groups in their service area of this assistance, so as to reach those most likely to benefit from such assistance.
Hospitals are also required to limit the amount charged patients who qualify for assistance to amounts generally billed patients with insurance. This requirement should put an end to the practice of charging the uninsured the highest of rates.
Collecting on Medical Debt
When it comes to collections, the regulations include strong protections. Hospitals are required to get approval from the governing board before the hospital or any third-party collection agency operating on their behalf uses extraordinary collection actions to collect on bills. The regulations include among these actions reporting collections to credit bureaus, selling debt to another party, and taking action that requires legal or a judicial process such as putting a lien on property, seizing a bank account, causing an individual's arrest or wage garnishments.
Typically, hospitals must wait 120 days following the date of the first billing statement before taking such actions. And, patients must be given a 30-day notice of the actions a hospital intends to take. The notice must also include a plain language summary of the financial assistance offered.
Finally, hospitals are required to accept applications for assistance up to 240 days following the date of the first billing statements. Both the hospital and its collection agencies must accept the application, and if the patient is found eligible, extraordinary collection actions must cease and a refund issued of amounts paid in excess of what the individual would be required to pay under the policy.
Hospitals -- and any third party collecting on their behalf -- are requited to take action to remove any adverse information that had been reported to a consumer credit bureau if the patient is subsequently found eligible for assistance for the particular account. This should help millions of Americans who've had their credit ruined because they were not informed of such assistance.
These new regulations do not go into effect until 2016. However, hospitals are currently required to rely on a reasonably good faith interpretation of the statute, which calls for transparency on policies and collection practices, and requires hospitals to make reasonable efforts to screen people for assistance.
What You Can Do
If you have outstanding bills from a non-profit hospital, regardless of whether or not you have insurance, call the hospital and ask for information on their financial assistance or charity care policy. Apply for assistance, even if the bill has already been sent to collection, or especially if it has been sent to collection. Work with the hospital and the collection agency to make sure it is not reported to the credit bureaus so that it does not drag down your credit score. If it has been reported and you are later granted assistance, make sure it is removed from your report. Remember, it is your right.
If you have medical debts that have gone to collection, it's important to review your credit reports for accuracy, and to ensure that items that are eligible for removal have been removed. It can also help to monitor your credit scores to get an overview of your standing over time. You can get your free credit reports annually from AnnualCreditReport.com, and you can get a free credit report summary updated monthly on Credit.com.
This Op/Ed contribution to Credit.com does not necessarily represent the views of the company or its affiliates.
In our Money Mic series, we hand over the podium to people with controversial views about money. These are their views, not ours, but we welcome your responses.
Today, one man recounts the moment he realized that he and his wife were drowning in debt, and how digging themselves out transformed their finances, their marriage -- and his calling in life.
Before tying the knot in 2008, my wife, Kim, and I never discussed money.
It wasn't an intentional choice to be secretive -- we just never prioritized sharing details about our income, spending habits, or debt when we were dating.
But I had financial skeletons in my closet. With $18,000 in student loans and another $18,000 from an auto loan, I brought a significant amount of debt into our marriage.
I guess I didn't worry about fessing up to Kim because I wasn't too concerned myself. I figured, with a little discipline, I'd get around to paying it off at some point.
What did alarm me, however, was an incident that happened shortly after our wedding.
In the course of one month, Kim charged $600 of new clothing and designer handbags to our joint credit card -- a fact I discovered while looking over the statement one day.
I was truly shocked, and it got me thinking: Did we have a spending problem?
What I realized, after taking a closer look at our finances, is that it wasn't just Kim who was threatening our financial well-being. In just a few months' time, we'd run up a $7,000 balance on our credit cards, thanks to a combination of Kim's shopping, my overspending on everyday expenses, and our $1,400 honeymoon cruise.
When I combined that balance with my own debt and Kim's outstanding $9,000 in student loans, I realized we were on the hook for $52,000 -- plus another $350,000 for our mortgage.
