Mercedes-BenzMercedes-Benz's Super Bowl ad featured a retelling of the tortoise-and-hare tale with a high-performance twist. Early results suggest that the ad was quite effective.
So, who won the Super Bowl?
No, not the game on the field. With all due props to Tom Brady and crew, it's the advertising Super Bowl that matters -- at least, to the companies that spent millions on those coveted ad spots.
Eleven auto brands ran ads during (or immediately before) Sunday night's NBC broadcast of Super Bowl XLIX. Each cost millions of dollars to run -- and in some cases, millions more to produce. Which generated the best results?
Which Advertisers Got the Biggest Results?
There are lots of ways to measure a TV ad's effectiveness. When it comes to car ads, one useful metric is this: How much immediate interest did the ad create in the car it advertised?
Car-buying research services Edmunds.com and Kelley Blue Book tracked surges in search interest on their sites during the Super Bowl. Their conclusion? A few brands did very well, but Toyota's (TM) luxury brand, Lexus, was the night's biggest winner, followed by Mercedes-Benz and BMW (BAMXF)
Lexus ran ads for two models during the game. In the second quarter, a spot called "Make Some Noise" featured the NX 200t crossover, and another called "Let's Play" ran in the third quarter and showed the RC 350 sports coupe sliding around like a radio-controlled toy car.
Those ads together gave Lexus a 37 percent increase in interest during the Super Bowl, Edmunds said, tops among automakers, and Kelley Blue Book said that the "Let's Play" spot was the most effective car ad of the night.
Strong Showings for German Luxury Stalwarts
Mercedes-Benz scored big with a lighthearted 60-second retelling of the tortoise-and-hare tale, in which the tortoise gets into a Mercedes AMG GT S sports car to help out his cause. Edmunds said that the ad drove a 36 percent increase in interest in Mercedes, second overall behind Lexus -- and a 2,189 percent increase in inquiries about the AMG GT S model.
It may seem a little odd to run a Super Bowl ad with mass-market appeal for a sports car that starts at $129,900. But in part, it's about building the Mercedes-Benz brand as much as it is about selling the AMG GT S itself -- and it's also about reaching all at once the small group of affluent buyers who might be interested in the model.
BMW saw good results with a well-executed ad featuring former "Today Show" co-hosts Katie Couric and Bryant Gumbel in an electric BMW i3. Edmunds.com tracked a 583 percent increase in interest for the i3 and a 16 percent overall boost for the BMW brand, while Kelley Blue Book saw a 1,131 percent surge in interest for the model.
Also worthy of mention: Super Bowl regular Fiat Chrysler (FCAU) scored a 52 percent surge of interest in Edmunds.com's metrics for its Fiat brand with a cheeky ad in which a bouncing blue pill transforms a Fiat 500 into the larger 500X model. And its Jeep brand saw interest increase 43 percent on Kelley Blue Book with a third-quarter spot featuring its new Renegade model.
But Do These Ads Really Have Much of an Effect on Buyers?
They can. A year ago, Fiat Chrysler's tiny Maserati brand ran a Super Bowl ad for its then-new Ghibli sedan. The ad kicked off a surge of interest that helped Maserati more than double its U.S. sales in 2014 -- a good precedent for Mercedes and its AMG GT S.
And in 2011, Chrysler's powerful two-minute "Imported from Detroit" ad featuring rapper Eminem did a lot to put the scrappy Detroit brand back on Americans' mental radar -- and their shopping lists.
However, it may be a few months before we know which -- if any -- of 2015's ads will join them in driving big traffic to an automaker's showrooms.
Motley Fool contributor John Rosevear has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. Find out the easy way for investors to ride the new mega-trend in the automotive industry in our free report.
GoDaddy got itself into another boatload of trouble over a Super Bowl ad last week, when it had to pull its lost puppy ad after angering animal rights groups. Heartwarming footage of a brave puppy finding its way home only to be told on arrival that the happy owner had just sold it online is not the stuff of charm or nostalgia.
Instead, the company ran a straightforward spot about small business owners. Variety raised the question of whether the entire string of events was another ploy to gain attention. The company had used risqué spots and pushed the boundaries of normal taste in the past as a way to gain mindshare and expand the business.
In one sense, it worked. GoDaddy is the largest registrar of Internet domains in the world. But a brief look at the company's SEC S-1 document, filed last year in anticipation of an eventual initial public offering that will likely happen this year, shows that a basic high-tech industry tenet doesn't always hold true. As GoDaddy has proven, increased bulk doesn't necessarily bring profitability.
Ready for an IPO?
Filing IPOs for high-tech companies that never once were profitable isn't new. The practice ran rampant during the dot-com boom and subsequent bust. The collapse largely scared off the practice for years, but it has seen resurgence of late. Box (BOX), for example, had put off its IPO last year. To do so, it had to bring in another large round of investment for enough cash to maintain operations. In January, Box finally had its public debut, with prices on its first day going from $14 to a $23.23 close, according to Fox Business.
In the red, these companies promise investors a bright future because of expected growth. Not only will increasing numbers drive up share prices, but eventually they will enable the business to invert the relative sizes of expenses and revenues to create profit. It worked for Amazon (AMZN) and Google (GOOG), right?
But GoDaddy is showing the limit of the theory. As the S-1 declares, "We operate the world's largest domain marketplace, where our customers can find that unique piece of digital real estate that perfectly matches their idea." Forget future scale. GoDaddy has already topped its industry and yet remains in the red.
It Started as Jomax in 1997
According to the most recent updated S-1, the company started as Jomax Technologies in 1997 and two years later changed the name to GoDaddy. It achieved positive cash flow by 2001, but not profitability. With Super Bowl ads going back to 2005, growth has been strong. Between 2009 and 2013, GoDaddy hit a bookings compound annual growth rate of 17 percent.
A shift in ownership and change in accounting happened in 2011, so the details of operations before then are unavailable. But in 2011, the company post more than $324 million on revenue of $894 million. In 2012, the net loss was $279 million on $910 million in revenue. The loss contracted sharply to roughly $200 million on $1.1 billion in revenue in 2013. The first nine months of 2014 showed $1 billion in revenue and $117 million net loss, compared to $825 million revenue and $134 million net loss in the same period of 2013.
The gap is closing, but that's after 17 years of business and, literally, becoming the largest company of its type in its industry. If that's not enough scale to see at least a few drops of black ink, what would be? Eventually a company needs to make more money than it spends. If that's not possible through growth, then one of two conditions is true. The business should control costs, rather than drive expansion, or management and investors should recognize that the company is not viable.
The old assumption that tech investors should take the growth view may be wrong. Perhaps what the industry and those who put money into it should consider is whether a company can build a solid business that can last. But that doesn't get the large jumps in stock price and an income means the old blue chip strategy of relying on dividends. It's a concept that remains foreign to the tech set.
NEW YORK -- U.S. stocks ended sharply higher Monday after a late rally driven by hopes for a Greek debt deal and as energy shares bounced with oil prices.
Greece's new government has proposed ending a standoff with its international creditors by swapping its outstanding debt for new growth-linked bonds, Finance Minister Yanis Varoufakis was quoted as saying on Monday.
Adding to the day's advance were energy shares, with the S&P 500 energy sector ending up 3 percent. U.S. crude settled up 2.8 percent at $49.57 a barrel, despite a strike at U.S. refineries that could boost crude supply.
Markets are finding some comfort in the fact there is a dialog that has the potential to lead to something other than a Grexit.
The sharp move higher came late in a session where the S&P 500 repeatedly moved between positive and negative territory.
"Markets are finding some comfort in the fact there is a dialog that has the potential to lead to something other than a Grexit. That is a constructive narrative for equity markets, not just in the U.S. but globally," said Peter Kenny, chief market strategist at Clearpool Group in New York. "Grexit" refers to the possibility of Greece exiting the eurozone.
The Dow Jones industrial average (^DJI) rose 196.09 points, or 1.14 percent, to 17,361.04, the Standard & Poor's 500 index (^GSPC) gained 25.86 points, or 1.3 percent, to 2,020.85 and the Nasdaq composite the Nasdaq composite (^IXIC) added 41.45 points, or 0.89 percent, to 4,676.69.
The gains also follow the worst monthly performance for the indexes in a year.
Shares of Exxon Mobil (XOM) were up 2.5 percent at $89.58 after it reported a smaller-than-expected profit drop. The results follow several disappointing earnings results from many multinational companies.
The pace of growth in the U.S. manufacturing sector slowed more than expected in January. U.S. consumer spending recorded its biggest decline since late 2009 in December, with cheaper gas not translating to higher activity.
Solar power companies were among the strongest of the day after China said it aims to install 15 gigawatts of solar power capacity this year, 43 percent more than it added in 2014. First Solar (FSLR) climbed 7.5 percent to $45.48.
About 7.7 billion shares changed hands on U.S. exchanges, above the 7.4 billion average for the last five sessions, according to BATS Global Markets.
NYSE advancing issues outnumbered decliners 2,271 to 821, for a 2.77-to-1 ratio; on the Nasdaq, 1,746 issues rose and 987 fell, for a 1.77-to-1 ratio favoring advancers.
The benchmark S&P 500 posted 4 new 52-week highs and 6 lows; the Nasdaq composite recorded 25 new highs and 82 lows.
