Michel Euler/APA saleswoman displays the new Monopoly board game version at a toy store in Paris.
There were plenty of winners and losers this week, with a leading toymaker growing at a time when its rivals are reeling and a home goods retailer failing to live up to its promises, again.
Most toymakers had a rough holiday shopping season, but Hasbro bucked the trend by posting growth at both ends of the income statement on Monday. Revenue would have climbed 7 percent if it wasn't for currency fluctuations overseas, matching the 7 percent gain in operating profit.
The toy giant behind Transformers, My Little Pony, and Monopoly also boosted its dividend. The new payout rate of 46 cents a share pushes Hasbro's yield to 3 percent, and it's not the only way that Hasbro is returning money to its shareholders. Its board also authorized $500 million in share buybacks.
The magnetic burrito roller is apparently also attracting hackers. Chipotle's Twitter (TWTR) account was hacked for a couple of hours on Sunday. The hacked account replaced Chipotle's corporate logo with a swastika and sent out a series of offensive tweets brimming with profanities and racial slurs.
Chipotle naturally apologized for the incident. Its brand isn't necessarily tarnished by the event, but it does remind investors that Chipotle is big and vocal enough to be a target of future hacking attempts.
No one was surprised when McDonald's posted another month of negative restaurant-level sales on Monday, but there may be hope for a turnaround closer to home. The world's largest burger chain saw comparable-restaurant sales slide 1.8 percent worldwide in January, but that was the result of major shortfalls in Asia. Comps for the U.S. and Europe actually rose 0.4 percent and 0.5 percent, respectively.
That's a pretty big deal. Stateside comps had fallen in 13 of the past 14 months before January, and even the one exception was just a flat April. This is the first month of meaningful year-over-year growth in more than a year for McDonald's, arming it with momentum as it heads into a new year with a new CEO.
Selling home furnishings would seem like a can't-miss business in this climate where low mortgage rates find potential home buyers snapping up new digs and existing home owners refinancing to invest in home improvement projects. Unfortunately for Pier 1 investors, the retailer can miss -- and it misses a lot.
Pier 1 lowered its guidance for its fiscal year that concludes at the end of this month. January sales haven't been as strong as the chain was expecting. This is actually the third time this fiscal year that Pier 1 has had to hose down its outlook. It's probably not a surprise that the CFO resigned this week, too.
In a surprising move, Netflix announced availability in Cuba. Yes, "House of Cards," "Orange Is the New Black," and other select programming can now be streamed through the premium online service.
It's easy to be cynical. Some watchdog groups claim that as little as 5 percent of the island has access to the Internet. This clearly isn't going to be a move that's going to pay off right away. However, it's a smart move for Netflix to take on the challenge of trying to open up a nation that in many ways seems lost in past. Outside of North Korea and perhaps China, is there any country that Netflix won't dare enter in its goal to entertain the global masses?
Motley Fool contributor Rick Munarriz owns shares of Netflix. The Motley Fool recommends Chipotle Mexican Grill, Hasbro, McDonald's, Netflix and Twitter. The Motley Fool owns shares of Chipotle Mexican Grill, Hasbro, Netflix and Twitter. Try any of our Foolish newsletter services free for 30 days. Looking for a winner for your portfolio? Check out The Motley Fool's one great stock to buy for 2015 and beyond.
Your defenses are down when you enter the airport. You've got money to burn, time to waste and you're in a state of euphoria because you'll be on a tropical beach in less than five hours. But, beware, ye of many impulses: Airport buys can make you broke if you're not careful. (See also: 25 Secrets From the World's Most Frugal Frequent Travelers)
So here's a list of what to watch out for at the airport (hint: most things), along with a couple items that are OK to dive into.
Worst Airport Buys
Plan ahead and you can avoid most of these pricey concourse purchases.
1. Personal snacks and drinks. David Bakke, travel expert at Money Crashers, implores you to avoid bottled water at all costs when you're at the airport. "You'll pay about triple the price that you do in a grocery store."
While you should avoid bottled water altogether -- it's bad for the environment and tap water is free, ya know -- I understand that sometimes you need it. To avoid this impulse buy, add a water bottle to your packing list and keep it in your carry-on so you can fill it from the fountain when you're past security. If you forget your water bottle, remember this tip from Aaron Deutsch, founder of TellThem.co.
"If you need a bottle of water at the airport, my tip is to buy it from McDonald's, not the news shops" he says. "McDonald's typically charges $1.50 to $2 while the news stores charge $2.50 to 3.50. Small savings but nice!"
"Healthy food is hard to find at the airport, and usually I bring what I need for the kids," adds Sandra Magura, author of the children's book HippoDuck -- Trouble at the Airport. "But on those unexpected delayed flights sometimes you run short. When I did, I was forced to get something from one of the convenience stores. I ended up buying a granola bar for my two-year-old. He loves them and so do I. What I don't love is the $4 price tag that went along with it. I can buy a box of six at Walmart for $2. They got me that time, but I will be sure to pack extras on the next trip."
2. Wi-Fi. Airports are increasingly jumping on the free Wi-Fi bandwagon or offering personal tablets for free use when you're in the terminal, but there are still hubs that require you to pay for Internet service if you want to get online while you're at the terminal. Most of us can use our phone networks to do what we need to do, but if you need more capability or a bigger screen that can only operate with Wi-Fi, do some detective work before purchasing.
Bakke offers a great hack. "If you need to access the Internet, see if the airport has a Starbucks -- where it's free -- rather than paying for Wi-Fi," he says.
Starbucks (SBUX) might not be the only place that offers free Wi-Fi, by the way. Pop into a few bars and restaurants to see if they offer it, if there are no Starbucks in the vicinity.
3. Headphones. Bakke warns to avoid headphones and other electronics from those newfangled vending machines that are popping up at airports. You've probably seen the Best Buy-branded models if you've traveled recently.
"I recently looked at these [headphones] with my son during a recent trip; he claimed he absolutely had to have them," Bakke recalls. "I made a bet with him that I could find them for half of what the machine was charging. Sure enough, we checked Amazon and found them for about that much cheaper."
You also can ask your airline's attendants if the flight offers headphones. Instead of buying a $200 pair of Beats just because they're pretty and you're on vacation and you think you deserve it, step back, take a breath, and find out if there are pairs for available on your flight, which usually only cost about $2.
"There is no reason that a set of headphones cannot have a permanent home in the side pocket of your carry on bag," adds John Z. Wetmore, producer for Perils for Pedestrians television. "It takes very little planning to avoid overpriced last-minute purchases. Packing checklists are your friend if you have a tendency to leave things at home when you pack at the last minute."
4. Neck pillows. You want to guess how many neck pillows are in my closet? Three! It seems like my husband buys a new pillow every time he flies, and those three aren't even counting the ones he's lost over the years. That's hundreds of dollars worth of neck pillows.
I've never purchased a neck pillow in my life; it's always seemed like a huge waste of money to look so silly on an airplane to me. Instead, I bring my own travel-worn bed pillow from home (it's flat, so it's easy to travel with), or I ask for a blanket/pillow on the flight so I can cuddle up on the window or rest my head on the tray table. Much better than sleeping straight up with an inner tube around your neck, in my opinion.
5. Currency exchange. The last time I traveled someplace where I needed to exchange currency, the dollar was worth half what it was at home -- and that didn't include the fees that the service charged. That's a tough blow to take when you've saved for so long for something.
DailyMail.com says:
With so much else to sort out before you go away, it's tempting simply to purchase your foreign currency at the last minute in the airport departure lounge. But doing that means you'll pay significantly more than you need to, as airport bureaux de change offer some of the worst possible deals to walk-up customers.
"The alternatives? Pre-order currency. Earlier this week, buying €500 on the spot at a Gatwick Moneycorp bureau would have cost you £440.88. Had you ordered the €500 online on www.moneycorp.com to pick up at the airport, the cost would have been £404.17.
This is obviously an example from Europe, but you can apply the same principles in the United States when you're preparing for travel abroad.
6. Parking. Sometimes you have no other choice but to drive yourself to the airport and park. And you'll pay dearly for it. If you can help it, ask a friend or family member to give you a ride -- slip 'em some cash for helping you save some -- or use public transportation where available and convenient.
Best Airport Buys
OK, not everything at the airport is a total ripoff.
1. Local food/beverage souvenir items. I'm not much for tangible souvenirs -- just one more piece of junk I have to put out at the yard sale next year -- so I prefer to preserve my trips' memories with photos that I can frame and local food items that I can consume when I'm home. For instance, I've purchased beignet dry mix from New Orleans and BBQ sauce from Memphis that bring back fond memories of each trip when I use them.
Liz Dahl, founder of Boomer Travel Patrol, agrees that this is a best practice, especially on liquids.
"For me, the best buys are local products from the city the airport is located, especially the liquid items," she says. "This is the place to buy those souvenirs, because you can take them on the plane with you at that point."
The latter is a good point to remember if you're only traveling with a carry-on bag. You won't be happy if you have to give up a liquid item because you overlooked the rules while you were shopping.
2. Duty-free. If you're in the market for cigarettes or alcohol, you can score great deals at the duty-free shops. All other items, especially electronics and beauty products, aren't a very wise purchase as you usually can find them cheaper at home or online.
Consider, however, that you're allowed to bring mini bottles of liquor onto your flight. That's right -- according to the TSA Blog, "Travelers may carry as many 3.4 ounce bottles of liquid (mini bottles of liquor are 1.7 ounces) that fit comfortably in one, quart sized, clear plastic, zip-top bag. Comfortable means that the bag will seal without busting at the seams. One bag is permitted per passenger."
That's pretty much an invitation to load up on the mini bottles at the duty-free shop.
Of course, there's this stipulation: FAA regulations state that "No person may drink any alcoholic beverage aboard an aircraft unless the certificate holder operating the aircraft has served that beverage."
But if you're savvy, you'll figure out how to make it work.
Do you have other suggestions for best/worse airport buys? Let us know in the comments below.
CareyHope
It's just like your mom told you about dates: You can tell a lot about someone from how they treat (and tip) the waiter or waitress.
"How you tip says a lot about who you are," Steve Dublanica, author of two best-selling books on waiting tables, wrote in "Keep the Change." "It reveals your attitude about money, how you spend it, your views on labor and class, whether you're generous or stingy, in the know or just plain ignorant."
"Most people do not tip to reward the quality of service," he wrote in his blog, WaiterRant, named after his first book. "They tip for psychological reasons like fear, guilt, empathy or acting out a personality disorder. "
Studies on the psychology of tipping are sometimes contradictory but in general bear him out. Extraverts may tip more because they like server attention and interaction. Neurotics tip in fear of server misbehavior. And psychotics tip (or not) however they damn well please for Machiavellian reasons of their own, according to one study.
Michael Lynn of Cornell University, the go-to university for hospitality studies, has conducted more than 20 studies on tipping. In one often-cited study, he found a correlation between the level of extraversion and neuroticism and the number of service roles tipped in various countries, with the U.S. scoring high.
Depending on the Kindness of Strangers
However, as any service person will tell you, people tip for many reasons, and economists struggle to find method to the madness. As Lynn wrote, "Tips are not legally required and are not given until after service is completed, so they are not necessary to ensure good current service."