At the time, Kim was just kicking off her career as a high school teacher, and I was selling flooring. Our combined annual income landed at just around $70,000 -- and we had no savings to speak of.
Seeing the numbers in black and white was anxiety-inducing, to say the least. How had we mismanaged our money so badly? And, more important, what did this mean for our future?
Prior to tallying up our debt, we'd talked about traveling internationally, starting a family and, some day, retiring comfortably. There was so much we wanted out of life, but basic math showed us we'd never manage to make progress on our goals while carrying this $52,000 weight.
I knew it was time to get real -- and Kim agreed. So we started hashing out a plan that would put us on the path to financial freedom.
Trimming, Selling and Communicating -- Our Debt-Repayment Plan of Attack
Whether it's money, business or any other area of expertise, I've always been a big believer in drawing upon others' success.
So I set out to find inspiration from people who knew a thing or two about money management, devouring personal finance blogs and books for strategies on getting out of debt. We also enrolled in a 13-week personal finance class through our church, which focused on how to better manage money as a couple.
Once the momentum was in full swing, we were putting anywhere from $1,000 to $5,000 a month toward our debt.
The flood of new information gave way to some powerful changes.
The first thing we did was write down all of our assets, debts, income and expenses on one sheet of paper to see the big picture -- and immediately realized we needed to slash our expenses.
Next, I painstakingly reviewed every line item in our budget, and found a lot of opportunities to save. I negotiated our Internet bill to under $20, and canceled our cable package, freeing up another $70 a month. We also scaled back restaurant visits to just a few times a month, and started clipping coupons.
Believe it or not, these measures put an extra $400 to $500 in our pockets each month that we could throw toward debt repayment.
And we didn't stop there. We also took steps to bring more money in.
I started with my brand-new Nissan Altima, which I sold for $16,000, and replaced with a 12-year-old used car for $2,500. Sure, the passenger-side door didn't open from the outside, but I was bettering our financial picture -- and that made it worth it.
Selling large household odds and ends online -- like our Nintendo Wii and a few of Kim's designer purses -- also became part of our routine. And Kim completed some professional development coursework that resulted in a $1,500 raise.
Any time extra money fell in our lap -- whether through a pay boost, a hefty tax return, or an item sold online -- we automatically earmarked it for debt repayment. Once the momentum was in full swing, we were putting anywhere from $1,000 to $5,000 a month toward our debt.
To stay on track, Kim and I had weekly money talks to review a comprehensive spreadsheet we'd made detailing our finances from month to month. Clicking from one tab to the next, we could literally see our debt gradually shrinking -- which served as a powerful visual reminder of our progress.
These weekly money dates also allowed us to hash out problems -- like disagreements over how much to spend on entertainment -- and encouraged us when we were feeling down.
I remember a few months when we didn't make as much progress because I hadn't earned as much commission from work. But talking through such issues re-energized us to keep going, making our relationship even stronger.
Finally, after 18 months, we crossed over the finish line -- and became debt-free.
The Debt-Free Life: 5 Years and Counting
About four and a half years have passed since Kim and I began the new, financially-free chapter of our lives.
After climbing out of the hole, we prioritized building up our emergency fund to $15,000, which was about five months' worth of expenses -- and started saving for a big international trip we'd dreamed about.
After socking away $300 a month for two years, we finally embarked on a two-week trip to Singapore, Hong Kong and Indonesia. The best part: The vacation was 100 percent paid in cash.
As simple as it sounds, that's probably the biggest lesson I learned from our financial journey: You can't spend more than you make. It's an obvious rule of thumb, but it was something Kim and I needed to learn the hard way.
Speaking of income, a happy result of our experience is that I'm now generating two to three times more money than I was when we were swallowed in debt ... as a financial planner.
A happy result of our experience is that I'm now generating two to three times more money than I was when we were swallowed in debt.
It feels great to come full-circle, using my skills and passions in a way that generates income -- and helps both us and others work toward financial security.