-With additional reporting by Chuck Mikolajczak.
What to watch Tuesday:
Automakers release vehicle sales for January.
The Commerce Department releases factory orders for December at 10 a.m. Eastern time.
These selected companies are scheduled to release quarterly financial results:
PHOENIX -- Apple (AAPL) said Monday it will invest $2 billion over 10 years to open a data center in the Phoenix suburb of Mesa that will be the company's fifth in the U.S. and serve as a control facility for the other four.
The announcement comes four months after an earlier Apple plan for the 1.3 million-square-foot facility it bought in 2013 failed. The tech giant had a deal with Merrimack, New Hampshire-based GT Advanced to use the plant to make sapphire glass for its products, but the company declared bankruptcy in October after production issues developed. GT openly accused Apple of using a "classic bait-and-switch strategy" with a deal that he called "massively one-sided."
Apple lawyers accused the GT of making false statements about the deal, among other allegations.
After the GT failure, Apple said it would work to find another use for the plant. It also has been working to help more than 600 GT employees who lost their jobs.
"This multi-billion dollar project is one of the largest investments we've ever made, and when completed it will add over 600 engineering and construction jobs to the more than one million jobs Apple has already created in the U.S.," Apple said in a statement. "Like all Apple data centers, it will be powered by 100 percent renewable energy, much of which will come from a new local solar farm."
An Apple spokesman said construction on the new data center should start late next year, if not earlier. GT is storing advanced furnaces it planned to use in its Apple venture at the plant while the furnaces are being liquidated, delaying the immediate use of the plant.
Apple company expects 150 permanent workers at the site, in addition to construction crews and contractors.
Apple also has committed to building and financing 70 megawatts of new solar power generation, enough to power more than 14,500 homes.
"This is a great day for Arizona, and we have moved rapidly to make this happen and take advantage of Apple's interest in our state," Arizona Gov. Doug Ducey said in a statement. "Apple is by far one of the most innovative and successful companies in the world. Its decision to bring this new facility to Mesa is a huge win for Arizona and a high testament to our business-friendly climate and talented workforce."
GT's October bankruptcy and ensuing effort to shut down the factory marked a surprising turn after state, local and business leaders previously bragged that the plant would be a major boost to the Arizona economy.
Then-Gov. Jan Brewer had hailed Apple's decision to open the plant in Mesa in November 2013, calling it a sign that the Arizona's efforts to provide a pro-business climate were paying off. The state has cut business taxes and created several incentives designed to lure new manufacturing businesses in the past several years.
Apple's data centers provide the computer muscle for its iCloud, ITunes, Siri and other products.
The next time something really bad happens to you, check the terms of your insurance policies. There's a chance you may be covered.
By bad, we mean something expensive, of course. If something expensive happens to you, consult your insurance policy or contact your agent. While you're probably just as likely to learn that you aren't covered for whatever calamity has befallen you, many insurance policies -- homeowners in particular, but also auto and life -- occasionally offer compensation for unusual but somewhat common problems.
As a general rule of thumb, the higher your premiums, the likelier you are to find coverage for more obscure problems, says Brett Woodward, a senior vice president at NFP, which specializes in offering life insurance for high-net-worth individuals. Still, even if you have a bare-bones policy, it can't hurt to give it a once-over. Maybe you are covered, or after reading this, you may want to adjust your policy so you have safeguards against these and other events. Here are some surprising protections you might find:
1. Your College Kid's Belongings
Some insurance policies will cover your child's belongings -- if he lives in a dorm, which is apparently considered less risky by the insurance industry than an off-campus apartment. (Good luck finding coverage for that on your policy, although your child can, however, get renters insurance.)
"The average college student will bring between $5,000 and $10,000 worth of personal property to college, ranging from technology, electronics and textbooks to clothing, furniture and bicycles," says Dick Lavey, chief marketing officer at the Hanover Insurance Group, in Worcester, Massachusetts. "Most students will suffer a loss at least once, with the most common cause being theft and the most severe being fire and weather events."
2. Yard Damage
You know that if a tree falls on your house, your homeowners insurance typically covers that. But if a tree falls onto your fence or guest cottage, there's a chance you're covered for that, too. Scour your policy for the term "other structures." If you find it, you've probably struck gold.
"Other structures coverage is a component of your homeowners insurance that pays for damages to other structures on your property, such as detached garages, sheds, fences and cottages," says Elaine Montgomery-Baisden, vice president of personal insurance at Travelers. A standard home policy will typically provide 10 percent of your total dwelling coverage, so if your home is insured for $200,000, you'd receive up to an additional $20,000 for those extras around your house.
3. Car Seats
If you were unlucky enough to be in a car wreck, but lucky enough to emerge unscathed, you might want to replace your young child's car seat -- even if doesn't appear to have been damaged. In fact, just about every safety expert out there will tell you to replace it to be on the safe side.
Many auto insurance policies will pay for the replacement -- a good thing considering how costly car seats can be. According to the parenting website WhatToExpect.com, you'll likely pay $90 to $350 for a good car seat (or far more, if you choose). Hanover Insurance, for example, pays $300 to replace a car seat, Lavey says. It probably goes without saying that in most and probably all cases, the car seat needs to be in your car at the time of the accident.
4. Spoiled Food
Say you bought a lot of steaks for a party, and your power went out the night before, so everything in the refrigerator spoiled. Many homeowners insurance policies cover that. Granted, you aren't likely to try to collect for the lost food in your refrigerator. You'd have to pay your deductible first, and chances are, it's higher than whatever is in the fridge. But this tidbit is worth remembering, just in case your power not only goes out during a storm, but a tree also collapses into your living room -- and on your shed (remember those other structures). In that case, especially if your refrigerator is well-stocked, you'll want to include spoiled food in your claim.
5. Chronic Illness
Some life insurance policies offer a chronic illness benefit. Odds are, you're well aware of whether your policy has it or not since you have to pay extra for this. But if you have an elderly parent who is chronically ill and needs significant care, assuming you're the executor of his or her estate, you may want to check and see if there's a life insurance policy lying around, and one with a chronic illness benefit.
"Some people who are concerned about outliving their money have these. It isn't meant to be a substitute for long-term care insurance, but it complements it," says Ray Caucci, senior vice president of product management, underwriting and advanced sales at Penn Mutual.
The downside, of course, is that the money spent on your loved one's care means less money will go to beneficiaries on the policy. That said, it may not be the first place you turn to, but if money is getting scarce, and a rider that pays for care when you're gravely ill is on the policy, you may want to utilize it.
6. Mice in your car
Say a family of mice now resides in your car, thanks to your stash of fast-food bags and crumbs on the floor. Or maybe a squirrel got into the engine and snacked on your wiring. It happens occasionally, and many car insurance policies will cover you for the damage -- as long as you have comprehensive coverage. Interestingly, if the same mouse and squirrel were to get inside your home and chew the wiring in the walls or do some other damage, most homeowners insurance policies won't cover that.
7. Gravestones
If a spouse or another family member has passed on, many homeowners insurance policies consider a gravestone an extension of your belongings and will often reimburse you for $1,000 to $5,000 if something should happen to it. After all, teenagers have been known to occasionally vandalize gravestones.
The moral of the story? If something expensive happens to you, by all means, check your insurance policy -- just don't get your hopes up.
Shutterstock
While achieving success in the stock market is never effortless, at least one renowned investor believes that racking up appreciable long-term gains is easier than commonly believed.
Joel Greenblatt, founder of Gotham Capital hedge fund and an adjunct professor at Columbia University's Graduate Business School, introduced his concept of "Magic Formula" investing in "The Little Book That Beats the Market." First published in 2005, the book became an investing classic, selling hundreds of thousands of copies. In 2010, he updated his findings in a follow-up titled "The Little Book That Still Beats the Market."
Greenblatt believes that identifying and investing in companies with both a high return on capital and a high earnings yield will produce market-beating results. This is the essence of the Magic Formula, although he employs a proprietary ranking system to select his investments.
According to Barron's, the Magic Formula produced an average annualized return of 19.5 percent when back-tested on stocks with market capitalizations of $1 billion-plus between 1988 and 2009. This performance outpaced the return of the S&P 500 index (^GPSC) by more than 10 percentage points over the same period. Greenblatt's Gotham Capital fund is itself well regarded for using this technique to post 40 percent annualized returns between 1985 and 2006.
While the global economy has weathered a deep recession and a painfully slow recovery since the debut of the "Little Book's," the core principles -- which emphasize finding undervalued stocks -- still hold true. And in a market that seems to consistently chase new highs, his "Magic Formula" may be more relevant than ever.
Understanding the Ratios
In his brief book, Greenblatt repeatedly assures the reader that return on capital and earnings yield are straightforward, easy-to-use ratios. He calculates return on capital using three terms: earnings before interest and taxes/(net working capital + net fixed assets).
EBIT makes it easier to compare earnings between companies that may have different debt levels and tax rates. Net working capital is comprised of current assets minus current liabilities, excluding cash. Net fixed assets is made up of the net depreciated cost of property and equipment.
The point of return on capital, according to Greenblatt, is to "purchase a business that can invest its own money at high rates of return rather than purchasing a business that can only invest at lower ones."