The U.S. minimum wage for tipped employees is $2.13 an hour, unchanged since 1991. One 2011 study estimated annual tips in the U.S. amount to $45 billion supplementing this wage. An Internal Revenue Service study found that waitstaff collect 70 percent of the tips in America in serving 130 million restaurant meals a day.
Studies have found that waitstaff can increase their tips by various behaviors, including touching a customer on the shoulder, squatting next to the table when writing up orders, drawing smiley faces on the check and giving candy. The last practice increases the tip 15 percent to 23 percent.
Even the weather can affect tips, with just the recounting of a sunshiny day increasing tips by 5 percent according to a Temple University study.
No Tipping, Please
Some restaurant owners, painfully aware of these whims, have instituted no-tipping policies. "You're not having to judge another human being as a number," Gabriel Frem said of the policy at Brand 158, his trendy Los Angeles restaurant. "You're not in direct conflict with the compensation model of the person serving you."
Zagat, which conducts annual surveys on aspects of dining, in 2013 asked diners their opinion of no-tipping policies but higher tabs. Only 21 percent said they like the idea, 34 percent were unsure, 28 percent flatly hated the concept and 17 percent liked the idea but only in high end restaurants.
Zagat also found that bad service still affects tips, with 43 percent of diners tipping 5 percent less, 29 percent tipping 10 percent less, 7 percent wouldn't change the amount of the tip and 6 percent wouldn't leave any tip for bad service.
The National Restaurant Association feels tipping is here to stay. "Along with flexible work schedules, tipping is what makes a restaurant server an attractive profession and makes the restaurant industry an industry of choice for millions of Americans," said Scott DeFife, executive vice president of policy and government affairs. "Our research continues to indicate that the vast majority of consumers take a positive view of the practice and custom of tipping for service that has evolved in our industry."
Strong Views
An online poll on emilypost.com agrees about the permanency of tipping in the U.S. It found 51 percent agreed with this: "Tipping has always been part of our culture and will remain so. The amount of the tip is always up to the customer. People just like to complain." A quarter agreed that banning tipping was a good idea, and 20 percent said they would stop tipping or avoid tipping situations if the expected tip percentage continued to rise.
Just a few decades ago, 10 percent was considered a fair tip, but now 15 percent to 20 percent is considered standard for adequate service, Emilypost.com says, offering recommendations on what to tip other service people. Zagat found that the average tip rose from 19 percent in 2013 to 19.3 percent in 2014.
The discourse can become heated, with customers ranting on Yelp (YELP) about bad servers and servers outing bad tippers on social media. Waitstaff are naming names, both the famous and the unknown, including Philadelphia Eagles running back LeSean McCoy, who allegedly left a 20-cent tip on a $61.56 tab. Celebrities who are notoriously bad tippers include Michael Jordan, Bill Cosby, Mick Jagger, Madonna and Rachael Ray. The most generous include President Barack Obama, Charlie Sheen, David Beckham, Drew Barrymore and Johnny Depp. Draw your own conclusions.
Dublanica wrote that 80 percent of his former customers were nice but posited 20 percent were likely "socially maladjusted psychopaths" and in their unguarded moments "often let their hidden prejudices, beliefs and character flaws slip Freudianly to the surface." In that light, he offers one final tip: "Tips spelled backward is spit!"
PeJo/Shutterstock
If January is about making New Year's resolutions, February has to be about breaking them -- or cutting corners to make things happen. Along comes Zeltiq Aesthetics (ZLTQ) -- one of the market's hottest stocks after soaring eightfold over the past two years -- ready to help dieters shake off some of the flab in their flanks.
Zeltiq isn't a household name, but its CoolSculpting machine is gaining traction with cosmetic surgeons, dermatologists and weight-loss-center physicians. CoolSculpting is a noninvasive procedure that uses extreme cold to freeze off stubborn fat cells. The FDA-cleared procedure isn't perfect, but the cool process is in hot demand. A whopping 1.5 million CoolSculpting procedures have been performed through the growing installed base of more than 2,800 systems.
We'll get a better snapshot on how Zeltiq fared in its latest quarter when it reports later this month, but for now we can explore the redemptive tale of how one of the biggest losers of 2012 turned into one of the biggest winners in 2013 and 2014.
Losing Weight and Gaining it Back
Zeltiq went public at $13 in late 2011, a year after CoolSculpting was approved by the FDA for the treatment of love handles. Investors didn't buy into the stock right away. There were just 600 machines in operation, and consumers were skeptical about the effectiveness of the procedure. CoolSculpting with its proprietary Cryolipolysis technology eliminates fat through advanced cooling, but it takes several weeks after the treatment for noticeable results to materialize. Despite the many benefits of the procedure -- it's an anesthesia-free process that can be tackled during a lunch break -- it didn't catch on. Revenue climbed just 12 percent in 2012, and the stock shed more than two-thirds of its value.
Then came 2013, when it all started coming together. Zeltiq was initially targeting just 10 percent in revenue growth for the entire year, but a few months later it was bumping that figure to 20 percent. A few months after that, it doubled its guidance to 40 percent. Revenue eventually clocked in with a 47 percent spurt, and Zeltiq's top line grew even faster through 2014.
Everything started coming together. The FDA went on to approve CoolSculpting for the treatment on abdomens and eventually thighs. Just last month the machine was approved to cool at lower temperatures that lead to shorter treatment times. In other words, as good as growth has been at Zeltiq, it will probably get better now that the average system can perform more procedures in any given day.
Weight for It
Shares of Zeltiq have closed higher in seven consecutive months. That would be a notable achievement even if the market weren't as rocky as it has been lately.
CoolSculpting isn't a magical cure for flab. Some reviewers have complained about the process not being as immediate or effective as liposuction or other invasive procedures. There are also some potential side effects. However, for a company that finally turned the corner of profitability last year, momentum is clearly in Zeltiq's corner.
After raising its top-line guidance several times through 2014, Zeltiq's report later this month should serve as a strong close to the year. New procedures and products should produce robust guidance for 2015. Just make sure to keep CoolSculpting machines away from the actual report. The last thing that investors would want is to see its financials cool off.
Motley Fool contributor Rick Munarriz owns shares of Zeltiq Aesthetics. The Motley Fool recommendsZeltiq Aesthetics. Try any of our Foolish newsletter services free for 30 days. To read about our favorite high-yielding dividend stocks for any investor, check outour free report.
WASHINGTON -- U.S. consumer sentiment unexpectedly fell in February from an 11-year high amid worries over slowing economic growth, suggesting a recent weakness in spending might last for a while.
The ebb in sentiment came despite strong job gains over the last three months, signs of an acceleration in wage growth as well as cheaper gasoline prices, factors that economists had expected would buoy consumer spending in the months ahead.
As it stands, the pullback in confidence, along with the early year decline in retail sales, hints of slower consumer spending growth in the first quarter.
"As it stands, the pullback in confidence, along with the early year decline in retail sales, hints of slower consumer spending growth in the first quarter," said Jennifer Lee, a senior economist at BMO Capital Markets in Toronto.
The University of Michigan said Friday its consumer sentiment index slipped to 93.6 in early February from a reading of 98.1 in January. Still, the index was at the second highest level since January 2007.
Economists had expected the sentiment index to hold steady.
Households early this month were less optimistic about current economic conditions as well as the outlook over the next six months. The survey also showed a fairly big fall in household intentions to purchase long-lasting manufactured goods, while plans to buy automobiles were little changed.
Consumer spending, which accounts for more than two-thirds of U.S. economic activity, weakened in December and January, surprising economists who had expected lower gasoline prices and a relatively robust jobs market to unleash a wave of discretionary spending.
Softer consumer spending has prompted economists to lower their estimates for first-quarter growth.
Still, economists remain optimistic about prospects for the remainder of this year. Growth this year is expected to be the strongest since 2005, driven in part by consumer spending.
"Consumers appear to be calibrating their assessment of current economic conditions and their expectations for the future, but the decline in sentiment isn't cause for alarm," said Jim Baird, chief investment officer for Plante Moran Financial Advisors in Kalamazoo, Michigan.
Import Prices Fall
A separate report from the Labor Department showed import prices recorded their biggest drop in six years in January as the cost of petroleum and a range of other goods fell, pointing to muted inflation pressures in the near term.
Import prices tumbled 2.8 percent last month, the largest decline since December 2008, after sliding 1.9 percent in December. It was the seventh straight month of declines in import prices.
"This report sets the stage for declines in both the producer and consumer inflation in January," said John Ryding, chief economist at RDQ Economics in New York.
"However, we believe the U.S. economy is experiencing an adjustment to much lower energy prices and that this does not signal the emergence of a sustained deflationary dynamic."
In the 12 months through January prices declined 8.0 percent, the largest year-on-year drop since September 2009.
Crude oil prices have plunged nearly 60 percent since June as increased shale production in the United State and weak global demand caused a glut on the market.
At the same time, the dollar has strengthened significantly against the currencies of the country's main trading partners, helping to pull inflation further away from the Federal Reserve's 2 percent target.
Ted S. Warren/APWorkers operate forklifts along a row of inventory shelves Friday, during a media tour of the new Amazon.com fulfillment center in DuPont, Wash.
DUPONT, Wash. -- Robots do a lot of the heavy lifting at the new Amazon.com (AMZN) fulfillment center, helping 500 human employees fill orders for the Seattle-based Internet retailer.
The center is one of 50 around the country and three in the Puget Sound area. The others are at Bellevue and Sumner. A fourth is under construction in Kent.
The $100 million DuPont Fulfillment Center has been operating since last June, but Amazon held a grand opening ceremony Friday for political and economic development officials, The News Tribune reported.
The center is a showcase for Amazon's robotic technology.
Robotic equipment improves safety because it operates without direct human control, minimizing the chance of injuries, said Greg Zielinski, the DuPont center's general manager.
Computer-driven equipment follows wires embedded in the floor to select merchandise on a two-story warehouse floor equal in area to 59 football fields.
The order travels on a conveyer belt to where it is boxed and labeled for shipment through a computerized system that routes the boxes to one of two dozen package-delivery trucks.
An algorithm decides which delivery company will handle the shipment to ensure the order arrives on time at the least cost.
NEW YORK -- Those days of calling your bank to let them know that, yes, you really are in Thailand, and yes, you really did use your credit card to buy $200 in sarongs, may be coming to an end.
The payment processing company Visa (V) will roll out a new feature this spring that will allow its cardholders to inform their banks where they are automatically, using the location function found in nearly every smartphone.
Having your bank and Visa know where you are at all times may sound a little like "Big Brother." But privacy experts are actually applauding the feature, saying that, if used correctly, it could protect cardholders and cut down on credit card fraud.
Credit and debit card fraud costs consumers and banks billions of dollars each year, and that figure has been growing as data breaches have become more common. The banking industry had $1.57 billion in debit card fraud in 2013 and $4 billion in credit card fraud in 2012, the latest years for which data are available, according to the Federal Reserve.
Facing these high costs, banks and the payment processors have been stepping up their efforts to cut down on fraud, and Visa's announcement is just one small piece of this drive. JPMorgan Chase (JPM) CEO Jamie Dimon has said repeatedly that his bank spends $250 million overall on cybersecurity every year, and plans to double that spending.