Today, Kim and I have about $20,000 set aside for retirement, on top of our $15,000 emergency fund. We also have another $5,000 designated for travel and gifts, so we aren't blindsided by baby showers and birthdays.
What's more, after significantly paying down the mortgage on our condo, we sold it toward the end of 2014. Between our equity and an extra $8,000 we'd saved on our own, we were able to put a 20 percent down payment on a larger home.
And we're going to need that extra space -- our first child is due at the end of this month.
Prepping for parenthood got me thinking about what it really means to be a good example. My parents, who are divorced, both individually filed for bankruptcy -- so you could say I didn't have the strongest money role models. But when it comes to raising my own children, teaching better money habits is a priority.
And knowing that I took control of my own finances, broke the debt cycle, and forged a new path for my family empowers me to do so.
Aaron Souppouris/Engadget
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.
Sometimes it's the acquirer that gets a Wall Street pop. Shares of Array BioPharma soared after acquiring the worldwide rights to a potential skin cancer treatment. Array is snapping up encorafenib from Swiss pharmaceuticals giant Novartis (NVS), a treatment that's in a late-stage clinical trial to aid in tackling melanoma when used in combination with another Array-owned treatment.
It was a great week for the leading premium video streaming service. Netflix stock shot up after the company posted a blowout quarterly report. This was an important report for Netflix. It had disappointed investors three years earlier by falling short of its subscriber forecast for the third quarter, pointing to last year's springtime price increase as a culprit. It came through by topping its projection of adding 4 million net subscribers during the holiday quarter.
Netflix's biggest growth came internationally, and the revitalized dot-com darling also excited investors by saying that it's two years away from turning a profit on its overseas business.
A great quarter is always relative. Cree shot higher despite posting ho-hum numbers last week. The LED lighting specialist reported revenue of $413.2 million, slightly below the $415.1 million that it had announced a year earlier. Adjusted earnings for the fiscal second quarter plunged 33 percent to $0.33 a share. That doesn't sound very encouraging, but analysts were only holding out for a profit of $0.22 a share on $409 million in revenue. It's a relative success, and with Cree's stock trading well below last year's highs, it was more than enough to push the shares higher.
Peer-to-peer lender Lending Club was a hot IPO last month, but that is leading to a cautious outlook by the firms that helped take it public. Shares of the leader in this fast-growing niche that pairs up people who want to borrow money with investors looking to lend some slumped after four underwriters initiated coverage with the equivalent of neutral ratings. Their price targets of $22 to $23 offered little upside from where Lending Club was when the week began.
One lone analyst -- BMO Capital -- was more optimistic. It initiated coverage with an outperform rating and a $28 price target. However, when the majority of a debutante's underwriters are cautious, it's not a good sign.
The parent company of Redbox took a hit after its CEO stepped down. Outerwall announced that Scott Di Valerio was leaving as CEO and resigning from the board of directors. Given the challenges that face Redbox with declining DVD rental usage and a recent price increase, having to find a new leader will make it that much harder to navigate these treacherous waters for physical media. Redbox recently scrapped its poorly received digital video offering.
There was a time when Travelzoo was a dot-com darling, growing quickly on the popularity of its weekly email missives offering sponsored travel deals. It seems as if the Travelzoo Top 20 emails are no longer as magnetic as they used to be. The stock took a hit last week after the travel-deals publisher posted a 16 percent plunge in revenue from the same quarter a year earlier. It also surprised the market -- in a bad way -- by posting a small adjusted loss. Analysts were holding out for a modest profit.
Molly Riley/APThe Cobalt was one of the GM models with faulty ignition switches.By TOM KRISHER
DETROIT -- With only five days left before the deadline to seek payments, compensation expert Kenneth Feinberg has decided that 50 death cases are eligible for money due to crashes caused by faulty General Motors (GM) ignition switches.
Feinberg, who was hired by the automaker to handle death and injury claims, released new totals on Monday. The deputy administrator of the compensation fund says she expects a flurry of claims before Saturday's deadline, and she also expects the number of deaths and injuries to rise.