The second measure, earnings yield, is simply: EBIT/enterprise value, where "enterprise value" is a company's market capitalization (both common and preferred stock) plus its net interest-bearing debt. Essentially, enterprise value allows an investor to see a corporation through the eyes of an owner purchasing a business stake, as it represents not just the equity acquired, but the liabilities assumed.
Earnings yield measures earnings before interest and taxes on that investment stake. The higher the yield, the more earnings a company's equity and debt are producing. On this metric, Greenblatt exhorts investors to "purchase a business that earns more relative to the price you are paying than less. In other words, a higher earnings yield is better than a lower one."
Why the Magic Formula Is Especially Relevant for Seniors
As Warren Buffet has often done, Greenblatt cites legendary investor Benjamin Graham as an influence on his investing style. Among Graham's numerous contributions to investment theory is the following insight: A stock that can be purchased for less than the liquidation value of its assets is a bargain for the taking.
As Greenblatt points out in his book, such stocks were found in abundance in the decades following the Great Depression, when Graham's investing career was at its zenith -- but not so much now.
Another limitation of this (and many other value approaches) is the difficulty of timing. Identifying and purchasing a company you believe to be undervalued begs a fundamental question: When will the market agree with your logic and bid up the company's price? Some stocks remain undervalued for years upon years. Graham's strategy zeroes in on mismatches between market value and liquidation value, but it doesn't speak at all to timing.
The Magic Formula, however, identifies stocks that are undervalued relative to their income-generating ability -- as evidenced by a high earnings yield. Coupling this with a present positive return on assets eliminates from the screening process stocks that may be bargains or value situations but that don't yet show substantial earnings power. Thus the formula narrows selections to stocks producing current results, which have potential to be noticed sooner by market participants.
This potential well serves the typical senior/retiree investor, who may willingly be in for a one-, three- or five-year investment, but doesn't necessarily want an open-ended holding period. Greenblatt recommends using his strategy for at least three years and even provides a method in "The Little Book" for utilizing one-year holding periods.
Getting Started With the Magic Formula
Perhaps the easiest way to get ideas for Magic Formula stocks is to visit Greenblatt's education site: magicformulainvesting.com. You'll find a handy stock screener based on the professor's particular criteria and adjustments, which is free to use upon registration. The formula tends to favor small-capitalization stocks, and the screener is set to a $50 million market cap by default, so conservative investors may want to play around with larger capitalizations, say $500 million or above.
If you prefer to go it alone, the last section of "The Little Book That Beats the Market" gives some handy tips for finding Magic Formula stocks with the type of screening tools your online broker might provide. The most pertinent advice is to substitute return on assets if return on capital isn't an option, and to screen for low price/earnings ratios as a proxy for earnings yield (they share a roughly inverse relationship). In any case, simply paying attention to return on capital and earnings yield in 2015 may lend a little magic to your stock investing results.
As the American workforce shifts away from a full-time employee model to a gig economy where workers earn income from a patchwork of different projects, tax time can be more complicated.
If you work odd jobs to supplement your income -- say a neighbor pays you for dog walking, tutoring or house cleaning -- then you're still supposed to report that money as income to the IRS even if you're not getting a W-2 (the income-reporting tax form used for employees) or 1099 (the income-reporting tax form used for independent contractors).
"Whether you get it in cash or check, if you're performing a service and getting paid for that, it's income," says Paul Gevertzman, a partner at the accounting firm Anchin, Block & Anchin in New York. "You're required to report it, and that's your responsibility, whether or not anybody else reports it."
Here's a look at what you need to know about giving or receiving income through person-to-person transactions.
If You Give Cash Payments
Say you pay a babysitter or nanny to watch your children. Many parents may not realize that they need to take some extra steps to comply with tax laws. "If someone, like a nanny, works out of your house on a full-time basis and doesn't have a business, they're supposed to get a W-2 from you," says Andrew Schwartz, founder of Schwartz & Schwartz, an accounting firm in Woburn, Massachusetts. The deadline for issuing W-2s to employees this year was Feb. 2.
To determine whether the IRS views your child care provider, gardener, cleaner or other worker as a household employee, Gevertzman suggests looking at how much control and autonomy the person has. "Do they perform it for others on a regular basis?" he asks. "Do they come to your house, or do you drop the kids off at their house? Are they operating it as a business, which would lean towards being an independent contractor?"
If you're paying an individual at least $1,900 per year, you're also legally supposed to withhold Social Security and Medicare taxes from their pay and pay the employer portion of those taxes, just as a company would do for its employees. "You have to file paperwork, and states have different rules than the IRS," Schwartz says. "Some states have quarterly filings, but in Massachusetts, it's actually monthly." IRS Publication 926 details the tax laws around household employees.
If You Receive Cash Payments
If you're the one receiving funds through a person-to-person transaction, then you need to keep track of those payments and tips whether or not you're issued a W-2 or 1099. "If they're a cab driver, they may want to keep track of tips not reported to their employer. A bartender is supposed to report all their tips to their employer," says Andrew Poulos, principal of Poulos Accounting & Consulting, Inc. near Atlanta. "If they get tips that are not reported to the employer, they are still legally supposed to claim those tips on Form 4137 with their tax return." IRS Form 4070 is a different form that's used for reporting tips to an employer, and employees who receive at least $20 in tips in a month are expected to file on the 10th of the following month.
Money earned through services like TaskRabbit.com is also taxable (though you'd receive payment via check or PayPal, not in cash). If you run a side business or a full-time business -- say you freelance as a graphic designer, writer or chef -- then you may need to file Form 1040 (Schedule C) with your tax return.
"Disclose all your income accurately," Poulos says. "Cash-based business gets audited, and they're not just going to go based on the 1099. They're going to go based off of bank statements, and if you report that you've made $30,000, and they get your bank statement and start adding up the deposits [that don't match], you could be in hot water."
Are you tired of thoughts about money that make you ill? Perhaps you've said at one time or another: "Will I have enough money for retirement? How can I pay off my credit card debt? How do I manage all of these medical bills? I wish I had more money to have fun, but that dreaded house payment is eating me alive!"
OK, maybe you haven't thought about all of these, but remember I'm the financial planner, and these questions and thoughts plague many. So perhaps that begs this question: Is there such a thing as financially happy couple? There are many financial battles to overcome, but you can believe financially happy couples do exist. And let me assure you, feeling happy doesn't have anything to do with driving a Maserati.
Simple but smart, these 10 ways will make anyone breathe a sigh of relief. They lighten the load, and if you can just make a little progress with each one, your smile is certain to start growing a little wider.
1. Make Giving a Priority
Giving, to your church, a charity, or in other ways is the best way to keep money from ruling over your life! It helps us to learn to be more selfless and not put money as the top priority in our lives. I know a couple that secretly pays dinner bills for restaurant goers from time to time. What a nice gesture! It would be easy to keep the money for themselves but they choose this selfless act of kindness.
For us it started with tithing. Trust me this wasn't easy for us. I've had a church background all of my life, so tithing comes to easy to me. With my wife, Mandy, it's taken some time and trust in Jesus to allow the both us to tithe together. It made for some interesting conversations, but the power was in the conversation and being able to work it out together.
We also sponsored a child through Compassion. It's a small amount each month, but we know it will make a huge impact on the kid that we're helping. Giving should be contagious.
2. Manage Spending Well
I won't bore you with a budget speech, but I will tell you it's smart to have a plan for your spending; otherwise, your money will own you. It will tell you where it wants to go everything month (with so many temptations to spend) and you'll likely do as it says.
If you're read my blog, you'll know that I hate budgeting, even though I recognize that budgeting is super-important for a couple to succeed financially. That's why I thank God everyday that he put Mandy, in my life, and she loves to budget. Opposites attract, right? I might be the financial planner in our relationship, but Mandy is our household CFO and is charge of all our finances. Mandy keeps it simple and uses an Excel spreadsheet and paper and pen. You can also set up a spending plan and track it using personal finance or budget software like Mint.com or YNAB. The key is to find what works best for you and your spouse.
3. Seek Alternative Sources of Income
My friends, it's not all about cost containment and smart spending. You can only squeeze your pennies so tight. Seeking alternative sources of income is a game changer. Everyone has some skill that could be marketable. And if you don't have any marketable skills, you can certainly learn some.
Six years ago, I never thought that starting a blog would produce extra money for our family. That became even sweeter when a few years later Mandy's blog was able to replace her income from her old corporate job. Making extra money allowed us a little breathing room so weren't always stressed out on how to pay the bills.
We definitely treated ourselves to several new and nicer things. But after we got through that phase, we've started to focus more on giving back. Either through more giving or investing into ways to share our message more like this blog. The other exciting and unexpected thing that we discovered is that by working on our businesses together we've grown that much closer together.
Financially happy people have long-term goals. To the extent possible they have a plan for their finances, how much money they'll need once they retire and even consider funding college or leaving an inheritance for their kids.
Those concepts feel overwhelming when you're just trying to pay for the last doctor's visit? Start small and get some help. Find a financial adviser you can trust that will help you create your plan and show you what just a little bit of savings each month into your 401(k) or IRA can do for you several years down the road. For example, we didn't have a lot to save for our kids to go to college someday, but we decided to start small. What used to have two zeroes behind it now has three. It's amazing what small, steady plodding can do!