Tracking Purchases
Here's how it works: starting in April, banks will update their smartphone apps to include Visa's new location-tracking software. If the consumer opts in, the Visa software will, over a period of time, establish a customer's home territory of roughly a 50-mile radius. If the person uses his or her Visa card at stores in that area, those transactions will be considered low risk for fraud.
When that person travels outside their home area, the phone will notify Visa that they've entered a new city or country, using either the phone's cellular data plan or the next time the phone connects to a Wi-Fi network. When that person uses their Visa card for a transaction in that location, Visa will already know he or she is there and will be less likely to flag the card for a fraud alert.
"We will be able to compare the merchant's location to the most recent cellphone location to show it's a less risky transaction," Visa executive Mark Nelsen said.
The feature is optional and can be deactivated at any time. Visa also says none of the location tracking will be used for marketing purposes.
Combating Counterfeit Cards
One type of fraud Visa's feature will directly address is counterfeit credit cards. Criminals can take stolen credit card information and code it onto a new card using equipment that can be readily purchased online. Counterfeit cards look like any other credit card, but have someone else's information on the magnetic stripe.
Nelsen said Visa hopes the new security feature will prevent "a good portion" of fraud perpetrated with counterfeit cards, because those cards are often used in a location other than where the actual card owner lives.
Visa's new anti-fraud measure, which the company announced Thursday, won't address every potential fraud situation. If a card user has both their phone and credit cards stolen, for example, Visa wouldn't necessarily know that the card was at risk of fraudulent use until the cardholder contacted the company.
The current version of Visa's anti-fraud software doesn't address the possibility of stolen credit card data being used to make online purchases, but a future version will, Nelsen said.
Visa is just one of dozens of financial companies trying to figure out the best way to use new technologies to combat fraud. MasterCard (MA) said Friday it is rolling out a pilot program later this year that will integrate biometric data, such as face, voice or fingerprints, into its payment system to help authenticate transactions.
Cumbersome Process
Many travelers have had the experience of having their credit cards declined when using them for the first time in a foreign city or country because the bank assumed the charge was fraudulent. The only solution in those situations was for the cardholders to call the banks or credit card issuer every time they travel to let them know where they will be.
The goal is to let more of those good transactions go through so we can focus on the real fraud.
The process is cumbersome and time-consuming for cardholders and also for banks, which incur large expenses to staff call centers to deal with these types of calls from customers. Some banks use systems like text message alerts, but that usually requires customers to reply or call a number before the transaction will go through.
"The goal is to let more of those good transactions go through so we can focus on the real fraud," Nelsen said.
Privacy experts were generally warm to the idea, as long as banks are clear on how a customer's smartphone location will be used.
"When a trusted party -- and I think people think of their bank as a trusted party -- is looking out for you using what technology they have, I think people will welcome that," said Jules Polenesky, with the Future of Privacy Forum. Polenesky said Visa approached him six months ago to get feedback on this idea and to address any privacy concerns.
Justin Bookman, director of consumer privacy at the Center for Democracy & Technology, also supported the feature as long as banks are clear it's optional and how the data is being used.
"We effectively share our location with our banks every day when we swipe our credit cards," Bookman said. "As long as it remains optional, I believe it's a worthwhile idea."
NEW YORK -- The S&P 500 index closed at a record high Friday, as energy shares gained with oil prices, while the Nasdaq composite index hit a 15-year high helped by technology stocks.
Equities rallied this week after a ceasefire agreement between Ukraine and Russia and apparent progress toward a deal on Greek debt.
It's possible there's a sentiment that technology is turning the corner.
The Nasdaq had the strongest gains of the three main indexes Friday. A strong report by Cisco Systems (CSCO) earlier in the week led some investors to conclude that technology demand is improving, said Peter Jankovskis, co-chief investment officer at OakBrook Investments in Lisle, Illinois.
"It's possible there's a sentiment that technology is turning the corner," he said.
The market gained momentum late in the session after many traders had held off on making big bets earlier in the last trading day before a long weekend. U.S. markets are closed Monday for the Presidents Day holiday.
The Dow Jones industrial average (^DJI) rose 46.97 points, or 0.26 percent, to 18,019.35, the Standard & Poor's 500 index (^GSPC)gained 8.51 points, or 0.41 percent, to 2,096.99, a record high. The Nasdaq composite (^IXIC) added 36.22 points, or 0.75 percent, to 4,893.84.
The Russell 2000 index (^RUT) of small-cap shares also finished at a record high.
For the week, the Dow rose 1.1 percent, the S&P 500 gained 2 percent and the Nasdaq added 3.2 percent.
Oil Tops $60
The S&P energy sector closed up 1.95 percent as oil topped $60 for the first time in 2015 despite persistent worries about oversupply.
In contrast, the S&P utilities sector was the worst performer, falling 1.6 percent, closing down for the third day in a row. Many investors are leaving safe-haven utilities stocks as they anticipate U.S. Federal Reserve interest rate increases later this year.
American Express (AXP) weighed on the S&P index with a 3 percent decline. Several brokerages slashed price targets for the company after Costco (COST) said it would stop accepting American Express cards in its U.S. stores.
Of the 391 S&P 500 companies that have reported earnings, about 71.1 percent have topped profit expectations, according to Thomson Reuters (TRI) data, while 57.5 percent have beaten on revenue.
The earnings growth rate for the quarter is 6.6 percent, down from the 11.2 percent expected on Oct. 1, but up from 4.2 percent expected on Jan. 1.
U.S. import prices tumbled 2.8 percent in January, the largest decline since December 2008 and the seventh straight month of declines, indicating inflation pressures could remain subdued, while consumer sentiment fell from an 11-year high.
About 6.5 billion shares changed hands on U.S. exchanges, below the 7.3 billion average so far this month, according to BATS Global Markets.
NYSE advancers outnumbered decliners 1,919 to 1,146, for a 1.67-to-1 ratio; on the Nasdaq, 1,726 issues rose and 983 fell, a 1.76-to-1 ratio.
The S&P 500 posted 76 new 52-week highs and 1 new low; the Nasdaq composite recorded 111 new highs and 29 lows.
What to watch Monday
U.S. stock and bond markets are closed for Washington's Birthday.
Sam Edwards
Got used textbooks cluttering up your bookshelves? It's time to turn them into cash.
I've written about selling textbooks before -- it's a great way to make money in college -- but today I want to take an in-depth look at the pros and cons of different reselling sites. These five websites will help you resell your textbooks for cash, gift cards or money that you can use to buy books for next semester. They all offer competitive prices and free shipping labels, but the sites have a few significant differences.
1. BookScouter.com
BookScouter is a great site. I used it to make up to $750 a month selling textbooks, and depending on which books you have at hand, you can make some serious cash.
When you put a book's ISBN into BookScouter, it scans a bunch of different book reselling sites and displays what each reseller is currently offering for that title. You get to pick the offer you like best and then ship your book directly to that reseller, who pays by PayPal or check.
To get an idea of what these different resellers offer, let's test a random textbook: the seventh edition of "Principles of Microeconomics," by N. Gregory Mankiw, ISBN 9781285165905. It was published in January 2014, and its publisher, Cengage Learning, gives $271.95 as the list price.
On, BookScouter, the highest offer came from RentText at $91.55, and the lowest offer was eTextShop at $41.25. Not bad, right? Here's a little more information about BookScouter:
Pros:
The site compares offers from many different textbook resellers.
BookScouter pays by PayPal or check.
Cons:
Doesn't share reseller guidelines on acceptable book condition. Instead, it routes you to the reseller's website, where you'll have to search for them. If you send in a book that is determined to be unacceptable, you won't get paid.
According to their FAQ: "BookScouter is not very useful for selling rare, collectible or antique books."
The Amazon Textbook Buyback program is ready to turn your textbooks into Amazon Gift Cards. That's right -- you don't get cash when you sell textbooks to Amazon, but you do get gift cards that you can spend on Amazon items, which is almost as good.
As of this writing, Amazon is offering $96 for "Principles of Microeconomics," which is higher than any of the BookScouter offers. What else do you need to know about Amazon?
Pros:
Amazon offers competitive prices. When I checked, they weren't always the highest, but were always close to or better than the prices on other reselling sites.
Your earnings will be on a gift card, ready to buy next semester's textbooks -- or anything else you might want to buy on Amazon.
Cons:
You only get paid in Amazon Gift Cards (so you can only spend your earnings on Amazon).
Amazon has very strict reselling guidelines. Books cannot have torn or folded pages, and they cannot have any notes or writing in them.
3. Half.com
Half.com is a division of eBay (EBAY) that focuses on books, music, movies and games. Just like eBay, you can list your textbooks on Half.com and sell them to other Half.com users.
Unlike the other resellers on this list, Half.com won't give you a suggested price for your textbooks. You price your item yourself, based on its value and condition. It's a good idea to see what other users are pricing for the same book, to get an idea of what your textbook is worth.
As of this writing, Half.com users are selling "Principles of Microeconomics," for $180.23 for a copy in "very good" condition, to $89.98 for a copy in "good" condition.
Is Half.com right for you?
Pros:
You get to price your item.
You can edit your item price and description if your item does not sell.
Cons:
You get to price your item. For some people, that will be enough to turn them off to Half.com. What if you price too high and nobody buys your book, or price too low and don't get as much money as another seller?
You have to write your own item description and notes. If your book description isn't as eye-catching as the competition, you might lose the sale.
4. eCampus.com
When you visit eCampus' website and click into its Sell Textbooks section, you'll see how much they've paid to book resellers in the past 72 hours -- $6,653, when I last checked.
How can you get some of this money? With eCampus you have two options: reselling books for in-store credit or selling them for cash in the form of a check or direct deposit. You'll generally get more money for your books if you sell them for in-store credit, and you can use that credit to buy next semester's textbooks.
For "Principles of Microeconomics," eCampus offered me $81 in cash and $97.20 in in-store credit, which equals the $81 cash value plus a 20 percent in-store bonus.
Should you make eCampus your old textbooks' new home?
Pros:
You can use your old textbooks to buy your new ones.
The company offers bonuses that increase your in-store credit value.
It accepts books with notes and highlighting.
Its in-store credit rate for my test book was higher than any of the other reseller offers.
Cons:
If you want cash, be prepared to accept a lower price from eCampus.
Like Amazon, Barnes & Noble also offers a Textbook Buyback program. It offers payment in check or PayPal for books in acceptable condition. B&N is ready to pay $91 for "Principles of Microeconomics," which is right in line with the other resellers on this list.
Is Barnes & Noble's Textbook Buyback the right site for you?
Pros:
B&N will accept books with underlining, as long as it is not excessive.
You'll receive payment via check or PayPal.
Cons:
You must have at least $10 worth of books to sell.
Want to make even more money with these five reseller sites? There's no rule that says you can only resell textbooks you already own.
Go to garage sales and thrift stores or scan eBay for cheap textbook listings. If you see a textbook in good condition, plug the ISBN number into one of these sites and see how much it's worth. Then, if the price is right, buy it, resell it and profit! You'll get an A+ in making money.
Have you used any of these sites to successfully sell your old textbooks? Which one was your favorite?