Feinberg, in an Internet posting, determined as of Friday that the families of 50 people killed and 75 people injured are eligible for payments. The fund has received 338 death claims and 2,730 claims for injuries. Of those, 58 death claims have been rejected as ineligible for compensation, as have 328 injury claims. Feinberg is either reviewing or awaiting documentation on 230 additional death claims and 2,327 injury cases.
A Problem for Years
GM was aware of faulty ignition switches on Chevrolet Cobalts and other small cars for more than a decade, but it didn't recall them until 2014. On 2.6 million of them, the switches can slip out of the "on" position, causing the cars to stall, knocking out power steering and turning off the air bags. Last year the company set aside $400 million to make payments but conceded that could grow to $600 million. The company's chief financial officer told analysts earlier this month that those numbers have not changed. Compensation for deaths starts at $1 million.
Camille Biros, deputy administrator for Feinberg, said that so far the GM claims are following the usual pattern for compensation cases with a large number of claims at the beginning, a lull in the middle, and a large number toward the deadline. "We've had a busy month already," Biros said. "We're expecting that in the last few days of this week ... we'll get a lot of claims in."
Feinberg is among the nation's most prominent compensation experts. He previously handled payments to victims of the 9/11 terrorist attacks and the BP oil spill. Claims filed by mail will trickle in next week and will be considered as long as they are postmarked by Saturday.
Feinberg has promised to decide the claims within 90 to 180 days from when he determines they are substantially complete. His law firm expects to continue working on claims at least through the spring, and perhaps into the summer. The ignition switch debacle, which brought congressional and Justice Department investigations and the maximum $35 million fine from the government's auto safety agency, touched off a companywide safety review. That brought a total of 84 recalls involving more than 30 million vehicles.
Thousands of flights were canceled today -- and more are already canceled on Tuesday. That means hundreds of thousands of potentially stranded passengers. Will you know what to do if it happens to you?
Problems in the Northeast are rippling outward across the country, The Associated Press reported. In West Palm Beach, Florida, where temperatures are expected to be in the 70s Monday, about 30 percent of flights have been canceled.
First thing to know: What do airlines owe travelers when they cancel a flight? You're not going to like the answer: Nothing. But they will make an effort to book you on the next available flight at no extra cost. That's the case whether you're stranded midway through your trip or are about to embark.
Allowances Vary
Most major airlines are allowing customers whose flights are canceled in the next few days to book new flights without paying a penalty. Customers ticketed on flights to dozens of Eastern airports are generally eligible for the allowance, though specific terms vary by airline.
"If your flight is canceled, most airlines will rebook you on the earliest flight possible to your destination, at no additional charge," USA.gov says. "If you're able to find a flight on another airline, ask the first airline to endorse your ticket to the new carrier. This could save you a fare increase, but there is no rule requiring them to do this.
Airlines have some incentives to help you. "Your airline ticket represents a contract between you and the airline; therefore, standard contract rules apply, leaving airlines open to a potential lawsuit if they don't make reasonable efforts to fulfill their side of the bargain," says USA Today. "For that reason -- and to keep customers happy -- most airlines will try to rebook you as soon as possible, as space and weather permit."
Some federal rules do apply. The U.S. Department of Transportation explains, "If your flight is canceled or diverted or experiences a lengthy delay, and you choose to cancel your trip as a result, you are entitled to a refund for the unused transportation - even for nonrefundable tickets - and for any bag fee that you paid."
When the weather is really bad, airlines often offer passengers more options. Says ABC News: "In the case of bad weather, airlines issue flexible policies that allow travelers to take their trips at a later date. These policies also waive change fees, even on the lowest-priced, most restrictive tickets.
Delta (DAL), for example, promised to refund the cost of tickets for canceled flights during last January's storm. It also offered passengers whose flights weren't canceled a free, one-time ticket change if they were traveling to one of the East Coast destinations most affected by the storm."