Make sure your goals aren't always centered around money, too! Some of our long-term goals include traveling to foreign countries and being strong Christian parents that our sons will respect. Working toward these goals together infuses a sense of happiness that can't be avoided.
5. Have Short-term Goals -- and Share Them, Too
Yes, short-term plans are important, too. I don't mean monthly, but think about what the next three years are going to look like. Set some attainable goals -- such as funding your savings account with X amount of dollars, paying off your car loan and starting contributions to your long-term plan. These are all admirable short-term goals that can be achieved in three years or less.
Even shorter goals may be in establishing a spending plan, carving out time to talk to your wife about money at least once a week (not on a date night or at the dinner table with the kids) so that you make sure you're both on the same page and overcome obstacles together.
I'm a big believer in setting long- and short-term goals. Every quarter, I write down my quarterly goals as well as review my one-year, three-year and lifetime goals. This is for my business and even more importantly my life and family goals.
I wasn't always a believer in writing down goals, but after doing it for over three years now I see the importance. One example is the two-week RV trip that we took last sumer. Never in a million years would we have been able to take that trip unless I made it a short-term goal. I can remember in January I put the trip on my calendar for May 29 so that I couldn't back out.
6. Avoid Debt
I won't tell you anything you likely don't already know here, but credit card debt is going to be the No. 1 killer of your financial happiness. Yep, once you dig yourself into a hole, it's difficult to get out of. High interest payments can add up to cost your more than the initial spending on your credit card -- and you'll soon be telling yourself it wasn't worth it.
I'm all in favor of using a credit card to fund expenses each month, but those have to be planned expenses. You don't deserve a shopping spree or night out on the town if you can't afford to pay for it with money in your checking account.
Sorry, but it's the truth. OK, so perhaps you've made that mistake. Now what? Check out online software like Ready for Zero to create a free debt plan. You'll also love this blog post by Dale Partridge that outlines how to become debt-free by age 30.
When Mandy and I first got together, I had credit card and student loan debt, while my wife had none. Even worse I didn't recognize that I was on a path of self-destruction because of my buying habits. It wasn't until I tried to convince my wife (she was my girlfriend at the time) that I needed a new flat screen TV. Did you catch that? I "needed" it. What I needed was a stern kick to the groin.
She wasn't that harsh, but she did voice her concern about getting the TV and putting it on my credit card. At first I resisted, but after a few days I realized she was totally right. That was a huge steppingstone for us in getting on the same page of not letting debt ruin us.
7. Learn to Be Content
If you're not aware, the Bible offers a lot sound advice that applies to today's finances. Learning to be content is probably the most important. I said "learning," because contentment doesn't come naturally and you have to be open to it. We all know the phrase, "keeping up with the Joneses," right?
If you decide to run that race (and stretch for the car, house and all that fun stuff you may not been able to really afford, you think you need or deserve to have), you won't finish. You'll keep running and running because there is always another Jones family to chase after, and at the end of the day, stuff can never make you financially happy. You can certainly have financial peace, but that doesn't have anything to do with a closet full of clothes (or that Maserati).
I can hear many critics saying, "Jeff, we've seen your house on Pinterest. Is that really being content?" I have to somewhat agree, but God has blessed us over and over again, and we never put ourselves in a situation that could have ruined us financially. We've learned to work hard, save money, and then reward ourselves. Besides, have you seen our three young boys? As much as they run and jump around like psycho ninjas, we need our big house.
8. Save for Emergencies
Another idea for peace of mind is a short-term savings account that funds the unexpected. Financial gurus will tell you that you need six months or more income set aside, but honestly, I'm a little tired of hearing this because most people have an extremely difficult time saving this much money and that takes a while to do.
I think it costs a lot of money to live these days, particularly with kids. So my advice goes back to seeking alternative sources of income. Start a savings account funding project, if you will. Earn a little extra money for the sole purpose of funding this account. Might you be able to save $500 in that account in six months? Could you have $1,000 in 12? I bet you could if you're willing to work a little bit extra to seek an alternative source of income.
One slightly unfair advantage we had on this was me deploying to Iraq right after we were married. Before I was deployed, we were lucky to have $500 in our savings account. Before I was deployed, we made a commitment to take all the extra money I would make and pay off all the debt we had, max out our Roth IR's and get our savings account to an amount we were both comfortable amount.
By the of the deployment we had $5,000. I can remember coming home from Iraq and so proud of achieving that. I was proud because it was the most money I had ever saved in my life -- and we achieved it together.
9. Don't Let Your House Own You
The biggest expense most people will ever have is their house, whether that be as a renter or homeowner. In general, you'll hear or read that the house payment shouldn't exceed 25 percent to 30 percent of your take-home pay. Yet, many people will extend this to 50 percent and are left with nothing to live on or save at the end of the month. It's so incredibly difficult to do all of the above if your house is eating your money away.
If you can't afford to buy with a 20 percent down payment, don't. Happily rent until you can. There are a lot of advantages in renting, and homeownership is certainly not the default answer to a roof over your head, as it was in the past. If the house is getting the best of you, I strongly recommend you consider downsizing or making a change. Yes, it can be a difficult experience on many levels, but it will be worth it in the long run.
10. Seek Mentors
Personal finance is a journey. Problems aren't solved overnight. Forget about the get-rich-quick mentality -- it sends more people to the poor house than it makes them rich. There are plenty of obstacles to overcome and a lot of perseverance needed to stick to our plans and make progress. That's why it's critical to find a mentor, counselor or coach you can trust to help guide you along the way.
Preferably, find someone who has traveled similar paths. Coaches can be found via your church or through organizations such as Crown or Dave Ramsey. Coaches can be leveraged to help with specific obstacles or goals, or they can be used on a quarterly basis for an overall review.
One of our mentors is our CPA. He's amazing at doing our taxes and also of advising us on our growing pains of running several businesses. In our last meeting, which ran almost four hours, we talked about life and how to balance everything we are doing. Since our CPA is a family man (he has four kids) and runs several businesses, his mentorship is invaluable.
Time to Get Financially Happy
There you have it: 10 tips for a financially happy marriage, and none involved buying an extravagant house or the Maserati I mentioned in the introduction. They are simple and stand the test of time. Anyone can follow them.
Print this article and find a coach. When your coach asks you about your goals, let the person know you'd like help implementing every one of these tips and to hold you accountable to avoid some of the mistakes that were mentioned.
Elaine Thompson/APMicrosoft employees show off Hololens devices.
Microsoft (MSFT) is making a big bet on virtual reality. The world's largest software company recently introduced HoloLens, a platform that claims to kick off the era of holographic computing.
The video is impressive. Folks strapping on the HoloLens headset suddenly see projections blended into their physical environments. Streaming video pops up against a wall. 3-D video game environments are rendered. However, HoloLens isn't all fun and games. It opens up the door for everything from collaborative designs to doctors and service technicians that can assist virtually.
HoloLens maps the physical environment, populating available space with the necessary holograms to do everything from serve up a Skype video call to erect virtual landscapes. Spatial sound capabilities make it seem as if the audio is emitting from the area in your environment where the holograms are being rendered.
Virtual reality isn't just science fiction anymore.
Virtually a Crowd
It's not just Microsoft getting into the game. Best Buy (BBY) recently began selling Samsung's Gear VR headsets on its website, paving the way for eventual availability at the chain's physical stores.
Owners of Samsung's Galaxy Note 4 "phablets" can snap the device to these $199 headsets to create virtual reality goggles. This is a big deal. Samsung had only indicated that Gear VR headsets would be limited to hardcore virtual reality enthusiasts and content developers. Gaining distribution through Best Buy makes it a mainstream product in the realm of consumer electronics, even if it's limited to BestBuy.com at the moment.
Even social networking titan Facebook (FB) knows that virtual reality is a platform of the future. It turned heads last year by shelling out $2 billion in cash and Facebook stock to acquire Oculus Rift, a fledgling maker of virtual reality headsets. The head-mounted display has been a magnetic attraction at tech shows, and it's Oculus that teamed up with Samsung to create Gear VR.
Passing the Creepiness Test
It's probably merely a coincidence that Microsoft should unveil HoloLens just as Google (GOOG)(GOOGL) is pulling the plug on sales of Google Glass, the high-tech specs that record and project online information.
Google Glass was too expensive and ultimately too creepy and unfashionable. By fashion standards, the HoloLens, Gear VR, and original Oculus Rift are larger and bulkier than Google Glass. However, they might prove to be more useful under the right indoor environments.
We live in changing times. Knocking people who use selfie sticks or are constantly buried in their smartphones is low-hanging fruit, but we're also years away from self-driving cars and other advances that will allow consumers more time to be distracted by the potential of holograms in edutainment and beyond.
There are too many major tech tastemakers hopping on virtual reality to ignore. The first wave of adopters may come from design professionals and enthusiasts, but it's a game changer that the public -- and investors -- can't afford to ignore.
Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Facebook and Google (A and C shares). The Motley Fool owns shares of Facebook, Google (A and C shares), and Microsoft. Try any of our Foolish newsletter services free for 30 days. Looking for a good way to invest in wearable tech? Check out our free report on the Apple Watch to learn where the real money is to be made for early investors.
One of the most significant consumer protections Americans have against unwanted text messages and robocalls could get eliminated if the Federal Communications Commission sides with a request made by industry lobbying groups.