I came to yoga, like most people, because I hated my job and going to yoga class was easier than finding another career. I was a well-paid corporate lawyer and, as I watched the gentle office dust drift through the filtered New York City sunlight, I dreamed of being anywhere else.
At first, it started with one or two classes a week, but soon, like an addict, I was there as often as I could skip out of work early. The yoga teacher was an escapee from the world of public relations. She had luscious dark, wavy hair, milky skin and sturdy thighs. At the end of every class, she turned off the lights, and we students lay there in the dark underneath musty, scratchy blankets.
I needed a teacher, a spiritual guide, someone to tell me that I was worth loving.
"You deserve good things!" she intoned in a throaty voice. I wept silently. I desperately wanted to deserve good things.
Over time, I needed that positive affirmation more and more. I needed a teacher, a spiritual guide, someone to tell me that I was worth loving, that my body was fine just the way it was, and that, somehow, the universe knew what it was doing. I decided that the most efficient way to do this was to become a yoga teacher myself.
Yoga teacher training isn't cheap. A class consisting of six months of weekend-long training classes cost nearly $3,000 over five years ago; now it's more. My first yoga teacher training class had about 20 people in it: several actors and dancers, a special-education teacher, a nutritionist, and a woman whose husband had celiac disease. We met all day Saturday and Sunday, as well as Wednesday nights. My tuition allowed me to go to unlimited yoga classes and to learn the difference between internal and external rotation. I learned how to avoid rotator cuff injuries and finally achieved a handstand. I hoped that by becoming a yoga teacher, I would have better hair, better abs, and better self-esteem. Now, I was the one telling people that they were worthwhile, so I had to believe it for myself.
In the midst of all this bliss, I got fired from my job. It was 2008.
Following the Path to Bliss
But, I'd gotten paid three months severance, which felt like a lot, so I decided to take the plunge and continue my yoga teacher training. The next level was the 300-hour teacher training, on top of the 200 hours I'd already completed. I would then be able to register with the Yoga Alliance -- a national organization that costs $55 a month -- as a 500-hour certified teacher. (Yoga Alliance standards are non-binding and have been criticized in the past.) I paid an additional $3,000 for more training (in installments this time) and continued to attend yoga classes. I was so blissed out, I could ignore my expiring bank account. I figured the universe would send me a sign.
As part of the advanced teacher training, I assisted a teacher during one class a week: picking up props, doling out blankets and learning how to pull on people's hips in down dog without making them cringe. I helped light candles; I was basically a glorified personal assistant. I also got to teach a real yoga class once a week -- without getting paid, of course. Up to this point, I'd made zero dollars teaching yoga. The teachers encouraged us to teach for free, to teach anyone, in fact, who would take their shoes off and stumble through a few poses listening to you ramble on how the hips hold feelings of guilt and resentment. Only by giving my skills away would I get something in return.
Only by giving my skills away would I get something in return.
I did get something out of teaching the free class. I was no longer embarrassed to bellow "OM" into a quiet room. I could chant in semi-melodious tones while my students closed their eyes in corpse pose. I blasted Rasa while my students filed into class and placed their expensive-looking handbags along the side of the wall. One time, I opened a window in the perennially stuffy studio and a woman's white athletic sock fell out onto the street below. The sock's owner was focused on tree pose and didn't see. (I told her, of course, but am ashamed to admit I thought about pretending like it didn't happen.)
Luckily, the money I wasn't making was money I saved by becoming a vegan. When I engaged in deep meditation practice (also part of being a yoga teacher), I saw a hamburger on the inside of my eyelids, and my eyes watered. My meditation teacher walked by and told me, "This path is not easy."
After the completion of my 500 hours of yoga teacher training, I was entitled to sub at the yoga studio for $25 a class, minus taxes. Most of the classes were early in the morning and late at night, so I sprinted across town from dawn to dark. I stalked pregnant yoga teachers, waiting for them to go on maternity leave.
Teaching Private Lessons
The real money, I heard, was in private clients, who allegedly paid up to $200 per class. One experienced teacher gave me a private client, a dentist, whom I taught weekly for credits for teeth cleanings. I hoped my polished enamel would compensate for the lack of heath insurance. I got a coveted private client -- a middle-aged executive with a tennis injury -- whom I met at 5:30 a.m. twice a week. On my way to see him, more than once I encountered people having sex behind a bar, still intoxicated from the night before.
Chasing after yoga classes was demeaning and brutal on the body. There was no sick pay, so I worked through the flu and food poisoning from a particularly nasty "health" salad. I picked up a class at 6 a.m. when a teacher left for graduate school and hoped it would turn into a regular gig. Sadly, after a few months, I was replaced with another young yoga teacher, no more experienced than I, but possibly less desperate.
I decided that some professional pictures of me wearing black spandex, contorting my limbs into impressive poses, were necessary for a website to attract private clients, so I shelled out $300 for a photography student to take pictures. There's a great photo of me aligned with some mahogany walls, toes pointed in the air. I was able to balance long enough for the photo. But I never got the promised private clients. I stopped paying for the Web host. I put the photo on Facebook (FB) and received many likes.
The Universe Will Guide You
I asked my yoga teachers for advice, feeling that they owed me something. As part of the training, I was assigned a "mentor" who was supposed to shepherd me through the painful process of going from mortal to guru. Mine was an incredibly toned woman with tan limbs who yelled at me to straighten my legs in class. I liked her no-nonsense approach. When I asked her for help finding classes, she asked, "How bad do you want it?"
"Um, well, bad," I said.
"You have to give things up and wait for your time. The universe will guide you," she said. I wondered what she meant. I couldn't always afford food for my dog and gave him half of mine. I asked my parents for more money, convinced that I would break into the business soon.
"Why don't you just start back on your antidepressants and get a real job?" my mom asked.
Adventures in Retail
Desperate for money and longing to be around luxury even if I couldn't afford it, I took a job in retail. My phone rang constantly with the calls of credit card companies. Then a lawyer I used to work with came in one day to shop.
"You work here?" she asked in marvel. I explained my situation. "That's incredible," she said. "I wish I could be like you."
Just then, my supervisor pulled me to the side. Someone had stolen several pairs of earrings during my shift as a dressing room attendant. A guard patted me down and checked the folds of my sweater and the cuffs of my jeans for stolen goods.
I began to attach myself to another yoga teacher in the meantime, reasoning that the toned one was simply not my true teacher. "When the student is ready, the teacher comes," I was told a yogi once said. I thought this woman would be my true teacher. She had a round, open face, liquid dark eyes, and a perfectly proportioned body, softly round yet strong. While my old teacher's moves were athletic and muscular, like a speed skater, my new teacher was fluid, popping into a handstand without seeming to flex a muscle. She wore hoop earrings and wrapped a beaded mala around her wrist.
I told her that I needed a job. I wasn't making enough money to pay my rent. I was thinking about moving back in with my parents. I cried and begged her for help, any kind of help, any kind of job. "I can't make it as a yoga teacher," I said. She offered to put me in touch with someone who needed cater waiters. "It pays well," she said. "It's just for a few nights. I'll send you his email. In the meantime, you should write down what you want on a piece of paper and set the proper intention. If you don't set the intention, if you don't really want it, it won't happen for you."
'Washing Dishes Is Like Yoga'
I sent my teacher an email about the catering gig once, then twice, and waited for a response that never came.
Finally, one weekend scraping kale and farro off of a plate as a dishwasher at a yoga retreat in upstate New York (discounted price, $300), I decided that I had had enough. My fellow new yoga teacher/ dishwasher kept looking at my handiwork critically. "Washing dishes is like yoga," she said. "You have to do it mindfully." She pointed to some congealed sauce I'd missed on a fork.
After that weekend, I filed for bankruptcy and ended the calls from creditors. I interviewed for a job with benefits and health insurance so that I could start back on antidepressants. I had to work in an office, but at least I could afford a beer after work.
I continued to teach yoga occasionally after that, but I no longer had the heart. It was wrong to tell people to "relax" and "let it go." I was merely posing as someone who had a sculpted butt and inner peace. There was nothing on that other side, and I couldn't look into their earnest, searching eyes and pretend otherwise.
Jessica Pishko is a San Francisco writer. She has a JD from Harvard Law School and an MFA from Columbia. This op/ed contribution does not necessarily represent the views of Credit.com or its partners.
For your tax preparer to allow you to take advantage of all the tax deductions, credits and loopholes to which you are entitled, you need to give him or her complete, detailed and accurate information.
The Necessities
The full names, as they appear on the Social Security card, Social Security numbers and dates of birth for you, your spouse and all dependents.
The relationship of each person you want to claim as a dependent, and whether or not, and how long, they lived with you.
All W-2s (all copies) and the final pay-stub for the year for each of your employers. Make copies of your W-2s to keep before giving them to your tax preparer. You may need to provide a copy of your W-2s to third parties for a variety of non-tax reasons.
All 1099s (for interest, dividends, gross proceeds, pensions, distributions from a Qualified Tuition Program, and other income), 1098s (for mortgage interest, contribution of a motor vehicle to charity, student loan interest, and tuition and fees), and K-1s and all attachments (for partnerships, sub-S corporations, estates, and trusts) from all sources.
All year-end statements and information from brokerage and mutual fund accounts and any average cost statement you receive from a mutual fund on the sale of fund shares.
If this is your first year with a new tax preparer, give him copies of your 2011, 2012, and 2013 federal and state tax returns.
And you need detailed information about these:
Itemized deductions (unreimbursed medical payments, charitable contributions, and job-related, job-seeking, and investment expenses),
Rental income and expenses, and/or
Self-employment income and expenses.
Your tax preparer doesn't necessarily need to see actual bills, receipts or cancelled checks. For the most part, he or she will just need numbers. Provide specific numbers for all of the deductions you are claiming. "Claim the maximum" or "Whatever I am allowed" or "Same as last year" is not appropriate. The maximum is what you actually paid. Tell your tax pro "$1,023.50" or "$20 per week for 50 weeks" or "4,638 miles."
For Special Situations, Provide Additional Information
Did you donate clothes, books, household items, furniture, etc to a church or charity? Provide any receipts and acknowledgements and a detailed listing of the items donated and their value. If you donated a car to a church or charity provide all the paperwork you received from the charity, especially the Form 1098-C, plus the original cost and date of purchase of the car.
Did you sell stock, bonds, mutual fund shares, or any other investments? Your tax pro will need the cost basis information for all trades. This information may be included on the Form 1099-B you received from your broker or the mutual fund house. But if the cost basis information for all trades is not included on this statement, have your broker provide you with a "profit and loss" report for all the year's trades that reconciles to the Form 1099B for each account. If you sold an investment you inherited your preparer will need the number of shares you inherited and the date of death of the person from whom they were inherited.
Did you buy or sell real estate? You must give your tax pro all closing/settlement statements, plus the cost of any capital improvements made over the years to a property you have sold.
Did you receive a distribution from an IRA, pension, or other retirement account, or convert a traditional IRA to a Roth account? You must provide the year-end statements for all IRA accounts. And with a distribution, your tax pro will need to know if you "took the money and ran" or rolled-over any of it to an IRA.