JetBlue, criticized for closing nearly its entire operation in Boston and New York for a short stretch last year, promised $50 credits or 5,000 frequent-flier miles for each canceled flight to an estimated 150,000 affected travelers, according to the Hartford Business Journal. It also pledged to "review compensating stranded customers for their out-of-pocket expenses."
The Days of Freebies May Be Over
If your flight is canceled because of weather, you can ask for meal and hotel vouchers, but don't get your hopes up. Travelers' experiences vary. Money Talks News editor Karen Datko said she was once on a flight to Philadelphia that was forced to land in Pittsburgh because of thunderstorms. The airline provided hotel vouchers to many stranded travelers on the flight, then hired a bus to drive others to Philly at no extra cost.
But Frank Zurline, owner of Bellingham Travel & Cruise in Bellingham, Washington, said the days when airlines shelled out such goodies are pretty much over. "Believe me, when they start charging you for everything, it's a nickel-and-dime industry," he said in an interview.
Airlines may dole out food and hotel vouchers at their discretion, but that's usually when the carrier is at fault, not for cancellations because of weather. Travel expert Mark Murphy with Travel Alliance told Money Talks News: "If it's weather, they don't have to pay you for your hotel or anything else. On the other hand, if it's a mechanical or another issue, there may be more flexibility for you as a consumer to negotiate."
One Exception: Valued Customers
There's an exception: If you're a valued frequent traveler, you're likely to get better treatment. That happened to Murphy once when faced with a flight cancellation on a business trip.
His carrier, US Airways, offered a seat on its next available flight to his destination. But it was the following day, too late to make his meeting. He says he approached airline representatives pleasantly and pointed out that he'd flown with the airline 66 times that year. Could they please help him out? They found him a seat on another airline that same day.
To be fair, he says, feeding and lodging the tens of thousands of travelers stranded in events like last year's would have been prohibitively expensive for the airlines.
9 Tips for Coping With Cancellations
You can take steps to reduce the inconvenience and stress of flight cancellations.
Buy tickets from a travel agent. You'll pay a small fee, perhaps $20 or $30. But a good agent watches your itinerary and, if your connection is canceled, rebooks you on another flight while you're in the air, Murphy says. You can waltz off the plane and onto your next flight while your fellow passengers scramble to find new accommodations.
Consider trip insurance. But be realistic about the coverage. For example, American Airlines says on its website: "Trip cancellation coverage will only refund prepaid, nonrefundable payments if you have to cancel for an unexpected covered reason. Covered reasons may include sudden medical emergencies, death of a family member or traveling companion, certain terrorist acts, being called for jury duty, or bad weather that completely shuts down your common carrier."
Get early warnings. Download your airline's app onto your phone and sign up for flight alerts. Be sure the airline has your phone number and email address. Keep an eye on Flight Aware while traveling to learn immediately if your flight's been grounded. The sooner you learn of trouble, the faster you can act.
Get rebooked. Line up at the customer service counter and, at the same time, call the airline's toll-free number. If you find a flight on another airline, ask your first carrier to endorse your ticket to the new airline.
Stay open to alternatives. When re-booking, try other airports or other cities near your destination. Try Amtrak, buses and even car rentals. Before renting a car, ask about drop fees and mileage charges for one-way trips.
Be nice. When asking overwhelmed airline personnel for help, remember that they didn't cause the problem. Try to be gracious, if for no other reason than it'll get you further.
Buy a one-day pass. If you're stuck in an airport and you don't belong to your airline's frequent-flier club, purchase a day pass for about $50. You get entry to a comfortable lounge and use of the loyalty program's hotline, advises The Associated Press. The main benefit is that members get better, quicker access to help from airline personnel in the lounge.
Travel in Europe. European Union laws are more generous than those in the U.S., says USA Today. Your airline must provide meals and "a hotel stay when the cancellation results in an overnight layover and a full reimbursement when the cancellation delays the passenger for five hours or more."