The banking and collection industries want the FCC to exempt so-called wrong number calls and texts to cell phones from enforcement under the Telephone Consumer Protection Act. To prevent unwanted calls, consumers, and law firms that represent them, are given the ability to file lawsuits seeking $500 to $1,500 for every robocall, unwanted telemarketing call and text message received.
A coalition of consumer groups has urged the FCC to keep the protections in place, but there is continuing concern that consumers will soon face a torrent of unwanted text messages and phone calls that will no longer be against the law. As the law now stands, those calls and texts are only supposed to go to those consumers who have signed up to receive them.
The industry groups say that they should not be held accountable when someone who signed up for the marketing messages changes cell phone numbers and someone else acquires the number.
Consumer groups, and TCPA lawsuits assert that the issue isn't the single accidental wrong number call. Instead they said it is the ongoing difficulty many consumers have had getting off these lists even after complaining and that, if the law is changed, the companies will pepper consumers with unwanted text messages and calls and, to avoid being held accountable, simply say they had the wrong number.
According to the Telephone Consumer Protection Act, it's illegal to robocall a mobile phone number without permission. The American Bankers Association wants to change that, arguing that robocalls will help fight identity theft and other kinds of fraud. Opponents say that's an overreach, one that will erode an important consumer protection.
Since 2003, more than 223 million Americans have registered with the Federal Trade Commission's National Do Not Call Registry. It helps, but you may have noticed the calls keep coming in. There are services and apps that may help, and, of course, there's the TCPA.
The latter protection is the reason a group of more than 75 national and state organizations, via the National Consumer Law Center, sent an open letter last month to the FCC urging the commission to keep in place important consumer and privacy protections for mobile phone users and to deny the American Bankers Association's petition for exemptions to existing rules.
At first glance, the exemptions requested by the American Bankers Association look reasonable. The ABA wants banks to have the ability to unleash the robots for data breach notifications and when fraud is suspected.
According to the letter sent out by the NCLC and its co-signers, "the proposed changes that the FCC is considering will open the floodgates for 'wrong number' calls to cell phones. This would not only be an improper interpretation of the TCPA, but it would gut essential privacy rights of cell phone users." While the ABA stated that the calls will not eat up mobile phone users' minutes, the NCLC letter contends "the banks have not yet demonstrated or explained how they could guarantee that these calls would not impact recipients' phone bills."
Why the Robocall?
Assume for the moment the above issues can be sorted out. There is no downside to immediate notification that your personal identifying information has been breached. Similarly, the other exemptions petitioned by the ABA include notification when an account has been compromised or fraud is suspected and when an institution wants to share information that may help remedy fraudulent activity.
In theory, the above notifications are a win for everyone. But we do not yet have a federal breach notification law, and even if the ABA modeled its notification policy on the most stringent existing state laws, there is no indication that the notification will be immediate -- just that the notification will be accomplished by robot.
"Financial institutions have found that automated communications are best suited to achieve these goals," the ABA argued. It's a well-crafted sentence, but it's hard not to wonder if it may simply be putting a nice spin on a cost-cutting move for the institutions that the ABA represents. Robocalls are a lot cheaper than operators.
While it's a stretch to expect strong breach notification and cybersecurity laws any time soon given the current climate in Washington, that's precisely what would be needed to make the ABA petition worthwhile to the public.
The Right Way to Do This
It's worth considering what form these notifications would take, since the nature of those robocalls could either have the desired effect of alerting consumers to an issue, or the unintended consequence of opening people up to scams that will be built off the new mode of communication. My worry is that consumers will become used to getting these robocalls, and fraudsters will invade that new comfort zone. If the FCC were to allow the exemptions that the ABA has requested, I would like to see strict guidelines about the kinds of instructions that those calls can provide.
For a robocall system to work, it would not be enough for it to say, "Please call the number on the back of your XYZ card for further instructions." Many institutions subcontract to identity theft resolution companies that set up a dedicated phone number to handle client inquiries, but robocommunications are easily spoofed. What's to keep a fraudster from creating a number and harvesting information? It could be the right answer is to send clients to the compromised institution's website for further instructions. Regardless, because the creation of a new service will always bring with it new opportunities for scam artists, these issues will have to be carefully assessed and addressed.
Any additional fighting capacity in the war against identity-related crime is to be welcomed, but it is important to make sure that new initiatives have public interest in mind, as opposed to bottom-line considerations. Ideally, the bottom line and the best interests of consumers are aligned. In our less than perfect world, however, one needs to negotiate.
Adam Levin is co-founder and CEO of Credit.com. This op/ed contribution to Credit.com does not necessarily represent the views of the company or its partners.
DETROIT -- Automakers reported double-digit U.S. sales increases in January, a sign that car sales didn't spin out even with a major snowstorm hitting the Northeast.
General Motors (GM) led the way with an 18 percent gain over last January. Encouraged by low gas prices, buyers snapped up GM's big SUVs like the Chevrolet Tahoe and GMC Yukon.
Toyota's (TM) sales rose 16 percent, and the Japanese automaker reported record January sales of its trucks and SUVs. Ford (F) and Nissan each posted 15 percent gains. Fiat Chrysler's (FCAU) sales rose 14 percent and Honda's (HMC) sales were up 12 percent.
U.S. sales of new vehicles were expected to be strong in January, continuing the brisk pace of the last half of 2014. Kelley Blue Book predicted overall sales will rise 13 percent to 1.14 million vehicles, making this the best January in nine years.
All automakers except Tesla Motors (TSLA) report U.S. sales results Tuesday.
January is typically a slow month for the auto industry. Buyers have less incentive to shop, since automakers offer fewer deals and promotions after the holidays and tax bills are looming. Bad weather can also keep customers away.
But this January was a big improvement over last year, when the polar vortex caused record-setting cold in much of the country. This year's Northeast blizzard had no real impact on sales, said Ford's U.S. sales analyst Erich Merkle.
Gas prices continued to fall in January, hitting a six-year low of $2.03 a gallon on Jan. 26, according to AAA. That gave consumers the confidence to choose bigger vehicles.
Big Pick Up in Truck, SUV Sales
Trucks, vans and SUVs were expected to account for 55 percent of sales to individual buyers in January, the highest percentage since 2004, according to the forecasting firm LMC Automotive. Sales of the behemoth Cadillac Escalade and Lincoln Navigator more than doubled.
Pickup truck sales also correlate closely to home construction, and new home construction rose sharply in December.
While incentives fell 10 percent from December, to $2,642 a vehicle, they were still about 4 percent higher than last January, according to car shopping site TrueCar.com. That trend could continue; as the pace of growth slows, automakers may have to offer more deals to protect their market share.
Analysts expect U.S. sales to increase this year but at a slower pace than in recent years as sales approach 17 million, their highest level in a decade.
If those factors remain in place, new vehicle sales will continue to rise, though a big shift in one or more could quickly slow things down.
Stable home values, an abundance of credit and low interest rates are all fueling the demand, along with low gas prices.
"If those factors remain in place, new vehicle sales will continue to rise, though a big shift in one or more could quickly slow things down," says Karl Brauer, a senior analyst with Kelley Blue Book.
At GM, sales of the nine-passenger Chevrolet Suburban SUV more than doubled to 4,130, while Chevrolet Silverado pickup sales were up 25 percent. GM's sales totaled 202,786 for the month.
Ford saw a 17 percent gain for F-Series pickup trucks as the new aluminum-bodied F-150 hit dealer lots. Ford Explorer SUV sales were up 28 percent, helping Ford achieve total sales of 171,732.
At Toyota, Prius hybrid sales were flat, the victim of low gas prices. But Toyota saw a 19 percent gain in truck and SUV sales. Toyota sold 169,194 vehicles in January.
Other automakers reported:
Fiat Chrysler's January sales totaled 145,007. One of every three vehicles the company sold was a Jeep; sales of the new Jeep Cherokee small SUV were up 44 percent.
Nissan sold 104,107 vehicles. Sales of Nissan's new Murano crossover were up 72 percent. The Rogue and Pathfinder SUVs also posted double-digit gains.
Honda sales totaled 102,184. Honda's car sales were flat, but its truck and SUV sales jumped 25 percent thanks to big gains for the CR-V crossover and the outgoing Pilot SUV.
Hyundai's sales rose 1 percent to 44,505. The Santa Fe crossover was up 15 percent, but sales of small cars like the Elantra and Veloster fell.
SUV-heavy Subaru said its sales jumped 24 percent to 40,812. Sales were led by the Outback SUV, which was up 38 percent.
Volkswagen's sales were flat at 23,504. Higher sales of the new Golf small car couldn't make up for losses elsewhere.
For all its dreaded mystique, tax time is actually pretty good news for most Americans. More than half of people who file will get a refund from the government. For them, April 15 is like a mid-year Christmas.
About a quarter of us, though, will end up owing money, and we fear one thing above all else: coming up short on April 15. In case you don't have enough cash to pay your taxes the government does allow payment with a credit card. It's tempting to just charge that bill and worry about it all later, but don't reach for the American Express just yet. Here are a few things to consider before putting your taxes on credit this year.