Did you pay alimony? Give you tax preparer the Social Security number of your ex-spouse, the amount of alimony paid for the year and any other required payments, such as health insurance premiums or real estate expenses, that you made on behalf of your ex-spouse.
Did you purchase a car, truck, SUV, motorcycle, boat or airplane? How much was the sales tax?
Did you refinance a mortgage?Give your preparer the Closing/Settlement Statement for the refinance and tell him or her the term of the new loan.
Did you win at the track or in the casinos? Provide details of your gambling activity for the year.
Did you have dependents, or were you in college? In addition to all Form 1098-Ts you receive give your tax pro all the bursar's reports"for the year that show tuition and other payments. You may be able to print-out a financial report from the college's website. Your preparer will also need to know what was spent on course-related books, supplies, and equipment. If you have taken a distribution from a Section 529 Qualified Tuition Program you must also provide the cost of room and board.
Did you pay for child care, whether directly to the provider or through an employer's Flexible Spending Account? The preparer needs the name, address, Social Security or Employer Identification number, and amount paid for each child to all care providers. You may be able to get detailed statements from the providers.
It might not be as romantic, but what if the celebrities who spent fortunes on expensive gifts for Valentine's Day skipped the presents and invested that money in the companies instead? Let's look at some crazy-expensive gifts celebrities have given or received for Valentine's Day and then examine how much money they'd have if, rather than giving the gift, they invested that money in the stock of the company that makes the gift.
1. Tom Cruise and Katie Holmes: $20 Million Gulfstream Jet
The "Top Gun" star reportedly bought his then-fiancée her own $20 million custom Gulfstream jet as a present in 2005. The couple's relationship has since crashed and burned, so perhaps Cruise wishes he had skipped the gift and invested the money?
The manufacturer of the jet, Gulfstream Aerospace, is a subsidiary of General Dynamics (GD). General Dynamics, founded in 1899 and based in Virginia, is an aerospace and defense company. Cruise would have made almost $7 million had he opted for traditional flowers and chocolates and invested his $20 million in General Dynamic stock:
$20 million invested in General Dynamics:
2006: $26.86 million (+34.3% or $6,860,000)
2. Katy Perry and Russell Brand: $340,000 Bentley
Katy Perry reportedly kissed goodbye to at least $340,000 when she bought then-fiancée Russell Brand a lilac-colored Bentley Brooklands for a Valentine's Day gift in 2010. I'd imagine the Bentley is still running smoothly, even if this couple isn't. In what might surprise some folks, the German car company Volkswagen AG (VLKAY) owns the luxury Bentley brand. It also owns Lamborghini, Bugatti, Porsche and Audi.
$340,000 invested in Volkswagen:
2012: $463,760 (+36.4 percent or $123,760)
2008: $389,640 (+14.6 percent or $49,640)
3. Jerry O'Connell and Rebecca Romijn: $52,000 Home Vineyard
In the most creative out of the bunch, O'Connell put in a vineyard at the couple's house as a Valentine's present about seven years ago. I'd imagine this gift-that-keeps-giving is one that O'Connell's glad he gave, but how much money would be have if he skipped the vineyard and invested his $52,000?
Since no company produces vineyards, we'll look at two alcoholic beverage makers: Constellation Brands (STZ) and Diageo (DEO).
Constellation Brands produces and markets alcoholic beverages in the U.S. and internationally. Its wine labels include Robert Mondavi, Clos du Bois, Blackstone, Estancia, Arbor Mist, Toasted Head, Simi, Black Box, Ravenswood, Rex Goliath, Kim Crawford, Franciscan Estate, Wild Horse, Ruffino, Nobilo, Mount Veeder, Inniskillin and Jackson-Triggs. The company was founded in 1945 and is based in New York.
London-based Diageo, founded in 1886, also produces and markets spirits, beer and wine. Its beverage portfolio is heavily slanted toward spirits and beer. Some of its better-known brands include Johnnie Walker, Seagram's 7 Crown, Smirnoff, Baileys and Guinness.
$52,000 invested in Constellation Brands (STZ):
According to HollywoodLife.com, musician Kanye West campaigned hard to get his then-fiancé on the cover of Vogue for Valentine's Day 2014. His lobbying paid off, though a little late, as the couple graced the cover of the famed magazine in March.
Considering Condé Nast charges $189,888 for a single-page ad in Vogue, getting a cover placement is a pretty priceless gift to give on Valentine's Day, along with near-impossible if you aren't a celebrity or model. Advance Publications owns Condé Nast but is privately held, so we don't have stock information to gauge Kanye's investment against, although it's likely that the cover meant more to Kim than extra money would.
5. Beyoncé and Jay Z: $2,390 Promise Bracelet
A more modest gift, although not doable for most this Valentine's Day, Jay Z gave wife and fellow musician Beyoncé Knowles a mixed-metal Promise Bracelet from Tacori last year, according to HollywoodLife.com. This company is privately owned, so the closest Jay Z could get to giving Beyoncé a valued item from the jeweler would be through a purchase, although some of his jewelry might hold its value better than other pieces.
Applying to both this couple and the next one, an Italian restaurant in Brooklyn called Brucie themed its Valentine's Day dinner menu on Beyoncé last year, and it will be offering up Kim Kardashian-inspired dishes this year.
6. David and Victoria Beckham: $8 Million Bvgari Necklace
Surely, David Beckham scored a win when he purchased his wife a $8 million Bvlgari necklace for Valentine's Day. Bvlgari is an Italian company that is best known for its jewelry, though it also produces and sells other luxury items such as watches, fragrances and accessories. The company was bought by the French firm LVMH Moet Hennessy Louis Vuitton. LVMH trades on the Paris exchange),so we'll look at two similar companies -- Tiffany (TIF) and Harry Winston Diamond (HW) -- that do trade on a major U.S. stock exchange.
Tiffany designs, manufactures and retails fine jewelry worldwide. The iconic company known for its blue boxes was founded in 1837 and is based in New York City. Harry Winston Diamond is a bit different; rather than being just a retailer, it also engages in diamond mining. Like many mining companies, this company is based in Canada (Toronto). The stocks of mining companies are typically more volatile than most, as you'll see below.
$8 million invested in Tiffany:
2012: $8 million (unchanged)
2008: $13.94 million (+74.3 percent or $5,944,000)
$8 million invested in Harry Winston:
2012: $9.71 million (+21.4 percent or $1,712,000)
2008: $4.64 million (loss of 39.5 percent or -$3,160,000)
In all but one scenario above (the 2008 return on Harry Winston Diamond), every celebrity would be better off -- in terms of strictly money -- had they foregone the pricey Valentine's Day gifts and invested the cash in the company that makes the expensive gift (or a similar one).
Lefteris Pitarakis/APBank of America headquarters in London's Canary Wharf financial district.
Bank of America (BAC) was caught having used its government-backed U.S. operations to finance overseas dividend arbitrage, according to The Wall Street Journal. Large hedge funds, mutual funds and other large investors use the complicated scheme to rake in dividends while avoiding foreign taxes.
It's a legacy gift of the U.S. domestic tax system and collective expertise in bending rules to make a buck. But it raises the question of whether U.S. taxpayers -- and international relations -- could be put at risk if the trades necessary for the arbitrage go badly.
The practice of dividend arbitrage has been around for decades. Countries typically impose a withholding tax on dividends paid by native companies to foreign shareholders. That amount typically runs 15 percent to 30 percent.
"Because of the withholding tax, we found that people would avoid high dividend-paying stocks in foreign countries because they knew it would have a drag on their performance," Susan Christoffersen, an associate professor of finance at the University of Toronto's Rotman School of Finance, told DailyFinance.
A Hypothetical Example
Dividend arbitrage is a financial dance that moves stock ownership moved back and forth across borders to technically avoid withholding when it comes due. Large shareholders like mutual funds or hedge funds tend to use it. Here's an explanation from a 2005 paper (paid access), "Crossborder dividend taxation and the preferences of taxable and nontaxable investors: Evidence from Canada," that Christoffersen co-authored:
A hypothetical U.S. mutual fund, Taxwise International Fund, owns 100,000 shares of TransCanada Pipelines. TransCanada pays a 29 cents a share dividend to shareholders of record on June 30. Without arbitrage, Taxwise would receive $29,000 less 15 percent Canadian withholding for a total of $24,650.
Taxwise lends its shares to a U.S. arbitrageur, which shorts the shares with dividend to a Canadian arbitrageur. The U.S. arbitrageur makes the market interest on the short sale.
After the dividends are paid, the two arbitrageurs undertake a prearranged swap. The Canadian arbitrageur receives the market interest from the U.S. arbitrageur minus a discount, which the latter keeps. The U.S. arbitrageur receives the $24,650 plus any profit made on the difference between the purchase and sales prices of the shares.
The U.S. arbitrageur returns the shares to Taxwise along with the $24,650 and a lending fee. According to the study, Taxwise would have likely given up about 5 percent of the dividends rather than the 15 percent that withholding would have required.
The specifics and intricacies can vary, depending on the two countries involved. But because the arbitrage is a derivative that requires short selling and depends on market interest rates, it can potentially be risky.
Dividend Arbitrage Began in the U.S.
According to the Journal's report, Bank of America had begun to finance such deals through its U.S. unit -- Bank of America National Association, or BANA -- which also runs the company's domestic retail banking business. Effectively, Bank of America had exposed government-backed consumer deposits to possible risk should the trades run into problems.
Dividend arbitrage originated in the U.S., according to a DailyFinance interview with Steven Rosenthal, a senior fellow at the Urban-Brookings Tax Policy Center. The practice was largely curtailed in 2010 after congressional hearings, as foreign investors were using derivatives to avoid 30 percent withholding. However, that didn't stop its use elsewhere.
"Many other countries, including many European countries, have a tax framework similar to ours prior to 2010," Rosenthal said. Even if the mechanisms largely don't work for dividends paid by U.S. corporations to foreign investors, they are still available internationally. An Italian or American investor might use them to receive dividends from a German, for example.
Bank of America Says It 'No Longer' Does This
Bank of America told the Journal that BANA had not sustained any losses as a result of the activity and "no longer finances dividend-arbitrage activity." But were those any losses on an individual trade basis or net losses, which, if profitable enough, might hide individual losses? Also, according to the Journal, other parts of Bank of America outside the U.S. continue to offer such services.
"I think the real problem here is derivatives are inherently complicated," Rosenthal said. "I think there are steps to make sure banks are exercising proper diligence and steps to take to carve out the risk from federally insured deposits."
The Dodd-Frank Wall Street Reform and Consumer Protection Act had a section that forced U.S. banks to spin off work in certain types of speculative ventures, including some derivatives, into a separate entity. The structure would have prevented consumer deposits from potentially being affected by risky trades that went badly and, therefore, invoking government insurance of those deposits to make good losses. That section was revoked as part of the $1.1 trillion spending bill passed and signed into law last December.
"I think Dodd-Frank did a good job," Rosenthal said. "But politically we haven't been able to hold the line and it's not clear where we're going to end up."
Getty Images
Dinner and a movie used to be the standard date night in America. But that's changed as home theaters have gotten better and the instant gratification of on-demand content has spread. The result may be a long, slow death spiral for the movie theater, once an iconic part of entertainment in America.
The Decline of the Box Office
For more than a decade, box office ticket sales have been in a slow and steady decline in the U.S. Ticket sales peaked in 2002 at 1.58 billion when the average cost of a ticket was $5.81. In the just over 12 years since, annual sales have fallen 20 percent to 1.27 billion last year and ticket prices have jumped 43 percent to an average $8.30. For a family of four, that means a $33.20 bill just to get in the theater.
From the industry's perspective, the problem has been masked by rising ticket prices, which have kept total box office revenue fairly flat. But if attendance continues to dwindle, the movie theater will be in trouble long-term.
Source: Box Office Mojo
For Hollywood, the downward trends at the box office don't have an easy fix because a number of factors have driven consumers away from the theater. In 2002, when ticket sales peaked, we were just starting to see widespread adoption of large-screen HD TVs, and today they're in most homes in the country. The theater experience has come into the home, taking away some of the box office's appeal.
The other big change in entertainment is the expansion of on-demand offerings. TV, movies and music are now available at the touch of a button instead of on the schedule of media companies. The on-demand world doesn't mix well with the regimented movie theater schedule.
As content has become on-demand and moved online, the time between a movie's box office release and streaming release has also been compressed. Last year's highest-grossing movie, "The Hunger Games: Mockingjay -- Part 1," was released Nov. 21 and will come out on iTunes Feb. 17, less than three months after opening weekend. Even a movie with an incredibly long box office run like "Frozen" took less than four months to hit DVD/Blu-ray. Compare that to 2004, when "Shrek 2," the year's highest-grossing movie, took nearly six months to move from theaters to DVD.
Unless you really want the "theater experience," why not just wait to see a movie via streaming or on DVD on your big screen at home?
Why Falling Ticket Sales Put Pressure on Theaters
For movie theaters, the problem isn't necessarily the lost ticket sales, but rather the lost concessions. A theater only takes a fraction of the revenue from each ticket sold, giving most of it to the studio and their distributor. Where the theater makes money is on a $5 bowl of popcorn or a $4 soda. These are incredibly high-margin items and they're the reason theaters make a profit.
But if fewer people are entering the theater each year, there are fewer opportunities to sell concessions. Not to mention, the sharp rise in ticket prices over the past decade may have some consumers thinking twice about spending even more on junk food.
The Future Looks Bleak for Movie Theaters
Theaters may also be biting the hand that feeds them: the movie studios themselves. As the box office has declined, movie companies have had to come up with new ways of distributing content. iTunes, Vudu, and others are making it easy to buy movies from the comfort of your home. Netflix (NFLX), Hulu, and Amazon (AMZN) have proved out the subscription streaming model and are now a key source of revenue once the box office and DVD sales channels have been exhausted. But streaming could be moved front and center in the future.
"The Interview" inadvertently tested the streaming distribution model, first being released on iTunes and now on Netflix less than a month after it "opened." That wasn't Sony's original distribution plan, but the movie reportedly made $15 million in online sales in the first four days after it was released and $16 million in the subsequent week. Granted, this movie was an unusual case, and its notoriety may have added to its streaming success, but if this model proves to be viable in the future, it could take content away from the box office.
The bottom line is that interest in the box office is waning in the U.S., and I don't see the trend reversing. Home theaters are getting better every year, more content is available on-demand, and the price of going to the movie theater has gotten prohibitively expensive.
Movie theaters were once a staple of American life (and dating), but those days are long gone. It's sad, but it's pretty clear that we're slowly witnessing the death of the box office.
Motley Fool contributor Travis Hoium owns shares of Apple. The Motley Fool recommends and owns shares of Amazon.com, Apple, and Netflix. Try any of our Foolish newsletter services free for 30 days. To read about our favorite high-yielding dividend stocks for any investor, check outour free report.
WASHINGTON -- Long-awaited rules to usher in a new era in which small, commercial drones zipping through U.S. skies are a part of everyday life were proposed by the Federal Aviation Administration on Sunday.
The proposal lays out requirements commercial operators must meet such as passing a knowledge test administered by the FAA and a security check by the Transportation Safety Administration in order to fly small drones, defined as weighing less than 55 pounds. It is likely to be two or three years before the rules are made final, but federal officials said that once they are in place the economic and safety benefits of unmanned aircraft are expected to be enormous.
Among the chores that officials envision drones performing: Aerial photography and mapping, crop monitoring and inspections of cell towers, bridges and other tall structures. But the proposal includes safety restrictions such as keeping drones within sight of operators at all times and no nighttime flights. That could mean no package or pizza deliveries by drone. Drones would also have to stay at least 5 miles away from an airport.
Final Rules Still to Come
"We have tried to be flexible in writing these rules," said FAA Administrator Michael Huerta. "We want to maintain today's outstanding level of aviation safety without placing an undue regulatory burden on an emerging industry." He said the agency intends to issue final rules as quickly as it can.
Even with the restrictions, drones are expected to play a "transformative role in fields as diverse as urban infrastructure management, farming, public safety, coastal security, military training, search and rescue, and disaster response," the White House said in a presidential memorandum on privacy released in conjunction with the rules.
The memorandum lays out measures federal agencies must follow to guard against abuse of data collected in drone flights. Among other steps, the order requires agencies to review privacy and civil rights protections before deploying drone technology and to adhere to a range of controls. Personally identifiable information collected in drone flights is to be kept no longer than 180 days, although there are exceptions.
It's questionable whether such steps will satisfy civil liberties advocates, who've objected strongly to the government's vigorous use of digital surveillance in the name of national security. The proposal also raises the possibility that final rules may include a separate category for very small drones -- those weighing 4.4 pounds or less -- that would include fewer restrictions.
The proposed rules are "a good first step" bringing the U.S. closer to realizing the benefits of drone technology, said Brian Wynne, president and CEO of the Association for Unmanned Vehicle Systems International, a trade group.
In the Money Mic series, LearnVest hands over the podium to people with controversial views about money. These are their views, not ours -- and we recognize their strategies may not work for everyone -- but we welcome your responses.Today, one man explains how he built a savvy real estate investment strategy -- one property at a time. Hi, I'm Tim. I'm 34 years old -- and an aspiring member of the Kiss My You-Know-What Club.
An old co-worker introduced me to this "secret society" years ago, declaring that he could do whatever he wanted in life -- even retire that very day -- because he'd achieved financial freedom. That conversation stuck with me, and I've made it my mission to achieve the same status. How am I getting there? Through careful savings, a diligent focus on income growth and shrewd real estate investments.
The Start of a Beautiful Relationship With Real Estate
Courtesy photo
I was attending the University of Texas at Austin when I executed my first deal. I'd started working at an e-commerce site around Christmastime during my freshman year, and was fortunate to still be working there when the company went public in the spring of 1999. I'd had my eye on some nearby property -- land that was being developed into large custom houses. It was right on Lake Travis, and I relished the idea of getting out of the city to enjoy it.
A combination of intuition and market research led me to believe the land was undervalued -- and the IPO was just what I needed to make the purchase. So I bought a couple hundred shares of the stock, and waited until my money increased 20 percent. Fortunately, it didn't take long -- in just a few weeks, I sold half for about $3,000. I combined that with some of my earnings, and put a 10 percent down payment on the land, which cost $52,500.
Stepping onto a piece of property and being able to say, "This is mine!" was so exciting. The right, emotional side of my brain couldn't wait to relax, listening to the lake lap against the shore. And the left, analytical side of my brain saw some serious potential for wealth creation.
A Home of My Own
Fast-forward a few years: I'd graduated, taken a sales job with a Fortune 100 company -- and wanted to buy a home of my own. But I couldn't swing the $400 mortgage on the land and a new house. So I decided to sell the property, netting about $12,000, and used the cash for a down payment on my first house in Austin. That was just the beginning of my adventures in real estate. Two years later my job moved me to Des Moines -- followed by three other cities in four years. With every move, my game got a little stronger.
I'd take advantage of attractive relocation packages -- often $30,000-$50,000 to cover moving fees and closing costs -- to ladder up, selling the house I was living in and going bigger each time.
I also cashed in on another perk: If your house sold within 60 days, you'd receive a bonus of 2 percent of your home's value. Otherwise, the company had to buy the house from you after the 60-day mark, so it was in their interest to provide this incentive. I was able to sell my houses in time, so for each move I transferred my previous equity, profit from the sale, relocation money, and the bonus into the next place.
As a result, I went from having about $30,000 in equity in my first house to $80,000 in another home just four years later -- without contributing any money of my own. I had a great run, but after several years I realized my heart was in Austin and I was tired of moving.
So I quit my job, moved back and found a sales consulting position with a flexible, work-from-home arrangement. Not long after, I got engaged to my wife Maria, who works in sales at a large consumer goods company. Back in Austin, where it all started, I doubled down on my passion for real estate.
Building a Future -- One Property at a Time
As I was adjusting to my new life in Texas, I couldn't help but think about my old colleague, and how liberating he said it felt to have financial independence. While I wasn't sure if I wanted to retire early -- and I'm still not -- the thought of having a choice was motivation enough.
Even though I made good money, lived below my means and maxed out my retirement accounts, I doubted it was enough to propel me to financial freedom. Since I'd had a good experience with real estate -- even if it was just buying and selling my own houses -- I came to the conclusion that was my ticket. The next logical step, I determined, would be to reenter the market -- as a landlord.
And Maria and I did just that in 2007, right after we got married. We bought a new home together, and then rented Maria's. It was our first foray into investment properties -- and we haven't looked back. Since then, we've bought one rental property a year -- a process we initially funded with our savings and tenants' rent. In 2009 it became even more affordable when I got my real estate license, which allowed me to start collecting 3 percent commission instead of paying it.
Austin is a great leasing locale, full of young renters. Fortunately, that led to a fairly steady market even when the rest of the country was still suffering from the major downturn in 2010 and 2011.
What's more, while the financing market got tighter, the pool of renters grew bigger. And because rents were increasing significantly faster than home sale prices, I had a steady stream of clients interested in my other venture and income stream -- a property management company.
I'd learned a lot managing our rentals -- including having to evict a tenant -- and realized I could help others be successful. Today -- four years after I launched the company -- I, with two employees, manage 80 properties for other investors. I help them find suitable properties, secure tenants, collect rents and manage the homes.
$11,000 a Month From Tenants
Overall, I'm thrilled with the success we've found -- and the strides it's allowed Maria and me to make toward our ultimate goal of financial freedom. Thanks to Maria's income and healthy profits from the management company, I was able to quit my sales job in 2011.
We're now bringing in $11,000 from tenants each month, with $6,000 going straight toward paying down our mortgage principals, and therefore increasing our net worth. The rest of it covers our property taxes, insurance and maintenance fees -- and there's still some free cash flow leftover.
We're aggressively paying down our mortgages as quickly as possible, so I negotiated 15-year terms with low interest rates. We're pacing to own five houses free and clear by the time I'm 47, and one more each year thereafter. That's when our net worth will shoot through the roof: We'll own all our houses outright and can pocket a huge chunk of the proceeds.
As a result of this incredible progress, Maria and I have been able to quadruple our net worth in the last five years -- and we see no signs of slowing down. Even if we never saved another dime or bought another house, the infrastructure we've created would still increase our net worth by $72,000 a year.