Fees, Fees, Fees
The IRS charges a fee to pay taxes with plastic. "Although you may not be aware," writes Chris Mettler, president of CompareCards.com, "every time you spend $100, the retailers you do business with pay the credit card company about $2 to $3. The IRS is a government agency responsible for collecting revenues from taxpayers, not giving money to credit card companies. There are laws that prevent the IRS from paying any kind of service charges to your credit card company. Since that's the way it works -- and since credit card companies still want their share of the transaction -- you end up having to pay it yourself in the form of an administrative fee."
The average transaction fee runs about 2 percent to 3 percent of the transaction. All things considered, that's not too bad, but it's still money you didn't have to pay.
Interest Rates
While there can be many reasons to use a credit card for your taxes, often the number one motive is simple: not enough money in the checking account to cover that bill.
The problem is that means you likely can't pay off that credit card bill at the end of the month, which means it will carry over and start collecting interest. If your interest rate is anything but rock bottom, this can add a bundle to a bill that was already too high from the get-go.
The IRS negotiates when taxpayers can't meet their burden. Setting up a fixed or negotiated plan is usually a better idea than spending the next six months with a hefty credit card bill, and generally it doesn't involve interest to boot.
Credit Score Concerns
Carrying a lot of debt can hurt your credit score, especially if you slide through on minimum payments. "If you have a high credit limit and a low tax debt (less than 25% of your limit), you might not see much adjustment in your score," writes Mettler. "If you're already trying to protect your credit though, adding a large balance into the mix may not be the best plan."
Compounding Payments
Putting last year's taxes on a credit card doesn't stop them from mounting this year, too. There aren't many great options if you just don't have the cash on hand, but if there's any way to avoid putting off taxes, it's better to just get them paid.
After all, if you think it's hard putting aside the money to pay one year's taxes at a time, imagine how much harder it'll get when you need to find the cash to pay off last year's bill too.
Rewards Are a Good Thing ... Maybe
Savvy credit card users might want to get some quick rewards points. After all, you're spending the money anyway, why not get something back for it? It's not a bad idea, but be careful before reflexively reaching for that travel card.
"It is important for you to study your credit card agreement thoroughly before rushing headlong into this kind of strategy," Mettler writes. "A lot of card companies will only offer 1 percent cash back on this kind of payment. ... When you factor in the 2 to 3 percent you'll probably pay in merchant fees, you will end up losing money overall."
Can credit cards work for your taxes? Sure. As a way to buy a little bit of time, especially for someone who has the cash but doesn't feel like emptying his bank account all at once. Just be careful. What seems like a quick fix on April 15 might come back to haunt you for the rest of the year.
Eric Reed is a freelance journalist who writes frequently on career and travel. You can read more of his work at his website A Wandering Lawyer.
It takes a certain kind of tenacity for a company to stand the test of time. A business begins. It is sold. Another owner takes the helm.
In our modern times, it's highly unusual to find a company that can lay claim to both longevity and consistent quality. It's even more unusual to find a company that has been producing goods since before much of the western U.S. territories became states.
Yet one such business still exists in Shawnee, Oklahoma -- Round House American Made Jeans, which just celebrated 112 years of operation as the oldest manufacturer in the state. Its product hasn't changed much since the company first started making work wear worn by railroad crews laboring to extend the train tracks westward. The same craftsmanship that took hold a century ago is still evident in the Round House jeans and overalls that carpenters and farmers across the country now don as their uniforms.
One step inside the company's plant reveals a meticulous production process -- fueled by decades of experience. But these days, Round House isn't just producing for a local, or even a national market; you can also find their goods in Tokyo and other cities oceans away.
Bunee TomlinsonDavid Antosh's family has run Round House Denim since 1964.Chapter 1: Time-Tested Fabric
A whir of sewing machines welcomes visitors inside the Round House Denim factory in Shawnee, a city of 30,975 at the intersection of Oklahoma 18 and Interstate 40. The road you turn on to find Round House American Made Jeans is fittingly 1 American Way.
Road House was founded in 1903, when Oklahoma was an American Indian territory. Back then, an estimated 42 passenger trains and 65 freight trains rumbled through Shawnee daily, and the railroad workers who traveled with those trains in order to build passages West needed durable clothes. They found the attire they needed at Round House, a company so inspired by its customer base that its founders named the business for the building used to hold and fix locomotives.
Over the years, the company made its mark during many historical events. When other companies ceased production during the Great Depression, Round House continued to manufacture jeans, dungarees, aprons, jackets, shirts and overalls. In 1942, Round House began producing khakis for the U.S. Army.
Bunee Tomlinson
The Antosh family has owned the company since 1964, when Edward Antosh bought the plant and became its president. Jim Antosh, Edward's son, became manager in 1978 after graduating with a master's degree in business administration and industrial engineering from Oklahoma State University.
In recent years the company has added on to its current location and seen record sales, something vice president David Antosh attributes to Americans seeking clothes made here in the U.S. "It started around the time of the [Great] Recession when people started buying close to home to help the economy," he says.
But things weren't always so easy for the Antosh family and Round House. When Jim took over, he was faced with one of the company's biggest challenges to date -- one of Round House's biggest customers had fallen on hard times and subsequently pulled its product orders.
"When Dad took, over it was a low point because C.R. Anthony, a chain-store retailer, had stopped carrying Round House, and they were a major customer," David says. "That was tough. The saving grace was that the company started selling to Walmart."
That Walmart account of nearly 100 stores helped spur production during an all-time low. The visibility also helped attract new clients. Now the company ships to hundreds of Midwestern regional farm and home supply stores and chains.
Just last year Round House started selling online from the company's website. Although online store accounts mark less than 5 percent of the sales, David believes it helps to improve relationships with customers. "Last year, we introduced four new jeans and five new jackets," he says. "We can try new styles of jeans and jackets immediately and get feedback from customers right away. It's nice to be getting feedback from customers. We are a growing company!"
Bunee TomlinsonThe factory in Shawnee, Oklahoma, makes about 1,250 jeans and overalls each day.Chapter 2: A Cut Above the Rest
A quote from Thomas Edison hangs in the hallway leading to the Round House factory floor. "Opportunity is missed by most people because it is dressed in overalls and looks like work."
Next to the quote are old-time photographs from the company along with shots of Hollywood actors wearing the product in movie and television stills, including Jennifer Aniston, Hugh Grant and Jessica Simpson.
Bunee TomlinsonAn electric knife can cut 72 layers of fabric at a time.
Upon entering the factory floor, the rhythmic display of the production process unfurls in front of you. Rolls of cotton fabric, sourced from the Texas Panhandle and weighing hundreds of pounds are stacked, ready for use. Material is laid 72 layers deep so someone can hand-cut them using an electric knife, slicing through all 72 layers at one time, directed by a pattern that employee Ginger Treme manages on a computer.
Treme organizes pattern pieces for Round Houses' signature jeans and overalls over a simulated piece of material on her computer screen, careful to maximize the space available. Each overall alone has about 40 pattern pieces.
Unsurprisingly, in her free time, Treme solves jigsaw puzzles. She's stuck with the company for 25 years. "I like what I do and I'm good at it," she says.
At Round House, all employees takes pride and ownership over the task they're responsible for. Velma Carr is charged with "felling," the complicated task of sewing the front and back of the overalls and jeans together. Her fingers are wrapped in pink tape to protect them during the quick movement. Carr's nearly 40 years with the company are evident as her pink-taped fingers orchestrate the machine's fast mechanisms. The tape protects them as she brings two pieces of material together beneath the jackhammering needle.
Each day, Round House produces an estimated 1,250 jeans and overalls, which works out to about 25,000 a month and about 300,000 a year.
David estimates that 90 percent of the 75 employees are women and nearly a third have been here for two decades. In fact, the company takes the priorities of its female staffers -- many of whom are mothers -- into consideration when structuring the production schedule. The factory's hours of 7 a.m. to 3:30 p.m. are in synch with school and day care hours. When snow closes these places down, many employees stay at home, worry-free, to care for their children and loved ones.
When the company is open, however, business is serious. Most eyes are focused on their fingertips and the new stitching being woven into the material. Employees rely on each other's talents to keep orders moving smoothly. "No one can get too far ahead or too far behind, or someone runs out of work," David says.
Quality and efficiency are key when your competitors spend little on employees. "We compete with companies in Bangladesh where they pay 10 cents an hour in labor costs," David says.
How they remain on top lies with the employees, whose loyalty means little turnover, and whose experience has perfected the factory's careful step-by-step process.
"We stay ahead [of competitors] by these things-having employees with a lot of experience who focus on quality and efficiency," David says. "To compete against foreign-made companies with tremendously lower labor costs, our employees have to stay ultra-quick, efficient and error-free."
Bunee TomlinsonRound House exports to more than 20 countries, with Japan being the biggest market outside the U.S.Chapter 3: Going International
When the Antosh family bought the business in the 1960s, blue jeans were hitting the mainstream. Teenagers had started wearing them in youthful rebellion as part of a uniform that symbolized the individuality of the free-spirited 1960s. They were no longer just the staple of ranchers and cowboys -- denim was suddenly cool.
In recent years, another sort of denim revolution has taken place in Round House's business model. The onetime all-American style standard has become increasingly popular overseas.
From Shawnee to the international market, Round House now exports to more than 20 countries, including China. According to David, shipping overseas began to take off for the company in the early 1990s when Japanese firms reached out to Round House because of the country's appreciation of American-made jeans.