The Making of a Serious Investment Strategy
Even though real estate is my net-worth-boosting tool of choice, I realize it's not for everyone. But I have found some key parallels between excelling in real estate and other types of investments.
For example, before I pull the trigger on a new purchase, I always envision the ideal exit strategy and worst-case scenario. With my first land investment, I wanted to flip it and make money. But if that didn't work out, I could have kept my used car, continued to make payments and built a house on it down the line. I knew that, financially, I'd survive even if the "worst" happened -- an assurance everyone should have before putting money on the line, whether it's buying stock or supporting a friend's new company.
I'm also diligent about calculating my ROI on each property by assessing the gross rent multiplier, or the ratio between how much rent a house can generate annually versus the purchase price. My goal is a gross rent multiplier of 12 -- meaning that's the maximum number of years it should take to pay off a house based solely on how much I receive in rent. It's why you'd never want to rent out a $300,000 house for just $1,500 a month-it'd take too long to recoup your money.
Although this calculation is specific to real estate, it's a principle anyone can use before making a large financial commitment. Take enrolling in grad school: It's important to ensure you don't spend more in tuition than you can earn back through salary bumps in a reasonable time frame.
Lastly, because I believe so strongly in my strategy, I've made sure to learn as much as I could about the industry -- just like anyone would research an investment before diving in.
Inspirational In-Laws
Honestly, I think I've been so motivated to master the real estate market because it's my version of the American dream. After all, I've had some amazing role models who've reinforced this idea.
My in-laws immigrated to the U.S. from Mexico when they were teenagers. They started as migrant farm laborers, but as they learned English and eventually became citizens, their employment opportunities opened up. They worked tirelessly -- my mother-in-law in food service and then retail, and my father-in-law primarily in construction. Even though they didn't have much, they expertly leveraged real estate investments to create a significant net worth.
They started simply: They lived in a rented trailer, but saved up enough to purchase it -- and eventually the land it sat on too. Then they rented out space on that land to accommodate three other trailers. This was years ago, of course, and they lived in Amarillo, which has a very low cost of living -- so they only paid a few thousand dollars for the land. But they did all the work themselves to maintain it, and charged enough rent to retire their debt in just a couple years.
Once they owned the land outright, they purchased a small house, and aggressively paid it off. They followed that cycle for years: Move, work hard to pay off a property in five to eight years, rent it out, and start over. The end result? They were able to send three kids to college and amass a large-enough portfolio to fund their retirement.
That success story is a huge inspiration for Maria and me to keep moving forward -- and proof of the power of real estate. If Maria's parents could achieve financial freedom with such few resources, how much more can we accomplish with ours? I can't wait to find out.
Any case studies presented do not indicate future performance. Strategies discussed are not appropriate for everyone. LearnVest Planning Services is a registered investment adviser and subsidiary of LearnVest, Inc., that provides financial plans for its clients. Information shown is for illustrative purposes only and is not intended as investment, legal or tax planning advice. Please consult a financial adviser, attorney or tax specialist for advice specific to your financial situation. Unless specifically identified as such, the individuals interviewed or quoted in this piece are neither clients, employees nor affiliates of LearnVest Planning Services, and the views expressed are their own. LearnVest Planning Services and any third parties listed, linked to or otherwise appearing in this message are separate and unaffiliated and are not responsible for each other's products, services or policies.
Mark Lennihan/AP
From a provider of supersize movie screenings hoping that it's the market's feature attraction to the leading installer of solar rooftop panels checking in with quarterly results, here are some of the things that will help shape the week that lies ahead on Wall Street.
Monday -- Hail to the Chiefs
The major exchanges are closed in observance of Presidents Day, and naturally it will be quiet on the U.S. business news front. The rest of the world will still be in action, and one overseas name to watch is Vipshop (VIPS).
The Chinese online discounter of branded apparel is growing quickly, and it reports fresh financials on Monday. Analysts see both sales and earnings climbing better than 80 percent relative to the prior year's quarter. Vipshop has routinely blasted through Wall Street profit projections, so it won't be much of a surprise if it earns more than the 9 cents a share that analysts are targeting.
Tuesday -- Host of the Party
The abridged trading week kicks off on Tuesday with Rackspace Hosting (RAX) reporting fourth-quarter results. Rackspace is a leading provider of Web-hosting services, with more than 300,000 business customers.
Rackspace was reeling through 2013 as the cutthroat nature of the industry saw margins contract sharply. It bounced back last year, and the shares hit a new 52-week high just last week. Rackspace reports after the market close on Tuesday.
Wednesday -- Rising Sun
SolarCity (SCTY) reports on Wednesday afternoon. It's the top dog in the realm of residential installations of solar rooftop panels. The market is still in its infancy, but SolarCity is larger than its 50 largest rivals combined.
SolarCity is growing quickly, but it's losing a lot of money. The market's holding out for a widening quarterly deficit on a 52 percent surge in revenue.
Thursday -- The Big Screen Gets Bigger
Last year was horrendous for multiplex operators. Just 1.26 billion movie tickets were sold last year, making this the worst year for exhibitor attendance in 20 years.
Imax (IMAX) has historically held up better than the industry, with global installations and its appealing supersize projections. However, market watchers expect Imax's revenue and profitability to decline when it reports quarterly results on Thursday.
Friday -- Jet Set
The day that Amazon.com (AMZN) has been cautiously eyeing arrives on Friday, when Jet.com is scheduled to begin taking limited sign-ups to its Web-based warehouse club. Jet plans to charge $49.99 a year for access to prices on products that are expected to be lower than on other online sites. It's an ambitious goal, but Jet.com is the handiwork of the guy who sold Diapers.com parent Quidsi to Amazon five years ago. In other words, he knows how Amazon works.
Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Amazon.com, Imax, Rackspace Hosting and SolarCity. The Motley Fool owns shares of Amazon.com, Imax and SolarCity. Try any of our Foolish newsletter services free for 30 days. Is your portfolio ready for what the new year has to offer? Check out our free report for one great stock to buy for 2015 and beyond.
Taxes seem to strike fear in the hearts of millions. And for some reason, that makes a few people lose their heads and hand out their personal information to strangers claiming to be from the Internal Revenue Service.
1. It's the IRS Calling
This scam has been going around my community. Threatening IRS agents call and inform you the police have a warrant for your arrest. And unless you go to Walgreens (WBA), buy a prepaid debit card loaded with hundreds of dollars and call back with the number, you're being carted off to the big house. Walgreens? You think we're going to fall for that, bad guys?
I'm sure all you Money Talks News readers are too sophisticated to be taken in by this scam, but apparently some people do in fact get a prepaid card or wire money to the criminals. Make sure your elderly relatives or other people who may be susceptible know that if they get a call from the IRS, it's fake.
But if you want to hear what one of these calls sounds like, listen to The Washington Post. If you're really concerned you might owe money, you can call the IRS at 800-829-1040.
2. No, Wait, It's the IRS Emailing
Let's be very clear. IRS staffers live in the Stone Age. They do not email. Ever. Or at least, they don't email you. They won't be sending you an email saying you need to click a link and verify your identity to get a refund. Likewise, you won't go to jail if you don't click on their link and fill in your personal information. It's all a ruse to get you to give up information to the bad guys so they can steal from you, as you'll see in scam No. 3.
3. Early Filers Stealing Your Identity
People use scam No. 2 to pull off scam No. 3, among other things. They use your name, address, Social Security number and all that other personal data you provided to fill out a fake tax return in your name. Then, they get a big refund, and your return gets rejected because the IRS thinks you already filed.
The problem can be fixed, but it's a giant headache. Your best bet is to guard your Social Security number closely and file your return as soon as you have all of your paperwork.
4. Promise of a Monster Tax Refund
Trust me when I say you probably don't want to have your taxes done by someone advertising on a telephone pole. They may say they are going to get you the biggest refund ever, but there's a chance they are going to falsify your information to do so.
That faked return may get you a refund, but maybe that's only after your preparer skims some off the top. It could also mean you lose certain Social Security and low-income housing benefits because the income listed on your tax return no longer meets eligibility criteria. Plus, if you get audited, the false information is your problem because the IRS holds taxpayers legally responsible for the information provided on their returns.
5. Fair Weather Tax Preparer
This scam is a variation of scam No. 4. These people don't necessarily claim to give you the biggest refund. They simply claim to do your taxes at a reasonable rate. The problem? They're really crooks.
These so-called tax preparers may take your money and run. Or they may file a return for you but then help themselves to your Social Security number and other information to be used later for devious deeds such as identity theft and retail fraud.
Protect yourself by carefully vetting any tax preparer. Search for reviews online, ask for referrals and read our article on how to pick the best tax pro.
6. The Charity That Isn't a Charity
Fraudulent charities can be a problem anytime of the year, but they can come back to bite you at tax time. If you are audited and deducted donations from a charity that really isn't a charity, you could get hit with more taxes and a penalty.
Typically, fake charities make look-alike logos and websites that trick you into thinking you're donating to established organizations. They may also spring up after a disaster and take advantage of the fact that you want to help. In reality, little to none of your money will make it to the stated cause. In addition, if a charity says it needs your Social Security number to take your donation, hang up the phone. No charity needs that information, and it's likely a ploy to steal your identity.
7. Playing Hide-and-Seek With Money Offshore
Now we move away from the scams that the bad guys try to pull on you to the scams taxpayers try to pull on the government.
First up is hiding money in offshore accounts. While this has long been acknowledged as a form of tax evasion, it's only in recent years that the IRS has started cracking down on offenders. Starting last year, foreign financial institutions began reporting information on U.S. account holders to the IRS.
It's going to be harder to hide that money, and if you want to come clean now, you may be able to reduce your penalties under the Offshore Voluntary Disclosure Program.
8. Pretending You're Destitute
Another way people try to scam the government is by not claiming all their income. In some cases, they may simply fail to declare money from side jobs on their taxes. Others may falsify their W-2s and 1099s, while still others split hairs over what's considered "wages" and insist they didn't earn any. It's all fun and games until you're audited or the IRS notices discrepancies in the information provided.
9. Puffing Up Income to Get a Refund
On the other hand, some people try to claim income they didn't earn. This may be done to become eligible for lucrative refundable credits like the Earned Income Tax Credit. That's one reason why those with EITCs are more likely to get audited than other taxpayers.
10. Not-So-Trustworthy Trusts
When it comes to trusts, some people may intentionally misuse them to shelter money from taxes, or they may act under the advice of unscrupulous or incompetent finance "professionals." A trust can be a legitimate and valuable way to arrange estate planning. However, before you inadvertently run afoul of the IRS, check with someone who specializes in trusts to help you set it up.
11. Elaborate Schemes to Elude the Law
This scam is something the IRS calls "abusive tax structures." Essentially, it involves taxpayers creating elaborate systems to pass money through multiple layers of businesses and accounts to conceal it from the government. If someone approaches you about investing your money in a way that seems incomprehensible, it's possibly a scam. If they also tell you it will nearly eliminate your tax liability, forget about it being a possibility. It's probably almost assuredly a scam.
12. But It's in Not in the Constitution
Apparently, there's a whole segment of the population that believes the 16th Amendment (that's the one authorizing an income tax) was never ratified to become part of the Constitution. Their arguments range from the idea that Ohio wasn't actually a state when it ratified the amendment to apparent transcription errors that occurred when preparing the amendment for votes in various states. As much I wish there was a way to magically get out of paying taxes, I'm not quite ready to argue that the fact some early 20th century typist misplaced some punctuation gives us a free pass on our taxes.
But maybe you are. In that case, you may call yourself a sovereign citizen. However, the IRS will call you a scam artist. And you can certainly fight the law on this if you want, but I can practically guarantee the law will win.
There you have it: 12 scams that are making the rounds this tax season. Hopefully, you won't be a victim, and hopefully you won't be fooled into thinking you can hide from the taxman. As anyone who's been audited will likely tell you, don't mess with the IRS.
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If you watch a lot of TV, it may seem like Americans are obsessed with their credit scores. Remember the ubiquitous freecreditreport.com ads? "F-R-E-E. that spells free." Go ahead, watch them all, we'll wait.
Sure, if you've applied for a car loan or mortgage lately, chances are you know roughly what your credit score is.
But what if you haven't needed credit? That's the situation my friend Chris finds himself in. He's a 30-year-old professional who doesn't own a car and, apart from some school loans, hasn't needed to use credit. That's admirable -- no credit card means no credit card debt -- but he knows good credit is essential to his future dreams of owning a home and starting his own business.
There's a bit of mystery that sometimes surrounds credit scores, so I first had him find out his exact number. My favorite way to do this is through the free budget tracker Mint.com. Among its many valuable features, Mint tracks your credit score for you, automatically updating it each quarter, and even breaks out the elements that affect it so you know exactly what you need to do to move it higher.
According to Credit.org, a score below 620 makes it less likely you will be approved for a standard credit card. With his limited credit history, this is where Chris finds himself. Let's take a look at his options for boosting his score.
The Friends and Family Plan
A pretty quick and painless way to raise your credit score is to ask a friend or family member with excellent credit to add you as an "authorized user" on their existing credit card account. Their credit account and related credit history will then show up on your credit report just the same as if you held the card yourself.
This is how I built up credit as a college student, and how I helped my former husband rehab his poor credit. It's a very effective strategy, and your benefactor never even has to give you access to the actual card.
Sound too good to be true? There are some caveats. You have to have a high degree of mutual trust for this to work -- a missed or late payment by either one of you will hurt the other's credit, and if the primary card holder racks up a high amount of debt, that could hurt you too. And of course, if the primary card holder gives you a physical card and you charge something to it, they are legally responsible for paying for it.
Secure Your Future
Not quite as simple, but equally effective is to get a secured credit card. With a secured card, you deposit cash, usually $200 to $300, which is held in a bank account as security in case you don't pay your bills. You can usually spend only up to the amount you have deposited, though some cards will gradually increase your credit line after several months of on-time payments.
The good news? Your credit score doesn't know the difference between a secured card and a regular one. As long as you pay your bills on time, your credit score should improve.
I recommend using this type of card to auto-pay a bill you already have, such as your mobile phone bill or your Internet bill. That way, you'll have monthly activity on the card and you're not tempted to charge purchases you wouldn't otherwise. To be extra safe, set up a second automatic payment from your bank account to the card each month to be sure it gets paid on time. Mint comes in handy here -- if you link your card to it, Mint will remind you when the bill is due.
The bad news? Most of these cards come with annual fees, ranging from $19 to $49, don't offer much in the way of extras and have double-digit interest rates. Of course, you're going to pay the bill in full and on time every month, so that won't be a problem, right?
Here are a few to consider (see a longer list at CardHub.com):
If you can part with $300, no fees and the cool factor make the Harley Davidson (HOG) Secured Visa (V) a great choice. It even comes with a few extra perks, including a reward program for Harley purchases.
If you have limited cash on hand, try the Capital One (COF) Secured MasterCard (MA), which lets you get a card with as little as $49. This card is one that will reward your on-time payments with a higher credit limit over time, but be careful that you don't charge more than you can pay off each month.
If you are eligible for USAA membership (limited to those who have served in the military and their families), check out the USAA Secured Card Platinum MasterCard. It has an annual fee of $35 but comes with some useful features, such as travel and car rental insurance, and it has particularly good terms for active military members. USAA stashes your deposit amount (anywhere from $250 to $5,000) in an interest-bearing CD account.
Be Credit-Smart
No matter which option you choose to build your credit, there are a few key rules that will keep your score heading northward.
Pay your bill on time, every time. No exceptions! When you're in credit-building mode, ideally you will pay the bill in full each month, but even if you have to pay the minimum due, on-time payment is the golden rule of good credit.
Keep your credit usage low. Credit usage refers to the percentage of total credit you have that you are actually using. Creditors don't want to see you maxing out those cards, even if you're paying on time. You want to keep this number under 20 percent.
Don't go card crazy. As your score rises, so will the number of card offers that show up in your mailbox. It's tempting to apply for these cards, but be selective. Too many applications will damage your newly improved score. Once your score is in the high 600s (considered in the "good" range), choose one unsecured card with a reasonable interest rate (under 15 percent) to replace your secured card. Regardless of the rate, continue to try to pay off the card each month. If you've gone the authorized user route, now's a great time to get a card in your own name and let the primary card holder off the hook. Either way, continue to use your new card just as responsibly.
Robyn Geareyis a Motley Fool contributing writer. Try any of our Foolish newsletter services free for 30 days. To read about our favorite high-yielding dividend stocks for any investor, check out our free report.
Groceries for a family of four cost an average of $727 to $1,303 a month, not including takeout and restaurant meals, according to the U.S. Department of Agriculture. That's a big chunk of change.
But there are ways to spend less on food and still eat a healthy, nutritious diet. And you may be thrilled to hear that you don't even need to clip coupons. In fact, experts say, other tactics may save you more money.
"I really challenge the assumption that coupons are the primary way to save money," says Carrie Rocha, founder of PocketYourDollars.com and a mother of two in Minneapolis.
What's more effective than using coupons? Strategic shopping, or buying the things you use when they are on sale, she says. Ideally, you'll purchase these staple items in large enough quantities to last until the next sale. If done correctly, smart shoppers should save you more than buying at full price with coupons.
Identify Your Favorites and Track Their Prices
Stephanie Nelson, who runs the website CouponMom.com and is author of "The Coupon Mom's Guide to Cutting Your Grocery Bills in Half," agrees. "Coupons are not the No. 1 way to save," she says.
Both experts advocate identifying the 10 or 15 items your family uses most often, with emphasis on the more expensive ones, tracking their prices and how often they go on sale. "When something is on sale for a really good price, buy enough to get around to the next sale," Rocha says.
For example, Nelson says her family eats about eight pounds of boneless chicken breast a week. She discovered that it's on sale every other week, at $2 a pound rather than the regular price of $4 per pound. By buying twice as much when it's on sale, she can save $832 a year. "I think the key is really honing in on what your high-impact items are," Nelson says. "If you can find a less expensive source, it really adds up."
There Is a Sales Season for Many Items
One way to save on produce is to buy what's in season: watermelon and berries in summer and citrus in winter, for example. But even nonperishable items have a sale season, Rocha says. Canned soup, baking supplies, cold medicines, canned fruits and vegetables, baking supplies and oatmeal all appear at their lowest prices in winter. Those items may go on sale in summer, she says, but not as often, and the price may not be as good. "Sale prices are lower when an item is in season," Rocha says, adding that coupon opportunities for additional savings are seasonal, too. "When products are in season, that is when there are coupons available for them."
Summer products include condiments, barbecue sauce, hot dog and hamburger buns, sunscreen, adhesive bandages and antibiotic spray. Steak and potatoes often go on sale before Valentine's Day because of the number of couples cooking a romantic meal at home.
Neither Nelson nor Rocha advocates shopping at warehouse stores as a top money-saving tactic, though that might be a good option for larger families. Just remember that you won't save money buying products you won't use or such large quantities you'll have to throw some out.
"Some people approach grocery shopping as a quest -- me vs. groceries," Rocha says. "If your quest it to save the most money, you may spend more."
11 Ways to Save Without Bothering With Coupons
Buy what's on sale. This is the single best tip for most shoppers. Meat, bread, produce, condiments, coffee, cereal, pet food -- nearly everything goes on sale from time to time. Many products go on sale at regular intervals. Find out when your favorite grocery items go on sale, and try to buy just enough until you can get the next discount.
Buy what's in season. This goes for both produce and nonperishable goods. Don't plan a dish that requires fresh mango in winter, when the fruit is more expensive. Instead, focus on oranges because they're actually in season.
Use what you buy. Many families end up throwing away significant quantities of food, either because they get tired of leftovers or they don't use items before they go bad. You can freeze or repurpose leftovers. Rocha recently used leftover mashed potatoes to make shepherd's pie. You can also freeze most things not used immediately, including many fresh fruits and vegetables. If you're faced with a pile of broccoli and a bag of potatoes, Rocha recommends using the AllRecipes.com "search by ingredient" section to find recipes for a meal with what you have on hand.
Don't buy more than you need. A great sale is no deal if you end up throwing away half of what you bought. If you find yourself routinely throwing out produce, bread and meat, then you are buying too much. Plus, not all items last forever, even if they're unopened, as Rocha learned the hard way when she bought a quantity of olive oil on sale, and it went back before she opened it. "I learned early on that overbuying is expensive," Rocha says. Cereal and crackers won't last long in humid climates, and family tastes may change as well.
Use store loyalty programs. Many stores require you to have a loyalty card to take advantage of sale prices. The cards are free and usually issued on the spot. Some programs give you bonuses, like discounts on gas, for using your card. Many allow you to "clip" coupons online and store them on your card, giving you an automatic discount at checkout.
Shop at discount groceries. Aldi and Save-A-Lot are expanding to more cities, and those no-frills stores can provide some good deals on staples, including produce. And some of their store-brand products also are quite good. "You can't make the argument that the quality is lower because it's at a discount store," Nelson says.
Try alternatives to your usual store. Most people have access to at least two grocery stores, as well as Walmart (WMT), Target (TGT) and perhaps a discount grocery. Visit other stores from time to time to see if they offer your favorite items at a price worth making an occasional special trip. Nelson's brand of coffee, for example, is $6 at her supermarket and $4 at Walmart, so she drops by Walmart occasionally to stock up.
Learn the sale cycles of your favorite products. If you live in an area with multiple supermarkets, the same products will go on sale, but not at the same time. If you missed the half-price Cheerios at Kroger (KR) last week, you may find them at Safeway this week. If your family eats a lot of yogurt, pay attention to how often your favorite brand goes on sale at the best price and stock up then.
Ask about markdowns. Talk to your store's department managers in meat, dairy, seafood and baked goods to find out if there is a time of day that unsold products are marked down.
Find the store clearance rack. Discontinued products are often sold for half-price or less in sale bins. And, if you need to clip, you can use coupons for these items.
Buy store brands. Stores brands of canned vegetables, cat food, paper products and many others items often are the same products sold under brand names. It's unlikely that you'll notice any difference in taste in one brand of beans over another.