Japan remains the company's largest international customer base, with people in cosmopolitan areas like Tokyo wearing Round House jeans and overalls as fashion statements. "They're just really interested in American culture and American goods," David says.
For many years the company worked with designer Daiki Suzuki of popular Japanese retailer Nepenthes, and it now has a partnership with Tokyo-based Via Transports. "Working with influential, trusted companies and individuals who understand the Japanese market has been key," David says. "Japan makes up about half of our exports."
The company's expansion into the European market began in the late 2000s when Round House partnered with WP Lavori -- the worldwide licensee of such international brands such as Woolrich John Rich & Bros. -- and gained more popularity in Italy and throughout Europe. "The biggest challenge is probably the cost of shipping from the U.S. to retailers in the eastern hemisphere," David says. "It can get expensive, but as we've increased exports, we've been able to work with freight companies to lower the costs."
Yet despite increased overseas popularity, Round House customer base is still very much close to home. "We still do about 85 percent of sales in the U.S.," David says, wearing his daily uniform of Round House jeans and dress shirt. "We just appeal to the American workers in what they want."
When it comes to smart shopping, saving doesn't always mean spending less. With some purchases, splurging a little up front can actually benefit you more in the long run. Here are a few items that you shouldn't be afraid to spend a few extra bucks on.
If you've ever had a bad night's sleep due to a lumpy, uncomfortable bed then you already know how important a good mattress is. Cheap mattresses can be bad for your back, neck and overall well-being. You're going to be lying on your bed practically every night for years to come. Investing in a higher quality model will not only give you better support and a more restful sleep, you'll also be more productive when you wake up!
Energy-efficient light bulbs are also worth spending a little extra on. While these bulbs may cost you a bit more up-front, they use an estimated 75 percent less energy, generate 75 percent less heat and can last up to 10 times longer than their incandescent counterparts. Some of the more efficient types can use nearly $130 less in energy costs per bulb. How's that for a brighter budget?
Lastly, if you want to cook up some savings in the kitchen, getting high-quality knives will not only help you cut your food with ease, you'll be slicing your long-term costs, as well. With a little care, a high-end blade can last you a lifetime. Plus, most people don't need more than three types -- a chef, paring and bread knife should be enough -- so there's no need to overspend on that 17-piece set.
While we all like to save a few bucks, when it comes to these products, splurging up front can sometimes be the best way to save in the end. Give these tips a try, and see for yourself.
Testing of herbal supplements sold by major retailers including Target and Walmart revealed that 79 percent have no trace of the herbs on the products' labels, according to an investigation by the New York State Attorney General.
The testing led Attorney General Eric T. Schneiderman to send letters to GNC, Target, Walmart and Walgreens to halt the sale of their store brand herbal supplements including Echinacea, Ginseng, and St. John's Wort. Walmart's products fared worst in the testing, the attorney general said, with only 4 percent containing DNA of the herbs on the product labels.
This investigation makes one thing abundantly clear: the old adage 'buyer beware' may be especially true for consumers of herbal supplements.
"This investigation makes one thing abundantly clear: the old adage 'buyer beware' may be especially true for consumers of herbal supplements," Schneiderman said. "The DNA test results seem to confirm long-standing questions about the herbal supplement industry. Mislabeling, contamination, and false advertising are illegal."
Not only are consumers being duped, he said, but it is also dangerous to use supplements when they contain ingredients that aren't on the label.
Unlike drugs, which are regulated by the U.S. Food and Drug Administration and subject to testing and clinical trials, herbal supplements are largely unregulated. Even still, many supplements have been recalled by the FDA when they've been found to be dangerous.
The industry has also found itself taken to task by the Federal Trade Commission over the years, typically over claims the supplements could achieve certain results -- like weight loss -- when there was no supporting evidence.
"Consumers already had ample reason to doubt most of the claims made by herbal supplement manufacturers, who have precious little scientific evidence indicating these herbs' effectiveness in the first place," said David Schardt, senior nutritionist at the Center for Science in the Public Interest. "But when the advertised herbs aren't even in many of the pills, it's a sign that this poorly regulated industry is in desperate need of reform. Until then, and perhaps even after then, consumers should stop wasting their money in the herbal supplements aisle."
Here are some of the findings of the the Attorney General's testing by retailer:
Six "Herbal Plus" brand herbal supplements per store were purchased and analyzed: gingko biloba, St. John's wort, ginseng, garlic, echinacea and saw palmetto.
Only one supplement consistently tested for its labeled contents: garlic. One bottle of Saw Palmetto tested positive for containing DNA from the saw palmetto plant, while three others didn't. The remaining four supplement types yielded mixed results, but none revealed DNA from the labeled herb.
Of 120 DNA tests run on 24 bottles of the herbal products purchased, DNA matched label identification 22 percent of the time.
Contaminants identified included asparagus, rice, primrose, alfalfa/clover, spruce, ranuncula, houseplant, allium, legume, saw palmetto and echinacea.
Six "Up & Up" brand herbal supplements per store were purchased and analyzed: gingko biloba, St. John's wort, valerian root, garlic, echinacea and saw palmetto.
Three supplements showed nearly consistent presence of the labeled contents: echinacea (with one sample identifying rice), garlic and saw palmetto. The remaining three supplements showed no DNA from the labeled herb.
Of 90 DNA tests run on 18 bottles of the herbal products purchased, DNA matched label identification 41 percent of the time.
Contaminants identified included allium, French bean, asparagus, pea, wild carrot and saw palmetto.
Six "Finest Nutrition" brand herbal supplements per store were purchased and analyzed: gingko biloba, St. John's wort, ginseng, garlic, echinacea and saw palmetto.
Only one supplement consistently tested for its labeled contents: saw palmetto. The remaining five supplements yielded mixed results, with one sample of garlic showing appropriate DNA. The other bottles yielded no DNA from the labeled herb.
Of the 90 DNA test run on 18 bottles of herbal products purchased, DNA matched label representation 18 percent of the time.
Contaminants identified included allium, rice, wheat, palm, daisy and dracaena (houseplant).
Six "Spring Valley" brand herbal supplements per store were purchased and analyzed: gingko biloba, St. John's wort, ginseng, garlic, echinacea and saw palmetto.
None of the supplements tested consistently revealed DNA from the labeled herb. One bottle of garlic had a minimal showing of garlic DNA, as did one bottle of saw palmetto. All remaining bottles failed to produce DNA verifying the labeled herb.
Of the 90 DNA test run on 18 bottles of herbal products purchased, DNA matched label representation 4 percent of the time.
Contaminants identified included allium, pine, wheat/grass, rice mustard, citrus, dracaena (houseplant) and cassava (tropical tree root).
What you see in a food ad may not be what you actually get but, rather, what the company wants you to think is available. For example, fast food gets its own food stylist before appearing in an ad. Finding exactly the right pickles, the best angle, the most flattering lighting, and carefully sculpting the drips of ketchup can make a burger go from flat disk to luscious dish.
Sometimes the company wants to sell something else. McDonald's (MCD) has a new campaign: Pay with Lovin', as MoneyTalkNews reports. A million customers will be picked at random up until Valentine's Day to pay for their orders with only a "random act of Lovin'," as the promotion rules explain. That might include fist bumping one of the employees, calling a loved one, blowing a kiss, or participating in a family group hug.
What McDonald's is selling here is a connection between the company and consumers, but that image is about as realistic as the doctored burger. Sales keep falling, as DailyFinance has previously reported, and Mickey D's is struggling to wipe away negative perceptions about its food and relevance. Previous attempts to do so by publicly discussing ingredients and methods of making products like Chicken Nuggets have backfired as the explanations were anything but appetizing, according to AOL Jobs.
An attempt to push brand shouldn't be surprising, as the company fired its previous CEO Don Thompson and installed Chief Brand Officer Steve Easterbrook as top executive, as the Associated Press reported last month. However, brand is tricky to promote. More than a veneer, it has to involve everything about a company to really work. Such a campaign can go wrong when some customers refuse to participate, as happened in Florida as reported by the Tampa Tribune. And as The Street notes, McDonald's needs to deliver more than hugs and fist bumps.
The problem is that once inside the restaurant, those same consumers may well be reminded of why they don't like McDonald's in the first place, such as the absence of healthy alternatives, slow lines, greasy-smelling restaurants and a huge menu that continues to be stuffed with classic calorie bombs.
The Lovin' campaign has the real possibility as coming across as a desperate quick-fix attempt by McDonald's to be loved by consumers when the chain is no longer part of cultural identity, as Vancouver Sun columnist Shelley Fralic pointed out.
Ask any five-year-old today who the Hamburglar is and you're likely to get a blank stare, as they scan their memory banks for the names of Lego characters, Skylander fighters, SpongeBob protagonists and Stampylongnose references that might offer a clue.
And that, in a nutshell, is the trouble with McDonald's.
McDonald's is no longer a cheap place to take the family and the same sums dropped on its burgers and fries might also buy a meal at any of a number of competitors. Kids don't have an association with going to golden arches and, so, grow up already disaffected.
Hammered by questions about food and questions of whether locations shortchange workers' pay, as AOL Jobs has reported, the company may not appear like a locus of love to consumers. That's something brief campaigns and videos aren't about to change.
Richard Drew/APShake Shack executives ring the New York Stock Exchange opening bell on Friday, the day of the chain's IPO.
Last week's debut of Shake Shack (SHAK) was a scorcher. The popular burger flipper and frozen custard mixer hit the market on Friday at $21, and it wasn't enough. The stock more than doubled on its first day of trading.
Friday's 119 percent surge came on top of the market's voracious appetite for the 63-unit burger chain. Underwriters were initially hoping to price the offering between $14 and $16 until market demand caused the firms taking Shake Shack public to raise that range to between $17 and $19.
Shake Shack has the growth characteristics of a hot eatery IPO. It's expanding at a heady pace. We've seen Shake Shack grow quickly since its humble beginnings as a hot dog cart that opened in the heart of New York City's Madison Square Park in 2001. There were just seven locations at the end of 2010, tripling to 21 at the end of 2012 before tripling again to 63 today.
Sales have naturally gone through the roof. System-wide sales -- now including 31 company-owned locations, five licensed domestic units and 27 licensed international locations -- have gone from $21 million in 2010 to $140 million in 2013. Shake Shack has been profitable in recent years, though margins and profits have contracted through 2014.
Shake Shack also happens to be riding the trend of fast-casual establishments that have successfully bridged the gap between traditional fast-food joints and conventional casual-dining eateries. Some are calling it the next Chipotle Mexican Grill (CMG), but that would be premature at best and inaccurate at worst.
A Chip Off the Old Chipotle
Chipotle went public nine Januarys ago, and it, too, was a Wall Street debutante that hit the market priced in the low $20s before doubling on its first day of trading. Both stocks were initially priced with market caps north of $700 million. Chipotle closed its first day of trading at more than $1.4 billion. Shake Shack wrapped up its first day on the market with a market cap of nearly $1.7 billion.
Chipotle's been a 30-bagger since hitting the market in 2016, and some Shake Shack investors are hoping for a similar trajectory. The problem, of course, is that the starting lines weren't exactly the same. Chipotle went public a year after ringing up a profit of $37.7 million on $627.7 million in revenue. Shake Shack is much earlier in its life cycle. Its trailing results clock in with a profit of $4.5 million on $106.7 million in revenues. It just doesn't make sense for Shake Shack to command a greater valuation than Chipotle.
There's also the matter of the brand. Chipotle is the market darling in burrito joints. There are others, but its streak of positive and recently accelerating comparable-restaurant sales places it in a league of its own. Shake Shack is certainly a quality brand, but there are plenty of gourmet burger places out there that are also growing quickly.
Consumer Reports last summer surveyed tens of thousands of fast-food fans to gauge the perceived quality of the leading national and regional brands. Shake Shack didn't make the list of 21 burger chains. Yes, the field is that crowded, and that will make it that much harder for any single chain to stand out, much less one that's pretty dearly priced today.
NEW YORK -- U.S. stocks jumped more than 1 percent Tuesday, led by energy shares as oil prices extended their recent rally, while higher-than-expected January car sales also bolstered the advance.
Merger activity also helped, with shares of Office Depot (ODP) jumping 21.6 percent to $9.28 after The Wall Street Journal reported the retailer was in advanced talks to merge with Staples Inc. Staples (SPLS) shares gained 10.9 percent to $19.01.
The S&P 500 has gained 2.8 percent over two sessions as the bounceback in oil prices and hopes of a Greek debt deal eased some concerns about the global economy, but the index has been locked in a trading range of 1,972 to 2,093 since mid-December and is nearly flat since Dec. 31.
The year so far has been marked by volatility, with the S&P 500's daily trading range often more than double its average over the past year.
U.S. crude oil prices rose 7 percent to settle at $53.05 . Brent and U.S. oil prices have risen roughly 19 percent since Wednesday's close. The S&P 500 energy index climbed 2.8 percent.
Shares of Dow components Exxon Mobil (XOM) were up 3 percent at $92.25 and Chevron (CVX) added 3.3 percent at $109.53. Machinery-maker Caterpillar (CAT) rose 3.8 percent to $83.92, among the Dow's biggest boosters.
"You've had some of those who had been extremely bearish start to take off their bearish bets when it felt like you may have gotten to a short-term bottom in oil," said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.
"Some of the trader pressure on the commodity itself has abated somewhat. With that, you've had more of an equity risk-on mentality."
The Dow Jones industrial average (^DJI) rose 305.36 points, or 1.76 percent, to 17,666.4, the Standard & Poor's 500 index (^GSPC) gained 29.18 points, or 1.44 percent, to 2,050.03 and the Nasdaq composite (^IXIC) added 51.05 points, or 1.09 percent, to 4,727.74.
Car-Buyers Out in Force
January car sales topped expectations, buoyed by low gas prices and easy credit. Ford Motor (F) gained 2.5 percent to $15.65, General Motors (GM) rose 2.6 percent to $33.98 and Fiat Chrysler (FCAU) climbed 3.3 percent to $13.95.
After the bell, shares of Chipotle Mexican Grill (CMG) fell 5.9 percent to $684 while shares of Walt Disney (DIS) rose 3.1 percent to $96.97, both following results.
Even as S&P 500 profit growth estimates for the fourth quarter have risen as more companies report, expectations for first-quarter results have tumbled. First-quarter earnings are now expected to fall 1.2 percent from a year ago, Thomson Reuters data showed.
About 8.4 billion shares changed hands on U.S. exchanges, above the 7.7 billion average for the last five sessions, according to BATS Global Markets.
NYSE advancers outnumbered decliners 2,478 to 615, a 4.03-to-1 ratio; on the Nasdaq, 2,029 issues rose and 753 fell, a 2.69-to-1 ratio.
The S&P 500 posted 19 new 52-week highs and no new lows; the Nasdaq composite recorded 65 new highs and 34 new lows.
What to watch Wednesday:
Payroll-processor ADP releases its survey of private-sector hiring for January at 8:15 a.m. Eastern time.
The Institute for Supply Management releases its service sector index for January at 10 a.m.
These selected companies are scheduled to report quarterly financial results:
dbvirago
That headline is not a typo. I intended to use "prey" and not "pray," although both words have a place in this sad saga.
Church vs. Adviser
In August 2014, the rector, wardens and vestrymen of Christ Church Cathedral of Indianapolis filed a federal lawsuit in Indiana. The defendants are JPMorgan Chase & Co. and JPMorgan Chase Bank N.A. (JPM).
The allegations in the complaint (which have not been adjudicated) are pretty shocking. It alleges that JPMorgan Chase Bank served as the sole trustee over the Christ Church trust accounts from July 2004 through December 2013. Between 2004 and 2007, the value of the trusts ranged from $35.4 million to $39.2 million. But, after about 7 and a half years of "management" by JPMorgan Chase, the value of the trust had decreased to $31.6 million as of December 2013.
The endowment at issue (called the Talbot Fund) originated with a significant gift to the church by the Eli Lilly family. A condition of the gift was that trust funds should be used to benefit the Episcopal Church and to enrich the spiritual life of Indianapolis.
Originally, three Indianapolis banks were designated by the Lilly family to serve as trustees. However, those banks no longer exist. JPMorgan Chase, through a series of mergers and consolidations, became the sole trustee tasked with the care, management, growth and preservation of the trusts.
What accounted for this allegedly dismal performance? According to the complaint, JPMorgan Chase used its position as trustee to purchase from itself a hodgepodge of private equity funds, structured notes, hedge funds and other proprietary funds. Allegedly, the percentage of proprietary products the bank bought from itself on behalf of the church ranged from 68 percent to 85 percent of the portfolio.
Fees Disclosed and Undisclosed
The complaint further alleges that JPMorgan Chase's conduct was calculated to increase fees to itself at the expense of the church. From 2004 through 2013, the annual disclosed fees increased from an average of $35,000 to $177,800, which does not seem unreasonable for managing a trust of this size. However, the church goes on to claim that the "affirmatively concealed revenues received by JPMorgan from the use of the trust funds is expected to be far greater and will render the disclosed fees to be insignificant in comparison."
Defendants have denied all the allegations in the complaint. They are seeking to have most of the claims dismissed, and a decision is pending.
JPMorgan Chase contends that between 2006 and 2013, the trust distributed more than $13 million to the church and that the trust still gained well more than $10 million during that period. The bank asserts the church ignores the fact that "the vast majority of investments ... produced solid -- and in some cases stellar -- returns for the trusts."
The Lilly Family's Fatal Mistake
One fact seems inescapable. The benefactor of the trust could have required that trust assets be invested in a globally diversified portfolio of low management fee index funds. Instead, the terms of the trust permitted the trustee to engage in active management, where the investment adviser attempts to "beat the market." By engaging in active management, the performance of the trust appears to have suffered the same fate as most individual investors: It significantly underperformed market returns available for the taking.
If you are pursuing the same flawed investing strategy, you might want to fundamentally change the way you invest. If the allegations in the complaint are proven true at trial, the church will be found to have been little more than "prey" for JPMorgan Chase's "predatory" attempt to generate higher returns for itself.
Messages left for the church's attorney and for the media relations department at JPMorgan Chase seeking comment for this article weren't returned.
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."
When it comes to smart shopping, saving doesn't always mean spending less. With some purchases, splurging a little up front can actually benefit you more in the long run. Here are a few items that you shouldn't be afraid to spend a few extra bucks on.
